Proposed changes to NSW Independent Planning Commission – major reform or tweaking around the edges?

In brief 8 min read

The NSW Government has announced 'major reforms' to the Independent Planning Commission, following a review by the NSW Productivity Commission. While the reforms are a step in the right direction, some may be left wondering whether the changes go far enough to address longstanding concerns regarding inefficiency and inconsistency in IPC decision-making.

Key takeaways

• The Independent Planning Commission (the IPC) is to be retained, but with changes to referral triggers designed to reduce the volume of matters considered by the IPC.
• The composition of the IPC is likely to change, and new performance benchmarks and firmer decision-making timeframes (yet to be advised) will be introduced.
• Arguably one of the most heavily criticised of the IPC's functions, the public hearing process is to be maintained, although multiple stage hearings and referrals to the IPC for advice are to be abolished.
• The Productivity Commission's recommendations go some way to addressing concerns regarding duplication between the Department of Planning, Industry and Environment (the Department) and IPC assessment processes, but are unlikely to remove all duplication and the associated cost and delay for proponents.
• While significant, the proposed reforms arguably fall short of a 'major reform' and 'overhaul' of the IPC. This is likely to disappoint some industry participants who were calling for more drastic changes, including limiting the IPC to an advisory role.

Background

On 19 October 2019, the NSW Minister for Planning and Public Spaces (the Minister) announced that the Productivity Commission would undertake a review of the IPC.

The Deputy Premier described the review as one of the Government's key measures to provide certainty to the mining industry, following a series of coal mining decisions by the IPC in 2019 that attracted strong criticism from industry.

However, calls for a review of the IPC's role, processes and composition have not been limited to the mining industry. Concerns regarding lack of certainty, consistency and timeliness in IPC decisions and processes have also been widely canvassed in the property sector.

On 1 February 2020, the Minister released the Productivity Commission's report, which contains 12 recommendations to improve the IPC's independence, governance and performance. The Government also issued a response to the report, in which it accepted all of the Productivity Commission's recommendations. 

Outcome of review

The Terms of Reference for the review expressly required the Productivity Commission to consider whether the IPC should be maintained. The review's scope, therefore, went beyond merely considering the IPC's structure and processes. The Productivity Commission conducted a desktop review of other common law jurisdictions, and found that the IPC appears unique from an international perspective, in that it has enabling legislation 'which results in a constant flow of applications being referred to it for assessment and determination'.

However, as predicted in our previous Insight, the Productivity Commission stopped short of recommending the dissolution of the IPC. This is unsurprising, given that more than 70% of unique submissions to the Productivity Commission were in support of retaining the IPC. The Productivity Commission concluded that it is in the public interest to maintain the IPC, and that it plays an important role in maintaining the integrity of the planning system and minimising the risk of corruption and undue political influence.

The report recommends some important changes to improve the IPC, including:

1. Governance – establishing the IPC as a separate and independent agency and formalising its governance arrangements, including by establishing the Chair as the head of the IPC with accountability to the Minister, developing a governance framework, and improving internal systems, procedures and the culture of the IPC Secretariat.
2. Composition – reducing the number of Commissioners (currently 29) and seeking Commissioners with greater generalist decision-making skills, rather than narrow technical expertise. The Productivity Commission concluded that some of the Commissioners' experience is highly specialised and may not be well suited to the IPC's core decision-making function.
3. Referral triggers – tightening the criteria for matters to be referred to the IPC, so that it determines only sufficiently contentious or complex projects. Previously, 25 community objections to a project could trigger a referral to the IPC. This is to be increased to 50 'unique' objections, and, for the first time, those objections must come from people living within a specified distance of the project (eg 100km), so that projects with large numbers of form submissions will not necessarily be referred to the IPC. This change to the objections trigger is predicted to reduce the IPC's caseload by more than 25%, based on data from the past five years.
4. No modifications – removing the referral of modification applications to the IPC (except those subject to reportable political donations).
5. Financial arrangements – reviewing and revising the IPC's budget to ensure it is appropriately resourced, and reviewing the remuneration model for Commissioners.
6. Performance and efficiency – establishing outcome-focused objectives and performance measures (including timeliness targets) the IPC must report against, improving internal policies and procedures and IT systems to support the IPC's workloads, implementing continuous improvement mechanisms, simplifying and shortening Statements of Reasons, and abolishing multiple stage public hearings.

The Department's role in the assessment of projects referred to the IPC has been the subject of much comment in recent years. Apparent overlap or duplication in consultation and assessment activities has been blamed as a source of delay and inconsistency in approach. The Productivity Commission suggests that:

• the Department should adopt a service delivery approach when undertaking assessments for the IPC;
• the IPC and Department should agree on independent experts to be appointed by the Department to undertake assessments (rather than the IPC engaging its own experts to undertake peer reviews, except as a last resort);
• the Department and IPC should, where appropriate, obtain any required legal advice jointly; and
• the IPC should reform and simplify its process of giving reasons, because the current Statement of Reasons format has become 'increasingly legalistic and lengthy'.

Analysis

Each of these measures has the potential to improve decision-making timeframes. In particular, the recommendation to reduce the number of Commissioners is welcomed, as this has the potential to mitigate the risk of inconsistency in decision-making, which has been a significant concern in recent times.

The recommendation to simplify and shorten Statements of Reasons, and not simply following the list of statutory considerations, is sensible from the perspective of making decisions more digestible for the public. However, this recommendation could potentially expose decisions to legal challenge if, with a view to being more concise and targeted in its reasons, the IPC fails to demonstrate that it has taken into account all relevant considerations in reaching its decision.

The introduction of an objector 'proximity' requirement as a trigger for referral to the IPC is a notable change. This has been recommended because, according to the Productivity Commission, referrals to the IPC have previously been triggered by a solely quantitative assessment of objections 'with no consideration as to the nature of …objections and the relationship between the objector and the area impacted by the development'. We anticipate that this recommendation will be criticised by public interest groups, who might argue that nowhere else in NSW planning law is an objector required to demonstrate proximity to the development site in order for their objection to be considered legitimate. Will this recommendation effectively create two classes of objectors, and is the IPC entitled to disregard entirely the views of those living far away from a development site?

While the Productivity Commission report emphasises that the IPC is not a judicial body, the recommended skillset for IPC panel members appears to closely resemble the skillset of commissioners of the Land and Environment Court, for example, understanding of planning legislation, and experience and expertise in making (and explaining) difficult decisions. If this recommendation is implemented, it may signal a shift in the IPC's role towards being a more quasi-judicial body, rather than a technical assessment panel.

Finally, the removal of referrals to the IPC for advice and multiple stage public hearings (although rarely used) represent improvements and may speed up approval timeframes by eliminating additional steps in the process. While the Productivity Commission has not recommended discontinuing single-stage public hearings, which many view as an unnecessary and costly duplication (in terms of time and resources) of the final IPC review and assessment process, it has recommended that the IPC facilitate a more interrogative hearing process.

Major reform or tweaking around the edges?

The Minister has described the proposed changes as a major reform and overhaul of the IPC. However, while the recommendations will no doubt be welcome to the property and mining industries and are a step in the right direction, some may be left wondering whether the changes go far enough to address the concerns that gave rise to the review in the first place.

Given that a number of submitters from the mining industry were calling for the IPC to be stripped of its role as a consent authority and limited to an advisory role, the Productivity Commission's recommendations are unlikely to constitute the major overhaul that industry was looking for.

What next?

Acting IPC Chair Peter Duncan AM has been appointed to oversee the implementation of the Productivity Commission's recommendations.

The Government has not yet indicated any timeframe for implementation of the reforms. It is also unclear what transitional arrangements will apply, for example, to projects currently under assessment by the Department that have more than 25 objections but less than 50 unique objections, and whether these projects will still be referred to the IPC for determination.

As such, proponents with projects currently before the Department or that have already been referred to the IPC should assume, for the time being, that they will not have the benefit of the recommended reforms.