Net positive biodiversity reform

The amendments follow from the release of the ‘NSW plan for nature’ by the Minns Government in July 2024 which recommended substantial reform to deliver a ‘nature positive’ state for NSW. The Plan was made in response to an independent statutory review finding that the BC Act ‘is not meeting its objects and is very likely never to do so’.

This article provides a high-level overview of the key changes and their impact on property developers.

Key Changes

The key changes to the BC Act are:

1. The BOS will transition to “net positive biodiversity outcomes”. Currently, the BOS only requires there be no net loss to biodiversity outcomes.
   • A strategy regarding the transition to a net positive scheme is expected to be made by the Minister “as soon as practicable” once the changes commence.
   • During the transition to a net positive scheme, the Minister may adopt a standard in the biodiversity assessment method (BAM) which will result in no net loss of biodiversity in NSW.
   • The BAM may include a savings or transitional provision.
2. The “avoid, minimise and offset hierarchy” is enshrined in the BOS, a new section 6.3A now requires that any action (e.g. clearing) that impacts biodiversity values must be approached in the following order:
   • first, all reasonable measures to avoid the impacts on biodiversity values must be taken;
   • once all reasonable measures to avoid the impacts have been taken, all reasonable measures to minimise the impacts on biodiversity values must be taken; and
   • once the above measures are taken, then offsetting under the BOS may be undertaken to compensate for any residual impact on biodiversity values.

   This section is not subject to a savings provisions and therefore will apply to pending applications.

3. The requirements for biodiversity development assessment reports (BDARs), which are submitted with certain development applications, will become more stringent. Specifically, BDARs must set out and assess the “genuine” measures the applicant has undertaken to firstly avoid, then minimise the impacts on biodiversity values. Although the mitigation hierarchy has been strengthened, as discussed below, the new BDAR requirements have not yet commenced.
4. New provisions relating to retirement of biodiversity credits, including:
   • preventing the retirement of biodiversity credits by paying the amount into the Biodiversity Conservation Fund in certain circumstances; and
   • giving proponents the ability to undertake “prescribed biodiversity conservation measures” as an alternative to retiring biodiversity credits.
5. New concurrence requirements for state significant development and state significant infrastructure.

Forthcoming Changes

Importantly, certain provisions are yet to come into effect.  These include the requirement for a BDAR to set out and assess the ‘genuine’ measures undertaken to firstly avoid, then minimise the impacts on biodiversity values. The requirement will likely commence to coincide with the forthcoming amendments to the Biodiversity Conservation Regulation 2017 (‘BC Reg’) which will outline the standards used to assess the validity of the genuine measures.  

Other key changes that will be detailed in the yet-to-be released BC Reg amendments include:

• the circumstances in which a person may make use of payment into the Biodiversity Conservation Fund as an alternative to the retirement of biodiversity credits; and
• the circumstances in which the ordinary rules for determining the number and class of biodiversity credits required as biodiversity offsets may be varied for the purposes of the Biodiversity Conservation Trust applying amounts from the Biodiversity Conservation Fund.

Transitional provisions apply to the application of amounts from the Biodiversity Conservation Fund.

Implications for Developers

The full impact of the changes will not be understood until the BC Reg is available, however, the Amendment Act is a step towards the NSW Government’s net positive goal.

More than ever, developers will need to ensure they have clear evidence that all reasonable measures to avoid and then minimise impacts to biodiversity are undertaken prior to proposing offsets. Detail is still to come in the BC Reg as to the assessment standards against which “genuine measures” will be assessed including the requirements for BDARs.

The ongoing ability for developers to pay money into the Biodiversity Conservation Fund to offset the impact of their development, is likely to become more limited as the regulations will prescribe circumstances where this is available.

Other conservation measures to offset losses will be required, and it will not be sufficient to just offset – there will need to be an element of regeneration and restoration of biodiversity to satisfy obligations under the BC Act and any applicable condition of development consent.

We will provide a further update once the new BC Regs are released.

The full text of the Amendment Act is accessible here. 

The Commencement Proclamation is accessible here.