Koala Encounters is part of the zoo where the public get to meet a koala up close (for a fee). The animals are rotated through the exhibit, when not being used they will be held in off-display areas. Individuals that don't tolerate the public or stress easily are not used.
At least, that's how it used to be done when there was only one enclosure. Maybe now, with eight enclosures, they might just rotate the public through them, a different enclosure every day.
The location of this complex within the zoo is between the Kangaroo Walkthru' and the Platypus House. This is on the site of the original Koala Encounters which was used until about five years ago.
Unless it's changed, the NSW law states that the public can't actually hold the Koalas, but they can stand beside them and touch them, or hey can hold a branch the Koala is attached too.
When I worked at Taronga some years ago we went one step further: there was to be no contact at all between the public and the animals.Thery could stand beside the Koala buut not touch it. Don't know if that's still the policy; maybe Zooworker or ZooPro could confirm that?