Fine to get rid of Part 3A, but should councils get the power?

One of the first announcements by the new Premier of NSW was that the role of Part 3A of the planning legislation would be substantially reduced.

Why is it so unpopular and what will be the consequences of its abolition? Is it just as simple as 'giving power back to local councils and communities'?

What is Part 3A?

Part 3A, which has operated for around five years, had a couple of policy objectives.

The first objective was to have a more efficient way of 'approving' government public work projects. Just doing an Environmental Impact Statement under Part 5 of the Act gave insufficient certainty. Something needed to be done but it was never explained why, instead of fixing the fundamental faults in the original Act, a whole new Part and process was required.

The second objective was more sinister. The private development lobby wanted to piggyback on the new 3A process and have the Minister decide their developments, especially those where they wanted a 'spot rezone' – a change of use or a substantial increase in quantum.

The Minister as a decision-maker was popular because it was such a lottery when you went to a council meeting to support your application. The local community usually would often be up in arms and local politics would take over. And you couldn't apply to a council for a rezoning.

The developers therefore liked the idea of the Minister being able to ignore a raft of environmental controls in other legislation as well as planning controls that applied to the unwashed when they had their developments decided by councils. Under Part 3A the Minister had the sort of power that the Queensland Government had over developments in the days before the FitzGerald Commission into Corruption. Except that, in Queensland, unlike in NSW, the public could appeal against ministerial decisions they didn't like.

So is Returning Power to Councils the Answer?

Unfortunately, the right answer is no. That is, so long as the councils continue to 'hear' disputed applications for consent in council meetings.

When a council meets it does so as a parliament. Parliaments are not devised to conduct hearings. Councils therefore conduct bad hearings. It is not the fault of councillors. It is the fault of the legislation, requiring them to consider difficult matters in a forum unsuited for that consideration.

Why don't council meetings provide a proper forum?

In a Discussion Paper in 2005 the NSW Independent Commission Against Corruption (ICAC) summarised the problem as follows:

Decisions on developments have the potential to significantly impact on people's interests. People with a relevant interest in a development application should be entitled to procedural fairness from the decision maker. The rules of procedural fairness including the right to a proper consideration of a matter, the right of affected parties to be heard and the right to be provided with reasons for decisions.

The structure and nature of council meetings often prevent procedural fairness rules from being applied. The lobbying of councillors highlights these problems. Proponents often lobby councillors with an interest in a development decision before a matter has reached council. This is a legitimate practice under the current system. However, it does little to encourage transparency. Others with a relevant interest in a development matter may not even be aware of what was said to the councillor and consequently denied an opportunity to respond.

Some councils have attempted to adopt a more transparent mechanism for allowing objectors and applicants to be heard by allowing them to address a council meeting prior to the vote on a development matter. This practice can also be fraught with difficulty. Residents and objectors are usually given a very limited time in which to make their case regardless of the complexity of the matter. The practice of receiving submissions in this form also allows proponents to make inaccurate statements that are not subject to challenge by council staff.

Finally, when a council votes on a development, it is not obliged to give reasons for its decisions if it approves the application. Councillors are also not obliged to respond to the issues raised by objectors and applicants when they address council.

Over the years the ICAC has vacillated how to overcome the problem of hearings at council meetings. For some years it unrealistically suggested that council meetings should operate more like a court when dealing with planning applications.

The Commission's Final Report following the Discussion Paper quoted above took a more realistic if somewhat irresponsible view of the problem:

The Commission does not believe it would be appropriate to apply a quasi-judicial standard to the making of decisions on development applications by elected bodies. The notion of a strictly impartial decision-maker (shielded from lobbying, advocating for no-one and no position, and coming to every issue with no opinion on the matter) faces real practical difficulties in the political context.

Provided there is no pecuniary interest, the Commission is not persuaded that there is a corruption argument to restrict councillors advocating for the interests of groups and individuals.

It is difficult to see that the fact that councillors may sometimes act as advocates is in itself conducive to corrupt conduct. In any case it is doubtful that the line between community representation and advocacy is capable of legislative definition. Indeed the concept of community representation has difficulties in itself, as frequently development applications throw up conflicting views within the community.

The Commission does not believe it is necessary as a matter of principle, nor is it desirable, (emphasis added) for development applications to be the subject of a formal hearing conducted in a quasi-judicial manner. Determining a development application does not involve the kind of adversarial contest between two or more parties that characterises court proceedings. It is unrealistic and inappropriate to expect an elected body to behave like a legal tribunal, and it is not desirable to give council meeting processes an overly judicial character.

The concern expressed in some submissions about the atmosphere and behaviour at council meetings is not peculiar to the development approval process and does not have any evident connection with corruption. The Commission regards these as management and performance issues more appropriately dealt with by the department of local government

The Commission's hearing into widespread and deep consequences of undue influence at Wollongong Council a couple of years after its Final Report demonstrated why the Commission's she'll be right approach was wrong.

The fact is that those seeking consent to their planning applications and those making objections are entitled to be properly heard by an independent hearing body. Councilors are not independent and, complying with the meeting procedures of the Local Government Act, it is impossible for them to conduct a proper hearing.

No wonder so many of those who appear in front of councils supporting or opposing development applications are so dissatisfied with the experience. No wonder so many complain to ICAC and other such bodies every year.

An Alternative Hearing Process

A number of councils have realised that there has to be a better way than rent-a-crowd crying for blood late at night after council has already dealt with a dozen applications.

What is needed is a proper hearing process before councillors make the final decision. This requires an independent panel, a hearing conducted using the rules for a hearing rather than a parliament and, crucially, detailed written reasons responding to the issues raised at the hearing and providing a reasoned set of recommendations. All the things a council meeting cannot provide.

A number of councils have set up Independent Hearing and Assessment Panels (IHAP) and they are working extremely well. The members are chosen in a way that makes it very difficult for anyone to lobby the members conducting a hearing. Councillors can still make a political decision and ignore a panel recommendation but there is a political risk to take, as, unlike when the Minister makes a decision under Part 3A, the report of the panel is made public before the final decision is made. Importantly, councils do not rehear the parties if they question the recommendations.

Panels have been shown to have reduced appeal costs and have led to greater community satisfaction with the process. They have reduced political friction and the time spent by councilors at meetings. I suspect councils with IHAPs provoke less complaints to ICAC and other such bodies.

So, while the Premier should certainly return the decisions to local councils and require developments to comply with local and State controls, he should insist that, where those decisions are controversial or involve a substantial discretion to be exercised, an IHAP must be appointed to ensure a proper hearing process is conducted. He might also suggest to the appeal Court that councils willfully ignoring IHAP recommendations that the Court agrees with should have costs awarded against them.