SHCAG Pty Ltd v Minister for Planning and Infrastructure and Boral Cement Limited

The site and its context 5The Berrima Colliery (the colliery) is one of, if not the, oldest operating collieries in the state. Coal extraction is carried out using the bord and pillar method. The colliery is located immediately west of the Wingecarribee River, approximately 7km west of Berrima in the town of Medway and 5km west of the Hume Highway, in the Southern Highlands. Delta Mining Pty Ltd operates the colliery on behalf of the Second Respondent, Boral Cement Limited (Boral). 6The predominant land use over the mining area is rural, where the land has been cleared and farmed. There are patches of native vegetation surrounding the Wingecarribee River. 7The underground workings of the colliery, by virtue of a very long history of operations, extend over a large area north and west of the pit top. Mining occurs in the basal section of the Wongawilli coal seam, generally 132-180m below the ground surface. The coal seam is overlain, in the main, by Hawkesbury sandstone. The coal seam dips generally from north to south, so that water within the mine drains towards the adit and into the Wingecarribee River. The current and historic workings occupy only a part of the much larger area covered by Consolidated Coal Lease 748 (CCL748) (Exhibit 3), which is held by Boral.

Background and the proposal 8The colliery has been in continuous production since about 1926, and earlier workings occurred from 1872. The colliery has been operating under s74 of the Mining Act 1992 (NSW) (Mining Act), which does not require consent for underground mining. The EPA Act was amended in 2005 to repeal clause 74 of the Mining Act, thereby requiring all mining to obtain approval under the EPA Act. Clause 8K of the Environmental Planning and Assessment Regulation 2000 (EPA Regulation) allowed s74 of the Mining Act to operate until its expiry on 30 September 2012. 9The colliery serves as a dedicated source of coal for Boral's Cement Works (the cement works) and is currently the only source of coal for the works. The cement works are located near the colliery, to the south of Berrima, in New Berrima. Production in excess of that required by the cement works is available for sale to a number of other potential customers and for export. 10The proposal includes the following:

• Extension to the underground mining of coal, using a bord and pillar method, in an area about 4 km north from the existing mine portal, within an approved Subsidence Management Plan (SMP) area. Extraction is to be from panels South West 1 and 406, with access and ventilation works in panel 59 (where extraction has recently been completed).
• Continued operation of the Berrima Colliery until 30 April 2020;
• Maximum production rates up to 460,000 tonnes per annum (tpa) of run-of-mine (ROM) coal;
• Operation of existing mining facilities and support structures;
• Transportation of product by road using trucks to stockpiling areas, the cement works and other potential markets;
• Increase the capacity of the Loch Catherine stockpile;
• Provision of a 20 m Asset Protection Zone (APZ) to the Loch Catherine stockpile and the pit-top facilities. The area of the APZ totals 3.74 ha. 11On 20 June 2012, the PAC, as a delegate for the Minister, granted approval to the proposal under s75J of the EPA Act, subject to conditions. 12Currently, the annual production of the colliery is approximately 220,000 tpa of ROM coal. The colliery has produced up to approximately 450,000 tpa and it has the capacity to produce up to 500,000 tpa. The proposed production of 460,000 tpa is required to improve the commercial viability of the colliery. Coal will continue to be supplied to the cement works and forecasts indicate that demand from the cement works may fluctuate between 120-250,000 tpa. 13Modernisation of the facilities and structures of the colliery will be necessary to maintain the existing operations, however any replacement of existing facilities and support structures will be subject to separate applications. The exception to this is the main amenities' septic system, which will be replaced as part of the proposal (Exhibit N, Volume 1, page 19).

Planning Framework 14Boral made a major project application pursuant to the provisions of Part 3A of the EPA Act, to the Minister, through the Department of Planning and Infrastructure (DoPI), for the proposal, known as Berrima Colliery Continued Operations Project, Major Project Application Number MP 10-0172. The proposal was classified as a major project under Part 3A as it is development for the purpose of coal mining (s75B of the EPA Act). 15Pursuant to s75J(1) of the EPA Act, the Minister has power to determine the matter and the Court, on appeal, exercises the same power, pursuant to s39(2) of the Land and Environment Court Act 1979 (NSW) (the LEC Act). 16Sections 75J(2) and (3) of the EPA Act provides: (2) The Minister, when deciding whether or not to approve the carrying out of a project, is to consider: (a) the Director-General's report on the project and the reports, advice and recommendations (and the statement relating to compliance with environmental assessment requirements) contained in the report, and (b) if the proponent is a public authority-any advice provided by the Minister having portfolio responsibility for the proponent, and (c) any findings or recommendations of the Planning Assessment Commission following a review in respect of the project. (3) In deciding whether or not to approve the carrying out of a project, the Minister may (but is not required to) take into account the provisions of any environmental planning instrument that would not (because of section 75R) apply to the project if approved. However, the regulations may preclude approval for the carrying out of a class of project (other than a critical infrastructure project) that such an instrument would otherwise prohibit. 17The use of the discretion available in s75J(3) is adopted from the description of the Court's powers and functions in relation to such a s75L merits appeal from the decisions of Preston CJ in Ironstone Community Action Group Inc v New South Wales Minister for Planning and Duralie Coal Pty Limited [2011] NSWLEC 195 (Ironstone) at [22]-[30] and Gerroa Environment Protection Society Inc v Minister for Planning and Cleary Bros (Bombo) Pty Ltd [2008] NSWLEC 173 (Gerroa) at [41]-[45]. 18The discretion available in s75J(3) of the EPA Act is not unfettered. s39(4) of the LEC Act states, 'In making its decision in respect of an appeal, the Court shall have regard to this or any other relevant Act, any instrument made under any such Act, the circumstances of the case and the public interest'. In Minister for Planning v Walker (2008) 161 LGERA 42 (Walker), Hodgson J held, at [55], that the principles of ESD have become a mandatory relevant consideration as an element of the public interest and the decision maker is bound to consider them. Furthermore, one of the objects of the EPA Act, clause 5(a)(vii), is to encourage ESD. 19Preston CJ held in both Ironstone and Gerroa, the effect of s75J(2) and (3) is that environmental planning instruments which specify relevant matters for a consent authority to consider in determining a development application for consent do not apply in respect of the determination of a major projects application at [25] Ironstone. The Minister, and hence the Court, may, but is not required to, take into account the provisions of environmental planning instruments which specify relevant matters. 20His Honour held, however, that this cannot be achieved with regard to provisions that operate to prohibit the proposal and hence deny the power to approve it. At most, all that can be sensibly done is to ascertain the underlying objectives of those provisions prohibiting the project and consider whether and, if so, the extent to which the project addresses each objective at [44] and [45] Gerroa. 21Accordingly, the environmental planning instruments and policies that we consider we should have regard to in these proceedings (but are not bound to apply) are as follows:

• Wingecarribee Local Environment Plan 2010 (LEP 2010);
• State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 (Drinking Water SEPP) and the Sydney Catchment Authority's Neutral or Beneficial Effect on Water Quality Assessment Guideline 2011;
• The NSW State Groundwater Dependent Ecosystems Policy;
• The Australian and New Zealand Environment and Conservation Council's guidelines for fresh and marine water quality 2000 (ANZECC guidelines).

LEP 2010 22The relevant aims of the plan, at subclause 1.2(2) are as follows: (d) (ii) do not adversely impact on natural systems and processes and the overall quality of Wingecarribee's natural environment, and (d) (iii) retain the critical natural, rural and built environmental landscape elements that make up the scenic and cultural heritage value of Wingecarribee, (j) to conserve the Aboriginal and European cultural and environmental heritage of Wingecarribee, (p) to protect and enhance waterways, riparian land and water quality in the drinking water catchments of Wingecarribee. 23Pursuant to the provisions of LEP 2010, the land overlying the colliery is situated within three separate zones, the RU2 Landscape Zone, the E2 Environmental Conservation Zone and the E3 Environmental Management Zone, as illustrated by a coloured map (Exhibit P). Coal mining is a prohibited activity in all three zones (as the dictionary definition of extractive industries, permitted in the Zone RU2, excludes winning or removal of extractive materials from a mine). While we disregard the provisions that operate to prohibit the proposal and hence deny the power to approve it, we consider we should have regard to the relevant objectives of those zones. 24The relevant objectives of the RU2 Rural Landscape Zone are: · To encourage sustainable primary industry production by maintaining and enhancing the natural resource base. · To provide for a range of compatible land uses, including extensive agriculture. 25The relevant objectives of the E2 zone are: · To protect, manage and restore areas of high ecological, scientific, cultural or aesthetic values. · To prevent development that could destroy, damage or otherwise have an adverse effect on those values. 26The relevant 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 encourage the retention of the remaining evidence of significant historic and social values expressed in existing landscape and land use patterns. · To provide for a restricted range of development and land use activities that provide for rural settlement, sustainable agriculture, other types of economic and employment development, recreation and community amenity in identified drinking water catchment areas. · To protect significant agricultural resources (soil, water and vegetation) in recognition of their value to Wingecarribee's longer term economic sustainability.

Drinking Water SEPP 27The discharge adit of the proposal discharges water into the Wingecarribee River. The Wingecarribee River is part of the Sydney Water Catchment, at clause 7. 28Clause 10 of the Drinking Water SEPP provides: A consent authority must not grant consent to the carrying out of development under Part of the Act on land in the Sydney drinking water catchment unless it is satisfied that the carrying out of the proposed development would have a neutral or beneficial effect on water quality.

Neutral or Beneficial Effect on Water Quality Assessment Guidelines 2011 29Clause 1.4 Principles, includes the following: It is the development proponent's responsibility to demonstrate that a development will have a neutral or beneficial effect on water quality. 30Clause 2.2 includes the following: The SEPP requires consent authorities to refuse approval to new developments under Part 4 of the EP&A Act unless they are satisfied that the proposal would have a neutral or beneficial effect on water quality. Although not specified in the SEPP, the neutral or beneficial effect on water quality guidelines may provide a framework to consider major infrastructure or other projects under Part 3A of the EP&A Act. The Minister for Planning determines these projects and which water quality test will be applied. 31Clause 3.1 includes the following definition of neutral or beneficial effect: A neutral or beneficial effect on water quality is satisfied if the development: (a) has no identifiable potential impact on water quality, or (b) will contain any water quality impact on the development site and prevent it from reaching any watercourse, waterbody or drainage depression on the site, or (c) will transfer any water quality impact outside the site where it is treated and disposed of to standards approved by the consent authority. 32Clause 3.2 includes the following guide for applying the neutral or beneficial effect test: 2. The development will not adversely affect water quality off-site because: a. pollutant loads from the development/activity can be transported to acceptable downstream treatment and disposal facilities without adverse off-site water quality impacts, or b. any water quality issues can be effectively managed on-site so that there are not adverse water quality impacts off-site, or c. there are no indirect adverse impacts on water quality caused, or likely to be caused, by changes to factors that currently affect water quality off-site such as treatment, assimilation of pollutants, or the hydrological cycle (such as changes to flow or flow paths, water courses or riparian corridors). The site of a proposed development or activity, to determine water quality impacts, is the land described in the development application, the Part 5 activity documentation, or where relevant, the project application. Pollutant loads or concentrations for each pollutant leaving a site are measured at the site boundary, or at the point where the pollutant enters a drainage depression, waterbody or watercourse.

NSW State Groundwater Dependent Ecosystems Policy 33Clause 2.3 Types of Groundwater Dependent Ecosystems in NSW includes the following, under Aquifer and cave ecosystems: As well, some micro-organisms in groundwater systems are important because they can exert a direct influence on water quality. Particular microbes (linked to biofilms as well as in pore water) are capable of transforming dissolved nutrients, organic matter and possibly contaminants. The fauna in groundwater may also play an important role in maintaining the physical structure of an aquifer by keeping the pore space free of fine organic matter and grazing on microbial biofilms (Boulton 2000).

ANZECC guidelines 34Section 2, 'A framework for applying the guidelines', includes, at subclause 2.2.1.9, the following: The Guidelines have not been designed for direct application in activities such as discharge consents, recycled water quality or stormwater quality, nor should they be used in this way. (The exception to this may be water quality in stormwater systems that are regard3ed as having some conservation value.) They have been derived to apply to the ambient waters that receive effluent or stormwater discharges, and protect the environmental values they support. In this respect, the Guidelines have not been designed to deal with mixing zones, explicitly defined areas around an effluent discharge where the water quality may still be below that required to protect the designated environmental values. As such, the application and management of mixing zones are independent but very important processes. 35Mixing zones are defined in clause 2.2.2, Box 2.4, as follows: Mixing zones are often defined as explicit areas around effluent discharges where the management goals of the ambient waters do not need to be achieved and hence the designed environmental values may not be protected. In this context, mixing zones are sometimes termed exclusion zones.

Site inspection and public submissions 36The hearing commenced with an inspection of the site and its environs. The Court and the parties travelled by cable railway from the pit top to just outside the portal of the mine, at which point we were able to view the Wingecarribee River Gorge. From this position it was not possible to view the site of the mine discharge, as it is several hundred metres downstream around a bend in the river and not readily accessible. This was followed by a brief inspection of the Loch Catherine stockpile, situated some distance to the southwest of the pit top and separated from the pit top by bushland. 37The Court and the parties then undertook a tour of the wider environs, passing through Berrima, noting the upstream water sampling site at the bridge over the Wingecarribee River, and then travelling north of the mine lease area before travelling south into the lease area along Richards Lane, including briefly visiting the Eagle Rock property. 38At the start of the proceedings, evidence was heard from two resident objectors and a third resident objector later gave his evidence in Medway. The key concern of the residents is the impact of coal haulage, along Medway Road, on their amenity. Their objections to the proposal can be summarised as:

• Noise impacts
• Noise is generated from the operations of the mine and from the trucks hauling coal through the village regularly.
• Traffic impacts
• Medway Road is unsuitable for regular use by heavy trucks and damage to the road pavement and verges has occurred. The trucks conflict with other road users and compromise road safety, specifically in relation to risks to children awaiting for, or alighting from, the school bus.
• Dust impacts
• Dust is generated by the trucks travelling along Medway Road, as the roads from the mine are unsealed and coal dust is emitted from the loaded trucks. The Medway village does not have reticulated drinking water and a particular concern to the residents was the build up of coal dust and dirt within their water tanks. A water filter, heavily coated with black dust, and said to be (which we have no reason to doubt) from the water system of one of the houses was shown to the Court. 39The residents are concerned that the proposal will impact on their property values. 40One resident objector expressed concern that the project approval was only until 2020, as this short time period would not be conducive to investment in upgrading infrastructure (such as construction of a bypass road).

Expert evidence 41Expert evidence on groundwater was provided by Mr Middlemis, on behalf of the Second Respondent and Mr Lee on behalf of the Applicant. Expert evidence on stygofauna and sub-surface groundwater dependent ecosystems (SGDE) was provided by Mr Anink and Mr Middlemis for the Second Respondent and Dr Leijs for the Applicant. 42Expert evidence on river water quality was provided by Mr Paul Anink and Dr Stephen Perrens on behalf of the Second Respondent and Dr Ian Campbell on behalf of the Applicant.

Surface and groundwater impacts 43The groundwater experts agree on the following:

• As a result of coal extraction, voids are created within the mine and water flows from the overlying extensive regional aquifer system in the Hawkesbury Sandstone into those voids. As a consequence, the water table is lowered. Over the history of the colliery, the cumulative effect has been considerable, such that bores to obtain either a stock and domestic water supply or water for irrigation (there are different water quality standards associated with the different uses) have had to be drilled deeper in order access water.
• In locations within one kilometre of the workings, the impacts on groundwater levels would likely preclude a successful irrigation bore and would require a deep stock and domestic bore. The probability of a successful groundwater supply bore is improved with lateral distance from the workings due to reducing drawdown impacts with distance and would likely not materially be affected by mining beyond a two kilometre distance (Exhibit O).
• The experts agree that in addition to the two recently constructed groundwater monitoring bores, identified as B62 and B63, that two further monitored sites be established between the proposal, the Wingecarribee River and Mandemar Creek. They agree on the need for a well-distributed 8 site network of groundwater monitoring bores in total with nested piezometers for measuring groundwater level fluctuations. The network will provide data to reduce uncertainty and validate the groundwater model, which can be used to refine predictions of drawdown impacts.
• The experts agree that the groundwater model in the WMP is at an early stage of development and that further validation is required, including improved monitoring to evaluate the likely range of recharge and related effects. 44Mr Lee says the groundwater studies in the EA demonstrate a poor understanding of the provenance of groundwater recharge/groundwater ingress to the mine and further detailed studies are necessary to adequately manage impacts. He says that a groundwater model will establish a predictive risk analysis of environmental impacts induced by further mining by the input of critical calibrated data such as rainfall, recharge, pumping rates, surface geology, vegetation and hydraulic aquifer characteristics. The NOW requirement for a groundwater model is usual practice for project approvals of this nature. According to Mr Lee, the groundwater model in the WMP is not yet able to reliably predict groundwater levels because the baseline data is insufficient. 45Mr Middlemis states that the doubling of the mine output will lead to an increase in groundwater inflow from 2.83 ML/day to 3.1 ML/day and this represents a 7% increase in groundwater inflow, based on the increase in roof area of the mine. 46Mr Lee says that the predicted increase in groundwater flow associated with the proposed expansion, based on average historic conditions, is questionable, because groundwater ingress from the proposed expansion is poorly understood and it is likely that much higher inflows will be encountered that those predicted by Mr Middlemis, in consequence of both secondary structures (faults, fractures and dykes) and improved aquifer quality (porosity and permeability) that is likely to the north, where the expansion is proposed. 47Mr Lee says that converting coal exploration core holes to determine groundwater yields is not appropriate, as bores drilled in that manner cannot provide aquifer yield information. Mr Middlemis disagrees and says that converting mineral exploration holes provides a cost effective method of establishing a groundwater level monitoring network. 48The stygofauna and SGDE experts agree on the following:
• Stygofauna occurs within the aquifer, despite limited knowledge of the taxa concerned and their abundance.
• Further hydrogeological monitoring and modelling is required to reduce uncertainties and the initial sampling effort (two monitoring bores and six roof drip locations) is too small to obtain a reliable impression of the stygofauna.
• A minimum of 15 stygofauna sampling sites (mix of bores and roof drip locations) would generally be expected to increase the chances of encountering the fauna.
• Whilst it is considered there is a low risk of incremental impacts due to continued mining, there is a lack of information to establish the cumulative impacts of mining to date.

River water quality 49The river water quality experts agree on the following:

• In order to permit the continued safe working of the mine, it is necessary for the mine to be drained, using a combination of natural drainage and pumping, with the water discharged into the Wingecarribee River via a licensed discharge point at the V notch weir at the adit, situated several hundred metres downstream from the mine portal;
• The discharge from the mine has elevated conductivity and hardness, as well as elevated concentrations of cadmium, manganese, zinc and nickel when compared to river upstream water quality, and the river upstream includes elevated concentrations of nutrients and aluminium compared to the mine discharge.
• Existing longer term water quality data suggest that for some parameters there is an improvement in water quality between the sampling point upstream of the mine and that below the mine. Dr Campbell argued that this finding does not permit a conclusion that the improvement is due to the addition of the mine discharge, given that many other factors may have been involved. It does, however, give some support for the view of Mr Anink and Dr Perrins, in relation to those specific parameters, that the discharge has not led to a lowering of standards.
• There is a lack of data to support assessment of the impacts and discharge volumes. 50Dr Campbell says that the discharge water from the mine constitutes pollution in that it exceeds the ANZECC guidelines for 95% ecosystem protection in regard to levels of manganese and nickel. Mr Middlemis acknowledges the manganese and nickel levels in the discharge water, but considers that the discharge water is 'natural' groundwater. 51Dr Campbell is concerned about the very limited nature of the preliminary toxicological data that has been gathered so far. There is no data for fish or algae, and Dr Campbell considers that this deficiency must be addressed. The identity of the Chironomid (bloodworm), which had been tested, was to family level only. Given that different species of Chironomid exhibit different sensitivities to pollutants, Dr Campbell is of the opinion that without knowing the specific identity of the experimental animal, interpretation of the results obtained is difficult.

Submissions 52The Second Respondent submits that continued operation of the existing colliery is important for ongoing employment and investment in the region and for its significant role in supplying coal for production of cement at the cement works. 53The Second Respondent submits that the Court does not have jurisdiction to review the past operation of the colliery.

Findings 54The whole of the mine is required to be dewatered, including all the historically mined components in addition to the new areas, as access to the proposed areas for mining is through the existing mine. As the Court is required to assess the environmental impacts of continued mining, the dewatering of the aquifer over the whole mine workings and its impacts are relevant.

Impacts of the coal haulage route being located along Medway Road 55Medway village is situated on the northern and southern sides of the western end of Medway Road and consists of roughly thirty dwellings, of which approximately fifteen front Medway Road on suburban sized lots, some with a front setback from the road of less than 20m. The village was originally owned by the colliery and used to house the miners, however the properties were later sold. 56The colliery and the stockpile area at Loch Catherine are located at the western end of Medway Road, not far from Medway village. Coal mined from the colliery is transported to the cement works by tri-axle tipper trucks travelling east along Medway Road and Taylor Avenue. The supply of coal to other customers also involves the transportation of coal by tri-axle tipper trucks travelling east along Medway Road and then north or south along the Hume Highway. The coal may be stored and then transported from the stockpile area at Loch Catherine, along the same routes. 57Currently, there are on average 23 truckloads of coal dispatched from the colliery or via the Loch Catherine stockpile area, using Medway Road, per weekday. When the colliery is operating at the proposed coal production rate of 460,000 tpa, it is expected that on weekdays this will increase to a maximum of 66 truckloads (Exhibit N, Appendix E, page 23). The general coal delivery period on a typical weekday will continue to be between 6am and 9pm. This means that there will be 132 truck movements through Medway village each weekday, which is equivalent to a truck movement every 6-7 minutes between 6am and 9pm, as 66 laden trucks travel east along Medway Road and 66 empty trucks return to the colliery, west along Medway Road. 58The Court has carefully considered the written and oral evidence of the resident objectors, which in summary states that the existing noise, dust and traffic impacts of the truck movements through Medway are a significant nuisance. 59The PAC's determination report includes the following in regard to [Medway] road safety (Exhibit L, Folio 916): The Commission notes that the Proponent is required to upgrade Medway Road by widening the road surface, repairing existing damaged sections of the road, upgrading 20m of Liebmans Road (from its intersection with Medway Road) and upgrading nine private property driveways along Medway Road. Further, the Proponent will be required to prepare and implement a Road Transport Protocol. This would include a Traffic Management Plan and Code of Conduct which in turn includes mechanisms to address designated haulage routes, measures to maximise low frequency trucking schedules, a complaints handling procedure, travel speed restrictions and compliance measures. The Commission also notes that the Proponent has committed to a 30km/hr speed limit through the village of Medway. This will ensure trucks pass through the village at an appropriate speed. 60In our opinion, the residents have raised valid concerns over noise, dust and safety impacts and these amenity impacts are caused by the haulage route from the colliery being located along Medway Road, through Medway village. Medway Road, even if it is repaired, widened and maintained and trucks travel at 30km/hr as proposed, is unsuitable for 132 truck movements per weekday because the trucks pass through the village of Medway, creating noise and emitting dust. There is inevitably a conflict between the large number of trucks passing through Medway each day and local traffic and pedestrians. We are not satisfied that the proposed conditions, including the preparation of a Road Transport Protocol, will satisfactorily ameliorated the detrimental impacts caused by 132 truck movements a day through Medway. 61The impact of the proposed haulage route along Medway Road, for a maximum of 132 truck movements per weekday, on the amenity of the residents of Medway, is sufficiently detrimental to warrant refusal of the proposal. 62We are satisfied that the existing 46 truck movements through Medway is having significant impacts on the amenity of the Medway residents and that the haulage route should not be through Medway village. A proposal to use the now disused rail corridor between the colliery and the cement works or to construct a road by-passing Medway may provide a way of addressing this issue, however that is a matter for some future application and it is not appropriate for us to speculate on what might be the outcome of such an application.

Water Management Plan (WMP) 63Part 3A of the EPA Act sets out a process to occur and for the material prepared pursuant to that process to be the subject of consideration, unlike an assessment under s79C in Part 4, which enumerates a list of mandatory matters of consideration. 64Once the project application is lodged and the project is classified as a major project under Part 3A, the Director-General prepares environmental assessment requirements (DGRs), pursuant to s75F(2) and consults relevant public authorities, having regard to the need for the requirements to assess any key issues raised by those public authorities, pursuant to s75F(4). 65The Sydney Catchment Authority's (SCA) letter, dated 24.9.10, to the DoPI in response to a request from the DoPI for input regarding key issues to assist in the preparation of the DGRs (Exhibit K, Folios 78 - 80) included the following advice: As the project has been classified a Major Project to be assessed and determined under Part 3A of the Environmental Planning and Assessment Act, it is not formally subject to the requirements of the Drinking Water Catchments Regional Environmental Plan No 1. Nevertheless, the SCA considers water quality issues should be comprehensively considered in the assessment process and that this planning instrument establishes appropriate assessment criteria. The SCA considers that the environmental assessment of the project should include an assessment of whether the project will have a 'neutral or beneficial effect on water quality'. The EA should include a framework for the mitigation, management and monitoring of water quality impacts during operation and closure activities. The EA should include management measures including existing and/or proposed for avoidance, minimisation, mitigation, remediation and offset measures. The EA should assess the cumulative environmental impacts of all components of the project. This assessment should consider the impacts that have arisen from previous mining activities in the locality. Monitoring The EA should include a minimum of 2 years of baseline data - as specified in the Impacts of Underground Coal Mining on Natural Features in the Southern Coalfields: Strategic Review. The EA should detail the proposed monitoring program - both pre-mining and ongoing. The program should nominate triggers for different levels of impacts. 66The DGRs for the proposal, issued 8.8.10 (Exhibit N, Volume 1, Appendix A), required the following to be addressed by the Environmental Assessment (EA) in relation to surface and groundwater: The Environmental Assessment of the proposal must include: • A detailed assessment of the key issues specified below, and any other significant issues identified in the risk assessment which includes: - a description of the existing environment, using sufficient baseline data; - an assessment of the potential impacts of the project, including any cumulative impacts, taking into consideration any relevant guidelines, policies, plans and statutory provisions (see below [refers to a list of planning instruments and policies, see Exhibit N, Volume 1, Appendix A]); and - a description of the measures that would be implemented to avoid, minimise and if necessary, offset the potential impacts of the project, including detailed contingency plans for managing any significant risks to the environment; • Groundwater and surface water - including: - an assessment of the potential impacts of the project on the quantity and quality of the surface and groundwater resources in the project area, including an explanation of site water balance and groundwater drawdown; - an assessment of the potential impacts of mine water discharge on the Wingecarribee River and its tributaries, paying particular attention to downstream uses of the water; - a description of the measures that would be implemented to prevent adverse impacts on the Wingecarribee River and its tributaries; and - a detailed description of surface water management at the pit-top and Loch Catherine; 67The DGRs for the proposal included a requirement for the proponent to consult with the SCA and that the consultation process and issues raised be described in the EA. 68The EA (Exhibit N) included, at Appendix D, a Groundwater Study prepared by Australian Groundwater and Environmental Consultants Pty Ltd (AGE report). The experts agree that there is a lack of data in the AGE report to support an assessment of the impacts of the proposal. 69The Director-General's Environmental Assessment Report (the report) recommended approval of the proposal, subject to conditions. The report included the following in regard to the AGE report and impacts on groundwater (Exhibit K, Folio 454): Boral argues that Berrima Colliery has been in existence and operation for over 85 years, and as such, it is reasonable to assume that groundwater hydrology is approaching steady-state conditions. That is, the zone of depressurisation around the existing mine workings is likely to have reached close to its maximum extent. Boral also argues that the continuation of mining operations would not significantly increase the total exposed coal seam face (relative to the existing extensive workings) and as a consequence, it is unlikely to significantly increase groundwater infiltration rates. This assertion is supported by the calculations of predicted groundwater inflows to the mine, which indicate roughly a 10% increase over the life of the project, to 3.1ML/day. While the Department accepts that Boral's groundwater assumptions hold merit, the absence of actual monitoring data to calibrate and confirm these assumptions means that Boral's position cannot yet be confirmed. However, the Department also considers that the risk to groundwater hydrology as a result of continued operations is likely to be both low and manageable. The Department accepts that groundwater depressurisation is likely to have approached its maximum extent as a result of historical mining operations, and continued operations are unlikely to significantly increase this. Coal extraction would not move any closer to the more sensitive area, including those along the Wingecarribee River. Any additional depressurisation effects are likely to expand to the north and west, away from the river. Further, the timeframes for mining allow for additional groundwater monitoring to be undertaken during the early stages of the project and for that monitoring data to be applied (if warranted) to an adaptive management approach. The submission made by NOW to Boral's Response to Submissions generally endorses the need for additional monitoring data to inform an adaptive management approach. The proposed monitoring program is aimed at confirming groundwater conditions in the area, and any potential connection between groundwater aquifers and surface water. NOW has recommended that this monitoring be undertaken and completed prior to the project being permitted to extract more than 220,000 tpa. While the Department appreciates NOW's desire to place a trigger on the need to undertake groundwater monitoring, it considers that a time-based trigger is more appropriate than an extraction rate limit. 70The report included the following in regard to impacts on surface water (Exhibit K, Folio 455): Boral proposed to continue discharge of groundwater to the Wingecarribee River subject to the requirements of its EPL. Despite this being current practice, OEH, NOW and SCA have raised concerns about potential water quality and hydrological impacts and have suggested that more detailed characterisation of discharge water and water quality in the Wingecarribee River is required. While the Department accepts the agencies' position that a continuation of current performance does not necessarily imply that the highest-achievable environmental outcomes are being attained, it still considers ongoing discharge of mine water to be low risk, given the monitoring data presented in the EA and the fact that discharges have been occurring for many years. The Department does, however, consider it appropriate to accept recommendations made by the agencies that Boral develop a more comprehensive water quality monitoring program and that data from such a program is then used to establish a broader suite of water quality objectives for the project. 71The PAC project approval 10_0172 imposed environmental performance conditions on the consent, at schedule 3 of the conditions. The environmental performance measures included requiring a WMP to be prepared (condition 31), to include a Site Water Management Plan, a Surface Water Management Plan and a Groundwater Management Plan. The WMP was to be prepared and implemented to the satisfaction of the Director-General and was to be reviewed, audited and revised regularly. 72The PACs determination report included the following relevant statements under 'Ground and Surface Water Impacts' (Exhibit L, Folio 918): The lack of appropriate data, on which to make a proper assessment of water impacts is raised in government agency, local government and public submissions alike. The Proponent also acknowledged to the Commission that the data were inadequate. This situation appears to arise from reliance on the long history of a mine with no obvious serious incidents and a level of operational and regulatory complacency that is out of step with current requirements. It means that the Commission is again faced with a decision as to whether to delay or refuse a Project until the required data are available for consideration, or construct an approval framework that will ensure collection of the required data, proper assessment of the options and retro-fitting of any actions required into the approval. Given the long history of this mine and its small size, the Commission is prepared in this instance to adopt the approach of constructing an approval framework that will ensure collection of the required data, proper assessment of the options and retro-fitting of any actions required into the approval. However, the Commission considers this to be poor practice and that its acceptability is likely to come under increasing scrutiny in the future. The Commission considers that the amended conditions establish an appropriate management approach for assessing and monitoring surface water and groundwater impacts. The conditions will also drive continuous improvement of water quality over time. 73The preparation of a management plan as a condition of consent should not be a panacea to overcome the necessity to consider a requisite matter, as the consent authority has an obligation to consider and determine all relevant matters, as required by the DGRs for a Part 3A major project. Priestley JA held in Mison & Anor v Randwick Municipal Council & Anor (1991) 23 NSWLR 734 (page 737 par C) the following: 'if the effect of an imposed condition is to leave open the possibility that development carried out in accordance with the consent and condition will be significantly different from the development for which the application was made, then again, it seems to me that the Council has not granted consent to the application made.' 74In relation to surface and groundwater issues of this proposal, the DGRs required an assessment of the potential impacts of the project on the quantity and quality of the surface and groundwater resources in the project area, an assessment of the potential impacts of mine water discharge on the Wingecarribee River and a description of the measures that would be implemented to prevent adverse impacts on the Wingecarribee River. 75When the requested data was not provided in the EA, the response of the DoPI in its report, quoted above, was to acknowledge that there was an absence of actual monitoring data to calibrate and confirm Boral's assumptions, however despite this and on the assumption that the risk to groundwater hydrology as a result of continued operations was likely to be both low and manageable, they recommended approval of the proposal with a condition imposed on the consent requiring the preparation of a WMP, to address the absence of monitoring data. 76The requirement for the preparation of the WMP as a condition of the consent left major and fundamental issues undetermined in respect of the impact of the proposal, which essentially deferred consideration of a matter that the consent authority was required to consider and determine, in accordance with the DGRs. 77In our opinion and based on the evidence before us, the surface and groundwater issues are major and fundamental issues in regard to this proposal and they cannot be left for later resolution, as consideration of the impacts and the means of controlling those impacts is important, when weighing up all relevant matters for consideration in determining this proposal. The condition in the PAC consent, requiring the preparation of the WMP, left open the possibility that development carried out in accordance with that consent and conditions may have been significantly different from the development for which the application was made. 78We have in evidence before us the WMP dated 11 January 2013 (Exhibit L), prepared in response to Condition 31 of Project Approval 10_0172. Much discussion occurred during the proceedings as to the status and adequacy of this document. The WMP includes the following qualification regarding its draft status (at 1.1): The Scoping Document highlighted the progressive nature of the studies required by both the Project Approval and licence PRP which will result in further updates to this plan as required. 79There is a lack of detailed information about the nature and extent of past impacts from the operation of the mine in relation to groundwater, the SGDE and the riverine ecosystem, as the colliery has not previously been the subject of an assessment under the provisions of the EPA Act and the past regulatory system was less extensive. Since the approval of the proposal, there has been a considerable increase in the data available to inform the assessment, but nevertheless a key question remains as to whether there is adequate information now available to permit an assessment and the granting of approval. 80If we are not satisfied that we have adequate information with which to determine the major and fundamental issues of groundwater and river water quality associated with this proposal, then we are unable to grant consent.

Adaptive management regime 81The intention of the WMP is to provide an adaptive management regime, under which management actions would be modified in response to the results of the monitoring program. Preston CJ held in Newcastle & Hunter Valley Speleological Society Inc v Upper Hunter Shire Council and Stoneco Pty Limited [2010] NSWLEC 48 (Speleological Society) at [184] that, 'in adaptive management, the goal to be achieved is set, so there is no uncertainty as to the outcome and conditions requiring adaptive management do not lack certainty, but rather they establish a regime which would permit changes, within defined parameters, to the way the outcome is achieved.' 82It follows that it is necessary for there to be precise limits imposed on the cumulative operations of the colliery. His Honour found that an adaptive management approach might include monitoring of impacts of management or decisions based on agreed indicators, at [164]. 83The experts agree that the current draft of the WMP does not set precise limits on the cumulative operations of the colliery, as there is yet no agreement as to all the indicators against which monitoring would be assessed and where monitoring points should be established and sampled. 84In our opinion and based on the expert evidence, there is a distinction between the WMP before us, which is in a draft state, as the groundwater model is still being developed and calibrated and the baseline data to establish indicators are still being collected; and an operational WMP which will be subject to continued fine tuning, where management actions will be modified in response to a stable monitoring system. There are data available from previous monitoring of river flows and river conditions from the SCA and for groundwater and there are post 2005 data from the mine. However, data on stygofauna and the SGDE, river health and the delineation of the mixing zone are still sparse and temporally limited. For example, table 40 (Exhibit L, Folio 1365 - 1380) provides detailed Trigger Action Response Plans for a number of attributes of the system, but as yet none for stream health, stygofauna and the SGDE. 85In addition, correspondence dated 7.2.13, from the Manager Mining Projects as nominee of the Director-General of DoPI, (Annexure B to the First Respondent's closing submissions) to the proponent, Boral, says that the DoPI is not satisfied that an appropriate consultation process has occurred during the development of the WMP and that the WMP should be subject to further consultation with both the EPA and NOW and that the DoPI has a number of concerns regarding the content of the WMP, although these concerns are relatively limited in scope and are attached to the correspondence as Appendix 1. The correspondence requests a revised copy of the WMP be submitted to DoPI no later than 22.2.13. 86The proposal before us cannot be categorised as providing an adaptive management regime, as there remain significant uncertainties and undefined parameters due to a lack of baseline data on the groundwater and river water quality issues. In our opinion and based on the evidence of the experts, the WMP before us remains in a draft state, as there are uncertainties as to the goals to be achieved by the WMP and consequently what is proposed is inconsistent with what Preston CJ found is necessary for an adaptive management regime.

Ecologically sustainable development (ESD) and the precautionary principle 87ESD is development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Telstra Corporation Limited v Hornsby Shire Council (2006) 146 LGERA 10 (Telstra) at [108]). ESD can be achieved through the implementation of a number of principles, including the precautionary principle. 88Preston CJ held in Telstra at [150], the following, in regard to the precautionary principle and the shifting of the evidentiary burden of proof: If each of the two conditions precedent or thresholds are satisfied - that is, there is a threat of serious or irreversible environmental damage and there is the requisite degree of scientific uncertainty - the precautionary principle will be activated. At this point, there is a shifting of an evidentiary burden of proof. A decision-maker must assume that the threat of serious or irreversible environmental damage is no longer uncertain but is a reality. The burden of showing that this threat does not in fact exist or is negligible effectively reverts to the proponent of the economic or other development plan, programme or project. 89We are satisfied that the precautionary principle is activated as the risk of significant environmental harm currently remains uncertain, based on the evidence before us, as the proposal may result in the following:

• The dewatering of the Hawkesbury Sandstone groundwater aquifer, which would change its ecology and may prevent future access to bore water for irrigation purposes; and/or
• an adverse impact on the health of the Wingecarribee River by discharging pollutants in the water discharged from the mine. 90The burden of proof that the proposal is not harmful falls on the proponent, Boral. The imposition of an adaptive management regime as a way of managing the risks of significant environmental harm is accepted as appropriate (Speleological Society at [185]). As found earlier in the judgment, we are not satisfied that the WMP can be categorised as an adaptive management regime while it is still in a draft state.

Conclusion 91In our opinion, the impact of the proposed haulage route along Medway Road on the amenity of the residents of Medway is sufficiently detrimental to warrant refusal of the proposal. 92Having regard to the AGE report, we find that there was a lack of data to support an assessment of the impacts of the proposal on surface water and groundwater in the application and that this left unresolved major and fundamental issues associated with the proposal, that could not be deferred for later resolution via a condition of consent. 93We are not satisfied that the WMP can be categorised as an adaptive management regime as it is still in a draft state and consequently we find that there is inadequate information with which to determine the major and fundamental issues of groundwater and river water quality associated with this proposal and we are unable to grant an approval. 94In our opinion, the precautionary principle is activated, as the risk of significant environmental harm remains uncertain and is not mitigated by an adaptive management regime. 95Given the above findings, it is not necessary to deal with the contentions regarding the conditions of consent.

Orders 96The orders of the Court are: 1.The appeal is upheld. 2.Major Project Application Number MP 10_0172 for the continued operation of the Berrima Colliery until 30 April 2020 is refused. 3.The exhibits, other than exhibits 1, 4, A, O, and P, are returned.

Susan O'Neill Commissioner of the Court Dr Paul Adam Acting Commissioner of the Court

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 February 2013