Residents of the New South Wales town of Port Stephens are calling on the federal environment minister, Sussan Ley, to save 52 hectares of koala habitat set to be destroyed by the expansion of a quarry.
The state’s independent planning commission recently approved the expansion of the Brandy Hill rock quarry in Port Stephens in the Hunter region, just two weeks after a parliamentary inquiry found koalas in the state would be extinct by 2050 without urgent government intervention.
The project is on a list of developments the NSW government wants fast-tracked in response to the Covid-19 pandemic and would more than double the quarry’s annual production from 700,000 tonnes a year to 1.5m tonnes to supply the Sydney construction market.
But the clearing of habitat at the site will affect koalas and other endangered species, including the grey-headed flying fox.
A decision from Ley on whether to grant the construction company, Hanson, federal environmental approval for the quarry expansion is due on 8 September and a community group, the Brandy Hill and Seaham Action Group, wants the minister to use her powers to rule it out.
“We’re a local community group that’s concerned by the possibility of destruction of such a large area of koala habitat at a time they are facing extinction in NSW,” said Chantal Parslow Redman, a Port Stephens resident and member of the group.
She said Ley’s decision had national significance in the aftermath of the bushfire disaster, which destroyed koala habitat across NSW.
“The question we need to ask is do we have the necessary laws and policy in place to protect threatened species at this time and this is what this project is testing,” Parslow Redman said.
“The federal environment minister does have an opportunity to use her powers to protect our koala population.”
The koala population of Port Stephens was identified by the NSW threatened species scientific committee as facing high risk of local extinction.
In its decision to approve the quarry expansion, the NSW IPC said the project would have a significant impact on the species but it had accepted the NSW Department of Planning, Industry and Environment’s assessment that those effects could be managed or mitigated through conditions.
The department found the koalas at the site were not a breeding population, but this is disputed by residents in the community action group.
In a series of comments in its reasons for its decision, the IPC also noted the methodology used by the department to assess the development was outdated and had not been updated to reflect the impact of the recent bushfire season on koala populations.
The IPC said the department should reevaluate the policy framework under which the environmental effects of projects on koalas were assessed.
The state’s approval of the project comes at a time in which the NSW environment minister, Matt Kean, has announced a target to double the state’s koala population by 2050.
He told Guardian Australia that habitat destruction and fragmentation was the “number one threat to koalas”.
“No one wants to see the country’s most-loved and iconic animal threatened, let alone become extinct,” he said.
“That is why last week I announced that the government must do better. We must stabilise our existing koala populations and double their number.”
He said the NSW chief scientist and experts were working on a plan to achieve that goal.
The controversy over the development also comes as the federal government is preparing legislation that would devolve environmental approval powers to the states.
It follows the interim report of the statutory review of the Environment Protection and Biodiversity Conservation Act, which recommends the establishment of bilateral approval agreements that would be governed by a legally enforceable set of national environmental standards.
Guardian Australia asked Ley if she was concerned the IPC had concluded that the NSW government’s assessment processes for the koala and other fire-affected species were out of date at a time the federal government was preparing to hand over its approval powers.
A spokesman for Ley said her decision about the Brandy Hill project would consider all issues raised through the public submission process.
“The decision will take into account all relevant impacts, including the impacts of the 2019/2020 bushfires,” he said.
Parslow Redman said state and federal governments had spent too long talking about declines in koala populations.
“I’m a mother of three young children and I can’t bear the thought of our kids growing up in a state where we no longer have a koala population,” she said.
“We’ve been talking about koala decline for how many decades? We need to actually start being proactive.”
Kate Washington, the NSW Labor spokeswoman for the environment and the member for Port Stephens, said the case highlighted that state and federal environmental laws “are incapable of protecting koala habitat”.
“This is how koalas become extinct: when we’ve got both levels of government with laws that are woefully inadequate and have been for some time, even more so since the bushfires,” she said.
“The federal minister has got the final say. She should actually do her job and ensure that 52 hectares of koala habitat isn’t cleared in an area where koalas are known to be endangered.”
Hanson’s plan to try to reduce impact on koalas includes preserving similar habitat near the quarry site that would be suitable for koalas. But experts who have assessed other major developments in NSW have questioned proposals that require animals to move into areas of new habitat.
A spokeswoman for Hanson said the company was continually working to reduce the risk of effects on koalas that used vegetation at the quarry site.
She said the NSW government’s assessment had concluded impacts to the koala could be “offset through suitable biodiversity offset credits”.
“As part of the Brandy Hill operations, areas of native vegetation will be retained within land owned by Hanson to the north-east, north-west and west of the development area, which contain habitat opportunities for koala’s similar to that within the quarry site,” she said.
“Additionally, land close by to the property is the subject of two separate BioBanking (offset) Agreements and have been secured for biodiversity conservation.”
Both the interim report of the EPBC review and a recent Australian National Audit office report found major flaws in Australia’s system of environmental offsets.