Court rejects mining proposal based on ESD and social impact

Planning update - 29 April 2013

Summary

  • Unacceptable environmental and social impacts were the drivers of the NSW Land and Environment Court's (LEC) decision to reverse the Minister for Planning and Infrastructure's (Minister) approval for an extension of an already existing open cut coal mine in Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited.1 
  • The decision confirms the importance of social and ecological sustainability in assessing development. 
  • The mining industry has expressed concern regarding certainty of approval decisions, given the level of investment in mining proposals. 
  • In this eBulletin, we discuss the decision and its implications for future mining proposals.   

 

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Background

On 3 February 2012, the Minister approved a project application for Warkworth Mining Limited (Warkworth) to extend its mining operations.

Bulga Progress Association Inc. (the Association), as an objector, appealed the Minister's decision to the LEC on the basis that the mine extension would have a significantly adverse impact on biological diversity and cause irreversible social damage to the Bulga community. 

On 15 April 2013, the LEC overturned the Minister's decision to approve Warkworth's project application.

 

Environmental, social and economic impacts - the LEC's view

Impact on biological diversity

Warkworth proposed to clear native vegetation classified as endangered ecological communities (EEC) (originally protected under the existing development consent) which would result in fragmentation of native vegetation. The proposal involved clearing:

  • 68ha of Warkworth Sands Woodlands (WSW). WSW is a unique ecological community with approximately 464.8ha remaining, found only in the Hunter Valley. 
  • 378.4 ha of Central Hunter Grey Box-Ironbark Woodland. Only 27 remnants greater than 100ha exist. 
  • 30.5ha of Central Hunter Ironbark-Spotted Gum-Grey Box Forest, of which 18,306ha remain and only 34 remnants greater than 100ha exist. 
  • Hunter Lowland Redgum Forest, of which less than 500ha remains.

Warkworth proposed no avoidance measures and few mitigation strategies to reduce the scale and intensity of the impact on biological diversity.

The LEC concluded that the direct offset and compensatory measures would not result in satisfactory protection and conservation, or improve or maintain the affected EECs.

Noise levels and social impact

The LEC noted that: 

  • the noise impacts would increase with the extension of mining operations; 
  • an appropriate noise criterion was not applied when formulating the noise conditions; 
  • the mitigation strategies proposed were ineffective, inappropriate and difficult to enforce; and 
  • more properties would be exposed to increased noise levels resulting in the acquisition of further properties and resulting in adverse impacts from the change in composition of the community and "solastalgia" (loss of a place).

Economic issues

The LEC was not satisfied that the economic benefits of coal mining to employment and the NSW economy outweighed the negative environmental and social impacts on the Bulga community.

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Key lessons from this case

Biological diversity 

  • Addressing impacts on biological diversity involves (in order of priority): avoidance and mitigation, followed by offset and compensatory measures. 
  • Offset and compensatory measures alone will not be enough to address the impacts on biological diversity. 
  • Avoidance and mitigation strategies should operate to specifically avoid impacting on biological diversity, while offset and compensatory measures should address any residual impacts after the application of avoidance and mitigation measures. 
  • The LEC said that Warkworth's "proposed biodiversity offsets and compensatory measures would not provide sufficient and measurable conservation gain for the particular components of biological diversity impacted."2 The Court then discussed the specific offset measures that would provide "sufficient and measurable conservation gain", including that: 
    • direct offsets should be traded across the same ecological communities; 
    • offsets must ensure the long term viability and functionality of the ecological community affected; 
    • an upfront offset ratio (the area of existing EEC to the area of EEC cleared) is recommended as an appropriate minimum and a long term offset ratio (the combined area of existing EEC and rehabilitated EEC to the cleared EEC area) should then be applied; 
    • successful restoration of EECs is evidence of an effective offset measure; and 
    • compensatory measures are limited in use and do not replace direct offset strategies.

Noise assessment 

  • The NSW Industrial Noise Policy should be the appropriate criteria to consider when formulating noise conditions, and significant departures from it are unlikely to be supported. 
  • Noise mitigation strategies that monitor the acoustics of mining equipment and the acquisition of noise-affected properties are unlikely to be supported, given the problems with monitoring and enforcing noise conditions and the social impact of property acquisition.

Social and economic assessment 

  • Objective data, in combination with interviews, surveys and observations among a variety of supporters and objectors, will provide a more complete analysis of the social and economic impacts of a project proposal. 
  • An evaluation of the economic impact of approving or disapproving the mining extension (input-output analysis) and the benefits and costs of the project (benefit cost analysis) in assessing the positive and negative economic impacts of a project is merely a guide and is not determinative.

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Message for mining projects

  • Mining proposals must thoroughly justify and balance the impact of the proposed development. 
  • Biodiversity and social impacts are given considerable weight in determining whether a mining proposal should be granted approval. 
  • Avoidance and mitigation will take precedence over offset and compensatory measures in addressing environmental and social impacts of the proposed development.

Authors
Yin Chiew, Lawyer
Alice Spizzo, Partner 

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Further information


1 [2013] NSWLEC 48.

2  Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited [2013] NSWLEC 48, para [202] per Preston CJ.

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