Second Report Finds Failures in Biodiversity Offset System

A NEW South Wales Upper House committee that examined the integrity of the Biodiversity Offsets Scheme has handed down its report after an eighteen-month inquiry.

The Upper House committee, which included members of the government, opposition and crossbench, received over 100 submissions and held four hearings into the scheme.

Committee Chair Ms Sue Higginson said, “An offsets scheme is supposed to protect biodiversity, by ensuring developers offset unavoidable biodiversity losses due to development with equivalent biodiversity gains elsewhere, meaning there is ‘no net loss’.”

The inquiry heard that the scheme’s design allows too much flexibility to trade off threatened species in exchange for cash, without guarantee that genuinely equivalent offsets will ever be found.

“We have heard that this scheme’s operation is so opaque and complex that no stakeholder group has full confidence in it,” Ms Higginson said.

She said, with little transparency about the biodiversity offset market, what offsets have been used for what developments, or the ecological outcomes of the scheme, it is not surprising that allegations of insider trading and collusion have surrounded it from the outset.

The report is consistent with the Auditor General’s report into the scheme that was tabled at the end of August which found that 96 percent of developer demand for species offset credits cannot be met.

This second report recommends that the design of the Biodiversity Offsets Scheme be reviewed and reformed to ensure the ecological integrity of offsetting practices and made nineteen recommendations to improve the functioning and the transparency of the scheme.

Ms Higginson said the inquiry found that the system is broken because the rules that should be applied are not being applied in the ways they should be.

She said the ‘like for like’ rules are not working, and, even though developers have paid more than $90 million into the Biodiversity Conservation Fund, there is no guarantee that it will ever be able to genuinely compensate for the biodiversity actually lost.

“It’s a complex system and it is very difficult to cost biodiversity loss,” she said.

“There are some things that can’t be offset, such as endangered species, but we’ve seen variations made for big developers.”

Ms Higginson said ‘avoid, minimise, offset’ should be the protocol but the system in NSW usually goes straight to offset.

“Do we want to keep losing biodiversity or do we want to make this scheme work the way it is meant to?” she said.

Further information about the inquiry, including submissions, transcripts of public hearings and the final report can be found by searching for ‘biodiversity inquiry’ at

By Andrew VIVIAN

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