Recent biodiversity offsets change in NSW: A perverse outcome?

Projects assessed under the NSW Biodiversity Conservation Act 2016 (BC Act) which trigger entry into the NSW biodiversity offset scheme require biodiversity credits. These credits can (usually) be generated at conservation sites, known as Stewardship sites, where biodiversity values have in perpetuity positive management actions, such as weed and feral animal control.

Under the biodiversity offset scheme, some biodiversity values are identified as being at risk of serious and irreversible impacts (SAII). Impacts on these entities may result in a project being refused, or may require additional outcomes for those entities. A subset of listed SAII threatened species are identified by the NSW Government as responding poorly to management (principle four).

Recent advice has been given by the NSW Government agency responsible for assessment of Stewardship site applications that they cannot generate credits for SAII principle four species. This advice presents a key risk for the approval of some projects, effectively introducing a new ‘rule’ to the existing offset scheme, which may not consider the outcomes that can be achieved on offset sites. EMM explains the outcomes and provides advice on how to address this issue.

When can you generate biodiversity credits for species listed as being at risk?  

The NSW Biodiversity Conservation Act 2016 (BC Act) and NSW Biodiversity Conservation Regulation 2017 (BC Regulation) defines the concept of serious and irreversible impacts as an impact “likely to contribute significantly to the risk of a threatened species or ecological community becoming extinct”. The BC Regulation outlines four principles that are used to help define if an impact is serious and irreversible. Included in these is principle 4, which considers how a species or communities habitat responds to management at an offset site and thus whether it is replaceable. For example, the Scrub Turpentine (Rhodamnia rubescens) is known to be affected by the disease Myrtle Rust (Austropuccinia psidii), and currently there are no measures to control the impacts of this disease at an offset site accepted by the NSW Government. Likewise, the Large-eared Pied Bat (Chalinolobus dwyeri) relies on caves for breeding and roosting, and management of an offset site is unlikely to generate new maternity cave sites (though it can secure an existing maternity cave site). There are currently a total of 52 species on the SAII principle 4 list.

EMM has become aware that some owners of offset sites (called Stewardship sites in NSW) are being advised that they cannot generate biodiversity credits for species listed as being at risk of SAII under Principle 4. It currently isn’t clear whether or not credits from conservation sites would be granted for SAII Principle 4 species; however, the response to a question on this issue sent by EMM to the NSW Government Biodiversity Offset Scheme Helpdesk was that: “alternative conservation measures such as investment in targeted research, propagation trials, or captive breeding programs may be a more appropriate offset than generating credits from managing the species at a stewardship site”. For most SAII Principle 4 species, this suggested pathway would not currently meet the offset rules listed under Section 6.2 of the BC Regulation (see point 2 below for more details).

Implications for those pursuing Stewardship sites

At the time of writing, the NSW Government has not issued this as formal advice to accredited assessors. There are a number of significant implications from this advice, and we wish to make both development proponents and those pursuing Stewardship sites aware of the implications of this.

  1. For developments: Projects with potential to impact on SAII species listed under Principle 4 will need to carefully consider the implications of these impacts. Impacts on these species are likely to have a high risk of being refused due to the irreplaceability of habitat. For local development, a project which results in SAII must be refused consent. For State Significant Development (SSD) and State Significant Infrastructure (SSI) projects the Minister must consider any “additional and appropriate measures” that can minimise the risk of SAII but can still grant approval or consent.

  2. Limitations in meeting credit obligations: Currently, the advice from the NSW Government would result in an inability to meet a credit obligation. Under the BC Regulation proponents have five pathways to meeting a credit obligation:

    - Retirement of like-for-like credits.
    - Retirement of credits under the variation rules.
    - Funding of a biodiversity conservation action.
    - Ecological rehabilitation (restricted to SSD mining projects).
    - Payment into the Biodiversity Conservation Fund (BCF).
    The “alternative conservation measures” suggested by the NSW Government above for SAII Principle 4 entities would fit under ‘funding of a biodiversity conservation action’. The NSW Government has published the “Ancillary rules: Biodiversity conservation actions” which lists the species for which ‘biodiversity conservation actions’ can be funded. However, of the 23 threatened species included in this document only one, Flame spider flower (Grevillea kennedyana), is also listed as a SAII Principle 4 species. This means that for the remaining 51 SAII Principle 4 species a proponent cannot currently fund a biodiversity conservation action. The only option would be payment into the Biodiversity Conservation Fund (BCF) or application of the variation rules (if available), which could potentially be a poor conservation outcome.

  3. Stewardship site landholders: Stewardship site landholders that have SAII Principle 4 species on their lands will likely no longer be able to generate and sell credits for these species, even though these are important species to keep and manage. This appears to be a perverse outcome, where conservation actions by willing landholders which could help to prevent the extinction of species under threat, are not being encouraged. An example of such conservation actions might be the seeking to control the spread of Myrtle Rust (if the disease is present basic treatment control measures may not be effective in achieving removal of the disease from a site), or feral animal control to reduce goat disturbance on roosting bats at cave sites (which has been observed to affect Large-eared Pied Bat) to improve breeding outcomes. These could be undertaken on existing Stewardship sites and achieve real conservation outcomes.

Recommended Actions

In our view, there are a number of actions that the NSW Government could take to improve the processes for SAII Principle 4 species:

  • Provide clear advice to accredited assessors on what the NSW Government policy is for these species and whether credits can be generated from Stewardship sites.
  • If they intend to focus on delivery of biodiversity conservation actions (eg. research, propagation trials, captive breeding programs) for Principle 4 species, urgently update the “Ancillary rules” document to include all SAII Principle 4 species.
  • We also suggest greater consideration of whether appropriate management at conservation sites could benefit SAII principle 4 species. For example, for Scrub Turpentine whether there could be potential to undertake intensive myrtle rust management (and monitor this for effectiveness), or for Large-eared Pied Bat, whether feral pest control will contribute to the breeding success of the species. This could then provide opportunities to improve outcomes for these threatened species through targeted site management, provide a list of sites where research and/or future reintroduction could occur (and the potential to trial these techniques), and also reward landholders who voluntarily undertake conservation of site with these threatened species. That is, currently the NSW Government seems to be assuming that site management will not provide benefits to these threatened species, rather than seeking to work with landholders to come up with appropriate management measures to improve outcomes for these threatened species. This appears to be a perverse outcome.


In our view urgently undertaking the above actions could help to both provide greater clarity to development proponents, as well as to improve the management and long-term outcomes for SAII principle 4 species.

About us

We identify innovative solutions for our clients that deliver strategic outcomes while ensuring offsets are delivered to achieve best-for-project outcomes.

We work through the complexities of assessing impacts to biodiversity, and successfully develop environmental offset packages under State and Commonwealth regulatory frameworks, including strategic offset frameworks based on direct and indirect measures.

Our experience leads us to work closely with proponents to understand their environmental offset obligations, identifying offset delivery solutions that are tailored both to their project’s biodiversity values but also the client’s environmental and social commitments more broadly, assessing value for money and cost efficiencies and aligning this with State and Commonwealth objectives.


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Steven Ward
Associate Ecologist