On 25 July 2013, the draft State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Resource Significance) 2013 (Draft SEPP) was released for public comment. The primary purpose of the Draft SEPP is to ensure that the significance of  mineral resources to the State and the region is to considered when determining mining proposals.

BACKGROUND

Our earlier In Brief dated 22 May 2013 discussed the Land and Environment Court’s findings in Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited [2013] NSWLEC 48 (Bulga decision). Significantly, the Court disapproved the proposed extension of the Mount Thorley Warkworth Mine due to its adverse environmental and social impacts, which outweighed the economic benefits of the proposal. 

The Draft SEPP appears to be the NSW Government’s response to the Bulga decision and other recent challenges to approvals for new mines or mine expansions. This is evident from the Frequently Asked Questions document on the Department's website which notes that, although the assessment of major projects has always been about balancing the economic and employment benefits of projects against any potential impacts, there is currently no clear statutory policy that sets out the need to balance the economic significance of the proposal.       

PROPOSED AMENDMENTS

The amendments proposed to the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP) by the Draft SEPP aim to improve investor confidence and increase certainty about decisions relating to mining proposals. In NSW alone, the mining and minerals industries provide over 35,000 people with direct employment and about 86,000 jobs indirectly.

Under the Draft SEPP, consent authorities will now be required to consider the significance of the relevant resource taking into account the following matters (new cl 12AA(1) and (2)):

  1. the economic benefits, both at the State and regional levels, of developing that resource; and
  2. any advice of the Director-General of the Department of Trade and Investment, Regional Infrastructure and Services as to the relative significance of that resource in comparison with other resources across the State having regard to:
    1. the size, quality and availability of that resource;
    2. its proximity to existing or proposed infrastructure;
    3. the relationship of that resource to any existing mine; and
    4. whether other industries or projects are dependent on the development of that resource.

Importantly, in determining a development application for a mining proposal, the significance of the resource is to be the consent authority’s principal consideration (new cl 12AA(3)). Further, the weight to be given by the consent authority to any other matter (for instance, environmental or social impacts) must be proportionate to that matter in comparison to the significance of the relevant resource (new cl 12AA(4)).

However, the consent authority will be required to consider any certification by the Chief Executive of the Office of Environment and Heritage regarding the adequacy of the proposed mitigation measures or biodiversity offsets (new cl 14(3)).

Finally, the Draft SEPP seeks to introduce non-discretionary development standards for noise, air quality, airblast overpressure, ground vibration and aquifer interference (new cl 12AC). If a mining proposal satisfies these standards, the consent authority cannot refuse the development application on the specific grounds to which the standard relates (i.e. noise, air quality, etc) (new cl 12AC(2)).

If made, the Draft SEPP will apply to proposals concerning coal mining, oil shale and mining of other minerals and metals, such as gold and silver mines. The proposed amendments do not apply to petroleum projects such as coal seam gas activities. Once introduced, the amendments will apply to all new development applications and proposals not yet determined.    

The public submission period for the Draft SEPP ends at 5pm on 12 August 2013.

IMPLICATIONS

If the proposed amendments are made to the Mining SEPP, the implications of the Bulga decision will be significantly watered down. Following the Bulga decision, it was open to consent authorities to refuse major coal projects on the basis of environmental impacts, despite the significant economic benefits of such projects. As a consequence of the proposed amendments, consent authorities will be required to treat economic benefits as the primary consideration. However, there will be clear development standards that establish criteria for environmental matters and any advice received from the Office of Environment and Heritage on biodiversity mitigation and offset measures will be elevated in importance.