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Wednesday, 16 September 2015 18:48

NSW Offsets Policy: A Dubious Way to Prevent Loss of Biodiversity

The efficacy of offsets depends on a strict set of rules and long-term consistency of application. The first article ponders whether offsetting will cost our natural heritage (koalas or coal, nature or one-off profits, short-term gain or things of wonder for our grandkids) whilst the second article provides an overview of the desirable guidelines for the creation and operation of offsets.

One of the recommendations of the NSW Government review of the biodiversity legislation released in December 2014 was for a system that:

… encourages the broader and deeper application of offsetting, as approved in the NSW Biodiversity Offsetting Policy for Major Projects and through mechanisms such as biodiversity certification and BioBanking. A state-wide biodiversity offsets fund should be operational as soon as possible.

To date the policy of offsets has been mostly applied to rural areas. Now the idea is increasingly being proposed for urban vegetation.

The efficacy of offsets depends on a strict set of rules and long-term consistency of application.

Koalas for Coal: Will it come to this in NSW?

Dr Oisin Sweeney, Scientific Officer at the National Parks Association highlights some of the issues with offsets. Published on the Independent Australia website on 23 May 2015.

The NSW government announced prior to the election that it would adopt all the recommendations contained in its recent biodiversity review. It is hard to overstate the magnitude of this: NSW is the most populous state in the country so future pressures on the environment will likely be felt most acutely here. The state also contains globally significant species and ecosystems, including a large part of the ‘Forests of Eastern Australia’ biodiversity hotspot.

To ensure that we don’t trade development for nature, the drafting and implementation of new biodiversity laws must be done well. The government’s ability to achieve this will determine the fate of the 970 threatened species and 104 threatened ecological communities in NSW.

While there are some sensible recommendations in the review, others may hasten the demise of species and ecosystems. One such example is the ‘deepening and broadening’ of biodiversity offsetting – a ‘solution’ to development that is increasingly applied across Australia and internationally.

If it sounds too good to be true…

Offsetting sounds great. Development, some argue, is inevitable. So let’s offset the environmental damage by recreating or protecting habitat elsewhere. What’s not to like? It’s easy to see why offsetting is attractive to governments dealing with multiple development pressures. It removes the pesky problem of having to make a choice.

But there are major question marks over whether recreating nature is possible. Even if it was, the time lag between the habitat destruction and the offset maturing means displaced animals will be long gone. And protecting similar habitat elsewhere to offset losses results in net habitat loss.

There is a smorgasbord of other problems too. Calculating baselines and conservation benefits is difficult, as is designing effective offsets.

In truth, development is not inevitable and society has a choice as to whether to sacrifice nature for commercial gain. This is why opponents see offsetting as a sweetener to get otherwise unacceptable projects over the line. In essence a political license to destroy forests, wetlands and anything else that stands in the way of development.

When is an offset not an offset?

Some of the complexities in offsetting become clearer when we consider a couple of examples. One hypothetical but certainly possible, and one currently being considered. Let’s start with the hypothetical.

1.     Coastal upland swamps

Coastal Upland Swamps in the Sydney Basin Bioregion are endangered at both state and federal level. 83% of coastal upland swamps lie on the Woronora plateau with an area of occupancy of <4500 ha. Only 8.6% of swamps on the plateau are in reserves and all are critical to the communities’ survival. This is because of the highly specific set of variables required for swamp formation, which makes recreating the community nigh on impossible. Unfortunately, the swamps lie on top of a seam of valuable coking coal which Wollongong Coal extracts.

Advice from the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development indicated that swamps would be impacted by mining via subsidence and cracking of the beds of swamps causing water loss. As yet, Wollongong Coal has not been required to find offsets for their activities. But what if it had? Or has to in future? The biodiversity review recommends that a monetary payment would suffice in the absence of a ‘like for like’ offset.

So it seems that there is now no unacceptable, ‘red flag’, development. Money solves all problems. Even were payments ring-fenced for nature conservation, it is a prime example of a perverse outcome: the destruction of one ecological community is permitted for the ‘benefit’ of another.

As a society, we need to ask whether a payment constitutes an acceptable offset to future generations for the loss of an ecological community.

2.     Koalas in Gunnedah

The Gunnedah district is home to the largest inland population of koalas in NSW. This results from the presence of food and shelter trees, soil type and groundwater availability. The Breeza plains near Gunnedah is the site of the controversial Shenhua Watermark coal mine proposal, approved by the NSW Planning Assessment Commission on 28 January. [And by the Federal Government just this month under the water trigger legislation.]

The mine is predicted to remove 847 ha of preferred koala habitat over its 30 year life. But assessments also predict groundwater drawdown in the adjacent Breeza State Forest. The shallow aquifer is considered important as it is within reach of tree roots, resulting in better food for koalas—essentially groundwater dependency. Impacts to the water table would therefore likely result in a drop in habitat quality for koalas.

Offset proposals include replanting or encouraging regeneration of food trees; using Breeza SF as an ‘avoidance measure’ and the rehabilitation of 2357 ha of koala habitat on the mine. Although the offset sites support similar vegetation communities to the mine, the aquifer is at a lower depth and the trees cannot access groundwater. Hence the offset is highly unlikely to ever reach the same quality for koalas as the mined area.

Plus, although koalas can use young trees for food6, there will be a time lag of 10–20 years in the creation of suitable feeding habitat. When we consider that koalas need tall non-feed trees with dense foliage as temperatures rise, the lag may be closer to 100 years. These offsets are likely to be woefully inadequate, and are not truly ‘like for like’ as groundwater and shelter trees have not been considered. This starkly illustrates the problems in defining suitable offsets.

What does the future hold?

The NSW government has committed to a draft of the new legislation by November and looks likely to go way beyond the recommended framework for offsetting laid out by a Senate Inquiry in 2014. Leaving aside the fact that the testimony from some of Australia’s leading scientists rubbished offsetting, the Inquiry recommended that offsetting be used only as a last resort, that a list of ‘red flag’ areas should be developed and that a consistent national standard be adopted based on the federal model. None of these are on the table in NSW.

All the evidence suggests that the NSW government is accelerating down a road to ruin, scattering out short term band aids as the juggernaut thunders on. As always, we can’t have our cake and eat it. Koalas or coal; nature or one-off profits; short-term gain or things of wonder for our grandkids: these are the choices we have to make.

Desirable Conditions Governing Offsets

Gibbons, P and Lindenmayer, DB (2007) Offsets for Land Clearing: No Net Loss or the Tail Wagging the Dog? Environmental Management and Restoration 8, 26–31

In 2003 NSW introduced legislation that allowed land clearing only if it improves or maintains environmental outcomes. Broad scale clearing has been banned but clearing is still permitted under limited circumstances. Offsetting has been introduced as a policy instrument used to permit clearing within an overall no net loss objective.

The principle of biodiversity offsets is that habitat loss can be evaluated and 'offset' within an area (usually larger area) of equivalent value. It assumes that sufficient habitat can be protected, enhanced and/or established elsewhere.

The main questions about the validity of offsets relate to:

  1. The amount of habitat gain that can actually be achieved by the offset
    Simply quarantining from clearing an area that already exists has been a traditional model for mitigation but this is not an offset, it does not make up for the area lost. Similarly, a gain cannot be sourced from protection of already well protected high value habitat, as this is part of the existing condition and no further improvement can be achieved. Offsets need to be new areas where there is a real potential of habitat replacement and improvement.
  2. The equivalency of the gain
    Vegetation communities are complex to reproduce on any equivalent basis. New plantings or regeneration strategies are unlikely to recreate the natural habitat for native mammals and reptiles that would have developed over many years in an area to be cleared. In practice a scoring system is used to try to measure the attributes of the area to be lost and matching scores are applied to the replacement area but operational expediency is unlikely to replace like-for-like. The desired outcome is a balance between the area being removed and the ability to develop offset habitat to support representative communities of species, even if it is 'modified'.
  3. Time lag between the loss and the gain
    There will be a time lag between the loss of vegetation and establishment of new vegetation so that displaced animals will have to move elsewhere (if possible). The prime example is the loss of hollow bearing trees that may take more than 100 years to produce hollows from a new plant.
  4. Adequacy of compliance
    Compliance is an ongoing problem. What authority is going monitor all the offset sites? An example is where Rio Tinto has to offset the loss of Warkworth Sands Woodland at its Mt Thorley Warkworth mines near Bulga. An area of the woodland has been cleared already but no action has been taken to create a protected area as compensation (see below).

Overall if the shortcomings of offsets are acknowledged they can be overcome through regulation that aims to ensure that there is indeed no net loss. And if clearing is likely to lead to a net loss then it should not be approved.

Despite the pitfalls, this did not stop the Wentworth Group in 2003, under A New Model for Landscape Conservation in NSW recommending some type of offset mechanism for NSW. Since then, research and development of the current policy for offsets in NSW has shown that it can work but only under a strict set of circumstances, which are:

  • The values lost from clearing can be feasibly restored elsewhere, ie realistically this can only occur if the lost site has a simple vegetation.
  • The vegetation proposed for clearing is unlikely to persist in situ, eg small paddock trees among cultivation or 'postage-stamp' areas of habitat.
  • Offsets must be in place for long enough to allow habitat to recover and restore key ecosystem processes (not just species composition).
  • Management MUST deal with inherent risk and uncertainty about the actual process of restoration. The focus should be not on the process, but the outcome. To create an outcome in the face of uncertainty, management must be adaptive; offsets must be guaranteed in perpetuity; and there must be adequate compliance.

Mining offsets: An example of flawed offset policy

A prime example of lack of compliance is the Warkworth coal mine in the Hunter Valley. In January 2015 a conservation officer from the Office of Environment and Heritage resigned from his position over what he describes as capture of the Department of Planning and the Office of Environment and Heritage by the coal and gas industries, leading to the real possibility of species and habitats being pushed to extinction.

Current Office of Environment and Heritage offset policy allows the controversial practice where companies can claim biodiversity offset credit for their plans to rehabilitate land currently being open-cut mined. Also, mining activities have been approved that will override protection agreements. For example the proposed current Warkworth open cut extension will destroy a conservation offset guaranteed by a Deed of Agreement by the Planning Minister in 2003.

For the Warkworth extension, Rio Tinto proposes to set up a biodiversity conservation area on the Goulburn River near Merriwa. This protection will not compensate for the destruction of the specific endangered ecological communities at Warkworth and the threatened species they support. Warkworth Sands Woodland cannot be adequately protected elsewhere to compensate, as there is not sufficient woodland left remaining. The chair of the NSW Scientific Committee has stated that the ecosystem removal of Warkworth Sands Woodland for open cut coal mining will likely lead to the irreversible extinction of the ecological community.

Now coastal upland swamps may be compromised

This month the NSW Government released some parts of a new ‘integrated mining policy’ and invited submissions. It is hard to believe that one part up for discussion is a proposal for coastal upland swamp offsets. As explained in STEP Matters (Issue 168) these swamps are classified as an endangered ecological community and are irreplaceable.