Proponents seeking approval for new projects, or modifications of existing projects, will need to consider closely the social impact assessment framework set out in Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7.

While it received significant media attention because of its statements on climate change, the recent decision on the Rocky Hill Mine Project is more widely relevant for what it says about assessing social impacts in a broad range of projects, particularly major projects in New South Wales.

That's because the more substantive (and certainly, in the Chief Judge's own view, the better) reason to refuse approval for the project was its social (and visual) impacts, which the Court decided could not be satisfactorily mitigated. In coming to that conclusion, Chief Justice Preston set out a framework for assessing social impacts.

While the framework is designed primarily for resources projects, and each application is assessed in its own circumstances, we think the framework in this case will be used for projects across various industries, so proponents should be using the framework to shape their applications and assessments.

How (and why) social impacts are assessed under the Environmental Planning and Assessment Act 1979

The Rocky Hill Mine Project case involved a proposed new open cut coal mine which was expected to produce 21 million tonnes of coal over 16 years. Gloucester Resources Limited (GRL) appealed to the Court against the refusal of its application for planning approval. The Court was required to determine GRL's application on its merits and therefore sat in the place of the consent authority.

The Environmental Planning and Assessment Act 1979 (NSW) requires, among other things, the likely social impacts of a project to be considered as part of the overall environmental impact assessment. The Act however does not provide guidance on how a social impact assessment should be conducted.

So the Court had to consider the potential social impacts from the proposed mine. Given the lack of guidance in the Act, Chief Judge Preston turned to the Social Impact Assessment Guideline (Department of Planning and Environment, 2017) and set out a framework for assessing social impacts based on it.

Step 1: Categorise the impact

The first step Chief Judge Preston took was to categorise the social impacts that may occur as a consequence of the project (Effects). The Guideline suggests the following nine categories of Effects, which the Judge adopted:

Way of life

Definition: This includes how people live, work, play and interact with each other.  

Community

Definition:  This includes the composition, cohesion, character and function of community and people’s sense of place.  In the judgment, this included:

  • masculinisation of the town through the influx of mine workers;
  • social tension between those who support and those who oppose the project; and
  • impact on emotional attachments to the land. 

Access to and use of infrastructure, services and facilities

Definition: This includes consideration of any increase in the burden on existing infrastructure (including traffic noise) and also additional facilities that would be required as a consequence of the project.  

Culture

Definition: This includes shared beliefs, customs, values and stories, as well as connections to land, places and buildings.  Culture includes both Aboriginal and European culture and heritage, with specific consultations with Aboriginal people considered best practice. 

Health and wellbeing

Definition: This incorporates both physical health (including impacts from noise, night lighting, fine particles and other contamination) but also mental health and other social impacts such as an expected exodus of residents. 

Surroundings

Definition: This includes access to and use of ecosystem services, public safety and security, access to and use of the natural and built environments, and aesthetic qualities and amenity.  The concept of the "amenity" of a place or locality is wide and flexible.  This is not just a physical inquiry – amenity may embrace the effect of a place on the senses, the residents’ perception of the locality and their envisaged impacts from the project. 

Personal and property rights

Definition: This includes issues related to economic livelihood and whether or not people experience personal disadvantage or have their civil liberties affected.  This consideration may extend to those who formerly owned the land subject to the project as well as those nearby. 

Decision making systems

Definition: This is related to the extent to which individuals and groups experience a say in the decisions that affect their lives and if they have access to complaints, remedy and grievance mechanisms.

Fears and aspirations

Definition: This is related to one or a combination of the above, or about the future of their community.  Relevantly, people who support the project also have fears and aspirations which should not be discounted 

Based on the Guidelines and the judgment, these Effects do not appear to be exhaustive. Chief Judge Preston also said the "distributive inequity" of the project (ie. the just distribution of environmental benefits and burdens of an activity), was another Effect to be considered. This Effect was not limited to the current generation but extended across generations.

Step 2: Consider how each category of Effect creates an impact

Chief Judge Preston then considered each of the Effects in turn. When assessing how each Effect will impact society, the economy and the environment, his Honour confirmed that the following principles apply:

  • Effects can be interlinked.For example, changes to people’s visual, acoustic or air quality environment may affect people’s surroundings, health and wellbeing, way of life and community, as well as people’s fears and aspirations about these matters.
  • An Effect can be direct, indirect or cumulative. Cumulative Effects include not only successive impacts from the project but more broadly include interactions with other past, current and foreseeable activities which aren't necessarily related spatially or temporally to the project.
  • The Effect can be tangible or intangible.For example, adverse impacts on mental health and rural ambiance contributed to extreme social risk ratings.
  • The Effect can be directly quantifiable, indirectly or partly quantifiable or only able to be described and assessed in qualitative terms.
  • The Effect can be experienced differentially.Separate consideration may be required for different communities, by different groups based on proximity and location but also over time.
  • The Effect need only have a perceived impact such that fear of an Effect is in itself relevant.In this case, fear of physical impacts on the community, the landscape and people's health were all relevant considerations.The probability of people's fears being realised informed the severity of the risk rating.

Step 3: Determine the materiality of the impact

Chief Judge Preston confirmed that the materiality of the social impact from an Effect will be affected by:

Extent

Definition: The geographical area affected by the impact (or the number or proportion of people or population groups who are affected). 

Duration

Definition: The timeframe over which the impact occurs. 

Severity

Definition: Scale or degree of change from the existing condition as a result of an impact. 

Sensitivity

Definition: Susceptibility or vulnerability of people, receivers or receiving environments to adverse changes caused by the impact, or the importance placed on the matter being affected.  Attributes of sensitivity include: conservation status; intactness; uniqueness or rarity; resilience to change and capacity to adapt; replacement potential; impacts on vulnerable people; and/or of value or importance to the community.

Step 4: Can mitigation and management strategies overcome the social impact?

The degree to which an impact can be mitigated or managed will be relevant to the assessment of the materiality of the risk rating. Merely satisfying applicable regulatory criteria will be relevant but will not prevent the Court from making determinations of adverse social impact. For example, installing required noise attenuation measures will not preclude the Court from considering the social impacts of noise even at mitigated levels.

Based on the judgment, a mitigation measure might be more likely to overcome an adverse social impact if it:

  • has a clear connection with the key social impacts likely to be caused by the project;
  • is a commitment or has enforceable content rather than being a mere recommendation;
  • provides specific guidance as to the substance of the mitigation measure;
  • is tangible, deliverable or likely to be durably effective; and
  • addresses the issues of serious concern to the community.

Using the social impact assessment framework

This decision provides a systematic and comprehensive assessment of social impacts of the project, based on the Guideline. As social impact assessment has growing importance in recent years, project stakeholders across industries have been looking for a reliable assessment framework. Chief Judge Preston's decision could provide what they have been seeking.

Project proponents should consider Justice Preston's framework carefully, starting early in the environmental assessments for their projects – whether new projects or modifications of existing projects.

While the Guideline, and Justice Preston's analysis, clearly apply to mining, petroleum and extractive industries, they could be applied similarly to projects in other industries as well. They may also be influential on approaches to projects in other Australian jurisdictions.