What has happened?

For the second time in 2 months, the NSW Land and Environment Court (LEC) has overturned a decision by the Planning Assessment Commission (PAC) to approve the expansion of an existing coal mine.

On 15 April 2013, Chief Justice Preston handed down a lengthy judgment in Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure & Anor [2013] NSWLEC 48 (Proceedings). 

In the Proceedings, the Bulga Milbrodale Progress Association Inc (Progress Association) appealed against the merits of a decision by the PAC (under delegated authority from the Minister) to grant an approval under Part 3A of the Environmental Planning and Assessment Act 1979 (EP&A Act) (a Project Approval) for the Warkworth Extension Project. 

Preston CJ upheld the appeal and determined that a Project Approval should not be granted for the Extension Project having regard to its ‘significant, adverse, biological diversity, noise and dust, and social impacts …’. 

This case note contains a brief summary of the key findings of the LEC. References in [square brackets] are references to paragraphs in the judgment. 

Background

The Warkworth mine is an open cut coal mine located in the NSW Hunter Valley several kilometers north east of the village of Bulga. The mines operates under a 2003 development consent granted under Part 4 of the EP&A Act. The Mount Thorley open cut coal mine is located in the same vicinity.  Although the Mount Thorley and Warkworth mines are separately owned and operated, in practice they are managed together as a single operation (the Mount Thorley-Warkworth mine complex): [267].

On 3 March 2010, the operator of the mine applied for an approval under (the now repealed) Part 3A of the EP&A Act for an extension of the mine (Extension Project).  The proposed extension would involve increases to the extent of land to be mined (including areas that are required to be permanently protected from coal mining under the 2003 development consent) and the lifespan of the mine.

On 3 February 2012, the PAC granted a Project Approval for the Extension Project.

The Proceedings

The Proceedings were heard in the Class 1 jurisdiction of the LEC. Judgment was handed down on 15 April 2013 (over 3 years after the project application was lodged and more than 1 year after approval by the PAC).

  1. Key issues raised by the Progress Association

The Progress Association submitted that the Extension Project should not be approved having regard to its significant and unacceptable impacts in terms of (at [12]):

  • impacts on biological diversity, including on … endangered ecological communities, that are not avoided, mitigated, offset or otherwise compensated;
  • noise impacts and dust emissions on the residents of Bulga and the surrounding countryside;
  • social impacts on the community of Bulga;
  • economic issues including that the full environmental costs are not internalised by the Project; and
  • the public interest.
  1. The key findings of the Court
  1. Biological diversity
  • Preston CJ found that the impacts of the Expansion Project on biological diversity were likely to be significant and that, in order determine whether those impacts are acceptable, it is necessary to consider the proposed measures to avoid, mitigate and offset them.
  • His Honour found that the Expansion Project proposed no avoidance measures and that the proposed mitigation measures and offset package were inadequate [153].
  • The inadequacy of the offsets package was stated to be ‘a fundamental matter to be considered in the decision-making process, to which significant weight should be assigned’ [255].
  1. Noise impacts
  • Preston CJ held that he could not be satisfied that the proposed noise impact conditions:
  1. set appropriate noise criteria; or
  2. were adequate to mitigate noise impacts.
  • Amongst other things, his Honour was critical of the proposed use of combined noise criteria for the Warkworth and Mount Thorley Mines.  His Honour held that such conditions (at [373]-[374]):
  1. were of doubtful legal validity; and
  2. The difficultly in monitoring and enforcing such conditions are reasons why they should not be used.
  1. Dust and air quality
  • Preston CJ arrived at similar conclusions in respect of the likely dust and air quality impacts. In particular, his Honour held that:
  1. the proposed combined air quality criteria for the Warkworth and Mount Thorley mines were of doubtful legal validity and would be difficult to monitor and enforce compliance (at [401]); and
  2. that no confident conclusion could be reached that the air quality impacts of the Expansion Project would be acceptable in practice (at [403]).
  1. Social impacts
  • Preston CJ concluded that the Expansion Project:
  1. would have some positive social impacts, particularly in the form of continuing employment in the local and broader community’; but
  2. there will be significant negative social impacts arising from continuation of adverse impacts of noise and dust, visual impacts, and adverse impacts arising from a change in the composition of the Bulga community’.

His Honour held that the negative social impacts must be taken into account when determining whether the Project should be approved.

  1. Economic issues

The proponent had undertaken economic analyses of the project including an ‘Input-Output Analysis’ (IO Analysis) and ‘Benefit-Cost Analysis’ (BCA). 

His Honour held (at [496]) that the results of these analyses were of limited utility in resolving the ‘polycentric problem’ of whether to grant a Project Approval.  In particular, the analyses were of limited value in assisting his Honour to decide whether he could:

‘… reach a state of satisfaction as to the nature and extent of impacts in considering each and all of the relevant matters, the weight I should assign to each matter, and the balancing of the matters, to determine whether the Project should be approved or disapproved’.

Implications

The judgment contains a helpful description of the approach the LEC will take when reviewing the merits of a decision to grant a Project Approval. In particular, it outlines the Court’s expectations in respect of the assessment and management of the environmental and social impacts of mining.

The judgment also casts doubt on the validity of conditions of approval which include combined noise or air quality criteria for adjacent mine(s). Such conditions have become more common as a tool to manage the cumulative impacts of neighbouring mining projects. The use of such conditions for future mining development will need to be carefully considered in the light of this judgment.

An appeal against Preston CJ’s decision in the Proceedings is pending.