The NSW Government is simultaneously consulting on a new native title settlement framework and a proposed Climate Change and Natural Hazards State Environmental Planning Policy (SEPP). Taken together, they signal a substantial shift in how land access, development approvals and indigenous rights will be managed across the state.

The Proposed Climate Change and Natural Hazards SEPP

The Department of Planning, Housing and Infrastructure (DPHI) has released an Explanation of Intended Effect (EIE) for a proposed SEPP. This would replace the existing Resilience and Hazards State Environmental Planning Policy. The new instrument is designed to provide a more consistent and integrated approach to managing climate and natural hazard risks across the development assessment framework under the Environmental Planning and Assessment Act 1979 (NSW).

The SEPP would apply statewide to local development, significant development and significant infrastructure. Its objective is to require decision-makers to give greater weight to climate risk earlier in the planning process and embed that assessment in the development application framework.

The proposed SEPP addresses five main risk areas:

• For climate change, proponents would need to assess projected climate risk, identify mitigation strategies and apply approved climate change scenarios to their development applications;
• For bushfires, consent authorities would be required to avoid inappropriate development in high-risk locations and to improve resilience in areas designated for population and development growth; 
• Coastal hazard provisions would incorporate existing legislative requirements under the Coastal Management Act 2016 (NSW) into the development application process;
• Flood provisions would consolidate and expand on existing local environmental plan controls. This may potentially make minimum floor heights and related requirements more restrictive as projected flood impacts are factored in; and
• A ‘build back better’ principle would govern the rebuilding of dwellings after natural disasters, signalling a move away from like-for-like replacement of vulnerable structures in high-risk areas.

The DPHI has also released companion documents for consultation. The draft Climate Change Scenario Guidelines promote consistent, merit-based decision-making using approved scenarios. An Urban Heat Policy for Land Use Planning requires urban developments to incorporate cooling measures such as green infrastructure, cool materials and passive design. A new Ministerial Direction to complement the SEPP at the rezoning and master planning stage is also proposed.

The DPHI has acknowledged that planning for climate risk does not mean eliminating all risk. The concept of ‘tolerable risk’ is central to how the SEPP is applied in practice. ‘Tolerable risk’ is defined in the EIE as understanding likely risks so that planning decisions reflect a balanced assessment of what is acceptable. That concept is likely to be interpreted through the lens of ecologically sustainable development and how broadly or narrowly it is construed will have significant consequences for development feasibility in exposed locations.

The practical implications of the SEPP are most acute for projects in coastal areas, floodplains and bushfire-prone land. This is where infrastructure such as transmission lines, pipelines, processing facilities and port infrastructure are commonly located. Those projects will need to evaluate physical climate risks earlier in the design and approvals process, anticipate more restrictive development controls and build additional resilience measures into their designs.

Consultation on the EIE closed on 16 March 2026.

A New Pathway for Native Title

In parallel, DPHI is consulting with native title groups on a new policy designed to resolve native title claims and compensation outside the Federal Court. Under the proposed framework, native title groups would be able to enter into consent determinations together with a whole-of-government Indigenous Land Use Agreement (ILUA) and a compensation package. This means all determinations would be resolved simultaneously and without litigation. The policy also proposes an out-of-court compensation settlement pathway for groups already recognised as native title holders by the Federal Court who have entered an ILUA with the NSW Government. This provides an alternative to commencing a separate compensation application for past acts.

The compensation methodology is a notable departure from existing approaches. The proposed policy would calculate compensation based on the operational and governance costs of registered native title body corporates. Previously land was valued for cultural loss or a parcel-by-parcel historical analysis was required for Federal Court proceedings. The proposed approach covers costs such as employment, office space, joint management of national parks, ranger programs and a discretionary budget for the body corporate to pursue its own economic, environmental, social, and cultural aspirations.

ILUAs developed under the policy would address the practical co-existence of native title rights and government or third-party activities such as fire management, leases and licences on public land, emergency response and construction of public works. They would also create pathways for transferring Crown land to native title groups and appointing body corporates as Crown Land Managers.

The policy is likely to have significant implications for any project requiring access to Crown land or touching areas subject to native title claims. Resource proponents frequently rely on ILUAs as a mechanism for securing land access and managing cultural heritage obligations. A faster, government-facilitated ILUA process could streamline negotiations but it may also concentrate decision-making power.

The policy does not extinguish the court pathway, with native title groups retaining the right to litigate if they prefer. 

Consultation sessions on this policy are being held through to April 2026.