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The rural and industrial zones and extractive industries

03 December 2013

Reformed Industrial and Rural zones for Victoria

Why are zones important?

The CMPA covers a broad range of construction material processing businesses engaged in the extracting, processing or otherwise working of sand and stone materials or materials recycling, the performance of which are all critical to the Victorian economy. 

In town planning terms, these are also land uses which generally have the potential to generate off site impacts and their ability to operate with minimal restrictions is also critical to achieving a more competitive construction industry in Victoria.

Modern town planning and land use regulation has its origins in the industrial revolution and the need to manage amenity conflicts between land uses, in particular between residential and rapidly expanding industry, and to achieve efficient spatial relationships between industry, their markets and workers in the layout of modern cities.

In managing land use conflicts planning systems across the world have all evolved differently, including the Victorian Planning System, which has adopted a system heavily reliant on zoning based controls and policies to guide the exercise of administrative discretion.   

Central to the efficacy of the Victorian land use planning system are its zones, which identify land uses that are either “as of right” (ie. do not need a permit), “permit required” or “prohibited” for any land which has been included in that zone.  If a permit is required, for example for ‘stone extraction’, then the planning permit is the principal mechanism for managing that use, typically through the imposition of permit conditions.  All land in Victoria is zoned for a particular purpose under local planning schemes and since the late 1990’s the zones applied to properties have been based on a standardised suite of zones approved by Minister for Planning.  Although in many instances customised Special Use Zones (SUZ’s) have continued to be applied to specific uses, eg. to protect long-standing extractive industry areas, institutional and other large scale uses which need to be protected.

Generally speaking most extractive industry and construction material processing uses will operate in one or more of the rural or industrial zones under local planning schemes, and can be appropriately accommodated in these zones, subject to meeting any specific requirements (eg. buffers etc…) in relation to surrounding land uses.  Importantly, these zones can also accommodate a limited range of other non-industrial and non-agricultural uses eg. accommodation, commercial and tourism related uses, that can be sensitive to extractive or processing operations if not sited or designed appropriately. 

Because the Victorian system has operated on the basis of a standardised “one size fits all” suite of zones the content of the standard zones, in particular the range of permissible uses and development, has always been the subject of considerable debate and formal review by successive Planning Ministers over the years.  The more restrictive approach to the rural and industrial zones, which perhaps prevailed until recently, arguably favoured the protection of extractive industry and other higher impact uses over accommodating other more commercial and sensitive uses.

The new Rural and Industrial Zones

Victoria’s current Planning Minister, The Hon Matthew Guy MLC, has continued this ongoing process of planning system reform and last year announced a comprehensive review of all Residential, Business, Industrial and Rural zones and appointed the Reformed Zones Ministerial Advisory Committee (the Advisory Committee) to carry out this task.  This review follows on the coat tails of other wide-ranging reviews to overhaul the planning system to improve its efficiency, including the Planning System Ministerial Advisory Committee, which made sweeping recommendations recently implemented through the Planning and Environment Amendment (General) Act 2013.

The key drivers of these reforms identified by the Government were economic imperatives to reduce red tape and remove barriers for business, in particular for tourism and retail investment in Victoria. In particular, the Minister and Advisory Committee have referred to the findings of the Victorian Competition and Efficiency Commission’s reports Unlocking Victorian Tourism and the Productivity Commission’s Report on the Economic Structure and Performance of the Australian Retail Industry, which both identified the inflexible and anti-competitive nature of land-use controls, which locked out opportunities to deliver more competition and productivity growth.

The first of the zone changes were announced by the Minister in May this year and related to the reformed industrial zones, which were finalised in response to the Commercial and Industrial Zones Report (28 February 2013) prepared by the Advisory Committee.

The final reformed zones were gazetted on 15 July 2013 and replaced the existing Industrial 1, 2 and 3 Zones.  The key change applied across all of these zones was the removal of the floor space cap on office uses, which was previously limited to 500 sqm.  Other changes were confined to the Industrial 3 Zone and included measures to encourage more retail opportunities in this zone:

The Minister announced further changes to the rural zones on 15 August 2013 in response to the Reformed Zone’s Ministerial Advisory Committee Rural Zones Report.  The new zones were gazetted on 5 September 2013 and replace the existing rural zones, namely the Farming Zone, Rural Activity Zone, Rural Conservation Zone, Rural Living Zone, Green Wedge and Green Wedge A Zones.  The changes generally seek to bring about greater flexibility for councils to consider tourism and accommodation related uses and also more flexibility to consider subdivisions.  Some of the key changes applying to the rural zones are noted below and include:

It is important to note that no land was rezoned as part of this reform process and the reformed zones simply replaced the existing zones and have been in operation from their gazettal date. 

How will the changes affect members?

By their nature extractive and material processing operations have the potential to generate impacts eg. noise and dust, and the proliferation of sensitive and commercial uses in industrial and rural areas can impact on member’s operations, particularly when seeking approval to expand an existing operation where its buffers have been encroached upon.  In some cases encroachment of sensitive uses can raise significant compliance issues eg. achieving noise limits mandated by environmental legislation and policies where a sensitive use has located in proximity to an existing quarry.

Whilst the changes to the industrial zones will bring about a degree of flexibility which will be welcomed by the retail and tourism sectors and other commercial operators looking to locate on cheaper industrial land, they will have the potential to introduce some non-industrial uses into industrial areas and potentially bring about land use conflicts in terms of amenity expectations and traffic congestion.   The commercialisation of industrial areas has also been criticised for its potential to erode the availability of prime industrial land for higher impact uses which require significant buffers and to increase the costs of such land.  It has also been suggested that the dispersal of retail and commercial uses in to industrial areas may undermine the viability of activity centres.

Similarly, the changes to the rural zones also have the potential to result in a greater proliferation of non-agricultural uses in rural areas, including in areas proximate to higher impact agricultural and extractive operations, potentially bringing about land use conflicts.

These issues were noted by a number of submitters to these processes and acknowledged by the Advisory Committee.

Councils are generally aware of the need to ensure that such uses are planned in an orderly manner which does not prejudice existing agricultural and extractive operations and the decision guidelines in the zones specifically recognise this eg. the Farming Zone and Rural Activity Zone require a council to consider, amongst other matters:

The purposes of the Farming Zone also specifically seeks:

All local planning schemes also include provisions (at Clause 52.09) which requires councils to give notice to the Department of any permit application for a sensitive use or subdivision within 500 metres of an extractive industry area or an existing work authority.  However it is not clear how well this mechanism is implemented in practice and if it is effective in addressing encroachment of these uses.  There is also a general requirement under the Planning and Environment Act 1987 for councils to direct that notice be given to owners and occupiers who may be materially affected by a permit application.  However councils exercise considerable discretion in determining the realm of affected parties and nearby extractive industry operations may not always be top of mind in this regard.

Whilst there is some degree of protection for operators under the existing regulatory framework, in light of these recent changes members will perhaps need to be more vigilant in monitoring permit applications for new uses and subdivisions in rural and industrial areas.  If members believe that a new use or subdivision of nearby land may not be compatible with their existing or planned operations then it will be important to raise these issues at the permit application stage to ensure that appropriate mitigation measures are considered and implemented (if appropriate).  This is also important for influencing reasonable community and amenity expectations about the use and development of land in rural and industrial areas, planning concepts which are frequently given weight in decisions to support and protect higher impacts uses in such areas.       

The zone changes also need to be considered against the backdrop of the State Government’s recent response to the Economic Development and Infrastructure Committee (EDIC) Inquiry into Greenfields Mineral Exploration and Project Development in Victoria.  The recommendations adopted by the Government include proposals for the greater involvement of the Minister for Energy and Resources in planning scheme amendments and incorporating extractive industry areas in Regional Growth Plans and identifying other planning mechanisms to identify and protect extractive industries.  In light of the recent zone changes it will perhaps now be more important that the Government follows through and implements these recommendations.

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