ENVIRONMENTAL PLANNING AND ASSESSMENT AMENDMENT (SYDNEY DRINKING WATER CATCHMENT) BILL 2017

11 October 2017

2nd Reading Speech


The Hon. ADAM SEARLE ( 20:31 ): I lead for the Labor Opposition in debate on the Environmental Planning and Assessment Amendment (Sydney Drinking Water Catchment) Bill 2017. I state at the outset that the Labor Opposition will be supporting the measures in this bill that secure the supply of electricity to the State. The problem this State is facing is largely one of the Government’s own making—a theme that I will develop during my contribution. The object of the bill before the House is to amend the Environmental Planning and Assessment Act 1979 and the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 to do three things.

First, it will validate the development consent granted on 21 September 2015 relating to the Springvale mine extension. The Labor Opposition wholeheartedly supports this measure.

Secondly, the bill will validate any other development consent that would have been valid under the test as the bill purports to clarify, or in reality will have been changed by, this legislation.

Thirdly, the legislation claims to be clarifying the application of the neutral or beneficial water quality test, the so-called NorBE test, in the case of a development application for the continuation of development under an existing development consent relating to the Sydney drinking water catchment. However, in reality it is not clarifying the application of that test; it is changing the law. It is changing the State environmental planning policy and it is changing the authorising legislation in section 34B of the Environmental Planning and Assessment Act. The Labor Opposition does not support the second and third measures for reasons that I will outline. We will move amendments that seek to remove those provisions from the bill.

It is useful to understand how we came to be in this situation. Springvale is an underground mine about 15 kilometres north-west of Lithgow, near the Blue Mountains where I live. I am happy to declare that interest. It undermines the Newnes State Forest on the edge of the Blue Mountains World Heritage area. It mines 4.5 million tonnes of coal per year, using longwall techniques and supplies coal, as the Minister outlined, to Mount Piper power station, as well as to the Port Kembla coal export terminal. As the Minister also outlined, in recent years several other mines in the area that could have supplied coal to Mount Piper have closed, as has the Wallerawang power station. Springvale is now the only local source of coal for Mount Piper and, with that power station, is the largest local employer. The mine and the power station each employ roughly 300 full-time equivalent staff—600 in total.

That is without taking into account the so-called downstreaming effects of the expenditure of local incomes in the local economy. Taking a conservative estimate, if those jobs were to be taken out of the local economy the direct hit for local businesses would probably be something like $15 million and the multiplying effect could be as high as $100 million. On any analysis, that would be devastating to not only the social fabric of the community but also the local economy.

In 2006 the Environment Protection Authority [EPA] instructed the mine to begin transferring wastewater to Wallerawang Power Station for treatment and reuse to avoid dumping it in the Sydney drinking water upper catchment and the Greater Blue Mountains World Heritage Area. When Wallerawang closed in November 2014, the water treatment plant was decommissioned and the environment protection licence for the mine was altered to allow the water to be discharged instead. Springvale is now licensed to discharge 19 megalitres of water from its discharge point into Sawyers Swamp Creek and the Coxs River—the second largest stream flowing into the Warragamba Dam, which supplies Sydney’s drinking water. This water comes from the coal seams being mined. It is highly saline and contains heavy metals. On a number of occasions the EPA has found Springvale to be in breach of its licence for exceeding limits on various forms of discharge, not only saline.

In 2014-2015 the mine sought and received approval to expand. Because of its location within the Sydney drinking water catchment, the mine was subject to the provisions of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, the so-called Catchment SEPP, which in clause 10 (1) prohibits the granting of development consent unless the consent authority “is satisfied that the…proposed development will have a neutral or beneficial effect on water quality”, which is the NorBE test. The environmental assessment for the expansion found that it would cause a significant increase in the salinity in the swamp and creek immediately downstream and that the discharge would increase the salinity of Warragamba Dam by up to 6 per cent. That is from the Planning Assessment Commission Review report on the Springvale extension project, dated May 2015.

In June 2014 the EPA commented on the environmental assessment for the Springvale extension and said that Centennial had failed to adequately assess the impact of the mining expansion on water quality and, “This is a major concern to the EPA”. The EPA described the contaminant load as a major issue, stating that the potential salt load alone of 7,500 to 13,000 tonnes per annum is “extremely large for a freshwater system”. That can be found in the NSW Environment Protection Authority letter to Howard Reed at the Department of Planning and Environment, dated 3 June 2014.

The Sydney Catchment Authority said at the time that the project should be refused consent unless a requirement were imposed that the discharged water be treated. It was quite obvious that something like a water treatment plant would be needed, even at that point. Without this requirement, the mine would not achieve the test of having a neutral or beneficial effect on water quality in the catchment. It would be downgrading the quality of the water flowing into Warragamba, making it saltier, adding heavy metals to it and contributing to the toxicity of the aquatic environment which, of course, is quite delicate. The approval was granted in September 2015 with a condition that by July 2017—that is, the July just gone—the mine had to significantly reduce the salinity of the water it was discharging into the Coxs River and progressively reduce the acute toxicity of the downstream environment from the measurement, which was 20 per cent above the allowable limits set by the EPA.

The mining company agreed to the time line but it was clear within a year or so that there was no other way to address that development consent without constructing an extremely expensive water treatment plant. I  think Centennial Coal thought, not unreasonably, that it should not shoulder the burden of this alone. Centennial and the operator of Mount Piper, Energy Australia, were in this together. Although the two companies obviously had some difficulties working out the financing arrangements, they nevertheless agreed to a joint venture project and have obtained planning consent for it as well as raised the necessary finance.

However, by July 2017 construction had not commenced and so, as the Minister has outlined, the proponent, Centennial Coal, as the operator of the mine, had to approach the regulatory authorities to seek a variation to extend the deadline for the construction of the water treatment plant until June 2019. That variation was granted.

The Planning and Assessment Commission made it clear in granting the approval that the discharge into Sawyers Swamp Creek and the Coxs River was to be an interim solution only and that action must be taken to treat the water and send it instead to the Mount Piper Power Station. As I indicated, Centennial Coal did gain development consent for the plant, but it has not commenced construction. Pretty much as soon as the Planning and Assessment Commission had approved the consent, environmental group 4nature Inc. lodged a challenge against the mine approval on the grounds that the Planning and Assessment Commission had failed to correctly apply the crucial mutual and beneficial effect test.

As the Minister outlined, the applicant was unsuccessful in the Land and Environment Court before Justice Pepper, but on appeal to the Court of Appeal on 2 August the applicant was successful. The Court of Appeal handed down a unanimous decision that the applicant’s construction was correct and that the construction contended for by Centennial Coal was not correct. The Court of Appeal found that the Planning and Assessment Commission should never have approved the proposed expansion to the Springvale coalmine, because the law prohibits the approval of developments within the Sydney drinking water catchment unless the consent authority is satisfied that it would have a neutral or beneficial impact on water quality.

The crucial question is where to start making that comparison. I understand that Centennial Coal proposed to the Planning and Assessment Commission [PAC], supported by submissions from the Department of Planning and Environment, that the comparison be between the proposed extended mining activity and the current activity, whereas the Court of Appeal found that that was not correct. It would not be quite correct in saying that the Court of Appeal found that the test was to compare the proposed new mining activity with no mining activity, but certainly in assessing the impact on water quality the decision-maker had to take into account that the mining consent was not permanent—in fact, mining was likely to come to an end, probably very shortly. That meant that the decision-maker had to turn his or her mind to a range of considerations, but did not. In the wake of the Court of Appeal ruling, the matter was sent back to the Land and Environment Court.

Interestingly, for some reason Centennial Coal thought that planning issues could be sorted out at that level, and I think at some stage the successful applicant thought so too. But it was quite clear within a reasonably short period that that was not going to fly and that although the court had some discretion about how much time the mine could be given, ultimately the Land and Environment Court y could only decide on what date the mine should be closed. That uncertainty is taking a terrible toll on the people whose livelihoods are being affected and is creating uncertainty in the electricity market, not because there is a shortage of supply but simply because of the risk of a shortage of supply.

At the point when it was clear that the parties and the court were not able to work through the problem through the court process and reach a solution for the benefit of themselves and the State, a responsible and responsive government should have reached out to the parties to the litigation, to the affected workforce and to the community in and around Lithgow as well as to the operator of the Mount Piper Power Station, Energy Australia, to get the parties around the table to try to find a solution that could be effected in short order. The Government should have explored that route, but it did not do so. I know the Government spoke with the two companies, but it did not speak to those who had brought the case or the affected communities and their representatives, the council and the union. I know the local member was reported in the media as talking up a big game, but he did not front his constituents—in fact, the contribution of the member for Bathurst to this debate in public was to float the prospect of invoking the essential services legislation.

What people thought of that proposal I will to leave for the Chamber to decide, but I doubt it was a serious proposal. I note that the Premier had time in her diary to attend the Bathurst car races last weekend. Good luck to her. She declined an invitation to meet with the Lithgow council, nor did she have time to stop off at Lithgow on the way to or from that particular fixture. That is not acceptable. The behaviour of the Government in not addressing this matter with urgency to allay uncertainty has placed the State’s electricity supply in crisis. It has put more than 600 local jobs at risk and it has failed to address the long-running environmental issue of untreated water flowing into the Sydney water catchment.

The bungling of the Berejiklian Government over the validity of the Springvale mine has put jobs, power and water quality at risk all in one go. That is some achievement. The current Premier and her ministry has left the State exposed to an over‑reliance on coal‑fired power by failing, during its six-year term in office, to support the adequate development of new electricity generation projects for New South Wales. It is actually worse than that. Why is the potential closure, or interruption of service, from Mount Piper so potentially devastating for the State of New South Wales? I will explain.

Mount Piper currently provides 10 to 15 per cent of the State’s electricity, or an average of 11 to 13 per cent depending on the day. Taking that offline and out of the market, whatever anybody else says, will place massive upward pressure on the cost of electricity and will stretch the system as we approach summer. Why is it a problem? On Monday, the Leader of the Opposition, Mr Foley, and I visited the site to address the workers. We stood at the entrance to the mine in the shadow of what had been the Wallerawang Power Station. Those opposite privatised the Wallerawang Power Station and sold it to EnergyAustralia. Having purchased the power station EnergyAustralia promptly closed it. It cost New South Wales 1,000 megawatts of energy and placed upward pressure on prices due to a lack of supply.

Mr Jeremy Buckingham: And cost jobs.

The Hon. ADAM SEARLE: I acknowledge that interjection. It cost jobs. It elevated the risk of events such as we are discussing to the rest of the State’s power supply. The fragility of the New South Wales power system and the situation in which we now find ourselves was brought about by the Liberal-Nationals Coalition and their privatisation mania. This side of the House will continue to work to reduce the risk to the State by advocating and promoting the rapid growth of renewable energy for the State and supporting a transition to a clean energy future. There is less risk with a diversity of sources. It includes supporting the objective of Australia as a whole achieving 50 per cent of its energy from renewable sources by 2030. The Leader of the Opposition and I have outlined in public those and other measures.

I note the contributions made by my colleagues in the other place, my local member of Parliament, the member for the Blue Mountains, Trish Doyle, the member for Summer Hill, Jo Haylen, and other Labor members. Given the uncertainty caused by the court case and the inability of the parties to sort it out between themselves with a legally effective result, NSW Labor proposes a commonsense solution to ensure the mine remains open. Labor supports guaranteeing the State’s electricity supply, securing the more than 600 jobs in and around the Lithgow area, and protecting drinking water by accelerating construction of the approved $150 million water treatment plant. On radio a few weeks ago I indicated that if the parties, the State Government and court were unable to solve the problem that NSW Labor would support other necessary measures.

As a matter of logic and common sense, this included having to legislate if necessary to ensure the mine remains open, subject to commitments to guarantee and accelerate the delivery of the necessary protections for our drinking water. We made this clear when we met at the request of the council and the union last Friday and agreed to the invitation to travel to Lithgow this Monday to meet with mine and power station workers and their families. As I have indicated, the Premier had declined requests to meet with the leaders of Lithgow City Council and the representatives of the Springvale workforce, and in desperation they sought the assistance of the Labor Opposition.

This Government sat on its hands for 10 weeks. For 10 weeks it talked only to the companies and not to the workforce or the litigant who brought the case to see whether it could be brought to a satisfactory conclusion. But as soon as word got out that the Leader of the Opposition and I were going to Lithgow to address the workforce and outline our plan to keep the mine open to secure the State’s power supply, the indecent haste with which this Government rushed to the papers on Monday to announce that it was going to do something could not be constrained. At least late is better than never.

The fact is that the Government should have acted earlier to try to sort this out, and it should have done so openly and transparently with everyone affected, not only the companies involved. It was simply unacceptable that the State’s newest and most modern coal-fired power station, Mount Piper, was facing the likelihood of no longer having a supply of coal. As the president of the Construction, Forestry, Mining and Energy Union [CFMEU] in that district, Andy Honeysett, put it, it should not have taken the intervention of the Labor Opposition to prompt the Government into action.

The Hon. Shayne Mallard: But it did.

The Hon. ADAM SEARLE: I acknowledge that interjection but the Government had made no comment earlier. The Opposition had spoken to the Government to ask what it was doing, but “No answer” was the stern reply. The Government certainly did not talk to the workforce, the council or the other litigant involved in the case to try to sort it out. The Government has announced legislation, but that legislation is not properly focused on simply securing Springvale and Mount Piper as it ought to. It also proposes reducing important environmental protections that are now in place, courtesy of the Court of Appeal ruling and the State environmental planning policy for the assessment of projects being renewed or extended in the Sydney water catchment.

Given that the legislation will immediately address the issues of energy security for the State and the 600-plus direct jobs in Lithgow, the Labor Opposition will support these moves by the New South Wales Government. But we will also act in this Chamber to ensure there is no reduction in protection for our drinking water. As I indicated earlier, it simply should not have come to this. The State cannot afford to lose more than 10 per cent of its power supply, but the Government dithered and has now overreached. I understand that the proposals in the legislation have caused people in the community—not only environmentalists but also regular citizens—to be concerned about the quality of our drinking water.

The fact is if we shut down or even put at risk 10 to 15 per cent of the State’s power supply, community support for environmental protection, strong action on climate change and the transition to a clean energy future would be destroyed overnight. This is about energy supply in the immediate term. It is about keeping the lights on and also about preserving several hundred jobs in Lithgow. It is neither fair nor reasonable that the Government is trying to invite the Parliament to make a false choice between either keeping the lights on or protecting drinking water. The fact is that both are necessary, and both can and should be achieved.

Energy Australia and Centennial Coal must accelerate the delivery of the water treatment plant they promised, because clean drinking water is non-negotiable. The problem created by the Court of Appeal decision is that even if the court were to delay the implementation of the final orders and allow Centennial to go back to the planning system, that would take time and lead to further uncertainty and it would push back even further the construction of the water treatment plant which is necessary to protect the water impacted by the past actions of the mine as well as the future activities proposed.

That is also not fair and reasonable. The company will not spend $100 million plus while there is any uncertainty about the approval of the mine, which is rational. I acknowledge that; it is fair and reasonable. Ensuring that the Springvale coalmine stays open is necessary, not only to keep hundreds of workers in jobs and the lights on but also because it is essential for the company to deliver on its promise to construct a water treatment plant. As the Deputy Leader of the Opposition in the other place said in debate on this legislation, the bill should deal only with the Springvale coalmine issue but it goes further and tries to weaken the legal protections and standards of the quality of Sydney’s drinking water catchment. We will oppose this course of action.

New South Wales Labor is proud of its record of improving the quality of Sydney’s drinking water and we are proud of our role in building on environmental protections in this State. If the legislation is passed by this House without the foreshadowed Labor amendments, the next Labor Government will restore those protections to the legislation to ensure that the proper protections for our drinking water are in place. We are committed to reinstating the proper standard of environmental assessment of projects in the Sydney drinking water catchment if the legislation is weakened this evening, although we earnestly hope it is not.

This legislation should deal with one matter only, which is to ensure that Springvale coalmine stays open and the supply of coal to Mount Piper remains flowing. We make no apology for supporting the necessary action to keep the mine open because we understand that, while there should be a transition to a clean energy future, it has to be a managed and just transition, and we will propose a transition authority to ensure that no worker and no community impacted by changes in technology or the energy mix are left behind. As I said, it is a false choice to force the Parliament to choose between keeping the lights on and protecting our precious drinking water. Both objectives can and should be achieved. Playing political games and using this opportunity as a Trojan horse to try to weaken the protection of our drinking water, as the Government proposes, will be condemned by the community.

The DEPUTY PRESIDENT ( The Hon. Trevor Khan ): Order! The debate will proceed without conversations occurring across the Chamber.

The Hon. ADAM SEARLE: As I outlined, I have been reasonably critical of the Government’s handling of this matter, questioning its competence. But we have to question whether the Government knows what the bill before the House does. The Premier’s contribution to this debate was printed in the Australian Associated Press yesterday and in the Australian today. She said:

The legislation will make sure that the water quality has to be at least as good as what was there before the mine so we’re putting in stringent environmental safeguards, which is a plus for the community.

We agree with the Premier. Those comments from the Premier show that she clearly agrees with the New South Wales Court of Appeal. It seems that the Minister opposite and the Minister in the other place do not agree with the Premier because that is not what the bill before this House does. I will come to that. The bill is in two parts. The first part validates the Springvale development consent subject to the environmental protections put in place by the Planning Assessment Commission, including the requirement to treat the salinity, which means invoking the water treatment plant approval. That is done and dusted in schedule 1. There is no issue about Springvale or the impact on the water as a result of schedule 1. But schedule 2 does not clarify the NorBE test. It changes section 34B of the Environmental Planning and Assessment Act and rewrites part of the catchment State environmental planning policy [SEPP] to get around the ruling of the Court of Appeal.

What will that mean? It means that all the mines operating before 2011 and other forms of development activity taking place in the Sydney water catchment that come up either for renewal or expansion will have to make those applications and be subject to the NorBE test, which will increase the level of environmental protections required of those activities. But the standard that the Court of Appeal says has to be complied with is significantly higher than the standard that the Government says was “settled law” prior to the Court of Appeal ruling. What the Government is now seeking to do is a special sweetheart deal for the resources industry to say, “As you have to renew your projects or you seek to expand them, we are going to put a limit on the environmental standards that you will have to comply with to protect Sydney’s drinking water. We are not going to have the standards high; we are going to have them significantly lower. ” That is not fair and reasonable.

The history of environmental protection in this State is one of incremental improvement: Each generation has higher standards than the one before. Surely it is beyond partisan politics that the vital drinking water that we all depend upon should have the highest and strictest standards applied to it. But that is not what the Government is doing. Apparently that is what the Premier wants, but it is not what the Minister and the Government are doing. We do not think schedule 2 is necessary. It is certainly not necessary to secure Springvale or Mount Piper or the 600 local jobs. The Government should understand this and jettison schedule 2. If it thinks the standards of environmental protection need to be explored we will certainly look into that, but do not rush at it like this.

I now turn to the issue of whether the higher standard articulated by the Court of Appeal should have taken the Government by surprise. I have read all the documents I can lay my hands on in relation to this matter. I have read the Land and Environment Court decision and the Court of Appeal decision. The first thing the Chamber should know is that the Court of Appeal is not a bunch of Green, left, weakling activists.

The Hon. Taylor Martin: Are you sure?

The Hon. ADAM SEARLE: I am asked from the other side whether I am sure. I am absolutely certain of that proposition. In so saying, I do no disrespect to the honourable judges.

The Hon. Don Harwin: Who sat on it?

The Hon. ADAM SEARLE: The President, Margaret Beazley, Justice Leeming and Justice Basten. I know what the Minister is going to say. Some things are quite clear when one reads the decision. The Minister referred to the independent Planning Assessment Commission. What a load of rubbish. The Planning Assessment Commission was anything but independent in this process. Interestingly, it gave no reasons for its decision. It was not asked for any, but it certainly did not provide them, despite the magnitude of what it was doing. It simply issued a two‑page outcome. It adopted completely all the propositions advanced to it by Centennial Coal and by the Department of Planning. The court was left in the position of having to infer as to what the Planning Assessment Commission took into account and what it did not.

In the event, that was not too difficult because of the document trail. It was quite clear, as Justice Leeming articulates succinctly and very clearly, that the decision-maker, the Planning Assessment Commission, did not look at the impact on water quality with and without mining activity, both before and after any proposed extension of the mine. To put it in very simple terms that administrative lawyers like to use, it did not do the job it was asked to do by answering all the questions it was asked. When one reads the decision, one finds the flaws in the current Planning Assessment Commission process laid bare. First of all, it does not appear to have had the requisite complete independence from the executive arm of government.

Of course, legally it is really an adjunct of the Executive and it did not produce reasons which could be clearly read and understood to work out whether it was doing its job properly. But returning to the issue of whether it was settled law, the fact is the NorBE test had never before been articulated or called into question in a court so the decisions of the Land and Environment Court and the Court of Appeal are the first legal decisions. It may be true that the Department of Planning was applying it in a way approved of by the Government, but it was not a test that the law required.

I am not an administrative lawyer; I am certainly not a specialist in environmental and planning law but I just do not see how those mistakes could have been made because catchment SEPP, clause 10, which is the test to be applied by the Planning Assessment Commission, was in almost identical terms to section 34B of the Environmental Planning and Assessment Act. The Act requires the form in which the SEPP had to be cast and I think the test was quite clear. I understand that the Government finds the higher standard insisted upon by the Court of Appeal to be inconvenient—and I am sure that those in the resources industry who are facing having to comply with higher environmental standards for our drinking water, as they seek to extend or renew existing developments in the Sydney water catchment, would find it convenient to have to comply with that higher standard. But surely when it comes to our drinking water we should all insist upon the highest standards to make sure that there are no risks.

The Hon. Don Harwin: We have the highest standards of drinking water.

The Hon. ADAM SEARLE: I acknowledge the interjection by the Minister but why is the Government walking away from its own SEPP and its own legislation? The legislation does not clarify; it rewrites. The bill the Government has proposed changes section 34B of the Environmental Planning and Assessment Act and rewrites the catchment SEPP, or the relevant part of the catchment SEPP. The Government is not clarifying it, it is rewriting it. The Government is changing it to provide, on any analysis, a lower standard of environmental protection for our drinking water than the standard the Court of Appeal found was in this Government’s SEPP. I think I am right in saying, but I am not certain, that the NorBE test was put in place by the current Government. It was certainly put in place in 2011 and given that the 2011 election was in March, it is fairly unlikely the Labor Government would have put it in place. The Court of Appeal has upheld it as the highest standard and now those opposite and the Government of this State are proposing to walk away from it and to weaken those protections.

We are all concerned with the fate of the coalmine and the fate of the power workers and we are very concerned for the energy security of the State. The Opposition supports the measures that address that. We support most of what is in schedule 1 to the bill and that is all this Parliament needs to do tonight. Schedule 2 goes much further. It actually does not affect Springvale and its surrounds at all because that is all looked after by schedule 1 and by the environmental protections approved by the Planning Assessment Commission and the water treatment plant proposal. Schedule 2 to the bill goes to the rest of the Sydney water catchment and will have effects far and wide on other matters, other mines and other activities, but not Springvale.

If the Government’s motivation is to secure Springvale and Mount Piper, schedule 2 is not needed. If the Government does not like the cut of the jib of the SEPP, or the way in which the Court of Appeal has interpreted it, let us have an inquiry, a full investigation and a proper public debate about what form the SEPP should be in, and not rush through this legislation as the Government is proposing because it is not needed to secure the objectives upon which all reasonable members in this House will agree. I foreshadow that the Opposition will propose amendments which strip out schedule 2 and those parts of schedule 1 that are dependent upon it. We want no risk to the State’s electricity supply and we make no apologies for standing up for that or for the livelihoods of the workers who are affected, but we will also stand up to protect our drinking water, and the integrity of the Sydney water catchment.

No matter how this Government tries to dress it up, the Court of Appeal has made the first authoritative ruling about what the catchment SEPP means. The Government does not like the ruling and wants to weaken it because it is inconvenient. I invite Government members to think again and to embrace the Premier’s words and the objectives that she says publicly she wishes to achieve. I invite them to accept the Opposition’s amendments in the spirit of cross-party cooperation. We can work on the objectives with which we all agree and consider those with which we cannot agree at a more leisurely pace. The Opposition will move its amendments and invites members to give them earnest consideration. Government members can join the Opposition in passing what is necessary and setting aside that which is not to ensure that our pristine drinking water is protected to the highest environmental standards.