Key Points:

Comments on the Draft Agreement must be lodged by 18 December, and it's expected to be finalised early in 2014.

The Federal and NSW Governments are on the way to delivering on their proposal to streamline Federal environmental assessments and approvals in NSW, with the release of the draft NSW assessment bilateral agreement for public comment until 18 December 2013.

This is the first major step in implementing the Memorandum of Understanding (MoU) which the Federal and NSW Governments signed on 5 November.

Purpose of the assessment bilateral agreement

The Draft Agreement when signed, will accredit various NSW environmental assessment processes for the purposes of assessing project proposals under the Federal Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act), so that, if a project requires approval under the EPBC Act, it will not need a separate assessment under the EPBC Act.

Currently, NSW is the only State without an assessment bilateral agreement, as its previous agreement expired in 2012. This means that projects in NSW which need EPBC Act approval will need separate Federal and State assessments, unless the Federal Minister for the Environment determines that an EPBC Act assessment for a particular project is not required, or accredits a particular State assessment for a particular project.

The Draft Agreement will not affect the need for EPBC Act approvals. However, the Federal and State Governments have committed to signing an approvals bilateral agreement, which will accredit specified State approvals so as to remove the need for EPBC Act approvals in many situations, by 18 September 2014.

Accredited NSW assessment processes

The Draft Agreement provides for accreditation of project assessments for:

  • State significant development (SSD) and State significant infrastructure (SSI) under the Environmental Planning and Assessment Act 1979 (NSW) (Planning Act), including project approval modifications for SSD and SSI; and
  • project approval modifications under section 75W of the former Part 3A of the Planning Act (ie. modifications of projects using the Part 3A-related savings arrangements).

Unlike the previous NSW assessment bilateral agreement, the Draft Agreement would not accredit assessments for projects which are not designated as State significant.

In addition, the specified NSW processes will only be accredited for a particular project if the NSW Government undertakes the assessment for that project in accordance with the procedures in Schedule 1 of the Draft Agreement. Broadly, these are designed to accommodate EPBC Act assessment requirements.

Projects which aren't covered

The Draft Agreement expressly excludes:

  • projects which don't occur wholly within NSW, or which are taken in NSW but have "relevant impacts" in other jurisdictions;
  • projects which are undertaken by a Commonwealth agency or in a Commonwealth area (eg. land which a Commonwealth agency owns or leases); and
  • projects which the Federal Environment Minister determines do not satisfy the accreditation requirements described above (provided the NSW Planning Minister has not yet told the Federal Minister formally that the project will be assessed in accordance with those requirements).

This provides some important limitations on the scope of the Draft Agreement.

The third category above is interesting – a note in the Draft Agreement states that will be used "in limited circumstances where the Minister determines that assessment of a particular action under the bilateral agreement would be more appropriately undertaken by the Commonwealth".

Bilateral procedure

The Draft Agreement outlines a process by which it will operate for any given project, including:

  • substantial interaction between the Federal and NSW Governments before and during the assessment phase;
  • efforts to agree Federal and State approval conditions so as to avoid duplication and inconsistency in conditions;
  • a requirement for the NSW Government to refer large coal mining and coal seam gas projects which are likely to have a significant impact on water resources (ie. projects which activate the EPBC Act "water trigger") to the Federal Government's Independent Expert Scientific Committee on CSG and Coal Mining (IESC) for advice;
  • a requirement for the NSW Government to take into account relevant Federal guidelines, including the Federal Government's EPBC Act Environmental Offsets Policy and relevant strategic assessments under the EPBC Act; and
  • the joint development and operation of Administrative Arrangements.

The EPBC Act itself contemplates measures to avoid duplication and inconsistency in project approvals, but the potential for overlapping EPBC Act and State approval requirements has been one of the main concerns about the EPBC Act since it began, so the statements in the Draft Agreement addressing this issue are welcome.

The requirement for reference to the IESC appears intended to address the intergovernmental agreement under which the IESC was established. However, the State environmental planning policy for mining and CSG already requires reference of various mining projects to the IESC, especially projects which trigger the NSW gateway assessment process. It is not clear yet whether the requirement in the Draft Agreement will mean two or more referrals to the IESC are necessary.

Continuing Federal involvement

The procedural requirements in the Draft Agreement and the proposed Administrative Arrangements mean that the Federal Environment Department will have a continuing role in environmental assessment, and many of the EPBC Act assessment provisions will remain relevant.

In addition, the Draft Agreement states that "transitional support" from the Federal Government "in the form of embedded [Federal Environment Department] officers will be considered".

Comparison with Queensland draft bilateral agreement

A draft Queensland assessment bilateral agreement was issued for public exhibition shortly before the Draft Agreement was issued for NSW. The two drafts are broadly similar, allowing for the fact that the Queensland draft will amend an existing agreement and the NSW draft is a completely new agreement.

What's next?

Comments on the Draft Agreement must be lodged by 18 December. We expect the Draft Agreement will be finalised early in 2014.

Administrative Arrangements for implementing the Draft Agreement also should be available in early 2014.

In addition, the Draft Agreement requires both Governments "to take steps to improve the efficiency and effectiveness of their own administrative processes to the greatest extent possible", so we could see some streamlining of NSW planning approval processes.

The NSW Government is currently working to get its Planning Bill through Parliament. While the Draft Agreement does not accommodate the Planning Bill, the Planning Bill won't be passed before late February 2014 and, even then, we expect it will have a staged commencement. Consequently, it may be that the Draft Agreement is put in place without reference to the Planning Bill and is then amended if and when the Planning Bill becomes law.