Investors to sue NSW government over ‘bio bank’ revaluation
A small group of investors struck a deal with the NSW government through a ‘Bio Bank’ worth millions of dollars. Then Macquarie St rewrote the rules.
NSW
Don't miss out on the headlines from NSW. Followed categories will be added to My News.
A group of investors is preparing to sue the NSW government after it slashed the value of their holding in a state-run ‘bio bank’ from as much as $8.4 million to little more than $9000.
The former head of the Environment Protection Agency (EPA) told The Daily Telegraph the government had misled the investors and destroyed confidence in the Biodiversity Offset Scheme in the biggest variation from proper policy he had ever seen.
Meanwhile the chairwoman of a soon-to-report parliamentary inquiry into the scheme told The Telegraph it was “in complete dysfunctional free fall.”
In 2016, Sydney retiree Jerry Lees and five other investors who own 42 hectares that can’t be built on behind Redhead south of Newcastle spent hundreds of thousands of dollars on consultants and paid $432,000 into a trust fund to protect a threatened plant species on the site forever.
Under the newly created offset scheme, an agreement was struck with the state government in 2018, which says the “biodiversity credits” were worth $5.8m, although their market value later rose to more than $8m.
The credits were available to be bought by property developers or road builders – including the state itself – to offset losses of the plant at other locations.
However, in 2020, the government slashed the value of the investors’ Tetratheca juncea (aka black-eyed Susan) credits by about 99 per cent.
“The whole thing is ludicrous,” Mr Lees told The Telegraph. “We are considering suing them.”
Former EPA boss Barry Buffier, who has consulted to the investor group, said there were “significant conflicts of interest” with the bio bank because the government sets the policy, runs the scheme and buys credits for its own projects.
Mr Buffier said “I’ve never seen anything” like the degree of “variation from policy” as had occurred in the treatment of the investors.
“They’ve clearly been misled in terms of how the scheme might be run and what it was supposed to do,” he said.
The government had destroyed confidence in the scheme, which would have “quite incredible” environmental consequences, Mr Buffier added.
The chair of a parliamentary inquiry into the integrity of the scheme, Sue Higginson of the Greens, told The Telegraph it was in “complete dysfunctional free fall”.
The inquiry report released on Thursday found the scheme’s operation is so opaque and complex that no stakeholder has full confidence in it.
The report makes 19 recommendations, with one specifically aimed at addressing the government’s role as “regulator, facilitator and buyer”.
The Department of Planning and Environment said it was unable to comment on the investors’ treatment “at this stage as it is subject to a legal review.”
In August, the Audit Office said the scheme had been ineffective and lacked transparency.
Join the conversation
The special letter that inspired Jeff Fenech to greatness
Johnny Lewis opens up on his relationship with the Marrickville Mauler, widely regarded as the nation’s greatest ever boxer, and his early life on the mean streets of Sydney’s inner west.
Read more
Minns mulls police powers to reject protests as costs soar
The Premier said a review would take place into protests and the allocation of police resources, saying cops should have powers to reject a protest, citing a $5m financial burden. Have your say in our poll.
Read more