Article by Jacinta Studdert, Susan Rose and Kate Doherty
On 1 July 2009 major amendments to the Contaminated Land Management Act 1997 (CLM Act) commenced. Key amendments to the CLM Act include:
- removal of the 'significant risk of harm' trigger for reporting contaminated land and the replacement with trigger values, which depend on the level of contamination;
- broadening the definition of persons responsible for contamination; and
- imposing a strict duty on individuals and companies to notify the Department of Environment and Climate Change (DECC) of contamination under section 60 of the CLM Act.
There are substantial penalties for failing to comply with the notification requirements under section 60 of the CLM Act as amended and companies should ensure that they have appropriate compliance measures in place. Ideally, a review of existing environmental management systems should have been undertaken and relevant management plans, procedures and contracts updated to enable risks associated with potentially contaminated land to be identified and strategies on how to manage those risks to be implemented.
The CLM Act Requirements
The amendments to the CLM Act represent a significant shift in contaminated land management within NSW and include key changes in the following areas:
- preliminary investigation orders that require potentially contaminated land to be investigated (s 10 of the CLM Act as amended);
- replacing the significant risk of harm test and giving the Environment Protection Authority (EPA) broader powers to regulate 'significantly contaminated land' (ss 11 and 12 of the CLM Act);
- management orders that require landholders to investigate, remediate and monitor significantly contaminated land (ss 13 to 16 of the CLM Act);
- broadening the range of persons responsible for contamination and potentially subject to preliminary investigation or management orders (s 6 of the CLM Act);
- imposing greater obligations on persons by placing them under a duty to notify the DECC upon becoming 'aware' of the contamination (s 60(4) of the CLM Act); and
- environmental offset arrangements that may be entered into where it is not practicable to remediate the contamination within a reasonable time (s 111A of the CLM Act).
Further information on the new requirements are detailed in the Deacons Legal Update 'Significant legislative changes to the regulation of contaminated land in NSW' published following the assent of the legislative changes under the Contaminated Land Management Amendment Act 2008 in December 2008.
Why consider the new CLM Act requirements?
Failure to properly consider and comply with contaminated land requirements may lead to project delays and additional costs, which may be significant. Potential delays are likely to arise in circumstances where contamination is discovered and work must cease to enable appropriate investigation, assessment, remediation and monitoring to be carried out. Assessing and managing contamination land issues, and in particular carrying out remediation works, is often costly and time consuming. Proactively addressing any potential issues is therefore recommended.
Individuals and companies that fail to properly consider contamination also leave themselves exposed to potential prosecution. Under the recent amendments, failure to report contamination to the DECC may result in penalties of up to $165,000 for corporations and $77,000 for individuals, if convicted (s 60 (1) and (2) of the CLM Act as amended). Additional penalties of up to $77,000 for corporations and $33,000 for individuals may also be imposed for each day that the offence continues (s 60 (1) and (2) of the CLM Act).
Duty to report
There is a duty for landowners and persons who have responsibility for contamination to report this to the DECC under section 60 of the CLM Act. Individuals and companies should be aware that:
- a person is required to notify the EPA, as soon as practical, after the person becomes aware of the contamination of land (s 60 (4) of the CLM Act);
- this requirement applies to a person whose activities have contaminated land and a land owner whose land has been contaminated, regardless of whether they were responsible for the contamination (s 60 (1) and (2) of the CLM Act);
- persons will be taken to be "aware" of contamination if that person ought "reasonably" to have been aware of the contamination (s 6(1)(c) of the CLM Act); and
- in reaching this conclusion, the DECC will take into account: the person's abilities, experience, qualifications and training; whether persons could reasonably have sought advice that would have made it aware of the contamination; and the circumstances of the contamination (s 60(9) of the CLM Act).
The DECC has released 'Guidelines on the Duty to Report Contamination under the Contaminated Land Management Act 1997' (Guidelines), which are designed to assist individuals and companies to understand their reporting obligations under section 60 of the CLM Act, as amended. The Guidelines, made under section 105 of the CLM Act, also provide guidance as to how the EPA, through the DECC, will assess and determine whether or not contamination is significant enough to require regulation.
It is important to note that only Part 1, the 'Introduction' to the Guidelines and Part 3, 'DECC regulatory actions' commenced on 1 July 2009, with Part 2 'Duty to Report Contamination' and the Appendices scheduled to come into force on 1 December 2009.
The appropriate weight to be given to the Guidelines is set out under section 105(2) of the CLM Act, which states that the DECC is under a duty:
- to take the Guidelines into consideration whenever they are relevant; and
- to depart from the Guidelines in individual cases when any law requires that departure or the interests of the public, justice or the administration of this Act make it necessary to do so.
Determining whether to report
The Guidelines assist individuals and companies to assess whether they have a duty to report under section 60 of the CLM Act1. Factors to be considered in determining whether to report include whether there are any indications of potential contamination based on the current and previous land uses, and site inspections.
A checklist is provided as a guide on whether or not to report, together with a list of examples of physical indicators of contamination to assist with site inspections2.
Notification of actual or foreseeable contamination is required if a contaminant is present at specified levels identified in Appendix A of the Guidelines, and if certain other factors are met as set out in section 2.3 of the Guidelines. The requirement to notify arises in relation to:
- onsite soil contamination;
- off-site soil contamination of neighbouring land;
- contamination of groundwater or surface water; and
- the foreseeable movement of contaminants.
The contamination thresholds set out in Appendix A of the Guidelines vary depending on the media tested (soil, groundwater, freshwater and marine water). For soil contamination the contaminating substances are categorised in sections covering metals and metalloids, organics, petroleum hydrocarbon components and others. The acceptable level of soil contamination depends on the current or approved use, with the lowest levels for residential use with accessible soil, followed by parks and recreational areas, residential with minimal soil access (such as apartments) and the highest levels allowed for commercial and industrial uses. For example, the trigger threshold for cadmium in the soil of a recreational park is 40 milligrams per kilogram, whereas it is 100 milligrams per kilogram for soil contamination at a commercial site. Only a single threshold value is set for the different respective chemical contamination of groundwater (based on drinking water standards) and for fresh water and marine water (based on the Ecosystem of 5% species protection value).
Form of report and information provided
Once an individual or company establishes they are under a duty to notify, the 'Site Contamination Notification Form' in Appendix B of the Guidelines will need to be completed and submitted to the DECC (s 60(6) of the CLM Act).
Except for proceedings relating to section 60 of the CLM Act, information provided by a person in complying with the section 60 duty to report is not admissible by the DECC as evidence in any other proceedings against that person for offences under other environment protection legislation administered by DECC(s 60(7) of the CLM Act).
How the DECC assess the significance of contamination and whether regulation is warranted
Upon receiving a report under section 60 of the CLM Act, the DECC will assess the information, and any other relevant information to which it has access, to determine whether the contamination is significant enough to warrant regulation (section 3.1 and 3.2 of the Guidelines). Section 12 of the CLM Act specifies the matters that the DECC must consider when declaring land to be significantly contaminated land. This includes any relevant guidelines, such as the Guidelines, and whether the:
- substances have already caused harm or are likely to cause harm (s 12(a) of the CLM Act);
- substances are toxic, persistent or bioaccumulative, or are present in large quantities or in high concentrations, or occur in combinations (s 12(b) of the CLM Act);
- existing or approved uses of the subject and adjoining land will increase the risk of harm from the substance, for example childcare centres (s 12(d) and (e) of the CLM Act); and
- substances have migrated, or are likely to migrate, from the land, either because of the nature of the land or the substances (s 12(f) of the CLM Act).
The DECC also has a general obligation under section 8 of the CLM Act to respond within a reasonable time to a person who has furnished information about actual or possible contamination of land, and to record what it has done and the reasons for doing it.
Regulation powers of the DECC
Once the DECC determines that the subject land warrants regulation, it has the power to take several actions under Part 3 of the CLM Act as amended, which include:
- issuing management orders requiring site assessment, remediation and/or monitoring(ss 13 to 16 of the CLM Act);
- agreeing to voluntary management proposals from interested parties to manage the land voluntarily (section 17 of the CLM Act); and
- issuing a clean-up or prevention notice under the Protection of the Environment Operations Act 1997 (s 46 of the CLM Act).
As the powers of the DECC to regulate contaminated land widens, and the responsibilities of landowners increase (regardless of whether they caused the contamination) it is important that both individuals and companies are aware of their obligations under the amended CLM Act and assess and manage their potential liabilities. Organisations will need to be particularly vigilant to ensure information is disseminated and the DECC is notified in circumstances where the organisation 'ought' to be aware of contamination.
Determining whether you have a duty to notify is not always clear and may require that preliminary site investigations are undertaken. If you are not sure of your obligations we recommend that you seek legal advice and consider engaging an suitably qualified consultant to undertake any necessary sampling and provide expert advice having specific regard to the CLM Act and Guidelines.
1 Section 2.1 of the Guidelines
2 Section 2.2 of the Guidelines
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.