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Corruption inquiries, internal reviews underscore fundamental flaws in NSW biodiversity offsetting regime

The Nature Conservation Council welcomes Environment Minister Matt Kean’s frank admission during a Budget Estimates hearing yesterday that the state’s biodiversity offsetting scheme needs “root-and-branch reform”.    

“We totally agree with the Minister on the need to overhaul this deeply flawed system,” Nature Conservation Council Chief Executive Chris Gambian said.  

“These reviews must be fully transparent and recommendations subject to public review if the government truly wants to restore public confidence in its biodiversity offsetting scheme.” 

Biodiversity offsetting allows developers to destroy native bushland and wildlife if they protect and enhance habitat elsewhere. The current system allows significant flexibility for developers, including paying the government to find offset habitat, and has created a lucrative market for biodiversity credit trading.  

The scheme is subject of an ICAC investigation following a series of articles by Guardian reporter Lisa Cox. The article alleged consultants who worked for a company that advised on offsets requirements for Western Sydney motorway projects were also connected with another company that profited from the sale of credits to offset those same projects. [1]   

“We warned the government at the time the biodiversity offsets scheme it was proposing posed a serious risk to the very species it was supposed to protect,” Mr Gambian said. “We also warned the system created significant opportunities for corruption.  

"Sadly, our warnings were ignored. The government pushed ahead and implemented a regime it knew was not fit for purpose, which has led us to where we are today.  

“The public never had confidence in this shonky scheme and their instincts have proven to be correct.  

"The government has a lot of work to do to reform the scheme to bring it up to standard.  

“It was encouraging to hear the minister say the public expects, and that he supports, like-for-like offsetting as a basic principle.   

“Sadly, the current system deviates considerably from that fundamental rule.”  

Extracts from Mr Kean’s testimony at yesterday’s Budget Estimates, 26-10-21 [2]  

“It’s clear there needs to be root and branch reform of the scheme both from a policy level and an integrity level and we will be doing both,” Environment Minister Matt Kean said.   

“Right now, what we’re doing is undertaking a comprehensive review of the offsets scheme in general, how it’s being applied, the governance structures around it, whether it’s got integrity.  

“The public has every right to know that any land or habitat that is taken for development, or roads or infrastructure is actually going to be offset with like for like [offset] credits.”   

REFERENCES  

[1] ‘Enormous sum of money’: $40m windfall from NSW environmental offsets sparks calls for inquiry, The Guardian, 16-4-21   

[2] NSW environmental offsets to be reformed after ‘appalling practices’ revealed, minister says, The Guardian, 26-10-21  

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