Navigating the Latest Conflict of Interest Regulations for Council Development Applications

KEY TAKE-OUTS:

• Council-related development applications are:
  • Made by or on behalf of a local council; or
  • For development on land of which the council is an owner, a lessee or a licensee or
  • For development on other land of that is vested in or under the control of the council.
• New rules introduced by the Environmental Planning and Assessment Amendment (Conflict of Interest) Regulation 2022 will affect development applications that seek approval for the carrying out of work within existing public roads, drainage reserves or public reserves.
• The Regulation will take effect from 3 April 2023.

From time to time, local councils in New South Wales make development applications to obtain consent to carry out development on land they own, occupy or otherwise control. The conflict which arises here is that the application is being made to the council itself for determination, as the consent authority under the Environmental Planning and Assessment Act 1979 (‘EPA Act‘).

The Environmental Planning and Assessment Amendment (Conflict of Interest) Regulation 2022 (‘Conflict of Interest Regulation‘) was introduced to amend the Environmental Planning and Assessment Regulation 2021 (‘EPA Reg‘) in respect to approvals for development applications proposed by councils on their own land. The changes are as follows:

What is a Council-related development?

New clause 9B(2) of Schedule 1 to the EPA Act will define ‘council-related development application‘ to mean:

‘…A development application, for which a council is the consent authority, that is—

(a) Made by or on behalf of the council, or

(b) For development on land—

(i) Of which the council is an owner, a lessee or a licensee, or

(ii)  Otherwise vested in or under the control of the council.’

Public exhibition

For the purposes of section 2.22 of the EPA Act, new clause 9B(1) of Schedule 1 of the EPA Reg will specify that the minimum public exhibition period for a council-related development application is 28 days.

Mandatory statement

New section 30B of the EPA Reg states that a council-related development application must be accompanied by either:

• A statement specifying how the local council will manage conflicts of interest that may arise in connection with the application because the council is the consent authority (a management strategy); or
• A statement that the council has no management strategy for the application.

Prohibition on determination of an application if there is no policy

It will not be legally possible for a council-related development application to be determined by the consent authority (including the Land and Environment Court on appeal) unless:

• The council has adopted a conflict of interest policy; and
• The council considers the policy in determining the application,

(See new section 66A(1) of the EPA Reg).

New section 66(2) of the EPA Reg states that a ‘conflict of interest policy:

‘(a) Specifies how a council will manage conflicts of interest that may arise in connection with council-related development applications because the council is the consent authority, and

(b) Complies with the Council-related Development Application Conflict of Interest Guidelines published by the Department and available on the NSW planning portal.’

Therefore, the delay in introducing the new Regulation to 3 April 2023 is to allow time for Councils to develop the required management strategy and conflict of interest policy.

If, as a landowner or developer, you are preparing a development application (that may not be determined before 3 April 2023) where you propose to authorise works in a public road, public reserve or drainage reserve, it would be prudent to check whether the local council has adopted a conflict of interest policy for council-related development applications.

Guidelines

The Department of Planning and Environment has published guidelines titled ‘Council-related Development Application Conflict of Interest Guidelines‘ (‘Guidelines‘). The Guidelines require that a council’s conflict of interest policy concerning council-related development applications must:

• Establish management controls and/or a management strategy to address potential conflicts of interest at the different phases of the development process for the types of council-related development that the council could be involved in,
• Outline the process through which potential conflicts of interest will be identified, the risks assessed and appropriate management controls determined, and
• Outline the process that will be followed to publicly communicate the management approaches for each development subject to the policy.

The Guidelines provide a sample conflict of interest policy and a sample management strategy statement, both which can be used as a template by councils for the preparation of their own documents.

The Guidelines recommend as best practice that council’s conflict of interest policies should also address conflicts that may occur after development consent has been granted to council-related development applications.

If Council or developers need assistance in navigating these changes, our Local Government, Environment and Planning Team at Coutts are ready to help.