Barrington - Gloucester - Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197 (27 August 2012)

Last Updated: 31 October 2013

This decision has been amended. Please see the end of the decision for a list of the amendments.

Land and Environment Court New South Wales

Case Title:	Barrington - Gloucester - Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure
Medium Neutral Citation:	[2012] NSWLEC 197
Hearing Date(s):	18, 19 and 20 October 2011
Decision Date:	27 August 2012
Jurisdiction:	Class 4
Before:	Pepper J
Decision:	Amended summons dismissed. The applicant is to pay the respondents' costs of the proceedings, unless within 21 days a notice of motion is filed, together with appropriate affidavit evidence in support, seeking an alternative costs order.
Catchwords:	JUDICIAL REVIEW: whether conditions of a project approval under Pt 3A of the Environmental Planning and Assessment Act 1979 are invalid for uncertainty - applicable legal principles - conditions not impermissibly uncertain - whether the Minister failed to take into account a mandatory relevant consideration - whether the principles of ecologically sustainable development, including the precautionary principle, are mandatory relevant considerations under Pt 3A - ecologically sustainable development principles, including the precautionary principle, are mandatory relevant considerations forming part of the public interest - ecologically sustainable development principles were correctly formulated and taken into account by the Minister granting approval.
Legislation Cited:	Environmental Planning and Assessment Act 1979, ss 4(1), 5, 7, 23(1)(f), 23D(1)(a), 75A, 75B, 75C, 75I, 75J, 75L, 75M, 75O, 75W 75X(5), Sch 6 cl 3(1), Pts 3, 3A, 4 Environmental Planning and Assessment Amendment (Part 3A Repeal) Act 2011, Pt 3A Protection of the Environment Administration Act 1991, s 6(2) Protection of the Environment Operations Act 1997, s 120 State Environmental Planning Policy (Major Projects) 2005, Sch 1
Cases Cited:	Aldous v Greater Taree City Council [2009] NSWLEC 17; (2009) 167 LGERA 13 Anderson v Director-General, Department of Environment and Climate Change [2008] NSWCA 337; (2008) 163 LGERA 400 Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 Australians for Sustainable Development Inc v Minister for Planning [2011] NSWLEC 33; (2011) 182 LGERA 370 Coffs Harbour City Council v The Minister for Planning and Infrastructure [2012] NSWLEC 4 Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349 Foster v Minister for Customs and Justice [2000] HCA 38; (2000) 200 CLR 442 Gray v Minister for Planning [2006] NSWLEC 720; (2006) 152 LGERA 258 Haughton v Minister for Planning and Macquarie Generation; Haughton v Minister for Planning and TRUenergy Pty Ltd [2011] NSWLEC 217; (2011) 185 LGERA 373 Hunter Environment Lobby Inc v Minister for Planning [2011] NSWLEC 221 Kennedy v NSW Minister for Planning [2010] NSWLEC 240 Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 King Gee Clothing Co Pty Ltd v Commonwealth [1945] HCA 23; (1945) 71 CLR 184 Leatch v National Parks and Wildlife Service (1993) 81 LGERA 270 Mid Western Community Action Group Inc v Mid-Western Regional Council & Stockland Development Pty Limited [2007] NSWLEC 411 Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; (2010) 243 CLR 164 Minister for Planning v Walker [2008] NSWCA 224; (2008) 161 LGERA 423 Mison v Randwick Municipal Council (1991) 23 NSWLR 734 MyEnvironment Inc v Vic Forests [2012] VSC 91 Newcastle & Hunter Valley Speleological Society Inc v Upper Hunter Shire Council and Stoneco Pty Limited [2010] NSWLEC 48 Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 Pittwater Council v Minister for Planning [2011] NSWLEC 162; (2011) 184 LGERA 419 Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347 Sean Investments Pty Ltd v MacKellar [1981] FCA 191; (1981) 38 ALR 363 South East Forest Rescue Incorporated v Bega Valley Shire Council and South East Fibre Exports Pty Ltd [2011] NSWLEC 250 Telstra Corporation Ltd v Hornsby Shire Council [2006] NSWLEC 133; (2006) 67 NSWLR 256 Ulan Coal Mines Ltd v Minister for Planning [2008] NSWLEC 185; (2008) 160 LGERA 20 Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118 Williams v Minister for Planning (No 2) [2011] NSWLEC 62 Williams v NSW Minister for Planning (No 3) [2010] NSWLEC 204
Texts Cited:	Oxford English Dictionary, online edition Macquarie Dictionary, online edition
Category:	Principal judgment
Parties:	Barrington - Gloucester - Stroud Preservation Alliance Inc (Applicant) Minister for Planning and Infrastructure (First Respondent) AGL Upstream Infrastructure Investments Pty Ltd (Second Respondent)
Representation
- Counsel:	Mr R P L Lancaster SC with Mr N M Eastman (Applicant) Mr A Shearer (First Respondent) Mr N J Williams SC with Ms A M Mitchelmore (Second Respondent)
- Solicitors:	Environmental Defender's Office (Applicant) Department of Planning (First Respondent) Freehills (Second Respondent)
File Number(s):	40411 of 2011

INDEX

Topic	Paragraph Number
The Applicant Challenges Approvals to Grant an Exploration Licence for Coal Seam Gas	[1]
AGL Applies for the Approvals	[8]
The Director-General's Environmental Assessment Report	[27]
The PAC Determination Report and Concept Plan Approval	[47]
The Major Project Approval and Conditions	[57]
Grounds 1 and 2: the Major Project Approval Conditions Are Invalid due to Uncertainty	[71]
Invalidity by Reason of Uncertainty: Applicable Legal Principles	[72]
The Conditions Under Challenge	[86]
The Conditions Are Not Invalid For Uncertainty or Lack of Finality	[93]
Condition 3.5	[98]
Conditions 3.8, 3.9, 4.1, 4.2 and 7.4 e)(i) - Groundwater Monitoring and Management	[106]
Conditions 2.1 and 3.9 c) - Gas Well Location	[125]
Condition 3.12: Uncertainty in Relation to Water Re-use and Disposal	[135]
Grounds 3 and 4: Failure to Consider the Precautionary Principle	[145]
Was the Minister Bound to Take Into Account the Principles of ESD and the Precautionary Principle?	[147]
The Precautionary Principle	[150]
The PAC Was Obliged to Consider ESD Principles Including the Precautionary Principle as Part of the Public Interest	[152]
Did the PAC Correctly and Adequately Consider ESD Principles, Including the Precautionary Principle?	[172]
The PAC Did Not Incorrectly State or Apply the Precautionary Principle	[180]
There Was No Failure to Properly Consider the Precautionary Principle in Respect of Groundwater	[191]
There Was No Failure to Properly Consider the Precautionary Principle in Respect of Water Re-Use and/or Disposal	[210]
Costs	[217]
Orders	[218]

JUDGMENT

The Applicant Challenges Approvals to Grant an Exploration Licence for Coal Seam Gas

1. It is a matter of common knowledge that the exploration for, and use of, coal seam gas is contentious. This judgment will, however, do little to quell the current anxiety surrounding the coal seam gas mining debate. In this regard it must be understood that the merits, or otherwise, of the use of this resource are irrelevant to the issues raised for determination by these judicial review proceedings, concerning, as they do, only the lawfulness of the approval under challenge.
   
2. The impugned decision concerns a project approval granted by the Planning Assessment Commission ("PAC") for coal seam gas extraction, processing and transportation development at Gloucester Basin (the Gloucester Gas Project or "the project") within a sub-area covered by petroleum exploration licence 285 ("the licence"). The licence covers an area of approximately 1600km² across the region around Gloucester and Stroud.
   
3. On 22 February 2011 two approvals were granted by the PAC, subject to conditions:
   

(a) a concept plan approval, pursuant to s 75O of the Environmental Planning and Assessment Act 1979 ("the EPAA"), for a staged well field development within the concept area, including development of wells, gas and water gathering lines and associated infrastructure ("the concept plan approval"); and

(b) a major project approval, pursuant to s 75J of the EPAA, for the construction and operation of gas wells at proposed sites within the Stage 1 Gas Field Development Area ("the Stage 1 area") and associated infrastructure, a central processing facility and the construction and operation of a high-pressure gas transmission pipeline from Stratford to a delivery station at Hexham in New South Wales ("the project approval").

4. The approvals were made by the PAC under delegation from the first respondent, the Minister for Planning and Infrastructure ("the Minister") (s 23(1)(f) of the EPAA), pursuant to ss 23D(1)(a) and 75O(1) of the EPAA.
   
5. The second respondent, AGL Upstream Infrastructure Investments Pty Ltd ("AGL"), is the proponent of the project for the purposes of 75A of the EPAA.
   
6. The applicant, Barrington-Gloucester-Stroud Preservation Alliance Inc ("the Alliance"), is an incorporated non-profit association, which contends that each of the approvals is invalid. In short, it argues, first, that certain conditions imposed in relation to both groundwater and wastewater in the project approval left open the possibility of a significantly different development from that for which approval was sought and are, therefore, uncertain. And second, that the PAC failed to correctly formulate and properly consider the precautionary principle in respect of the project approval.
   
7. I do not agree with either argument. First, properly construed, the conditions about which complaint is made in relation to the project approval are within the permissible limits of the power pursuant to which they were imposed and are not uncertain with respect to impacts. Second, notwithstanding that the precautionary principle is a mandatory relevant consideration forming part of the public interest, the principle was adequately considered by the PAC in granting the project approval. It follows that the amended summons filed 17 June 2011 must be dismissed.
   

AGL Applies for the Approvals

8. On 21 May 2008 the project was declared by the Minister to be a major project under the now repealed (effective from 1 October 2011: see the Environmental Planning and Assessment Amendment (Part 3A Repeal) Act (2011) ("the Repeal Act")) Pt 3A of the EPAA (the transitional provisions of the Repeal Act applied Pt 3A to projects already approved under that Part: Sch 6 cl 3(1) of the EPAA).
   
9. On 28 May 2008, the Minister (by his delegate) determined that the project was development of a kind described in Sch 1 of the State Environmental Planning Policy (Major Projects) 2005. Thus the project was declared to be one which attracted the operation of Pt 3A of the EPAA for the purpose of s 75B of that Act.
   
10. On 31 July 2008, ENSR Australia Pty Ltd ("ENSR"), the then owners of the licence, lodged a preliminary project application for the project. Approval was sought for the concept plan and concurrent project approval was sought for Stage 1 of the project.
    
11. On 4 August 2008 the Minister authorised the submission of a concept plan application for the project pursuant to s 75M of the EPAA.
    
12. The proposal for the concept plan approval was described as comprising five elements, and concurrent project approval was sought for elements two to five. The five elements were:
    
    • (a) first, staged development of gas extraction wells and associated infrastructure within an area of approximately 210km² of the Gloucester Basin;
      
    • (b) second, construction and operation of up to 110 gas extraction wells and associated infrastructure within the Stage 1 area;
      
    • (c) third, the construction and operation of a central processing facility to compress and process the extracted gas ready for transport;
      
    • (d) fourth, construction and operation of a gas transmission pipeline to transport the gas from the central processing facility to the existing gas supply network at Hexham; and
      
    • (e) fifth, construction and operation of a gas delivery station at Hexham to deliver gas to the existing Sydney-Newcastle gas pipeline.
      
13. The Director-General of the Department of Planning and Infrastructure ("the Department") issued requirements for the preparation of an Environmental Assessment for the concept plan application and the project plan application on 26 August 2008 ("the DGRs"). Supplementary requirements were provided on 19 October 2008.
    
14. In December 2008 AGL purchased the licence from ENSR.
    
15. On 11 August 2009, AECOM on behalf of AGL advised the Department of a variation of the concept plan and the major project applications. By letter dated 25 August 2009, the Director-General confirmed that the environmental assessment requirements previously issued would apply to the amended project together with specified additional requirements.
    
16. By letter dated 10 November 2009, AGL was notified by the Director-General that the draft Environmental Assessment prepared by AECOM dated November 2009 had been relevantly assessed as adequately addressing the DGRs issued for the project on 26 August and 19 October 2008 and 25 August 2009.
    
17. On 11 November 2009 an Environmental Assessment for the concept plan and concurrent project application prepared by AECOM ("the EA") was submitted to the Director-General of the Department on behalf of AGL. The EA noted that, given the spatial nature of the Stage 1 development, an "environmental envelope" approach had been adopted to assess and avoid or minimise potential environmental impacts. The content of the EA is discussed in further detail below.
    
18. The EA was placed on public exhibition on 18 November 2009 for two months. A Submissions Report analysing the 147 submissions received was prepared by AECOM, finalised on 24 May 2010. The potential impacts of wastewater produced by the project and groundwater management and the impact on aquifers were among the key issues raised in the submissions. The Submissions Report stated that, in relation to the submissions on groundwater, a conceptual hydrogeological model should be developed and subject to ongoing review.
    
19. On 8 July 2010 the NSW Office of Water ("NOW") wrote to the Department and recommended against concept approval for individual bores or determination of volumetric limits for bores until such time as the conceptual hydrogeological model referred to in the Submissions Report was completed and NOW had determined its adequacy.
    
20. On 30 July 2010 SRK Consulting (Australasia) Pty Ltd ("SRK") prepared a report for AGL entitled Gloucester Basin Stage 1 Gas Field Development Project: Preliminary Groundwater Assessment and Initial Conceptual Hydrogeological Model ("the SRK Report"). The objective of the report was to conduct a review of the hydrogeological regime in the Gloucester Basin and to present a hydrogeological model to "conceptualise the groundwater system across Stage 1" of the development.
    
21. On 16 August 2010 NOW wrote a further letter to the Department stating that the Stage 1 development should not be approved until AGL had completed the model and NOW was satisfied that the impacts of any production wells were consistent with its policies.
    
22. On 20 August 2010 AGL provided the SRK Report to the Department.
    
23. On 31 August 2010 AGL emailed NOW outlining the staged investigation approach that it was proposing for the project, which consisted of five (or six, depending on how they were divided) phases. The phases included a desktop study, a detailed groundwater investigation together with the establishment of a baseline monitoring network, numerical modelling, monitoring and project updates.
    
24. In a letter to the Department dated 28 September 2010, NOW indicated that it was satisfied that the Stage 1 development could be granted approval and that if approval was granted NOW would be in a position to authorise drilling works. The letter noted that the SRK Report "clearly identifies the knowledge gaps which exist" but that the monitoring and assessment program "will largely satisfy the requirements of condition 4.1 of the project approval, and inform the development of the hydrogeological model referred to in condition 3.6". The letter went on to state, however, that production well entitlements would not be issued until the modelling had been assessed as satisfactory and demonstrated "no more than minimal harm to beneficial aquifers" consistent with its guidelines and that, if the modelling did not demonstrate compliance "with minimal harm requirements, the scale of the operation may need to be adjusted to a level at which these requirements can be satisfied."
    
25. Also on that day, the Minister delegated his approval powers to the PAC for consideration of the concept plan application. This decision was made on the basis that there would be merit in the PAC determining both applications.
    
26. On 28 October 2010, NOW indicated in an email to the Department that the previous issues raised by NOW concerning the draft project approval conditions had now been "covered" and that the proponents preference for a field development plan was acceptable.
    

The Director-General's Environmental Assessment Report

27. In November 2010, the Director-General issued his Environmental Assessment Report pursuant to s 75I of the EPAA and provided it to the PAC ("the Director-General's EA Report"). It is necessary to examine the Director-General's EA Report in some detail because of its significance in light of the grounds of review.
    
28. The Director-General's EA Report stated that the Department was satisfied that AGL had undertaken "an appropriate and conservative level of assessment covering all aspects of the project, including the concept plan area". It was satisfied that the project was consistent with best practice and acceptable environmental and amenity standards. After setting out the objects of the EPAA in s 5(a) of that Act, the Director-General's EA Report canvassed the application of those objects to the project, including the principles of ecologically sustainable development ("ESD"). The Report expressly stated the following (p 10, emphasis added):
    

Of particular relevance to the environmental impact assessment and eventual determination of the subject project application by the Minister, are those objects stipulated under section 5(a). Relevantly, the objects stipulated under (i), (ii), (vi) and (vii) are significant factors informing determination of the application (noting that the proposal does not raise significant issued relating to communication and utility services, land for public purposes, community services and facilities or affordable housing). With respect to ecologically sustainable development, the EP&A Act adopts the definition in the Protection of the Environment Administration Act 1991, including the precautionary principle, the principal of inter-generational equity, the principle of conservation of biological diversity and ecological integrity, and the principle of improved valuation, pricing and incentive mechanisms. In applying the precautionary principle, public decisions should be guided by careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment and an assessment of the risk-weighted consequences of various options.

It is important to recognise, that while the EP&A Act requires that the principles of ecologically sustainable development be encouraged, it provides other objects that must be equally included in the decision-making process for the subject proposal. The Department's assessment has given due to consideration to the objects of the Act in its assessment including:

the need to encourage the principles of ecologically sustainable development;

the Department's assessment of the need for the project (section 2.3) has considered the benefits of the project in helping to secure less-greenhouse gas intensive fuel resources, which are consistent with the principle of inter-generational equity;

the Department's assessment of the ecological impacts of the project (section 5.3) is based on a conservative and rigorous assessment of the likely extent of the ecological impacts and of likely offset requirements to ensure that appropriate and adequate measures are put in place to prevent the threats of serious or irreversible environmental damage consistent with the precautionary principle and the principle of conservation of biological diversity and ecological integrity; and

the Department's assessment of key issues (including sections 5.1 and 5.3) has considered the requirement for appropriate contingency strategies (in relation to groundwater impacts to surrounding users) and appropriate offsets for residual biodiversity impacts, which is consistent with the principle for the appropriate valuing of natural resources.

the proper management, development and conservation of natural and artificial resources (including agricultural land, natural areas, water resources and minerals) has been considered in sections 4.4 and 5 (in relation to land use, water and biodiversity impacts);

the orderly development of land, which has been considered in sections 5.2, 5.4 and 5.5 of the Department's assessment in relation to the potential amenity impacts of the project (noise, air quality and visual) on surrounding receptors; and

the protection of the environment including threatened species, which has been considered in section 5.3 of the Department's assessment.

29. In the Director-General's EA Report the Department identified the "following key environmental issues associated with the proposal" (p 21):
    

Surface and groundwater;

Air quality;

Flora and fauna;

Noise and vibration;

Heritage; and

Visual amenity.

30. Section 5.1 contained a detailed analysis of the environmental impacts of the project on the surface and groundwater. The "key risks" identified related to potential risks to groundwater aquifers during gas well drilling for coal seam gas extraction (including potential dewatering of beneficial aquifers, groundwater migration between aquifers and risks to groundwater quality) and the management of water extracted from the wells (including the potential for groundwater and surface water contamination from water storage, surface water discharge or reinjection into the aquifers and disposal of waste produced from the water treatment process) (p 21).
    
31. Other impacts discussed concerned general issues relating to erosion and sedimentation.
    
32. The Director-General's EA Report noted that low connectivity between deep bedrock aquifers and surface bedrock and alluvial aquifers indicated that the shallower surface and alluvial aquifers were not substantially dependent on water levels in the deeper coal seams. Hence dewatering these deeper aquifers was unlikely to affect water volumes available for beneficial use closer to the surface within the Gloucester Basin. The Director-General's EA Report noted that groundwater monitoring results from nearby coal mining operations at Duralie and Stratford also supported this conclusion (p 24):
    

In this regard, the Department is satisfied even with consideration of dewatering activities from surrounding mines, the dewatering volumes proposed as part of the project (2 mega-litres a day) are unlikely to affect overall water availability or water security for beneficial use within the Gloucester Basin (including for associated ecosystems), as the dewatering activities associated with the project would be limited to deep rock aquifers.

33. On this basis the Department recommended conditions of approval limiting the maximum water extraction rate for the project to 2ML per day unless otherwise agreed to by NOW.
    
34. Further, because the Department considered that the shallow/alluvial aquifers were likely to remain the primary source of beneficial groundwater used for agriculture, the Director-General's EA Report stated that the Department was satisfied that dewatering of deepwater aquifers by the project would "pose a low risk of affecting water security in the region".
    
35. The Department was also satisfied that:
    
    • (a) dewatering activities were unlikely to pose a significant risk of migration of saline groundwater from targeted seams;
      
    • (b) gas well installation was unlikely to pose significant risks of creating fractures and connectivity between seams;
      
    • (c) the additive component of the fraccing liquid would not pose a material risk to groundwater quality due to the relatively small quantity of fraccing liquid used, its highly diluted nature rendering it non-toxic, its confinement to the deep bedrock aquifer, its ultimate extraction and transportation to storage ponds and the fact that the proponent was not proposing the use of benzene, toluene, ethylbenzene and xylene ("BTEX chemicals") in the fraccing process;
      
    • (d) gas well development was unlikely to pose a significant risk of creating connectivity between strata which would encourage gas migration; and
      
    • (e) through the implementation of measures specifically designed to minimise gas migration to the surface via old coal exploration wells, this risk could be appropriately managed.
      
36. The Director-General's EA Report stated as follows (p 25, emphasis added):
    

In summary based on the Proponent's assessment, the Department is satisfied that gas well development is unlikely to pose a significant risk of gas migration and/ or dewatering or water quality risk to shallow aquifers (and associated groundwater users or groundwater dependent waterways/ species. Notwithstanding, given the large area of proposed extraction, the Department accepts that there is likely to be spatial differences in hydro-geological conditions across the basin, with localised geological conditions having the potential to pose higher risk of gas migration or groundwater impact as a result of increased connectivity/ permeability between deep and shallow aquifers in the case of fault and fracture features. However, the Department considers that prudent well location based on further detailed field monitoring and seismic surveys designed to confirm hydro-geological conditions at a finer scale (as proposed by the Proponent), would enable such risks to be minimised and avoided as far as possible and has therefore, recommended conditions in this regard. The Department specifically required that a minimum of six months of baseline monitoring be undertaken to establish detailed pre-constructions hydro-geological conditions, which would form the basis of gas well location.

To monitor any interactions of the gas production wells with the surrounding hydro-geological environment during the operational phase, the Proponent has committed to establishing and implementing a detailed monitoring network covering both shallow and deep water aquifers as well as surface waters. The Department supports this operational monitoring strategy and has recommended conditions reinforcing these commitments. The Department has also specified that the monitoring locations are determined in consultation with NOW and are representative of registered bores in the area to ensure that any impacts to these users from any extraction activities in the vicinity can be identified early. The Proponent has identified that the information gathered from the monitoring network could be used to continually update the hydro-geological model developed of the area to date as new information becomes available and enable its use as a predictive and verification tool as gas well development progresses. The Department supports this strategy and considers that it should be coupled with a precautionary approach of staged gas well development so as to enable potential impacts from a limited number of well development to be confirmed via monitoring prior to whole scale development of the area, which may lead to cumulative impacts that are more difficult to manage. The Department considers that this approach would also enable any adverse impacts to be quickly identified and acted upon, including amendment of the location of future wells. The Department has consequently recommended conditions of approval in this regard. The Department has also required a contingency strategy to form part of the Proponent's groundwater management strategy, such that adverse impacts attributable to the project can be addressed, including compensation to affected bore users, if applicable.

The Department considers that the above approach provides a prudent and robust framework for the development of the gas wells based on appropriate well location, ongoing information gathering and adaptive management. The Department notes that such a monitoring network and hydro-geological model will also form a strong basis for information gathering in relation to any future development in the concept plan area and has recommended assessment of groundwater issues for any future extraction wells in the concept plan area, on this basis. NOW has indicated that it can support project approval for the Stage 1 Gas Field Development Area (as well as concept plan approval for the broader project) subject to the conditions framework proposed by the Department.

37. In terms of the management of extracted water, the Director-General's EA Report noted the Department's satisfaction that implementation of appropriate remediating measures meant that the storage areas for the extracted untreated water from the wells, including fraccing liquid and concentrated saline wastewater, would neither pose a significant risk of groundwater contamination to shallow aquifers via leaching nor of surface water contamination through flooding during periods of heavy rain (p 25).
    
38. With respect to the disposal of treated waters, the Director-General's EA Report rejected the preferred option of re-use of extracted water as irrigation water on the basis that the Department considered that this option could pose "additional risks of aquifer interference" and "that there has been insufficient assessment of this option to determine with any level of certainty whether this would comprise a safe and feasible option." Thus the Department did not support this use, in the absence of any further assessment, as part of a separate modification application that assessed the risks to groundwater aquifers. Of the remaining water re-use options, the Report noted that the Department was satisfied that there were no significant water quality constraints to preclude the option of surface discharge to waterways or drinking water use.
    
39. Accordingly, with the exception of groundwater re-injection, none of the water quality options identified "should be precluded from an approval". Instead the Department "required the Proponent to further investigate and determine the final suite of disposal options in consultation with relevant agencies (including the Department of Environment, Climate Change and Water, or "DECCW"), prior to the commencement of construction" (p 26). This was intended to provide maximum flexibility in the range of options and opportunities to be explored.
    
40. In summary the Director-General's EA Report noted that (pp 26-27):
    

...the Department is satisfied that the surface and groundwater impacts of the gas extraction component of the project can be managed so as to not result in unacceptable groundwater outcomes. Based on this, the Department is also satisfied there are no significant surface or groundwater constraints to the future development of wells within the broader concept plan area. The Department has incorporated comprehensive further environmental assessment requirements in relation to surface and groundwater impacts as part of the recommended concept plan approval, which the Proponent must address in seeking any further approval for gas wells within the concept plan area.

41. Relevantly, the Director-General's EA Report concluded that the central processing facility and gas delivery station components of the project would not pose "a material risk" to biodiversity as they would be located on an already disturbed site (p 36). Similarly, the gas wells and associated linear infrastructure (for example, gas gathering lines) would pose "a low risk" of impact to existing remnant vegetation as this infrastructure would also be located on disturbed sites (p 37).
    
42. In addition, in relation to the development of future gas wells in the concept plan area, the generally disturbed nature of the area, together with the inherent flexibility of gas well locations, meant that this could be undertaken without posing "a significant risk to biodiversity" and that there were no unacceptable biodiversity constraints for future development within the concept plan area. The Department had, in any event, incorporated comprehensive further assessment requirements in relation to flora and fauna as part of the recommended concept plan approval (p 42).
    
43. Thus it was concluded that "the Department is satisfied based on its assessment that the residual biodiversity impacts of the proposal can be appropriately managed, mitigated or offset and is therefore satisfied that there are no unmanageable biodiversity constraints to the development of the project" (p 42).
    
44. And the "Conclusions and Recommendations" contained in the Director-General's EA Report were to the effect that the Department was satisfied that the proponent had undertaken "an appropriate and conservative level of assessment covering all aspects of the project", that there were "no significant environmental or amenity constraints" to the project, and that the Department was "satisfied that the Proponent has undertaken sufficient assessment of all project elements for which project approval has been sought" (p 55). Thus (p 55):
    

On balance, the Department considers the project to be justified and in the public's interest and should be approved subject to conditions in relation to the concept plan and project components, and the Proponent's Statement of Commitments.

45. It was therefore recommended that the PAC, having considered all the matters in the Director-General's EA Report, approve the concept plan and project application.
    
46. On 21 December 2010, the Department recommended that the Deputy Director-General forward the Director-General's EA Report to the PAC for determination. In the "Background" section, the briefing note stated that (emphasis added):
    

The Proponent originally raised concerns regarding the requirement for staged gas well development to minimise the potential for groundwater impacts, recommended in condition 3.9 of the instrument of project approval. This approach has been recommended by the Department as it is considered consistent with a precautionary approach of monitoring and confirming potential groundwater impacts from a limited number of wells prior to full scale development of the area, which may lead to cumulative impacts that are more difficult to manage.

The PAC Determination Report and Concept Plan Approval

47. On 22 February 2011, following its own consideration of the matter, the PAC issued a report in respect of the project ("the PAC Determination Report").
    
48. The PAC Determination Report identified as among the key issues "surface and groundwater" and "flora and fauna". In particular, the PAC stated that, in making its decision it "considered closely...impacts on groundwater".
    
49. The PAC Determination Report detailed the various site inspections that the PAC had made of the project to view, amongst other things, existing groundwater monitoring bores and storage ponds. It also described a site visit to the AGL's Camden Gas Project, which was undertaken to enable the PAC to gain a further understanding of the extraction processes anticipated for the project, including fraccing and the recovery of fraccing fluids. The PAC, "conscious of both the limited extent of experience with commercial coal seam gas extraction in New South Wales to date" and the likely expansion of this type of extraction in the future in the State, reviewed some of the extensive material from the United States concerning coal seam gas extraction in that country and related environmental issues.
    
50. Turing first to issues concerning "groundwater and surface water", the PAC Determination Report noted that "a key concern in the assessment" was the risk that the extraction process would adversely impact upon these waters. Risk possibilities associated with geological fault zones in the gas field included the release of coal seam waters to surface waters or shallow aquifers, the possible loss of waters from existing surface streams and shallow aquifers, the possible contamination of these waters by substances in coal seam waters and fraccing fluids, and the escape of gas into ground and/or surface waters.
    
51. The PAC Determination Report referred to and quoted extracts from the SRK Report that discussed these risks in the context of a number of geological faults reported in the relevant area. The PAC Determination Report then stated the following (pp 6-7, emphasis added):
    

While these extracts need to be read in the broader context of the above report, they indicate a level of uncertainty at various points in the predictions. Some geological uncertainty is, of course, inevitable in underground gas extraction and mining operations. But, a greater degree of definition of the geology and groundwater modelling in the Environmental Assessment and supporting documents would have given a greater degree of assurance that risks such as those outlined above were negligible. This is especially the case in moving from the Project Approval for Stage 1 to the Concept Plan approval for the whole gas field development area.

The Commission nevertheless accepts the position implicit in the Department's recommendation for approval, that it is possible to develop the gas field by adaptive management, using modern geological, hydrogeological and drilling techniques, with acceptable minimisation of risks. The proponent has proposed, and the Department's conditions of approval require, the progressive development of the preliminary conceptual hydrogeological model supporting the application into a fully operational numerical model. This model will be based on the results of the more extensive drilling and geological testing which will accompany the gas field development. It will be an important tool in adaptive management. Since this development will be a complex task requiring the DG's approval, the Commission has included a requirement in the conditions of approval that the model be peer reviewed to assist the Department and relevant agencies in their assessment of the model, its outputs and its application in adaptive management.

The conditions of approval also require extensive monitoring of groundwaters and surface waters for quantity and quality through the life of the project in order to continually assess any adverse or non-planned environmental impacts. 'Hold Point' conditions are specified in the approval conditions, should any such impacts become apparent, with the 'Hold Points' being established using risk analysis. These are important measures to ensure adaptive management action is initiated early enough to avoid any adverse impacts arising from unanticipated geological faults encountered during development of the gas field.

The Commission also noted conditions requiring water quality criteria to be met in relation to possible surface water discharges. It is not uncommon for existing water quality in rural areas to exceed the nominal relevant water quality criteria specified in the Australian and New Zealand Guidelines for Fresh and Marine Water Quality 2000 (ANZECC 2000 Guidelines) In such a situation site-specified water quality criteria need to be developed in accordance with the ANZECC 2000 Guidelines and this has been incorporated into the final condition of approval.

7.2 Impacts from the Fraccing Process

The hydraulic fracturing ('fraccing') process opens the coal seam to allow depressurisation, desorption and flow of the coal seam gas to the collection wells. A wide variety of materials has been employed to achieve the desired gas production outcomes. The fraccing fluids are designed to meet several engineering criteria. There has been an evolution in the development of this specialised technology, which can be expected to continue into the future. Future tailoring of fraccing fluids to optimise the development of this field can be anticipated. The Commission has added a condition which requires detailed specification of the fraccing fluids to be used, with relevant toxicity and carcinogenicity information, and for the information to be updated annually.

Concern has arisen in other places related to the risk of some chemicals used in fraccing entering groundwaters. Specifically benzene, toluene, ethylbenzene and xylene (BTEX), a component in the diesel fuel sometimes added to fraccing fluids, has drawn attention in this industry. The proponent has not proposed to use BTEX in its fraccing operations. The Commission has added a condition specifically banning the use of fraccing fluids containing BTEX.

52. In considering the concept plan approval, the PAC deemed it prudent to incorporate an additional environmental assessment requirement on future project applications. This would require a demonstration that the nature of the environmental impacts associated with the development of the whole gas field would be consistent with the nature of environmental impacts identified for the current project (p 8).
    
53. The PAC had regard to the project application and the associated documentation provided by the Department, including the Director-General's EA Report. The PAC noted the Department's assessment of key issues raised in the submissions to it.
    
54. The PAC Determination Report indicated that it would approve the concept plan and the major project application subject to the Department's recommended conditions. In so doing, although the PAC was satisfied that the Department's recommended conditions adequately addressed all aspects of environmental impacts for the project, it nevertheless supplemented and strengthened them by making the following amendments:
    

Project Approval Conditions

Project Approval Conditions

Condition #	Amendments to Condition	Reason
Project Approval Conditions
3.7 Groundwater Management	Add new condition: "The Proponent shall ensure that no fraccing fluids containing Benzene, Toluene, Ethylbenzene and Xylene (BTEX) chemicals are used in gas field development".	Although AGL have indicated the use of BTEX is not anticipated, it is considered this commitment needs to be explicitly stated as a condition.
3.9 Groundwater Management	Add new item (d): "d) include an independent peer review by an appropriately experienced and qualified hydrogeolist (who is approved by the Director-General for the purposes of this condition) on the robustness and technical veracity of the model".	To assist the Department and agencies in their decision on the veracity and robustness of the hydrogeological modelling required for the Stage 1 Project.
3.12 Extracted Water Management	Add new item (i) "i) provide for the development of site specific water quality criteria in accordance with Australian and New Zealand Guidelines for Fresh and Marine Water Quality 2000 (ANZECC 2000 Guidelines), as necessary, in consultation with DECCW, for the purposes of conditions b),c), d) and e) above".	The water quality criteria established for the site are likely to involve the development of site-specific criteria in the Gloucester region according to the ANZECC 2000 Guidelines. The Proponent should be responsible for this development in consultation with DECCW.
4.1 Ground Water Monitoring	Amend item (c) as follows: "Identify performance criteria for gas well development, including monitoring criteria to detect early indicators for drawdown impacts to beneficial aquifers or of cumulative drawdown effects and hold points (based on risk assessment) for further development where adverse impacts are identified; Amend item (e) as follows: "include provisions for the monitoring of coal seam dewatering rates and hold points (based on risk assessment) in the case that water volumes are greater than the predicated two mega litres per day (unless managed in accordance with condition 3.12g);"	The "hold points" are critical parts of the adaptive management proposed. They need to be adequately defined based on environmental risk management criteria.
4.1 Ground Water Monitoring	Amend item (g): "g) provide detailed specifications (including information on toxicity and/or carcinogenicity) of fraccing fluids to be used in gas well development, with annual updates;"	Technological changes are anticipated with likely changes in fraccing fluids. The condition will allow for such development while keeping close track of any potential environmental risks.

55. Ultimately, the PAC considered that adequate measures had been included in the amended conditions of approval to ensure that the project "achieved acceptable environmental standards in relation to impacts on surface and ground water...flora and fauna".
    
56. Thus, on the same day, the PAC determined, pursuant to s 75O of the EPAA, to approve the concept plan. The concept plan approval stipulated in detail future environmental assessment requirements for subsequent stages of the project. These included an assessment of the "key issues" in consideration of all components of the project and, importantly, "cumulative impacts from other projects associated with the Concept Plan", namely:
    

a comprehensive groundwater impact assessment;

a comprehensive extracted water management strategy;

a flora and fauna impact assessment;

a heritage impact assessment;

an air quality impact assessment;

a visual impact assessment;

a noise impact assessment;

a construction traffic assessment; and

a gas well decommissioning and rehabilitation strategy.

The Major Project Approval and Conditions

57. In addition, pursuant to s 75J of the EPAA the PAC determined to approve the major project as set out in the terms of that approval insofar as it related to "the Proposal" as defined, namely the Stage 1 area; the central processing facility; the gas transmission pipeline; the Hexham delivery station; and associated ancillary infrastructure.
    
58. Section 1 of the major project approval sets out the terms of the approval and the limits of the approval. Condition 1.6 expressly states, "to avoid any doubt", that the approval does not authorise "b) direct re-injection of groundwater produced during gas well development, back into groundwater aquifers as a water disposal option." Section 2 deals with the project design requirements. In particular, conditions 2.1 and 2.2 are concerned with the minimisation of the risk of groundwater impacts in the location of gas wells (condition 2.1) and the finalisation of the route alignment of the gas transmission pipeline (condition 2.2).
    
59. Conditions 1.1, 1.2, 2.1 and 2.2 state:
    

Administrative Conditions

Terms of Approval

1.1 The Proponent shall carry out the project generally in accordance with the:

a) Major Project Application 08_0154;

b) Gloucester Gas Project Environmental Assessment, dated November 2009 and prepared by AECOM;

c) Gloucester Gas Project Submissions Report, dated May 2010, and prepared by AECOM;

d) Gloucester Basin Stage 1 Gas Field Development Project Preliminary Groundwater Assessment and Initial Conceptual Hydrogeological Model, dated July 2010, and prepared by SRK Consulting;

e) additional information on offset site(s) and pre-construction surveys submitted to the Department by email on 10 August 2010 and 31 August 2010, respectively;

f) draft management plans on acid sulphate soil and the threatened species Grevillea Parviflora sub. Species parviflora, submitted to the Department by email on 12 October 2010;

g) the concept plan approval granted with respect to the Gloucester Gas Project (08_0154); and

h) the conditions of this approval.

1.2 In the event of an inconsistency between:

a) the conditions of this approval and any document listed from condition 1.1a) to 1.1f) inclusive, the conditions of this approval shall prevail to the extent of the inconsistency; and

b) any document listed from condition 1.1a) to 1.1f) inclusive, the most recent document shall prevail to the extent of the inconsistency.

...

2.1 The Proponent shall in consultation with DII and NOW ensure that gas wells within the Stage 1 Gas Field Development Area are located consistent with the locational principles identified in Statement of Commitment 3 (concept area) of the Environmental Assessment, with consideration to flood prone land and with consideration to minimising the risk of groundwater impacts consistent with the requirements of condition 3.10. Prior to the commencement of construction of the Stage 1 Gas Field Development Area, the Proponent shall submit to DII location sheets identifying the final location of wells including associated infrastructure such as gas/water gathering lines and access roads. Where gas development is phased, the Proponent shall submit the above information (with appropriate updates) to DII prior to the commencement of each phase.

Nothing in this condition precludes the Proponent from submitting the above required information as part of the Field Development Plan referred to in Condition 3.10.

2.2 The Proponent shall finalise the route alignment of the gas transmission pipeline within the 100 metre assessment corridor identified in the Environmental Assessment, in consultation with affected landowners, within the aim of maximising the length of route within existing disturbed areas (including existing infrastructure easements) and minimising conflict with private properties and landuse. Where the route is proposed to traverse existing infrastructure easements the Proponent shall ensure that the pipeline route is located in consultation with the owners of existing infrastructure within the easement with the aim of minimising conflict with the ongoing operation and future upgrade/ maintenance requirements of that infrastructure. Prior to the commencement of construction of the gas transmission pipeline, the Proponent shall submit to the Department route alignment sheets identifying the final location of the pipeline.

60. Section 3 concerns the imposition of specific environmental conditions. Conditions 3.1 to 3.13 are concerned with the impact of the project on water. In relation to "Surface Water Quality", conditions 3.1 and 3.2 provide as follows:
    

3.1 Except as may be expressly provided by an Environment Protection Licence for the project, the Proponent shall comply with section 120 of the Protection of the Environment Operations Act 1997 which prohibits the pollution of waters.

3.2 Soil and water management measures consistent with Landcom's Managing Urban Stormwater: Soils and Conservation shall be employed during the construction of the project for erosion and sediment control.

61. In relation to "Groundwater Management" conditions 3.5 to 3.7 state:
    

3.5 The Proponent shall implement all reasonable and feasible measures to ensure that gas wells are constructed, operated and decommissioned to avoid and minimise gas migration risks and adverse impacts to beneficial aquifers including associated groundwater users, surface waters and groundwater dependent ecosystems.

3.6 Unless otherwise agreed to by the Director-General, prior to the commencement of construction of the Stage 1 Gas Field Development Area, the Proponent shall identify and plug with cement any abandoned or old exploration wells located within a 500 metre radius of finalised gas well locations to minimise the risk of gas migration via these wells.

3.7 The Proponent shall ensure that no fraccing fluids containing Benzene, Toluene, Ethylbenzene and Xylene (BTEX) chemicals are used in gas field development.

62. In terms of hydrogeological modelling, the following conditions are imposed:
    

3.8 Prior to the commencement of construction the project, the Proponent shall in consultation with NOW update the conceptual hydrogeological model developed during the assessment stage of the project (referred to in the document listed in condition 1.1d) based on baseline data gathered from (but not necessarily limited to), the pre-construction investigations identified below:

a) seismic surveys of the site to identify geological features of risk;

b) preliminary field sampling of hydraulic conductivity, groundwater levels, groundwater quality and surface water quality based on a packer, pump and slug testing program and surface water sampling; and

c) long-term baseline monitoring (i.e. at least six months) at groundwater and surface water locations determined in consultation with NOW, to ensure representative baseline data on pre-construction conditions (including seasonal variability) in relation to the shallow rock and alluvial beneficial aquifers, deeper coal seam water bearing zones, groundwater users and surface waters.

3.9 The updated conceptual hydrogeological model referred to in condition 3.8 shall be submitted for the Director-General's approval, prior to the commencement of construction and shall include:

updated assessment of the potential for drawdown and displacement of shallow rock and alluvial beneficial aquifers, considering impacts to nearby registered bore users, based on detailed baseline data gathered from condition 3.8 a) to c);

optimal areas for gas well location within the Stage 1 Gas Field Development Area based on minimising the risk of gas migration and of interaction with beneficial aquifers and the outcomes of the updated assessment;

recommendations for phased gas well development including identifying the maximum number of gas wells that would be developed during the first phase of development and associated operational groundwater monitoring strategy consistent with the requirements of condition 4.1; and

include an independent peer review by an appropriately experienced and qualified hydrogeologist (who is approved by the Director-General for the purposes of this condition) on the robustness and technical veracity of the model.

In submitting the updated conceptual hydrogeological model for the Director-General's approval, the Proponent shall provide written evidence of consultation with NOW on the robustness and technical veracity of the model (including well location areas and phasing program) identifying the issues raised by NOW and how these have been addressed by the Proponent.

63. Condition 3.10 imposes a requirement on the proponent to ensure that gas wells within the Stage 1 area are developed in a manner that avoids and minimises adverse impacts to beneficial aquifers consistent with condition 3.5. In consultation with NOW, AGL must develop and submit to the Director-General a Field Development Plan. The condition states:
    

Field Development Plan Implementation during Operation

3.10 Unless otherwise agreed to by the Director-General, the Proponent shall ensure that gas wells within the Stage 1 Gas Field Development Area are developed in a phased manner to avoid and minimise adverse impacts to beneficial aquifers consistent with the requirements of condition 3.5. Prior to the commencement of construction of the Stage 1 Gas Field Development Area, the Proponent shall in consultation with NOW develop and submit to the Director-General a Field Development Plan, which includes a phasing program for the development of gas wells and details of the final location of gas wells and associated infrastructure such as gas/water gathering lines and access roads for at least the first phase of gas well development identified in the Field Development Plan. As gas field development progresses, the Proponent shall in consultation with NOW update the Field Development Plan with phasing and location details of gas wells and associated infrastructure for subsequent phases, and submit the plan to the Director-General prior to the commencement of each phase.

The first phase of gas well development within the Field Development Plan shall be as per the requirements of condition 3.9c). All subsequent phases of gas field development shall be consistent with the outcomes of the groundwater monitoring program and associated numerical hydro-geological model implemented in accordance with conditions 4.1 and 4.2, requirements of condition 3.5, to the satisfaction of the Director-General in consultation with NOW. Subsequent phases shall be undertaken in accordance with any requirements of the Director-General (in consultation with NOW) following its review of groundwater monitoring results in accordance with conditions 4.1 and 4.2.

64. Condition 3.11 sets the maximum rate of groundwater extraction at 2ML per day over a 12 month period in relation to any water licences obtained from NOW.
    
65. Prior to the commencement of the project, AGL is required to develop an Extracted Water Management Strategy in consultation with, amongst others, NOW, DECCW and relevant local councils, dealing with water disposal and re-use options (condition 3.12). Specifically, condition 3.12 c), d), e) and i) provide that AGL will develop an Extracted Water Management Strategy which:
    

c) if discharge to surface waters is proposed - identifies details of all practical measures investigated to prevent, control, abate or mitigate that discharge; details of the receiving environment including water quality and flow conditions; proposed discharge rate and frequency; and details of all practical measures investigated to protect the environment from harm as a result of that discharge including demonstration that any discharge would satisfy the requirements of condition 3.1;

d) if re-use for irrigation is proposed - demonstrates that there is demand for the volumes of water to be generated, details of all practical measures investigated to protect the environment from harm including details of optimal application rates to prevent over-irrigation and associated salinity issues or groundwater contamination, and demonstration that any discharge would satisfy the requirements of condition 3.1;

e) if extracted water is proposed to be made available to the market - demonstrates that suitable buyers of the water have been secured and where the water is proposed to supplement drinking water supplies, demonstration that the water quality is suitable for drinking water supplies;

...

i) provides for the development of site specific water quality criteria in accordance with the Australian and New Zealand Guidelines for Fresh and Marine Water Quality 2000 (ANZECC 2000 Guidelines), as necessary, in consultation with DECCW, for the purposes of conditions b), c), d) and e) above.

66. Specific conditions concerning heritage impacts (conditions 3.35 to 3.39) and waste generation and management are imposed, including conditions for generated liquid waste (conditions 3.51 to 3.53). AGL is also required to ensure that all gas wells are decommissioned and rehabilitated at the cessation of operation (condition 3.56).
    
67. Section 4 imposes conditions with respect to environmental monitoring and auditing. In relation to groundwater monitoring, conditions 4.1 and 4.2 state:
    

4.1 Prior to the commencement of construction of the Project, the Proponent shall develop a Groundwater Monitoring Program in consultation with NOW and to the satisfaction of the Director-General, covering the operation of the Stage 1 Gas Field Development Area. The program shall detail the monitoring strategy that would be implemented to measure dewatering and water quality impacts of gas well development on beneficial aquifers (including associated groundwater users, surface waters and groundwater dependent ecosystems) during the implementation of the Field Development Plan for the Stage 1 Gas Field Development Area and measure any residual impacts following the decommissioning of wells. The program shall:

a) identify surface and groundwater monitoring locations demonstrating their appropriateness for obtaining representative water quality and water level data on operational impacts in relation to beneficial aquifers, groundwater users and surface waters. In the first instance the monitoring locations shall focus on the first phase of gas well development in the Field Development Plan, as identified under condition 3.10 and shall be updated as well development progresses;

provide details of the monitoring points (including location, depth of monitoring, duration and frequency of monitoring and parameters to be monitored);

identify performance criteria for gas well development, including monitoring criteria to detect early indicators of drawdown impacts to beneficial aquifers or of cumulative drawdown effects and hold points (based on risk assessment) for further development where adverse impacts are identified;

identify the frequency of on monitoring results including at a minimum prior to the commencement of each phase of the Field Development Plan (subsequent to the first phase) in accordance with the requirements of condition 3.10;

include provisions for the monitoring of coal seam dewatering rates and hold points (based on risk assessment) in the case that water volumes are greater than the predicted two mega litres per day (unless managed in accordance with condition 3.12g);

include provisions for monitoring the potential for gas migration to the surface;

provide detailed specifications (including information on toxicity and/or carcinogenicity) of fraccing fluids to be used in gas well development, with annual updates;

include provisions for ongoing monitoring, post decommissioning of wells to determine any residual impacts;

identify a procedure for contingency or remedial action where adverse impacts are identified including compensation to groundwater users and/or rehabilitation measures where affects to groundwater dependent ecosystems/communities are attributed to the project; and

identify mechanisms for the regular review and update of the program in consultation with NOW as required.

In submitting the program for the Director-General's approval, the Proponent shall provide written evidence of consultation with NOW on the robustness and acceptability of the monitoring program, including issues raised by NOW and how these have been addressed.

The monitoring program shall be updated in consultation with NOW to the satisfaction of the Director-General, prior to the commencement of each phase of the Field Development Plan, taking into account the recommendations of the Numerical Hydrogeological Model developed in accordance with condition 4.2.

4.2 The Proponent shall in consultation with NOW develop a Numerical Hydrogeological Model of the Stage 1 Gas Field Development Area building on the detailed conceptual hydrogeological model developed in accordance with conditions 3.8 and 3.9 and based on the monitoring results from the operation of the project, obtained in accordance with condition 4.1. The Model shall be used as a predictive, adaptive management and verification tool to guide the ongoing operation and implementation of gas wells as part of the Field Development Plan including feeding into recommendations on the phasing of gas wells in accordance with condition 3.10 (this includes identifying any impacts of the project from the previous phase of gas well development and the mitigation and contingency measure employed to control any impacts including their effectiveness and the recommended number and location of gas well to be developed in the next phase). The Model shall also feed into recommendations on updates to the Groundwater Monitoring program in accordance condition 4.1.

68. Section 5 expressly deals with compliance monitoring and tracking.
    
69. Section 7 stipulates the requirement to prepare and implement a Construction Environmental Management Plan, which includes a Flora and Fauna Management Plan and a Soil and Water Management Plan detailing pre-construction investigations, base-line water quality monitoring and a downstream water quality monitoring strategy to monitor down stream impacts to water quality during construction (condition 7.3).
    
70. Condition 7.4 states that the proponent must prepare and implement an Operation Environmental Management Plan that includes an environmental risk analysis to identify key environmental performance issues associated with the operation phase of the project. Issues to be addressed in the Plan include measures to monitor and manage groundwater impacts and flood risks and risks of equipment damage or disconnection during flood events (condition 7.4 e)(i) and (ii)). This Plan must be submitted to the Director-General for approval one month prior to the commencement of the operation of the project. If no approval is received, operation cannot commence:
    

Operation Environmental Management Plan

7.4 The Proponent shall prepare and implement an Operation Environmental Management Plan to detail an environmental management framework, practices and procedures to be followed during operation of the project. The Plan shall be consistent with Guideline for the Preparation of Environmental Management Plans (DIPNR 2004) and shall include, but not necessarily be limited to:

a) a description of key operational and maintenance activities associated with the project;

b) identification of all statutory and other obligations that the Proponent is required to fulfill in relation to operation of the project, including any approvals, licenses, approvals and consultations;

c) a description of the roles and responsibilities for all relevant employees and contractors involved in the operation of the project including relevant training and induction provisions for ensuring that all employees, contractors and sub-contractors are aware of their environmental and compliance obligations under these conditions of approval;

d) overall environmental policies and principles to be applied to the operation of the project;

e) an environmental risk analysis to identify the key environmental performance issues associated with the operation phase and details of how environmental performance would be monitored and managed to meet acceptable outcomes including what actions will be taken to address identified potential adverse environmental impacts. In particular, the following environmental performance issues shall be addressed in the Plan:

(i) measures to monitor and manage groundwater impacts including residual impacts following decommissioning of gas wells in accordance with conditions 4.1and 4.2;

(ii) measures to monitor and manage flood risks including risks of equipment damage or disconnection during flood events and measures for clean up and restoration;

(iii) measures to monitor and manage noise emissions including measures for regular performance monitoring of noise generated by the project (in addition to measures identified in conditions 4.3) and 4.4), measures to proactively respond to and deal with noise complaints and procedure for the development of a case-specific noise management protocol in consultation with DECCW to manage short-term noise amenity impacts at surrounding receptors in the case of works identified in condition 3.22b);

(iv) measures to monitor and manage air quality impacts in accordance with the requirements of this approval;

(v) measures to monitor and manage landscape plantings and revegetation measures;

(vi) measures to monitor and manage operational traffic impacts particularly during maintenance events where operational traffic volumes associated with the project may increase and procedures for restoring any damage attributable to the project during the operation phase;

(vii) hazard and safety and emergency management measures including measures to control bushfires; and

(viii) rehabilitation and completion criteria for the decommissioning and rehabilitation of the project; and

f) procedures for the periodic review and update of the Operation Environmental Management Plan as necessary.

The Operation Environmental Management Plan shall be submitted for the approval of the Director-General no later than one month prior to the commencement of Operation of the

project or within such period as otherwise agreed by the Director-General. Operation shall not commence until written approval has been received from the Director-General. Uncertainty and Lack of Finality

Grounds 1 and 2: the Major Project Approval Conditions are Invalid due to Uncertainty

71. Given their underlying legal and factual similarities, it is convenient to deal with these two grounds together. Each concern an allegation that the imposition of the conditions attached to the project approval resulted in the PAC impermissibly:
    
    • (a) deferring matters which were essential to the consideration of the major project;
      
    • (b) giving approval to a potentially significantly different development from that which was sought in the project application, with significantly different environmental impacts from those for which approval was sought; and
      
    • (c) delegating its power.
      

Invalidity by Reason of Uncertainty: Applicable Legal Principles

72. The PAC's jurisdiction, as a delegate of the Minister, to approve or disapprove major project applications derives from s 75J of the EPAA. It states:
    

75J Giving of approval by Minister to carry out project

(1) If:

(a) the proponent makes an application for the approval of the Minister under this Part to carry out a project, and

(b) the Director-General has given his or her report on the project to the Minister,

the Minister may approve or disapprove of the carrying out of the project.

(2) The Minister, when deciding whether or not to approve the carrying out of a project, is to consider:

(a) the Director-General's report on the project and the reports, advice and recommendations (and the statement relating to compliance with environmental assessment requirements) contained in the report, and

(b) if the proponent is a public authority-any advice provided by the Minister having portfolio responsibility for the proponent, and

(c) any findings or recommendations of the Planning Assessment Commission following a review in respect of the project.

(3) In deciding whether or not to approve the carrying out of a project, the Minister may (but is not required to) take into account the provisions of any environmental planning instrument that would not (because of section 75R) apply to the project if approved. However, the regulations may preclude approval for the carrying out of a class of project (other than a critical infrastructure project) that such an instrument would otherwise prohibit.

(4) A project may be approved under this Part with such modifications of the project or on such conditions as the Minister may determine.

(5) The conditions of approval for the carrying out of a project may require the proponent to comply with any obligations in a statement of commitments made by the proponent (including by entering into a planning agreement referred to in section 93F).

73. Section 75X(5) of the same Act relevantly provides:
    

The only requirement of this Part that is mandatory in connection with the validity of an approval of a project or of a concept plan for a project is a requirement that an environmental assessment with respect to the project is made publicly available under section 75H (or under that section as applied by section 75N). This subsection does not affect the operation of section 75T in relation to a critical infrastructure project.

74. The Alliance relied upon a suite of cases in support of the proposition that a development consent will fail for uncertainty where it leaves open the possibility of a significantly different decision (Mison v Randwick Municipal Council (1991) 23 NSWLR 734 at 737, Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 at [24] and Mid Western Community Action Group Inc v Mid-Western Regional Council & Stockland Development Pty Limited [2007] NSWLEC 411 at [21]). However, it must be borne in mind that the principles articulated in those cases concern approvals given pursuant to Pt 4 of the EPAA, not Pt 3A, and a separate line of authority has emerged in respect of approvals granted under Pt 3A of that Act (Ulan Coal Mines Ltd v Minister for Planning [2008] NSWLEC 185; (2008) 160 LGERA 20, Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347, Pittwater Council v Minister for Planning [2011] NSWLEC 162; (2011) 184 LGERA 419 and Coffs Harbour City Council v The Minister for Planning and Infrastructure [2012] NSWLEC 4).
    
75. As was noted by Preston J in Ulan, there is no common law principle that an exercise of statutory power must be certain or final in order to be valid (King Gee Clothing Co Pty Ltd v Commonwealth [1945] HCA 23; (1945) 71 CLR 184 at 194-195 cited in Ulan at [49]).
    
76. Rather, a condition will only be invalid because it lacks certainty or finality if it falls outside the class of conditions that the statute impliedly or expressly permits (Ulan at [50] and the authorities cited thereat, Rivers SOS at [133] and Coffs Harbour at [162]). This will involve a question of statutory construction of the provision empowering the imposition of the impugned condition and its application to the circumstances of the particular project (Ulan at [51], Rivers SOS at [133] and Coffs Harbour at [163]).
    
77. Where a condition does fall outside what the statute permits and it is not severable, the purported approval will be no approval at all (Ulan at [50], Rivers SOS at [133] and Coffs Harbour at [162]).
    
78. But merely because there is ambiguity or uncertainty in the meaning of words will not axiomatically lead to invalidity. This is because courts will strive to avoid uncertainty by adopting a construction which gives statutory instruments and decisions practical effect (Ulan at [66] and [72] and Pittwater Council at [64]).
    
79. Specifically with respect to the power to grant approval on conditions pursuant to s 75J of the EPAA, in Ulan Preston J relevantly opined as follows (at [74] and [75], cited with approval in Coffs Harbour at [163]):
    

74 However, the power to grant approval on conditions in s 75J of the Act, neither expressly nor impliedly requires, in order for a condition to be valid, that a condition set the parameters for adjustment of a project to achieve an outcome or an objective specified in the conditions. The power to impose conditions on an approval under Pt 3A of the Act is not confined in the manner specified for conditions of development consent under Pt 4 of the Act (see ss 80 and 80A of the Act). The power to grant approval under s 75J is expressly stated to be able to be exercised, first, "with such modifications of the project" and, secondly, "on such conditions", as the Minister may determine in both cases.

75 Clearly, the power to impose conditions on an approval under Pt 3A is wide. There is no warrant to read that power down by imposing the limitation argued by Ulan that parameters of any adjustment to the Project to meet any outcome or objective specified, must also be specified.

80. In Ulan, a project approval was granted under Pt 3A of the EPAA in relation to a number of open cut coal mines and an underground coal mine. At issue was whether a condition imposed as part of the approval fell outside the power contained in s 75J of the Act. It was contended that a condition relating to water use was uncertain because it required an adjustment to the scale of the mining operations that gave rise to the potential for a significantly different project to that approved. The challenge failed: while the relevant clause did not permit the carrying out of mining operations exceeding or otherwise in breach of the permissible outer parameters of the project, it did allow flexibility in the carrying out of mining operations within those parameters. The failure of the condition under challenge to specify the permissible parameters for adjustments of the scale of mining operations did not cause the condition to be outside the class of conditions that s 75J permits.
    
81. As Preston J observed in Ulan, "questions of degree are always involved in determining whether a condition is sufficiently uncertain so as to be outside power" (at [77]). As his Honour emphasised, particularly in light of the size and scale of the projects approved under Pt 3A (at [78] and [80]):
    

78 Retention of practical flexibility, leaving matters of detail for later determination, and delegation of supervision of some stage or aspect of the development, may all be desirable and be in accordance with the statutory scheme: see Scott v Wollongong City Council (1992) 75 LGRA 112 at 118; Transport Action Group Against Motorways v Roads and Traffic Authority [1999] NSWCA 196; (1999) 46 NSWLR 598 at 629 [117] - 630 [122]; Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 at 292 [55] and Hurstville City Council v Renaldo Plus 3 Pty Limited [2006] NSWCA 248 (8 September 2006) at [89].

...

80 The scale of the projects subject to approval under Part 3A, which are often complex, extensive and multi-stage projects, make the retention of such flexibility appropriate and inevitable, a point also made in relation to other large scale projects under Part 5 of the Act (see Transport Action Group Against Motorways v Roads and Traffic Authority [1999] NSWCA 196; (1999) 46 NSWLR 598 at 630 [124] - 631 [125]) and under Part 4 (see Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 at 292 [54]).

82. Thus, if follows that while the principle of finality of administrative decision making applies in the context of a project approval given pursuant to Pt 3A of the EPAA, the extent of its application will be derived from the statutory and factual framework within which the decision is made and cannot be considered in isolation (Pittwater Council at [60]).
    
83. Ulan was followed by Rivers SOS, in which the applicant sought judicial review of the approval of a long wall coalmine project under Pt 3A of the EPAA. The mine traversed rivers, swamps and a reservoir. Conditions were imposed that prevented the proponent from undertaking certain mining activities without the approval of the Director-General and a series of conditions requiring the preparation of plans to the satisfaction of the Director-General. In particular, condition 6 required the provision of suitable offsets to compensation for the proponent exceeding specified performance measures. It was argued that the conditions lacked finality, were uncertain or involved a purported sub-delegation of the Minister's power to approve the activities constituting the project to the Director-General. The arguments were rejected on the basis that the Minister had approved the entire project, even if subject to conditions requiring that various steps be taken and criteria satisfied before certain activities could commence. Moreover, even though condition 6 did not specify the offsets the Director-General required the proponent to provide, it did not fall outside the power expressly or impliedly permitted under s 75J(4) of the EPAA to impose conditions having regard to the condition, its relationship with other conditions of the approval, its likely operation and the nature and extent of the project.
    
84. As Pain J noted in Pittwater Council (at [69]), both Ulan and Rivers SOS make it clear that, because of the complexity of the projects considered under Pt 3A, the principles in Mison developed in relation to Pt 4 do not apply as rigidly to those projects approved under Pt 3A. I endorse and apply her Honour's remarks to the present proceedings.
    
85. In Pittwater Council, the council alleged that in purporting to grant a project and concept plan approval subject to conditions requiring the preparation of amended plans which would decrease the number of dwellings, the height of the buildings and their positioning, and make other design modifications, the conditions imposed by the PAC were either uncertain because too much discretion was left to the Director-General to approve the modified plans, or amounted to an impermissible delegation to the Director-General of the PAC's function (at [37]). Pain J rejected the submission, holding that the discretion conferred on the Director-General and the proponent by the imposition of the conditions by the PAC was suitably confined (at [76]). The limits on the modifications imposed by the PAC had the effect of limiting the changes in the building envelopes and hence limiting the discretion of the Director-General to approve the modified plans (at [77]). Therefore, there was sufficient certainty in the conditions of approval that the modifications fell within s 75J(4) of the EPAA "taking into account the need to allow flexibility in relation to Pt 3A matters" (at [77]).
    

The Conditions Under Challenge

86. Initially, the Alliance relied on the preliminary hydrogeological model contained in the SRK Report to submit that the level of environmental impact of the project was "unknown". But in circumstances where the model was prepared on the basis of available data from the region, including data from the Stratford Pilot Project, this description is not apt. Moreover, the Department did not rely only on the SRK Report in informing itself on the impact of dewatering on groundwater levels and contamination. As the chronology detailed above plainly demonstrates, the Department and the PAC had regard to a range of sources as to the impacts of Stage 1 of the project on groundwater.
    
87. In respect of groundwater, water use and water disposal, the Alliance argued that the project approval conditions address these issues at such a high level of generality, so indirectly and in such ambivalent terms that they are not within the class of modifications or conditions permitted by s 75J of the EPAA.
    
88. The Alliance further took issue with the conditions relating to the quantity of water, sand, chemicals or other material constituting the hydraulic fracture stimulation fluid to be used and the conditions specifying the chemicals permitted to be used forming the fluid.
    
89. To summarise, the Alliance submitted that:
    
    • (d) the terms of the statutory power contained in s 75J demand that the modifications of the project and the conditions imposed must be those that "the Minister may determine". That is to say, the repository of the power is the Minister, or an authorised delegate such as the PAC, and conditions that expressly, or in substance, pass the responsibility for determining modifications or conditions to another person, such as the Director-General, are outside the power conferred by s 75J;
      
    • (e) it was not permissible for the PAC to leave for the future determination of the Director-General matters that were fundamental to the nature and extent of the approved project. So much of the structure and framework of the project concerning groundwater and water use was left to the future discretionary determination of the Director-General by reason of the scope and operation of the conditions that the conditions fell outside the ambit of s 75J; and
      
    • (f) the project approval delegates to the Director-General a number of significant decisions concerning the modifications and conditions of the approval that a significantly different development than that for which approval was sought could result.
      
90. It is under this rubric that the Alliance specifically impugns conditions 3.5, 3.8, 3.9, 4.1, 4.2 and 7.4 e)(i) as being outside the power contained in s 75J because of the uncertainty and lack of finality flowing from their impact on the receiving groundwaters and/or surface waters.
    
91. The Alliance also challenges conditions 2.1 and 3.9 c) on the basis that the precise location of the gas wells within the envelopes encompassing Stage 1 of the project is not specified and that certain locational principles are so discretionary that they do not constrain the location of the wells, thereby giving rise to additional uncertainty.
    
92. To the extent that contentions were also raised in the Alliance's written submissions in relation to conditions not the subject of challenge in the points of claim or statement of issues for determination (namely, conditions 1.1, 1.2, 3.7 and 3.10) these have been ignored.
    

The Conditions Are Not Invalid For Uncertainty or Lack of Finality

93. The Alliance's contentions suffer, from the outset, from the following general legal hurdles. First, the submission that a different project was approved from that for which approval was sought, must confront the power contained in s 75J(4) of the EPAA that permits the Minister (or in this case the PAC, as his delegate) to approve a project subject to modifications (Pittwater Council at [68]).
    
94. Second, the submission is not easily reconciled with the terms of the project approval itself and suffers from the same legal mischaracterisation as that identified in Rivers SOS (at [30]-[33]), namely, that the PAC determined to "grant project approval pursuant to Section 75J of the Act to the Proposal referred to in Schedule 1, subject to the conditions in Schedule 2" (emphasis added). The term "Proposal" is defined to encompass that for which the project approval was sought, viz:
    

Stage 1 project comprising the pre-construction, construction, commissioning, operation, decommissioning and rehabilitation of the:

Stage Gas Field Development Area - 110 gas wells and associated infrastructure including gas and water gathering lines, within a approximately 50km² section of the overall 2010km² gas field development area, between the townships of Gloucester and just south of Stratford in the Gloucester local Government area;

Central Processing Facility - a facility for the compression and processing of the extracted gas, and associated infrastructure (including extracted and treated water storage ponds, salt evaporation ponds, water treatment plant, options for treated water disposal (excluding groundwater re-injection) and an up to 15 megawatt gas-fired electricity generation facility) at one of two locations in the Gloucester Shire local Government area: site 1 (within the property owned by the Proponent known as the "Tiedeman" property) or site 7 (land currently owned by Gloucester Coal, and adjacent to a rail loop which currently services the Stratford Colliery);

Gas Transmission Pipeline - an approximately 95-100 kilometre length pipeline between the central processing facility and existing gas supply network at Hexham (located within an overall assessment corridor of 100 metres width), traversing the Gloucester Shire, Great Lakes Shire, Dungog Shire, Port Stephens, Maitland City and Newcastle City local Government areas;

Hexham Delivery Station - a gas delivery station at Hexham to deliver the transported gas to the existing Newcastle-Sydney gas supply pipeline, in the Newcastle City local Government area; and

associated ancillary infrastructure such as access roads, temporary construction facilities and construction personnel camps.

95. Put another way, the PAC has approved the carrying out of the whole project (as defined by the "Proposal"), including the constraining conditions in Schedule 2. These conditions do not permit some expanded or different project to be carried out which does not fall within the description of the "Proposal" for which the approval was sought and given.
    
96. Third, the Alliance's arguments proceed from the unstated premise that the PAC was legally required to impose conditions specifying in detail the criteria to be used in respect of Stage 1 of the project, especially insofar as the impacts of the project on groundwaters and surface waters are concerned. But there is no such requirement to do so under Pt 3A of the EPAA. As a matter of law, it was open to the PAC to impose no conditions in respect of these matters. That it chose to impose constraints by way of the conditions detailed in Schedule 2 is, in my opinion, an impediment to concluding that the project approval is invalid by reason of uncertainty or lack of finality.
    
97. It is now convenient to consider the conditions challenged under the first and second grounds of review.
    

Condition 3.5

98. In respect of condition 3.5, the Alliance asserts that it is uncertain for two reasons:
    
    • (a) first, the obligation it purports to impose on AGL is to implement all "reasonable and feasible" measures. In Schedule 2 of the project approval, this compound expression is defined in the glossary as:
      

Consideration of best practice taking into account the benefit of proposed measures and their technological and associated operational application in the NSW and Australian context. Feasible relates to engineering considerations and what is practical to build. Reasonable relates to the application of judgment in arriving at the decision, taking into account: mitigation benefits, cost of mitigation versus benefits provided, community views and nature and extent of potential improvements.

This description, it is submitted, is so wide as to be meaningless because "nobody" can say what it is that this condition requires AGL to implement, if for no other reason than any cost/benefit analysis may vary over time as market conditions change;

(b) second, the measures to be implemented are to ensure that development of the gas wells will "avoid and minimise" gas migration risks and adverse impacts to beneficial aquifers. This expression "creates absurdity" insofar as the two are inconsistent actions, viz, a risk cannot be both minimised and avoided.

99. Condition 3.5, upon which AGL relies in support of its claim that the project approval is invalid, is a continuing requirement to implement "all reasonable and feasible measures" as defined to ensure that gas wells are constructed, operated and decommissioned to avoid and minimise adverse impacts to beneficial aquifers associated with groundwater users, surface waters and groundwater dependent ecosystems.
    
100. In my opinion, when considered both on its own terms and in context with the other conditions of the project approval, condition 3.5 is not so uncertain as to be beyond power.
     
101. First, it cannot be contested that the Gloucester project is complex and extensive. In development such as this it is recognised that the power to impose conditions permits a degree of practical flexibility (Ulan at [78] and [80] and Pittwater Council at [64] and [69]). Given the scope and staged nature of the project, it is entirely appropriate that condition 3.5 adopts general standards of reasonableness and feasibility, incorporating the notion of best practice, as an overall criterion of groundwater management. The concepts of "reasonableness" and "feasibility" are familiar to the law and are readily capable of application, especially given the content ascribed to the composite term by reason of the definition set out in Schedule 2 of the major project approval. The description is not, in my view, so wide as to be meaningless, but rather, reflects the large scale of the project.
     
102. The imposition of criteria of reasonableness or feasibility to be determined by the Director-General was not, for example, in Rivers SOS, subject to criticism or considered to be outside the power contained in s 75J on the basis that the criteria were uncertain (at [128]).
     
103. Second, I do not accept that there is an inherent inconsistency in the simultaneous use of the words "avoid" and "minimise". As a transitive verb, "avoid" means "to prevent, to obviate, to keep off" (Oxford English Dictionary, online edition) or "to keep away from; to keep clear of; shun; evade" (Macquarie Dictionary, online edition). To "minimise" means "to reduce to the smallest possible amount, extent or degree" (Oxford English Dictionary, online edition and Macquarie Dictionary, online edition). In the context of condition 3.5 both actions have the goal of, in effect, reducing to zero the gas migration risks and adverse impacts to the waters affected by the project. Far from being incompatible, the two actions are, properly construed, synonymous in describing the ultimate aim informing the measures that AGL must implement pursuant to this condition. Such a construction "is consistent with the admonition that courts should adopt a construction which gives statutory instruments and decisions practical effect by avoiding uncertainty" (Ulan at [72]).
     
104. Third, when considered in light of the other conditions of the project approval, the textual uncertainty, if any, in the language of condition 3.5 becomes even further muted. An examination of the surrounding project approval conditions makes it plain that the practical flexibility inherent in the condition is nevertheless constrained by the numerous obligations imposed upon AGL by those conditions. For example:
     
     • (a) from the outset, condition 1.1 requires AGL to carry out Stage 1 of the project generally in accordance with a number of prescribed documents including, for example, the major project application, the EA, the Submissions Report, the SRK Report and the correspondence passing between AGL and the Department in August 2011 concerning the staged program for development of a groundwater model and ongoing monitoring;
       
     • (b) condition 2.1 insists that AGL consult with NOW and the NSW Department of Industry and Investment ("DII") to ensure that gas wells within Stage 1 are located consistent with the locational principles identified in commitment 3 of the Statement of Commitments - Concept Area, contained in the EA, with consideration given to minimising the risk of groundwater impacts consistent with the requirements of condition 3.10. AGL must, prior to the commencement of the construction of Stage 1, submit to DII location sheets identifying the final location of the wells and associated infrastructure. Commitment 3 in the Statement of Commitments - Concept Area of the EA states that the location of the wells within the concept area is to be selected generally in line with specified criteria, including (see further below the discussion in relation to conditions 2.1 and 3.9 c) concerning gas well location):
       

Minimum of 40m from a major watercourse or 20m from a minor watercourse;

Avoidance of vegetation and riparian areas wherever possible.

(c) in addition, condition 3.10 - which is not the subject of challenge by the Alliance - states that, unless otherwise agreed to by the Director-General, AGL shall ensure that gas wells within Stage 1 are developed in a phased manner to avoid and minimise adverse impacts to beneficial aquifers consistent with the requirements of condition 3.5 and that, prior to the commencement of the construction of Stage 1, AGL must develop and submit, in consultation with NOW, a Field Development Plan, which is to include details of the final location of gas wells and associated infrastructure. The first phase of the gas well development is to be in accordance with condition 3.9 c) (an updated conceptual hydrogeological model including recommendations for phased gas well development, identification of the maximum number of gas wells to be developed during the first phase and an associated Operational Groundwater Monitoring Strategy) and all subsequent phases of gas field development are to be consistent with the outcomes of the Groundwater Monitoring Program and hydrogeological model implemented in accordance with conditions 4.1 (dealing with the development of a Groundwater Monitoring Program) and 4.2 (dealing with the development of a Numerical Hydrogeological Model to, amongst other things, build on the conceptual hyrogeological model developed in accordance with conditions 3.8 and 3.9 and to guide the ongoing operation and implementation of gas wells);

(d) except as otherwise provided by an environmental protection licence for the project, condition 3.1 requires AGL to comply with s 120 of the Protection of the Environment Operations Act 1997 ("the POEOA"), which prohibits water pollution;

(e) in addition to the other conditions expressly dealing with groundwater management (conditions 3.6 and 3.7), there are conditions concerning the updating of the conceptual hydrogeological model developed during the assessment stage of the project prior to the commencement of the construction phase of the project (conditions 3.8 and 3.9). The rate of groundwater extraction has been fixed at no greater than 2ML per day (condition 3.11). Again, prior to construction AGL must develop an Extracted Water Management Strategy dealing in detail with water disposal and re-use pursuant to condition 3.12 (including the development of site-specific water quality criteria in accordance with the Australian and New Zealand Guidelines for Fresh and Marine Water Quality 2000, or the "ANZECC 2000 Guidelines") and storage (in condition 3.13). The management of hazards and risks is provided for in conditions 3.46 to 3.56, including a condition requiring the design, operation and technical controls for the wellheads to be consistent with the Departmental guideline Development in the Vicinity of Coal Seam Methane Wells (condition 3.46), a condition relating to the decommissioning of gas wells (condition 3.56), compliance tracking (condition 3.51), and the disposal of water or salt waste (conditions 3.51 to 3.53);

(f) AGL must develop a Groundwater Monitoring Program covering the operation of Stage 1 prior to construction (condition 4.1). The Program is to, amongst other things, identify and provide groundwater monitoring points, identify performance criteria for gas well development, include provision for de-watering rates and hold points, provide detailed specifications of fraccing fluids and identify a procedure for contingency or remedial action where adverse impacts are identified. Complimentary to the Groundwater Monitoring Program, AGL is to develop a Numerical Hydrogeological Model to be used as a predictive, management and verification tool to guide the ongoing operation and implementation of gas wells (condition 4.2); and

(g) a Compliance Tracking Program is to be developed and implemented to track compliance with the approval (condition 5.1) and a detailed Construction Environmental Management Plan must be prepared and implemented prior to the construction phase of the project, incorporating a Flora and Fauna Management Plan, a Watercourse Crossing Management Strategy and a Soil and Water Management Plan (conditions 7.2 and 7.3). A similarly detailed Operation Environmental Management Plan, detailing the practices and procedures to be followed during the operation of the project consistent with the Guideline for the Preparation of Environment Management Plans (DIPNR 2004), is to be prepared and implemented by AGL one month prior to the commencement of the operation stage of the project (condition 7.4). The Plan must include an environmental risk analysis to identify the key environmental performance issues including groundwater impacts and flood risks.

105. As the above survey demonstrates, and contrary to the Alliance's submissions, there is sufficient specification of the parameters within which the project is to be constructed and operate that legal uncertainty is not established either at a textual or contextual level. Leaving latitude in relation to the means by which the objective of ensuring that all reasonable and feasible measures are implemented to avoid and minimise any harm to beneficial aquifers, groundwater and surface water users and dependent ecosystems is to be met, is within the power under s 75J to grant the approval subject to modifications and conditions and is not outside the statutory scheme of Pt 3A. The adjustments to the project that might be made by AGL pursuant to condition 3.5, as informed and circumscribed by the other conditions in the project approval, will not, in my opinion, cause the project to impermissibly depart from that which was established by the approval.
     

Conditions 3.8, 3.9, 4.1, 4.2 and 7.4 e)(i) - Groundwater Monitoring and Management

106. As summarised above, conditions 3.8 and 3.9 require AGL to prepare an updated conceptual hydrogeological model. The conditions stipulate the tests and investigations that must be undertaken in developing that model (condition 3.8) and the matters that must be included in the model (condition 3.9). If the Director-General approves the model in condition 3.8, development of the first phase of the project must be in accordance with that determination insofar as any identification of the maximum number of gas wells that would be developed consistent with the requirements of condition 4.1, and development of subsequent phases, is contingent upon consistency with the outcomes of the Groundwater Monitoring Program with which conditions 4.1 and 4.2 are concerned, and is subject to such further requirements as the Director-General, in consultation with NOW, may impose upon review of the results of the Groundwater Monitoring Program.
     
107. Condition 4.2 requires the development of a Numerical Hydrogeological Model that builds upon the conceptual hydrogeological model and the data obtained from the Groundwater Monitoring Program. Its specifications are stipulated.
     
108. The Alliance's challenge to these conditions, and condition 7.4 e)(i), appears to be based upon claims of uncertainty as to environmental impacts and impermissible delegation.
     
109. In respect of conditions 3.8 and 3.9, because these require the future update of a conceptual hydrogeological model and its provision to the Director-General for approval, the conditions do not, the Alliance contends, in fact impose an obligation upon AGL to operate the gas wells to a specified standard in relation to their impact upon groundwater.
     
110. Although condition 4.1 appears to set a framework for the Director-General to assess the impacts of the project against those established in the Groundwater Monitoring Program, the condition does not, according to the Alliance, confine or regulate the impacts of the project on groundwater because the PAC has not actually determined the qualitative or quantitative level of acceptable environmental impacts. For example, provisions for the monitoring of coal seam dewatering rates and hold points based on risk assessments in the case that water volumes are greater than the predicted 2ML per day were left for determination at a future date. In addition, the Alliance submits that the condition suffers from the vice that it leaves the approval of the Groundwater Monitoring Program to the absolute discretion of the Director-General.
     
111. The Numerical Hydrogeological Model referred to in condition 4.2 is challenged on the basis that, in truth, it is no model at all, but merely a guide to the operation of the project and it imposes no substantive obligations on AGL. The model is not required to be produced by any particular time and it is not subject to a requirement that the Director-General formally approve it.
     
112. Likewise, the Alliance claims that the Operation Environmental Management Plan provided for in condition 7.4 affords the Director-General a wide discretion to require its provision before the commencement of the operation of the project and, to the extent that the Plan purports to impose concrete obligations, these are inchoate and are at the discretion of the Director-General.
     
113. As the respondents submit, these matters must be seen in the context of the email dated 31 August 2010 from AGL to NOW, which outlined the staged investigation approach that AGL proposed for the project, dealing with the monitoring of surface water and groundwater works. That email proposed:
     

Phase 1: Desktop study (completed) - review of existing data, compilation of an initial conceptual hydrogeological model and recommendations regarding future phases.

Phase 2a: Detailed groundwater investigation (to commence October 2010) - geological re-appraisal (based on seismic and geological structure); drill site selection on access (multiple locations); develop monitoring plan (and agency liaison); apply for monitoring bore licences and water licences for new gas production wells; drilling, testing and piezometer installation programs (packer testing, pumping test and slug testing programs); hydrochemistry and isotope sampling (most surface water and all groundwater sites); assess connectivity of aquifers; complete data analysis and reporting; and establishment of an appropriate monitoring network.

Phase 2b: Baseline monitoring network (to commence late 2010 after Stage 2a) - datalogger installation in primary monitoring locations to assess surface water variability and seasonal variability of groundwater units (water level changes in the upper aquifers and deeper coal seam water bearing zones), download quarterly and compile after 6 months in advance of numerical modelling.

Phase 3: Numerical modelling (commencing mid 2011) - update of the conceptual hydrolgeological model and construction of numerical model(s) (as required) to describe initial steady state impacts and then predict groundwater impacts for various staged development scenarios.

Phase 4: Monitoring program (ongoing) - review of monitoring plan, maintain (and expand if required) long-term monitoring network, and associated compliance reporting.

Phase 5: Project updates (as required) - further investigations, periodic review/update of the montoring network and numerical models(s) (as required).

114. This staged approach is given effect to by condition 1.1 e).
     
115. The measures required to monitor and manage groundwater impacts and residual impacts following decommissioning of gas wells stipulated in condition 7.4 e)(i) form part of the Operation Environmental Management Plan mandated generally by condition 7.4 and in respect of which, approval by the Director-General must be given prior to the operation of the project commencing. The matters specified in condition 7.4 e)(i) form part of an environmental risk analysis (7.4 e)) to identify, monitor and manage environmental performance throughout the operation of the project.
     
116. In my opinion, none of the impugned conditions have the consequence contended for by the Alliance. First, read together the conditions provide a regime to manage and monitor the phased development and operation of the gas wells within the outer limits of the project as approved and assessed. The conditions operate over the life of the project to identify and rectify potential environmental impacts. As conditions concerning monitoring, implementation and management, they appropriately and permissibly leave the approval of such matters to the Director-General (Ulan at [78]).
     
117. Second, the conditions variously require the preparation of plans, reports, and investigations, each of which state to a sufficiently high level of specificity, in light of the complexity and enormity of the project, the matters that must be addressed and the information to be provided. There is nothing impermissible in the conditions specifying that the contents of the reports and plans must be to the satisfaction or approval of the Director-General. The conditions are not, in this regard, dissimilar to those in question in Ulan (see, for example, at [40]) or Rivers SOS (see, for example, at [114] and [125]) in respect of which similar arguments to those raised in this case were rejected by the Court.
     
118. Third, to reiterate, approval has been given by the Minister for the entire project, the outer limits of which, as is discussed below in further detail, are clear. To impose conditions that require the satisfaction of the Director-General as to particular matters before the project can commence is not beyond the power contained in s 75J of the EPAA.
     
119. Fourth, again, the conditions cannot be considered in isolation but must be examined in the context of the other approval conditions and background documents expressly incorporated into the conditions (see condition 1.1) such as the EA (which identifies further matters to be included in the Groundwater Monitoring Program) and the Submissions Report. Other conditions imposing requirements on potential groundwater risks include conditions 3.1, 3.6, 3.7, 3.10, 3.11, 3.13, 3.46-3.49, 5.1 and 7.1-7.4. These conditions strongly militate against the suggestion that the conditions concerning the monitoring and management of the impacts of the project on groundwater were legally uncertain or were unacceptably delegated to the Director-General.
     
120. Fifth, it must be recalled that the major project approval is not the only document governing the carrying out of the project (again see condition 1.1). Constraints are also imposed by other documents such as the Submissions Report and the EA. Further limitations are imposed through the need to obtain bore licences, water licences and environmental protection licences. Breach of the legislation pursuant to which the latter two licences are issued can result in criminal sanctions being imposed on AGL (by, for example, s 120 of the POEOA: see condition 3.1).
     
121. Sixth, underlying the Alliance's submission, at least in part, is the assumption that detailed objective numerical criteria must be specified in the conditions to ensure their validity. A similar argument, albeit within the statutory and factual framework relevant to that case, failed in Ulan (at [73]-[76]). As Preston J remarked, which is apposite here (at [74]-[75]):
     

74 However, the power to grant approval on conditions in s 75J of the Act, neither expressly nor impliedly requires, in order for a condition to be valid, that a condition set the parameters for adjustment of a project to achieve an outcome or an objective specified in the conditions. The power to impose conditions on an approval under Part 3A of the Act is not confined in the manner specified for conditions of development consent under Part 4 of the Act (see sections 80 and 80A of the Act). The power to grant approval under s 75J is expressly stated to be able to be exercised, first, "with such modifications of the project" and, secondly, "on such conditions", as the Minister may determine in both cases.

75 Clearly, the power to impose conditions on an approval under Part 3A is wide. There is no warrant to read that power down by imposing the limitation argued by Ulan that parameters of any adjustment to the Project to meet any outcome or objective specified, must also be specified.

122. To the extent that particular complaint was made about condition 4.1 g) requiring detailed specifications "(including information on toxicity and/or carcinogenicity)" of fraccing fluids to be used, again, this condition must be read in light of the other provisions within condition 4.1 (which provides that AGL must develop a detailed Groundwater Monitoring Program in consultation with NOW) and the other conditions of the project approval, including condition 3.7, which states that AGL shall ensure that no fraccing fluids containing BTEX chemicals are to be used in gas field development, and condition 1.1 c), which requires AGL to carry out the project generally in accordance with the Submissions Report, which also discusses the typical constitution of fraccing fluid and the additives that may be used in it. The conditions therefore operate to specifically prohibit the use of fraccing fluids considered to be harmful while permitting other fraccing fluids to be used upon consultation with NOW and with the approval of the Director-General. The condition is not impermissibly uncertain in its operation and does not provide for a different development to that in respect of which approval was sought.
     
123. The Alliance sought to distinguish the present case from Ulan. But despite the factual differences between that case and these proceedings, the reasoning is, in my opinion, nevertheless applicable in the following respects:
     
     • (a) in determining to grant project approval the PAC gave detailed consideration to issues pertaining to groundwater; and
       
     • (b) the conditions of the project approval expressly impose detailed criteria for the extraction and protection of groundwater (for example, conditions 3.1, 3.5, 3.7-3.11, 3.13 and 4.2).
       
124. Thus the conditions of the project approval concerning groundwater do not, properly analysed, delegate or defer the approval of Stage 1 of the project to the Director-General, rather they ensure practical flexibility, leaving matters of detail for later determination together with the delegation of supervisory aspects of the development, all of which are within the ambit of the statutory scheme contained in s 75J of the EPAA. Contrary to the Alliance's submission, the fact that the Director-General has oversight of the collation and review of baseline monitoring and data collection does not, in my opinion, delegate any function of approval to him (Rivers SOS at [39]-[46]), but is consistent with the PAC having approved Stage 1 of the project subject to the satisfactory completion of various conditions attaching to the approval, including conditions as to groundwater.
     

Conditions 2.1 and 3.9 c) - Gas Well Location

125. The Alliance submits that the final location of the gas wells is uncertain insofar as there is an element of discretion involved in applying the environmental envelope approach and locational principles. The Alliance argues that a prescription permitting a particular number of gas wells within an environmental envelope means that the final location of the gas wells is, from the outset, unknown.
     
126. The project approval allows for up to 110 gas wells in Stage 1 within a 50km² area. Within that area an environmental envelope approach is adopted that involves establishing 600 x 600m square grids or envelopes. Mapping and analysis is undertaken to determine indicative well site locations. Up to four wells may be located at each well site location within an individual grid square. Locational principles have been adopted in the Statement of Commitments for the concept area in the EA, which are as follows:
     

2. The location of wells and associated infrastructure forming part of the Concept Plan would be developed in consideration of relevant environmental constraints and would be subject to consultation with landowners with a view to minimising the potential impacts.

3. The location of wells within the Concept Area would be selected generally in line with the following:

· Not within 200 m of existing residences unless otherwise agreed;

· Minimum of 40 m from a major watercourse or 20 m from a minor watercourse;

· Avoidance of vegetation and riparian areas wherever possible;

· Avoidance of Indigenous and European heritage places or items;

· Adjacent to existing fence lines and access tracks wherever practicable;

· Avoidance of existing infrastructure;

· On relatively flat ground, where possible;

· In consideration of visual effects and opportunistic use of natural screening such as vegetation; and

· In consultation with landowners.

4. The location of gas and water gathering lines and access roads within the Concept Area would be selected generally in line with the following:

· In existing disturbed areas wherever possible;

· Avoidance of vegetation and riparian areas wherever possible;

· Avoidance of Indigenous and European heritage places or items;

· Avoidance of existing infrastructure;

· Utilising existing fence lines and access tracks wherever practicable;

· On relatively flat ground where possible;

· In consideration of land use and landowner preferences.

127. And for the project area, the locational principles provide that:
     

4. The Proponent will ensure that the location of compound sites and other ancillary facilities are selected generally in line with the following :

· In existing disturbed areas wherever possible;

· Avoiding vegetation and riparian areas where possible;

· Minimum of 40 m from a major watercourse and 20 m from a minor watercourse;

· Avoiding Indigenous and European heritage places or items

· Utilising existing access tracks where practicable;

· Avoiding impacts on existing infrastructure

· On relatively flat ground where possible;

· Considering visual effects and opportunistic use of natural screening such as vegetation;

· In consultation with landowners.

128. Condition 2.1 requires that AGL, in consultation with DII and NOW, ensure that gas wells within Stage 1 are to be located in conformity with these principles. Additional consideration must be given to flood prone land and to minimising the risk of groundwater impacts consistent with the requirements contained in condition 3.10. Moreover, AGL must submit to DII location sheets identifying the final location of the wells including associated infrastructure. It must be recalled that condition 3.10 is not the subject of challenge by the Alliance.
     
129. The installation of gas wells is to take place under a phased program that includes identifying the maximum number of gas wells developed during the first phase pursuant to the updated conceptual hydrogeological model approved by the Director-General (conditions 3.8 and 3.9). Once the first phase of the project is underway data is to be collected under the Groundwater Monitoring Program (condition 4.1) for input into the Numerical Hydogeological Model (condition 4.2). These empirical tools are in turn to be utilised to determine all future phases of the project under the Field Development Plan (condition 3.10). The conceptual hydrogeological model, the Groundwater Monitoring Program and the Numerical Hydogeological Model must be prepared in consultation with relevant State departments and submitted for the approval of the Director-General. Without it, construction cannot commence.
     
130. Within this framework, it is plain that conditions 2.1 and 3.9 c) are not beyond the scope of the power to impose conditions provided in s 75J(4) of the EPAA. This is because, first, the outer limits of the gas well locations are clear. A maximum of 110 gas wells are permitted within 50km² for Stage 1. Moreover, one well location is permitted within each 600 x 600m envelope and up to four gas wells are permitted at each location.
     
131. Second, the locational principles are likewise not uncertain. For example, the principle that a well is not to be located within 200m of a residence, is tolerably clear. Others are expressed more generally but nevertheless with sufficient precision that they are within the acceptable limits of the power contained in s 75J(4) (such as the avoidance of Indigenous heritage items or places).
     
132. Third, when the methodology adopted by the project approval concerning gas well location is considered as a whole, it is revealed that the staged process of gas well development rests on approval being given by the Director-General, and constraints are imposed by reference to various criteria and information contained in documents such as the EA, the Submissions Report, the Field Development Plan (condition 3.10) and the Groundwater Monitoring Program (condition 4.1). For instance, the design, operation and technical controls for the well heads must be consistent with the requirements of the Department's guideline Development in the Vicinity of Operating Coal Seam Methane Wells (condition 3.46) and the Director-General can withhold his approval in respect of the conceptual hydrogeological model (conditions 3.8 and 3.9) or the Field Development Plan, thereby preventing construction.
     
133. Given that the outer limits of the project are clearly set out, I also do not accept the Alliance's position that there was a sub-delegation of power to the Director-General contrary to s 75J in respect of the project approval. The flexibility and discretion provided for in the location of the gas wells is permissible when it is recalled that the Minister's approval (as delegated to the PAC) has been given to the whole project, albeit subject to conditions that require satisfaction of the Director-General in order to implement the approval (Rivers SOS at [30]-[33]).
     
134. For similar reasons I find that there is no potential, as alleged, for a fundamentally different project to result from that for which approval was sought and given. In this regard, the conditions do no more than impose further limitations on the implementation of the project as approved.
     

Condition 3.12: Uncertainty in Relation to Water Re-use and Disposal

135. Ground two is concerned with condition 3.12 of the project approval dealing with extracted water management. The Alliance argues that a failure to identify the water quality standards with respect to the re-use and disposal of water could alter the development in a fundamental respect and that the impact on the environment of the project may, therefore, be significantly different than that which was approved.
     
136. Adopting, at least in part, the reasoning above in relation to ground one, I have concluded that this ground of review must also be rejected.
     
137. First, any purported failure to identify a specific standard with respect to water quality will not necessarily lead to invalidity. As the respondents submitted in response, there is no warrant to read down the power contained in s 75J to impose only conditions that expressly specify the precise parameters to be met in the implementation of the approval (Ulan at [74]-[76]).
     
138. Second, it should be recalled that condition 1.1 requires the project to be carried out generally in accordance with the documents identified in that condition, which include the EA and the Submissions Report. Each of these documents describes in detail how the re-use and disposal of water is to be dealt with. The management of this water is, therefore, not left at large but must be handled in a manner consistent with those documents. Once condition 3.12 is read in context with the other conditions of the major project approval, such as 3.5 to 3.13 and 4.1 to 4.2, it is tolerably clear that the re-use and disposal of resultant water is provided for in a clearly identified manner.
     
139. Third, the outer limits of the condition are established. Aquifer reinjection is not permitted (condition 1.6 b), although it was initially sought by AGL), but discharge to surface water, re-use by way of irrigation and the sale of the water to the market are (condition 3.12 c), d) and e)).
     
140. Fourth, the condition requires that particular information be provided by AGL in respect of each of the three methods of re-use and disposal of water and AGL must demonstrate, after consultation with DII and NOW and to the satisfaction of the Director-General, that discharge and re-use for irrigation will satisfy condition 3.1 (compliance with s 120 of the POEOA) and that the water quality of any water sold to the market is suitable for drinking water supplies (see condition 3.12 c), d) and e) respectively). Additional information that must be provided is stipulated in the Extracted Water Management Strategy, which mandates measures that AGL must implement and information that must be provided, also in consultation with NOW and DII and to the satisfaction of the Director-General (condition 3.12 b), f), g), h) and i)).
     
141. For example, the Extracted Water Management Strategy must identify a contingency strategy for the management of extracted water if the volumetric rate of groundwater extraction is greater than 2ML per day (condition 3.12 g), referring to condition 3.11). And condition 3.12 i) provides that the Extracted Water Management Strategy must develop site-specific water quality criteria in accordance with the ANZECC 2000 Guidelines. Within these Guidelines, which are based on, amongst other things, ecologically sustainable development, there are standards for re-use for irrigation, discharge to surface water and use of the water for human consumption. The PAC expressly noted the Guidelines in relation to the conditions requiring water quality criteria to be met in relation to surface discharge. On any reasonable view, therefore, the condition itself makes plain the criteria to be maintained in respect of extracted water management as part of the project approval.
     
142. Fifth, other conditions dealing with the management of produced and extracted water impose constraints on the use to which this water can be put (see conditions 1.6 b), 1.7, 3.1, 3.2, 3.11, 3.13, 3.53, 5.1, 7.2, 7.3 a) and c) and 7.4).
     
143. Sixth, other statutory and regulatory obligations, including licensing requirements, also regulate produced and extracted water (see conditions 1.7 and 3.1). By reference to the Submissions Report (condition 1.1), the project approval accepts that an environmental licence will be required in relation to the use of any extracted water for irrigation or discharge and that the final discharge point will have to be specified in the licence (condition 1.1 c) incorporates that Report into the project approval).
     
144. The fact that the conditions leave it open for AGL to determine which of the range of water use options it will ultimately adopt does not give rise to a significantly different development from that which the PAC approved. Each of the options contained within condition 3.12 is canvassed in sufficient detail that no impermissible uncertainty arises. In circumstances where the PAC was of the opinion that the water would be treated in a manner that would produce water of high quality, it was open to the PAC, as the Minister's delegate, to approve the treatment and re-use of extracted and produced water and to leave the precise details, tests and performance standards to be determined to the satisfaction of the Director-General, after consultation with DII, NOW, the Hunter Central Rivers Catchment Management Authority, DECCW and relevant local councils.
     

Grounds 3 and 4: Failure to Consider the Precautionary Principle

145. These grounds may be dealt with together. Each concerns the allegation that the principles of ecologically sustainable development ("ESD"), and in particular the precautionary principle, were mandatory relevant considerations that were not taken into account, either adequately or at all, by the Minister. Ground 3 seeks to establish that the application of the precautionary principle to the issue of groundwater was an essential consideration, and similarly, ground 4 seeks to establish the same in respect of the issue of water re-use and disposal.
     
146. Three primary issues fall for determination in respect of grounds 3 and 4, namely:
     
     • (a) first, whether the principles of ESD including the precautionary principle are mandatory relevant considerations;
       
     • (b) second, what is required by way of consideration of the principles in order to constitute a valid exercise of power; and
       
     • (c) third, did the PAC, as the delegate of the Minister, fail to correctly formulate and properly consider the principles of ESD, including the precautionary principle, in granting the major project approval?
       

Was the Minister Bound to Take Into Account the Principles of ESD and the Precautionary Principle?

147. Of course, the Minister is not bound to take a particular matter into account unless there is an express requirement that he or she must do so under the relevant statute or an implication to this effect is found in the scope, subject-matter and purpose of the statute as a matter of statutory construction (Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40; (1986) 162 CLR 24 at 39-40).
     
148. In short, the Minister and AGL submitted that the principles of ESD were not, upon proper analysis of s 75J, matters that the Minister was bound to take into account in the exercise of his powers under that provision.
     
149. Section 4(2) of the EPAA defines "ecologically sustainable development " as having the same meaning as that contained in s 6(2) of the Protection of the Environment Administration Act 1991. That provision is as follows:
     

(2) For the purposes of subsection (1) (a), ecologically sustainable development requires the effective integration of economic and environmental considerations in decision-making processes. Ecologically sustainable development can be achieved through the implementation of the following principles and programs:

(a) the precautionary principle-namely, that if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

In the application of the precautionary principle, public and private decisions should be guided by:

(i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment, and

(ii) an assessment of the risk-weighted consequences of various options,

(b) inter-generational equity-namely, that the present generation should ensure that the health, diversity and productivity of the environment are maintained or enhanced for the benefit of future generations,

(c) conservation of biological diversity and ecological integrity-namely, that conservation of biological diversity and ecological integrity should be a fundamental consideration,

(d) improved valuation, pricing and incentive mechanisms-namely, that environmental factors should be included in the valuation of assets and services, such as:

(i) polluter pays-that is, those who generate pollution and waste should bear the cost of containment, avoidance or abatement,

(ii) the users of goods and services should pay prices based on the full life cycle of costs of providing goods and services, including the use of natural resources and assets and the ultimate disposal of any waste,

(iii) environmental goals, having been established, should be pursued in the most cost effective way, by establishing incentive structures, including market mechanisms, that enable those best placed to maximise benefits or minimise costs to develop their own solutions and responses to environmental problems.

The Precautionary Principle

150. The underlying premise of the precautionary principle was stated by Stein J in the seminal decision of Leatch v National Parks and Wildlife Service (1993) 81 LGERA 270 (at 282):
     

...the precautionary principle is a statement of commonsense and has already been applied by decision-makers in appropriate circumstances prior to the principle being spelt out. It is directed towards the prevention of serious or irreversible harm to the environment in situations of scientific uncertainty. Its premise is that where uncertainty or ignorance exists concerning the nature or scope of environmental harm (whether this follows from policies, decisions or activities), decision-makers should be cautious.

151. In Telstra Corporation Ltd v Hornsby Shire Council [2006] NSWLEC 133; (2006) 67 NSWLR 256 Preston J analysed in comprehensive and careful detail the principles of ESD, including the precautionary principle. As articulated by Preston J in Telstra the precautionary principle may be summarised as follows:
     
     • (a) the application of the precautionary principle and the concomitant need to take appropriate precautionary measures is triggered by the satisfaction of two conditions precedent; first, a threat of serious or irreversible environmental damage; and second, a lack of scientific certainty as to that damage (at [128]). These conditions are cumulative. Once both of these conditions or thresholds are satisfied, precautionary measures should be taken to avert the anticipated threat of environmental damage, but they should be proportionate (at [128]);
       
     • (b) it is not necessary that serious or irreversible environmental damage has actually occurred, it is the threat of such damage that is required. Moreover, the environmental damage threatened must attain the threshold of being serious or irreversible (at [129]). If there is no threat of serious or irreversible environmental damage, or if there is no (or no considerable) scientific uncertainty, the precautionary principle will not apply (at [130]-[149]);
       
     • (c) if the two conditions precedent or thresholds are satisfied, the precautionary principle will be activated. At this point there is a shifting of the evidentiary burden of proof and a decision maker must assume that the threat of serious or irreversible environmental damage is no longer uncertain but is a reality. The burden of showing that this threat does not in fact exist or is negligible effectively reverts to the proponent of the development (at [150]-[155]);
       
     • (d) the precautionary principle permits the taking of preventative measures without having to wait until the reality and seriousness of the threats become fully known (the concept of preventative anticipation) (at [156]);
       
     • (e) the precautionary principle should not be used to try to avoid all risks. A zero risk precautionary standard is inappropriate. Similarly the precautionary principle cannot be based on a purely hypothetical approach to the risk, founded on mere conjecture which has not been scientifically verified (at [157]-[160]);
       
     • (f) the type and level of precautionary measures that will be appropriate will depend on the combined effect of the degree of seriousness and irreversibility of the threat and the degree of uncertainty. The more significant and more uncertain the threat, the greater degree of precaution required. Some margin for error should be retained until all of the consequences of the decision to proceed with a development are known. One means of retaining a margin for error is to implement a step-wise or adaptive management approach, whereby uncertainties are acknowledged and the area affected by the development is expanded as the extent of the uncertainty is reduced (at [161]-[165]);
       
     • (g) the precautionary principle embraces a concept of proportionality. That is to say, measures should not go beyond what is appropriate and necessary in order to achieve the objectives in question. Where there is a choice between several appropriate measures, recourse should be had to the least onerous measure. A reasonable balance must be struck between the stringency of the precautionary measures, which may have associated financial, livelihood and opportunity costs, and the seriousness and irreversibility of the potential threat (at [166]-[178]);
       
     • (h) the precautionary principle, where triggered, does not necessarily prohibit the carrying out of development until full scientific certainty is attained. Were it otherwise it would result in a "paralysing bias" in favour of the status quo and would ban "the very steps that it requires" (at [179]-[181]); and
       
     • (i) the precautionary principle is but one of the set of principles of ESD. It should not be viewed in isolation but rather as part of the package of ESD principles (at [182]-[183]).
       

The PAC Was Obliged to Consider ESD Principles, Including the Precautionary Principle

152. Section 5 of the EPAA sets out the objects of that Act, which expressly include, in s 5(a)(vii), "to encourage" ecologically sustainable development (emphasis added):
     

5 Objects

The objects of this Act are:

(a) to encourage:

(i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment,

(ii) the promotion and co-ordination of the orderly and economic use and development of land,

(iii) the protection, provision and co-ordination of communication and utility services,

(iv) the provision of land for public purposes,

(v) the provision and co-ordination of community services and facilities, and

(vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species, populations and ecological communities, and their habitats, and

(vii) ecologically sustainable development, and

(viii) the provision and maintenance of affordable housing, and

(b) to promote the sharing of the responsibility for environmental planning between the different levels of government in the State, and

(c) to provide increased opportunity for public involvement and participation in environmental planning and assessment.

153. The responsibilities of the Minister are set out at s 7 of the EPAA. Although there is no direct reference to ESD principles contained within the provision, the Minister is nevertheless charged with the responsibility of promoting and co-ordinating environmental planning and assessment "for the purpose of carrying out the objects" of the EPAA, such objects including those expressed in s 5 of the Act (emphasis added):
     

7 Responsibility of Minister

Without affecting the functions that the Minister has apart from this section, the Minister is charged with the responsibility of promoting and co-ordinating environmental planning and assessment for the purpose of carrying out the objects of this Act and, in discharging that responsibility, shall have and may exercise the following functions:

(a) to carry out research into problems of environmental planning and assessment and disseminate information including the issue of memoranda, reports, bulletins, maps or plans relating to environmental planning and assessment,

(b) to advise councils upon all matters concerning the principles of environmental planning and assessment and the implementation thereof in environmental planning instruments,

(c) to promote the co-ordination of the provision of public utility and community services and facilities within the State,

(d) to promote planning of the distribution of population and economic activity within the State,

(e) to investigate the social aspects of economic activity and population distribution in relation to the distribution of utility services and facilities, and

(f) to monitor progress and performance in environmental planning and assessment, and to initiate the taking of remedial action where necessary.

154. Division 2 of Pt 3A of the EPAA deals with the approval of major projects, including the major project the subject of these proceedings. It includes s 75J, which provides for the giving of approval by the Minister to carry out a project. There is no express reference to the principles of ESD in either s 75J or, more generally, in Pt 3A of the EPAA. The matters that are expressly required to be taken into account in any exercise of power under s 75J of the Act are contained in s 75J(2).
     
155. The question, therefore, is whether consideration of ESD principles and in particular the precautionary principle, is mandatory as a matter of implication (Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349 at [126]).
     
156. In Minister for Planning v Walker [2008] NSWCA 224; (2008) 161 LGERA 423 Hodgson JA (with whom Campbell and Bell JJA agreed at [65] and [66] respectively) held that the Minister was obliged to consider the public interest in exercising his or her powers under Pt 3A (which includes s 75J) even if that requirement was not explicitly stated in the EPAA (at [39]). But his Honour went on to qualify this obligation in the following way (at [41]);
     

41 However, this requirement, so stated, operates at a very high level of generality, and does not of itself require that regard be had to any particular aspect of the public interest: cf Walsh v Parramatta Council [2007] NSWLEC 255 at [60] (quoted above in the extract from Notaras). One would generally presume that a Minister making a decision does have regard to the public interest, and one would look for substantial evidence to make out a case that the Minister had not had regard to the public interest.

157. Furthermore (at [44]):
     

44 However, that does not of itself mean that a "mandatory" requirement that the Minister have regard to the public interest is necessarily breached in all cases where the Minister does not have regard to the principles of ESD. The "mandatory" requirement that the Minister have regard to the public interest does not of itself make it mandatory (that is, a condition of validity) that the Minister have regard to any particular aspect of the public interest, such as one or more of the principles of ESD. Whether or not it is mandatory to have regard to one or more of the principles of ESD must depend on statutory construction.

158. Thus, the decision in Gray v Minister for Planning [2006] NSWLEC 720; (2006) 152 LGERA 258 was overruled to the extent that it held that a decision maker under Pt 3A was obliged to consider ESD principles.
     
159. The "better view" was, therefore, described in Walker by Hodgson JA as follows (at [54]-[56]):
     

54 On the other hand, if the supposed legislative intention is that decisions by the Minister be void if the Minister had failed to take into account an object of the EPA Act in circumstances where that object was materially relevant, there would be a question as to what would be the result if the Minister did consider it, and came to the (erroneous) conclusion that it was not relevant. To hold that the result would then be that the decision was void would involve a merits review of the Minister's judgment as to relevance; while to hold that the result would be that the decision was not void, because the Minister had at least considered whether the object was relevant, would seem contrary to the supposed mandatory legislative requirement that the object be taken into account if it is relevant.

55 I think that the better view is that good decision-making would involve the Minister considering whether any of the objects of the EPA Act was relevant to the decision, and taking into account those that were considered relevant; but that a failure by the Minister to consider whether (say) "provision and maintenance of affordable housing" was relevant to a particular decision, or an incorrect decision that this object was not relevant, would not without more make a decision void. If that view is correct in relation to this object of the EPA Act, then in my opinion it must also be correct in relation to other objects, including the principles of ESD. Accordingly, I do not agree with the contrary view adopted by Pain J in Gray, and by the primary judge in this case.

56 However, I do suggest that the principles of ESD are likely to come to be seen as so plainly an element of the public interest, in relation to most if not all decisions, that failure to consider them will become strong evidence of failure to consider the public interest and/or to act bona fide in the exercise of powers granted to the Minister, and thus become capable of avoiding decisions. It was not suggested that this was already the situation at the time when the Minister's decision was made in this case, so that the decision in this case could be avoided on that basis; and I would not so conclude.

160. To summarise, if, in a particular case, the Minister does not consider ESD principles, the failure may lead to an inference that he or she failed to consider the public interest, but this is dependent on the individual circumstances of the case. Cogent evidence will be required to demonstrate that there has been a failure by a decision maker to have regard to the public interest.
     
161. This is to be contrasted with consent authorities making decisions pursuant to s 79C of the EPAA. In that instance, ESD principles must be considered (Telstra Corporation at [121]-[124] per Preston J, Walker at [43], Aldous v Greater Taree City Council [2009] NSWLEC 17; (2009) 167 LGERA 13 at [24] per Biscoe J, Williams v NSW Minister for Planning (No 3) [2010] NSWLEC 204 at [33] per Biscoe J, Newcastle & Hunter Valley Speleological Society Inc v Upper Hunter Shire Council and Stoneco Pty Limited [2010] NSWLEC 48 per Preston J, South East Forest Rescue Incorporated v Bega Valley Shire Council and South East Fibre Exports Pty Ltd [2011] NSWLEC 250 at [155] and [157] per Preston J. Similarly see, albeit in a different statutory context, MyEnvironment Inc v Vic Forests [2012] VSC 91 at [260]- [272] per Osborn JA).
     
162. In Kennedy v NSW Minister for Planning [2010] NSWLEC 240 Biscoe J, citing Walker, held that although the public interest consideration operates at a very high level of generality, it requires consideration of ESD principles at the development and concept approval stages of a project granted under Pt 3A of the EPAA and consideration of these principles in respect of a modification application determination for a Pt 3A project under s 75W of the that Act (at [77]-[78]). In Kennedy it was alleged that the modification approvals the subject of those proceedings were invalid by reason of the failure of the Minister to have regard to the precautionary principle and the principle of inter-generational equity insofar as they relate to Aboriginal cultural heritage. While the Director-General's Modification Report that the Minister had before him when making the decision to approve the modifications did not expressly refer to ESD principles, it nevertheless did refer to the public interest and the protection of Aboriginal heritage. Moreover, Aboriginal cultural heritage was specifically addressed in the Report. Because the substance of the precautionary principle and inter-generational equity were addressed, the challenge to the approvals on this basis was dismissed (at [82]-[90]).
     
163. In Australians for Sustainable Development Inc v Minister for Planning [2011] NSWLEC 33; (2011) 182 LGERA 370 it was argued that two project approvals granted pursuant to Pt 3A were invalid because the Minister failed to consider, or adequately consider, the principles of ESD as an element of the public interest. Biscoe J described the obligation to consider ESD principles in the context of approval under Pt 3A of the EPAA as follows (at [241]-[243]):
     

241 The requirement to consider ESD principles cannot be an invitation to the court on judicial review to consider the merits of the decision, or to hold decisions invalid merely because in the court's view insufficient weight was given to the principles, or because in the court's view incorrect results were reached in light of the principles.

242 Having regard to the statutory terms of the precautionary principle and the principle of inter-generational equity set out earlier, it can be said that those principles of ESD need only be taken into account to the extent that there is some material environmental issue, risk or consequence - actual or potential - relevant to the issue being determined. As such environmental issues, risks or consequences do not necessarily stop at the boundaries of the land the subject of the application, the principles must be considered in the environment in which the land exists.

243 The decision-maker is then required to consider the substance of the matters referred to in the ESD principles with respect to the actual or potential issues, risks or consequences. The requirement is not satisfied by mere reference, recitation or lip service to ESD principles. Nor will it fail to be satisfied merely because the labels of ESD principles were not employed if the decision-maker nevertheless considered the substance in relation to such matters: for example, where the decision-maker considered the possible long term environmental consequences, and did so uninhibited by lack of full scientific certainty.

164. It was held in that case that the principles were drawn to the Minister's attention and that the applicant did not discharge its onus of proof that the Minister failed to consider the substance of the principles (at [246]-[250]).
     
165. Williams v Minister for Planning (No 2) [2011] NSWLEC 62 concerned facts and circumstances that were not dissimilar to those impugned in Kennedy. Relevantly, the result was identical (at [88]-[91] per Pain J following the reasoning of Biscoe J in Kennedy, which her Honour described as "correct": at [89]).
     
166. In Hunter Environment Lobby Inc v Minister for Planning [2011] NSWLEC 221, Pain J again held, in an objector appeal under s 75L of Pt 3A of the EPAA, that because ESD principles - the precautionary principle and the principle of inter-generational equity - are an aspect of the public interest, they "can be a relevant consideration in my decision" (at [21]). These principles informed her Honour's approval of a project involving the consolidation and expansion of a coal mine subject to conditions.
     
167. In Pittwater Council Pain J summarised Walker, without commenting on the subsequent decisions of this Court referred to above, in holding that "there was a requirement on the Minister in making a decision under Pt 3A to consider the public interest, which operated at a high level of generality. Such a conclusion did not mean that the public interest included all aspects of ecologically sustainable development as mandatory" (at [141]).
     
168. Finally, in Haughton v Minister for Planning and Macquarie Generation; Haughton v Minister for Planning and TRUenergy Pty Ltd [2011] NSWLEC 217; (2011) 185 LGERA 373, the issue was whether the principles of ESD had been considered in their application to anthropogenic climate change in the context of conditional concept approvals for two new power stations at Bayswater and Mt Piper. The applicants argued that in determining to grant concept plan approvals under s 75O of Pt 3A of the EPAA the Minister was bound, but failed, to consider the principles of ESD, the obligation arising as an element of the public interest. In dismissing this ground of review, Craig J accepted that the principles of ESD were embedded in the public interest, albeit at a high level of generality, and whilst noting that the concept of the 'public interest' was a multifaceted one (at [152] and [158]). After a review of the material before the Minister, his Honour found that the material in fact reflected the substance of the principles of ESD, and in particular, the relationship between greenhouse gas emissions and their contribution to climate change (at [177]).
     
169. The above review of the applicable authorities makes it abundantly clear, in my opinion, that in considering the public interest in any exercise of power under s 75J of Pt 3A of the EPAA, the decision maker - in this case the PAC, as the delegate of the Minister - was bound to consider the principles of ESD, which included the precautionary principle and the principle of inter-generational equity. This conclusion is reinforced when regard is had to the responsibilities of the Minister pursuant to s 7 of the EPAA and the objects of the Act as set out in s 5. Although in no way determinative, I am comforted in arriving at this conclusion by the fact that both AGL and the Director-General put to the PAC the principles of ESD as matters that were relevant considerations to be taken into account.
     
170. I therefore reject the submission of AGL and the Minister that there was no requirement to consider ESD principles. In the words of Hodgson JA in Walker, the time has come that "the principles of ESD" can now "be seen as so plainly an element of the public interest" (at [56]).
     
171. Having said this, however, as the above cases make abundantly clear, the PAC was obliged to consider these principles at a high level of generality. As discussed further below, there is nothing, in my opinion, arising from either the statutory framework pursuant to which the major project approval was determined, or the circumstances of the case, that derogates from this view.
     

Did the PAC Correctly and Adequately Consider ESD Principles, Including the Precautionary Principle?

172. Having determined that the principles of ESD, which include the precautionary principle, are relevant mandatory considerations that the PAC was obliged to take into account in approving the major project application having regard to the public interest, there are four, possibly five, additional applicable legal principles that should be borne in mind.
     
173. First, regard must also be had to the level of particularity at which the subject matter that is said to be relevant and mandatory is to be considered. As was observed by this Court in Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118 (at [60] per Preston J), " the statute must expressly or impliedly oblige the decision-maker to enquire and consider the subject matter at the level of particularity involved in the applicant's submission." Likewise, it was observed in Foster v Minister for Customs and Justice [2000] HCA 38; (2000) 200 CLR 442 (at [23] per Gleeson CJ and McHugh J) that where an allegation is made that a decision maker is required to consider a matter at a level of particularity, "there must be found in the legislation an implied obligation of the Minister to examine and investigate the contention at the level of particularity involved in the submission" (see also Sean Investments Pty Ltd v MacKellar [1981] FCA 191; (1981) 38 ALR 363 at 374-375 per Deane J).
     
174. In the present case, provided the PAC considers the matters expressly referred to in s 75J(2) of the EPAA, no further statutory detail in Pt 3A informs the level of particularity which the mandatory relevant consideration of ESD principles, as part of the requirement to consider the multifaceted concept of the public interest, is to take. Moreover, the concept of ESD as stated in s 6(2) the Protection of the Environment Administration Act and as incorporated by reference into the EPAA, is stated at a high level of generality. In addition, in enacting the EPAA Parliament did not subordinate ESD principles to all other considerations (see the objects contained in s 5(a) of the EPAA, which are expressed only "to encourage" ESD). But it must be noted that this is a project approval, and not the determination of a concept plan, where more detailed consideration of ESD principles would be premature (Haughton at [167]). Thus all factual matters touching upon ESD principles and, in particular, the precautionary principle and the principle of inter-generational equity, are not necessarily mandatory relevant considerations. Put another way, the level of generality at which these principles are considered does not, in my view, mandate any particular method of analysis nor the outcome that should result from any consideration (Drake-Brockman at [132(2)]). Thus descent to a direct application of the principles to each and every condition imposed in the approval is not required.
     
175. The allegations made by the Alliance that coal seam gas mining presents a threat of serious or irreversible damage to groundwater or other water, are not only unsupported by any evidence, they are, moreover, formulated at such a high level of generality that they cannot found an assessment of the risks associated with the project. In summary, there is no basis for an implication in the terms of Pt 3A, and in particular s 75J, for an obligation to consider matters pertaining to the precautionary principle at the level of particularity for which the Alliance contends.
     
176. Second, consideration of ESD principles does not require specific reference to the particular principles comprising ESD. It is sufficient that the PAC engage with the substance of those principles (Drake-Brockman at [132(7)] and Walker at [59]).
     
177. Third, the weight to be given to any relevant consideration of ESD principles is a matter for the PAC (Peko-Wallsend at 40-41).
     
178. Fourth, a proper, genuine and realistic, in the sense of more than passing or perfunctory, consideration of the principles must, however, be given. While use of this formula has been cautioned against, lest it permit an impermissible slide into merits review (Kindimindi at [79] and Anderson v Director-General, Department of Environment and Climate Change [2008] NSWCA 337; (2008) 163 LGERA 400 at [57]), its use continues to endure (Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; (2010) 243 CLR 164 at [26], [32] and [34]).
     
179. Fifth (which is perhaps no more than an application of the third and fourth principles stated above), it is for the PAC, as the decision-maker, to decide whether or not the two preconditions to the application of the precautionary principle exist, and if so, the extent of the risk, the level of scientific uncertainty and what proportionate response, if any, should be made. These are matters of merit that are not the subject of judicial review. An incorrect assessment of the preconditions or the adequacy of the response if met, is not amenable to judicial review as the Alliance's case is presently framed. To do so would be to trespass on the merits of the decision made by the PAC to approve the major project.
     

The PAC Did Not Incorrectly State or Apply the Precautionary Principle

180. The Alliance submitted that the correct formulation of the precautionary principle involved, as stated in Telstra per Preston J, the identification of the two threshold conditions, namely, the threat of serious and irreversible damage and scientific uncertainty about the nature and scope of the threat of environmental damage. Both these conditions precedent were demonstrated, it argued, on the materials before the PAC, and therefore, the burden of demonstrating otherwise shifted to AGL to show that the threat did not exist or was negligible. This not having been discharged by AGL, the PAC was obliged to proceed on the basis that there was a threat of serious or irreversible environmental harm and determine what preventative measures ought to be taken in light of this assumption.
     
181. However, the PAC did not, the Alliance contended, take this approach, misstating and misconstruing its obligation, and therefore, failing to properly, or at all, take into account the precautionary principle in granting the project approval. Rather, the PAC, after identifying issues productive of serious environmental damage and an absence of scientific certainty, accepted the "implicit" recommendation that there would, or could, be an acceptable minimisation of risk through adaptive management. Hence the PAC deferred to the Director-General, at some future date, the task of assessing and responding to identified risks, whereas the legally correct consideration of the precautionary principle required the assumption of the realisation of the risk and consideration of appropriate responsive measure by it. In proceeding to assume that minimal risk was posed, as a consequence of accepting the submissions (both explicit and implicit) of AGL and the Department to the effect that adverse effects were not expected and that the risk of harm was not significant, the PAC did not in substance consider and apply the precautionary principle.
     
182. In the EA, to which the PAC had regard, the principles of ESD and the precautionary principle were described as follows (pp 28-3 - 28-4, emphasis added):
     

28.3 Ecological Sustainability

Ecologically Sustainable Development (ESD) is a concept firmly enshrined in New South Wales environmental legislation and government policy. Schedule 2 of the EP&A Regulation establishes four guiding principles to assist in achieving ESD, as follows:

· The precautionary principle - namely, that if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

· Inter-generational equity - namely, that the present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations.

· Conservation of biological diversity and ecological integrity - namely, that conservation of biological diversity and ecological integrity should be a fundamental consideration.

· Improved valuation and pricing of environmental resources - namely, that environmental factors should be included in the valuation of assets and services, such as polluter pays, full life cycle costing, and utilising incentive structures/market mechanisms to meet environmental goals.

The EPBC Act also identifies a fifth principle for consideration in environmental impact, namely:

'Decision making processes should effectively integrate both long term and short term economic, environmental, social and equitable considerations.'

These five principles are interrelated and need to be considered both individually and collectively as part of determining whether or not a project would be consistent with the principles of ESD in Australia.

28.3.1 The Precautionary Principle

The IGAE states that the precautionary principle is to be a guiding principle for informed policy making and program implementation by all levels of government in Australia. In this manner, it is to guide both the public and private sector in its decision making and assessment of different options, particularly when decisions are being made in the face of uncertainty. In doing so, it requires avoidance of serious or irreversible damage to the environment, whenever practicable.

The Project has taken on board the precautionary principle by carrying out detailed environmental investigations in order to gain as much knowledge about the environmental characteristics of a locality and the processes and interactions of various components of the environment as reasonably as possible. This knowledge has been used to inform project design and the selection of alternatives, identify the potential environmental impacts of the proposal and develop specific environmental management practices and safeguards for the proposed works which aim to avoid significant environmental impacts and manage or minimise residual impacts.

Environmental monitoring would be undertaken throughout the construction, operation and rehabilitation phases of the Project to assess the adequacy of the precautions and safeguards used to minimise environmental impacts. This approach is consistent with the precautionary principle.

With regard to the Concept Area approval, further detailed investigations would be undertaken in this area as part of future project applications prior to the commencement of works, to ensure that the potential environmental impacts of the proposal are fully understood and that appropriate safeguards are

identified to protect the environment.

183. In not dissimilar terms is the Director-General's EA Report, to which the PAC also had regard, where s 5 of the EPAA is quoted and express regard is had to the principles of ESD, including the precautionary principle, and to the definition given to ESD in the Protection of the Environment Administration Act (pp 10 - 11, emphasis added, quoted in full earlier in the judgment):
     

Of particular relevance to the environmental impact assessment and eventual determination of the subject project application by the Minister, are those objects stipulated under section 5(a). Relevantly, the objects stipulated under (i), (ii), (vi) and (vii) are significant factors informing determination of the application (noting that the proposal does not raise significant issues relating to communication and utility services, land for public purposes, community services and facilities or affordable housing). With respect to ecologically sustainable development, the EP&A Act adopts the definition in the Protection of the Environment Administration Act 1991, including the precautionary principle, the principle of inter-generational equity, the principle of conservation of biological diversity and ecological integrity, and the principle of improved valuation, pricing and incentive mechanisms. In applying the precautionary principle, public decisions should be guided by careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment and an assessment of the risk-weighted consequences of various options.

184. It is the expression "whenever practicable" that is the genesis of the Alliance's submission that the precautionary principle has been misconstrued and therefore not considered by the PAC.
     
185. I do not accept the Alliance's submissions in this regard.
     
186. First, when regard is had to the definition given to the precautionary principle contained in s 6(2)(a) of the Protection of the Environment Administration Act it is plain that no error of construction, and thus consideration, has occurred. Section 6(2)(a) states that, in the application of the precautionary principle, public and private decisions "should be guided by (i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment, and (ii) an assessment of the risk-weighted consequences of various options" (emphasis added).
     
187. On any view, the test articulated both in the EA and in the Director-General's EA Report is consistent with the statutory description of the precautionary principle in s 6(2) of the Protection of the Environment Administration Act 1991, which in turn is picked up by s 4(1) of the EPAA.
     
188. Second, to the extent that the Alliance places considerable emphasis on the articulation of the precautionary principle in Telstra, not only was that decision concerned with proceedings within Class 1 of this Court's jurisdiction, and not a case concerning judicial review, but the statement by Preston J cannot supplant the plain and unambiguous words of the statute in either s 6(2) of Protection of the Environment Administration Act or s 4(1) of the EPAA.
     
189. Third, the submission impermissibly invites the Court to examine the adequacy, that is to say the merits, of the PAC's assessment of the risk of irreversible environmental damage and scientific uncertainty (Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 at [117]).
     
190. Fourth, even in the PAC incorrectly assessed either the risk of serious environmental harm or the state of scientific uncertainty accompanying coal seam gas extraction, properly analysed, this amounts to an error of fact, which is not reviewable in these proceedings (Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 356 per Mason CJ).
     

There Was No Failure to Properly Consider the Precautionary Principle in Respect of Groundwater

191. The Alliance's third ground of review as pleaded in the points of claim contains an implicit acceptance that the precautionary principle was considered by the PAC. This is correct.
     
192. A brief survey of the background as to the assessment of groundwater reveals that adequate consideration of the precautionary principle in respect of groundwater occurred. For example, the Director-General set out a number of general requirements and key assessment requirements in relation to groundwater. As one of a number of such requirements, the environmental assessment process was required to address the issue of groundwater, including the likely volume of extraction, watercourses to be traversed by the proposed pipeline and an assessment of erosion and sedimentation risk. A general environmental risk analysis was also required. In response, AGL submitted the EA. In the EA reference was made to historic exploration activities in the area, including the development of a number of production evaluation wells, and the establishment of the Stratford Pilot Project. The EA made express reference to the precautionary principle in relation to assessment of the ecological, air quality, ground and surface water impacts of the project. Land use was considered, and it was noticed that Stage 1 of the project was situated on rural land used for a mix of grazing and rural residential land uses. The agricultural suitability of the land was considered and it was noted that the land was suitable for grazing. Surface water was considered, particularly in relation to any impacts on pipeline water crossings, and potential impacts on groundwater were considered.
     
193. In relation to groundwater, three recognised aquifer systems were recorded (a shallow alluvial aquifer, a shallow bedrock aquifer and a deep bedrock aquifer). The water quality of each aquifer was discussed. The properties of each of the aquifers were described based on previous studies undertaken, bore hole drilling logs and information gathered from the Stratford Pilot Project and associated monitoring. Extraction trials were undertaken. On the basis of these trials it was considered that migration between the deep bedrock aquifers and the alluvial aquifers was unlikely and that the rocks covering the coal seams formed a relatively impermeable confining layer. Features of the well design were also contemplated with a view to maintaining the integrity of the aquifers. Potential impacts were listed, together with migration measures to be adopted. It was noted that data from the pilot testing indicated that little, if any, response from the pilot wells monitored suggested an increase in aquifer permeability as a result of fraccing and the removal of the groundwater. To further manage any potential impacts a Groundwater Management Plan was prescribed in detail.
     
194. In addition to the consideration of the potential groundwater issues in the EA, an overall assessment of the ecology of the environment and the potential impacts of the project was undertaken. This analysis was supported by the Ecological Assessment appended to the EA. This assessment considered the potential impacts arising from the project on flora and fauna. The analysis expressly adopted the precautionary principle in assuming the potential existence of threatened flora or fauna species where field sampling was not adequate for the purposes of detection. The EA also contained a hazard and risk analysis, an examination of soils and geology and the management of potential impacts of the project on those soils, waste management measures, general environmental management measures that would be applied, including the Groundwater Management Plan, and a further Soil and Water Management Plan. In addition, the Statement of Commitments included matters relating to water. Finally there was an overall consideration of the proposal justification.
     
195. Following the exhibition process, the Submissions Report was prepared. It similarly identified and discussed potential impacts with respect to groundwater management. Water quality issues in relation to the use of fraccing fluids were addressed, including the additives that were to be used.
     
196. Communications involving AGL, the Department and NOW as to hydrogeological modelling occurred. As a consequence, the Preliminary Groundwater Assessment and Initial Conceptual Hydrogeological Model Report prepared by SRK was provided. AGL also outlined the staged investigation approach it proposed to adopt, comprising five individual phases, the first of which was an initial desktop study to provide recommendations regarding further phases. The SRK Report represented this first phase. As a result, NOW confirmed that the proposed program appeared to be consistent with developing the level of knowledge required to inform its assessment regarding the possible issue of water licences. NOW also confirmed that it was satisfied that project approval could be granted. However, NOW stated that production well entitlements could not be issued until the modelling was complete. AGL undertook to obtain groundwater and/or bore licences for each well through NOW prior to drilling.
     
197. In the Director-General's EA Report, the Department considered the views expressed by AGL as to the potential impacts of Stage 1 of the project, and the subsequent material on which it relied in support of its contention that the proposal to conduct coal seam gas mining in the Gloucester Basin would not have a significant impact on groundwater. The Report focused on the principles of ESD in relation to the concept plan approval and the project approval, in the context of a discussion of the objects of the EPAA. It set out an assessment of the environmental impacts that included a section dedicated specifically to surface and groundwater. The Report identified, as one of the risks arising from the project, the potential risks to groundwater aquifers and outlined the information available in respect of the aquifer system and proposed well construction methods. The Department's assessment was that there was expected to be low hydrological connectivity between the coal seams targeted and the surface and/or alluvial aquifer systems. It was therefore satisfied that dewatering activities associated with the project were unlikely to pose a significant risk to those alluvial systems. It was the Department's view that prudent well location, based on further detailed field monitoring and seismic surveys designed to confirm hydrogeological conditions, would enable any risks associated with spatial differences in hydrogeological conditions across the relevant geographical area to be minimised. Accordingly, the Department recommended various conditions to provide for the implementation of a monitoring framework. It was also satisfied, on the basis of the information given to it as to the composition of the fraccing fluids, that these fluids would not pose a water contamination risk.
     
198. To ensure the impacts of Stage 1 of the project on groundwater were managed, the Department recommended conditions of approval that contained "a precautionary approach of staged gas well development", which "would also enable any adverse impacts to be quickly identified and acted upon, including amendment of the location of future wells".
     
199. The Department considered the project was justified in the public interest, noting that the project had the potential to generate significant gas reserves for the New South Wales market, with new transmission lines also serving to supply gas directly to a significant domestic and industrial area in New South Wales (the Hunter region) and to increase the total capacity of the distribution network. In addition, the project would involve direct economic benefits to the State, including capital investment of up to $276 million.
     
200. The PAC conducted its own review of the concept plan and the Stage 1 project. In granting the concept plan approval and the project approval, the PAC imposed detailed conditions addressing water issues as set out earlier in this judgment. The conditions of the project approval were expressly imposed in order to:
     
     • (a) prevent, minimise and/or offset adverse environmental impacts;
       
     • (b) set standards and performance measures for acceptable environmental performance;
       
     • (c) require regular monitoring and reporting; and
       
     • (d) provide for the ongoing environmental management of the project.
       
201. The PAC Report recorded that the PAC had considered the issues raised in the Director-General's EA Report and that it was satisfied that the Department had carried out an adequate assessment. Nevertheless, the PAC also undertook further consideration of groundwater and surface water related issues, and noted that there were several risk possibilities associated with the fault zones in the gas fields. The PAC recognised that there were information limitations, however, it accepted that it was possible to develop the gas field by adaptive management in order to achieve an acceptable minimisation of risks. It referred to various considerations proposed in the Director-General's EA Report designed to achieve an acceptable minimisation of risks and added further conditions in order to "ensure adaptive management action is initiated early enough to avoid any adverse impacts arising from an unanticipated geological faults encountered during development of the gas field".
     
202. The PAC Report specifically considered potential risks relating to groundwater, identified uncertainties in the information before it, and came to the view that those risks could be appropriately managed through precautionary conditions adopting an adaptive management regime (see, in particular, section 7 of that Report).
     
203. The PAC implemented conditions relating to groundwater issues. It adopted the conditions recommended in the Director-General's EA Report and imposed additional conditions. These were imposed by way of "adaptive management". At the risk of repetition, the conditions included provisions concerning, amongst other things:
     
     • (a) a requirement to implement all reasonable and feasible measures to minimise gas migration risks and adverse impacts to beneficial aquifers (condition 3.5);
       
     • (b) a prohibition of certain fraccing fluids (condition 3.7);
       
     • (c) a requirement to identify and plug old wells within a 500 m radius of finalised gas well locations to minimise the risk of gas migration (condition 3.6);
       
     • (d) a limitation on the volume of groundwater that could be extracted (up to 2 ML per day unless NOW permitted a greater level when it granted the necessary water licence) (condition 3.11);
       
     • (e) the preparation of a detailed baseline monitoring regime as a precursor to an updated hydrogeological model (conditions 3.8 and 3.9);
       
     • (f) the phased development of gas wells (condition 3.10 and 3.9(c));
       
     • (g) the development of a Groundwater Monitoring Program (condition 4.1);
       
     • (h) as part of the Groundwater Monitoring Program, the identification of performance criteria and coal seam dewatering rates, coupled with hold points that would require operations to cease at a particular well in the event that certain criteria and rates were exceeded (conditions 4.1(c) and (e)). The PAC saw these hold points as "critical parts of the adaptive management proposed";
       
     • (i) the obtaining of water licences from NOW authorising AGL to extract groundwater as part of Stage 1 of the project (condition 3.11);
       
     • (j) prohibiting AGL from causing any water pollution unless authorised by an environmental protection licence issued by DECCW under the POEOA (condition 3.1);
       
     • (k) the development of a new Numerical Hydrogeological Model (condition 4.2);
       
     • (l) the preparation and implementation of a Construction Environmental Management Plan including a Soil and Water Management Plan (conditions 7.2 and 7.3);
       
     • (m) the preparation and implementation of an Operation Environmental Management Plan, to include an environmental risk analysis and adopt measures to monitor and manage groundwater impacts and flood risks (condition 7.4).
       
204. The conditions imposed involve monitoring of impacts, licencing, phasing, the provision of hold points based on indicators, periodic evaluation and a compliance system in relation to groundwater directed towards adaptive management. They are intended to deal with risks from expected and unexpected events, in accordance with the precautionary principle, and collectively amount to an adequate consideration of scientific uncertainty as to the impacts of the project and the possibility of irreversible environmental damage.
     
205. The PAC undertook its own further investigations. The members of the PAC met with the Department on two occasions and discussed issues concerning groundwater and hydrogeology, including the imposition of conditions relevant to these issues. Members of the PAC also attended a site visit of the Gloucester Gas Project where they inspected existing groundwater monitoring bores and discussed geology and groundwater within the Gloucester area, the fraccing process and fraccing chemicals. The PAC also undertook a site visit to AGL's coal seam gas project in Camden. The PAC Report expressly recorded that the condition concerning staged gas well development was adopted on the basis that it was considered consistent with a precautionary approach. Further, the Report indicated that consideration had been given to the materials provided to it, including the EA, the Submissions Report, the responses to that Report and the SRK Report. All of those materials recorded issues raised in relation to groundwater.
     
206. In addition, the PAC was "conscious" of the "limited experience with commercial coal seam gas extraction in New South Wales" and undertook the step of educating itself by having regard to the extensive documented experience of coal seam gas extraction in the USA. It specifically referred to the report of the United States Environmental Protection Agency, Evaluation of impacts to underground sources of drinking water by hydraulic fracturing of coalbed methane reservoirs. This information informed the PAC in considering the level of risk and the appropriate precautionary measures.
     
207. In my opinion, it cannot therefore be said that the PAC failed to consider ESD principles, and in particular the precautionary principle, in relation to groundwater. Nor can it be said, in my view, that the PAC had insufficient information before it to make an informed decision in this regard. The material before the PAC contained an extensive analysis of the issues concerning groundwater, which resulted in the imposition of conditions aimed at ensuring that appropriate measures were adopted and implemented having regard to the precautionary principle. In short, the Alliance has not discharged its onus of proof that the PAC did not consider the substance of ESD principles, including the precautionary principle.
     
208. Ultimately, this ground may be characterised as an allegation that the PAC did not consider the precautionary principle adequately because it did not have enough information to be satisfied as to the impacts of the project on groundwater. To the extent that the Alliance submits that the conditions are inadequate, I agree with the submissions of both AGL and the Minister that an examination posed in these terms descends to the merits of the conditions, and is not a matter appropriate for judicial review.
     
209. I therefore dismiss this ground of review.
     

There Was No Failure to Properly Consider the Precautionary Principle in Respect of Water Re-Use and/or Disposal

210. No separate submissions were put in relation to the fourth ground of review, either in written form or orally. To this extent, much of the reasoning expressed above is repeated and applied. In my opinion, it is plain that factually the PAC did consider, at the very least, the substance of the precautionary principle in relation to the water produced and extracted by the project.
     
211. In addition, for example, the DGRs necessitated that the Environmental Assessment address how extracted water would be stored, used, disposed of and re-supplied. Four disposal options were initially contemplated in the EA: first, aquifer reinjection; second, discharge to surface water; third, irrigation; and fourth, the sale of water. As indicated above, a detailed discussion of the treatment processes was contained in the EA as well as the Submissions Report. Various treatment options were considered and the proposed method of treatment was reverse osmosis, which was considered capable of treating water to whatever standard is required.
     
212. The Director-General's EA Report specifically referred to the precautionary principle and concluded that the Department's assessment of the ecological impacts of the project had been undertaken consistent with that principle. The Report went on to specifically consider the issue of extracted water management, including disposal options. It noted that public submissions had raised concerns about this topic. The Department's view was that the option of reinjection could pose additional risks of aquifer interference and that there had been insufficient assessment of that option to determine, with an appropriate degree of certainty, that it was a safe and feasible option. Accordingly, aquifer reinjection was not supported. However, the Director-General's EA Report recorded that it was satisfied with the remaining options. It considered that a water management strategy should provide details of the final disposal options selected and proposed conditions in relation to that matter.
     
213. In the PAC Report it was evident that the PAC had considered the issues raised in the Director-General's EA Report and was satisfied that the Department had carried out an adequate assessment. Further, the PAC consulted the project documentation and related submissions and took additional steps (described above) to inform itself more fully about the project and associated issues concerning water. The PAC identified that a key concern in its assessment was the risk of the extraction process impacting adversely on surface and groundwaters, which it went on to give express consideration to. The PAC expressly noted that the proposed conditions regarding the development of water quality criteria to be met in relation to possible surface water discharges were likely to involve the development of site-specific criteria in the Gloucester region. It considered that site specific water quality criteria needed to be developed in accordance with the ANZECC 2000 Guidelines. Therefore, PAC specifically added item (i) to condition 3.12 requiring the development of these criteria as an additional precaution.
     
214. Furthermore, other conditions were imposed relevant to the treatment of processed water. These include requiring the appropriate lining of storage ponds and a design to conform with a one in 100 year flood design standard (condition 3.13); a specific limitation as to the volume of groundwater that can be extracted (condition 3.11); and the implementation of various plans and monitoring regimes. As seen above, relevant licence and legislative obligations also apply so as to control activities concerning produced and extracted water treatment and disposal.
     
215. In my view, given the express discussion of water reuse and disposal in the DG's EA Report and the PAC Report, as well as the implementation of specific precautionary conditions concerning water reuse and disposal, the allegation that the precautionary principle was not considered in respect of this issue cannot stand.
     
216. For these reasons, this ground of review is also rejected.
     

Costs

217. These being proceedings filed in Class 4 of the Court's jurisdiction, normally costs would follow the event. However, one or more of the parties may seek to argue that some other costs order is appropriate in light of the nature of this litigation. This ought to be reflected in the orders.
     

Orders

218. The orders of the Court are as follows:
     
     • (1) the amended summons is dismissed;
       
     • (2) the applicant is to pay the respondents' costs of the proceedings, unless within 21 days a notice of motion is filed, together with appropriate affidavit evidence in support, seeking an alternative costs order; and
       
     • (3) the exhibits are to be returned.
       

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Amendments

25 Oct 2013

Admin error

Paragraphs: Index Added before Judgment