New environmental protection reforms in Victoria and the national state of play: Part two - Clean Air / Pollution

In anticipation of the commencement of significant amendments to the Environment Protection Act 2017 (Vic) (New EP Act) on 1 July 2021,¹ Corrs' Environment and Planning team is publishing a series of insights to explain key elements of the new law, and compares these to the position taken in other Australian jurisdictions. Part one can be read here.

In this, Part two, we focus on the new duties to notify the EPA of particular contamination and pollution incidents. Although new to Victoria, these duties already exist in other Australian jurisdictions, as detailed below.

Victoria's new duties to notify the EPA

Contaminated land

Under the New EP Act, a person in management or control of land must notify the Environment Protection Authority Victoria (Vic EPA) as soon as practicable after he or she becomes aware, or reasonably should have become aware, that the land has been contaminated by notifiable contamination.

The New EP Act does not define 'management or control' in the context of contaminated land. However, guidance published by the Vic EPA confirms that a person who holds a legal interest in the land, such as an owner, leaseholder or committee of management, or has access rights to use the land (for example, under a licence), would be taken to have sufficient power over the land for the purposes of being in management or control.

Multiple persons could be in management or control of land at the same time and subject to the duty to notify, even if one or none of them caused the notifiable contamination.

What constitutes 'notifiable contamination' requires close examination of the qualitative and quantitative requirements set out in the categories prescribed under the Environment Protection Regulations 2021 (EP Regulations).

A range of particular wastes, chemicals and substances are captured by the categories of prescribed notifiable contamination under the EP Regulations either directly (e.g. friable asbestos and non-aqueous phase liquids) or indirectly by being called up via references to the National Environment Protection (Assessment of Site Contamination) Measure 1999 (NEPM (ASC)), the Australian Drinking Water Guidelines Paper 6 – National Water Quality Management Strategy or the Australian and New Zealand Guidelines for Fresh and Marine Water Quality.

Where contamination relates to a particular waste, chemical or substance that is not captured by the prescribed categories in the EP Regulations, it might otherwise constitute notifiable contamination if the reasonable cost of remediation is likely to exceed $50,000.

While the $50,000 threshold is a convenient test to be applied, it is important to remember that this does not apply to all contamination. Rather, it only applies if the particular contaminant falls outside those captured by the categories of prescribed notifiable contamination.

Importantly, the duty to notify applies to both legacy and new notifiable contamination.

The Vic EPA has confirmed that a person in management or control of land is not expected to undertake an investigation solely for the purpose of determining if they have notifiable contamination. Rather, ordinarily the requisite knowledge will derive from the steps that person takes in complying with the separate general environmental duty and duty to manage contaminated land.

A range of exemptions may be available to avoid the notification requirement. For example, these include where notification has already been given under the New EP Act or where a statutory audit has previously been undertaken or a statutory remedial notice has previously been issued. A number of limitations apply to these exemptions (such as a requirement that there be no material change in the condition of the land), so the scope and ongoing relevance of the exemptions will need to be carefully considered in practice. An exemption may also be available for substances not listed in the NEPM (ASC), such as per- and poly-fluoroalkyl substances (PFAS).

Where the duty is triggered, a failure to notify 'as soon as practicable' is an offence and fines may be imposed as either a criminal or a civil penalty, ranging from nearly $22,000 for individuals to nearly $110,000 for corporations. There is currently no guidance on what 'as soon as practicable' means. Even so, while the drafting of the New EP Act suggests that the requirement is not immediate or within a certain timeframe (as is the case in other jurisdictions) organisations will need to have procedures in place to facilitate swift disclosure.

Pollution incidents

The New EP Act also introduces a duty to notify the Vic EPA of certain types of pollution incidents. This duty applies to a person engaging in an activity and requires notification to the Vic EPA as soon as practicable after the person becomes aware, or reasonably should have become aware, of the occurrence of a 'notifiable incident'.

A pollution incident will be a 'notifiable incident' if it causes or threatens to cause material harm. This means material harm that does not actually occur is captured by the duty. Material harm is:

an actual adverse effect on human health or the environment that is not negligible; or
an actual adverse effect on an area of high conservation value or of special significance; or
when the costs of preventing or minimising the harm, or restoring the environment, are likely to be $10,000 or more.

Like the duty relating to notifiable contamination, this duty does not apply if the incident has already been notified to the Vic EPA.

A failure to notify as required is a civil penalty provision, and if the failure occurs in a business context it is an offence. Either way, fines may be imposed up to nearly $44,000 for individuals and just over $218,000 for corporations.

Interstate comparisons

Queensland

In Queensland, the duty to notify the Department of Environment and Science (the Department) is a well-established feature of the Environmental Protection Act 1994 (Qld). The duty relates to 'events' and 'activities' that cause or threaten environmental harm.

The circumstances in which the duty is triggered vary depending on the person concerned and the extent of harm. For example, a person carrying out an activity must notify the Department within 24 hours of becoming aware that an event has happened in connection with the activity which causes or threatens the harm. The 24-hour window is more prescriptive than the position in Victoria.

Further, an owner, occupier and/or environmental auditor must notify the Department if they become aware of a change in the condition of contaminated land, or an event (present-day or historic) involving a hazardous contaminant on the land that is causing, or reasonably likely to cause, serious or material environmental harm.

Failure to comply with the duty to notify is an offence for which significant penalties may be imposed. The maximum penalty depends on the actions and position of the offender and ranges from just over $13,000 to nearly $69,000.

New South Wales

Similar duties to notify contamination already exist in NSW under the Contaminated Land Management Act 1997 (NSW) (CLM Act). Landowners must report contamination that they are aware of, or ought reasonably to be aware of, to the NSW Environment Protection Authority (NSW EPA).

Like the new duty in Victoria, the NSW duty arises even if the owner did not cause the contamination or own the land when the contamination occurred. Failure to notify as soon as practicable after the person becomes aware of the contamination is an offence which can attract substantial fines of up to $165,000 for body corporates and a further $77,000 per day for a continuing offence. For individuals fines can be up to $77,000 and a further $33,000 per day for a continuing offence.

There is also a broad duty to notify the relevant authorities (such as the NSW EPA, the Ministry of Health, and Fire and Rescue NSW) of pollution incidents which cause or threaten 'material harm' to the environment under the Protection of the Environment Operations Act 1997 (NSW) (POEO Act).

Depending on the circumstances, this duty may apply to various individuals, for example, the person carrying out the activity causing the pollution incident, their employer and the occupier of the premises. The duty to notify arises immediately after the person becomes aware of the pollution incident or is notified of it.

Non-compliance with this broad duty is an offence. The offence can also attract substantial fines of up to $2 million for a corporation, and a further $240,000 for each day the offence continues and, for individuals, up to $500,000 and a further $120,000 for each day the offence continues.

Western Australia

The Contaminated Sites Act 2003 (WA) (CS Act) sets out a regime for the notification, management and remediation of contaminated sites. Owners and occupiers of sites known to be contaminated must report that site to the CEO of the Department of Water and Environmental Regulation (CEO) within 21 days. If an owner or occupier suspects that the site is contaminated, then it must be reported 'as soon as it is reasonably practicable to do so'.

The duty to report known or suspected contaminated sites also applies to any person who knows or suspects that they caused the contamination and an auditor engaged under the CS Act. Failure to report is an offence which attracts a maximum penalty of $250,000 (for an individual or body corporate) and a daily penalty of $50,000.

In relation to pollution incidents, the Environmental Protection Act 1986 (WA) requires an occupier of premises to notify the CEO of a discharge of waste which causes or may cause pollution, material or serious environmental harm. The notification is to be given as soon as is practicable after the discharge. Failure to report is an offence which attracts a maximum penalty of $50,000 (for an individual or body corporate) and a daily penalty of $10,000.

What will the new duty to notify mean for Victorians?

Victorians will need to carefully consider a range of factors when assessing the impact of the new duties to notify the EPA.

Owners, occupiers or any other party in management or control of land will need to assess what they know or reasonably should know about the presence and extent of contamination (regardless of who caused it or when), whether this amounts to notifiable contamination, and if so, whether an exemption applies.
After the New EP Act commences, persons in management or control need to continue to monitor the status of the land to determine if any suspected or actual contamination needs to be investigated and in turn, whether the duty to notify the Vic EPA is triggered. This duty arises regardless of when contamination occurred or who caused it. Ongoing compliance with the separate general environmental duty and, where applicable, the duty to manage contaminated land, will assist with monitoring for circumstances which trigger the duty to notify.
The duty to notify contaminated land and/or pollution incidents will need to be considered in any contract which places a party in management or control of land, such as a lease, a licence or construction contract. Responsibility, as between the parties, for compliance with the duties to notify can be addressed contractually.
Organisations should ensure adequate policies, procedures and training are in place to ensure staff and on-site workers understand when the duty to notify is triggered. This is particularly necessary to ensure that on-the ground knowledge of actual or suspected contamination, or the occurrence of a pollution incident, is quickly and efficiently relayed to enable assessment of whether it is notifiable.
What 'reasonably should be known' is determined having regard to the particular person's (or organisation's) skills, knowledge and experience. This means that experienced organisations, such as property developers and operators of industrial sites with a history of dealing with contaminated land, should be mindful that the duty to notify 'notifiable contamination' may be triggered earlier than for persons who are less familiar with managing contamination.

Footnote

¹ ^{Under the Environment Protection
Amendment Act 2018 (Vic).}

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.