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07 Nov 2013

Re-adjusting the balance - NSW Mining SEPP amendment to emphasise resource significance becomes law

by Nick Thomas, Claire Smith

The significance of the resource to be mined will now be a more important factor in an assessment.

After a long period of consultation and further consideration, the NSW Government has amended the key State planning policy for mining, to emphasise the significance of the resource in the assessment process and to standardise the assessment of key environmental issues for mining projects.

The outcome should be a clearer and more consistent process for assessment of mining projects, but it will not necessarily lead to approval of mining proposals.

When does the Amendment SEPP apply?

State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Resource Significance) 2013 (Amendment SEPP) was published on 4 November and takes effect from that date.

The Amendment SEPP applies to all current and future applications for a new development consent, or modification of an existing development consent, for mining projects. It does not apply to coal seam gas or other petroleum production, or to extractive industries.

What does the Amendment SEPP do?

Essentially, the Amendment SEPP:

  • makes the "significance of the resource" in terms of economic benefits to the State and the region a mandatory consideration and the "principal" consideration under the Mining SEPP for a consent authority when deciding whether or not to grant development consent for a mining project;
  • requires the consent authority to take into account any advice from the Director-General of Trade and Investment, Regional Infrastructure and Services regarding the relative significance of the resource compared with other mineral resources in NSW. Relevant factors in assessing the significance of the resource include:
    • the size, quality and availability of the resource;
    • proximity and access to existing or proposed infrastructure;
    • the relationship of the resource to any existing mine; and
    • whether or not other industries or projects are dependent on the development of the resource;
  • specifies non-discretionary development standards for cumulative noise levels, cumulative air quality levels, airblast overpressure, ground vibration and aquifer interference. If an application complies with those standards, the consent authority cannot impose more onerous standards for those matters (although an application which does not comply with the standards could still be approved, and the consent authority is also free to impose project specific conditions regulating these areas provided they are not already the subject of the development standards); and
  • requires a consent authority to consider any certification by the Chief Executive of the Office of Environment and Heritage (OEH) or the Director-General of the Department of Primary Industries that measures to mitigate or offset biodiversity impacts of the proposed development will be adequate.

How is the Amendment SEPP different from the previous draft?

In July this year, the NSW Government released a draft Amendment to State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP), which some interpreted as a response to the NSW Land and Environment Court decision in April, rejecting on merit appeal a planning approval for the expansion of the Warkworth mine in the NSW Hunter Valley.

The draft Amendment attracted a significant volume of submissions. Some supported the Amendment, while many commented that it either went too far to protect resource projects or didn't go not far enough.

The draft Amendment proposed broadly the same changes to the Mining SEPP as the Amendment SEPP provides. However, the Amendment SEPP contains some important changes:

  • specific examples of economic benefits of developing a resource are now provided for the purpose of establishing the significance of the mineral resource – these are job creation, expenditure (including capital investment) and State royalties;
  • as indicated above, the amendments relating to resource significance now expressly apply to applications for modification of existing consents as well as applications for new consents;
  • the Minister for Planning must review any of the non-discretionary development standards which are based on a Government policy (eg. noise and aquifer interference) if the relevant policy changes;
  • a consent authority must consider any certification by either the Chief Executive of OEH orthe Director-General of the Department of Primary Industries as to biodiversity impacts, rather than just certification by the Chief Executive of OEH, and
  • the Minister for Planning must review the whole Mining SEPP within two years and report publicly on the review.

Implications

The Amendment SEPP seeks to specify the weighting to be given to various factors in an assessment of an application for a mining project. This is not often done in a planning instrument such as a SEPP, so it is not entirely clear what the practical effect will be. However, it is clear that the significance of the resource to be mined (in terms of economic benefits and having regard to other mineral resources in NSW) will be a more important factor in an assessment as a result of the Amendment SEPP.

It is important to remember that the weighting in the Amendment SEPP applies only to the matters specified in the Amendment SEPP, and not to the other matters which planning legislation requires a consent authority to consider, such as the "public interest", which has led to a lot of legal challenges to planning approvals for mining projects. The Planning Bill 2013, which is currently before the NSW Parliament, retains the "public interest" as an important consideration in assessing applications.

In addition, although the non-discretionary development standards should simplify the assessment and determination of impacts regarding several key environmental issues, each of those standards has a fairly specific scope, and there are many other issues on which a project could be refused, or significant project specific conditions of consent could be imposed.

Overall, mining proponents should find the Amendment SEPP clarifies the assessment process and enhances consistency in decisions, but this will not necessarily avoid a decision that a project application be refused, nor will it necessarily avoid significant obligations in the conditions of a consent.

Consequently, proponents will still need a thorough understanding of the legal requirements for environmental assessment and approval, and a robust environmental assessment for their projects.

 

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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.