Landowners can generate income by selling biodiversity credits.
Biobanking is a market-based scheme created to offset the loss of biodiversity on sites as a result of development. The NSW Biobanking scheme commenced in the middle of 2008 by virtue of the new Part 7A of the Threatened Species Conservation Act 1995 (NSW).
Why are developers interested?
The Biobanking scheme is an alternative to the "7 Part Test" for assessment of threatened species (which may include preparing a species impact statement) under the Environment Planning and Assessment Act 1979 (NSW).
Why are landowners interested?
Landowners can generate income by selling biodiversity credits in relation to land that may not otherwise be developed by protecting native vegetation or threatened species or both.
Landowners may establish biobank sites by entering into biobanking agreements with the Minister.
The landowner's promise to maintain or improve biodiversity values on a biobank site creates biodiversity credits. These biodiversity credits may be bought and sold.
A purchaser of biodiversity credits may offset the loss of biodiversity on a development site by retiring biodiversity credits.
A developer can obtain a biobanking statement from the Director General which sets out the measures and the biodiversity credits required to be retired for its development.
A biobanking statement can be obtained at any time before development consent is issued. Developers are not required to retire the credits until after development consent is granted.
The Director General may refuse to issue a biobanking statement where the developer has not demonstrated that all cost-effective measures are being carried out to minimise any negative impact of the development on biodiversity values.
The underlying legal structure is that the developer's development consent will require the retirement of a specific number and type of biodiversity credits, which the developer will satisfy by purchasing biodiversity credits from a selling landowner.
A biobanking agreement is registered on the title to the land and is binding on landowners, their successors in title and mortgagees in possession.
A biobanking agreement requires landowners to undertake management actions. Management actions include controlling weeds, controlling erosion, retaining dead timber, monitoring and record keeping.
Landowners must report (including annual reports) on compliance with the biobanking agreement and are entitled to management payments from the BioBanking Trust Fund to assist with the cost of carrying out the management actions.
BioBanking Trust Fund
The BioBanking Trust Fund is managed by a fund manager appointed by the Minister.
When a biodiversity credit is first transferred from one landowner to another (usually on the first sale of the biodiversity credits) the present value of all management payments under a biobanking agreement must be paid into the BioBanking Trust Fund.
Payments to the BioBanking Trust Fund are made in priority to payments to the landowner.
The money paid into the BioBanking Trust Fund is held on trust for the landowner.
Payments to the landowner start when 80% of the total fund deposit has been received by the BioBanking Trust Fund.
No management payments will be made if there are insufficient funds available in the BioBanking Trust Fund.
Dealing with the land
Landowners wanting to transfer ownership of land or subdivide land the subject of a biobanking agreement must notify the Director-General.
If the land is to be subdivided, the landowner's obligations under the biobanking agreement will be separated and attributed, as appropriate, to the relevant parts of the subdivided land.
If a lease or licence is entered into over the land, that lease or licence must incorporate the relevant requirements of the biobanking agreement and be consistent with the biobanking agreement.
Varying or ending a biobanking agreement
The Minister may vary or terminate a biobanking agreement if it will not negatively impact the biodiversity values of the biobank site.
If a landowner does not comply with its obligations under a biobanking agreement the Minister may order a landowner to carry out work at their own cost to rectify the non-compliance.