A new regime for biodiversity assessment will commence on 25 August 2017, changing the way in which biodiversity impacts are both assessed and addressed in the development and use of land throughout the State.

Here we address the key changes this will bring for developers and some of the proposed benefits, as well as likely challenges, that the new regime will present.

What is changing?

The new regime aims to have biodiversity impacts of new development assessed and managed in a transparent and consistent way, with the objective of delivering certainty to developers and to the environment. This is grounded in a reliance on an objective method for assessment which invests heavily in the idea that biodiversity losses on one site can be offset on other sites across the State.

Under the new Biodiversity Conservation Act, certain development proposals will require an accredited ecologist to prepare a biodiversity development assessment report (BDAR).

The key part of these reports will be the application by the ecologist of the Biodiversity Assessment Method (BAM). The BAM is a highly technical, metric-based methodology for determining the impacts of proposed development on biodiversity.

By application of the BAM, the BDAR will identify what steps need to be taken to avoid and mitigate impacts of the proposed development on biodiversity. For impacts that cannot be avoided/mitigated, the report will identify a biodiversity offset credit requirement. That requirement will then translate into a condition of development consent where the developer must obtain biodiversity offset credits (or pay money into an offsets fund).

The BAM has been formulated on the principle that there be no net loss to biodiversity as a consequence of new development.

This replaces the regime of species impact statements under the Threatened Species Conservation Act.

Like species impact statements, a BDAR will only be required if a certain threshold is met – being that the development is likely to significantly affect threatened species. There are a number of ways to determine this under the legislation (satisfying any one will act as a trigger):

  • An application of a 5-part test of significance (which is the same as the current threshold test of significance)
  • If the proposed development is in a ‘declared area of outstanding biodiversity value’
  • If the ‘biodiversity offsets scheme threshold’ is met – which is determined by reference to how much clearing of native vegetation is required relative to the size of the lot to be developed. The biodiversity offsets scheme threshold will also be exceeded if clearing is proposed on land within a ’sensitive biodiversity values land map’

The application of the BAM may result in a finding that the proposal has the potential for ‘serious and irreversible impacts on biodiversity values’.

  • For development that is not state significant, the consent authority cannot consent to the proposal if the proposal is likely to have serious and irreversible impacts.
  • For state significant development/infrastructure, if the Minister (as consent authority) forms the opinion that serious and irreversible impacts are likely, then the Minister can still approve the development if the Minister also considers those impacts and determines whether there are additional and appropriate measures that can minimise those impacts.

More about biodiversity offsets

Developers may be familiar with biodiversity offsetting under the NSW biobanking scheme or under the offsets policy for major projects. This new regime incorporates elements of these existing schemes.

The new biodiversity offsets scheme can be summarised as follows:

  • Biodiversity offset credits are created after a biodiversity stewardship agreement is entered into between a landholder and the Minister for Environment. The agreements require the landholder to carry out specified ‘management actions’ on the site and the actions are funded by way of payment from a Biodiversity Stewardship Payments Fund.
  • A biodiversity stewardship site assessment report is prepared by an accredited assessor to determine the number and type of credits created for a particular site. The report also involves an application of the BAM.
  • Credits are traded where a proponent wants to carry out development and needs to offset impacts by ‘retiring’ a certain number and class of biodiversity offset credits.
  • The Act requires credits of a ‘like-for-like’ type to be traded. The Biodiversity Conservation Regulations provide detail on what this entails and also contains rules about what can be done when a like-for-like credit is not available on the market.
  • Rather than obtaining credits themselves, a developer can choose to pay into the Biodiversity Conservation Fund (the Fund). The Biodiversity Conservation Trust, as manager of the Fund, then becomes responsible for securing the required offsets.

The consent authority can vary the offset requirement calculated by the accredited assessor, however any reduction in the offset obligation requires concurrence from the Office of Environment & Heritage. A variation requires the consent authority to have formed the view that the reduction is justified having regard to the environmental, social and economic impacts of the proposal. No consultation is required if the conditions of consent are consistent with the biodiversity development assessment report (or require additional offsetting).

Whilst the new regime has been pitched as bringing greater cost certainty to developers, we expect there will be a period of adjustment which will impact upon how quickly this will be achieved.

  • The costs of engaging an accredited ecologist to prepare the report are likely to be significant.
  • Because of the highly technical nature of the BAM, it will be difficult at first for developers to predict their likely offset costs in the early project planning stage.
  • There is also a considerable unknown in how the offset market will develop. As a market-based instrument, the cost of an offset credit will be directly related to the level of demand and supply. This will only properly be understood once the market becomes more established and the willingness of private landholders to offer up their land becomes known.
  • Once developers become more familiar with the application of the BAM and the offset market develops, costs will become more predictable.
  • The consent authority will be able to require additional offsetting, over and above what is required by an application of the BAM, without concurrence from OEH (OEH concurrence is only required if a consent authority proposes to reduce the offsetting obligation). Depending on how often local councils may choose to exercise that discretion, this will impact on the extent of transparency and cost certainty being promised by the NSW Government.

Changes to native vegetation clearing absent other development

There are also significant changes to how clearing of native vegetation is being treated. This applies when the clearing is not part of new development that requires development consent and so the process described above is not triggered.

In rural areas, clearing of native vegetation will also be subject to a much simplified process under the Local Land Services Act (which repeals the controversial Native Vegetation Act).

A Native Vegetation Regulatory Map (Regulatory Map) will identify categories of land across the state:

  • Category 1 – ‘Exempt land’ which will not require any approval for the clearing of native vegetation;
  • Category 2 – ‘Regulated Land’ on which clearing of native vegetation may be carried out:
    • with approval of the Native Vegetation Panel; or
    • without approval but in accordance with an allowable activity; or
    • without approval but in accordance with a land management code
  • Category 3 – ‘Excluded Land’ being land not captured by this process (ie urban land)

This Regulatory Map and categorisation generally applies to clearing for agricultural purposes but may be relevant for developers who wish to maintain developable land pending rezoning and a development application.

Where Native Vegetation Panel approval is required, the BAM will be applied and the biodiversity offsets scheme will be accessed.

For clearing of native vegetation in urban areas which does not otherwise require development consent, a new SEPP will create a trigger for approval from the Native Vegetation Panel only if the biodiversity offsets scheme threshold is exceeded. In this case, the BAM will be applied and the biodiversity offsets scheme will be accessed.

There will be a change from the existing requirement for clearing proposals to ‘maintain or improve environmental outcomes’ to the BAM’s ‘no net loss’ standard.

However, for clearing native vegetation below the threshold (or non-native vegetation), the local council DCP will effectively determine whether any permit is required and what process is required for approval. Tree preservation clauses in LEPs will be repealed.

What's next?

The Government is finalising material that will support the operation of the new regime (including the relevant regulations, the BAM, the new Vegetation SEPP and the relevant mapping) with intended commencement on 25 August 2017.