A LEGAL challenge is under way against the NSW government's approval for Shenhua's controversial Watermark coal project in the Liverpool Plains.
On January 29 the government's independent approvals body the Planning Assessment Commission (PAC), gave the green light to the Watermark project.
The Upper Mooki Landcare group, represented by the Environmental Defenders Office (EDO), has launched a judicial review of NSW government's approval in the Land and Environment Court.
The EDO will argue on behalf of its client that the PAC's approval failed to properly consider if the mine was likely to have a significant impact to on the local koala population, in accordance with legal requirements.
Koalas are listed as a threatened species - vulnerable to extinction and protected by state and federal law.
If successful the judicial review would invalidate the development consent issued by the PAC.
Planning Minister Rob Stokes - responsible for the PAC - and Shenhua are listed as respondents to the review.
The Land understands Shenhua will defend the development consent for the Watermark project, and the evidence presented to the PAC on the regional koala population.
Mr Stokes did not respond in time for publication.
EDO NSW principal solicitor Sue Higginson said planning law required the NSW government to determine if the mine would place a viable local population of koalas at risk of extinction.
"The assessment of the impacts on koalas was inadequate," she said.
"The details of the koala population to be impacted upon was not correct, in the sense of what is required by law."
The public and Shenhua made submissions to the PAC on koalas, and estimates of population numbers varied widely.
Shenhua placed the numbers for the Gunnedah local government area between 8613 and 16,893.
The Australian Koala Foundation, however, argued the real figure was much lower - between 800 to 1300.
Ms Higginson said the EDO would argue the PAC fell short of its duties.
Any risk of extinction for threatened species caused by a project proposal must be identified during the approvals process under NSW law.
"Our client says the PAC satisfied itself with the wrong questions about the local koala population and the likely legal impact," Ms Higginson said.
"There is a legal requirement for the PAC to ascertain what the viable local koala population is so it can properly assess the impacts on that population - but we haven't got to the starting point of what that is yet."
The work to make a determination in accordance with what the law says you must do simply was not done, she said.
"If the allegation is proven in the court our client contends it is a point that can't be 'fixed up', more work needs to be done to understand the actual impact in accordance with the law," Ms Higginson said.
Federal Environment Minister Greg Hunt, who is jointly responsible for the project approval, is yet to make a determination on the project.
On February 27 he announced the approval process had been halted to allow advisory body, the Independent Expert Scientific Panel, to review the project.
The panel is expected to report to Mr Hunt this week.