04 Feb 2016

NSW Guidelines for the economic assessment of mining and coal seam gas proposals finalised

by Claire Smith, Nicole Besgrove

Guidelines for the economic assessment of the impacts of NSW mining and CSG proposals are now finalised.

The NSW Department of Planning and Environment released the final Guidelines in late December 2015 which will now need to be used by proponents and relevant professionals employed by the proponent in the preparation of a development application for a mining or CSG project in NSW.

We previously examined the detail of the draft Guidelines and note the following key changes in the final version of the Guidelines:

  • if a project involves mitigation measures to reduce environmental, social or other costs (for example, biodiversity offsets or subsidence prevention measures), the risk that those measures may or may not be fully effective is to be discussed in the economic assessment;
  • economic assessments are to explicitly consider whether a project will have any significant distributional impacts (ie. identify the most likely winners and losers from a project and report qualitatively on the extent of any expected material impacts);
  • proponents must present the net producer surplus (profit) which is attributable to NSW only;
  • specific techniques for estimating second round / flow-on economic effects of a proposal in the local effects analysis (LEA) are provided; and
  • costs of remediation and decommissioning of a site should be accounted for in the analysis of all costs and benefits attributable to the project.

The appraisal guidelines for environmental, heritage, social and transport impacts contained in the draft version are no longer included in the final version. However, it is understood that the Guidelines will be supported by Technical Notes which will set out the default methodologies, parameters and assumptions to be used as part of the economic assessment, including guidance on how to identify and value these impacts of the project.

How will the Guidelines and Technical Notes apply?

The Indicative Secretary's Environmental Assessment Requirements (SEARs) released in October 2015 provides that an Environmental Impact Statement (EIS) must include (amongst other things) a comprehensive economic appraisal, consistent with the Guidelines which:

  • includes a quantitative analysis and assessment, where feasible and reasonable, of all issues considered in the EIS;
  • qualitatively describes impacts that cannot be quantified; and
  • provides the framework by which environmental, social and economic impacts identified in the EIS are compared on a common basis and the results are incorporated into the conclusions of the EIS as appropriate.

Where Technical Notes are available, the proponent should identify and quantify impacts consistent with those notes. However, where no Technical Note is available for a particular environmental, social or transport-related cost (or benefit), proponents are to still quantify impacts wherever possible having regard to good practice, including relevant research and approaches used in other Australian and international jurisdictions for quantifying similar impacts.

Accordingly, compliance with the Guidelines and consistency with any Technical Notes will be necessary as part of the assessment of any new projects and to ensure compliance with the SEARs.

What mining and CSG proponents need to do

Proponents for all new State significant development for mining and coal seam gas proposals need to consider whether their proposal complies with the Guidelines and, when released, are consistent with any supporting Technical Notes.

If you would like to understand the full impact of the final Guidelines on your organisation and its future mining or CSG projects, please contact us.


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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.