The Environment Protection and Sustainability Victoria Amendment Act 2014 (Amendment Act) was passed by the Victorian Parliament in late March and it received Royal Assent on 1 April 2014.
The Amendment Act delivers on part of the Victorian Government's implementation of its waste policy released in April 2013, Getting full value: the Victorian Waste and Resource Recovery Policy (Getting Full Value).
The Amendment Act's main elements include:
- the replacement of the existing 12 regional waste management groups with six new waste and resource recovery groups, and accompanying governance changes;
- the transfer of responsibility for administering the Victorian landfill levy proceeds to the Department of Environment and Primary Industries (DEPI) and the provision for landfill levy distributions to occur via ministerial determination rather than through regulations;
- the formal ending of the Environment and Resource Efficiency Plans (EREP) programme under the Environment Protection Act 1970 (EP Act), which required Victoria's largest energy and water users to identify and implement resource efficiency measures (energy, water and waste) with a payback of three years or less;
- other amendments to the EP Act aimed at removing duplication and reducing regulatory burden, including provisions relating to works approvals, waste transport permits, clean-up notices, prescribed industrial waste annual returns, waste management plans and landfill levies; and
- amendments to the Sustainability Victoria Act 2005 (SV Act) aimed at focussing Sustainability Victoria on waste management and resource recovery, including changing the composition of Sustainability Victoria's (SV) Board and providing for SV to be the lead agency for facilitating resource recovery market development and education.
Introduction of waste and resource recovery groups
Proposals to reform and consolidate waste management groups in Victoria have been on the table for several years. Getting Full Value identified the need for new institutional and governance arrangements and the Government set up a Ministerial Advisory Committee to advise on the optimal arrangements. The Committee's report was delivered in May 2013 and the Government's response in August 2013 accepted most of the report's recommendations, including recommendations that legislative amendments were required.
The Amendment Act implements these recommendations by making changes to the EP Act which replace the existing 12 regional and metropolitan waste management groups with six new waste and resource recovery groups (WRRG) comprising:
- the Barwon South WRRG;
- the Gippsland WRRG;
- the Goulburn Valley WRRG;
- the Grampians Central WRRG;
- the Loddon Mallee WRRG; and
- the North East WRRG.
The legislative changes also seek to modernise the governance arrangements of the new WRRGs by providing for strengthened board structures that enable local government representation alongside skill-based directors. The waste planning role of the WRRGs is also expanded to cover all waste streams, including construction and demolition (C&D) and commercial and industrial (C&I) waste. Significantly, the Amendment Act provides that the WRRGs are not successors in law to the former regional waste management groups, with the aim of providing the new groups with a "clean slate".
The Metropolitan Waste Management Group (MWMG) is renamed by the Amendment Act as the Metropolitan Waste and Resource Recovery Group (MWRRG) and its region is expanded to include the Mornington Peninsula Shire Council municipal district. Unlike the RWWGs, the new MWRRG is taken to be the successor in law to the MWMG.
As the Second Reading Speech for the Amendment Bill identifies, "the new groupings reflect waste flows, transport links and communities of interest, with each group including at least one major regional centre".
A key task of the new WRRGs will be to undertake infrastructure planning under a new Victorian waste and resource recovery infrastructure planning framework established by the Amendment Act. The aim of the new framework is to better link statewide, metropolitan and regional planning and provide for better links to land use planning. The centrepiece of the framework will be the Statewide Waste and Resource Recovery Infrastructure Plan (SWRRIP) and Regional Waste and Resource Recovery Implementation Plans. Consultation drafts of the SWRRIP and Metropolitan Waste and Resource Recovery Strategic Plans were released in September 2013.
Administration of the Sustainability Fund and landfill levy arrangements
The Amendment Act transfers responsibility for administering the Sustainability Fund from SV to DEPI. The Second Reading Speech indicates that "[t]his will provide a clear separation of financial management of the fund from SV given that it may benefit from the fund, thereby removing any perceived conflict of interest".
The administration of, and reporting on, the landfill levy is also streamlined by the Amendment Act, which provides that the distribution of levy revenue will no longer occur from the Environment Protection Fund held by the Environment Protection Authority Victoria (EPA), but will instead be transferred to a DEPI account for distribution. The Sustainability Fund will also be held directly by DEPI instead of being located within the Environment Protection Fund. Under these new governance arrangements, landfill levy distributions will occur in future via ministerial determination instead of through regulations.
The Amendment Act also provides for the annual indexation of the landfill levy to maintain its value in real terms. This is consistent with the Victorian Government's commitment in Getting Real Value to not change the landfill levy rate for 10 years, allowing only for annual adjustments at the Treasurer's rate (set at 2.5 per cent in 2013-2014).
Scrapping of the EREP programme
The EREP programme commenced in 2007 pursuant to provisions introduced under the EP Act. Its supporting regulations had been scheduled to lapse on 31 December 2014. The programme required about 250 facilities that annually used more than 100 terajoules of energy and/or more than 120 megalitres of water to identify and implement energy and water efficiency and waste reduction measures that have a payback of three years or less.
The Victorian Government announced its decision to discontinue the EREP programme in February 2013. The Amendment Act implements this decision, which was made following a review that found the programme could place unnecessary compliance burdens on business due to duplication with Commonwealth programmes and in particular the Carbon Pricing Mechanism (CPM). Given this logic, it is interesting to note that the EREP programme has ended shortly before the likely repeal of the CPM in July 2014 and the increasing budgetary shadow over the future of the national Energy Efficiency Opportunities (EEO) programme. It could be argued that the logic behind ending the EREP programme falls down if both national initiatives end.
Other amendments to the EP Act
The Amendment Act includes others measures aimed at reducing red tape and streamlining EPA administrative processes. These include:
- providing EPA with greater flexibility in granting works approval exemptions where there is determined to be no adverse environmental impacts;
- allowing waste transport permits to be issued for up to five years;
- removing the effectively redundant requirement for businesses dealing with prescribed industrial waste from the need to submit annual returns to EPA;
- adding an express power in the EP Act to amend clean-up notices to avoid the process of having to revoke and reissue clean-up notices; and
- a new offence for breach of a reporting requirement of a clean-up notice, to enable infringement notices to be issued for minor administrative breaches.
Amendments to the SV Act
The Amendment Act amends the SV Act to change the composition of the SV board, with the aim of strengthening the board's waste industry and waste management knowledge and experience.
The Second Reading Speech outlines the intent behind these changes:
"Under the new arrangements, Sustainability Victoria will be the lead agency for facilitating waste and resource recovery market development initiatives such as product stewardship, accreditation, sponsorship of trials and research and development...Sustainability Victoria will lead the development of a statewide community and business education strategy for waste and resource recovery that will cascade to regional and local levels, in collaboration with local government, waste and resource recovery groups and the Environment Protection Authority. This will avoid duplication of effort and allow programs to be tailored to local needs, which will be an important function of the new waste and resource recovery groups."
The Victorian Government and its relevant agencies are commencing implementation of the changes introduced by the Amendment Act. Progress and further developments should be monitored closely, particularly in the context of the Victorian State election in November 2014.
How we can help
Norton Rose Fulbright is a market leader in advising the waste and resource recovery sector on a broad range of environmental, sustainability and carbon market issues. We have a detailed legal and technical understanding of the sector, with extensive experience working with many of the leading facility owners and operators, Government and EPA, and other service providers to the sector.
Please do not hesitate to contact us if you would like our assistance with understanding the implications of the Amendment Act or with other policy and regulatory reforms in Victoria or nationally.
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