DCO promoters urged to get ahead of biodiversity curve

NSIP promoters who embrace biodiversity net gain now can reap the rewards of adopting best practice and achieving real enduring environmental benefits. Doing so will also have a positive effect on their development consent order (DCO) applications, as net gain is capable of being an 'important and relevant matter' as part of the DCO determination process. It will also be a positive benefit when the decision maker carries out the 'planning balance' exercise.

Co-written by Matthew Carpenter of Pinsent Masons, the law firm behind Out-Law.

The government has said that net gain requirements will not be made mandatory for NSIPs under the upcoming Environment Bill, but in our view there is good reason to think that these projects could be subject to the same rules in the future. Indeed, recent advice from the Natural Capital Committee includes recommendations that an environmental net gain approach for development should apply to all developments under the 1990 Town and Country Planning Act (TCPA) and projects considered by the Planning Inspectorate, which includes NSIPs, or the Marine Management Organisation.

We have also seen a step change in approach during examination in relation to design and sustainability following the launch by the National Infrastructure Committee (NIC) of its Design Principles for National Infrastructure and net zero Paris Agreement commitments and the rising environmental capital agenda.

What is biodiversity net gain?

The UK government's policy of embedding an environmental net gain principle for development, including housing and infrastructure, dates back to the 25 Year Environment Plan, published in 2018. An influencing factor in the move towards 'net gain' was the reported decline in the UK's biodiversity, including housing and infrastructure.

Key provisions in respect of net gain are included in the Environment Bill, which is now back before the UK parliament having been delayed due to the general election. The bill is due to be considered by the Public Bill Committee at the end of September 2020.

The general thrust of the proposed changes is that developers must demonstrate a net biodiversity gain of 10% based on the Department for Environment, Food and Rural Affairs (Defra) biodiversity metric in order to obtain planning permission, which is quite a robust change to the existing system. This would not apply to DCOs; however, there are clear signals that law and policy will head further in this direction in the future making it worth considering what the changes in the bill could mean for the DCO regime.

How could net gain apply to NSIPs?

The government published a summary of consultation responses considering whether the net gain requirement under the bill should apply to NSIPs or marine development in July 2019. Following a review of these responses, the government confirmed that it would "continue to work on exploring the potential net gain approaches for these types of development" rather than initially include them in the scope of the mandatory requirement in the Environment Bill.

However, we are seeing that many local planning authorities have already incorporated net gain policies into their local plans, and have been pushing for NSIPs, through their local impact reports, to deliver and contribute against these policies. As local impact reports must be taken into account and local planning policies are "important and relevant" matters for the secretary of state to consider when determining a DCO application, it becomes a matter that developers are well advised to consider and address.

Annex C to the Planning Inspectorate Advice Note 11 states: "Natural England will seek opportunities for positive environmental outcomes from major infrastructure developments", with NSIPs making a "significant contribution to delivering the environmental ambition" in the 25 Year Environment Plan. At the same time, examining authorities and the secretary of state need to report on the duty in section 40(1) of the 2006 Natural Environment and Rural Communities Act (2006 NERC Act), and must have regard to the purpose of the conservation of biodiversity and the United Nations Environmental Programme on Biological Diversity of 1992 when making a decision on whether to grant development consent.

The government is clearly keen to build on national environmental improvement and diversity, with an intention to plan towards a rise in the international ranking on quality of environment which would put the UK among the top performing countries in this area. DCO applicants should therefore expect emerging government policy to generally align with the environmental principles identified in the bill, many of which are already familiar from other regimes. In the context of NSIPs, this policy will need to be clear with regard to net gain and its role in mitigation, as well as in relation to associated development.

The government is currently considering comments following consultation on the draft National Policy Statement (NPS) for Water Resources Infrastructure. The draft NPS introduces a requirement for water resource NSIPs to achieve environmental net gain, which has not previously been expressly included in NPSs. Given that this is the most recent NPS to be drafted it is a good indicator of the direction of travel for government policy. At the same time, the Planning Inspectorate has indicated that this draft NPS will be a 'relevant and important matter' for other NSIPs, including those outside the water sector - indicating that there is the potential for the biodiversity net gain requirements to apply to other infrastructure sectors within the scope of the 2008 Planning Act (PA 2008).

It is also worth highlighting that clause 93 of the bill - the general duty to conserve and enhance biodiversity – provides for amendments to section 40 of the 2006 NERC Act, and would require public authorities to "consider what action the authority can properly take, consistently with the proper exercise of its functions, to further the general biodiversity objective". Considering the review of NPSs with this objective in mind, it is easy to see the direction of travel and weight which may be given to the need to consider the Defra Biodiversity Metric and the need to protect and enhance habitats in the context of the DCO regime and NSIPs. In addition, section 10 of PA 2008 requires the secretary of state to have regard to mitigating, and adapting to, climate change when reviewing NPSs – a further indication that net gain will feature in any review.

It is therefore entirely feasible that NSIPs will be subject to biodiversity net gain requirements in the future – with the potential, should these objectives be applied to NSIPs, for promoters to be faced with a biodiversity impact deficit to make up, if they have not previously considered these requirements. The bill therefore offers promoters the opportunity to get ahead of the current situation: by incorporating biodiversity net gain provisions into their plans now. They could use this as a positive promotional aspect of their projects, as well as mitigation and compensation, making it easier to balance the requirements with their project needs in the future should they later become compulsory for NSIPs.

There is also emerging practice and precedent to recognise net gain in the context of NSIPs. For example, in the secretary of state's decision for the recently-granted Cleve Hill Solar Park DCO, he confirmed in relation to the inclusion of compulsory acquisition powers: "there is a compelling case for inclusion [of these powers] particularly in view of the additional benefits in respect of biodiversity net gain that the development would be able to deliver".

Another example is the Riverside Energy Park DCO, for which promoter Cory Environmental Holdings Ltd provided net gain information and provisions voluntarily while working closely with the local planning authority. The provision on net gain could not be secured on land within the promoter's ownership, and so it was necessary to secure a mechanism through the DCO which delivered this offsite and provided for its management and maintenance.

This is a relatively flexible field, meaning that complying with the provisions before they become mandatory could lead to opportunities for promoters to engage with and influence government decisions at the appropriate time. However, any land requirements will need to be carefully considered and the case fully supported and made out.

Additional contributions by Alex Tresadern of Pinsent Masons, the law firm behind Out-Law.

The Pinsent Masons planning team is hosting a series of webinars in September that will share critical thinking across both the public and private sector and explore whether the government's proposed planning reforms are likely to do the job in terms of facilitating the rebuilding of the UK economy. Find out more, and book, the Residential and Commercial; Energy and Infrastructure; and Environment events.