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Client Update: Resource significance no longer to be key consideration in NSW mining project approvals

8 July 2015

In brief: The NSW Government has released a proposal to amend the state environmental planning policy governing the assessment of mining proposals, to remove the requirement that the principal consideration be the significance of the resource and economic benefits of developing the resource. Partner Bill McCredie (view CV) and Senior Associate Naomi Bergman report on the proposed removal of this requirement, less than two years after its introduction.

How does It affect you?

  • The significance of a resource will no longer be the principal consideration for a consent authority when determining whether to grant development consent to a proposed mining development.
  • By reducing the weight to be given to economic considerations, the amendment will elevate the relative importance of environmental and social considerations, and may put a number of future mining proposals at risk of refusal.

Background

In November 2013, we reported on the insertion of a new provision in State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP) that made resource significance the principal consideration in the assessment of mining proposals.

Clause 12AA of the Mining SEPP currently requires a consent authority to consider the significance of the resource that is the subject of the application, having regard to the economic benefits of developing the resource (such as employment generation and expenditure, including capital investment, and the payment of royalties to the state) and any advice by the Secretary of NSW Trade & Investment regarding the relative significance of the resource in comparison with other resources across the state.

Proposed amendment

Yesterday, 7 July 2015, the NSW Government released a draft amendment to the Mining SEPP, proposing to remove clause 12AA, thereby reversing the amendment made in 2013.

The key objective of the amendment, according to the Government's media release, is to remove the provision making the significance of the resource the principal consideration under the Mining SEPP.

However, the draft amending instrument goes much further. Not only will clause 12AA(4) (the 'principal consideration' clause) be removed, the general requirement under clause 12AA(1) to consider resource significance and economic benefits will be repealed. Accordingly, there will no longer be any express requirement under the Mining SEPP to consider resource significance or economic benefit.

On the other hand, provisions of the Mining SEPP that expressly require consideration of:

  • the compatibility of a proposed mine with other existing and approved land uses;
  • impacts on water resources, threatened species and biodiversity; and
  • the greenhouse gas emissions of a project,

will remain, arguably creating a relative imbalance between environmental, social and economic considerations under the policy.

Implications

While the economic benefits of a development will still be a relevant consideration for a consent authority in determining an application under section 79C of the Environmental Planning and Assessment Act 1979 (NSW), the proposed amendment to the Mining SEPP will significantly reduce the weight to be given to economic considerations in the assessment of mining projects.

In addition, the amendment (if made) would bring an end to the existing process whereby the advice of NSW Trade & Investment may be sought regarding the relative significance of a resource in comparison to other available resources across the state, and the requirement for the consent authority to consider that advice. In the absence of clause 12AA, there is no similar requirement for a consent authority to consider the comparative availability and quality of a resource when assessing a mining project.

The proposed amendment has been touted as restoring balance between environmental, social and economic considerations. In practice, it is likely to elevate the relative importance of environmental and social considerations and sideline resource significance as a relevant consideration. This may put a number of future mining projects at risk of refusal.

If the Government's intention is to reset the balance between environmental, social and economic considerations in the assessment process, then resource significance should remain as a relevant consideration under the Mining SEPP (albeit not the principal consideration).

As no transitional provisions are currently proposed, the amendment (if made) would affect all mining applications currently on foot, including applications currently before the Planning Assessment Commission.

Submissions

Submissions on the proposed amendment are open until 21 July 2015.

 

For further information, please contact:

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