Land and Environment Court New South Wales Medium Neutral Citation: 4nature Incorporated v Centennial Springvale Pty Ltd [2016] NSWLEC 121 Hearing dates: 9 May 2016 Date of orders: 13 September 2016 Decision date: 13 September 2016 Jurisdiction: Class 4 Before: Pepper J Decision: Amended summons dismissed. Costs reserved. Catchwords: JUDICIAL REVIEW: whether decision-maker reached state of satisfaction required by environmental planning instrument in granting development consent – whether decision-maker misdirected itself as to the law in the consideration and determination of the consent – whether the decision-maker failed to take into account a mandatory relevant consideration – application dismissed. Legislation Cited: Environmental Planning and Assessment Act 1979, ss 23D, 79C, 89E, Pt 4 Div 4.1 Environmental Planning and Assessment Regulation 2000, cls 268R, 268V Land and Environment Court Rules 2007, rr 4.2, 4.3 State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, cls 3, 7, 9, 10 Cases Cited: Anderson v Minister Administering the Water Management Act 2000 [2014] NSWCA 386 Australian Conservation Foundation Incorporated v Minister for the Environment [2016] FCA 1042 Australian Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 Bat Advocacy NSW Inc v Minister for the Environment Protection, Heritage and the Arts [2011] FCAFC 59; (2011) 180 LGERA 99 Buck v Bavone [1976] HCA 24; (1976) 135 CLR 110 Caroona Coal Action Group Inc v Coalmines Australia Pty Ltd [2010] NSWLEC 1; (2010) 172 LGERA 25 Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd [2010] NSWCA 353; (2010) 178 LGERA 411 Centro Properties Ltd v Hurstville City Council [2004] NSWLEC 401; (2004) LGERA 257 Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378 Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 Cranbrook School v Woollahra Municipal Council [2006] NSWCA 155; (2006) 66 NSWLR 379 Currey v Sutherland Shire Council (1998) 100 LGERA 365 Egan v Hawkesbury City Council (1993) 79 LGERA 321 Gold and Copper Resources Pty Limited v Hon Chris Hartcher MP Minister for Resources and Energy Special Minister (No 2) [2014] NSWLEC 30 Gold and Copper Resources Pty Ltd v Minister for Resources and Energy [2013] NSWLEC 66; (2013) 211 LGERA 196 Jojeni Investments Pty Ltd v Mosman Municipal Council [2015] NSWCA 147; (2015) 89 NSWLR 760 Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 Master Education Services Pty Ltd v Ketchell [2008] HCA 38; (2008) 236 CLR 101 Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2016] NSWCA 253 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Border Protection v Singh [2014] FCAFC 1; (2014) 231 FCR 437 Minister for Immigration and Citizenship v Li [2013] HCA 8; (2013) 249 CLR 332 Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 Mosman Municipal Council v IPM Pty Ltd [2016] NSWLEC 26 Oates v Attorney-General (Cth) [2001] FCA 84; (2001) 181 ALR 559 Parramatta City Council v Hale (1982) 47 LGRA 319 Plaintiff M47/2012 Director-General of Security [2012] HCA 46; (2012) 251 CLR 1 R v Connell; Ex parte The Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69 CLR 407 Soliman v University of Technology, Sydney [2012] FCAFC 146; (2012) 207 FCR 277 Sutherland Shire Council v Benedict Industries Pty Ltd (No 4) [2015] NSWLEC 101 Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 581 Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664 Tovir Investments Pty Ltd v Waverly Council [2014] NSWCA 379 Weal v Bathurst City Council [2000] NSWCA 88; (2000) 111 LGERA 181 Zentai v O'Connor (No 3) [2010] FCA 691; (2010) 270 ALR 293 Texts Cited: Category: Principal judgment Parties: 4nature Incorporated (Applicant) Centennial Springvale Pty Limited (First Respondent) Springvale SK Kores Pty Limited (Second Respondent) Minister for Planning (Third Respondent) Representation: Counsel: Mr R Lancaster SC with Mr N Kelly (Applicant) Mr N Williams SC with Ms J Davidson (First and Second Respondent) Mr J Hutton (Third Respondent) Solicitors: Environment Defenders Office (Applicant) Ashurst (First and Second Respondent) Department of Planning (Third Respondent) File Number(s): 2016/163569 Publication restriction: INDEX 4nature Incorporated Seeks to Set Aside an Approval for the Expansion of a Mine [1] Issues for Determination [9] Factual Background Leading up to the Granting of Consent [12] The Mine Extension Project [13] The Assessment and Approval of the Project [32] Statutory and Planning Framework [127] Did the PAC Publish a Statement of Reasons? [135] Applicable Legal Principles [153] Did the PAC Attain the Necessary State of Satisfaction That the Carrying Out of the Project Would Have a Neutral or Beneficial Effect on Water Quality? [162] Did the PAC Fail to Consider a Mandatory Relevant Consideration – Satisfaction of NorBE? [213] Costs [219] Orders [222] Judgment 4nature Incorporated Seeks to Set Aside an Approval for the Expansion of a Mine 1. The applicant, 4nature Incorporated ("4nature"), challenges the decision of a Planning Assessment Commission ("PAC"), as delegate of the third respondent, the Minister for Planning ("the Minister"), to grant development consent to the first respondent, Centennial Springvale Pty Limited ("Centennial"), for the Springvale Mine Extension Project ("the project"), on 21 September 2015 ("the consent"). 2. It was not in dispute that 4nature is a: 1. not-for-profit organisation whose primary object is environmental protection; 2. charity registered with the Australian Charities and Not-for-profits Commission; and 3. corporate body incorporated under the Associations Incorporation Act 2009. 1. Springvale Mine ("the mine") is an underground coal mine located approximately 15kms northwest of Lithgow and 120kms west of Sydney. Centennial and the second respondent, Springvale SK Kores Pty Limited ("Springvale"), own the mine in equal shares. 2. Centennial and Springvale: 1. were jointly named as the applicant in the consent for the project; and 2. own the mine, and the Angus Place underground coal mine ("the Angus Place mine"), in equal shares and as participants in an unincorporated joint venture. 1. The consent was granted pursuant to s 89E of the Environmental Planning and Assessment Act 1979 ("the EPAA"). 2. It was not contentious that the land to which the development consent applies includes land within the Sydney Drinking Water Catchment, as defined in cl 7 of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 ("the Catchment SEPP"). 3. The gravamen of 4nature's complaint is that the PAC did not reach, as required by cl 10(1) of the Catchment SEPP, an independent state of satisfaction as to whether the carrying out of the project will have a neutral or beneficial effect ("NorBE") on water quality before it granted the consent. Because such satisfaction was a pre-condition to the exercise of its power to approve the project, the consent is invalid. 4. In my opinion, having regard to the totality of the material before the PAC, 4nature's challenge cannot be sustained and must fail. Issues for Determination 1. The grounds of challenge to the PAC's decision to grant the consent, as pleaded, were three-fold: 1. first, whether the PAC attained the requisite state of satisfaction that the carrying out of the project would have a neutral or beneficial effect on water quality as required by cl 10(1) of the Catchment SEPP; 2. second, whether the PAC misdirected itself as to the law to be applied in the consideration and determination of the consent; 3. third, whether the PAC failed to take into account a mandatory relevant consideration, namely, whether pursuant to cl 10(1) of the Catchment SEPP the project would have a neutral or beneficial effect on water quality. 1. At the hearing, 4nature agreed that if it failed in respect of the first ground of review, it could not succeed on the second, the latter being a variant of the former. It is therefore convenient for them to be dealt with together. 2. It should also be noted that 4nature neither pleaded nor argued that the state of satisfaction required to be reached by the PAC was a jurisdictional fact that the Court could determine for itself, or that the decision of the PAC was legally unreasonable (Minister for Immigration and Citizenship v Li [2013] HCA 8; (2013) 249 CLR 332). Factual Background Leading up to the Granting of Consent 1. The parties agreed on a number of background facts informing the challenge, some of which were contained in a comprehensive statement of agreed facts, others of which were found in a four volume agreed tender bundle. Accordingly, the following facts and chronology are not, in the main, contentious. The inferences to be drawn from these events are, however, contestable. The Mine Extension Project 1. Development consent (DA 11/92) was granted for the mine in July 1992. Underground coal mining operations commenced in 1995 and continued under DA 11/92 until 30 September 2015, subject to a number of subsequent modifications. On 5 December 2013, a modification to the 1992 consent was approved, allowing mining operations to continue under that development consent until 30 September 2015. 2. The project was granted the consent the subject of these proceedings on 21 September 2015. The project involves an enlargement of the existing underground mine by extending mining operations to the south, east and southeast, and by prolonging the mine life by 13 years. Extraction of up to 4.5 million tonnes of run-of-mine coal per year is permitted until 31 December 2028. The project is classified as State significant development, and accordingly, Pt 4, Div 4.1 of the EPAA governed its assessment and approval. 3. The project will be carried out partly within the "Sydney Drinking Water Catchment", as defined in the Catchment SEPP. 4. Water is discharged from the mine according to an Environment Protection Licence 3607 ("EPL 3607") via Licensed Discharge Points ("LDPs"). The following LDPs, namely, LDP001, LDP002, LDP009, and LDP010, are within the area of land covered by the consent and within the Sydney Drinking Water Catchment. 5. The locations of LDP001, LDP002, LDP009 and LDP010 are depicted on the figure attached at appendix 'A'. 6. The Upper Coxs River is a tributary of the Upper Nepean and Upstream Warragamba extraction management unit and is also a sub-catchment within the Sydney Drinking Water Catchment. 7. Sawyers Swamp Creek is a third order Strahler watercourse located in the Sydney Drinking Water Catchment and partly located in the area of land covered by the consent. 8. Downstream of the area of land covered by the consent, the Coxs River (fifth and sixth order Strahler), Lake Wallace, Lake Lyell and Lake Burragorang are all within the Sydney Drinking Water Catchment. 9. Lake Burragorang is impounded by the Warragamba Dam. The latter is the major water storage for greater metropolitan Sydney. 10. The Springvale Delta Water Transfer Scheme ("SDWTS") is defined in the consent as meaning: Existing pipeline that transfers groundwater inflows from the underground workings and dewatering bores to licensed discharge point LDP009. 1. The removal of groundwater inflows into the underground mine is essential for operational safety. 2. The SDWTS was commissioned in 2006 as part of a Pollution Reduction Program under EPL 3607. 3. The SDWTS facilitated the transmission of groundwater pumped from the mine and the Angus Place mine, to Wallerawang Power Station. The transmitted water was used in the cooling towers at that power station. When not required at Wallerawang Power Station, groundwater from the SDWTS was directed to Sawyers Swamp Creek via EnergyAustralia's LDP020. 4. In August 2012 responsibility for EnergyAustralia's LDP020 transferred to the mine. The new LDP became LDP009. Prior to the SDWTS, groundwater pumped from the mine was discharged to the Wolgan River via the Newnes Plateau. Between 2006 and 2012, when the SDWTS was offline, there were periods when there was discharge to the Wolgan River. 5. Permanent closure of the Wallerawang Power Station was announced on 20 November 2014. 6. Immediately prior to the grant of the consent, as authorised by DA 11/92 and EPL 3607, groundwater from the Springvale Mine was transmitted through the SDWTS and discharged into Sawyers Swamp Creek via LDP009. Just before the water was discharged at LDP009, it travelled through a series of sediment ponds. At LDP009, discharged water then travelled through an earthen based drainage line for a distance of approximately 300m prior to entering Sawyers Swamp Creek at a location east of the Kerosene Vale Ash Dam. 7. The consent permits the SDWTS to transfer extracted groundwater from dewatering bores directly to LDP009 to be discharged. The SDWTS has a capacity of 30 ML/day discharge at LDP009. 8. Immediately prior to the grant of the consent, mine water from the Angus Place mine was permitted to be discharged into the Coxs River catchment via LDP001 (through Kangaroo Creek) and LDP009 (through Sawyers Swamp Creek) until 2024. 9. The Angus Place mine is a separate mine to the project. An application for State significant development consent to extend that mine's life has yet to be approved. The Angus Place mine has been on care and maintenance since 28 March 2015. The Assessment and Approval of the Project 1. In September 2012 Springvale Coal Pty Ltd (as Manager of the Springvale unincorporated joint venture, for and on behalf of the Springvale joint venture participants) ("Springvale Coal") requested the Director-General's Environmental Assessment Requirements ("DGRs") for the project in accordance with Pt 4 of the EPAA. 2. The DGRs were issued on 6 November 2012. They included a requirement for an Environmental Impact Statement ("EIS") addressing, amongst other things, a detailed assessment of the potential impacts on the quality and quantity of surface water and ground water resources. Attachment 1 to the DGRs listed policies, guidelines and plans which might be relevant to the project. It included a reference to the Catchment SEPP. 3. In respect of "Water Resources", the DGRs identified as a key issue for the purposes of the project's environmental assessment: • whether the development can operate to achieve a neutral or beneficial effect on water quality in the drinking water catchment, consistent with the provisions of the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011. 1. The Springvale Mine Extension Project Groundwater Impact Assessment was prepared and published on 9 February 2014 by RPS Pty Ltd ("RPS") for Springvale Coal. In relation to the proposed development, it was predicted that there would be no change in water quality: 7.3.9 Potential Water Quality Impacts No change in water quality is expected as a result of the proposed development. Groundwater inflows to the underground operations are expected to remain consistent with current inflow water quality at around 700 to 1000 µS/cm as discussed in Section 4.9. No deterioration of quality of groundwater inflows have been observed due to current mining operations, and consequently none are predicted due to the proposed development. Similarly no detrimental impacts to groundwater quality are expected within the shallow groundwater aquifer or within the swamps. Consistent with historical mining at Springvale, no deterioration in groundwater quality has occurred. 1. In April 2014 Springvale Coal submitted a development application dated 18 November 2013 to the Department for State significant development consent for the project ("the DA"). 2. An EIS for the project was submitted in conjunction with the DA on 7 April 2014. The EIS was publicly exhibited from 12 April 2014 until 26 May 2014. The EIS included an assessment of the impacts of the project and an assessment of the cumulative impacts of the project and an extension to the nearby Angus Place mine (not yet approved). The EIS referred to the Catchment SEPP and its application to the project, including the aims of the Catchment SEPP, cl 9(1), and the NorBE test contained in cl 10(1). It stated that Appendices E and F of the EIS (the groundwater and surface water impact assessments, respectively) addressed the NorBE test: 5.4.7 SEPP (Sydney Drinking Water Catchment) 2011 SEPP (Sydney Drinking Water Catchment) 2011 applies to land within the Sydney drinking water catchment. The Project Application Area is partly located within the Sydney drinking water catchment. The aims of SEPP (Sydney Drinking Water Catchment) 2011 are: (a) to provide for healthy water catchments that will deliver high quality water while permitting development that is compatible with that goal (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 9(1) of this SEPP provides that any development or activity proposed to be carried out on land within the Sydney drinking water catchment should incorporate the Sydney Catchment Authority's current recommended practices and standards. Section 10.2 addresses this. Alternatively, clause 9(2) of this SEPP provides that if such practices and standards are not incorporated, it needs to be demonstrated to the satisfaction of the consent authority how the practices and performance standards proposed to be adopted will achieve outcomes not less than those achieved by the Authority's current recommended practices and standards. Section 10.2 addresses this. Clause 10(1) of this SEPP provides that a consent authority must not grant consent to the carrying out of development on land within 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. 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. The "NorBE Tool" is set out in Appendix 1 of the document titled Neutral or Beneficial Effect on Water Quality Assessment Guideline 2011 prepared by the Sydney Catchment Authority. Appendix E and Appendix F address the "NorBE" test. 1. The EIS was prepared on the basis that mine water from the project could be transferred to the Wallerawang Power Station for use as cooling water. Closure of that power station meant that such transfer was no longer an option for dealing with mine water discharge. 2. In section 10.2 of the EIS, entitled "Water Management", after reference to the DGRs, it was noted that the Coxs River Catchment was listed as within the boundary of the Sydney Drinking Water Catchment. Further, in section 10.2.2.1, dealing with "Surface Water System", the EIS noted that: 10.2.2.1 Surface Water Sydney Spatial details of catchments and associated watercourses are illustrated in Figure 2.27. The Project Application Area is located within Coxs River Catchment, the Wolgan River Catchment, and the Colo River Catchment which covers a small area to the south east of the site. Springvale Mine's surface facilities are located within the Coxs River Catchment. The Coxs River Catchment and the Wolgan River Catchment are both under the jurisdiction of the Hawkesbury-Nepean Catchment Management Authority, although the Coxs River is listed within the boundary of the Sydney Drinking Water Catchment under the State Environmental Planning Policy (Sydney Drinking Water Catchment 2011). Whilst water quality and river flow objectives have not been formally set for the Hawkesbury-Nepean catchment, an impact assessment against relevant environmental values is presented. A statement of neutral or beneficial effect is also presented. Surface water flow in the Coxs River is in a southerly direction, reflecting surface topographic gradient toward Lake Wallace and further downstream, Lake Lyell, which is the water supply reservoir for Mount Piper Power Station via intermediate transfer to Thompsons Creek Dam. Outflow from Lake Lyell eventually contributes to Lake Burragorang which is the primary drinking water reservoir for the City of Sydney. 1. Section 10.2.4.1 concerned "Impacts to Water Quality". In that section the EIS stated that the project would not lead to a change in the beneficial use of groundwater as drinking water supply. However, because the Coxs River lay within the Sydney Drinking Water Catchment, a comparative evaluation was undertaken to assess the current and proposed water quality and addressed the requirement under the Catchment SEPP that the proposed conditions have a neutral or beneficial impact on water quality. With respect to the NorBE test, the EIS stated that: Neutral of Beneficial Assessment SEPP (Sydney Drinking Water Catchment) 2011 requires all new developments in the Sydney Drinking Water Catchment to demonstrate a NorBE on water quality. The SCA has established an assessment guide to assist in addressing relevant issues to determine whether or not a project will have a NorBE on receiving water quality. A number of supporting guidelines and interactive tools have been developed by the SCA to assist approval authorities in undertaking a NorBE Assessment. Of relevance to the Proposal, is the SCA guideline entitled 'Development in Sydney's Drinking Water Catchment Water Quality Information Requirements' as well as the 'Neutral or Beneficial Effect on Water Quality Assessment Guideline'. Regarding the proposed Project, the Guidelines require the following information to be included in the assessment: ▪ details of the project including site plans and constraints ▪ site contamination report ▪ water quality control details ▪ surface water modelling ▪ pollution control details, including any erosion and sedimentation controls ▪ water balance and water cycle management ▪ identification of the likely pollutants of concern (both construction and operation) ▪ identification of measures to control the identified pollutants ▪ description of the expected levels of pollutants before and after the development ▪ details of any required offsets. 1. The specific items of required "information" were elaborated upon, including surface water modelling which stated that "groundwater modelling indicates that there is no predicted decrease in groundwater contribution to surface water in the Coxs River". In relation to salinity, the EIS stated that (emphasis added): Salinity Whilst salinity of discharge exceeds the ANZECC guidance value for the Water Quality Objective - Protection of Aquatic Ecosystems, it is consistent with Water Quality Objective – Drinking Water – Groundwater and Water Quality Objective – Industrial Water Supplies. Review of groundwater quality against the ADWG [Australian Drinking Water Guidelines] indicates it is essentially consistent, where the drinking water standard considers a TDS of 600mg/L (~895 µS/cm) to be good quality drinking water and a TDS of between 600 and 900 mg/L (~895 µS/cm to 1,345 µS/cm) to be fair quality drinking water. It is noted that the guidance values for salinity in the ADWG is an aesthetic-based value and is not a health-based value. 1. The groundwater impact assessment in Appendix E of the EIS stated that groundwater inflows into the mine were expected to increase steadily from 11.84 ML/day at the commencement of mining to 18.75 ML/day by the middle of 2022, before tailing off to around 16.85 ML/day towards the end of the mine. Salinity of groundwater inflows was expected to remain consistent with the existing inflow water quality at around 700 to 1000 microsiemens per centimetre ("μS/cm"). 2. In relation to potential water quality impacts, the groundwater impact assessment concluded that: No deterioration of quality of groundwater inflows have been observed due to current mining operations, and consequently none are predicted due to the proposed development. Similarly no detrimental impacts to groundwater quality are expected within the shallow groundwater aquifer or within the swamps. Consistent with historical mining at Springvale, no deterioration in groundwater quality has occurred. 1. The surface water impact assessment at Appendix F of the EIS noted that the Coxs River was, at the time of the assessment, already a disturbed ecosystem. It stated that increased inflows associated with the project would be disposed of via transfer to the SDWTS. In the event that the SDWTS was unavailable, inflows would be discharged into the Coxs River via LDP009. It was noted that the Coxs River was within the Sydney Drinking Water Catchment and that the proposed project was required to have a neutral or beneficial impact on water quality in conformity with the Catchment SEPP. The Surface Water Impact Assessment, referring to the NorBE test, concluded that the project would have a neutral effect on water quality because the beneficial use of that water as potential drinking water was maintained. Review of groundwater quality indicated that it was essentially consistent with the requirements of the Australian Drinking Water Guidelines ("ADWG"), with the exception of salinity, where it would fall within the aesthetic guideline for salinity for fair quality drinking water, being of a Total Dissolved Solids measure ("TDS") between 600 and 900 mg/L (approximately 895 μS/cm to 1345 μS/cm), but below the aesthetic guideline for good quality drinking water of a TDS of less than 600 mg/L (approximately 895 μS/cm). 2. Numerous community members, public agencies and interest groups made submissions in response to the EIS. Submissions from the Sydney Catchment Authority ("SCA"), the Environment Protection Authority ("EPA") and the Office of Environment and Heritage ("OEH") raised concerns regarding the impact of the project on the Sydney Drinking Water Catchment. 3. On 3 June 2014 the EPA sent a letter to the Department of Planning and the Environment ("the Department"). After noting that it had previously advised the Department that the draft EIS had not adequately assessed the potential environmental impacts of the proposed discharge of saline mine water to the Coxs River system, the EPA went on to comment that it was unable to support the Springvale and Angus Place expansions in their current form because of the absence of any commitment in either the draft or final EISs to address the handling and treatment of mine water, either in the short or long term. The EPA recommended that were the Department to grant approval to the project, a condition requiring that the mine water either be treated to significantly reduce the salt and contaminant levels or to achieve a beneficial re-use, or a combination of both, by a set date, be imposed. The letter offered, "as a matter of priority" given the complexity of the issues dealing with mine water, to meet with the Department to discuss the issues to "achieve a good environmental outcome for the upper Cox River." 4. Attached to the EPA's 3 June 2014 letter were some "final comments" on the discharge limits: The EISs wrongly assume that the discharge limits currently applied to mine water licence discharge points (in particular LDP009 of Springvale and Angus Place LDP001) indicates "an acceptability" of the current mine water discharge quality. The discharge limits that have been applied to mine water discharges (LDP001 and LDP009) to the Coxs River by the EPA, were established on an interim basis to enable the mines to continue to operate while undertaking works identified in pollution reduction programs (PRPs) attached to both licences to identify and implement a solution to the mine water discharge quality. The PRPs have required either the development of options to cease water discharges (such as redirecting mine water at Angus Place backed [sic] into old underground workings) or to develop options to treat mine water to ensure any discharge can meet the ANZECC (2000) trigger value for upland rivers of 350 µS/cm. To date no option(s) to cease or treat the mine water has been developed by Centennial Coal. Centennial's approach to mine water is to continue and to increase the discharge from LDP001 and LDP009 to the environment for the next 3 decades without treating the mine water to an appropriate standard. The EPA's ongoing programs are not based on the continuation of the discharging of high volumes of potentially toxic, saline mine water often containing high (relative to ANZECC) levels of metal contaminants to the receiving environment of the Upper Coxs River catchment. Furthermore, it is misleading to suggest that a discharge of this magnitude and poor quality directly into Coxs River tributary streams will have a neutral or beneficial effect on water quality in Sydney's drinking water catchment or the upper Coxs River and its tributaries in terms of hydrology and aquatic health. 1. The SCA also sent the Department a letter on 3 June 2014, noting its primary concern in relation to the increased mine water discharges and associated water quality impacts in respect of salinity in Marangaroo Creek and the Coxs River, and the additional discharge of approximately 50ML/day of mine water from the project into receiving watercourses which would have a greater impact than that addressed in the EIS. 2. Additional "discrepancies and issues" identified in the EIS for further consideration included that: • Salinity predictions have been undertaken upstream of Lake Wallace, not where discharge occurs in Swayers Swamp Creek (LDP009). No predictions are made on what would be an expected increase in salinity compared to the current conditions at the discharge point LDP009 and impacts on water quality in Coxs River downstream of Lake Wallace. The model predictions for average Coxs River salinity should include an envelope around the average showing 10th and 90th percentiles. • There is no analysis whether elevated salt levels are likely in the Coxs River where it enters Lake Burragorang. 1. On 25 July 2014 the EPA advised Centennial by letter that it had advised the Department that it was unable to support the project given the absence of any commitment or detailed plan to address the handling and treatment of the mine water in either the short or long term. 2. The Department and the Department of the Environment for the Commonwealth requested the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development to provide an assessment of the project on 3 July 2014. In particular, questions 6, 7 and 8 concerned the impact of the proposed mine extension on water quality: Question 6: Are the cumulative water quality impacts of discharges to the Coxs River accurately and reasonably described? Response 36. The cumulative water quality impacts of Springvale and Angus Place mine water discharges to the Coxs River, an important contributing source to Sydney's drinking water supply, were not modelled for all relevant contaminants, did not consider all likely discharge conditions, and are therefore not accurately and reasonably described. 37. Salinity was the only water quality variable modelled for cumulative impacts. The cumulative impact of other contaminants was not provided, even though the EIS states (Appendix C within Appendix F) that levels of copper, zinc, nitrogen and phosphorus have been elevated above ANZECC 95th percentile protection level for slightly to moderately disturbed ecosystems. The contributing water quality impacts to Coxs River from other mines in the area are not quantified. 38. Water quality impact estimations for the Coxs River for both Springvale and Angus Place were conducted for scenarios that included the transfer of large volumes of water through the Springvale Delta Water Transfer Scheme (SDWTS) to the Wallerawang Power Station. This may no longer be a viable option because the Wallerawang Power Station has been placed into care and maintenance. Increased discharge volumes resulting from reduced demand from the Wallerawang Power Station would affect the outcome of the cumulative water quality impact assessment and should be considered as a potential discharge scenario. … Question 7: Is the information provided sufficient to predict any changes to either water quality or water quantity in the Coxs River at Kelpie Point which would arise as a result of the mining operation? (Kelpie Point – station number 563000 – is located on the Coxs River close to its entry location into Warragamba Dam. The Sydney Catchment Authority has undertaken flow and quality monitoring at this location for extended periods.) Response 43. No. The proponent's estimation of downstream impacts was limited to site water balance and cumulative salt mass balance modelling that did not model impacts beyond the upper Coxs River catchment (i.e. not downstream of Lake Lyell). In addition, the existing condition of the Coxs River was not adequately described and the downstream impact modelling that was undertaken included transfer of large volumes of water through the SDWTS to the Wallerawang Power Station, which may no longer be a viable option. … Question 8: If so, what are the predicted changes to water quality water quantity in the Coxs River at Kelpie Point and what are the consequences for stored water within Warragamba Dam? 48. Water quantity and quality changes in the Coxs River at Kelpie Point cannot be reliably estimated based on the information presented in the EIS documentation, as detailed in the response to Question 7. For similar reasons, the consequences for stored waters in Warragamba Dam also cannot be reliably estimated from information in the EIS. 1. A Response to the Submissions ("RTS") to the EIS was prepared on behalf of Centennial on September 2014. The RTS was submitted by Centennial to the Department on 2 October 2014. 2. The RTS noted that the updated median salinity at LDP009 (reflecting monitoring up to 29 May 2014) was 1060 μS/cm (equivalent to 710 mg/L, assuming a conversion factor of 0.67 between salinity as electrical conductivity and TDS) and that the impact of discharging water of this quality at LDP009 would be neutral or beneficial because future discharges were expected to be of equivalent water quality to the currently approved discharge. 3. Under section 3.1.26 concerning "Water Quality", the RTS also noted the observation by the SCA that there was no assessment on whether elevated salt levels would be likely in the Coxs River where it entered Lake Burragorang, although the Regional Water Quality Impact Assessment ("Regional Assessment") included in the RTS predicted an increase in salinity in the Lake from 85 mg/l to 97 mg/l under the proposed water management strategy. 4. The Regional Assessment was prepared by RPS on 10 September 2014, to assess the water quality impact of the proposed discharges from the project and the Angus Place mine extension project. 5. The prediction scenarios in section 3.3.3 of the Regional Assessment were as follows: Flow statistics of predicted daily flow at this location are presented in Table 3.6, including for the prediction null case. As indicated above, the prediction null case comprises both Angus Place Colliery and Springvale Mine ceasing discharge on 30 June 2014. Table 3.6: Predicted Daily Flow Statistics (ML/d) at #011 (Kangaroo Creek, downstream of point of discharge from Angus Place LDP001) Percentile CAL NUL WS1 WS2a WS2b Minimum 0.1 0.0 5.4 2.0 2.0 5% 2.2 0.1 14.5 2.1 2.1 10% 2.4 0.1 14.9 2.2 2.1 20% 2.9 0.2 17.1 2.3 2.2 50% 4.1 0.5 26.1 2.9 2.5 80% 5.3 1.2 28.8 12.1 0.8 90% 6.7 2.9 29.4 15.1 4.9 95% 9.6 6.4 30.9 15.7 8.4 Maximum 853.8 458.4 437.5 460.4 460.4 1. The "Impact Assessment" in section 4.1 of the Regional Assessment provided a summary of the model results from the top of the catchment downstream to Lake Burragorang. 2. A table in section 4.1 contained a summary of the predicted daily flows into the Coxs River catchment: Table 4.1: Summary of Predicted Daily Flows (ML/d) in the Coxs River Catchment Location Node NUL WS1 WS2a WS2b Kangaroo Creek and Coxs River above Wangcol Creek/Blue Lagoon Kangaroo Creek downstream of Angus Place LDP001 #011 0.5(0.0-458) 26.1(5.4-474) 2.9(2.0-460) 2.5(0-460) Coxs River above Wangcol Creek/Blue Lagoon #056 1.4(0.0-1613) 27.4(6.9-1629) 5.1(2.0-1616) 3.4(2.0-1616) Sawyers Swamp Creek Sawyers Swamp Creek downstream of Springvale LPD009 #014 0.2(0.0-170) 14.4(0.0-186) 28.0(3.0-199) 28.0(3.0-199) Sawyers Swamp Creek above Coxs River #166 0.2(00-223) (14.5(0.0-239) 28.2(3.0-252) 28.2(3.0-252) 1. Table 4.2 contained a summary of the predicted daily salinity in the Coxs River catchment: Table 4.2: Summary of Predicted Daily Salinity (mg/L) in the Coxs River catchment. Location Node NUL WS1 WS2a WS2b Kangaroo Creek and Coxs River above Wangcol Creek/Blue Lagoon Kangaroo Creek downstream of Angus Place LDP001 #011 50(50-68) 789(75-804) 698(55-804) 664(55-804) Coxs River above Wangcol Creek/Blue Lagoon #056 50(50-89) 761(63-804) 538(57-804) 498(57-804) Sawyers Swamp Creek Sawyers Swamp Creek downstream of Springvale LDP009 #014 50(50-50) 761(50-804) 799(160-804) 800(160-804) Sawyers Swamp Creek above Coxs River #166 51(50-379) 751(50-804) 799(154-804) 799(154-804) Lake Wallace Coxs River above Lake Wallace #047 599(107-771) 755(111-797) As per WS1 As per WS1 Lake Wallace #074 321(91-552) 604(79-747) As per WS1 As per WS1 Lake Lyell and above Lake Lyell Coxs River above Lake Lyell #035 231(50-540) 552(67-740) As per WS1 As per WS1 Lake Lyell #174 223(127-462) 422(145-566) As per WS1 As per WS1 Thompsons Creek Reservoir Thompsons Creek Reservoir #272 276(237-471) 477(314-613) As per WS1 As per WS1 Lake Burragorang and above Lake Burragorang Coxs River above Lake Burragorang #225 90(50-217) 153(52-503) As per WS1 As per WS1 Lake Burragorang #280 85(73-97) 97(74-112) As per WS1 As per WS1 1. It showed salinity increasing at the discharge point, at Lake Burragorang and at the Coxs River above the lake. Moreover, the Regional Assessment stated that: From the above, there is no target for salinity since the ADWG do not have a health-based water quality criteria. There is also no target for salinity for the Prospect Water Filtration Plant with respect to Raw Water Supply Agreement. As identified in the SSTV Assessment, other water quality characteristics meet the ADWG and the Raw Water Supply Agreement specifications. The predicted minor increase in salinity in Lake Burragorang due to the proposal is therefore considered to have a neutral effect with respect to the Neutral or Beneficial Effect test criteria. 1. On 12 September 2014 Dr Justin Bell, the Principal Environmental Engineer for RPS, wrote a letter to Springvale Coal, seeking assistance to address a query received from the EPA on the proposed total predicted discharge to the Coxs River associated with the project. The letter noted that: …the predicted total discharge to the Coxs River ranges from 21.14ML/d in 2014 to a peak of 31.84ML/d in 2024 with SDWTS at 30ML/d. When the SDWTS is upgraded to a capacity of 50ML/d, discharge to the Coxs River ranges from 21.14ML/d in 2014 to 45.03ML/d in 2024. It is noted that this latter scenario represents Angus Place discharge predominantly being transferred to SDWTS and Springvale discharging through its LDP009 since there is now no direct demand at Wallerawang Power Station. In the circumstance that SDWTS is not available to Angus Place Colliery, discharge to the Coxs River of only mine water make at Springvale LDP009 and Pit Top via LDP001 ranges between 12.72ML/d in 2014 and 18.66ML/d in 2022. Following cessation of mining at Springvale Mine, discharge to the Coxs River reduces to <1ML/d. A regional water quality impact assessment has been prepared by RPS (2014c) as part of the Response to Submissions and that water quality model presents the impact to flow and salinity of each of these scenarios. 1. On 26 September 2014 Dr Bell wrote a second letter to Centennial Angus Place Pty Ltd, providing comments to the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development. In response to the question "are the cumulative water quality impacts of discharges to the Coxs River accurately and reasonably described", the following answer was provided: To address this query as well as queries from the Sydney Catchment Authority (SCA) and the Environmental Protection Authority (EPA) and the NSW Office of Environment and Heritage, a regional water quality impact assessment was undertaken as well as a Site Specific Trigger Value (SSTV) Assessment as per the ANZECC (2000) methodology. These studies are reported in RPS (2014e) and RPS (2014fg) [sic] respectively. Direct toxicity assessments have been undertaken and the results of those assessments are described elsewhere in the Response to Submissions. To summarise, the outcome of the SSTV assessment was that there is elevated concentrations of copper and zinc, however, these are also elevated in background, upstream source waters. With respect to nutrients, the water quality of discharge at Angus Place LDP001 has a median nitrate concentration of 0.64mg/L, which is less than the default ANZECC (2000) trigger value of 0.7mg/L with respect to toxicity. At Springvale, the concentration of nitrate is not currently measured at Springvale LDP009 but groundwater quality from Bore 6 had a median nitrate concentration of 0.42mg/L, as reported in the Water Management section of the main EIS. The impact of the closure of Wallerawang Power Station is addressed in the regional water quality impact assessment (RPS, 2014e). In summary, the predicted salinity concentration under the proposed water management strategies lie within the historical range except at immediately upstream of Lake Burragorang. The predicted salinity immediately upstream of Lake Burragorang is, however, less than the default ANZECC 95th percentile protection guideline value of 350µS/cm (234mg/L, assuming a conversation factor of 0.67). The predicted impact to flow of proposed water management strategies is not significant in the Coxs River but mine water discharge does dominate flow in Kangaroo Creek and Sawyers Swamp Creek respectively. 1. Further, in response to the question "what are the predicted changes to water quality water quantity in the Coxs River at Kelpie Point and what are the consequences for stored water within Warragamba Dam?", the following answer was provided (emphasis added): In summary, the impact to flow is not significant at this location. The impact to water quality, as salinity, under the proposed water management strategy is outside the range of historical observation, however, is below the default ANZECC trigger value for 95% protection of aquatic ecosystems (350µS/cm, 234mg/L assuming a conversion factor of 0.67). As indicated above, the proposed water management strategy has insignificant impact to storage volume in Lake Burragorang and predicted impact to salinity is a minor increase from 85mg/L to 97mg/L. Further detail is presented in RPS (2014e). 1. There was no mention of any impact on Sawyers Swamp Creek. 2. Various government agencies provided comments on the RTS as follows: 1. the SCA disagreed that the predicted increases in salinity represented a neutral effect on water quality and expressed significant concerns in relation to the predicted salinity increases in Lake Burragorang, Coxs River, Kangaroo Creek and Sawyers Swamp Creek. The SCA stated that the absence of health-related criteria for salinity was irrelevant and identified the water quality targets in Table 3.3.3 of the Australian and New Zealand Environment Conservation Council 2000 Guidelines ("ANZECC 2000") as the most appropriate water quality targets for salinity in upland streams and lakes. The SCA noted that the predicted impacts of the project would mean that water at LDP009 discharging into Sawyers Swamp Creek could not be diluted to below the Site Specific Trigger Value for salinity of 95% of the time; and 2. the EPA objected to the approach adopted in the RTS to handling mine water and raised concerns about the adequacy of the assessment of the impact of discharges at LDP009. The EPA also expressed concerns that the guidelines in ANZECC 2000 had been misapplied in the assessment of LDP009. 1. Specifically, the objections of the EPA were outlined in a letter to the Department on 4 November 2014. This letter noted that: • In its Responses the proponent's approach has been to regard salt, expressed as Electrical Conductivity in micro-Siemens per Centimetre (µS/cm EC), as being a pollutant of no particular significance in the upper Coxs River. This is not the case. Refer to Attachment One. ... • In its Responses, the proponent indicates it remains committed to addressing the toxicity characteristics of the mine water discharge from Licensed Discharge Point 9 (LDP9) from Springvale Colliery. The EPA agrees that Centennial needs to find the reason for this toxicity and be prepared to eliminate it. Refer to Attachments One and Two. • The EPA has previously raised the need for the proponent to address the salinity of the discharge authorised by Environment Protection Licence (EPL 3607) for Springvale Colliery and the EPA's current position is a continuation of a regulatory effort to reduce the salinity concentrations of the upper Coxs River. The EPA considers the current limits on LDP9 to be interim until a change in management of the mine water (handling, treatment etc) is implemented. Refer to Attachment 4A. • In its Responses the proponent's Coxs River Catchment Restoration Program outlines a variety of measures to improve the catchment riparian zone and landscape; however, none relate to a stated goal of improving water quality. Refer to attachment 4B. … 1. Relevantly, Attachment 4A stated: It is important for the Department of Planning and Environment (DPE) to know that even if the Springvale Mine Extension Project was not being proposed, and if the recent circumstances at Angus Place were not occurring, the EPA would still be negotiating with Centennial Coal and its licensee to reduce the salinity of its discharge from Licensed Discharge Point 9 (LDP9). The EPA's current position is a continuation of a regulatory effort to reduce the salinity concentration of the upper Coxs Rive. The EPA considers the current limits on LDP9 to be interim until a change in management of the mine water handling, treatment etc is implemented. 1. The particular objections of the SCA were outlined in a letter to the Department on 12 November 2014, in the following terms: I refer to your Department's e-mail dated 9 October 2014 inviting comments on the Angus Place Mine and Springvale Mine Extension Projects Response to Submissions (RTS) document including Regional Water Quality Impact Assessment for both mines. You have requested advice on whether the issues raised in our submission have been adequately addressed in the RTS. The Sydney Catchment Authority's (SCA's) primary and main concerns in relation to the Angus Place Mine and Springvale Mine Extension Projects are related to the increased mine water discharges and associated water quality impacts (salinity) for Sawyers Swamp Creek, Kangaroo Creek, Marangaroo Creek, Coxs River and Lake Burragorang. In its RTS document, the proponent has responded to the SCA's concerns by referring to its Regional Water Quality Impact Assessment Report (RWQIAR) for both mines. This letter therefore responds to the RWQIAR for both Centennial extension projects. The RWQIAR has predicted minor increases in median salinity in Lake Burragorang (from 85 to 97mg/L); increases in salinity upstream of Lake Burragorang (from 90 to 150-500mg/L), and significant increases in salinity in Kangaroo Creek and Sawyers Swamp Creek (from 50 to 550-800mg/L) directly downstream of the Angus Place and Springvale Mine discharge points. The RWQIAR concludes that the Angus Place Mine and Springvale Mine Extension Projects will have a neutral or beneficial effect (NorBE) on water quality. The proponent argues that there is a minimal impact on the water quality of the receiving aquatic systems and that there are no feasible alternatives to managing the mine water, except for the discharge of these waters at different locations in the catchment. The SCA disagrees with these statements and has significant concerns in relation to the predicted increases in salinity in Lake Burragorang, Coxs River, Kangaroo Creek and Sawyers Creek. Based on predicted increases in salinity, the SCA has assessed that both extension projects do not achieve a NorBE on water quality. The SCA therefore recommends both applications be refused unless there is a requirement placed upon the applicant to treat mine water discharges to a higher and appropriate level prior to discharge. 1. In December 2014, Springvale Coal prepared a reply to all agency submissions on the RTS, noting, in response to the SCA's comments, that although the proposed discharges dominate flows in Sawyers Swamp Creek, the Sawyers Swamp Creek was a highly disturbed catchment and that discharges to the creek had occurred since 2006. It acknowledged the proposed increase in salinity in Lake Burragorang, but remarked that this was considered to have a neutral effect as set out in the Regional Assessment. 2. In response to the objections of the SCA, Springvale Coal noted that: Issues SCA01) The SCA disagrees with these statements and has significant concerns in relation to predicted increases in salinity in Lake Burragorang, Coxs River, Kangaroo Creek and Sawyers Creek. Based on predicted increases in salinity, the SCA has assessed that both extension projects do not achieve a NorBE on water quality. The SCA therefore recommends that both applications be refused unless there is a requirement placed upon the applicant to treat mine water discharges to a higher and appropriate level prior to discharge. As presented in the RWQIAM (RPS, 2014e), the Proposal will lead to salinity in the Coxs River that is within historical ranges aside from Kangaroo Creek, where discharge from the Angus Place Colliery resides at the top of the Coxs River catchment and historical increase in salinity in Kangaroo Creek is due to the discharge of mine water make at this location. It is proposed that discharge to Kangaroo Creek continues. As noted in the RWQIAM (RPS, 2014e), Sawyers Swamp Creek is a highly disturbed catchment and historical and current land uses includes wet ash deposition, dry ash placement facility, underground mining access portal and Kerosene Vale open cut mine, now rehabilitated. It is acknowledged in the EIS, SWIA, and RWQIAM that the proposed discharges do dominate flows in both Kangaroo Creek and Sawyers Swamp Creek. It is highlighted that discharge at Kangaroo Creek has been on-going for a considerable period and discharge to Sawyers Swamp Creek has occurred since 2006, whenever mine water make from the SDWTS was not required by Wallerawang Power Station. The proposed increase in salinity in Lake Burragorang due to the Proposal is acknowledged, however, as stated in the RWQIAM, this is considered to have a neutral effect. … Accordingly, for Lake Burragorang, it was put that the Proposal constitutes a neutral effect on water quality since the predicted increase in salinity is minor in nature and does not lead to an impact in regard to its use as bulk raw water supply. 1. In response to the issues identified by the EPA, the reply relevantly stated as follows: Issue EPA27) …The RPS reports do not properly account for the overriding principle in the ANZECC (2000) guidelines that should guide management, which is continual improvement (see Section 2.2.1.7). For example, in waters that are of better quality than that set by the water quality objectives, some emphasis should be could still be [sic] given to reducing the level of contamination from all sources. Wherever possible, ambient water quality should not be allowed to degrade to the levels prescribed by the water quality objectives. It is also not acceptable to allow poor environmental performance or water pollution, simply because a waterway is degraded. The NWQMS also notes that accepted modern technology, consistent with ongoing economic viability, should be maintained even where this will secure higher water quality outcomes than what the water quality objectives require. An update to the SSTV assessment will be undertaken and a discussion is presented in response to query EPA33. As presented in the EIS and in Centennial's response to the Pollution Reduction Program (PRP) on its Environmental Protection Licence (EPL), treatment of 30-50ML/d via Reverse Osmosis is not economically feasible. Issue EPA28) …The EPA's policy is that the water quality objectives /ANZECC trigger values should be met at the edge of the area where initial (near-field) mixing occurs. Options to meet this policy aim are considered and weighed against the matters to be considered in licensing decisions as set out under Section 45 of the Protection of the Environment Operations Act 1997. The matters that need to be taken into account include the impact of the measures that can be taken to mitigate the impacts of the pollution and maintain or restore the environmental values of the waterway. While the EPA's licensing approach is to consider the effect of a discharge at the edge of a defined initial "near-field" mixing zone, if the discharge volume from the licenced discharge point would dominate flows in system under most conditions then the dilution effects within a near field mixing zone may be relatively minimal. EPA would therefore examine the pollutant concentrations at the point of discharge relative to ANZECC trigger values. This issue is addressed in the response to query EPA29 provided below. Issue EPA29) …Effective discharge controls that consider the level of water treatment, the concentration and the total mass of pollutants, and the in situ dilution, should ensure that the area of a mixing zone is small and the designated values and uses of the water body as a whole are not prejudiced. The EPA's comment is acknowledged. As stated in the SWIA (RPS, 2015ab), Lake Wallace is a water supply reservoir that was constructed in 1978 for use by Wallerawang Power Station. Other components of the Coxs River Water Supply Scheme include Lake Lyell and Thompsons Creek Reservoir. With the decommissioning of Wallerawang, there is no longer direct extraction from Lake Wallace; however, the lake still constitutes a component of the Coxs River Water Supply Scheme for EnergyAustralia's other power station, Mount Piper Power Station. The Sawyers Swamp Creek catchment is a highly disturbed state, with historical and current land uses comprising wet ash deposition, dry ash placement and a rehabilitated open cut mine. Discharge has been occurring to Sawyers Swamp Creek since 2006 and as presented in the Ecological Impact Assessment, there is no expected change to aquatic ecosystems downstream of Springvale LDP009 due to the proposal. A SSTV assessment, as applied to immediately upstream of Lake Wallace is not considered unreasonable. 1. On 20 February 2015, the Neutral or Beneficial Effect on Water Quality Assessment Guideline 2015 ("the 2015 NorBE Guidelines") was published in the Government Gazette (No 13). These Guidelines defined a "neutral or beneficial effect" as: 3.1 Definition of neutral or beneficial effect Consent authorities must consider a number of matters to determine a development application, including that it will have a neutral or beneficial effect on water quality (NorBE). The consent authority may refuse an application on other grounds even if NorBE is satisfied. A neutral or beneficial effect on water quality is satisfied if the development: (a) has no identifiable potential impact on water quality, or (b) will contain any water quality impact on the development site and prevent it from reaching any watercourse, waterbody or drainage depression on the site, or (c) will transfer any water quality impact outside the site where it is treated and disposed of to standards approved by the consent authority. Public authorities undertaking activities in the Sydney drinking water catchment must also consider whether the proposed activity will have a neutral or beneficial effect on water quality. The site of a proposed development or activity, to determine water quality impacts, is the land described in the development application, the Part 5 activity documentation, or where relevant, the SSD or SSI application. Pollutant loads or concentrations for each pollutant leaving a site are measured at the site boundary, or at the point where the pollutant enters a drainage depression, waterbody or watercourse. Section 4 describes how a neutral or beneficial effect is assessed and the matters that a proponent must address in an application. 1. The definition of neutral or beneficial effect contained in the 2015 NorBE Guidelines was relevantly identical to that contained in the 2011 NorBE Guidelines (published on 21 January 2011 in the Government Gazette (No 6)). 2. As part of its reply to the RTS, Springvale Coal commissioned a report by Jacobs Group (Australia) Pty Ltd ("Jacobs") entitled, Additional Simulations of the Regional Water Quality Impact Assessment Model which was published on 26 March 2015 ("the Jacobs March 2015 Report"). 3. The Jacobs March 2015 Report included model predictions of mine water discharge. It was "highlighted that the NUL simulation presents the predicted flow and salinity in the circumstance of both Angus Place Colliery and Springvale Mine extension projects not proceeding. As such, comparison of the prediction simulation and the NUL presents the impact due to the Proposal." Summaries in tabular form of predicted daily salinity (Table 4.10) and of end pipe target daily salinity (Table 4.12) in the Coxs River catchment, were attached. 4. In April 2015 the Department prepared a Preliminary Environmental Assessment Report ("PEAR"). In the PEAR the Department: 1. after summarising the existing development consent and operations, noted that as at April 2015 Springvale Coal had extracted 17 longwalls, including LW1 and LW401 to LW416. Moreover, it was "currently" extracting LW417 and that LW418 to LW423 were approved but had yet to be extracted; 2. noted that the Catchment SEPP applied to land within the hydrological catchments that contribute to Sydney's drinking water supply: The State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 (SEPP Sydney Drinking Water Catchment) applies to land within the hydrological catchments that contribute to Sydney's drinking water supply. The aims of this Policy are to: • provide for healthy water catchments that would deliver high quality water while permitting development that is compatible with that goal; • provide that a consent authority must not grant consent to a proposed development unless it is satisfied that the proposed development would have a neutral or beneficial effect on water quality; and • support the maintenance or achievement of the water quality objectives for the Sydney drinking water catchment. Recent modeling indicates that discharge of mine water into the Coxs River via LDP 9 would have a neutral impact on water quality within the catchment, indicating that the project would not contravene the aims of this SEPP. This is discussed in detail in Section 6.4. 1. outlined the concerns expressed by the SCA and the EPA: The Sydney Catchment Authority (SCA, now part of Water NSW) is concerned about increased mine water discharges and associated water quality impacts to the Coxs River and Sydney's drinking water catchment. Specifically, SCA remains concerned about predicted increases in salinity in Lake Burragorang, Coxs River, Kangaroo Creek and Sawyers Creek. SCA indicated that the project would not achieve the test of neutral or beneficial effect on water quality unless there is a requirement to treat mine water discharges to a higher level prior to discharge. The Environment Protection Agency (EPA) also remains concerned about the water quality of proposed mine water discharges. The EPA states that its ultimate goal for the project is to reduce the concentration of saline discharges to 350 microSiemens per centimetre (µS/cm) electrical conductivity (EC) and to reduce the total load of salt being discharged into this system. However, the EPA acknowledges that these goals may not be achievable in the short term. Consequently, the EPA has agreed to allow Springvale Coal to: • undertake pre-feasibility studies on achieving standards of 700 µS/cm (50th percentile) or 900 µS/cm (90th percentile) for mine water discharges into the Coxs River or its tributaries; • continue negotiations with NOW, SCA and Energy Australia regarding water management in the upper Coxs River; and • develop water management options and Pollution Reduction Programs (PRPs) for Springvale and Clarence coal mines, including necessary actions to ensure that Angus Place can be brought online seamlessly through PRPs. 1. and, under "Predicted Surface Water Impacts", especially "Discharge of Mine Water", stated that (emphasis added): Under the State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011, the Minister's delegate is required to be satisfied that the project would have a 'neutral or beneficial effect' on water quality, since the Coxs River catchment and Lake Burragorang are part of this catchment. The Department notes that existing discharges from Springvale meet the current EPL's limits for EC and that Centennial is currently investigating options to further reduce the salinity levels of discharges. The Department agrees with the EPA that these alternative treatment arrangements may take some time to implement, but is satisfied that they would result in a 'beneficial' effect on water quality in the Coxs River and its downstream waterways, compared with existing discharges. Jacobs states that the predicted increase in salinity in Lake Burragorang (either with or without treatment) is equivalent to an increase of 6% and 5% respectively, which it considers has a 'neutral' impact to water quality, since the predicted increase in salinity is in itself minimal. The Department does not consider that an increase of 5 – 6% is arithmetically 'neutral'. However, this should not be the basis of the assessment. The critical question is whether the increase is 'environmentally neutral'. In this regard, it is important to note that the predicted increase in salinity in Lake Burragorang results not from higher EC in inflows from the Coxs River, but from an increased total salt load as a result of the expanded mining area and the proposal to divert up to 19 ML/day of Clarence Colliery's mine water from the Wollangambe River. The increase must also be considered in the light of the Australian Drinking Water Guidelines (2015) and the potential for any such increase to lead to any 'environmental harm'. In the Department's opinion, there is no basis on which to conclude that there would be any negative effects from the predicted increase in salinity, which is well within the range of normal upland streams and catchments in eastern Australia and well within the expected standards of the Drinking Water Guidelines. On this basis, the Department considers the changes to be environmentally 'neutral'. The Department also notes that, as at the date of this report, the EPA has not had the opportunity to review the final Jacobs report and further consider potential discharge management options in light of the modelling results. However, as stated in Section 5.4, the EPA has acknowledged that reducing the salinity of mine water discharges to 350 µS/cm EC may not be achievable in the short term. 1. In other words, the PEAR opined that the predicted increase in salinity in Lake Burragorang was attributable to the predicted impacts of the project, but it went on to conclude that this would not have a negative impact and would be "environmentally neutral". 2. On 27 April 2015 the Minister issued a request to the PAC under s 23D of the EPAA and cls 268R and 268V of the Environmental Planning and Assessment Regulation 2000 for a review of the project. Paragraph 1 of the Minister's request to the PAC required it to: Carry out a review of the Springvale Mine Extension Project, and: (a) consider the EIS for the proposed development, the issues raised in submissions, the issues raised in the advice from the IESC, the formal Response to Submissions document, the subsequent response to agency comments on the response to submissions document the Department of Planning and Environment's Preliminary Assessment Report, and any other relevant information provided on the proposed development during the course of the review. (b) assess the merits of the proposed development as a whole, paying particular attention to its potential: • subsidence impacts on upland swamps; and • impact on the region's water resources, particularly discharges of mine water to the Coxs River catchment; and (c) recommend any further measures to avoid, minimise, and/or manage the potential impacts. 1. The Minister's request included that the PAC hold a public hearing and provide a report to the Department. Thus, on 27 May 2015, a public hearing was held by the PAC in Lithgow. 2. In late May 2015 Centennial Coal Company Limited ("Centennial Coal") - the parent of Springvale Coal - and the EPA reached agreement about the reduction of salinity in the discharge of mine water from the project (and the Angus Place mine). That agreement was summarised in a letter from the EPA to the Department dated 22 June 2015. This agreement was reached in the context of Springvale Coal's existing environment protection licence limit of 1200 μS/cm EC for discharges at LDP009. 3. On 3 June 2015 there was a departmental meeting with the PAC and WaterNSW (formerly the SCA). PAC Secretariat notes of the meeting revealed that "key concerns" included "NorBE – Sydney Drinking Water Catchment SEPP". In particular, the issue of whether there was a "water impact" if "mitigated within project site, or if mine water was transferred and treated to appropriate level". One of the "key issues" was the "treatment and discharge at LD009". Although it was noted that "water quality would improve compared to before i.e. 'beneficial effect'" and the 22 June 2015 agreement was mentioned, concern was expressed as to existing modelling and the appropriate baseline to measure the change in the salinity level at Lake Burragorang. Specifically, the question "how do you differentiate from other sources of impact?" was asked. 4. The discussion was also reflected in the handwritten notes of the PAC Chair, Mr Brian Gilligan, where explicit reference was made to what may be inferred are the NorBE guidelines: that there was no water quality impact; the water quality impact could be mitigated on site; and that unsuitable water could be transferred for treatment. 5. The handwritten notes of Mr David Johnson (one of the PAC members), attending the meeting, recorded that Mr Malcolm Hughes, a Senior Manager at the Department, had said the following: ‑ Concerned re "Neutral or Beneficial Effect" on catchment waters. Defined in SEPP for Syd. Drinking Water Catchment. [3 ways of achieving NOBE]. ‑ Loss of water-quality re Springvale is negligible ‑ Greatest concern of SCA/WNSW is discharge quality to Coxs R (LDP09) ‑ Company (Springvale/Centennial) have not negotiated or consulted with SCA/WNSW! 1. Mr Johnson's notes also recorded that Mr Howard Reed, from the Department, had said: ‑ Apparently the Co. & EPA have reached an agreement for EPL based on salinity of discharge into Coxs R. satisfying:- 50th%ile ---- 700µS max 90th%ile ---- 900µS max 100th%ile ---- 1,000µS max + medium term goal of 500µS 1. The notes concluded with the statement that Mr Hughes would "like to see Jacobs re-doing their modelling on resultant effects (of above agreement) on Lake Burragorang." This was echoed in the PAC Secretariat notes. 2. On 26 June 2015 the PAC published its first project review report ("the first PAC Review Report"). Relevantly, the PAC considered that the project was approvable subject to stringent conditions. However, it recommended that prior to the project being determined additional information be provided. 3. The executive summary to the first PAC Review Report stated as follows (emphasis added): The Springvale Mine Extension Project is a proposed extension of the existing Springvale underground coal mine, which is located approximately 15 kilometres northwest of Lithgow, within the Lithgow City Council Local Government Area. The proposal involves extending the existing underground mine operations to the south and southeast, with the mine continuing to operate in largely the same way it has since 1995. It would continue to extract up to 4.5 million tonnes of run-of-mine coal per year from the Lithgow Seam, and would continue to use the existing coal transportation, water and ventilation systems. On 27 April 2015, the Minister requested the Commission to conduct a public hearing and review the merits of the project, paying particular attention to subsidence impacts on upland swamps, and impacts on the region's water resources, particularly discharges of mine water to the Coxs River catchment. The Commission was constituted by Brian Gilligan (chair), with Abigail Goldberg and David Johnson. The Commission examined the documents referred to in the Terms of Reference, including the Preliminary Environmental Assessment Report (PEAR) provided by the Department of Planning and Environment (the Department). The Commission also received written submission, held a public hearing, visited the site and surrounds (accompanied by an officer from the Office of the Environment and Heritage (OEH)), and met with the Applicant, the Department, the Environment Protection Authority (EPA), the NSW Office of Water, the Department of Trade and Investment (DTI), WaterNSW and Council. The Commission notes that the PEAR was lacking recent information about the position of agencies on some key issues, which made the task of undertaking the review in a timely and effective manner challenging. In particular, the most recent submission from OEH was not provided to the Commission until 19 June when the Commission was close to finalising its review report. With the exception of the matters raised in this late submission, the Commission has been able to ascertain most of the relevant information during the course of the review. Residual matters are flagged in the relevant sections of the report. Subject to the resolution of these residual concerns, the Commission agrees with most of the findings and recommendations of the PEAR. However, the Commission has also provided significant recommendations to enhance the determination of this proposal and to ensure that potential impacts are avoided, minimized or mitigated as summarised in Section 5 of this report. The Commission considers the three key issues that require further consideration are the final plan of action in relation to discharge impacts on Coxs River, adaptive management options and offset policy provisions in relation to the impact on swamps, and resolving some of the uncertainty regarding non-conventional subsidence effects. The Commission has also considered other issues, including subsidence-related impacts on watercourses, rock features and built features, socio-economic impacts, biodiversity impacts from clearing, and noise impacts. In relation to discharge impacts on Coxs River, the Commission has recommended that the Department consults further with the EPA and WaterNSW, and that the target levels for salinity and other toxicity factors are formally agreed upon with an accompanying tight schedule for action by the Proponent. In relation to swamps, the Commission recommends that the Department consider opportunities for adaptive management in relation to certain swamps based on a comprehensive monitoring program in key areas and deferred Extraction Plan approvals to reflect a progressive risk assessment process. In relation to non-conventional subsidence effects, the Commission recommends that the Department give further consideration to upsidence and valley closure effects, and ensure that appropriate monitoring is included in any consent. The Commission believes it is important to view the proposal in the strategic context of power supply for NSW, and notes that the Springvale mine is now the only local mine currently supplying coal to the Mt Piper Power Station, which provides approximately 15% of NSW's electricity. While noting objections raised about some elements of the economic assessment, the Commission agrees with both DTI and the Department's independent peer review that the proposal, taken overall, would make a positive contribution to the region and the state of NSW. The Commission has carefully weighed the key areas of concern, including discharge impacts on the region's water resources and swamp impacts, against the significance of the resource and the socio-economic benefits. The Commission is satisfied that the project's benefits as currently understood outweigh its potential impacts, and on balance is approvable. The project should proceed to determination, subject to the recommendations outlined in this report including the resolution of residual issues raised by OEH and the application of the Draft Offsets Policy. 1. As an introductory matter, the first PAC Review Report noted that 17 longwalls had been extracted and that an 18th was currently being extracted. It further noted that the 1992 development consent was due to expire on 30 September 2015 and had already been extended by a year. 2. Chapter 3.2 dealt with "Water Resources". In relation to surface water impacts, the first PAC Review Report noted that: Key Watercourses and Catchments The Springvale mine is predominantly located within the catchments of the Wolgan River and the Coxs River. The Wolgan River flows to the north from the mine location through the Wolgan Valley, before entering the Colo River, which flows into the Hawkesbury River. From the mine location, the Coxs River generally flows south path [sic] Lithgow, before flowing into Lake Burragorang, which is impounded by Warragamba Dam (the primary reservoir for Sydney's drinking water supply). Discharge into Coxs River A large number of the written submissions and presentations at the public hearing raised concerns about the discharge of highly saline mine water into the Coxs River, which may in turn have impacts on Sydney's water supply, and has previously caused major impacts to swamps. The proposed extension of mining would generate up to 19ML/day of mine water make at its peak, which is a significant increase of 6-7ML/day above the existing operations. The Commission notes that the Applicant has been discharging surplus mine water to the Coxs River via discharge point LDP 9 since the recent closure of the Wallerawang Power Station. While the Applicant has an Environment Protection Licence (EPL) with a discharge limit of 30 ML/ day and an electrical conductivity (EC) limit of 1,200 µS/cm, the EPA has indicated that these licence limits are interim and has asked the Applicant to consider treatment options that would substantially reduce the EC to 350 µS/cm (in accordance with the ANZECC guidelines for protecting aquatic ecosystems). Since the EIS and RTS, the Applicant has engaged a consultant to prepare a report (the Jacobs Report) to support its position that this level of treatment would be both prohibitively expensive and impractical due to the scale of pre-treatment required. The Jacobs Report concludes that the predicted increase in salinity in Lake Burragorang with treatment is 5%, while the predicted increase is only 6% without treatment. The Commission notes that the EPA has reviewed the Jacobs report, and has raised issues in relation to the model calibration and validation. The Commission also notes that comments were not sought from WaterNSW on this report, however WaterNSW has raised concerns directly with the Commission regarding the model. Notwithstanding its concerns about the model methodology, the EPA has acknowledged that reducing the salinity of mine water discharges to 350 µS/cm EC may not be achievable in the short term. The Applicant has advised the EPA that it could meet a performance measure of 700 µS/cm to 900 µS/cm at LDP 9 by 31 December 2016, using a combination of pre-treatment of discharge water, duplication of existing reverse osmosis infrastructure and blending of water from Clarence Colliery. The EPA has since agreed to a timeframe of two years (i.e. until 30 June 2017) for the Applicant to meet a 50th percentile of 700 µS/cm, a 90th percentile of 900 µS/cm for salinity and a 100th percentile limit of 1000 µS/cm EC. In the longer term, the EPA would require that the salinity of the mine water discharge be further reduced, firstly to 500 µS/cm (90th percentile) by 30 June 2019. The Commission notes that these limits would be set by a variation of the Springvale EPL (EPL 3607). In addition, the EPA would require the Applicant to undertake a year-round monitoring program with a status report by 30 June 2017 on the impact of the mine's discharge on the aquatic environment. Finally, the EPA remains concerned about other toxicity factors in the mine water, including ionic composition and high bicarbonate alkalinity, and has indicated that it will continue to correspond with the Applicant regarding this matter (see EPA correspondence in Appendix 4). The Applicant has recently agreed in principle to the EPA's proposals, as described above (see correspondence from the Applicant in Appendix 4). The Commission also notes that this plan of action would meet Energy Australia's stated salinity threshold of 550µS/cm. While the Applicant's agreement in principle is qualified, overall, the Commission is encouraged that a tangible plan of action with a clear timeline can be finally established, before determination, after many years of disagreement between the Applicant and the EPA. The Commission recommends that, prior to determination, this plan is included in the Statement of Commitments attached to the recommended conditions of consent. In addition, the Commission notes that WaterNSW has not been adequately consulted on the discharge issues, and recommends that the Department seeks further advice from WaterNSW prior to determination. In a recent meeting, WaterNSW indicated that it supports the proposed approach in principle, and would be able to provide more accurate data for the purpose of developing a program to meet the proposed performance criteria. WaterNSW has also requested that a condition of consent is included requiring a 'negligible change' in the salinity level at Lake Burragorang, in accordance with WaterNSW's principles for managing mining impacts. … Water make The Applicant does not currently hold any surface water licences and NOW previously indicated to the Department that the Applicant may have difficulty obtaining the appropriate licences to deal with the water make associated with the project. While the Commission acknowledges that these licences are governed by separate legislation (the Water Management Act 2000) to the development consent process, it believes that it is important to consider whether the Applicant is likely to meet its water licensing requirements. During its review, the Commission has consulted with representatives of NOW and is satisfied that there are a number of options available to the Applicant to account for the predicted surface water take. Nevertheless, the Commission recommends that this matter is further resolved before determination and the Applicant includes relevant commitments in its Statement of Commitments appended to any consent. 3.2.4 Summary of Recommendations 1. That, prior to determination, the Department liaises with WaterNSW about the salinity level of discharges into Coxs River, and consider WaterNSW's request to include a condition of consent requiring a 'negligible change' in the salinity level at Lake Burragorang. 2. That, prior to determination, an agreed plan of action relating to the salinity level of discharges into the Coxs River is included in the Statement of Commitments, and adequately addressed in conditions of consent relating to the relevant management plan and monitoring program. 3. That, prior to determination, the Department liaises further with the EPA in relation to other toxicity factors in the mine water, including ionic composition and high bicarbonate alkalinity, and ensures that the agreed criteria are included in the Statement of Commitments. 4. That, prior to determination, the Department liaises further with NOW about the options available for the Applicant to acquire water licences, and that the Applicant include appropriate resolutions as commitments in its Statement of Commitments. … 1. Consistent with the Summary of Recommendations a number of recommendations were made: Water Resources 4. That, prior to determination, the Department liaises with WaterNSW about the salinity level of discharges into Coxs River, and considers WaterNSW's request to include a condition of consent requiring a 'negligible change' in the salinity level at Lake Burragorang. 5. That, prior to determination, an agreed plan of action relating to the salinity level of discharges into the Coxs River is included in the Statement of Commitments, and adequately addressed in conditions of consent relating to the relevant management plan and monitoring program. 6. That, prior to determination, the Department liaises further with the EPA in relation to other toxicity factors in the mine water, including ionic composition and high bicarbonate alkalinity, and ensure that the agreed criteria are included in the Statement of Commitments. 7. That, prior to determination, the Department liaises further with NOW about the options available for the Applicant to acquire water licences, and that the Applicant include appropriate resolutions as commitments in its Statement of Commitments. … 1. There were numerous references to the NorBE test in the first PAC Review Report. For example, in Appendix 2 (which contained a summary of comments made during the public hearing) a comment was made in relation to surface water that "Neutral or Beneficial Effect (NorBE) test should be properly applied to water quality in the catchment." Similarly, in Appendix 3 (which contained a number of summary notes of meetings with various departments) in relation to a meeting with WaterNSW it was noted that "the Neutral or Beneficial Effect (NorBe) Assessment guidelines form part of the Sydney Drinking Water Catchment SEPP 2011 requirements which must be considered by WaterNSW" was discussed. 2. The first PAC Review Report also attached a letter from the EPA dated 28 May 2015, detailing the EPA's request that further reductions in salinity were necessary to progressively improve the water quality of the Upper Coxs River and that the salinity of the mine water discharge needed to be reduced below 700/900 EC in the future, and that by 30 June 2019 the EPA required a 90th percentile of 500 EC for the Springvale mine water discharge. A reply from Centennial Coal dated 29 May 2015 (also included in the first PAC Review Report) agreed to this target. 3. On 9 July 2015 Centennial Coal wrote to the Department to respond to the first PAC Review Report and, after referring to the 22 June 2015 agreement with the EPA, stated that modelling had indicated that salinity levels of 700 to 900 μS/cm EC would have a neutral or beneficial effect on the salinity level at Lake Burragorang. 4. In August 2015 the Department released Addendum Report: State Significant Development Springvale Mine Extension Project (SSD 5594) ("the Addendum Report"). The Addendum Report considered in detail the first PAC Review Report. In accordance with the PAC recommendation, the Department consulted with WaterNSW prior to preparing the Addendum Report. 5. In respect of "Water Resources", the Addendum Report stated as follows: Water Resources Refer to Section 2.3 4. That, prior to determination, the Department liaises with Water NSW about the salinity level of discharges into Coxs River, and considers Water NSW's request to include a condition of consent requiring a 'negligible change' in the salinity level at Lake Burragorang. The EPA and Centennial have reached an agreement regarding salinity limits in mine-water discharges over specified timeframes. Water NSW understands that there is a long history of negotiations between the EPA and Centennial in relation to salinity limits in mine-water discharges and accepts that the recent agreement is likely to be the best outcome. The Department is satisfied that the mine-water discharge volumetric and quality limits agreed by the EPA and Centennial, as reflected in the recommended consent, would result in a 'beneficial effect' on waters within the catchment. It is considered to be more effective to regulate the quality of water discharges at the LDP, rather than at or within Lake Burragorang, and to then carry out regular monitoring downstream of the LDP to determine any impacts on water quality. 1. In relation to the application of the Catchment SEPP, significantly, the Addendum Report noted in section 2.3 dealing with "Water Resources" that (emphasis added): State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 The project is located within Sydney's drinking water catchment and therefore must be considered under the provisions of State Environmental Planning Policy (Sydney Drinking Water Catchment) 2011 (Sydney Drinking Water Catchment SEPP). The Sydney Drinking Water Catchment SEPP was made in 2011 in response to section 34B of the EP&A Act, under which a SEPP must provide that consent authorities must refuse to grant consent to a development application relating to any part of the Sydney drinking water catchment unless the consent authority is satisfied "that the carrying out of the proposed development would have a neutral or beneficial effect on the quality of water". In response to this requirement, clause 10(1) of the Sydney Drinking Water Catchment SEPP states that 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' (NorBE) on water quality. The Neutral or Beneficial Effect on Water Quality Assessment Guideline (SCA, 2011) provides guidance, principally for local government authorities, on how to assess whether development proposals would achieve NorBE. WaterNSW has advised that the guideline and the associated 'NorBE Tool' are not intended to be used to assess State significant developments but rather are designed for local developments. Notwithstanding, guidance is provided on defining what is a 'neutral or beneficial effect' and the guideline states that NorBE can be considered to be satisfied for water quality if the development: a) has no identifiable potential impact on water quality; or b) will contain any water quality impact on the development site and prevent it from reaching any watercourse, water body or drainage depression on the site; or c) will transfer any water quality impact outside the site where it is treated and disposed of to standards approved by the consent authority. Neither the SEPP nor the guidelines clearly define 'neutrality' or 'beneficial effect' in relation to water quality. That is, they do not indicate whether neutrality is purely to be measured in either purely arithmetic terms, or in terms of one measure or another of ecological health, or by the achievement of particular water quality guidelines. They do not specify locations at which neutrality must be measured, either upstream or downstream of a development. In terms of water quality, they do not specify whether quality parameters should relate to delivered drinking water, stored drinking water, catchment flows delivered to storages, or to catchment flows close to or at source. They also do not specify how an existing development should be treated when it seeks to either modify its consent, or to replace an existing consent with a new development consent, as is the case at Springvale. Further, they provide no guidance as to the particular circumstances at Springvale where discharges that were previously transferred for industrial use at the nearby Wallerawang Power Station can no longer be used in this manner. Consequently, in order to assess whether the project would achieve NorBE under the requirements of the SEPP, it is necessary for the Department to first establish the point in time, or the 'base case', against which to make the NorBE assessment. Secondly, it is necessary to establish the basis for measurement of current and future discharges against this base case. Underground mining operations, and associated mine-water discharges, have been taking place at Springvale for over twenty years. A significant change to the way in which mine-water discharges are handled occurred in 2006, when the Springvale Delta Water Transfer Scheme (SDWTS) was commissioned, as part of a Pollution Reduction Program required by the EPA. The SDWTS permits groundwater inflows to Springvale's underground mine workings to be transferred by pipeline to the Wallerawang Power Station for use as cooling water. The original function of the SDWTS was to reduce the volume of water sourced by the power station from the regional surface rivers and lakes which feed into the drinking water catchment. Cooling tower water was treated via Wallerawang's reverse osmosis (RO) plant prior to being discharged to the Coxs River, with Wallerawang's EPL limiting its water discharges to the Coxs River to a 100th percentile of 2,900 µS/cm EC and 30 ML/day volumetric. As described in the Department's PAR, since the closure of the Wallerawang Power Station in early 2014, Centennial has had no choice but to discharge its surplus mine-water directly into the Coxs River via LDP 9. The current licensed water discharge limits from LDP 9 are a 100th percentile limit of 1,200 µS/cm EC and 30 ML/day volumetric. The Department and Water NSW have considered the question of what is an appropriate 'base case' for Springvale, given the length of time the mine has been operating and other variables, including the closure of the Wallerawang Power Station. In the context of the long-term and existing mining operations at Springvale, the Department considers that the most appropriate position is to consider the base case as being the existing discharge limits on Springvale's EPL that existed at the time the current development application was made (i.e. 1,200 µS/cm EC). On this basis, implementation of the EPA's agreement with Centennial to meet a 50th percentile of 700, a 90th percentile of 900 and a 100th percentile of 1,000 µS/cm EC limits for salinity by 30 June 2017 would clearly result in a 'beneficial' effect on water quality in the Coxs River and downstream water storages in the medium to long term, compared with Springvale's existing approved EC limits for mine-water discharges. The increased salt load which would result from the predicted increase in discharges from an average of 12 ML/day to 18-19 ML/day is considered to be 'environmentally neutral', since aquatic organisms react to salt concentrations, rather than salt loads. Because salt concentrations would drop significantly as a result of the agreed changes to EC limits under Springvale's EPL, saline ecotoxicity resulting would also drop. That is, the proposal's beneficial effect on water quality is best demonstrated through the commitment to reduce salt concentrations. This beneficial effect on water quality would also be environmentally beneficial. It is noted that Centennial is also seeking approval to upgrade the SDWTS from its current capacity of 30 ML/day to 50 ML/day to accommodate increased inflows from the concurrent operations of both Springvale and Angus Place mines. Centennial has confirmed that, with Angus Place now operating in 'care and maintenance' and not expected to be re-opened until Springvale is in its final years of project life, the SDWTS would not need to be upgraded until 2028. On this basis, the EPA has requested that development consent for the project specifically excludes expansion of the capacity of the SDWTS. The EPA has also said that its agreement with Centennial regarding future salinity limits was based on volumetric discharge limits of 30 ML/day, not 50 ML/day. The Department agrees that expansion of the SDWTS's capacity is not required for successful operation of the Springvale extension (including the management of water from Angus Place whilst it is on 'care and maintenance'). The Department therefore agrees with the EPA and recommends a condition expressly excluding upgrade of the SDWTS's capacity from the consent. The Department notes that, if Centennial plans to re-commence operations at Angus Place prior to 2028, or if there is a need to upgrade the SDWTS prior to this time, then Centennial would be required to submit a modification to the proposed consent, which would in turn require additional public and agency consultation. The Department and EPA have accepted that alternative treatment arrangements would need to be put in place by Centennial in order to achieve the proposed discharge limits, and that this may take some time to implement. However, the Department is satisfied that the water quality and volumetric limits for mine-water discharges agreed between the EPA and Centennial and reflected in the proposed consent would result in 'beneficial effect' on waters within the catchment. Water NSW has advised it accepts the outcomes agreed between the EPA and Centennial in relation to future salinity levels in Springvale's mine-water discharges. Negligible Change at Lake Burragorang In its submission to the Commission, Water NSW requested that a condition of consent is imposed requiring a 'negligible change' in salinity levels in Lake Burragorang. The Department has considered this request and further discussed the issue with Water NSW. The Department notes that the EPA considers that the water quality impacts of the project are best managed by controlling water quality at source (i.e. the LDP) rather than at any particular downstream location. Further, it is considered impractical to regulate water quality associated with Springvale discharges at Lake Burragorang due to the: • significant distance between the Springvale and Lake Burragorang (>20km); and • cumulative water discharges into the Coxs River catchment from other industrial and agricultural sources, over which Centennial has no control. Furthermore, the Department questions what would constitute a 'negligible change' in salinity levels at Lake Burragorang, and if a greater than a negligible change is identified, what could be done under the existing consent to manage the impact. The Department notes that the modelled variations in salinity under median rainfall conditions in Lake Burragorang are minimal, regardless of whether both Springvale and Angus Place are closed (98 mg/L) or whether the mines are operated sequentially (103 mg/L) or concurrently (104 mg/L). The Department notes all these levels are fundamentally very similar and are substantially less than the 600 mg/L recommended by the Australian Drinking Water Guidelines 2015 (ADWG). The PAR noted that this predicted increase of 5 – 6% is not arithmetically 'neutral'. However, the Department is of the view that that 'arithmetic neutrality' should not be the basis of its assessment. The critical question is whether the increase is 'environmentally neutral', to both ecosystems and the ultimate users of the water (i.e. the population of Sydney). In this regard, it is important to note that the predicted increase in salinity in Lake Burragorang results not from higher EC in inflows from the Coxs River, but from an increased total salt load as a result of the expanded mining area. The increase must be considered in the light of the ADWG and the potential for any such increase to lead to any 'environmental harm'. In the Department's opinion, there is no basis on which to conclude that there would be any negative effects from the predicted increase in salinity, which is well within the range of normal upland streams and catchments in eastern Australia and well within the expected standards of the ADWG. On this basis, the Department considers the changes to be environmentally 'neutral'. The Department is of the view that the appropriate places to measure and manage the impacts of mine-water discharges area at the mine's LDPs. The Department is satisfied that the water quality limits agreed between the EPA and Centennial and included in the draft conditions, as well as the implementation of the proposed Upper Coxs River Action & Monitoring Plan (see below) would result in a 'beneficial effect' on water quality in the Coxs River and its downstream waterways, when compared to the existing approved discharges. 1. In respect of PAC Recommendation 5 ("That prior to determination, an agreed plan of action relating to the salinity level of discharges into the Coxs River is included in the Statement of Commitments, and adequately addressed in conditions of consent relating to the relevant management plan and monitoring program"), the Addendum Report concluded that: The agreement reached between the EPA and Centennial in relation to salinity levels in Springvale's mine-water discharges to the Coxs River and the associated monitoring regime has been reflected in the revised consent, as well as in Centennial's revised Statement of Commitments. 1. The Department discussed the NorBE test in the Addendum Report. The Department referred to the Catchment SEPP and the 2011 NorBE Guidelines (relevantly identical to the 2015 NorBE Guidelines) and noted that the 2011 NorBE Guidelines could provide guidance on what was a neutral or beneficial effect. The Department stated that the 2011 NorBE Guidelines indicated that the neutral or beneficial effect test could be satisfied if the development: 1. had no identifiable potential impact on water quality; or 2. contained or prevented any water quality impact from reaching any watercourse, water body or drainage depression; or 3. transferred any water quality impact outside the site where it was treated and disposed of to standards approved by the consent authority. 1. However, the Department further noted that the Catchment SEPP and the 2011 NorBE Guidelines did not clearly define "neutrality" or "beneficial effect" in relation to water quality; did not specify locations at which neutrality must be measured; did not specify whether quality parameters should relate to delivered drinking water, stored drinking water, catchment flows delivered to storages, or to catchment flows close to or at source; and did not specify how an existing development should be treated when it modifies or replaces its development consent. 2. The Department also identified the "base case" against which to measure whether the project would have a neutral or beneficial effect on water quality, as the discharge limits on the Springvale Coal's environment protection licence (EPL 3607) that existed at the time the development application was made, namely, 1200 μS/cm EC. 3. On this basis the Department concluded that the salinity limits agreed to between Centennial Coal and the EPA would result in a beneficial effect on water quality because they would result in lower salt concentrations than 1200 μS/cm EC in the future, notwithstanding that the total salt load would increase due to the volumetric increase in discharges. The Department repeated the conclusion expressed in the PEAR that a predicted increase in salinity at Lake Burragorang of 5-6% was, while not arithmetically neutral, environmentally neutral. The Department noted that the modelled variations in salinity under median rainfall conditions in Lake Burragorang were minimal, regardless of whether both the Springvale and Angus Place mines were closed (98 mg/L), whether the mines were operated sequentially (103 mg/L), or whether the time were operated concurrently (104 mg/L). The Department considered these levels to be very similar and observed that they were substantially less than the 600 mg/L recommended by the ADWG for good quality drinking water. 4. On 13 August 2015 the Minister issued a second request to the PAC to conduct a review of the project, to hold a public hearing, and to provide a report to the Department containing its findings and recommendations. The terms of reference for the second review included consideration by the PAC of: … b) the terms and effect of the draft SEPP if it is made; c) the Department of Planning and Environment's addendum to its original assessment report on the project and recommended conditions; d) any submissions made to the Planning Assessment Commission as part of any public hearings held in relation to this review; and e) any submissions made by the applicant to the Planning Assessment Commission on the matters the subject of this review. 1. On 1 September 2015 WaterNSW advised the PAC that it had no outstanding issues. 2. On 2 September 2015 PAC member Mr Johnson recorded, in a meeting with the EPA at Lithgow Council, a discussion of a salinity reduction timetable. 3. On 3 September 2015 the PAC held a public hearing in Lithgow. 4. A meeting was held on the same day between the PAC and the EPA concerning, among other things, the discharge into the Coxs River. PAC Secretariat notes record that the EPA considered the salinity limits over various timeframes to be acceptable and that it was "satisfied that NorBE has been met through the recommended conditions". In relation to drinking water, the notes record that it was recommended or required that there be a review of discharge points aimed at ensuring that the NorBE test "is passed… EPA supports this". 5. On 15 September 2015 the PAC published its second PAC review report for the project ("the second PAC Review Report"). The concluding paragraph of the executive summary to the second PAC Review Report stated that (emphasis added): The Commission has carefully weighed the key areas of concern, including mine water discharge impacts and subsidence-related swamp impacts, against the socio-economic benefits. The Commission notes that the Springvale Mine is now the only local mine currently supplying coal to the Mt Piper power station, which provides approximately 15% of NSW's electricity. The Commission is satisfied that the project's benefits as currently understood outweigh its potential impacts, and that on balance the project is approvable. The project is able to proceed to determination, subject to the recommendations outlined in this report. 1. In relation to "Mine water Discharge", the second PAC Review Report stated in section 4.2 that (emphasis added): 4.2. Mine water Discharge A major concern that was raised in public submissions and at both public hearings is the discharge of mine water into the Coxs River and the potential flow-on impacts in the broader catchment. The Commission considered these issues in detail in its previous report and made recommendations, including need for further consultation with both the EPA and WaterNSW. Further consultation and additional recommended conditions The Commission notes that further consultation has occurred between the Department, the EPA and WaterNSW, as recommended. This consultation has focussed on the development of an appropriate plan of action to manage salinity and other toxicity factors from the mine water discharge. The plan of action involves a series of mine water discharge limits that will be implemented over the short term (i.e. by 30 June 2017) and the long term (i.e. June 2019). The details of this plan of action are described in section 2.3 of the Department's Addendum Report and relate to salinity levels in the discharge waters. The Commission also notes that the Department has included an additional condition requiring the preparation of an Upper Coxs River Action and Monitoring Plan. In its meeting with the Commission, the EPA confirmed that it has now formally agreed to a set of proposed mine water quality discharge limits. The Commission notes that the EPA also provided formal written confirmation to the Department about these limits in a letter dated 10 August 2015, which was not referred to in the Department's Addendum Report and is included in Appendix 5. The Applicant has agreed to meet the proposed limits and they have now been included in the recommended conditions of consent. The EPA also informed the Commission that it is planning to undertake a review of all the relevant discharge points from the Springvale Mine. WaterNSW has confirmed that it has no residual concerns but would like to be consulted if there are changes to recommended conditions related to water management. Mine water transfer option A number of verbal and written submissions, including detailed submissions from the Colong Foundation and Lithgow Environment Group, raised the possibility of transferring mine water to the Mount Piper power station, where it could potentially be treated at the existing reverse osmosis plant. The Commission has discussed this option with the Department and the EPA. The EPA acknowledges this option could provide a further safeguard against deterioration of Cox's River water quality. The Commission is satisfied that the proposed discharge limits, together with the requirement for an Upper Coxs River Action and Monitoring Plan, provide an appropriate way to deal with mine water discharges. The Commission emphasises that significant progress has been made in relation to this issue since the Commission's previous review of the project. Nevertheless, the Commission believes that a requirement to consider the option of transferring mine water to the power station should be incorporated into the recommended conditions of consent. 1. Accordingly, it was recommended that: 1. That the proposed condition relating to the Water Management Plan should be strengthened to take into account the outcome of the EPA review of all licenced discharge points, any further advice from WaterNSW and consider all available options for ensuring that the agreed discharge limits will be met, including the option of transferring mine water for treatment at Mt Piper power station. 1. The second PAC Review Report concluded that (emphasis added): The Commission has carefully considered the proposal and the submissions made, including written submissions to the Commission, proposals for changes to the wording of specific conditions, presentations at the public hearing, the submissions made on the Addendum Report, various other documents provided by the Department, other government agencies and the Applicant, and the Mining SEPP Amendment. The Commission has sought specific expert advice from the EPA, WaterNSW and OEH, and held meetings with EPA and Council. The Commission has also sought clarification on a number of issues from the Department. The Commission has made four recommendations in this report, particularly relating to the consideration of transferring mine water to Mt Piper power station for treatment, an expanded role for the proposed Independent Monitoring Panel, the strengthening of the Extraction Plan and the Water and Biodiversity Management Plans, and further investigations into low frequency noise. Provided that these recommendations are adequately addressed, the Commission is satisfied that the project can be approved, subject to conditions. 1. Appendix 5 (correspondence) attached a letter dated 10 August 2015 from the EPA to the Department referring to the EPA's earlier letter dated 22 June 2015, setting out the agreement between the EPA and Centennial Coal. In both, it was noted that the EPA's support for the project was contingent on Centennial meeting 700/900 EC limits by 30 June 2017 and 500 EC limits by 30 June 2019. 2. On 16 September 2015, Centennial provided a formal response to the second PAC Review Report. 3. Around the same time (September 2015) the Department prepared a Final Assessment Report: State Significant Development Springvale Mine Extension Project (SSD 5594) ("Final Assessment Report") for the PAC in response to issues identified in the second PAC Review Report, as well as in reply to Centennial's formal response to the second PAC Review Report. 4. In the "Executive Summary" in the response to the second PAC Review Report, the Department stated that (emphasis added): The limits recommended by the EPA require Centennial to improve the quality of water discharged from the mine over time, including short and longer term limits for salinity. Centennial will be required to detail how it will achieve these limits through the preparation of an action and monitoring plan prepared in consultation with the EPA and WaterNSW. … The Department has carefully weighed the impacts of the project against the social and economic benefits of the project, including the recent Mining SEPP Amendment and in accordance with the requirements of the Environmental Planning and Assessment Act 1979. On balance, the Department remains satisfied that the project's benefits substantially outweigh its residual costs, that it is in the public interest and should be approved, subject to strict conditions of consent. 1. In the "Overview of Commission's Review", the Final Assessment Report noted the second PAC Review Report's conclusion (quoted above) and acknowledged that the majority of the recommendations made in the first PAC Review Report in June 2015 had been addressed in the Addendum Report. But the PAC made four recommendations that it considered would strengthen the conditions of consent. These were: • strengthening the proposed condition of consent relating to a Water Management Plan for the project to require consideration of all available options for ensuring that agreed discharge limits will be met, including the option to transfer mine water for treatment at Mt Piper Power Station; • expanding the role of the Independent Monitoring Panel to ensure a greater focus on avoidance or minimisation of swamp impacts and adaptive management measures; • strengthening the proposed conditions of the Extraction Plan and the Water and Biodiversity Management Plans to expressly require consultation with the Independent Monitoring Panel in preparing, revising and enforcing these plans; and • requiring further investigations into low frequency noise. 1. Overall, the Department supported each of the PAC's recommendations. It proposed actions to ensure that each was given effect to. In respect of mine water discharges it proposed that: Table 1: Commission's Recommendations and the Department's Responses Commission's Recommendation Department's Consideration and Action Mine Water Discharges The Department agrees with the Commission and has recommended that: That the proposed condition relating to the Water Management Plan should be strengthened to take into account the outcome of the Environment Protection Authority (EPA) review of all licensed discharge points, any further advice from WaterNSW and consider all available options for ensuring that the agreed discharge limits will be met, including the option of transferring mine water for treatment at Mt Piper power station. • condition 14(d)(ii) of Schedule 4 is amended to include a requirement to consider any EPA review of licensed discharge points and any further advice from WaterNSW as part of the Surface Water Management Plan component of the project's Water Management Plan; and • condition 13(c) of Schedule 4 is amended to require identification of all available water management measures designed to achieve the mine water discharge criteria and associated timeframes, including the option of transferring mine water for treatment at Mt Piper Power Station, as part of the Upper Coxs River Action & Monitoring Plan. 1. In conclusion, the Final Assessment Report stated that the Department considered that its recommended conditions provided a "comprehensive, strict and precautionary approach to ensuring that the project can comply with relevant criteria and standards". 2. On 18 September 2015 the project was referred to the PAC for determination. The cover letter from the Department to the PAC noted that the Department had finalised its assessment and recommended that the project be approved, subject to conditions. The Final Assessment Report was attached. The cover letter noted that the Final Assessment Report focused on providing a response to the four recommendations made by the PAC in the first PAC Review Report, the second PAC Review Report and the Addendum Report. 3. On 21 September 2015 the PAC granted development consent to the project, subject to conditions. The consent was signed by the PAC as the Minister's delegate: … for the Minister for Planning, the Planning Assessment Commission of NSW approves the development application referred to in Schedule 1, subject to the conditions in Schedules 2 to 6. These conditions are required to: • prevent, minimise, and/or offset adverse environmental impacts; • prevent, minimise, and/or offset impacts on controlling provisions and matters protected under the EPBC Act; • set standards and performance measures for acceptable environmental performance; • require regular monitoring and reporting; and • provide for the ongoing environmental management of the development. 1. Condition 9 of the consent concerned water supply and provided that: The Applicant shall ensure that it has sufficient water for all stages of the development, and if necessary, adjust the scale of operations on site to match its available water supply. 1. By reference to "Table 6: Water Management Performance Measures", condition 12 of the consent prescribed water quality limits for mine water discharge which included the salinity limits agreed between the EPA and Centennial Coal on 22 June 2015 (under "mine water discharges"). 2. Condition 13 of the consent required the preparation of an Upper Coxs River Action and Monitoring Plan in consultation with the relevant statutory authorities, including the EPA and WaterNSW, to be submitted to the Secretary of the Department for approval by 30 June 2016: The Applicant shall prepare an Upper Coxs River Action & Monitoring Plan for the development to the satisfaction of the Secretary. This plan must: a) be prepared in consultation with DPI-Water, WaterNSW, EPA and Energy Australia; b) be submitted to the Secretary for approval by 30 June 2016, unless otherwise agreed by the Secretary; c) identify all available water management measures designed to achieve the mine water discharge criteria and associated timeframes required by condition 12 above, including potential transfer of mine water to Mt Piper Power Station and consideration of all licensed discharge points within the Upper Coxs River catchment (including at Springvale Mine, Lidsdale Siding, Western Coal Services and Angus Place Colliery); d) include a financial justification and timetable for achieving reductions in salinity in the Upper Coxs River to 500 (90th percentile) µS/cm EC by June 2019 and identify enforceable mechanisms for the implementation of the proposed measures; … 1. A Water Management Plan was required to be prepared and implemented pursuant to condition 14. The Water Management Plan had to include detailed measures to ensure compliance with the mine water discharge limits and an updated Regional Water Quality Impact Assessment Model together with a program to validate that model. 2. Significantly, in the letter to the Secretary of the Department accompanying the approval (also dated 21 September 2015), the PAC stated that it had carefully weighed the key areas of concern, including mine water discharge impacts, against the socio-economic benefits of the project, and was satisfied that the benefits outweigh the potential impacts, and therefore, approved the project (given the reliance placed by both parties on the letter, it is quoted almost in its entirety, emphasis added): The Commission notes that the project has been subject to a rigorous assessment process involving multiple opportunities for public consultation, which is summarised below: • the environmental impact statement (EIS) for the project was exhibited by the Department for public comment between 12 April and 26 May 2014; • the Applicant provided a formal Response to Submissions (RTS) in September 2014; • the Department prepared a Preliminary Environmental Assessment Report (PEAR) in April 2015; • the Commission carried out its first review of the project, which involved seeking written submissions and holding a public hearing on 27 May 2015; • the Commission provided a report to the Department based on its first review of the project in June 2015; • the Department prepared an Addendum Report in August 2015; • the Commission carried out its second review of the project, which involved seeking written submissions and holding a public hearing on 3 September 2015; • the Commission provided a report to the Department based on its second review of the project in September 2015; and • the Department prepared a Final Assessment Report (FAR) in September 2015. The Commission has carefully considered the proposal, the EIS, the RTS, the PEAR, the Addendum Report, the FAR, various other documents provided by the Department, other government agencies and the Applicant, the recent repeal of clause 12AA of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (the Mining SEPP Amendment), and the submissions made during the assessment process, including written submissions to the Commission and presentations at the public hearings. The Commission made four recommendations in its second review report, which related to an expansion of the role of the proposed Independent Monitoring Panel, consideration of transferring mine water to Mt Piper power station for treatment, the strengthening of the Extraction Plan and the Water and Biodiversity Management Plans, and further investigations into low frequency noise. The Commission notes that these recommendations have been substantially adopted by the Department in its FAR and associated recommended conditions of consent. In relation to the role of the proposed Independent Monitoring Panel (the Panel), the Commission acknowledges the Department's position that the enforcement and regulation of any development consent should remain with the relevant government agencies in accordance with their statutory obligations. It was not the Commission's intention to insert an additional layer of regulatory enforcement, but rather to achieve better monitoring and mitigation of potential impacts, with a focus on avoidance or minimisation of impacts and adaptive management. The Commission is satisfied that this has been achieved through the strengthening of the recommended conditions of consent, which will ensure that the Panel will have access to all relevant information, will be involved in the plan formulation and decision making process, and will have all of its documentation publicly available. The Commission has carefully weighed the key areas of concern, including mine water discharge impacts and subsidence-related swamp impacts, against the socio-economic benefits of the project. The Commission is satisfied that the project's benefits outweigh its potential impacts, and has determined that the project should be approved, subject to the Department's recommended conditions. 1. In a document published on 22 September 2015 (the day after the consent was granted), entitled "Planning Assessment Commission's determination of the Springvale Mine Extension Project" ("the Factsheet"), the PAC reiterated that it had carefully weighed the key areas of environmental concern against the socio-economic benefits of the project, and was "satisfied that the project's benefits outweigh its potential impacts." The PAC further stated, in particular, that it was (emphasis added) "satisfied the potential water impacts of the project have been comprehensively assessed and that the project's impacts on surface water and swamps can be appropriately dealt with through the robust and comprehensive framework of monitoring, management and mitigation included in the conditions of consent." 2. Neither party has requested that the PAC provide a formal statement of its reasons for granting consent to the project. Statutory and Planning Framework 1. Section 89E(1) of the EPAA, contained in Div 4.1 of that Act, empowers the Minister to determine a development application in respect of State significant development: 89E Consent for State significant development (1) The Minister is to determine a development application in respect of State significant development by: (1) (a) granting consent to the application with such modifications of the proposed development or on such conditions as the Minister may determine, or (b) refusing consent to the application. 1. Section 79C(1) applies to any assessment of a development application under Div 4.1 of the EPAA: 79C Evaluation (1) Matters for consideration-general In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application: (a) the provisions of: (i) any environmental planning instrument, and (ii) any proposed instrument that is or has been the subject of public consultation under this Act and that has been notified to the consent authority (unless the Secretary has notified the consent authority that the making of the proposed instrument has been deferred indefinitely or has not been approved), and (iii) any development control plan, and (iiia) any planning agreement that has been entered into under section 93F, or any draft planning agreement that a developer has offered to enter into under section 93F, and (iv) the regulations (to the extent that they prescribe matters for the purposes of this paragraph), and (v) any coastal zone management plan (within the meaning of the Coastal Protection Act 1979 ), that apply to the land to which the development application relates, (b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality, (c) the suitability of the site for the development, (d) any submissions made in accordance with this Act or the regulations, (e) the public interest. 1. The stated aims of the Catchment SEPP are located in cl 3(1) of that instrument: 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. 1. Part 2 of the Catchment SEPP is concerned with the assessment and approval of development and activities. 2. Clause 9(1) of the Catchment SEPP states that: 9. Recommended practices and performance standards of Water NSW (1) Any development or activity proposed to be carried out on land to which this policy applies should incorporate Water NSW's current recommended practices. 1. Clause 10 of that instrument proscribes that development consent cannot be granted unless the carrying out of the proposed development would have a neutral or beneficial effect on water quality: 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. 1. The NorBE Guidelines are set out above (at [72]). The NorBE Tool referred to in cl 10(2) of the Catchment SEPP relevantly states that: The NorBE test is not an exact science. The SCA's approach to decide a neutral or beneficial effect will be a mixture of: • using various guidelines, standards and practices to show that NorBE is satisfied • quantitative neutral or beneficial effect evaluation or assessment using the WEM and/or the S3QM / MUSIC stormwater models • assessment of water quality risks • qualitative assessment of internal offsets to ensure a neutral or beneficial effect. 1. It was a matter of agreement that the NorBE Tool was not required to be applied to the project. Did the PAC Publish a Statement of Reasons? 1. As stated above, neither 4nature, Centennial, nor Springvale has made a formal (or for that matter, informal) request to the PAC for a statement of its reasons for the grant of consent. 2. 4nature asserted that such a request was unnecessary because the reasons for the PAC's decision were in fact contained in the cover letter from the PAC to the Department dated 21 September 2015. This document records the PAC's reasons for granting consent to the project, namely, because the PAC was "satisfied that the project's benefits outweigh its potential impacts, and has determined that the project should be approved, subject to the Department's recommended conditions". That this was the reason for the PAC's decision was supported, 4nature argued, by the Factsheet published almost contemporaneously by the PAC on 22 September 2015, which repeated verbatim the reason given for the approval and referred to the letter dated 21 September 2015 as a "Determination Report". 3. That the letter dated 21 September 2015 could be said to comprise a statement of reasons of the PAC's determination to grant consent was important to 4nature for at least two reasons. First, according to 4nature, it was demonstrative of the legal error made by the PAC insofar as it reveals that the PAC had approached its assessment by weighing up the benefits versus the impacts of the project and by making its determination on this basis, and not, as it was required to do, by reaching a state of satisfaction about whether the project would have a neutral or beneficial effect on water quality. 4. A statement of reasons by a decision-maker can constitute evidence of the material put before the decision-maker, the way the material has been dealt with and, most obviously, the reasons for the making of the decision. A failure to include an express reference to a particular matter may justify the inference that the matter was not taken into account. It may be inferred that no finding, evidence or reason that was of any significance to the decision has been omitted (Bat Advocacy NSW Inc v Minister for the Environment Protection, Heritage and the Arts [2011] FCAFC 59; (2011) 180 LGERA 99 at [46]). But while a failure to include a matter in a statement of reasons may justify such an inference, the omission is not necessarily conclusive (Bat Advocacy at [47]). 5. Second, it negated any submission by the respondents that 4nature had failed to invoke judicial mechanisms to establish that the PAC did not reach the requisite degree of satisfaction required by cl 10(1) of the Catchment SEPP by formally requesting a statement of reasons from the PAC under the relevant curial processes (see r 4.3 of the Land and Environment Court Rules 2007 ("the LEC Rules") and Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd [2010] NSWCA 353; (2010) 178 LGERA 411 at [70]). 6. But as Pain J observed in Gold and Copper Resources Pty Ltd v Minister for Resources and Energy [2013] NSWLEC 66; (2013) 211 LGERA 196 at [87]): 87. I do not understand from the observations of Preston J at [69] - [70] at first instance or of Tobias JA at [70] set out above that I must infer there is a gap in Gold and Copper's case if such mechanisms are not availed of, contrary to the Respondents' submission. Such mechanisms exist to potentially assist an applicant's case. In Caroona the absence of such material was considered as part of the Court's assessment of whether there was material on which it could determine that satisfaction was reached by the Minister. In Caroona there was a written ministerial briefing which addressed relevant matters which the Court could weigh up in light of the onus of proof placed on the applicant. 1. Her Honour's remarks are equally apposite in the present case. Here there was a plethora of documentary evidence that the parties took the Court to in aid of the competing inferences they respectively implored the Court to find in their favour. 2. And in any event, as 4nature noted, r 4.3 of the LEC Rules allows "any party" to seek a statement of reasons. Thus to the extent that the respondents have pleaded a positive case, namely, that the mandated state of satisfaction was attained by the PAC as the Minister's delegate, each could have equally sought the PAC to furnish them with a written statement explaining the basis of its decision and each elected not to. 3. It is now convenient to turn to the question of whether the letter dated 21 September 2015 constitutes a written statement of the reasons of the PAC for the decision to grant consent, as claimed by 4nature. 4. 4nature relied on the following matters in support of its contention that the letter constitutes the PAC's written statement of reasons: 1. the letter was published contemporaneously with the approval and accompanied the consent; 2. the letter is available on the PAC website under the heading "Determination" and is entitled "Determination Letter" (a fact not in dispute); and 3. the content of the letter is consistent with the Factsheet published by the PAC on 22 September 2015, where the reasons given for the approval are repeated verbatim. 1. However, in my opinion, the better characterisation of the 21 September 2015 letter is that of a cover letter that does no more than summarise, in a compendious manner, the global reasons, stated at a very high level of generality, why the project was approved. This includes the matters to which the PAC was additionally required to have regard to pursuant to s 79C of the EPAA, namely, the likely environmental, social and economic impacts of the development and, amongst other things, the public interest, both of which were reflected in the stated conclusion "that the project's benefits outweigh its potential impacts". The letter was not, and did not purport to be, in my view, an exhaustive statement of all of the reasons why the project was approved. 2. While no doubt it would have been preferable in this instance for the PAC to recite the words of the power being exercised in s 89E of the EPAA and to repeat the language of cl 10(1) of the Catchment SEPP and every other statutory criterion the PAC was obliged to consider in arriving at its decision, in the letter, to descend to this level of detail in an accompanying cover letter was neither necessary nor required. 3. This is not to say that inferences cannot be drawn from the letter, but those that 4nature seeks to draw, in particular, that the express failure to reference the attainment of the state of satisfaction required by cl 10(1) of the Catchment SEPP means that it was not in fact reached, or that the express reference to the project's benefits and its potential impacts means that the PAC misunderstood, and therefore failed to carry out, its statutory task in determining the development application – or both – are, at best, weak and are open to easy rebuttal by an examination of the entirety of the body of documentary material before the PAC. 4. Put another way, I do not find that, read reasonably, the letter dated 21 September 2015 (either separately from, or together with, the Factsheet) constitutes a comprehensive statement from the PAC of all of its reasons for granting the consent, and accordingly, the omission in that letter of any explicit statement of satisfaction of the neutral or beneficial effect on water quality by the carrying out of the project does not have the near fatal consequences urged upon me by 4nature. To reiterate, at its highest, the letter is no more than a high-level report by the PAC to the Department informing the latter of its decision and providing some context for that decision. 5. Even if, contrary to the finding above, the letter dated 21 September 2015 did constitute a definitive statement of reasons of the PAC for granting consent, not all failures to advert to a particular matter for consideration in a statement of reasons will immediately result in the conclusion that it has not been taken into account or, in this instance, that a necessary mental state has not been reached. Whether the inference can be drawn, and if so, its strength, will depend on the surrounding facts and circumstances, including the material before the decision-maker informing and evidencing the decision-making process, and the statutory context within which the decision was made (Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594 at [67] and [70] per Gummow J). 6. Furthermore, as Griffith J recently remarked in Australian Conservation Foundation Incorporated v Minister for the Environment [2016] FCA 1042 ("ACF"), a "beneficial construction" ought generally to be afforded to any statement of reason (complete or, at its highest in the present case, incomplete) which explains the basis upon which an impugned decision was made, (at [141]-[147], citing Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259). But having said this, just as reasons for an administrative decision should not be read with a keen eye attuned to finding error, equally those "eyes should not be so blinkered as to avoid discerning an absence of reasons or reasons devoid of any consideration of a submission central to a party's case" (Soliman v University of Technology, Sydney [2012] FCAFC 146; (2012) 207 FCR 277 at [57] and see also ACF at [150]-[151]). 7. Given that it was common ground that the PAC was not required to provide a statement of reasons in respect of its decision to grant the approval, what then, if anything, turns on the absence of a statement of reasons from the PAC for its decision to grant the consent? 8. In my view, on the facts of this case, little turns on the fact that no document of this ilk exists, save that to the extent that the onus of establishing that the necessary state of satisfaction under cl 10(1) of the Catchment SEPP was not reached by the PAC falls upon 4nature, it must discharge its evidential burden on the documentary material before the PAC at the time it made its decision. Applicable Legal Principles 1. At this juncture, it is convenient to restate some fundamental general principles in judicial review relevant to the present proceedings. 2. First, the party seeking to establish jurisdictional error, or some other basis of relief, bears the onus of proof. As Gummow J explained in SZGUR (at [67], footnotes omitted): 67 An applicant…for judicial review of the Tribunal's decision, as the moving party, bears the onus of establishing jurisdictional error on the part of the Tribunal. Nothing in the Migration Act displaces the usual position that it is for the moving party to make out its case. In Industrial Equity Ltd v Deputy Commissioner of Taxation, Gaudron J made a similar point with respect to the AD(JR) Act. We are not concerned here with questions of a presumption of the regularity or validity of administrative action. Rather, the point to be made is that it fell to the first respondent to establish a basis for drawing the inference necessary to make out the alleged jurisdictional error. There was certainly no burden upon the Minister to demonstrate the positive proposition that the Tribunal had indeed considered the request. 1. Second, and more specifically, where an applicant in judicial review proceedings asserts that a decision-maker did not form a required state of satisfaction, that applicant must establish the absence of the necessary mental state on the balance of probabilities (Caroona Coal Action Group Inc v Coalmines Australia Pty Ltd [2010] NSWLEC 1;(2010) 172 LGERA 25 at [58]-[60] and [68]-[70] per Preston J, affirmed by the Court of Appeal in Caroona at [35]-[41] and [72]-[73] per Tobias, Giles and Hodgson JJA agreeing, Gold and Copper Resources Pty Limited v Hon Chris Hartcher MP Minister for Resources and Energy Special Minister (No 2) [2014] NSWLEC 30 at [80]-[83] per Pain J, and Mosman Municipal Council v IPM Pty Ltd [2016] NSWLEC 26 at [89] per Pepper J). 2. Merely because, as in the present proceedings, a respondent to such a challenge pleads that the necessary mental state was attained, does not ease the evidential burden on the applicant. Thus in the present case, the respondents do not need, in order to succeed, to affirmatively demonstrate that the PAC held a particular state of mind. By way of corollary, and again notwithstanding a positive pleading to this effect by Centennial and Springvale, it is strictly unnecessary for the purpose of resolving grounds 1 and 2 of the proceedings for the Court to make a positive finding that the PAC did in fact form the requisite state of satisfaction (Caroona at [57]-[58] per Tobias JA). All that the Court must determine is whether the PAC failed to reach the mandated state. 3. A court will not lightly infer that the PAC has overlooked or failed to reach the statutory state of satisfaction. It is a conclusion that the Court would come to only after "anxious" deliberation (Parramatta City Council v Hale (1982) 47 LGRA 319 at 345 per Moffit P; cited with approval in Currey v Sutherland Shire Council (1998) 100 LGERA 365 at 373 per Stein JA; Weal v Bathurst City Council [2000] NSWCA 88; (2000) 111 LGERA 181 at 202 per Giles JA and Centro Properties Ltd v Hurstville City Council [2004] NSWLEC 401; (2004) 135 LGERA 257 at [37] per McClellan J). 4. Third, where it is necessary to affirmatively establish that a decision-maker held a particular state of mind or took into account a specific matter as a precondition to the exercise of power, it is likely to be insufficient to simply refer, without more, to material before the decision-maker which demonstrates that he or she was aware of the issues relevant to his or her decision which, if considered, would establish the requisite mental state or satisfy the precondition (Caroona at [64] per Tobias JA). 5. Fourth, and at the risk of repetition, while mechanisms to obtain reasons from a decision-maker may assist in establishing that a decision-maker has reached the necessary state of satisfaction, if these mechanisms are not utilised, this does not demand that a Court automatically infer that there is an evidential lacuna in an applicant's case (Gold and Copper Resources at [87] per Pain J). 6. Fifth, the obligation on a decision-maker to consider mandatory relevant matters requires the decision-maker to engage in an active intellectual process in which each mandatory matter receives his or her genuine consideration (Bat Advocacy at [44]. Or what has more recently been truncated to a process of "active consideration": Minister for Immigration and Border Protection v Singh [2014] FCAFC 1; (2014) 231 FCR 437 at [65]-[66]). 7. Sixth, in the absence of any statutory or contextual indication, the weight to be given to any matter is generally for the decision-maker to determine (Bat Advocacy at [44]). However, a failure to give more than cursory consideration or weight to a factor of great importance, or an overly eager dismissal of the matter on the basis that it is irrelevant, will more easily support the inference that the factor was not in fact considered at all (Bat Advocacy at [44]). Did the PAC Attain the Necessary State of Satisfaction That the Carrying Out of the Project Would Have a Neutral or Beneficial Effect on Water Quality? 1. In relation to the first two grounds of challenge, 4nature did not submit that there had been no regard to the state of satisfaction contained in cl 10(1) of the Catchment SEPP by the PAC granting approval. The argument was more nuanced. 2. Rather, 4nature contended that in the absence of any reference to having attained the requisite state of satisfaction in the PEAR, PAC Review Reports, the contemporaneous documents prepared with the consent, or the cover letter dated 21 September 2015, there was a strong basis for inferring that the state of satisfaction set out in cl 10(1) of the Catchment SEPP was not reached by the PAC. In particular, 4nature submitted that the material before the PAC was inconsistent with the PAC being satisfied that the carrying out of the project would have a neutral or beneficial effect on water quality principally because: 1. the methodological approach to the NorBE test advocated by the Department in the PEAR was not consistent with the text of cl 10(1); 2. the modelling before the PAC indicated identifiable adverse impacts on water quality from the point of discharge (at LPD009) all the way to Lake Burragorang; and 3. there was no modelling of the overall effect on water quality of the staged reduction in salinity concentration of discharges set out in the conditions to the consent, but which was nevertheless asserted by the Department to result in a beneficial effect to water quality in the medium to long term. 1. A threshold question arose as to what was the appropriate comparator for the purposes of cl 10(1) of the Catchment SEPP. 2. According to 4nature, the relevant comparison was between the water quality if the project were carried out and the water quality if it were not ("the NUL case"). Furthermore, in order to make a proper comparison, it was necessary to have recourse to appropriate modelling on the impact of the project on water quality. 3. Centennial and Springvale rejected the contention that cl 10(1) was uniquely directed to a 'with or without' test when assessing the carrying out of the development on water quality. It was their submission that the appropriate comparator (in other words, the "base case") to be applied for any given development application was a factual question for the decision-maker as at the date of the determination of the application. For the reasons elaborated upon below, this position should be accepted. 4. The Department identified the base case against which the neutral or beneficial effect on water quality, if any, of the project was to be measured as the discharge limits on Centennial's environmental protection licence (EPL 3607) held at the time the development application for the project was submitted: 1200 µS/cm EC (or 800 mg/L TSP). 5. But the Department's approach was, 4nature submitted, not in conformity with the text of cl 10(1) of the Catchment SEPP. This was because the project was entirely new, and therefore, if it were not approved the discharges permissible under the old development would cease, regardless of what was permissible under EPL 3607. It was for this reason that the appropriate methodology for determining the project's effect on water quality was to examine the potential water quality impacts of carrying out the project compared to the project not being carried out: the NUL case. This approach more closely aligned with the language and purpose of cl 10(1). 6. The NUL case baseline methodology was, moreover, the same approach that was used by the Department to conclude that the 5% to 6% increase in the median daily salinity in Lake Burragorang demonstrated that the project would have a beneficial or neutral effect on water quality. 7. In other words, while the Department relied, on the one hand, on the NUL case for the purpose of concluding that there was a neutral or beneficial effect on water quality at Lake Burragorang by the proposed project, the Department on the other hand, advocated an approach in the Coxs River of comparing the maximum discharge concentrations permissible under EPL 3607 (even though this was an interim limit) with the staged reduction in discharge concentrations contained in the agreement between the EPA and Centennial. Ignoring the inconsistency, the vice with this approach, according to 4nature, was that it assumed as the baseline a continuing notional concentration based on interim maximum permissible concentrations, rather than actual concentrations. Because it does not apply the appropriate baseline, viz, the NUL case, it was contrary to the text of cl 10(1) of the Catchment SEPP. 8. 4nature noted that the Addendum Report referred to the Catchment SEPP and the 2011 NorBE Guidelines and acknowledged that the NorBE Guidelines provided guidance on what constituted a neutral or beneficial effect. The Addendum Report also stated that the appropriate place to measure and manage the impact of the mine water discharges was at the mine's Licensed Discharge Points, which was consistent with the NorBE Guidelines and cl 9(1) of the Catchment SEPP. 9. This methodology was also consistent with the approach taken for the purposes of modelling the water quality impacts for the project in the Jacobs March 2015 Report. That Report modelled the predicted flow and salinity of the project proceeding and not proceeding to measure the impact of the project on water quality. The results showed that downstream of LDP009 at Sawyers Swamp Creek the median daily salinity would increase from 50 mg/L to 761 mg/L if the project proceeded. Similarly, downstream of LDP009 at Sawyers Creek above the Coxs River, in an area outside the boundaries of the consent, the median salinity would rise from 95 mg/L to 715 mg/L if the project proceeded. 10. These changes were, 4nature contended, an identifiable negative impact on water quality at the point of discharge outside the boundaries of the project contrary to the NorBE Guidelines. The predicted increased median daily salinity was also above the limit recommended by the ADWG for good quality drinking water and exceeded the appropriate limits in the ANZECC 2000. A median daily salinity of 761 mg/L is equivalent to approximately 1136 µS/cm, whereas 50 mg/L is equivalent to approximately 75 µS/cm, and under the ANZECC 2000 guidelines of 350 µS/cm 11. The application of the ANZECC 2000 guidelines to the project was endorsed by WaterNSW (formerly the SCA) for the purpose of assessing water quality impacts at the LDPs and was expressly referred to in the DGRs as being of assistance. 12. In the present case, 4nature submitted, applying the 2015 NorBE Guidelines, there was neither containment of any water quality impact nor transfer outside the site, and the modelling indicated that identifiable impacts would occur on water quality from the point of discharge at Sawyers Swamp Creek all the way down the water system to Lake Burragorang. 13. In addition, 4nature relied upon the fact that notwithstanding the Department's assertion that the staged reduction in discharge concentrations (see condition 12 of the consent) would result in a beneficial effect on the water quality in the medium to long term, the PAC was not provided with any modelling of the overall effect of the staged reduction in concentration of salinity of discharges as compared to the NUL case or existing water quality. Instead, what the modelling above demonstrated was an increase in salinity levels for Sawyer Swamp Creek downstream of LDP009 as well as Lake Burragorang. 14. As a result, the approach adopted by the Department was inconsistent with the Catchment SEPP, and because the PAC's determination was informed by the Department's methodology, the PAC applied the wrong test and the proscribed state of satisfaction was not, and could not have been, reached. To the extent that the PAC Review Reports indicated that it reached the requisite state of satisfaction, the PAC failed to include findings and recommendations in those reports that would permit the inference to be drawn that the PAC was satisfied that the project would have a neutral or beneficial impact on water quality. 15. In summary, therefore, the material before the PAC demonstrated that there was no neutral or beneficial effect on water quality within the meaning of cl 10(1) of the Catchment SEPP and because this material was inconsistent with the PAC reasonably attaining the necessary state of satisfaction, this strongly supported an inference that the PAC did not in fact reach that state. 16. For the reasons largely put by the respondents, I do not accept 4nature's submissions. 17. The "satisfaction" required pursuant to cl 10(1) of the Catchment SEPP to found a valid exercise of power by the PAC (as the consent authority) to grant approval was a state of mind that had to be reasonably open to it and formed on a correct understanding of the law (R v Connell; Ex parte The Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69 CLR 407 at 430, Buck v Bavone [1976] HCA 24; (1976) 135 CLR 110 at 118-119 and Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 at [130]-[137]. As was recently articulated in Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2016] NSWCA 253 (at [12]-[13]): 12 It is trite law that a state of satisfaction of a public officer which is legally flawed cannot satisfy the precondition to the engagement of a statutory power. In The King v Connell; Ex parte The Hetton Bellbird Collieries Ltd, Latham CJ, after referring to passages in an earlier authority, stated: "Thus, where the existence of a particular opinion is made a condition of the exercise of power, legislation conferring the power is treated as referring to an opinion which is such that it can be formed by a reasonable man who correctly understands the meaning of the law under which he acts. If it is shown that the opinion actually formed is not an opinion of this character, then the necessary opinion does not exist." 13 As later explained by Gibbs J in Buck v Bavone, the opinion will not be lawfully formed if, in reaching it, the officer has failed to consider matters that he or she was required to consider, or taken into account matters which he or she was required to disregard. 1. Clause 10(1) of the Catchment SEPP is, however, silent as to the relevant comparator. It does not specify a base case against which to assess the neutral or beneficial effect on water quality by the carrying out of development. The 2011 and 2015 NorBE Guidelines are similarly silent. 2. The applicable legal principles of construction relating to subordinate legislation such as the Catchment SEPP are well known and are not repeated here, save to note that the general principles relating to the interpretation of primary legislation (Acts of Parliament) are equally applicable to the interpretation of environmental planning instruments (Cranbrook School v Woollahra Municipal Council [2006] NSWCA 155; (2006) 66 NSWLR 379 at [36]–[46] and [63], Sutherland Shire Council v Benedict Industries Pty Ltd (No 4) [2015] NSWLEC 101 at [41]–[47] and IPM at [117]). 3. Accordingly, cl 10(1) must be construed having regard to its text, with recourse to its wider statutory context and by reference to the general purpose and policy underpinning both the clause and the Catchment SEPP (see generally the principles summarised in Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 at [39], Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378 at [23]–[26], Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 581 at [65]–[66] and Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664 at [22] and [23]). 4. Having said this, it must be recalled that subordinate legislation such as the Catchment SEPP is generally drafted less carefully than primary legislation, such as Acts and regulations, and should therefore be construed having regard to more practical considerations, rather than by a strict adherence to its language (Egan v Hawkesbury City Council (1993) 79 LGERA 321 at 331 per Meagher JA, Tovir Investments Pty Ltd v Waverly Council [2014] NSWCA 379 at [54] per Leeming JA, Benedict Industries (No 4) at [43], IPM at [117]). 5. There is no warrant, having regard to the text, context or purpose of cl 10(1) of the Catchment SEPP, to read into that clause the application of the NUL case comparator that 4nature posits. In my opinion, the provision does not require that any one particular approach be adopted. This is because the selection of the appropriate base case involves matters of judgment, and retaining a degree of flexibility is both necessary and desirable where, as the NorBE Guidelines state, the NorBE test "is not an exact science" and neither the Catchment SEPP nor the NorBE Guidelines clearly define "neutrality", "beneficial effect" or "water quality" (matters adverted to the by Department in the Addendum Report). 6. That a different comparative methodology may be used for different development is not contrary to the language of the clause nor its intent as reflected in the aims of the Catchment SEPP (for example, "to provide for healthy water catchments that will deliver high quality water while permitting development that is compatible with that goal": cl 3(a)). Provided that, objectively measured, the state of satisfaction is reached by the decision-maker having regard to the material before it, this pre-condition to the exercise of the power to grant development consent will be met. 7. It was therefore open to a decision-maker under cl 10(1) of the Catchment SEPP to identify the appropriate baseline and to form the view that he or she was satisfied that the carrying out of the development would have a neutral or beneficial effect on water quality compared to the existing water quality as at the date of its determination to grant consent. It was equally open to a decision-maker in assessing whether the impact of the proposed development on water quality was neutral or beneficial to have, if relevant, regard to the term of the project as a whole. 8. None of these comparative approaches are incompatible with either the text of cl 10(1) or the wider statutory context and purpose of the Catchment SEPP. Clause 10(1) is ultimately concerned with, as the Minister emphasised, drinking water quality. And the purpose of the Catchment SEPP, is to provide for the delivery of high quality drinking water (see the aims of the instrument in cl 3). That the Catchment SEPP and cl 10(1) are deliberately silent on how to best promote this objective is, in my opinion, consistent with a legislative decision to equip the consent authority with a broad range of methodological tools at their disposal to ensure that drinking water quality is maintained irrespective of the proposed development. It is not difficult to envisage that some development activity will necessitate adjustments in assessment and the inherent flexibility of an indeterminately attained state of satisfaction will permit the aims of the Catchment SEPP to be achieved. The fluid construction of cl 10(1) of the Catchment SEPP may be contrasted with the more prescriptive approach set out in cl 10(2), where the assessment must be undertaken by reference to the NorBE Tool. 9. Further, nothing in the Catchment SEPP or the NorBE Guidelines (albeit mindful of the general edict against using subsidiary instruments such as the NorBE Guidelines to construe principal instruments such as the Catchment SEPP: Master Education Services Pty Ltd v Ketchell [2008] HCA 38; (2008) 236 CLR 101 at [19], Plaintiff M47/2012 v Director-General of Security [2012] HCA 46; (2012) 251 CLR 1 at [56] and Jojeni Investments Pty Ltd v Mosman Municipal Council [2015] NSWCA 147; (2015) 89 NSWLEC 760 at [40]) insist on the neutrality or beneficial effect being measured purely in arithmetic terms, in terms of ecological health, or even by conformity with particular water quality guidelines. Nor is there any specificity on where or how the neutrality or beneficial effect must be measured in relation to the development (although the NorBE Guidelines indicate where pollutant loads or concentrations leaving a development site are to be measured). 10. There is nothing impermissible or inconsistent with the regulation of the impact of any development on the quality of water at its source by, as in the present case, the imposition of enforceable conditions of consent measuring water quality at various discharge points. 11. It was therefore reasonably open to the Department to select the existing discharge limits for salinity under EPL 3607 as the base case for the pre-development baseline. This was consistent with the actual pre-development position at the site. It was also consistent with the conduct of underground coal mining at Springvale for the past 20 years and the lawful mine water discharges at the time of the PAC's consideration of the development application. EPL 3607 was granted under a separate statutory regime, was ongoing, and was not contingent upon the right to conduct mining activity on the existing site. 12. The Department's approach was also consistent with the NorBE Tool developed by the then SCA and referenced in the NorBE Guidelines. While the Tool did not apply to the project, the description of the Tool's assumptions are instructive, to the extent that it compares the "predicted effect of the proposal on water quality with the estimated effect of the current (legal) use and condition of the site". This is precisely what the Department did. It compared the legal discharge limits pre-development with the predicted effect of the project on the salinity of the discharges using the modelling that Centennial provided. There was nothing impermissible about this approach. As stated above, underground mining and associated mine water discharges had been occurring since 1995. 13. Thus the Department and the EPA were satisfied that there would be a neutral or beneficial effect on water quality (WaterNSW had no residual concerns) even though the project might cause an arithmetic increase in the overall salinity levels relative to current levels. 14. I agree with Centennial and Springvale that it cannot be justifiably inferred that if the consent was not granted that mine water discharges associated with the 1992 development consent would cease (for example, there were still a number of long walls that had been approved but were yet to be extracted). The inclusion of the NUL case in the Jacobs March 2015 Report is not definitive evidence of this fact. The expiration of the 1992 consent on 30 September 2015 was in respect of the right to conduct mining operations. The Department may be taken to be aware of this fact. It has not been established, for example, that Centennial and Springvale would cease pumping out inflow water from the underground mine if no approval was granted for the project. 15. As the respondents have correctly asserted, there was no submission or advice before the PAC suggesting that the Department's Addendum Report was incorrect insofar as it had selected an inappropriate base case. That a different baseline measurement could have been adopted by the Department does not mean that the PAC has erred in accepting the Department's approach. It is not contended by 4nature that the Department's methodology was irrational or unlawfully unreasonable. 16. Of course it was the PAC and not the Department that was required to hold the requisite state of satisfaction under cl 10(1) of the Catchment SEPP. While it is correct to observe, as 4nature repeatedly emphasised, that there is no explicit statement of satisfaction from the PAC, this does not preclude inferences as to the PAC's mental state being draw from the materials before the PAC as the consent authority. It is axiomatic that inferences can be drawn from the material before a decision-maker as to whether or not that decision-maker has formed a particular opinion or reached a specific state of mind (Hale at 345-346, Currey at 375 and Caroona at [61]-[65] per Tobias JA). 17. There was abundant material before the PAC informing it of the content of cl 10(1) of the Catchment SEPP and that it had to be satisfied of the NorBE test. As Centennial and Springvale submitted, this was not a case in which the material before the PAC demonstrated no more than that it was aware of the clause and the issues relevant to its application. The PAC was repeatedly informed of the application of the NorBE test in the DGRs, the EIS, the PEAR, the Addendum Report, the two PAC Review Reports, the public hearings before the PAC and at the meeting with WaterNSW in June 2015 and the EPA in September 2015. 18. The application of the NorBE test to the proposed development was discussed in EIS, Centennial's Response to Submissions, the SCA's comments on the Response to Submissions, the reply to the SCA's comments, the Jacobs March 2015 Report, the PEAR, the Addendum Report and the meeting between PAC and the EPA in September 2015. 19. The PAC was advised that the Department regarded the NorBE test as satisfied and that the discharge limits for salinity agreed between Centennial and the EPA would have a beneficial impact on water quality, and moreover, that the predicted increased salinity at Lake Burragorang would be environmentally neutral. 20. The NorBE test, and the need to be satisfied of it, was discussed between the PAC (where the PAC Chair and other members of the PAC were present) and WaterNSW in the meeting between those two entities on 3 June 2015. It was discussed again at the meeting between the EPA and the PAC (where the Chair of the PAC was again present) on 3 September 2015. And as at 1 September 2015, WaterNSW advised the PAC that it had no outstanding issues concerning the project. 21. Likewise, the PAC Review Reports made it plain that the PAC was aware of the NorBE test and the need to attain the necessary mental state. The first PAC Review Report recorded submissions from the EPA, WaterNSW and OEH concerning the salinity level of the discharges and discussed the proper application of the NorBE test to water quality in the catchment area. 22. The PAC sought expert advice from the EPA and WaterNSW which was recorded in the second PAC Review Report. The EPA advised the PAC that it was satisfied that NorBE existed through the recommended conditions, especially in relation to drinking water. WaterNSW advised the PAC that it accepted the agreement between the EPA and Centennial as to salinity in the discharge of the mine water from the project (the 22 June 2015 agreement). The second PAC Review Report recorded the PAC's satisfaction that the proposed discharge limits for salinity the subject of the agreement with the EPA, and the requirement for an Upper Coxs River Action and Monitoring Plan (included in the conditions attached to the consent), were appropriate. 23. The PAC had before it not only the text of cl 10(1) of the Catchment SEPP but was, as the detailed chronology above demonstrates, aware of its obligation under the clause. The PAC was also aware of the various assessments of the application of the NorBE test to the project and the advice of the Department and the EPA that the NorBE test would be satisfied if the recommended conditions concerning salinity were imposed. The granting of the consent with the adoption of the recommended conditions is, in my opinion, a powerful indicator that the PAC formed the requisite state of satisfaction. 24. Finally, the PAC referred in its cover letter dated 21 September 2015 to the project having been subject to a rigorous assessment process, and expressly referred to the recommendations of the second PAC Review Report, which were developed following the meeting with the EPA and which were plainly designed at satisfying the NorBE test. As the Factsheet accurately noted, "the potential water impacts of the project had been comprehensively assessed". 25. In summary, having regard to the material before the PAC surveyed comprehensively above, I do not accept, on the balance of probabilities, that the PAC did not reach the necessary degree of satisfaction required by cl 10(1) of the Catchment SEPP. In my opinion, the evidence is almost overwhelmingly to the contrary. The PAC was aware that it could not approve the project absent satisfaction of the NorBE test in cl 10(1) of the Catchment SEPP. It stated that the project could be approved subject to conditions and it proceeded to adopt the conditions recommended by the Department and agreed to and accepted by the EPA and WaterNSW as to discharge limits for salinity that the Department and EPA considered would meet the NorBE test. 26. I therefore find that the PAC, after appropriate active intellectual engagement, did not apply the wrong test, but reached an independent state of satisfaction that the carrying out of the project would have a neutral or beneficial effect on water quality and that it proceeded to grant consent on this basis. 27. I make this finding notwithstanding that modelling exists predicting that the project could result in increased changes in the median daily salinity at the LDPs outside the boundaries of the project, and moreover, that there was no equivalent discharge modelling for the staged reduction in discharge concentrations as approved in condition 12. 28. In my opinion, it may reasonably be assumed that the PAC was aware of these matters but considered that the carrying out of the project would, in any event in light of the totality of the material before it, have a neutral or beneficial effect on water quality within the meaning of the cl 10(1) of the Catchment SEPP. 29. That there was material before the PAC that gave rise to the potential for a different state of satisfaction being reached does not mean that the mental state it achieved was not reasonably open to it when regard is had to the totality of the information before it. 30. Misleading or inadequate advice or modelling furnished by the Department (or any other body, such as the EPA or WaterNSW) to the PAC, as a delegate of the Minister, does not necessarily lead to the invalidity of a decision which has taken into account that advice (Anderson v Minister Administering the Water Management Act 2000 [2014] NSWCA 386 at [130]-[136] per Tobias AJA, with Meagher and Barrett JJA agreeing, citing Oates v Attorney-General (Cth) [2001] FCA 84; (2001) 181 ALR 559 at [132]-[136] and Zentai v O'Connor (No 3) [2010] FCA 691; (2010) 270 ALR 293 at [357] and [362]). 31. Moreover, a mistake of fact is not a ground of judicial review (unless it gives rise to irrationality or unreasonableness, neither of which were relied upon by 4nature in the present case) and administrative decisions are not open to challenge merely on the basis that they are wrong (Australian Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 355-356). 32. For all the reasons discussed above, to find otherwise on evidence before me would be to cavil with the ultimate findings of the PAC in a manner that is impermissible in judicial review proceedings. Grounds 1 and 2 are therefore dismissed. Did the PAC Fail to Consider a Mandatory Relevant Consideration – Satisfaction of NorBE? 1. There was agreement between the parties that if the PAC failed to consider a mandatory relevant matter, namely cl 10(1) of the Catchment SEPP in the exercise of its power to grant consent, this would result in jurisdictional error with the likely consequence that the consent would be declared invalid (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 30-31, Hale at 339-341 and Weal at [80]). 2. 4nature submitted that having regard to the material before the PAC, and the absence of any reference to the requisite state of satisfaction in cl 10(1) of the Catchment SEPP having been reached by it in those materials, the PAC failed to properly consider the NorBE test contained in that clause. The PAC had done no more than advert to the NorBE requirement, and because of its failure to apply the NUL case in its baseline assessment of the project, the Court ought to infer that the PAC had not actively engaged in the process of evaluation necessary to reach the requisite state of satisfaction. 3. Having regard to the material before the PAC extensively surveyed and discussed above, in my opinion, this submission is not sustainable. Not only did the PAC consider the NorBE test contained in cl 10(1), it actively engaged in the intellectual evaluative process demanded by that clause. There is no cogent basis for drawing the contrary inference sought by 4nature. 4. At the risk of repeating the reasons given above, that there is no direct evidence of the PAC having independently analysed the results of Centennial's modelling does not mean that the PAC did not take this information into account in the relevant sense. For the Court to find otherwise in the circumstances of this case would be to trespass into merits review (Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 at [79]). 5. And even if the cogency of the modelling as a component of the NorBE test in cl 10(1) of the Catchment SEPP (assuming for present purposes that the language of that clause made it so), was a mandatory consideration, it cannot be found with a sufficient degree of confidence that the PAC was unaware of, and therefore did not properly consider, either the so-called 'failure' of the Department to use the NUL case baseline comparator, or the absence of any modelling before the PAC comparing the predicted impacts of the staged reduction in salinity concentrations as prescribed in the conditions of the consent to the observed water quality or the NUL case (Anderson at [130]-[136]). 6. Accordingly, I reject the third ground of challenge. Costs 1. Having failed on all three grounds of its challenge to the PAC's decision, and these being Class 4 proceedings, normally 4nature would be liable to pay the respondents' costs of the proceedings. 2. However, given that 4nature is a not-for-profit registered charity whose primary object is environmental protection, it is not difficult to conceive, subject to the appropriate evidence being marshalled, of a different costs order being sought by it (see r 4.2 of the LEC Rules). 3. On this basis, and at the request of 4nature, costs are reserved. Orders 1. Because 4nature has been unsuccessful in its challenge to the decision to approve the project, the amended summons must be dismissed. Costs are reserved. And the exhibits are to be returned. ********** Appendix "A" LENVPLX11_2016_09_13_12_19_29_957 (421 KB, pdf) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 September 2016