NSW Government response to reviews of Biodiversity Conservation Act 2016 and Local Land Services Act 2013

This article was co-authored by Leon Batchelor.

The NSW Government has published its 'NSW plan for nature' in response to the reviews of the Biodiversity Conservation Act 2016 (BC Act) and the Local Land Services Act 2013 (LLS Act) (Response). The Response states that it delivers on the NSW Government's intentions to reform the Biodiversity Offset Scheme, to stop excess land clearing, and to strengthen environmental protections.¹

The proposed reforms are wide-ranging and comprise legislative changes, development of new spatial tools and data sets, investment in nature, strategic leadership, and seeking to leverage private investment in biodiversity projects or 'natural capital markets'.

NSW Environment Minister, Penny Sharpe, has indicated following the release of the Response that the reforms in relation to the Biodiversity Offset Scheme could be implemented by the end of 2024.² The timing of broader reforms to the BC Act and LLS Act is unclear.

• Background
• What is in? Key reforms supported or 'supported in principle'
• What is out? Reforms 'for further consideration'
• Key takeaways

Background

The review of the BC Act found the current legislative regime was not meeting its objectives, which include the conservation of biodiversity at regional and State scales, and was unlikely ever to do so without significant reform.³

The Review Panel acknowledged that under the current trajectory of biodiversity loss, half of the threatened species in the State would become extinct within the next 100 years.⁴ In the most recent NSW biodiversity outlook report 2024, this trajectory was confirmed together with the fact that the carrying capacity of habitat to support native species had decreased from 31 percent to 29 percent since 2020.⁵

The Review Panel found that the Biodiversity Offset Scheme required a clear 'nature positive' objective in alignment with the Global Biodiversity Framework and that the scheme should be simplified and more broadly and consistently applicable to development and land clearing. Improved transparency and accountability measures were also recommended, following a series of highly publicised credit transactions that led to a parliamentary inquiry and review by the NSW Auditor General.⁶

What is in? Key reforms supported or 'supported in principle'

Amendments to the definition of ESD and BC Act objects

The Government has committed to revising the objects and operative provisions of the BC Act to "set nature on a path to recovery."

The current overarching purpose of the BC Act is to "maintain a healthy, productive and resilient environment for the greatest well-being of the community, now and into the future, consistent with the principles of ecologically sustainable development[ESD]".

The Review Panel considered that the existing principles of ESD are no longer fit for purpose due to their emphasis on protecting and conserving nature that is out of step with global and national ambitions to pursue a 'nature positive' agenda. Other particular objects in the BC Act that are not aligned with restoring biodiversity loss are also likely to be modified.

Amendments to the Biodiversity Offset Scheme and offset hierarchy

In line with the Review Panel's recommendation, biodiversity offsets will remain a feature of environmental regulation in NSW where impacts are genuinely unavoidable. The Response states the NSW Government intends to ensure the offset hierarchy - to avoid, minimise, and then offset impacts on the environment - is applied rigorously and offsets are maintained as a genuine last resort.

To this end, the Government has committed to:

• Amend the BC Act to require the scheme to transition to overall 'net positive' outcomes over time, going beyond the current 'no net loss' standard.
• Introduce a new statutory standard, requiring proponents to demonstrate how they have genuinely avoided and minimised impacts to biodiversity, with a focus on avoiding impacts on species and ecological communities at risk of a serious and irreversible impact.
• A new public register will provide transparency regarding 'avoid' and 'minimise' measures for approved developments.

The NSW Government will also seek to limit conditions under which proponents can transfer an offset obligation to the Biodiversity Conservation Fund (BCF) instead of purchasing and retiring credits.⁷ The practice has been criticised as leading to a reduction in genuine offsets being retired on a 'like-for-like' basis and for failing to achieve biodiversity outcomes within an acceptable timeframe.

Data-informed decision-making

The NSW Government has committed to a range of administrative and technological improvements to ensure that data is accessible, reliable, and fit for purpose.

The Response refers to the need for a "primary source of truth" in the understanding of biodiversity in the State. To this end, it has committed to improve existing environmental information systems and, specifically, the understanding of biodiversity, vegetation and habitat extent, condition, connectivity, and resilience. The Response indicates that, where possible, data will be shared across agencies and with the public.

The improvements could compliment actions being taken by the Australian Government in establishing Environment Information Australia, which, among other matters, will advise on developing a new national standard for environmental data and information and will be responsible for its implementation.⁸

What is out? Reforms 'for further consideration'

A number of key recommendations of the Review Panel have not been supported at this interval.

BC Act will not have statutory primacy

A central recommendation of the Review Panel was to establish the primacy of protections to biodiversity under the BC Act over the operation of other legislation, including the LLS Act.

Under those other laws, landowners have been able to avoid the application of the Biodiversity Offset Scheme by carrying out native vegetation clearing with no or minimal assessment of the impact on biodiversity values.

The Government has indicated it will not assign primacy to the BC Act but has committed to identify opportunities to improve biodiversity outcomes under other relevant laws.

No to 'no go' zones

The Review Panel called for the establishment of 'no go' zones of high biodiversity value that cannot be developed or cleared, such as World Heritage Areas, Ramsar wetlands, and areas of strategic importance to biodiversity, such as habitat corridors and climate refugia. The Review Panel intended that that these zones would be mapped and expand as areas where 'Significant and Irreversible Impact' from clearing or development were identified by consent authorities through the assessment of development applications.⁹

The NSW Government has not supported this recommendation, preferring an approach whereby areas of current and future high biodiversity value are mapped to provide clear guidance to the community and decision-makers about areas where biodiversity impacts should be avoided.

Simplified triggers for the Biodiversity Offset Scheme

Presently for local development, the Biodiversity Offset Scheme is triggered if the proposed development meets an area clearing threshold, is identified on the Biodiversity Values Map or meets the 'test of significance' in section 7.3 of the BC Act.

The test of significance is used to determine whether a proposed development or activity is likely to significantly affect threatened species or ecological communities and whether a Biodiversity Development Assessment Report is required, and the Biodiversity Offset Scheme is triggered.

The Review Panel criticised the test of significance pathway as introducing a level of subjectivity resulting in inconsistent regulation of biodiversity impacts and recommended that the test is removed from the BC Act.¹⁰

The Response suggests that the test of significance will remain a feature of the BC Act and therefore it is unclear whether the entry requirements for the Biodiversity Offset Scheme will be simplified.

The NSW Government has proposed to amend entry thresholds to remove from the scheme its application to small, low-impact local developments and clearing under the StateEnvironmental Planning Policy (Biodiversity and Conversation) 2021.

Amendments to the LLS Act

The NSW Government has supported each of the recommendations of the review of the native vegetation provisions of the LLS Act. Specific actions that are proposed include:

• Amend the Land Management (Native Vegetation) Code 2018 (Native Vegetation Code) to reduce areas approved to be cleared.
• Reinstate caps on equity clearing under the Native Vegetation Code, which allows for paddock trees and associated ground cover of a certain scale to be cleared without approval.
• Finalise the draft Native Vegetation Regulatory Map, which designates land as either regulated or exempt to assist landholders understand the categorisation of their properties. This is intended to end high levels of unallocated clearing.
• Require landholders to notify Local Land Services or obtain approvals from Local Land Services for all parts of the Native Vegetation Code.

The NSW Government will also review compliance and enforcement powers and penalties for unlawful clearing under the LLS Act and BC Act.

Key takeaways

• Nature positive reforms to the BC Act represent significant step-change in how impacts on biodiversity from proposed development and land clearing will be assessed, including the use of offsets.
• Initiatives to improve the quality and availability of nature data within government agencies and publicly will assist the transition towards nature-positive outcomes and provide opportunities for landowners to identify areas to prioritise nature repair and increase participation in nature capital markets.
• Coordinated reforms of other NSW legislation regulating the use of land for development and land clearing will be central to the ability of the BC Act reforms to achieve their stated aims.

Our team of environmental and planning lawyers can assist you in navigating the legal complexities of nature positive development in NSW. Please contact us if you would like further information on the NSW Government's Plan for Nature.

For further NSW planning updates, refer to our Planning Quarterly.

Footnotes