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Focus: Agriculture vs mining: Gateway to more red tape in NSW

5 April 2012

In brief: The New South Wales Government has released its latest round of plans, policies and guidelines aimed at delivering key initiatives in its Strategic Regional Land Use Planning Policy. Partner Jim Parker (view CV) and Lawyer Lara Neate examine the new proposals.

How does it affect you?

  • Major mining and coal seam gas production proposals located on, or within two kilometres of, strategic agricultural land will need to go through a stringent new 'gateway' process.
  • Compliance with the Code of Practice for the Coal Seam Gas Exploration Industry will be a condition of all exploration licences.
  • All exploration licences will include a standard condition regarding effective community engagement.
  • Aquifer interference approvals will be required for various activities, unless the overall proposal passes the gateway process.
  • Once strategic regional land use plans are in force, only development located on strategic agricultural land will require an Agricultural Impact Statement (AIS).

The new range of policies

On 6 March 2012, the NSW Government released its latest round of plans, policies and guidelines aimed at delivering key initiatives in its Strategic Regional Land Use Planning Policy. These include:

  • draft Strategic Regional Land Use Plans for the New England North West and Upper Hunter regions;
  • a draft Aquifer Interference Policy;
  • a draft Code of Practice for the Coal Seam Gas Exploration Industry;
  • Community Consultation Guidelines; and
  • Guidelines for AISs.

These plans, policies and guidelines seek to protect 'strategic agricultural land', and associated water sources, from mining and coal seam gas proposals.

Background

The NSW Government's overarching Strategic Regional Land Use Policy was a key election promise and seeks to protect strategic agricultural land, of which there are two types: biophysical strategic agricultural land (land with high soil fertility and a high level of access to water) and critical industry clusters (concentrations of highly productive industries within a region related to each other, eg the equine industry). In general, restrictions will apply equally to both types of land.

Extensive mapping has been undertaken for the New England North West and Upper Hunter regions, and will be undertaken across the rest of the state at a regional level, to identify strategic agricultural land, and map its relationship to coal and gas resources. This mapping is interactive and can be viewed on the Department's 'have your say' website.

Draft strategic regional land use plans will also be produced for the Southern Highlands and Central West in 2012, and for the Murrumbidgee, Alpine and Western regions by 2015.

Gateway assessment

The independent gateway assessment process will investigate the impacts of state-significant mining or coal seam gas projects that are on or within two kilometres of strategic agricultural land. The gateway process will only apply once the relevant strategic regional land use plan is in force.

A panel of independent experts (from the fields of agriculture and soil science, water, economics and mining) will assess the proposal against specific criteria (eg, the risk of reduction in agricultural productivity and the impacts on highly productive groundwater). The proposal must satisfy a public-benefit test based on a triple bottom line cost benefit analysis. Submissions from the community, councils and government agencies must be sought and considered. Consideration will be given to the impacts of the proposal on aquifers, measured against the provisions of the Aquifer Interference Policy (discussed below).

A proposal must be granted a gateway certificate before the proponent can lodge a development application and proceed to a full merits assessment in the usual course. The gateway determination will be final and binding on the NSW Government.

It is proposed that the Cabinet may declare a project to be an exceptional circumstance project, if the subject resource is of exceptional value to the state. A gateway certificate would not be required and the project would proceed directly to a full merits assessment.

Draft Upper Hunter Strategic Regional Land Use Plan

The area covered by the draft Upper Hunter Strategic Regional Land Use Plan (the UHSRLUP) includes the Singleton, Muswellbrook, Upper Hunter, Gloucester and Dungog local government areas, as well as parts of the Mid-Western Regional (Bylong-Wollar-Ulan corridor) and Cessnock local government areas.

Approximately 16.5 per cent of the region has been mapped as strategic agricultural land. That land covers 12 per cent of mapped coal resources and 14 per cent of mapped coal seam gas resources. The entire Hunter River catchment is covered by the draft UHSRLUP.

The draft UHSRLUP and the draft New England North West Strategic Land Use Plan (NENWSLUP), discussed below:

  • commit to the delivery of a fully costed infrastructure plan for the regions by the end of 2012;
  • require the Department of Planning to prepare a guideline for voluntary planning agreements between mining and coal seam gas companies and councils;
  • consider broader land use issues associated with mining, such as housing, environmental impacts and heritage protection;
  • include mapping of land and waterways with high-value biodiversity. The draft UHSRLUP commits to complete the Upper Hunter Strategic Biodiversity Assessment.

It is proposed that local environmental plans must be amended to bring them into line with the content of strategic regional land use plans.

Draft NENWSLUP

The area covered by the draft NENWSLUP includes Armidale, Dumaresq, Glenn Innes Severn, Gunnedah, Guyra, Gwydir, Inverell, Liverpool Plains, Moree Plains, Narrabri, Tamworth Regional, Tenterfield, Uralla and Walcha local government areas.

Approximately 9.6 per cent of the region has been mapped as strategic agricultural land, overlapping 6.4 per cent of the region's mapped coal resource and 5.6 per cent of the region's mapped coal seam gas resource.
In addition to the matters discussed above, the draft NENWSLUP identifies that a regional air monitoring network will be created for the region, similar to that recently finalised for the Upper Hunter.

Draft Code of Practice for Coal Seam Gas Exploration

The draft code of practice aims to establish a best-practice framework for community relations, land holder involvement and the protection of water resources. It sets minimum standards for coal seam gas exploration licence holders. Compliance with the code of practice will be a condition of all exploration licences.

The code of practice lists 19 overarching objectives and requirements, including obligations that:

  • licence holders make immediate contact with landholders, both in writing and in person;
  • licence holders have an Access Arrangement with all landholders on whose land they will be exploring;
  • licence holders be willing to reimburse all reasonable legal costs, to allow landholders to engage a solicitor to review proposed agreements;
  • compensation is to be paid to offset any inconvenience, noise and land use;
  • exploration companies keep landholders informed of progress and variations in exploration activities; and
  • exploration companies rehabilitate discontinued well sites to their previous state, or as agreed with the landholder, and to a standard accepted by the NSW Government.

Draft Aquifer Interference Policy

This policy explains the licensing and approval process for aquifer interference activities under the Water Management Act 2000 (NSW) and the Water Act 1912 (NSW). It:

  • explains how the volume of water taken from a water source will be licensed and the extent to which trading can occur;
  • outlines the approval requirements for aquifer interference activities (a security deposit will be required to reflect the level of risk of aquifer interference);
  • establishes exemptions (an aquifer interference approval will not be needed if a state significant mining of coal seam gas development has been granted a gateway certificate, or where a development consent is granted where gateway provisions do not yet apply).

The NSW Government is rolling out aquifer interference approvals under the Water Management Act. The first stage requires those involved in aquifer interference activities in groundwater that underlies biophysical strategic agricultural land to hold an aquifer approval. The next stage will require aquifer interference approvals for de-watering bores for coal seam gas extractions and the disposal of water.

Guideline for AIS

Until strategic regional land use plans are finalised, an AIS is required for all state significant development applications for mining and petroleum (including coal seam gas) and all applications for associated state significant infrastructure (such as pipelines) that have the potential to affect agricultural industries or resources. The AIS forms part of the Environmental Impact Statement produced for the project. Following the finalisation of strategic regional land use plans, only development located on strategic agricultural land will require an AIS.

A merits assessment of the AIS will be undertaken by the Department of Planning and Infrastructure in consultation with the office of Agricultural Sustainability and Food Security. The Director General's Requirements (DRGs) will identify matters to be considered for each individual project. Unless varied by the DGRs, an AIS should include:

  • information relating to the site and the region;
  • an assessment of impacts;
  • mitigation measures; and
  • documented consultation with adjoining land-users and government departments.

Guideline for Community Consultation Requirements for the Exploration of Coal and Petroleum, including Coal Seam Gas

All exploration licences will include a standard condition regarding effective community engagement. The standard condition requires:

  • the licence holder to engage effectively with the community in relation to the planning for, and conduct of, activities authorised by the licence, according to the guideline; and
  • an annual report on community consultation to be submitted to the Department of Trade and Investment, Resources and Energy.

The condition does not replace other conditions or statutory obligations requiring additional access arrangements.

Licence holders must undertake genuine and effective community consultation, and must develop a community consultation plan, which includes the following steps:

  • the identification of the community;
  • providing information to the community, including mandatory consultation with local councils within 28 days of being granted an exploration licence;
  • receiving and considering feedback from the community; and
  • responding to complaints and other communication.

Licence holders are subject to reporting requirements, and must maintain a record of community engagement and a complaints register. Compliance with the guidelines will be considered when determining an application for renewal or any other approvals under the exploration licence.

Submissions

The draft documents are on public exhibition until Thursday, 3 May 2012. Interested parties are invited to make submissions, attend public forums and information sessions, and participate in the online discussion. A public forum was held in Gunnedah on 20 March 2012 and drop-in sessions were held in Moree, Narrabri, Tamworth and Armidale throughout March. Drop-in sessions and public forums will be held in Singleton, Muswellbrook, Gloucester and Dungog throughout April, with details available on the Department's 'have your say' website.

For further information, please contact:

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