4nature Incorporated v Centennial Springvale Pty Ltd

[2016] NSWLEC 121

Land and Environment Court

New South Wales

Medium Neutral Citation:	4nature Incorporated v Centennial Springvale Pty Ltd [2016] NSWLEC 121
Hearing dates:	9 May 2016
Date of orders:	13 September 2016
Decision date:	13 September 2016
Jurisdiction:	Class 4
Before:	Pepper J
Decision:	Amended summons dismissed. Costs reserved.
Catchwords:	JUDICIAL REVIEW: whether decision-maker reached state of satisfaction required by environmental planning instrument in granting development consent – whether decision-maker misdirected itself as to the law in the consideration and determination of the consent – whether the decision-maker failed to take into account a mandatory relevant consideration – application dismissed.
Legislation Cited:	Environmental Planning and Assessment Act 1979, ss 23D, 79C, 89E, Pt 4 Div 4.1 Environmental Planning and Assessment Regulation 2000, cls 268R, 268V Land and Environment Court Rules 2007, rr 4.2, 4.3 State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, cls 3, 7, 9, 10
Cases Cited:	Anderson v Minister Administering the Water Management Act 2000 [2014] NSWCA 386 Australian Conservation Foundation Incorporated v Minister for the Environment [2016] FCA 1042 Australian Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 Bat Advocacy NSW Inc v Minister for the Environment Protection, Heritage and the Arts [2011] FCAFC 59; (2011) 180 LGERA 99 Buck v Bavone [1976] HCA 24; (1976) 135 CLR 110 Caroona Coal Action Group Inc v Coalmines Australia Pty Ltd [2010] NSWLEC 1; (2010) 172 LGERA 25 Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd [2010] NSWCA 353; (2010) 178 LGERA 411 Centro Properties Ltd v Hurstville City Council [2004] NSWLEC 401; (2004) LGERA 257 Certain Lloyd’s Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378 Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 Cranbrook School v Woollahra Municipal Council [2006] NSWCA 155; (2006) 66 NSWLR 379 Currey v Sutherland Shire Council (1998) 100 LGERA 365 Egan v Hawkesbury City Council (1993) 79 LGERA 321 Gold and Copper Resources Pty Limited v Hon Chris Hartcher MP Minister for Resources and Energy Special Minister (No 2) [2014] NSWLEC 30 Gold and Copper Resources Pty Ltd v Minister for Resources and Energy [2013] NSWLEC 66; (2013) 211 LGERA 196 Jojeni Investments Pty Ltd v Mosman Municipal Council [2015] NSWCA 147; (2015) 89 NSWLR 760 Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 Master Education Services Pty Ltd v Ketchell [2008] HCA 38; (2008) 236 CLR 101 Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2016] NSWCA 253 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Border Protection v Singh [2014] FCAFC 1; (2014) 231 FCR 437 Minister for Immigration and Citizenship v Li [2013] HCA 8; (2013) 249 CLR 332 Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 Mosman Municipal Council v IPM Pty Ltd [2016] NSWLEC 26 Oates v Attorney-General (Cth) [2001] FCA 84; (2001) 181 ALR 559 Parramatta City Council v Hale (1982) 47 LGRA 319 Plaintiff M47/2012 Director-General of Security [2012] HCA 46; (2012) 251 CLR 1 R v Connell; Ex parte The Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69 CLR 407 Soliman v University of Technology, Sydney [2012] FCAFC 146; (2012) 207 FCR 277 Sutherland Shire Council v Benedict Industries Pty Ltd (No 4) [2015] NSWLEC 101 Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 581 Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664 Tovir Investments Pty Ltd v Waverly Council [2014] NSWCA 379 Weal v Bathurst City Council [2000] NSWCA 88; (2000) 111 LGERA 181 Zentai v O’Connor (No 3) [2010] FCA 691; (2010) 270 ALR 293
Texts Cited:
Category:	Principal judgment
Parties:	4nature Incorporated (Applicant) Centennial Springvale Pty Limited (First Respondent) Springvale SK Kores Pty Limited (Second Respondent) Minister for Planning (Third Respondent)
Representation:	Counsel: Mr R Lancaster SC with Mr N Kelly (Applicant) Mr N Williams SC with Ms J Davidson (First and Second Respondent) Mr J Hutton (Third Respondent)   Solicitors: Environment Defenders Office (Applicant) Ashurst (First and Second Respondent) Department of Planning (Third Respondent)
File Number(s):	2016/163569
Publication restriction:

INDEX

4nature Incorporated Seeks to Set Aside an Approval for the Expansion of a Mine [1]

Issues for Determination [9]

Factual Background Leading up to the Granting of Consent [12]

The Mine Extension Project [13]

The Assessment and Approval of the Project [32]

Statutory and Planning Framework [127]

Did the PAC Publish a Statement of Reasons? [135]

Applicable Legal Principles [153]

Did the PAC Attain the Necessary State of Satisfaction That the Carrying Out of the Project Would Have a Neutral or Beneficial Effect on Water Quality? [162]

Did the PAC Fail to Consider a Mandatory Relevant Consideration – Satisfaction of NorBE? [213]

Costs [219]

Orders [222]

Judgment

4nature Incorporated Seeks to Set Aside an Approval for the Expansion of a Mine

1. The applicant, 4nature Incorporated (“4nature”), challenges the decision of a Planning Assessment Commission (“PAC”), as delegate of the third respondent, the Minister for Planning (“the Minister”), to grant development consent to the first respondent, Centennial Springvale Pty Limited (“Centennial”), for the Springvale Mine Extension Project (“the project”), on 21 September 2015 (“the consent”).

2. It was not in dispute that 4nature is a:

1. not-for-profit organisation whose primary object is environmental protection;

2. charity registered with the Australian Charities and Not-for-profits Commission; and

3. corporate body incorporated under the Associations Incorporation Act 2009.

3. Springvale Mine (“the mine”) is an underground coal mine located approximately 15kms northwest of Lithgow and 120kms west of Sydney. Centennial and the second respondent, Springvale SK Kores Pty Limited (“Springvale”), own the mine in equal shares.

4. Centennial and Springvale:

1. were jointly named as the applicant in the consent for the project; and

2. own the mine, and the Angus Place underground coal mine (“the Angus Place mine”), in equal shares and as participants in an unincorporated joint venture.

5. The consent was granted pursuant to s 89E of the Environmental Planning and Assessment Act 1979 (“the EPAA”).

6. It was not contentious that the land to which the development consent applies includes land within the Sydney Drinking Water Catchment, as defined in cl 7 of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 (“the Catchment SEPP”).

7. The gravamen of 4nature’s complaint is that the PAC did not reach, as required by cl 10(1) of the Catchment SEPP, an independent state of satisfaction as to whether the carrying out of the project will have a neutral or beneficial effect (“NorBE”) on water quality before it granted the consent. Because such satisfaction was a pre-condition to the exercise of its power to approve the project, the consent is invalid.

8. In my opinion, having regard to the totality of the material before the PAC, 4nature’s challenge cannot be sustained and must fail.

Issues for Determination

9. The grounds of challenge to the PAC’s decision to grant the consent, as pleaded, were three-fold:

1. first, whether the PAC attained the requisite state of satisfaction that the carrying out of the project would have a neutral or beneficial effect on water quality as required by cl 10(1) of the Catchment SEPP;

2. second, whether the PAC misdirected itself as to the law to be applied in the consideration and determination of the consent;

3. third, whether the PAC failed to take into account a mandatory relevant consideration, namely, whether pursuant to cl 10(1) of the Catchment SEPP the project would have a neutral or beneficial effect on water quality.

10. At the hearing, 4nature agreed that if it failed in respect of the first ground of review, it could not succeed on the second, the latter being a variant of the former. It is therefore convenient for them to be dealt with together.

11. It should also be noted that 4nature neither pleaded nor argued that the state of satisfaction required to be reached by the PAC was a jurisdictional fact that the Court could determine for itself, or that the decision of the PAC was legally unreasonable (Minister for Immigration and Citizenship v Li [2013] HCA 8; (2013) 249 CLR 332).

Factual Background Leading up to the Granting of Consent

12. The parties agreed on a number of background facts informing the challenge, some of which were contained in a comprehensive statement of agreed facts, others of which were found in a four volume agreed tender bundle. Accordingly, the following facts and chronology are not, in the main, contentious. The inferences to be drawn from these events are, however, contestable.

The Mine Extension Project

13. Development consent (DA 11/92) was granted for the mine in July 1992. Underground coal mining operations commenced in 1995 and continued under DA 11/92 until 30 September 2015, subject to a number of subsequent modifications. On 5 December 2013, a modification to the 1992 consent was approved, allowing mining operations to continue under that development consent until 30 September 2015.

14. The project was granted the consent the subject of these proceedings on 21 September 2015. The project involves an enlargement of the existing underground mine by extending mining operations to the south, east and southeast, and by prolonging the mine life by 13 years. Extraction of up to 4.5 million tonnes of run-of-mine coal per year is permitted until 31 December 2028. The project is classified as State significant development, and accordingly, Pt 4, Div 4.1 of the EPAA governed its assessment and approval.

15. The project will be carried out partly within the “Sydney Drinking Water Catchment”, as defined in the Catchment SEPP.

16. Water is discharged from the mine according to an Environment Protection Licence 3607 (“EPL 3607”) via Licensed Discharge Points (“LDPs”). The following LDPs, namely, LDP001, LDP002, LDP009, and LDP010, are within the area of land covered by the consent and within the Sydney Drinking Water Catchment.

17. The locations of LDP001, LDP002, LDP009 and LDP010 are depicted on the figure attached at appendix ‘A’.

18. The Upper Coxs River is a tributary of the Upper Nepean and Upstream Warragamba extraction management unit and is also a sub-catchment within the Sydney Drinking Water Catchment.

19. Sawyers Swamp Creek is a third order Strahler watercourse located in the Sydney Drinking Water Catchment and partly located in the area of land covered by the consent.

20. Downstream of the area of land covered by the consent, the Coxs River (fifth and sixth order Strahler), Lake Wallace, Lake Lyell and Lake Burragorang are all within the Sydney Drinking Water Catchment.

21. Lake Burragorang is impounded by the Warragamba Dam. The latter is the major water storage for greater metropolitan Sydney.

22. The Springvale Delta Water Transfer Scheme (“SDWTS”) is defined in the consent as meaning:

Existing pipeline that transfers groundwater inflows from the underground workings and dewatering bores to licensed discharge point LDP009.

23. The removal of groundwater inflows into the underground mine is essential for operational safety.

24. The SDWTS was commissioned in 2006 as part of a Pollution Reduction Program under EPL 3607.

25. The SDWTS facilitated the transmission of groundwater pumped from the mine and the Angus Place mine, to Wallerawang Power Station. The transmitted water was used in the cooling towers at that power station. When not required at Wallerawang Power Station, groundwater from the SDWTS was directed to Sawyers Swamp Creek via EnergyAustralia's LDP020.

26. In August 2012 responsibility for EnergyAustralia's LDP020 transferred to the mine. The new LDP became LDP009. Prior to the SDWTS, groundwater pumped from the mine was discharged to the Wolgan River via the Newnes Plateau. Between 2006 and 2012, when the SDWTS was offline, there were periods when there was discharge to the Wolgan River.

27. Permanent closure of the Wallerawang Power Station was announced on 20 November 2014.

28. Immediately prior to the grant of the consent, as authorised by DA 11/92 and EPL 3607, groundwater from the Springvale Mine was transmitted through the SDWTS and discharged into Sawyers Swamp Creek via LDP009. Just before the water was discharged at LDP009, it travelled through a series of sediment ponds. At LDP009, discharged water then travelled through an earthen based drainage line for a distance of approximately 300m prior to entering Sawyers Swamp Creek at a location east of the Kerosene Vale Ash Dam.

29. The consent permits the SDWTS to transfer extracted groundwater from dewatering bores directly to LDP009 to be discharged. The SDWTS has a capacity of 30 ML/day discharge at LDP009.

30. Immediately prior to the grant of the consent, mine water from the Angus Place mine was permitted to be discharged into the Coxs River catchment via LDP001 (through Kangaroo Creek) and LDP009 (through Sawyers Swamp Creek) until 2024.

31. The Angus Place mine is a separate mine to the project. An application for State significant development consent to extend that mine's life has yet to be approved. The Angus Place mine has been on care and maintenance since 28 March 2015.

The Assessment and Approval of the Project

32. In September 2012 Springvale Coal Pty Ltd (as Manager of the Springvale unincorporated joint venture, for and on behalf of the Springvale joint venture participants) (“Springvale Coal”) requested the Director-General’s Environmental Assessment Requirements (“DGRs”) for the project in accordance with Pt 4 of the EPAA.

33. The DGRs were issued on 6 November 2012. They included a requirement for an Environmental Impact Statement (“EIS”) addressing, amongst other things, a detailed assessment of the potential impacts on the quality and quantity of surface water and ground water resources. Attachment 1 to the DGRs listed policies, guidelines and plans which might be relevant to the project. It included a reference to the Catchment SEPP.

34. In respect of “Water Resources”, the DGRs identified as a key issue for the purposes of the project's environmental assessment:

•   whether the development can operate to achieve a neutral or beneficial effect on water quality in the drinking water catchment, consistent with the provisions of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011.

35. The Springvale Mine Extension Project Groundwater Impact Assessment was prepared and published on 9 February 2014 by RPS Pty Ltd (“RPS”) for Springvale Coal. In relation to the proposed development, it was predicted that there would be no change in water quality:

7.3.9 Potential Water Quality Impacts

No change in water quality is expected as a result of the proposed development. Groundwater inflows to the underground operations are expected to remain consistent with current inflow water quality at around 700 to 1000 µS/cm as discussed in Section 4.9. No deterioration of quality of groundwater inflows have been observed due to current mining operations, and consequently none are predicted due to the proposed development.

Similarly no detrimental impacts to groundwater quality are expected within the shallow groundwater aquifer or within the swamps. Consistent with historical mining at Springvale, no deterioration in groundwater quality has occurred.

36. In April 2014 Springvale Coal submitted a development application dated 18 November 2013 to the Department for State significant development consent for the project (“the DA”).

37. An EIS for the project was submitted in conjunction with the DA on 7 April 2014. The EIS was publicly exhibited from 12 April 2014 until 26 May 2014. The EIS included an assessment of the impacts of the project and an assessment of the cumulative impacts of the project and an extension to the nearby Angus Place mine (not yet approved). The EIS referred to the Catchment SEPP and its application to the project, including the aims of the Catchment SEPP, cl 9(1), and the NorBE test contained in cl 10(1). It stated that Appendices E and F of the EIS (the groundwater and surface water impact assessments, respectively) addressed the NorBE test:

5.4.7 SEPP (Sydney Drinking Water Catchment) 2011

SEPP (Sydney Drinking Water Catchment) 2011 applies to land within the Sydney drinking water catchment. The Project Application Area is partly located within the Sydney drinking water catchment.

The aims of SEPP (Sydney Drinking Water Catchment) 2011 are:

(a)   to provide for healthy water catchments that will deliver high quality water while permitting development that is compatible with that goal

(b)   to provide that a consent authority must not grant consent to a proposed development unless it is satisfied that the proposed development will have a neutral or beneficial effect on water quality, and

(c)   to support the maintenance or achievement of the water quality objectives for the Sydney drinking water catchment.

Clause 9(1) of this SEPP provides that any development or activity proposed to be carried out on land within the Sydney drinking water catchment should incorporate the Sydney Catchment Authority’s current recommended practices and standards. Section 10.2 addresses this. Alternatively, clause 9(2) of this SEPP provides that if such practices and standards are not incorporated, it needs to be demonstrated to the satisfaction of the consent authority how the practices and performance standards proposed to be adopted will achieve outcomes not less than those achieved by the Authority’s current recommended practices and standards. Section 10.2 addresses this.

Clause 10(1) of this SEPP provides that a consent authority must not grant consent to the carrying out of development on land within the Sydney drinking water catchment unless it is satisfied that the carrying out of the proposed development would have a neutral or beneficial effect on water quality. For the purposes of determining whether the carrying out of the proposed development on land in the Sydney drinking water catchment would have a neutral or beneficial effect on water quality, the consent authority must, if the proposed development is one to which the NorBE Tool applies, undertake an assessment using that Tool. The “NorBE Tool” is set out in Appendix 1 of the document titled Neutral or Beneficial Effect on Water Quality Assessment Guideline 2011 prepared by the Sydney Catchment Authority. Appendix E and Appendix F address the “NorBE” test.

38. The EIS was prepared on the basis that mine water from the project could be transferred to the Wallerawang Power Station for use as cooling water. Closure of that power station meant that such transfer was no longer an option for dealing with mine water discharge.

39. In section 10.2 of the EIS, entitled “Water Management”, after reference to the DGRs, it was noted that the Coxs River Catchment was listed as within the boundary of the Sydney Drinking Water Catchment. Further, in section 10.2.2.1, dealing with “Surface Water System”, the EIS noted that:

10.2.2.1 Surface Water Sydney

Spatial details of catchments and associated watercourses are illustrated in Figure 2.27. The Project Application Area is located within Coxs River Catchment, the Wolgan River Catchment, and the Colo River Catchment which covers a small area to the south east of the site. Springvale Mine’s surface facilities are located within the Coxs River Catchment. The Coxs River Catchment and the Wolgan River Catchment are both under the jurisdiction of the Hawkesbury-Nepean Catchment Management Authority, although the Coxs River is listed within the boundary of the Sydney Drinking Water Catchment under the State Environmental Planning Policy (Sydney Drinking Water Catchment 2011). Whilst water quality and river flow objectives have not been formally set for the Hawkesbury-Nepean catchment, an impact assessment against relevant environmental values is presented. A statement of neutral or beneficial effect is also presented.

Surface water flow in the Coxs River is in a southerly direction, reflecting surface topographic gradient toward Lake Wallace and further downstream, Lake Lyell, which is the water supply reservoir for Mount Piper Power Station via intermediate transfer to Thompsons Creek Dam. Outflow from Lake Lyell eventually contributes to Lake Burragorang which is the primary drinking water reservoir for the City of Sydney.

40. Section 10.2.4.1 concerned “Impacts to Water Quality”. In that section the EIS stated that the project would not lead to a change in the beneficial use of groundwater as drinking water supply. However, because the Coxs River lay within the Sydney Drinking Water Catchment, a comparative evaluation was undertaken to assess the current and proposed water quality and addressed the requirement under the Catchment SEPP that the proposed conditions have a neutral or beneficial impact on water quality. With respect to the NorBE test, the EIS stated that:

Neutral of Beneficial Assessment

SEPP (Sydney Drinking Water Catchment) 2011 requires all new developments in the Sydney Drinking Water Catchment to demonstrate a NorBE on water quality. The SCA has established an assessment guide to assist in addressing relevant issues to determine whether or not a project will have a NorBE on receiving water quality. A number of supporting guidelines and interactive tools have been developed by the SCA to assist approval authorities in undertaking a NorBE Assessment. Of relevance to the Proposal, is the SCA guideline entitled ‘Development in Sydney’s Drinking Water Catchment Water Quality Information Requirements’ as well as the ‘Neutral or Beneficial Effect on Water Quality Assessment Guideline’.

Regarding the proposed Project, the Guidelines require the following information to be included in the assessment:

▪    details of the project including site plans and constraints

▪    site contamination report

▪    water quality control details

▪    surface water modelling

▪    pollution control details, including any erosion and sedimentation controls

▪    water balance and water cycle management

▪    identification of the likely pollutants of concern (both construction and operation)

▪    identification of measures to control the identified pollutants

▪    description of the expected levels of pollutants before and after the development

▪    details of any required offsets.

41. The specific items of required “information” were elaborated upon, including surface water modelling which stated that “groundwater modelling indicates that there is no predicted decrease in groundwater contribution to surface water in the Coxs River”. In relation to salinity, the EIS stated that (emphasis added):

Salinity

Whilst salinity of discharge exceeds the ANZECC guidance value for the Water Quality Objective - Protection of Aquatic Ecosystems, it is consistent with Water Quality Objective – Drinking Water – Groundwater and Water Quality Objective – Industrial Water Supplies. Review of groundwater quality against the ADWG [Australian Drinking Water Guidelines] indicates it is essentially consistent, where the drinking water standard considers a TDS of 600mg/L (~895 µS/cm) to be good quality drinking water and a TDS of between 600 and 900 mg/L (~895 µS/cm to 1,345 µS/cm) to be fair quality drinking water. It is noted that the guidance values for salinity in the ADWG is an aesthetic-based value and is not a health-based value.

42. The groundwater impact assessment in Appendix E of the EIS stated that groundwater inflows into the mine were expected to increase steadily from 11.84 ML/day at the commencement of mining to 18.75 ML/day by the middle of 2022, before tailing off to around 16.85 ML/day towards the end of the mine. Salinity of groundwater inflows was expected to remain consistent with the existing inflow water quality at around 700 to 1000 microsiemens per centimetre (“μS/cm”).

43. In relation to potential water quality impacts, the groundwater impact assessment concluded that:

No deterioration of quality of groundwater inflows have been observed due to current mining operations, and consequently none are predicted due to the proposed development.

Similarly no detrimental impacts to groundwater quality are expected within the shallow groundwater aquifer or within the swamps. Consistent with historical mining at Springvale, no deterioration in groundwater quality has occurred.

44. The surface water impact assessment at Appendix F of the EIS noted that the Coxs River was, at the time of the assessment, already a disturbed ecosystem. It stated that increased inflows associated with the project would be disposed of via transfer to the SDWTS. In the event that the SDWTS was unavailable, inflows would be discharged into the Coxs River via LDP009. It was noted that the Coxs River was within the Sydney Drinking Water Catchment and that the proposed project was required to have a neutral or beneficial impact on water quality in conformity with the Catchment SEPP. The Surface Water Impact Assessment, referring to the NorBE test, concluded that the project would have a neutral effect on water quality because the beneficial use of that water as potential drinking water was maintained. Review of groundwater quality indicated that it was essentially consistent with the requirements of the Australian Drinking Water Guidelines (“ADWG”), with the exception of salinity, where it would fall within the aesthetic guideline for salinity for fair quality drinking water, being of a Total Dissolved Solids measure (“TDS”) between 600 and 900 mg/L (approximately 895 μS/cm to 1345 μS/cm), but below the aesthetic guideline for good quality drinking water of a TDS of less than 600 mg/L (approximately 895 μS/cm).

45. Numerous community members, public agencies and interest groups made submissions in response to the EIS. Submissions from the Sydney Catchment Authority (“SCA”), the Environment Protection Authority (“EPA”) and the Office of Environment and Heritage (“OEH”) raised concerns regarding the impact of the project on the Sydney Drinking Water Catchment.

46. On 3 June 2014 the EPA sent a letter to the Department of Planning and the Environment (“the Department”). After noting that it had previously advised the Department that the draft EIS had not adequately assessed the potential environmental impacts of the proposed discharge of saline mine water to the Coxs River system, the EPA went on to comment that it was unable to support the Springvale and Angus Place expansions in their current form because of the absence of any commitment in either the draft or final EISs to address the handling and treatment of mine water, either in the short or long term. The EPA recommended that were the Department to grant approval to the project, a condition requiring that the mine water either be treated to significantly reduce the salt and contaminant levels or to achieve a beneficial re-use, or a combination of both, by a set date, be imposed. The letter offered, “as a matter of priority” given the complexity of the issues dealing with mine water, to meet with the Department to discuss the issues to “achieve a good environmental outcome for the upper Cox River.”

47. Attached to the EPA’s 3 June 2014 letter were some “final comments” on the discharge limits:

The EISs wrongly assume that the discharge limits currently applied to mine water licence discharge points (in particular LDP009 of Springvale and Angus Place LDP001) indicates “an acceptability” of the current mine water discharge quality.

The discharge limits that have been applied to mine water discharges (LDP001 and LDP009) to the Coxs River by the EPA, were established on an interim basis to enable the mines to continue to operate while undertaking works identified in pollution reduction programs (PRPs) attached to both licences to identify and implement a solution to the mine water discharge quality. The PRPs have required either the development of options to cease water discharges (such as redirecting mine water at Angus Place backed [sic] into old underground workings) or to develop options to treat mine water to ensure any discharge can meet the ANZECC (2000) trigger value for upland rivers of 350 µS/cm.

To date no option(s) to cease or treat the mine water has been developed by Centennial Coal.

Centennial’s approach to mine water is to continue and to increase the discharge from LDP001 and LDP009 to the environment for the next 3 decades without treating the mine water to an appropriate standard. The EPA’s ongoing programs are not based on the continuation of the discharging of high volumes of potentially toxic, saline mine water often containing high (relative to ANZECC) levels of metal contaminants to the receiving environment of the Upper Coxs River catchment. Furthermore, it is misleading to suggest that a discharge of this magnitude and poor quality directly into Coxs River tributary streams will have a neutral or beneficial effect on water quality in Sydney’s drinking water catchment or the upper Coxs River and its tributaries in terms of hydrology and aquatic health.

48. The SCA also sent the Department a letter on 3 June 2014, noting its primary concern in relation to the increased mine water discharges and associated water quality impacts in respect of salinity in Marangaroo Creek and the Coxs River, and the additional discharge of approximately 50ML/day of mine water from the project into receiving watercourses which would have a greater impact than that addressed in the EIS.

49. Additional “discrepancies and issues” identified in the EIS for further consideration included that:

•   Salinity predictions have been undertaken upstream of Lake Wallace, not where discharge occurs in Swayers Swamp Creek (LDP009). No predictions are made on what would be an expected increase in salinity compared to the current conditions at the discharge point LDP009 and impacts on water quality in Coxs River downstream of Lake Wallace. The model predictions for average Coxs River salinity should include an envelope around the average showing 10th and 90th percentiles.

•   There is no analysis whether elevated salt levels are likely in the Coxs River where it enters Lake Burragorang.

50. On 25 July 2014 the EPA advised Centennial by letter that it had advised the Department that it was unable to support the project given the absence of any commitment or detailed plan to address the handling and treatment of the mine water in either the short or long term.

51. The Department and the Department of the Environment for the Commonwealth requested the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development to provide an assessment of the project on 3 July 2014. In particular, questions 6, 7 and 8 concerned the impact of the proposed mine extension on water quality:

Question 6: Are the cumulative water quality impacts of discharges to the Coxs River accurately and reasonably described?

Response

36.   The cumulative water quality impacts of Springvale and Angus Place mine water discharges to the Coxs River, an important contributing source to Sydney’s drinking water supply, were not modelled for all relevant contaminants, did not consider all likely discharge conditions, and are therefore not accurately and reasonably described.

37.   Salinity was the only water quality variable modelled for cumulative impacts. The cumulative impact of other contaminants was not provided, even though the EIS states (Appendix C within Appendix F) that levels of copper, zinc, nitrogen and phosphorus have been elevated above ANZECC 95th percentile protection level for slightly to moderately disturbed ecosystems. The contributing water quality impacts to Coxs River from other mines in the area are not quantified.

38.   Water quality impact estimations for the Coxs River for both Springvale and Angus Place were conducted for scenarios that included the transfer of large volumes of water through the Springvale Delta Water Transfer Scheme (SDWTS) to the Wallerawang Power Station. This may no longer be a viable option because the Wallerawang Power Station has been placed into care and maintenance. Increased discharge volumes resulting from reduced demand from the Wallerawang Power Station would affect the outcome of the cumulative water quality impact assessment and should be considered as a potential discharge scenario.

…

Question 7: Is the information provided sufficient to predict any changes to either water quality or water quantity in the Coxs River at Kelpie Point which would arise as a result of the mining operation? (Kelpie Point – station number 563000 – is located on the Coxs River close to its entry location into Warragamba Dam. The Sydney Catchment Authority has undertaken flow and quality monitoring at this location for extended periods.)

Response

43.   No. The proponent’s estimation of downstream impacts was limited to site water balance and cumulative salt mass balance modelling that did not model impacts beyond the upper Coxs River catchment (i.e. not downstream of Lake Lyell). In addition, the existing condition of the Coxs River was not adequately described and the downstream impact modelling that was undertaken included transfer of large volumes of water through the SDWTS to the Wallerawang Power Station, which may no longer be a viable option.

…

Question 8: If so, what are the predicted changes to water quality water quantity in the Coxs River at Kelpie Point and what are the consequences for stored water within Warragamba Dam?

48.   Water quantity and quality changes in the Coxs River at Kelpie Point cannot be reliably estimated based on the information presented in the EIS documentation, as detailed in the response to Question 7. For similar reasons, the consequences for stored waters in Warragamba Dam also cannot be reliably estimated from information in the EIS.

52. A Response to the Submissions (“RTS”) to the EIS was prepared on behalf of Centennial on September 2014. The RTS was submitted by Centennial to the Department on 2 October 2014.

53. The RTS noted that the updated median salinity at LDP009 (reflecting monitoring up to 29 May 2014) was 1060 μS/cm (equivalent to 710 mg/L, assuming a conversion factor of 0.67 between salinity as electrical conductivity and TDS) and that the impact of discharging water of this quality at LDP009 would be neutral or beneficial because future discharges were expected to be of equivalent water quality to the currently approved discharge.

54. Under section 3.1.26 concerning “Water Quality”, the RTS also noted the observation by the SCA that there was no assessment on whether elevated salt levels would be likely in the Coxs River where it entered Lake Burragorang, although the Regional Water Quality Impact Assessment (“Regional Assessment”) included in the RTS predicted an increase in salinity in the Lake from 85 mg/l to 97 mg/l under the proposed water management strategy.

55. The Regional Assessment was prepared by RPS on 10 September 2014, to assess the water quality impact of the proposed discharges from the project and the Angus Place mine extension project.

56. The prediction scenarios in section 3.3.3 of the Regional Assessment were as follows:

Flow statistics of predicted daily flow at this location are presented in Table 3.6, including for the prediction null case. As indicated above, the prediction null case comprises both Angus Place Colliery and Springvale Mine ceasing discharge on 30 June 2014.

Table 3.6: Predicted Daily Flow Statistics (ML/d) at #011 (Kangaroo Creek, downstream of point of discharge from Angus Place LDP001)

Percentile	CAL	NUL	WS1	WS2a	WS2b
Minimum	0.1	0.0	5.4	2.0	2.0
5%	2.2	0.1	14.5	2.1	2.1
10%	2.4	0.1	14.9	2.2	2.1
20%	2.9	0.2	17.1	2.3	2.2
50%	4.1	0.5	26.1	2.9	2.5
80%	5.3	1.2	28.8	12.1	0.8
90%	6.7	2.9	29.4	15.1	4.9
95%	9.6	6.4	30.9	15.7	8.4
Maximum	853.8	458.4	437.5	460.4	460.4

57. The “Impact Assessment” in section 4.1 of the Regional Assessment provided a summary of the model results from the top of the catchment downstream to Lake Burragorang.

58. A table in section 4.1 contained a summary of the predicted daily flows into the Coxs River catchment:

Table 4.1: Summary of Predicted Daily Flows (ML/d) in the Coxs River Catchment

Location	Node	NUL	WS1	WS2a	WS2b
Kangaroo Creek and Coxs River above Wangcol Creek/Blue Lagoon
Kangaroo Creek downstream of Angus Place LDP001	#011	0.5(0.0-458)	26.1(5.4-474)	2.9(2.0-460)	2.5(0-460)
Coxs River above Wangcol Creek/Blue Lagoon	#056	1.4(0.0-1613)	27.4(6.9-1629)	5.1(2.0-1616)	3.4(2.0-1616)
Sawyers Swamp Creek
Sawyers Swamp Creek downstream of Springvale LPD009	#014	0.2(0.0-170)	14.4(0.0-186)	28.0(3.0-199)	28.0(3.0-199)
Sawyers Swamp Creek above Coxs River	#166	0.2(00-223)	(14.5(0.0-239)	28.2(3.0-252)	28.2(3.0-252)

59. Table 4.2 contained a summary of the predicted daily salinity in the Coxs River catchment:

Table 4.2: Summary of Predicted Daily Salinity (mg/L) in the Coxs River catchment.

Location	Node	NUL	WS1	WS2a	WS2b
Kangaroo Creek and Coxs River above Wangcol Creek/Blue Lagoon
Kangaroo Creek downstream of Angus Place LDP001	#011	50(50-68)	789(75-804)	698(55-804)	664(55-804)
Coxs River above Wangcol Creek/Blue Lagoon	#056	50(50-89)	761(63-804)	538(57-804)	498(57-804)
Sawyers Swamp Creek
Sawyers Swamp Creek downstream of Springvale LDP009	#014	50(50-50)	761(50-804)	799(160-804)	800(160-804)
Sawyers Swamp Creek above Coxs River	#166	51(50-379)	751(50-804)	799(154-804)	799(154-804)
Lake Wallace
Coxs River above Lake Wallace	#047	599(107-771)	755(111-797)	As per WS1	As per WS1
Lake Wallace	#074	321(91-552)	604(79-747)	As per WS1	As per WS1
Lake Lyell and above Lake Lyell
Coxs River above Lake Lyell	#035	231(50-540)	552(67-740)	As per WS1	As per WS1
Lake Lyell	#174	223(127-462)	422(145-566)	As per WS1	As per WS1
Thompsons Creek Reservoir
Thompsons Creek Reservoir	#272	276(237-471)	477(314-613)	As per WS1	As per WS1
Lake Burragorang and above Lake Burragorang
Coxs River above Lake Burragorang	#225	90(50-217)	153(52-503)	As per WS1	As per WS1
Lake Burragorang	#280	85(73-97)	97(74-112)	As per WS1	As per WS1

60. It showed salinity increasing at the discharge point, at Lake Burragorang and at the Coxs River above the lake. Moreover, the Regional Assessment stated that:

From the above, there is no target for salinity since the ADWG do not have a health-based water quality criteria. There is also no target for salinity for the Prospect Water Filtration Plant with respect to Raw Water Supply Agreement. As identified in the SSTV Assessment, other water quality characteristics meet the ADWG and the Raw Water Supply Agreement specifications. The predicted minor increase in salinity in Lake Burragorang due to the proposal is therefore considered to have a neutral effect with respect to the Neutral or Beneficial Effect test criteria.

61. On 12 September 2014 Dr Justin Bell, the Principal Environmental Engineer for RPS, wrote a letter to Springvale Coal, seeking assistance to address a query received from the EPA on the proposed total predicted discharge to the Coxs River associated with the project. The letter noted that:

…the predicted total discharge to the Coxs River ranges from 21.14ML/d in 2014 to a peak of 31.84ML/d in 2024 with SDWTS at 30ML/d. When the SDWTS is upgraded to a capacity of 50ML/d, discharge to the Coxs River ranges from 21.14ML/d in 2014 to 45.03ML/d in 2024. It is noted that this latter scenario represents Angus Place discharge predominantly being transferred to SDWTS and Springvale discharging through its LDP009 since there is now no direct demand at Wallerawang Power Station. In the circumstance that SDWTS is not available to Angus Place Colliery, discharge to the Coxs River of only mine water make at Springvale LDP009 and Pit Top via LDP001 ranges between 12.72ML/d in 2014 and 18.66ML/d in 2022. Following cessation of mining at Springvale Mine, discharge to the Coxs River reduces to <1ML/d.

A regional water quality impact assessment has been prepared by RPS (2014c) as part of the Response to Submissions and that water quality model presents the impact to flow and salinity of each of these scenarios.

62. On 26 September 2014 Dr Bell wrote a second letter to Centennial Angus Place Pty Ltd, providing comments to the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development. In response to the question “are the cumulative water quality impacts of discharges to the Coxs River accurately and reasonably described”, the following answer was provided:

To address this query as well as queries from the Sydney Catchment Authority (SCA) and the Environmental Protection Authority (EPA) and the NSW Office of Environment and Heritage, a regional water quality impact assessment was undertaken as well as a Site Specific Trigger Value (SSTV) Assessment as per the ANZECC (2000) methodology. These studies are reported in RPS (2014e) and RPS (2014fg) [sic] respectively. Direct toxicity assessments have been undertaken and the results of those assessments are described elsewhere in the Response to Submissions.

To summarise, the outcome of the SSTV assessment was that there is elevated concentrations of copper and zinc, however, these are also elevated in background, upstream source waters. With respect to nutrients, the water quality of discharge at Angus Place LDP001 has a median nitrate concentration of 0.64mg/L, which is less than the default ANZECC (2000) trigger value of 0.7mg/L with respect to toxicity. At Springvale, the concentration of nitrate is not currently measured at Springvale LDP009 but groundwater quality from Bore 6 had a median nitrate concentration of 0.42mg/L, as reported in the Water Management section of the main EIS.

The impact of the closure of Wallerawang Power Station is addressed in the regional water quality impact assessment (RPS, 2014e). In summary, the predicted salinity concentration under the proposed water management strategies lie within the historical range except at immediately upstream of Lake Burragorang. The predicted salinity immediately upstream of Lake Burragorang is, however, less than the default ANZECC 95th percentile protection guideline value of 350µS/cm (234mg/L, assuming a conversation factor of 0.67). The predicted impact to flow of proposed water management strategies is not significant in the Coxs River but mine water discharge does dominate flow in Kangaroo Creek and Sawyers Swamp Creek respectively.

63. Further, in response to the question “what are the predicted changes to water quality water quantity in the Coxs River at Kelpie Point and what are the consequences for stored water within Warragamba Dam?”, the following answer was provided (emphasis added):

In summary, the impact to flow is not significant at this location. The impact to water quality, as salinity, under the proposed water management strategy is outside the range of historical observation, however, is below the default ANZECC trigger value for 95% protection of aquatic ecosystems (350µS/cm, 234mg/L assuming a conversion factor of 0.67).

As indicated above, the proposed water management strategy has insignificant impact to storage volume in Lake Burragorang and predicted impact to salinity is a minor increase from 85mg/L to 97mg/L. Further detail is presented in RPS (2014e).

64. There was no mention of any impact on Sawyers Swamp Creek.

65. Various government agencies provided comments on the RTS as follows:

1. the SCA disagreed that the predicted increases in salinity represented a neutral effect on water quality and expressed significant concerns in relation to the predicted salinity increases in Lake Burragorang, Coxs River, Kangaroo Creek and Sawyers Swamp Creek. The SCA stated that the absence of health-related criteria for salinity was irrelevant and identified the water quality targets in Table 3.3.3 of the Australian and New Zealand Environment Conservation Council 2000 Guidelines (“ANZECC 2000”) as the most appropriate water quality targets for salinity in upland streams and lakes. The SCA noted that the predicted impacts of the project would mean that water at LDP009 discharging into Sawyers Swamp Creek could not be diluted to below the Site Specific Trigger Value for salinity of 95% of the time; and

2. the EPA objected to the approach adopted in the RTS to handling mine water and raised concerns about the adequacy of the assessment of the impact of discharges at LDP009. The EPA also expressed concerns that the guidelines in ANZECC 2000 had been misapplied in the assessment of LDP009.

66. Specifically, the objections of the EPA were outlined in a letter to the Department on 4 November 2014. This letter noted that:

•   In its Responses the proponent’s approach has been to regard salt, expressed as Electrical Conductivity in micro-Siemens per Centimetre (µS/cm EC), as being a pollutant of no particular significance in the upper Coxs River. This is not the case. Refer to Attachment One.

...

•   In its Responses, the proponent indicates it remains committed to addressing the toxicity characteristics of the mine water discharge from Licensed Discharge Point 9 (LDP9) from Springvale Colliery. The EPA agrees that Centennial needs to find the reason for this toxicity and be prepared to eliminate it. Refer to Attachments One and Two.

•   The EPA has previously raised the need for the proponent to address the salinity of the discharge authorised by Environment Protection Licence (EPL 3607) for Springvale Colliery and the EPA’s current position is a continuation of a regulatory effort to reduce the salinity concentrations of the upper Coxs River. The EPA considers the current limits on LDP9 to be interim until a change in management of the mine water (handling, treatment etc) is implemented. Refer to Attachment 4A.

•   In its Responses the proponent’s Coxs River Catchment Restoration Program outlines a variety of measures to improve the catchment riparian zone and landscape; however, none relate to a stated goal of improving water quality. Refer to attachment 4B.

…

67. Relevantly, Attachment 4A stated:

It is important for the Department of Planning and Environment (DPE) to know that even if the Springvale Mine Extension Project was not being proposed, and if the recent circumstances at Angus Place were not occurring, the EPA would still be negotiating with Centennial Coal and its licensee to reduce the salinity of its discharge from Licensed Discharge Point 9 (LDP9). The EPA’s current position is a continuation of a regulatory effort to reduce the salinity concentration of the upper Coxs Rive. The EPA considers the current limits on LDP9 to be interim until a change in management of the mine water handling, treatment etc is implemented.

68. The particular objections of the SCA were outlined in a letter to the Department on 12 November 2014, in the following terms:

I refer to your Department’s e-mail dated 9 October 2014 inviting comments on the Angus Place Mine and Springvale Mine Extension Projects Response to Submissions (RTS) document including Regional Water Quality Impact Assessment for both mines. You have requested advice on whether the issues raised in our submission have been adequately addressed in the RTS.

The Sydney Catchment Authority’s (SCA’s) primary and main concerns in relation to the Angus Place Mine and Springvale Mine Extension Projects are related to the increased mine water discharges and associated water quality impacts (salinity) for Sawyers Swamp Creek, Kangaroo Creek, Marangaroo Creek, Coxs River and Lake Burragorang.

In its RTS document, the proponent has responded to the SCA’s concerns by referring to its Regional Water Quality Impact Assessment Report (RWQIAR) for both mines. This letter therefore responds to the RWQIAR for both Centennial extension projects.

The RWQIAR has predicted minor increases in median salinity in Lake Burragorang (from 85 to 97mg/L); increases in salinity upstream of Lake Burragorang (from 90 to 150-500mg/L), and significant increases in salinity in Kangaroo Creek and Sawyers Swamp Creek (from 50 to 550-800mg/L) directly downstream of the Angus Place and Springvale Mine discharge points. The RWQIAR concludes that the Angus Place Mine and Springvale Mine Extension Projects will have a neutral or beneficial effect (NorBE) on water quality. The proponent argues that there is a minimal impact on the water quality of the receiving aquatic systems and that there are no feasible alternatives to managing the mine water, except for the discharge of these waters at different locations in the catchment.

The SCA disagrees with these statements and has significant concerns in relation to the predicted increases in salinity in Lake Burragorang, Coxs River, Kangaroo Creek and Sawyers Creek. Based on predicted increases in salinity, the SCA has assessed that both extension projects do not achieve a NorBE on water quality. The SCA therefore recommends both applications be refused unless there is a requirement placed upon the applicant to treat mine water discharges to a higher and appropriate level prior to discharge.

69. In December 2014, Springvale Coal prepared a reply to all agency submissions on the RTS, noting, in response to the SCA’s comments, that although the proposed discharges dominate flows in Sawyers Swamp Creek, the Sawyers Swamp Creek was a highly disturbed catchment and that discharges to the creek had occurred since 2006. It acknowledged the proposed increase in salinity in Lake Burragorang, but remarked that this was considered to have a neutral effect as set out in the Regional Assessment.

70. In response to the objections of the SCA, Springvale Coal noted that:

Issues SCA01) The SCA disagrees with these statements and has significant concerns in relation to predicted increases in salinity in Lake Burragorang, Coxs River, Kangaroo Creek and Sawyers Creek. Based on predicted increases in salinity, the SCA has assessed that both extension projects do not achieve a NorBE on water quality. The SCA therefore recommends that both applications be refused unless there is a requirement placed upon the applicant to treat mine water discharges to a higher and appropriate level prior to discharge.

As presented in the RWQIAM (RPS, 2014e), the Proposal will lead to salinity in the Coxs River that is within historical ranges aside from Kangaroo Creek, where discharge from the Angus Place Colliery resides at the top of the Coxs River catchment and historical increase in salinity in Kangaroo Creek is due to the discharge of mine water make at this location. It is proposed that discharge to Kangaroo Creek continues. As noted in the RWQIAM (RPS, 2014e), Sawyers Swamp Creek is a highly disturbed catchment and historical and current land uses includes wet ash deposition, dry ash placement facility, underground mining access portal and Kerosene Vale open cut mine, now rehabilitated. It is acknowledged in the EIS, SWIA, and RWQIAM that the proposed discharges do dominate flows in both Kangaroo Creek and Sawyers Swamp Creek. It is highlighted that discharge at Kangaroo Creek has been on-going for a considerable period and discharge to Sawyers Swamp Creek has occurred since 2006, whenever mine water make from the SDWTS was not required by Wallerawang Power Station.

The proposed increase in salinity in Lake Burragorang due to the Proposal is acknowledged, however, as stated in the RWQIAM, this is considered to have a neutral effect.

…

Accordingly, for Lake Burragorang, it was put that the Proposal constitutes a neutral effect on water quality since the predicted increase in salinity is minor in nature and does not lead to an impact in regard to its use as bulk raw water supply.

71. In response to the issues identified by the EPA, the reply relevantly stated as follows:

Issue EPA27) …The RPS reports do not properly account for the overriding principle in the ANZECC (2000) guidelines that should guide management, which is continual improvement (see Section 2.2.1.7). For example, in waters that are of better quality than that set by the water quality objectives, some emphasis should be could still be [sic] given to reducing the level of contamination from all sources. Wherever possible, ambient water quality should not be allowed to degrade to the levels prescribed by the water quality objectives. It is also not acceptable to allow poor environmental performance or water pollution, simply because a waterway is degraded. The NWQMS also notes that accepted modern technology, consistent with ongoing economic viability, should be maintained even where this will secure higher water quality outcomes than what the water quality objectives require.

An update to the SSTV assessment will be undertaken and a discussion is presented in response to query EPA33.

As presented in the EIS and in Centennial’s response to the Pollution Reduction Program (PRP) on its Environmental Protection Licence (EPL), treatment of 30-50ML/d via Reverse Osmosis is not economically feasible.

Issue EPA28) …The EPA’s policy is that the water quality objectives /ANZECC trigger values should be met at the edge of the area where initial (near-field) mixing occurs. Options to meet this policy aim are considered and weighed against the matters to be considered in licensing decisions as set out under Section 45 of the Protection of the Environment Operations Act 1997. The matters that need to be taken into account include the impact of the measures that can be taken to mitigate the impacts of the pollution and maintain or restore the environmental values of the waterway. While the EPA’s licensing approach is to consider the effect of a discharge at the edge of a defined initial “near-field” mixing zone, if the discharge volume from the licenced discharge point would dominate flows in system under most conditions then the dilution effects within a near field mixing zone may be relatively minimal. EPA would therefore examine the pollutant concentrations at the point of discharge relative to ANZECC trigger values.

This issue is addressed in the response to query EPA29 provided below.

Issue EPA29) …Effective discharge controls that consider the level of water treatment, the concentration and the total mass of pollutants, and the in situ dilution, should ensure that the area of a mixing zone is small and the designated values and uses of the water body as a whole are not prejudiced.

The EPA’s comment is acknowledged. As stated in the SWIA (RPS, 2015ab), Lake Wallace is a water supply reservoir that was constructed in 1978 for use by Wallerawang Power Station. Other components of the Coxs River Water Supply Scheme include Lake Lyell and Thompsons Creek Reservoir. With the decommissioning of Wallerawang, there is no longer direct extraction from Lake Wallace; however, the lake still constitutes a component of the Coxs River Water Supply Scheme for EnergyAustralia’s other power station, Mount Piper Power Station.

The Sawyers Swamp Creek catchment is a highly disturbed state, with historical and current land uses comprising wet ash deposition, dry ash placement and a rehabilitated open cut mine. Discharge has been occurring to Sawyers Swamp Creek since 2006 and as presented in the Ecological Impact Assessment, there is no expected change to aquatic ecosystems downstream of Springvale LDP009 due to the proposal. A SSTV assessment, as applied to immediately upstream of Lake Wallace is not considered unreasonable.

72. On 20 February 2015, the Neutral or Beneficial Effect on Water Quality Assessment Guideline 2015 (“the 2015 NorBE Guidelines”) was published in the Government Gazette (No 13). These Guidelines defined a “neutral or beneficial effect” as:

3.1 Definition of neutral or beneficial effect

Consent authorities must consider a number of matters to determine a development application, including that it will have a neutral or beneficial effect on water quality (NorBE). The consent authority may refuse an application on other grounds even if NorBE is satisfied.

A neutral or beneficial effect on water quality is satisfied if the development:

(a)   has no identifiable potential impact on water quality, or

(b)   will contain any water quality impact on the development site and prevent it from reaching any watercourse, waterbody or drainage depression on the site, or

(c)   will transfer any water quality impact outside the site where it is treated and disposed of to standards approved by the consent authority.

Public authorities undertaking activities in the Sydney drinking water catchment must also consider whether the proposed activity will have a neutral or beneficial effect on water quality.

The site of a proposed development or activity, to determine water quality impacts, is the land described in the development application, the Part 5 activity documentation, or where relevant, the SSD or SSI application. Pollutant loads or concentrations for each pollutant leaving a site are measured at the site boundary, or at the point where the pollutant enters a drainage depression, waterbody or watercourse.

Section 4 describes how a neutral or beneficial effect is assessed and the matters that a proponent must address in an application.

73. The definition of neutral or beneficial effect contained in the 2015 NorBE Guidelines was relevantly identical to that contained in the 2011 NorBE Guidelines (published on 21 January 2011 in the Government Gazette (No 6)).

74. As part of its reply to the RTS, Springvale Coal commissioned a report by Jacobs Group (Australia) Pty Ltd (“Jacobs”) entitled, Additional Simulations of the Regional Water Quality Impact Assessment Model which was published on 26 March 2015 (“the Jacobs March 2015 Report”).

75. The Jacobs March 2015 Report included model predictions of mine water discharge. It was “highlighted that the NUL simulation presents the predicted flow and salinity in the circumstance of both Angus Place Colliery and Springvale Mine extension projects not proceeding. As such, comparison of the prediction simulation and the NUL presents the impact due to the Proposal.” Summaries in tabular form of predicted daily salinity (Table 4.10) and of end pipe target daily salinity (Table 4.12) in the Coxs River catchment, were attached.

76. In April 2015 the Department prepared a Preliminary Environmental Assessment Report (“PEAR”). In the PEAR the Department:

1. after summarising the existing development consent and operations, noted that as at April 2015 Springvale Coal had extracted 17 longwalls, including LW1 and LW401 to LW416. Moreover, it was “currently” extracting LW417 and that LW418 to LW423 were approved but had yet to be extracted;

2. noted that the Catchment SEPP applied to land within the hydrological catchments that contribute to Sydney’s drinking water supply:

The State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 (SEPP Sydney Drinking Water Catchment) applies to land within the hydrological catchments that contribute to Sydney’s drinking water supply. The aims of this Policy are to:

•   provide for healthy water catchments that would deliver high quality water while permitting development that is compatible with that goal;

•   provide that a consent authority must not grant consent to a proposed development unless it is satisfied that the proposed development would have a neutral or beneficial effect on water quality; and

•   support the maintenance or achievement of the water quality objectives for the Sydney drinking water catchment.

Recent modeling indicates that discharge of mine water into the Coxs River via LDP 9 would have a neutral impact on water quality within the catchment, indicating that the project would not contravene the aims of this SEPP. This is discussed in detail in Section 6.4.

3. outlined the concerns expressed by the SCA and the EPA:

The Sydney Catchment Authority (SCA, now part of Water NSW) is concerned about increased mine water discharges and associated water quality impacts to the Coxs River and Sydney’s drinking water catchment. Specifically, SCA remains concerned about predicted increases in salinity in Lake Burragorang, Coxs River, Kangaroo Creek and Sawyers Creek. SCA indicated that the project would not achieve the test of neutral or beneficial effect on water quality unless there is a requirement to treat mine water discharges to a higher level prior to discharge.

The Environment Protection Agency (EPA) also remains concerned about the water quality of proposed mine water discharges. The EPA states that its ultimate goal for the project is to reduce the concentration of saline discharges to 350 microSiemens per centimetre (µS/cm) electrical conductivity (EC) and to reduce the total load of salt being discharged into this system. However, the EPA acknowledges that these goals may not be achievable in the short term. Consequently, the EPA has agreed to allow Springvale Coal to:

•   undertake pre-feasibility studies on achieving standards of 700 µS/cm (50th percentile) or 900 µS/cm (90th percentile) for mine water discharges into the Coxs River or its tributaries;

•   continue negotiations with NOW, SCA and Energy Australia regarding water management in the upper Coxs River; and

•   develop water management options and Pollution Reduction Programs (PRPs) for Springvale and Clarence coal mines, including necessary actions to ensure that Angus Place can be brought online seamlessly through PRPs.

4. and, under “Predicted Surface Water Impacts”, especially “Discharge of Mine Water”, stated that (emphasis added):

Under the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, the Minister's delegate is required to be satisfied that the project would have a 'neutral or beneficial effect' on water quality, since the Coxs River catchment and Lake Burragorang are part of this catchment.

The Department notes that existing discharges from Springvale meet the current EPL’s limits for EC and that Centennial is currently investigating options to further reduce the salinity levels of discharges. The Department agrees with the EPA that these alternative treatment arrangements may take some time to implement, but is satisfied that they would result in a ‘beneficial’ effect on water quality in the Coxs River and its downstream waterways, compared with existing discharges.

Jacobs states that the predicted increase in salinity in Lake Burragorang (either with or without treatment) is equivalent to an increase of 6% and 5% respectively, which it considers has a ‘neutral’ impact to water quality, since the predicted increase in salinity is in itself minimal.

The Department does not consider that an increase of 5 – 6% is arithmetically ‘neutral’. However, this should not be the basis of the assessment. The critical question is whether the increase is ‘environmentally neutral’. In this regard, it is important to note that the predicted increase in salinity in Lake Burragorang results not from higher EC in inflows from the Coxs River, but from an increased total salt load as a result of the expanded mining area and the proposal to divert up to 19 ML/day of Clarence Colliery’s mine water from the Wollangambe River. The increase must also be considered in the light of the Australian Drinking Water Guidelines (2015) and the potential for any such increase to lead to any ‘environmental harm’.

In the Department’s opinion, there is no basis on which to conclude that there would be any negative effects from the predicted increase in salinity, which is well within the range of normal upland streams and catchments in eastern Australia and well within the expected standards of the Drinking Water Guidelines. On this basis, the Department considers the changes to be environmentally ‘neutral’.

The Department also notes that, as at the date of this report, the EPA has not had the opportunity to review the final Jacobs report and further consider potential discharge management options in light of the modelling results. However, as stated in Section 5.4, the EPA has acknowledged that reducing the salinity of mine water discharges to 350 µS/cm EC may not be achievable in the short term.

77. In other words, the PEAR opined that the predicted increase in salinity in Lake Burragorang was attributable to the predicted impacts of the project, but it went on to conclude that this would not have a negative impact and would be “environmentally neutral”.

78. On 27 April 2015 the Minister issued a request to the PAC under s 23D of the EPAA and cls 268R and 268V of the Environmental Planning and Assessment Regulation 2000 for a review of the project. Paragraph 1 of the Minister's request to the PAC required it to:

Carry out a review of the Springvale Mine Extension Project, and:

(a)    consider the EIS for the proposed development, the issues raised in submissions, the issues raised in the advice from the IESC, the formal Response to Submissions document, the subsequent response to agency comments on the response to submissions document the Department of Planning and Environment's Preliminary Assessment Report, and any other relevant information provided on the proposed development during the course of the review.

(b)    assess the merits of the proposed development as a whole, paying particular attention to its potential:

•   subsidence impacts on upland swamps; and

•   impact on the region's water resources, particularly discharges of mine water to the Coxs River catchment; and

(c) recommend any further measures to avoid, minimise, and/or manage the potential impacts.

79. The Minister’s request included that the PAC hold a public hearing and provide a report to the Department. Thus, on 27 May 2015, a public hearing was held by the PAC in Lithgow.

80. In late May 2015 Centennial Coal Company Limited (“Centennial Coal”) - the parent of Springvale Coal - and the EPA reached agreement about the reduction of salinity in the discharge of mine water from the project (and the Angus Place mine). That agreement was summarised in a letter from the EPA to the Department dated 22 June 2015. This agreement was reached in the context of Springvale Coal's existing environment protection licence limit of 1200 μS/cm EC for discharges at LDP009.

81. On 3 June 2015 there was a departmental meeting with the PAC and WaterNSW (formerly the SCA). PAC Secretariat notes of the meeting revealed that “key concerns” included “NorBE – Sydney Drinking Water Catchment SEPP”. In particular, the issue of whether there was a “water impact” if “mitigated within project site, or if mine water was transferred and treated to appropriate level”. One of the “key issues” was the “treatment and discharge at LD009”. Although it was noted that “water quality would improve compared to before i.e. ‘beneficial effect’” and the 22 June 2015 agreement was mentioned, concern was expressed as to existing modelling and the appropriate baseline to measure the change in the salinity level at Lake Burragorang. Specifically, the question “how do you differentiate from other sources of impact?” was asked.

82. The discussion was also reflected in the handwritten notes of the PAC Chair, Mr Brian Gilligan, where explicit reference was made to what may be inferred are the NorBE guidelines: that there was no water quality impact; the water quality impact could be mitigated on site; and that unsuitable water could be transferred for treatment.

83. The handwritten notes of Mr David Johnson (one of the PAC members), attending the meeting, recorded that Mr Malcolm Hughes, a Senior Manager at the Department, had said the following:

‑   Concerned re “Neutral or Beneficial Effect” on catchment waters. Defined in SEPP for Syd. Drinking Water Catchment. [3 ways of achieving NOBE].

‑   Loss of water-quality re Springvale is negligible

‑   Greatest concern of SCA/WNSW is discharge quality to Coxs R (LDP09)

‑   Company (Springvale/Centennial) have not negotiated or consulted with SCA/WNSW!

84. Mr Johnson’s notes also recorded that Mr Howard Reed, from the Department, had said:

‑   Apparently the Co. & EPA have reached an agreement for EPL based on salinity of discharge into Coxs R. satisfying:-

50th%ile ---- 700µS max

90th%ile ---- 900µS max

100th%ile ---- 1,000µS max

+ medium term goal of 500µS

85. The notes concluded with the statement that Mr Hughes would “like to see Jacobs re-doing their modelling on resultant effects (of above agreement) on Lake Burragorang.” This was echoed in the PAC Secretariat notes.

86. On 26 June 2015 the PAC published its first project review report (“the first PAC Review Report”). Relevantly, the PAC considered that the project was approvable subject to stringent conditions. However, it recommended that prior to the project being determined additional information be provided.

87. The executive summary to the first PAC Review Report stated as follows (emphasis added):

The Springvale Mine Extension Project is a proposed extension of the existing Springvale underground coal mine, which is located approximately 15 kilometres northwest of Lithgow, within the Lithgow City Council Local Government Area. The proposal involves extending the existing underground mine operations to the south and southeast, with the mine continuing to operate in largely the same way it has since 1995. It would continue to extract up to 4.5 million tonnes of run-of-mine coal per year from the Lithgow Seam, and would continue to use the existing coal transportation, water and ventilation systems.

On 27 April 2015, the Minister requested the Commission to conduct a public hearing and review the merits of the project, paying particular attention to subsidence impacts on upland swamps, and impacts on the region’s water resources, particularly discharges of mine water to the Coxs River catchment. The Commission was constituted by Brian Gilligan (chair), with Abigail Goldberg and David Johnson. The Commission examined the documents referred to in the Terms of Reference, including the Preliminary Environmental Assessment Report (PEAR) provided by the Department of Planning and Environment (the Department). The Commission also received written submission, held a public hearing, visited the site and surrounds (accompanied by an officer from the Office of the Environment and Heritage (OEH)), and met with the Applicant, the Department, the Environment Protection Authority (EPA), the NSW Office of Water, the Department of Trade and Investment (DTI), WaterNSW and Council.

The Commission notes that the PEAR was lacking recent information about the position of agencies on some key issues, which made the task of undertaking the review in a timely and effective manner challenging. In particular, the most recent submission from OEH was not provided to the Commission until 19 June when the Commission was close to finalising its review report. With the exception of the matters raised in this late submission, the Commission has been able to ascertain most of the relevant information during the course of the review. Residual matters are flagged in the relevant sections of the report.

Subject to the resolution of these residual concerns, the Commission agrees with most of the findings and recommendations of the PEAR. However, the Commission has also provided significant recommendations to enhance the determination of this proposal and to ensure that potential impacts are avoided, minimized or mitigated as summarised in Section 5 of this report.

The Commission considers the three key issues that require further consideration are the final plan of action in relation to discharge impacts on Coxs River, adaptive management options and offset policy provisions in relation to the impact on swamps, and resolving some of the uncertainty regarding non-conventional subsidence effects. The Commission has also considered other issues, including subsidence-related impacts on watercourses, rock features and built features, socio-economic impacts, biodiversity impacts from clearing, and noise impacts.

In relation to discharge impacts on Coxs River, the Commission has recommended that the Department consults further with the EPA and WaterNSW, and that the target levels for salinity and other toxicity factors are formally agreed upon with an accompanying tight schedule for action by the Proponent. In relation to swamps, the Commission recommends that the Department consider opportunities for adaptive management in relation to certain swamps based on a comprehensive monitoring program in key areas and deferred Extraction Plan approvals to reflect a progressive risk assessment process. In relation to non-conventional subsidence effects, the Commission recommends that the Department give further consideration to upsidence and valley closure effects, and ensure that appropriate monitoring is included in any consent.

The Commission believes it is important to view the proposal in the strategic context of power supply for NSW, and notes that the Springvale mine is now the only local mine currently supplying coal to the Mt Piper Power Station, which provides approximately 15% of NSW’s electricity. While noting objections raised about some elements of the economic assessment, the Commission agrees with both DTI and the Department’s independent peer review that the proposal, taken overall, would make a positive contribution to the region and the state of NSW.

The Commission has carefully weighed the key areas of concern, including discharge impacts on the region’s water resources and swamp impacts, against the significance of the resource and the socio-economic benefits. The Commission is satisfied that the project’s benefits as currently understood outweigh its potential impacts, and on balance is approvable. The project should proceed to determination, subject to the recommendations outlined in this report including the resolution of residual issues raised by OEH and the application of the Draft Offsets Policy.

88. As an introductory matter, the first PAC Review Report noted that 17 longwalls had been extracted and that an 18th was currently being extracted. It further noted that the 1992 development consent was due to expire on 30 September 2015 and had already been extended by a year.

89. Chapter 3.2 dealt with “Water Resources”. In relation to surface water impacts, the first PAC Review Report noted that:

Key Watercourses and Catchments

The Springvale mine is predominantly located within the catchments of the Wolgan River and the Coxs River. The Wolgan River flows to the north from the mine location through the Wolgan Valley, before entering the Colo River, which flows into the Hawkesbury River. From the mine location, the Coxs River generally flows south path [sic] Lithgow, before flowing into Lake Burragorang, which is impounded by Warragamba Dam (the primary reservoir for Sydney’s drinking water supply).

Discharge into Coxs River

A large number of the written submissions and presentations at the public hearing raised concerns about the discharge of highly saline mine water into the Coxs River, which may in turn have impacts on Sydney’s water supply, and has previously caused major impacts to swamps.

The proposed extension of mining would generate up to 19ML/day of mine water make at its peak, which is a significant increase of 6-7ML/day above the existing operations. The Commission notes that the Applicant has been discharging surplus mine water to the Coxs River via discharge point LDP 9 since the recent closure of the Wallerawang Power Station. While the Applicant has an Environment Protection Licence (EPL) with a discharge limit of 30 ML/ day and an electrical conductivity (EC) limit of 1,200 µS/cm, the EPA has indicated that these licence limits are interim and has asked the Applicant to consider treatment options that would substantially reduce the EC to 350 µS/cm (in accordance with the ANZECC guidelines for protecting aquatic ecosystems).

Since the EIS and RTS, the Applicant has engaged a consultant to prepare a report (the Jacobs Report) to support its position that this level of treatment would be both prohibitively expensive and impractical due to the scale of pre-treatment required. The Jacobs Report concludes that the predicted increase in salinity in Lake Burragorang with treatment is 5%, while the predicted increase is only 6% without treatment.

The Commission notes that the EPA has reviewed the Jacobs report, and has raised issues in relation to the model calibration and validation. The Commission also notes that comments were not sought from WaterNSW on this report, however WaterNSW has raised concerns directly with the Commission regarding the model.

Notwithstanding its concerns about the model methodology, the EPA has acknowledged that reducing the salinity of mine water discharges to 350 µS/cm EC may not be achievable in the short term. The Applicant has advised the EPA that it could meet a performance measure of 700 µS/cm to 900 µS/cm at LDP 9 by 31 December 2016, using a combination of pre-treatment of discharge water, duplication of existing reverse osmosis infrastructure and blending of water from Clarence Colliery.

The EPA has since agreed to a timeframe of two years (i.e. until 30 June 2017) for the Applicant to meet a 50th percentile of 700 µS/cm, a 90th percentile of 900 µS/cm for salinity and a 100th percentile limit of 1000 µS/cm EC. In the longer term, the EPA would require that the salinity of the mine water discharge be further reduced, firstly to 500 µS/cm (90th percentile) by 30 June 2019. The Commission notes that these limits would be set by a variation of the Springvale EPL (EPL 3607). In addition, the EPA would require the Applicant to undertake a year-round monitoring program with a status report by 30 June 2017 on the impact of the mine’s discharge on the aquatic environment. Finally, the EPA remains concerned about other toxicity factors in the mine water, including ionic composition and high bicarbonate alkalinity, and has indicated that it will continue to correspond with the Applicant regarding this matter (see EPA correspondence in Appendix 4).

The Applicant has recently agreed in principle to the EPA’s proposals, as described above (see correspondence from the Applicant in Appendix 4). The Commission also notes that this plan of action would meet Energy Australia’s stated salinity threshold of 550µS/cm. While the Applicant’s agreement in principle is qualified, overall, the Commission is encouraged that a tangible plan of action with a clear timeline can be finally established, before determination, after many years of disagreement between the Applicant and the EPA. The Commission recommends that, prior to determination, this plan is included in the Statement of Commitments attached to the recommended conditions of consent.

In addition, the Commission notes that WaterNSW has not been adequately consulted on the discharge issues, and recommends that the Department seeks further advice from WaterNSW prior to determination. In a recent meeting, WaterNSW indicated that it supports the proposed approach in principle, and would be able to provide more accurate data for the purpose of developing a program to meet the proposed performance criteria. WaterNSW has also requested that a condition of consent is included requiring a ‘negligible change’ in the salinity level at Lake Burragorang, in accordance with WaterNSW’s principles for managing mining impacts.

…

Water make

The Applicant does not currently hold any surface water licences and NOW previously indicated to the Department that the Applicant may have difficulty obtaining the appropriate licences to deal with the water make associated with the project. While the Commission acknowledges that these licences are governed by separate legislation (the Water Management Act 2000) to the development consent process, it believes that it is important to consider whether the Applicant is likely to meet its water licensing requirements. During its review, the Commission has consulted with representatives of NOW and is satisfied that there are a number of options available to the Applicant to account for the predicted surface water take. Nevertheless, the Commission recommends that this matter is further resolved before determination and the Applicant includes relevant commitments in its Statement of Commitments appended to any consent.

3.2.4 Summary of Recommendations

1.   That, prior to determination, the Department liaises with WaterNSW about the salinity level of discharges into Coxs River, and consider WaterNSW’s request to include a condition of consent requiring a ‘negligible change’ in the salinity level at Lake Burragorang.

Did the PAC Attain the Necessary State of Satisfaction That the Carrying Out of the Project Would Have a Neutral or Beneficial Effect on Water Quality?

162. In relation to the first two grounds of challenge, 4nature did not submit that there had been no regard to the state of satisfaction contained in cl 10(1) of the Catchment SEPP by the PAC granting approval. The argument was more nuanced.

163. Rather, 4nature contended that in the absence of any reference to having attained the requisite state of satisfaction in the PEAR, PAC Review Reports, the contemporaneous documents prepared with the consent, or the cover letter dated 21 September 2015, there was a strong basis for inferring that the state of satisfaction set out in cl 10(1) of the Catchment SEPP was not reached by the PAC. In particular, 4nature submitted that the material before the PAC was inconsistent with the PAC being satisfied that the carrying out of the project would have a neutral or beneficial effect on water quality principally because:

1. the methodological approach to the NorBE test advocated by the Department in the PEAR was not consistent with the text of cl 10(1);

2. the modelling before the PAC indicated identifiable adverse impacts on water quality from the point of discharge (at LPD009) all the way to Lake Burragorang; and

3. there was no modelling of the overall effect on water quality of the staged reduction in salinity concentration of discharges set out in the conditions to the consent, but which was nevertheless asserted by the Department to result in a beneficial effect to water quality in the medium to long term.

164. A threshold question arose as to what was the appropriate comparator for the purposes of cl 10(1) of the Catchment SEPP.

165. According to 4nature, the relevant comparison was between the water quality if the project were carried out and the water quality if it were not (“the NUL case”). Furthermore, in order to make a proper comparison, it was necessary to have recourse to appropriate modelling on the impact of the project on water quality.

166. Centennial and Springvale rejected the contention that cl 10(1) was uniquely directed to a ‘with or without’ test when assessing the carrying out of the development on water quality. It was their submission that the appropriate comparator (in other words, the “base case”) to be applied for any given development application was a factual question for the decision-maker as at the date of the determination of the application. For the reasons elaborated upon below, this position should be accepted.

167. The Department identified the base case against which the neutral or beneficial effect on water quality, if any, of the project was to be measured as the discharge limits on Centennial’s environmental protection licence (EPL 3607) held at the time the development application for the project was submitted: 1200 µS/cm EC (or 800 mg/L TSP).

168. But the Department’s approach was, 4nature submitted, not in conformity with the text of cl 10(1) of the Catchment SEPP. This was because the project was entirely new, and therefore, if it were not approved the discharges permissible under the old development would cease, regardless of what was permissible under EPL 3607. It was for this reason that the appropriate methodology for determining the project’s effect on water quality was to examine the potential water quality impacts of carrying out the project compared to the project not being carried out: the NUL case. This approach more closely aligned with the language and purpose of cl 10(1).

169. The NUL case baseline methodology was, moreover, the same approach that was used by the Department to conclude that the 5% to 6% increase in the median daily salinity in Lake Burragorang demonstrated that the project would have a beneficial or neutral effect on water quality.

170. In other words, while the Department relied, on the one hand, on the NUL case for the purpose of concluding that there was a neutral or beneficial effect on water quality at Lake Burragorang by the proposed project, the Department on the other hand, advocated an approach in the Coxs River of comparing the maximum discharge concentrations permissible under EPL 3607 (even though this was an interim limit) with the staged reduction in discharge concentrations contained in the agreement between the EPA and Centennial. Ignoring the inconsistency, the vice with this approach, according to 4nature, was that it assumed as the baseline a continuing notional concentration based on interim maximum permissible concentrations, rather than actual concentrations. Because it does not apply the appropriate baseline, viz, the NUL case, it was contrary to the text of cl 10(1) of the Catchment SEPP.

171. 4nature noted that the Addendum Report referred to the Catchment SEPP and the 2011 NorBE Guidelines and acknowledged that the NorBE Guidelines provided guidance on what constituted a neutral or beneficial effect. The Addendum Report also stated that the appropriate place to measure and manage the impact of the mine water discharges was at the mine’s Licensed Discharge Points, which was consistent with the NorBE Guidelines and cl 9(1) of the Catchment SEPP.

172. This methodology was also consistent with the approach taken for the purposes of modelling the water quality impacts for the project in the Jacobs March 2015 Report. That Report modelled the predicted flow and salinity of the project proceeding and not proceeding to measure the impact of the project on water quality. The results showed that downstream of LDP009 at Sawyers Swamp Creek the median daily salinity would increase from 50 mg/L to 761 mg/L if the project proceeded. Similarly, downstream of LDP009 at Sawyers Creek above the Coxs River, in an area outside the boundaries of the consent, the median salinity would rise from 95 mg/L to 715 mg/L if the project proceeded.

173. These changes were, 4nature contended, an identifiable negative impact on water quality at the point of discharge outside the boundaries of the project contrary to the NorBE Guidelines. The predicted increased median daily salinity was also above the limit recommended by the ADWG for good quality drinking water and exceeded the appropriate limits in the ANZECC 2000. A median daily salinity of 761 mg/L is equivalent to approximately 1136 µS/cm, whereas 50 mg/L is equivalent to approximately 75 µS/cm, and under the ANZECC 2000 guidelines of 350 µS/cm

174. The application of the ANZECC 2000 guidelines to the project was endorsed by WaterNSW (formerly the SCA) for the purpose of assessing water quality impacts at the LDPs and was expressly referred to in the DGRs as being of assistance.

175. In the present case, 4nature submitted, applying the 2015 NorBE Guidelines, there was neither containment of any water quality impact nor transfer outside the site, and the modelling indicated that identifiable impacts would occur on water quality from the point of discharge at Sawyers Swamp Creek all the way down the water system to Lake Burragorang.

176. In addition, 4nature relied upon the fact that notwithstanding the Department’s assertion that the staged reduction in discharge concentrations (see condition 12 of the consent) would result in a beneficial effect on the water quality in the medium to long term, the PAC was not provided with any modelling of the overall effect of the staged reduction in concentration of salinity of discharges as compared to the NUL case or existing water quality. Instead, what the modelling above demonstrated was an increase in salinity levels for Sawyer Swamp Creek downstream of LDP009 as well as Lake Burragorang.

177. As a result, the approach adopted by the Department was inconsistent with the Catchment SEPP, and because the PAC’s determination was informed by the Department’s methodology, the PAC applied the wrong test and the proscribed state of satisfaction was not, and could not have been, reached. To the extent that the PAC Review Reports indicated that it reached the requisite state of satisfaction, the PAC failed to include findings and recommendations in those reports that would permit the inference to be drawn that the PAC was satisfied that the project would have a neutral or beneficial impact on water quality.

178. In summary, therefore, the material before the PAC demonstrated that there was no neutral or beneficial effect on water quality within the meaning of cl 10(1) of the Catchment SEPP and because this material was inconsistent with the PAC reasonably attaining the necessary state of satisfaction, this strongly supported an inference that the PAC did not in fact reach that state.

179. For the reasons largely put by the respondents, I do not accept 4nature’s submissions.

180. The “satisfaction” required pursuant to cl 10(1) of the Catchment SEPP to found a valid exercise of power by the PAC (as the consent authority) to grant approval was a state of mind that had to be reasonably open to it and formed on a correct understanding of the law (R v Connell; Ex parte The Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69 CLR 407 at 430, Buck v Bavone [1976] HCA 24; (1976) 135 CLR 110 at 118-119 and Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 at [130]-[137]. As was recently articulated in Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2016] NSWCA 253 (at [12]-[13]):

12   It is trite law that a state of satisfaction of a public officer which is legally flawed cannot satisfy the precondition to the engagement of a statutory power. In The King v Connell; Ex parte The Hetton Bellbird Collieries Ltd, Latham CJ, after referring to passages in an earlier authority, stated:

“Thus, where the existence of a particular opinion is made a condition of the exercise of power, legislation conferring the power is treated as referring to an opinion which is such that it can be formed by a reasonable man who correctly understands the meaning of the law under which he acts. If it is shown that the opinion actually formed is not an opinion of this character, then the necessary opinion does not exist.”

13   As later explained by Gibbs J in Buck v Bavone, the opinion will not be lawfully formed if, in reaching it, the officer has failed to consider matters that he or she was required to consider, or taken into account matters which he or she was required to disregard.

181. Clause 10(1) of the Catchment SEPP is, however, silent as to the relevant comparator. It does not specify a base case against which to assess the neutral or beneficial effect on water quality by the carrying out of development. The 2011 and 2015 NorBE Guidelines are similarly silent.

182. The applicable legal principles of construction relating to subordinate legislation such as the Catchment SEPP are well known and are not repeated here, save to note that the general principles relating to the interpretation of primary legislation (Acts of Parliament) are equally applicable to the interpretation of environmental planning instruments (Cranbrook School v Woollahra Municipal Council [2006] NSWCA 155; (2006) 66 NSWLR 379 at [36]–[46] and [63], Sutherland Shire Council v Benedict Industries Pty Ltd (No 4) [2015] NSWLEC 101 at [41]–[47] and IPM at [117]).

183. Accordingly, cl 10(1) must be construed having regard to its text, with recourse to its wider statutory context and by reference to the general purpose and policy underpinning both the clause and the Catchment SEPP (see generally the principles summarised in Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 at [39], Certain Lloyd’s Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378 at [23]–[26], Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 581 at [65]–[66] and Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664 at [22] and [23]).

184. Having said this, it must be recalled that subordinate legislation such as the Catchment SEPP is generally drafted less carefully than primary legislation, such as Acts and regulations, and should therefore be construed having regard to more practical considerations, rather than by a strict adherence to its language (Egan v Hawkesbury City Council (1993) 79 LGERA 321 at 331 per Meagher JA, Tovir Investments Pty Ltd v Waverly Council [2014] NSWCA 379 at [54] per Leeming JA, Benedict Industries (No 4) at [43], IPM at [117]).

185. There is no warrant, having regard to the text, context or purpose of cl 10(1) of the Catchment SEPP, to read into that clause the application of the NUL case comparator that 4nature posits. In my opinion, the provision does not require that any one particular approach be adopted. This is because the selection of the appropriate base case involves matters of judgment, and retaining a degree of flexibility is both necessary and desirable where, as the NorBE Guidelines state, the NorBE test “is not an exact science” and neither the Catchment SEPP nor the NorBE Guidelines clearly define “neutrality”, “beneficial effect” or “water quality” (matters adverted to the by Department in the Addendum Report).

186. That a different comparative methodology may be used for different development is not contrary to the language of the clause nor its intent as reflected in the aims of the Catchment SEPP (for example, “to provide for healthy water catchments that will deliver high quality water while permitting development that is compatible with that goal”: cl 3(a)). Provided that, objectively measured, the state of satisfaction is reached by the decision-maker having regard to the material before it, this pre-condition to the exercise of the power to grant development consent will be met.

187. It was therefore open to a decision-maker under cl 10(1) of the Catchment SEPP to identify the appropriate baseline and to form the view that he or she was satisfied that the carrying out of the development would have a neutral or beneficial effect on water quality compared to the existing water quality as at the date of its determination to grant consent. It was equally open to a decision-maker in assessing whether the impact of the proposed development on water quality was neutral or beneficial to have, if relevant, regard to the term of the project as a whole.

188. None of these comparative approaches are incompatible with either the text of cl 10(1) or the wider statutory context and purpose of the Catchment SEPP. Clause 10(1) is ultimately concerned with, as the Minister emphasised, drinking water quality. And the purpose of the Catchment SEPP, is to provide for the delivery of high quality drinking water (see the aims of the instrument in cl 3). That the Catchment SEPP and cl 10(1) are deliberately silent on how to best promote this objective is, in my opinion, consistent with a legislative decision to equip the consent authority with a broad range of methodological tools at their disposal to ensure that drinking water quality is maintained irrespective of the proposed development. It is not difficult to envisage that some development activity will necessitate adjustments in assessment and the inherent flexibility of an indeterminately attained state of satisfaction will permit the aims of the Catchment SEPP to be achieved. The fluid construction of cl 10(1) of the Catchment SEPP may be contrasted with the more prescriptive approach set out in cl 10(2), where the assessment must be undertaken by reference to the NorBE Tool.

189. Further, nothing in the Catchment SEPP or the NorBE Guidelines (albeit mindful of the general edict against using subsidiary instruments such as the NorBE Guidelines to construe principal instruments such as the Catchment SEPP: Master Education Services Pty Ltd v Ketchell [2008] HCA 38; (2008) 236 CLR 101 at [19], Plaintiff M47/2012 v Director-General of Security [2012] HCA 46; (2012) 251 CLR 1 at [56] and Jojeni Investments Pty Ltd v Mosman Municipal Council [2015] NSWCA 147; (2015) 89 NSWLEC 760 at [40]) insist on the neutrality or beneficial effect being measured purely in arithmetic terms, in terms of ecological health, or even by conformity with particular water quality guidelines. Nor is there any specificity on where or how the neutrality or beneficial effect must be measured in relation to the development (although the NorBE Guidelines indicate where pollutant loads or concentrations leaving a development site are to be measured).

190. There is nothing impermissible or inconsistent with the regulation of the impact of any development on the quality of water at its source by, as in the present case, the imposition of enforceable conditions of consent measuring water quality at various discharge points.

191. It was therefore reasonably open to the Department to select the existing discharge limits for salinity under EPL 3607 as the base case for the pre-development baseline. This was consistent with the actual pre-development position at the site. It was also consistent with the conduct of underground coal mining at Springvale for the past 20 years and the lawful mine water discharges at the time of the PAC’s consideration of the development application. EPL 3607 was granted under a separate statutory regime, was ongoing, and was not contingent upon the right to conduct mining activity on the existing site.

192. The Department’s approach was also consistent with the NorBE Tool developed by the then SCA and referenced in the NorBE Guidelines. While the Tool did not apply to the project, the description of the Tool’s assumptions are instructive, to the extent that it compares the “predicted effect of the proposal on water quality with the estimated effect of the current (legal) use and condition of the site”. This is precisely what the Department did. It compared the legal discharge limits pre-development with the predicted effect of the project on the salinity of the discharges using the modelling that Centennial provided. There was nothing impermissible about this approach. As stated above, underground mining and associated mine water discharges had been occurring since 1995.

193. Thus the Department and the EPA were satisfied that there would be a neutral or beneficial effect on water quality (WaterNSW had no residual concerns) even though the project might cause an arithmetic increase in the overall salinity levels relative to current levels.

194. I agree with Centennial and Springvale that it cannot be justifiably inferred that if the consent was not granted that mine water discharges associated with the 1992 development consent would cease (for example, there were still a number of long walls that had been approved but were yet to be extracted). The inclusion of the NUL case in the Jacobs March 2015 Report is not definitive evidence of this fact. The expiration of the 1992 consent on 30 September 2015 was in respect of the right to conduct mining operations. The Department may be taken to be aware of this fact. It has not been established, for example, that Centennial and Springvale would cease pumping out inflow water from the underground mine if no approval was granted for the project.

195. As the respondents have correctly asserted, there was no submission or advice before the PAC suggesting that the Department’s Addendum Report was incorrect insofar as it had selected an inappropriate base case. That a different baseline measurement could have been adopted by the Department does not mean that the PAC has erred in accepting the Department’s approach. It is not contended by 4nature that the Department’s methodology was irrational or unlawfully unreasonable.

196. Of course it was the PAC and not the Department that was required to hold the requisite state of satisfaction under cl 10(1) of the Catchment SEPP. While it is correct to observe, as 4nature repeatedly emphasised, that there is no explicit statement of satisfaction from the PAC, this does not preclude inferences as to the PAC’s mental state being draw from the materials before the PAC as the consent authority. It is axiomatic that inferences can be drawn from the material before a decision-maker as to whether or not that decision-maker has formed a particular opinion or reached a specific state of mind (Hale at 345-346, Currey at 375 and Caroona at [61]-[65] per Tobias JA).

181. There was abundant material before the PAC informing it of the content of cl 10(1) of the Catchment SEPP and that it had to be satisfied of the NorBE test. As Centennial and Springvale submitted, this was not a case in which the material before the PAC demonstrated no more than that it was aware of the clause and the issues relevant to its application. The PAC was repeatedly informed of the application of the NorBE test in the DGRs, the EIS, the PEAR, the Addendum Report, the two PAC Review Reports, the public hearings before the PAC and at the meeting with WaterNSW in June 2015 and the EPA in September 2015.

182. The application of the NorBE test to the proposed development was discussed in EIS, Centennial’s Response to Submissions, the SCA’s comments on the Response to Submissions, the reply to the SCA’s comments, the Jacobs March 2015 Report, the PEAR, the Addendum Report and the meeting between PAC and the EPA in September 2015.

183. The PAC was advised that the Department regarded the NorBE test as satisfied and that the discharge limits for salinity agreed between Centennial and the EPA would have a beneficial impact on water quality, and moreover, that the predicted increased salinity at Lake Burragorang would be environmentally neutral.

184. The NorBE test, and the need to be satisfied of it, was discussed between the PAC (where the PAC Chair and other members of the PAC were present) and WaterNSW in the meeting between those two entities on 3 June 2015. It was discussed again at the meeting between the EPA and the PAC (where the Chair of the PAC was again present) on 3 September 2015. And as at 1 September 2015, WaterNSW advised the PAC that it had no outstanding issues concerning the project.

185. Likewise, the PAC Review Reports made it plain that the PAC was aware of the NorBE test and the need to attain the necessary mental state. The first PAC Review Report recorded submissions from the EPA, WaterNSW and OEH concerning the salinity level of the discharges and discussed the proper application of the NorBE test to water quality in the catchment area.

186. The PAC sought expert advice from the EPA and WaterNSW which was recorded in the second PAC Review Report. The EPA advised the PAC that it was satisfied that NorBE existed through the recommended conditions, especially in relation to drinking water. WaterNSW advised the PAC that it accepted the agreement between the EPA and Centennial as to salinity in the discharge of the mine water from the project (the 22 June 2015 agreement). The second PAC Review Report recorded the PAC’s satisfaction that the proposed discharge limits for salinity the subject of the agreement with the EPA, and the requirement for an Upper Coxs River Action and Monitoring Plan (included in the conditions attached to the consent), were appropriate.

187. The PAC had before it not only the text of cl 10(1) of the Catchment SEPP but was, as the detailed chronology above demonstrates, aware of its obligation under the clause. The PAC was also aware of the various assessments of the application of the NorBE test to the project and the advice of the Department and the EPA that the NorBE test would be satisfied if the recommended conditions concerning salinity were imposed. The granting of the consent with the adoption of the recommended conditions is, in my opinion, a powerful indicator that the PAC formed the requisite state of satisfaction.

188. Finally, the PAC referred in its cover letter dated 21 September 2015 to the project having been subject to a rigorous assessment process, and expressly referred to the recommendations of the second PAC Review Report, which were developed following the meeting with the EPA and which were plainly designed at satisfying the NorBE test. As the Factsheet accurately noted, “the potential water impacts of the project had been comprehensively assessed”.

189. In summary, having regard to the material before the PAC surveyed comprehensively above, I do not accept, on the balance of probabilities, that the PAC did not reach the necessary degree of satisfaction required by cl 10(1) of the Catchment SEPP. In my opinion, the evidence is almost overwhelmingly to the contrary. The PAC was aware that it could not approve the project absent satisfaction of the NorBE test in cl 10(1) of the Catchment SEPP. It stated that the project could be approved subject to conditions and it proceeded to adopt the conditions recommended by the Department and agreed to and accepted by the EPA and WaterNSW as to discharge limits for salinity that the Department and EPA considered would meet the NorBE test.

190. I therefore find that the PAC, after appropriate active intellectual engagement, did not apply the wrong test, but reached an independent state of satisfaction that the carrying out of the project would have a neutral or beneficial effect on water quality and that it proceeded to grant consent on this basis.

191. I make this finding notwithstanding that modelling exists predicting that the project could result in increased changes in the median daily salinity at the LDPs outside the boundaries of the project, and moreover, that there was no equivalent discharge modelling for the staged reduction in discharge concentrations as approved in condition 12.

192. In my opinion, it may reasonably be assumed that the PAC was aware of these matters but considered that the carrying out of the project would, in any event in light of the totality of the material before it, have a neutral or beneficial effect on water quality within the meaning of the cl 10(1) of the Catchment SEPP.

193. That there was material before the PAC that gave rise to the potential for a different state of satisfaction being reached does not mean that the mental state it achieved was not reasonably open to it when regard is had to the totality of the information before it.

194. Misleading or inadequate advice or modelling furnished by the Department (or any other body, such as the EPA or WaterNSW) to the PAC, as a delegate of the Minister, does not necessarily lead to the invalidity of a decision which has taken into account that advice (Anderson v Minister Administering the Water Management Act 2000 [2014] NSWCA 386 at [130]-[136] per Tobias AJA, with Meagher and Barrett JJA agreeing, citing Oates v Attorney-General (Cth) [2001] FCA 84; (2001) 181 ALR 559 at [132]-[136] and Zentai v O’Connor (No 3) [2010] FCA 691; (2010) 270 ALR 293 at [357] and [362]).

195. Moreover, a mistake of fact is not a ground of judicial review (unless it gives rise to irrationality or unreasonableness, neither of which were relied upon by 4nature in the present case) and administrative decisions are not open to challenge merely on the basis that they are wrong (Australian Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 355-356).

196. For all the reasons discussed above, to find otherwise on evidence before me would be to cavil with the ultimate findings of the PAC in a manner that is impermissible in judicial review proceedings. Grounds 1 and 2 are therefore dismissed.

Did the PAC Fail to Consider a Mandatory Relevant Consideration – Satisfaction of NorBE?

213. There was agreement between the parties that if the PAC failed to consider a mandatory relevant matter, namely cl 10(1) of the Catchment SEPP in the exercise of its power to grant consent, this would result in jurisdictional error with the likely consequence that the consent would be declared invalid (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 30-31, Hale at 339-341 and Weal at [80]).

214. 4nature submitted that having regard to the material before the PAC, and the absence of any reference to the requisite state of satisfaction in cl 10(1) of the Catchment SEPP having been reached by it in those materials, the PAC failed to properly consider the NorBE test contained in that clause. The PAC had done no more than advert to the NorBE requirement, and because of its failure to apply the NUL case in its baseline assessment of the project, the Court ought to infer that the PAC had not actively engaged in the process of evaluation necessary to reach the requisite state of satisfaction.

215. Having regard to the material before the PAC extensively surveyed and discussed above, in my opinion, this submission is not sustainable. Not only did the PAC consider the NorBE test contained in cl 10(1), it actively engaged in the intellectual evaluative process demanded by that clause. There is no cogent basis for drawing the contrary inference sought by 4nature.

216. At the risk of repeating the reasons given above, that there is no direct evidence of the PAC having independently analysed the results of Centennial’s modelling does not mean that the PAC did not take this information into account in the relevant sense. For the Court to find otherwise in the circumstances of this case would be to trespass into merits review (Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 at [79]).

217. And even if the cogency of the modelling as a component of the NorBE test in cl 10(1) of the Catchment SEPP (assuming for present purposes that the language of that clause made it so), was a mandatory consideration, it cannot be found with a sufficient degree of confidence that the PAC was unaware of, and therefore did not properly consider, either the so-called ‘failure’ of the Department to use the NUL case baseline comparator, or the absence of any modelling before the PAC comparing the predicted impacts of the staged reduction in salinity concentrations as prescribed in the conditions of the consent to the observed water quality or the NUL case (Anderson at [130]-[136]).

218. Accordingly, I reject the third ground of challenge.

Costs

219. Having failed on all three grounds of its challenge to the PAC’s decision, and these being Class 4 proceedings, normally 4nature would be liable to pay the respondents’ costs of the proceedings.

220. However, given that 4nature is a not-for-profit registered charity whose primary object is environmental protection, it is not difficult to conceive, subject to the appropriate evidence being marshalled, of a different costs order being sought by it (see r 4.2 of the LEC Rules).

221. On this basis, and at the request of 4nature, costs are reserved.

Orders

222. Because 4nature has been unsuccessful in its challenge to the decision to approve the project, the amended summons must be dismissed. Costs are reserved. And the exhibits are to be returned.

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Appendix “A”

LENVPLX11_2016_09_13_12_19_29_957 (421 KB, pdf)

Decision last updated: 13 September 2016