Key points

  • Developers are now on notice that a failure to consider climate change risks on (or arising from) their proposed coastal developments could result in rejected proposals or could leave approvals open to future challenge.  
  • Owners of businesses and properties with operations and facilities in coastal areas will increasingly need to consider adaptation strategies to ensure the preservation of their infrastructure and assets and balance restoration costs against new design or relocation costs.
  • Local councils are likely to adopt a more conservative approach in approving development as they consider the risks of future negligence claims if landowners suffer loss or property damage.

This article examines recent developments in case law and policy in response to climate change and potential sea level rise, and discusses the implications for developers, owners and local councils in coastal areas.  

Recent cases

There is an increasing trend by courts and planning tribunals towards the recognition of climate change impacts on and arising from proposed developments in coastal areas.

Victoria

In Myers v South Gippsland Shire Council [2008] VCAT 2414, the Victorian Civil Administrative Tribunal (VCAT) refused, on climate change-related grounds, to approve a development proposal to subdivide an area of coastal land. A coastal hazard vulnerability assessment was required by the tribunal which considered issues including sea level rise, storm tide and surges, coastal processes and local topography and geology. The tribunal held the key issue in assessing the appropriateness of the subdivision was to balance the finding of the coastal vulnerability assessment with the expectation of township zoning development. Adopting a precautionary approach, the tribunal held that granting a development approval in the circumstances would result in a poor planning outcome and unnecessarily burden future generations. The application was accordingly refused by the tribunal.

In Gippsland Coastal Board v South Gippsland Shire Council [2008] VCAT 1545, VCAT overturned a council’s decision to grant development consent for six coastal dwellings. While the relevant planning legislation did not specifically require consideration of coastal recession or sea level rise, it required the responsible consent authority to consider any significant effects which the environment may have on use of the development. The tribunal found that the location of the development was not suitable for the proposed development given the unacceptable risk of sea level rise and flood inundation. Although the tribunal conceded that there was no scientific certainty as to the degree or magnitude of sea level rise, there was general consensus that some level of climate change would lead to extreme weather beyond the historical record of sea levels or inundation from coastal or inland storm events.

New South Wales

The New South Wales Court of Appeal (Court of Appeal) in Minister for Planning v Walker (2008) 161 LGERA 423; [2008] NSWCA 224 has affirmed the possibility of future challenges to planning and development approvals under the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) if decision makers fail to take into account long-term environmental risk factors, including climate change. The Court of Appeal agreed with the views of Preston CJ in Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133 that although section 79C of the EP&A Act (which sets out the evaluation process for consent authorities) does not expressly refer to principles of ecologically sustainable development (ESD principles) as factors required to be taken into account by a consent authority, the ‘public interest’ is broad enough to embrace ESD principles, including the precautionary principle. The Court of Appeal said that, while it is not mandatory for the Minister to consider any particular aspect of the ‘public interest’, ESD principles are likely to be an element of public interest in relation to most planning decisions in coastal areas, and failure to consider ESD would provide strong evidence of the failure to consider the public interest.

The Court of Appeal decision, however, sits uncomfortably with a orders made on 1 February 2010 by the New South Wales Land and Environment Court (court) to effectively overrule a local council’s planning policy to roll back beachfront living given the threat of sea level rise. In court proceedings between Byron Shire Council and a local resident, the court upheld a home owner’s right to protect his property from the sea, effectively undermining the Council’s long-term strategy of planned retreat aimed at pushing back development from the seafront. These decisions illustrate the considerable uncertainty which currently exists, especially for local councils, in terms of formulating and implementing long-term local planning policies.

South Australia

In Northcape Properties Pty Ltd v District Council of Yorke Peninsula [2008] SASC 57, the South Australian Supreme Court upheld a decision of the Environment, Resources and Development Court refusing a subdivision of a large parcel of coastal land, finding that rising sea levels and changes in flood patterns caused by global warming would erode a buffer zone and prevent public access to the coast.

Queensland

In Charles & Howard Pty Ltd v Redland Shire Council (2007) QPEC 95, the Queensland Planning and Environment Court dismissed an appeal against a decision by Redland Shire Council. The Council had granted approval to construct a building pad but required the applicant to locate the building pad on the western side of the land, instead of the eastern side. In imposing the condition, the Council took into account the impact of climate change on the flood prone land. The Court found that the condition requiring the house to be located in an area less prone to tidal inundation was relevant and reasonable as it better reflected the aims of the planning scheme provisions.

Conclusion

These decisions demonstrate the willingness of courts and planning tribunals, across various Australian jurisdictions, to accept evidence of climate change risk and emphasise the need for development applicants and consent authorities to take account of climate change risks, in particular the impact of rising sea levels, when planning their developments.

Recent policy developments

Local councils

Local councils representing all states established a National Sea Change Taskforce1 in 2004. The taskforce was set up to be the national body representing the interests of coastal councils and communities experiencing the effects of rapid population and tourism growth. It now has more than 68 member councils from around Australia. It promotes adopting a coordinated national approach to managing sea change growth with a commitment by all three levels of government to work collaboratively to ensure that coastal development is managed with a focus on sustainability of coastal communities and the coastal environment.

The ‘Planning for Climate Change’ Research Report

The Taskforce commissioned and released a report in July 2008, ‘Planning for Climate Change: Leading Practice Principles and Models for Sea Change Communities in Coastal Australia’2, which outlines the implications of climate change for sea change communities and explains why new approaches to coastal planning and governance are needed.

The Report concludes that while climate change is increasingly recognized by the Federal Government as a critical issue for coastal communities, few local planning schemes include specific provisions for consideration of climate change risks, in particular sea level rise. Although South Australia and Western Australia have long included provisions for local governments to maintain a coastal setback planning control to accommodate potential sea level rise, these controls are currently under review to take into account the States’ wider approach to climate change adaptation and to incorporate the impacts of more up to date scientific evidence.

Federal parliamentary coastal inquiry

More importantly, a report3 of a Federal parliamentary inquiry into climate change and environmental impacts on coastal communities was released in Federal Parliament on 26 October 2009. The inquiry, which was conducted over a period of 18 months by the House of Representatives Standing Committee on Climate Change, Water, Environment and the Arts, made 47 recommendations, designed to help address many challenges facing coastal councils and residents in coastal areas.

Key recommendations include:

  • Establishment of a new Coastal Zone Ministerial Council to develop an Intergovernmental Agreement on the Coastal Zone endorsed by the Council of Australian Governments (COAG).  
  • A separate funding program for infrastructure enhancement in coastal areas vulnerable to climate change.  
  • An Australian Law Reform Commission inquiry into the liability issues facing public authorities and property owners in respect of climate change.  
  • A Productivity Commission inquiry into insurance cover for coastal properties.

The inquiry was conducted by a bipartisan committee which includes representatives of the Australian Labor Party, the Liberal Party of Australia and the National Party.

State governments

There have also been a range of new policy measures released by each state government in relation to sea level rise and its impact on states’ coastal regions. No such policy has been released by the land-locked ACT or by the Northern Territory. The states’ policies (other than Tasmania) include stated sea level rise benchmarks which are critical to strategic and land use planning by local councils. While the five mainland states will or are currently utilizing these benchmarks, there are some inconsistencies in the benchmark levels which account for the varied impacts climate change is expected to have on coastlines from state to state. Details of the benchmarks are on this map.

New South Wales

In October 2009, the New South Wales Government released its Policy Statement4 on Sea Level Rise following extensive public consultation. The Policy Statement specifies sea level planning benchmarks for the New South Wales coastline.

As a result, the Department of Planning has released a ‘Draft NSW Coastal Planning Guideline: Adapting to Sea Level Rise’ which adopts the New South Wales sea level rise benchmarks in the Policy Statement. The draft guideline5 outlines a proposed approach to assist councils, State agencies, planners and development proponents when addressing sea level rise in land-use planning and development assessment. Public consultation on the draft guideline closed on 11 December 2009 and a final version is expected to be released by the Department of Planning later in 2010.

Victoria

In December 2008, the Victorian Government published the ‘Victorian Coastal Strategy’ (strategy)6 which is the state government’s policy commitment specifying sea level planning benchmarks for the Victorian coastline. The strategy is given operation to in planning schemes through clause 15.08 ‘Coastal Areas’ of the State Planning Policy Framework.

Tasmania

In 2006, the Tasmanian Government commissioned the ‘Sharples Report’ to investigate the vulnerability of the Tasmanian coastline to the impacts of climate change and sea level rise. Following its release, the Tasmanian Government undertook the ‘Climate Change and Coastal Risk Management’ project to build on the Sharples Report findings and to look at the risks that storm surge and sea level rise pose for built infrastructure and natural values and assets in low lying coastal areas. After extensive consultation a ‘Revised Draft State Coastal Policy 2008’7 has been developed and was referred to the Resource and Development Commission (Commission) in June 2009 for full assessment and report, including public consultation. The Commission’s assessment of the Revised Draft is expected to be released in mid-2010.

Queensland

In August 2009, the Queensland Department of Environment and Resource Management released a new ‘Draft Queensland Coastal Plan’8 to deal with emerging coastal hazards, including those resulting from climate change. The call for submissions closed on 30 November 2009 and a final Plan is due for release in late 2010.

Western Australia

At present, the ‘State Coastal Planning Policy’9 implemented in 2003 is still in effect. Although subsequently amended in 2006, it is generally considered to be out of date and still refers to the 2003 IPCC 3rd Assessment Report which has since been superseded.

Otherwise, the EPA prepared a ‘Draft Environmental Assessment Policy – Climate Change’ in late 2009. However, the EPA has returned to the drawing board on this policy and another draft policy is expected to be released later in 2010. The Office of Climate Change is also currently developing a ‘WA Climate Change Adaptation and Mitigation Strategy’ (CCAMS) but its release date is unclear. As a result, there is considerable uncertainty and a lack of guidance in Western Australian government policy in relation to coastal planning and development.

South Australia

The South Australian sea level rise policy of 1991 is still in effect but currently under review. Further information about South Australia’s management of coastal development and planning can be found in the Coastal Planning Information Package.10

Nationally

The ‘National Climate Change Adaptation Framework’ released in 2007, endorsed by COAG, outlines key adaptation actions and specifically identifies the coast as a sector vulnerable to climate change. In spite of this, there is currently no national approach to establishing sea level rise benchmarks. While there are potential benefits of a consistent approach across jurisdictions, sea level rise will vary regionally and any national approach would need to accommodate this.

Implications

Climate change stands to have significant impacts on existing coastal developments and associated infrastructure. Recent case law and government policy trends indicate that there is a policy shift towards incorporating climate change considerations in future planning, and the grant of planning approvals, for coastal developments.

Developers

Developers in coastal areas will need to assess the potential for climate change impacts (such as sea level rise, increased storm severity, flood risk) on their projects and incorporate appropriate adaptation measures in their design proposals. Adaptation measures should focus on minimising the physical effects and consequential costs of climate change. For example, developers should ensure that proposed developments are not located in low-lying areas that are subject to flood inundation and not located in waterfront positions vulnerable to predicted coastal retreat.

There will greater potential, where damage or loss is suffered by a developer, to sue the council where it can be said that development consent was granted negligently. However, contributory negligence on behalf of the developer in failing to consider and develop its own climate change measures will also be relevant to this question. Therefore, it would be prudent for developers to carry out and develop their own climate change vulnerability assessments and adaptation strategies.

Existing owners

In relation to existing developments, property owners will increasingly need to develop adaptation strategies to ensure their assets are preserved over their life spans. These measures will no doubt come at a cost. However, planning now for climate change could significantly reduce costs which owners would otherwise incur from infrastructure and asset damage.

Local councils

In some states, consent authorities such as local councils are offered limited protection from liability under various statutes if they carry out their planning and development functions in good faith in relation to flood liable land or land in coastal zones which may be affected by coastal hazards (see for example section 733 of the Local Government Act 1993 (NSW), section 733 or Part 5 of the Civil Liability Act 2002 (NSW)).

Where a consent authority acts in good faith in granting or refusing development consents, or preparing environmental planning instruments or development control plans, these statutory provisions provide councils with some protection from liability.

Where a council is negligent, however, these statutory provisions do not prevent an individual claiming against that council in negligence. It may be possible to seek contribution from the council to the extent that they are negligent in granting development consents. Additionally, as scientific evidence improves and local climate change impacts are able to be forecasted with more certainty, it is likely that councils will adopt an even more conservative approach when exercising their statutory powers in granting development approvals. However, as noted above, developers who fail to develop and adopt adequate adaptation strategies and measures are likely to attract some form of contributory negligence.

Insurance

Lastly, and perhaps one of the more immediate threats for property owners and developers in costal areas, is the recent surge in insurance premiums and their availability. As sea levels rise, and coastal erosion continues, insurances may become increasingly and potentially prohibitively expensive and therefore it is prudent for developers and owners to factor in this future costs into their development planning.