Balancing act: NSW Government to emphasise resource significance in mining applications

Key Points:

The amendments to the Mining SEPP seek to guide the decision-maker's weighting of the matters that must be taken into consideration, and are likely to change the decision-making framework for determining mining applications.

The NSW Government has released a consultation draft of amendments to a planning policy aimed at emphasising the relative importance of economic benefits over other factors to be considered in determining applications for planning approval of major mining projects.

Proposed changes

The proposed amendments have been interpreted by some as a response to the April 2013 Land and Environment Court decision of Bulga Milbrodale Progress Association v Minister for Planning and Infrastructure, in which planning approval for the expansion of the Warkworth mine in the Hunter Valley of NSW was refused by the Court on merit appeal, a decision which overturned the Minister for Planning's approval of the project. The Court held that the adverse impacts on biodiversity and the amenity of the local community outweighed the economic benefits of the project.

The draft would amend the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP), which prescribes some of the matters for consideration by a consent authority when determining an application for planning approval of mining developments. The consent authority for mining projects will in many cases be the Minister for Planning, because of the projects' constituting State Significant Development (although the Minister may delegate this role to the Planning Assessment Commission).

Currently, the matters for consideration prescribed in the Mining SEPP are:

• compatibility with other land uses in the vicinity;
• compatibility with other mining, petroleum or extractive industry in the vicinity;
• natural resource management and environmental management;
• efficiency of proposed resource recovery;
• transport impacts; and
• rehabilitation of land.

The key amendments will alter the decision-making process for such projects by:

• Making the "significance of the resource" in terms of economic benefits to the State and the region a mandatory consideration and the "principal" consideration when deciding whether or not to grant consent;
• Requiring the decision-maker to take into account any advice from the Director-General of Trade and Investment, Regional Infrastructure and Services regarding the relative significance of the resource compared with other resources in NSW in terms of its:
• • size, quality and availability;
  • proximity to existing and proposed infrastructure;
  • relationship to any existing mine; and
  • importance to other industries or projects which may be dependent upon its development.
• Requiring the decision-maker to weigh the other matters for consideration under the Mining SEPP in terms of their relative importance in comparison with the significance of the resource.
• Specifying non-discretionary development standards for noise levels, air quality, airblast overpressure, ground vibration and aquifer interference, so that if an application complies with those standards, impacts on those subject matter cannot form the basis for refusing the application (although an application that does not comply may still be approved); and
• Requiring a consent authority to consider any certification by the Chief Executive of the Office of Environment and Heritage (OEH) that measures to mitigate or offset biodiversity impacts will be adequate.

Implications

In the Bulga decision, the Chief Judge noted that legislation rarely specifies the weight that a decision-maker should give to the various considerations that it must take into account when making an administrative decision. Decision-makers are required to subjectively "evaluate the relative importance of the relevant matters, each compared to the others." Once this has been done, the decision-maker must balance the weighted matters against each other.

The amendments to the Mining SEPP seek to guide the decision-maker's weighting of the matters that the Mining SEPP says must be taken into consideration. In that regard the amendments are likely to change the decision-making framework for determining mining applications, through elevating the significance of a resource to be the "principal" consideration under the Mining SEPP.

However, the matters which are prescribed in the Mining SEPP are not the only matters that are relevant to the determination of such an application. The parent legislation of the Mining SEPP, the Environmental Planning and Assessment Act 1979 (NSW) (Planning Act), lists in section 79C numerous matters for consideration in planning applications under Part 4 of the Planning Act (which mining projects generally will fall under). The provisions of policies such as the Mining SEPP are just one of many considerations, with others including "the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality" and "the public interest". There is likely to be scope for the decision-maker to ultimately determine what weight to give to each of these considerations.

The specification of non-discretionary development standards for noise, air quality, airblast overpressure, ground vibration and aquifer interference, and the altered weighting of considerations, are likely to raise issues in terms of how those standards relate to the factors that a consent authority must take into account under section 79C of the Planning Act. The amendments also indicate that the consent authority must take into consideration (but not necessarily accept) any certification by the Chief Executive of OEH that biodiversity impact mitigation or offset measures will be adequate.

We suggest that parties with an interest in these proposed amendments carefully consider their terms and consider putting forward a submission to the Department of Planning Infrastructure.

Submissions on the draft amendments to Mining SEPP must be lodged by 12 August 2013.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.