Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited

[2013] NSWLEC 48

Land and Environment Court

New South Wales

Medium Neutral Citation:

Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited [2013] NSWLEC 48

Hearing dates:

20-24 August 2012, 10-12 September 2012, 14 September 2012, 17 October 2012, 6-8 November 2012 and 15 November 2012

Decision date:

15 April 2013

Jurisdiction:

Class 1

Before:

Preston CJ

Decision:

1.The appeal is upheld.

2.Project application no 09_0202 for the carrying out of the Warkworth Extension Project is disapproved.

3.The exhibits, other than Exhibit W33, are returned.

Catchwords:

APPEAL - objector appeal against Minister's decision to approve extension of open cut coal mine - impacts on endangered ecological communities - significant impacts not avoided or mitigated materially - reliance on offsets to compensate for impacts - offsets package inadequate - significant noise impacts on nearby residents - noise criteria for project inappropriate - noise control measures inadequate - social impacts - on balance negative social impacts on local community - economic analyses of project - input-output analysis and benefit cost analysis - economic analyses inadequate - balancing of environmental, social and economic factors - project disapproved

Legislation Cited:

Environmental Planning and Assessment Act 1979 Pts 3A, 4, ss 5, 75E, 75F, 75H, 75J, 75L, 75R
Environmental Planning and Assessment Amendment (Part 3A Repeal) Act 2011, Sch 1, 1.7 [2]
Environment Protection and Biodiversity Conservation Act 1999 (Cth)
Land and Environment Court Act 1979 ss 37(1), 39
National Parks and Wildlife Act 1974 ss 56, 69B, 69F
Protection of the Environment Administration Act 1991 s 6(2)(d)
Threatened Species Conservation Act 1995

Cases Cited:

Associated Provincial Picture Houses, Limited v Wednesbury Corporation [1948] 1 KB 223
Australians for Sustainable Development Inc v Minister for Planning [2011] NSWLEC 33; (2011) 182 LGERA 370
Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197
Botany Bay City Council v Saab Corp Pty Ltd [2011] NSWCA 308
Drake v Minister for Immigration and Ethnic Affairs (No 1) (1979) 46 FLR 409; 24 ALR 577
Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349
Foley v Waverley Municipal Council (1963) 8 LGRA 26
Foster v Minister for Customs (2000) 200 CLR 442
Hunter Environmental Lobby Inc v Minister for Planning [2011] NSWLEC 221
Ironstone Community Action Group Inc v NSW Minister for Planning and Duralie Coal Pty Ltd [2011] NSWLEC 195
Kennedy v NSW Minister for Planning [2010] NSWLEC 240
Kulin Holdings Pty Ltd v Penrith City Council (1999) 103 LGERA 402
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24
Minister for Planning v Walker [2008] NSWCA 224; 161 LGERA 423
New Century Developments Pty Ltd v Baulkham Hills Shire Council (2003) 127 LGERA 316
Newbury District Council v Secretary of State for the Environment [1981] AC 578
Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347
Telstra Corporation Ltd v Hornsby Shire Council [2006] NSWLEC 133; (2006) 146 LGERA 10
Ulan Coal Mines Ltd v Minister for Planning [2008] NSWLEC 185; (2008) 160 LGERA 20
Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30

Category:

Principal judgment

Parties:

Bulga Milbrodale Progress Association Inc (Applicant)
NSW Minister for Planning and Infrastructure (First Respondent)
Warkworth Mining Limited (Second Respondent)

Representation:

Mr R D White (Barrister) (Applicant)
Ms A M Mitchelmore (Barrister) (First Respondent)
Mr N J Williams SC with Mr R C Scruby (Second Respondent)
Environmental Defender's Office (Applicant)
Legal Services Branch, NSW Department of Planning & Infrastructure (First Respondent)
Minter Ellison Lawyers (Second Respondent)

File Number(s):

10224 of 2012

Table of Contents

PART 1: INTRODUCTION
A coal mine seeks to extend its operations	[1]
Project approval is granted by the Minister	[5]
Local residents appeal the Minister's decision to the Court	[6]
The Court's task on the appeal	[7]
The parties' respective positions on the appeal	[12]
Outcome of appeal: project is refused	[14]
The structure of the balance of the judgment	[22]
PART 2: THE MERITS REVIEW TASK ON APPEAL
The nature of the appeal against the Minister's decision	[24]
The decision-making process to determine a project application	[31]
Identifying the parameters of the power to determine a project application	[44]
Preconditions and relevant matters to be considered	[46]
Power to attach conditions to an approval	[71]
PART 3: IMPACTS ON BIOLOGICAL DIVERSITY
The vegetation communities to be cleared	[75]
Significance of vegetation communities to be cleared	[85]
Warkworth Sands Woodland ('WSW')	[86]
Central Hunter - Grey Box-Ironbark Woodland ('CHGBIW')	[105]
Central Hunter Ironbark-Spotted Gum-Grey Box Forest ('CHISGGBF')	[111]
Hunter Lowland Redgum Forest ('HLRF')	[117]
Scale and nature of impacts on biological diversity	[123]
Loss of sizeable area of WSW	[124]
Loss of largest remnants of WSW	[129]
Loss of high quality WSW	[131]
Loss of WSW remnants is permanent and irreplaceable	[134]
Loss of an ecological community that is factually, critically endangered	[136]
Loss of sizeable area of CHGBIW	[137]
Loss of permanently conserved part of NDA 1	[139]
Consequential effects of clearing of EECs for the Project	[140]
Conclusion on impacts on biological diversity	[146]
The strategies to manage the Project's impacts on biological diversity	[147]
No avoidance of impacts on EECs	[154]
Little mitigation of impacts on EECs	[170]
Warkworth's proposed offsets package	[183]
Offsets package would inadequately compensate for the Project's significant impacts
Synopsis of findings on offsets package	[202]
Remote biodiversity areas do not contain affected EECs	[203]
Remote biodiversity areas not proven to provide conservation gain
for threatened fauna	[206]
Distinguishing extant EECs and areas to be rehabilitated as EECs	[208]
Area of extant WSW EEC in offsets less than estimated	[213]
Offset area and offset ratio for extant EECs too low	[232]
Lower habitat quality of WSW EEC in offsets	[238]
Risk and uncertainty that derived grasslands would not become EECs	[240]
Other compensatory measures offer insufficient conservation benefits	[252]
Conclusion on offsets package	[255]
PART 4: NOISE AND DUST IMPACTS
The competing positions on noise and dust impacts	[256]
Noise impacts: an introduction to the issues and their resolution	[259]
Noise impacts of existing operations	[267]
Noise impacts of the extended operations	[276]
Contribution of Saddleback Ridge to noise attenuation	[283]
The noise criteria proposed in conditions of Project Approval	[286]
INP process for determining appropriate noise criteria	[296]
The process followed for setting noise criteria in the Project Approval	[317]
The Project Approval noise criteria and mitigation strategies differ from those of the INP	[327]
Establishing too high background levels	[330]
Setting the criteria based on what the mine can achieve, not what is acceptable	[334]
Insufficient accounting for the effect of meteorology on noise levels	[348]
Insufficient accounting for annoying noise characteristics	[362]
Combining the noise criteria for different mines	[367]
Increased noise mitigation and acquisition of noise receivers	[375]
Association's proposed noise conditions	[381]
Conclusion on noise impacts	[385]
Dust and Air Quality	[386]
PART 5: SOCIAL IMPACTS
Social impacts: the parties' competing positions	[404]
Social impacts: the resolution in summary	[408]
Positive social impacts	[410]
Negative social impacts: solastalgia	[420]
Social impacts from adverse noise and dust impacts	[431]
Social impacts from adverse visual impacts	[434]
Social impacts from adverse change in composition of the community	[440]
On balance, negative social impacts are likely	[445]
PART 6: ECONOMIC ISSUES
Economic issues: the parties' competing positions	[446]
Economic issues: the resolution in summary	[450]
The Input-Output Analysis	[454]
Benefit Cost Analysis
The parties' experts' competing evidence on the BCA	[464]
Distribution of Choice Modelling survey too limited	[470]
Deficiencies in information provided to survey respondents	[471]
Values in Choice Modelling survey inadequate	[479]
All relevant matters, at level of particularity required, not considered	[480]
Other non-market impacts and values not considered	[482]
Polycentricity of issues not considered	[483]
Different weighting and balancing to that required	[484]
Issues of equity or distributive justice not considered	[485]
Conclusion on economic analyses	[496]
PART 7: BALANCING OF RELEVANT MATTERS AND DETERMINATION	[497]

Judgment

PART 1: INTRODUCTION

A coal mine seeks to extend its operations

1. Warkworth Mining Limited ('Warkworth') operates Warkworth mine, an existing open cut coal mine located a few kilometres north east of the village of Bulga in the Hunter Valley. Warkworth is one of several coal mines in the area, others being Mount Thorley, Bulga, Wambo and Hunter Valley Operations South.

1. Mining at Warkworth began in 1981. Current mining operations are under a development consent DA 300-9-2002-I issued by the Minister for Planning in May 2003 under Part 4 of the Environmental Planning and Assessment Act 1979 ('EPA Act'). The development consent, which has been modified five times, permits coal mining in a specified area until 2021. The consent is subject to numerous conditions, including conditions requiring conservation of areas of native vegetation and landforms to the north, west and south west of the Warkworth mine designated as non-disturbance areas and habitat management areas.

1. Since 2003, coal prices have increased, making it economic to mine areas that were previously considered uneconomic, including parts of the areas designated as non-disturbance areas and habitat management areas under the 2003 development consent.

1. Accordingly, in 2010, Warkworth lodged a major project application (no 09_0202) for project approval under the then in force Part 3A of the EPA Act to extend the Warkworth mine ('the Project') spatially to the west and south west and temporally until 2031 to mine the underlying coal reserve. The extension of the mine would necessitate, among other physical actions:

• the closure and excavation of Wallaby Scrub Road, a popular local road and the northern extension of the historic Great North Road;

• clearing (under the 2003 development consent and for the Project) of around 766 ha of four types of endangered ecological communities ('EECs') listed under the Threatened Species Conservation Act 1995 ('TSC Act'), being about 107 ha of Warkworth Sands Woodland and Hunter Lowland Redgum Forest; 628 ha of Central Hunter Grey Box-Ironbark Woodland and 31 ha of Central Hunter Ironbark-Spotted Gum-Grey Box Forest;

• removal of a significant local landform, Saddleback Ridge, separating the Warkworth mine from the village of Bulga; and

• emplacement of overburden from the Warkworth mine at the Mount Thawley mine immediately adjoining to the south.

Project approval is granted by the Minister

1. On 3 February 2012, the Minister for Planning and Infrastructure, by his delegate the Planning Assessment Commission of NSW ('the PAC'), conditionally approved Warkworth's project application for the Project under the former s 75J of the EPA Act. The conditions included a requirement for Warkworth to provide biodiversity offsets to compensate for the impacts of the Project on biological diversity, including on endangered ecological communities.

Local residents appeal the Minister's decision to the Court

1. Many local residents of the village of Bulga and surrounding countryside oppose the Project. Through the Bulga Milbrodale Progress Association Inc ('the Association') the residents made submissions objecting to the Project. As the Association was entitled to do under s 75L(3) of the EPA Act, the Association appealed to this Court against the Minister's decision to approve the Project.

The Court's task on the appeal

1. On the appeal, the Court re-exercises the statutory power originally exercised by the Minister to determine Warkworth's project application by either approval or disapproval. The Court stands, metaphorically speaking, in the shoes of the Minister and determines for itself, on the facts and law that exist at the time of determination of the appeal, whether to approve or disapprove the application for the Project.

1. In hearing and disposing of the appeal, the Court has all of the functions and discretions that the Minister had in respect of Warkworth's project application: s 39(2) of the Land and Environment Court Act 1979 ('the Court Act').

1. The appeal is by way of rehearing and fresh evidence or evidence in addition to, or in substitution for, the evidence given on the making of the decision by the Minister may be given on the appeal: s 39(3) of the Court Act. The Court is required to determine the appeal on the issues raised and the evidence given on the appeal.

1. In making its decision, the Court is to have regard to the Court Act and any other Act including the EPA Act, any instrument made under any such Act, the circumstances of the case and the public interest (s 39(4) of the Court Act).

1. Because new issues may be raised and different emphasis may be placed on other issues, and new or difference evidence may be given, compared to the issues or evidence before the Minister as the original decision-maker, the preferable decision to be reached by the Court on the appeal may be different to the decision of the original decision-maker. This is the nature and consequence of external merits review of administrative decisions.

The parties' respective positions on the appeal

1. The Association submitted that the Court should refuse Warkworth's project application for the Project by reason of the Project's significant and unacceptable impacts in terms of: impacts on biological diversity, including on the endangered ecological communities, that are not avoided, mitigated, offset or otherwise compensated; noise impacts and dust emissions on the residents of Bulga and the surrounding countryside; social impacts on the community of Bulga; economic issues including that the full environmental costs are not internalised by the Project; and the public interest.

1. The Minister and Warkworth both submitted that Warkworth's project application should be approved, although on different conditions to those originally imposed by the Minister to better address the impacts of the Project that have been raised in the evidence on the appeal. They submitted that the Project as modified, if approved on the conditions proposed, would have acceptable impacts in terms of biological diversity, noise, dust, social and economic factors, and that balancing the economic, social and environmental factors, the Project is acceptable.

Outcome of appeal: project is refused

1. I have determined that Warkworth's project application for the Project should be refused, having regard to the significant, adverse, biological diversity, noise and dust, and social impacts of the Project.

1. In relation to biological diversity, I find that the Project would be likely to have significant adverse impacts on biological diversity, including on the four endangered ecological communities, but in particular on Warkworth Sands Woodland, which impacts would not be mitigated by the Project or by the proposed conditions of approval. I am not persuaded, on the evidence before the Court, that the biodiversity offsets and other compensatory measures proposed by Warkworth are appropriate or feasible or would be likely to compensate for the significant biological diversity impacts. I find, therefore, that the Project will have significant and unacceptable impacts on biological diversity that are not able to be avoided, mitigated or compensated.

1. In relation to noise, I find, on the evidence before the Court, that the noise criteria proposed in the conditions of the Project Approval are not appropriate; the noise impacts of the Project on the residents of Bulga will be intrusive and adversely affect the reasonable use, enjoyment and amenity of the residents of the village of Bulga and the surrounding countryside; the noise mitigation strategies are unlikely to reduce noise impacts to levels that would be acceptable; and that undertaking greater noise mitigation strategies may result in greater social impacts. The approach of combining noise criteria and noise mitigation strategies for the Warkworth mine (as extended by the Project) and the Mount Thorley mine is of doubtful legal validity and would make monitoring and enforcing compliance difficult.

1. In relation to dust, whilst the levels of the air quality criteria, and the mitigation strategies, proposed in the conditions of the Project Approval, might satisfactorily address dust emissions, the approach of combining the Warkworth mine (as extended by the Project) and the Mount Thorley mine in setting the air quality criteria and the mitigation strategies would make operating the mines, managing air quality, monitoring performance, and enforcing compliance difficult. No confident conclusion can be drawn that air quality impacts particularly dust emissions from the Project will comply with the proposed conditions of the Project Approval.

1. In relation to social impacts, I find that the Project's impacts in terms of noise, dust and visual impacts and the adverse change in the composition of the community by reason of the acquisition of noise and air quality affected properties, are likely to cause adverse social impacts on individuals and the community of Bulga. The Project's impacts would exacerbate the loss of sense of place, and materially and adversely change the sense of community, of the residents of Bulga and the surrounding countryside.

1. I am not satisfied that the economic analyses relied on by Warkworth and the Minister have addressed these environmental and social factors adequately. I am also not persuaded that these economic analyses are a substitute for the consideration, assigning of weight and balancing of the relevant matters required to be undertaken by the Court in the exercise of the statutory power to determine the project application.

1. Balancing these significant adverse environmental and social impacts against the material economic and social benefits of the Project, I consider the Project has not been established to be justified on environmental, social and economic grounds. Warkworth's project application therefore should be refused. As a consequence, the Minister's decision to approve the Project is now replaced by the Court's decision to disapprove the carrying out of the Project. The Warkworth mine now will need to be confined to and operate in accordance with the 2003 development consent alone.

1. In hearing the appeal, I have been assisted by Commissioner Pearson under s 37(1) of the Court Act.

The structure of the balance of the judgment

1. The balance of the judgment will now elaborate on my reasons for determining that the preferable decision is to disapprove Warkworth's project application. These reasons will explain why I have come to a different decision to that of the Minister and why I have not been persuaded by Warkworth and the Minister on the appeal that approval should be granted. It is not necessary, in these circumstances, to deal with such of the issues joined between the parties or between the parties' experts that have not influenced me to reach my decision to disapprove the application and I will not do so.

1. I will elaborate on my reasons in the following order:

• the merits review task on appeal;

• impacts on biological diversity;

• noise and dust impacts;

• social impacts;

• economic issues; and

• the balancing of the factors.

PART 2: THE MERITS REVIEW TASK ON APPEAL

The nature of the appeal against the Minister's decision

1. The Association appealed to the Court, under s 75L(3) of the EPA Act, against the determination of the Minister (by his delegate the PAC) under s 75J of the EPA Act to grant approval to the Project. The Association had a right to appeal because, but for Part 3A, the Project would be designated development to which the provisions of Part 4 of the EPA Act would apply (s 75L(1)(d)), and the Association was an objector who had made a submission under s 75H of the EPA Act by way of objection to Warkworth's project application for approval under Part 3A to carry out the Project (s 75L(2) of the EPA Act).

1. In determining the appeal under s 75L(3) of the EPA Act, the Court has, pursuant to s 39(2) of the Court Act, "all the functions and discretions" the Minister had in determining the project application under s 75J of the EPA Act. The appeal is by way of rehearing (s 39(3)) of the Court Act). In making its decision in respect of the appeal, the Court "shall have regard to this [the Court Act] or any other relevant Act, any instrument made under any such Act, the circumstances of the case and the public interest" (s 39(4) of the Court Act).

1. The decision of the Court is deemed to be the final decision of the Minister, "and shall be given effect to accordingly" (s 39(5) of the Court Act).

1. The conferral of power on the Court in these terms indicates that the task to be undertaken is analogous to that of the various courts and tribunals, both Commonwealth and State, in reviewing decisions of government agencies, termed merits review. Merits review has been described, in the context of appeals against administrative decisions to the Administrative Appeals Tribunal, as being to determine what is "the correct or preferable decision" on the material before the reviewer: Drake v Minister for Immigration and Ethnic Affairs (No 1) (1979) 46 FLR 409; 24 ALR 577 at 589. Where the statute reposing the power, the exercise of which is under review, imposes limits on the exercise of the power, such that the power is only enlivened if certain circumstances exist or may only be exercised in a particular way if certain circumstances exist, the reviewing court must determine whether the limits on the power are satisfied. There may be only one decision reasonably available on the evidence and that decision will therefore be the correct decision. Where there is a range of decisions reasonably open and all of those would be correct, the Court chooses, on the evidence before it, what it considers to be the preferable decision. In the present case, there is a range of decisions reasonably open as to whether to approve or disapprove, and if to approve, with what modifications and on what conditions to approve, Warkworth's project application to carry out the Project.

1. The task of the Court in reviewing the decision of the Minister (by his delegate the PAC) is not to consider whether that decision was correct or preferable on the material available to the PAC, but rather to determine, based on the evidence now before the Court, what is the preferable decision.

1. Merits review of administrative decisions is not only directed to ensuring fair treatment of all persons affected by an administrative decision, it also has broader, long term objectives of improving the quality and consistency of administrative decisions, and ensuring openness and accountability (Administrative Review Council, What decisions should be subject to merits review? AGPS, 1999, 1.5). The benefits of merits review led the Administrative Review Council ('ARC') to recommend that, if an administrative decision is likely to have an effect on the interests of any person, in the absence of good reason, that decision should ordinarily be open to be reviewed on the merits (2.4). The ARC identified two types of decisions that by their nature are unsuitable for merits review: legislation-like decisions of broad application (which are subject to the accountability safeguards that apply to a legislative decision) or decisions that follow automatically from the happening of a set of circumstances (which leaves no room for merits review to operate) (3.1). Factors that may exclude merits review lie, first, in the nature of the decision, such as decisions of a preliminary or a procedural nature, or policy decisions of high political content; secondly, in the effect of the decision, such as decisions where there is no appropriate remedy; and thirdly, in the costs of review of the decision, such as where the decision has such limited impact that the costs of review cannot be justified (4.1, 4.2, 4.39 and 4.52).

1. The Minister's decision to approve the Project was made under the former Part 3A of the EPA Act. Part 3A was enacted to provide for particular kinds of development that, because of their nature and scale, had potential to generate high levels of adverse impact and, because of their state or regional planning significance, required a level of planning consideration beyond local consideration. However, the task conferred on the Minister under Part 3A of considering and determining to approve or disapprove the carrying out of a project is an administrative task, and none of the factors identified by the ARC as potentially making an administrative decision unsuitable for merits review are present. The availability of merits review of that decision under s 75L of the EPA Act is significant both in terms of providing an avenue for an objector representing a community affected by the decision to have the issues reconsidered and in terms of overall accountability of the decision-making process.

The decision-making process to determine a project application

1. The exercise of the power under s 75J to approve or disapprove the carrying out of the Project requires consideration, weighting and balancing of the environmental, social and economic impacts of the Project. The range of interests affected, the complexity of the issues and the interdependence of the issues, means that decision-making involves a polycentric problem. A polycentric problem involves a complex network of relationships, with interacting points of influence. Each decision made communicates itself to other centres of decision, changing the conditions, so that a new basis must be found for the next decision: J Jowell, "The Legal Control of Administrative Discretion" [1973] Public Law 178, 213. Fuller uses the concept of a spider web to assist in visualising the kind of situation presented by a polycentric problem (L L Fuller, "The Forms and Limits of Adjudication" (1978) 92 Harvard Law Review 353, 395). A pull of one strand of the web will distribute tensions, after a complicated pattern of adjustment, throughout the web as a whole. Doubling the original pull will not simply double each of the resulting tensions but will rather create a different, complicated pattern of tensions. This would occur if the doubled pull caused one of the weaker strands to snap. This is a polycentric problem because it is many centred, each crossing of strands is a distinct centre for distributing tensions (Fuller at 395).

1. Fuller contends that polycentric problems are unsuited to solutions through adjudication. This is because the resolution of a polycentric problem involves "spontaneous and informal collaboration, shifting its forms with the task at hand" (at 371 and Jowell at 213-215). Polycentric problems cannot be resolved by identifying each issue at the start then sequentially resolving each of the originally identified issues. In a polycentric problem, the resolution of one issue will have repercussions on the other issues; the other issues may change in nature and scope depending on how the first issue is resolved.

1. A decision to approve the carrying out of a project is a polycentric problem. A decision about one issue raised by the carrying out of the project is linked by interacting points of influence to decisions about other issues, necessitating readjustment of the project (Jowell at 214).

1. This spontaneous transformation of the nature and scope of the issues in resolving polycentric problems makes classic forms of adjudication out of place and instead resolution by exercise of managerial authority, a form of executive action, more appropriate (Fuller at 371, and Jowell at 214, 218).

1. Eisenberg, in a response to Fuller, suggested two ways in which a polycentric problem might be able to be resolved through adjudication: first, if a single criterion could be made dispositive, it would be possible to determine the rights of the parties by the application of the criterion and hence by adjudication. Secondly, if all criteria could be objectively weighted and choices were not interdependent, adjudication may also be appropriate in those circumstances (M A Eisenberg, "Participation, responsiveness, and the consultative process: an essay for Lon Fuller" (1978) 92 Harvard Law Review 410, 425). However, Eisenberg notes that often criteria cannot be reduced to one authoritative standard or objectively weighted except by seriously impoverishing the situation. The decision the Minister must make under s 75J of the EPA Act to approve or disprove of the carrying out of a project is a good example. The criteria to be considered are numerous, cannot be objectively weighted, and are interdependent. The decision-maker must not only determine what are the relevant matters to be considered in deciding whether or not to approve the carrying out of the project, but also subjectively determine the weight to be given to each matter. Eisenberg suggests that where this is the case, an optimal solution can normally be arrived at by vesting a single decision-maker with managerial authority; that is, authority not only to select and apply relevant criteria but also to determine how much weight each criterion is to receive, and to change those weights as new objectives and criteria may require (Eisenberg at 425).

1. The process of decision-making under s 75J of the EPA Act therefore involves: first, identification of the relevant matters needing to be considered; secondly, fact finding for each relevant matter; thirdly, determining how much weight each relevant matter is to receive, and fourthly, balancing the weighted matters to arrive at a managerial decision.

1. The first step requires analysis of the statutes which contain the power of the original decision-maker (the Minister) to make the administrative decision to disapprove or to approve, with or without conditions, the project application, and the power of the reviewer (the Court) to review on the merits that decision so as to determine the nature, scope and parameters of the powers and the matters which the decision-maker must consider (is bound to consider) and those which the decision-maker may consider (is not bound to ignore). In an application for approval to carry out a project under Part 3A, the relevant matters will include the various impacts on the environment the project is likely to have.

1. Having identified the relevant matters which must or may be considered, the decision-maker needs, as a second step, to undertake fact finding and inference drawing so as to enable consideration of these matters. On a merits review appeal, facts are found and inferences are drawn based on the evidence before the reviewer, in this case the Court. Amongst the relevant matters to be considered in determining an application for approval to carry out a project are the likely impacts of the project on the environment. The process of fact finding and inference drawing to enable consideration of these impacts includes ascertaining the nature and extent of each type of impact and the nature and efficacy of measures proposed in the application for approval, or that could be imposed as conditions of approval, to prevent, mitigate or compensate for each type of impact.

1. The third step requires the original decision-maker and the reviewer exercising the functions of the decision-maker to determine how much weight each relevant matter should receive. Occasionally, although rarely, the statutes regulating the making or reviewing of the administrative decision may dictate or indicate the weight or relative weight that should be assigned to the relevant matter. More commonly, however, the weight to be assigned is in the discretion of the decision-maker. The assigning of weight is a subjective task. The decision-maker needs to evaluate the relative importance of the relevant matters, each compared to the others. The decision-maker cannot delegate that task to others or subordinate it to the marketplace.

1. In the absence of any statutory indication of the weight to be given to the various considerations, it is generally for the decision-maker to determine the appropriate weight to be given to the matters to be taken into account: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 41. There are, however, limits to this proposition and a decision-maker who fails to give adequate weight to a relevant factor of great importance, or gives excessive weight to a relevant factor of no great importance may have made a decision that is manifestly unreasonable: Associated Provincial Picture Houses, Limited v Wednesbury Corporation [1948] 1 KB 223. The exercise of managerial authority in the sense elaborated on by Fuller and Eisenberg is, subject to the ultimate limits of Wednesbury unreasonableness, consistent with the approach required by Peko-Wallsend.

1. The fourth step requires the weighted matters to be balanced, each against the others. Because all of the matters may not be, or be capable of being, reduced to a common unit of measurement, such as money, balancing of the weighted matters is a qualitative and not quantitative exercise. The ultimate decision involves an intuitive synthesis of the various matters. Forms of economic analysis, such as cost benefit analysis, which endeavour to balance different factors by use of a common, quantitative unit, such as money, assist but are not a substitute for the intuitive synthesis required of the decision-maker. I will explain the reason for this statement when I deal with the issue of the economic analysis later in this judgment. For now, it is sufficient to say that economic analyses are not a substitute because, first, the decision-maker's statutory duty is to apply weight to and balance the relevant matters, and this cannot be subordinated to the process and outcome of economic analyses (such as by cost benefit analysis); secondly, not all relevant matters required to be considered have a market value and are therefore not able to be objectively weighted by the marketplace by assigning a monetary value; and thirdly, the assigning of non-market values to relevant matters that have no market value imperfectly captures and undervalues these matters.

1. The result of the balancing exercise, the intuitive synthesis, is a determination of whether the project ought to be approved or disapproved and, if approved, what modifications or conditions should be imposed.

1. I will now elaborate on the first of these steps, identifying the parameters of the powers to be exercised in determining, on the appeal, the project application. I will consider the second and third steps as I evaluate the relevant matters of the impacts of the Project in terms of biological diversity, noise and dust, social, and economic impacts. I will consider the fourth step in my concluding part of the judgment where I balance the matters.

Identifying the parameters of the power to determine a project application

1. The Minister's power to approve or disapprove a project application under Part 3A, and so the Court's functions on an appeal under s 75L, was conferred by s 75J of the EPA Act which provided:

(1)   If:

(a) the proponent makes an application for the approval of the Minister under this Part to carry out a project, and

(b) the Director-General has given his or her report on the project to the Minister,

the Minister may approve or disapprove of the carrying out of the project.

(2) The Minister, when deciding whether or not to approve the carrying out of a project, is to consider:

(a) the Director-General's report on the project and the reports, advice and recommendations (and the statement relating to compliance with environmental assessment requirements) contained in the report, and

(b) if the proponent is a public authority-any advice provided by the Minister having portfolio responsibility for the proponent, and

(c) any findings or recommendations of the Planning Assessment Commission following a review in respect of the project.

(3) In deciding whether or not to approve the carrying out of a project, the Minister may (but is not required to) take into account the provisions of any environmental planning instrument that would not (because of section 75R) apply to the project if approved. However, the regulations may preclude approval for the carrying out of a class of project (other than a critical infrastructure project) that such an instrument would otherwise prohibit.

(4)   A project may be approved under this Part with such modifications of the project or on such conditions as the Minister may determine.

(5)   The conditions of approval for the carrying out of a project may require the proponent to comply with any obligations in a statement of commitments made by the proponent (including by entering into a planning agreement referred to in section 93F).

1. The statutory provision continues to apply to applications for approval to carry out a project made but not finally determined before the repeal of Part 3A: see Sch 6A, [2] of the EPA Act introduced by the Environmental Planning and Assessment Amendment (Part 3A Repeal) Act 2011, Sch 1, 1.7 [2].

Preconditions and relevant matters to be considered

1. Subsection (1) of s 75J of the EPA Act establishes the preconditions which must be satisfied to enliven the power to approve or disapprove of the carrying out of a project: first, the proponent must have made an application to the Minister for approval to carry out the project and, secondly, the Director-General must have given his or her report on the project to the Minister.

1. Subsection (2) of s 75J expressly states the relevant matters that the Minister is bound to consider in deciding whether to approve of the carrying out of the project. Where the proponent is not a public authority, such as Warkworth in this case, there are only two mandatory relevant matters to be considered: first, the Director-General's report on the project and, secondly, if the PAC has reviewed the project, any findings or recommendations of the PAC.

1. Subsection (3) of s 75J gives the Minister power, but does not require the Minister, to consider the provisions of any environmental planning instrument which do not apply to the project because of s 75R of the EPA Act. This facultative power in subsection (3) is necessary because s 75R(3) makes environmental planning instruments (other than State environmental planning policies) not applicable to or in respect of, an approved project. Hence, local environmental plans, such as Singleton Local Environmental Plan 1996, which would otherwise be applicable, do not apply. Section 75R(2) makes State environmental planning policies applicable but only to the declaration of a project as a project to which Part 3A applies and to the carrying out of the project. Hence, State Environmental Planning Policy (Mining, Petroleum and Extractive Industries) 2007 ('Mining SEPP') applies to declare the Warkworth extension project as a project to which Part 3A applies and would also apply to the carrying out of the project if approval were to be granted. However, the Mining SEPP does not apply to the process of approval of the application to carry out the Project. This means that the Minister is not bound to consider the matters in cl 12 of the Mining SEPP in determining whether to approve or disapprove of the Project: Ironstone Community Action Group Inc v NSW Minister for Planning and Duralie Coal Pty Ltd [2011] NSWLEC 195 at [25].

1. By the operation of s 75R making such environmental planning instruments not applicable, the Minister is not bound to consider provisions of such environmental planning instruments. Nevertheless, s 75J(3) enables the Minister to consider such provisions if he wishes to in determining a project application under s 75E of the EPA Act.

1. In these proceedings, the Association submitted (Applicant's closing written submissions [172], [173]) that the objectives of the Rural 1(a) Zone under the Singleton Local Environmental Plan 1996 may be taken into account under the facultative power of s 75J(3) of the EPA Act. The objectives of the Rural 1(a) Zone are:

(a)   to protect and conserve agricultural land and to encourage continuing viable and sustainable agricultural land use,

(b)   to promote the protection and preservation of natural ecological systems and processes,

(c)   to allow mining where environmental impacts do not exceed acceptable limits and the land is satisfactorily rehabilitated after mining,

(d)   to maintain the scenic amenity and landscape quality of the area,

(e)   to provide for the proper and co-ordinated use of rivers and water catchment areas,

(f)   to promote provision of roads that are compatible with the nature and intensity of development and the character of the area.

1. The Association submitted that the Project is inconsistent with at least objectives (a), (b), (c) and (d). The Minister's position is that the Project is consistent with these objectives (Minister's Statement of Facts and Contentions in Reply ('SFCR') at [34]). Warkworth's position is that the Project is not in conflict with the objectives, as the impacts of the Project are within acceptable limits; the land the subject of mining will be satisfactorily rehabilitated after mining; the Project promotes the protection and preservation of natural ecological systems and processes; and the Project maintains the scenic amenity and landscape quality of the area and these will not be unacceptably impacted by the clearing and removal of Saddleback Ridge (Warkworth's SFCR at [39]).

1. The relevant matters which the Minister is bound to take into account in determining whether to approve or disapprove the Project are not only those matters which s 75J(1) and (2) of the EPA Act expressly state must be considered, but also include those matters which, by implication from the subject matter, scope and purpose of the EPA Act, are required to be considered: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 40.

1. In identifying the implied relevant matters, the starting point is the objects of the EPA Act, provided in s 5:

The objects of this Act are:

(a) to encourage:

(i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment,

(ii) the promotion and co-ordination of the orderly and economic use and development of land,

(iii) the protection, provision and co-ordination of communication and utility services,

(iv) the provision of land for public purposes,

(v) the provision and co-ordination of community services and facilities, and

(vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species, populations and ecological communities, and their habitats, and

(vii) ecologically sustainable development, and

(viii) the provision and maintenance of affordable housing, and

(b) to promote the sharing of the responsibility for environmental planning between the different levels of government in the State, and

(c) to provide increased opportunity for public involvement and participation in environmental planning and assessment.

1. Warkworth relies on the objects stated in s 5(a)(i), (ii) and (vii) submitting that the objectives presuppose development and that necessarily involves change (T 7/11/12, p 141.40). The Minister submits that the objects in s 5 do not stipulate or imply a hierarchy (relying on Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349 at [127] per Jagot J), and that accordingly, consideration of ESD should not obscure that the EPA Act is also concerned with the encouragement of other matters, which include the matters specified in s 5(a)(i) and (ii).

1. One object of the EPA Act, in s 5(a)(vii), is to "encourage" ecologically sustainable development. The Association submits that the principles of ESD are a mandatory relevant matter to be considered in determining a project application for a Part 3A project.

1. In Minister for Planning v Walker [2008] NSWCA 224; 161 LGERA 423, Hodgson JA (with whom Campbell and Bell JJA agreed) held that it is a condition of validity of the exercise of powers under the EPA Act that the Minister consider the public interest. Although that requirement is not explicitly stated in the Act, it is so central to the task of a Minister fulfilling functions under the Act that it goes without saying. Any attempt to exercise powers in which a Minister did not have regard to the public interest could not be a bona fide attempt to exercise the powers (at 450 [39]). Hodgson JA also found that the principles of ESD are likely to come to be seen as so plainly an element of the public interest, in relation to most if not all decisions, that failure to consider them will become strong evidence of failure to consider the public interest and/or to act bona fide in the exercise of powers granted to the Minister (at 454 [56]).

1. In Walker, however, the Court of Appeal held that this was not already the situation at the time when the Minister made his decision to approve the concept plan in that case in 2006, hence the Minister's decision could not be avoided in that case on the basis that he had failed to consider the principles of ESD. However, this can no longer be said to be the case today. Moreover in Walker, Hodgson JA (with whom Campbell JA on this point agreed) held that since the principles of ESD were not addressed by the Minister in giving his approval to the concept plan, they would need to be addressed when a project approval is sought. It was important that the Minister conscientiously address the principles of ESD in dealing with any project application (at 455 [62] and [63]).

1. Recent decisions of this Court have held, although the public interest consideration operates at a very high level of generality, it requires consideration of principles of ESD at the stage of granting approval and modification for a Part 3A project: see Kennedy v NSW Minister for Planning [2010] NSWLEC 240 at [77], [78]; Australians for Sustainable Development Inc v Minister for Planning [2011] NSWLEC 33; (2011) 182 LGERA 370 at [239]-[242]; Hunter Environmental Lobby Inc v Minister for Planning [2011] NSWLEC 221 at [21]; and Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197 at [169].

1. It is not necessary in these proceedings to determine whether the principles of ESD are mandatory relevant considerations in their own right, and it is sufficient to conclude that as an aspect of the public interest they may be taken into account in cases where issues relevant to the principles of ESD arise.

1. Warkworth accepted that the principles of ESD, in particular the precautionary principle, intergenerational equity, and the conservation of biological diversity and ecological integrity, are relevant matters in determining whether to approve the Project (Warkworth's closing written submissions [135]). The position of both the Minister and Warkworth was that the Project is consistent with the principles of ESD (SFCR at [28] (Minister), [22] Warkworth). The Minister submits (Minister's closing written submissions [2]) that the Association's contention that the particular impacts of the Project are inconsistent with the principles of ESD, such that an approval is not in the public interest, should not obscure the place of ESD as but one of the objects in s 5 of the EPA Act.

1. In addition to the matters which the EPA Act expressly or by implication requires the Minister (and the Court on appeal) to consider in determining whether to approve or disapprove of the carrying out of the Project under s 75J(1), s 39(4) of the Court Act requires the Court, in determining the appeal, to have regard to the Court Act and any other relevant Act, any instrument made under any such Act, the circumstances of the case and the public interest. In this appeal, the relevant Acts include the EPA Act, National Parks and Wildlife Act 1974 ('NPW Act') and TSC Act, which are relevant to the endangered ecological communities affected by the carrying out of the Project.

1. Section 39(4) of the Court Act also requires the Court to have regard to the public interest. In Hunter Environmental Lobby Inc v Minister for Planning [2011] NSWLEC 221, Pain J held at [21] that because the principles of ESD are an aspect of the public interest, they were relevant considerations in the circumstances of that merit review proceeding, being an objector appeal under s 75L of the EPA Act against the approval of an extension of a coal mine, as is the present case.

1. The public interest also includes community responses regarding the project for which approval is sought. In Telstra Corporation Ltd v Hornsby Shire Council [2006] NSWLEC 133; (2006) 146 LGERA 10, I confirmed (at [192]) that community responses are aspects of the public interest in securing the advancement of one of the express objects of the EPA Act in s 5(c), being "to provide increased opportunity for public involvement and participation in environmental planning and assessment" (see also Kulin Holdings Pty Ltd v Penrith City Council (1999) 103 LGERA 402 at 415; New Century Developments Pty Ltd v Baulkham Hills Shire Council (2003) 127 LGERA 316 at [58]). I said, however, that in considering the community responses, an evaluation must be made of the reasonableness of the claimed perceptions of adverse effect on the amenity of the locality (see also Foley v Waverley Municipal Council (1963) 8 LGRA 26 at 30). An evaluation of reasonableness involves the identification of evidence that can be objectively assessed to ascertain whether it supports a factual finding of an adverse effect on the amenity of the locality. A fear or concern without rational or justified foundation is not a matter which, by itself, can be considered as an amenity or social impact: Telstra v Hornsby Shire Council at [193] and [195].

1. Warkworth submits (closing written submissions [149]) that the evidence that the Court has heard from individual objectors cannot be regarded as representative of the Bulga community as, first, the seven deponents of affidavits were members of the applicant and, secondly, of the fifteen persons who were Bulga residents who gave evidence as individuals (as distinct from persons who objected on behalf of an organisation), the only two younger objectors were from families who had long opposed the mine, there were significant family groupings, and only one (Mr Caban) was described as directly employed in the mining industry whereas on 2006 census figures about 19 per cent of the Singleton LGA and Bulga village were employed in mining. Those limitations may be accepted, however, it is not determinative of the weight to be given to that evidence. The objectors' evidence as to the likely consequences of approval of the Project was based on experience of the noise and dust impacts of the current operations of the Mount Thorley and Warkworth mines, in particular in the period since Mount Thorley recommenced operation. There was objective evidence in support of that evidence in the form of noise monitoring data (Exhibit W4), and in the site observations recorded in Dr Stubbs' evidence (discussed below). The objectors' evidence is more than an expression of subjective fear or concern.

1. In the present proceedings, therefore, the relevant considerations are those matters expressly specified in s 75J(1) and (2) of the EPA Act; matters arising from the objects of the Act including the principles of ESD; matters specified in s 39(4) of the Court Act, including other relevant Acts, and the public interest, which includes the principles of ESD and community responses to adverse affects on amenity, where those responses reflect more than an unjustified fear or concern and where based on logically probative evidence.

1. The task for the decision-maker, including the Court on appeal, in considering a proposed development such as the Project, is first to identify the potential impacts, both positive and negative, that should be considered. The Director-General's Requirements under s 75F of the Act (Exhibit A, vol 1, tab 3) identified the issues required to be addressed in the Environmental Assessment of the Project. Those issues raised potential impacts on air quality, noise impacts, impacts on biodiversity, surface and groundwater impacts, impacts of predicted road and rail traffic, Aboriginal and non-Aboriginal heritage, visual impacts, potential GHG emissions, waste streams, potential social impacts on the local and regional community, and assessment of the costs and benefits of the project as a whole. The Environmental Assessment Report prepared by the Department under s 75I(1), for consideration by the Minister (or delegate) in accordance with s 75J(2)(a), assessed each of those potential and actual impacts of the Project, concluding (Exhibit A, vol 2, tab 9 at 854) that while the Project would have a significant number of impacts including the clearing of 764.7ha of woodland EECs, significant noise and/or dust impacts on 16 privately owned residences and properties, and impacts on 113 Aboriginal sites, those impacts could be adequately mitigated, managed, offset and/or compensated.

1. The reasons provided by the PAC in support of its decision (as delegate of the Minister) to approve the Project (Exhibit A, TB vol 5, tab 112) noted (at 2582) the background to the proposed expansion of the current mine complex, and the "unusual challenges" presented to the PAC by the proposal which seeks to overturn previous approval conditions and the associated deed in order to mine areas that were intended to be protected in perpetuity; has a high stripping ratio which means that related environmental impacts (noise, dust, blasting and rehabilitation) are proportionately higher than many comparable mines; involves the closure of a significant public road; and has strong community and local government opposition. The PAC addressed specifically noise impacts, dust impacts, closure of Wallaby Scrub Road, biodiversity offsets, and social impacts, and concluded (at 2587) that the amended conditions would "adequately protect and manage impacts associated with the project."

1. The contentions raised by the parties identified impacts of the Project on biodiversity, economic impacts and social impacts, in particular through noise and dust, and the expert evidence focussed on those impacts. The objector evidence focussed on social impacts, in particular noise and dust, and impacts arising from the change in the community through acquisition of properties; and visual amenity impacts from removal of Saddleback Ridge.

1. In considering whether the Project should be approved, and if so, on what conditions, each of these impacts must be assessed in light of the evidence before the Court; if likely to be adverse, consideration needs to be given to whether those impacts are acceptable; or if not, whether they can be avoided, or if not avoided, mitigated. In that context, the objector evidence as to past environmental performance of the Mount Thorley-Warkworth mine complex, and the concerns raised by the objectors that the present proposal represents a departure from the previous position reflected in the Deed, and in particular, the retention of Saddleback Ridge, are relevant.

1. Having considered each of the likely impacts, the task then is to determine the weight to be given to each factor, as an exercise of managerial authority, subject to the limits identified by Mason J in Peko-Wallsend at 41, and to balance the factors in favour of and against granting approval. That assessment requires consideration of any conditions that might be imposed to mitigate or ameliorate any impacts.

Power to attach conditions to an approval

1. The power to approve the Project carries with it power to approve with such modifications of the Project or on such conditions as the Minister (and the Court on appeal) may determine (s 75J(4) of the EPA Act).

1. While the power to impose conditions under s 75J is not confined in the manner specified for conditions of development consent granted under Part 4 of the Act, and is wide (Ulan Coal Mines Ltd v Minister for Planning [2008] NSWLEC 185; (2008) 160 LGERA 20 at [74], [75]) it is not unlimited. A condition must fall within the class of conditions expressly or impliedly authorised under s 75J, which involves construction of the section and its application to the circumstances of the particular project: Ulan Coal Mines Ltd at [50], [51]; Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347 at [133]; Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197 at [76].

1. The power to attach conditions to an approval requires that a condition be for a purpose for which the power to grant approval under Part 3A of the Act is conferred, as ascertained by a consideration of the scope and purpose of the Act, and not for an ulterior purpose; reasonably and fairly relate to the project permitted by the approval; and not be so unreasonable that no reasonable approval authority could have imposed it: Newbury District Council v Secretary of State for the Environment [1981] AC 578; Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30 at [57]; Hunter Environment Lobby Inc v Minister for Planning [2011] NSWLEC 221 at [87], [88]. The second requirement looks to the relationship between the condition attached to the approval and the permitted project, including its likely impacts on the environment: Botany Bay City Council v Saab Corp Pty Ltd [2011] NSWCA 308 at [9]. An approval permitting the carrying out of the project the subject of the application for approval could not have attached a condition regulating a different project on different land not the subject of the application for approval.

1. The power to impose conditions on a project approval also includes the power to require the proponent to comply with any obligations in a statement of commitments made by the proponent, including entering into a planning agreement (see s 75J(5) of the EPA Act).

PART 3: IMPACTS ON BIOLOGICAL DIVERSITY

The vegetation communities to be cleared

1. The Project involves extending the existing north pit and west pit of the Warkworth mine to the west across Wallaby Scrub Road beyond the 2003 development consent limits and also extending the west pit south to Putty Road.

1. The westward extension of north pit involves clearing and open cut mining of part of the existing Habitat Management Area 1 ('HMA 1') established under the 2003 development consent and a transition area, between HMA 1 and Habitat Management Area 2 ('HMA 2'), which had no conservation status under the 2003 development consent.

1. Habitat Management Areas ('HMAs') are required to be conserved and managed under the 2003 development consent. They are areas of value for conservation of flora and fauna and their habitat, but also contain economic coal resources. Condition 4 of Sch 4 of the 2003 development consent requires Warkworth to exclude open cut mining in the HMAs unless, in the opinion of the Minister, Warkworth has demonstrated that there is a clear justification for open cut mining on social, economic and environmental grounds. To assist the Minister in his decision-making, Warkworth is required to:

• establish the coal reserve in the HMAs;

• investigate the options for mining this reserve;

• assess the implications of any open cut mining proposal on the offset strategy, as set out in the Flora and Fauna Management Plan, and broad conservation outcomes; and

• assess the environmental, economic and social aspects of any open cut mining proposal in the area (Condition 4(c)).

1. The Deed of Agreement entered into between Warkworth and the Minister, as required by Condition 4 of Sch 4 of the 2003 development consent, envisaged that the mechanism for Warkworth seeking the Minister's decision to approve open cut mining in the HMAs would be by planning approval under the EPA Act. In the meantime, Warkworth was required to conserve and manage the lands in the HMAs in accordance with the Flora and Fauna Management Plan.

1. The area of HMA 1 and the transition area between HMA 1 and HMA 2 is overwhelmingly comprised of two endangered ecological communities, a large patch of Warkworth Sands Woodland and surrounding areas of Central Hunter Grey Box-Ironbark Woodland.

1. The westward extension of west pit involves clearing and open cut mining of more of the existing HMA 1 (so that in total nearly half of HMA 1 would be cleared and mined) as well as of part of non-disturbance area 1 ('NDA 1').

1. NDA 1 is an area which Warkworth is required by Condition 4(b) of Sch 4 of the 2003 development consent to "[p]ermanently protect ... for conservation and exclude open cut mining". To that end, Warkworth was required to, and did, enter a Deed of Agreement with the Minister to protect the NDAs and HMAs.

1. The southern extension of west pit involves clearing and open cut mining of more of NDA 1, including the elevated Saddleback Ridge (so that in total about half of NDA 1 would be cleared and mined), as well as an area to the south of NDA 1 which has no conservation status under the 2003 development consent.

1. These areas of HMA 1 and NDA 1, and the southern area, are comprised of two endangered ecological communities, Central Hunter Grey Box-Ironbark Woodland (for about half of the area) and Warkworth Sands Woodland (very small pockets). The remainder of the vegetation is Central Hunter-Ironbark grassland.

1. In summary, the Project would result in the further clearing of endangered ecological communities, being 67.9 ha of Warkworth Sands Woodland and Hunter Lowland Redgum Forest (adding to the 38.8 ha approved to be cleared under the 2003 development consent); 378.4 ha of Central Hunter Grey Box-Ironbark Woodland (adding to the 249.1 ha approved to be cleared under the 2003 development consent); and 29 ha of Central Hunter Ironbark-Spotted Gum-Grey Box Forest (adding to the 1.5 ha approved to be cleared under the 2003 development consent).

Significance of vegetation communities to be cleared

1. As I have noted, the vegetation communities to be cleared, to a large extent, are endangered ecological communities ('EECs') listed under the TSC Act. These vegetation communities are threatened with extinction. The most at risk is the Warkworth Sands Woodland.

Warkworth Sands Woodland ('WSW')

1. WSW is a vegetation community occurring only in aeolian sand deposits ('Warkworth Sands') south east of Singleton in the Hunter Valley. Warkworth Sands have a very restricted distribution and consequently WSW, which only occurs on Warkworth Sands, has a very restricted distribution (NSW Scientific Committee's Final Determination, [1] and Joint Report of Ecology Experts (Exhibit W13), p 2). WSW has been found nowhere else in the Hunter Valley, NSW, Australia or the world. It is a unique ecological community.

1. WSW is characterised by the assemblage of flora species listed in para 2 of the Scientific Committee's Final Determination. It is "generally of woodland to low woodland structure with trees of Angophora floribunda and Banksia integrifolia, and shrubs and ground species including Acacia filicifolia, Pteridium esculentum, Imperata cylindrica, Brachyloma daphnoides and Melaleuca thymifolia": (at [4]).

1. The Scientific Committee, in its final determination in 2002 listing WSW as an EEC, found that WSW is now mainly confined to a small area near Warkworth, around 15 km south east of Singleton. This occurrence now comprises nearly 80% of the extant vegetation. The current WSW extent may be as little as 13% of its pre-settlement extent (at [9]).

1. Stephen Bell, a vegetation scientist called by the Association, with extensive experience in the assessment of vegetation communities in the Hunter and Central Coast region, including WSW, re-examined the pre-settlement and the current extent of WSW. Mr Bell estimated that the pre-settlement of WSW could not have exceeded 3,101 ha. This figure was arrived at by calculation, using a geographic information system, of the combined area of 12 occurrences of the Warkworth Land System (Warkworth Sands) mapped by Storey et al (1963), less the area of two occurrences at Kurri Kurri which could not have supported WSW EEC (Bell Report annexed to his affidavit of 23 July 2012, pp 30-31). However, Mr Bell considered that not all of the occurrences of Warkworth Land System mapped by Storey would have necessarily supported WSW EEC, based on analysis of the remnant vegetation that remains there. Mr Bell therefore concluded that the pre-settlement extent of WSW EEC was in the order of 800 ha (Bell Report, p 31).

1. Dr Robertson, an ecologist who prepared the ecological assessment for the Project, used an estimate of 3,038 ha (Robertson report annexed to his affidavit of 19 August 2012, Table 5.1, p 62). This figure was the estimate made by Mr Travis Peake, of Umwelt Environmental Consultants, who was engaged by the Department of Planning to review Dr Robertson's ecological assessment. Mr Peake calculated the 3,038 ha figure based on the 12 occurrences of Warkworth Land System mapped by Storey (3,733 ha) less the two Kurri Kurri occurrences which were definitely not WSW- supporting (695 ha), giving 3,038 ha (Umwelt, (2011), p 3.8 and Appendix 2).

1. Mr Bell estimated that only about 400 ha of WSW EEC now remains (Bell report, pp 33 and 73). Dr Robertson also originally estimated the extant area of WSW EEC as being 400 ha. Dr Robertson noted that the earlier report by Travis Peake et al, "Warkworth Sands Woodland − An Endangered Ecological Community: Distribution, Ecological Significance and Conservation Status" (2002), stated that out of 800 ha of WSW estimated to remain in 2002, half was estimated to be dominated by Eucalyptus crebra, Eucalyptus moluccana and Corymbia maculata. Dr Robertson noted that, as these species of tree are actually dominants of other vegetation communities, half of the 800 ha was actually another forest community (Robertson report para 173, pp 61-62). Dr Robertson therefore used an estimate of 400 ha as being reasonable based on the knowledge in 2002. Warkworth, in its Preferred Project Report ('PPR'), also used the estimate of 400 ha as being the WSW remaining at the time of listing of WSW as an EEC (PPR, TB vol 1, Tab 8, p 551).

1. However, Dr Robertson suggested that, based upon more recent survey work undertaken in 2011, the estimate of remaining WSW should be increased to 464.8 ha (Robertson report, para 173 and table 5.1, pp 61-62 and Joint Report of Ecology Experts (Exhibit W13), pp 4-7). The more recent survey work was undertaken for the purposes of the ecological assessment for the Project (Cumberland Ecology 2011) and the peer review of that assessment by Umwelt (2011).

1. Mr Peake (in Umwelt (2011)) derived his estimate of 464.8 ha by examination of the detailed mapping undertaken for the ecological assessment and by field inspections of the vegetation. Mr Peake estimated the likely error in this calculation of 464.8 ha to be plus or minus 50 ha. (Umwelt (2011), Section 3.4.1.3, pp 3.8-3.9). Mr Peake estimated that 358.1 ha of WSW occurred in the Warkworth area.

1. In later evidence, however, Dr Robertson revised this estimate significantly, increasing the area of extant WSW EEC to 746.1 ha (Exhibit W18). This increase in the area of remaining WSW EEC, he said, was the result of the more accurate mapping of Warkworth Sand deposits undertaken by Dr Hazelton (a soil scientist called by Warkworth), his rechecking of previously mapped areas of WSW and other vegetation communities using this sand mapping, and his conducting statistical analyses of the composite flora data sets (Robertson report, para 189, p 65).

1. I do not accept that Dr Robertson's revised figure for the extant area of WSW EEC is accurate. The fundamental assumption of Dr Robertson, and of Dr Clements who was also called by Warkworth, was that any vegetation occurring on aeolian sands in the Warkworth area can only be WSW EEC and no other vegetation community (see Exhibit W13, p 19). This is incorrect legally and factually.

1. Legally, whilst occurrence on aeolian sands is a necessary edaphic criterion for a vegetation community to be able to be characterised as WSW EEC, it is not sufficient - other criteria in the Scientific Committee's Final Determination must also be satisfied, including the floristic criteria such as, the assemblage of species (in [2]) and the particular species dominance (in [4] and [5]). The nature, extent and duration of impacts caused by agricultural clearing, altered fire frequency, weed invasion and grazing on the vegetation may also have effected a radical transformation of the vegetation community, so that it can no longer be characterised as being WSW (as was the case with Blue Gum High Forest EEC in Hornsby Shire Council v Vitone Developments Pty Ltd [2003] NSWLEC 272). For example, the depauperate occurrences of vegetation in parts of the grazing property "Archerfield" now proposed to be included in the Northern Biodiversity Area as a biodiversity offset, even though occurring on aeolian sands, have been so impacted by the agricultural clearing and grazing as to raise real doubts as to whether the vegetation could still be characterised as WSW EEC.

1. Factually, Mr Bell's evidence, including on the floristics of the vegetation in the additional areas with aeolian sands sought to be included by Dr Robertson as WSW EEC, establishes that the vegetation can better be characterised as being of other vegetation communities than WSW (see, for example, Mr Bell in Exhibit W13, p 18 and Appendix A and Bell Report, pp 42-50).

1. I am, therefore, not persuaded that the extant area of WSW EEC is as high as 746 ha but instead I find that the extant area is closer to the 464.8 ha figure that Mr Peake calculated and Dr Robertson originally determined.

1. Of this area of extant WSW EEC, the main occurrence is in a small area near Warkworth, between Wallaby Scrub Road and Wollombi Brook. This main occurrence comprises 80% of the extant vegetation of WSW EEC (Scientific Committee's Final Determination, [9] and Travis Peake, "The Vegetation of the Central Hunter Valley, NSW, Vol 2: Profiles of Vegetation Communities" (Hunter Central Rivers Catchment Management Authority, 2006) (Peake (2006)), pp 90-91).

1. Mr Peake estimated in 2011 that the area of this main occurrence at Warkworth is 358.1 ha (Umwelt (2011), p 3.7). Within this main occurrence is the only very large remnant (greater than 100 ha) of WSW EEC remaining (Peake (2006), p 89). The size and integrity, and lack of fragmentation, increases the importance of this main occurrence of WSW EEC.

1. WSW EEC is not only of value as an endangered ecological community but it also provides habitat for a number of threatened species including squirrel glider (Petaurus norfolcensis), speckled warbler (Pyrrholaemus saggita), brown treecreeper (Climacteris picumnis subs victoriae), and grey-crowned babbler (Pomatosomus temporalis subs temporalis) (Scientific Committee's Final Determination, [6]). Each of these threatened fauna have been recorded in the Warkworth Project area (Ecology Study, Annexure E to Environmental Assessment, p 5.46, Robertson report, p 132 [364] and Exhibit W15, Table of threatened fauna recorded in the Warkworth Project area).

1. The Scientific Committee finds that the current WSW is subject to ongoing threats including "open-cut coalmining, sandmining and the construction of mining infrastructure as well as pressures from agricultural clearing, altered fire frequency, weed invasion and grazing" (at [10]). These threats are real. A substantial portion (around 30%, being 106.7 of 358.1 ha) of the main occurrence of extant WSW EEC at Warkworth will be cleared and coal mined for the Project (see also Peake (2006), p 90).

1. No areas of WSW occur within a conservation reserve (at [11]). Some areas of WSW have been required to be conserved under conditions of approval for the Wambo coal mine, but these are not permanently protected as subsequent approvals can revoke the requirement to conserve the areas of WSW.

1. Mr Bell opines that because of the highly restricted nature of the distribution of WSW, both pre-settlement and extant, extreme caution needs to be taken concerning any potential impacts upon it - 400 ha leaves very little room for error. Under the national criteria for assessing threat status to communities, WSW EEC clearly exceeds the maximum threshold for Very Restricted (less than 1,000 ha extant) and is subject to threatening processes (Bell report, p 3).

Central Hunter - Grey Box-Ironbark Woodland ('CHGBIW')

1. CHGBIW is one of three EECs that will be affected by the Project that occur on Permian sediments in the Hunter Valley (NSW Scientific Committee's Final Determination, [1]). CHGBIW has a wider distribution than WSW, occurring throughout the central Hunter Valley within the local government areas of Cessnock, Singleton and Muswellbrook (at [6]) and see Peake (2006), p 66).

1. CHGBIW typically forms a woodland to open forest on slopes and undulating hills (at [1]). It is characterised by the assemblage of species in para 2 of the Scientific Committee's Final Determination.

1. Mr Peake estimated in 2006 that the pre-settlement area of CHGBIW was 46,920 ha, of which 14,818 ha remained (Peake (2006), p 64). Mapped occurrences of the community include 27 remnants greater than 100 ha but more than 1,000 small remnants less than 10 ha, indicating a high level of fragmentation (Peake (2006), p 65) and Scientific Committee's Final Determination, [9]).

1. CHGBIW is not only of value as an endangered ecological community, but also provides habitat for an endangered population of the orchid Cymbidium canaliculatum, the vulnerable species of orchid Diuris tricolor and the tree Eucalyptus glaucina, and the endangered species of orchid Pterostylis gibbosa (Scientific Committee's Final Determination, [7]). Diuris tricolor has been recorded in the Warkworth area (Umwelt (2011), p 32).

1. The Scientific Committee finds that the current CHGBIW is subject to ongoing threats, including continual clearing related to open-cut coal mining and rural subdivision, and weed invasion (NSW Scientific Committee's Final Determination, [10]). These threats are real as an area of 627.5 ha of CHGBIW will be cleared and coal mined for the Project.

1. CHGBIW has very poor reservation status, not occurring in conservation reserves (except for possibly very small areas in Wollemi National Park) (Peake (2006), p 64).

Central Hunter Ironbark-Spotted Gum-Grey Box Forest ('CHISGGBF')

1. CHISGGBF is the second of the EECs that occurs on Permian sediments in the Hunter Valley that will be affected by the Project (NSW Scientific Committee's Final Determination, [1]). Like the CHGBIW, this community is distributed through the Hunter Valley in the local government areas of Cessnock, Singleton and Muswellbrook (Scientific Committee's Final Determination, [6] and Peake (2006), p 162).

1. CHISGGBF typically forms open forest to woodland (at [1]). The ecological community is characterised by the assemblage of species in para 2 of the Scientific Committee's Final Determination.

1. Mr Peake estimated in 2006 that the pre-settlement area of CHISGGBF was 46,753 ha, of which 18,306 ha remained (Peake (2006), p 160). Mapped occurrences of the community include 34 remnants greater than 100 ha and more than 1,000 small remnants less than 10 ha indicating a high level of fragmentation (Peake (2006), p 161 and Scientific Committee's Final Determination, [9]).

1. CHISGGBF is not only of value as an endangered ecological community but also provides habitat for the endangered population of orchid Cymbidium canaliculatum, the vulnerable species of orchid Diuris tricolor, and the tree Eucalyptus glaucina, the endangered species Lepidium hyssopifolium, and the critically endangered species Persoonia pauciflora (Scientific Committee's Final Determination, [7]).

1. The Scientific Committee found CHISGGBF is subject to ongoing threats including continual clearing related to open cut coal mining and rural subdivision, and weed invasion (at [11]). An area of 30.5 ha of CHISGGBF will be cleared and coal mined for the Project.

1. CHISGGBF has very poor reservation status, with only an area of 1.6% of the total extant community conserved in Belford National Park (Peake (2006), p 160).

Hunter Lowland Redgum Forest ('HLRF')

1. HLRF is the third of the EECs occurring on Permian sediments in the Hunter Valley affected by the Project. HLRF is found on gentle slopes arising from depressions and drainage flats on Permian sediments on the Hunter Valley floor (Scientific Committee's Final Determination, [1]).

1. The ecological community is distributed more broadly through the Hunter Valley, in the local government areas of Maitland, Cessnock, Port Stephens, Muswellbrook and Singleton (Scientific Committee's Final Determination, [3]).

1. HLRF is generally an open forest (at [5]) and is characterised by the assemblage of species in para 1 of the Scientific Committee's Final Determination.

1. Much of the pre-settlement area of HLRF has been cleared. Only about 27% (less than 500 ha) of the original distribution survives and this is highly fragmented (Scientific Committee's Final Determination, [7]).

1. HLRF is subject to ongoing threats, particularly clearing which still occurs at a higher rate, leading to fragmentation. Other threats include grazing, weed invasion and altered fire frequency (at [8]).

1. Only a small area of HLRF (less than 2% in total) is conserved in National Parks (Scientific Committee's Final Determination, [6]).

Scale and nature of impacts on biological diversity

1. The carrying out of the Project would have significant impacts on the EECs, particularly WSW and CHGBIW, and key habitats of fauna species. I will identify the key impacts.

Loss of sizeable area of WSW

1. The Project would result in the clearing and open cut mining of 106.7 ha of WSW and HLRF (Dr Robertson's revised figures include the areas of HLRF to be cleared within the area of WSW to be cleared (see Exhibit W16 as amended)). Some of this clearing has already been approved under the 2003 Development Consent (38.8 ha). The total area of WSW to be lost is significant by reference to a number of criteria.

1. An area of 106.7 ha is a sizeable area of clearing in itself. It also represents a loss of 23% of the extant area of WSW (106.7 ha of 464.8 ha remaining). The loss of around a quarter of the remaining distribution of an EEC, caused by a single project, is significant. Mr Bell opines that any development that proposes to remove around 25% of the total known distribution of WSW EEC (which is found only in the vicinity of Warkworth in the Hunter Valley of NSW), including most of the high quality examples of it, contradicts the ideals of threatened species legislation (Bell Report, p 52).

1. The loss of 106.7 ha of WSW also results in the remaining area of WSW EEC being reduced to only 12% of its pre-settlement distribution (the pre-settlement area of 3,038 ha has already been reduced to 464.8 ha, which would be further reduced to 358.1 ha by the Project, which is 12% of 3,038 ha).

1. Mr Peake, in the review of Warkworth's Ecological Assessment of the Project commissioned by the Department of Planning (Umwelt (2011)), explains the significance of this reduction. The remaining area of WSW of 464.8 ha constitutes only 15.3% of its pre-settlement area. This already represents a large historical reduction in its area of occupancy. It means that the community, once naturally restricted in its occurrence (because of its occurrence only on aeolian sands), is now highly restricted and therefore has a greatly reduced inherent ability to tolerate the impacts of further threatening processes, such as the predicted impacts associated with climate change, as it has little opportunity to migrate elsewhere over time (Umwelt (2011), p 3.19). The further reduction of the area of WSW EEC by the Project to 12% of the pre-settlement area further reduces the ability of the community to tolerate further threatening processes.

1. WSW EEC is also a short range endemic community, that is to say, it occurs across a range that is naturally very short. WSW's range was probably formerly 35 km but now is only 20 km. Communities with short ranges are naturally more susceptible to landscape-scale changes, and frequently have no place to migrate, over time, as a result of landscape-scale changes, such as those predicted to occur as a result of climate change (Umwelt (2011), p 3.20). The loss of a further 106.7 ha, caused by the Project, of such a short range endemic community is therefore more significant.

1. The results of the Choice Modelling study were incorporated in the BCA, at $34 million per impacted highly significant Aboriginal heritage site, and $460,000 per hectare of EEC cleared of the 764.7ha total clearing including current approvals (Annexure O, p 9); at $113,000 per ha of planting of EEC and $320,000 per ha of protection of EEC (Annexure O, p 10); and at $31 million per year as community values associated with the employment provided by the Project (Annexure O, p 11).

1. While there is value in attempting to quantify and take into account non-market, environmental, social and cultural costs (and benefits) of a proposed development in preparing a BCA, I agree with the Association that the Choice Modelling study and the BCA undertaken for the Project have a number of deficiencies which lessen their usefulness.

Distribution of Choice Modelling survey too limited

1. First, I accept the evidence of Mr Campbell that confining the distribution of surveys to NSW households was too limited, and that the broader Australian community could well place values on the ecological and Aboriginal cultural heritage impacts of the Project (Exhibit W5, para 6, 15). The value of Aboriginal cultural heritage and endangered ecological communities and their biota is not restricted to NSW but extends throughout Australia. The nation-wide concern and campaigns to protect natural areas in Tasmania (such as Franklin-Gordon Rivers, Lemonthyme and Southern Forests, and more recently, the Tarkine) and in Queensland (Daintree and the Wet Tropics) are illustrations.

Deficiencies in information provided to survey respondents

1. Secondly, the information provided to survey respondents was not, in my view, sufficiently accurate to enable them to make informed and meaningful choices. Using ecological impacts as the first example, the questionnaire advised the survey respondents that continuation of the mine as currently planned would result in clearing of native vegetation, which comprises three EECs; 35,000 ha of EECs occur in the Hunter Valley in an unprotected state and 500 ha are conserved in protected areas; and that in 22 years' time, 900 ha of the three EECs will be cleared (TB vol 7, tab 276, p 4358). This information is inaccurate, indiscriminate and uninformative.

1. It is inaccurate in that there are four, not three, EECs affected by clearing and the total area to be cleared (under the existing consent and the Project Approval) is less than stated (around 765 ha instead of 900 ha). It is indiscriminate in that it groups the four disparate and heterogeneous EECs to be cleared by the Project, and the many disparate and heterogeneous EECs in the Hunter Valley, in both their protected and unprotected states, into one homogeneous category of "EECs". Each EEC listed under the TSC Act is different, with different ecological attributes and making different contributions to conservation of biological diversity and ecological integrity, and hence has different value. The differences needed to be explained so that respondents could consider valuing them differently. A critical omission is the failure to inform respondents that one of the EECs to be cleared, the WSW, is endemic to the particular area and will be proportionately affected by clearing to a far greater extent than any of the other EECs.

1. It is uninformative not only in failing to inform respondents of these matters but also of other information relevant to valuing the EECs to be cleared, including at a general level, what are endangered ecological communities, why their conservation is important, and what are the threats to their long-term survival, and more particularly, what are the relative condition and quality of the EECs to be cleared compared to equivalent EECs in the Hunter Valley, what are the relative condition and quality of the EECs to be cleared compared with those which would remain, and what are the threats to these EECs and whether and to what extent the Project exacerbates, abates or otherwise affects the EECs and their on-going survival. The survey respondents were also not provided with factual findings and inferences of the kind I made in Part 3 as to the value of and impacts on the EECs to be cleared by the Project. Information about these matters affects the survey respondents' knowledge and understanding and hence the choices they would make. Unless the respondents are well-informed of the EECs and the impact of the Project on them, they are not able to make a knowledgeable and informed choice and thereby ascribe proper values.

1. These deficiencies in the information provided to the survey respondents therefore materially affect the reliability of the choices made and values ascribed by the respondents.

1. It is not an answer to that to say, as Warkworth submits, that the questionnaire was conservative in proceeding on the basis that 900 ha was to be cleared when in fact a total of 760 ha is to be cleared (subs at [230](a)). This may have increased the total value of EECs lost by an amount equal to the additional 140 ha multiplied by the value per hectare for an EEC. However, it cannot be known whether this increase in value of EECs lost would be more than offset by the effect of the deficiencies in the information provided and the valuation made based on that information.

1. Another example is that concerning impact on small rural communities, where survey respondents were advised that if the mine continues as currently planned some of the properties in the small rural community will be adversely impacted by noise and dust; that on request these properties would be purchased by the mine; that acquired properties may then be rented to mine employees or others or remain vacant; that this would result in a change in the population mix and/or a reduction in the population of the small rural community; and that if the mine continues as currently planned an additional 15 families out of a total of 175 would be displaced from the small rural community (TB vol 7, tab 276, p 4360). This information does not reflect factual findings and inferences of the kind I have made in Part 4 as to the social impacts caused by adverse noise, air quality and visual impacts on the individual residents and the community of Bulga. It also does not include information concerning other impacts arising from noise and dust, including those arising from undertaking mitigation measures and acquisition as proposed in the conditions.

1. As acknowledged by Professor Bennett and Mr Gillespie (Exhibit W5, p 8-9) the context provided for this attribute in the questionnaire means that the value obtained from the CM study is only applicable to: families who are significantly adversely affected by noise and dust to the extent that they obtain the right to request acquisition of their properties, who trigger this right and who have their properties acquired; families in the Bulga Village and the adjoining areas on the west side of Wollombi Brook; and to between 1-15 impacted families. The survey respondents are also not informed of the significance of the true impact to the residents of Bulga. Again, the deficiencies in the information provided means that the survey respondents were not able to make a knowledgeable and informed choice and ascribe proper value to the social impacts of the Project.

1. As acknowledged by Professor Bennett and Mr Gillespie, the estimates of value obtained from Choice Modelling studies are context specific, and relate to the circumstances described in the survey questionnaire (Exhibit W5, p 8). The Choice Modelling survey was undertaken before the EA was prepared (Gillespie, T 23/8/12, p 81.33). I accept the evidence of Mr Gillespie that the questionnaire was based on discussions with Warkworth about what the impacts of the Project were likely to be, and that it takes a while to actually implement the questionnaire. However, I am not persuaded that the responses can be regarded as reliable or meaningful in the absence of a complete understanding and presentation of the facts.

Values in Choice Modelling survey inadequate

1. Thirdly, the Choice Modelling survey attributed values to each of the choices, ranging from zero up to $625, and did not ask respondents what they were prepared to pay. Professor Bennett's explanation was that the levels were determined based on focus group discussions (T 23/8/12, p 92.35); it has been established in the literature that a direct question of how much a respondent is willing to pay offers the opportunity for them to behave strategically, to overstate their willingness to pay; and that one of the advantages of Choice Modelling is providing respondents with a choice situation in which they establish trade offs between environmental goods and a payment but they are never actually asked that question which is subject to potential for misrepresentation (T 23/8/12, p 91.40ff). I agree with Mr Campbell that modelling a situation based on a willingness to pay of survey respondents presented with a range of levels that, as Professor Bennett described (T 23/8/12, p 92.28) and Mr Gillespie accepted (T 23/8/12, p 93.18) has nothing to do with the costs, is of limited assistance in the situation confronting a decision-maker (T 23/8/12, p 93.1). It has also not been established what information was provided to the focus group, so as to establish whether that information was deficient in ways such as I have raised earlier. If so, the levels determined, based on the focus group discussions, will be too low. This obviously matters as it affects the survey respondents' choices which are based on the levels given in the questionnaire.

All relevant matters, at level of particularity required, not considered

1. Fourthly, while the economists identified, in consultation with Warkworth, likely benefits and costs associated with the Project, those likely benefits and costs may not represent the range of matters that are relevant for the determinative task of an approval authority. I have identified above matters relevant to biodiversity and ecological integrity, including the EECs, noise and dust, and social impacts, which were not included in the Choice Modelling survey or BCA.

1. Further, the level of particularity with which a matter is identified, for the purposes of ensuring that all relevant matters are taken into consideration, is important: Foster v Minister for Customs (2000) 200 CLR 442 at [23], per Gleeson CJ and McHugh J. It is for the decision-maker, having regard to the proper identification of the relevant matters, to determine the level of particularity at which a particular matter must be considered, and whether the relevant state of satisfaction is reached in relation to matters described in qualitative terms: Foster v Minister for Customs at [38] per Gaudron and Hayne JJ; Drake-Brockman v Minister for Planning & Anor [2007] NSWLEC 490; (2007) 158 LGERA 349 at [128]-[129]. In this instance, for example, the level of particularity identified for consideration of noise and dust impacts is clearly inadequate to encompass the range and diversity of such impacts which I have found to be likely to arise if the Project is approved.

Other non-market impacts and values not considered

1. Fifthly, the experts agreed that it is difficult and not practical to measure all non-market impacts of projects. They agreed that no estimate of environmental/ecosystem services was included in the BCA, and that it is difficult to say whether there would be any impact on environmental services values as a result of the Project (Exhibit W5, p 2). I agree with Mr Campbell that there are non-market values that have either not been, or have inadequately been, taken into consideration in the BCA, including impacts of noise and dust, impacts on amenity values, and ecosystem services (aff, second dot point). The omission of these non-market values is a deficiency of this BCA.

Polycentricity of issues not considered

1. Sixthly, the information provided to, and the choices made by, the survey respondents also do not account for the polycentricity of the issues. As explained in Part 2 of the judgment, a polycentric problem, such as determining whether to approve or disapprove a mining project, cannot be resolved by identifying each issue and sequentially resolving it; the resolution of one issue has repercussions on the other issues. Yet, this technique is employed in the Choice Modelling survey. The survey respondents considered and made choices regarding each issue separately and sequentially, with no consideration being given to the repercussions of the choices they made on the other issues. This limits the reliability and utility of the choices made, and the values derived from the choices.

Different weighting and balancing to that required

1. Seventhly, the approach in the BCA and Choice Modelling is to attribute weight to each of the factors considered in both absolute terms, by assigning a dollar value, and in relative terms, by providing a range of dollar amounts from which the respondents can choose, with no open-ended option. That approach confines the Court to the economists' assessment of particularity and value, in a context where there is no evidence available to the Court to assign its own. It also seeks to supplant the Court's essential task, exercising the functions of the approval authority, of applying the appropriate weight to the relevant matters, on the facts as found by the Court.

Issues of equity or distributive justice not considered

1. Eighthly, the BCA and Choice Modelling have not considered issues of equity or distributive justice. Instead, they are concerned only with the aggregation of costs and benefits, not how or why these are allocated. (Joint Report of Economic Experts (Exhibit W5), p 2).

1. Distributive justice involves the just distribution or allocation of the benefits and burdens of economic activity. Principles of distributive justice vary according to what is the subject matter of distribution (such as resources, income, wealth, opportunities, jobs, welfare and utility); the entities to whom a distribution is to be made (such as natural persons, corporations, groups of persons, and non-human living organisms or ecological communities); and the basis on which a distribution is to be made (such as equality, wealth maximisation, or according to individual characteristics or free transactions). Issues of distributive justice not only apply within generations (intra-generational equity) but also extend across generations (inter-generational equity). In the context of environmental justice, distribution of environmental risks and harm should be equitable or fair.

1. The BCA and Choice Modelling failed to have regard to issues of distributive justice. First, while the BCA and Choice Modelling considered some of the entities to whom a distribution of benefits would be made if the Project were to be approved, such as Warkworth and its shareholders (profits of the mine), the NSW Government (royalties and State taxes), the Commonwealth Government (company and income taxes), local councils (community infrastructure contributions) and employees and contractors (remuneration for goods and services provided), they did not have adequate regard to the entities to whom a distribution of burdens would be made.

1. One of these entities is the people of Bulga who would suffer the burdens of significant adverse noise, dust, visual and social impacts, as well as degradation of the natural environment of the local area. There was consideration of some individuals of Bulga village regarding some impacts but not of all of the affected people for all of the impacts.

1. Another entity is the broader community in the State and the nation who would suffer from the reduced natural and cultural environment of Bulga village and surrounds in the event of the Project being approved. For example, present and future members of the broader community would suffer a diminution of recreational value (degradation of the Bulga village and its environment); scenic value (diminution of the beauty of the landscape and its natural components); cultural value (loss of European cultural heritage such as the historic Wallaby Scrub Road; Aboriginal cultural heritage, such as Aboriginal sites and objects; and natural heritage such as EECs); scientific value (such as loss of extant EECs and habitat of threatened fauna); and other values.

1. Further entities are the components of biological diversity, such as the EECs and threatened fauna within the disturbance area, which would also suffer the burdens of the Project. The clearing and open cut mining of the EECs and habitats would unacceptably disturb "the integrity, stability, and beauty of the biotic community". There is an ethical dimension to these land use impacts on the biotic community; it is not exclusively an economic problem (Aldo Leopold, A Sand County Almanac (1966) Oxford University Press at 262).

1. Secondly, the BCA and Choice Modelling did not address the equity or fairness in either the distribution of the benefits and burdens of these entities or the nature and extent of the distributed benefits and burdens.

1. In an assessment of the equity or fairness of the Project's distribution of benefits and burdens, assistance can be gained by consideration of two distinct principles of ecologically sustainable development, inter-generational equity and intra-generational equity. The principle of inter-generational equity provides that the present generation should ensure that the health, diversity and productivity of the environment are maintained or advanced for the future generations (see s 6(2)(b) of the Protection of the Environment Administration Act 1991). The principle of intra-generational equity involves people within the present generation having equal rights to benefit from the exploitation of resources as well as from the enjoyment of a clean and healthy environment: see Telstra v Hornsby Shire Council at [117]. A decision-maker should conscientiously address the principles of ESD in dealing with any application for a project under the former Part 3A of the EPA Act: see Minister for Planning v Walker at [62], [63].

1. With respect to inter-generational equity, the BCA and Choice Modelling did not consider adequately, or accord sufficient weight to, this principle of ESD. This is a traditional limitation of cost benefit analysis in not considering the issue of inter-generational equity: see Laurence H Tribe, "Ways Not To Think About Plastic Trees: New Foundations for Environmental Law" (1974) 83 Yale Law Journal 1315, 1319-1320. The BCA and Choice Modelling did not directly determine whether the Project, if approved, would maintain or enhance the health, diversity and productivity of the local environment at Bulga for the benefit of future generations or the value of doing so.

1. With respect to intra-generational equity, the BCA and Choice Modelling failed to consider adequately the burdens that would be imposed on some entities, including the people of Bulga and the components of biological diversity in the Bulga environment, and on the ability of those entities to live in and enjoy a clean and healthy environment.

1. These failures to consider adequately inter-generational and intra-generational equity limit the utility of the BCA and Choice Modelling to the Court for the purposes of evaluating, weighting and balancing the relevant matters to be considered in determining the Project Application.

Conclusion on economic analyses

1. Warkworth accepted in submissions that both the IO analysis and the BCA provide only models, and that they are a guide to, but not a determinant of, an assessment of the impacts of the Project. Warkworth submitted that while different modelling might have been done, the evidence provided by the Association's experts cannot show that had different modelling been done, the benefits of the Project would not have been substantial (subs at [208]). That may be so, however the economic analyses provided on behalf of Warkworth suffer from the difficulty identified by Eisenberg (at [35] above) in resolution of polycentric problems, by attempting to objectively weight criteria and assuming that choices are not interdependent. Having regard to the limitations of the economic analyses as discussed above, I am of the view that the results of those analyses are of limited value in deciding whether I can reach a state of satisfaction as to the nature and extent of impacts in considering each and all of the relevant matters, the weight I should assign to each matter, and the balancing of the matters, to determine whether the Project should be approved or disapproved.

PART 7: BALANCING OF RELEVANT MATTERS AND DETERMINATION

1. The final task of the Court, exercising the power to determine the application for approval of the Project, after fact finding and assigning weight to the relevant matters, is to balance the matters to determine whether the preferable decision is to approve or disapprove of the carrying out of the Project.

1. I have found, amongst other things, that the Project would have significant and unacceptable impacts on biological diversity, including on endangered ecological communities, noise impacts and social impacts; that the proposed conditions of approval are inadequate in terms of the performance criteria set and the mitigation strategies required to enable the Project to achieve satisfactory levels of impact on the environment, including the residents and community of Bulga; and that the proposed conditions of approval, including by combining the Warkworth mine with the Mount Thorley mine, are likely to make monitoring and enforcing of compliance difficult, thereby raising the possibility that the Project's impacts may be greater and more adverse than allowed by the conditions of approval.

1. These matters must be balanced against the economic benefits and positive social impacts in the broader area and region, which are substantial. In my view, balancing all relevant matters, the preferable decision is to disapprove of the carrying out of the Project. The consequence will be that Warkworth can still carry out the existing mine, as authorised under the development consent DA 300-9-2002-1, granted in 2003, as modified from time to time, but would not be able to extend the mine under the Project Approval granted by the Minister (by his delegate the PAC) on 3 February 2012. The existing consent authorises mining until 2021 in the existing approved area.

1. Accordingly, the orders of the Court are:

(1)   The appeal is upheld.

(2)   Project application no 09_0202 for the carrying out of the Warkworth Extension Project is disapproved.

(3)   The exhibits, other than Exhibit W33, are returned.

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Decision last updated: 15 April 2013