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What this report is about

Extreme rainfall across eastern Australia in 2021 and 2022 led to a series of major flood events in New South Wales.

This audit assessed how effectively the NSW Government provided emergency accommodation and temporary housing in response to the early 2022 Northern Rivers and late 2022 Central West flood events.

Responsible agencies included in this audit were the Department of Communities and Justice, NSW Reconstruction Authority, the former Department of Planning and Environment, the Department of Regional NSW and the Premier’s Department.

Findings

The Department of Communities and Justice rapidly provided emergency accommodation to displaced persons immediately following these flood events.

There was no plan in place to guide a temporary housing response and agencies did not have agency-level plans for implementing their responsibilities.

The NSW Government rapidly procured and constructed temporary housing villages. However, the amount of temporary housing provided did not meet the demand.

There is an extensive waitlist for temporary housing and the remaining demand in the Northern Rivers is unlikely to be met. The NSW Reconstruction Authority has not reviewed this list to confirm its accuracy.

Demobilisation plans for the temporary housing villages have been developed, but there are no long-term plans in place for the transition of tenants out of the temporary housing.

Agencies are in the process of evaluating the provision of emergency accommodation and temporary housing.

The findings from the 2022 State-wide lessons process largely relate to response activities.

Audit recommendations

The NSW Reconstruction Authority should:

  • Develop a plan for the provision of temporary housing.
  • Review the temporary housing waitlist.
  • Determine a timeline for demobilising the temporary housing villages.
  • Develop a strategy to manage the transition of people into long-term accommodation.
  • Develop a process for state-wide recovery lessons learned.

All audited agencies should:

  • Finalise evaluations of their role in the provision of emergency accommodation and temporary housing.
  • Develop internal plans for implementing their roles under state-wide plans.

Extreme rainfall across eastern Australia in 2021 and 2022 led to a series of major flood events in New South Wales. In response, the NSW Government declared each of these events a natural disaster and made available a wide range of support for affected individuals and businesses. The flooding experienced by the State was widespread and its severity caused significant destruction in communities across the State. Some of the most significant damage occurred in the Northern Rivers and Central West regions of New South Wales.

Whilst areas of the Northern Rivers are prone to regular flooding, the scale of flooding in 2022 had not been experienced in the region before. On 28 February 2022, the Wilsons River in Lismore reached a height of 14.4 metres, approximately 2.3 metres higher than the previous record. A second flood occurred on 30 March 2022, with the river reaching 11.4 metres. The flooding in the region was extensive, affecting towns including Lismore, Coraki, Woodburn and Ballina. Between late February and early April 2022, 13 lives were lost in the Northern Rivers floods. In addition, 4,055 properties were deemed uninhabitable, and a further 10,849 properties were assessed as damaged. Approximately 4,000 people had to be evacuated from Lismore alone during this period, with thousands displaced from their homes across the region.

In the Central West, on 14 November 2022, the Lachlan River at Forbes peaked at 10.6 metres and was categorised as major flooding due to the inundation of extensive rural areas with properties, villages and towns isolated. On the same day in Eugowra, the Mandagery Creek peaked at 9.8 metres, passing the previous record of 9.6 metres in 1950. Flooding occurred in other areas of the Central West including Parkes, Molong, Cowra and Canowindra. Two lives were lost in the town of Eugowra with 80% of homes and businesses in the town damaged.

This audit assessed the following two areas of NSW Government support provided in response to these flood events:

  • Provision of emergency accommodation: short-term accommodation provided to displaced persons unable to return to their own home in an emergency situation.
  • Provision of temporary housing provided in the form of temporary pods and caravans.

The Department of Communities and Justice (DCJ) is responsible for the provision of emergency accommodation and other welfare services in response to a disaster event. With regards to temporary housing, the following agencies were involved in this audit:

  • Resilience NSW was the lead agency responsible for recovery and led the implementation of the temporary housing program under the oversight of the Chair, Housing Taskforce (HTF) from July 2022. On 16 December 2022, Resilience NSW was abolished, with some staff transferred to the NSW Police Force, Department of Premier and Cabinet (DPC) and DCJ. The remaining staff were transitioned to the newly established NSW Reconstruction Authority.
  • The Department of Planning and Environment (DPE) chaired the HTF until July 2022 and led the process for the identification and evaluation of temporary housing village sites. On 1 January 2024, DPE was abolished and the DPE functions discussed in this report now form part of the Department of Planning, Housing and Infrastructure.
  • NSW Public Works (NSWPW), a branch of the Department of Regional NSW (DRNSW) procured and managed the construction of the pods used in this program, and procured the caravans used as part of the temporary housing response.

The then DPC (now Premier’s Department (PD)) was responsible for whole-of-government policy advice, convening the Crisis Policy Committee of Cabinet, and whole-of-government communications.

This audit assessed how effectively the NSW Government provided emergency and temporary housing in response to the early 2022 Northern Rivers and late 2022 Central West flood events. We addressed this objective by examining whether the audited agencies:

  • effectively planned for the provision of emergency accommodation and temporary housing prior to the flood events
  • provided emergency accommodation and temporary housing to meet the needs of affected communities in response to the flood events
  • are effectively capturing lessons learned in relation to their provision of emergency accommodation and temporary housing as part of the flood response.

There is a State-level plan in place to guide the approach to emergency accommodation

The Welfare Services Functional Area Supporting Plan (WSFASP, the plan) is a supporting plan to the New South Wales Emergency Management Plan (EMPLAN). The plan outlines the responsibilities of the Department of Communities and Justice (DCJ) for the coordination and delivery of disaster welfare services in New South Wales. This includes the provision of emergency accommodation services. The plan in place during the flood events outlined the responsibilities of DCJ and the former Office of Emergency Management (OEM), some responsibilities of which have since transitioned to the NSW Reconstruction Authority (the Reconstruction Authority). The plan sets out a framework for government and non-government organisations to coordinate to provide key welfare services during an emergency, and outlines agreed roles and responsibilities. The plan outlines preparedness measures and arrangements for the provision of key welfare services during the response to and recovery from emergencies in New South Wales.

The plan details the organisations and key positions involved in welfare services, including their overall roles and responsibilities, and a basic structure for the delivery of disaster welfare services. For example, the plan states that both the former Department of Families and Communities Services and the not-for-profit Adventist Development and Relief Agency (ADRA) are responsible for emergency accommodation but does not clarify the detailed responsibilities associated with this role. These provide a State-wide, though not detailed, approach to emergency accommodation and welfare services in a disaster recovery context.

There was no plan in place to guide the temporary housing response, despite the NSW Government utilising this type of response in a previous emergency event

The State-level emergency planning documents do not contemplate the need for temporary housing as a government disaster response. Although there was a temporary housing response to the Black Summer bushfires in 2019–20, albeit on a smaller scale, no specific plans were in place to guide this response or the flood events in 2021–22. The NSW Government therefore had to develop its approach to addressing demand for temporary housing whilst responding to the flood emergency as it was occurring.

A partnership was established between the NSW Government and the Minderoo Foundation in 2020 to provide 100 pods to people whose homes were destroyed in the Black Summer bushfires. The initial rollout consisted of four-person pods, however the need for greater capacity was identified, with larger, family-sized pods developed for up to six people. The implementation of this program did not include formalising the work completed in documented plans for future use in response to other emergency events.

A plan that sets out how temporary housing should be used is in place in Queensland. The Queensland Government released a Temporary Emergency Accommodation (TEA) plan in 2021 which describes the arrangements, roles and responsibilities of key organisations critical to supporting displaced community members after the closure of an evacuation centre. The TEA plan outlines the five phases in the provision of accommodation support which includes temporary housing recovery. This demonstrates that a plan for the use of temporary accommodation would not be unprecedented.

Without plans in place to respond to all aspects of an emergency, decision makers are forced to be reactive in their decision making or to develop these plans while also responding to the events. In this specific instance, the government was forced to develop governance structures and perform tasks such as options analysis and site selection for temporary housing during the immediate aftermath of the flood events.

The Reconstruction Authority has acknowledged the need for a formalised plan for temporary housing responses and has started work to develop this in preparation for future flood events. It advised that the Housing Taskforce (HTF) has begun this work by performing assessments and reviews of high-risk areas and engaging with local councils and community groups. The Reconstruction Authority is also developing a Recovery Readiness Checklist, which will include preparedness for the provision of temporary housing in an emergency. Pre-event recovery planning specific to Local Government Areas (LGAs) is also underway, with the Reconstruction Authority developing tailored checklists which cover the provision of temporary housing. These tools will form part of the State's recovery response under the NSW Recovery Plan, which the Reconstruction Authority is currently in the process of updating. The Reconstruction Authority advises that this update will include identifying responsibilities in relation to the temporary housing response and recovery more broadly.

The WSFASP in place during the flood events had not been reviewed and updated in line with its planning requirements

Plans which outline the coordination and delivery of services in response to an emergency are imperative to ensure all required activities are completed, and the needs of affected communities are met. Plans also serve as a common reference point for decision making. Out of date plans can result in unclear roles and responsibilities, requiring agencies to make improvised decisions due to the urgent nature of emergency response. This creates a risk of key activities not being fulfilled and community needs going unmet.

The WSFASP in place during the flood response was last updated and endorsed by the State Emergency Management Committee (SEMC) in June 2018. As part of the planning requirements outlined in the plan, the State Welfare Services Functional Area Coordinator (WelFAC) is required to ensure the plan is reviewed every five years, or when relevant aspects require review following emergency operations or changes to legislation. The State WelFAC is an officer from DCJ responsible for the monitoring, support and coordination of disaster welfare services in New South Wales.

In 2020, a machinery of government change was implemented which established Resilience NSW as a public service executive agency and transferred persons employed in OEM to Resilience NSW. Despite these legislative changes, the plan had not been updated in line with its requirements to reflect these and subsequent changes, as OEM was still listed as one of the two agencies responsible for the coordination and delivery of disaster welfare services. Similarly, the plan had not been updated to reflect emergency operations changes with ADRA listed as the responsible coordinator for the provision of emergency accommodation services, despite no longer being responsible for this service.

The WSFASP has since been updated to reflect these changes and was endorsed by the SEMC in September 2023. The current WSFASP aligns with the welfare services responsibilities following the transfer of the welfare services functional area to DCJ in 2023. This includes the role of DCJ as the lead agency for the WSFASP, and DCJ and the Housing Contact Centre (HCC) within DCJ as the coordinator of emergency accommodation. The updated plan also provides an outline of the key welfare services that are delivered by the functional area, including emergency accommodation, personal support, essential food and grocery items, and transition from emergency accommodation. The outline provides a description of each service and the agency, team or non-government organisation responsible for coordinating the service.

Agencies did not have agency-level plans in place for implementing their responsibilities under State-level emergency accommodation and temporary housing plans

The State EMPLAN establishes a framework for sub plans, supporting plans and related policy instruments and guidelines. It states that a supporting plan should describe the support which is to be provided to the controlling or coordinating authority during emergency operations and be an action plan which describes how an agency or functional area is to be coordinated in order to fulfill the roles and responsibilities allocated. Without this more detailed guidance being in place, there is no common reference point for individuals within an agency to refer to when implementing the broader State-level plans, such as the WSFASP.

The WSFASP defines emergency accommodation and outlines the government and non-government organisations responsible for its provision. It does not provide a detailed description of the specific roles and responsibilities related to its provision. DCJ does not have an agency-level plan in place that specifies these in more detail, and did not have any standard operating procedures (SOPs) in place to guide the process of housing displaced persons in emergency accommodation.

The absence of SOPs to guide this process can increase the chance of inconsistent implementation of the WSFASP, with a reliance on the experience of staff to complete tasks to house people in emergency accommodation. For example, at the onset of an emergency, staff in the HCC contact local accommodation venues such as hotels and motels to determine availability in the area. They may also book blocks of rooms in preparation for housing displaced persons. At the time of the flood events, there was no documentation which detailed the process for DCJ staff to follow and these tasks were not recorded anywhere as requiring completion before a disaster occurred.

DCJ has advised that they have since developed internal processes which form part of the training program for Disaster Welfare staff. In addition to this, the HCC has developed a guide which steps out the various processes relating to the provision of emergency accommodation, as well as outlining the different roles and responsibilities within the HCC in relation to these processes.

As noted, there is no State-level plan in place to guide the temporary housing response. As a result, there is no framework to guide this process at an agency level for the Reconstruction Authority. The absence of both State and agency-level plans guiding the provision of temporary housing at the time of the flood events meant that agencies were required to develop a process to follow at the same time as responding to the flood events.

Appropriate governance structures were established quickly and changed as needed to reflect recovery needs

The State Recovery Committee (SRC) was activated following the 2019–20 bushfires and was still operating at the time of the 2022 floods. As part of this, the SRC had a terms of reference which included responsibilities of the SRC and a membership list. The responsibilities of the SRC in the terms of reference are to:

  • provide strategic direction in relation to disaster recovery
  • oversee reconstruction and recovery efforts in disaster impacted areas
  • provide senior leadership to facilitate whole-of-government coordination
  • monitor and report to the Premier, Deputy Premier and Cabinet on the progress of recovery efforts in disaster impacted areas.

Once the flood events commenced on 28 February 2022, the SRC increased its meeting frequency to every two days initially, for a total of 13 meetings in March. The SRC continued to meet at least twice a week from mid-April until the end of May, at which point it reduced gradually in frequency to weekly and then fortnightly. The SRC continued to meet throughout all of 2022 and 2023.

The SRC established a range of subcommittees to assist with recovery efforts. These subcommittees were operational from March 2022 onwards. Subcommittees had terms of reference setting out their role and were chaired by appropriate agencies with operational responsibilities that aligned with those roles. The Health and Wellbeing subcommittee was established as part of this and initially had responsibility for the provision of both emergency accommodation and temporary housing. This subcommittee was chaired by a relevant Senior Executive in DCJ.

As noted above, none of the whole-of-government plans prior to the flood events allocated responsibility to an agency or subcommittee for constructing and managing temporary housing. Although temporary housing had been utilised by the government previously in response to the 2019–20 bushfires, its provision had never been implemented on the scale required in response to the flood events.

In early March, the SRC created a new subcommittee: the Housing Taskforce (HTF). The HTF contained key staff from a wide variety of agencies, as well as other key stakeholders like local councils where appropriate, and was chaired by a Senior Executive from the Planning Branch of the Department of Planning and Environment (DPE). A terms of reference was quickly developed for the subcommittee. The HTF’s initial purpose included developing a strategy for identifying locations and pathways for temporary housing. This allowed the Health and Wellbeing subcommittee and the HTF to provide more focus on their particular areas of responsibility.

The SRC helped to manage issues but did not provide strategic risk management

Subcommittees regularly reported to the SRC throughout the flood response period. The SRC was able to manage issues with these programs as they arose, often by connecting relevant staff and providing a forum for these issues to be resolved across agencies. In this way, the SRC was able to manage issues, which aligns with its role in facilitating whole-of-government coordination.

Given that all relevant agencies were represented on the SRC, it was uniquely placed to provide strategic risk management across all aspects of the recovery effort including provision of accommodation and housing following the floods. This would fall within the SRC’s role of providing strategic direction in relation to disaster recovery. Strategic risk management involves addressing external risks, including those which may impact the government’s ability to achieve its objectives. The SRC did not undertake strategic risk management to proactively identify issues that could hinder the recovery effort, such as through developing risk registers and assigning mitigation strategies to agencies or specific individuals.

In regards to the flood temporary housing response, this may have included identifying and mitigating risks that could impact on the quantity of housing provided, risks to the overall flood recovery budget, and risks related to further flood events occurring that might hinder flood recovery. While the SRC did not consider this work during the flood response, Resilience NSW and the Reconstruction Authority both documented some whole-of-government risks to the delivery of the response to natural disasters as part of their enterprise risk management processes, including throughout 2022. However, this work was not undertaken specifically in relation to the unfolding flood events, but was instead done as part of the agency's regular review of its enterprise risks. Given that only one agency was involved in this risk identification, it was not a substitute for whole-of-government risk identification through the SRC.

The HTF did undertake some separate risk identification for the temporary housing response in the Northern Rivers, but not until October 2022. The HTF had been in operation since March 2022 without undertaking formal risk assessments to determine key risks to the provision of temporary housing that required mitigation. Some of the risks identified included expenditure on temporary housing exceeding its allocated budget, temporary housing sites failing to deliver agreed outcomes, and that there would be inappropriate or ineffective engagement with Aboriginal communities. This risk identification from the HTF was also reflected in Resilience NSW's and the Reconstruction Authority’s enterprise risk registers, where it is identified that there is a risk that the agencies do not effectively deliver on short and medium term housing.

The SRC provided oversight of the work of subcommittees

As noted above, one of the roles of the SRC is to oversee reconstruction and recovery efforts in disaster impacted areas. To fulfil this role of providing oversight, the SRC received updates on the activities of each subcommittee at each meeting.

In March 2022, each subcommittee developed a 100-Day Flood Action Plan that set out actions that would be completed in the first 30, 60 and 100 days. Each subcommittee was required to update its Flood Action Plan and report progress on implementation to the SRC every two weeks. The SRC received this regular reporting from each subcommittee, which included the status of each item, actions undertaken to date, and the next steps that each subcommittee was undertaking. This served to provide the SRC with oversight of the actions of each group to supplement the subcommittee updates with greater detail.

The quality of reporting from the HTF to the SRC reduced throughout August and September 2022. At this time the updates from the subcommittee included either only a verbal update or only statistical updates on the temporary housing response. This means that throughout this period, the SRC was providing only limited oversight of the temporary housing response. From October 2022, the HTF provided more detailed updates to the SRC, providing data on the temporary housing villages including the number of dwellings, estimated capacity and the status of each of the village sites (whether operational or estimated date of construction completion).

DCJ adapted its usual procedures to house a large number of people in emergency accommodation following the Northern Rivers flood event

The HCC, a branch within DCJ, is responsible for arranging emergency accommodation during a disaster, although this responsibility was not outlined in a specific emergency accommodation plan or procedure at the time of the flood events. Once a disaster is declared, the HCC is activated for a disaster welfare response. The team is required to estimate the number of people who will be displaced by the disaster and may seek emergency accommodation. The team is also required to contact local accommodation providers such as hotels, motels and caravan parks to determine vacancy information, as well as obtain information about the facilities such as wheelchair accessibility and pet-friendly rooms. The HCC team will then make direct contact with staff at evacuation centres and facilitate bookings based on the demand. A central internal database is utilised by the HCC, which enables them to see providers and book within the system.

In following these procedures, DCJ housed 788 people in the two weeks following the initial flood event by utilising the standard local accommodation providers. On 27 April 2022, 1,440 people were reported as staying at local accommodation providers as part of the emergency accommodation response. Exhibit 5 shows the number of people housed in emergency accommodation across the North Coast from March 2022 to early April 2023.

Governance structures continued to operate as previously established in response to the Central West flood event

The governance structures established in response to the 2019–20 bushfires and the flood event in the Northern Rivers mostly operated in the same capacity for the management of the Central West flood event. In October 2022, the meeting frequency for the SRC reduced to fortnightly, following the same structure with subcommittee updates discussed as part of the agenda. There was no increase in meeting frequency during or in the immediate aftermath of the response to the Central West flood event.

Resilience NSW continued to document whole-of-government risks to the delivery of the response to natural disasters during the response to the Central West flood event, and this work was continued by the Reconstruction Authority once established. Resilience NSW also continued to develop risk dashboard heatmaps each quarter, monitoring any changes in the residual risk rating of these risks, as well as outlining issues identified, and any new and emerging risks.

DCJ housed displaced persons in the Central West quickly, considering additional needs during the process

DCJ, through the HCC, advised that it followed its standard process outlined above for the provision of emergency accommodation during the Central West flood event. The evacuation order for Eugowra was made on 15 November 2022, and by 8 December 2022, DCJ had housed 93 people from the community in emergency accommodation. The HCC was able to utilise alternative accommodation such as rooms at Charles Sturt University to meet the increasing demand for emergency accommodation in the Central West.

Through the initial consultation process conducted with displaced persons at evacuation centres, the HCC was also able to consider their additional needs and meet these where possible. For example, companion animals were supported by Local Land Services and the Royal Society for the Prevention of Cruelty to Animals through the provision of boarding services. DCJ advised that local needs were also considered as part of the intake process. For example, displaced persons were accommodated as close to their hometown as possible. Those evacuated from Forbes were given priority for emergency accommodation in Forbes. This did impact evacuees from other towns. Ordinarily, those displaced in Eugowra would also be housed in Forbes, but due to limited accommodation options, they were evacuated to Orange instead. Other considerations made for displaced persons included level access and accessible rooms for those with disabilities, and baby care items, such as cots, where required.

The At-home Caravans program was implemented as immediate shelter for displaced persons awaiting pods on their property in the Central West

By 28 November 2022, Resilience NSW made the decision to activate the At-home Caravans program in the Central West, with applications from displaced persons being taken within a week after the flood event in Eugowra. Caravans were temporarily set up on private properties in Eugowra. Displaced persons are able to live in these caravans while waiting for a pod to be installed on their property. By 10 January 2023, 102 caravans had been delivered to the Central West and started to be located on private properties. At 30 May 2023, Resilience NSW had delivered 124 out of the 129 required caravans to properties. A plan was implemented to provide immediate shelter in the community through the caravans, organise medium-term housing in the form of pods, and support displaced persons to repair or rebuild their homes. Caravans were provided to households where properties required demolition, those that were damaged but reparable, and rental properties with owner’s consent.

Other options for immediate shelter were considered but not progressed. Placing caravans on site at showgrounds or caravan parks was considered, however a NSWPW assessment found that 95% of impacted homes could accommodate caravans on property. Caravans on property require less ongoing case management, site works and utilities. Private farm house rental accommodation was also considered, however extremely low availability of these in the area resulted in the decision to not progress this option.

Resilience NSW was able to meet the demand for housing in the Central West by placing temporary housing on people’s property

Resilience NSW conducted early analysis of potential temporary housing village sites in the aftermath of the floods in the Central West. However, after reviewing the situation in Eugowra and the relatively larger blocks, it was decided a more appropriate solution would be to place temporary pods on private property. Part of this decision was the impact a centralised village located in Eugowra would have on displaced persons from other affected towns. At 30 May 2023, 59 out of 100 pods had been installed on private properties. These pods replaced caravans initially installed on private properties, although at the time of the audit some disaster-affected persons were still living in caravans while they wait for pod installation on their property.

Resilience NSW was able to utilise the excess pods from the Northern Rivers to reduce the wait time for displaced persons to move into the pod from the caravan located on their property. Once their eligibility had been confirmed, the resident met with NSWPW and the builders contracted to install the pods. The resident confirmed where they would like the pod placed and the size needed. Applicants were then prioritised by Resilience NSW and pods installed in order of this prioritisation. NSWPW engaged the same third-party contractor used in the Northern Rivers construction to expedite the installation process.

Resilience NSW used measures to adapt the pods for suitable use in the Central West, as well as configuring them to meet mobility needs of residents. Cabonne Shire and Forbes Shire Councils required pods to be built at a height of 1.5 metres. The pods were therefore installed on scaffolding to raise their height. As the pods were designed and constructed for the Northern Rivers climate, insulation was installed on the base of the pods to ensure the inside temperature was appropriate for residents in the Central West. The raised height of the pods also impacted their accessibility, so the contractor was also engaged to install ramps instead of stairs where needed.

The first demobilisation of a pod occurred on 7 August 2023, after the resident’s home had been repaired and it was suitable for them to move back home. The Reconstruction Authority advised that as pods continue to be demobilised, they will be cleaned, any required repairs completed, and then moved onto the next property as needed. There was no long-term plan initially developed for the transition of tenants out of temporary housing, although the Reconstruction Authority has advised that the newly developed Temporary Housing Plan will include these considerations to inform processes at the end of the lease period. There has been consideration for returning the pods to the Northern Rivers once the work in the Central West is complete.

The Reconstruction Authority advised that due to the delays residents are facing in accessing trades and payment of insurance claims, the HTF is currently seeking the support of councils to extend the placement of pods beyond the two years that were initially planned.

There was no clear process in place to support displaced persons in emergency accommodation who were ineligible for temporary housing in the Central West

The WSFASP in place during the flood events did not outline a transition plan for displaced persons staying in emergency accommodation. Resilience NSW took over responsibility for the transition of displaced persons from emergency accommodation to temporary housing. It was not always possible to house rental tenants by placing a pod on the property they were occupying because they were unable to obtain landowner permission. It was necessary to find an alternative property to install these pods, usually on property owned by a family member. This was able to address most tenants’ issues.

It was unclear which agency was responsible for the support of renting households in the medium to long-term. The lack of a documented process for the provision of emergency accommodation created a gap in relation to the support for displaced persons. The WSFASP has since been updated to include provision for coordinated case management support to assist people in emergency accommodation with longer-term housing needs.

DCJ maintained a list of displaced persons who had been staying in emergency accommodation and were unable to exit without assistance. This list was provided to Resilience NSW weekly. Resilience NSW provided updates to DCJ on the status of those who were being transitioned into temporary housing, but no assistance was provided by Resilience NSW to those who were ineligible for temporary housing. DCJ was therefore required to provide case management to these people to assist in their transition to more stable housing.

Agencies learned and applied lessons from the Northern Rivers floods to the Central West flood event, but most have not formalised these for future consideration

Agencies involved in the provision of emergency accommodation and temporary housing learned key lessons from the Northern Rivers floods that could be applied in the Central West response. These lessons included the Reconstruction Authority rapidly standing up the At-home Caravans Program to provide immediate accommodation to displaced persons, and instigating a community reference group to provide feedback on the proposed housing response plan. These lessons learned were largely undocumented, with many staff being involved across both the Northern Rivers and Central West flood response, and able to directly apply lessons learned from their experience in the earlier response. It is good practice to formalise lessons learned to ensure that future responses may have access to contemporary information to learn from both positive and negative experiences in previous situations.

DCJ and Premier’s Department (PD) have not yet documented any lessons learned from their roles in the flood events. Some lessons were documented by Resilience NSW in April 2022 as part of a process to identify emerging insights. These lessons covered a broad range of activities, including findings relevant to the provision of temporary housing.

In June 2023, the Reconstruction Authority formally documented its own lessons learned from the provision of temporary housing. This includes identifying actions to avoid repeating some of the negative experiences, such as Aboriginal communities not being consulted at the appropriate time, and not having adequate program design processes in place for the temporary housing program. In addition, NSWPW has commissioned an evaluation of its work in the construction and provision of temporary housing, which includes a formal lessons learned component.

External reviews have also been conducted and have captured interim lessons learned, including the 2022 NSW Flood Inquiry and the ‘Response to major flooding across New South Wales in 2022’ Parliamentary Inquiry.

Agencies are in the process of evaluating the provision of emergency accommodation and temporary housing

Agencies have commenced the process of evaluating their role in the provision of emergency accommodation and temporary housing. DCJ advised that an external evaluation would commence shortly and that it was in the process of engaging a consultancy firm to conduct this. NSWPW has also commenced an external review of its provision of temporary housing. DPE and PD have not commenced a review, although PD has established a new unit for strategic communications during disasters in response to the agency's involvement in crisis communications during the flood events. This unit has been developed to deliver overarching whole-of-government messaging during disaster events.

Similarly, the Reconstruction Authority advised that an evaluation was planned for the provision of temporary housing. In addition, Resilience NSW commissioned an evaluation of the use of the Minderoo Foundation pods in response to the 2019–20 bushfires. This review reported in November 2022, though it had limited consideration of the role of the Minderoo Foundation pods as a source of temporary housing in the Northern Rivers. This report made 19 recommendations to the Reconstruction Authority and the Minderoo Foundation, and found that the Minderoo pods had largely been delivered in line with the original intended objectives.

There is no State-wide process in place to capture lessons learned from all agencies involved in recovery

Each year, the SEMC conducts a State-wide lessons learned exercise, incorporating learnings from all of the emergency events in the previous year. This exercise has commenced for the 2022 emergency events, however at the time of the audit it was in draft and not yet formally endorsed by the SEMC.

The agencies involved in the State lessons learned process are agencies with emergency response responsibilities. The findings largely relate to these response activities, with very few lessons learned relating to recovery. Only a limited number of agencies are involved in this activity, and the 2022 review did not incorporate the views of a number of agencies that were involved in the recovery phase of the Northern Rivers and Central West flood events.

While it is important that lessons are learned from the response phase of an emergency, it is equally important that State-wide lessons are learned from the recovery phase to ensure that appropriate State-wide changes can be made, or positive experiences can be continued. There is currently no process in place to capture these lessons learned from the recovery phase from all agencies involved in the recovery phase.

Appendix one – Responses from entities

Appendix two – About the audit

Appendix three – Performance auditing

 

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Parliamentary reference - Report number #389 - released 22 February 2024

Published

Actions for State heritage assets

State heritage assets

Environment
Local Government
Planning
Compliance
Management and administration
Regulation
Risk

What the report is about

This audit assessed how effectively the Department of Planning and Environment (Heritage NSW) is overseeing and administering heritage assets of state significance.

Heritage that is rare, exceptional or outstanding to New South Wales may be listed on the State Heritage Register under the Heritage Act 1977. This provides assets with legal recognition and protection. Places, buildings, works, relics, objects and precincts can be listed, whether in public or private ownership.

Heritage NSW has administrative functions and regulatory powers, including under delegation from the Heritage Council of NSW, relevant to the listing, conservation and adaptive re-use of heritage assets of state significance.

In summary, the audit assessed whether Heritage NSW:

  • is effectively administering relevant advice and decisions
  • is effectively supporting and overseeing assets
  • has established clear strategic priorities and can demonstrate preparedness to implement these.

What we found

Heritage NSW does not have adequate oversight of state significant heritage assets, presenting risks to its ability to promote the objects of the Heritage Act.

Information gaps and weaknesses in quality assurance processes limit its capacity to effectively regulate activities affecting assets listed on the State Heritage Register.

Heritage NSW has adopted a focus on customer service and recently improved its timeliness in providing advice and making decisions about activities affecting listed assets. But Heritage NSW has not demonstrated how its customer-focused priorities will address known risks to its core regulatory responsibilities.

Listed assets owned by government entities are often of high heritage value. Heritage NSW could do more to promote effective heritage management among these entities.

What we recommended

The report made eight recommendations to Heritage NSW, focusing on:

  • improving quality assurance over advice and decisions
  • improving staff guidance and training
  • defining and maintaining data in the State Heritage Register
  • clarifying its regulatory intent and approach
  • sector engagement and interagency capability to support heritage outcomes.

The Heritage Act 1977 (the Heritage Act) and accompanying regulation provide the legal framework for the identification, conservation and adaptive re-use of heritage assets in New South Wales.

The Department of Planning and Environment (Heritage NSW) has responsibility for policy, legislative and program functions for state heritage matters, including supporting the Minister for Heritage to administer the Heritage Act.

Heritage assets that are rare, exceptional or outstanding beyond a local area or region may be listed on the State Heritage Register under the Heritage Act. These assets include places, buildings, works, relics, moveable objects and precincts, and assets that have significance to Aboriginal communities in New South Wales. Assets nominated for and listed on the State Heritage Register ('listed assets') may be owned privately or publicly, including by local councils and state government entities.

The Heritage Act establishes the Heritage Council of NSW (the Heritage Council) to undertake a range of functions in line with its objectives. Heritage NSW provides administrative support to the Heritage Council, for example providing advice on assets that have been nominated for listing on the State Heritage Register. Many of Heritage NSW’s core activities also relate to exercising functions and powers under delegation from the Heritage Council. These include making administrative decisions about works affecting listed assets, and exercising powers to regulate asset owners’ compliance with requirements under the Heritage Act.

Heritage NSW states that heritage:

…gives us a sense of our history and provides meaningful insights into how earlier generations lived and developed. It also enriches our lives and helps us to understand who we are.  

According to Heritage NSW, an effective heritage system will facilitate the community in harnessing the cultural and economic value of heritage.

The objective of this audit was to assess how effectively the Department of Planning and Environment (Heritage NSW) is overseeing and administering heritage assets of state significance.

For this audit, ‘heritage assets of state significance’ refers to items (including a place, building, work, relic, moveable object or precinct) listed on the State Heritage Register ('listed assets'), and those which have been nominated for listing.

Conclusion

The Department of Planning and Environment (Heritage NSW) does not have adequate oversight of state significant heritage assets. Information gaps and weaknesses in certain assurance processes limit its capacity to effectively regulate activities affecting assets listed on the State Heritage Register. These factors also constrain its ability to effectively support voluntary compliance and promote the objects of the Heritage Act, which include encouraging conservation and adaptive re-use.
Heritage NSW has adopted a focus on customer service and recently improved the timeliness of its advice and decisions on activities affecting listed assets. But Heritage NSW has not demonstrated how its customer service priorities will address known risks to its regulatory responsibilities. It could also do more to enable and promote effective heritage management among state government entities that own listed assets.

The information that Heritage NSW maintains about assets listed on the State Heritage Register ('listed assets') is insufficient for its regulatory and owner engagement purposes. Data quality and completeness issues have arisen since the register was established in 1999. But Heritage NSW's progress to address important gaps in the register, and its other information systems, has been limited in recent years. These gaps limit Heritage NSW’s capacity to detect compliance breaches early and implement risk-based regulatory responses, and to strategically target its owner engagement activities to promote conservation and re-use.

Heritage NSW makes decisions on applications for works on listed assets, requiring technical skills and professional judgement. But Heritage NSW does not provide its staff with adequate guidance to ensure that consistent approaches are used, and it lacks sufficient quality assurance processes. There are similar weaknesses in Heritage NSW's oversight of decisions on applications that are delegated to other government entities.

Heritage NSW has prioritised the implementation of customer service-focused activities, policies, and programs to reduce regulatory burdens on asset owners since 2017. For example, Heritage NSW has refreshed its website, introduced new information management systems, and implemented new regulation for the self-assessment of exemptions for minor works. However, Heritage NSW has not taken steps to mitigate oversight and quality risks introduced with the reduced regulatory burdens. Heritage NSW has made some, but to date insufficient, progress on a key project to update its publications. These documents (over 150 publications) are intended to play an important role in promoting voluntary compliance and supporting heritage outcomes. Heritage NSW started a new project to update relevant publications in April 2023.

Heritage NSW has recently implemented processes to improve its efficiency, such as screening new nominations for listing on the State Heritage Register. Heritage NSW has also reported improvements in the time it takes to decide on applications for works affecting listed assets. In the third quarter of 2022–23, 87% of decisions were made within the statutory timeframes. This compares to 48% in 2021–22. Heritage NSW has similarly improved how quickly it provides heritage advice on major projects, with 90% of advice reported as delivered on time in the third quarter of 2022–23, compared to 44% in 2020–21.

Assets owned by state government entities comprise a large proportion of State Heritage Register listings. These assets are often of high heritage value or situated within large and complex precincts or portfolios. But Heritage NSW does not implement targeted capability building activities to support good practice heritage management among state government entities and to promote compliance with their obligations under the Heritage Act.

The expected interaction between Heritage NSW's strategic plans and activities, and the priorities of the Heritage Council of NSW, is unclear. Actions to clarify the relevant governance arrangements have also been slow following a review in 2020 but this work re-commenced in late 2022.

Heritage NSW has been progressing work to draft reforms to the Heritage Act. This follows recommendations made in a 2021 Upper House Inquiry into the Heritage Act. To build preparedness for future reforms, Heritage NSW will need to do more to address the risks and opportunities identified in this audit report. In particular, it will need to ensure it has sufficient information and capacity to implement a risk-based regulatory approach; clear and effective governance arrangements with the Heritage Council of NSW; and enhanced engagement with government entities to promote the conservation and adaptive re-use of listed assets in public ownership.

This chapter assesses the effectiveness of Heritage NSW's oversight of state heritage assets, including its visibility of listed assets, and its oversight of regulatory decision-making. It also assesses Heritage NSW's activities to engage with owners to meet their obligations under the Heritage Act and to support heritage outcomes.

This chapter assesses the timeliness of Heritage NSW’s provision of advice, recommendations, and decisions on heritage issues to support heritage management outcomes with respect to listed assets.

This chapter assesses whether the Department of Planning and Environment (Heritage NSW) has established clear strategic priorities to effectively oversee and administer activities related to listed assets, and its preparedness to implement reforms. It also assesses the adequacy of planning activities and governance arrangements to support the achievement of strategic directions.

Appendix one – Response from agency

Appendix two – About the audit

Appendix three – Performance auditing

 

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

Parliamentary reference - Report number #384 - released 27 June 2023

Published

Actions for Regulation of public native forestry

Regulation of public native forestry

Environment
Industry
Compliance
Management and administration
Regulation
Risk

What this report is about

The Forestry Corporation of NSW (FCNSW) is a state-owned corporation that manages over two million hectares of public native forests and plantations supplying timber to sawmills across NSW.

The NSW Environment Protection Authority (EPA) is responsible for regulating the native forestry industry in NSW.

FCNSW must comply with Integrated Forestry Operations Approvals (IFOAs), which set out rules for how timber harvesting may occur.

Most harvesting is undertaken under the Coastal IFOA, which commenced in 2018.

This audit assessed how effectively Forestry Corporation of NSW manages its public native forestry activities to ensure compliance, and how effectively the Environment Protection Authority regulates these activities.

What we found

Forestry Corporation of NSW (FCNSW) clearly articulates its compliance obligations.

While FCNSW undertakes monitoring of its contractors, it does not do so consistently and does not target its monitoring activities on a risk basis.

FCNSW has largely fulfilled mandatory Coastal IFOA training requirements, but has not yet trained other staff who would also benefit from the training.

Contractor compliance appears to be improving, but there are gaps and inconsistencies in FCNSW's documentation of this.

FCNSW is not measuring its overall compliance to determine how it is tracking against its target.

The EPA undertakes proactive inspections of Coastal IFOA harvesting operations on a risk basis. However, it does not assess the risk at harvest sites covered by other IFOAs.

Most EPA compliance staff have received basic training, but few have received more advanced training required to effectively undertake forestry inspections.

Some EPA offices do not have the necessary equipment to undertake forestry inspections.

The EPA and FCNSW are not implementing all elements of a Memorandum of Understanding that aims to promote a cooperative relationship between the agencies.

What we recommended

The report made recommendations to FCNSW which aim to improve:

  • staff training
  • consistency of compliance reviews and data capture
  • targeting of compliance activities
  • measurement of performance.

The report made recommendations to the EPA which aim to improve:

  • risk-assessments
  • staff training
  • staff equipment.

The report also recommended that FCNSW and EPA should fully implement their Memorandum of Understanding.

The Forestry Corporation of NSW (FCNSW) is a state-owned corporation that supplies timber to sawmills in New South Wales, including timber harvested from public native forests. FCNSW is responsible for the management of around two million hectares of public native forests and plantations. Around half the area of native forests is permanently set aside for conservation.

Public native forestry is regulated through the Forestry Act 2012, Biodiversity Conservation Act 2016, Protection of the Environment Operations Act 1997 and associated regulations. Under the Forestry Act 2012, the objectives of FCNSW include, where its activities affect the environment, to conduct its operations in compliance with the principles of ecologically sustainable development contained in section 6(2) of the Protection of the Environment Administration Act 1991. This involves the integration of social, economic and environmental considerations in decision-making processes.

In undertaking its native forestry operations, FCNSW must comply with Integrated Forestry Operations Approvals (IFOA), issued jointly by the Minister for the Environment and the Minister for Agriculture, which set out rules to protect species and ecosystems where timber harvesting is occurring, and aim to ensure forests are managed in an ecologically sustainable way. FCNSW must also ensure that its contractors undertake forestry operations in line with IFOAs. The Coastal IFOA, developed in 2018, consolidated the four IFOAs for the Eden, Southern, Upper and Lower North East coastal regions of New South Wales into a single IFOA. The other three current IFOAs are Brigalow Nandewar, South Western Cypress and Riverina Redgum (the Western IFOAs).

The NSW Environment Protection Authority (EPA) is responsible for regulating native forestry in New South Wales. Under the Protection of the Environment Administration Act 1991, one of the objectives of the EPA is to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development. This includes monitoring FCNSW’s compliance with IFOA conditions, including by maintaining and enforcing a compliance program.

The Coastal IFOA also introduced a new structure and regulatory approach for IFOAs, establishing outcomes, conditions and protocols. The conditions set mandatory actions and controls intended to protect threatened plants, animals, habitats, soils and water. The protocols, referenced in the conditions, set out additional enforceable actions and controls intended to support the effective implementation of the conditions.

Public native forestry is the largest component of hardwood supply in New South Wales. The 2019–20 bushfires had a major impact on regional communities, and large areas of native forest. This heightened environmental risks and challenges in public native forestry. Five million hectares of New South Wales was impacted, including more than 890,000 hectares of native State Forests. This is over 40% of the coastal and tablelands native State Forests in New South Wales.

In addition to effective compliance activities, the success of the regulatory approach to public native forestry operations depends on how wood supply yields are modelled, and ensuring that harvested volumes do not exceed these yields. This is of particular importance in areas where forests have been severely damaged by fire. This audit did not consider sustainable yields. Recent reviews of this include an independent review of the FCNSW sustainable yield model and a Natural Resources Commission review in 2021.

This audit assessed how effectively Forestry Corporation of NSW manages its public native forestry activities to ensure compliance, and how effectively the Environment Protection Authority regulates these activities.

Conclusion

Forestry Corporation of NSW (FCNSW) clearly articulates its compliance obligations at the corporate level and for each harvest site. However, there are deficiencies in FCNSW’s compliance approach. While FCNSW undertakes monitoring of its contractors in a number of ways, it does not consistently monitor compliance across its contractors and does not target its monitoring activities on a risk basis. This increases the risk that non-compliant practices will not be identified, potentially leading to environmental harm.

FCNSW has a compliance strategy and program that sets out its compliance obligations and how they will be managed. FCNSW’s Compliance Policy outlines compliance requirements, actions to ensure compliance, and responsibilities for staff, supervisors, senior management and board members. FCNSW also has a compliance monitoring system manual that outlines its monitoring program, and its risk-assessment and incident reporting procedures. These corporate documents set out FCNSW’s overall approach to managing compliance.

Harvesting in State Forests is undertaken by contractors or sub-contractors. FCNSW provides training to its staff and contractors and undertakes monitoring to identify contractor compliance with relevant requirements through a variety of means, including its quality assurance assessment (QAA) program. FCNSW also communicates compliance obligations to contractors in harvest plans.

FCNSW is not undertaking its monitoring activities on a risk basis. The frequency of contractor supervision is inconsistent and is not tied to the contractor’s past performance, meaning that monitoring resources are not necessarily being targeted at the areas of highest -risk.

FCNSW also does not target its QAAs on a risk basis. FCNSW does not have procedures for how QAAs should occur outside the North Coast region. QAAs are conducted inconsistently, with some reviews occurring in only part of the harvest site while others cover the whole harvest site. In addition, some QAAs do not meet FCNSW’s minimum standards. FCNSW’s record keeping of QAAs is also inconsistent, making it difficult to determine true levels of compliance and the cause of identified potential non-compliances.

In addition, FCNSW does not collate and analyse the results of its compliance monitoring to target its compliance audits. Undertaking these audits on a risk basis would allow FCNSW to apply its resources to the highest-risk harvest sites and contractors.

The EPA identifies native forestry as a high priority regulatory activity and undertakes proactive inspections of Coastal IFOA harvest sites on a risk basis. However, the EPA does not assess the risk at Western IFOA harvest sites, leaving a significant gap in its inspection regime. This means that the EPA may not be inspecting all high-risk harvest sites to ensure compliance with regulations across those sites. The EPA has started to train more of its staff in conducting forestry inspections, but it currently has a limited number of trained and experienced staff to undertake this work.

The EPA has developed a Regulatory and Compliance Priorities Statement 2022–23 which identifies native forestry as a key risk. This statement identifies that forestry is a priority area for its compliance activities because of the increased environmental risk and sensitivity in forests following the 2019–20 bushfires. A divisional plan for its regulatory operations contains specific actions for forestry, including ensuring that the EPA has a consistent approach to recording regulatory actions undertaken and identifying priority areas for assurance over State Forests.

As part of its compliance activities, the EPA responds to complaints received, or reports of non-compliance, across all four IFOA areas and also carries out proactive inspections in the Coastal IFOA area. To guide these inspections, the EPA determines the level of risk posed by each harvest site in the Coastal IFOA area using information it gathers from FCNSW. The EPA prioritises inspections of sites rated as high and medium-risk, but the EPA has not undertaken risk-assessments for the three Western IFOAs. By not determining the risks in these areas, the EPA does not have assurance that it is checking FCNSW compliance with regulations across all high-risk sites.

Most EPA staff have basic training in forestry matters, but few staff have the more advanced training required to effectively undertake forestry inspections. In addition, not all EPA officers have access to the technology required to undertake forestry inspections, such as internet-enabled tablets and specialised tapes for measuring tree diameter. This limits the EPA’s ability to determine the level of compliance with regulations and respond effectively to instances of environmental harm in relation to public native forestry.

The Coastal IFOA does not contain provisions which allow the EPA to unilaterally restrict forestry activities in the aftermath of a catastrophic event such as the 2019–20 bushfires. Following the bushfires, FCNSW approached the EPA and asked for additional site-specific operating conditions (SSOC) at some locations to assist it in maintaining compliance. The SSOCs were issued by the EPA and FCNSW was required to carry out forestry operations in accordance with the SSOCs at relevant harvest sites. These SSOCs were in place for 12 months. After a year, FCNSW decided not to renew this approach with the EPA, but implemented its own voluntary measures during harvesting operations. Unlike the SSOCs, the EPA was unable to undertake enforcement activities for breaches of voluntary measures.

Appendix one – Responses from agencies
Appendix two – About the audit
Appendix three – Performance auditing

 

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

Parliamentary reference - Report number #382 - released 22 June 2023

Published

Actions for Regulation and monitoring of local government

Regulation and monitoring of local government

Planning
Whole of Government
Environment
Local Government
Compliance
Regulation
Risk

What the report is about

The Office of Local Government (OLG) in the Department of Planning and Environment is responsible for strengthening the local government sector, including through its regulatory functions.

This audit assessed whether the OLG is effectively monitoring and regulating the sector under the Local Government Act 1993. The audit covered:

  • the effectiveness of departmental arrangements for the OLG to undertake its regulatory functions
  • whether the OLG has effective mechanisms to monitor and respond to risks and issues relating to council compliance and performance.

What we found

The OLG does not conduct effective, proactive monitoring to enable timely risk-based responses to council performance and compliance issues.

The OLG has not clearly defined and communicated its regulatory role to ensure that its priorities are well understood.

The OLG does not routinely review the results of its regulatory activities to improve its approaches.

The department lacks an adequate framework to define, measure and report on the OLG's performance, limiting transparency and its accountability.

The OLG's new strategic plan presents an opportunity for the OLG to better define, communicate, and deliver on its regulatory objectives.

What we recommended

The OLG should:

  • publish a tool to support councils to self-assess risks and report on their performance and compliance
  • ensure its council engagement strategy is consistent with its regulatory approach
  • report each year on its regulatory activities and performance
  • publish a calendar of its key sector support and monitoring activities
  • enhance processes for internally tracking operational activities
  • develop and maintain a data management framework
  • review and update frameworks and procedures for regulatory responses.

 

The Local Government Act 1993 (the LG Act) provides the legal framework for the system of local government in New South Wales. The LG Act describes the functions of councils, county councils and joint organisations which should be exercised consistent with the guiding principles and requirements of the LG Act. Councils also have functions and responsibilities under other Acts.

There are 128 local councils, nine county councils and 13 joint organisations of councils in the New South Wales local government sector. Each council is unique in size and location, owns and manages assets, and delivers services for their communities. According to 2021–22 data provided by the Department of Planning and Environment (the department), local councils managed $175.2 billion in infrastructure, property plant and equipment, held $16.8 billion of cash and investments, collected $7.8 billion in rates and charges and entered into $3.7 billion of borrowings. Councils' decision-making responsibilities directly impact the communities they serve, including responsibilities relevant to financial management, economic development, environmental sustainability and community wellbeing.

Under the LG Act, each elected council is accountable to the community they serve. In addition to Auditor-General reports, issues relating to council performance and compliance have been identified in public inquiries commissioned by the Minister for Local Government and investigations by the Independent Commission Against Corruption, NSW Ombudsman and Office of Local Government (OLG). Challenges and opportunities related to the operations and sustainability of the local government sector have also been reported by the sector and identified in reports by NSW government agencies such as the Independent Pricing and Regulatory Tribunal.

The department is the primary state government agency with responsibility for policy, legislative, regulatory and program functions for local government matters. The Office of Local Government (OLG) is a business unit within the department that advises the Minister for Local Government and exercises delegated functions of the Secretary of the Department of Planning and Environment under the LG Act.

Key departmental planning documents state that the OLG is responsible for strengthening the sustainability, performance, integrity, transparency and accountability of the local government sector. As the state regulator of the local government sector, the OLG aims to promote voluntary compliance, build councils' capacity for high performance, and intervene only when 'warranted and appropriate'. Relevant regulatory activities include issuing guidelines, investigating councils and councillors, and supporting the Minister for Local Government's discretionary intervention powers. The OLG's other functions include developing policy, administering grants and programs, supporting local government election processes, and issuing certain approvals.

The objective of this audit was to assess whether the OLG is effectively monitoring and regulating the local government sector under the LG Act. The assessment included:

  • the effectiveness of departmental arrangements for the OLG to undertake its regulatory functions
  • whether the OLG has effective mechanisms to monitor and respond to risks and issues relating to council compliance and performance.

This report focuses on the OLG’s activities relevant to powers under Chapter 13 of the LG Act, and related regulatory activities, such as monitoring risks, issuing guidance and engaging with councils. It also examines strategic and operational planning for these activities in the context of the OLG's other activities, and departmental arrangements to oversee and enable the OLG's regulatory effectiveness.

Other OLG activities were not in scope of the audit but are commented on in this report where contextually relevant. This includes the OLG's responsibilities under the LG Act with respect to councillor misconduct, and the 2022 review of the councillor misconduct framework commissioned by the former Minister for Local Government.

Conclusion

The Office of Local Government (OLG) in the Department of Planning and Environment (the department) does not conduct effective, proactive monitoring to enable timely risk-based responses to council performance and compliance issues. Council performance and compliance varies and a range of issues continue across the local government sector – some significant – that can impact on councils' operations and sustainability.

The department recognises that an effective and efficient sector is 'crucial to the economic and social wellbeing of communities across the State,' but the OLG does not routinely review the results of its regulatory activities to improve its approaches. The OLG has also not clearly defined and communicated its regulatory role to ensure that its priorities are well understood.

Inadequate performance measurement and reporting on its regulatory activities is a significant transparency and accountability issue, and the OLG cannot demonstrate that it is effectively regulating the local government sector.

The department lacks an adequate framework to define, measure and report on the OLG's performance as the state regulator of the sector under the Local Government Act 1993 (the LG Act). The OLG's various council engagement activities are not well structured and coordinated towards delivering on a clearly defined regulatory role and its regulatory priorities are not well understood. In 2022, the OLG identified, in its new strategic plan, that there is a need for it to define its role in the sector. It would be expected that a clearly defined role already underpins its aim to 'strike the right mix of monitoring, intervention, capability improvement and engagement activities'.

The OLG collects various sources of information about council compliance and performance but its systems and processes do not enable structured, proactive sector monitoring to enable timely, risk-based responses. Ineffective sector monitoring is a particular issue in the context of compliance, financial management and governance risks that have been identified in inquiries and reviews by other government agencies including integrity bodies and reported by the sector. Audit Office data for 2021–22 shows that 62 councils did not have or regularly update key corporate governance policies, and 63 do not have basic controls to manage cyber security risks. Further, 31 councils or joint organisations did not meet the statutory requirement to have an audit, risk and improvement committee by 30 June 2022.1

Overall, the OLG has made limited progress on projects that have been identified since 2019 to improve its sector monitoring, such as updating its performance measurement framework for councils. These factors limit its capacity to identify and act on issues early. In early 2023, the OLG started to implement a new council risk assessment tool.

The OLG's two main frameworks to guide its sector improvement and intervention activities were last updated in 2014 and 2017. The OLG considered relevant statutory criteria when advising the Minister on the use of powers to issue performance improvement and suspension orders under the LG Act. But the OLG lacks complete and approved procedures to guide staff when preparing advice and recommendations related to interventions, and other response options. This creates risks to the consistency and transparency of relevant processes.

The department and the OLG have identified that resourcing issues present a risk to the OLG's regulatory functions. Projects since 2021 to review the OLG's budget did not progress. The OLG does not routinely review the costs or evaluate the effectiveness of its regulatory activities.

The OLG's 2022–2026 strategic plan sets out a vision to be, 'A trusted regulator and capability builder enabling councils to better serve their communities'. Implementing the strategic plan presents an opportunity for the OLG to better define, communicate, and deliver on its regulatory objectives towards strengthening the sector. The OLG advises that a delivery plan and performance indicators for its new strategy are being developed, alongside work resulting from the 2022 review of the councillor misconduct framework.

 


1 This data has been sourced through the Audit Office's financial audits of councils. The Local Government 2022 report, which compiles results from the local government sector financial statement audits for the year ended 30 June 2022, will include this and additional data, and related information. This report is expected to be tabled in June 2023.

This chapter considers the effectiveness of departmental arrangements for the OLG to undertake its regulatory functions.

This chapter assesses whether the OLG has effective mechanisms to monitor and respond to risks and issues relating to council compliance and performance.

The OLG’s 2017 Improvement and Intervention Framework is intended to guide appropriate responses to council compliance or performance risks and issues. The publicly available framework states that generally, the OLG will encourage councils to meet their obligations before a more formal intervention will be considered. It also states that any intervention or improvement response will be proportionate to the circumstances.

Appendix one – Response from agency

Appendix two – Statutory powers relevant to council accountability under the Local Government Act

Appendix three – About the audit

Appendix four – Performance auditing

 

Copyright notice

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

Parliamentary reference - Report number #380 - released 23 May 2023

Published

Actions for Planning and managing bushfire equipment

Planning and managing bushfire equipment

Community Services
Justice
Planning
Environment
Local Government
Asset valuation
Compliance
Financial reporting
Information technology
Infrastructure
Internal controls and governance
Management and administration
Procurement
Regulation
Risk
Shared services and collaboration
Workforce and capability

What the report is about

This audit assessed the effectiveness of the NSW Rural Fire Service (RFS) and local councils in planning and managing equipment for bushfire prevention, mitigation, and suppression.

What we found

The RFS has focused its fleet development activity on modernising and improving the safety of its firefighting fleet, and on the purchase of new firefighting aircraft.

There is limited evidence that the RFS has undertaken strategic fleet planning or assessment of the capability of the firefighting fleet to respond to current bushfire events or emerging fire risks.

The RFS does not have an overarching strategy to guide its planning, procurement, or distribution of the firefighting fleet.

The RFS does not have effective oversight of fleet maintenance activity across the State, and is not ensuring the accuracy of District Service Agreements with local councils, where maintenance responsibilities are described.

What we recommended

  1. Develop a fleet enhancement framework and strategy that is informed by an assessment of current fleet capability, and research into appropriate technologies to respond to emerging fire risks.
  2. Develop performance measures to assess the performance and capabilities of the fleet in each RFS District by recording and publicly reporting on fire response times, fire response outcomes, and completions of fire hazard reduction works.
  3. Report annually on fleet allocations to RFS Districts, and identify the ways in which fleet resources align with district-level fire risks.
  4. Develop a strategy to ensure that local brigade volunteers are adequate in numbers and appropriately trained to operate fleet appliances in RFS Districts where they are required.
  5. Establish a fleet maintenance framework to ensure regular update of District Service Agreements with local councils.
  6. Review and improve processes for timely recording of fleet asset movements, locations, and maintenance status.

This audit assessed how effectively the NSW Rural Fire Service (the RFS) plans and manages the firefighting equipment needed to prevent, mitigate, and suppress bushfires. This audit also examined the role of local councils in managing bushfire equipment fleet assets. Local councils have vested legal ownership of the majority of the land-based firefighting fleet, including a range of legislated responsibilities to carry out fleet maintenance and repairs. The RFS has responsibilities to plan and purchase firefighting fleet assets, and ensure they are ready for use in response to fires and other emergencies.

This report describes the challenges in planning and managing the firefighting fleet, including a confusion of roles and responsibilities between the RFS and local councils in relation to managing certain land-based rural firefighting fleet – a point that has been made in our Local Government financial audits over several years. This role confusion is further demonstrated in the responses of the RFS and local councils to this audit report – included at Appendix one.

The lack of cohesion in roles and responsibilities for managing rural firefighting vehicles increases the risk that these firefighting assets are not properly maintained and managed, and introduces a risk that this could affect their readiness to be mobilised when needed.

While the audit findings and recommendations address some of the operational and organisational inefficiencies in relation to rural firefighting equipment management, they do not question the legislative arrangements that govern them. This is a matter for the NSW Government to consider in ensuring the fleet arrangements are fit for purpose, and are clearly understood by the relevant agencies.

The NSW Rural Fire Service (hereafter the RFS) is the lead combat agency for bushfires in New South Wales, and has the power to take charge of bushfire prevention and response operations anywhere in the State. The RFS has responsibilities to prevent, mitigate and suppress bushfires across 95% of the State, predominantly in the non-metropolitan areas of New South Wales. Fire and Rescue NSW is responsible for fire response activity in the cities and large townships that make up the remaining five per cent of the State.

The RFS bushfire fleet is an integral part of the agency's overall bushfire risk management. The RFS also uses this fleet to respond to other emergencies such as floods and storms, motor vehicle accidents, and structural fires. Fleet planning and management is one of a number of activities that is necessary for fire mitigation and suppression.

The Rural Fires Act 1997 (Rural Fires Act) imposes obligations on all landowners and land managers to prevent the occurrence of bushfires and reduce the risk of bushfires from spreading. Local councils have fire prevention responsibilities within their local government areas, principally to reduce fire hazards near council owned or managed assets, and minor roads.

The RFS is led by a Commissioner and is comprised of both paid employees and volunteer rural firefighters. Its functions are prescribed in the Rural Fires Act and related legislation such as the State Emergency Rescue Management Act 1989. The RFS functions are also described in Bush Fire Risk Management Plans, the State Emergency Management Plan, District Service Agreements, and RFS procedural documents. Some of the core responsibilities of the RFS include:

  • preventing, mitigating, and suppressing fires across New South Wales
  • recruiting and managing volunteer firefighters in rural fire brigades
  • purchasing and allocating firefighting fleet assets to local councils
  • establishing District Service Agreements with local councils to give the RFS permissions to use the fleet assets that are vested with local councils
  • carrying out fleet maintenance and repairs when authorised to do so by local councils
  • inspecting the firefighting fleet
  • supporting land managers and private property owners with fire prevention activity.

In order to carry out its legislated firefighting functions, the RFS relies on land-based vehicles, marine craft, and aircraft. These different firefighting appliance types are referred to in this report as the firefighting fleet or fleet assets.

RFS records show that in 2021 there were 6,345 firefighting fleet assets across NSW. Most of the land-based appliances commonly associated with firefighting, such as water pumpers and water tankers, are purchased by the RFS and vested with local councils under the Rural Fires Act. The vesting of firefighting assets with local councils means that the assets are legally owned by the council for which the asset has been purchased. The RFS is able to use the firefighting assets through District Service Agreements with local councils or groups of councils.

In addition to the land-based firefighting fleet, the RFS owns a fleet of aircraft with capabilities for fire mitigation, suppression, and reconnaissance during fire events. The RFS hires a fleet of different appliances to assist with fire prevention and hazard reduction works. These include aircraft for firefighting and fire reconnaissance, and heavy plant equipment such as graders and bulldozers for hazard reduction. Hazard reduction works include the clearance of bush and grasslands around major roads and protected assets, and the creation and maintenance of fire trails and fire corridors to assist with fire response activity.

The RFS is organised into 44 RFS Districts and seven Area Commands. The RFS relies on volunteer firefighters to assist in carrying out most of its firefighting functions. These functions may include the operation of the fleet during fire response activities and training exercises, and the routine inspection of the fleet to ensure it is maintained according to fleet service standards. Volunteer fleet inspections are supervised by the RFS Fire Control Officer.

In 2021 there were approximately 73,000 volunteers located in 1,993 rural fire brigades across the State, making the RFS the largest volunteer fire emergency service in Australia. In addition to brigade volunteers, the RFS has approximately 1,100 salaried staff who occupy leadership and administrative roles at RFS headquarters and in the 44 RFS Districts.

Local councils have legislative responsibilities relating to bushfire planning and management. Some of the core responsibilities of local councils include:

  • establishing and equipping rural fire brigades
  • contributing to the Rural Fire Fighting Fund
  • vested ownership of land-based rural firefighting equipment
  • carrying out firefighting fleet maintenance and repairs
  • conducting bushfire prevention and hazard reduction activity.

The objective of this audit was to assess the effectiveness of the RFS and local councils in planning and managing equipment for bushfire prevention, mitigation, and suppression. From the period of 2017 to 2022 inclusive, we addressed the audit objective by examining whether the NSW RFS and local councils effectively:

  • plan for current and future bushfire fleet requirements
  • manage and maintain the fleet required to prevent, mitigate, and suppress bushfires in NSW.

This audit did not assess:

  • the operational effectiveness of the RFS bushfire response
  • the effectiveness of personal protective equipment and clothing
  • the process of vesting of rural firefighting equipment with local councils
  • activities of any other statutory authorities responsible for managing bushfires in NSW.

As the lead combat agency for the bushfire response in NSW, the RFS has primary responsibility for bushfire prevention, mitigation, and suppression.

Three local councils were selected as case studies for this audit, Hawkesbury City Council, Wagga Wagga City Council and Uralla Shire Council. These case studies highlight the ways in which the RFS and local councils collaborate and communicate in rural fire districts.

Conclusion

The RFS has focused its fleet development activity on modernising and improving the safety of its land-based firefighting fleet, and on the purchase of new firefighting aircraft

The RFS has reduced the average age of the firefighting fleet from approximately 21 years in 2017, to approximately 16 years in 2022. The RFS has also enhanced the aerial fleet with the addition of six new aircraft to add to the existing three aircraft.

Recommendations from inquiries into the 2019–20 bushfires have driven significant levels of fleet improvement activity, mainly focused on the addition of safety features to existing fleet appliances. The RFS has dedicated most of its efforts to purchasing and refurbishing firefighting appliances of the same type and in the same volumes year on year.

However, the RFS is unable to demonstrate how the composition, size, or the locations of the NSW firefighting fleet is linked to current fire prevention, mitigation, and suppression requirements, or future fire risks.

There is limited evidence that the RFS has undertaken strategic fleet planning or assessment of the capability of the firefighting fleet to respond to current bushfire events or emerging fire risks

The RFS has not established a methodology to assess the composition or volumes of the firefighting fleet against fire activity and fire risks in the 44 NSW Rural Fire Districts. The RFS has not developed performance measures or targets to assess or report on fire response times in each of its districts, nor has it developed measures to assess the effectiveness of responses according to fire sizes and fire types. Similarly, the RFS has limited performance measures to assess fire prevention activity, or to assess fuel load reduction works, so it is not possible to assess whether its fleet capabilities are fit for these purposes.

The RFS does not have an overarching strategy to guide its planning, procurement, or distribution of the firefighting fleet

RFS fleet planning and fleet allocations are based on historical fleet sizes and compositions, and distributed to locations where there are appropriately trained brigade volunteers.

The RFS takes an asset protection approach to bushfire prevention and planning that is based on the Australian and New Zealand Standard for Risk Management. This approach requires that the RFS identify assets at risk of fire, and develop treatment plans to protect these assets. However, fleet requirements are not linked to NSW asset protection plans, meaning that fleet is not allocated according to the identified risks in these plans. Further, the RFS does not develop fire prevention plans for areas where there are no identified assets.

The RFS has not conducted future-focused fleet research or planning into technologies that match fleet capabilities to emerging or future fire risks. Since the significant fire events of 2019–2020, the RFS has not changed its approach to planning for, or assessing, the operational capabilities of the fleet. The RFS advises it is scoping a project to match resources to risk, which it plans to commence in 2023.

The RFS does not have effective oversight of fleet maintenance activity across the State, and is not ensuring the accuracy of District Service Agreements where maintenance responsibilities are described

The RFS does not have a framework to ensure that District Service Agreements with local councils are accurate. Almost two thirds of service agreements have not been reviewed in the last ten years, and some do not reflect actual maintenance practices. There is no formalised process to ensure communication occurs between the RFS and local councils for fleet management and maintenance.

RFS fleet management systems at the central level are not integrated with RFS district-level databases to indicate when fleet assets are in workshops being maintained and serviced. The RFS has a new centralised Computer Aided Dispatch System that relies on accurate fleet locations and fleet condition information in order to dispatch vehicles to incidents and fires. A lack of interface between the district-level fleet systems and the centralised RFS fleet dispatch system, may impact on operational responses to bushfires. 

The RFS has not made significant changes to the size or composition of the firefighting fleet in the past five years and does not have an overarching strategy to drive fleet development

Since 2017, the RFS has made minimal changes to its firefighting fleet volumes or vehicle types. The RFS is taking a fleet renewal approach to fleet planning, with a focus on refurbishing and replacing ageing firefighting assets with newer appliances and vehicles of the same classification and type. While the RFS has adopted a fleet renewal approach, driven by its Appliance Replacement Program Guide, it does not have a strategy or framework to guide its future-focused fleet development. There is no document that identifies and analyses bushfire events and risks in NSW, and matches fleet resources and fleet technologies to meet those risks. The RFS does not have fleet performance measures or targets to assess whether the size and composition of the fleet is meeting current or emerging bushfire climate hazards, or fuel load risks across its 44 NSW Fire Districts.

The RFS fleet currently comprises approximately 4,000 frontline, operational firefighting assets such as tankers, pumpers, and air and marine craft, and approximately 2,300 logistical vehicles, such as personnel transport vehicles and specialist support vehicles. Of the land-based firefighting vehicles, the RFS has maintained a steady number of approximately 3,800 tankers and 65 pumpers, year on year, for the past five years. This appliance type is an essential component of the RFS land-based, firefighting fleet with capabilities to suppress and extinguish fires.

Since 2017, most RFS fleet enhancement activity has been directed to upgrades and the modernisation of older fleet assets with new safety features. There is limited evidence of research into new fleet technologies for modern firefighting. The RFS fleet volumes and fleet types have remained relatively static since 2017, with the exception of the aerial firefighting fleet. Since 2017, the RFS has planned for, and purchased, six additional aircraft to add to the existing three aircraft in its permanent fleet.

While the RFS has made minimal changes to its fleet since 2017, in 2016 it reduced the overall number of smaller transport vehicles, by purchasing larger vehicles with increased capacity for personnel transport. The consolidation of logistical and transport vehicles accounts for an attrition in fleet numbers from 7,058 in 2016, to 6,315 in 2017 as shown in Exhibit 2.

The firefighting fleet management system is not always updated in a timely manner due to insufficient RFS personnel with permissions to make changes in the system

The RFS uses a fleet management system known as SAP EAM to record the location and status of firefighting fleet assets. The system holds information about the condition of the firefighting fleet, the home location of each fleet asset, and the maintenance, servicing, and inspection records of all assets. The RFS uses the system for almost all functions related to the firefighting fleet, including the location of vehicles so that they can be dispatched during operational exercises or fire responses.

Staff at RFS Headquarters are responsible for creating and maintaining asset records in the fleet management system. RFS District staff have limited permissions in relation to SAP EAM. They are able to raise work orders for repairs and maintenance, upload evidence to show that work has been done, and close actions in the system.

RFS District staff are not able to enter or update some fleet information in the system, such as the location of vehicles. When an RFS District receives a fleet appliance, it cannot be allocated to a brigade until the location of the asset is accurately recorded in the system. The location of the asset must be updated in the SAP EAM system by staff at RFS Headquarters. District staff can request system support from staff at RFS Headquarters to enter this information. At the time of writing, the position responsible for updating the fleet management system at RFS Headquarters was vacant, and RFS District personnel reported significant wait times in response to their service requests.

The RFS conducts annual audits of SAP EAM system information to ensure data is accurate and complete. RFS staff are currently doing data cleansing work to ensure that fleet allocations are recorded correctly in the system.

Communication between brigades, local councils and the RFS needs improvement to ensure that fleet information is promptly updated in the fleet management system

RFS brigade volunteers do not have access to the fleet management system. When fleet assets are used or moved, volunteers report information about the location and condition of the fleet to RFS District staff using a paper-based form, or by email or phone. Information such as vehicle mileage, engine hours, and defects are all captured by volunteers in a logbook which is scanned and sent to RFS District staff. RFS District staff then enter the relevant information into the fleet management system, or raise a service ticket with RFS Headquarters to enter the information.

Brigade volunteers move fleet assets for a range of reasons, including for fire practice exercises. If volunteers are unable to report the movement of assets to RFS District staff in a timely manner, this can lead to system inaccuracies. Lapses and backlogs in record keeping can occur when RFS staff at district offices or at Headquarters are not available to update records at the times that volunteers report information. A lack of accurate record keeping can potentially impact on RFS operational activities, including fire response activity.

Brigade volunteers notify RFS District staff when fleet appliances are defective, or if they have not been repaired properly. District staff then enter the information into the fleet management system. The inability of volunteers to enter information into the system means they have no visibility over their requests, including whether they have been approved, actioned, or rejected.

Local councils are responsible for servicing and maintaining the firefighting fleet according to the Rural Fires Act, but this responsibility can be transferred to the RFS through arrangements described in local service agreements. Council staff record all fleet servicing and maintenance information in their local systems. The types of fleet information that is captured in local council records can vary between councils. RFS staff described the level of council reporting, and the effectiveness of this process, as 'mixed'.

Councils use different databases and systems to record fleet assets, and some councils are better resourced for this activity than others

Firefighting fleet information is recorded in different asset management systems across NSW. Each council uses its own asset management system to record details about the vested fleet assets. All three councils that were interviewed for this audit had different systems to record information about the fleet. In addition, the type of information captured by the three councils was varied.

Exhibit 10: Systems used by local councils to manage the firefighting fleet
System Hawkesbury City Council Uralla Shire Council Wagga Wagga City Council
Financial asset management system TechnologyOne Civica Assetic
Asset management system TechnologyOne Manual MEX

Source: Audit Office analysis of information provided by the RFS and local councils.

Local councils have varying levels of resources and capabilities to manage the administrative tasks associated with the firefighting fleet. Some of the factors that impact on the ability of councils to manage administrative tasks include: the size of the council; the capabilities of the information management systems, the size of the staff team, and the levels of staff training in asset management.

Uralla Shire Council is a small rural council in northern NSW. This council uses financial software to record information about the firefighting fleet. While staff record information about the condition of the asset, its replacement value, and its depreciation, staff do not record the age of the asset, or its location. Staff manually enter fleet maintenance information into their systems. Uralla Shire Council would like to purchase asset maintenance software that generates work orders for fleet repairs and maintenance. However, the council does not have trained staff in the use of asset management software, and the small size of the fleet may not make it financially worthwhile.

The Hawkesbury City Council uses a single system to capture financial and asset information associated with the firefighting fleet. Hawkesbury is a large metropolitan council located north-west of Sydney, with a relatively large staff team in comparison with Uralla Shire Council. The Hawkesbury City Council has given RFS District staff access to their fleet information system. RFS District staff can directly raise work orders for fleet repairs and maintenance through the council system, and receive automated notifications when the work is complete.

Two of the three audited councils report that they conduct annual reviews of fleet assets to assess whether the information they hold is accurate and up-to-date.

More than half of the fleet maintenance service agreements between the RFS and local councils have not been reviewed in ten years, and some do not reflect local practices

Local councils have a legislated responsibility to service, repair, and maintain the firefighting fleet to service standards set by the RFS. Councils may transfer this responsibility to the RFS through District Service Agreements. The RFS Districts are responsible for ensuring that the service agreements are current and effective.

The RFS does not have monitoring and quality control processes to ensure that service agreements with local councils are reviewed regularly. The RFS has 73 service agreements with local councils or groups of councils. Sixty-three per cent of service agreements had not been reviewed in the last ten years. Only four service agreements specify an end date and, of those, one agreement expired in 2010 and had not been reviewed at the time of this audit.

The RFS does not have a framework to ensure that service agreements with local councils reflect actual practices. Of the three councils selected for audit, one agreement does not describe the actual arrangements for fleet maintenance practices in RFS Districts. The service agreement with Hawkesbury City Council specifies that the RFS will maintain the firefighting fleet on behalf of council when, in fact, council maintains the firefighting fleet. The current agreement commenced in 2012, and at the time of writing had not been updated to reflect local maintenance practices.

When District Service Agreements are not reviewed periodically, there is a risk that neither local councils nor the RFS have clear oversight of the status of fleet servicing, maintenance, and repairs.

RFS District Service Agreements set out a requirement that RFS and local councils establish a liaison committee. Liaison committees typically include council staff, RFS District staff, and RFS brigade volunteers. While service agreements state that liaison committees must meet periodically to monitor and review the performance of the service agreement, committee members determine when and how often the committee meets.

RFS District staff and staff at the three audited councils are not meeting routinely to review or update their service agreements. At Wagga Wagga City Council, staff meet with RFS District staff each year to report on activity to fulfil service agreement requirements. Uralla Shire Council staff did not meet routinely with RFS District staff before 2021. When liaison committees do not meet regularly, there is a risk that the RFS and local councils have incorrect or outdated information about the location, status, or condition of the firefighting fleet. Given that councils lack systems to track and monitor fleet locations, regular communication between the RFS and local councils is essential.

The RFS has not established processes to ensure that local councils and RFS District personnel meet and exchange information about the fleet. Of the three councils selected for this audit, one council had not received information about the number, type, or status of the fleet for at least five years, and did not receive an updated list of appliances until there was a change in RFS District personnel. This has impacted on the accuracy of council record keeping. Councils do not always receive notification about new assets or information about the location of assets from the RFS, and therefore cannot reflect this information in their accounting and reporting.

RFS area commands audit system records to ensure fleet inspections occur as planned, but central systems are not always updated, creating operational risks

RFS District staff are required by the Rural Fires Act to ensure the firefighting fleet is inspected at least once a year. Regular inspections of the fleet are vital to ensure that vehicles are fit-for-purpose and safe for brigade volunteers. Inspections are also fundamental to the operational readiness and capability of RFS to respond to fire incidents.

RFS Area Command personnel conduct audits of fleet maintenance data to ensure that fleet inspections are occurring as planned. These inspections provide the RFS with assurance that the fleet is being maintained and serviced by local council workshops, or third-party maintenance contractors.

Some RFS Districts run their own fleet management systems outside of the central management system. They do this to manage their fleet inspection activity effectively. Annual fleet inspection dates are programmed by staff at RFS Headquarters. Most of the inspection dates generated by RFS Headquarters are clustered together and RFS Districts need to separate inspection times to manage workloads over the year. Spreading inspection dates is necessary to avoid exceeding the capacity of local council workshops or third party contractors, and to ensure that fleet are available during the bushfire season.

The fleet inspection records at RFS Headquarters are not always updated in a timely manner to reflect actual inspection and service dates of vehicles. District staff are not able to change fleet inspection and service dates in the central management system because they do not have the necessary permissions to access the system. The usual practice is for RFS District staff to notify staff at RFS Headquarters, and ask them to retrospectively update the system. As there is a lag in updating the central database, at a point in time, the actual inspection and service dates of vehicles can be different to the dates entered in the central fleet management system.

Fleet inspection and maintenance records must be accurately recorded in the central RFS management system for operational reasons. RFS Headquarters personnel need to know the location and maintenance status of fleet vehicles at all times in order to dispatch vehicles to incidents and fires. The RFS fleet management system is integrated with a new Computer Aided Dispatch System. The Computer Aided Dispatch System assigns the nearest and most appropriate vehicles to fire incidents. The system relies on accurate fleet locations and fleet condition information in order to dispatch these vehicles.

There is a risk that RFS Headquarters' systems do not contain accurate information about the location and status of vehicles. Some may be in workshops for servicing and repair, while the system may record them as available for dispatch. As there are many thousands of fleet vehicles, all requiring an annual service and inspection, a lack of accurate record keeping has wide implications for State fire operations.

RFS is currently exploring ways to improve the ways in which fleet inspections are programmed into the fleet management system.

RFS provides funds to councils to assist with maintaining the firefighting fleet, but does not receive fleet maintenance cost information from all local councils

Each year the RFS provides local councils with a lump sum to assist with the cost of repairing and maintaining the firefighting fleet. This lump sum funding is also used for meeting the costs of maintaining brigade stations, utilities, and other miscellaneous matters associated with RFS business.

In 2020–21, the RFS provided NSW local councils with approximately $23 million for maintenance and repairs of appliances, buildings, and utilities. Ninety councils were provided with lump sum funding in 2021, receiving on average $257,000. The amounts received by individual councils ranged from $56,200 to $1,029,884.

Some councils provide itemised repairs and maintenance reports to RFS District staff, showing the work completed and the cost of that work. However, not all councils collect this information or provide it to the RFS. Local councils collect fleet maintenance information in their local council systems. In some cases, the responsibility for fleet maintenance is shared across a group of councils, and not all councils have oversight of this process.

The RFS has not taken steps to require local councils to provide itemised maintenance costings for the firefighting fleet. Thus, the RFS does not have a clear understanding of how local councils are spending their annual fleet maintenance funding allocations. The RFS does not know if the funding allocations are keeping pace with the actual cost of repairing and maintaining the fleet.

RFS District staff report that funding shortfalls are impacting on the prioritisation of fleet servicing and maintenance works in some council areas. When fleet servicing and maintenance is not completed routinely or effectively, there is a risk that it can negatively impact the overall condition and lifespan of the vehicle. Poor processes in relation to fleet maintenance and repair risk impacting on the operational capabilities of the fleet during fire events.

The timeliness and effectiveness of fleet servicing and maintenance is affected by resource levels in RFS Districts and local councils

Local councils have a legislated responsibility to service and maintain the firefighting fleet to the service standards set by the RFS. Fleet maintenance is usually done by the entity with the appropriate workshops and resources, and the maintenance arrangements are described in District Service Agreements. RFS District staff conduct annual inspections to ensure that the firefighting fleet has been serviced and maintained appropriately, and is safe for use by brigade volunteers. If the fleet has not been maintained to RFS service standards or timelines, RFS District staff may work with local councils to support or remediate these works.

The effectiveness of this quality control activity is dependent on relationships and communication between the RFS Districts and local councils. While some RFS staff reported having positive relationships with local councils, others said they struggled to get fleet maintenance work done in a timely manner. Some councils reported that funding shortfalls for fleet maintenance activity was impacting on the prioritisation of RFS fleet maintenance works. When fleet maintenance work is not completed routinely or effectively, it can negatively impact on the overall condition and lifespan of the vehicle. It can also reduce the capacity of the RFS to respond to fire events.

Fleet quality control activities are carried out by RFS District staff. In some of the smaller RFS Districts, one person is responsible for liaising with local councils and brigade volunteers about fleet maintenance and repairs. In the regions where resources are limited, there is less ability to maintain ongoing communication. This is impacting on fleet service and maintenance timelines and the timeliness of fleet monitoring activity.

The RFS has mutual support arrangements with agencies in NSW and interstate, though shared fleet levels are yet to be quantified

The RFS has arrangements with state, federal, and international fire authorities to provide mutual support during fire incidents. In NSW, the RFS has agreements with the three statutory authorities – Fire and Rescue NSW, the Forestry Corporation of NSW, and the NSW National Parks and Wildlife Service. The agreement with Fire and Rescue NSW provides a framework for cooperation and joint operations between the agencies. The agreements with the Forestry Corporation of NSW and the NSW National Parks and Wildlife Service describe the control and coordination arrangements for bush and grass fires across NSW. These arrangements are set out in legislation and incorporated into local Bush Fire Risk Management Plans.

The RFS has agreements with fire authorities in three of the four Australian states and territories that share a border with NSW – the Australian Capital Territory, Queensland, and South Australia. Each agreement sets out the arrangements for mutual assistance and joint operations, including arrangements for sharing aircraft. The agreement between the RFS and Victoria had lapsed. The RFS told the NSW Bushfire Inquiry that the agreement with Victoria would be finalised by June 2020. In June 2022, the RFS reported that the agreement was in the process of being finalised.

The arrangements for mutual aid from Western Australia, Northern Territory and Tasmania, are managed by the National Resource Sharing Centre. These agreements set out the arrangements for interstate assistance between Australian fire services, emergency services, and land management agencies in those states and territories.

These mutual support arrangements may assist during state-based fire events. However, when there are competing demands for resources, such as during the bushfires of 2019–2020, there can be limits on fleet availability. During the 2019–2020 fires, resources were stretched in all jurisdictions as these fires affected NSW, Victoria, and Queensland.

There are opportunities for the RFS and other NSW agencies to quantify fleet resources across the State and identify assets that can be mobilised for different fire activities. This form of fleet planning may be used to enhance surge capabilities during times of high fire activity. There are also opportunities for the RFS and other agencies to match the levels of shared assets to projected bushfire risks.

Appendix one – Responses from agencies 

Appendix two – About the audit 

Appendix three – Performance auditing

 

Copyright notice

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

Parliamentary reference - Report number #376 - released 27 February 2023

 

Published

Actions for Government's acquisition of private property: Sydney Metro project

Government's acquisition of private property: Sydney Metro project

Transport
Planning
Whole of Government
Compliance
Infrastructure
Internal controls and governance
Project management
Risk

What the report is about

Sydney Metro is Australia’s largest public transport project. It requires the acquisition of many private properties, including residential and business properties.

This audit assessed the effectiveness of the acquisition of private properties for the Sydney Metro project. The audited agencies were Sydney Metro, the Department of Planning and Environment (Valuer General NSW) and Transport for NSW (the Centre for Property Acquisition).

The audit assessed agencies against the framework for property acquisitions in New South Wales. It did not re-perform the valuations done for individual properties that were acquired by Sydney Metro.

What we found

Acquisitions of private property for the Sydney Metro project were mostly effective in the sample of acquisitions we assessed. We found Sydney Metro:

  • complied with legislative and policy requirements for compensation and communication with people subject to property acquisitions
  • kept accurate records of its acquisitions and applied probity controls consistently
  • did not complete detailed plans or negotiation strategies for the high-risk and high-value acquisitions we reviewed
  • did not comply with legislative timelines for most compulsory acquisitions because of delays in receiving the required information from the Valuer General in these cases.

The Centre for Property Acquisition has overseen the implementation of reforms to residential acquisition processes, but its assessment of the effectiveness of these reforms has not been comprehensive.

What we recommended

The audit made four recommendations to the audited agencies to improve:

  • plans and strategies for the acquisition of high-risk and high-value properties
  • timeliness of issuing compensation determinations for compulsory acquisitions
  • data quality on the experience of people subject to property acquisitions.

The NSW Government has the power to acquire land that is owned or leased by individuals or businesses, if it is needed for a public purpose. The power arises from the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act). Government agencies that have the power to compulsorily acquire private property are referred to as ‘acquiring authorities’. People who are subject to acquisitions are referred to as ‘affected parties’ and include property owners (business or residential), businesses with a commercial lease on a property, or individuals with residential tenancy leases. In recent years, the vast majority of acquisitions by the NSW Government have been for public transport or road projects.

Sydney Metro is a NSW Government agency with responsibility for building the Sydney Metro railway project. Sydney Metro is Australia’s largest public transport project. The project requires the acquisition of a large number of private properties. Sydney Metro has been one of the largest acquirers of private property in recent years, completing over 500 acquisitions between 2020 and mid-2022, with a total acquisition value of over $2 billion. Other agencies and statutory officers involved in the acquisition of property for the Sydney Metro project include:

  • the Department of Planning and Environment (DPE), which supports the minister responsible for the Just Terms Act. DPE also provides staff to the Valuer General of NSW
  • the Valuer General of NSW, an independent statutory officer that determines compensation in cases where the acquiring authority and the affected party cannot agree on compensation for property that has been acquired
  • Transport for NSW, which includes the Centre for Property Acquisition (CPA). The CPA does not have a direct role in acquiring properties, but its responsibilities include developing guidance for acquiring agencies and monitoring and reporting on their activities.

About this audit

The objective of this audit was to assess the effectiveness of acquisitions of private properties for Sydney Metro projects. The audit assessed agencies against the legislative and policy requirements in place for government acquisitions of private property in New South Wales. In line with the Audit Office's legislative mandate, the audit does not comment on the merits of the policy objectives reflected in the Just Terms Act.

The audit examined a sample of 20 property acquisitions. This was not a statistically representative sample. While our report provides comments on Sydney Metro’s overall acquisition processes, it does not provide assurance regarding the acquisitions that were not examined for this audit.

The audit did not re-perform the valuations done for individual properties that were acquired by Sydney Metro. Affected parties who disagree with the valuation of their property have the right to seek independent assessment of this via the Valuer General and the Land and Environment Court.

Conclusion

Acquisitions of property for the Sydney Metro project were mostly effective in the sample of acquisitions we assessed. Sydney Metro followed requirements for communication with affected parties. Compensation processes were conducted in compliance with legislative requirements, but compensation determinations for compulsory acquisitions were not completed within legislated time frames due to delays in receiving these from the Valuer General. Governance and probity processes were followed consistently, with some relatively minor exceptions. 

Sydney Metro has detailed guidelines for acquisitions that are based on relevant legislation and government policy. In the 20 acquisitions we assessed for this audit, these procedures were followed consistently. This included adhering to minimum timelines for negotiation periods, engaging independent valuers and other experts when needed, and complying with governance and probity processes.

Sydney Metro staff followed requirements for communication and support for residential acquisitions by assigning ‘personal managers’ and providing additional support to affected parties when needed. The Centre for Property Acquisition (CPA) has overseen reforms to the residential property acquisition process in recent years. These reforms include the introduction of the NSW Property Acquisition Standards and the use of personal managers, in addition to the existing acquisition managers, for residential acquisitions. However, the CPA has not assessed the impact of these changes on the experiences on people affected by property acquisitions.

Sydney Metro did not comply with the legislative requirement to provide a formal compensation notice to the affected party within 45 days of a compulsory acquisition starting in any of the eight relevant acquisitions in our sample. This was because Sydney Metro must wait for the Valuer General to complete a compensation determination before Sydney Metro can send the compensation notice, and the Valuer General did not do this within 45 days. We acknowledge that Sydney Metro does not have full control over this process, and that it has taken steps to mitigate the impact of delays on affected parties. 

This chapter presents our findings on Sydney Metro's acquisition of industrial and commercial properties. Industrial properties include construction businesses and manufacturing facilities. Commercial properties were mostly properties such as shopping centres and office towers. Many of these acquisitions involve businesses and properties that are relatively complex and have high values. This means the valuation process can require multiple experts and can be lengthy and contested. Adherence to governance and probity requirements is important for these acquisitions in order to demonstrate that the acquiring authority has achieved value for money.

This chapter presents our findings on Sydney Metro's acquisition of residential properties, which include apartments and houses, and small business leases, which mostly affected businesses in small shopping centres or arcades. Most of these acquisitions were lower value compared to industrial and commercial property acquisitions and did not require as much expert advice on complex technical issues. However, residential property acquisitions can be personally distressing for the affected parties and require staff from the acquiring authority to provide support and show empathy while ensuring legislative compliance and value for money.

Appendix one – Responses from agencies

Appendix two – About the audit 

Appendix three – Performance auditing 

 

Copyright notice

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

Parliamentary reference - Report number #375 - released 9 February 2023

Published

Actions for Bushfire recovery grants

Bushfire recovery grants

Environment
Industry
Compliance
Internal controls and governance
Management and administration
Service delivery

What the report is about

The Bushfire Local Economic Recovery (BLER) program was created after the 2019–20 bushfires, and commits $541.8 million to bushfire affected areas in New South Wales. It is co-funded by the Commonwealth and NSW governments.

This audit assessed how effectively the Department of Regional NSW (the department) and Resilience NSW administered rounds one and two of the BLER program. These rounds were:

  • Round one: early co-funding, split between two streams:
    • ­Fast-Tracked projects 
    • ­Sector Development Grants (SDG)
  • Round two: open round.

What we found

The Department of Regional NSW did not effectively administer the Fast-Tracked stream of the BLER. 

The administration process lacked integrity, given it did not have sufficiently detailed guidelines and the assessment process for projects lacked transparency and consistency. 

At the request of the Deputy Premier's office, a $1 million threshold was applied, below which projects were not approved for funding. The department advises that some of the projects excluded were subsequently funded from other programs. 

This threshold resulted in a number of shortlisted projects in areas highly impacted by the bushfires being excluded, including all shortlisted projects located in Labor Party-held electorates.

The department's administration of the SDG stream had a detailed and transparent assessment process. However, conflicts of interest were not effectively managed. 

The department's administration of the open round included a clearly documented, detailed and transparent assessment framework. Some weaknesses in the approach to conflicts of interest remained.

What we recommended

The Department of Regional NSW should ensure that for all future grant programs it:

  1. establishes and follows guidelines that align with relevant good practice guidance 
  2. ensures a communications plan is in place, including the communication of guidelines to potential applicants
  3. ensures staff declare conflicts of interest prior to the commencement of a grants stream, and that these conflicts of interest are recorded and managed
  4. ensures regular monitoring is in place as part of funding deeds 
  5. documents all key decisions and approvals in line with record keeping obligations.

This audit assessed how effectively the Department of Regional NSW and Resilience NSW administered rounds one and two of the Bushfire Local Economic Recovery (BLER) program.

As noted in this report, Resilience NSW was involved in the set-up and ongoing administration and monitoring of the BLER program. During the audited period, Resilience NSW was tasked with working with the Department of Regional NSW to create program objectives, guidelines and criteria. Their role also involved liaising with the Commonwealth Government, which provided co-funding for the program. Resilience NSW also had an ongoing role in quality assurance and compliance to ensure agencies administering disaster assistance did so in accordance with relevant guidelines. On 16 December 2022, the NSW Government abolished Resilience NSW.

Our work for this performance audit was completed on 3 November 2022, when we issued the final report to the two audited agencies. The audit report does not make specific recommendations to Resilience NSW. On 24 November 2022, the then Commissioner of Resilience NSW provided a response to the final report, which we include as it is the formal response from the audited entity at the time the audit was conducted.

During the 2019–20 bushfire season, New South Wales experienced 11,774 fire incidents, burning 5.5 million hectares of the state. There were 26 fatalities and 2,476 homes destroyed. The agriculture sector was heavily impacted with 601,858 hectares of pasture damaged.

Due to the widespread impacts of these fires on the state, the NSW and Commonwealth governments committed $4.4 billion toward bushfire response, recovery, and preparedness. This included the establishment of the Bushfire Local Economic Recovery (BLER) program, with $541.8 million committed to support job retention and creation in areas impacted by bushfires. The program also aims to strengthen community resilience and reduce the impact of future natural disasters. The BLER program is co-funded, with the Commonwealth and NSW governments funding 50% each.

The BLER program is comprised of three funding rounds:

  • round one early co-funding, split between
    • Fast-Tracked projects
    • Sector Development Grants (SDG)
  • round two: open round
  • round three: final projects and initiatives.

Resilience NSW was involved in setting up the BLER program and the Department of Regional NSW (the department) is responsible for administering it. The Commonwealth National Recovery and Resilience Agency must also endorse any projects proposed by the NSW Government for funding as part of the funding agreement between the State and Commonwealth governments.

Successful projects under the SDG stream were announced in September 2020 and projects funded through the Fast-Tracked stream were announced in October 2020. Round two (the open round) was administered after these two streams and successful projects were announced in June 2021.

The Department of Premier and Cabinet established the 'Good Practice Guide to Grants Administration' (the Good Practice Guide) in 2010 to assist the NSW Government in ensuring grants administration was performed consistently across all NSW Government grants programs. Compliance with the Good Practice Guide was not compulsory, but provided an outline of best practice covering the entire lifecycle of a grants program. This guide was in place at the time these grants were designed and administered.

The design and delivery of round one of the program occurred quickly, as part of the response to the 2019–20 bushfires, and was responding to a request from the Commonwealth Government for rapid project identification.

The objective of this audit was to assess how effectively the Department of Regional NSW and Resilience NSW administered rounds one and two of the BLER program. Round three was excluded from this audit because it had not been announced at the time of the audit.

We addressed this objective by examining whether the audited agencies:

  • effectively planned administration of the BLER program and established appropriate guidelines
  • implemented an effective assessment process for the BLER program
  • are effectively monitoring implementation of projects and program outcomes.

Conclusion

The Department of Regional NSW did not effectively administer the Fast-Tracked stream of the Bushfire Local Economic Recovery program. The administration process lacked integrity, given it did not have sufficiently detailed guidelines, and the assessment process for projects lacked transparency and consistency.

There were significant gaps in the documentation of decision-making throughout this funding stream. At the request of the Deputy Premier's office, a $1 million threshold was applied, below which projects were not approved for funding. This threshold was applied without a documented reason and was not part of the program guidelines. The department advises that some of the projects excluded through application of the threshold were subsequently funded from other programs.

The department's administration of the Sector Development Grants stream had a detailed and transparent assessment process. That said, conflicts of interest were not effectively managed, and the department did not effectively engage with stakeholders during the grants process.

The department's administration of the open round included a clearly documented, detailed and transparent assessment framework that it followed throughout. The department also implemented probity arrangements in the open round, although some weaknesses in the department's approach to conflicts of interest remained.

Fast-Tracked stream

Following requests from the Commonwealth Government in May and June 2020 to identify projects rapidly and as soon as practical, the department used an expedited process to identify relevant projects that had applied for other grants programs but had not received funding or which were identified as local priority projects. The department developed a set of guidelines for the Fast-Tracked stream based on draft Commonwealth funding criteria, but the department's guidelines lacked sufficient detail to ensure transparent and consistent decision-making. The guidelines also did not contain detailed information on how the assessment and approval processes would work. The department did not implement conflict of interest declarations for staff involved in the assessment process.

The assessment process implemented for the Fast-Tracked stream deviated from the guidelines. For example, the guidelines did not set out a role for the then Deputy Premier or his office in the assessment process, but the Deputy Premier's office played a key role in project selection. At the direction of the Deputy Premier's office, a $1 million minimum threshold, not mentioned in the guidelines, was applied to projects, below which, projects would not be funded. This resulted in a number of shortlisted projects in areas highly impacted by the bushfires, including all shortlisted projects located in Labor Party-held electorates, being excluded without a rationale being documented at the time. The department advised that some of these projects were subsequently funded through other funding streams.

The department's assessment process was inconsistent, poorly documented and lacked transparency. The department initially identified 445 potential projects through consultation with councils and through identifying projects that had been unsuccessful for other grant programs. The department only assessed 164 of these 445 projects for funding against the criteria in the guidelines. The department did not document the rationale for not assessing the remaining 281 projects against the criteria. The department also sought advice from Public Works Advisory (PWA) on whether projects could commence within six months, which was an eligibility criterion for the Fast-Tracked stream. PWA were only asked to assess 25 of the 445 projects, of which 19 were funded through the Fast-Tracked stream. The department also did not consistently follow PWA's advice and funded projects which PWA had advised were unable to commence within six months, which was not in line with the guidelines.

The department monitors 21 of the 22 Fast-Tracked projects on a quarterly basis to ensure projects are on track. Resilience NSW is responsible for the remaining project and does not monitor this on a quarterly basis but has established a project control group that performs a similar function. The agencies advised that this project is being transitioned to the department's management.

Sector Development Grants (SDG)

The department designed and published guidelines for the SDG stream. The guidelines largely align with the Department of Premier and Cabinet's 'Good Practice Guide to Grants Administration', although they could have been strengthened by including more detail on the eligibility of projects and the role of cost benefit analyses in the assessment process. The guidelines included a detailed and transparent assessment process which the department largely followed.

There were gaps in the administration of the SDG stream assessment process. The department did not effectively manage conflicts of interest as it did not ensure all required conflict of interest forms were completed and some forms were completed after the assessment process was finalised. The department also advised that the final version of the conflict of interest register, which contained the declarations for the SDG stream, was lost during a record management system change. The department did not develop guidance for communicating with stakeholders for the SDG stream. Feedback was received from industries which had been excluded from the SDG stream, relaying their concerns, and requesting a broader range of agribusiness sectors be considered for eligibility. A communications plan or strategy could have incorporated guidance on engaging agribusiness stakeholders during the planning stages of the stream, ensuring they were aware of the rationale for the eligible industries selected.

The majority of SDG funding went to areas highly impacted by the bushfires, although some highly impacted areas received less funding than lower impacted areas, and there is no clear reason for this.

The department does not monitor SDG projects on a quarterly basis to ensure that they remain on track but it ensures it has sufficient evidence that milestones have been completed before making funding payments.

Open round

The department designed and implemented a clearly documented and detailed assessment process for the open round. There were some areas where the process could have been improved, for example, the published guidelines did not set out the role of the former Deputy Premier or include reference to consultation with members of Parliament (MP) as part of the process, despite the fact that MPs were consulted as part of this round.

The department improved its management of conflicts of interest compared to the Fast-Tracked and SDG streams by maintaining a conflict of interest register, though not all conflict of interest declarations were collected. The department also developed a communications plan which led to improvements in stakeholder engagement.

One of the purposes of the open round was to distribute funding to local government areas (LGA) which did not receive funding through the Fast-Tracked stream. This intention was not outlined in the guidelines for this funding stream. The majority of funding from the open round went to LGAs which had been highly impacted by the bushfires.

The department monitors the open round projects on a quarterly basis to ensure that they are on track.

1. Recommendations

To promote integrity and transparency, the Department of Regional NSW should ensure that for all future grant programs it:

  1. establishes and follows guidelines that align with relevant good practice guidance including accountabilities, key assessment steps and clear assessment criteria
  2. ensures a communications plan is in place, including the communication of guidelines to potential applicants
  3. ensures staff declare conflicts of interest prior to the commencement of a grants stream, and that these conflicts of interest are recorded and managed
  4. ensures regular monitoring is in place as part of funding deeds
  5. documents all key decisions and approvals in line with record keeping obligations.

Stage one of the BLER program consisted of early co-funded projects valued at a total of $180 million. This included 22 Fast-Tracked priority projects valued at a total of $107.8 million. The purpose of these projects was to deliver immediate and significant economic impacts to high and moderate bushfire-impacted areas.

A timeline of key dates may be found at Exhibit 5.

Fifty-two projects worth a total of $73.2 million were funded through the SDG stream. One grantee withdrew their project from the stream in early 2021, leaving a total of 51 projects (of which 49 are co-funded with the Commonwealth Government).

A timeline of key dates may be found at Exhibit 9.

The department distributed $283 million to 195 successful projects as part of the open round of the BLER program.

A timeline of key dates may be found at Exhibit 11.

The department entered into funding deeds with successful applicants

The Good Practice Guide advises that the agency administering a grant should enter into a formal agreement with each grant recipient which sets out the arrangements under which a grant is provided, received, managed and acquitted. Across all three streams, the department sent out a letter of offer to successful project managers to let them know that they had been successful in receiving funding, and then entered into funding deeds with grantees. The one exception was the project that RNSW managed, discussed below.

The reviewed funding deeds were signed by department staff with the appropriate level of delegation. They contained an appropriate level of information and key clauses that would allow the department to monitor the progress of the grant to ensure its completion as agreed with the grantee. The reviewed funding deeds contained key information, including:

  • total value of the grant
  • key deliverables at each milestone
  • expected completion date of both the overall project and each milestone
  • reporting requirements, including provisions to allow the department to request relevant information
  • variation procedures.

The department only makes payments after confirming that milestones have been reached

The department has provided payments to grantees only after they could demonstrate that they had completed the agreed milestone. To ensure each milestone has been completed, the department requires grantees to provide evidence that they have fulfilled the milestone. Types of evidence provided includes photographs and invoices. Where the grantee provides insufficient evidence to the department, the department follows-up with the grantee to ensure that enough information is provided to justify the milestone payment.

The department also plans to undertake site visits of projects at select milestones and at the completion of most projects. The department has undertaken a risk assessment of each SDG and open round project, and uses this risk assessment to determine the number of milestones for the project, as well as the number of site visits that the department will undertake. Fast-Tracked projects all had PWA providing either project management or assurance and as such oversight is being provided through that mechanism. The milestones and site visits at each level of risk can be seen in Exhibit 15 for SDG and Exhibit 16 for open round.

Exhibit 15: Milestones and site visits for each level of risk - SDG
Risk rating Milestones Site visits
Low Two Zero
Medium Three One
High Four Two
Source: Department of Regional NSW.
 
Exhibit 16: Milestones and site visits for each level of risk - open round
Risk rating Milestones Site visits
Low Three One
Medium Four Two
High Five Three
 Source: Department of Regional NSW.

The department does not monitor quarterly progress for SDG grants

As part of the LER framework, the department reports to the Commonwealth every quarter on the status and financials of each project, including whether there are any risks to project delivery and the mitigations in place for those risks. For projects funded through the Fast-Tracked stream and the open round, the department collects quarterly progress reports from the grantees. These progress reports allow the department to determine if there are project risks, which can then be reported to the Commonwealth. The progress reports also allow the department to determine if a milestone is likely to be met within the next quarter or whether a project variation may be needed.

While the department monitors projects funded through the Fast-Tracked stream and the open round on a quarterly basis, there is no quarterly monitoring of progress for projects funded through the SDG stream. The SDG funding deeds do not include a provision to require quarterly reporting to the department. The department only collects progress reports from grantees when the grantee reports that it has completed a milestone. Quarterly monitoring of the SDG stream would allow the department to determine if projects require corrective action.

Resilience NSW is not collecting quarterly reports for the Fast-Tracked grant it is responsible for administering

One of the projects funded through the Fast-Tracked stream was the rebuilding of three local halls across two LGAs, for a total value of $3 million. RNSW is responsible for managing this grant and entered into funding deeds with the relevant councils. It is not documented why RNSW is responsible for these funding deeds rather than the department, which is the signatory for all of the other Fast-Tracked stream funding deeds. RNSW advised it was due to the responsible RNSW Director having a strong working relationship with the relevant councils.

The funding deeds which RNSW signed with the relevant councils set out a requirement that the councils would report on this project to RNSW every quarter. The second milestone of each of these projects involved the submission of a quarterly report. However, RNSW was unable to provide evidence that it carried out this monitoring of the project. At the time of the audit, no second milestone payment had been made. Undertaking quarterly monitoring would provide RNSW with assurance that the money is being expended for the proper purpose and whether the projects will be completed by the target date.

RNSW and the relevant councils developed project control groups for each project, which allows it to monitor the implementation of the projects. PWA is also represented on these project control groups and provides an advisory role in the implementation of the projects.

RNSW and the department advised that responsibility for this project will be transitioned to the department and it will be monitored on a quarterly basis, in line with the other Fast-Tracked projects.

The department has a consistent approach to validating variations

The department's funding deeds with grantees allow for the variation of contracts at the department's discretion after the grantee has written to the department. It is important for the department to consider the impact of any project variation request on the overall program objectives, because a project which costs more than was originally planned or which takes additional time may put at risk the objectives of the BLER program. To ensure that requests for variation are handled consistently and appropriately, the department's Grants Management Office (GMO) has developed a process document which applies to variation requests across the BLER program.

For the grants reviewed as part of this audit, the GMO applied this variation process consistently and has documented the outcomes. Larger variations are reviewed at a higher level of delegation and sign-off. To determine whether a variation is accepted, the GMO considers the following factors:

  • consistency with BLER program objectives
  • delivery within the timeframes of the BLER program
  • eligibility under the BLER program guidelines
  • financial viability to deliver within the requested budget.

The department is preparing multiple evaluations, but it has delayed its process evaluation

When developing round one of the BLER program, the department developed an evaluation plan. A total of $1.1 million has been reserved for conducting process, outcome, and economic evaluations of the BLER program and two other bushfire recovery grant programs.

To assist with evaluating program outcomes and economic impact, the department is planning a post-completion survey in 2023–24. This timeline will allow most projects to be completed and enough time for project outcomes to be realised. The department advised that the data collected through this survey would allow the department to determine whether the BLER program has achieved its objectives, as it includes information such as the number of jobs created through each project.

The process evaluation was initially planned for March to June 2021. This would have aligned with the announcement of the open round funding and would have allowed for the learnings from rounds one and two of the BLER program to be applied to the development of round three. However, the department did not conduct this evaluation in a timely way. The department advised that this was because funding deed negotiations were still ongoing, and the department was waiting for 50% of funding deeds to be signed. Given this, the department was not in a position to commence its process evaluation. In December 2021, the department revised its evaluation plan and advised that it commenced its process evaluation in April 2022. It is unlikely that this will allow time for the department to apply learnings to round three, which is currently underway.

Appendix one – Responses from agencies

Appendix two – BLER program distribution

Appendix three – About the audit

Appendix four – Performance auditing

 

Copyright notice

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

Parliamentary reference - Report number #373 - released 2 February 2023

Published

Actions for Development applications: assessment and determination stages

Development applications: assessment and determination stages

Planning
Local Government
Internal controls and governance
Management and administration
Service delivery

What the report is about

Local councils in New South Wales are responsible for assessing local and regional development applications.

Most development applications are assessed and determined by council staff under delegated authority. However, some development applications must be referred to independent local planning panels or Sydney and regional planning panels for determination.

Councils provide support to local planning panels. The Department of Planning and Environment provides support to Sydney and regional planning panels.

This audit assessed whether Byron Shire Council, Northern Beaches Council and The Hills Shire Council had effectively assessed and determined development applications in compliance with legislative and other requirements.

It also assessed whether The Hills Shire Council, Northern Beaches Council and the Department of Planning and Environment had provided effective support to relevant independent planning panels.

What we found

All councils had established clear roles, responsibilities and delegations for assessment and determination of development applications and had also established processes to ensure quality of assessment reports.

Northern Beaches Council and The Hills Shire Council have established comprehensive approaches to considering and managing risks related to development assessment.

Northern Beaches Council's approach to publishing its assessment reports promotes transparency.

Across a sample of development applications assessed and determined between 2020–22:

  • Northern Beaches Council and The Hills Shire Council had assessed and determined applications in compliance with legislative and other requirements. However, The Hills Shire Council could do more to transparently document any conflicts of interest within assessment reports.
  • Byron Shire Council had assessed most applications in compliance with legislative and other requirements. However, we found opportunities for the Council to:
    • ensure determinations were made in line with delegations
    • strengthen its approach to transparent management of conflicts of interest and quality review of assessments.

The Hills Shire Council and Northern Beaches Council had effectively supported their respective local planning panels.

The Department of Planning and Environment had processes that meet requirements for supporting regional planning panels but could do more to promote consistency in approach, share information across panels and measure the effectiveness of its support.

What we recommended

We made recommendations to Byron Shire Council, The Hills Shire Council and the Department of Planning and Environment to address the gaps identified and improve the transparency of processes.

Local councils in New South Wales are responsible for assessing local and regional development applications under the Environmental Planning and Assessment Act 1979 (EP&A Act).

In assessing development applications, councils consider:

  • whether the proposed development application is compliant with legislation and environmental planning instruments
  • whether the proposed development meets local planning controls and objectives
  • any environmental, social and economic impacts
  • any submissions from impacted properties, neighbours and interested parties
  • the public interest.

Once assessed, a development application will be determined by council staff under delegated authority, the elected council, or an independent planning panel.1 

The involvement of a particular independent planning panel is established under legislative and policy instruments, and depends on the type and value of the proposed development. Most development applications are assessed and determined by council staff under delegated authority.

In determining development applications, independent planning panels must manage any potential, real or perceived conflicts of interest of panel members for a given development application, meet and vote on development applications, and publish their decisions and reasons.

Under the EP&A Act, and as required by statutory instruments and procedures, councils and the Department of Planning and Environment (DPE) must provide secretariat and other support functions to independent planning panels.

Previous reviews and inquiries have identified several significant risks that are present within the processes involved in the assessment and determination of development applications. These risks include possible non-compliance with complex legal and policy requirements, potential improper influence from developers and other stakeholders, and a perceived lack of transparency within the planning system and planning outcomes.

There are several planning pathways for development in New South Wales. This audit focuses on local and regional development that requires assessment and determination by a local council and/or an independent local planning panel or Sydney or regional planning panel in three Local Government Areas (LGAs): Byron Shire Council, Northern Beaches Council, The Hills Shire Council.

Audited councils were selected from a range of criteria, including:

  • the number, value and types of development applications determined in 2018–19
  • average determination timeframes
  • appeals against determinations and Land and Environment Court outcomes
  • LGA demographics.

The audit also avoided councils that had previously been subject to a performance audit.

The objective of this audit was to assess whether:

  • selected councils have effectively assessed and determined development applications in compliance with relevant legislation, regulations and government guidance
  • selected councils and DPE effectively support independent planning panels to determine development applications in compliance with relevant legislation, regulations and government guidance.

Conclusion – Byron Shire Council

Byron Shire Council has established clear roles, responsibilities and delegations for assessment and determination of development applications. However, the effectiveness of the Council's approach is limited by gaps in governance, risk management and internal controls.

Byron Shire Council has established clear roles, responsibilities and delegations for assessment and determination of development applications. However, the Council does not have a consolidated policy and procedure for development assessment, has not adequately followed up on the outcomes of internal reviews that identified opportunities to strengthen its assessment and determination procedures and approach, and has not demonstrated that it has managed relevant risks effectively.

The Council has not ensured that delegations have been consistently followed in the assessment of development applications.

Byron Shire Council's approach to managing conflicts of interest in development assessments does not provide transparency over potential conflicts of interest.

Byron Shire Council manages the risk of conflicts of interest for development assessment under its Code of Conduct. The Council has also implemented a separate policy that details additional requirements for managing conflicts of interest relevant to the development assessment process, but has not regularly updated this policy and requirements between it and the Code of Conduct have not been aligned. This creates a risk that planning staff may be following inconsistent or outdated advice in managing conflicts of interest.

Across the period of review, the Council did not require staff to provide a disclosure of interest for individual development applications to be contained within assessment reports. Including these disclosures would increase transparency and ensure that staff are sufficiently considering any conflicts of interest relevant to each separate assessment process.

Byron Shire Council has processes that promote compliance with legislation, regulation and government policy, but can improve how it undertakes some aspects of these that would ensure transparency, quality and consistency.

Our review of a sample of completed development applications from the Council indicated that most assessments were completed in compliance with relevant legislation, regulations and government guidance, but that there were some opportunities to improve elements of the assessment process, including: transparency of any conflicts of interest involved in the assessment process, ensuring compliance with delegated authority limits, and consideration of modification application provisions.

The Council has established templates to guide planners through relevant assessment considerations required by legislation, regulations and other guidance. However, it could do more to strengthen its approach to peer or manager review, monitoring legislative changes, and how it monitors the completion of relevant training by planning staff. 

 

Conclusion – Northern Beaches Council

Northern Beaches Council has established processes to support compliant and effective assessment and determination of development applications.

The Council has a clear governance and risk management framework for development assessment that sets out roles, responsibilities and delegations.

Northern Beaches Council has established clear roles, responsibilities and delegations for development application assessment and determination. The Council has identified development assessment related risks, and has put in place controls and mitigating actions to manage the risks to within risk tolerances.

Northern Beaches Council's approach to managing conflicts of interest promotes transparency.

Northern Beaches Council manages the risk of conflicts of interest for development assessment under its Code of Conduct. The Council has implemented an additional framework for planning staff to respond to the risk of conflicts of interest in development assessment processes. This framework requires its staff to disclose any conflicts of interest as a formal step in assessing development applications and includes declarations of any interests within assessment reports or planning panel minutes.

Our review of a sample of completed development applications indicated that the assessment reports had been compliant with the Council's approach to transparently documenting conflicts of interest.

Northern Beaches Council has established processes to deliver consistent, quality assessment of development applications.

Northern Beaches Council staff use an electronic development assessment tool that provides guidance, links to legislative and policy instruments and other applications that support assessment and drive consistency in approach. The Council applies a peer review process in which a manager or team member in a more senior position reviews an assessment report prior to determination to ensure that expected standards of quality and consistency have been met.

Our review of a sample of completed development applications indicated that assessments were undertaken in compliance with relevant legislation, regulations and government guidance.

Northern Beaches Council transparently documents assessment reports, supporting information and determination outcomes.

Northern Beaches Council has implemented a transparent approach to how it assesses and determines development applications. The Council publishes assessment reports, supporting technical reports, plans and submissions for all development applications. Notices of determination and final plans are also published alongside the assessment reports, allowing for greater transparency to the public.

Northern Beaches Council has established processes to effectively support the Northern Beaches Local Planning Panel.

Northern Beaches Council has established processes to support the Northern Beaches Local Planning Panel as required under legislative and policy instruments. The Council has processes to ensure that development applications required to be referred to a planning panel are identified and monitored, supports identification and documentation of any conflicts of interest, and transparently documents decisions of the panel.

Our review of a sample of meeting records held across the audit period of review indicated that these requirements were met and were transparently documented. 

 

Conclusion – The Hills Shire Council

The Hills Shire Council has established processes to support compliant and effective assessment and determination of development applications.

The Council has established a comprehensive governance and risk management framework for development assessment that sets out clear roles, responsibilities and delegations.

The Hills Shire Council has established a comprehensive framework for managing risks related to development assessment. Such risks are clearly identified and associated controls are in place to reduce or mitigate the risks. The Council has undertaken regular internal audits of development assessments, including reviewing completed applications to ensure compliance with relevant legislative and policy requirements.

The Council has established clear roles, responsibilities and delegations, and its staff assessing and determining development applications are supported by a standard set of policies and procedures for undertaking assessment and determination of applications.

The Hills Shire Council is managing conflicts of interest in line with Code of Conduct requirements but could more transparently document these.

The Hills Shire Council manages conflicts of interest for those involved in development application processes through provisions under its Code of Conduct. Under this Code of Conduct, staff must declare any conflicts of interest to their manager. However, the Council does not require staff to disclose any conflicts of interest in development application assessment reports which limits transparency to reviewing managers or any other determination bodies.

The Hills Shire Council has established processes to deliver consistent, quality assessment of development applications.

The Hills Shire Council has established templates to guide planners through relevant development assessment and determination considerations required by legislation, regulations and other guidance. The Council requires a peer review to occur prior to any determination which ensures a check on the compliance and quality of the assessment report prepared.

Our review of a sample of completed development applications from the Council indicated that assessments were performed in compliance with relevant legislation, regulations and government guidance.

The Hills Shire Council has established processes to effectively support The Hills Shire Local Planning Panel.

The Hills Shire Council has met requirements to provide secretariat and other support to The Hills Shire Local Planning Panel as required under legislative and policy instruments. It has processes to ensure that development applications required to be referred to a planning panel are identified and monitored, supports identification and documentation of any conflicts of interest, and transparently documents decisions of the panel.

Our review of a sample of meeting records held across the audit period of review indicated that these requirements were met and were transparently documented. 

 

Conclusion – Department of Planning and Environment

The Department of Planning and Environment (DPE) has established processes that meet its statutory and policy requirements to support Sydney and regional planning panels.

DPE has established processes to provide secretariat and other support to planning panels. It has met requirements to provide administrative support to the panels through its planning panels secretariat including undertaking administrative functions, supporting recruitment of panel members, and addressing complaints about the panel processes.

DPE has not ensured collection of annual pecuniary interest declarations for all panel members for the three Sydney and regional planning panels in scope for this audit. DPE could not provide annual pecuniary interest declarations for part of the audit period for three of the 47 members of these panels, as is required by DPE's Code of Conduct for Regional Planning Panels.

DPE does not formally measure its effectiveness in providing support to panels, but panel chairs consulted as part of this audit advised that they had no concerns with the level of secretariat support provided by DPE.

DPE could do more to facilitate information sharing between panels and could formalise how it provides comparative information to panels to improve consistency and standardisation in approach and share good practice. DPE has identified these gaps in reviews of its services and functions and has a plan in place to address them.

DPE has effectively documented planning panel decisions and made them available to all stakeholders. It also effectively documented interests declared as part of consideration of development applications for in-scope panels. 


1 Prescribed councils within designated Sydney districts are required to refer contentious development applications to local planning panels for determination. If the proposed development is above a threshold for estimated cost of works, or meets other prescribed criteria, the EP&A Act may require it to be referred to a Sydney or regional planning panel.

This audit continues a series of audits examining the development assessment process in NSW local councils and is focused on the assessment and determination stages.

The Audit Office of New South Wales previously considered local government development assessments in our 2019 performance audit: 'Development assessment: pre-lodgement and lodgement in Camden Council and Randwick City Council'.

Appendix one – Response from agencies

Appendix two – Council profile: Byron Shire Council

Appendix three – Council profile: Northern Beaches Council

Appendix four – Council profile: The Hills Shire Council

Appendix five – About the audit 

Appendix six – Performance auditing

 

Copyright notice

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

Parliamentary reference - Report number #370 - released 12 December 2022

 

Published

Actions for Effectiveness of the Biodiversity Offsets Scheme

Effectiveness of the Biodiversity Offsets Scheme

Planning
Environment
Infrastructure
Internal controls and governance
Management and administration
Regulation

What the report is about

This audit examined whether the Department of Planning and Environment (DPE) and the Biodiversity Conservation Trust (BCT) have effectively designed and implemented the Biodiversity Offsets Scheme (‘the Scheme’) to compensate for the loss of biodiversity due to development.

Under the Biodiversity Conservation Act 2016, the Scheme enables landholders to establish in-perpetuity Biodiversity Stewardship Agreements on sites to generate credits for the unique biodiversity on that land. These credits can be sold to offset the negative impact of development on biodiversity.

What we found

DPE has not effectively designed core elements of the Scheme. DPE did not establish a clear strategic plan to guide the implementation of the Scheme.

The BCT has various roles in the Scheme but lacked safeguards against potential conflicts, creating risks to credit supply.

The effectiveness of its implementation has also been limited. Key concerns around the Scheme’s transparency, sustainability and integrity are yet to be fully resolved.

A market-based approach to biodiversity offsetting is central to the Scheme's operation but credit supply is lacking and poorly matched to growing demand. DPE has not established a clear, resourced plan to manage the shortage in credit supply. Data about the market, published by the DPE and the BCT, does not provide an adequate picture of credit supply, demand and price to readily support market participation.

These factors create a risk that biodiversity gains made through the Scheme will not be sufficient to offset losses resulting from development, and that the DPE will not be able to assess the Scheme’s overall effectiveness.

DPE is leading work with the BCT to improve the Scheme, but this is not yet guided by a long-term strategy with clear goals.

What we recommended

The audit made 11 recommendations to DPE and the BCT, focusing on:

  • a long-term strategic plan for the Scheme
  • improvements to the operation and transparency of the market and credit supply
  • frameworks to ensure the financial and ecological sustainability of biodiversity stewardship sites
  • enhanced public reporting and data management
  • resolving issues in conflicting governance and oversight.

 

 Fast facts

  • 96% –  proportion of developer demand for species credits not met by current supply
  • 97% – proportion of species credits that have never been traded on the biodiversity market
  • 60% – proportion of the 226 Biodiversity Stewardship sites under active land management
  • $90m – value of developers’ obligations paid directly into the Biodiversity Conservation Fund
  • 20% – proportion of developer obligations transferred to the BCT that have been acquitted.

The NSW Government's Biodiversity Outlook Report 2020 estimates that, without effective management, only 50% of species and 59% of ecological communities that are listed as threatened in New South Wales will still exist in 100 years. The NSW State of the Environment 2021 report identifies habitat destruction and native vegetation clearing as presenting the single greatest threat to biodiversity in the State.

According to the Organisation for Economic Co-operation and Development (OECD), biodiversity offsets are 'measurable conservation outcomes that result from actions designed to compensate for significant, residual biodiversity loss from development projects'. The OECD states that a feature of such schemes is that biodiversity offsets are intended to be implemented as the 'final step of a mitigation hierarchy' whereby reasonable first steps are taken to avoid and minimise the negative impacts.

The NSW Biodiversity Offsets Scheme was established in 2017 under the Biodiversity Conservation Act 2016 (the Act). The purpose of the Act is to 'maintain a healthy, productive and resilient environment for the greatest well-being of the community, now and into the future, consistent with the principles of ecologically sustainable development'.

The Department of Planning and Environment (DPE) designed and manages this Scheme. Under the Act, a feature of the Scheme is a 'market-based conservation mechanism through which the impacts to biodiversity can be offset.' The Scheme enables landholders to establish in-perpetuity Biodiversity Stewardship Agreements (BSAs) on sites to generate biodiversity credits, which can be sold to offset the negative impact of development on biodiversity. BSA sites are intended to be managed over the long term to generate the biodiversity gains required to offset the impact.

The Biodiversity Conservation Trust (BCT) monitors and supports landholders to manage BSA sites under the Scheme. This includes making payments to landholders from funds held in the Biodiversity Stewardship Payments Fund for undertaking the required biodiversity management actions.

This Scheme was preceded by several other offsetting schemes in New South Wales, including the BioBanking scheme that started in 2008. DPE has arrangements to transition sites, credits, and offset obligations from this and other previous schemes.

The current biodiversity credit market in New South Wales consists of 1394 different types of ecosystem credits, which are approved to be traded in 364 different offset trading groups, and 867 different species credits. Trading rules, set out in the Biodiversity Conservation Regulation 2017 (the Regulation), prioritise offsetting the obligations of a development with like-for-like ecosystem or species credits.

The Scheme is implemented through the planning system in New South Wales. Proposed development that involves the clearing of native vegetation, and meets certain thresholds, is required to undertake a Biodiversity Development Assessment Report. These reports determine an offset obligation, in biodiversity credits, to compensate for the biodiversity loss proposed. These reports are considered by consent authorities (such as a council, for local development, or by the Minister for Planning for major projects). An offset obligation is then included in the conditions of development approval.

In addition to establishing a market for trading between developers, with offset obligations, and landholders, who sell credits from their BSA sites, the Scheme allows developers to pay into the Biodiversity Conservation Fund and transfer their obligations to the BCT. This allows the developer to proceed with their project. The BCT must then meet these acquired obligations by buying the required credits, or by undertaking other approved activities set out in the Regulation. The BCT has more options than developers on how and when it acquits its obligations.

This audit examined whether DPE and the BCT have effectively designed and implemented the Biodiversity Offsets Scheme to compensate for the loss of biodiversity due to development.

Conclusion

The Department of Planning and Environment (DPE) has not effectively designed core elements of the NSW Biodiversity Offsets Scheme. DPE did not establish a clear strategy to develop the biodiversity credit market or determine whether the Scheme’s operation and outcomes are consistent with the purposes of the Biodiversity Conservation Act 2016.

The effectiveness of the Scheme's implementation by DPE and the BCT has been limited. A market-based approach to biodiversity offsetting is central to the Scheme's operation but credit supply is lacking and poorly matched to growing demand: this includes a potential undersupply of in-demand credits for numerous endangered species. Key concerns around the Scheme’s integrity, transparency, and sustainability are also yet to be fully resolved. As such, there is a risk that biodiversity gains made through the Scheme will not be sufficient to offset losses resulting from the impacts of development, and that DPE will not be able to assess the Scheme’s overall effectiveness.

DPE developed the Scheme following a 2014 review of the State's biodiversity legislation and building on previous offsetting arrangements in New South Wales. At the time the Scheme commenced in 2017, DPE lacked a strategic plan to guide its implementation, set clear outcomes and performance measures, and respond effectively to risks. DPE did establish a detailed scientific method for assessing biodiversity impacts under the Scheme and a system for accrediting assessors to undertake this technical work. These are important foundations for the robustness of the Scheme.

The Scheme has been in place for five years, but the biodiversity credit market is not well developed. Most credit types have never been traded. Also, according to DPE data, around 90% of demand cannot be matched to credit supply – and there is likely to be a substantial credit undersupply for at least seven endangered flora species, three endangered fauna species, and eight threatened ecological communities. Credit demand is projected to grow – especially in relation to the NSW Government’s $112.7 billion four-year infrastructure pipeline.

As with any market, potential participants need information about demand and price in order to understand risks and opportunities. But information about the biodiversity credit market, published by DPE and the BCT, does not provide an adequate picture of credit supply, demand and price to support market participation. This can create uncertainty for landholders who may be weighing the costs and benefits of establishing Biodiversity Stewardship Agreement (BSA) sites, and for development proponents who need to know whether they can purchase sufficient credits and at what price. Development proponents who lack market information are being incentivised to meet their offset obligations by paying into the Biodiversity Conservation Fund, which is managed by the BCT. This option provides developers with more certainty that enables them to progress their projects, but does not result in the development being offset until the BCT later acquits the obligation.

The BCT has multiple roles in the Scheme. These include setting-up and administering BSAs which generate credits, acquiring offset obligations from developers who pay into the Biodiversity Conservation Fund, and purchasing credits to meet its acquired obligations. There have been inadequate safeguards to mitigate the potential for conflicts between these roles. As the BCT directs its efforts towards facilitating BSA sites and purchasing credits to meet its obligations, there is a risk that government is insufficiently focused on supporting overall credit supply.

DPE has begun developing a credit supply strategy. Its absence, and a lack of clarity around responsibility for credit supply under the Scheme, has contributed to the significant risk of insufficient and poorly matched credits to meet the growing demand. The BCT's acquired obligations from developers have been increasing year-on-year, and are likely to continue to grow. 

There is a risk that the BCT will not have sufficient funds to acquit its growing obligations with like-for-like credits, which could result in sub-optimal biodiversity outcomes. The Scheme rules allow the BCT to acquit its obligations with measures other than like-for-like credits. DPE has not provided clear guidance to the BCT on when or how to do so, or how this would fulfil the 'no net loss' of biodiversity standard.

There are transparency and integrity risks to the Scheme. DPE does not maintain a public register of biodiversity credits with complete information, including credits' transaction histories, consistent with the legislative intent for a single register. DPE also does not have ready access to information to check that developments have been acquitted with the required credits.

Risks to the sustainability of the Scheme and its outcomes remain. DPE and the BCT have not yet implemented a decision-making and intervention framework to ensure adequate initial and ongoing funding for the long-term management of new and existing BSA sites. DPE also did not collect ecological data from sites under previous schemes before they were transitioned, and BCT only introduced ecological monitoring requirements for new BSA sites in March 2021. The lack of monitoring requirements creates a risk that the biodiversity gains, which BSA sites are required to generate to offset biodiversity losses, will not be measured and achieved under the Scheme.

This section presents an overview of the status of the biodiversity credit market in New South Wales. It describes development of the market under the Scheme in the context of transitional arrangements from previous schemes, and the extent of market participation and transactions to date. It also presents information about emerging trends in credit demand and supply.

Background

A purpose of the Biodiversity Conservation Act 2016 (the Act) is to establish a market-based conservation mechanism through which impacts on biodiversity can be offset. Sufficient credits of appropriate types, which are well matched to demand, are necessary for enough transactions to inform prices and enable efficient like-for-like offsetting. For transactions to occur efficiently in the market, participants require reliable and easy-to-access information about supply, demand and price.

The Scheme was established in 2017 with an existing credit supply and offset obligations (credit demand) as regulations had been introduced to preserve and transition credits and obligations from previous schemes including the BioBanking Scheme, which started in 2008.

Credits under the BioBanking scheme are referred to as 'BBAM credits', and credits under the current Scheme are referred to as 'BAM credits'. BBAM credits are still available, and the transitional arrangements enable DPE to determine the 'reasonable equivalence' of these to the current Scheme's credit numbers and classes. DPE has stated that reasonable equivalence of credits is based on ecological not financial equivalence. 

This section assesses the clarity and alignment of the goals of the Scheme to key features of its design and operations. It also examines structural elements of the Scheme that aim to maintain integrity within administering agencies, and the status of actions to address risks or issues.

Background

The Biodiversity Conservation Act 2016 (the Act) sets out the legal framework for the Scheme. Given the complexities, financial interests, and range of stakeholders associated with the Scheme, it requires strong safeguards. Transparency and assurances around the Scheme's integrity are also relevant to participants' confidence in it, which in turn is important for market development.

Core components of the Scheme, identified in section 1.3 of the Act, are to be consistent with the ‘principles of ecologically sustainable development’.

The Act and other administrative arrangements of government allocate responsibility to DPE and the Minister for Environment and Heritage for the Scheme’s design and elements of its implementation. This includes responsibility for the Scheme’s policy, legislative and regulatory framework.

Responsibility is allocated to the BCT for implementing and operating certain elements of the Scheme. This includes administering Biodiversity Stewardship Agreements (which generate credits) and securing offsets on behalf of development proponents who pay into the Biodiversity Conservation Fund to meet their offset obligations.

This broad legislative framework is not intended to detail responsibilities for the full range of roles and activities that agencies need to take to implement and regulate the Scheme effectively, and ensure its good governance. Agencies should do this as part of sound and transparent public administration. 

This section assesses how effectively components of the Scheme have been designed and are being implemented to provide assurance that the impacts of development are being avoided and minimised such that only ‘unavoidable’ impacts remain to be offset. The section also assesses whether the Scheme and its market embeds the necessary controls to ensure that obligations are offset as required.

Background

The Biodiversity Assessment Method, and the quality of its application by DPE-Accredited Assessors, is critical to the robustness the Scheme. The method is designed to be applied to avoid and minimise impacts at proposed development sites before identifying offset obligations. The effectiveness of Scheme outcomes requires that obligations are offset with the retirement of the necessary and appropriate credits.

The Biodiversity Conservation Act 2016 (the Act) requires the relevant Minister (the current Minister for Environment and Heritage) to establish a method for the purpose of assessing the impacts of actions on threatened species and ecological communities.

The Act also specifies that this method must be applied by an accredited person. DPE is responsible for the design and implementation of this accreditation system, arrangements for which are set out in an instrument under the Act.

A Biodiversity Development Assessment Report is a report by a DPE-Accredited Assessor using the Biodiversity Assessment Method. These reports assess the biodiversity impacts of the proposed development and establish offset obligations as part of the development approval process. It is important that local councils and other development consent authorities understand and can assess the quality of these reports.

DPE manages the process of ‘retiring’ credits against the identified offset obligations. Once a credit is retired it cannot be reused to acquit another obligation, which is critical to Scheme outcomes. DPE is also responsible for maintaining records of credit transactions, which results in a legally binding transfer of credit ownership from seller to buyer. 

This section assesses how effectively the supply of biodiversity credits has been supported by encouraging and enabling landholders to participate in the Scheme. It also assesses whether sufficient action is underway to address issues and risks to the establishment of BSA sites, especially in the context of known credit supply issues (section 2).

Background

Credit supply is generated when a landholder establishes a Biodiversity Stewardship Agreement (BSA) on their land. Establishing a BSA site requires landholders agree to an in-perpetuity management plan, so it is important that they have sufficient support and access to relevant information about risks and opportunities when deciding to do so. Ensuring adequate credits supply underpins the Scheme's ability to deliver the intended biodiversity outcomes.

A landholder establishes an offset site through a BSA, which is a legal agreement with the Minister of Environment and Heritage (delegated to the Biodiversity Conservation Trust). The BSA is registered on the title of the land.

DPE-Accredited Assessors develop Biodiversity Stewardship Site Assessment Reports, which are submitted by landholders to the BCT as part of the BSA application. These reports apply the Biodiversity Assessment Method to detail the number and types of credits that a BSA site is expected to generate by implementing a 20-year management plan. The BCT issues credits to landholders on registration of the BSA.

Ensuring an adequate and appropriate supply of credits is important so that like-for-like matches between credits and obligations can be efficiently secured in a timely way. This minimises the use of offset variation rules, and can avoid potential delays in developers securing appropriate offsets to meet their offset obligations. It also makes it easier for the BCT to locate the necessary credits to acquit the obligations it acquires from developers. 

This section assesses how effectively BSA sites, which need to be managed by landholders to generate the biodiversity gains represented by credits, are regulated and supported by the Biodiversity Conservation Trust. It also assesses whether actions have been taken to address identified risks to the suitability of funds required to ensure long-term BSA site management.

Background

For Biodiversity Stewardship Agreement (BSA) sites to achieve the expected biodiversity gains to offset losses from development impact, they need sufficient funding for the required management actions, and to be effectively regulated and supported over the long-term. Funding for these sites is generated through the returns on landholders' initial investment (Total Fund Deposit). The BCT is required to monitor landholders' compliance with BSAs and should also ensure ecological outcomes on sites are measured.

DPE and the BCT are responsible for developing and implementing a system of oversight to ensure the implementation of management actions at BSA sites is delivering the intended outcomes in a financially and environmentally sustainable way. The agencies' key mechanisms for delivering this are:

  • calculating the costs of the required land management actions in perpetuity
  • annual reporting systems for monitoring compliance with land management requirements
  • reporting systems for monitoring ecological outcomes arising from land management actions.

Landholders are required to pay the required Total Fund Deposit amount for their BSA accounts into the Biodiversity Stewardship Payments Fund, which is held in trust and managed by the BCT. A costing tool is used by landholders to calculate the value of the deposit, based on the required management payments (in perpetuity), administrative fees, and the discount rate applied.

The Total Fund Deposit can be paid upfront but is usually paid from the proceeds of the sale of credits. Once this occurs the BSA site becomes 'active' and management payments commence to enable the landholder to undertake the required management actions. BSA sites that have not yet sold enough credits to make the deposit are 'passive' sites that do not require active land management.

Sites in passive management for an extended duration present risks to biodiversity outcomes, and potentially to Scheme integrity, if the quality of credits is undermined due to an absence of active site management. 

Appendix one – Response from agencies 

Appendix two – Like-for-like, variation and ancillary rules

Appendix three – Detail on progress of the IIAP

Appendix four – About the audit 

Appendix five – Performance auditing 

 

Copyright notice

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

Parliamentary reference - Report number #367 - released 30 August 2022

Published

Actions for Facilitating and administering Aboriginal land claim processes

Facilitating and administering Aboriginal land claim processes

Planning
Environment
Industry
Local Government
Premier and Cabinet
Whole of Government
Cross-agency collaboration
Compliance
Management and administration

What the report is about

The Aboriginal Land Rights Act 1983 (NSW) (the Act) provides land rights over certain Crown land for Aboriginal Land Councils in NSW.

If a claim is made over Crown land (land owned and managed by government) and meets other criteria under the Act, ownership of that land is to be transferred to the Aboriginal Land Council.

This process is intended to provide compensation for the dispossession of land from Aboriginal people in NSW. It is a different process to the recognition of native title rights under Commonwealth law.

We examined whether relevant agencies are effectively facilitating and administering Aboriginal land claim processes. The relevant agencies are:

  • Department of Premier and Cabinet (DPC)
  • Department of Planning and Environment (DPE)
  • NSW Aboriginal Land Council (NSWALC).

We consulted with Local Aboriginal Land Councils (LALCs) and other Aboriginal community representative groups to hear about their experiences.

What we found

Neither DPC nor DPE have established the resources required for the NSW Government to deliver Aboriginal land claim processes in a coordinated way, and which transparently commits to the requirements and intent of the Act.

Delays in determining land claims result in Aboriginal Land Councils being denied the opportunity to realise their statutory right to certain Crown land. Delays also create risks due to uncertainty around the ownership, use and development of Crown land.

DPC has not established governance arrangements to ensure accountability for outcomes under the Act, and effective risk management.

DPE lacks clear performance measures for the timely and transparent delivery of its claim assessment functions. DPE also lacks a well-defined framework for prioritising assessments.

LALCs have concerns about delays, and lack of transparency in the process.

Reviews since at least 2014 have recommended actions to address numerous issues and improve outcomes, but limited progress has been made.

The database used by DPC (Office of the Registrar) for the statutory register of land claims has not been upgraded or fully validated since the 1990s.

In 2020, DPE identified the transfer of claimable Crown land to LALCs to enable economic and cultural outcomes as a strategic priority. DPE has some activities underway to do this, and to improve how it engages with Aboriginal Land Councils – but DPE still lacks a clear, resourced strategy to process over 38,000 undetermined claims within a reasonable time.

What we recommended

In summary:

  • DPC should lead strategic governance to oversee a resourced, coordinated program that is accountable for delivering Aboriginal land claim processes
  • DPE should implement a resourced, ten-year plan that increases the rate of claim processing, and includes an initial focus on land grants
  • DPE and DPC should jointly establish operational arrangements to deliver a coordinated interagency program for land claim processes
  • DPC should plan an interagency, land claim spatial information system, and the Office of the Registrar should remediate and upgrade the statutory land claims register
  • DPC and NSWALC should implement an education program (for state agencies and the local government sector) about the Act and its operations
  • DPE should implement a five-year workforce development strategy for its land claim assessment function
  • DPE should finalise updates to its land claim assessment procedures
  • DPE should enhance information sharing with Aboriginal Land Councils to inform their claim making
  • NSWALC should enhance information sharing and other supports to LALCs to inform their claim making and build capacity.

Fast facts

  • 53,800 the number of claims lodged since the Act was introduced in 1983
  • 38,200 the number of claims awaiting DPE assessment and determination (about 70 per cent of all claims lodged)
  • 207 the number of claims granted by DPE in six months to December 2021
  • 120 LALCs, and the NSWALC, have the right to make a claim and have it determined
  • +5 years around 60 per cent of claims have been awaiting determination for more than five years
  • 22 years the time it will take DPE to determine existing claims, based on current targets

The return of land under the Aboriginal Land Rights Act 1983 (NSW) (the Act) is intended to provide compensation for the dispossession of land from Aboriginal people in New South Wales. A claim on Crown land1 made by an Aboriginal Land Council that meets criteria under the Act is to be transferred to the claimant council as freehold title. The 2021 statutory review of the Act recognises the spiritual, social, cultural and economic importance of land to Aboriginal people.

The Minister for Aboriginal Affairs administers the Act, with support from Aboriginal Affairs NSW (AANSW) in the Department of Premier and Cabinet (DPC). AANSW also leads the delivery of Opportunity, Choice, Healing, Responsibility and Empowerment (OCHRE), the NSW Government's plan for Aboriginal affairs, and assists the Minister to implement the National Agreement on Closing the Gap – which includes a target for increasing the area of land covered by Aboriginal and Torres Strait Islander people's legal rights or interests.

The Act gives responsibility for registering land claims to an independent statutory officer, the Registrar of the Aboriginal Land Rights Act (the Registrar), whose functions are supported by the Office of the Registrar (ORALRA) which is resourced by AANSW.2

The Land and Environment Court of New South Wales has stated that there is an implied obligation for land claims to be determined within a reasonable time. The Minister administering the Crown Land Management Act 2016 (NSW) is responsible for determining land claims. This function is supported by the Department of Planning and Environment (DPE),3 whose staff assess and recommend claims for determination based on the criteria under section 36(1) of the Act. There is also a mechanism under the Act for land claims to be negotiated in good faith through an Aboriginal Land Agreement.

The NSW Aboriginal Land Council (NSWALC) is a statutory corporation constituted under the Act with a mandate to provide for the development of land rights for Aboriginal people in NSW, in conjunction with the network of 120 Local Aboriginal Land Councils (LALCs). LALCs are constituted over specific areas to represent Aboriginal communities across NSW. Both NSWALC and LALCs can make land claims.

DPC and DPE are responsible for governance and, in partnership with NSWALC, operational and information-sharing activities that are required to coordinate Aboriginal land claim processes. LALCs, statutory officers, government agencies, local councils, and other parties need to be engaged so that these processes are coordinated effectively and managed in a way that is consistent with the intent of the Act, and other legislative requirements.

The first land claim was lodged in 1983. The number of undetermined land claims has increased over time, and at 31 December 2021 DPE data shows 38,257 undetermined claims.

The issue of undetermined land claims has been publicly reported by the Audit Office since 2007. Recommendations to agencies to better facilitate processes and improve how functions are administered have been made in multiple reviews, including two Parliamentary inquiries in 2016.

The objective of this audit was to assess whether relevant agencies are effectively facilitating and administering Aboriginal land claim processes. In making this assessment, we considered whether:

  • agencies (DPE, DPC (AANSW and ORALRA) and NSWALC) coordinate information and activities to effectively facilitate Aboriginal land claim processes
  • agencies (DPE and DPC (ORALRA)) are effectively administering their roles in the Aboriginal land claim process.

We consulted with LALCs to hear about their experiences and priorities with respect to Aboriginal land claim processes and related outcomes. We have aimed to incorporate their insights into our understanding of their expectations of government with respect to delivering requirements, facilitating processes, and identifying opportunities for improved outcomes. 

Conclusion

The Department of Premier and Cabinet (DPC) and the Department of Planning and Environment (DPE) are not effectively facilitating or administering Aboriginal land claim processes. Neither agency has established the resources required for the NSW Government to operate a coordinated program of activities to deliver land claim processes in a way that transparently commits to the requirements and intent of the Aboriginal Land Rights Act 1983 (NSW) (the Act). Arrangements to engage the NSW Aboriginal Land Council (NSWALC) in these activities have not been clearly defined.

There are more than 38,000 undetermined land claims that cover approximately 1.12 million hectares of Crown land. As such, DPE has not been meeting its statutory requirement to determine land claims nor its obligation to do so within a reasonable time. Over 60 per cent of these claims were lodged with the Registrar of the Aboriginal Land Rights Act, for DPE to determine, more than five years ago.

DPE’s Aboriginal Outcomes Strategy 2020–23 identifies transferring claimable Crown land to Local Aboriginal Land Councils (LALCs) as a priority to enable economic and cultural outcomes. Since mid-2020 DPE has largely focused on supporting LALCs to identify priority land claims for assessment and on negotiating Aboriginal Land Agreements. This work may support the compensatory intent of the Act but is in its early stages and is unlikely to increase the pace at which land claims are determined. Based on current targets, it will take DPE around 22 years to process existing undetermined land claims.

Delays in processing land claims result in Aboriginal Land Councils being denied the opportunity to realise their statutory right to certain Crown land in NSW. The intent of the Act to provide compensation to Aboriginal people for the dispossession of land has been significantly constrained over time.

Since 2014, numerous reviews have made recommendations to agencies to address systemic issues, improve processes, and enhance outcomes: but DPC and DPE have made limited progress with implementing these. Awareness of the intent and operations of the Act was often poor among staff from some State government agencies and local government representatives we interviewed for the audit.

DPC has not established culturally informed, interagency governance to effectively oversee Aboriginal land claim processes – and ensure accountability for outcomes consistent with the intent of the Act, informed by the expectations of the NSWALC and LALCs. Such governance has not existed since at least 2017 (the audited period) and we have not seen evidence earlier. DPE still does not have performance indicators for its land claim assessment function that are based on a clear analysis of resources, that demonstrate alignment to defined outcomes, and which are reported routinely to key stakeholders, including NSWALC and LALCs.

LALCs have raised strong concerns during our consultations, describing delays in the land claim process and the number of undetermined land claims as disrespectful. LALCs have also noted a lack of transparency in, and opportunity to engage with, Aboriginal land claim processes. DPE’s role in assessing Aboriginal land claims, and identifying opportunities for Aboriginal Land Agreements, requires specific expertise, evidence gathering and an understanding of the complex interaction between the Act and other legislative frameworks, including the Native Title Act 1993 (Cth) and the Crown Land Management Act 2016 (NSW). In mid-2020, DPE created an Aboriginal Land Strategy Directorate within its Crown lands division, increased staffing in land claim assessment functions, and set a target to increase the number of land claims to be granted in 2021–22. In the six months to December 2021, DPE granted more land claims (207 claims) than in most years prior. DPE has also assisted some LALCs to identify priority land claims for assessment.

But the overall number of claims processed per year remains well below the historical (five-year) average number of claims lodged (2,506 claims). As such, DPE has not yet established an appropriately resourced workforce to assess the large number of undetermined land claims and engage effectively with Aboriginal Land Councils and other parties in the process. There also are notable gaps in DPE’s procedures that impact the transparency of the process, especially with respect to timeframes and the prioritisation of land claims for assessment.

DPC (the Office of the Registrar of the Aboriginal Land Rights Act, ORALRA) has not secured or applied resources that would assist the Registrar to use discretionary powers, introduced in 2015, not to refer certain land claims to DPE for assessment (those not on Crown land). This could have improved the efficiency and coordination of end-to-end land claim processes.

DPC (ORALRA) is also not effectively managing data and ensuring the functionality of the statutory Register of Aboriginal land claims. This contributes to inefficient coordination with DPE and NSWALC, and creates a risk of inconsistent information sharing with LALCs, government agencies, local councils and other parties. More broadly, responsibilities for sharing information about the location and status of land under claim are not well defined across agencies. These factors contribute to risks to Crown land with an undetermined land claim, which case law has found to establish inchoate property rights for the claimant Aboriginal Land Council.4 It can also lead to uncertainty around the ownership, use and development of Crown land, with financial implications for various parties.


1 Crown land is land that is owned and managed by the NSW Government.
 AANSW and ORALRA were previously part of the Department of Education, before the 1 July 2019 Machinery of Government changes.
 Previously, these functions were undertaken by the Department of Industry (2017–June 2019) and the Department of Planning, Industry and Environment (July 2019 to December 2021). 
 The lodgement of a land claim creates an unformed property interest for the claimant Aboriginal Land Council over the claimed land. This interest will be realised if the Crown Lands Minister determines that the land is claimable.

Since 1983, 53,861 Aboriginal land claims have been lodged with the Registrar.25

The Land and Environment Court of New South Wales has stated there is an implied obligation on the Crown Lands Minister to determine land claims within a reasonable time.26

As at 31 December 2021, DPE has processed less than a third (31 per cent) of these land claims: 14,273 were determined by the Crown Lands Minister (that is, granted or refused, in whole or part) and 2,562 were withdrawn. This amounts to 16,835 claims processed, including the negotiated settlement of 15 claims through three Aboriginal Land Agreements. As a result, DPE reports that approximately 163,900 hectares of Crown land has been granted to Aboriginal Land Councils since 1983 up to 31 December 2021.

There are 38,257 land claims awaiting determination, which cover about 1.12 million hectares of Crown land.

The 2017 report on the statutory review of the Act noted that the land claims ‘backlog’ was one of the ‘Top 5’ priorities identified by LALCs during consultations. The importance of this issue is consistent with findings from our consultations with LALCs in 2021 (see Exhibit 7).

Exhibit 7: LALCs report that delays undermine the compensatory intent of the Act

LALCs raised concerns about delays in the Aboriginal land claim process, including waiting decades for claims to be assessed and years for land to be transferred once granted.

The large number of undetermined claims has been described by LALCs as disrespectful, and as reflecting under-resourcing by governments.

LALCs reported that these delays undermine the compensatory intent of the Act, including by creating uncertainty for their plans to support the social and economic aspirations of their communities.

Source: NSW Audit Office consultation with LALCs.

Delays in delivering on the statutory requirement to determine land claims, and limited use of other mechanisms to process claims in consultation or agreement with NSWALC and LALCs, undermines the beneficial and remedial intent of Aboriginal land rights under the Act. It also:

  • impacts negatively on DPE’s ability to comply with the statutory requirement to determine land claims, because often the older a claim becomes the more difficult it can be to gather the evidence required to assess it
  • creates uncertainty around the ownership, use and development of Crown land, which can have financial impacts on Aboriginal Land Councils, government agencies, local councils and developers.

Risks that arise in the context of undetermined claims are discussed further in section 3.3.


25 According to DPC (ORALRA) data in the ALC Register up to 31 December 2021. DPC (ORALRA) data indicates that the Registrar has refused to refer claims to DPE for assessment under section 36(4A) of the Act in a small number of cases – for example, seven times in 2017 and none since that time.
26 Jerrinja Local Aboriginal Land Council v Minister Administering the Crown Lands Act [2007] NSWLEC 577 at 125. The Court stated, ‘While a reasonable time may vary on a case-by-case basis, a delay of 15 to 20 years in determining claims does not accord with any idea of reasonableness’.

NSW Treasury describes public sector governance as providing strategic direction, ensuring objectives are achieved, and managing risks and the use of resources responsibly with accountability.

Consistent with the NSW Treasury’s Risk Management Toolkit (TPP-12-03b), governance arrangements for Aboriginal land claim processes should ensure their effective facilitation and administration. That is, arrangements are expected to contribute to and oversee the performance of administrative processes and service delivery towards outcomes, and ensure that legal and policy compliance obligations are met consistent with community expectations of accountability and transparency.

DPC and DPE are responsible for governance and, in partnership with NSWALC, operational and information-sharing activities required to coordinate Aboriginal land claim processes. LALCs, statutory officers, government agencies, local councils, and other parties (such as native title groups and those with an interest in development on Crown land) need to be engaged so that these processes are coordinated effectively with risks managed – consistent with the intent of the Act, and other legislative requirements.

Policy commitments to Aboriginal people and communities made by the NSW Government in the OCHRE Plan and Closing the Gap priority reforms establish an expectation for culturally informed governance.

Exhibit 12: LALCs want their voices to be heard and responded to by government

LALCs expressed a strong desire to have their voices heard so that outcomes in the Aboriginal land claim process are informed by LALC aspirations and consistent with the intent of the Act. The importance of respect and transparency were consistently raised.

The following quotes are from our consultations with LALCs during this audit which illustrate the inherent cultural value of land being returned, as well as the importance of its social and economic value and potential.

There’s batches of land in and around town. This land is significant…We want to get the land activated to encourage economic development, and promote the community…our job is to step up to create infrastructure, employment, maintenance and services and lead by example.

One of the best things we were able to do is develop a long term 20-year plan and where Crown Land could directly see where land was transferred to us and it was going to things like education, housing, health and other social programs…

There has been a claim lodged on a parcel of land that has long lasting cultural significance, a place that is very special to the Aboriginal community members and holds a lot of history. If the claim lodged was successful this land would be used to strengthen the cultural knowledge of the local youth, through placing signage that depicts stories that have been passed down by the Elders, cultural talks and tours and school group visits. This land, although not large in size, has a significant number of cultural trees and artefacts. Aboriginal families and members of the LALC that have lived in our town are very protective of the site and others surrounding it, respecting the importance of the cultural history of the site. There is one, which is a cultural one. We received a land claim that contained a cultural site. This is the high point: we were given back lands that contained rock engravings, carvings. A real diamond for us, especially as an urban based land council.

At the heart of the ALRA is the ability to claim Crown Land…The slow determination of claims gets in the way of us doing what we want to do, which is focus on our communities and address our real needs which are about health, wellbeing and culture. If we could realise these rights, we can address all sorts of socio-economic needs. We would become an economic benefit to the state…If it was operating well there could be more caring for Country too.

Note: Permission has been granted by LALC interviewees to use these quotes in this context.
Source: Excerpts from NSW Audit Office interviews with LALC representatives, facilitated by Indigenous consultants.

The Crown Lands Minister, supported by DPE, is required to determine whether Aboriginal land claims meet the criteria to be ‘claimable Crown lands’ under section 36(1) of the Act. DPE staff within its Crown Lands division are responsible for assessing land claims and preparing recommendation briefs to the Crown Lands Minister, or their delegate, on determination outcomes. That is, on whether to grant or refuse the claim.38 DPE staff also make decisions about which land claims within the large number of undetermined claims should be processed first.

 

Appendix one – Response from agencies

Appendix two – About the audit

Appendix three – Performance auditing

Banner image used with permission.
Title: Forces of Nature
Artist: Lee Hampton – Koori Kicks Art
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© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

Parliamentary reference - Report number #365 - released 28 April 2022.