Our principles for the use of biodiversity offsets in New South Wales

Offsets are then used to address the remaining impacts. This may include modifying the proposal to avoid an area of biodiversity value or putting in place measures to prevent offsite impacts.

Offsets cannot be used to satisfy approvals or assessments under other legislation, such as assessment requirements for Aboriginal heritage sites and for pollution or other environmental impacts (unless specifically provided for by legislation or additional approvals).

Offset schemes should not encourage landholders to deliberately degrade or mismanage offset areas in order to increase the value from the offset.

A range of tools is required to achieve the NSW Government’s conservation objectives, including the establishment and management of new national parks, nature reserves, state conservation areas and regional parks, and incentives for private landholders.

They must:

• include the conservation of structure, function and compositional elements of biodiversity, including threatened species
• enhance biodiversity at a range of scales
• consider the conservation status of ecological communities
• ensure the long-term viability and functionality of biodiversity.

Biodiversity management actions, such as enhancement of existing habitat and securing and managing land of conservation value for biodiversity, can be suitable offsets. Reconstruction of ecological communities involves high risks and uncertainties for biodiversity outcomes and is generally less preferable than other management strategies, such as enhancing existing habitat.

Enhancement of biodiversity in offset areas should be equal to or greater than the loss in biodiversity from the impact site.

Setting aside areas for biodiversity conservation without additional management or increased security is generally not sufficient to offset the loss of biodiversity. Factors to consider include protection of existing biodiversity (removal of threats), time-lag effects, and the uncertainties and risks associated with actions such as revegetation.

Offsets may include:

• enhancing habitat
• reconstructing habitat in strategic areas to link areas of conservation value
• increasing buffer zones around areas of conservation value
• removing threats by conservation agreements or reservation.

As impacts on biodiversity are likely to be permanent, the offset should also be permanent and secured by a conservation agreement or reservation and management for biodiversity. Where land is donated to a public authority or private conservation organisation and managed as a biodiversity offset, it should be accompanied by resources for its management. Offsetting should only proceed if an appropriate legal mechanism or instrument is used to secure the required actions.

Offsets should minimise ecological risks from time-lags. The feasibility and in-principle agreements to the necessary offset actions should be demonstrated prior to the approval of the impact. Legal commitments to the offset actions should be entered into prior to the commencement of works under approval.

Offsets should be based on quantitative assessment of the loss in biodiversity from the clearing or other development and the gain in biodiversity from the offset. The methodology must be based on the best available science, be reliable and used for calculating both the loss from the development and the gain from the offset. The methodology should include:

• the area of impact
• the types of ecological communities and habitat or species affected
• connectivity with other areas of habitat or corridors
• the condition of habitat
• the conservation status and/or scarcity or rarity of ecological communities
• management actions
• level of security afforded to the offset site.

The best available information or data should be used when assessing impacts of biodiversity loss and gains from offsets. Offsets will be of greater value where:

• they protect land with high conservation significance
• management actions have greater benefits for biodiversity
• the offset areas are not isolated or fragmented
• the management for biodiversity is in perpetuity, such as secured through a conservation agreement.

Management actions must be deliverable and enforceable.

They must offset impacts on the basis of like-for-like or better conservation outcomes. Offsets should be targeted according to biodiversity priorities in the area, based on the conservation status of the ecological community, the presence of threatened species or their habitat, connectivity and the potential to enhance condition by management actions and the removal of threats.

Only ecological communities that are equal or greater in conservation status to the type of ecological community lost can be used for offsets. One type of environmental benefit cannot be traded for another: for example, biodiversity offsets may also result in improvements in water quality or salinity but these benefits do not reduce the biodiversity offset requirements.

Wherever possible, offsets should be located in areas that have the same or similar ecological characteristics as the area affected by the development.

They must be beyond existing requirements and not already funded under another scheme. Areas that have received incentive funds cannot be used for offsets. Existing protected areas on private land cannot be used for offsets unless additional security or management actions are implemented. Areas already managed by the government, such as national parks, flora reserves and public open space, cannot be used as offsets.

Offsets must be audited to ensure that the actions have been carried out and monitored to determine that the actions are leading to positive biodiversity outcomes.