You are here: Home > Conservation programs > Principles for the use of biodiversity offsets

Principles for the use of biodiversity offsets in NSW

Offsetting is a practical tool for decision makers who balance the relative environmental, social and economic merits of development proposals. Formal offset arrangements are a feature of:

• developments under the EP&A Act using the Biobanking Scheme
• land use planning under the EP&A Act using biodiversity certification
• native vegetation regulation under the Native Vegetation Act 2003.

These regulatory schemes use a range of mechanisms to secure offsets including biobanking agreements, biodiversity certification agreements and property vegetation plans.

Offsets are calculated using an assessment methodology which quantifies the impacts and determines the offset required. These outcomes must meet the improve or maintain standard.

Biodiversity offsets are also commonly required for major developments under Part 3A of the EP&A Act. Offsets are secured under the mechanisms mentioned above as well as conservation agreements under the National Parks and Wildlife Act 1974 and planning agreements under the EP&A Act. The improve or maintain standard is not mandatory.

The Department of Planning and Infrastructure makes Part 3A decisions by considering a range of social, economic and environmental factors (based on the advice of OEH). The BioBanking Assessment Methodology is increasingly being used by proponents and OEH to inform these decisions. 

The following principles provide a useful framework for considering environmental impacts and developing offset proposals. The principles do not apply where legislation defines requirements for biodiversity offsets.

1. Impacts must be avoided first by using prevention and mitigation measures.

Offsets are then used to address remaining impacts. This may include modifying the proposal to avoid an area of biodiversity value or putting in place measures to prevent offsite impacts.

2. All regulatory requirements must be met.

Offsets cannot be used to satisfy approvals or assessments under other legislation, e.g. assessment requirements for Aboriginal heritage sites, pollution or other environmental impacts (unless specifically provided for by legislation or additional approvals).

3. Offsets must never reward ongoing poor performance.

Offset schemes should not encourage landholders to deliberately degrade or mismanage offset areas in order to increase the value from the offset.

4. Offsets will complement other government programs.

A range of tools is required to achieve the NSW Government’s conservation objectives, including the establishment and management of new national parks, nature reserves, state conservation areas and regional parks and incentives for private landholders.

5. Offsets must be underpinned by sound ecological principles.

They must:

• include the consideration of structure, function and compositional elements of biodiversity, including threatened species
• enhance biodiversity at a range of scales
• consider the conservation status of ecological communities
• ensure the long-term viability and functionality of biodiversity.

Biodiversity management actions, such as enhancement of existing habitat and securing and managing land of conservation value for biodiversity, can be suitable offsets. Reconstruction of ecological communities involves high risks and uncertainties for biodiversity outcomes and is generally less preferable than other management strategies, such as enhancing existing habitat.

6. Offsets should aim to result in a net improvement in biodiversity over time.

Enhancement of biodiversity in offset areas should be equal to or greater than the loss in biodiversity from the impact site.

Setting aside areas for biodiversity conservation without additional management or increased security is generally not sufficient to offset against the loss of biodiversity. Factors to consider include protection of existing biodiversity (removal of threats), time-lag effects, and the uncertainties and risks associated with actions such as revegetation.

Offsets may include enhancing habitat, reconstructing habitat in strategic areas to link areas of conservation value, or increasing buffer zones around areas of conservation value and removal of threats by conservation agreements or reservation.

7. Offsets must be enduring - they must offset the impact of the development for the period that the impact occurs.

As impacts on biodiversity are likely to be permanent, the offset should also be permanent and secured by a conservation agreement or reservation and management for biodiversity. Where land is donated to a public authority or a private conservation organisation and managed as a biodiversity offset, it should be accompanied by resources for its management. Offsetting should only proceed if an appropriate legal mechanism or instrument is used to secure the required actions.

8. Offsets should be agreed prior to the impact occurring.

Offsets should minimise ecological risks from time-lags. The feasibility and in-principle agreements to the necessary offset actions should be demonstrated prior to the approval of the impact. Legal commitments to the offset actions should be entered into prior to the commencement of works under approval.

9. Offsets must be quantifiable - the impacts and benefits must be reliably estimated.

Offsets should be based on quantitative assessment of the loss in biodiversity from the clearing or other development and the gain in biodiversity from the offset. The methodology must be based on the best available science, be reliable and used for calculating both the loss from the development and the gain from the offset. The methodology should include:

• the area of impact
• the types of ecological communities and habitat/species affected
• connectivity with other areas of habitat/corridors
• the condition of habitat
• the conservation status and/or scarcity/rarity of ecological communities
• management actions
• level of security afforded to the offset site.

The best available information/data should be used when assessing impacts of biodiversity loss and gains from offsets. Offsets will be of greater value where:

• they protect land with high conservation significance
• management actions have greater benefits for biodiversity
• the offset areas are not isolated or fragmented
• the management for biodiversity is in perpetuity (e.g. secured through a conservation agreement).

Management actions must be deliverable and enforceable.

10. Offsets must be targeted.

They must offset impacts on the basis of like-for-like or better conservation outcome. Offsets should be targeted according to biodiversity priorities in the area, based on the conservation status of the ecological community, the presence of threatened species or their habitat, connectivity and the potential to enhance condition by management actions and the removal of threats. Only ecological communities that are equal or greater in conservation status to the type of ecological community lost can be used for offsets. One type of environmental benefit cannot be traded for another: for example, biodiversity offsets may also result in improvements in water quality or salinity but these benefits do not reduce the biodiversity offset requirements.

11. Offsets must be located appropriately.

Wherever possible, offsets should be located in areas that have the same or similar ecological characteristics as the area affected by the development.

12. Offsets must be supplementary.

They must be beyond existing requirements and not already funded under another scheme. Areas that have received incentive funds cannot be used for offsets. Existing protected areas on private land cannot be used for offsets unless additional security or management actions are implemented. Areas already managed by the government, such as national parks, flora reserves and public open space cannot be used as offsets.

13. Offsets and their actions must be enforceable through development consent conditions, licence conditions, conservation agreements or a contract.

Offsets must be audited to ensure that the actions have been carried out, and monitored to determine that the actions are leading to positive biodiversity outcomes.