Australia: Contaminated Sites Act review in Western Australia: Reporting obligation proposed for environmental consultants

Introduction

The Western Australia Department of Environment Regulation (DER) is close to completing its review of the Contaminated Sites Act 2003 (Act) that began in 2012. The DER considers that the Act is working well overall, but could be fine-tuned to make it simpler, more transparent and more proportionate. Following stakeholder responses received in the first round of public consultation last year, the DER looks likely to change four key areas of the Act, including a new reporting obligation for environmental consultants. The second and final stage of public consultation is open until 24 February 2014.

The review is intended to fine-tune the Act and its administrative processes, for example, by improving the site classification process. Already the contaminated land database (Database) is unreliable because the DER has a backlog of unprocessed reports, having received an unexpectedly high number of reports in the first six months.¹ The backlog means a negative search result may be inaccurate because contaminated sites are still awaiting classification.²

Outcomes of consultation: proposed changes

By reviewing the consultation submissions received in 2013 the DER has identified four key areas for reform, as set out in full in the DER's Discussion Paper released in November 2013. The Discussion Paper can be viewed and downloaded from the DER website.

The DER is now seeking feedback on the following proposed reforms:

1. Expanded scope of duty to report

The DER proposes to extend the mandatory reporting obligations to environmental consultants who are not currently 'caught' by the Act, but with a carve-out for field and laboratory technicians. This change would override the confidentiality obligations owed by consultants to their clients. The feedback on this issue was evenly split with those in favour citing better protection of the environment and human health. Those against the proposal identify a potential reluctance by land owners and polluters to seek professional advice, which may be a consequence if confidentiality is eroded. This is a contentious area of reform and we expect it to generate significant response during the second round of consultation.

2. Proposed new classification

A new classification 'contaminated – investigation required' was considered in the first round of consultation. The new classification would allow the DER to classify and add a known contaminated site to the Database more quickly, without having to wait for a decision on the extent of remediation to be undertaken. Although the majority of respondents were in favour of the new classification, the responses also suggest it could be contentious and, therefore, costly for the DER and affected parties. The responses also highlighted the general lack of understanding of the DER's expectations around the existing classification 'possibly contaminated - investigation required'. As a result, the DER has not proposed a new classification, but has initiated improvements to its internal procedures to provide clearer guidance on the meaning of this existing classification.³

3. Are the mandatory disclosure requirements clear?

Currently under the Act, owners of land must give written disclosure to a proposed buyer, mortgagee or lessee in respect of all land classified as 'contaminated – remediation required', 'contaminated – restricted use' or 'remediated for restricted use' at least 14 days before the completion of a transaction to sell, mortgage or lease the land.⁴ The majority of respondents agreed that these mandatory disclosure requirements are clear but said that the terms 'owner' and 'completion of transaction' needed clarifying. The DER proposes to make minor changes to the definition of 'owner' and to add a definition of 'completion of a transaction' to make its specific meaning clear in a transaction involving a sale, mortgage or a lease.

4. Proposed new time limit for providing documents to the Contaminated Sites Committee

The Contaminated Sites Committee (CSC) has statutory responsibility for determining who is responsible for remediation where the parties can't agree. Most respondents support a time limit for providing documents to the CSC to expedite the process. The DER has proposed a 10 week time limit for providing documents and is keen to give the CSC the ability to publish reasons for its decisions on responsibility for remediation (with the intention of informing stakeholders of the CSC's likely views and ultimately reducing the number of determinations the CSC must make). The DER also proposed extending the offence of providing false or misleading information to include making a written submission (which is false or misleading) to the CSC in connection with determining responsibility for remediation.

The role of the State Administrative Tribunal

Currently, the Supreme Court hears appeals from CSC decisions, such as responsibility for remediation, and the CSC hears appeals from DER decisions, such as site classification and clean up notices. The right of appeal to the Supreme Court is limited to appeals on points of law and doesn't extend to merits review. The Legislative Council Standing Committee on Legislation (LCSLC) recommended in 2009 that appeals against both CSC and DER decisions should be heard by the State Administrative Tribunal (SAT).⁵

Although SAT has very broad jurisdiction to hear appeals in many other areas of law, an appeal to SAT was not an option when the Act was drafted, because SAT did not exist. SAT has wide powers aimed at resolving disputes at an early stage, which include ordering parties to attend mediation or compulsory conferences, and is generally more informal and flexible than the Supreme Court. The DER is concerned that the addition of a right of appeal to SAT, which could be followed by an appeal to the Supreme Court, will further delay site remediation. The DER is also concerned that for appeals against DER decisions, SAT will be more expensive and less accessible than the CSC is to applicants.

The Government has not yet responded to the LCSLC recommendation and as part of the Act review, the DER is seeking feedback on whether stakeholders support SAT review of DER decisions and CSC decisions.

Has the Act delivered so far?

Although the DER says the Act is working well, in practice it has proved difficult to apply in some instances, particularly where contamination is suspected rather than known. Reporting of known or suspected contaminated sites is mandatory for owners, occupiers, polluters and environmental auditors (where they are engaged to provide a report) and there are strict timeframes for reporting. A breach of this requirement can result in a penalty of up to $250,000 plus a daily penalty of $50,000 so greater certainty is needed about when the obligation to report is triggered.

The DER encourages reporting the site if it is unclear if the duty to report is triggered (see the DER Contaminated Sites Management Series Guidance, Reporting of Known or Suspected Contaminated Sites (2006)). While this approach may avoid the risk of prosecution for failure to report (provided the report is made on time), it may increase the exposure of the reporter and others to liability for remediation costs and possible penalties for causing pollution under the Environmental Protection Act 1986 (WA).

Determining whether to report is not always straightforward because consideration of whether land is 'contaminated' within the meaning of the Act involves a complex analysis of the concentration of the substance, whether it exceeds background concentrations and whether the concentration is sufficient to present a risk of harm to human health, the environment or an environmental value. The terms 'human health' and 'environment' are generally well understood (and 'environment' is further defined in the Act) but the concept of an 'environmental value' and the term 'sufficient' (in this context) are less familiar. Without professional advice, there is a risk that sites may be reported unnecessarily or not reported when they should be, leading to penalties under the Act for failure to report.

Conclusion

The proposed amendments to the Act are straightforward and should be beneficial, to the extent that they bring greater clarity to the application of the Act. However, during the second round of consultation the DER may encounter resistance to its proposal to extend the mandatory reporting requirements to environmental consultants. The impacts of this proposal, if it proceeds, may be wider than anticipated, potentially reducing the likelihood that consultants will be engaged in cases of suspected contamination, and creating a need to re-draft confidentiality deeds, or the confidentiality provisions within existing contracts that govern the consultant's responsibilities. Accordingly we would encourage all stakeholders to respond to the DER and provide feedback on the proposed changes to the Act and on this issue in particular.

Footnotes

¹The Act commenced on 1 December 2006.
²As an interim measure, the DER screens reports to determine their priority and takes longer to classify sites that are not considered to be an immediate or serious risk to human health. In some cases the process far exceeds the statutory classification period of 45 days.
³Summary of responses to the first stage of consultation on the review of the Contaminated Sites Act 2003, Department of Environment and Conservation, p. 13.
⁴Section 68(1) Contaminated Sites Act 2003 (WA).
⁵Report 14, Legislative Council Standing Committee on Legislation Inquiry into the jurisdiction and operation of the State Administrative Tribunal, 2009p. 334.

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