NSW Biodiversity Offsets Policy for Major Projects: FAQ

What are offsets and why are they used?

Biodiversity offsets are areas of land that are protected and managed to improve biodiversity values. They help to ensure that negative impacts on the environment arising from a development are balanced through environmental gains achieved in another location. For example, a development may require an area of native woodland to be cleared. To offset the biodiversity loss associated with the clearing, another area of similar woodland can be protected and managed to improve habitat quality. Over time, the gain in biodiversity achieved by improving the similar area of woodland will balance the biodiversity lost due to the development.

Do biodiversity offsets work?

Offsetting to compensate for impacts to biodiversity is a developing practice recognised under the Convention on Biological Diversity as an important component of environmental impact assessment and is internationally accepted as part of the mitigation hierarchy – avoid, minimise, offset.

Offsets take time to mature and for biodiversity gains from new management regimes to be realised. For offset policies to be based on best practice, they need to include monitoring requirements and be flexible enough to incorporate new information.

The policy incorporates international best practice standards, including those identified by the Business and Biodiversity Offsets Programme and in the Independent report on biodiversity offsets commissioned by the International Union for Conservation of Nature and International Council on Mining and Metals. These include:

  • limits to offsetting (through impacts for further consideration)
  • additionality (offsets must be additional to other legal requirements)
  • equivalency (offsets must be targeted to the biodiversity values being lost or to higher conservation priorities)
  • permanence (offsets must be enduring).

How does the policy deliver good environmental outcomes?

A key feature of the policy is the use of biobanking agreements to secure offset sites in perpetuity. Offset sites secured under a biobanking agreement have clear governance arrangements, sound management plans and secure funding to undertake management actions to ensure they are viable in the long term and provide ongoing benefits to biodiversity. This gives everyone increased confidence that agreed management actions will be undertaken and conservation outcomes achieved.

The policy will encourage landowners to create offsets on strategically important land, including:

  • land adjacent to rivers, streams and wetlands
  • important mapped biodiversity corridors .

The introduction of a Biodiversity Offsets Fund will also allow for the strategic purchase and consolidation of biodiversity offsets.

What is the Biodiversity Offsets Fund?

The policy includes the development of a Biodiversity Offsets Fund. The fund will allow proponents to satisfy their offset requirement via a monetary contribution. The fund will then purchase offsets on their behalf. The fund will increase certainty for proponents and will enable a more strategic approach to purchasing offsets. It will also make it easier for landowners to receive stewardship payments for managing and protecting biodiversity on their land. The fund will be developed over 12-18 months following commencement of the policy in October 2014.

How long will offset sites be protected for?

Permanently. A biobanking agreement, including the requirement to undertake management actions, is recorded on the property title and transferred transparently to future owners in perpetuity. Future owners will also receive the benefit of annual payments to cover the cost of managing the site. Biobanking agreements can only be terminated in certain circumstances, including (see Part 7A, Division 2 of the Threatened Species Conservation Act 1995):

  • by consent of the Minister and the biobank site owner, provided measures are taken to offset the impact of the termination
  • to facilitate certain developments, including by public authorities or due to grant of mining authority or petroleum title, providing certain conditions are met, including consent of the Minister and on most occasions offsetting of impacts on biodiversity.

The removal of biobank sites is not something that is promoted by the Government, as these sites are established to protect biodiversity in perpetuity. However, these provisions reflect the practical realities of changing land use needs along with the difficulty associated with predicting these in the long term. In the rare event of such an agreement being removed from a site, this site will usually be fully offset, taking into account the biodiversity present and the predicted gain that was to be achieved through the initial biobanking agreement.

Can offset sites be added to the national parks estate?

Yes. This can only take place after a biobanking agreement has been established on a site. A biobanking agreement will ensure that adequate funding is secured for the site’s future management by the National Parks and Wildlife Service.

Are biobanking agreements the only way to secure an offset site?

The introduction of the policy will see a transition from proponents using several different conservation mechanisms to secure offsets, to one (biobanking agreements). To facilitate this transition, certain rules have been put in place to help proponents and government meet the increasing demand for biobanking agreements.

Biobanking agreements must be used to secure offsets if any of the following conditions are met:

  • there are appropriate credits available on the market for purchase
  • the Biodiversity Offsets Fund has been established, or
  • a service agreement for establishment of biobanking agreements has been put in place by OEH.

If none of these conditions are met, a proponent may use an alternative mechanism to secure offsets during the transitional period. The alternative mechanism must as closely as possible meet the five criteria for effective offset sites set out in Appendix A of the policy.

Why are only biobanking agreements used to secure offsets?

Of the various mechanisms that have been used in the past to secure offsets, only biobanking agreements fully adhere to the criteria outlined in Principle 5 of the policy – Offsets must be enduring, enforceable and auditable. Principle 5 provides the following criteria (see Appendix A of the policy):

a) the principal objective of ongoing site management is biodiversity conservation

b) management actions are undertaken in accordance with a plan of management

c) there is reasonable likelihood that sufficient resources will be available to implement the plan of management over time

d) there are appropriate accountability mechanisms in place to secure the outcomes, and these mechanisms cannot be altered without alternative and comparable offsetting arrangements being put in place

e) the arrangements are in-perpetuity and conservation obligations are transparently transferred and disclosed to any new owners of the land through appropriate administrative procedures.

A biobanking agreement is the only mechanism tested in NSW that meets these criteria. Biobanking agreements:

  • provide the security and certainty that are necessary to ensure offsets achieve intended biodiversity gains
  • ensure there is continuous funding available for management of the offset site and have clear monitoring and reporting requirements
  • provide confidence for both proponents and the community that the agreed management actions will be undertaken and conservation outcomes achieved. 

What is the Framework for Biodiversity Assessment (FBA)?

The Framework for Biodiversity Assessment (FBA) is a methodology that has been developed to assess biodiversity loss and gain. The FBA is applied by accredited ecological consultants and assesses the amount and type of biodiversity being impacted on at a development site, and how much gain to biodiversity can be expected from an offset site. See the fact sheet Framework for Biodiversity Assessment for more information.

Who is qualified to apply the Framework for Biodiversity Assessment?

The Framework for Biodiversity Assessment can only be applied by an ecological consultant  accredited under the BioBanking Scheme in accordance with section 142B(1)(c) of the Threatened Species Conservation Act 1995.

Does the assessment methodology in the Framework for Biodiversity Assessment replace the BioBanking Assessment Methodology?

The Framework for Biodiversity Assessment methodology only applies to major projects, that is, State significant development and State significant infrastructure. Any other developments requiring biodiversity assessment may use the BioBanking Scheme as an optional alternative to considering biodiversity impacts under the Environmental Planning and Assessment Act 1979. For more information, see the fact sheet Relationship to BioBanking.

How are impacts on biodiversity values not included in the Framework for Biodiversity Assessment assessed?

Impacts on biodiversity not specifically addressed by the Framework for Biodiversity Assessment, for example, those on marine mammals and migratory shorebirds, will continue to be assessed according to current practice. The assessment should still follow the broad principles and guidance provided by the policy where relevant.

Why does the policy not require offsets for non-threatened species?

The first key principle of the policy requires that ‘before offsets are considered, impacts must first be avoided and unavoidable impacts minimised through mitigation measures’. This principle applies to all biodiversity on a development site.

Where offsets are required to compensate for any remaining impacts on biodiversity, the policy focuses on threatened species, populations and ecological communities. This mirrors the focus of the Environmental Planning and Assessment Act 1979 under which major project applications are assessed.

Why does the policy only apply to major projects? Does the Government plan to extend the policy to other development?

The policy has been introduced specifically for major projects, including State significant development and State significant infrastructure under the Environmental Planning and Assessment Act 1979 (EP&A Act). The policy was specifically designed for these project types and the legislative framework under which they are determined.

In the future, a whole-of-government offsets policy for other types of development, such as approval of housing developments under Part 4 of the EP&A Act, is likely to be considered. . The development of such a policy would need to be tailored to those other types of development and the legislative frameworks under which they are determined. A policy for other types of development may therefore look different to this policy. The intent of any such policy will be, however, that consistencies will be achieved where they can be.

What if I disagree with my offset assessment?

The Department of Planning and Environment has clear guidelines on how to appeal a determination of development application under the Environmental Planning and Assessment Act 1979.

What are supplementary measures?

Supplementary measures provide proponents with an alternative option for fulfilling an offset requirement when appropriate like-for-like offset sites cannot be found. Supplementary measures are actions that can be taken to improve biodiversity, other than protecting and managing offset sites. Supplementary measures do not necessarily need to meet all the principles that apply to offset sites.

The amount of money to be contributed to supplementary measures is approximately equivalent to the cost of an offset site. Ensuring the amount a proponent is required to contribute to supplementary measures is commensurate with the cost of establishing an offset site will prevent an artificial bias towards supplementary measures over offsets.

More information on supplementary measures is available in Appendix B of the policy.

Can 100% of a developer’s offset requirement be met by funding supplementary measures?

Not generally. Supplementary measures are only available when an offset site is not feasible, and would typically be used in conjunction with offset sites. It would be very rare for a proponent to need to meet their entire offset requirement through supplementary measures.

Can proponents establish offsets on their own land?

Proponents can still own and manage their own offset sites if they choose. They can establish a biobanking agreement on their own land and undertake the agreed management actions themselves using their own funds.

Why is the option of rehabilitation as an offset limited to mine sites?

Mine sites have clear governance arrangements around rehabilitation which are provided through mining leases. Mining leases set out rehabilitation requirements, including security, reporting and compliance. No such mechanisms currently exist to guarantee rehabilitation of other development sites. However, further consideration will be given throughout the transitional implementation period to the merits of extending mine site rehabilitation to other forms of post-development rehabilitation, and the mechanisms to secure appropriate biodiversity gains.

Can biobanking agreements be established on public land with existing management requirements?

Biobanking agreements can be established on almost all land tenures, including public land. Land excluded from biobanking includes national parks and certain reserves under the Forestry Act 2012.
Some public lands have pre-existing management requirements. For example, the Crown Lands Act 1989 allows for public positive covenants for protecting the environment to be placed on Crown land, which can require some biodiversity management actions to be carried out on this land.

Principle 4 of the policy states that ‘offsets must be additional to other legal requirements’. This is to ensure that the offset provides an actual addition to biodiversity rather than enabling actions to be undertaken that were going to occur anyway.

Given that offsets must be additional to existing legal requirements, only management activities in addition to those already legally required on the land are taken into account when calculating biodiversity credits that may be generated.

Can offset sites be established on a site generating carbon credits?

Land management requirements for the purpose of creating carbon credits are not considered to be legal requirements for biodiversity management under the policy. This means the same site can potentially generate both biodiversity credits and carbon credits through the same management actions.

Page last updated: 18 April 2016