Proposed guidelines will allow mining to withhold information

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.