‘Economic benefits’ hold sway in changes to NSW mining policy

The economic benefits of a mining project will now be the ‘principal consideration’ for decision-makers such as the NSW Planning Assessment Commission when they consider new mining developments and expansions, following changes introduced this month by the NSW Government.

November 2013

UPDATE: Further amendments to the Mining SEPP in the second half of 2015 repealed the provision of central concern in this blog, so that there is no longer an explicit requirement that economic considerations be the ‘principal’ consideration. Other concerns noted in the blog and detailed submission, such as limits on conditions, were not addressed. For more, read our July 2015 submission on the Mining SEPP Amendment 2015 (repealing the prioritisation of resource significance).

The amendments to the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP) apply to coal and other minerals, but not coal seam gas.

The Mining SEPP now prioritises the significance of the mineral resource over other environmental, social and economic considerations in the SEPP, such as:

  • dust and noise pollution affecting local residents
  • limiting truck traffic on local roads near houses and schools
  • compatibility with  other land uses such as farming, villages, vineyards or horse studs
  • protection of water resources, threatened species and biodiversity,  minimising greenhouse emissions and waste, and rehabilitating the land.

Consideration of these matters is to be ‘proportionate’ to the significance of the mineral resource, based on advice from the State mining department.

The amendments limit the conditions that can be placed on mining projects in relation to five environmental and social impacts – cumulative noise levels, air quality levels, air blast overpressure, ground vibration and aquifer interference. If ‘non-discretionary development standards’ for these impacts are met, the project cannot be refused on those grounds, and the decision-maker cannot require ‘more onerous standards’. However, if impacts exceed these standards, decision-makers may still approve the project.

EDO NSW gave detailed comments on the draft amendments, along with many other submitters, although few changes were made and no EDO NSW recommendations were taken up. For example, we suggested that decision-makers should not be required to prioritise the economic benefits of mining as the ‘principal consideration’ ahead of any negative impacts or more appropriate land uses; and that the Mining SEPP should promote the ecologically sustainable development of significant mineral resources (consistent with the existing  Mining SEPP and planning laws).

EDO NSW also proposed that the environmental standards should be improved to meet World Health Organisation recommendations and National Environment Protection Measures; should allow for continuous improvement rather than a ceiling on conditions; and should protect a wider range of residents and sensitive natural areas.

The Planning Department’s website stated that the policy changes ‘aim to increase confidence for investors and the community about how decisions are made on mining proposals.’ The amendments are also intended to require that ‘economic and environmental issues… are properly balanced’.

The policy changes follow a rare successful challenge by the residents of Bulga village, in the Hunter Valley, to the expansion of the Warkworth coal mine beyond 2021. The Land and Environment Court refused the development application, due to significant and adverse noise, dust and social impacts on Bulga residents, and on biodiversity – including endangered plant and animal species. The case also provided scrutiny of the economics behind the mine expansion. Rio Tinto and the Planning Department are now appealing the Court’s decision.

Even the Planning and Assessment Commission’s (PAC’s) original approval of the Warkworth coal mine expansion, under the old rules, observed that the system of approvals for mining was already weighted against local communities. The PAC described the approval of mining developments in NSW as ‘almost inevitable’ when ‘the overall economic benefits of the mines are balanced against the local community impacts.’ It said that ‘in almost all cases’ mines had been approved and local communities ‘have either been radically altered in character or become non-viable.’

The PAC’s comments underline the importance of more robust and balanced environmental, social and economic criteria in development decision-making processes. It also highlights the need for better data and close scrutiny of what NSW gains and loses when major projects are approved. It is important that the worth of our communities – and their social, cultural and environmental fabric – is truly valued.

However, the new weighting of factors under the Mining SEPP will now make the refusal of a mine approval on environmental and social grounds, similar to Bulga, even more difficult.

The new policy is unlikely to achieve the stated aim of requiring that economic and environmental issues are ‘properly balanced’.

By focusing primarily on the economic benefits of developing significant resources, the new policy allows competing and complementary land uses to be downgraded. It prioritises short-term gains, by requiring decision-makers to give ‘principal’ weight to mining a significant resource, even if this may be an unsustainable land use in the circumstances.

It also likely to decrease, rather than increase, the NSW community’s confidence about how decisions are made on mining proposals, and reinforce public perceptions that mining industry regulation, more than any other industry, is ‘too lax’.

*Nari Sahukar is a Senior Policy & Law Reform Solicitor at EDO NSW.