A shake up of planning and development laws in New South Wales

Articles Written by Samantha Daly (Partner), Lara Douvartzidis (Associate), Stephanie Ritchie (Associate)

The COVID-19 pandemic has spurred a considerable amount of recent activity by Planning Ministers all over Australia, including in NSW. These recent activities are discussed below, as well as an update on the status of the reforms to the Independent Planning Commission, which many energy and resources companies are keeping a close eye on.

COVID-19 – Planning Ministers across Australia commit to keep approvals running

On 20 April 2020, the Commonwealth Minister for Population, Cities and Urban Infrastructure, Alan Tudge MP, issued a media statement, affirming that swift changes will be made to the planning regime to ensure development applications can be approved at their usual pace despite the COVID-19 pandemic. The continuity of the planning regime is aimed at keeping businesses and jobs running as normal as possible, particularly in vital sectors such as building and construction where the economic impact of the virus can be mitigated and the economy can recover quickly.

The media statement highlighted the fact that Planning Ministers from each State and Territory, and the President of the Australian Local Government Association, have reached agreement to ensure planning approvals continue to run throughout the COVID-19 pandemic.

Notwithstanding States and Territories’ varying planning regimes, the following principles were agreed and will be implemented by all State-level governments:

  • Decision making in the public interest is a paramount theme in all planning systems and this must continue as a guiding consideration.
  • Transparency for stakeholders about changes to systems and particular decisions.
  • Decisions made within jurisdictions are consistent, where possible.
  • Consideration of the level of public interest in a particular planning change or development proposal.
  • Balancing administrative and legal review rights with the need to address the pandemic emergency and to assist community and economic recovery.
  • All reasonable effort is made to maintain the usual pace of planning approvals recognising, as far as practical, community consultation will continue through new forms of communication recognising social distancing requirements.

The Planning Ministers further acknowledged the lessons learned by the COVID-19 pandemic and committed to change the procedural requirements, including the use of technology and other planning processes, response to future emergency events, sharing of information between jurisdictions and improvements to planning systems for potential ongoing implementation once the market returns to business as usual.

The Planning Ministers will review the principles in June 2020 to assess their ongoing suitability for Australia’s economic recovery phase amidst the coronavirus pandemic.

COVID-19 – NSW Planning System Acceleration Program

In late April 2020 the NSW Government launched its Planning System Acceleration Program in an effort to boost the economy and employment during the COVID-19 pandemic. The program is designed to accelerate the assessment of development applications and re-zonings for certain projects, which will be determined based on consideration of the following criteria:

  • The number of jobs generated in project construction and on an ongoing basis;
  • The timeframe for delivery, namely whether for development applications, projects can commence within the six months to September 2020 and, for planning proposals, whether projects can proceed to Development Approval within that six-month window; and
  • The capacity to create public benefit, e.g. through the delivery of additional dwellings, affordable housing and/or significant public space.

Detail in relation to the above criteria is contained in the ‘Priority Projects Criteria’ dated April 2020 and is published on the Department of Planning, Industry and the Environment’s (DPIE) website. An independent probity advisor will oversee the application of the priority project criteria and whilst the assessment process will be fast-tracked, the usual planning rules and policies will remain unchanged.

Projects identified for fast-tracked assessment will be announced in tranches, with decisions on projects within a tranche to be made within four weeks. The NSW Government has already announced Tranche One and Tranche Two. Tranche One comprised a total of 24 projects to be determined by 21 May 2020. The most significant of those projects is the Snowy 2.0 – Main Works, valued at $4.6 billion and set to generate 2,000 jobs, and the Mt Druitt CBD project, valued at $1.49 billion and projected to create 2,988 new jobs, both of which have now been approved.

Tranche Two comprised of a further 24 priority projects to be determined by 18 June 2020. These projects include a new retail centre, industrial precincts, three new schools and the relocation of the Sydney Fish Markets. Tranche Two is expected to inject more than $5.37 billion into the NSW economy and could provide more than 15,000 jobs.

The Planning System Acceleration Program is a welcome initiative by the NSW Government in seeking to accelerate projects with the potential to generate jobs and significant capital expenditure in order to boost the NSW economy in the recovery phase of COVID-19. Energy and resources companies with existing projects or rezoning proposals in the planning system should consider the Priority Projects Criteria in detail and potentially put their projects, including modifications, forward to the Government for consideration for acceleration in future tranches.

Updates on reforms to the Independent Planning Commission

On 1 February 2020, NSW Planning and Public Spaces Minister Rob Stokes MP announced that the Independent Planning Commission (IPC) will be overhauled following an extensive review by the NSW Productivity Commission.

The NSW Government accepted all 12 recommendations provided by the NSW Productivity Commission in their final Report published on 13 December 2019. The changes will introduce ‘new performance benchmarks, streamlined processes, greater accountability, and new Commissioners, to ensure the system works better for everyone.’

In accordance with the findings of the Report the key changes to the IPC will include:

  • Establishing the IPC as a separate and independent agency, with its chair accountable to the Minister for Planning and Public Spaces and responsible for delivering on the Government’s agreed objectives and performance measures;
  • Clarifying roles - with the IPC to act as a decision-maker on the State’s most controversial projects rather than re-assessing the Department’s technical work;
  • Eliminating bureaucratic double handling with the introduction of a single-stage public hearing process;
  • Ensuring only the most complex and contentious projects are referred to the IPC by raising the referral threshold to 50 unique community objections and making the Minister the consent authority for all modifications; and
  • Introducing accountability benchmarks for decision-making timeframes to ensure timely determinations.

The reform of the IPC is being spearheaded by Acting IPC Chair Peter Duncan AM. We understand that the IPC is planning to have the majority (if not all) of the reforms in place by 30 June 2020. Since February there have already been a number of changes made to the IPC’s role and processes as outlined below.

Legislative amendments involving the IPC

On 16 March 2020 the State Environmental Planning Policy (State and Regional Development) Amendment (State Significant Development) 2020 (NSW) was enacted which amended the State Environmental Planning Policy (State and Regional Development) 2011 (NSW) (SRD SEPP) to raise the threshold for when State significant development applications will be determined by the IPC. Under the Amendment, clause 8A(1)(b) of the SRD SEPP was amended to raise the threshold of the number of objections for determination by the IPC from 25 to 50 persons (other than a council). Additionally, a separate subclause ((8A(5)) was inserted for the purpose of outlining what should be counted as “one submission” under clause 8A(1)(b). Under this new clause both a petition and any submissions that contain the same or substantially the same text will be viewed as “one submission” only. Importantly, the amendments also confirm that modification applications will no longer be determined by the IPC unless the applicant has disclosed a reportable political donation in connection with the application.

Further, in late April the Environmental Planning & Assessment Regulation 2000 (NSW) (EP&A Regulation) was amended to allow public hearings and meetings to occur by telephone or videoconference during the COVID-19 pandemic. Minister Stokes said the amendment ‘was vital to clarify the legal requirements for public hearings and meetings during the pandemic and ensure planning bodies can continue to operate without delay.’ Following this legislative change the IPC will conduct all public hearings and public meetings electronically, using tele- and/or video-conferencing facilities, until 25 September 2020. The Commission will also stream proceedings online and continue to publish transcripts on its website. The Commission will continue to accept written submissions or comments up to one week (7 days) after the public hearing or meeting. The IPC subsequently released an addendum to the Public Hearing, Public Meeting and Site Inspection Guidelines to respond to these new COVID-19 processes. In deciding whether to undertake a site inspection in the current COVID-19 environment, the Commission will first consider alternative sources of information about the physical attributes of the site, including:

  • video/photographic and other informative submissions from the applicant;
  • the applicant providing a virtual inspection of the site on a video call to the IPC;
  • undertaking a locality tour, for appropriate sites within driving distance; and/or
  • seeking detailed site information from DPIE and its officer/s who conducted a site inspection, including any notes or photographs taken as part of DPIE’s assessment of the project.
New IPC public hearing guidelines

On 10 March 2020 the IPC public hearing guidelines were updated and publically released, which set out the considerations that will guide the Commission in relation to the conduct of a public hearing. It should be noted these guidelines relate only to public hearings and should not be confused with public meetings conducted by the Commission (which are the subject of a separate guideline). Importantly, the guideline confirms that there will be no new multi-stage public hearings. Some of the key aspects of the new guidelines to note are as follows:

  • The IPC may use Counsel assisting – there is no criteria or guidance as to when the IPC may elect to use Counsel assisting in a public hearing.
  • The IPC intends for public hearings to be a more interactive process, with more opportunity for the IPC to ask questions and seek clarification of matters and seek to get to the crux of key issues. Hearings will involve:
    • The Chair of the appointed Panel giving a brief opening statement describing the IPC’s role in determining the development application;
    • The Applicant providing a description of the proposed development;
    • The DPIE presenting its assessment report and the rationale for its recommendation to the IPC that a project be approved or refused; and
    • Pre-registered members of the public presenting to the Panel.
  • After the presentations, the IPC will adjourn briefly to consider the submissions made and may ask follow-up questions of the Applicant or the Department. Questions can be answered immediately or taken on notice.
  • Further submissions may be made to the IPC after the public hearing for a period of 7 days.
Statement of Expectations for the Independent Planning Commission

The Statement of Expectations (SoE) for the IPC have recently been released by Stokes MP, and will apply for the period from 1 May 2020 to 30 June 2021 (or until otherwise amended). The purpose of the SoE is to outline the expectations in relation to the purpose, functions and roles of the IPC, as well as key governance and performance objectives to improve the effectiveness of the IPC in determining contentious State significant development applications and providing independent expert advice, when required.

The SoE lists four key objectives that the IPC should consider when performing its functions:

  • independent and objective decision making;
  • openness and transparency in the operations of the IPC;
  • delivering robust and timely determinations within the legislative and Government policy framework to best serve the people of NSW; and
  • encouraging effective community and other stakeholder participation to inform IPC determinations and advice. 

The SoE also delineates three key functions of the IPC, to:

  • determine State significant development and modification applications for which it is the consent authority;
  • conduct public hearings for development applications and other planning and development matters, when requested; and
  • provide independent expert advice on any planning matters, when requested.

In the IPC undertaking its functions and roles the SoE states:

Of principal importance to the successful undertaking of these functions are the interactions between myself as the Minister and the Government as the entity responsible for determining policy for the State; the Planning Secretary, who I expect to coordinate whole-of-government planning assessments prior to matters being provided to the Commission; and the Commission who I expect to make decisions based on the legislation and policy frameworks and informed by the Planning Secretary’s assessment. I expect these roles to be respected so that duplication of functions is avoided.

Importantly, Stokes MP has also developed key performance indicators to ‘ensure ongoing timeliness and quality of decisions’. These key performance indicators will be used by the IPC during the drafting of its Annual Report to Parliament and quarterly on the IPC’s website for State significant determinations. The SoE makes clear that the IPC is expected to implement all applicable recommendations of the Productivity Commission Review and report to Stokes MP on progress towards adopting the recommendations.  

The SoE also includes expected timelines for State Significant Development Determinations from the date of the provision of the Assessment Report by the DPIE to determination by the Commission (excluding any time where the IPC has requested further information from DPIE or the Applicant).

The Determination should be made within:

  • 5 weeks (35 calendar days) for routine determinations (no public meeting or hearing) and modifications with political donations;
  • 8 weeks (56 calendar days) for determinations subject to a public meeting; and
  • 12 weeks (84 calendar days) for determinations subject to a public hearing.

In relation to Gateway and Rezoning Reviews, advice is also to be provided to the Planning Secretary within:

  • 5 weeks (35 calendar days) including any meetings and preparation of the advice (unless otherwise agreed with the Planning Secretary and excluding any time where the IPC has requested further information from DPIE, Council or the Applicant).

In relation to Mining and Petroleum Gateway Certificates, the relevant timelines that apply are the ones specified in State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (NSW). In meeting these timeframes, Stokes MP acknowledges that DPIE also has an obligation to ensure the IPC is made aware of upcoming matters, provide adequate assessment documentation and respond to information requests in a timely manner, in accordance with the Memorandum of Understanding (MoU) between DPIE and the IPC.

Memorandum of Understanding between the Department and the Commission

On 5 May 2020 the DPIE and the IPC both signed an a MoU, taking effect that day and providing for common understanding in which to make decisions for the betterment of NSW as a whole, and to clarify how these two bodies will work together in order to exercise their respective responsibilities under the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act), with an emphasis on quality, probity, timeliness and transparency.

The DPIE and the IPC will interact in the following instances in order to effectively exercise their respective responsibilities under the Act:

  • When the DPIE is undertaking its assessment for development applications where the IPC is the consent authority (delivering “assessment as a service”).
  • When the IPC is determining a development proposal (including conducting public meetings as part of the determination).
  • When the IPC is undertaking a public hearing into a matter at the request of the Minister.
  • When the IPC is undertaking a function of the Mining and Petroleum Gateway Panel.
  • When the IPC is undertaking a Gateway Review of a planning proposal at the request of the Minister.
  • When the IPC is preparing advice at the request of the Minister or the Planning Secretary’s delegates within DPIE.
  • When the IPC is named as a party to, or otherwise involved in proceedings relating to an application assessed by DPIE.

The following commitments have also been made by the DPIE and the IPC, which should be viewed as minimum requirements in order to successfully carry out their respective functions, including:

  • The DPIE and the IPC will undertake their respective functions with honesty and impartiality, to strengthen public trust in the planning system (including achieving administrative consistency and avoid duplication wherever possible);
  • The DPIE and the IPC will work together to administer efficient, timely and effective processes under the Act (noting that the DPIE will administer the receipt and public exhibition of development and modification proposals, and the statutory notification of decisions);
  • The DPIE and the IPC will work together to optimise public access to all information used in decision-making (including that the DPIE will maintain the public register of development proposals, including matters determined by the IPC, but the IPC will ensure that the public register is complete for matters determined by the IPC); and
  • The DPIE and the IPC will communicate clearly and in a manner that invites cooperation and strengthens public trust in the planning system (including that the IPC will use the DPIE assessment report as the starting point for its determination).

Other recent planning reforms in NSW (related to COVID-19)

There have been a number of recent planning reforms in NSW as a result of COVID-19.

Changes to the appeal periods in the Environmental Planning & Assessment Act 1979 (NSW)

The COVID-19 Legislation Amendment (Emergency Measures-Miscellaneous) Act 2020 (NSW) amends 34 separate pieces of legislation, including the EP&A Act. Included in this raft of amendments are significant changes to the appeal periods under various sections of the EP&A Act.

The time for applicants to commence a merit appeal against a decision which relates to certain development or modification applications (including a deemed refusal) has been extended from 6 months to 12 months. This extension applies to decisions made during the period 25 September 2019 to 25 March 2022. This fact that the provision applies retrospectively (to decisions made during the 6 month period before 25 March 2020) means that for certain modification or development applications where the right to appeal a determination or refusal (including a deemed refusal) of the application may have expired, those appeal rights may now be re-activated.

Additionally, the time to commence objector appeals (for designated development, or State significant development that would otherwise be designated development) has been extended from 28 days to 58 days where the relevant decision occurs during the period 25 March 2020 to 25 March 2022 or occurred during the 28 day period immediately before that period.

The prescribed period under the EP&A Act for judicial review challenges to be brought (i.e. three months from the date of the decision) has not changed.

Changes to the Environmental Planning & Assessment Regulation 2000 (NSW)

Amendments were also made to the EP&A Regulation, which came into effect on 15 May 2020. This amendment, the Environmental Planning and Assessment Amendment (Lapsing of Consent) Regulation 2020 (NSW), has the effect of significantly raising the threshold for what is considered physical commencement of a development consent. As a consequence, the broad ‘peg in the ground’ approach as endorsed in Hunter Development Brokerage Pty Ltd v Cessnock City Council; Tovedale Pty Ltd v Shoalhaven City Council [2005] NSWCA 169 will no longer be tenable. In this case, the Court of Appeal found that certain survey works (including, for example, placing pegs in the ground, removing vegetation, and constructing permanent survey marks) were considered engineering work necessary to effect a subdivision and therefore considered activities sufficient to physically commence a development consent.

Prior to this amendment, the EP&A Regulation did not place limitations on physical commencement.

Clause 124AA was inserted into the EP&A Regulation and outlines the following activities as not being sufficient to constitute physical commencement of a development in order to save a development consent from lapsing:

  1. Creating a bore hole for soil testing,
  2. Removing water or soil for testing,
  3. Carrying out survey work, including the placing of pegs or other survey equipment,
  4. Acoustic testing,
  5. Removing vegetation as an ancillary activity,
  6. Marking the ground to indicate how land is to be developed.

Consequentially, clause 123AA has the effect of significantly narrowing the Hunter test, though it is important to note that Clause 124AA does not apply to consents granted before 15 May 2020. It will apply to all development consents granted after this date, noting that this change to the EP&A Regulation is permanent (compared to other amendments that have a prescribed period of application). 

Changes to lapsing periods of consent

In addition to the above amendment to the EP&A Regulation which narrows the kinds of works that may be sufficient to prevent the lapsing of a development consent, section 4.53 of the EP&A Act has been amended to change the period during which a development consent or deferred commencement consent will lapse, so that:

  • all consents and deferred commencement consents granted in the 2 year period from 25 March 2020 will have a five-year lapsing period that cannot be reduced by the consent authority (this applies even if the consent itself stipulates a lapsing period of less than 5 years);
  • for consents and deferred commencement consents granted prior to 25 March 2020 that had not already lapsed, the lapsing date has been extended by 2 years. For example, if a consent lapsed on 30 March 2020, it has been revived and is now valid until 30 March 2022; and
  • consents and deferred commencement consents that have lapsed since 25 March 2020 are revived and extended by 2 years from the date they lapsed.
Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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