The updates to the NSW planning system are here!

By Brendan Bateman, Nick Thomas, Claire Smith and Wagih Doueihi

15 Mar 2018

The latest round of NSW planning reforms mean processing timeframes should reduce, but application timeframes and the cost of compliance could expand.

The Environmental Planning and Assessment Amendment Act 2017 (NSW), which commenced on 1 March 2018, restructures the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) and makes broad amendments which will impact on all stages of the development assessment, approval and implementation process. 

Some of the amendments will require changes to the way in which proponents prepare for and carry out developments, and it seems that not all of the amendments are widely understood.  Proponents will need to come to grips with the amendments as soon as possible.

Here is a quick overview of some of the key things you should know.

Decimal delight

If you have heard people excitedly talking about "section 4.15 considerations", "section 7.11 contributions" or "section 4.55 modifications", it's because the EP&A Act has been completely renumbered and reorganised. As a result, navigating the new Act and the lingo that comes with it will take some getting used to. In the meantime, a concordance table with the most frequently used provisions can be downloaded here, while a full concordance table is available at the end of the in-force version of the EP&A Act.  Fortunately, there are broad transitional provisions which deem references in a range of documents to the former provisions as references to the renumbered provisions.

Sayonara section 75W modifications

After six years of grandfathering key provisions of the Part 3A approvals regime, the door has finally been shut on requests to modify an approved project under section 75W.

Proponents who lodged a request before 1 March 2018 should lodge their environmental impact assessment material by 1 September 2018. If, after 1 September:

  • the request has not been determined; and
  • the Secretary of the Department of Planning and Environment (DPE) notifies the proponent that insufficient information has been provided to deal with the request and the request will not be dealt with under section 75W,

then the request can no longer be dealt with under section 75W.

DPE has recently updated its website to say that proponents will have until 1 March 2019 "at the latest" to lodge their assessments, but it's not entirely clear how this statement will fit with the transitional arrangements described above.

New modification requests for former Part 3A projects which have development consents will have to be approved under the more limited power in section 96 (renumbered to section 4.55), which means that proponents will need to demonstrate that the project  as modified meets the "substantially the same development" test. However, the transitional provisions have tweaked the test for these projects, to allow the comparison to be made against the project as last modified under section 75W, rather than as originally approved.

Modification requests for projects which will now be treated as State significant infrastructure can be modified under the State significant infrastructure scheme, which is in the same terms as section 75W, and without the new restrictions we have described above.

Concept plan approvals will still be able to be modified under section 75W so long as the project to which the concept relates remains "substantially the same" as the project to which the concept plan currently relates (including any modifications previously made under section 75W). 

The application of the "substantially the same" development test is a significant change for major project operators who have been relying on the broad section 75W modification process as an important part of their project development.

The PAC becomes the IPC

The Planning Assessment Commission (PAC) has been renamed the Independent Planning Commission (IPC). To ensure that the IPC maintains its focus on its primary function as an independent decision-maker, the IPC will not undertake the review function which the PAC previously performed.

This removes the possibility of conducting a detailed assessment twice on the same proposal, and the NSW Government expects that this will shave 70 to 160 days from the State significant development determination process on some projects.

Councillors will no longer be able to exercise a local council's consent authority functions

All local councils in Greater Sydney and Wollongong (as well as other councils to be identified in the new regulations when they are released) must have a local planning panel, which will exercise consent authority functions on behalf of the council.

The vast majority of development applications will continue to be determined by council staff under delegation, with complex or controversial proposals referred to the local planning panel. 

The change is expected to help depoliticise and improve the quality and timeliness of decision-making.

Development consents can still be modified to authorise non-compliant work

In response to the longstanding decision in Windy Dropdown Pty Ltd v Warringah Council [2000] NSWLEC 240, the exposure draft version of the Amendment Bill had included a provision precluding a development consent from being modified to authorise part of a development which had been carried out in contravention of the consent. This would have meant that proponents would have no alternative but to seek a fresh consent to regularise their development, or undo the non-compliant work before seeking a modification.

However, to the relief of some proponents, the provision has not made its way into the EP&A Act. 

New types of conditions

The condition making power in section 80A (renumbered to 4.17) has been expanded to allow:

  • conditions which require proponents to provide a financial assurance, such as a bank guarantee or a bond, to secure or guarantee funding for or towards the carrying out of works or programs required by or under the consent; and
  • "transferrable conditions" which cease to have effect on the issue of an authorisation under another Act (such as an environment protection licence under the Protection of the Environment Operations Act 1997).

The power to impose bonds fills a perceived gap in the development consent scheme, but could impose a significant additional financial burden on proponents.

The concept of transferable conditions should help allow the impacts of a development to be more flexibly managed while reducing duplication across parallel regimes.  However, the power to turn off conditions in this way is discretionary and requires a consent authority to evaluate similar conditions in the relevant approvals, so we expect some practical challenges for proponents in this area.

The imposition of these types of conditions is restricted to State significant development for now, but we understand that new regulations are being prepared to govern these condition-making powers, and that may involve a review of this limitation.

The Secretary can now take enforceable undertakings

In addition to their current range of regulatory powers, DPE, local councils and other planning authorities will be able to negotiate enforceable undertakings in relation to planning related compliance matters. Ultimately, it will be the DPE Secretary who decides whether an undertaking should be accepted, having regard to the recommendation of the relevant authority.

This is a welcome change for some given that enforceable undertakings have long proven to be a useful tool for the Environment Protection Authority in dealing with environmental compliance matters.

New step-in powers given to the Secretary for integrated approvals

The DPE Secretary has been given reserve powers to step in to prevent delays and resolve conflicts between approval agencies where a local council is the consent authority. The Secretary may provide advice, concurrence or general terms of approval on behalf of another agency where:

  • the relevant agency has not done so within statutory timeframes; or
  • the advice, concurrence or general terms of approval from two or more agencies conflict.

In further good news to proponents of integrated development, the review scheme for determinations of development applications in section 82A (renumbered to 8.2) has been expanded so that it applies to their proposals.  In requesting a review, proponents can amend their proposed development to address the consent authority's reasons for refusal. This provides proponents with a useful means of recourse before commencing review proceedings in Court.

Consistency is key for CCs

The requirement that a construction certificate be consistent with the development consent to which it relates has been moved from the regulations into the EP&A Act. The change, which is intended to address the decision in Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404, makes clear that the Court can declare a construction certificate invalid if it is inconsistent with the development consent (but only if proceedings are commenced within 3 months of the construction certificate being issued).

Mandatory pre-lodgement consultation is on the horizon for proponents

The EP&A Act now provides that the regulations may require proponents for a development consent or other approval under the Act (including modifications) to undertake community consultation in relation to their applications before they are lodged. The new regulations are not yet available, but there is already concern that the pre-lodgement consultation requirements will have the potential to add time and cost to the development application process. 

Stronger community engagement

Planning authorities will have until 1 July 2019 to prepare a community participation plan that outlines how they will engage with the community in relation to proposals and development applications they are considering. Each plan must be prepared according to community participation principles set out in the EP&A Act. This will apply not only to consent authorities but also to proponents who are entitled to self-assess their proposals under Part 5 (ie. mostly public authorities).

Decision-makers are also required to provide a statement of reasons for their decisions, and this must be considered in the evaluation of future modifications.

More strategic planning

Local councils have until 1 July 2020 (or in some cases, 1 July 2019) to prepare and make a local strategic planning statement, which addresses the planning priorities for the local government area and how the priorities align with any strategic plans applying to the area. The statements must also explain the interaction with regional and/or district level priorities and how they are given effect at a local level.

Each statement will set a strategic context that has shaped the development of the applicable local environmental plan (LEP). The local strategic planning statement will not form part of the LEP, however it will provide strategic context and rationale for local planning controls. These statements are intended to inform rezoning decisions and guide development.

The NSW planning portal just got more important

The NSW planning portal will, among other things, become a repository of all development consents granted in NSW after 1 March 2018. Most development consents will take effect from the date that they are registered on the NSW planning portal - not from the date that they are determined.

What about the 2013 reforms?

While the extent of reform is not as comprehensive as under the NSW Government's previous proposal -  the now lapsed Planning Bill 2013 - the amendments do give effect to some of the key initiatives which received broad support during consultation on the Planning Bill 2013. 

If you would like to better understand how the changes affect your development or business, please come and speak with us. 

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.