Australia: VAGO recommends significant reforms to Victoria's contaminated land management system

Environment and Climate Change Update
Last Updated: 18 January 2012
Article by Mark Beaufoy

The Victorian Auditor-General's report on managing contaminated sites was released on 7 December 2011. The audit conducted by the Victorian Auditor General's Office (VAGO), which commenced in March 2011, involved a detailed review of the role and practices of DPCD, EPA and a number of councils in managing contaminated sites.

The report concludes that these agencies "are not effectively managing contaminated sites, and consequently cannot demonstrate that they are reducing potentially significant risks to human health and the environment to acceptable levels" (p.7). Significant gaps are identified in the existing regulatory system for dealing with contaminated sites, leading to lack of accountability, coordination and responsibility, and inaction (particularly in relation to "orphan sites" – sites where the party responsible for the contamination is unknown, insolvent or unable to pay for the cost of clean up).

The Auditor-General identifies that 80 per cent of contaminated sites are dealt with through the planning system, but that councils are not well placed to make such decisions as they:

  • lack the necessary technical capacity to make decisions relating to contaminated land
  • do not have sufficient funds to identify sites or obtain the necessary technical expertise
  • are not assisted by sufficiently detailed policies and guidelines.

The role of the EPA in the planning system was considered too uncertain and discretionary, meaning that the advice of the EPA was not always sought, and where it was sought, was not always helpful or followed.

The Auditor-General also identifies the lack of any requirement in Victoria for owners, managers, councils or developers to report contamination to any agency or notify the community. Statutory obligations (of different formulations and scope) requiring reporting of contamination exist in all other States. The report states – "this is significant gap, and one that could result in immediate and long-term harm to both human health and the environment through allowable inaction" (p.21). However, the report does not acknowledge that many sites which present an imminent risk to human health or the environment would be reported voluntarily to the EPA pursuant to a common law duty of care and to cooperate early with the regulator where enforcement action is likely.

The VAGO audit is one of many current reviews of the contaminated land management system in Victoria. For example, the Advisory Committee on potentially contaminated land, appointed by the Planning Minister under the Planning and Environment Act 1987 (PCL Advisory Committee), recently released an issues and options paper (November 2011), received submissions and has conducted a workshop on potential reforms (for more information on this review see our update here). Some of the reviews identified in the VAGO report have been public knowledge for some time (such as the EPA compliance and enforcement review, the PCL Advisory Committee appointed by the Planning Minister and the review of State Environment Protection Policies), but others are identified in the VAGO report for the first time (such as the EPA internal operational review of contaminated sites management 2011 which is reported to have identified 19 key risks associated with the current system). The EPA has recently conducted a series of "contaminated environments workshops" and intends to release a discussion paper in early 2012. The Auditor-General report comments that while these reviews are a positive initiative, "they are being planned in an ad hoc manner and occurring in isolation from one another" (p.22).

The Auditor-General makes four key recommendations (quoted in full below). Some of these recommendations are within the term of reference of the PCL Advisory Committee.

1 - DPCD assisted by the EPA and in consultation with councils should:

  • undertake a systematic and coordinated review of the entire regulatory framework for the management of potentially contaminated and contaminated sites to improve clarity and address gaps, including:
    • the wording application and use of the environmental audit overlay
    • the application of the framework for planning permits and planning scheme amendments and the types of use to which it applies 
    • the use, content, guidance, material and peer review of environmental site assessments
    • establishing mandatory reporting requirements 
  • establish processes to capture information about framework and system issues and processes to address issues in a timely way 
  • establish a performance framework to assess the efficiency and effectiveness of the contaminated sites framework and system.

2 - DPCD should:

  • assume responsibility and accountability for the leadership coordination and oversight of the contaminated sites framework
  • establish mechanisms and processes to improve the leadership, coordination, oversight and accountability of, and for, the contaminated sites framework and system 
  • clarify and communicate responsibilities within the framework so that they are clear and understood.

3 - The EPA should:

  • develop mechanisms and processes that enable the identification and recording of contaminated land 
  • assess the risk of these sites 
  • prioritise high risk sites and actions to manage the associated risks.

4 - Councils, with the support of the DPCD, should:

  • develop systems to capture ongoing site conditions to inform their compliance monitoring activities around the development, management and clean up of contaminated sites 
  • develop compliance monitoring programs and enforcement processes consistent with better practice and perform these activities on a routine basis 
  • assess the level of expertise and financial resources required to accurately manage and clean up high risk sites.

The report has been tabled in the Victorian State Parliament. A full copy of the report is accessible here.

The VAGO report, and other reviews by the PCL Advisory Committee and EPA, are likely to result in extensive reforms to the contaminated land management system in Victoria. These reforms will have significant implications for all stakeholders including local government, landowners and developers of contaminated land, as well as industries which may have caused or be causing contamination. The gaps in the current system clearly present uncertainty and risks.

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DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to

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