By JOANNE McCARTHY
March 31, 2015, 9:30 p.m.
THE NSW Department of Planning is proposing new guidelines to assess
coal mines that will allow mining companies to withhold more information about
the financial costs and benefits of mining projects from the public.
The draft guidelines could also controversially consider biodiversity
offsets as benefits to the community after lobbying by the mining industry.
Biodiversity offset land is bought to compensate for the destruction of areas
to make way for mines. Reclassifying them as a benefit to the community rather
than a cost will enhance the economic argument for a mine project.
The draft guidelines are being developed in consultation with the mining
industry to replace Department of Planning and NSW Treasury guidelines prepared
in 2012.
The changes are in response to scathing criticism by the NSW Planning
Assessment Commission of some mine economic assessments, and the Department of
Planning for uncritically accepting those assessments.
But an independent report of a Newcastle company’s economic assessments
of three NSW coal mine projects in January, where the new draft guidelines were
quoted and appeared to underpin an ‘‘unorthodox’’ new approach to economic
assessments, found the assessments lacked transparency and made it ‘‘difficult
to verify the calculations undertaken’’.
The Centre for International Economics (CIE) report found the AIGIS
Group’s cost benefit analyses of Centennial Coal’s Airly, Angus Place and
Springvale mines were ‘‘inconsistent with well-established principles and the
NSW Government’s November 2012 Guideline for the use of cost benefit analysis
in mining and coal seam gas proposals’’.
The CIE report, commissioned by the Department of Planning, found some
methods used in the AIGIS reports were likely to significantly overstate the
true net economic benefit to the local community.
The CIE report also criticised the ‘‘inappropriate’’ inclusion of biodiversity
offset land costs as ‘‘benefits’’ to the community.
The AIGIS Group included quotes from the new draft guidelines. It also
noted that Centennial Coal planned to ‘‘no longer place material that might be
considered commercially sensitive in the public domain in the context of
submitting consent approvals’’.
Australia Institute economist Rod Campbell said the Department of
Planning was developing its own rules, in consultation with the mining
industry, to help mining companies get around serious economic assessment
requirements and existing rules.
‘‘There are now new guidelines which mean unorthodox economics are now
endorsed and it is no longer necessary to meet the ‘expected’ orthodoxy,’’ Mr
Campbell said.
A department spokesman said it was working with other government
departments, including NSW Treasury, to develop the new guidelines in response
to criticism from the Planning Assessment Commission.
They would be released to the public for comment before they were
finalised.
Centennial Coal did
not respond to a question about whether it had a copy of the draft guidelines,
saying it believed they were cabinet in confidence documents. It said it was
reasonable to include biodiversity offsets as benefits.
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