SUBJECT LAND: Rocklands Reservoir to Douglas mine site

MEDIUM NEUTRAL CITATION [2004] VCAT 20

The decisions of the responsible authorities are varied; and permits are granted, and directed to be issued, in the same terms as set out in the notices of decision of the responsible authorities, save that the conditions are varied by adding the following two conditions to each permit:

- An Environmental Management Plan ("EMP") must be prepared and submitted to the responsible authority for endorsement. The EMP must be prepared to the satisfaction of the responsible authority in consultation with Wimmera Mallee Water Authority and Glenelg Hopkins Catchment Management Authority. It must contain provisions to give effect to the commitments set out in the planning permit application dated 13 August 2003 and be consistent with the other conditions of this permit.

- As an off-set for loss of native vegetation, the developer must fence-off, revegetate, and maintain for a period of five years, a parcel of land, in an appropriate location or locations (in either the Rural City of Horsham or the Shire of Southern Grampians or both) and sufficient to achieve a net gain in terms of vegetation conservation, to the satisfaction of the responsible authority in consultation with the Department of Sustainability and Environment.

1 The Victorian National Parks Association Inc and the Mineral Policy Institute (the objectors) seek to review the decisions of the Southern Grampians Shire Council and the Horsham Rural City Council (the councils) made pursuant to their planning schemes (the schemes) to grant a permit to Iluka Resources Limited (Iluka) to construct and use a pipeline from the Rocklands Reservoir to the Douglas Mine site and for the removal of native vegetation necessary to construct the pipeline. The objectors contend that the use of the pipeline to transmit water to the mine would result in a reduction in the flows along the Glenelg and Wimmera rivers when compared with the flows which would otherwise occur. Key issues which arise in the case are: in considering whether a permit should be granted for the use of the pipeline, do the relevant considerations include the maintenance of satisfactory environmental flows in the river and lakes systems; and, assuming these matters are relevant, would it be a proper exercise of discretion to refuse to grant a permit in the circumstances of this case? A subsidiary issue relates to the removal of native vegetation. Is the native vegetation which is to be removed in the construction of the pipeline inappropriate having regard to the legislative and policy framework?

2 Before turning to these issues, I will set out in more detail the proposal, the planning controls and my findings in relation to water issues. I also wish to record the considerable assistance given to me by the parties. The council submissions were quite sufficient for the purpose. I was fortunate to have comprehensive and fully argued submissions from Ms Forsyth, on behalf of the objectors. And the submissions from Mr Gobbo QC and Ms Foley, on behalf of Iluka, and Ms Brennan, on behalf of the water authority, were of considerable assistance.

3 Iluka proposes to mine mineral sands at the Douglas Mine site, in western Victoria. This proposal was the subject of a substantial environmental enquiry and was given approval earlier this year. I understand the approval was given on the basis that the mine would not result in unacceptable environmental impacts and would have significant, positive social and economic impacts on Victoria, particularly the Wimmera and Western districts. However, for the mine to operate, it needs water. And the means identified to bring water to the mine is by the construction of a pipeline, some 20 kilometres in length, from the Rocklands Reservoir. This pipeline, which needs a planning permit under the relevant planning schemes, was not covered by the earlier approval.

4 The pipeline route crosses the municipalities of the Horsham Rural City Council (5.57 kilometres) and the Southern Grampians Shire Council (14.28 kilometres) and traverses both the Rural Zone and the Public Conservation and Resource Zone in each planning scheme. Most of the pipeline will be located upon cleared, agricultural land. However the construction of the pipeline will require the removal of some native vegetation, particularly where the pipeline crosses the Glenelg River.

5 Neither the construction of the pipeline nor the grant of permits to use the pipeline will entitle Iluka to water from the Rocklands Reservoir. This reservoir is part of the Wimmera Mallee water system, which is managed by the Wimmera Mallee Water Authority (the water authority). But in the exercise of its powers pursuant to section 124(7) of the Water Act 1989 the water authority has agreed to supply the requisite water from the Rocklands Reservoir by agreement with Iluka. The agreement entitles Iluka to receive 5,000 megalitres of water each supply year, with an option to receive a further 2,000 megalitres. In consideration of receiving the 5,000 megalitres of water, Iluka has agreed to pay a non-returnable capital contribution to the water authority of $1,000 per megalitre. This sum is in addition to recurrent charges for the water. This arrangement was said to be an example of the water authority's sale of savings policy, whereby it allocates water to a new user, by agreement, in exchange for funds which can be used to effect improvements to the system (usually the piping of water to replace open channels) that will result in an equivalent annual saving of water.

6 In order to decide the circumstances in which a permit is needed for the use of the pipeline, it is necessary to characterise the pipeline pursuant to the schemes. Two possible characterisations were suggested: namely utility installation and minor utility installation. Clause 74 of each scheme defines utility installation, relevantly, as land used to collect, treat, transmit, store, or distribute water. Clearly a pipeline fits within this description. The clause also defines minor utility installation to mean land used for a utility installation comprising, inter alia, water mains. Thus if the proposed pipeline is to be characterised as a water main, it is a minor utility installation. If this is not an accurate characterisation, then the pipeline is to be regarded as a utility installation.

7 The Macquarie Dictionary defines a water main to mean a main or principal pipe or conduit in a system for conveying water. Subject to one matter, I find that the proposed pipeline fits this description. The pipeline is a principal pipe. It makes no difference that it is to serve a private purpose. The matter relates to a pumping station, which will be comprised in a building having an area of some 100 square metres, which is to be located close to the Rocklands Reservoir. I would not regard such a pumping station as simply part of a water main. I find that this part of the proposal is a utility installation.

8 The effect of my findings determines the circumstances in which a permit is required for the use of the pipeline in the various schemes. But I should indicate that, if I had found that the whole of the pipeline constituted a utility installation pursuant to the schemes, it would not have affected my conclusions. My conclusions are the same whether the use is characterised as a minor utility installation and a utility installation (in the case of the pumping station) or simply as a utility installation.

9 In the Rural Zone, a utility installation requires a permit; but a permit is not required for a minor utility installation.

10 In the Public Conservation and Resource Zone, a utility installation, being conducted by a private body, requires a permit. Further, in the Public Conservation and Resource Zone a permit is required to carry out works.

11 A permit is also required by clause 52.17 of each scheme to remove native vegetation.

Scope of relevant considerations - introduction

12 On the basis of my findings, a permit is required to construct and use the pipeline (and the pumping station) within the Public Conservation and Resource Zone in both the Rural City of Horsham and the Shire of Southern Grampians. But what is the scope of considerations which are relevant in deciding whether or not such a permit should be granted? And do these considerations extend to considering whether denying a permit would render it more likely that flows along the Glenelg and Wimmera rivers would be greater, with a beneficial impact upon the environment? Before considering these questions, it is desirable to set out in more detail my findings concerning water issues.

13 Evidence was given by Maxwell James Burns, the Manager of Operations and Project Manager with the water authority. I accept his evidence; and my findings are based upon his evidence.

14 The Wimmera Mallee water supply system is almost 100 years old and is the largest of its type in the world. It covers 3,000,000 hectares and supplies approximately 60,000 people, 13,000 farms and 50 towns. But the system is extremely inefficient. In some parts of the system, for every 10 litres delivered from the reservoir only one litre is received by the customer. The balance is lost due to seepage or evaporation. This is explained by the fact that the system primarily uses open, earthen channels and is located in a hot, dry part of Australia.

15 The system diverts water which would otherwise flow along the Glenelg and Wimmera rivers. The diversion of water, exacerbated by the drought over the last seven years, has meant that flows along these rivers have been meagre; with serious adverse environmental consequences. The objectors are naturally concerned that any substantial, additional use of water in the region will make an already serious problem worse.

16 In 1989 the Victorian Government recognised the finite limitations of the Wimmera Mallee water supply system. It acknowledged that the catchments and streams were fully committed and under stress. The government decided that there should be no increase in the consumptive use or diversion of water from streams in the system. However it also recognised that ongoing social and commercial development would require some water consumption. Hence it adopted a policy that would allow additional use of water, if this was matched by an equivalent saving in water, so that there was no net increase in water diversion from the system. This policy was known as a sale of savings policy.

17 During the period 1992 to 2002 the water authority carried out a major initiative known as the Northern Mallee Pipeline Project. The project area was 700,000 hectares. The project involved replacing the previous system, which was based upon open channels, with a piped system. The source of supply was also changed: previously it had been from the Glenelg and Wimmera river systems; it was changed to a supply from the Murray River system. The new piped system was based upon an annual flow of 5,000 megalitres. This replaced the previous flow (ex reservoir) of 49,509 megalitres. Hence there was a net saving of water of 44,509 megalitres per annum; and a saving from the Glenelg/Wimmera system of 49,509 megalitres per annum. These savings resulted, essentially, from eliminating seepage and substantially reducing evaporation.

18 The total cost of the Northern Mallee Pipeline Project was about $50,000,000. About $40,000,000 of this amount was contributed by governments; with the balance being contributed by landowners.

19 The Victorian Government and the water authority reached agreement as to who should benefit from the water savings to the Glenelg/Wimmera system from the Northern Mallee Pipeline Project. Some 34,690 megalitres per year were assigned to increased environmental flows along the rivers. The balance saved to the Glenelg/Wimmera system (14,819 megalitres per year) was to be divided equally between existing customers of the water authority and new customers. Hence, some 7,500 megalitres per annum was earmarked for customers involved with future developments.

20 The water authority has initiated a feasibility study into piping the remainder of the channel system, which is known as the Wimmera Mallee Pipeline Project. The current estimate of the cost of the project is $500,000,000. It is forecast that this project will yield total savings of 103,000 megalitres per year. It is proposed that most of these savings will be made available for increased environmental flows; but 10,000 megalitres of the savings is identified for use by new developments. There is no confirmation that the whole of this project will proceed, although it can proceed in sections and some parts have either been completed (Speed/Patchewollock) or are underway (Cannie Ridge).

21 It is to be observed that the cost of saving a megalitre of water in the Northern Mallee was about $1,000 per megalitre. By contrast, the average cost to save a megalitre of water by implementing the Wimmera Mallee Pipeline Project is about $5,000 per megalitre. No doubt the return per dollar spent will be greater in the northern portions of the Wimmera Mallee Pipeline Project area than in the southern portions. Hence the average cost of saving a megalitre of water is unlikely to be universal across the whole project area.

22 In March 2002 the water authority envisaged that a water allocation of up to 7,000 megalitres per annum to Iluka would derive from additional savings from the Wimmera Mallee Pipeline Project, rather than from savings derived from the Northern Mallee Pipeline Project. Subsequently, on 2 September 2002, the Minister endorsed a proposal by the water authority to treat the allocation of the initial 5,000 megalitres as a saving from the Northern Mallee Pipeline Project. It is arguable that the effect of this decision was to reduce the amount that Iluka was required to pay pursuant to the sale of savings policy. On the other hand, the 7,500 megalitres per annum saved by the Northern Mallee Pipeline Project, which had been allocated to new developments, had not been taken up and could realistically be said to be available for sale.

23 On about 28 October 2002 the water authority entered into an agreement with Iluka. The agreement, which was made pursuant to section 124(7) of the Water Act 1989, involved the allocation of 5,000 megalitres per year, with an option of an additional 2,000 megalitres per year, to be supplied from the Rocklands Reservoir, by means of a pipeline, to the Douglas Sands site. The capital cost to Iluka of the initial allocation was $5,000,000. The water authority proposes to use these funds to implement new water savings works as part of the Wimmera Mallee Pipeline Project.

Scope of relevant considerations - statutory provisions

24 Clause 36.03-5 of each scheme provides that before deciding on an application to use land or construct works, in addition to the decision guidelines in clause 65, the responsible authority must consider, as appropriate, State and local policies, the comments of any relevant land manager and whether the development is appropriately located and designed.

25 Clause 65 generally requires the responsible authority to consider, as appropriate, a wide range of planning matters, including State and local policies, factors likely to contribute to land degradation or salinity, or reduce water quality, and the matters set out in section 60 of the Act.

26 Section 60 of the Planning and Environment Act 1987 provides that before deciding on an application the responsible authority must consider certain matters, including any significant effects which the responsible authority considers the use or development may have on the environment.

27 State and local policies which are included in each scheme are broad sweeping. These include policies designed to protect catchments and enhance downstream water quality (clause 15.01-2).

28 Moreover section 84B of the Act provides that in determining an application for review under the Act the tribunal must take into account certain matters, such as any relevant planning scheme and the objectives of planning in Victoria. These objectives include an objective of providing for the protection of natural resources and the maintenance of ecological processes (section 4(1)(b) of the Act).

29 Furthermore, section 84B(1)(d) provides that in determining an application for review, the tribunal must take account of and give effect to any relevant State environment protection policy declared under section 16 of the Environment Protection Act 1970. One such policy is the policy entitled Waters of Victoria which was made on 4 June 2003. Clause 41 of this policy provides that, to protect aquatic ecosystems, adequate environmental flows need to be provided to waterways, wetlands, lakes and estuaries. To enable this, the policy specifies certain actions, the most relevant of which are:

(1) Relevant protection agencies, particularly relevant water authorities, ... need to work with other protection agencies, businesses and communities to develop and implement measures to provide environmental flows;

(2) No increased allocation from any river, stream, lake, wetland or estuary should be approved unless it is consistent with the Water Act 1989 and is subject to a process which is designed to provide environmental flows;

30 It can be observed that the apparent scope of relevant considerations is extremely broad. This is typically the case with planning permit decisions. Yet if all apparently relevant factors need to be considered in a particular case, with reasons being articulated as to how the matter was taken into account, the making of planning permit decisions would be quite impossible. In the real world, most decisions revolve around just one or two key considerations.

31 The scope of relevant considerations in the grant of a planning permit is a vexed one. For many years the conventional wisdom has been that, in exercising a discretion conferred by a particular planning scheme provision, the decision maker is confined to considerations which are relevant to the purpose of the particular provision. This principle, which has become known as the National Trust principle, was articulated by the Full Court of the Supreme Court of Victoria in National Trust of Australia (Victoria) v Australian Temperance and General Mutual Life Assurance Society Limited [1976] VicRp 60; [1976] VR 592. The principle has been applied over many years by the tribunal and its predecessors. It has recently been endorsed, in the context of current planning scheme provisions, by Balmford J in Shalit v Jackson Clement Burrows Architects Pty Ltd [2002] VSC 528.[1]

32 In the National Trust case the court was concerned with an application under clause 24(4) of the Melbourne Metropolitan Planning Scheme for a permit to erect a building in excess of the height permitted in the relevant area. Clause 5A of that planning scheme required the responsible authority, when considering an application for a permit, to consider the primary purpose for which the land was zoned, the orderly and proper planning of the area, the proximity of the land to any reservation, and the amenity of the neighbourhood. For all intents and purposes, clause 5A of that scheme was the equivalent of clause 65 of current planning schemes. The National Trust was not concerned with the height of the proposed building, but with the retention of an existing historic building, which was to be demolished to make way for the new building. The National Trust argued that, by reason of clause 5A, its concern was a relevant consideration. However, the court concluded:

In relation to the application under clause 24(4) of the Planning Scheme the argument was to the effect that having regard to the provision in clause 5A of the Planning Scheme it was a consideration relevant to the grant or refusal of a permit under that subclause to exceed the stipulated height that the orderly and proper planning of the area within which the land was situate and the amenity of the neighbourhood would or could be adversely affected by the demolition of an historic building to make way for the projected building of the height sought.

The latter part of this argument meets immediately with difficulty. For the purpose of the grant of the discretion is to control the height of buildings in a particular area. Notwithstanding the general words of clause 5A the responsible authority is not entitled "to introduce into the considerations affecting the grant of a licence an element foreign to the duties" of the authority in that regard, or to engage "in a consideration of matters extraneous to the application for a licence", or matter which is "too remote" therefrom. (Victorian Railways Commissioners v McCartney and Nicholson (1934) 52 CLR at pp. 390, 395, 398). "The discretion must be used and the power exercised bona fide and with the view of achieving ends or objects not outside the purposes for which the discretion or power is conferred". (Shrimpton v the Commonwealth (1945) 69 CLR, at pp. 620, 627, 631 and 632). The discretion conferred by clause 24(4) is one conferred for the purpose of controlling the height of buildings. In that connection it is proper to have regard to what is prescribed by clause 5A. But to use that discretion for the purpose of endeavouring to ensure the conservation of an historic building and to regulate the orderly and proper planning of the area in which it is situated and the amenity of the neighbourhood, in other respects than with regard to the height of the building, is to endeavour to achieve ends outside the purpose for which the power is conferred and to intrude into the exercise of the discretion matters which are extraneous to it. The responsible authority could not properly refuse the permit under the Planning Scheme on such considerations and could not properly have regard to them in determining whether to grant a permit or not.

33 In the Shalit case Balmford J concluded that a provision which required a permit to be obtained to construct works on land affected by a Land Subject to Inundation Overlay was to be exercised having regard to flooding matters and did not extend to issues such as maintaining views. Leave was given by the Court of Appeal for an appeal to be heard against this decision; but the matter was settled and did not proceed to a hearing.

34 More recently the Court of Appeal considered the National Trust case in another context, namely the circumstances in which a permit application was exempt from the requirement to notify neighbouring owners and occupiers.[2] In the course of her judgement Warren AJA, with whom the other judges agreed, commented:

The National Trust case was concerned with circumstances where the relevant planning control was silent as to conservation matters hence rendering the objection irrelevant. In the present case the Act and Scheme specify the matter to be taken into account and the exemptions that are to apply with respect to objections. In this matter the scope of relevant considerations to be applied by the responsible authority and, if need be, the Tribunal on review, is defined by the Planing and Environment Act and Scheme. (See sections 60 and 84B of the Planning and Environment Act and clause 65 of the Melbourne Planning Scheme).[3]

35 The National Trust principle has a valuable role to play in the administration of planning in Victoria. Indeed, current planning schemes, which are based on the Victoria Planning Provisions, are predicated upon the application of the National Trust principle. These schemes contain many provisions which require a permit to be obtained in specific circumstances, which are designed to regulate use or development in those specific circumstances. For example, there are specific controls in relation to the construction of buildings in wildfire areas, in areas prone to erosion, in areas susceptible to flooding and in areas susceptible to land salinity. Similarly there are provisions in relation to the height of buildings, access on to main roads and the removal of native vegetation. Sometimes these specific controls are part of an overlay provision; sometimes they are the result of specific clauses of the scheme. If, upon an application for a permit under one of the specific provisions, the decision maker was required to consider the full panoply of planning considerations set out in sections 60 and 84B of the Planning and Environment Act and in clause 65 of each planning scheme, planning decision making would grind to a standstill.

36 As presently advised, I consider that the tribunal, even when constituted by the President, is bound by decisions of the Supreme Court of Victoria. Hence I regard myself as bound by the decision in Shalit, the ratio decidendi of which is directly in point, and hold that the National Trust principle applies to planning schemes based upon the Victoria Planning Provisions. (Incidentally, any other finding would create a severe problem for planning decision-making in Victoria and would require an immediate legislative amendment.) But I am also of the independent view that the National Trust principle is applicable to current Victorian planning schemes.

37 Prior to the introduction of the ResCode provisions into Victorian Planning Schemes, the Tribunal held on a number of occasions that the National Trust principle meant that general amenity considerations were not relevant to a residential development when the only reason a permit was required was by the operation of heritage provisions. This approach was subsequently confirmed by Balmford J in the Salmal case. When ResCode was introduced the Minister, aware of the National Trust principle, made a specific provision so that ResCode did apply to the construction of a single dwelling on a lot when the only reason why a planning permit was necessary was by reason of a heritage overlay.[4] Of course, the provision of a subordinate instrument cannot dictate the interpretation of provisions of an Act, such as sections 60 and 84B of the Planning and Environment Act. But a detailed understanding of the operation of the planning system will always be valuable in appreciating the purpose of particular provisions of legislation.

38 In the Shalit case Balmford J noted that the National Trust decision was made in the context of clause 5A of the Melbourne Metropolitan Planning Scheme; it was not made in circumstances where the relevant planning scheme was completely silent as to matters, such as orderly planning and amenity, which were to be taken into account in deciding whether or not to grant a permit. She noted that the current version of clause 5A, namely clause 65, set out considerations to be taken into account "as appropriate". She reasoned that provisions such as sections 60 and 84B of the Planning and Environment Act should be interpreted in the same manner. I agree. Such an interpretation best gives effect to the purpose of these provisions.[5]

39 Section 60(1) of the Planning and Environment Act sets out matters which the responsible authority, before deciding on an application, must consider and, if the circumstances appear to so require, may consider. As Hayne JA observed in Returned Services League of Australia (Victorian Branch) Inc, Glenroy Subbranch v Moreland City Council [1998] 2 VR 406, at 413:

Section 60 of the Planning and Environment Act is not easy to construe. At first sight the contrast drawn between matters which a responsible authority (and the tribunal on re-hearing) "must consider" and those which it "may consider" "if the circumstances appear to so require" is stark and suggests a distinction between obligation and unfettered discretion. The nature and extent of the difference, however, may not be as obvious as that first sight might suggest.

It is noted that subpara. (iii) of para. (b) refers to "any other relevant matter". It would be strange if a responsible authority had a completely unfettered discretion whether or not to consider a relevant matter before deciding on an application.

40 In that case, the Court of Appeal held that the responsible authority is bound to have regard to the matters set out in subparagraphs (i), (ii), (iia) and (iii) of paragraph (b) of the subsection, if these matters bear upon the issue under consideration.[6] In my opinion, the same logic applies to paragraph (a) of the subsection. The commandment that certain matters "must" be considered is, in my opinion, to be qualified by the proviso that the matter bear upon the issue under consideration. In other words, section 60(1)(a) of the Act is to be read as if it contained the words "if relevant to the application" or "if relevant" after the words "must consider". Thus the commandment that the responsible authority must consider all objections does not mean that an irrelevant objection (to take an extreme example, that the applicant has red hair) must be considered.

41 Section 84B of the Planning and Environment Act ought be given a similar interpretation. It is true that in this section the words "where appropriate" have been included in many of the paragraphs to subsection (1). These words have not been included in relation to taking into account a relevant planning scheme, the objectives of planning in Victoria and State environment protection policies. But it does not follow that all parts of a planning scheme or all the objectives of planning in Victoria will be relevant to every application, particularly if the application is under a specific provision of a planning scheme. No doubt the words "were appropriate" were not included in paragraphs (a) and (b) because some part of the planning scheme and some of the objectives of planning will be relevant in every case.

42 The function of sections 60 and 84B of the Planning and Environment Act is precisely the same as clause 65 of each planning scheme in Victoria and, more significantly, is precisely the same as clause 5A of the Melbourne Metropolitan Planning Scheme at the time of the National Trust case. In my opinion, just as it was proper to have regard to the matters prescribed by clause 5A in the context of a control over the height of buildings, sections 60 and 84B must be applied in a particular application for permit, or a particular application for review, in the context of the discretion then being exercised. But the scope of relevant considerations in the exercise of a discretion under a planning scheme provision is to be ascertained by reference to the purpose for which the discretion has been conferred, not by reference to the broad words of clause 65 or sections 60 or 84B.

43 The purposes of the Public Conservation and Resource Zone are specified as:

* to implement the State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and Local Planning Policies;

* to protect and conserve the natural environment and natural processes for the historic, scientific, landscape, habitat or cultural values;

* to provide facilities which assist in public education and interpretation of the natural environment with minimal degradation of the natural environment or natural processes;

However, as these purposes are the purposes of a zonal control, they are to be interpreted in relation to the land within the zone. They are not purposes in relation to land outside the zone. The decision guidelines, which are set out at clause 36.03-5 of the schemes, confirm such an approach.

44 Thus, when a permit is sought to construct and use a pipeline within the Public Conservation and Resource Zone it will be necessary to consider whether such development and use will adversely affect the natural environment within the zone and be an appropriate use of land within the zone. But, leaving aside native vegetation issues - which are dealt with subsequently - this was not the real basis of the objectors' concerns. The objectors' concerns were directed, not so much at the land within the Public Conservation and Resource Zone in respect of which the applications were made, but at the protection of the natural environment generally, especially the Wimmera river and lakes system.

45 The objectors relied upon a report of a panel appointed under the Act to consider two planning applications for groundwater bores to supplement the water supply for the town of Clunes.[7] In the course of the panel proceedings, the panel obtained advice from the Victorian Government Solicitor to the effect that, in considering the applications, the planning scheme and Act requires consideration of the impact of the bores on groundwater reserves. It is not necessary, in this proceeding, to determine whether or not that advice was correct. It is enough to make two observations. First, there is a fundamental difference between constructing bores to obtain water from a natural source and constructing a pipeline to transmit water from a man-made reservoir. And second, the planning controls which are relevant in this case to the construction of a pipeline and pumping station, by a private person, in the Public Resource and Recreation zone do not have as a purpose the control of water flows in the wider river systems.

46 Thus, in my opinion, the objectors concerns are not relevant considerations in the exercise of the discretion to grant a permit for the development or use of land for a pipeline and pumping station within the Public Conservation and Resource Zone of the schemes under consideration.

Planning permit inappropriate vehicle for controlling environmental flows

47 Assuming I am wrong in the foregoing analysis and I am required to have regard to wider planning issues, such as the provision of appropriate environmental flows along the Wimmera River System, what would be my conclusions? The answer to this question is to be ascertained by considering the provisions of each planning scheme and their legislative context.

48 It is first to be observed that the planning schemes only control the development and use of land for a pipeline within the Public Conservation and Resource Zone. The schemes contemplate that the construction and use of the pipeline within the Rural Zone is as of right. Assuming it is relevant to take wider environmental issues into account and, further, assuming the construction and use of the pipeline will diminish environmental flows along the Wimmera river system, it would seem contrary to the intention of the scheme for a permit to be refused for the construction and use of a pipeline by a private company in the Public Conservation and Resource Zone on this account. This is because the same factors would be equally applicable to the construction and use of a pipeline in the Rural Zone, where the pipeline is as of right. Moreover the same factors would be equally applicable to the use of a pipeline in the Public Conservation and Resource Zone by a public land manager, which is as of right.

49 Although it is true that the scope of planning controls is not impliedly limited by other statutory controls, the existence of other statutory controls is relevant in the exercise of the discretion whether or not to grant a planning permit. For example, specific legislation exists in relation to subdivisions[8], liquor[9] and building[10]. Although none of this legislation limits the scope of planning legislation (except where expressly provided), planning decisions will inevitably be made in the knowledge that other controls exist in relation to specific land uses or specific aspects of land use. This does not mean that the planning decision maker, vested with a discretion, cannot enter the territory covered by specific legislation; rather it means that the planning decision maker, after considering all relevant issues, may choose not to enter the territory covered by the specific legislation.

50 In the context of environmental flows and water entitlements, there is specific legislation in the Water Act 1989. Section 9(1) of this Act gives a water authority the right to take the amounts of water that are made available to it under a bulk entitlement. Section 36 allows a water authority to apply to the Minister for Water for the grant of a bulk entitlement to water, including water in a waterway. In considering an application under section 36, the Minister (or, if referred to it, the Governor in Council) must consider various matters, including the availability of water in the area and the need to protect the environment. Indeed, section 42(2) provides that the Minister (or the Governor in Council) must not approve an application for a bulk entitlement unless he considers that the allocation of water under the entitlement is not likely to have any significant impact in terms of the matters required to be considered, which include the need to protect the environment.

51 An Order granting a bulk entitlement may also specify, in relation to the entitlement, numerous other matters concerning the supply and use of water.[11] The Minister has prepared a draft Order pursuant to these powers, entitled "Draft Bulk Entitlement (Wimmera and Glenelg rivers - Wimmera Mallee Water) Conversion Order 2003". This draft Order is designed to set out, in a comprehensive manner, the entitlements to water from the Wimmera-Glenelg system and the shares of water from the system, based upon the total available water in any particular year. The proposed method of control is not only comprehensive, but also is equitable, in that all users of water, whether they be existing or proposed users, are regulated.

52 Indeed, the State environment protection policy - Waters of Victoria, which the Tribunal is required to take account of and give effect to, specifies that to enable adequate environmental flows relevant protection agencies, particularly relevant water authorities must develop and implement appropriate measures; and that no increased allocation from any river should be approved unless it is consistent with the Water Act 1989 and is subject to a process which is designed to provide environmental flows. This policy clearly directs that the mechanism to ensure adequate environmental flows be a mechanism under the Water Act, to be carried into effect by protection agencies and water authorities. It is not a mechanism under a planning scheme to be carried into effect by a responsible authority under such a scheme.[12]

53 As I observed during argument, the scope of section 6(1)(a) and 4(1)(b) of the Planning and Environment Act 1987 may permit a planning scheme to be made for an area which regulates the use of water so as to ensure equity between water users and proper environmental flows. But the planning schemes for the Rural City of Horsham and the Shire of Southern Grampians do not seek to do this. (Indeed, no planning schemes in Victoria seek to do this.) The existence of comprehensive remedies, in and under the Water Act 1989, provides a cogent explanation as to why planning schemes do not seek to regulate water use. Similarly, this explanation is a valid one in the exercise of a discretion under a planning scheme whether or not to permit the construction and use of a pipeline.

54 I also accept the contention made by Iluka that the construction and use of the pipeline is not logically connected with its entitlement to water. Whether or not the pipeline is constructed, Iluka will still have its entitlement to the water that the objectors would prefer to be used as environmental flows. It is true that it would be difficult for Iluka to use the water if the pipeline was not constructed (the use of water tankers is really only a theoretical possibility), but this does not create a connection between the pipeline and the entitlement to water as a matter of logic. It is logic, not expediency, which should influence the weight given to a consideration.

55 I am also of the view that the current planning scheme controls are totally inadequate, and inappropriate, to regulate the use of water so as to ensure appropriate environmental flows. Most water is used by existing users of water. Typically these users will not require a planning permit for either use or development, as the use will be entrenched and the works necessary to deliver the water will be in place. Hence if current planning scheme provisions are to be the tool to regulate the use of water and ensure adequate environmental flows it will only be new users, or existing users which require new development to deliver the water, which will be affected. Such a system of regulation would be unfair and biased. It would wrongly assume that the right of existing users of water is superior to the right of proposed users of water. In truth, many proposed users will be far more efficient in their use of water and will generate far greater community benefits per litre of water used than is the case with existing users. Although a system of control which focuses upon new entrants is sometimes appropriate, it will usually be quite inappropriate in managing the use of a natural resource. It will usually be more appropriate to use a market mechanism or some form of global regulation. For this reason alone I would not uphold the objectors applications for review.

56 For the reasons set out, even if I was obliged to consider the impact of the approval of the pipeline upon environmental flows in the Wimmera River system, I would exercise my discretion to disallow the applications for review.

57 In the circumstances, it is unnecessary to consider whether the allocation of water to Iluka will unreasonably impact upon environmental flows. Iluka argued that its agreement with the Water Authority meant that, in net terms, more water will not be taken from the catchment. Of course, its contention is dependent upon there being water savings from capital improvements, equivalent to its allocation, and upon its capital contribution being sufficient to pay for those capital improvements. There is obviously room for debate about whether such capital improvements can be improvements which have already been made, or whether they must be new capital improvements. There may also be room for debate about whether a sale of savings policy is appropriate at all, or whether public funds should be used to capture all water savings and so direct them to additional environmental flows. However, if it was left to me, I would conclude that the approach taken in this matter by the water authority and the Minister is not inappropriate.

58 Prior to the identification of the final route for the pipeline, a number of proposed routes were surveyed by environmental consultants to Iluka. One of these consultants was Neil Marriott, a botanist with over 20 years experience carrying out flora surveys, particularly in the Wimmera region. Mr Marriott gave evidence to the tribunal about his work and expressed the opinion that the native vegetation to be removed would not constitute a significant loss. I accept his evidence. I am satisfied that the pipeline route has been chosen so as to have minimal impact upon native vegetation. I am satisfied that, to the extent that native vegetation will be affected by the construction of the pipeline, no significant trees, or communities, will be adversely affected. I am also satisfied that conditions have been imposed upon the grant of the permits to ensure that sound environmental practices will be followed during the construction of the pipeline; including the planting of replacement vegetation so as to achieve a net gain outcome in native vegetation terms.

59 The objectors submitted that Iluka has given insufficient emphasis to Victoria's Native Vegetation Management - A Framework for Action (DNRE, 2002). But I do not accept this.

60 I also reject the (somewhat half hearted) submission made on behalf of the objectors that there were alternative routes which would have less impact upon native vegetation. In a pipeline case, alternative routes will be relevant. But the evidence presented by Ms Barnett in support of her contention that alternative routes should be considered was meagre in comparison with the work performed by Iluka. She has certainly not persuaded me that any alternative route would produce a less adverse impact on native vegetation than the proposed route.

61 It is also relevant that officers of the Department of Sustainability and Environment have identified the native vegetation to be removed by walking over the pipeline route; and DSE has consented to the grant of the proposed permits.

62 In all the circumstances, I do not uphold the application for review of the permits in relation to the removal of native vegetation.

63 I agree with two minor changes to the permits put forward by Iluka. The first is to give legal effect to a number of commitments made in the application for the permits. The second is to strengthen the obligation to achieve a net gain of native vegetation in the area.

For Iluka Resources Limited: Mr J Gobbo QC and Ms M Foley of counsel

[1] This decision was consistent with the earlier decision of Balmford J in Salmal Constructions Pty Ltd v Richards (1998) 99 LGERA 423, although this was not a decision under a VPP based planning scheme. In the Salmal case Balmford J decided that general amenity considerations, such as privacy, were not relevant considerations in deciding to grant a permit pursuant to an urban conservation area provision.

[2] Sweetvale Pty Ltd v VCAT [2003] VSCA 83

[3] Sweetvale Pty Ltd v VCAT [2003] VSCA 83, at para [16]. However the decision did not turn on this comment, but on the effect of section 47(1) of the Planning and Environment Act.

[4] See clause 54 of the Victoria Planning Provisions.

[5] As explained by Dawson J in Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214, at 235, "the literal rule of construction, whatever the qualifications with which it is expressed, must give way to a statutory injunction to prefer a construction which would promote the purpose of an Act to one which would not, especially where that purpose is set out in the Act".

[6] [1998] 2 VR 406, at 413 to 414.

[7] Ballarat Planning Scheme, Permit applications 2000/361 and 2000/406, Ministerial Call In Panel Report, July 2001.

[8]Subdivision Act 1988.

[9]Liquor Control Reform Act 1998.

[10]Building Act 1993.

[11]Section 43 and 47 of the Water Act 1989.

[12] The decision of the tribunal in Learmonth Springs Pty Ltd v Yarra Ranges Shire Council (2002) 12 VPR 186 is essentially based on a similar analysis to that contained in these paragraphs: see, especially, paragraph 23 of that decision. Dam cases, such as Perissa Pty Ltd v Delatite Shire Council [2001] VCAT 603 and Mercer v Moorabool Shire Council [2002] VCAT 401, may involve different considerations, which do not need to be explored here.