The Independent Commission Against Corruption (ICAC) has called for reform of Part 3A of the Environmental Planning and Assessment Act.

Part 3A planning laws allow the State Government to override local council decisions on major projects.

In its report on the exercise of discretion under Part 3A of the Act, the ICAC recommended that the NSW Minister for Planning refer private sector applications under Part 3A, which exceed development standards by more than 25 per cent, to an independent quasi-judicial body for determination.

It recommended that the Planning Assessment Commission (PAC) assume this role, with strengthened independence.

The ICAC made a total of 20 recommendations to manage and mitigate corruption risks in the Part 3A process.

“The Part 3A system is characterised by a lack of published, objective criteria,” the report stated.

“There are also various elements of Part 3A that are discretionary, particularly as regards residential and commercial development, which are prohibited or exceed existing development standards.

“The existence of a wide discretion to approve projects that are contrary to lcao plans and do not necessarily conform to state strategic plans has the potential to deliver sizeable windfall gains to particular applicants.

“This creates a corruption risk and a community perception of a lack of appropriate boundaries.”

The ICAC recommended an amendment of the Environmental Planning and Assessment Act to limit the application of Part 3A to projects that are permissable under existing planning laws and processes.

It also recommended the PAC perform a “gateway role” by independently scrutinising proposals to call in private sector projects via ministerial order.

Minister for Planning, Tony Kelly, said he welcomed the findings of the ICAC report and stressed that there had been “no inappropriate use of discretion in the NSW planning system”.

“This is a further demonstration of the independence and robustness of the planning system, which supports jobs and investment throughout NSW,” he said in a statement.

“The Department of Planning has been, and will continue to work proactively with ICAC on keeping the state planning system corruption free.”

Mr Kelly said he has asked the Department of Planning to investigate recommendations made by the ICAC.

He said the Government has agreed to conduct a review of the PAC, as recommended by the ICAC. It would also consider the ICAC’s recommendation that the EP&A Act and the types of projects under Part 3A be amended.