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Developers and the Biodiversity Offsets Scheme

The Biodiversity Regulation 2017, under the Biodiversity Conservation Act 2016, outlines the framework for addressing biodiversity in development and land clearing including the Biodiversity Offsets Scheme.

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The Biodiversity Offsets Scheme (The Scheme) is designed to avoid, minimise and offset impacts on biodiversity from development and land clearing and to ensure land that is used to offset impacts is secured in-perpetuity.

The Scheme involves a biodiversity assessment that determines the impact a development will have on biodiversity. The Scheme introduces a set of processes to be followed when carrying out development and land clearing activity. This activity may result in fees being incurred by the Developer or Landholder approximate to the level of impact on biodiversity.

Following an extensive review into land management and biodiversity in NSW, a new land management framework has been established. This came into effect on 25 August 2017.

For developers and landholders, there are two key elements to the Scheme:

  1. 1. developers and landholders who undertake development or land clearing and generates a credit obligation must ‘retire’ the obligation by offsetting their activity; and
  2. 2. landholders who establish a biodiversity stewardship site on their land, generating credits to sell to developers or landholders requiring those credits, must securely offset activities at other sites.

Most relevant to developers is Part A of the Scheme. Madison Marcus summarise the steps involved in Part A as follows:


Step 1. The Developer or Landholder determines whether the Scheme applies

Environment NSW outlines where the Scheme will apply, namely:

  • ●  local development (assessed under the Environmental Planning and Assessment Act 1979) that is likely to significantly affect threatened species or triggers the Biodiversity offsets Threshold*;
  • ●  state significant development/infrastructure projects;
  • ●  biodiversity certification proposals. This is a streamlined biodiversity assessment for areas of land that are proposed for development at a strategic planning stage.
  • ●  clearing of native vegetation in urban areas and areas zoned for environmental conservation that exceeds the Scheme and does not require development consent;
  • ●  clearing of native vegetation that requires approval by the Native Vegetation Panel under the Local Land Services Act 2013; and
  • ●  activities assessed and determined under Part 5 of the Environmental Planning and Assessment Act 1979.

*The Biodiversity Offsets Scheme Threshold (Part 7 Regulation) is determined by two elements:

  • ●  when the amount of native vegetation being cleared exceeds a threshold area (clause 7.2. provides tabling of area clearing thresholds); and
  • ●  whether the area being cleared is mapped on the Biodiversity Values Map (clause 7.3). For the Biodiversity Values Map viewer, click here.

If the land clearing exceeds the trigger, the Scheme applies.

Development proposals that DO NOT exceed the Threshold

The developer or landholder must carry out a test of significance for all development proposals that do not exceed the Threshold. A test of significance will determine the impact of environmental clearing. The guidelines for this current test are not yet available.

Where the impact is significant, the developer or landholder must carry out a Biodiversity Assessment Method (BAM) in relation to identified impacts. Details on the BAM are contained in Step 2 below.

Those below the Threshold and test of significance will be assessed under s79C Environmental Planning and Assessment Act 1979.


Step 2. An Accredited Assessor applies the Biodiversity Assessment Method (BAM) and offsetting rules to the activity

If the Scheme does not apply to the activity then an Accredited Assessor must be engaged.

The Assessor will complete a Biodiversity Assessment Report (BAR) which must form part of the development application, which a consent authority will have regard to.

The BAR sets out how the developer or landholder has applied steps to avoid and minimise impacts on biodiversity, and sets out the number and type of ecosystems and species credits required to offset residual impacts of the activity on biodiversity (‘credit obligation’).


Step 3. Authority assesses the application and determines whether to approve or refuse

A consent authority must consider whether the proposal may have a ‘serious and irreversible impact’ and will reject an application if it is deemed likely.

The impact is regarded as serious and irreversible if it ‘is likely to contribute significantly to the risk of a threatened species or ecological community becoming extinct.’ (clause 6.7(2)).  More information on the guideline principles and criteria for determining this impact can be found here.


Step 4. Authority determines the application and the offset obligation (credit obligation)

If the consent authority approves the application, a credit obligation (and other actions required) is determined and will be included as conditions of the relevant approval or consent.

The consent authority has the discretion to vary the credit obligation generated by the BAR and other conditions may also be imposed to secure commitments in the BAR.


Step 5. The Developer or Landholder satisfies its credit obligation and can begin the approved activity

Once the consent authority has issued the approval or consent that includes the final credit obligation, developers and landholders have two primary ways that they can satisfy this obligation:

Biodiversity Regulations Part 6 Division 6.1

  • ●  Option to retire ‘like for like’ credits (Clause 6.3, 6.4) (for more information on ‘like for like’ credits click here); or
  • ●  Offsets Payment Calculator to determine the cost of developer or landholder’s credit obligation which will be transferred to the Biodiversity Conservation Fund.

The Calculator is used to determine the price payable by developers and landholders through either: (Clause 6.2(2))

  • ●  Funding a biodiversity action; or
  • ●  Making payment to the Biodiversity Conservation Fund.

For more information on the calculator, click here.

When the developer or landholder has completed these steps for all credits they are required to retire, they can proceed with their activity in accordance with the approval. The Biodiversity Conservation Trust is responsible for the credit obligation for applying Fund money towards securing biodiversity offsets. (Clause 6.6)

Areas of exception for 12 months: Camden, Campbelltown, Fairfield, Hawkesbury, Liverpool, Penrith and Wollondilly. Development applications are permitted to be made under the former scheme for the next 3 months.

Fees associated with the Biodiversity Offset Scheme:

Environment NSW has provided a fees table for relevant transactions in the Biodiversity Offsets Scheme process. The table of fees can be viewed here.

If you have any questions relating to the Biodiversity Offsets Scheme or anything contained in this article, please contact the authors Denis Hall, Director – Real Estate & Developments or Paul Jayne, Partner – Planning, Environment & Government on:

Denis Hall Madison Marcus

Denis Hall,  Director – Real Estate & Developments
+61 2 9762 0424

paul jayne madison marcus law firm

Paul Jayne, Partner – Planning, Environment & Government
+61 2 9762 0483

Madison Marcus Law Firm produced this article. It is intended to provide general information in summary form on legal topics, current at the time of first publication. The contents do not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought in particular matters.

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