Who does this affect?

Anyone seeking development approval for coal mining and any other industries or projects which may potentially create greenhouse gas emissions and where the use of your products by third party users would result in further greenhouse gas emissions.

What do you need to do?

Ensure that environmental assessment includes a full and detailed assessment of the impacts of greenhouse gas emissions, including indirect emissions by third party users, nationally and globally.

David O'Donnell  
T +61 2 9296 2266

Debra Townsend  

Stephen Davis  

Laurence Iffla  

David Bell  

Chris Wheeler  

06 December 2006

Ecologically sustainable development principles in environmental assessments: Gray v The Minister for Planning & Ors

The NSW Land and Environment Court has considered an application by an interested person regarding the environmental assessment prepared by Centennial Hunter Pty Ltd for its proposed Anvil Hill coal mine in the Hunter Valley.

In a judgment handed down on 27 November 2006, the applicant successfully sought a declaration that Centennial's environmental assessment for the proposed mine did not adequately address the requirements prescribed by the Director-General according to the Environmental Planning and Assessment Act 1979 (NSW). Justice Pain held that the Director-General failed to take into account ecologically sustainable development principles when accepting as adequate Centennial's environmental assessment. The environmental assessment had omitted to assess the full impact of greenhouse gas emissions resulting from the project. Although there was a detailed assessment of emissions arising directly from the project and from its electricity use, the environmental assessment was held to be insufficient for failing to detail the indirect impacts of burning of coal by third parties (both locally and globally).

What does it mean for you?

This decision confirms the significance of ecologically sustainable development principles in the process of environmental assessment generally as well as under Part 3A of the Environmental Planning and Assessment Act. As a consequence, the scope of matters to be considered in environmental assessment is broadened. Justice Pain found that the impacts of climate change are relevant when considering and applying the ecologically sustainable development principles. With respect to climate change, a full assessment of greenhouse gas emissions which includes both direct and indirect greenhouse gas emissions would usually be required. Notably, this decision may have implications not only for coal mines, but for a range of other industries or projects which have the potential to create greenhouse gas emissions and where the use of its products by third party users would result in further emission of greenhouse gases.

What is the issue?

The environmental assessment requirements issued for the project by the Director-General of the NSW Department of Planning necessitated a detailed greenhouse gas assessment. A detailed assessment of direct greenhouse gas emissions from coal mining and emissions from the project's use of electricity was included. However the indirect emissions of third party users of the coal were not included in Centennial's initial environmental assessment which was publicly exhibited. The NSW government argued that Centennial's environmental assessment was adequate since the use of coal by third party users, some of whom may be overseas, would be subject to other regulations and were independent of the Anvil Hill project.

The court held that there was a “sufficiently proximate link” between the mining of the coal in NSW and the use of that coal in power stations elsewhere leading to the emission of greenhouse gases which contribute to climate change. Justice Pain found that although there were many contributors of greenhouse gases and the impact would be felt globally as well as in NSW which meant that the impact may not be accurately measured, this did not mean that the contribution from a single large source such as Anvil Hill should be ignored in the environmental assessment process. The purpose of environmental assessment is to enable decision makers to be properly informed about the environmental consequences of the project before them. A decision maker's obligations include having regard to principles of ecologically sustainable development (relevantly, the precautionary principle and the inter-generational equity principle). To effectively discharge those obligations, an assessment of the project's impacts on the environment, including the threats to climate change relating to the coal mine and the coal produced from the coal mine, was required.

Frank Sartor, the NSW Minister for Planning, has already indicated that the NSW Government intends to appeal this decision.

A trend for State and Commonwealth cases to consider broad environmental impacts of mining operations

Whilst this case was determined under NSW law, it reflects the trend of several other recent cases run at both the State and Commonwealth level, which have considered the broad environmental impacts of mining operations. Litigation to date (including Gray) has largely been in the context of administrative law challenges to decisions. However, there are currently proceedings before the Queensland Land and Resources Tribunal which attempt a merits review of these issues. In the Queensland proceedings, the Queensland Conservation Council is commencing proceedings under the Mineral Resources Act 1989 (Qld) and the Environmental Protection Act 1994 (Qld) to challenge the environmental merits of two major coal projects. The Conservation Council is submitting that conditions must be imposed requiring the offset of the greenhouse gas emissions associated with mining, transporting and using the coal.