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The implemenTaTion of BioBankingin The nSW planning SySTema revieW of The BiodiverSiTy offSeTS Banking Scheme propoSed By The deparTmenT of The environmenT and conServaTion
alessandra kane | Student id: 3025586
10 november 2006
PLA
N 4
132
- Th
esis
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oje
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List of Figures....................................................................................................... 3 List of Abbreviations............................................................................................. 4 1 Introduction ....................................................................................................... 5
1.1 Objective..................................................................................................... 7 1.2 Thesis Methodology.................................................................................... 9
2 Biodiversity...................................................................................................... 10 2.1 What is biodiversity?................................................................................. 10 2.2 The importance of biodiversity.................................................................. 12 2.3 Key Threats to Biological Diversity ........................................................... 14
3 Methods for conserving biodiversity ................................................................ 22 3.1 Framework for approaches to conserving biodiversity.............................. 22
3.1.1 Scope of a Framework ....................................................................... 23 3.1.2 Other Challenges ............................................................................... 24
3.2 The use of markets in conserving biodiversity .......................................... 25 3.3 Offsets ...................................................................................................... 27
4 Biodiversity Conservation in Australia ............................................................. 35 4.1 Policies and legislation for the conservation of biodiversity nationally ...... 35 4.2 Policies and legislation for the conservation of biodiversity in NSW ......... 37
4.2.1 National Parks and Wildlife Act, 1974 ................................................ 38 4.2.2 Native Vegetation Act 2003................................................................ 39 4.2.3 Threatened Species Conservation Act 1995...................................... 39 4.2.4 Environmental Planning and Assessment Act, 1979.......................... 41
4.3 Market and monetary mechanism within the EP&A Act 1979 for conservation ................................................................................................... 44
4.3.1 Mount Owen Coal Mine...................................................................... 45 5 The Biodiversity Banking and Offsets Scheme................................................ 48
5.1 Overview of the scheme ........................................................................... 49 5.2. Operation of the Scheme......................................................................... 51
5.2.1 Biobanking assessment methodology................................................ 51 5.2.2 Biobank site identification and Biobank agreement............................ 52 5.2.3 Biodiversity credits ............................................................................. 54 5.2.4 Biodiversity Statements certification................................................... 55 5.2.5 Legislation.......................................................................................... 56 5.2.6 Management of the scheme............................................................... 58
6 Review of the Scheme .................................................................................... 61 6.1 Conserving NSW or Constructing NSW?.................................................. 62
6.1.1 Areas of high biodiversity value.......................................................... 62 6.1.2 Participation by National Parks? ........................................................ 63 6.1.3 Fragmented habitats .......................................................................... 63 6.1.4 Biobanking and the Planning System................................................. 64
6.2 Implementation of the Scheme ................................................................. 69 Conclusion ......................................................................................................... 72 Bibliography ....................................................................................................... 74 Appendix 1 ......................................................................................................... 80
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List of Figures
Figure 2.1 - Biodiversity and Ecosystems
Figure 2.2 -Threatened numbers in NSW
Figure 2.3 - Remnant Cumberland Plain Woodlands
Figure 2.4 - Cumberland Plain Woodlands: A threatened Ecological
Community
Figure 2.5 - Projected population growth for the regions
Figure 2.6 - Spatial distribution of Australia’s population
Figure 2.7 - Vegetation clearances in NSW.
Figure 3.1 - Policy instruments to protect biodiversity in Australia
Figure 3.2 - Types of market instruments
Figure 3.3 - Law of Diminishing Returns
Figure 3.4 - Wetland Mitigation Banking Scheme
Figure 4.1 - List of Acts protecting biodiversity in NSW
Figure 4.2 - Map of protected areas through National Parks and Reserve
system in NSW
Figure 4.3 - Mount Owen Mine biodiversity offset areas
Figure 5.1 - The Biobanking Scheme in action
Figure 6.1 - Biobanking in the development assessment process
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24
27
30
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37
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48
60
67
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List of Abbreviations
Biobanking – refers to the Biodiversity Banking and Offsets Scheme
DEC – Department of the Environment and Conservation
EP&A Act 1979 – Environmental Planning and Assessment Act, 1979
EPI – Environmental Planning Instrument
SIS – Species Impact Statement
TSC Act, 1995 – Threatened Species Conservation Act, 1995
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1 Introduction
Biodiversity is recognised globally as an integral part of ecosystems and the
biosphere, upon which all life on earth depends. Biodiversity is considered to be
the variety of life contained within species, genetics and ecosystems with
significant benefits to the economy, environment, science and culture.
The loss of biodiversity is occurring globally on every continent, through the
destruction of habitats, extinction of species and increasing numbers of species
and ecological communities that are classified as endangered, threatened or
vulnerable.
Within Australia and New South Wales (NSW), the number of species,
populations, ecological communities and habitats listed as endangered is
increasing as a result of broad scale land clearing of flora and fauna habitats to
accommodate agriculture and urban development.
As the population of NSW continues to grow, balance is required between urban
development and the conservation of biodiversity and threatened species.
Current best practice approaches to conserving biodiversity are through the
establishment of National Parks and nature reserves by public authorities.
However, the cost of acquiring land solely for conservation purposes is becoming
increasingly high, particularly where habitats with high biodiversity qualities or
threatened species are located along the coastal areas of NSW or in close
proximity to established urban areas, where prime development land is located.
As a solution, conservation of biodiversity is encouraged on privately owned land
through a combination of strategies, legislation and funding schemes. Alternative
methods such as the use of market mechanisms including offsets and tradeable
permit rights for environmental matters are used in NSW, but this is on a small
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scale and market tools relating directly to biodiversity have not been
implemented to their full extent in a formal system.
The Department of the Environment and Conservation (DEC) recognises the
need for urban development to be balanced with halting the loss of biodiversity
and the importance of the contribution that private land owners can potentially
have in achieving this.
As a result, DEC has developed a market based approach scheme known as the
Biodiversity Banking and Offsets Scheme (BioBanking), which will be formally
implemented through the addition of a new Part 7A to the Threatened Species
Conservation Act, 1995 (TSC Act, 1995).
Biobanking proposes to allow for the loss or impact of biodiversity as a result of a
development, if the damage is offset on a site elsewhere which contains the
same biodiversity values.
The scheme will create an environmental market specifically aimed at the trading
of biodiversity credits to offset development impacts so that there is no net loss of
biodiversity. Private land owners that enter into an agreement with the Minister
for the Environment to nominate their land as a Biobank site will be able to
generate credits through management actions that improve or maintain
biodiversity. Where a development is likely to have an impact on biodiversity, a
developer may purchase these credits to offset the impact of a development.
In addition, the scheme will streamline the process of development assessment
by simplifying the assessment of sites containing threatened species, populations
or ecological communities. The Scheme will provide a developer with the option
of submitting a Biobanking Statement, which outlines the number and types of
credits purchased by the developer, demonstrating that the impacts of
biodiversity have been considered upfront and have been offset. The alternative
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is to prepare a Species Impact Statement, which must then be assessed in the
development assessment process, lengthening the time required for the process.
1.1 Objective
This thesis examines the proposed scheme as a market based tool to conserve
biodiversity and its potential implementation in the planning system and the
development assessment process.
The purpose of this thesis is to examine whether the scheme is likely to
contribute to the conservation of biodiversity, whether it will hinder or streamline
the development assessment process with particular regard to Species Impact
Statements and its general implementation in the NSW planning system.
The thesis is separated into five chapters to explain the concept of biodiversity,
the theory behind the scheme, how it will operate and reviewing its likely success
as a market tool for conservation in the planning system.
Chapter 2 outlines the concept of biodiversity and the theories for its
conservation. The importance of biodiversity is recognised due to its significant
benefits to the economy, environment and society. As biodiversity is declining,
the key threatening processes are reviewed, as these processes form the basis
of many strategies and statutory policies.
Chapter 3 explains how biodiversity is best conserved in-situ (or in its natural
surroundings) through a combination of protected areas and non-protected
areas. Land outside protected areas such as natural parks and reserves are
private and are just as important for conservation. However, given the value of
land when used for urban development compared to conservation, the need for
the use of market mechanisms to encourage the private conservation of land is
recognised. By assigning a monetary value to land with high biodiversity values
environmental markets encourage its protection by showing landowners that
biodiversity is worth conserving. A popular market mechanism aimed at
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achieving environmental goals includes offsets. In the U.S. the Wetland
Mitigation Banking Scheme utilises offsets where a development will impact on a
wetland.
Chapter 4 examines the current legislation in Australia and the use of offsets
within the Environmental Planning and Assessment Act, 1979 (EP&A Act, 1979),
to protect biodiversity. Currently the use of offsets within NSW is underutilised
with no formal structure or market in place. Where they are used this is generally
on a case by case basis for developments with a consent authority requiring an
impact on biodiversity to be offset as part of a compensatory habitat through a
condition of consent by the EP&A Act, 1979.
An outline of the concept of the proposed Biodiversity Banking and Offsets
Scheme from DEC is provided in Chapter 5. The scheme incorporates the
theories and tools for conserving biodiversity and implementation in current
legislation as discussed in the previous chapters.
Chapter 6 of the thesis is a critical review of the Scheme regarding the success
of its potential implementation in the NSW planning system and as a tool for
conserving biodiversity. This chapter includes published views from the
development industry and environmental groups regarding the proposed
scheme.
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1.2 Thesis Methodology
The proposed Biodiversity Banking and Offsets Scheme has not been finalised at
this stage. The Biodiversity Banking Bill has not been gazetted at this time, but
was passed by the Lower House of Parliament with amendments on the 18th
October 2006. Due to this the assessment of the scheme in practice cannot be
undertaken. In addition given the limited use and lack of formal structure within
the NSW Planning system regarding the use of offsets, limited case studies were
available for review.
This thesis incorporates a review of the literature surrounding biodiversity,
environmental markets, and market tools for conservation and current best
practices in Australia. In addition, informal discussions have been held with the
Department of Planning, DEC and Xstrata Coal to source case studies where
offsets have been implemented as a condition of consent through the EP&A Act,
1979.
The Bill was required to undergo an extensive public consultation period as part
of the process for the TSC Act, 1995 to be amended. The scheme will create a
market in which biodiversity credits can be traded to offset the impacts of a
development.
This scheme is completely new to NSW and because of this reason and the
innovative approach it has taken to biodiversity conservation, a number of key
industry and environmental groups have published papers in response to the
scheme. The views of these stakeholders have been examined in considering
the effect the Scheme will have on the NSW planning system and its likely
success.
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2 Biodiversity
In order to appreciate the need to conserve biodiversity it is necessary to
understand what constitutes biodiversity, why its loss is important and what
processes are contributing to the disappearance of species, ecosystems and
habitats.
2.1 What is biodiversity?
Biodiversity is a part of all life on earth, including plant and animal species and
the interactions within and between ecosystems, which form part of the global
biosphere.
In 1992 the United Nations Earth Summit was held in Rio de Janeiro, which
recognised the importance of biological diversity. As a step towards conserving
biodiversity, 150 government leaders (including Australia) signed the Convention
of Biological Diversity, which defined key terms in relation to biodiversity and the
provision of actions to promote sustainable development (The Convention on
Biological Diversity, 2006, a).
The Convention defined biological diversity and ecosystems as follows:
Biological diversity – “means the variability among living organisms from
all sources including, inter alia, terrestrial, marine and other aquatic
ecosystems and the ecological complexes of which they are part; this
includes diversity within species, between species and of ecosystems”
(The Convention on Biological Diversity, 1992, article 2).
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Ecosystem – “means a dynamic complex of plant, animal and micro-
organism communities and their non-living environment interacting as a
functional unit”.
(The Convention on Biological Diversity, 1992, article 2).
In Australia, The National Strategy for Biodiversity adopts the above definition
from the United Nations Convention on Biological Diversity. In addition, the
strategy defines biological diversity on three different levels: genetic diversity,
species diversity and ecosystem diversity.
1.Genetic diversity - the variety of genetic information contained in all of
the individual plants, animals and microorganisms that inhabit the earth.
Genetic diversity occurs within and between the populations of organisms
that comprise individual species as well as among species;
2. Species diversity - the variety of species on the earth;
3. Ecosystem diversity - the variety of habitats, biotic communities and
ecological processes
(Department of the Environment, Sport and Territories, 1996, Introduction)
The evolution of Australia and its separation from other continents has resulted in
Australia containing a diversity of animals and plant species, with many species
endemic to this country. The Department of the Environment states that 85% of
flowering plants, 84% of mammals, 45% of birds and 89% of inshore, freshwater
fish are distinctive to Australia (Department of the Environment and Heritage,
2006, a). In addition, Australia has a range of ecosystem types, some examples
of which include coastal, estuarine, wetland, arid, semi-arid and alpine
environments (NSW National Parks and Wildlife Service, 1999).
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2.2 The importance of biodiversity
Biodiversity involves the variety of life, in which every species is unique.
As species become extinct or endangered the capacity for ecosystems to
function is diminished. The global biosphere depends on the functioning of
ecosystems, of which Australia’s biodiversity is an essential component and the
importance of which is highlighted by the following:
“the biosphere is alive and metabolizing, everything is forever changing,
renewing, evolving, and it is the interconnectedness and symbiotic
functioning of living matter at all levels that maintains the checks and
balances. The natural laws that apply in the natural world, particularly those
that balance populations and nutrients, maintain equilibrium (White, 2003,
p.174 in Worboys et.al, 2005, p. 20)”.
The need for the conservation of biodiversity is evident due to the importance of
maintaining the biosphere for the survival of life on earth. However, biodiversity
has many other functions which are essential to human communities, as outlined
below.
• Social, cultural, recreational benefits
- The health of ecosystems is linked to human health e.g. purification of
water, detoxification of wastes through natural processes (World
Health Organisation, 2005)
- Culture and identity is linked to ecosystems e.g. Aboriginal and Torres
Strait Islander People; Indigenous cultures in the Amazon.
• Ecological role of biodiversity
– Species play a role which contributes to the healthy functioning of
ecosystems so they may provide services such as purifying water and
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air (for example wetlands and mangrove communities can act as water
filters for waste).
– The loss of a species reduces the ability of an ecosystem to function
and may be less likely to adapt to environmental change (Wikipedia,
2006).
• Economic benefits
- Pharmaceuticals – approximately 25% of prescriptions are filled by
drugs derived from plants (Guruswamy and McNeely, 1998)
- Free ecosystem services are valued at over $30 trillion globally
(Environment Australia, 2001)
- Use of natural resources e.g. forestry, fishing
- Ecotourism
• Scientific importance
– Species help scientists to understand evolution, their functioning and
role.
– Biodiversity contributes to the control of pests and diseases and
maintains genetic resources which are essential for crop production
and ability to adapt to change (The Convention on Biological Diversity,
2006, a)
Biodiversity is subject to indirect and direct threats, leading to change that may
effect the healthy functioning of ecosystems that produces outputs essential to
humans. The relationship between change, biodiversity, ecosystems and the
reliance by human communities is summarised in Figure 2.1 below.
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Figure 2.1 Biodiversity and Ecosystems. The interaction between biodiversity and ecosystems
and the services produced from these are shown (The Convention on Biological Diversity, 2006,
b).
2.3 Key Threats to Biological Diversity
In 1992 the Convention on Biological Diversity was attended by 150 Government
leaders worldwide, symbolising the importance of biodiversity for human life and
the unprecedented rate at which it is being lost (The Convention on Biological
Diversity, 2006, a)
Since this time, further future conferences of the Convention have taken place
with a Strategic Plan adopted in 2002 that was committed to achieve by 2010 “a
significant reduction of the current rate of biodiversity loss at the global, regional
and national level, as a contribution to poverty alleviation and to the benefit of all
life on Earth” (The Convention on Biological Diversity, 2006, b).
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Despite this target being endorsed by government leaders, species populations
are continuing to be threatened, with species becoming extinct at rates 1,000
times more than previously experienced by the Earth, effectively meaning “we
are responsible for the sixth major extinction event in the history of the Earth, and
the greatest since the dinosaurs disappeared, 65 million years ago” (The
Convention on Biological Diversity, 2006, b, iv).
In Australia 107 species are extinct, with Australia having a higher rate of
mammal extinction than any other continent; and a further 1500 flora and fauna
species are listed as endangered or vulnerable (Young, et al., 1996).
In NSW a total of 962 species, populations and ecological communities are listed
as endangered or vulnerable with 75 species extinct (NSW Parliamentary
Counsel's Office, 2006, a).
0100200300400500600700
No of
endangered
species/
communities
2001 2003 2005
Year
Threatened Species numbers in NSW
Threatened Species
- Plants
Threatened Species
- Animals
Endangered
Ecological
Communities
Figure 2.2 – Threatened numbers in NSW. This table Illustrates the number of plant species,
animal species and endangered ecological communities from 2001-2005. While the number of
threatened species slightly decreased at the end of 2005, the number of endangered ecological
communities continued to increase (Source: Data used from Australian Bureau of Statistics,
2006, (a) to formulate the table).
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The major threat to biodiversity at a global scale according to Kumar, 1999,
p.226 is “the activities and overpopulation of Homo sapiens”. Overpopulation,
deforestation, pollution and climate change are global factors, which lead to the
cumulative impact on biodiversity (Wikipedia, 2006).
In Australia 11 threatening processes to biodiversity have been identified by
Thackway & Cresswell, 1995 b (in Worboys et.al, 2005, p.375) being:
1. Agriculture
2. Grazing
3. Weeds
4. Clearing
5. Fire
6. Feral animals
7. Forestry
8. Mining
9. Salinisation
10. Tourism
11. Urbanisation
In NSW, clearing of native vegetation is a major threat to biodiversity with land
clearing estimated at approximately 150,000 hectares per year (NSW National
Parks and Wildlife Service, 1999).
An example of the extent to which vegetation communities are being threatened
are the Cumberland Plain Woodlands which are endemic to central NSW. The
Woodlands originally covered 107,000 hectares or 30% of the Sydney Basin, but
today an area of only 6,400 hectares remains, less than 6% of the original
vegetation (Department of the Environment and Heritage, 2006, b).
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Figure 2.3 Remnant Cumberland Plain Woodlands (National Parks and Wildlife Service, 2004)
Impacts from land clearing on the fringe of Sydney for agriculture, housing and
hobby farming further threaten the remaining portions of the Cumberland Plain
Woodlands.
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Figure 2.4: Cumberland Plain Woodlands: A threatened Ecological Community. This figure shows
the extent of encroachment of Sydney on the threatened vegetation (Department of the
Environment and Heritage, 2003)
As of 2005 the population of New South Wales was 6,774,200 people, with an
additional 1,227,600 people predicted by 2021, thereby providing a further threat
from increased urban development (Australian Bureau of Statistics, 2006, a).
The NSW State Government has also predicted further growth in NSW with
Sydney expected to accommodate a population increase of 1.1 million by 2031
(Department of Planning, 2005). A number of draft regional strategies have been
prepared which predict the future growth of NSW regions (refer to Figure 2.3)
and provide a planning framework to accommodate the new growth.
Not to scale
N
Remaining Cumberland Plain Woodlands in Sydney
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0 200,000 400,000 600,000 800,000
Current
Population -
2005
Projected
Population
up to 2025North Coast
South Coast
Illawarra
Lower Hunter
Central Coast
Figure 2.5: Projected population growth for the regions. The NSW Government has provided
current and future population projections in anticipation that future population growth will be
located within the North Coast, South Coast, Illawarra, Lower Hunter and Central Coast regions
(in addition to Sydney) (Source: Data compiled from the Department of Planning draft regional
strategies, Department of Planning, 2006 a-e).
The current geographical distribution of New South Wales population can be
seen in Figure 2.6, with the status of vegetation areas within NSW shown in
Figure 2.7.
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Figure 2.6 Spatial distribution of Australia’s population. As can be seen the eastern coast of NSW
is heavily populated (Australian Bureau of Statistics 2006, b)
Figure 2.7 Vegetation clearances in NSW. A significant amount of uncleared vegetation is present
along the NSW coastal area (Glanzig, 1995)
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As can be seen in the above figures the amount of vegetation on uncleared land
is constrained by the densely populated regions and cleared areas. The
predicted increase in population for Sydney and NSW coastal regions is likely to
require further clearing of vegetation, which is a key threat to biodiversity.
Threats to biodiversity result from direct physical activities, however actions such
as poor land use planning, absence of strategic planning, incompatible land
uses, inadequate legislation and lack of political support and funding can
contribute to the loss of biodiversity (Worboys et al, 2005).
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3 Methods for conserving biodiversity
3.1 Framework for approaches to conserving biodiversity
The United Nations Conference on Biological Diversity recognised that
biodiversity is essential for sustainable development, yet the rate of loss
continues and must be addressed.
The protection of habitats is recognised as the most effective method of
protecting biodiversity at all levels, that is, at the genetic, species and ecosystem
level (Kumar, 1999).
This is generally achieved through the two basic conservation concepts of in-situ
and ex-situ conservation, which are defined below by the United Nations
Conference on Biological Diversity.
"Ex-situ conservation" means the conservation of components of
biological diversity outside their natural habitats
(The Convention on Biological Diversity, 1992, article 2).
(For example by collecting and preserving specimens of selected species
in zoos and botanical gardens)
"In-situ conservation" means the conservation of ecosystems and natural
habitats and the maintenance and recovery of viable populations of
species in their natural surroundings and, in the case of domesticated or
cultivated species, in the surroundings where they have developed their
distinctive properties
(The Convention on Biological Diversity, 1992, article 2).
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(Such as World Heritage areas, National parks and reserves)
In either case, the scope of activities for conservation of biodiversity entails
protection, maintenance and management, sustainable use, restoration and
enhancement (Aretino et al, 2001).
3.1.1 Scope of a Framework
Kumar suggests that to achieve conservation in-situ the approach needs to be a
combination of processes and mechanisms; requiring co-ordination of
conservation and land use planning through “regulations and institutional
mechanisms” (Kumar, 1999, p.31).
When the scope of biodiversity and this range of approaches are considered, it
becomes clear that the conservation of biodiversity is not just a scientific
exercise, nor the sole responsibility of scientists.
Scientific methods alone (such as seed banks, breeding programs and nurseries)
are not enough to halt the loss of biodiversity resulting from human activities.
Appropriate policy is required to address the causes that are threatening the key
processes of biodiversity.
Policy instruments used in the conservation of biodiversity generally fall into three
broad types:
1. Legislative instruments, for example:
a. which allow for threat abatement plans,
b. regulation of activities, such as approvals for land use change,
vegetation clearing
c. World Heritage areas, National parks and nature reserves,
environment protection zones,
d. recovery and conservation plans;
2. Voluntary agreements such as conservation agreements; and
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3. Market-based instruments such as tradeable permits.
(Department of the Environment and Conservation, 2006, a)
A successful policy for the conservation of biodiversity will include a combination
of the above instruments, as outlined in Figure 3.1 below.
Figure 3.1 Policy instruments to protect biodiversity in Australia (Department of the Environment
and Conservation, 2006, a)
3.1.2 Other Challenges
Severely fragmented habitats are a particular challenge, with biodiversity at the
ecosystem level able to be better managed than concentrated solely on every
individual species (Kumar, 1999).
To encourage the amalgamation of fragmented areas Kumar 1999, p.29
specifies that “local support for biodiversity conservation is critical and desirable.
What is needed is to provide new options for a limited or sustainable use of
biodiversity by actively involving local people in managing protected areas”.
As almost two thirds of land in Australia is managed by the private sector, there
is a need to provide mechanisms to allow these diverse and spatially distributed
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sites to be linked, amalgamated and promoted to obtain a coordinated and
integrated approach over a wider area (Productivity Commission, 2004).
While some legislative and regulatory processes are in place, they apply mostly
to public lands and lands under control of government or not-for-profit agencies.
As species numbers continue to decline inventive approaches are required to put
a system for the conservation of private land into place.
Market-based instruments have the potential to harness this opportunity and to
encourage conservation by private land owners. A Productivity Commission
Report in 2004 into the impacts of biodiversity and native vegetation regulations
found:
“the key advantage of using market-based approaches is that they reflect
individuals’ voluntary decisions and cost-benefit trade-offs. Thus markets
promote achievement of native vegetation and biodiversity conservation at
least cost and promote innovative solutions over time as individuals have
an incentive to identify cost-effective solutions” (Productivity Commission,
2004, p. 196).
This concept is explained further below.
3.2 The use of markets in conserving biodiversity
A market “is a concrete place to spend money…a spontaneous tool of exchange”
(Hanley et al, 2001, p.12).
Markets which deal directly in environmental products involve the theory of
environmental economics. Central to this concept is the need to place a
monetary value for environmental goods and services and understanding that
“the economy is not separate from the environment” (Pearce, 1990, p.4).
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Markets alone are insufficient to address all issues of conservation with a
combination of policy instruments recognised as the best approach to
conservation (Productivity Commission, 2004).
In relation to biodiversity they cannot be solely relied upon to encourage
conservation because of the “public good aspects of biodiversity, to the time
horizon one needs to appreciate the value of biodiversity and to the uncertainties
associated with its importance” in addition the “intrinsic, aesthetic and cultural
values in other areas of society have always been protected by legislation, and
that will continue to be true in the area of biodiversity” (Heal, 1998, p.126).
For this reason environmental markets work in conjunction with legislation, as
these types of markets are a type of regulation created from the need to address
a statutory requirement or an environmental target contained within a strategic
document (Collins, 2005).
Governments can assist in the creation of markets helping to “establish, monitor
and enforce the trading rules of the market, but not the market price itself”
(Hanley, 2001, p.25).
Where environmental markets occur, they consist of three different types of
market type instruments being price based, quantity-based and market friction as
outlined in Figure 3.2.
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Figure 3.2 Types of market instruments. A number of mechanisms have emerged from
environmental markets which are associated with government actions to support market
approaches to the conservation of biodiversity (Collins, 2005, p.6).
These types of market based instruments can be applied in a number of different
environmental markets relating to environmental issues such as air or water
pollution, greenhouse gas emission trading, salinity and energy.
In relation to the proposed Biodiversity Banking and Offset Scheme, the market
instrument used to aim to balance urban development with conservation is
offsets. For this reason the background of offsets and what constitutes a
‘biodiversity offset’ is examined further below.
3.3 Offsets
Offset schemes are currently used where a development will impact on the
environment and is required to compensate for this impact by offsetting a portion
of land (either on site or off site) so there is no net loss to the environment.
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An offset is defined as:
“Environmentally beneficial activities undertaken to counterbalance an
adverse environmental impact, aspiring to achieve ‘no net environmental
loss’ or a ‘net environmental benefit’” (WA EPA 2004 in International
Council on Mining and Metals, 2005, p.4).
The NSW Government in 2002 released a concept paper for the development of
a Green Offsets scheme in NSW as an additional mechanism to reduce pollution
and environmental impacts from development. The paper outlined the following
basic principles for offsets which should be considered in the preparation of any
offset scheme:
“ • Environmental impacts must be avoided first by using all cost-effective
prevention and mitigation measures. Offsets are then only used to
address remaining environmental impacts.
• All standard regulatory requirements must still be met.
• Offsets must never reward ongoing poor environmental performance.
• Offsets will complement other government programs.
• Offsets must result in a net environmental improvement” (NSW
Government, 2002, p. 4)
In addition offsets should be:
“• enduring – they must offset the impact of the development for the
period that the impact occurs
• quantifiable – the impacts and benefits must be reliably estimated
• targeted – they must offset the impacts on a ‘like for like or better’ basis
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• located appropriately – they must offset the impact in the same area
• supplementary – beyond existing requirements and not already being
funded under another scheme
• enforceable – through development consent conditions, licence
conditions, covenants or a contract” (NSW Government, 2002, p. 4)
Offsets can provide an economic advantage over on-site conservation enforced
through just regulatory controls. The NSW Government concept paper
recognises that a law of diminishing returns may apply as outlined in Figure 3.3
(NSW Government, 2002). The graph indicates that the cost of reducing an
impact on the environment (including biodiversity conservation) from a
development can increase dramatically as it approaches full/complete
conservation (i.e. returning the environment to 100% normal or previous value).
At some point the extra cost of mitigation is greater than the marginal
environmental value added. Offsets operating in a market provide the opportunity
to achieve that final (otherwise high cost on-site) recovery of value by providing
the equivalent environmental value at another site.
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Figure 3.3 Law of Diminishing Returns (NSW Government, 2002, p.4).
Biodiversity offsets are a method to conserve biodiversity in-situ to compensate
for an activity where environmental damage will occur. A biodiversity offset is
defined as:
“Conservation actions intended to compensate for the residual,
unavoidable harm to biodiversity caused by development projects, so as
to aspire to no net loss in biodiversity. Before developers contemplate
offsets, they should have first sought to avoid and minimise harm to
biodiversity” (Ten Kate et al, 2004, p.13)
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Offsets are different from managing the impacts of a development on land with
biodiversity values. For example, a portion of land that is proposed to be
developed which will have an impact on the critical habitat located on the site.
The developer may offset this impact by purchasing another portion of land
elsewhere with the same ecological characteristics or use on-site offsets. The
latter involves conserving the original critical habitat on site and allocating an
additional portion of land on site for conservation.
The use of biodiversity offsets can have a number of benefits for business,
governments, conservation groups and local communities. The benefits can
include the following:
• Provides the opportunity for development impacts to be mitigated, allowing
a development which previously might not have been possible.
• Offsets are a market instrument which encourages conservation without
the need to create new legislation (Ten Kate et al, 2004).
• Conservation groups have the opportunity to acquire more sites for
conservation and potentially improve linkages between ecological
corridors (Ten Kate et al, 2004).
While biodiversity offsets can generate a number of benefits, there are potential
risks involved which must be considered in the development of any scheme.
Some of the potential areas of concern include the following:
• Can potentially allow inadequate development to occur where it would
previously not have been possible.
• Cost and liability of an offset particularly in managing and funding offset
schemes and the legal liability associated with areas offset in perpetuity
(International Council on Mining and Metals, 2005).
• Inadequate representation of all stakeholders in determining offsets.
• Difficulty in assigning values to biodiversity and whether offset areas will
result in areas that are the same.
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In NSW the EPA is currently trialling pilot (broad environmental) offset schemes
to reduce air pollution and water pollution in the Hawkesbury-Nepean River and
drinking water catchments for Sydney (NSW Government, 2002). However, no
regulated scheme currently exists for biodiversity credits within NSW. Because of
this it is necessary to examine international models where offsets are used to
specifically target the impacts of a development on biodiversity. The proposed
Biodiversity Banking Offset Scheme draws on experience of other schemes
internationally, namely the United States Wetland Mitigation Banking Scheme.
3.3.1 Case Study: US Wetland Mitigation Banking Scheme
This scheme uses biodiversity offsets to mitigate the impacts of development on
wetlands through the trading of biodiversity credits in an environmental market.
It is estimated that half of the 220 million acres of wetlands in the United States
remains (Kenny, 2006). To halt the further loss of these important ecosystems
the U.S. Army Corps of Engineers created a Wetland Mitigation Scheme under
the Clean Water Act.
Where a developer proposes to impact on a wetland, a permit is required under
the Act from the U.S. Army Corps of Engineers. Where a development will have
an unavoidable impact on a wetland, the US Army Corps requires the loss to be
compensated by restoring, enhancing or creating a new wetland (Bayon, 2006).
This can be done on site or by an offsite offset through one of the following
means:
1. Buying credits through a mitigation bank;
2. Make a monetary payment to the US Army Corps who provide the money
to non profit organisations who conserve or enhance wetlands; or
3. Pay a third payment to conserve, enhance or create a wetland offsite
(Bayon, 2006).
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A mitigation bank is a bank that holds wetland credits that have been generated
from private landowners who dedicate their land solely to the conservation,
enhancement or creation of wetlands. A developer will purchase credits from this
central bank to offset the impacts of their development. The money used to
purchase these offsets is transferred to the private landowner so they maintain
the wetland. This process is outlined in the figure below.
Figure 3.4 Wetland Mitigation Banking Scheme (Collins, 2005, p.78)
The scheme enables the conservation of wetlands as it places a monetary value
on wetlands, so that they are seen as an asset. As a result of this a number of
businesses have been created dedicated solely to enhance, manage and create
wetlands, such as Wildands Inc which manages over 15,000 acres of wetlands
(Bayon, 2006).
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However the scheme has been criticised by environmental groups as the scheme
allows credits to be sold before a wetland is operating and with a lack of
enforcement by U.S Army Corps. In addition the scheme has been criticised
because of the difficulties of offsetting ‘like for like’ wetlands, particularity where
offsets are not in the same area as the site where the wetland is being lost
(Godden, Vernon, Whitten et al in Productivity Commission, 2004). These could
offer potential ‘lessons’ for any Australian biobanking scheme.
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4 Biodiversity Conservation in Australia
In 1992 Australia signed the United Nations Convention on Biological Diversity,
at the Rio Earth Summit, which recognised the importance of preserving
biodiversity and its role in promoting sustainable development. Since this time a
number of strategic and statutory plans have been developed on a national, state
and local level to achieve the conservation of biological diversity.
In Australia, a number of strategies and legislation are in force that set the
framework for the protection of biodiversity nationally and within NSW. Each
piece of legislation has a particular aspect on which the proposed Biodiversity
Offsets Banking Scheme was modelled, which includes the objectives for
conserving biodiversity, conservation agreements and threatened species
assessment.
Currently the use of market tools is limited, with no formal piece of legislation
creating an environmental market for biodiversity. The closest comparison of the
Scheme and the current use of market mechanisms are offsets imposed through
a condition of consent in the Environmental Planning and Assessment Act, 1979.
4.1 Policies and legislation for the conservation of biodiversity nationally
The Australian Government has recognised the significant contributions that
biodiversity makes to culture, the environment, economy and science and the
need to protect the essential process of ecosystems for current and future
generations. In 1996 the Department of Environment and Heritage prepared the
National Strategy for the Conservation of Australia’s Biological Diversity. The
strategy includes goals and principles to minimise the threats to biodiversity,
encourage the integration of natural resource management and conservation and
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improve co-ordination of these activities across all levels of government and the
community.
Within the strategy the use of market instruments was stated as an incentive
measure to encourage in-situ conservation on land outside the protected areas
system. In 2001 the strategy was reviewed by the Australian and New Zealand
Environment and Conservation Council (2001), who found the original principle of
strengthening conservation areas outside protected areas in the strategy, had
only been partially achieved. At this time, market based incentives were not
utilised as part of this achievement, with no schemes underway in NSW.
While the strategy is an important document for setting the framework in how to
conserve biodiversity at the national level, the key legislative instrument is the
Environment Protection and Biodiversity Act 1999 (EPBC Act 1999). In
combination with a number of other Acts (such as the World Heritage Properties
Conservation Act 1983, Ozone Protection and Synthetic Greenhouse Gas
Management Act 1989, Environment Protection (Sea dumping) 1981 and Natural
Heritage Trust of Australia Act 1997, the Acts ensure that activities which may
impact on the ecological processes within ecosystems, habitats and ecological
communities are regulated.
The EPBC Act 1999 requires approval for any activity, action or project which
may have an environmental impact on Commonwealth land, a global
environment or an environmental matter which is considered to be of national
significance (Department of the Environment and Heritage, 2006, c). The Act
identifies threatening processes for biodiversity and allows the nomination of
species and ecological communities to be listed as endangered or vulnerable.
Currently there are 1580 species and 36 ecological communities listed as
vulnerable or endangered by the Act (Department of the Environment and
Heritage, 2006, d).
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The EPBC Act provides for the protection and management of biodiversity at the
national level; however as the variety of species, genetic and ecosystems is
different across the bioregions the need for individual state policies and
legislation is also required.
4.2 Policies and legislation for the conservation of biodiversity in NSW
The protection of biodiversity within NSW requires an ecologically sustainable
management approach that incorporates scientific knowledge with policies and
legislation.
In NSW a combination of policies and legislation are currently in force to achieve
this, which are listed in Figure 4.1 below.
Figure 4.1 List of Acts protecting
biodiversity in NSW (information sourced
through NSW Parliamentary Counsel’s
Office, NSW legislation, 2006,
www.legislation.nsw.gov.au)
Legislation Threatened Species Conservation Act 1995
National Parks and Wildlife Act 1974
Native Vegetation Act 2003
Wilderness Act 1987
Marine Parks Act 1997
Noxious Weeds Act, 1993
Water management Act
Catchment Management Authorities Act 2003
Rural Land Protection Act 1989
Coastal Protection Act 1979
Environmental Planning and Assessment Act 1979
Local Government Act, 1993;
Crown Lands Act, 1989
Fisheries Management Act, 1994
Coastal Protection Act, 1979
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These are supported by a number of state and local policies some of which
include the NSW Biodiversity Strategy, NSW Forest Policy, NSW Coastal Policy,
NSW Wetland Management Policy, State of the Environment Reports, Local
Approvals Policies and local council biodiversity policies.
A brief summary is provided below of key statutory legislations which protect
threatened species and ecological communities and promote conservation of
biodiversity in NSW and in the NSW Planning system. They were a consideration
in the preparation of the proposed Biodiversity Banking and Offsets Scheme.
4.2.1 National Parks and Wildlife Act, 1974
The National Parks and Wildlife Act (NPWS) came into force on the 27
November 1974. The objective of the Act is to conserve nature in-situ through the
dedication of protected areas. These areas are created and managed through
the Act such as national parks, nature reserves, wildlife refuges, state
conservation areas and regional parks.
Figure 4.2
Map of protected areas
through National Parks
and Reserve system in
NSW (NSW
Environment Protection
Authority, 2003)
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Private conservation of land is encouraged through voluntary conservation agreements in
Part 4 Division 12 of the Act. A conservation agreement is a joint agreement between the
Minister for the Environment and a private landowner to permanently conserve an area
containing scientific interest, critical habitat, ecological communities or threatened species
(NSW Parliamentary Counsel’s Office, 2006, a). A draft agreement is placed on
public exhibition and once approved is registered to the title of the land, ensuring in the
event the property is sold the management of the land will continue in accordance with
the agreement.
4.2.2 Native Vegetation Act 2003
The Native Vegetation Act 2003 came into force on the 11 December 2003. The
objective of the Act is to prevent broad scale land clearing of native vegetation.
This Act requires approval through consent or a Property Vegetation Plan to
clear certain categories of native vegetation on land other than a national park,
conservation area, state forestry area or urban area (excluding rural-residential
areas). Property Vegetation Plans include vegetation clearing requirements and
may include proposals for incentive measures.
4.2.3 Threatened Species Conservation Act 1995
The TSC Act 1995 came into force on the 22 December 1995. The TSC Act 1995
is specifically aimed at the protection of threatened species, populations and
ecological communities.
This Act allows for the listing of species, populations and ecological communities
by the Scientific Committee who assign a status of endangered, critically
endangered, vulnerable or extinct. Critical habitats are also listed under the Act.
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To protect and manage these listings the Act includes provision for the
preparation and implementation of recovery plans, threat abatement plans and
licenses. However marine life is not included under this Act, but separately
managed with similar processes through the Fisheries Management Act 1994.
Where an action is likely to or will impact on a species, a species impact
statement is required. Part 6 Division 2 of the Act outlines the contents and
Director-General’s requirements of a Species Impact Statement (SIS). The need
for an SIS is triggered when applying for a license under the TSCA, as a
requirement of the Environmental Planning Assessment Act 1979 or Plantations
and Reafforestation Act, 1999 (NSW Parliamentary Counsel’s Office, 2006, b).
However the need for a SIS may not be required in certain circumstances. Part 7,
Division 5 of the TSCA relates to the biodiversity certification of Environmental
Planning Instruments (EPI). Biodiversity certification is granted if the Minister for
the Environment considers an EPI to “lead to the overall improvement or
maintenance of biodiversity values” (NSW Parliamentary Counsel’s Office, 2006,
b, Cl. 126G). Biodiversity values are defined within this section to include
“threatened species, populations and ecological communities, and their habitats”
(NSW Parliamentary Counsel’s Office, 2006, b, Cl. 126G).
An EPI that has biodiversity certification effectively means that a development
which requires consent under Part 4 or Part 5 of the Environmental Planning and
Assessment Act, 1979 is considered to be development that will not significantly
affect a biodiversity value, and therefore does not require a Species Impact
Statement to be prepared (NSW Parliamentary Counsel’s Office, 2006, b).
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4.2.4 Environmental Planning and Assessment Act, 1979
The EP&A Act 1979 is the principal statutory instrument regulating land use in
NSW. One of the objectives of the Act is to protect and conserve native plants
and animals including threatened species, habitats, populations and ecological
communities (NSW Parliamentary Counsel’s Office, 2006, c).
The Act provides for the protection of the environment and biodiversity values in
a number of ways such as environmental planning instruments, implementation
of conditions of consent and S.94 Contributions Plans.
An Environmental Planning Instrument (EPI) under the EP&A Act 1979 are plans
that are made to achieve the objectives of the Act, control development, allow the
reservation of land for public purposes and protection of vegetation, flora and
fauna (Farrier & Stein, 2006).
Part 3, Division 1, Section 26 of the Act contains provisions that relate directly to
the protection of the environment in the preparation of an EPI (NSW
Parliamentary Counsel’s Office, 2006, c). The purpose of this division is to
ensure that the regulation of land use, such as the establishment of zones is
correctly implemented in the first instance so that biodiversity values are
acknowledged and additional controls imposed for their protection if necessary.
This is also relevant in identifying categories of developments and land use
categories and activities that are suitable for areas of critical habitat, threatened
species or ecological communities in EPI’s such as Regional Environmental
Plans (REP’s), State Environmental Planning Policies (SEPP’s) and Local
Environmental Plans (LEP’s).
Generally an EPI will contain some sort of provision relating to any of the
following; the protection of threatened species, habitats, ecological communities,
ecological processes, biodiversity or the environment. Some are dedicated
directly to conserving and protecting species or ecological communities such as
SEPP 14 – Coastal Wetlands, SEPP 19 – Bushland in Urban Areas, SEPP 26 –
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Littoral Rainforests, SEPP 39 - Spit Island Bird Habitat, SEPP 44 – Koala Habitat
Protection, SEPP 71 – Coastal Protection, Sydney REP 20—Hawkesbury
Nepean River and Greater Metropolitan Regional Environmental Plan 2 -
Georges River Catchment.
Projects which are considered to be major or of state significance deemed by the
Minister of Planning are assessed separately under Part 3A of the Act. The
Director-General prepares the requirements for environmental assessment with
regard to any relevant guidelines from the Department of Planning (NSW
Parliamentary Counsel’s Office, 2006, c).
Other development applications and the impacts they may have on the
environment are considered through the following clauses contained within the
Act.
Section 78A – Development Applications
Part 4, Section 78A of the Act requires a Species Impact Statement to be
prepared and submitted with a development application if the subject land is “part
of critical habitat or is likely to significantly affect threatened species, populations
or ecological communities, or their habitats” (NSW Parliamentary Counsel’s Office,
2006, c).
Land that is designated as critical habitat is listed under the TSCA, however it is
determining if development is ‘likely’ to affect threatened species, populations or
ecological communities that must be determined by the applicant.
To do this the Act provides requires the following seven factors to be taken into
consideration:
“a) in the case of a threatened species, whether the action proposed is likely to
have an adverse effect on the life cycle of the species such that a viable local
population of the species is likely to be placed at risk of extinction,
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(b) in the case of an endangered population, whether the action proposed is
likely to have an adverse effect on the life cycle of the species that constitutes
the endangered population such that a viable local population of the species
is likely to be placed at risk of extinction,
(c) in the case of an endangered ecological community or critically endangered
ecological community, whether the action proposed:
(i) is likely to have an adverse effect on the extent of the ecological
community such that its local occurrence is likely to be placed at risk of
extinction, or
(ii) is likely to substantially and adversely modify the composition of the
ecological community such that its local occurrence is likely to be placed at
risk of extinction,
(d) in relation to the habitat of a threatened species, population or ecological
community:
(i) the extent to which habitat is likely to be removed or modified as a result of
the action proposed, and
(ii) whether an area of habitat is likely to become fragmented or isolated from
other areas of habitat as a result of the proposed action, and
(iii) the importance of the habitat to be removed, modified, fragmented or
isolated to the long-term survival of the species, population or ecological
community in the locality,
(e) whether the action proposed is likely to have an adverse effect on critical
habitat (either directly or indirectly),
(f) whether the action proposed is consistent with the objectives or actions of a
recovery plan or threat abatement plan,
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(g) whether the action proposed constitutes or is part of a key threatening
process or is likely to result in the operation of, or increase the impact of, a key
threatening process” ( NSW Parliamentary Counsel’s Office, 2006, c, Part 1,
S.52A (2)).
If an SIS is found to be required, this must be prepared in accordance with
Section 109 to 110 of the TSCA. A SIS will contain (among other requirements) a
detailed study of the threatened species, populations or ecological communities
and the proposed mitigation measures to ensure the development proposal will
not have an adverse impact on these areas.
In addition if the answer was yes to the ‘seven part test’ (i.e. the development is
likely to impact on a threatened species, population, ecological community) then
Section 79B also requires the application to be referred to the Director General of
the National Parks and Wildlife Service or the Minister of Planning (depending on
whom is the consent authority).
The information to be contained with an SIS and the process that must be
followed is also found in the preparation of Environmental Impact Statements. An
EIS is required when a development will have a signifacent impact on many
factors of the environment. As part of the preparation of an EIS, a SIS is included
in the report.
4.3 Market and monetary mechanism within the EP&A Act 1979 for conservation
Development applications are required through the assessment process to
consider the potential impacts on the environment and whether a proposal will be
detrimental to the environment. Where developments may be found to have an
environmental impact, but the opportunity is provided to counterbalance this
through other means the Act provides some flexibility for this to occur.
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Section 94 of the Act permits the creation of S.94 Contributions Plans which
outline for local governments types of developments or locations that trigger an
increase the demand for public amenities or services within an area. Where this
occurs an applicant may provide a dedication of land or a monetary payment in
accordance with a S.94 Contributions Plan (NSW Parliamentary Counsel’s
Office, 2006, c).
Where a development does not trigger a S.94 Contributions Plan other provisions
are available to address an impact of a development. In relation to biodiversity
conservation a development which may impact on a threatened species,
ecological communities or critical habitat may use offsets to counterbalance the
impacts. Offsets are currently used in the NSW planning system, applied through
conditions of consent in accordance with Section 80A.
No specific provision is contained with the EPA Act relating to offsets; rather
these are negotiated on an individual basis according to the type of development
and scale of impact involved. Typically they are used where a development is
found to have an impact on a threatened species or critical habitat. Offsets can
be on-site, where a portion of the site is dedicated solely to protect and maintain
biodiversity values or off-site where an alternative site with the same biodiversity
values is purchased by the developer and then transferred to a public authority
for management to ensure conservation. The benefits of offsets have been
examined in Chapter 3.
A case study is provided as an example of a development which has utilised
offsets to conserve biodiversity.
4.3.1 Mount Owen Coal Mine
The Mt Owen Mining Complex is located 25 kilometres northwest of Singleton in
the Upper Hunter Valley of New South Wales and is operated by Thiess Pty Ltd
(Thiess) under a partnership with Xstrata Coal Australia Pty Ltd. The mine
consists of two adjacent open-cut coal mines being the Mount Owen Mine and
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Ravensworth East Mine, with the Glendell Mine proposed to the south (Xstrata
Coal & Thiess, 2006).
The Mount Owen mine is located on the Ravensworth State Forest (RSF), which
is a significant remnant of woodland with 19 threatened fauna species listed
through the NSW TSCA 1995 including the Green and Golden Bell Frog of which
240 hectares have already been cleared (NSW Mineral Council, 2006).
On the 8.12.2004, Development Application 14-1-2004 was granted approval for
an extension to the current open cut mining operations including activities such
as increasing the processing rate coal handling and preparation plant to 15
million tones of run of mine coal a year (Department of Planning, 2004). As part
of the approved works a further 35 hectares of the RSF and 59 hectares of
woodland adjacent to the mine would be disturbed (Xstrata Coal & Thiess, 2006).
To offset the impact of the loss of habitat which is associated with threatened
fauna a comprehensive Biodiversity Offset Strategy (BOS) was approved. The
strategy was prepared through extensive consultation with the Department of
Infrastructure, Planning and Natural Resources (now DOP), National Parks and
Wildlife Service (now part of DEC) and the Mt Owen Advisory Group (Xstrata
Coal & Thiess, 2006).
To permit the use of on-site offsets the BOS was incorporated into the
development consent through a number of development conditions, which are
outlined below.
• Condition 41 - The BOS must be satisfactorily implemented.
• Condition 42 – Within three years from the 8.12.2004 the mine must
ensure the biodiversity offset areas are secured through a long term
measure including rezoning under Singleton LEP 1996, transfer of land for
protection to Forests NSW or a Deed of Agreement with the Minister (ref
consent).
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• Condition 43 – Within 18 months of 8.12.2004 a minimum of 6 alternative
habitats are to be created in the biodiversity offset area for the Green and
Golden Bell Frog.
• Condition 45 – A Flora and Fauna Management Plan is required and must
include and assessment of the BOS.
• Condition 46 – An annual review is required of the BOS and Flora and
Fauna Management Plan to review performance
• Condition 47 – Within three years from 8.12.2004 and continually every
three years and Independent Audit of the BOS and Flora and Fauna
Management Plan is required, which is required to be paid for by the
applicant.
Through the combination of these conditions it aims to implement the BOS and
ensure its long-term management by providing security and regular monitoring
during the duration of the mine’s activities.
The Biodiversity Offsets areas cover a total of 415 hectares within six individual
offset areas known as the Northwest Offset; Northeast Offset; Forest East Offset;
Travelling Stock Reserve (TSR) Offset; Southeast Offset; and Southeast Corridor
Offset (Xstrata Coal & Thiess, 2006). The location of the offsets is shown in
Figure 4.3.
The proposed mining works would remove a total of 94 hectares of woodland
and 8 hectares of riparian vegetation, while the BOS would provide a total of 100
hectares of woodland and 17 hectares of riparian vegetation through the total
offset area. The BOS was considered acceptable as it provided vegetation
communities which were “like for like” (Hunter Valley Coal Corporation, 2003, p.
12) and would allow for the increase of these vegetation types over time.
The Mount Owen case is an example of the use of an on-site to offset the impact
on biodiversity and its implementation in the NSW planning system.
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Figure 4.3: Mount Owen Mine biodiversity offset areas (Xstrata Coal & Thiess, 2006, p. 4)
5 The Biodiversity Banking and Offsets Scheme
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5.1 Overview of the scheme
A new approach to the way biodiversity is conserved has been prepared by the
DEC. The initiative is known as the Biodiversity Banking and Offsets Scheme or
BioBanking and is a voluntary scheme using offsets as a tool to conserve
biodiversity in situ (Department of Environment and Conservation, 2006, b).
The NSW Government began investigating a scheme in mid 2005 after
recognising the need for a regulatory framework relating to the use of offsets,
which are currently implemented on an individual case by case basis
(Department of Environment and Conservation, 2005). The Minister for the
Environment, Bob Debus (Parliament of New South Wales, 2006, a) in his
second reading of the Bill to the Legislative Assembly on 8th June 2006 made
the following comment regarding the purpose of the scheme:
“The present threatened species law focuses our efforts on evaluating
the impact of each individual development. We need to bring our laws and
approach into line with the latest science. The death by a thousand cuts,
that is, the cumulative losses caused by hundreds of individual
developments, must be reversed. At the same time, of course, we still
need the social and economic benefits of development “
The Threatened Species Conservation Amendment (Biodiversity Banking) Bill
(TSCA) was released on 8 June 2006 and at this time has not been passed by
Parliament. A number of amendments have been made to the Bill by the
Legislative Assembly, with the Bill currently residing with the Legislative Council
(a copy of the Bill with amendments are found in Appendix 1). It is anticipated
that the scheme will be implemented in mid 2007 with the amendment to the
TSCA accompanied by a set of Biodiversity Banking regulations.
The scheme is based on the use of an offset market mechanism combined with
statutory controls by inserting a new part 7A into the TSCA 1995, to promote the
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conservation of biodiversity values on private land. For the purposes of this
scheme biodiversity values are defined as “the composition, structure and
function of ecosystems including threatened species, populations and ecological
communities (Department of Environment and Conservation, 2006, c).
The objectives of the scheme are to provide developers with a choice of
preparing a SIS or going through the scheme to offset the impacts of a
development and to create a market to provide opportunities for private sector
conservation of land. The ultimate goal of the scheme is to “conserve areas with
high biodiversity values by placing an economic value on biodiversity, providing
incentives for conservation actions and disincentives for loss” (Department of
Environment and Conservation, 2006).
The scheme is voluntary and allows ‘biodiversity credits’ to be produced by
landowners who undertake actions to protect and/or enhance biodiversity on their
property (Department of Environment and Conservation, 2006, b). These credits
can then be sold to developers needing to offset impacts on biodiversity, which is
based on the same concept as the U.S Wetland Mitigation Scheme described
earlier.
Four main components will allow this to occur, being:
1. Allowing landowners and the Minister for the Environment to enter into an
agreement (Biobanking Agreement) to create Biobank sites on private
land.
2. The creation of biodiversity credits through actions on Biobank sites which
“improve or maintain” biodiversity values (Department of Environment and
Conservation, 2006, b). Biodiversity credits will be determined through the
use of a Biobanking Assessment Methodology.
3. The purchase and trading of credits once registered.
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4. Using the Biobanking Assessment Methodology to determine the type and
number of credits required to offset the impact of a development on
biodiversity values.
(Department of Environment and Conservation, 2006, b)
An outline of the Threatened Species Conservation (Biobanking) Bill and the role
of the components in the scheme are provided further below.
5.2. Operation of the Scheme
5.2.1 Biobanking assessment methodology
To be eligible for purchasing biodiversity credits, the candidate must demonstrate
that the proposed project will “improve or maintain” biodiversity values
(Department of Environment and Conservation, 2006, b). To determine if a site
will achieve this and hence whether it is feasible to obtain biodiversity credits, a
Biobanking Assessment Methodology will be implemented.
The Biobanking Assessment Methodology (BAM) is a tool to prevent “areas of
high biodiversity value being offset by areas of low biodiversity value”
(Department of Environment and Conservation, 2006, c). The BAM will be used
to determine how biodiversity values will be assessed through:
• “the number and class of biodiversity credits that may be created for
management actions carried out on a biobank site, and
• the number and class of biodiversity credits that must be retired to offset
the impact of the development and ensure that it improves or maintains
biodiversity values ”.
(Department of Environment and Conservation, 2006, d).
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To achieve this, the tool will consider the size of the area to be impacted,
threatened species that will be affected, habitat linkages and condition of the
habitat (Department of Environment and Conservation, 2005).
The aim of the BAM is to calculate credits for a particular ecological community,
so when credits are required to offset the impact of a development, only credits
that have the same ecological community or conservation status as the site
where biodiversity values are being lost will be used.
The BAM is a computer-based tool modeled on the current biometric and
threatened species tools used under the Native Vegetation Act 2003
(Department of Environment and Conservation, 2006, b).
The tool has not been released for public viewing at this stage. The Bill requires
the BAM to be placed on public exhibition and implemented prior to the
establishment of the Biobanking Scheme.
5.2.2 Biobank site identification and Biobank agreement A Biobank site is a “conservation area under a conservation agreement that
generates credits in accordance with the scheme” (Department of Environment
and Conservation, 2006, c).
In determining whether a site is suitable to enter the scheme, criteria such as
location, quality of habitat and potential threats from adjoining lands will be
considered (Department of Environment and Conservation, 2006, c). Sites that
may be suitable as Biobank sites may include land in environment protection
zones specified in LEP’s (Department of Environment and Conservation, 2006,
b). National Parks, Nature reserves and other protected lands that are managed
by DEC will not be eligible as a Biobank site.
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If the site is found to be suitable, the landowner and the Minister for the
Environment will agree on a list of management actions that must be undertaken
by the landowner to conserve or enhance biodiversity values on the site.
Management actions include activities such as controlling or removing exotic
plant species, controlling feral animals, planting indigenous vegetation
(Department of Environment and Conservation, 2005).
By undertaking management actions to conserve or enhance biodiversity values,
the site generates biodiversity credits.
In order for land to become an official Biobank site the landowner and the
Minister for the Environment enter into a Biobanking Agreement, which are
similar to Conservation Agreements required by the National Parks and Wildlife
Act as discussed in Chapter 4.
The Biobanking Bill also requires the Minister before entering a Biobanking
Agreement to consider “whether the person (whether or not an individual) is a fit
and proper person to enter into, and fulfill the obligations imposed by, the
agreement” (Parliament of New South Wales, 2006, b).
A Biobanking Agreement will include details of the management actions to be
undertaken, number and class of biodiversity credits and a timing for their
creation (Department of the Environment and Conservation, 2006, b). A
Biobanking Agreement is a legal agreement to ensure that management actions
are carried out for eternity, even after all credits are purchased from the site.
Once a Biobanking Agreement has been established it will be registered on the
land title so that, in the event the land is sold, the management actions still have
to be undertaken as stipulated by the agreement. In addition, the Biobank site will
be entered into a register by the Director General of DEC. This register will
contain the location and copy of conservation agreements to ensure that only a
registered Biobank site can generate credits.
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Potential parties interested in establishing Biobank sites may include not-for-
profit organisations wanting to expand conservation lands, and private
landowners and Aboriginal people wanting to conserve their land, while
generating credits allowing a return.
5.2.3 Biodiversity credits
Biodiversity credits are generated from management actions on Biobank sites.
Once a credit is created, they are listed in the register so that the status of the
credit can be monitored. A credit will be kept in the database until it is purchased,
at which stage the credit is ‘retired’ (Department of the Environment and
Conservation, 2006, b).
DEC (2006, c) specifies that credits may be obtained through one of the following
means:
1. Creation of a Biobank site to generate credits;
2. Through a broker to help source or set up credits; or
3. Purchasing credits from a landowner who has generated credits from a
biobank site.
The price of credits will not be regulated by DEC but rather set by the market;
that is, landowners will be responsible for the price they receive for their
biodiversity credits (Department of the Environment and Conservation, 2006, c).
Possible considerations in determining the price of a biodiversity credit are likely
to include costs associated with implementing management actions,
establishment of conservation agreements, land acquisition, obtaining expert
advice, compliance and reporting (Department of the Environment and
Conservation, 2005).
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Potential purchasers for credits include developers wanting to offset impacts from
a project, government agencies and non-profit organisations wanting to improve
or increase conservation areas.
Biodiversity credits may be cancelled by the Director General under certain
circumstances, including where a landowner has violated a Biodiversity
Agreement by not completing management actions, providing false information
when purchasing credits, credits containing errors or at the request of the
landowner (Department of the Environment and Conservation, 2006,b ).
Where a person violates a Biodiversity Agreement or commits an offence in
relation to credits DEC may bring proceedings in Court that carry penalties up to
$550,000 (Parliament of New South Wales, 2006, b).
5.2.4 Biodiversity Statements certification
A Biobanking Statement is the document that is required to be obtained by the
person wishing to purchase biodiversity credits. The number and type of credits
required to offset the impact of a development will be contained within the
statement in addition to “any on-site measures required for the development to
improve or maintain biodiversity values” (Department of the Environment and
Conservation, 2006, b).
Biobanking statements are issued by the Director General if the applicant can
demonstrate that all other cost-effective measures to mitigate impacts have been
exhausted and the development will “improve or maintain biodiversity values”
(Parliament of New South Wales, 2006, b). Certain types of development will be
unable to purchase biodiversity credits and obtain a Biobanking statement if the
land is of high conservation land that cannot be offset elsewhere.
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A Biobanking Statement is submitted to the consent authority when a DA is
lodged under Part 4 or Part 5 of the EP&A Act, 1979 (note Part 3A of the EP & A
Act 1979 is excluded from the Biodiversity Banking Scheme, unless the Minister
for Planning directs a developer to purchase biodiversity credits).
Once a Biobanking Statement is submitted with a DA this has the effect of
meeting the requirements for an SIS under the EP & A Act, 1979 and TSC Act
1995. That is, a SIS is not required and the consent authority does not have to
take into consideration the impact of the development on biodiversity values.
A biobanking statement issued to offset the impact of a development expires
after two years or if there are any changes to the development proposal
(Parliament of New South Wales, 2006, b). The purpose of this provision in the
amendment is to ensure that the correct amount and type of credits have been
purchased to offset the development impacts.
Where an offence occurs in relation to the Biobanking Statement, DEC may
impose penalties up to $100,000 (Parliament of New South Wales, 2006, b).
5.2.5 Legislation
The scheme will amend the Threatened Species Conservation Act 1995 by
adding a new part 7A to enable the Biodiversity Banking Bill. The content of this
amendment are the components of the BioBanking Scheme that have been
discussed.
In relation to the EP&A Act, 1979 the Bill contains provisions that will affect this
piece of legislation either through direct amendments made to the Act or via
indirect actions from amendments to the TSC Act, 1995.
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The Threatened Species Conservation Amendment (Biodiversity Banking) Bill
will have the following implications for the EP&A Act 1979 indirectly by amending
the TSC Act, 1995:
• Management actions undertaken on Biobanking sites will be exempt
from development consent under Part 4 of the EP&A Act 1979.
• Where a Biobanking Statement is submitted with an approved DA the
consent authority must require the Biobanking Statement to be
complied with as a condition of consent, which will not be able to be
appealed in the Land and Environment Court.
• A review of a determination can be requested by an applicant for a
development under Part 4 of the EP&A Act 1979. This can occur
where additional conditions of consent have been imposed by the
consent authority that are inconsistent with the Biobanking Statement
or where it requires further action to be undertaken to mitigate impacts
on site that have already been addressed in the Biobanking Statement.
• The Director-General of DEC must refer an application for a
Biobanking Statement to the Minister of Planning if the development is
of a type that is specified in a State Environmental Planning Policy.
Amendments made directly to the EP&A Act, 1979 by the Bill are outlined below.
Part 3A - Major Infrastructure and other projects
Section 75J is proposed to be amended to allow the Minister of Planning to
require a biobanking statement to be obtained for a project, whether or not one
was submitted.
Part 4 – Development Assessment
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The Bill inserts a new section after 78A (8) and 79B (3) that specifies Part 7A of
the TSC Act (being the proposed Biobanking Bill) allows for certain
circumstances where development will not significantly affect species,
populations, ecological communities or habitats (Parliament of New South Wales,
2006, b).
An amendment is made at the end of section 79C (1) as well as amending
sections 111 and 112 to state that a consent authority does not have to consider
the likely impact of a development on biodiversity values if a Biobanking
Statement has been submitted (Parliament of New South Wales, 2006, b). These
amendments do not restrict the power of consent authorities in any way of
refusing development consent on other grounds such as amenity and character.
In addition an amendment to Section 96 of the EP&A Act 1979, is proposed so
that when a development is modified the developer is required to obtain a new
Biobanking Statement to ensure that the correct biodiversity credits have been
obtained and consultation with DEC occurs.
The Biobanking Scheme interacts with other Acts, but it will not override the
Native Vegetation Act and the requirement of that Act to obtain approval for
vegetation clearing.
5.2.6 Management of the scheme
The Biodiversity Banking Offset Scheme will be managed by DEC. The role of
DEC will include managing the registry of Biobank sites, credits and Biodiversity
Agreements while ensuring compliance with the scheme.
Compliance with the Scheme will be enforced through special provisions in the
Bill, which grant the Minister special enforcement powers where an offence
occurs (Department of the Environment and Conservation, 2006, b).
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Such powers include requiring landowners who breach biobanking agreements
to pay a penalty or rectify the situation at their own cost. In addition the Minister
via the Land and Environment Court may repossess a Biobank site where a
breach or continuing non-compliance of an agreement occurs and biodiversity
values are at risk (Department of the Environment and Conservation, 2006, b).
DEC will be responsible for the management of the scheme, however other
parties will be involved throughout the process. The Bill allows for the use of
Conservation Brokers who will assist landowners in establishing and selling
biodiversity credits (Department of the Environment and Conservation, 2006, b).
They can also play a role in assisting developers to obtain credits and apply for
Biobanking Statements. Examples of Conservation Brokers could include non-
profit organisations, consultants and Aboriginal organisations (Department of the
Environment and Conservation, 2006, b).
An outline of the role of the Conservation Broker and Biobanking Process is
provided below in Figure 5.1.
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Figure 5.1 The Biobanking Scheme in action (Department of the Environment and Conservation,
2005, p.8).
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6 Review of the Scheme
The loss of biodiversity is an important environmental global issue because of the
potential dire consequences it has for the earth. In Australia there are a myriad of
statutory mechanisms aimed at protecting biodiversity values. Despite this the
number of threatened species and ecological communities are increasing.
The conservation of biodiversity is a difficult task as pressure to release land for
urban development increases. It is acknowledged that the best practice method
to conserve biodiversity is through in-situ conservation, but the task of providing
land to achieve this is difficult. The NSW State Government has allocated land
through national parks, conservation areas and land use zoning. However, as
previously outlined a majority of land in Australia is owned or managed by the
private sector and therefore the need to provide mechanisms to protect
biodiversity on these lands is required.
Market mechanisms such as the use of offsets can help to provide land for
compensation by removing the onus from governments to dedicate reserves and
national parks and instead placing it on those who are undertaking activities for
economic gain and responsible for increasing the risk to biodiversity.
As a solution, the DEC in NSW has prepared an innovative scheme, known in
short as Biobanking, using a combination of statutory and market mechanisms to
preserve biodiversity.
The Scheme is still in its infancy, as the legislation has not yet been passed.
Despite this, unveiling of this scheme has split industry and environmental
groups, causing controversy.
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6.1 Conserving NSW or Constructing NSW?
6.1.1 Areas of high biodiversity value
The concept of the Biobanking Scheme is based on allowing developers to
purchase credits where a development will impact on biodiversity values, which
include threatened species, ecological communities and critical habitat.
Because of this, the scheme has been viewed by many environment groups as a
license to destroy valuable areas of land with high conservation value. In the
Second Reading of the Bill before the Legislative Assembly, it was noted that at
least 44 environment groups had objected to the proposal (Parliament of New
South Wales, 2006, a).
The argument has been presented that the scheme defeats the purpose as it
permits the destruction or loss of biodiversity. While impacts of a development on
biodiversity values are offset elsewhere, the difficultly lies in determining whether
the offsets will have the same ecological value as the area that is being
impacted. The key to ensuring areas of the same biodiversity values are being
offset and credited will lie in the Biodiversity Assessment Methodology.
As this methodology has not been finalised it is difficult to determine how
successful this application will be. In the event that this application does not
generate the results or similar values expected, the legislation should provide a
mechanism that protects land of high conservation value, making it exempt from
the scheme.
The Environment Liaison Office would like to see the scheme expanded to
ensure this occurs by using “systematic regional biodiversity surveys and
assessment that identifies and protects areas of high conservation value and
identifies degraded areas to be rehabilitated to create corridors and linkages”
(Environment Liaison Office, 2006, p.3). In this way areas that should not be
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developed will not be eligible for the biodiversity offsets scheme as “biodiversity
offsets are no substitute for forgoing development projects that should not have
taken place in the first place” (Ten Kate et al, 2004, p.81) .
6.1.2 Participation by National Parks?
The Biobanking scheme currently applies only to the private conservation of land,
dedicating Biobank sites to be managed by private landowners. The NCC has
indicated that the scheme should allow for landholders to negotiate the transfer
of their land to the National Parks system to allow for the generation of credits
(Nature Conservation Council, 2006). The problem with this method is the cost
involved by NPWS or DEC in maintaining the site. However the idea could be
implemented into the scheme as another way of generating credits for a
landowner who may wish to dedicate their land but does not wish to be bound to
implementing management actions. Should this occur, to reduce maintenance
costs by NPWS, the site could generate credits only when it is transferred to
DEC and then the site is retired; that is, no more management actions required
and therefore no more credits can be generated.
6.1.3 Fragmented habitats
Despite concerns from environmental groups, the scheme has the potential to
increase the conservation of biodiversity. A particular challenge to the
conservation of biodiversity is fragmented habitats. Developers wanting to offset
the impacts of their development have the option of purchasing credits on a
registered Biobank site that is appropriately located in areas with the potential to
increase habitat linkages. In addition, the private conservation of land will be
encouraged through the market by allowing landowners to receive monetary
benefits for the conservation works they undertake on their land, which is
particularly important for landowners that cannot develop their land for urban
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purposes because of important biodiversity values on site. This potentially has
the opportunity of creating a number of new businesses, dedicated to creating
Biobank sites, as was seen in the US Wetland Mitigation Banking Scheme.
6.1.4 Biobanking and the Planning System
The concept of Biobanking is to provide flexibility in the approach to the
development assessment of threatened species and biodiversity values to allow
for their protection while still enabling development. In this way the scheme
allows for continuing development trends which are required to support economic
growth in NSW, while ensuring that as part of this process the conservation of
biodiversity is not forgotten. Because of this while the scheme will be
implemented through a new part to the TSCA 1995 the scheme has important
implications for the EP&A Act 1979.
Development assessment
A Biobanking Statement is issued by the DEC once other cost-effective
measures to mitigate the impacts of a development have been explored and the
development will “improve or maintain” biodiversity values (Parliament of New
South Wales, 2006, b). Because of the process the scheme requires the
developer to go through in granting a Biobanking Statement, it effectively
negates the need for a Species Impacts Statement to be submitted to Council
because the likely impact on threatened species or communities has been
considered and addressed.
As a result, this has the implication of altering the development assessment
process. An outline of the development assessment process using the
Biobanking Scheme compared to current practice for developments likely to
impact on threatened species under Part 4 of the EP& A Act, 1979 is provided in
Figure 6.1.
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The aim of the Biobanking Scheme is to streamline the development assessment
process removing the requirement for consent authorities to consider biodiversity
values where a Biobanking Statement is provided. A comparison of the current
development assessment process using the Biobanking Scheme under Part 4 of
the EP&A Act, 1979 is provided in Figure 6.1.
As can be seen the Biobanking Scheme has some positive benefits for the
developer, such as removing the need to prepare a SIS and potentially the
issues associated with Council considering these in the assessment process.
Further, it can remove lengthy delays in the assessment processes where
Council requires the use of offsets. Currently offsets are used on a case-by-case
basis and these are often requested once a thorough assessment of the DA has
been done (Department of the Environment and Conservation, 2006, c).
However whether this will be beneficial to the developer in the overall project is
another matter. The developer is required instead to go through the process of
Biobanking which could potentially incur the same costs and amount of time
through negotiation, purchasing offsets or engaging a conservation broker.
Moreover, obtaining a Biobanking Statement does not secure consent and in
particular it does not enable development to take place on land which is
classified as ‘prohibited’. The development assessment process still has to be
followed.
Because of this the Biobanking Scheme also has a myriad of other legislation
such as BASIX, SEPP’s and LEP’s that is has to be integrated with.
Further, the use of Biobanking Statements in the development assessment
process effectively diminishes the power of local governments to consider the full
impacts of a development and the public interest under S.79C of the EP&A Act,
1979.
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Figure 6.1 Biobanking in the development assessment process. A comparison of the proposed scheme against the current development assessment process under the EP& A Act, 1979.
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Figure 6.1 Biobanking in the development assessment process continued
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The NSW Biodiversity Strategy recognises that “local initiatives are the key to
achieving ecologically sustainable development (of which biodiversity
conservation is a core objective). Through its traditional roles in planning and
development and increasingly through its new roles in environmental
management, monitoring and reporting, Local Government will be a key player in
efforts to conserve biodiversity” (NSW National Parks and Wildlife Service, 1999,
p.49).
The Biobanking Scheme is an initiative from DEC, which so far does not specify
how the scheme will be implemented in Local Government. It appears to be
moving away from involving Local Government, despite the recognition of the
role they play. For example, no comment is provided on how planners in Local
Government will be instructed to view Biobanking Statements. A suggestion to
improve co-ordination between these two sectors is to run a workshop or training
to understand and gain competency in how to apply a Biobanking Statement, as
was done for BASIX. Given the amount of planning legislation currently in
existence in NSW this would be beneficial.
Greater integration of the scheme with local government is needed, particularly in
Local Environmental Plans. The draft standard LEP template provides an
opportunity to implement provisions in relation to the Biobanking Scheme.
Increased alignment of the scheme with planning, particularly with strategic
planning can lead to better conservation outcomes. For example, the NCC raised
concerns with the lack of restriction of activities near Biobank sites and therefore
the increase of threatening processes in proximity to Biobank sites. Local
Governments have the opportunity to co-ordinate strategic planning activities
with DEC to determine which areas are most suited to conservation.
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If no formal consultation occurs between DEC and local governments then at the
very least, local governments should have the opportunity to access the register
containing details of Biobanking sites and the type of credits generated so as to
identify these areas and perhaps strengthen the need for protection around them
through strategic plans or LEP’s by restricting development in close proximity to
the sites and even identifying potential areas for conservation adjacent to
Biobank sites. By identifying the location of Biobank sites in an Local
Government Area a local council even has the opportunity to establish their own
biobanking sites which can generate credits providing revenue and protecting
land that may have intrinsic value to the local community.
Public consultation
Currently there is no avenue for public consultation within the Biobanking
Scheme. Developers negotiate directly with DEC to offset the impacts of a
development and purchase the necessary number and type of credits to achieve
this. Where developers are successful DEC will issue the Biobanking Statement.
As dicussed above a Biobanking Statement effectively means a consent
authority does not have to consider biodiversity values in relation to S.79C (1).
However biodiversity has significant benefits to local communities through
culture, recreation and the ecosystem support they provide. Local communities
should have the opportunity to comment on a Biobanking Statement before it is
granted by DEC as once this is done, no avenue is available.
6.2 Implementation of the Scheme
The Scheme is an innovative approach for NSW in combining legislation with
market mechanisms. The management of biodiversity is a complex task and the
need to provide an appropriate equilibrium between the two is necessary.
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As the scheme is only in draft format it is unclear at this stage how the market will
work and if it will be successful. Landowners with Biobank sites in theory should
be able to obtain the price asked for biodiversity credits as “if essential resources
for a commodity suddenly become scarce or expensive, the commodity will
become less available than formerly and prices will rise” (Jordan, 1995, p.88).
Biodiversity credits can be considered scarce as development impacts will be
restricted to finding credits with the same ecological characteristics in a given
location. The concern with this is if the price is too high then the developer may
not wish to pursue the development through the Biobanking Scheme and revert
back to using an SIS.
The potential implementation of the scheme has been carefully thought out by
DEC. The Bill contains clauses such as granting the Minister special enforcement
powers through revoking Biodiversity Agreements and imposing penalties for
non-compliance. In addition, Biobank sites, credits and agreements will be
contained in a central register in order to track progress and monitor compliance.
The Bill does not provide for ongoing costs associated with monitoring
compliance, with these details to be stipulated in the regulations. Because of this
if the price of biodiversity credits is to be unregulated, it is uncertain how DEC will
maintain the scheme. It will be necessary to ensure that no further costs are
passed onto the developer or landowner in order to ensure enough people
participate in the scheme, especially as it is voluntary.
The DEC appears to have carefully planned the establishment of Biobank sites
and generation of credits. It would seem that learning from problems with the US
Wetland Mitigation Banking Scheme have been incorporated into the scheme.
Biobank sites will be required to be legally linked to the title of the land to ensure
that even when the land is sold management actions on site continue.
Biobanking agreements will be established when credits are able to be placed on
the market for sale to ensure that the management actions required to generate
the credits are undertaken.
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In recognition that not all policies are perfect, and there will be learning with
experience through implementation, the Bill requires the Scheme to be reviewed
within two years of operation, with a report to be produced within a year for public
exhibition to demonstrate the success or failings of the scheme. A two-year
timeframe is an appropriate goal to aim for, however at the time of this two year
period it will be necessary to ensure that this clause is enforced.
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Conclusion
The importance of biodiversity and the benefits it provides to local, national and
global communities and environments have been demonstrated. Current
conservation mechanisms are failing to keep up with the growth and resulting
destruction of habitats that is occurring. New and innovative measures are
required to conserve biodiversity on private lands.
The use of an offset market mechanism has the potential to demonstrate to
landowners that it is worthwhile to protect biodiversity. While such mechanisms
have been criticised for uncertainty they provide in relation to the new areas that
are created as a result of the impacts from a development, it is a step towards
requiring developers to contribute to the conservation of biodiversity.
In NSW the current practice is to use offsets on an individual case by case basis
through a condition of development consent. By providing a formal system in
which to allow the trading of biodiversity credits, this gives more certainty to
developers with the potential to increase lands dedicated solely to conservation.
Some areas of the scheme require further detail such as the biobanking
assessment methodology to ensure that like for like areas are traded to provide
conservation areas of high quality so as to avoid sites with low biodiversity
values. In addition better integration is needed with local government and the
planning system when the scheme is finalised and the regulations are released.
Only when the details are complete can a thorough assessment of the potential
outcome of the scheme be realised.
Despite the concerns raised, the Biodiversity Banking and Offsets Scheme is a
tool which uses a combination of market mechanisms and legislation. The loss of
biodiversity is a critical issue and every method should be tested to conserve
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species, populations, ecological communities and habitats which are essential to
the functioning of the global biosphere. The scheme provides an innovative
approach to conserving biodiversity, adding a further dimension to the current
conservation methods.
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Appendix 1
1. Parliament of New South Wales (2006) Threatened Species Conservation Amendment (Biodiversity Banking) Bill 2006, http://www.parliament.nsw.gov.au/prod/parlment/NSWBills.nsf/0/E5FB44CF76E29FB0CA2571870025A52A
2. Parliament of New South Wales (2006, b) Threatened Species
Conservation Amendment (Biodiversity Banking) Bill, Third reading, Legislative Assembly, 18 October 2006, Hansard, http://www.parliament.nsw.gov.au/prod/parlment/hansart.nsf/8bd91bc90780f150ca256e630010302c/feb305bbfa0d994eca25719300085bed!OpenDocument
