Wollongong Coal Pty Ltd v Minister for Planning and Environment [2016] NSWLEC 154 | Case summary | Zoe

NSWNSWLEC

Wollongong Coal Pty Ltd v Minister for Planning and Environment

[2016] NSWLEC 154

Land and Environment Court (NSW)|2016-09-23|Before: Moore J

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

2016-09-23

Before

Moore J

Catchwords

[1986] HCA 40 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332
[2013] HCA 18 Rivers SOS Inc v Minister for Planning (2009) 178 LGERA 347
[2009] NSWLEC 213 Terrace Tower Holdings Pty Ltd v Sutherland Shire Council (2003) 129 LGERA 195

Source

Original judgment source is linked above.

Catchwords

[1986] HCA 40 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332[2013] HCA 18 Rivers SOS Inc v Minister for Planning (2009) 178 LGERA 347[2009] NSWLEC 213 Terrace Tower Holdings Pty Ltd v Sutherland Shire Council (2003) 129 LGERA 195

Judgment (56 paragraphs)

[1]

TABLE OF CONTENTS Introduction The role of the Planning Assessment Commission The nature of these proceedings The evidence The original scope of the current Proposal Reviewing a PAC report The first PAC review The PAC documents relevant to the application for the current Proposal The conclusion and recommendation of the Second Review Report Ground 1 Introduction State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 Relevant extracts from the Second Review Report and associated documents Executive Summary 2.3 Project Surrounds 4.1.1 Compatibility with Other Land Uses (Clause 12) 4.2 Water and Subsidence 4.3 Impacts on Upland Swamps 4.4 Socio-Economic Benefits and Impacts Second Review Report's Conclusion The transmission letter The fact sheet Wollongong Coal's position on Ground 1 The Minister's position on Ground 1 Ground 1 - The first element Ground 1 - The Second element Wollongong Coal's complaint The Minister's responses Minister's response 1 - the PAC's consideration of the Drinking Water SEPP was consistent with Wollongong Coal's invitation Minister's response 2 - the PAC's consideration did not suggest it was a mandatory requirement that the proposal satisfy cl 10(1) of the Drinking Water SEPP Minister's response 3 - the PAC's conclusions in the Second Review Report demonstrate that the Drinking Water SEPP was but one factor considered by the PAC in a proper evaluation process Conclusion on Ground 1 Ground 2 Introduction The Second Review Report The First Review Report The PAC report on Modification 1 (Preliminary Works Project) Applicant's background material Consideration of Ground 2 Conclusion on Ground 2 Severability Conclusion Ground 1 Ground 2 Orders

[6]

The original scope of the current Proposal

When the current Proposal was lodged by the former owner of the Russell Vale Colliery, it was significantly different in scope from the form requiring consideration by the PAC in its Second Review. As noted in Wollongong Coal's document entitled "Underground Expansion Project - Preferred Project Report", a significant number of elements of extension to the mine's workings that had been incorporated in the original proposal application in 2009 had been removed.
The "Preferred Project Report (including response to submissions)" for the underground expansion project formed part of the material tendered on behalf of the Minister. Although the document does not appear to be dated, the index to the Minister's tendered documents note it as being dated September 2013. On page 14 of this document, there appears a table under the heading "1.1 Comparison of PPR vs Original Proposal". There are, in the table, details of the three elements deleted from the original proposal.
These potentially relevant removed identified elements were described in this document in the following terms: • 7 longwalls in two Areas Wonga West longwalls • Area 3 - LW's 1-5 • Removed from this application. To be revised and to be resubmitted as a separate application to DPI at a later date. • Area 4- LW's 6-7 • Total ROM Coal = 0 Million tonnes • Total ROM Coal = 24.6 Million tones Bulli West-Bulli Seam 1st Workings • 1st workings to access the Bulli Seam in the western area of the Project Application Area • Removed from this application and to be reviewed for inclusion in a future application Balgownie Seam 1st Workings • 1st workings to access the Balgownie Seam in the western area of the Project Application Area • Removed from this application and to be reviewed for inclusion in a future application

[9]

The first PAC review

A First Review of the current Proposal was undertaken by the PAC with its report (the First Review Report) being published in April 2015. The PAC Panel which undertook this review was comprised of three members, amongst whom were Mr Woodward and Mr Forward, who have also formed part of the PAC Panel which has undertaken the Second Review of the current Proposal. Mr Woodward has chaired the panel for the purposes of the Second Review, although he did not chair the First Review panel (Mr Forward did so). Mr Stoeckel was added to the two continuing members from the First Review process to constitute the PAC Panel for the Second Review.
The panel which undertook the First Review provided its 67-page First Review Report based on the proposal as it was at the time of that review. There are two aspects of the First Review Report that require noting for the purposes of these proceedings. The first is that this report concluded that it did not have sufficient information to reach a definitive recommendation concerning the proposal being examined and, therefore, made a range of what might be regarded as precursor recommendations about further investigation that it considered was necessary to permit an informed conclusion to be drawn concerning the proposal.
Relevant to the matters requiring consideration in these proceedings, the specific recommendations included the ones in the First Review Report for further investigation of matters arising concerning potential impacts on water and water quality in the water catchments covered by the protective provisions of State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 (the Drinking Water SEPP) and its predecessor Regional Environmental Plan. Further material prepared in response to those recommendations (including reports based on further investigations) provided a basis for conducting the PAC's Second Review of the current Proposal.
Second, the First Review Report contains material that provides context for the complaint that founds Ground 2 in these proceedings. In that regard, the First Review Report expresses concern about matters of cumulative impact of the making of sequential applications concerning expansion of this colliery. The relevant passage from the First Review Report is in the following terms: The Commission notes that previous PACs have raised concerns about determining various modification applications, and the unsatisfactory, piecemeal approval being taken to this major mining project. The PAC determining MOD 2 stated: This Commission is put in a very difficult position. On the one hand, it shares objectors' concerns in regard to the piecemeal approach to gaining planning approval and agrees that ideally this application should not be considered in isolation in the absence of the expansion plan. On the other hand, this application is said to be essential to maintain the operation of the mine and the employment of existing mineworkers until the expansion plan is determined (Planning Assessment Commission, 2014). The current proposal has been modified and substantially cut back to reduce the potential adverse impacts of the mine. The consequence of this is that once again it presents the decision-maker with a piecemeal application, considering the proponent's stated intention to lodge a subsequent application for a larger and long-term mining approval.
The above quotation comes from "2.1 background and Historical Context" in "Part 2 Project Description" of the First Review Report.
The first paragraph in "7.1 Conclusions" of "Part 7 Conclusions and Recommendations" of the First Review Report is in the following terms: The incremental nature of this proposal is in keeping with the earlier modification submitted and the Commission shares the view expressed in earlier PAC reports that this is not an acceptable way to undertake planning of a proposal that has the potential for significant environmental and community impacts. Effective consideration of cumulative impacts is particularly challenging.
I should observe, at this point, that there is no procedural barrier contained in the EP&A Act or in any State Environmental Planning Policy that would preclude the making of multiple project applications pursuant to Pt 3A of the EP&A Act, nor to the making of applications for modification to proposals that had been approved pursuant to the processes that had been contained in Pt 3A.
Indeed, specific provisions had been included in Pt 3A to enable the granting of consent to modifications proposed to projects that had been approved under the Part. In the context of these proceedings, two modifications have been sought to the project approval for the preliminary works at the Russell Vale Colliery.

[11]

The conclusion and recommendation of the Second Review Report

Prior to turning to consider matters of detail in any of these documents, it is appropriate to set out the entirety of the conclusion of the PAC Panel at 5.2 of the Second Review Report and the short recommendation that follows it at 5.3 of this report. Those elements of the report are in the following terms: 5.2 CONCLUSION Water and subsidence are two of the major issues considered in the Commission's first review of this project. The Commission engaged E/Prof Galvin and Dr Mackie to assist in its review of the project. They identified various issues that required further consideration and assessment including the setting up of an integrated risk assessment panel (IRAP). The proponent has provided extensive documentation and plans in response to the recommendations in the First Review including the IRAP assessment results. In January 2016, this Commission again retained E/Prof Galvin and Dr Mackie to review the additional information provided by the proponent for the second review of the project. Dr Mackie identified a number of significant concerns relating to the revised groundwater modelling. The proponent was provided with an opportunity to clarify these issues including the provision of the numeric model to Dr Mackie. Notwithstanding all the additional information, Dr Mackie still has residual concerns, which are shared by E/Prof Galvin and detailed in their advice in Appendix 6. This leads to the Commission's doubt and lack of confidence in the proponent's ability to provide scientifically sounded and properly assessed documentations to support this application. For example, the earlier report predicted that fracturing to surface would be unlikely at the end of mining. The recently provided data appear to confirm cracking to surface has already occurred. Yet, this is not confirmed in the recent report. Thus the risk of water loss remains uncertain. The magnitude of the potential water loss is also contested, ranging from negligible, 15ML per year to 2.6GL per year. As a result of such uncertainty, the potential impacts on upland swamps and Giant Dragonfly are also uncertainty as the swamps depends on the surface and shallow groundwater while the Giant Dragonfly depends on the swamps. The proponent has placed substantial emphasis on mitigation strategy to deal with residual impacts. However, it is likely that some damage has already occurred before mitigation measures can be initiated and there is considerable uncertainty about the types of mitigation measures and the effectiveness of the measures to be employed. Long term operation and management costs of these measures after mine closure have not been considered. The project is located in a highly sensitive area, a drinking water catchment area. The environment is also very fragile because of past multi seam underground mining activities. Subsidence induced fracturing is already occurring. The critical issue is where is the tipping point and what is the cumulative impact of long wall mining? It should be noted that during the current review, the Commission has received a letter from WaterNSW and advices from the experts engaged by the Commission. These documents have not been forwarded to the proponent for a response before this review is finalised. The reason for not providing these final assessments to the proponent is because the proponent has ample opportunities to provide information to the Commission during the first and second review processes. During this current review, the Commission reviewed the proponent's submissions, met with the proponent twice, carried out two site inspections and provided written questions to the proponent to seek clarification on the information provided. Importantly, this review is part of the assessment process, and the proponent will have further opportunity to make submissions prior to any final determination. Advices from WaterNSW and the Commonwealth's Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development have both identified significant risks with respect to the proponent's water modelling of the predicted impacts. The Commission's experts confirmed the risk of water loss remains uncertain. The magnitude of water loss is uncertain with the projected range from the proponent and Water New South Wales varying from minimal to 2.6GL/year. The Commission considers this is a high risk situation. The Commission also has regard to the objectives of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, particularly "a project will have neutral or beneficial effect on water quality". From the evidence currently presented to it, the Commission is of the opinion that the project satisfies neither of these requirements. On the basis of all the information provided, the Commission is of the view that the social and economic benefits of the project as currently proposed are likely outweighed by the magnitude of impacts to the environment. [emphasis added] Following the release of this review report, the proponent will have the opportunity to respond to this report before the Department finalises the assessment of this project for the consent authority's determination. The proponent will also have the opportunity to meet the consent authority before a decision is made on the application. 5.3 RECOMMENDATION The Commission recommends that any further consideration of the proposal should have regard to the issues raised in this Review Report.

[12]

Introduction

Ground 1, as pleaded, has earlier been set out. In essence, the complaint is that the terms of the Second Review Report have been crafted by the PAC on the basis that the Drinking Water SEPP applied to, and was required to be satisfied for, any approval of the current Proposal.
The Director-General's requirements for the current Proposal were provided to a representative of the then owner of the Russell Vale Colliery by letter from the Director-General's delegate on 18 August 2009. The Director-General's requirements note, on the topic of references, that an attachment contains a list of the Guidelines, Policies, and Plans that may be relevant to the environmental assessment of the project. The attached list notes, in a section entitled "Surface Water", that one of the documents to which the project applicant's attention was drawn was the Drinking Water Catchments Regional Environmental Plan No 1 (the Regional Environmental Plan), a document that was, as earlier noted, the predecessor to the Drinking Water SEPP.
During the course of his oral submissions, Mr Williams acknowledged that it was appropriate for the PAC to have regard to the Drinking Water SEPP in its deliberations but submitted that consideration of the language of the various documents mandated the conclusion that the PAC had gone further and had considered that the relevant mandatory satisfaction test posed by the Drinking Water SEPP, in cl 10, was required to be met by the current application. Mr Williams submitted that, in so doing, the PAC made an error of law in its understanding of the task that had been referred to it by the Minister and that, as a consequence, its review and reporting function had miscarried.
Mr Shearer concurred in the basic propositions advanced by Mr Williams (that the PAC could have regard to the Drinking Water SEPP but was not permitted to regard the satisfaction of consent granting prerequisites under the SEPP as being mandatory) but submitted that a proper understanding of the language used by the PAC in the Second Review Report made it clear that it was not treating the Drinking Water SEPP's tests as mandatory preconditions, merely that it had had regard to the objectives of the Drinking Water SEPP as a matter for consideration in its overall deliberations leading to the Second Review Report.

[13]

State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011

Two versions of the Drinking Water SEPP were provided to me on behalf of Wollongong Coal. The current version is the one to which reference was made during the course of the proceedings. There are three provisions in the Drinking Water SEPP to which it will be necessary to have regard. They are contained in cll 3, 10 and 13. The first of these, cl 3, sets out the aims of the policy. The provision is in the following terms: 3 Aims of Policy The aims of this Policy are: (a) to provide for healthy water catchments that will deliver high quality water while permitting development that is compatible with that goal, and (b) to provide that a consent authority must not grant consent to a proposed development unless it is satisfied that the proposed development will have a neutral or beneficial effect on water quality, and (c) to support the maintenance or achievement of the water quality objectives for the Sydney drinking water catchment.
Clause 10 imposes a mandatory test that must be satisfied before any development under Pt 4 of the EP&A Act can be approved on land to which the SEPP applies, being the land in the Sydney drinking water catchment as defined in cl 7 of the SEPP. The terms of cl 10 are set out below: 10 Development consent cannot be granted unless neutral or beneficial effect on water quality (1) A consent authority must not grant consent to the carrying out of development under Part 4 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. (2) For the purposes of determining whether the carrying out of the proposed development on land in the Sydney drinking water catchment would have a neutral or beneficial effect on water quality, the consent authority must, if the proposed development is one to which the NorBE Tool applies, undertake an assessment using that Tool. Note. The NorBE Guideline provides information and guidance for consent authorities in the use of the NorBE Tool.
The savings provisions in the Drinking Water SEPP are contained in cl 13 which reads: 13 Savings A development application that has been made but not finally determined before the commencement of this Policy, or an amendment to this Policy, must be determined as if this Policy or the amendment had not commenced.
There are three observations to be made with respect to these provisions. First, with respect to the mandatory prerequisite contained in cl 10, it only applies to development under Pt 4 of the EP&A Act and not to development proposals made under Pt 3A (which, as earlier noted, continues to apply to the current Proposal despite the repeal of Pt 3A in the intervening period).
Second, it is clear from the terms of s 75J(3) of the EP&A Act that the Minister (and in this case, the PAC upon reference from the Minister) can take into account the provisions of the Drinking Water SEPP but is not required to be satisfied that any mandated test has been met before recommending granting or granting approval to such a proposal.
Finally, it is also appropriate to note that, although there is the transitionary provision earlier set out, the terms of the Regional Environmental Plan applied from 1 July 2009 (prior to the lodgement of the current Proposal) until the coming into effect of the Drinking Water SEPP. The Regional Environmental Plan contained, in cl 26(b), the requirement that development under Pt 4 of the EP&A Act on land within the catchment ("catchment" being defined in cl 5 in terms generally coincidental with the relevant definition in the Drinking Water SEPP) could not be approved unless the consent authority was satisfied that the carrying out of the proposed development would have a neutral or beneficial effect on water quality.
As a consequence, the mandated consent test had applied for any Pt 4 application, relevantly, throughout the period since the lodgement of the current Proposal. Although the aims of the Regional Environmental Plan differ from those of the Drinking Water SEPP, nothing arises from that in these proceedings.

[15]

Executive Summary

In the Executive Summary of the Second Review Report, at [iii], after noting that the Departmental assessment was that the social and economic benefits of the project outweighed the residual costs and it was in the public interest that the project be approved subject to conditions, the Second Review Report continued: The Commission has considered all the available information including additional information provided by relevant agencies and experts. There is no disagreement about the importance of protecting Sydney's drinking water catchment, both in terms of the water quality and quantity. The proponent has argued that this can be achieved by the proposed mining layout and mining methods, acknowledging that the mine plan has been substantially modified and reduced compared with the original proposal. The Department's assessment concluded that the social and economic benefits of the project outweigh the residual costs and it is in the public interest that the project be approved subject to conditions. Advices from WaterNSW and the Commonwealth's Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development have both identified significant risks with respect to the proponent's water modelling of the predicted impacts. The Commission's experts confirmed the risk of water loss remains uncertain. The magnitude of water loss is uncertain with the projected range from the proponent and Water New South Wales varying from minimal to 2.6GL/year. The Commission considers this is a high risk situation. The Commission also has regard to the objectives of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, particularly "a project will have neutral or beneficial effect on water quality". From the evidence currently presented to it, the Commission is of the opinion that the project satisfies neither of these requirements. On the basis of all the information provided, the Commission is of the view that the social and economic benefits of the project as currently proposed are likely outweighed by the magnitude of impacts to the environment. In reaching its conclusion, the Commission has had regard to the evidence presented to it by the proponent, the Department, the public submissions and presentations to the public hearing and from the advice provided by the Commission's independent experts, the IESC, OEH, and WaterNSW and the relevant State Environmental Planning Policy (Mining SEPP and Sydney Drinking Water Catchment SEPP). [emphasis added]
Following that commentary, the PAC Panel noted its recommendation that any further consideration of the proposal should have regard to the issues raised in this Review Report.
As can be seen from the conclusion to the Second Review Report (earlier reproduced at [28]), this extract also reproduces, at the end of the Executive Summary, the final three paragraphs of 5.2 of the Second Review Report and notes the recommendation in identical terms to that contained in 5.3 of the Second Review Report.
In this context, it should be expressly noticed that the final paragraph (in bold above) of the extracted element of the Executive Summary of the Second Review Report differs from that which is set out in the conclusion of this Report.

[17]

4.1.1 Compatibility with Other Land Uses (Clause 12)

The second mention of the Drinking Water SEPP is on page 7 of the Second Review Report in "4.1.1 Compatibility with Other Land Uses (Clause 12)". It is clear from the context within which these comments appear that the cl 12 to which reference is made in the heading is the provisions of cl 12 of State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Significance of Resource) 2015 (the Mining SEPP).
As the Second Review Report notes, the provisions of this Mining SEPP amendment do not strictly apply to this project, as the current Proposal is a transitional Pt 3A application but, as the Review Report also notes, the terms in the Minister's request require the PAC to consider the Mining SEPP, as amended. The terms of cl 12 are set out below: 12 Compatibility of proposed mine, petroleum production or extractive industry with other land uses Before determining an application for consent for development for the purposes of mining, petroleum production or extractive industry, the consent authority must: (a) consider: (i) the existing uses and approved uses of land in the vicinity of the development, and (ii) whether or not the development is likely to have a significant impact on the uses that, in the opinion of the consent authority having regard to land use trends, are likely to be the preferred uses of land in the vicinity of the development, and (iii) any ways in which the development may be incompatible with any of those existing, approved or likely preferred uses, and (b) evaluate and compare the respective public benefits of the development and the land uses referred to in paragraph (a) (i) and (ii), and (c) evaluate any measures proposed by the applicant to avoid or minimise any incompatibility, as referred to in paragraph (a) (iii).
It is in this context that the terms of "4.1.1 Compatibility with Other Land Uses (Clause 12)" of the Second Review Report are to be noted. This element of the Second Review Report is in the following terms: The Department concluded that the project is not likely to result in unacceptable impacts to surrounding land uses in general. Residual impacts could be minimised, mitigated or compensated for to achieve acceptable environmental and amenity outcomes via recommended conditions of approval. The Commission is yet to be convinced the Department's conclusion is reasonable and justified. Land use compatibility requires that each land use type should not pose any significant threat or impact to the other use. As will be discussed in Section 4.5 of this report, the Commission finds potential noise impacts on adjacent residences would not be negligible or beneficial, if reasonable benchmarks for existing noise were used for the assessment instead of using the "modelled maximum noise levels for 1Mtpa". Similarly, traffic noise impact on residences along Bellambi Lane requires reassessment. The risk of subsidence induced cracking to surface resulting in water loss remains uncertain. As a result, the potential impacts on water quality and quantity and the upland swamps remain uncertain and the environmental consequences are also uncertain. Even if the risk of water loss is low, if it occurs, how and what mitigation measures could apply to remediate the situation and the likelihood of success has not be clearly demonstrated. Any water loss and the associated impact on water quality and upland swamps could be permanent and irreversible. Sections 4.2 and 4.3 of this report discuss these concerns in detail. On the evidence, the Commission is not convinced that "the project is not likely to result in unacceptable impacts to surrounding land uses in general". In reaching this conclusion, the Commission is also mindful of one of the key objectives of the Sydney Drinking Water Catchment SEPP that consent cannot be granted unless the project has a neutral or beneficial effect on water quality. From the evidence currently presented to it, the Commission is of the opinion that the project satisfies neither of these requirements.
The particular element of this section of the Second Review Report about which Wollongong Coal complains is that which is set out in the final paragraph of the above extract. This, too, is discussed later.

[19]

4.3 Impacts on Upland Swamps

The next section of the Second Review Report is "4.3 Impacts on Upland Swamps". This section of the Second Review Report arose out of work undertaken following recommendations made in the First Review Report proposing various follow-up matters needing to be attended to after consideration of that First Review Report. At "4.3.7 Commission's Consideration and Findings", the PAC dealt with potential impacts on the upland swamps. Although I was only taken to portion of the paragraphs reproduced below in the Second Review Report, it is appropriate to set out, in my view, the totality of the section of this report under this heading. It is in the following terms: In considering the potential impacts to upland swamps, the Commission notes the advices from the proponent's consultant, the Integrated Risk Assessment Panel, the Department of Planning and Environment, the DPI, the OEH and WaterNSW. Of particular concern to the Commission is the OEH view that the risk assessment underestimated the project's impacts, given the permanent and irreversible nature of bedrock cracking beneath the swamps. The OEH is responsible for the care and protection of the environment. One of its functions is to provide scientific evidence and expert knowledge to underpin environmental decision making. Therefore, the Commission considers significant weigh must be given to its advice. The OEH's opinion together with the Commission's experts' advices on groundwater and subsidence and their review of the integrated assessment process reinforce the Commission's concern about the uncertainty of the project's potential impact to the catchment area in terms of water quantity & quality, upland swamps and biodiversity. The Commission's consideration has regard to the general principle of the Offset Policy that when an impact is identified, avoidance should be the first consideration, followed by mitigation and finally offsets. In the circumstances here, there is significant doubt in any mitigation measures that could remediate the impact or be able to reduce the impact to an acceptable level. Any loss of water could be permanent and irreversible resulting in changes to the composition and nature of the swamps with unknown long-term consequences. Any socio-economic benefits arising from the project must be balanced with the risk of water loss and associated impacts in the drinking water catchment area, which is a highly sensitive area. In response to the Commission's question regarding options to avoid impacts to CCUS4, the proponent advised that the cost of avoiding 230m section of longwall 6 beneath CCSU6 would be $10 million. No independent verification of the cost has been provided to the Commission. As discussed in the previous section of this report, the Commission's experts raised significant concerns about the potential cracking to surface at the eastern ends of LW6 and LW7 with a resulting potential loss of 10% of water flow in the Cataract Creek. This leads to the question of whether LW6 should be mined at all. The proposed offsets may be able to offset the swamps, although the question is raised that the proposed offsets are not similar in characteristic, nature and composition to the damaged ones. A further question that appears to be overlooked is the potential water quality impact from the damaged swamps. The Commission finds that 1. The uncertainty in predicting subsidence and the environmental outcomes for upland swamps and the sensitive nature of the area warrants a cautious approach. 2. There is significant doubt as to what mitigation measures could be applied to remedy the cracking of bedrock beneath the swamps, apart from offset. 3. If the OEH's classification of risk is considered, the potential damage of 14 swamps with uncertain environmental consequences in a drinking water catchment area is a significant concern, if offset could not be found within the catchment area.
The contribution that this makes to the context of consideration of Ground 1 is also discussed later.

[24]

Wollongong Coal's position on Ground 1

Wollongong Coal's written outline of submissions sets out the three complaints made concerning the consideration by the PAC of the Drinking Water SEPP, as shown, the company said, by the terms of the Second Review Report. Those were: 1. The Drinking Water SEPP did not apply to the Project Application. 2. The PAC erroneously believed that the Drinking Water SEPP applied to the Project Application. 3. That erroneous view affected the Report.
The primary documentary aspects relied upon by Wollongong Coal in its written outline of submissions were in the following terms: 16) It is clear that the PAC considered that the Drinking Water SEPP was binding in respect of the Project Application, because it said so in terms. It said the following (at page 3) [Court Book 39]. The vast majority of the land that is covered by the underground mining lease is owned and managed by WaterNSW, formerly Sydney Catchment Authority and lies within the Metropolitan Special Area water catchment. As a consequence, the project assessment must consider State Environmental Planning Policy (Sydney's Drinking Water Catchment) 2011, which states that: "Consent for development on land in the Sydney Drinking Water Catchment cannot be granted unless it has a neutral or beneficial effect on water quality". 17) The PAC's treatment of the Drinking Water SEPP provides the factual substrate for ground 1 of the Summons [Court Book 1-6]. Although the purported quote is not accurate, it is apparently an attempt to refer to the effect of cl 10(1) of the Drinking Water SEPP. As will be seen, that prohibition does not apply to this application. 18) It is also apparent from the text of the PAC Report that it gave weight to the Drinking Water SEPP as a document that set out requirements that were binding upon the approval of the project. It said: The Commission also has regard to the objectives of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, particularly "a project will have neutral or beneficial effect on water quality". From the evidence currently presented to it, the Commission is of the opinion that the project satisfies neither of these requirements. (Report at iii) [Court Book 33] In reaching its conclusion, the Commission has had regard to … the relevant State Environmental Planning Policy (Mining SEPP and Sydney Drinking Water Catchment SEPP). (Report at iv) [Court Book 34] On the evidence, the Commission is not convinced that "the project is not likely to result in unacceptable impacts to surrounding land uses in general". In reaching this conclusion, the Commission is also mindful of one of the key objectives of the Sydney Drinking Water Catchment SEPP that consent cannot be granted unless the project has a neutral or beneficial effect on water quality. From the evidence currently presented to it, the Commission is of the opinion that the project satisfies neither of these requirements. (Report at 7) [Court Book 43] The Commission also has regard to the objectives of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, particularly "a project will have neutral or beneficial effect on water quality". From the evidence currently presented to it, the Commission is of the opinion that the project satisfies neither of these requirements. (Report at 45) [Court Book 81] 19) The PAC's treatment of the Drinking Water SEPP can be contrasted with its treatment of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (NSW) (the Mining SEPP). The PAC was specifically directed to consider a version of the Mining SEPP by the terms of reference: see paragraph 8. In respect of the Mining SEPP, the PAC observed at 7 [Court Book 43]: Although the provisions of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Significance of Resource) 2015 (Mining SEPP) do not strictly apply to this project because it is a transitional Part 3A application, the terms of reference in the Minister's request require to the Commission to consider the Mining SEPP as amended. 20) The point for present purposes is that the PAC expressly adverted to its view that the Mining SEPP was not applicable to the project, but that it was being considered because the Minister had expressly directed the PAC to do so. The contrast with the terms of its treatment of the Drinking Water SEPP. 21) The PAC ultimately concluded that "[o]n the basis of all the information provided, [it was] of the view that the social and economic benefits of the project as currently proposed are likely outweighed by the magnitude of impacts to the environment": Report at iii [Court Book 33]
Mr Williams' oral submissions concerning Ground 1 can best be understood from his own words (Transcript 22 September 2016, page 11 line 36 to page 12 line 14): Your Honour, taking all of those matters together, in our submission there's no real room for doubt that the PAC regarded itself as bound by the Catchment SEPP. There's no real reason for doubt because the Commission itself said so in the words "must consider", on p 78. The Commission itself used the language of a requirement on several occasions. The Commission itself did not recognise at any point in the report that this was a discretionary matter. The Commission used the language of relevant SEPP without qualifying that at all to indicate that it had at most a discretionary relevance, and, we say, because in the contemporaneous documents, the booking documents, the Commission expressly applied the language of the SEPP, albeit with misquotation or adjustment with no recognition of the significance of those adjustments, as one of the key reasons for recommending refusal of the project. Those matters together, your Honour, in the absence of any contrary indication in this report or any of the contemporaneous documents emanating from the PAC, point irrevocably to a conclusion that this PAC regarded itself as bound. We say that the fact that a full year earlier a PAC that had two common members but one different member that was considering a different review under different terms of reference and in a different report did recognise the inapplicability is insufficient to cast any doubt on the strength of the conclusion that emerges from all of those references put together, and the absence of any acknowledgement in this report. We say those matters together lead irrevocably to the conclusion that the PAC thought it was bound. There was no sensible inference, we say, available that the PAC did not mean what it said, that it must consider these requirements of these relevant state environment planning policies.
Mr Williams also took me to several passages in the decision of the Chief Judge in Rivers SOS Inc v Minister for Planning (2009) 178 LGERA 347; [2009] NSWLEC 213 in support of his submission that, relevantly, the Drinking Water SEPP did not apply to the current Proposal. It is unnecessary to turn to the terms of his Honour's decision in any detail as it is clearly the position that the test in cl 10 of the Drinking Water SEPP is not required to be satisfied by the current Proposal, nor is the test in cl 10(1) of the Drinking Water SEPP a matter of mandatory consideration by the PAC in its Second Review process.

[31]

Project Application's Environmental Assessment

I turn, first, to consider relevant elements contained in Wollongong Coal's Environmental Assessment document.
The Project Application's Environmental Assessment document discusses the Drinking Water SEPP on pages 71 to 73. There are a number of points to be noted arising from "4.3.5 State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011" on those pages. First, at the commencement of the section, the document acknowledges that the Drinking Water SEPP "applies to land within the hydrological catchments that contribute to Sydney's drinking water supply". The section then sets out the three aims of the Drinking Water SEPP. It then acknowledges: A large part of the PAA [Project Application Area] is designated as a Schedule 1 Restricted Access Area (Metropolitan Special Area) under the Sydney Water Catchment Management Act 1998 (refer to s 4.4.3) and is managed by the Sydney Catchment Authority (SCA). Consequently, this SEPP applies.
It expressly sets out, relevant to this complaint by Wollongong Coal, the second aim of the policy, that being: To provide that a consent authority must not grant consent to a proposed development unless they are satisfied that the proposed development will have a neutral or beneficial effect on water quality.
The document then notes that, in deciding whether or not to approve the project under Pt 3A, "the Minister may take into account Clause 9 and Clause 10 of the SEPP (Sydney Drinking Water Catchment)". The document then sets out the terms of those clauses; describes the Neutral or Beneficial Effect tool and then contains a section under the heading "Implications for the Project". This section reads: Impacts of the Project on the quality of water within lands to which the Sydney Drinking Water Catchment SEPP applies are assessed in Chapter 20. The assessment concludes that the Project will not have a significant impact on water quality. As a Part 3A project under the EP&A Act, a development application under Part 4 of the Act does not have to be submitted. Although not specified in the SEPP, the NorBE guideline may provide a framework to consider major infrastructure and other projects under Part 3A of the EP&A Act. The Minister for Planning and Infrastructure determines these projects and which water quality test will be applied.
In the context of Ground 1, it is particularly appropriate to note, from the material set out above, the following that appears on page 72 of the Environmental Assessment: In deciding whether or not to approve the project under Part 3A, the Minister may take into account Clause 9 and Clause 10 of the SEPP (Sydney Drinking Water Catchment).
It is to be observed that this comment appears after the aims of the Drinking Water SEPP had been set out in the document and immediately prior to the setting out of the terms of cll 9 and 10 of the Drinking Water SEPP.
Although I was not taken to the detail of the Environmental Assessment, it is appropriate to refer, in some detail, to Ch 20 of that document, as it is referenced, as set out above, as comprising the Environmental Assessment document's discussion of the impacts on water quality within the catchment. Chapter 20 is entitled "Catchment Area Surface Water". It commences at page 285 of the document and runs to page 330. Although, at the commencement of this chapter, in the introduction, in 20.1.1, under the heading "Legislation, Guidelines and Policies", it states: The assessment has been prepared with reference to a number of guidelines, policies, and legislation, in particular the Water Management Act 2000, as outlined in Chapter 3 of Annex O.
However, given the earlier references on pages 71 to 73 of the Environmental Assessment document, it is reasonable to assume that this chapter encompasses matters envisaged as relating to any consideration of the proposed development in the context of the PAC, as the Minister's delegate, taking into account matters arising from the SEPP despite the fact that a careful reading of the 46 pages in this chapter discloses no specific mention of the SEPP.
The chapter is highly technically detailed and it is unnecessary to set out any significant elements of that detail. It is, however, appropriate to note that 20.3 deals with past mining impacts, and 20.4 deals with potential impacts. The discussion of potential impacts commences on page 306, with the question of cumulative impacts being dealt with at 20.4.8, commencing on page 319. Although it is not necessary to deal with it in my consideration of Ground 1, it will be necessary to return to this element of the Environmental Assessment, in my consideration of Ground 2.

[32]

Annex O to the Environmental Assessment

In Pt 3 Guidelines and Legislation, Annex O to the Environmental Assessment deals, at 3.4, with the Drinking Water SEPP. This portion of Annex O commences by setting out the aims of the Drinking Water SEPP. It then notes the management regime in similar terms to that set out after [70] above. This paragraph in Annex O also expressly states: Consequently, this SEPP applies.
After setting out cll 9 and 10 of the Drinking Water SEPP and having, as in the material extracted from the main body of the Environmental Assessment, noted that: In deciding whether or not to approve the project under Part 3A, the Minister may take into account Clause 9 and 10 of the SEPP, Annex O then discusses the Neutral or Beneficial Effect tool (NorBE tool). The relevant portion of Annex O, on this point, reads: The Neutral or Beneficial Effect tool (NorBE tool) identified in Clause 10 of SEPP (Sydney Drinking Water Catchment) 2011 describes how to assess a Neutral Beneficial Effect (NorBE) on water quality for development applications made to consent authorities for land in the Sydney Drinking Water Catchment, as defined in the SEPP. The NorBE tool is detailed in Appendix 1 of the Neutral or Beneficial Effect of Water Quality Assessment Guidelines 2011 (NorBE Guidelines). The NorBE Guidelines supports the implementation of the SEPP by providing clear direction on what a neutral or beneficial effect means, how to demonstrate it, and how to assess an application against the neutral beneficial effect on water quality test using the NorBE tool. Although not specified in the SEPP, the NorBE Guideline may provide a framework to consider major infrastructure and other projects under Pt 3A of the EP&A Act. The Minister for Planning and Infrastructure determines these projects and which water quality test will be applied. Monitoring to date indicates that the proposed works will not have significant impact on water quality within lands to which this the Sydney Drinking Water Catchment SEPP applies.

[35]

Minister's response 2 - the PAC's consideration did not suggest it was a mandatory requirement that the proposal satisfy cl 10(1) of the Drinking Water SEPP

It is clear from the summary of public submissions to the PAC, set out in Appendix 3 to the Second Review Report, that potential impacts on the water catchment area were a significant element of the those submissions.
The PAC was required, by 1(d) of the Minister's terms of reference (earlier set out), to have regard to those submissions. In addition, it is clear that the Drinking Water SEPP could also be engaged for consideration by 1(c) of the Minister's terms of reference, in that the SEPP engaged with potential environmental impacts of the development in the locality and the region.
Indeed, although the expression "the public interest" is not set out in terms in the Minister's request to the PAC to carry out this Second Review of the current Proposal, it is necessarily implicit from the overall terms of the Minister's request. In considering matters of the public interest, a merit assessment body, such as the PAC, can cast its net widely in seeking to inform itself (Terrace Tower Holdings v Sutherland Shire Council [2003] 129 LGERA 195; [2003] NSWCA 289 at [81] per Mason P).
Although, in Wollongong Coal's original written submissions, it was said that the PAC should not have regard to the Drinking Water SEPP, it is clear, as set out above at [59], that Mr Williams acknowledged, in his oral submissions, that it was permissible for the PAC to have regard to the aims of the Drinking Water SEPP (set out earlier at [33]). It is also agreed, as I understood the position adopted by the Minister, that this was the position but, it was also agreed, the SEPP did not apply and, as a consequence, the test in cl 10(1) of the SEPP was not called into play with respect to the current proposal. It is, therefore, necessary to consider the various instances where the PAC's report and the two associated documents make reference to the Drinking Water SEPP and how, having had regard to those references, the nature of those references should be characterised.
If the references can correctly be characterised as arising from the PAC having regard to the aims of the Drinking Water SEPP (particularly that which is set out in cl 3(b)), this aspect of Wollongong Coal's complaint will also fail on this basis.
Although I have set out, between [40] and [56], and at [28], the relevant elements of the PAC's Second Review Report, these have included, where appropriate, surrounding supporting context for the remarks. It is, now, appropriate to set out, more starkly, the specific references to the Drinking Water SEPP contained in the Second Review Report. Executive Summary The Commission also has regard to the objectives of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, particularly a project will have neutral or beneficial effect on water quality.
Although the PAC uses the word "objectives", this is a clear reference to the aim in cl 3(b) of the SEPP. The PAC expressly says that it has had regard to those objectives (aims) and there is nothing in this extract that could lead one to conclude that the PAC has applied some mandatory test, merely that it was of the opinion that the project satisfies neither of those requirements (of a neutral or beneficial effect on water quality).

[43]

Minister's response 3 - the PAC's conclusions in the Second Review Report demonstrate that the Drinking Water SEPP was but one factor considered by the PAC in a proper evaluation process

The final aspect of the Minister's response to Wollongong Coal's first complaint is that the PAC merely had regard to the aims of the Drinking Water SEPP as one of a multitude of factors taken into account.
I am satisfied that this is an appropriate conclusion to be drawn from the document itself. First, the conclusion to the Second Review Report sets out the wide range of matters to which the PAC had regard. The objectives of the Drinking Water SEPP were merely one aspect of the matters considered by the PAC in reaching its conclusion. Indeed, the functional outcome paragraph of the Second Review Report's conclusion is in the following terms: On the basis of all the information provided, the Commission is of the view that the social and economic benefits of the project as currently proposed are likely outweighed by the magnitude of impacts to the environment.
This is a general conclusion rather than something specifically founded on the Drinking Water SEPP in any impermissible fashion. As earlier noted, this paragraph is also reproduced in the Executive Summary to the Second Review Report (as set out at [40] above).
Second, in the Executive Summary, the PAC says: In reaching its conclusion, the Commission has had regard to the evidence presented to it by the proponent, the Department, the public submissions and presentations to the public hearing and from the advice provided by the Commission's independent experts, the IESC, OEH, and WaterNSW and the relevant State Environmental Planning Policy (Mining SEPP and Sydney Drinking Water Catchment SEPP).
These extracts from the Executive Summary and the Conclusion to the Second Review Report make it clear that, as the Minister's third response suggested, the Drinking Water SEPP was but one factor considered by the PAC in its evaluation process, an evaluation process which merely considered or had regard to the Drinking Water SEPP rather than being treated by the PAC as something that was mandated to be satisfied.

[45]

Introduction

The basis for this ground (the relevant extract from the pleadings has earlier been reproduced) is that the PAC took into account a prohibited consideration - that being, as it emerged during the course of the hearing, Wollongong Coal considering the PAC Panel impermissibility, having had regard to hypothetical future development proposals in addition to the cumulative outcomes to be expected from already approved proposals or modifications thereto.
Wollongong Coal's written submissions, on this ground, were in the following terms: 66. The PAC formed an adverse view in respect of the Project Application because Wollongong Coal's existing approval had been the subject of a number of incremental modifications. The existence of those modifications caused the PAC "major concern": Report at 3 [Court Book 39]. See also Report at ii ("concern") [Court Book 32]. In Wollongong Coal's submission, it was an error for the PAC to have regard to those modifications and on that basis to form a "concern" about the project. 67. It is convenient to start with some issues of general principle. The matters to which a decision-maker is prohibited from having regard are determined as a matter of construction of the statute conferring the relevant power: Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 38. That task of statutory construction is to be approached by construing the relevant statute coherently and as a whole: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]. A matter may be an irrelevant, and thus prohibited, consideration if it is per se not relevant to the statutory criteria to be applied by the decision-maker: Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [84]. 68. Here, the relevant sources of the PAC's power was s 23D(1)(b)(ii) of the Act, which empowered (and obliged) the PAC to carry out a review of a project if requested to do so by the Minister. 69. The scope of that review, including the matters to which the PAC was entitled to have regard, was here determined by the terms of reference given by the Minister. Those terms of reference identified the matters which the PAC was to consider: see paragraph 8. The fact of previous modifications was not said to be such a matter. 70. It can be accepted that, by implication, the Minister's terms of reference directed the PAC to review the Project Application by reference to matters which could lawfully bear on an ultimate decision by the Minister to approve or not approve the Project Application under s 75J of Pt 3A. 71. However, the Minister's terms of reference cannot be read as permitting the PAC to have regard to matters in such a manner (a) as to be contrary to the policy of the Act read as a whole, or (b) such that the consideration was per se irrelevant to the conclusion reached by the PAC. 72. Here, the PAC formed an adverse view about the project because Wollongong Coal had obtained incremental modifications of its existing project approval. That cannot have been consistent with the policy of the Act; further, the matter was per se irrelevant to any potential adverse view. 73. As to the policy of the Act. Wollongong Coal sought modifications of its existing approval pursuant to an express statutory privilege: s 75W(2). The Minister's delegate (the PAC) decided to permit those modifications pursuant to an express statutory power to do so: s 75W(4). It is contrary to the policy of the Act for the PAC to form an adverse view about a project because the proponent has availed itself of an available statutory facility to modify a project and the Minister's delegate has in his or her discretion permitted the modification. It is not for the PAC to "second guess" the decision to grant the modifications. 74. As to the objective relevance of the consideration: the fact of the incremental modifications was per se irrelevant to the formation of any adverse view about the Project Application. The existence of incremental modifications, if anything, could only assist ultimate assessment of the Project Application: it could permit evidence as to the impacts of different modes of operating the mine to be obtained and considered. 75. A similar point was made in Pilkington v Secretary of State for the Environment [1974] 1 All ER 283 at 286-7: I do not regard it as part of the duty of the local authority itself to relate one planning application or one planning permission to another to see if they are contradictory. Indeed I think it would be unnecessary officiousness if a planning authority did such a thing. They should regard each application as proposed for a separate and independent development, and they should consider the merits of the application on that basis. 76. The PAC erred in its consideration of the previous modifications. The PAC's consideration of this matter was material to the Report. It led the PAC to form a "major concern" about the Project Application. There is no way of unpacking that concern from any part of the report.
The Minister's terms of reference to the PAC were set out above at [5]. Elements (a)(iii) and (iv) both necessarily permit the PAC to have regard to known past or permitted future mining activities (including that potentially to be permitted as an outcome of the current Proposal) and the consequences (including cumulative impacts) of such approvals. The additional matter requiring my attention is whether the PAC has impermissibly speculated about, and taken into account, what it may have anticipated to be future mining activities as yet unapplied for by Wollongong Coal.
It is clear from the totality of Mr Williams' written and oral submissions that Wollongong Coal's objection is not to this PAC Panel considering what might be the cumulative impacts of what has already been approved (whether having been given effect or remaining to be implemented being immaterial) and any approval that might arise from the current proposal (Transcript 22 September 2016, page 18, line 49 to page 19, line 9): Your Honour, there's absolutely nothing in the Act to suggest that cumulative impacts are a matter that the commission can't take into account when assessing an application but it has to assess each application on its merits, and it can assess the cumulative impacts of a particular small application just as much as it can assess the cumulative impacts of a large one. We don't deny for a moment that cumulative impacts are a matter that it can and probably should take into account, but that's a different matter to saying that it doesn't like the way the proponent has gone about making applications which are lawfully available to the proponent, each of which to this point of course has been approved, plainly because they meet the criteria.
However the complaint that the PAC's process is tainted merely because "it doesn't like the way the proponent has gone about making applications which are lawfully available to the proponent" can provide no foundation to attack the Second Review Report unless Wollongong Coal can demonstrate that such concern has infected the PAC's evaluative processes.
As I understood the actual substantive basis for Mr Williams' submissions, both written and oral, Wollongong Coal's complaint in reality was that this PAC Panel has impermissibly speculated on, and had regard to, what might be future cumulative impacts of as yet unmade applications which Wollongong Coal might make in the future - at least including those that were originally within the original scope of the current Proposal but have been removed and either expressly identified as to be subject to a future separate application (Wonga West longwalls) or reviewed for potential inclusion in a future application (Bulli West-Bulli Seam and Balgownie Seam first workings (see [14]).

[46]

The Second Review Report

Wollongong Coal's concerns are founded on two passages contained in the Second Review Report. The first of these passages is on page (ii) of the Executive Summary and is the first paragraph under the heading "Commission's considerations". Before quoting this passage, it is appropriate to note comments on page (i) concerning the First Review Report that provide some contextual background to the passage on the following page. The passage providing this background is in the following terms: In December 2014, the Commission was asked to review the project, including the holding of public hearings. The Commission's Review Report was submitted to the Minister for Planning in April 2015. The report was critical of the piecemeal approach to small approvals and concluded that "the Commission does not have sufficient information or confidence to determine the merits of the proposal sufficient for a determination for approval. It may be possible for the proposal, or a modified proposal, to be approved if all the additional information identified in this Review Report provides a greater level of confidence for the protection of water quality and quantity in the Sydney catchment area and satisfies all the other issues identified in this review." The report included 15 recommendations.
The first passage of substance on this issue in the Second Review Report (being, as noted, in the Executive Summary) is in the following terms: The Commission continues to have concern with the incremental approach to the assessment of a project which may have significant environmental consequences in a highly sensitive area, the Sydney Drinking Water Catchment Area. This concern was first raised by an earlier Commission panel when determining the 2010 application for a small extension to the existing mine to allow continue operation, pending the determination of the current application. The same concern was raised again in the three subsequent modifications to the approval of the 2010 application and, in the first Commission review of this project. The key issue is the potential cumulative environmental impacts on the catchment area and nearby residents. The bracket creep effect is a substantial concern to the Commission.
The second passage is to be found on page 3 of the body of the Second Review Report and is the fourth paragraph under the heading "2.4 Current Proposal and its history". That passage is in the following terms: It is a major concern to this Commission that the current project application again seeks incremental piecemeal approval of a small extension to the existing operation with the stated intention to seek approval for a larger extension to the west of the mine at a later time. The Commission has significant doubt as to the timing of the assessment process of the Wonga West area given the time taken from the lodgement of the EA for this project in August 2009 and the Commission's first review in late 2014. The potential of small modifications over time to the current project (if approved) cannot be ignored so as to allow the mine to continue its operation until the approval of the bigger expansion project. This incremental approach to the assessment of a major development in a sensitive area (drinking water catchment) combines with the uncertainty of cumulative impacts of past and future mining in the area warrants a cautious approach in the review of this application.

[48]

The PAC report on Modification 1 (Preliminary Works Project)

On 13 October 2011, a different PAC Panel determined a Preliminary Works proposal for the Russell Vale Colliery.
On 13 October 2011, a PAC Panel comprising Dr Shepherd and Mr Woodward approved NRE No 1 Colliery Preliminary Works Project, with the project application being described as: The project is to continue extraction of up to 1 million tonnes of run-of-mine coking coal a year from the Bulli and Wongawilli seams, for the next three years. The run-of-mine coal would continue to be transported to the Port Kembla Coal Terminal by truck. The project also includes upgrades to the existing surface facilities and infrastructure with a nine-month construction phase. The project has a capital investment value of $122,000,000.
In its determination, that PAC Panel made the following comments: The Commission notes that a number of submissions from agencies and members of the public raised concerns about the approval of infrastructure under this project for which the primary purpose is facilitation of the proposed future expansion project. The Commission is aware that development of this infrastructure could be used to pressure both decision-makers and regulators in relation to this future expansion project. However, the Commission notes that the proponent in response to these submissions confirm that it would be developing the infrastructure at its own financial risk. It is clear from the submissions in the assessment report that there are substantial concerns with the proposed future expansion project. However, the Commission has not seen this proposal and is in no position to form any view on it. Consequently, the Commission's decision on the project application before it cannot be construed as any form of endorsement of any aspect of this future expansion project. That said, the PAC considers that separation of project applications where the primary purpose of the first is to facilitate the second could lead to lack of public confidence in the New South Wales' assessment and regulatory systems and must be considered undesirable. In this context, it should be noted that major regulatory authorities in Wollongong City Council were among those submitters who raised the concern.
In December 2012, a further PAC Panel determined Modification 1 for the Preliminary Works Project for the Russell Vale Colliery (the PAC acted as the determining authority on delegation from the Minister on this occasion). That panel of the PAC approved modification of the Preliminary Works Project (but modification more limited than that which had been sought in the application). The Preliminary Works Project had, itself, been approved by the PAC in October 2011.
In the PAC's determination of Modification 1 to the Preliminary Works Project, that PAC Panel included a section in its determination dealing with the issue of incremental determinations of modification and other applications concerning the colliery. It did so in "6.4 The Role of Repeated Modifications of this Mining Project". It is appropriate to set out, as part of the contextual material in consideration of this ground, this portion of the determination. It is in the following terms: 6.4 The Role of Repeated Modifications in 1this Mining Project This project modification needs to be seen in context. As noted above, the Proponent has been preparing a proposal for a much larger project for some considerable time. In October 2011 the Commission approved a modification to allow limited extraction and development of preliminary works for the main project in the belief that this would allow the environmental assessment for the main project to be lodged, exhibited, assessed and determined without the need for any other modifications. This approach was strongly opposed by some government agencies, Wollongong City Council and Community Groups on the basis that it was a piecemeal approach to planning in which the primary purpose of the application was to facilitate positive decisions on a subsequent controversial project proposal for which no detail was available. The Commission agreed with the views expressed by these submitters: 'the Commission considers that separation of project applications where the primary purpose of the first is to facilitate the second could lead to lack of public confidence in the New South Wales assessment and regulatory systems and must be considered undesirable. In this context it should be noted that major regulatory authorities and Wollongong City Council were among those submitters who raised the concern'. However the Commission considered that the benefits of continued operation while a proper consideration of the main project was undertaken outweighed the concerns. The Commission also considered that the potential environmental impacts of the modification were acceptable. The position with the current modification is essentially the same as the last one. It is an interim step designed to provide continuity of mine operations while the main project is assessed and determined. It also suffers from the same type of perceived defects as the last one: it seeks approval for some extraction and some development works to facilitate future operations for which limited detail is available. It has also received the same in-principle criticisms from the same sources. The only differences evident to the Commission are that the future operations to be facilitated are smaller in scale and the environmental assessment for the main project has at least now been lodged with the Department. The question is what to do about it. The position of the Community Groups is clear: the modification is an abuse of process and should be refused. The agencies and Council are equally concerned about approval of the maingates without full information about the potential environmental impacts of extraction of the longwall panels they are designed to facilitate. The Proponent and CFMEU point out that, without at least some of the maingates in place when LW5 is completed, the continuity of operations will be lost and the main project will fail during the assessment process. The position is compounded by the fact that, even if this current modification is approved, at least one or more modifications will be required to extract LW6 (and possibly LW7) before the main project can be determined. This is based on extraction of the shortened LW5 taking 4-5 months and the fact that the information relevant to a decision on LW6 and LW7 is not included in this modification application. The Commission has carefully considered the options available and the concerns expressed by the various interested parties. The Commission is not prepared to agree to development of all the maingates sought (i.e. 6, 7 and 8). Because of the immediacy of the continuity requirements, the Commission will agree to the development of Maingate 6 in conjunction with extraction of LW5. (On the information available to the Commission, to approve LW5 without Maingate 6 would be a futile exercise.) The Commission makes no comment about the merits of extraction for LW6. That will have to be considered on the basis of the information supplied at the time approval is sought. The approval of the maingate for LW6 should not be taken as any form of endorsement by this Commission of the possibility of approval for extraction.
That PAC Panel resolved to grant partial approval to the modifications sought. Other aspects of mine expansion were, clearly, left to future applications, whether the current Proposal or some further modification application. In its conclusion, this PAC Panel said, inter alia: The Commission notes the considerable disquiet expressed by community groups, government agencies and Wollongong City Council on a range of matters including, inter alia, the absence of important information, the piecemeal approach to assessment of this mining project, the track record of the proponent in meeting commitments and regulatory requirements and the risk to the catchment.

[49]

Applicant's background material

The Preliminary Assessment Report that was the precursor to the original version of the current Proposal notes that the project will include the following activities: (1) Continued westward development of the existing Wonga Mains drivage from Russell Vale to access underground working areas; (2) Multi-seam (Bulli, Balgownie and Wongawilli seams) coal extraction, ramping up coal production of up to three-million tonnes per annum (Mtpa) with a projected mine life of at least 20 years. This will involve: (a) Extraction from the Wongawilli seam by first workings with the continued development of the Wonga Mains drivage; (b) Longwall mining of the Wongawilli seam in the Wonga East area, beneath previously mind Balgownie and Bulli seam workings; (c) Extraction from the Balgownie seam by first workings beneath the existing mined-out Bulli seam longwalls in the Wonga West area, using the cut-and-flit mining method (anticipated to have no direct subsidence impacts); (d) Extraction of Wongawilli seam coal from beneath the previously mined Bulli seam workings in the Wonga West area, by longwall mining; (e) Continued development and extraction of the Bulli seam from the V Mains area by first workings and selected pillar extraction; and (f) First workings in in the Bulli seam in the Bulli West area (anticipated to have no direct subsidence impacts), and a range of other matters relating to colliery infrastructure rather than mining activities. The Preliminary Assessment Report is dated August 2009.
The Environmental Assessment dated February 2013 describes the current Proposal (as it was envisaged in that document) in the following terms relating to underground mining: The project will increase coal production up to three-million tonnes per annum (Mtpa) with a projected mine life of 18 years. The project includes: � continued westward development of the existing Wonga Mains drivage from Russell Vale for ventilation and to access underground working areas; � longwall mining of the Wongawilli seam in the Wonga East area, beneath previously mined Balgownie and Bulli seam workings; � longwall mining of the Wongawilli seam in the Wonga West area beneath the previously mined Bulli seam workings; � first workings in the Bulli seam in the Bulli West area (anticipated to have no direct subsidence impacts); � Balgownie seam mining, limited to first workings only, beneath overlying Bulli seam workings (anticipated to have no direct subsidence impacts), and further supporting infrastructure works related to this version of the proposal (designated as Stage 2 with the preliminary works project being designated as Stage 1).
The Environmental Assessment document contains a section (20.4.8 Cumulative Impacts) that dealt with a range of what were identified by the authors of that document as "geographic areas requiring consideration for potential cumulative impacts on the Sydney water catchment area". This, in itself, constitutes an invitation to those assessing the current Proposal to have proper and appropriate regard to cumulative impacts (as I am satisfied the PAC has done in its Second Review Report).
Relevant to this ground is a section commencing on page 320, under the heading "Cataract Creek, Bellambi Creek and Cataract River". Under the heading, "Stability and Connectivity", this section says: The Bulli, Balgownie and Wongawilli workings, which underlie the Cataract Creek catchment, have been mined in the previous NRE and Cordeaux leases by longwall extraction, with up to 1.4 metres of subsidence. The proposed Wongawilli stream extraction at Wonga East will generate up to a predicted additional 1.2 metres subsidence in the Cataract Creek catchment. As a worst case scenario, the main channel of Cataract Creek is predicted to undergo up to an additional 0.8 metres of subsidence over Longwall Panel A to LW8 (Seedsman Geotechnics, 2012); however, NRE has committed to an adaptive management strategy whereby monitoring of subsidence will be undertaken and, when subsidence reaches 250 millimetres, the longwall will be discontinued. The proposed extraction in Wonga East will result in a cumulative subsidence effect, with the subsidence caused through the previous Bulli, Balgownie and Wongawilli workings, however, no site-specific, cumulative effect on the creek bank and stability or pool levels is anticipated due to the additional subsidence.
This is followed by a further short portion of technical discussion which it is unnecessary to quote. However, this portion also deals with stream water quality and does so in the following terms: There are no anticipated cumulative impacts on the water quality within, or discharging from, the proposed NRE mining area.
The Environmental Assessment then continues with "20.5 Stream Risk Assessment" and, under its first subheading, deals with Cataract Creek and Cataract River. This says: Due to the proposed mine plan which incorporates narrow longwalls with wide pillars, the proposed mining at Wonga East is not anticipated to be a significant risk to either Cataract Creek or Cataract River (upstream of Cataract Reservoir) in regard to streamflow, stream pools, water quality or aquatic ecosystems.
In "20.7 Summary", the Environmental Assessment acknowledges that: All of the creeks, swamps, Cataract River and the Cataract Reservoir are contained within the Sydney Catchment Authority controlled Metropolitan Special Area.
It is this "Special Area" to which the SEPP applies.
Wollongong Coal's Preferred Project Report Underground Expansion Project does not appear to be dated, but is noted in the index to the folder of the Court Book containing this document (Exhibit 2) as being dated September 2013. The Preferred Project Report became the subject of the Departmental Secretary's Environmental Assessment Report dated December 2014 and the reference that same month to the PAC Panel that undertook the First Review of the current Proposal.
The Preferred Project Report commences with "1 Overview of Preferred Project", followed by a comparison of the proposed project report with the original proposal, with this comparison setting out, in a table, a summary of project changes, including a number of originally proposed underground workings' extensions that were no longer pressed but were described as "potentially to be dealt with in a future application or applications". The overview of the Preferred Project was in the following terms: After serious consideration of community and agency submissions, involving predominantly environmental opposition to the original proposal, Gujarat NRE Coking Coal Limited (NRE) has taken the decision to modify the scope of its mine layout for the Underground Expansion Project Part 3A Application. The elements of the surface facilities upgrade will remain the same. An outline of the preferred project follows. * The estimated project life has been reduced to a maximum of five years. * The Wonga East longwall (LW) layout has been extensively modified to minimise impacts to identified significant features while attempting to maximise the recovery of coal reserves. * The Wonga Mains drivage will not be extended northwards under the south arm of the Cataract Reservoir through the known geological feature (in the Bulli seam). � The Wonga West longwalls will be removed from this application. The Wonga West longwall layout will be revised and resubmitted as a separate application at a later date. � The Western Balgownie and Western Bulli seam first workings will be removed from this application. � There is no change proposal to the pit-top upgrade, three-million tonnes per annum (MTPA) extraction rate or peak coal transport rates as presented in the original environmental assessment (EA). As a result of the changes, the preferred project now effectively represents Stage 2 of the development of the NRE No 1 Colliery rather than the establishment of the colliery's operations for the next 20 years as was presented by NRE in the original EA. The preferred project, via the revised Wonga East layout, will provide NRE with an ongoing, albeit reduced, income stream to continue to establish environmental baseline data and undertake the necessary additional environmental studies required to demonstrate the practicality of the environmentally responsible extraction of the existing large volumes of economically viable ROM coal in the remaining central and western areas of the lease. A more detailed summary comparing the original proposal presented in the EA with the current preferred project is presented in Table 1, page 14.

[50]

Consideration of Ground 2

It is to be observed that the first of the passages about which complaint is made is merely put as a contextual introduction to the PAC's analysis of the specific matters that the PAC considered needed to be addressed. These are dealt with in the second and subsequent paragraphs on page (ii) and throughout page (iii) of the Executive Summary, leading to the two concluding paragraphs in this summary as being: On the basis of all the information provided, the Commission is of the view that the social and economic benefits of the project as currently proposed are likely outweighed by the magnitude of impacts to the environment. In reaching its conclusion, the Commission has had regard to the evidence presented to it by the proponent, the Department, the public submissions and the presentations to the public hearing and from the advice provided by the Commission's independent experts, the IESC, OEH, and WaterNSW and the relevant State Environmental Planning Policy (Mining SEPP and Sydney Drinking Water Catchment SEPP).
There is nothing in those aspects of the PAC's explanation of how it reached its conclusion that could reasonably infer that the comment concerning cumulative impacts was anything other than merely an introductory observation. There is no indication that it was a matter taken into account in reaching the conclusion as set out at the end of the Executive Summary.
I now turn to consideration of the second passage set out above (that found on page 3 of the body of the Report). Properly understood, it can be seen that the PAC acknowledges that Wollongong Coal can reasonably be expected to lodge a further proposal for the Wonga West area. This is clear from the company's own documents, particularly the comments in the second‑last quoted paragraph at [132] above.
It is implicit, it seems to me, that the words "cumulative impacts of past and future mining in the area" clearly relate to mining that has already been undertaken and mining which has been approved but which is, as yet, to be undertaken or which might arise from the current Proposal (if approved). I draw this conclusion from the contextual reading of all of the material, not only in the Second Review Report but that which was considered by the PAC as founding the information basis for its preparation of, and reaching the conclusions in, its Second Review Report.
It is also to be observed that, in the Conclusion to the Second Review Report, the PAC inferentially deals with the potential cumulative impacts of mining under the catchment in the sixth paragraph. It is appropriate to repeat the terms of the paragraph: The project is located in a highly sensitive area, a drinking water catchment area. The environment is also very fragile because of past multi-seam underground mining activities. Subsidence-induced fracturing is already occurring. The critical issue is where is the tipping point and what is the cumulative impact of longwall mining?
This portion of the Second Review Report had, to provide context to the passage in the sixth paragraph, earlier made the following observation: This leads to the Commission's doubt and lack of confidence in the proponent's ability to provide scientifically sounded and properly assessed documentations to support this application. For example, the earlier report predicted the fracturing to surface would be unlikely at the end of mining. The recently provided data appear to confirm cracking the surface has already occurred. Yet this is not confirmed in the recent report. Thus, the risk of water loss remains uncertain.
There is nothing in either of these passages (or anything else set out in the conclusion to the Second Review Report) that indicates that, in any fashion, the conclusion is in any way founded upon speculation about future unapplied-for mining activities. The final sentence in the sixth paragraph quoted above is expressly cast in the present tense, rather than in any future tense. It is clear that the totality of the conclusion is addressed to activities from past approvals and their impacts and such material as has been provided to the PAC Panel about the expected impacts of the current Proposal.
Properly viewed, there is nothing in either passage that could lead to the conclusion that they provided any foundation for the conclusion derived by the PAC and were, thus, impermissibly used contra Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24; [1986] HCA 40. Nor did the PAC have regard to or rely on any irrelevant matter in deriving its conclusion contra to Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18.

[52]

Severability

Although I have found that Ground 2 fails, against the possibility that I might be wrong at law in reaching this conclusion, I have also turned to consider the question of whether the "offending paragraphs" in the Second Review Report are capable of being severed from the remainder of the Second Review Report in a fashion that would do no violence to a proper understanding of the PAC's reasoning, nor remove an element that was a necessary part of the foundations for the conclusion reached by the PAC in its discussion at 5.2 of the Second Review Report.
This matter can be dealt with comparatively briefly.
During the course of the hearing, I asked Mr Shearer what he might wish to say on the issue of severability of the paragraphs forming the basis for Ground 2 if I were to uphold Wollongong Coal's complaint concerning them. He said (Transcript 22 September 2016, page 57, lines 26 to 32): Your Honour asked about the question of severability. I've gone through the report in some detail and sought to show your Honour the way in which the impugned aspects feature in the report. In my submission, when one has regard to the way in which they do feature, that kind of approach would be open because when one looks at the ground 2 subject matter, it occurs at the very beginning of the report and doesn't rate a mention anywhere else in the report.
Although the first of the extracts from the Second Review Report relied upon by Wollongong Coal as supporting this ground of objection is the opening paragraph on the second page of the Executive Summary of the Second Review Report under the heading "Commission's Considerations", that which follows on from that paragraph, if that paragraph were to be treated as not part of the report, does not require the retention of that paragraph, either for purposes of logical coherence in understanding that which follows, nor as supporting material for anything to be drawn from that which is written both before and after that paragraph in the Executive Summary.
The second complained of paragraph, set out at [115], simply expresses (as earlier noted) the desirability of taking a cautious approach to the current Proposal in circumstances where: 1. There have been a number of approved elements in the past and where impacts of that which has already been undertaken or approved (but remains to be undertaken) or which might arise from the current Proposal (if approved) are uncertain; and 2. Wollongong Coal has itself foreshadowed further possible applications for this mine.
However, a fair reading of the Conclusion to the Second Review Report reveals that the passages founding the Ground 2 complaint were not relied on by the PAC to derive its conclusion. There is nothing in the commentary in 5.2 (leading to the Second Review Report's conclusion) that touches upon, or by implication follows from, the passages discussed above. It is clear from the language used that that which was said in those passages did not constitute any element taken into account by the PAC in its reasoning process leading to the conclusions set out in 5.2 of the Second Review Report.
This conclusion can also be drawn with respect to the comments made by the PAC Panel that approved Modification 1 to the Preliminary Works Approval, where similar sentiments were expressed but which sentiments did not act as a barrier to that PAC Panel approving that modification application.
Hence, if I am wrong on Ground 2 as to the paragraphs of which complaint is made, the offending paragraphs are severable without impacting on the remainder of the substance of the Second Review Report, its conclusions or its recommendation.

Wollongong Coal Pty Ltd v Minister for Planning and Environment

At a glance

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Judgment (56 paragraphs)

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Cases Cited (12)

Cited By (2)