The New South Wales Auditor-General has found the government has failed to deliver an effective biodiversity offset scheme because its policy had no strategy or safeguards.
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 environmental impact of developments, but according to the report issued by Auditor-General Margaret Crawford, 96 per cent of the demand from developers for species credits had not been met by supply.
There is a massive pipeline of developments planned for NSW but the report found the government's offset policy had no surety of supply of land for offsets.
"Biodiversity gains made through the scheme will not be sufficient to offset losses resulting from development," the report said.
The report stated that "key concerns around the scheme's transparency, sustainability, and integrity are yet to be fully resolved."
'Damning report': Greens
Greens MP and spokesperson for the environment Sue Higginson said the report was "absolutely damning".
"The independent report confirms that we are facing an environmental crisis and the government's current policy is broken," she said.
Ms Higginson claimed that a failure of this kind in the corporate sector would result in the company trading as insolvent and bankrupt.
"We would see them on trial for serious, false, and misleading conduct," she said.
Ms Higginson said the failures had prompted a warning that "half of all threatened species are likely to be extinct in 100 years' time".
"The Premier, himself, needs to intervene to halt projects that are relying on the offsets scheme until there is accurate accounting.
"Right now, the offsets scheme is trading biodiversity that doesn't and can't exist anywhere else."
Government committed to improving
In a statement, NSW Environment Minister James Griffin said he was focused on making sure the scheme was easier to participate in, brought greater consistency to how it applied to local development, and stimulated the supply of efficiently priced biodiversity credits.
He said the scheme was in its strongest position since commencement, and he appreciated the Auditor-General's acknowledgement of the work undertaken to improve the scheme to date.
In a separate statement, the Department of Planning and Environment said the NSW Biodiversity Offsets Scheme was a world-leading, rigorous, and transparent scheme that aimed to ensure "no net loss" of biodiversity from development.
