The planning system has been identified as having a critical role to play in supporting the economy during this time. To ensure that the planning system is able to adapt to the challenges presented by COVID-19, a number of amendments have been made to planning legislation in each jurisdiction in an effort to stimulate economic activity. Whilst there are many economic benefits associated with these amendments, it is inevitable that these changes to the planning system will create some tension with maintaining high levels of environmental protection and standards of planning practice. The question for government and industry is how we will collectively respond to these challenges. Time will tell whether and how the new changes to the planning system will impact the quality of the projects being delivered.
The environmental Kuznets curve is an environmental economics theory that predicts that periods of economic development will initially result in environmental decline, however after a level of economic growth has occurred, this reduces as society improves its response to environmental degradation through targeted policies and directing investment towards cleaner sources of energy and environmentally sustainable development solutions. The environmental Kuznets curve might predict that the downward pressure on the economy as a result of COVID-19 will result in a corresponding regression in environmental and planning performance in society.
Waiving compliance with conditions of an approval
The recent Queensland omnibus legislative changes has given the Minister the power to make declarations waiving the requirement to comply with certain conditions of an environmental approval and to allow temporary environmental authorities where these actions are reasonable as a result of the COVID-19 emergency.
Similarly, earlier legislative amendments allowed the Planning Minister to authorise temporary use licences and vary conditions of a development approval during the COVID-19 emergency. We have seen this power utilised to enable places to produce hand sanitiser, change operating hours and vehicle and pedestrian access requirements. These changes are understandable during the pandemic but will bring with them new impacts on surrounding land uses and infrastructure networks.
Legislative change in NSW has instead focused on fast tracking development assessment, and also extending periods for lapsing and the abandonment of uses.
Despite these changes, it is important to recognise that in the absence of any express legislative exemptions, in general COVID-19 cannot be relied upon to justify a non-compliance with development consent conditions or environmental requirements.
Practically, we are seeing that some regulators will take a more flexible approach to environmental enforcement and compliance action in recognition of the challenges businesses face due to COVID-19, but others will still expect strict compliance with licence conditions.
Fast-tracked development assessment – will the economic benefits outweigh the environmental outcomes?
The NSW government has already made a number of changes to the planning system which are hoped to support the economy now and into the post-COVID-19 future. The fast-tracking of certain project assessments across the State under the Department of Planning, Industry and Environment's 'Planning System Acceleration Program' is one of the key strategies being implemented to deliver jobs and boost the economy. For those projects selected to be fast-tracked, the Department has committed to assessing and determining these developments within just four weeks. By accelerating the assessment of select projects, which will keep the construction industry moving, the government expects that more than 30,000 jobs will be created by the end of September 2020.
Whilst the economic benefits associated with the Acceleration Program may be clear, it raises the question of whether the Department will be able to deliver on its commitment to ensuring the same level of rigorous environmental assessment is applied to those projects that are set to be fast-tracked. Ultimately, only projects that are already in the Department's system that are able to demonstrate compliance with specific criteria, including the following 'essential' criteria, will be considered:
- Jobs – does the project create jobs during construction and ongoing?
- can a decision on the project be made quickly?
- for development applications – can the project commence within six months?
- for planning proposals – can the project proceed to development application stage within six months?
- Public benefit – can the project deliver or support public benefits (e.g. affordable housing or new public space and parklands)?
To ensure that the NSW Department is able to determine projects identified for fast-tracked assessment in four weeks, a new 'one-stop-shop' comprised of all key State Government agencies has been created within the Department. This one-stop-shop will operate in a similar way to Queensland's State Assessment and Referral Agency which was successfully established nearly 10 years ago. Coupled with additional resources, the NSW Department is confident that whilst the assessment process may be accelerated for selected projects, the process and level of assessment that these projects are subjected to under the NSW Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) will not change. With this in mind, it remains critical that developers strictly comply with the statutory processes that apply to such developments to minimise the risk of any judicial review proceedings being commenced which may undermine an approval.
Stunting or stimulating the growth of the renewable energy industry?
It is anticipated that the significant growth experienced by the renewable energy industry in recent years will be affected by COVID-19, due to the global financial contraction which has resulted from the pandemic, as well as the marked reduction in oil prices. Whilst the pressure for planning changes to be implemented which further support the growth in renewable energy projects has been high on the agenda for State and Commonwealth governments for some time, the reduction in economic activity, which in turn leads to reductions in power demand, may slow the shift towards renewable energy targets for a period of time.
Despite this, we note that the recent amendments to the State Environmental Planning Policy (Infrastructure) 2007 (ISEPP) which have been implemented to encourage further investment in innovative renewable energy projects in NSW (focusing on particular solar energy systems) reflects one of the recent steps being taken to stimulate the growth of the renewable energy industry.
With a number of studies suggesting that renewable energy projects create more jobs on a per dollar basis compared to investments in fossil fuel projects, despite the economic impacts of COVID-19, the long-term trend towards renewable energy is expected to continue even if for a period of time it may be slowed. This trend would support the hypothesis of the environmental Kuznets curve, which suggests that if investment is directed towards renewable energy projects, then economic growth and environmental protection can be compatible.
Other steps already taken in response to COVID-19
A number of temporary changes to legislation have recently been introduced including the following:
- the declaration of certain shop uses in Queensland that can operate 24-7 during the COVID-19 emergency, and the opportunity for further use declarations if needed;
- the power for the Queensland Minister to extend or suspend periods in the Planning Act;
- the lapsing period for certain development consents in NSW has been extended;
- the 12 month assumption of abandonment in relation to existing use rights has been extended in NSW;
- the NSW Minister has been given the ability to issue additional directions to consent authorities in relation to the pooling of development contributions and the timing of when contributions must be paid; and
- increasing the period in which applicants or objectors may commence an appeal to the Land and Environment Court of NSW.
Many of these changes have been made in recognition of the fact that, as the economic impacts of COVID-19 continue, developers are likely to need more time than usual to obtain finance for projects and physically commence construction work and trigger the operation of their development consent.
Keeping up to speed with the latest changes being made and guidance documents being issued by regulatory authorities is essential to successfully being able to assess compliance risks for businesses during COVID-19.
How will these changes to the planning system affect you?
The Planning and Environment team at McCullough Robertson Lawyers recognises that COVID-19 has affected government, individuals and business in significant and varying ways.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.