Gloucester Resources Ltd v Minister for Planning

[2019] NSWLEC 7

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7
Hearing dates:	13-17, 20-24, 27-28 August 2018 and 16, 30 November and 7, 14 December 2018 (further evidence and written submissions)
Date of orders:	08 February 2019
Decision date:	08 February 2019
Jurisdiction:	Class 1
Before:	Preston CJ
Decision:	The Court orders: (1)   The appeal is dismissed. (2)   State significant development application No SSD5156 for the amended Rocky Hill Coal Project is determined by refusal of consent to the application.
Catchwords:	APPEAL – open cut coal mine – impacts on existing, approved and likely preferred uses of land in the vicinity – high visual impact – negative social impacts – impacts of the mine on climate change – economic and public benefits of the mine and other land uses – impacts and costs of mine outweigh benefits of mine – development consent refused
Legislation Cited:	Environment Protection and Biodiversity Conservation Act 1999 (Cth) Environmental Planning and Assessment Act 1979 Environmental Planning and Assessment Regulation 2000 Environmental Protection Act 1994 (Qld) Gloucester Development Control Plan 2010 Gloucester Local Environmental Plan 2010 Mineral Resources Act 1989 (Qld) Paris Agreement 2015 Protection of the Environment Administration Act 1991 Protection of the Environment Operations Act 1997 State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2009 State Environmental Planning Policy (Petroleum Production and Extractive Industries) Amendment (Air and Noise Impacts) 2018 State Environmental Planning Policy (State and Regional Development) 2011 United Nations Framework Convention on Climate Change 1992
Cases Cited:	Abley v Yankalilla District Council (1979) 22 SASR 147; (1979) 58 LGRA 234 Aldous v Greater Taree City Council (2009) 167 LGERA 13; [2009] NSWLEC 17 Australian Conservation Foundation v Latrobe City Council (2004) 140 LGERA 100; [2004] VCAT 2029 Border Power Plant Working Group v Department of Energy 260 F Supp 2d 997 (SD Cal, 2003) BP Australia Ltd v Campbelltown City Council (1994) 83 LGERA 274 Broad v Brisbane City Council [1986] 2 Qd R 317 Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited (2013) 194 LGERA 347; [2013] NSWLEC 48 Coast and Country Association of Queensland v Smith [2015] QSC 260 Coast and Country Association Queensland Inc v Smith [2016] QCA 242 Commonwealth v Tasmania (1983) 158 CLR 1; [1983] HCA 21 Gippsland Coastal Board v South Gippsland Shire Council (No 2) [2008] VCAT 1545 Gray v Minister for Planning (2006) 152 LGERA 258; [2006] NSWLEC 720 Hancock Coal Pty Ltd v Kelly (No 4) (2004) 35 QLCR 56; [2014] QLC 12 Harris v Scenic Rim Regional Council (2014) 201 LGERA 12; [2014] QPEC 16 Hub Action Group v Minister for Planning (2008) 161 LGERA 136; [2008] NSWLEC 116 Hunter Environment Lobby Inc v Minister for Planning [2011] NSWLEC 221 Massachusetts v Environmental Protection Agency 549 US 497 (2007) Mid States Coalition for Progress v Surface Transportation Board 345 F 3d 520 (8th Cir, 2003) Minister for Environment and Heritage v Queensland Conservation Council (2004) 139 FCR 24; [2004] FCAFC 190 Minister for Planning v Walker (2008) 161 LGERA 423; [2008] NSWCA 224 Montana Environmental Information Centre v US Office of Mining 274 F. Supp 3d 1074 (D Mont, 2017) Myers v South Gippsland Shire Council (No 1) [2009] VCAT 1022 Myers v South Gippsland Shire Council (No 2) [2009] VCAT 2414 Northcape Properties Pty Ltd v District Council of Yorke Peninsula [2007] SAERDC 50 Northcape Properties Pty Ltd v District Council of Yorke Peninsula [2008] SASC 57 Rainbow Shores Pty Ltd v Gympie Regional Council [2013] QPELR 557; [2013] QPEC 26 Re Sydney Harbour Collieries Co (1895) 5 Land Appeal Court Reports 243 San Juan Citizens Alliance v United States Bureau of Land Management 326 F Supp 3d 1227 (D N M, 2018) Sierra Club v Federal Energy Regulatory Commission 867 F 3d 1357 (DC Cir, 2017) Taralga Landscape Guardians Inc v Minister for Planning and RES Southern Cross Pty Ltd (2007) 161 LGERA 1; [2007] NSWLEC 59 Telstra v Hornsby Shire Council (2006) 67 NSWLR 256; (2006) 146 LGERA 10 The State of the Netherlands v Urgenda Foundation 200.178.245/01, 9 October 2018 Urgenda Foundation v The State of the Netherlands C/09/456689/HA ZA 13-1396, 24 June 2015 Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc (2014) 200 LGERA 375; [2014] NSWCA 105 WildEarth Guardians v US Bureau of Land Management 870 F 3d 1222 (10th Cir, 2017) Wollar Property Progress Association Inc v Wilpinjong Coal Pty Ltd [2018] NSWLEC 92
Texts Cited:	Bell-James, J and Ryan, S, “Climate change litigation in Queensland: A case study in incrementalism” (2016) 33 EPLJ 515: 53 Bennett, K, “Australian climate change litigation: Assessing the impact of carbon emissions” (2016) 33 EPLJ 53: 546-548 Bonyhady, T, “A Useable Past: The Public Trust in Australia” (1995) 12 EPLJ 329 Figueres C et al (2017), “Three years to safeguard our climate”, Nature 546: 593-595 Global warming of 1.5°C: An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty [V. Masson-Delmotte, et al (eds.)]. World Meteorological Organization, Geneva, Switzerland Guidelines for the Economic Assessment of Mining and Coal Seam Gas Proposals (December 2015) McGlade C and Ekins P (2015), “The Geographical Distribution of Fossil Fuels unused when limiting Global Warming to 2ºC”, Nature 517: 187-190 Trenberth, K E, “Climate change caused by human activities is happening and it already has major consequences” (2018) 36 Journal of Energy and Natural Resources Law 463-481
Category:	Principal judgment
Parties:	Gloucester Resources Limited (Applicant) Minister for Planning (First Respondent) Groundswell Gloucester Inc (Second Respondent)
Representation:	Counsel: Mr A Galasso SC, Mr C Ireland (Applicant) Ms K Stern SC, Ms T Phillips, Mr M Sherman (First Respondent) Mr R White (Second Respondent)   Solicitors: McCullough Robertson Lawyers (Applicant) Department of Planning and Environment (First Respondent) Environmental Defenders Office (Second Respondent)
File Number(s):	2017/383563
Publication restriction:	Nil

Table of contents

An open cut coal mine is proposed [1]

The development application for the Rocky Hill Coal Project [9]

The assessment and determination of the development application [20]

The appeal to the Court against the Minister’s refusal [23]

The planning framework for determining the mine proposal [25]

The impacts of the mine on existing, approved and likely preferred uses [57]

The vicinity of the development [58]

The existing, approved and likely preferred uses [62]

The impact of the proposed mine on the likely preferred uses [82]

The incompatibility with the existing, approved or likely preferred uses [83]

The comparative public benefits of the mine and other land uses [87]

The visual impacts of the mine [90]

The existing visual environment [91]

The viewpoints likely to be affected [124]

Methodology for assessing the visual impacts [130]

The experts’ assessment of the visual impacts [143]

High visual effect [162]

Visibility [163]

Distance [165]

Cognitive mapping [174]

Low integration [175]

Topographic location, form and shape [176]

Materials, texture and colour [182]

Vegetation [189]

Change over time [200]

Night lighting [207]

Cumulative visual impact [214]

High visual sensitivity [216]

High visual impact [217]

The amenity impacts of the mine [223]

Noise impacts [224]

Dust impacts [264]

The social impacts of the mine [270]

What are the social impacts? [270]

Changes to people’s way of life [276]

Changes to people’s community [287]

Changed access to and use of infrastructure, services and facilities [326]

Impact on people’s culture [340]

Impact on people’s health and wellbeing [353]

Impact on people’s surroundings [369]

Impact on people’s personal and property rights [380]

Impact on people’s decision making systems [389]

People’s fears and aspirations [393]

Distributive inequity of the Project [398]

Conclusion on the social impacts of the Project [417]

The impacts of the mine on climate change [422]

Gloucester Groundswell’s argument for refusal of the mine [422]

GRL’s argument for approval of the mine [451]

The GHG emissions of the Project support refusal of the Project [486]

Both direct and indirect GHG emissions should be considered [486]

All GHG emissions contribute to climate change [514]

The Project’s emissions will contribute to climate change [525]

No specific proposal to offset the Project’s emissions [529]

Possibility of abatement unrelated to the Project not relevant [531]

Assumptions of market substitution and carbon leakage unproven [534]

Producing coking coal not a justification for GHG emissions [546]

The Project’s poor environmental and social performance justifies refusal [550]

The economic and public benefits of the mine and other land uses [557]

The net economic benefits of the Project [561]

Direct economic benefit: royalties [570]

Direct economic benefit: company income tax [581]

Indirect economic benefit: worker benefits [587]

Indirect economic benefit: supplier benefits. [607]

Indirect costs [637]

Conclusion on the cost benefit analysis [664]

Local effects analysis [670]

The respective public benefits of the Project and other land uses [682]

Balancing the benefits and the impacts of the mine [686]

Orders [700]

Judgment

An open cut coal mine is proposed

1. There is a valley, near Rocky Hill, that a coal mine proposes to cut and fill. The Gloucester valley is a creature of a unique topographic feature. The valley is the floor of a nest, the sides being ranges east and west. The Bucketts is the rocky range to the west. The Mograni range is the mountain range to the east. Both ranges are forest clad. Over aeons, the ranges have eroded. The foothills are talus and slopes, broken by gullies and creeks. The valley floor is an alluvial plain, through which the Avon River flows.

2. In this topographical embrace nestles the country town of Gloucester. The valley and footslopes surround the town. The higher ranges complete the enclosure. The setting is scenic and serene. An idyll, some suggest.

3. Beneath the surface of the valley lies the mineral resource of coal. Geological forces have pushed productive seams of coal near to the surface in the valley beneath Rocky Hill.

4. A mining company, Gloucester Resources Limited (GRL), wishes to mine this coal. It has proposed an open cut coal mine to produce 21 million tonnes of coal over a period of 16 years.

5. The location of this coal resource, and hence the open cut mine, is close to the town of Gloucester. The town has a core of denser urban development and a penumbra of rural-residential estates and smaller agricultural and agri-tourism properties. These outliers of the town are within one to two kilometres of the boundary of the proposed mine. Some properties within the rural-residential estates are only about a kilometre from the mining pit. They are even closer to the large earthern barrier that will be constructed to shield the mining pit from direct view.

6. The proposed mine has divided the community of Gloucester. Of the submissions on the amended development application, 90% opposed the mine and of the submissions from the Gloucester postcode, 83% opposed the mine. They are concerned about the noise and dust impacts of the mine, the adverse impacts on the visual amenity and rural and scenic character of the valley, and the social impacts on the community. They are also concerned that the opening of a new coal mine will contribute to climate change. The supporters of the mine primarily invoke the economic benefits that a new mine will bring, including local employment and expenditure.

7. The proponent, GRL, unsuccessfully applied to the Minister for Planning for development consent for the Rocky Hill Coal Project. The Minister, by his delegate the Planning and Assessment Commission, refused consent to the mine. GRL appealed to this Court. The Court on the appeal exercises the function of the Minister as the consent authority to determine the development application for the Rocky Hill Coal Project.

8. I have determined that GRL’s development application for the Rocky Hill Coal Project should be refused. The mine will have significant adverse impacts on the visual amenity and rural and scenic character of the valley, significant adverse social impacts on the community and particular demographic groups in the area, and significant impacts on the existing, approved and likely preferred uses of land in the vicinity of the mine. The construction and operation of the mine, and the transportation and combustion of the coal from the mine, will result in the emission of greenhouse gases, which will contribute to climate change. These are direct and indirect impacts of the mine. The costs of this open cut coal mine, exploiting the coal resource at this location in a scenic valley close to town, exceed the benefits of the mine, which are primarily economic and social. Development consent should be refused.

The development application for the Rocky Hill Coal Project

9. GRL lodged a development application for consent to carry out the Rocky Hill Coal Project on 18 December 2012. The Rocky Hill Coal Project is State significant development within the meaning of s 89C(1) now s 4.36(1) of the Environmental Planning and Assessment Act 1979 (“EPA Act”). It is development for the purposes of coal mining as defined in Item 5 of Sch 1 to State Environmental Planning Policy (State and Regional Development) 2011 (“SEPP SRD”) and is declared by cl 8 of SEPP SRD to be State significant development. The Minister for Planning is the consent authority for State significant development (the former s 89D(1) now s 4.5 of the EPA Act). Accordingly, GRL lodged its development application with the Department of Planning and Environment (the Department).

10. The originally proposed development was to extract 2.5 million tonnes per year of run-of-mine (“ROM”) coal from a new open cut mine and to construct a coal handling and preparation plant as well as an overland conveyor to transport product coal to a dedicated load-out bin and rail loop for transportation to the Port of Newcastle.

11. On 11 August 2016, the Minister’s delegate agreed to accept, and GRL lodged, an amended development application and amended environmental impact statement (“EIS”) for the State significant development of the Rocky Hill Coal Project (under cl 55(1) of the Environmental Planning and Assessment Regulation 2000 (“EPA Regulation”)). The amended EIS for the amended Rocky Hill Coal Project stated that the principal coal product to be produced from the Rocky Hill Coal Mine is coking coal which is used in the manufacture of steel. The maximum ROM coal production would be 2 million tonnes per annum and the total ROM coal production would be 21 million tonnes.

12. The Rocky Hill Coal Project is estimated to be developed, operated and rehabilitated over a period of up to 21 years. The site establishment and construction stage would occur over a period of approximately 10 months, mining operations would occur over a period of approximately 16 years and final void backfilling and closure would occur over approximately 3 years.

13. Of the site area of approximately 832ha, about 500ha would be disturbed throughout the life of the Rocky Hill Coal Project.

14. The proposed mine is to consist of the following principal components, the location of which is identified in Figure B to the Executive Summary to the amended EIS:

1. Three contiguous open cut pits (Avon, Bowen Road and Main Pits) varying in depth from approximately 80m to 220m, lying to the west of what is currently McKinley’s Lane;

2. a long-term “amenity barrier” to the west and north of the site stretching for around 2.5km north-south, with variable height, rising between 10-40m above the natural ground level (amended EIS, p 2-42), as well as two interim barriers which are intended to visually screen areas of activity and provide for noise mitigation;

3. a consolidated in-pit and permanent out-of-pit overburden emplacement (at the base of the hill after the incline commences) and an interim overburden emplacement (which would be removed at the cessation of coal extraction with the overburden materials from that area used to backfill the final void);

4. a ROM pad and associated breaker station comprising a feed conveyor, rotary breaker, a sized coal conveyor and coal bin from which the trucks would be loaded; and

5. a new sealed 4.4km private haul road to be used by multi-combination trucks to transport ROM coal from the coal bin at the Rocky Hill Site to the Stratford Mining Complex.

15. During an approximate 10 month period following the grant of development consent and other required approvals, GRL proposes to undertake site establishment activities, including the construction of water management structures and the private haul road and upgrading of the surrounding public roads.

16. Sequential mining operations would involve the following:

1. Vegetation clearing – Around 51.8ha of remnant native vegetation is to be progressively cleared.

2. Soil removal and stockpiling – Topsoil (to a depth of 10-15cm) and subsoil (to a further depth of 60-85cm) from the pit site will be stripped and stored until the sequence of mining allows its transfer onto the final landform.

3. Overburden removal – the majority of overburden from the initial 2 years of mining would be used to construct the western and northern amenity barriers. Subsequently, the overburden would be placed within the proposed footprint of disturbance either beyond the open cut pits or within the open cut pits. Reject (rock) materials from the rotary breaker would be collected from the reject stockpile and backloaded by haul trucks to the overburden emplacement where they would be mixed randomly with the overburden. As the final landform is progressively developed from Year 3 onwards, long term revegetation activities would be undertaken.

4. Coal recovery – the coal exposed in each open cut pit would be removed by excavator and transported by haul truck to the ROM pad.

5. Rehabilitation – areas of disturbance would be progressively rehabilitated (either temporarily or permanently). The final void would be backfilled in an attempt to create a landform resembling the landscape prior to development. The achievability of this aim was questioned by the Minister.

17. The construction workforce for the mining development would be 60 persons and the operations workforce would be 110 persons. The amended EIS states that GRL has “retained its target of 75% of locally resident employees by the end of Year 3 operations”. While this may be GRL’s target, the achievability of such target was questioned by the Minister.

18. Mining operations would occur during the daytime during Years 1-3 (7am-6pm Monday to Friday and 8am-1pm Saturday) and the daytime and evening (7am-10pm Monday to Saturday) from Years 4-16.

19. During operations, there are expected to be approximately 156 to 278 light vehicle movements and 10 to 18 heavy vehicle movements occurring per day. Peak operational traffic movements would occur around shift start and finish times, between 6am and 7am, 1.45pm and 2.45pm, 5.30pm and 6.30pm and 10.15 and 10.45pm.

The assessment and determination of the development application

20. As required by the former s 89F(1) of the EPA Act, the amended Project Application was placed on exhibition from 17 August to 14 October 2016. At the conclusion of this exhibition period, the Department had received 2,570 submissions, with 2,308 in objection and 261 in support. Thus, approximately 90% of submissions opposed the mining development. Of the 2,308 objections received, 2,294 were individual letters (including 1,108 form letters) and 14 were from special interest groups. 72% of objectors raised the visual impacts of the mine as a reason for refusal. 66% of objectors raised the location of the mine and its proximity to other land uses.

20. Pursuant to cl 85A of the EPA Regulation, on 26 October 2016, the Department wrote to GRL requesting a response to this second round of submissions. GRL provided its response on 19 June 2017. In October 2017, the Department published its environmental assessment report on the amended Rocky Hill Coal Project. The Department concluded:

“Having assessed all matters relevant to the amended project as set out in this report, the Department does not consider that the amended project is able to or should be approved, and the Department does not recommend that the Commission approve the development.”

22. On 23 October 2017, the amended development application was referred to the Planning and Assessment Commission, as the delegate of the Minister, for determination. On 14 December 2017, the Commission determined the amended development application under the former s 89E(1) of the EPA Act by refusing consent to the application. The Commission gave three reasons:

1. The creation and operation of an open cut coal mine in this proposed location, within the RU1 and E3 zones of the Gloucester Local Environmental Plan 2010, is in direct contravention of each zone’s objectives;

2. The residual visual impact of the mine would be significant throughout all stages of the Project; and

3. The Project is not in the public interest.

The appeal to the Court against the Minister’s refusal

23. On 19 December 2017, GRL filed an appeal under then s 97 now s 8.7 of the EPA Act against the Minister’s refusal of consent. On 23 April 2018, the Court ordered that Gloucester Groundswell Inc be joined as a party to the proceedings, pursuant to s 8.15(2) of the EPA Act. Gloucester Groundswell is a local community action group concerned about the impacts of the Rocky Hill Coal Project on the local community and on the local and wider environment.

24. The Minister and Gloucester Groundswell raised numerous contentions as to why they said development consent should be refused to the Rocky Hill Coal Project. As finally pleaded in the Minister’s amended statement of facts and contentions filed 23 May 2018 and Gloucester Groundswell’s statement of facts and contentions filed 1 May 2018, the principal contested issues may be summarised as:

1. the incompatibility of the proposed mine with the existing, approved and likely preferred uses of land in the vicinity of the proposed mine, under cl 12 of State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2009 (“the Mining SEPP”);

2. the adverse visual impacts of the mine;

3. the adverse social impacts of the mine, including social impacts caused by the noise, dust and visual impacts of the mine;

4. the economic and public benefits of the mine are uncertain and overstated and not shown to be greater than the public costs of the mine; and

5. the Rocky Hill Coal Project is not in the public interest because:

1. of the matters in (1) to (4) above; and

2. it is contrary to the principles of ecologically sustainable development because the direct and indirect greenhouse gas emissions of the mine will contribute to climate change.

The planning framework for determining the mine proposal

25. As noted above, GRL’s development application for the Rocky Hill Coal Project is in respect of State significant development. The power to determine a development application in respect of State significant development is in s 4.38(1) of the EPA Act, which provides:

“The consent authority is to determine a development application in respect of State significant development by:

(a)  granting consent to the application with such modifications of the proposed development or on such conditions as the consent authority may determine, or

(b)  refusing consent to the application.”

26. Although development consent may not be granted if the development is wholly prohibited by an environmental planning instrument (see s 4.38(2)), development consent may be granted despite the development being partly prohibited by an environmental planning instrument (s 4.38(3)). These subsections are not engaged in the facts of this case. As explained below, the applicable Gloucester Local Environmental Plan 2010 (“GLEP 2010”) permits open cut coal mining with consent in the RU1 Primary Production zone (which applies to 23% of the site of the Rocky Hill Coal Project) but prohibits open cut coal mining in the E3 Environmental Management zone (which applies to 77% of the site). However, cl 7(1)(b) of the Mining SEPP makes mining permissible with consent in the E3 Environmental Management zone because development for the purposes of extensive agriculture may be carried out without consent in that zone. The Mining SEPP prevails to the extent of any inconsistency over GLEP 2010. Development for the purpose of mining is therefore permitted on the whole site.

27. Section 4.15 of the EPA Act applies to the determination of the development application for State significant development (s 4.40 of the EPA Act). Section 4.15(1) provides:

“(1) In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application:

(a) the provisions of:

(i) any environmental planning instrument, and

(ii) any proposed instrument that is or has been the subject of public consultation under this Act and that has been notified to the consent authority (unless the Planning Secretary has notified the consent authority that the making of the proposed instrument has been deferred indefinitely or has not been approved), and

(iii) any development control plan, and

(iiia) any planning agreement that has been entered into under section 7.4, or any draft planning agreement that a developer has offered to enter into under section 7.4, and

(iv) the regulations (to the extent that they prescribe matters for the purposes of this paragraph),

that apply to the land to which the development application relates,

(b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality,

(c) the suitability of the site for the development,

(d) any submissions made in accordance with this Act or the regulations,

(e) the public interest.”

28. The relevant environmental planning instruments are the Mining SEPP and GLEP.

29. The aims of the Mining SEPP are stated in cl 2 to include:

“The aims of this Policy are, in recognition of the importance to New South Wales of mining, petroleum production and extractive industries:

(a) to provide for the proper management and development of mineral, petroleum and extractive material resources for the purpose of promoting the social and economic welfare of the State, and

(b) to facilitate the orderly and economic use and development of land containing mineral, petroleum and extractive material resources, and

(b1) to promote the development of significant mineral resources, and

(c) to establish appropriate planning controls to encourage ecologically sustainable development through the environmental assessment, and sustainable management, of development of mineral, petroleum and extractive material resources, and…”

30. The Mining SEPP applies to all of New South Wales (cl 4). If the Mining SEPP is inconsistent with any other environmental planning instrument, the Mining SEPP prevails to the extent of the inconsistency (cl 5(3) of the Mining SEPP and see s 3.28(1)(a) of the EPA Act).

31. Clause 7 of the Mining SEPP makes certain mining development permissible with consent, including “mining carried out…on land where development for the purposes of agriculture or industry may be carried out (with or without consent)” (cl 7(1)(b)(i) of the Mining SEPP). “Mining” is defined in cl 3(2) of the Mining SEPP to mean:

“the winning or removal of materials by methods such as excavating, dredging, or tunnelling for the purpose of obtaining minerals, and includes:

(a) the construction, operation and decommissioning of associated works, and

(b) the stockpiling, processing, treatment and transportation of materials extracted, and

(c) the rehabilitation of land affected by mining.”

32. Open cut mining is a type of mining and is defined in cl 3(2) of the Mining SEPP to mean “mining carried out on, and by excavating, the earth’s surface but does not include underground mining.”

33. As explained below, GLEP 2010 permits without consent development for the purposes of extensive agriculture in the E3 Environmental Management zone and permits without consent development for the purposes of extensive agriculture and with consent development for the purposes of agriculture in the RU1 Primary Production zone. Extensive agriculture is a type of agriculture and is defined in GLEP 2010 to mean “any of the following: the production of crops or fodder (including irrigated pasture and fodder crops) for commercial purposes, the grazing of livestock for commercial purposes, beekeeping, or a dairy (pasture-based).”

34. Clause 7(1)(b)(i) of the Mining SEPP therefore makes mining permissible with consent in the E3 Environmental Management zone, notwithstanding that mining is prohibited in that zone by GLEP 2010. The Mining SEPP prevails over GLEP 2010 to the extent of any inconsistency.

35. Clause 12 of the Mining SEPP requires the consent authority, before determining a development application for mining, to consider the compatibility of the proposed mine with other land uses in the vicinity of the mine. Clause 12 provides:

“Before determining an application for consent for development for the purposes of mining, petroleum production or extractive industry, the consent authority must:

(a) consider:

(i) the existing uses and approved uses of land in the vicinity of the development, and

(ii) whether or not the development is likely to have a significant impact on the uses that, in the opinion of the consent authority having regard to land use trends, are likely to be the preferred uses of land in the vicinity of the development, and

(iii) any ways in which the development may be incompatible with any of those existing, approved or likely preferred uses, and

(b) evaluate and compare the respective public benefits of the development and the land uses referred to in paragraph (a) (i) and (ii), and

(c) evaluate any measures proposed by the applicant to avoid or minimise any incompatibility, as referred to in paragraph (a) (iii).”

36. Clause 12 is critical to the Minister’s and Gloucester Groundswell’s principal contention that the Rocky Hill Coal Project should be refused. I will address the clause in more detail when I deal with that contention.

37. Clause 12AB identifies various non-discretionary development standards for mining for the purposes of s 4.15(2) and (3) of the EPA Act (cl 12AB(2) of Mining SEPP). The object of the clause is stated in cl 12AB(1):

“The object of this clause is to identify development standards on particular matters relating to mining that, if complied with, prevents the consent authority from requiring more onerous standards for those matters (but that does not prevent the consent authority granting consent even though any such standard is not complied with).”

38. The development standards identified in cl 12AB include standards with respect to the cumulative noise level (cl 12AB(3)) and cumulative air quality level (cl 12AB(4)). The standards for the cumulative noise level and cumulative air quality level were amended after the hearing of the appeal concluded. State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Air and Noise Impacts) 2018, which commenced on 21 September 2018, applies to development applications made but not finally determined, before the commencement of the amendment (cl 23 of the Mining SEPP).

39. The amended cumulative noise level standard in s 12AB(3) is:

“The development does not result in a cumulative amenity noise level greater than the recommended amenity noise levels, as determined in accordance with Table 2.2 of the Noise Policy for Industry, for residences that are private dwellings.”

40. The “Noise Policy for Industry” is defined in cl 12AB(9) to mean “the document entitled Noise Policy for Industry published by the Environment Protection Authority and in force as at the commencement of this clause”. That NSW Noise Policy for Industry is the policy published in 2017. It replaced the NSW Industrial Noise Policy 2000.

41. The amended cumulative air quality level standard in cl 12AB(4) is:

“The development does not result in a cumulative annual average level greater than 25 µg/m3 of PM10 or 8 µg/m3 of PM2.5 for private dwellings.”

42. This cumulative air quality level is stricter than the former cumulative air quality level in two respects: firstly, it lowers the cumulative annual average level of particles sized PM10 from 30 µg/m3 to 25 µg/m3 and, secondly, it introduces a cumulative annual average level for particles sized PM2.5, which is 8 µg/m3.

43. Subsections 4.15(2) and (3) of the EPA Act regulate the consent authority’s consideration of the non-discretionary development standards. Those subsections provide:

“(2) If an environmental planning instrument or a regulation contains non-discretionary development standards and development, not being complying development, the subject of a development application complies with those standards, the consent authority:

(a) is not entitled to take those standards into further consideration in determining the development application, and

(b) must not refuse the application on the ground that the development does not comply with those standards, and

(c) must not impose a condition of consent that has the same, or substantially the same, effect as those standards but is more onerous than those standards, and the discretion of the consent authority under this section and section 4.16 is limited accordingly.

(3) If an environmental planning instrument or a regulation contains non-discretionary development standards and development the subject of a development application does not comply with those standards:

(a) subsection (2) does not apply and the discretion of the consent authority under this section and section 4.16 is not limited as referred to in that subsection, and

(b) a provision of an environmental planning instrument that allows flexibility in the application of a development standard may be applied to the non-discretionary development standard.”

44. There was a limited contest between the parties as to the effect of s 4.15(2). The Minister and Gloucester Groundswell argued that s 4.15(2) does not preclude an assessment of the qualitative aspects of the development which may be affected by the matters to which the non-discretionary development standards relate and that cl 12AB of the Mining SEPP does not constrain a consent authority from refusing consent or imposing conditions of consent in relation to any matter or measurement that is not covered by the non-discretionary standards identified in cl 12AB of the Mining SEPP. GRL argued that, in some cases, the respondent’s submissions overstepped the mark of what can be considered under s 4.15(2) of the EPA Act and cl 12AB of the Mining SEPP. I will address this contest when I deal with the issues of the adverse noise impacts and the economic and social impacts.

45. Clause 12A requires the consent authority to consider the Minister’s voluntary land acquisition and mitigation policy. Subclause 12A (2) provides:

“(2) Before determining an application for consent for State significant development for the purposes of mining, petroleum production or extractive industry, the consent authority must consider any applicable provisions of the voluntary land acquisition and mitigation policy and, in particular:

(a) any applicable provisions of the policy for the mitigation or avoidance of noise or particulate matter impacts outside the land on which the development is to be carried out, and

(b) any applicable provisions of the policy relating to the developer making an offer to acquire land affected by those impacts.”

46. The “voluntary land acquisition and mitigation policy” is defined in cl 12A(1) to mean “Voluntary Land Acquisition and Mitigation Policy approved by the Minister and published in the Gazette on the date on which State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Air and Noise Impacts) 2018 is published on the NSW legislation website” (which was 21 September 2018).

47. Clause 14, 15, 16 and 17 of the Mining SEPP require the consent authority, before granting consent to the development for the purposes of mining, to consider whether the consent should be issued subject to conditions relating to natural resource management and environmental management (cl 14), resource recovery (cl 15), transport (cl 16) and rehabilitation (cl 17).

48. Clause 14(2) of the Mining SEPP also requires consideration of an assessment of the greenhouse gas emissions (including downstream emissions) of development for the purposes of mining.

49. GLEP 2010 is the applicable local environmental plan. The particular aims of GLEP 2010 stated in cl 1.2(2) are:

“(a) to manage the resources of Gloucester,

(b) to protect rural lands, natural resources and assets of heritage significance,

(c) to manage development to benefit the community,

(d) to embrace and promote the principles of ecologically sustainable development, conservation of biological diversity and sustainable water management, and to recognise the cumulative impacts of climate change,

(e) to protect, enhance and provide for biological diversity, including native threatened species, populations and ecological communities, by long term management and by identifying and protecting habitat corridors and links throughout Gloucester,

(f) to encourage a mix of housing to meet the needs of the community,

(g) to provide a secure future for agriculture.”

50. The majority of the site of the Rocky Hill Coal Project (77%) is zoned E3 Environmental Management. The objectives of the E3 zone are:

“-To protect, manage and restore areas with special ecological, scientific, cultural or aesthetic values.

-To provide for a limited range of development that does not have an adverse effect on those values.

-To conserve biological diversity and native vegetation corridors, and their scenic qualities, in a rural setting.”

51. Land uses permitted without consent in the E3 zone include extensive agriculture, which is defined to include the production of crops or fodder for commercial purposes, raising of livestock for commercial purposes or a pasture-based dairy. Land uses permitted with consent in the E3 zone include various residential and tourism uses, such as backpackers’ accommodation, bed and breakfast accommodation, camping grounds, caravan parks, dual occupancies, dwelling houses, eco-tourist facilities and farm stay accommodation. Land uses prohibited in the E3 zone include industries, high density residential uses and retail and wholesale uses, as well as any other development not specified as being permitted without consent or with consent. Mining, including open cut mining, would fall into this last mentioned category and is prohibited in the E3 zone by GLEP 2010.

52. The minority of the site of the Rocky Hill Coal Project (23%) is zoned RU1 Primary Production. The objectives of the RU1 zone are:

“- To encourage sustainable primary industry production by maintaining and enhancing the natural resource base.

- To encourage diversity in primary industry enterprises and systems appropriate for the area.

- To minimise the fragmentation and alienation of resource lands.

- To minimise conflict between land uses within this zone and land uses within adjoining zones.

- To encourage eco-tourism enterprises that minimise any adverse effect on primary industry production and the scenic amenity of the area.”

53. Land uses permitted without consent in the RU1 zone include extensive agriculture. Land uses permitted with consent in the RU1 zone include various types of agriculture; various residential tourism uses, such as backpackers’ accommodation, bed and breakfast accommodation, camping grounds, caravan parks, dual occupancies, dwelling houses, eco-tourist facilities and farm stay accommodation; various types of industries; and open cut mining. The land uses that are prohibited in the RU1 zone are any development not specified as being permitted without consent or with consent.

53. In the vicinity of the proposed mine there are large lot residential estates, including the Forbesdale, Thunderbolt and Avon River Estates, which are zoned R5 Large Lot Residential. The objectives of the R5 zone are:

“- To provide residential housing in a rural setting while preserving, and minimising impacts on, environmentally sensitive locations and scenic quality.

- To ensure that large residential lots do not hinder the proper and orderly development of urban areas in the future.

- To ensure that development in the area does not unreasonably increase the demand for public services or public facilities.

- To minimise conflict between land uses within this zone and land uses within adjoining zones.”

55. There is a restricted range of land uses permitted without consent in the R5 zone. The land uses that are permitted with consent in the R5 zone include dual occupancies, dwelling houses and bed and breakfast accommodation. Land uses that are prohibited in the R5 zone are any development not specified as being permitted without consent or with consent. Mining, including open cut mining, falls into this category and is prohibited.

56. The Gloucester Development Control Plan 2010 (“DCP”) applies to the site of the Rocky Hill Coal Project. In the Guidelines for subdivision in rural and environmental protection zones, the DCP “requires the protection of the environment and scenic qualities and character of the area by minimising the impact areas and retaining existing vegetation” (p 105 of the DCP).

The impacts of the mine on existing, approved and likely preferred uses

57. The Minister’s principal contention as to why the Rocky Hill Coal Project should be refused was the incompatibility of the proposed mine with other land uses in the vicinity, contrary to cl 12 of the Mining SEPP. Clause 12 requires the consent authority to make three evaluations. The first, in cl 12(a) is to consider:

“(i) the existing uses and approved uses of land in the vicinity of the development, and

(ii) whether or not the development is likely to have a significant impact on the uses that, in the opinion of the consent authority having regard to land use trends, are likely to be the preferred uses of land in the vicinity of the development, and

(iii) any ways in which the development may be incompatible with any of those existing, approved or likely preferred uses.”

The vicinity of the development

58. Subclause 12(a) of the Mining SEPP refers to land uses “in the vicinity of the development”. The parties’ planners, Mr Ryan for GRL and Mr Darroch for the Minister, agreed that from a planning perspective, the “vicinity” of the development extends beyond the land directly abutting the site of the Rocky Hill Coal Project. Determining the uses of land in the vicinity involves consideration of not only the proximity or nearness in space of the uses of land to the proposed mine, but also visual considerations and “demographic and geographic features of the area” (Abley v Yankalilla District Council (1979) 22 SASR 147 at 152-153; (1979) 58 LGRA 234 at 239-240).

59. The planners agreed that the area in the “vicinity” of the proposed mine is generally described in Mr Ryan’s evidence (at [14] and Figure 1) as extending, in the north, to the north of the town of Gloucester; in the south, to the south of the Stratford Mine Complex; in the east, to the Mograni Range; and in the west, to the rise of the Bucketts Range. The planners agreed that the Forbesdale, Avon River and Thunderbolt rural residential estates and the town of Gloucester were included within this area of the vicinity.

60. Mr Ryan stated that identification of the “vicinity” of a development, in a planning context, turns on the question of “what land is potentially open to experiencing some impact from a particular development?” Thus the areas that lie within the “vicinity” of a given mining proposal will turn on the nature and extent of the potential impacts of that proposal. Mr Darroch generally agreed with this approach but did not consider that the operational measures implemented to mitigate the impacts of the development may affect how one views its “vicinity”; that is, the sphere of potential impacts.

61. Mr Darroch further observed that one should not take a static approach to the land uses in the “vicinity” of the proposed Rocky Hill Site as “the occupants and visitors to the valley are never fixed in any area”. He provided the example of a resident of the Forbesdale Estate, who will not just experience the impacts of the proposed mine statically from their living room window or front yard, but who will be impacted by the mine as they move through the whole of the space characterised as the “vicinity”. Indeed, many of the objectors referred to their enjoyment of their rural properties by reason of their ability to horse ride and walk around the large parcels of land.

The existing, approved and likely preferred uses

62. Subclause 12(a) of the Mining SEPP requires consideration of three types of uses of land in the vicinity of the development: existing uses, approved uses and likely preferred uses.

63. Existing uses are uses of land that are actual, physical and lawful. The planners agreed, and I find, that the existing uses in the vicinity of the proposed mine include: residential (including rural-residential estates); tourism uses (including tourist and visitor accommodation and tourism activities); agri-business (such as the Hillview Herb Farm) and agriculture (including cattle grazing, hobby farms and dairy farming); and uses associated with Gloucester township, including commercial (retail and business), recreational facilities (such as the golf course) and social infrastructure facilities (such as the high school and the hospital). Mr Ryan also included the Stratford Mine as an existing land use in the vicinity. Mr Darroch observed that there was some overlap between tourist, residential and agricultural uses, with rural lifestyle “tree changers” supplementing their income by providing tourist accommodation and engaging in farming activities.

64. Approved uses are uses that have been approved by the grant of development consent under the EPA Act, but have not commenced in accordance with the consent. The planners agreed, and I find, that the approved land uses, to which development consents have been granted in the last 12 months, include new and modified dwellings, modifications to commercial premises and boundary adjustments.

65. Likely preferred uses refer to uses of the land that, having regard to land use trends, are likely to be the preferred uses of land in the vicinity.

66. The planners agreed that indicators of land use trends, giving rise to likely preferred uses, are: the historical, current and approved uses of the land; the planning controls under the applicable land use zonings, including the range of permissible uses in each zone, the objectives of each zone, and the development standards for development in the zone, such as the minimum lot size; uses identified in State, regional and local strategic plans, studies and strategies as being preferred future uses; and economic circumstances.

67. Mr Darroch further observed that land use trends indicating the likely preferred uses may be observed from historical progressions in planning instruments and planning strategies. In this regard, he compared the express aims of the GLEP 2010 to those contained in the preceding instrument, the Gloucester Local Environmental Plan 2000 (GLEP 2000) and identified a “very significant change and significant indicator of trend”, namely, a shift away from the former objective of protecting “prime crop and pasture land” to an objective of protecting “rural lands”, indicating a focus on a broader range of land uses in the rural areas than just crop and pasture land. Mr Darroch considered that the change in the objective from protecting “prime crop and pasture land” to providing “a secure future for agriculture” recognises a change in the type of rural activity and agricultural pursuits.

68. Mr Darroch also identified an increased emphasis in GLEP 2010 (when compared with GLEP 2000) on promotion of the principles of ecologically sustainable development, conservation of biological diversity and recognition of the cumulative impacts of climate change (cl 1.2(2)(d) and (e) of GLEP 2010).

69. A comparison of the GLEP 2000 and GLEP 2010 zoning maps reveals, in this regard, that a substantial parcel of land toward the south of the Forbesdale estate, previously zoned as the equivalent of what is now RU1 (Primary Production), has been rezoned E3 (Environmental Management) under the current GLEP 2010.

70. Mr Darroch noted an even more pronounced shift in land use trends when GLEP 2010 is compared to the still earlier instrument, being Gloucester Local Environmental Plan 1984, the aims of which were to “provide for the orderly expansion of urban development arising from mining projects in the Shire of Gloucester, and to ensure that the existing rural and natural qualities of the Shire are preserved”. The GLEP 2010 objectives contain no mention of mining projects. Mr Darroch considered that the change from “seeking the orderly expansion of urban development arising from mining projects” to the GLEP 2010 aims “to manage the resources of Gloucester”, “to protect rural lands, natural resources and assets of heritage significance” and “to manage development to benefit the community” (cl 1.2(2)(a), (b) and (c)), is a clear indicator of the progression that has led to the current rural land use trends.

71. Mr Darroch also considered the Gloucester Shire Council Housing Development Strategy 2006 (“HDS 2006”) – described as the “cornerstone of the studies and strategies informing the preparation of the GLEP 2010 and the change in land use trends between 2000 and 2010” – to be important to ascertainment of relevant land use trends which inform the likely preferred uses in the vicinity of the Rocky Hill Site. The HDS 2006 noted that (p 16):

“In 2000 Gloucester Shire Council gazetted the current Local Environmental Plan to guide development, including subdivision and housing, for a minimum period of twenty years. At this time, Gloucester Shire was undergoing a decline in population due to the impacts of a change in the timber industry and dairy deregulation.

In 2003, a development boom began to emerge across Australia and the excitement that was initiated by the Baby Boomer generation had a substantial impact on all residential, rural residential and rural land holdings across the shire.”

72. The HDS 2006 also included the following analysis of “Rural lifestyle housing” (p 26):

“The problem with the utilisation of land areas of 100 Ha for generally dwelling construction is that the land available for agricultural activities requiring larger parcels is becoming limited and very expensive. Due to this rise in land value, the purchase of land for traditional agriculture is no longer viable, as a greater return is being realised from the subdivision and sale of the land.”

73. The HDS continued (pp 28-29):

“The development concessions available and the subdivision of lots to obtain a dwelling entitlement have resulted in a progressive change to the agricultural landscape in Gloucester Shire. The traditional farms that have been impacted by government policy and economic change are now developing as residential lots with agriculture as a supplementary activity. This agricultural change has fragmented traditional agriculture; however is allowing the emergence of a variety of agricultural industries to develop as indicated in the Local Environmental Study.

Rural housing is developing and is taking a number of forms, from weekend occupation of caravans and rural sheds to the construction of large homes and entertaining facilities. An emergence of home business operations is occurring as people are opting out of city life and running businesses partly from the rural home. Other permanent business opportunities are growing in the boutique agricultural sector and in bed and breakfast, farm stays and tourism ventures.

New rural housing does have the draw back of conflicts with agricultural activities as to times of operation of machinery, fertilizer spreading, spray control and burning off of vegetation. Generally complaints have been received by Council from new residents who have purchased land for life style reasons and have not recognized the right to farm principle. These complaints are very small in number.

The positives of new rural housing is that rural areas that experienced a decline in population have been revitalized by new residents who are adding to rural activities, joining the rural fire service and participating in local activities in th[eir] respective community groups. This revitalization of rural communities is a positive transition.”

74. Mr Darroch observed that, according to the HDS 2006, the location of future land release areas for the kinds of “lifestyle” farms/dwellings to which the strategy refers is to the south-east of the Gloucester village, and directly to the north of the proposed mine site, which gives an indication of the likely preferred uses in these areas.

75. Mr Darroch further observed that the change from historically agriculture on large lots towards the rural lifestyle agriculture of the “tree changers” is also commented upon in the Agricultural Strategy for Gloucester Shire 2015 (“GAS 2015”) which notes that “[t]here are a large number of hobby or life-style farms in the Shire. This is primarily the result of retirees and some life-style change people moving to the area because of its attractive climate, scenery and location”(p 13). Mr Darroch identified that this “confirms the changing trends from large lot cropping and grazing to rural lifestyle land use, which contributes to an understanding of the ‘likely to be preferred uses of land in the vicinity of the development’”. The GAS 2015 also emphasised the “clean and green environment” could be a marketing attribute both for Gloucester tourism and agricultural businesses (pp 16-17).

76. Mr Ryan agreed with Mr Darroch’s comments on the GAS 2015 that hobby farms and small scale farms had both positive and detrimental effects in the Shire.

77. Mr Darroch further considered that the tourism uses described in the GAS 2015 and HDS 2006 were likely preferred uses with a propensity to grow in the area.

78. In this connection, the Destination Management Plan for 2015-2018 identified tourism as a key component in creating a strong economy and noted that a key outcome was “an improved quality and number of tourism facilities, products and operators” (p 4).

79. The planners agreed, and I find, that the likely preferred uses, having regard to the land use trends in the vicinity of the Rocky Hill Coal Project, include: agri-business and agriculture; rural dwellings and farm stays; large lot residential dwelling houses; tourism accommodation and tourism operators, including agri-tourism; and residential and non-residential uses associated with the Gloucester township.

80. Although Mr Ryan added mining as a likely preferred use, this was rejected by Mr Darroch. The requirement for the consent authority to examine the likely preferred uses under clause 12 of the Mining SEPP only arises for development that is otherwise permissible with consent under the Mining SEPP. If the fact that a mining proposal were permissible with consent was enough to lead to a conclusion that mining is a likely preferred use, the consideration and balancing process provided for under clause 12 would have little work to do. Mr Darroch stated, in this regard:

“[I]f it were sufficient for permissibility of a use to lead to a conclusion that the use is a Likely Preferred Use, there would be no need for the SEPP to refer to land use trends or preferred uses, which necessarily makes DR’s [David Ryan’s] argument circular.”

81. I agree that mining should not be considered to be a likely preferred use in the vicinity of the mining merely because the Mining SEPP makes mining permissible with consent in the zones in the vicinity of the proposed mine.

The impact of the proposed mine on the likely preferred uses

82. Paragraph 12(a)(ii) of the Mining SEPP requires consideration of whether the proposed mine is likely to have a significant impact on the likely preferred uses in the vicinity of the proposed mine. The Minister and Gloucester Groundswell contended that the Rocky Hill Coal Project would have significant visual impacts, amenity impacts (by reason of the noise and air quality impacts) and social impacts on the likely preferred uses. GRL contended that the design and operation of the Rocky Hill Coal Project, and the mitigation measures GRL proposes, will ensure that the proposed mine will not have a significant impact on the likely preferred uses. I analyse the visual, amenity and social impacts in successive sections of the judgment below. For the reasons I give below, I find that, by reason of the visual, amenity and social impacts, the Rocky Hill Coal Project will have a significant impact on the likely preferred uses in the vicinity of the proposed mine.

The incompatibility with the existing, approved or likely preferred uses

83. Paragraph 12(a)(iii) of the Mining SEPP requires consideration of any ways in which the proposed mine may be incompatible with any of the existing, approved or likely preferred uses. Subclause 12(c) of the Mining SEPP requires an evaluation of any measures proposed by the applicant to avoid or minimise any incompatibility found under cl 12(a)(iii).

84. The Minister and Gloucester Groundswell contended that the Rocky Hill Coal Project will be incompatible with existing, approved and likely preferred uses in the following ways: the adverse impact on the rural character of land in the vicinity; the adverse impact on the residential and rural-residential uses in the vicinity; the adverse impacts on the agricultural uses in the vicinity; and the adverse impacts on tourism uses in the vicinity. The Minister and Gloucester Groundswell contended that the measures proposed by GRL will not avoid or minimise to an acceptable degree the incompatibility of the Rocky Hill Coal Project with the rural character and the residential, rural-residential, agricultural and tourism uses in the vicinity of the proposed mine.

85. GRL contended that the measures it proposed to mitigate the visual, amenity, and social impacts, including the amenity barriers to minimise visual and noise impacts, and the proposed conditions of consent, will ensure that the Rocky Hill Coal Project is not incompatible with the existing, approved and likely preferred uses in the vicinity of the proposed mine.

86. I address the visual, amenity, and social impacts of the proposed mine in successive sections below. For the reasons I give below, I find that the Rocky Hill Coal Project, by reason of its visual, amenity and social impacts, will be incompatible with the existing, approved and likely preferred uses in the vicinity and that the measures proposed by GRL will not avoid or minimise this incompatibility.

The comparative public benefits of the mine and other land uses

87. Subclause 12(b) of the Mining SEPP requires an evaluation and a comparison of the respective public benefits of the proposed mine and the existing, approved and likely preferred uses of land in the vicinity of the proposed mine. GRL contended that the Rocky Hill Coal Project will provide public benefits in terms of an economic benefit to NSW in order of $224.5 million, in net present value terms, over the life of the mine; employment opportunities in the local community, with GRL expressing a desire to have 75% local employees; and economic opportunities for local suppliers, with GRL expressing a desire to spend 74% of total non-wage operational expenditure in the Taree-Gloucester area.

88. The Minister and Gloucester Groundswell contended that the claimed public benefits of the Rocky Hill Coal Project are uncertain and have been substantially overstated by GRL. In comparison, the Minister and Gloucester Groundswell contended that the public benefits of the existing, approved and likely preferred uses, if left unaffected by the proposed mine, are certain and will be substantial. Gloucester Groundswell also contended that the proposed mine will have significant public disbenefits by reason of the direct and indirect greenhouse gas emissions attributable to the mine, contributing to climate change.

87. I address the public benefits of the mine and other land uses below. For the reasons I give below, I find that the public benefits of the Rocky Hill Coal Project have not been proven to outweigh either the public costs of the proposed mine or the public benefits of the existing, approved and likely preferred uses in the vicinity if those uses were left unaffected by the proposed mine.

The visual impacts of the mine

90. There was some disagreement between the parties’ experts on visual impacts, Mr Wyatt for GRL and Mr Moir for the Minister, as to the methodology that should be employed to assess the visual impacts of the proposed mine, including the applicability in Australia of the UK Guidelines for Landscape and Visual Impact Assessment. Nevertheless, in the end, there was general agreement on the approach that should be followed in order to assist the visual impacts of the Rocky Hill Coal Project. This involved:

1. an analysis of the existing visual environment to determine the baseline against which the visual impacts of the proposed mine are to be assessed;

2. a viewpoint analysis to identify sites likely to be affected by the proposed mine;

3. an assessment of the extent of the visual impacts of the proposed mine on the viewpoints, including the visual impacts during the life of the mine and, after completion of mining, the cumulative visual impacts of the mine and the night lighting impacts of the mine; and

4. an assessment of the extent to which the visual impacts are mitigated by the proposed mitigation measures.

The existing visual environment

91. Analysis of the existing visual environment includes identification and appraisal of the visual catchment, visual quality, landscape character, visual sensitivity and landscape values.

92. The visual catchment or viewshed of the proposed mine is the study area for the visual impact assessment. The viewshed is the area that may potentially be visually affected by the proposed mine. Mr Wyatt explained that the viewshed is not the same as the extent of visibility, as it might be possible to see components of the mine from areas outside the viewshed. Rather, the viewshed is the area from which there could be a visual impact.

93. Defining the viewshed is based on the elevations of the components of the mine and the parameters of human vision. Mr Wyatt noted that the town of Gloucester and the surrounding rural area in which the proposed mine is to be located is a landscape that includes both natural and man-made elements. In this type of landscape, the viewshed is defined by a distance at which the largest element of the mine would be an insignificant or negligible element in a viewer’s field of view. The central field of view in human vision is approximately 10 degrees (15 degrees whilst sitting). An object which takes up less than 5% of this 10 degrees cone of view may be discernible. However, it is an insignificant element in a landscape which has other signs of human modification.

94. Mr Wyatt said that the viewshed for the mine is based on a distance at which a 50m visual barrier takes up 0.5 degrees of the vertical field of view. The vertical field of view is between 10 degrees to 15 degrees. Therefore, the viewshed of the mine would extend to a point at which a 50m high exposed face of the mine earthworks will take up less than 5% of the normal vertical field of view (i.e. 0.5 degrees). The distance of 6km was used by Mr Wyatt to define the edge of the viewshed or study area for this visual assessment.

95. Mr Wyatt noted that within a viewshed, differing zones of visual impact can be determined based upon the distance of the viewer to the exposed face of the largest visual component of the mine. The visual impact of the mine at 6km is obviously less than the visual impact of the mine seen from a distance of 0.5km, as the apparent height and scale of the mine changes as a person moves nearer or further away.

96. Mr Wyatt noted that at 6km, a fully visible face of the mine earthworks 50m in height would be approximately 0.5 degrees in vertical angle, and this is defined as the limit of the viewshed. Between 1km to 3km, there would be a visually noticeable visual impact where the face of the visual barrier would be visible in the landscape in most lighting conditions. The landscape between the view and the mine can reduce visual impact, more so if vegetation is closer to the viewer. Between 0.5km to 1km, a visually prominent visual impact occurs where the exposed faces of the mine earthworks have increased visibility and are visually prominent in the landscape. Vegetation is less effective at screening the mine, unless the vegetation is in close proximity to the viewer. At less than 0.5km, a visually dominant visual impact would occur where the component of the mine visible at this distance would dominate the landscape. Vegetation, to be effective as a screen, must be located immediately adjacent to the viewer.

97. The visual quality of the landscape refers to the value of the landscape to the community. Mr Moir explained that scenes of high visual quality are those which are valued by a community for the enjoyment, sense of place and improved amenity they create. Conversely, scenes of low visual quality are of little value to the community, with a preference that they be changed and improved, often through the introduction of landscape treatments. Mr Moir explained that the assessment of the visual quality of the landscape has regard to the following parameters:

“- visual quality increases as relative relief and topographic ruggedness increases

- visual quality increases as vegetation pattern variations increase

- visual quality increases due to the presence of natural and/or agricultural landscapes

- visual quality increases owing to the presence of water forms in the landscape (without the water becoming a featureless expanse) and related to water quality and associated activity.

- visual quality increases with increases in land use compatibility.”

98. Visual sensitivity is the measure of how critically a change to the existing landscape is viewed by people from different areas. Mr Moir explained that the assessment of visual sensitivity is based on the number of people affected, land use within the view and the distance of the viewer from the proposal. In considering the sensitivity of the receptor, two factors are considered: (a) the susceptibility of the receptor to the type of change arising from the specific proposal and (b) the value attached to the receptor. The magnitude of sensitivity is affected by: the size and scale of the effect, the geographical extent of the area affected, the duration of the effect and its reversibility.

99. Mr Moir explained that sensitivity assessment can be supported using a matrix approach. High, moderate and low ratings can be assigned to refer to the degree of visual sensitivity of a particular land use to a visual impact within a particular distance of that use. For example, Mr Moir assessed that residential uses, whether residences in a township or rural residences, would have a high visual sensitivity within 0km to 2km and within 2km to 4.5km, moderate visual sensitivity within 4.5km to 7km and low visual sensitivity at greater than 7km. Mr Wyatt agreed that the visual sensitivity is always considered to be high for residential receptors.

100. Mr Wyatt adopted a different approach of assessing landscape sensitivity by reference to landscape units. Landscape units are based on the physical characteristics of the area within the viewshed. The characteristics that assist in defining the landscape units include geology, vegetation, topography and drainage patterns, as well as the extent of man-made modifications and urban development. Mr Wyatt identified three landscape units within the viewshed of the mine. These are:

• Gloucester Valley Floor – farmland: This is the landscape unit on which the mine would be sited and comprises the majority of the land within the viewshed. The relatively gentle undulations and the extensive clearing has created an attractive rural setting with the occasional rural farm residences.

• Gloucester Valley Floor – urban/rural residential areas: The urban areas of Gloucester as well as Avon River, Forbesdale and Thunderbolt Estates are located on this valley floor.

• Gloucester Valley ranges: The ranges to the east and west define the Gloucester Valley and are typically well forested.

101. Mr Wyatt assessed the sensitivity of these landscape units within the viewshed of the mine to undergo change from the mine. He found:

1. Gloucester Valley Floor – farmland: Medium sensitivity. This unit is man-modified, contains other infrastructure and mining and is not as topographically dramatic as the escarpments on either side of the valley.

2. Gloucester Valley Floor – urban/rural residential areas: Low-medium sensitivity. This landscape unit contains many man-made elements and alterations. Abundance of built form and other visual elements lessens the sensitivity of these areas.

3. Gloucester Valley escarpments: High. The escarpments define the valley and are the major attraction to locals and visitors travelling along The Bucketts Way. The presence of the open rural area in the foreground and their forested slopes increases the attractiveness of these escarpments.

102. In oral evidence, Mr Wyatt accepted that the high percentage of survey respondents who indicated that they were concerned about the visual impacts of the proposed mine suggested that there was a high degree of sensitivity amongst residents and other persons who responded to the survey. Mr Moir similarly considered that survey information of this kind reflected the high value that the community placed in the scenic amenity provided by the landscape surrounding the town of Gloucester.

103. The landscape values refer to the relative value attached to individual elements of a landscape. Mr Moir explained that:

“Assessment of landscape values considers the relative value attached to individual elements of the landscape based on how they are perceived by a community, local area, nation or by the international community. Evidence of how a landscape is recognised can be observed in statutes and local planning documents, historic and cultural elements (location and aspect of built forms in the landscape, songs, art, desire lines), tourism activities and promotional material indicating value attached to the identity of the particular area.”

104. Mr Moir explained that landscape values can be indicated through factors such as:

“- Landscape quality – this refers to the intactness of the landscape from visual, functional and ecological perspectives and its condition.

- Scenic quality- this relates to aesthetic values, sense of place and other intangible qualities.

- Rarity – this refers to the value of the landscape due to unique elements, features or attributes.

- Representativeness – this refers to the landscape being a good example of its type.

- Conservation interests – this relates to the presence of features that indicate that the landscape has value in its own right.

- Perceptual qualities – this involves perceptions or experiences of the area, such as experiences of being in the wilderness or tranquillity.

- Community consensus – this relates to opinions as expressed by the public on the importance of the landscape.

- Cultural association – this refers to the association of particular people, artists, writers or events in history that contribute to perceived landscape value.”

105. Mr Wyatt agreed in oral evidence that, when assessing visual impact, it is important to have an understanding of the subjective viewpoints or perceptions of those who will see the proposed mine, and that these are matters of significance in the visual impact assessment. Further, to the extent that a place is recognised for its landscape characteristics or scenic quality across geographical and cultural boundaries, this is relevant to the value that is placed on the landscape.

106. Mr Wyatt also said that, to the extent that indigenous communities placed particular value on the landscape, this “undoubtedly… would increase the value of the landscape” and that documents indicating there is a cultural heritage associated with the area, both from an indigenous and non-indigenous background, are relevant to inform the visual assessment. Similarly, Mr Moir said that where there are “any cultural values whether they be Aboriginal or European … they have to be taken into consideration, and they do contribute to the sensitivity of the landscape”.

107. The visual impact experts assessed the landscape values in the catchment. Dr Lamb, who prepared the historic heritage assessment in the amended EIS, found:

“a. The Gloucester Basin section of the valley is of moderate to high aesthetic quality as a result of the interaction between the distinctive geological formations and the cleared, rural lands of the valley floor.

b. The Gloucester Bucketts are of high aesthetic significance and landmark quality… and have also been the inspiration for artistic achievement and were mentioned in historical and commemorative accounts of the values of the place. They are important to tourism and the image of the setting of Gloucester and of local significance.’ (pp 12-12.)”

108. Mr Moir addressed many of the factors that indicate landscape values. In relation to scenic quality and rarity, Mr Moir found:

“After assessing the landscape character of Gloucester and its setting, it is my opinion that the setting of Gloucester is both unique (rare) and of high scenic quality. The landscape formations of the dramatic and unusual Bucketts Ranges and furrowed slopes of the Mograni Ranges combined with the mosaic landscape patterns of undulating farmland interspersed with the vegetation of the Gloucester and Avon Rivers as they move towards their junction on the valley floor, involve a combination of landscape elements that cannot be experienced elsewhere in the Gloucester Basin. These elements would have contributed to the original settlers choosing this location to site the town.”

109. Further, Mr Moir says as to scenic quality:

“In my view the surrounds of the mine site have a high scenic quality that extends from the north of Stratford through to the northern side of the town of Gloucester. While the area extending from Wards River to Barrington all have a scenic quality, Lamb fails to recognise that the area as indicated on the figure has a particularly distinctive and high scenic value possessing a combination of landscape features that are not present throughout the Gloucester Basin. In my view, the area surrounding the proposed mine site is a unique and distinctive setting, given the presence of the monolithic Bucketts Range which is both unique and imposing, particularly when viewed in its juxtaposition with the human scale of the town. The Bucketts Range and its surrounding scenery is clearly the dominant element within the surrounding context.”

110. As to cultural association, Mr Moir found:

“It is an emotive and iconic landscape and the juxtaposition of the dramatic Bucketts with the rolling pasture was remarkable enough to feature as the subject of well-known impressionist and leader of the Heidelberg School, Arthur Streeton, and late 18th century Australian artist Thomas Boyd (amongst others).”

111. As to community consensus, Mr Moir referred to how the landscape is viewed in the planning instruments and strategies. Mr Moir noted that the land surrounding Gloucester was rezoned in GLEP 2000 for the purpose of environmental protection. When the strategic planning and zoning were revisited following completion of the 2005 Local Environmental Study, the environmental conservation zones around town were extended to the south. The 7(d) zone was converted to E2/E3 zones, which have zone objectives as follows:

“Zone E2 Environment Conservation

- To protect, manage and restore areas of high ecological, scientific, cultural or aesthetic value.

- To prevent development that could destroy, damage or otherwise have an adverse effect on those values.

Zone E3 Environmental Management

- To protect, manage and restore areas with special ecological, scientific, cultural or aesthetic value.

- To provide for a limited range of development that does not have an adverse effect on those values.

- To conserve biological diversity of native vegetation corridors, and their scenic qualities, in a rural setting.”

112. Mr Moir noted that the majority of the proposed Rocky Hill Coal Project sits within the E3 Environmental Management zone. Mr Moir noted that the Gloucester Shire Council submission in 2013 to the Rocky Hill Coal Project, highlighted as grounds of objection that: “The proposed mine compromises Council’s ongoing intent to protect the scenic qualities of the town of Gloucester from inappropriate development, as specified in the Gloucester Local Environmental Plan 2010.”

113. Mr Moir noted that community consensus was reflected in the responses to surveys of the community conducted by the former Gloucester Shire Council, in response to the original EIS submission in 2013. Around 80% of survey respondents opposed the mine, with over 75% concerned about impacts on visual amenity, water, dust, noise, agriculture and town character. In response to the overwhelming majority of dissent in the community, the former Gloucester Shire Council voted to oppose the development of the mine.

114. Mr Moir noted that Gloucester Shire Council’s submission in 2013 stated that:

“There is a strong sense of place and connection of Gloucester residents to their local area. Sense of place is comprised of the meanings, beliefs, symbols, values and feelings that individuals or groups associate with a particular locality. Gloucester residents, whether living in the area for generations or newly arrived, have developed strong connections to this area. That sense of place has been challenged by the potential significant changes that may result as a consequence of this large scale extractive industry activity. Each major proposal has caused psychological stress for individuals in our community.”

115. Mr Moir noted that in August 2016, Mid-Coast Council submitted a comprehensive report objecting to the amended proposal on the same grounds as the objection to the original proposal. The 2016 Mid-Coast Council submission noted that: “The number of submissions the Department of Planning and Environment received in response to the 2013 Rocky Hill submission, correlated with the results of the former Gloucester Council, was 1399 opposing the mine and 345 in favour.” In response to the amended mine proposal in 2016, 2634 individual submissions were received by the Department of Planning and Environment during the public exhibition phase. Of these submissions, 2376 were objecting to the proposal. 72% of submissions opposed to the mine listed visual impacts as a key reason for their objection. Mr Moir noted that in October 2017, the newly elected Mid-Coast Council voted again to maintain the objection to the proposed mine, reiterating the statement made by the Council administrator, Mr John Turner in 2016, that “this coal mine proposal is simply in the wrong place” and is “simply too close to residential areas”.

116. Mr Moir drew the conclusion from these consistent objections to the proposed mine by Gloucester Shire Council, Mid-Coast Council and members of the community that the visual landscape forms a significant part of the character of the Gloucester town and region and is highly valued by the community and the many visitors to the area. There is a significant concern amongst the community that there will be a negative impact on the perception of the town, its character and its economy if the Rocky Hill Coal Project were to proceed.

117. Mr Moir opined that, having regard to the Gloucester Shire Council, Mid-Coast Council and other agency and community submissions, it is clear that the proximity of the proposed mine to the town of Gloucester, and in particular its relationship to key character elements that dominate the setting of the town (i.e. The Bucketts and Mograni Ranges and the Avon River floodplain), is a significant concern for the Gloucester community and a threat to the values that inform their connection with the landscape and sense of place.

631. Mr Rajaratnam said that the lower bound estimate of supplier premiums to NSW and local suppliers arising from a new mine is zero based on competitive markets where suppliers can readily respond to changes in demand for their services (Rajaratnam report, [4.14]).

632. Mr Rajaratnam estimated the upper bound of supplier premiums using a computer generated equilibrium model of the Australian economy. He found:

“The upper bound estimate of supplier premiums is estimated using a computer general equilibrium model of the Australian economy, CIE-REGIONS. An increase in mining production of $100 million in NSW by a new mine (not mine specific) results in expenditure of $35 million on intermediate inputs:

- $23.5 million sourced from NSW local suppliers

- $6.5 million sourced from interstate

- $5 million imported from overseas.” (Rajaratnam report, [4.15]).

633. Focusing on the producer surplus to suppliers of the Project, Mr Rajaratnam found:

“The producer surplus to local suppliers of the new mine (the red triangle in chart 4.1) was estimated based on the direct impact and short-run supply elasticities. That is, suppliers gain by being able to charge a higher price to service the additional mining activity due to the Project. Based on the modelling undertaken by my team using the CIE-REGIONS model, the producer surplus (economic benefit) to NSW suppliers created by additional mining activity is:

- approximately 0.01 per cent of expenditure on locally sourced intermediate inputs

- approximately 0.007 per cent of total expenditure on intermediate inputs sourced locally, interstate and overseas.

For example, if a new mine spends $100 million on intermediate inputs, this implies the economic benefit to NSW suppliers supplying to the new mine is $7 000.” (Rajaratnam report, [4.17]-[4.18]).

634. Mr Rajaratnam concluded:

“If I adopt the non-wage operational expenditure profile presented in table 5 in Stephen Brown’s report (assuming that these all relate to intermediate inputs), this equates to supplier benefits of $2.86m (in NPV terms) based on the estimate that 0.007 per cent of expenditure on intermediate inputs is a benefit to suppliers.” (Rajaratnam report, [4.19])

635. Mr Brown accepted that his modelling exercise to estimate supplier benefits was “so shrouded in uncertainty that Mr Rajaratnam’s estimate is just as valid” as Mr Brown’s estimate (Transcript, 22/08/18, pp 536-537).

636. I find that any economic benefit to suppliers by achieving higher surpluses through supplying to the Project will be small, in the order of magnitude of Mr Rajaratnam’s estimate $2.86 million (in NPV terms). It may even be that there are no supplier benefits, as the DAE 2016 report concluded. Mr Brown’s inflated figure of $408.7 million (in NPV terms) is unreliable and unproven. Mr Brown’s inputs and methodology are uncertain and not able to be tested or verified. A number of inputs seem plainly wrong. I accept and adopt the critical analysis of Mr Brown’s estimates by Mr Rajaratnam and the Minister in cross-examination, summarised above.

Indirect costs

637. Indirect costs include the net environmental, social and transport costs, net public infrastructure costs and indirect costs to other industries. (Economic Assessment Guidelines, p 15).

638. Environmental and social impacts of mining projects include impacts to air quality, ambient noise, biodiversity, greenhouse gas emissions, groundwater, non-Aboriginal heritage, Aboriginal heritage, surface water and visual amenity. Transport related impacts may occur, such as increased traffic congestion (Economic Assessment Guidelines, p 15). Guidance on how to identify and value environmental, social and transport costs is provided by the Technical Note Supporting the Guidelines for the Economic Assessment of Mining and Coal Seam Gas Proposals (April 2018) (“Technical Notes”).

639. The DAE 2016 report quantified the net environmental, social and transport costs as $9.9 million (in NPV terms), of which $3.3 million were attributable to the NSW community (p 15-37 and Table 4.6). These figures incorporate the quantified costs associated with air quality ($0.14 million), greenhouse gas emissions ($3.13 million) and noise impacts ($1,854). The impacts to Aboriginal heritage, non-Aboriginal heritage, biodiversity, water, traffic and transport, and visual amenity were not quantified and were considered qualitatively.

640. The DAE 2016 report concluded that the Project would not generate any additional public infrastructure costs for any level of government (p 15-48).

641. The DAE 2016 report did not quantitatively assess whether the Project would cause any indirect costs to other industries in the CBA, but did discuss qualitatively the effects of the Project on other local industries in the LEA (section 5.5). The DAE 2016 report discussed the impact of the Project on agricultural use of land within the Project site, but not on any other land in the vicinity (p 15-61). The DAE 2016 report concluded that the Project “is not expected to have any material effects on tourism and business travel” (p 15-61).

642. The Economic Assessment Guidelines note that a new mining project may impact on the surplus obtained from other industries, such as tourism. The Guidelines suggest that:

“It is preferable if these effects are measured through environmental impacts, where applicable. For example, tourism might be impacted by air pollution and then the most direct way to estimate this impact is to value it through the approach for air pollution” (p 17).

643. The Economic Assessment Guidelines recognise that there may be some unquantified impacts from this approach. Where these are likely to be significant, “consideration should be given to the loss of surplus in these other industries” (p 17).

644. For environmental, social and transport related costs, Mr Brown adopted the figures in the DAE 2016 report for air quality and ambient noise (Brown report, [3.55], [3.69]). Mr Brown took a different approach to apportioning the cost of additional greenhouse gas emissions to NSW. The DAE 2016 report had quantified the costs of the Scope 1 and Scope 2 emissions (but not Scope 3 emissions) generated by the Project to be $9.73 million (in NPV terms). On the basis that the NSW share of the Australian population is 32%, $3.13 million was attributed as a cost to the NSW community (DAE 2016 report, p 15-41). This apportionment accorded with the approach for apportionment of benefits and cost to NSW recommended in the Economic Assessment Guidelines (see, for example, pp 10, 11 (Table 3.4), 12 (Table 3.6) and 15 (Table 3.9) and Technical Note 9 dealing with estimating and costing GHG emissions, pp 48, 49).

645. Mr Brown, however, considered that the DAE 2016 report had overestimated the costs of GHG emissions to the NSW economy. He said that “climate change is a global issue and apportioning of these costs by the NSW population in total Australia population does not fully recognise the global nature of the greenhouse gas issue”. He considered that:

“A more reasonable estimate to apportion the NSW costs of greenhouse gas emissions is to consider the NSW population in a global context (0.1 per cent). When this calculation is undertaken… the costs of greenhouse gas emissions falls to $0.01 million in NPV terms over the period 2016 to 2034 using a 7 per cent real discount rate.” (Brown report, [3.60]-[3.62]).

646. I find Mr Brown’s approach to apportionment of the costs of GHG emissions to be unsound. Mr Brown cites no authority in support. It is inconsistent with the method for apportionment of benefits and costs required by the Economic Assessment Guidelines and the Technical Note. It is also inconsistent with the rationale for including in the estimated costs of GHG emissions of the Project the Scope 1 and Scope 2 emissions (which occur physically in NSW) but not necessarily Scope 3 emissions (which may occur outside of NSW or overseas). Under the Climate Change Convention and the Paris Agreement, Australia needs to account for Scope 1 and Scope 2 emissions that occur in Australia but not for any Scope 3 emissions that occur outside of Australia. Apportionment of Scope 1 and Scope 2 emissions that occur in Australia by the proportion of the NSW population to the Australian population logically attributes the cost of the Scope 1 and 2 emissions to the NSW community.

647. Mr Brown otherwise adopted a zero cost for the impacts that the DAE 2016 report had assessed qualitatively to biodiversity, traffic and transport costs, water (surface and groundwater), Aboriginal heritage, non-Aboriginal heritage and visual amenity (Brown report, Table 7).

648. Mr Brown agreed with the DAE 2016 report that there are no expected additional public infrastructure costs required by either the NSW government or the local council (Brown report, [3.94]).

649. Unlike the DEA 2016 report which only discussed the impacts on other industries qualitatively, Mr Brown sought to quantify the impacts on other industries. In relation to agriculture, Mr Brown limited his analysis to the impact of the Project on agricultural use of land within the Project site, and did not consider other land in the vicinity. He assigned a value of zero for the indirect costs associated with agricultural production (Brown report, [3.105]).

650. In relation to tourism, Mr Brown considered that the conclusion of the DAE 2016 report that there are not likely to be significant impacts on tourism appeared to be reasonable (Brown report, [3.108]). Mr Brown identified that of the visitors to the Gloucester region who were assessed to be statistically significant, all were NSW residents either visiting friends and relatives or holidaying in the region. Mr Brown considered that:

“This implies that, at the NSW level, any adverse impacts on tourism are likely to be zero. This is because if tourism is discouraged in the region because of the Project, a reasonable assumption is that this cohort of tourists would visit other parts of NSW instead resulting in no net change in tourism expenditure across the state.” (Brown report, [3.113]

651. Mr Brown said that any adverse effects relating to tourism are a matter for the LEA, rather than the CBA. He nevertheless considered that some tourism to the Gloucester region might be discouraged by the Project. He estimated a 10% reduction in tourism numbers per annum to the Taree-Gloucester SA3 region, which would imply a loss of $2.4 million in 2016 Australian dollars in NPV terms over the period 2016-2034 using a 7% real discount rate (Brown report, [3.120]).

652. Mr Brown revisited the impact of the Project on tourism in his supplementary report (July 2018). He said:

“…I have found no compelling evidence, based on the nature of tourism in the Gloucester region and the Visual Impact Expert Report, that there will be a significant impact on tourism in the town of Gloucester.

Should there be any adverse consequence to tourism in Gloucester, the likely impacts will be relatively small. For example, using a methodology consistent with a CBA approach undertaken in the expert witness economic analysis report that I submitted on 8 July 2018, an illustrative 10 per cent reduction in tourism numbers would cost the town of Gloucester between $160,000 to $190,000 per annum.” (Brown supplementary report, [5.7]-[5.8]).

653. Mr Brown sought to support his zero estimate on the impact of the Project on tourism on the basis that “there are positives and negatives that would be associated with the mine”. In terms of positives, Mr Brown suggested that the mine would enhance friends and relatives visiting people working in the mine and increase business travel associated with the mine. Mr Brown accepted “of course there may well be negatives”. But he thought that the positives may balance out the negatives, so went with a zero estimate (Transcript, 23/08/18, p 573).

654. I find that the assessments of both the DAE 2016 report and Mr Brown of the environmental, social and transport costs, and the indirect costs to other industries, to be deficient.

655. First, the assessments are dependent on the findings and conclusions of GRL’s expert reports that there will be no, or no significant, environmental and social impacts of the Project. For example, the assigning of a value of zero for the indirect costs associated with visual amenity was based on Dr Lamb’s visual impact assessment that there would be only temporary visual impacts in the short term (Brown report, [3.86]-[3.92] and the DAE 2016 report, pp 15-47 and 15-48).

656. I have found that the assessments of GRL’s experts of the environmental and social impacts of the Project have significantly underestimated the likely severity, extent and duration of the environmental and social impacts of the Project. In particular, I have found that the Project will have significant impacts on visual amenity and social impacts. There has been no economic assessment of the indirect costs if the environmental and social impacts of the Project were to be as significant as I have found they will be.

657. Secondly, the assessments of the impact on and the indirect costs to other industries were limited. In relation to agriculture, both the DAE 2016 report and Mr Brown limited the assessment to the impact of the Project on agricultural use of land within the Project site, and did not consider whether the Project might impact on agricultural uses of land in the vicinity of the Project. Mr Brown accepted that he did not consider the impact of the Project on agri-tourism businesses or small agricultural holdings in the vicinity (Transcript, 23/08/18, p 573). Mr Brown accepted that if families who operated smaller dairies, such the Frasers and the Williams, moved away from the area and nobody took over their dairies, the area would lose the production or the value generated from those business (Transcript, 23/08/18, p 579). Mr Brown did not consider such a loss of production or value in his analysis (Transcript, 23/08/18, p 579). The possibility of a loss of economic benefits associated with small agricultural and agri-tourism businesses was raised by a number of objectors to the Project.

658. In relation to other industries, Mr Brown accepted that if the presence of the mine caused people within industries in Gloucester to move from the region and therefore take businesses out of the area, that would be an indirect cost of the Project to other industries (Transcript, 23/08/18, p 573). Mr Brown accepted that his assessment of the impact of the Project on other industries was based more on assumption than analysis (Transcript, 23/08/18, p 574).

659. In relation to tourism, Mr Brown’s assessment that the indirect cost to the tourism industry in NSW is zero was not informed by any expertise in the tourism industry (Transcript, 22/08/18, p 524) or any empirical research or analysis of individual businesses in the tourism industry in the Gloucester region (Transcript, 23/08/18, p 573).

660. Mr Brown’s criticism of the Destination NSW tourism figures, which had estimated that tourism contributed $51 million per annum to Gloucester, was founded on an assumption that Destination NSW had based their figures on statistics for the Hunter Region of NSW (Brown supplementary report, [3.9]). This assumption was incorrect. Destination NSW’s figures for Gloucester were based on data for the North Coast NSW not the Hunter region (see baseline analysis of Tourism in Mid Coast NSW, p 73).

661. Mr Brown accepted that the tourism industry in the Gloucester region is growing; that it is an industry in which significant amounts are being expended within the entire local government area of Gloucester; and that anything that had an adverse impact on that industry is capable of having a significant economic impact on the entire Gloucester local government area (Transcript, 23/08/18, pp 577-578).

662. Having regard to these deficiencies in Mr Brown’s analysis, although he accepted that the Project would have negative impacts on tourism, his flawed analysis did not accurately quantify the negative impacts and his suggestion that the positive impacts of the Project on tourism would balance out the negative impacts is not supportable.

663. In these circumstances, I find that the indirect costs of the Project to other industries are likely to be much greater than assessed by the DAE 2016 report or Mr Brown, although it is not possible on the evidence to quantify the indirect costs to other industries.

Conclusion on the cost benefit analysis

664. I find that the economic benefits of the Project, assessed by Mr Brown in his CBA, are uncertain and in any event substantially overstated. The total direct benefits of the Project are likely to be much lower than he claimed, because less royalties and company income tax will be paid by GRL. The total direct benefits will be in the order of $20 million (in NPV terms) less than those claimed by Mr Brown. The indirect benefits of the Project will be very small. I find that any worker benefits or supplier benefits will be small, perhaps even none, and nowhere near the inflated values assigned by Mr Brown. On Mr Rajaratnam’s estimates, the total indirect benefits would be in the order of $122 million (in NPV terms) less than those claimed by Mr Brown.

665. Conversely, the total indirect costs of the Project are likely to be greater than those assessed by Mr Brown. Environmental, social and transport related costs are likely to be greater than the low values assigned by Mr Brown, but these cannot be quantified on the evidence. There are likely to be indirect costs to other industries, including the agricultural, agri-tourism and tourism industries, but these also cannot be quantified on the evidence. Certainly, the costs will be greater than the zero value assigned by Mr Brown.

666. The consequence of the significantly smaller direct and indirect benefits and the greater indirect costs will be a significantly reduced net economic benefit of the Project.

667. Although this much reduced NPV of the Project might still be positive, this does not mean that the Project is in the public interest (Economic Assessment Guidelines, p 3). First, there is still considerable uncertainty as to the magnitude of the net economic benefits of the Project. The direct and indirect benefits might be smaller than Mr Rajaratnam estimated and the indirect costs may be much greater than anyone has estimated. The positive net economic benefit might therefore not be large.

668. Secondly, the unquantified impacts of the Project, particularly the visual, amenity and social impacts discussed elsewhere in the judgment, are significant and need to be assessed qualitatively and balanced against the quantified net economic benefits: see Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited at [39]-[41]. I find that these unquantified impacts of the Project should be determinative of the application for consent.

669. Thirdly, issues of distributive equity need to be considered. As explained earlier, there is distributive inequity in the distribution of the benefits of the Project (which are largely economic benefits) and the burdens or costs of the Project (such as the environmental, social and economic costs). This distributional inequity is between members of the present generation (intra-generational equity), such as by affecting different parts of the local community differently and having different impacts on different socio-economic and vulnerable groups. The distributional inequity is also between the present and future generations (inter-generational equity), such as by groups within the current generation receiving economic benefits but future generations experiencing environmental costs (Economic Assessment Guidelines, p 19).

Local effects analysis

670. A local effects analysis (LEA) is intended to be complimentary to the cost benefit analysis (CBA). The LEA translates the effects estimated in the CBA for the NSW community to the impacts on the local communities near the Project site. The LEA identifies and enumerates local effects that have been incorporated in the CBA in order to inform communities, identify local impacts and changes and provide information that will assist in developing mitigation plans and strategies. It is not intended that components of the LEA can be added together to provide a single summary measure or that an LEA measures economic welfare outcomes (Economic Assessment Guidelines, pp 5, 20). The LEA is not intended to capture the full range of effects experienced by local people as a result of the Project, but rather prioritises and analyses the following effects of the Project: effects relating to local employment and income, effects relating to non-labour project expenditure, effects on other local industries, and environmental and social effects (Economic Assessment Guidelines, pp 5, 21).

670. The DAE 2016 report included a LEA (section 5), prepared in accordance with the Economic Assessment Guidelines. The LEA noted that the results of the LEA were not in addition to those in the State level CBA, but rather the results presented were largely already covered in the CBA. The LEA noted that the components of the LEA cannot be added together to provide a single summary measure - each item reported presented a different local effect. The LEA noted that it did not measure economic welfare outcomes (p 15-64).

671. The LEA analysed the local effects of the Project, which were required to be analysed by the Economic Assessment Guidelines, of effects relating to local employment (section 5.3), effects relating to non-labour project expenditure (section 5.4), effects on other local industries (section 5.5) and environmental and social effects (section 5.6).

672. As the Economic Assessment Guidelines require, the LEA did not add together the results from these sections of the effect of the Project on the locality. The results were presented in Table 5.6 (Estimated local effects – site establishment and construction stage) and Table 5.7 (Estimated local effects – ongoing operations). The DAE 2016 report summarised the LEA results as follows:

“Overall, the amended Project is expected to directly employ around 32 FTE persons from the locality during the site establishment and construction stage and 73 FTE per year from the locality during ongoing operations, incremental to the base case. This direct employment is expected to result in a net increase in income of the locality of $0.4 million during the site establishment and construction stage and $1 million a year during ongoing operations, equivalent to 7 and 16 additional FTE respectively (assuming that these individuals would earn the average wage in the locality if they weren’t employed at the Project).

In addition to employment, the amended Project is expected to result in the direct expenditure of $23 million a year in the locality on non-labour inputs during the site establishment and construction stage and $48 million a year in the locality during ongoing operations.

The amended Project also creates external costs to the locality. The largest external cost is expected to be from air quality impacts. The total value of quantifiable external effects to the locality is estimated to be around $1000 during the site establishment and construction stage and $23,000 a year during ongoing operations”. (pp 15-64, 15-65).

674. Mr Brown included a local effects analysis in his report (section 4), but it was not prepared in accordance with the Economic Assessment Guidelines in a number of respects. The LEA was a CBA for the Taree-Gloucester region. Like his CBA for NSW, his LEA sought to estimate the direct and indirect benefits of the Project and the indirect costs of the Project, calculate the NPV of these benefits and costs, and derive the net economic benefit to the Taree Gloucester region (see Table 11). Mr Brown concluded:

“The net benefits of the Project to the Taree-Gloucester region is estimated to be $117.3 million in NPV terms over the period 2016 to 2034 using a 7 per cent real discount rate.” (Brown report, [4.21]).

675. Mr Brown’s LEA involved analysing effects of the Project other than the effects that the Economic Assessment Guidelines state should be analysed; adding together the components of the LEA to provide a single summary measure (the net economic benefits), which the Economic Assessment Guidelines state should not be done; and measuring the economic welfare outcomes (including the indirect economic benefits to workers and suppliers and the net economic benefit to the Taree-Gloucester region), which the Economic Assessment Guidelines state that an LEA is not intended to measure.

676. Mr Brown’s analysis of the direct and indirect benefits and the indirect costs in the LEA suffered from the same deficiencies as his analysis of the direct and indirect benefits and indirect costs in his CBA (addressed above). In particular, his estimates of worker benefits and supplier benefits were based on assumptions and methodologies that were inconsistent with the Economic Assessment Guidelines, uncertain and unproven (as explained above).

677. Mr Brown’s assessment of worker benefits to the Taree-Gloucester region was also based on the assumption, provided to him by GRL, that 75% of workers would reside in or relocate to the Gloucester area (Brown report, [4.5]). That assumption was not proven on the evidence. The Department in its Environmental Assessment Report considered that it was unlikely that the Rocky Hill Coal Project would exceed the proportion of 38% of workers from the former Gloucester local government area employed by the nearby Stratford coal mine (p 72). Mr Brown had noted the Department’s view in his report (Brown report, [2.17]). The annual reviews of Yancoal, which operates the Stratford mine, show that the proportion of local workers employed in the mine has increased in the last five years from the 38% figure, to be 60% in 2016 and 2017, however, the area defined as the local area in which workers reside expanded to include Gloucester, Stroud and Dungog.

678. Mr Brown conceded in oral evidence that he could not see any reason why the percentages of local employees at the Stratford mine would not provide a reliable guide for the potential proportion of local employees in the Rocky Hill Coal Project (Transcript, 23/08/18, p 581). The fact that local employees are already employed at the Stratford mine might mean that they might not be available to be employed at the Rocky Hill Coal Project, which might suggest that the percentage of local employees might be lower at the Rocky Hill Coal Project than at the Stratford mine (Transcript, 23/08/18, p 581).

679. Mr Rajaratnam also questioned whether the Rocky Hill Coal Project will have the assumed 75% of local workers. He considered that:

“While there may be some opportunity to draw employment from local residents from the Mid-coast region, the employment profile (i.e. direct employment) may end up more like the neighbouring mining LGAs, where a large proportion of employment in the mines is filled from outside the local residents.” (Rajaratnam report, [3.30]).

680. If the percentage of local workers is lower than Mr Brown’s assumed 75%, as seems highly likely, his estimate of worker benefits would need to be reduced.

681. I find Mr Brown’s LEA to be unreliable and unhelpful. Contrary to GRL’s submission, because of its deficiencies, Mr Brown’s LEA does not prove that the Project will deliver net economic benefits to the Taree-Gloucester region.

The respective public benefits of the Project and other land uses

682. The second way in which the public benefits of the Rocky Hill Coal Project need to be considered is by evaluating and comparing the respective public benefits of the Project and the existing, approved and likely future uses of land in the vicinity of the Project (under cl 12(b) of the Mining SEPP).

683. The public benefits of the Project have been evaluated above. The public benefits of the existing, approved and likely future uses of land in the vicinity of the Project have not been evaluated, by way of economic assessment, in the same way as the public benefits of the Project have been evaluated.

684. Mr Brown endeavoured to quantify “the economic contribution of tourism to the town of Gloucester”, which he estimated to be within a range of $4.7 million and $5.8 million in 2014 per annum (Brown supplementary report, [5.6]). This estimate was however, flawed, not only for the reasons I have earlier identified, but also because it focused on a different community (the town of Gloucester) rather than the community of NSW (which was the focus of the CBA of the Project) or the vicinity of the Project (which is the focus of cl 12 of the Mining SEPP). There was no other economic assessment of other uses of land in the vicinity of the Project in order to quantify the public benefits of the other land uses. Accordingly, it is not possible on the evidence to evaluate and compare quantitatively the respective public benefits of the Project and the other land uses.

685. In terms of a qualitative evaluation, I have listed earlier in the judgment the uses of land that are existing uses, approved uses and likely preferred uses. These include residential, tourism, agri-tourism and agricultural uses. These uses undoubtedly yield public benefits, including economic benefits. The Project will impact on these uses. For the reasons I have given earlier, by reason of the Project’s visual, amenity and social impacts, the Project will have a significant impact on the likely preferred uses and will be incompatible with the existing, approved and likely preferred uses. As a consequence, the Project will adversely affect the public benefits of the existing, approved and likely preferred land uses.

Balancing the benefits and the impacts of the mine

686. The task of determining the development application for the Project, in essence, requires the Court, exercising the function of the consent authority, “to balance the public interest in approving or disapproving the Project, having regard to the competing economic and other benefits and the potential negative impacts the Project would have if approved”: Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc at [171].

687. The Rocky Hill Coal Project will yield public benefits, including economic benefits, but it will also have significant negative impacts, including visual, amenity, social and climate change impacts and impacts on the existing, approved and likely preferred uses of land in the vicinity of the Project, which are all costs of the Project. Balancing the benefits and costs of the Project is, in the end, a qualitative and not quantitative exercise. I have previously likened it to a process of intuitive synthesis of the relevant factors: Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited at [141]. Forms of economic assessment such as cost benefit analysis, which quantify, monetise and aggregate different factors, assist but are not a substitute for the intuitive synthesis required of the consent authority in determining the development application.

688. I find that the negative impacts of the Project, including the planning impacts on the existing, approved and likely preferred land uses, the visual impacts, the amenity impacts of noise and dust that cause social impacts, other social impacts, and climate change impacts, outweigh the economic and other public benefits of the Project. Balancing all relevant matters, I find that the Project is contrary to the public interest and that the development application for the Project should be determined by refusal of consent to the application.

689. GRL submitted that the location of the coal mine is dictated by the location of the geological resource of the coal. Unlike other types of development, which can be moved elsewhere to avoid or mitigate adverse impacts, the location of a coal mine cannot be changed. GRL submitted that it cannot promote a development that addresses this coal resource and also accommodate every negative impact of doing so (Transcript, 27/08/18, p 846).

690. However, the fact that the coal resource is in the location of the Gloucester valley does not mean that the resource there must be exploited, regardless of the adverse impacts of doing so. A development that seeks to take advantage of a natural resource must, of course, be located where the natural resource is located. But not every natural resource needs to be exploited.

691. A dam can only be located on a river, but not every river needs to be dammed. The environmental and social impacts of a particular dam may be sufficiently serious as to justify refusal of the dam. The proposed hydroelectric dam on the Gordon River in south western Tasmania (later inscribed on the World Heritage List) is an example of a dam with unacceptable environmental and social impacts (considered in the Tasmanian Dams Case, Commonwealth v Tasmania (1983) 158 CLR 1.)

692. Seaside residential development can only be built at the seaside, but not every seaside development is acceptable to be approved. For example, the likely impact of coastal processes and coastal hazards on coastal development, including with climate change, may be sufficiently serious as to justify refusal of the coastal development, as the various courts and tribunals decided in Northcape Properties Pty Ltd v District Council of Yorke Peninsula [2007] SAERDC 50, upheld on appeal [2008] SASC 57; Gippsland Coastal Board v South Gippsland Shire Council (No 2) [2008] VCAT 1545; Myers v South Gippsland Shire Council (No 1) [2009] VCAT 1022; Myers v South Gippsland Shire Council (No 2) [2009] VCAT 2414; and Rainbow Shores Pty Ltd v Gympie Regional Council [2013] QPELR 557; [2013] QPEC 26.

693. Mining development might only be able to be undertaken at the location of the mineral resource, but not every mining development is acceptable to be approved. Fossil fuel reserves underlie the city and the harbour of Sydney, but no longer would coal mining in Sydney be regarded as acceptable, environmentally or socially, as the NSW Land Appeal Court held as far back as 1895 in Re Sydney Harbour Collieries Co (1895) 5 Land Appeal Court Reports 243 (discussed in Tim Bonyhady, “A Useable Past: The Public Trust in Australia” (1995) 12 EPLJ 329 at 333-336).

694. The acceptability of a proposed development of a natural resource depends not on the location of the natural resource, but on its sustainability. One of the principles of ecologically sustainable development is the principle of sustainable use – the aim of exploiting natural resources in a manner which is ‘sustainable’ or ‘prudent’ or ‘rational’ or ‘wise’ or ‘appropriate’: Telstra Corp Ltd v Hornsby Shire Council at [109]. This principle also has an ecological core: use of natural resources needs to be within ecological limits. The use of natural resources should be “within their capacity to sustain natural processes while maintaining the life-support systems of nature” (to use the words of one of the objects of the Environment Protection and Biodiversity Conservation Act 1999 (Cth), although that statute is not directly applicable to this application in NSW).

695. In Hub Action Group v Minister for Planning (2008) 161 LGERA 136; [2008] NSWLEC 116 at [70], I observed that:

“The principle of sustainable use of natural resources involves the exploitation of natural resources in a way which is sustainable in the long-term and which reduces environmental harm. It involves consideration of the effects of use on all natural resources, certainly the effect of the use on the resources the intended subject of the activity but also the effect that the use of those resources might have on the sustainable use of other resources.”

696. In this case, the exploitation of the coal resource in the Gloucester valley would not be a sustainable use and would cause substantial environmental and social harm. The Project would have high visual impact over the life of the mine of about two decades. The Project would cause noise, air and light pollution that will contribute to adverse social impacts. The Project will have significant negative social impacts on people’s way of life; community; access to and use of infrastructure, services and facilities; culture; health and wellbeing; surroundings; and fears and aspirations. The Project will cause distributive inequity, both within the current generation and between the current and future generations.

697. The Project will be a material source of GHG emissions and contribute to climate change. Approval of the Project will not assist in achieving the rapid and deep reductions in GHG emissions that are needed now in order to balance emissions by sources with removals by sinks of GHGs in the second half of this century and achieve the generally agreed goal of limiting the increase in global average temperature to well below 2ºC above pre-industrial levels.

698. By reason of these various impacts, the Project will have significant impacts on, and be incompatible with, the existing, approved and likely preferred uses of land in the vicinity of the Project.

699. In short, an open cut coal mine in this part of the Gloucester valley would be in the wrong place at the wrong time. Wrong place because an open cut coal mine in this scenic and cultural landscape, proximate to many people’s homes and farms, will cause significant planning, amenity, visual and social impacts. Wrong time because the GHG emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in GHG emissions. These dire consequences should be avoided. The Project should be refused.

Orders

700. The Court orders:

1. The appeal is dismissed.

2. State significant development application No SSD5156 for the amended Rocky Hill Coal Project is determined by refusal of consent to the application.

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Amendments

11 February 2019 - Correction to typographical error at [454]

Decision last updated: 11 February 2019