In brief - While landowners may benefit from establishing a biodiversity stewardship site on their land, close consideration needs to be given to the process and requirements
If you own a rural property you may have heard something about "biobanking" or "biodiversity stewardship sites". Equally, you might just be wondering why the government would pay you good money for native scrub suitable for raising goats, feral pigs and not much else... What's the catch? What's required? How can you, as a landowner, benefit?
New changes in the law - introduction of the Biodiversity Offsets Scheme
The Biodiversity Conservation Act 2016 (BC Act) and accompanying regulations commenced in August 2017.
The BC Act introduces a Biodiversity Offsets Scheme (BOS), which replaces the old biobanking scheme. In a nutshell, the BOS is designed to create a system for the creation and sale of biodiversity credits by landowners to those impacting the environment.
One of the main aims of the BOS is to establish and encourage an open market between those impacting biodiversity values (usually developers) and those managing and protecting biodiversity values in areas nearby (usually landowners).
How can this benefit you?
There can be significant benefits in establishing a site on your land.
The areas of your land that contain threatened species or areas of biodiversity value are likely to be heavily vegetated and probably not suitable for grazing. Additionally, establishing a site on your land can, if done properly and in the right areas, prove to be lucrative.
Your accredited assessor can give you an idea of the likely number of credits generated by your site and the potential return in doing so.
How to establish a biodiversity stewardship site and sell credits
- Determine whether you are eligible.
- Get an accredited assessor to draft a report and calculate credits.
- Enter into a biodiversity stewardship agreement (Agreement) with the Biodiversity Conservation Trust (Trust).
- Sell your credits.
- Receive annual payments and manage the biodiversity stewardship site (site).
Who needs credits?
Developers, mining companies, government departments (and in some cases the Trust) need biodiversity credits to offset the impact of developments on the environment.
How do you generate credits?
Landowners generate credits by setting aside and managing tracts of their land, and entering into a biodiversity stewardship agreement. In return, they receive classes of credits which can be publicly traded through the public register.
Step One – The land must meet certain eligibility criteria
Among other things (like not already being a reserve or already subject to conservation measures), your land must contain threatened species or areas of biodiversity value to be considered for a site. Usually, this can be answered quickly through a report by an accredited assessor. You will also need to pass a "fit and proper" person test if you choose to go ahead and establish a site.
Step Two – Establishing the site
If you want to test the waters, you may lodge an expression of interest through the Biodiversity Conservation Trust (Trust) "expression of interest register" to identify potential purchasers of credits, before you proceed with making a formal application.
If you proceed with a formal application, you will need to get an accredited assessor to prepare a biodiversity stewardship site assessment report (Stewardship Report).
Once your assessor has prepared the Stewardship Report, you submit an application including the Stewardship Report to the Trust via the Biodiversity Offsets and Agreement Management System (BOAMS), together with applicable fees.
Step Three – Assessment by the Trust
The Trust will assess your application against relevant legal and technical requirements and agree on the terms of the BSA. This is not a quick process and registration of the BSA on title is a legal obligation that will remain over the property title forever.
The Agreement will include a management plan that sets out proposed management actions and the cost of those actions over a determined period, (usually 20 years, but can be longer or shorter). The Agreement will also determine the ongoing maintenance costs.
Once the BSA is agreed and entered into by the Trust and the landholder, the agreement and credits will be registered on the Biodiversity Offsets Scheme Public Register.
Step Four – Sell the credits, manage the site
By establishing a site, you effectively receive two streams of income:
- the Stewardship Report will calculate a deposit you must make into the Biodiversity Stewardship Payments Fund (Payments Fund) for ongoing management of the site (Deposit). The Payments Fund then pays you scheduled management payments from the Deposit over the number of years determined in the Stewardship Report and by the Fund, and
- any profit you make from selling credits above and beyond the payments you need to make into the Payments Fund.
Buying credits – what happens next?
In most cases, the credit will be transferred by the credit holder to the developer on settlement of the purchase. The purchaser of a credit must apply in writing to the Department to retire the credit.
Caution here - the Department of Planning, Industry and Environment (Department) can refuse an application to retire a credit for a number of reasons. Most importantly, if the Department becomes aware that you have not made the required payment into the Payments Fund, it will refuse to register the transfer of the credit.
This area of law is new and rapidly evolving. Investigating and establishing a site, complying with your management obligations, and handling the sale and transfer of credits must be carefully managed.
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.