The Southern Coalfields Inquiry

In 2006, amid growing publicised concern of the possible negative effects of underground coal mining to the south of Sydney, the NSW State Government commissioned an independent expert panel to generally review underground mining in the Illawarra region and its impact on significant natural features. The resulting Southern Coalfield Inquiry (SCI ), was released by the NSW Department of Planning (DOP ) in 2008 and concluded that long wall mining caused subsidence, which had the potential to impact on significant rivers and streams and lead to the loss or redirection of surface water flows, changes in water quality, loss of ecosystem functionality, stream bed cracking and loss of visual amenity in that region.1

In light of these conclusions, the report made the following recommendations for assessing and determining project applications lodged under Part 3A of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) (see background to planning process at the end of this article):

  • Imposing new restrictions on the conduct of mining projects in areas vulnerable to the effects of subsidence impacts.  
  • Imposing increased monitoring and assessment requirements to address subsidence effects and impacts.  
  • Involvement of all key stakeholders in the identification of significant natural features and the engagement of persons affected by the mining proposals earlier in the process.  
  • An increased use of peer reviewed scientific and expert opinion.  
  • A reversed onus of proof requiring proponents of resources projects to gather appropriate evidence to show that the proposed project does not have an unacceptable impact of natural features.  

These recommendations will apply to all major resource projects in NSW and will have lasting effects on the approval process.  

The Bulli Seam Operation Report

The practical significance of the 2008 SCI recommendations became clearer following BHP Billiton’s submission of a Preferred Project Report (PP R) in response to the Planning and Assessment Committee’s (PAC ) Bulli Seam Operation Report released in July 2010. BHP Billiton’s Bulli Seam Operations Proposal was a project that was anticipated to produce 260 million tonnes of coal over 30 years with a net production benefit of $10bn. Following BHP Billiton’s provision of an Environmental Assessment Report (EA R) and responses to public submissions made during the consultation phase, the (then) Minister for Planning Kristina Keneally directed that the PAC be constituted to review BHP Billiton’s proposal.

In its report the PAC was critical of what it considered to be information deficiencies in BHP Billiton’s EA R, including the fact that BHP Billiton had not assessed the effect of its operations on 1,538 possible sites of natural or special significance in the relevant area. The PAC report was effectively a restatement of the recommendations of the SCI , and concluded that:

“it is no longer a viable proposition for mining to cause more than negligible damage [to areas of natural and special significance].”

In September 2010 BHP Billiton responded to the PAC ’s findings by submitting a PP R which fully conformed to the PAC ’s recommendations and omitted substantial areas of the original project proposal to avoid negatively impacting any natural or special sites of significance. The PP R is currently awaiting approval from the DOP .

Understanding the shift in policy

As a result of the SCI , the process for obtaining major project approval under Part 3A has undergone a significant shift. The movement towards the adoption of the SCI recommendations during the assessment process will undoubtedly make obtaining approval more burdensome, and it seems unlikely that an incoming state government will reduce those requirements, even if Part 3A is amended or removed from the EPA Act.

However, the shift is one geared towards proponents demonstrating greater precaution in their EA Rs than as had previously been the case, and can be overcome by:

  • Conducting thorough investigations as part of any environmental assessment of significant natural features (i.e. rivers and significant streams, swamps and cliff lines), and significant special features (i.e. Aboriginal and European heritage sites and built infrastructure) in the area affected by the proposal.  
  • Engaging with relevant persons to assist in identifying and preserving significant natural and special features in the area affected by the proposal.  
  • Identifying the impacts on significant natural and special features in the area relevant to the proposal, with particular attention to the risks to water flows, water quality and aquatic ecosystems.  
  • Identifying and reporting measures to monitor, minimise damage to and remediate any effects on the significant natural and special features that would be potentially affected by the proposal.  
  • Improved anticipation and reporting on those features likely to be affected by a project proposal will clearly improve on the prospects of an earlier and more successful grant of project approval.

Background to approval of major resources projects in NSW

The approval of major mining and petroleum projects in NSW is governed by an interaction between the EPA Act, the State Environmental Planning Policy (Major Development) 2005 (Major Project SEPP ), the Mining Act 1992 (Mining Act), the Petroleum (Onshore) Act 1991 (Petroleum Act) and potentially the Environment Protection and Biodiversity Conservation Act 1999. The EPA Act outlines the way a project is to be assessed, the Major Project SEPP identifies what environmental assessment paths various projects are to follow, and the Mining and Petroleum Acts deal with the grant of rights to extract resources from projects.

In considering how these legislative instruments apply, a party wishing to commence a mining or petroleum project in NSW should first turn their mind to determine whether their’s is a ‘major project’. Schedule 1 of the Major Project SEPP sets out the indications of a ‘major project’, which includes:

  • any coal mining projects  
  • projects with a capital investment value of more than $30m  
  • any projects in environmentally sensitive areas of State significance (i.e. in the presence of sensitive wetlands, coastal areas, heritage precincts and the like).  

If the proposed project falls into one of the those categories, then approval will be required to be dealt with under Part 3A of the EPA Act before a lease or licence under the Mining Act or Petroleum Act can be granted. Indeed it would be prudent for a person seeking approval to explore or undertake in major projects in NSW to first have regard to the Part 3A approval process before applying for such a lease or licence, as the non-availability of development consent will be a complete show stopper.  

The assessment process

If a proposed project meets the criteria of a ‘major project’, it will require the approval of the Minister for Planning (Minister) or his/her delegate under Part 3A. The process to obtain the Minister’s approval generally follows the following course:  

  • A person seeking approval (Proponent) for a new project prepares a brief Preliminary Environmental Assessment (PEA ) identifying potential environmental issues with the proposed project.  
  • The PEA is used by the DOP to determine the key issues in the project and formulate the Director General’s Requirements (DGR) which are then provided to the Proponent.
  • The DGR are formulated to highlight key matters of environmental concern to the DOP which are required to be environmentally assessed and reported on by the Proponent.  
  • The Proponent must fully respond to the DGR in a detailed EA R.  
  • The DOP and other key government agencies assess the Proponents EA R to ensure that each of the DGR has been adequately addressed.  
  • If considered adequate, the EA R is publicly exhibited for a minimum of 30 days, during which time the Minister invites public comment, places advertisements in appropriate newspapers and receives submissions from relevant public authorities, local councils and any other affected parties.  
  • If submissions are received, they are forwarded to the Proponent who prepares responses to the submissions, and if having regard to those submissions and the DOP ’s view of them, a PP R may be called for from the Proponent which may include a revised or ‘improved’ proposal for the project.
  • The DOP assess the adequacy of the responses prepared by the Proponent, and provide a report, the Director-General’s Report, to the Minister with a recommendation of either approval or disapproval to the Minister.  
  • The Minister considers the Director General’s Report, the matters set out in the EPA Act, the Proponent’s EA R and PP R (if submitted), and then notifies the Proponent whether the project has been approved or disapproved.  
  • A recommendation of approval usually sets out conditions of approval, which typically require the Proponent to prepare and implement a number of management plans and strategies to the satisfaction of the DOP .  

At any stage during the assessment process the Minister may request the PAC to provide a review of a project. The PAC is a statutory body constituted under Section 23D of the EPA Act and made up of members appointed by the Minister who have expertise in planning, architecture, heritage, the environment, law and engineering. Under the EPA Act, the Minister has the power to direct the PAC to advise and make recommendations as to any aspect of a project being assessed under Part 3A.