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Friday, 16 June 2017 06:57

Assessment of Biodiversity Offsetting – A Fail and Worse to Come

Over the past 200 years NSW has lost almost half of its bushland through land clearing and only 9% of what is left is in good condition. Clearing of native vegetation and habitat modification are the greatest threats to the survival of the majority of species on the threatened list.

The biodiversity laws that the government passed in late-2016 place a great deal of emphasis on offsetting as a means of allowing development to occur. The theory is that biodiversity lost when clearing for a development can be replaced by providing for restoration or protection of biodiversity in another place.

The Nature Conservation Council recently published a report on the operation of NSW’s biodiversity offset schemes, called Paradise Lost: The Weakening and Widening of NSW Biodiversity Offsetting Schemes, 2005–16. This article outlines the key findings of the report.

As you can tell from the title, the principles of offsetting have been severely compromised. We can expect worse to come under the new laws.

Concept of Biodiversity Offsetting

Biodiversity offsetting has been in use in NSW since 2005 under various pieces of legislation.

One example is the money that was paid by NSW Transport Infrastructure Development Corporation to compensate for the loss of 0.33 ha of Blue Gum High Forest when the railway station at Hornsby was expanded. The money was used to help purchase land to expand the area of protection of Blue Gum High Forest next to Dalrymple-Hay Nature Reserve.

We have written before about the theoretical difficulties of using offset schemes to compensate for lost vegetation and habitat loss and the measures that should be taken to counteract these difficulties.

The basic principles that should be observed are given below.

Offsets hierarchy

Offsets should only be used after appropriate avoidance and minimisation measures have been taken according to the mitigation hierarchy. A biodiversity offset is a commitment to compensate for significant residual adverse impacts.

No net loss

A biodiversity offset should be designed and implemented to achieve measurable conservation outcomes that can reasonably be expected to result in no net loss and preferably a net gain of biodiversity.

Some areas should be off limits – red flags

There are situations where residual impacts cannot be fully compensated for by a biodiversity offset because of the irreplaceability or vulnerability of the biodiversity affected.

Consider whether restoration is possible

Biodiversity offsetting assumes ecosystems and habitats can be re-created. This is often not the case, particularly if offset sites have been highly degraded and lost essential characteristics. In Australia, a number of studies have shown revegetated areas rarely resemble the ecosystem it was intended they would replicate.

Timing mismatch

It takes some time for species to establish a viable population in a new habitat. Offsetting should allow for a phased-in approach to prevent the total loss of species that are already threatened. The loss of hollow-bearing trees is a particular example.

Stakeholder participation

In areas affected by the project and by the biodiversity offset, the effective participation of stakeholders should be ensured in decision-making about biodiversity offsets. All stages including their evaluation, selection, design, implementation, monitoring and communication of results to the public should be undertaken in a transparent and timely manner.

Long-term management

The design and implementation of a biodiversity offset should be based on an adaptive management approach, incorporating monitoring and evaluation, with the objective of securing outcomes that last in perpetuity.

Case Studies

There are five types of offsets schemes operating in NSW. The performance of each of these schemes was examined through the lens of eight case studies:

  • Namoi catchment property vegetation management plans – approval for land clearing under the Native Vegetation Act
  • Kellyville in northwest Sydney – creation of credits under the BioBanking scheme
  • Wagga Wagga local environment plan – biodiversity certification for strategic planning
  • Albury local environment plan – biodiversity certification for strategic planning
  • Huntlee development in Hunter Valley – Office of Environment and Heritage principles for biodiversity offsetting
  • Boggabri and Maules Creek coal mines – development consent – Office of Environment and Heritage principles for biodiversity offsetting
  • Warkworth mine extension – Office of Environment and Heritage principles for biodiversity offsetting
  • Mt Owen mine expansion – NSW biodiversity offsets policy for major projects

The report provides a detailed description of the features of each case study and compares them with the expected standards. The criteria for the analysis were:

  • be a last resort after avoidance and mitigation (including appropriate ‘red flags’)
  • deliver biodiversity equivalence (like-for-like)
  • provide security and achieve benefits in perpetuity
  • deliver a net gain in biodiversity
  • be additional to conservation measures already in place
  • be enforceable, resourced and well-managed
  • be subject to a rigorous monitoring and evaluation framework
  • be open and transparent

 It was demonstrated that biodiversity offsetting is failing to deliver the environmental outcomes promised. No case studies resulted in outcomes deemed ‘good’ and the outcomes were:

  • ‘disastrous’ in one study (Boggabri/Maules Creek)
  • ‘poor’ in five studies (Warkworth, Mount Owen, Huntlee, Albury, Kellyville)
  • ‘adequate’ in two studies (Namoi, Wagga Wagga)

For more details read the report.

Comparison of Offset Schemes

The report considers that a scheme should have the following features:

  • excludes discounting of offset credits
  • excludes supplementary measures
  • excludes mine rehabilitation
  • clear standard for environmental outcomes
  • does not allow payment in lieu of offsets
  • red flags
  • impacts on water quality and soil are taken into account
  • like-for-like offsetting

The case studies demonstrate the features of the five biodiversity offset schemes in operation. It was found that the later models contained fewer best-practice principles and standards than the earlier ones:

  • only the first offsets scheme (the Environmental Outcomes Assessment Methodology under the Native Vegetation Act) contained all eight features
  • the Biodiversity Offsets Policy for Major Projects introduced by the Baird government in 2014 contained only one of the eight features

Overall, biodiversity offsetting schemes have failed to deliver the promised outcomes and they have become weaker as standards have slipped.

Draft Biodiversity Offset Scheme is Even Worse

The latest Draft Biodiversity Offset Scheme (BOS) and the Biodiversity Assessment Methodology (BAM) that will be used to determine offsetting does not include any of the features described above.

The BAM is a metric-based tool that allows biodiversity impacts and improvements to be assessed and quantified in terms of ecosystem credits and species credits, collectively known as biodiversity credits that will need to be offset.

The proponent can choose to between three methods of meeting their offset obligation:

  • buying credits for a suitable site under the offset rules from the market, or they can establish a Biodiversity Stewardship Agreement on their own land and retire the credits generated
  • make a payment to the Biodiversity Conservation Trust that will source the offsets
  • paying for conservation actions as approved by the consent authority

Key points for submissions

The key points on the features that should be in the offsetting legislation and the changes that are needed are listed below.

1. Discounting of biodiversity credits should not be permitted

The government proposes introducing ‘discounting’ that will allow offset credit requirements to be ‘discounted’ based on claimed social and economic benefits. Economic prioritisation policies are likely to contribute to the incremental and permanent loss of significant biodiversity in NSW, and undermine the credibility of the policy.

2. Supplementary measures should not be included

The BOS allows the use of ‘biodiversity conservation actions’ that may include research or surveys into the biodiversity under threat. This is not a genuine offset. The Scientific Committee stated in a report on this idea that this:

… is clearly a case of developers being able to buy themselves out of any obligation to protect biodiversity in any meaningful way.
NSW Scientific Committee (2014) Submission on the Draft NSW Biodiversity Offsets Policy for Major Projects

3. Allowance of mine rehabilitation

Numerous critics have questioned whether degraded mine sites can be effectively restored and in any case mine site rehabilitation should be an obligation of the mining company. Recently, developers have been permitted to use mine rehabilitation sites to generate biodiversity offset credits. The government proposes continuing this practice under the draft BOS.

4. Clear standards

The Biodiversity Conservation Act requires that the biodiversity assessment method should adopt a standard that result in no net loss but the draft BAM does not have a clear objective to protect biodiversity.

5. No payment in lieu

The draft BOS would allow proponents to discharge offset requirements simply by paying money into Biodiversity Conservation Trust. The development could proceed without certainty that the required offset is possible.

6. Red flags

The BOS does include some restrictions on proposals that cause ‘serious and irreversible impacts’ (SAII) but the criteria for defining SAII are too weak. It includes only the most endangered and restricted area species and ecological communities. In the case of major projects the SAII risks can be ignored. The net effect will be that EECs and endangered species not listed in the list of SAIIs, e.g. STIF and Duffys Forest, could be cleared without offset requirements if the land area is below the clearing thresholds. A council’s discretionary DCP would be the only protection.

7. Other impacts on water and soil

Other impacts should be considered in the BAM. The assessment methodology covers only a limited range of biodiversity values such as vegetation integrity and habitat suitability but not soil health and water quality and availability.

8. Like-for-like principle

The like-for-like principle that offsets should replace the values being lost is undermined in several aspects. For example:

  • Offsets can be found from a radius of 100 km. It will be easier and cheaper to find offsets outside urban areas undermining preservation of biodiversity and threatened species and EECs such as STIF. The loss of existing geographic distribution if sites in urban areas are lost will undermine species resilience and long term adaptation to climate change.
  • Offsets can be used for species across similar vegetation classes or between species. This even applies to threatened species; a koala can be swapped for a wallaby.

Conclusion

The government is proceeding with this model despite warnings expressed by leading scientists, lawyers and conservationists. The government basically has ignored the advice of the experts because it is wants to deliver development at any cost. Implementing the BOS will in fact add extinction pressures to the very species and ecological communities it is supposed to protect by facilitating the more rapid and widespread destruction of threatened species habitat across NSW.

Please Send a Submission

Closing date: Wednesday 21 June. Lodge online or post to Land Management and Biodiversity Conservation Reforms, Office of Environment and Heritage, PO Box A290, Sydney South, NSW 1232.