in brief corrs Delivery of the Strategic Regional Land Use Policy What it means for coal and gas projects on or near strategic agricultural land

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1 corrs in brief Delivery of the Strategic Regional Land Use Policy What it means for coal and gas projects on or near strategic agricultural land The NSW Government has recently released a number of draft plans, policies and guidelines that deliver on its Strategic Regional Land Use Policy. This Policy aims to protect high quality agricultural land and water resources from the impact of mining and petroleum projects. Significantly, all State significant mining and petroleum proposals on or within 2km of strategic agricultural land will be considered under an independent gateway assessment and will require a gateway certificate before a development application may be lodged. The gateway assessment process will investigate the impacts of major resource projects on strategic agricultural land undertaken by a panel of experts and the decision of the panel is final and binding. Those projects failing to pass the gateway cannot proceed to lodge a development application. The NSW Government has acknowledged that, due to the implementation of the gateway, some exploration licences issued in the past will not lead to mining or production in the future. The Policy also includes: The introduction of strict new controls to protect groundwater and aquifers; The requirement to prepare an agricultural impact statement as part of the environmental impact statement; The implementation of stringent new rules for coal seam gas exploration and production; and Banning the use of BTEX chemicals and evaporation ponds. While the Policy is aimed at protecting strategic agricultural land from coal and petroleum projects, and will clearly have a significant impact on these industries, proponents of other major projects on or near strategic agricultural land should familiarise themselves with the Policy as such projects may be affected by the draft Aquifer Interference Policy and Guideline for Agricultural Impact Statements. Background In the lead up to the NSW election in 2011, the Coalition announced its Strategic Regional Land Use Policy (Regional Policy) to control development of regional areas and balance the needs of conflicting land uses such as mining, petroleum, agriculture and tourism industries. The key aim of the Regional Policy is to deliver: a tough, independent assessment process for major resources projects; the toughest regulatory regime for coal seam gas (CSG) in Australia; greater protection of our groundwater sources through the introduction of a new Aquifer Interference Policy; and certainty for industry by establishing clear rules and transparent assessment processes. The Regional Policy will apply state-wide in regional areas where there is high value agricultural land and increasing activities from the mining and petroleum, in particular CSG, industries. The Department of Planning and Infrastructure (Planning Department) document titled Delivery of the Strategic Regional Land Use Policy (Regional Policy Factsheet) provides a general overview of the Regional Policy and its operation. The Regional Policy will be implemented through the development and implementation of Strategic Regional Land Use Plans (Regional Plans) for region specific areas. These Plans will be used to define land use priorities for different areas of land within a region. They will identify the best places for agriculture, mining, CSG extraction, wine-growing, horse breeding, conservation, urban development and other types of land use. Following consultation with government agencies, a stakeholder reference group and local councils of these regions, draft Regional Plans will be prepared and exhibited MAKING BUSINESS SENSE

2 for public comment. Draft Regional Plans have already been prepared for the Upper Hunter and New England North West areas. Further Regional Plans will be prepared for: (a) the Central West and Southern Highlands area, which are expected to be finalised in 2012; and (b) the Murrumbidgee, Alpine and West areas, which are expected to be finalised by As part of the consultation process for the Regional Policy, drafts of the following documents have been released for public comment: Upper Hunter Strategic Regional Land Use Plan (Hunter Plan); New England North West Strategic Regional Land Use Plan (New England Plan); Aquifer Interference Policy (Aquifer Policy); and Code of Practice for Coal Seam Gas Exploration (CSG Code). These documents will be on public exhibition for eight weeks and any submissions in respect of them must be made by 3 May In the context of the Regional Policy, the Government has also published the following guidelines: Guideline for Agricultural Impact Statements (AIS Guideline); and Guideline for Community Consultation Requirements for the Exploration of Coal and Petroleum, including Coal Seam Gas (Community Consultation Guideline). Regional Policy Factsheet, Hunter Plan and New England Plan The Hunter Plan and New England Plan (collectively, Draft Plans) aim to minimise land conflicts arising from the rapid growth of coal mining activities and the recent emergence of the CSG industry, and establish a balanced approach to the interests of a highly productive agriculture and agribusiness and sustainable growth and certainty for the mining industry in the regions. The Plans identify key regional challenges including: ensuring an appropriate balance between competing land uses, in particular, achieving co-existence where possible between mining, CSG activities and agriculture; maintaining or enhancing future opportunities for environmentally responsible mining, including developing strategies to manage the projected growth of the coal and CSG industries to effectively deliver reliable energy in a carbon constrained economy; maintaining or enhancing future opportunities for sustainable agriculture; and defining and protecting strategic agricultural land (Strategic Land). The Draft Plans are expected to be finalised and in force from June Given the similarities of the Draft Plans, one may reasonably expect that the other Regional Plans yet to be prepared will be drafted in similar terms. Under the Regional Policy, there are two categories of Strategic Land, namely: (a) biophysical strategic agricultural land (Biophysical Land) which has high soil fertility and a high level of access to water, and covers an area of more than 20 hectares; and (b) critical industry clusters (CIC) which are concentrations of highly productive industries (such as equine and viticulture) within a region that are related to each other, contribute to the identity of that region and provide significant employment opportunities. The Department of Primary Industries (DoPI) is responsible for identifying and mapping Strategic Land, which is then incorporated into the relevant Regional Plan. As part of this mapping process, DoPI will also map coal, gas and other mineral resources in regional areas to identify the relationship between the location of Strategic Land and natural resources. In the context of the areas covered by the Draft Plans, DoPI has identified over 1.3 million hectares of Strategic Land. Once Strategic Land is mapped in the relevant Regional Plan, it is proposed to include the maps in the State Environmental Planning Policy (Mining, Petroleum and Extractive Industries) 2007 (Mining SEPP). Once Strategic Land is identified in the relevant Regional Plan, all State significant mining and petroleum proposals on or within 2km of Strategic Land will be required to undertake the new independent gateway assessment process (gateway). Clauses 5 and 6 of the State Regional Planning Policy (State and Regional Development) 2011 set out mining and petroleum activities declared to be State significant development (SSD). Before proponents can proceed to lodge a development application (DA) under the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act), a gateway certificate must be issued. Proposals that do not pass the gateway cannot proceed to DA lodgment. A flowchart of the gateway process is located at the end of this Corrs In-Brief. However, the Draft Plans indicate that proposals will be exempt from the gateway in circumstances where Cabinet PAGE 2

3 declares a proposal to be an exceptional circumstance on the basis that the subject resource is of exceptional value to the State. Proponents for such proposals may proceed to DA lodgment without the need for a gateway certificate. The specific details regarding the criteria for an exceptional circumstance and the frequency of its use remain to be seen. If the exemption does not apply, the proponent must lodge a gateway certificate application with the Independent Mining and Coal Seam Gas Gateway Panel (Panel). The role of the Panel is to investigate and assess the impacts of the proposal on Strategic Land, and determine whether the proposal has an acceptable or unacceptable impact on Strategic Land. The Panel will comprise independent experts from the fields of agriculture, soil science, hydrology, economics and mining. In making a gateway determination, the Panel must consider the proposal against specific criteria. The draft criteria outlined in the Plans indicate that the Panel will need to consider the following: 1 whether the gateway certificate application verifies that the land the subject of the proposal does not meet the criteria of Strategic Land. 2 in the context of land identified as Biophysical Land, whether the proposal would significantly reduce the agricultural productivity of the land due to: (a) surface area disturbance and subsidence; (b) impacts on soil fertility, rooting depth or soil profile materials and thicknesses; (c) increases in land surface microrelief or soil salinity, or significant changes to soil acidity; and (d) impacts on highly productive groundwater, including the provisions of the Aquifer Policy and the advice of the Minister for Primary Industries. 3 in the context of land identified as CIC, whether the proposal would lead to significant impacts on the cluster through: (a) surface area disturbance and subsidence; (b) reduced access to agricultural resources; (c) reduced access to support services and infrastructure; (d) reduced access to transport routes; and (e) loss of scenic and landscape values. 4 whether the proposal would be in the public interest through a cost benefit analysis undertaken in accordance with the Government's published cost benefit methodology (currently being developed); 5 any submissions received from relevant agencies, council(s) and the community during the 21 day exhibition period for the gateway application; and 6 any advice received from the Commonwealth Independent Expert Scientific Committee (IESC) that is considered by the Minister for Primary Industries in relation to the impacts of the proposal on aquifers. It is anticipated that the Mining SEPP will be amended to require the issue of a gateway certificate and list the mandatory gateway criteria. If a proponent passes the gateway and may proceed to lodge a DA, the proposal will be exempt from the requirement to obtain an aquifer interference approval under the Water Management Act 2000 (NSW) (WM Act) (discussed below). However, all State significant development (SSD) and State significant infrastructure (SSI) proposals, including those that have passed the gateway, located on Strategic Land will be required to prepare an agricultural impact statement (AIS) (discussed below) to demonstrate that the impacts of the proposal on agricultural land and resources will be avoided and minimised to acceptable levels. While the Regional Policy does not apply to development applications lodged with local councils under Part 4 of the EPA Act in relation to proposals that are not SSD, the mapping may nevertheless be used to inform councils development assessment processes. It is also anticipated that the mapping may be used by councils to assist with identifying appropriate zonings and planning provisions for inclusion into local environmental plans (LEPs) to reflect the high value of agricultural land in the regions. In this respect, the Planning Department proposes to issue a direction under section 117 of the EPA Act requiring LEPs covered by a Regional Plan to be consistent with the content and objectives of the relevant Regional Plan. The Regional Policy Factsheet states that the gateway process will deliver greater balance and rigour to the assessment process and will result in some mining and coal seam gas production activities being ruled out on some agricultural land. However, the gateway is expected to impact licensees who have been granted exploration licences as, with the delivery of the Regional Policy and the identification of Strategic Land, some of the licences will not lead to mining projects or CSG production. Finally, the Draft Plans acknowledge that the cumulative impacts of mining, in particular noise and dust impacts, have impacts on agricultural land and water resources. For these reasons, the Planning Department, Office of Environment and Heritage and DoPI are developing a specific cumulative impact assessment methodology for mining and CSG proposals to help identify the thresholds and mitigation. PAGE 3

4 Aquifer Policy The purpose of the Aquifer Policy is to explain the role and requirements of the Minister for Primary Industries and NSW Office of Water (NSW Water) in the water licensing and approval processes for aquifer interference activities (AI activities) under the WM Act and the Water Act 1912 (NSW) (Water Act). The Aquifer Policy has two components, namely: 1 water licensing requirements for AI activities under the WM Act and Water Act; and 2 AI approval requirements where the relevant groundwater underlies Biophysical Land. The second stage of the roll out of the Aquifer Policy will address the AI approval requirements for activities interfering with groundwater that does not underlie Biophysical Land. Although the Aquifer Policy applies to all AI activities, it has been developed mainly to address the following high risk activities: mining activities, such as open cut voids, underground mine workings and the disposal of water taken from an aquifer including water taken as part of CSG extraction; other extractive industries, such as sand and gravel extraction; large projects which require dewatering for the construction and maintenance of associated works, such as buildings, roads and other civil works; injection works used to transmit water into an aquifer; and activities with the potential to contaminate groundwater or result in unacceptable loss of storage or structural damage to an aquifer. Under the WM Act, the term aquifer is defined as a geological structure or formation, or an artificial landfill, that is permeated with water or is capable of being permeated with water. More generally, however, the term aquifer is understood to mean a groundwater system that is sufficiently permeable to allow water to move within it, and which can yield productive volumes of groundwater. The term "aquifer interference activities" is defined by the WM Act as involving: (a) the penetration of an aquifer; (b) the interference with water in an aquifer; (c) the obstruction of the flow of water in an aquifer; (d) the taking of water from an aquifer in the course of carrying out mining or any other activity prescribed by the regulations; and (e) the disposal of water taken from an aquifer in the course of carrying out mining or any other activity prescribed by the regulations. Examples of AI activities include mining, CSG extraction, injection of water and commercial, industrial, agricultural and residential activities that intercept the water table or interfere with aquifers. The Water Management (General) Amendment (Aquifer Interference) Regulation 2011 (NSW) (Aquifer Regulation), which was introduced in June 2011, specifies that the extraction of sand and the extraction of road base material are also considered AI activities. Water licences A water licence is required under either the WM Act or the Water Act where any act by a person carrying out the AI activity causes: (a) the removal of water from a water source; (b) the movement of water from one part of an aquifer to another part of an aquifer; or (c) the movement of water from one water source to another water source. A water licence is required whether water is taken for consumptive use or whether it is taken incidentally by the AI activity. The kind of licence that is required for AI activities will depend upon whether or not a water sharing plan has commenced in respect of the relevant water source. If the relevant water source has a water sharing plan in place under the WM Act, the person carrying out the AI activity will require a water access licence. This licence gives the holder a share of the pool of water available for extraction, rather than a guaranteed volume of water per year. However, separate approvals are still required for AI activities, water supply works and water use. On the other hand, if a water sharing plan does not apply to the relevant water source, the person carrying out the AI activity will require a water licence under the Water Act. This licence covers both the taking of water from a river or aquifer and any approvals for works or activities that cause this water to be taken. The Water Act is being gradually replaced by the WM Act as water sharing plans are finalised for particular water sources. Therefore, once a water sharing plan is finalised for a water source where existing water licences issued under the Water Act are in force, these licences for AI activities will convert to aquifer access licences under the WM Act. Water licence exemptions Section 2.5 of the Aquifer Policy outlines exemptions from the requirement to hold a licence under the WM Act and the Water Act, which include, for example: PAGE 4

5 (a) road or rail infrastructure construction undertaken by a "roads authority" as defined by the Roads Act 1993 (NSW) or an "authority" as defined by the Transport Administration Act 1988 (NSW) provided that the environmental impact of the construction or maintenance has been considered under section 111 of the EPA Act or is exempt from the need for such consideration under section 110E of the EPA Act; and (b) certain activities associated with the construction, alteration, renovation or maintenance of residential dwellings. AI approvals Since water access licences under the WM Act do not authorise works or activities, persons undertaking AI activities will require a separate AI approval unless an exemption applies. The use of chemicals in the process of hydraulic fracturing, a common technique used in CSG extraction, is expected to be regulated under the Petroleum (Onshore) Act 1991 (NSW) (PO Act) and the EPA Act. The actual process of hydraulic fracturing will require an AI approval. An AI approval is issued under section 91(3) of the WM Act. The approval confers a right on its holder to carry out one or more specified AI activity at a specified location, or in a specified area or water source, in the course of carrying out specified activities. In the context of SSD and SSI, separate approvals under the WM Act are generally not required. However, this exemption for SSD and SSI proposals does not extend to AI approvals (see sections 89J(1)(g) and 115ZG(1)(g) of the EPA Act). Therefore, all AI activities will require an AI approval, except if an exemption applies. The assessment process for the proposal applies an account for, avoid/prevent and remediate approach. The approach requires proponents to: 1 demonstrate that they have the ability to obtain the necessary licences in order to account for the take of water from any relevant water source. In circumstances where the necessary licence entitlements may not be obtained, the proposal will need to include mitigation or avoidance strategies in order to reduce the take of water to a point where it can be accounted for; or 2 if proponents are unable to meet the requirements in (1) above, demonstrate that the proposal has been designed in such a way to prevent the take of water; or 3 demonstrate that the proposal includes strategies to prevent any more than minimal harm occurring to any water source, their dependent ecosystems or other water users; and 4 commit to undertake remedial action for unforeseen adverse impacts occurring during and after the AI activity where planned mitigation, prevention or avoidance strategies fail. Before the Minister for Primary Industries issues an AI approval, NSW Water must undertake an assessment of the proposal s ability to meet the requirements set out above. This assessment will determine the potential level of impact and will identify where further mitigation, prevention or avoidance measures are required. If no suitable or practical mitigation or prevention options are available, proponents may be asked to avoid impacts by modifying the proposal. An AI approval will either be exempted or will only be issued where it can be demonstrated that adequate arrangements are in place to ensure no more than minimal harm will be done to the aquifer or its dependent ecosystems. The minimum harm criteria is set out in Appendix 1 of the Aquifer Policy and covers the potential impacts of water table and water pressure drawdown, aquifer compaction and water quality. In order to meet the minimum harm criteria, consideration will be given to potential impacts such as: water level or pressure drawdown impacts on nearby water users; water level drawdown and related impacts on surface water and groundwater dependent ecosystems; acidity issues to arise; waterlogging or water table rise; significant levels of aquifer compaction; deterioration of the ambient water quality of the water sources; significant river bank instability; and significant soil erosion. In the case of petroleum exploration and production proposals, NSW Water will also consider: if the design, construction and operation of the bore will modify the existing hydraulic connection between aquifers. If the proposal is likely to increase inter-aquifer leakage, an AI approval will not be issued; if hydraulic fracturing will cause more than minimal harm to the aquifer or its dependent ecosystems, or will modify the hydraulic connection between aquifers, an AI approval will not be issued; and the method for disposal of extracted water. It is anticipated that an amendment to the Petroleum (Onshore) Regulation 2007 will prohibit the use of evaporation ponds and stipulate that the method of disposal will be included as a condition of AI approval or development consent under the EPA Act. Therefore, proponents will need to demonstrate that evaporation ponds will not be used to dispose of extracted water. PAGE 5

6 In order to prevent more than minimal harm occurring to groundwater underlying Biophysical Land, its dependent ecosystems or other water uses, four risk management zones will be established for and apply to Highly Productive Groundwater (HPG) and related key water source features. HPG is groundwater that contains water supply works yielding a minimum specified threshold and low salinity levels. Water source features include groundwater bores, high priority groundwater dependent ecosystems and groundwater dependent culturally significant sites on, in or under Biophysical Land. Significantly, an AI approval will not be issued for an activity that proposes to directly operate within a water protection zone, except if the zone relates to HPG. Further, mining and petroleum proposals in a water protection zone that relate to HPG will not be issued with an AI approval unless specified exemptions apply. In the limited intrusion zone, AI approvals will not be issued for a mining or petroleum proposal that will directly operate within the zone if it will cause more than 10 per cent of the three dimensional extent of this zone, subject to an exemption. After AI approval is given, unforeseen impacts may still occur during the life of the AI activity. If unforeseen impacts are larger than those predicted in the assessment process, approval holders will be required to cease the activity until remedial action is completed. A security deposit such as a bank guarantee or sum of money will be held by the Government to cover the costs of remediation works for unforeseen impacts or ongoing post-closure activities. The amount of security will be determined on a case-by-case basis. Exemption from AI Approvals General exemptions from the need to hold an AI approval will be specified in the AI Regulation and include: SSD mining and petroleum proposals that have been granted either a gateway certificate or development consent, in circumstances where the gateway does not apply, under the EPA Act; individual activities that existed prior to AI approvals being required under the WM Act where they did not require a licence under the Water Act. However, if the activity is modified or expanded resulting in a greater impact on the aquifer, the activity will require an AI approval; activities covered by a water supply work approval; mineral and coal exploration activities undertaken in accordance with conditions of authorisations under the Mining Act 1992 (NSW) provided they do not allow the activity to cause or enhance interconnectivity with aquifers; petroleum exploration activities undertaken in accordance with conditions of titles under the PO Act, provided they do not allow the activity to cause or enhance interconnectivity with aquifers; in aquifers the Minister for Primary Industries determines to be high value aquifers or not being high value aquifers; and monitoring bores or wells, and leachate ponds and sumps if constructed and operated in accordance with appropriate standards and guidelines. For the purpose of the exemption, other interference activities that intersect the water table but do not take water, such as geotechnical site investigations, sampling activities, seismic surveys and small scale excavation are considered to be low risk activities and are exempt from the need to hold an AI approval. It is proposed that the Mining SEPP will be amended to require the Minister for Primary Industries to provide advice, which will be made public, on aquifer impacts during the assessment of SSD mining and petroleum proposals within highly productive groundwater beneath Biophysical Land either: (a) at the gateway stage; or (b) if the gateway does not apply, during the assessment of the relevant development application. This advice will be based on the minimal harm criteria. As part of the environmental assessment process, the Planning Department will consult with NSW Water in respect of the preparation of Director-General s Requirements under the EPA Act and NSW Water will also provide advice to the Planning Department on aquifer impacts. CSG Code The purpose of the CSG Code is to establish a best practice framework for CSG exploration companies (explorers) in dealing with landholders and communities. To achieve this purpose, the CSG Code sets out requirements for initial contact, access arrangements and ongoing provision of information to landholders, as well as imposing obligations on explorers before and after their mining or petroleum activities. All explorers will be required to comply with the CSG Code as a condition in all new licences and licence renewals. Initial contact Following the grant of a petroleum exploration licence (PEL), under the CSG Code, explorers will be required to notify by mail all landholders affected by the proposed activities. This initial contact should then be followed up by personal contact, PAGE 6

7 preferably by senior staff with authority to make decisions and commitments on behalf of the explorer, with individual landholders. During this process, the CSG Code indicates that explorers must be flexible to address a landholder's needs and expectations, in order to reach agreement. For instance, a landholder may prefer a well to be drilled behind a belt of trees or along an existing road rather than in the centre of a paddock. Access arrangement Once an agreement has been reached between the explorer and landholder, the explorer must draft an access arrangement for the landholder's consideration. In addition to the statutory requirements set out in Part 4A of the PO Act for matters required to be incorporated into the access arrangement, where appropriate, the CSG Code lists a number of other matters that must be addressed including: acceptable noise levels and times; acceptable dust levels; use of water on the property; notification of drilling and stimulation methods to be used; land use after rehabilitation; explorer's plans to prevent the possible spread of weeds and stock/agricultural diseases from the wheels of its vehicles; emergency plans; rehabilitation of discontinued well sites to their previous state or as agreed with the landowner; and location of core holes or wells and how the explorer will access them. Compensation is considered an important part of the access arrangement and the landholder must be compensated for all reasonable costs for their time, and to offset the inconvenience, noise and deprivation of part of their land, which may be in the form of monetary compensation or works in-kind to be undertaken by the explorer. The explorer should also reimburse the landholder for all its reasonable legal costs incurred in relation to the review, negotiation and finalisation of the terms and conditions of the access arrangement. Once an access arrangement is entered into with a landholder, explorers have the obligation to keep the landholder informed about the progress of and variations to exploration activities, such as exploration findings. The rationale for this obligation is to ensure transparency, but also to allow the landholder to develop some idea of the likelihood of CSG production occurring on their land. As landholders are responsible for the management of all chemicals on their land, explorers must provide specific details of all chemicals brought onto or stored on their land. Further, explorers must ensure the local community is informed by establishing a community consultation plan and certain information is provided to the local council (discussed below). Additional obligations for CSG explorers The major concerns from the community about CSG activities in respect of water are the methods of disposal of water produced as a by-product of CSG activities (product water) and the possible impact of these activities on water resources from both a depletion and contamination perspective. Under the current framework, explorers are required to: (a) obtain a water access licence under the AI Regulation if the relevant CSG activities will result in groundwater being taken at a greater rate than 3 megalitres per year; and (b) undertake baseline assessment of aquifers and the potential impacts of CSG activities on water resources prior to project approval and development. The CSG Code will impose the following additional obligations on explorers: to treat or otherwise dispose of product water, and must not use evaporation ponds which have now been banned; and to lodge a substantial security deposit under section 16 of the PO Act with the Department of Trade and Investment, Resources and Energy (DTI) to ensure all the obligations imposed on the explorer by the conditions of the PEL are met. The Government will call on this security in circumstances where the explorer cannot rehabilitate the land disturbed by the CSG activities. The CSG Code also notes that the Government is developing a standard for well construction, which explorers will be obliged to meet, to minimise the risk of damage to beneficial aquifers. Explorers would then be required to demonstrate that, in the conduct of fraccing, their activities will not result in connectivity between near surface aquifers and targeted CSG water bearing zones and compaction. AIS Guideline As an interim measure for the period leading up to the finalisation of the Regional Plans, all new SSD for mining and petroleum proposals, as well as applications for associated SSI proposals (such as pipelines), which have the potential to affect agricultural resources or industries, will be required to submit an AIS as part of the environmental impact statement (EIS). This interim measure has immediate effect for SSD mining and petroleum projects only. PAGE 7

8 From June 2012, it is anticipated that all SSD and SSI proposals located on Strategic Land will require an AIS to be prepared and submitted as part of the environmental assessment process. However, this requirement will be constrained by the delay in the finalisation of some Regional Plans. For instance, the Regional Plans for the Murrumbidgee, Alpine and West areas may not be finalised until 2015 and, therefore: (a) no Strategic Land will be mapped in the areas; and (b) the need for an AIS will not be triggered. The purpose of the AIS is to demonstrate that impacts on agricultural resources and industries are avoided or minimised to acceptable levels. The term "agricultural resources" is used to describe the land on which agriculture is dependent and the associated water resources (quality and quantity) that are linked to that land. The specific requirements for the EIS, including the AIS, will be listed in the Director-General's Requirements (DGRs) for the proposal by the Planning Department, in consultation with the Department of Primary Industries. However, the DGRs will require the following matters to be addressed in the AIS: 1 information relating to the site and region, including: (a) a detailed assessment of the agricultural resources and agricultural production of the project area, including on the soils, slope, land characteristics, water characteristics and relevant history of agricultural enterprises within the project areas; and (b) the identification of the agricultural resources and current agricultural enterprises within the surrounding locality of the project area; 2 assessment of the impacts, including: (a) identification and assessment of the impacts of the project on agricultural resources and industries, including a risk-based assessment of the consequential productivity effects and uncertainty of the impacts and mitigation measures; (b) accounting for any physical movement of water away from agricultural use as a result of the project and mitigation measures; and (c) assessment of the socio-economic impacts such as agricultural support services, processing and valueadding industries, regional employment, visual amenity and tourism infrastructure; 3 mitigation measures through the identification of feasible options for minimising adverse impacts on agricultural resources, including agricultural lands, enterprises and infrastructure at the local and regional level; and 4 consultation with adjoining land-users and government agencies by providing details of the project's engagement strategy. Following submission of the AIS by the proponent, a merit assessment of the report will be undertaken by the Planning Department, in consultation with the Office of Agricultural Sustainability and Food Security, to determine: (a) the value of the agricultural resources and associated enterprises to be impacted; (b) the impact of the project on agricultural resources and enterprises; and (c) whether the impacts are unacceptable and should be avoided. If the Planning Department determines that a project would have a significant or unacceptable detrimental impact on agricultural lands or industries, the project will not be supported. The AIS Guideline states that local councils should also consider the need for an explicit assessment of the potential impacts of mining and petroleum projects on agricultural resources or industries. We will need to wait and see whether local councils adopt their own assessment guidelines to apply to mining and petroleum projects where the council is the consent authority. Community Consultation Guideline A condition of all exploration licences will now require licence holders to effectively engage with the local community. The condition will provide as follows: The licence holder must effectively engage with the community in relation to the planning for and conduct of activities authorised by the exploration licence. The consultation undertaken must be in accordance with the "Community Consultation Guideline" and be to the satisfaction of the Director General. An annual report to Community Consultation must be submitted to the department within 28 days of the anniversary of the licence being granted, together with evidence that the consultation has been undertaken. This condition does not remove or replace the obligation on the licence holder to enter into access arrangements with landholders. Further, the Community Consultation Guideline is subject to change, and it is the responsibility of the licence holder to ensure compliance with the applicable version from time to time. PAGE 8

9 The Community Consultation Guideline specifies that effective consultation involves preparing a community consultation plan that: 1 Identifies the stakeholders directly or indirectly "impacted" by the proposed activities. The level of impact can be described as high, medium or low being: (a) high impact means significant, repetitive, regular or frequent aspects of the project that will affect people's lives and lifestyles, such as excessive noise and dust; (b) medium impact refers to occasional, or regular but infrequent aspects of the project that may be partial or avoidable/manageable; and (c) low impact refers to infrequent and very occasional impacts of the project that will not affect the community's wellbeing; 2 Specifies how and when information will be delivered to the community, including the type of information to be provided, the form of the information and how it will be distributed. Examples of consultation methods are the publication and distribution of factsheets, newsletters and media releases, and holding public meetings and briefings. In addition, within 28 days of obtaining an exploration licence, the licence holder must notify the relevant local council(s) of the existence and extent of the licence and proposed plans for community consultation; 3 Establishes channels of communication that allow good community feedback and identification of potential issues. The plan must implement a system for receiving and considering community feedback and complaints, and acknowledging and responding to such feedback and complaints. Licence holders are also required to register all complaints and feedback received, and details of actions taken in response. A summary of these complaints and responses must be submitted to the DTI as part of the annual report on community consultation. Importantly, the DTI will monitor licence holder performance through the review of annual reports and investigation of community complaints. Non-compliance with the Community Consultation Guidelines may result in licences not being renewed. Implications The Regional Policy introduces a number of significant reforms to the assessment process for proposals on Strategic Land or having an impact on groundwater underlying Biophysical Land. While the reforms are intended to capture coal and petroleum projects, they are also likely to affect all development on Strategic Land and AI activities. Proponents will need to familiarise themselves with the relevant Regional Plan to ascertain whether their proposal is on or near Strategic Land and, if so, consider the impacts of the proposal on Strategic Land and its water resources and how these impacts can be minimised. key contacts Christine Covington Partner, Sydney Tel christine.covington@corrs.com.au Tim Poisel Lawyer, Sydney Tel tim.poisel@corrs.com.au SYDNEY Governor Phillip Tower 1 Farrer Place Sydney NSW 2000 Tel Fax MELBOURNE Bourke Place 600 Bourke Street Melbourne VIC 3000 Tel Fax BRISBANE Waterfront Place 1 Eagle Street Brisbane QLD 4000 Tel Fax PERTH Woodside Plaza 240 St George s Terrace Perth WA 6000 Tel Fax Corrs Chambers Westgarth, 2012 This publication does not constitute legal advice and should not be relied on as such. You should seek individualised advice about your specific circumstances. We have sent this publication to you because you have requested to receive these publications from us. If you do not wish to receive such publications, please send an with Unsubscribe in the subject heading and containing your name and contact details to privacy@corrs.com.au. PAGE 9

10 gateway process Is the proposal for State significant mining or petroleum development? (ie Classes 5 or 6 of State Environmental Planning Policy (State and Regional Development) 2011)? YES Is the proposal located on land mapped in a Strategic Regional Land Use Plan as strategic agricultural land? YES Has Cabinet declared the proposal to be an exceptional circumstance? Proponent submits a gateway certificate application and supporting assessment documentation NO NO YES The proposal is subject to the usual development assessment regime that would apply to that type of development, which will require submission of an agricultural impact statement as part of the environmental impact statement NO Is the specific site verified as meeting the criteria for strategic agricultural land? YES Gateway certificate application publicly notified, publicly exhibited for 21 days and submissions sought Independent Mining and Coal Seam Gas Gateway Panel (Panel) considers the application based on the following factors: Biophysical strategic agricultural land: soil and water impacts aquifer impacts Critical industry clusters: surface area disturbance access to resources landscape values A public benefit test based on triple bottom line cost benefit analysis methodology Advice of Minister for Primary Industries on aquifer impacts (which will take into account the advice of the Commonwealth Independent Expert Scientific Committee (IESC) Advice of the IESC Panel decides whether or not to issue a gateway certificate and decision is made publicly available on the Department of Planning and Infrastructure s website YES NO Development application can be lodged and is subject to full merit assessment, which will require the submission of an agricultural impact statement as part of the environmental impact statement. The proposal is exempt from the need to hold an aquifier interference approval Development application cannot be lodged and the proposal is unable to proceed PAGE 10