Independent review of the Biodiversity Conservation Act 2016 released

The NSW Environment Minister Penny Sharpe, tabled the independent review (Report) of the Biodiversity Conservation Act 2016 (Act) in Parliament on 24 August 2024. The review was undertaken in accordance with the statutory 5 year review period in the Act and was conducted by independent reviewer Dr Ken Henry AC, supported by Mr Mike Mrdak AO, Dr John Keniry AM and Professor Michelle Leishman.

In the Report, the independent panel found that the Act is incapable of meeting its primary purpose of maintaining a healthy, productive and resilient environment, and is never likely to do so:

While the Biodiversity Conservation Act 2016 has been in operation for only five years, we cannot pretend that it is ever likely to achieve its objectives.

Biodiversity is not being conserved at bioregional or State scale. The diversity and quality of ecosystems is not being maintained, nor is their capacity to adapt to change and provide for the needs of future generations being enhanced. Yet these are the principal purposes of the legislation.

The Report considered the principal operative provisions of the Act to be deficient given:

• its objectives are undermined by other legislation;
• its effectiveness to restore, conserve and enhance biodiversity is limited;
• very little data is being collected on the effectiveness of the Act and there exists limited capacity to evaluate whether it is achieving its objectives;
• key advisory resources including the Biodiversity Conservation Advisory Panel are underutilised;
• a lack of Aboriginal inclusion, involvement and participation;
• the regulatory provisions of the Act are complex and costly, and the integrity of the Biodiversity Offsets Scheme is both deficient and compromised;
• stakeholders lack access to transparent data; and
• the Act requires reform to align with national and global frameworks.

Recommendations of the Report

The Report seeks to remedy these deficiencies through a shift to ‘nature positive’ framing, promoting investment in conservation and restoration, increasing certainty and lessening compliance costs in complying with regulatory requirements, expanding credit supply and value, and overall shifting the focus of the Act from preventing biodiversity harm to proactively seek nature positive outcomes including regeneration and repair of biodiversity and ecosystems. Nature positive is explained as meaning our environment is being repaired and regenerated, which is to be contrasted with traditional sustainability approaches which have focussed on slowing or stabilising the rate of biodiversity loss.

The Report contains 58 recommendations, categorised into the following categories:

(a) creating a new ‘nature positive’ architecture including an overarching object in the Act of ‘nature positive’ and commitments to achieve a standard of net gain in biodiversity,

(b) developing a Nature Positive Strategy (with reference to national biodiversity targets) to ensure the efficiency of the Biodiversity Conservation Trust and to provide for principles against which the Trust is to align its strategic investment planning,

(c) investing in a single nature positive spatial tool that clearly identifies no-go areas where development cannot occur (including any areas where it has been determined that a project would cause serious and irreversible impacts (SAII)),

(d) nature positive development to regulate future and past development to ensure consistency with biodiversity objectives,

(e) species and ecosystem recovery to halt and reverse biodiversity loss including regular reporting of progress under the Nature Positive Strategy,

(f) data-informed decision-making placed in the hands of the EPA to report on biodiversity in real time,

(g) leveraging private investment into emerging nature markets, and

(h) intersection with other acts to ensure primacy of nature positive outcomes.

Impact on Future Development

Key recommendations which, if adopted, would have a significant impact on future development include:

• requiring a net gain for biodiversity through setting credit obligations at 120% of calculated biodiversity loss;
• the potential for the Minister to be given a ‘call-in’ power to determine if local development, clearing or major projects would give rise to a SAII and for major projects have a concurrence role in determining if that impact should be approved. The Report states that SAII should only be approved for major projects in exceptional circumstances;
• introducing anti-avoidance rules allowing consent authorities to retrospectively apply the Biodiversity Offsets Scheme if there has been pre-emptive clearing to avoid the scheme applying;
• greater focus on avoiding and minimising impacts to biodiversity from development;
• including a requirement that steps taken to avoid and minimise biodiversity impacts be a condition of development consent;
• giving the Minister for the Environment sole discretion to discount biodiversity credit requirements, rather than the current situation which provides discretion to the Minister for Planning for State significant development or infrastructure projects;
• identifying and mapping areas where development cannot occur;
• having rezoning (where expected impacts trigger the area clearing thresholds or the Biodiversity Values Map).trigger a need for biodiversity certification;
• removing the option of using ecological mine site rehabilitation to meet credit obligations;
• requiring proponents to show that they have made demonstrable steps to find like-for-like credits before allowing payment into the Biodiversity Conservation Fund and publishing a list of credit types for which payment into the Fund is not permitted; and
• providing a new power to the Biodiversity Conservation Trust to require landholders to commence active management of biodiversity stewardship sites.

These recommendations, if adopted, will have a significant impact on whether proponents of development will be required to offset the impacts of development, the availability of offset credits and potential to pay into the Biodiversity Conservation Fund. The report includes various recommendations to incentivise private investment to support land restoration and conservation (including giving greater value to restoration credits) as well as continued investment in the Biodiversity Credits Supply Fund. The lack of credit supply remains a significant barrier to achieving a reasonable balance between development and biodiversity conservation in NSW. The recommendation in the Report to align relevant legislation with a nature positive outcome may create further challenges in achieving this balance if social and economic considerations take a back seat to biodiversity outcomes.

The NSW government will now consider the findings of the review and develop a whole of government response. The Report has recommended tailored engagement with Aboriginal people and organisations as well as the Commonwealth government when responding to the Report. Concurrently we can expect to see a consultation draft of the new ‘nature positive’ legislative package from the Commonwealth government later this year including a number of new national environmental standards which will likely influence State legislative reform in the future (see our earlier article on this topic here). In addition the Australian government has committed to establish a nature repair market that may provide additional avenues for investment in biodiversity protection as well as offsetting options (see our earlier article on this topic). Based on a number of comments in the Report, we can expect to see some significant reforms coming our way in NSW:

Improvements delivered to date have been made within the existing legislative framework, limiting what could be achieved. Legislative reforms are now needed to deliver improved biodiversity outcomes, better integrate the scheme into strategic planning processes, reduce complexity and build confidence.