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INSIGHT

A new era for Victoria's environmental protection

By Jillian Button 26 June 2018
Environment & Planning Government Risk & Compliance

In brief

The Environment Protection Amendment Bill 2018 is the first major overhaul of Victoria's environmental law in almost 50 years. The Bill is expected to transform Victoria's environmental protection law, including by introducing a general environmental duty requiring all Victorian businesses, industry and community members to prevent environmental harm. Partner Jillian Button and Lawyers Elise Rutherfurd and Zainab Mahmood provide a high-level overview of the key changes.

Jump To

  1. Key reforms: new duties and obligations
  2. Other reforms
  3. Enforcement and regulation

How does it affect you?

  • The Environment Protection Amendment Bill 2018 (the Bill) will repeal the Environment Protection Act 1970 (Vic) and insert a range of new substantial provisions into the Environment Protection Act 2017 (the Principal Act).
  • The Principal Act currently deals only with the constitution and operation of the Victorian Environment Protection Authority (EPA). Upon the commencement of the Bill, the Principal Act will become Victoria's centrepiece environmental legislation.
  • The Bill would result in a major expansion of the scope of Victoria's environmental protection regime: it will result in an increase on the environmental duties on companies, and strengthen the EPA regulatory, compliance and enforcement powers.
  • Companies should therefore be aware of these impending changes to Victoria's environmental protection regime, including the introduction of a new 'general environment duty' (GED). This new duty, which is the centrepiece of the Bill, will impose a broad obligation on body corporates to take proactive steps to minimise risks of harm caused by any activities undertaken by that entity, so far as reasonably practicable. The new general duty is modelled on the equivalent duty in Victoria's occupational health and safety legislation. Failure to comply with this duty could result in civil, or even criminal, penalties of up to $1.6 million, with higher penalties for aggravated breaches.
  • Other key proposed changes include:
    • a new duty to notify the EPA when certain pollution incidents occur;
    • reform of Victoria's waste-management framework through the introduction of duties for the management, control, containment, disposal and depositing of 'priority waste' and 'industrial waste';
    • new duties regarding the management and control of contaminated land, including a duty to notify the EPA in relation to contaminated sites with a likely clean-up cost of more than $50,000;
    • a new right providing affected community members with standing to apply directly to court for civil orders restraining a breach of an environmental duty;
    • a more streamlined and cost-effective auditing process, including through the introduction of a 'Preliminary Risk Screen Assessment'; and
    • the introduction of a tiered, risk-based framework for site licensing.
  • Companies should review their policies and practices to ensure they are well-placed to respond to the proposed changes, which are expected to be fully implemented by no later than 1 December 2020.
  • The strategic implications of the modernised legislation should not be underestimated; in many cases a comprehensive review of environmental risk management will be justified in preparation for the new regime coming into effect.

Key reforms: new duties and obligations

The reforms proposed in the Bill adopt a 'preventative approach' to environmental issues, 'focusing on preventing waste and pollution impacts rather than managing those impacts after they have occurred'.1 As part of this preventative approach, the Bill contains a number of new duties on individuals and companies. The key duties are summarised in the table below.

Duty

Details

General environmental duty
  • Requires any persons (individual or body corporates) engaging in any activity that may give rise to risks of harm to human health or the environment from pollution or waste to minimise those risks so far as reasonably practicable.2
  • The Bill provides guidance on minimum standards of conduct expected of businesses, including: (i) implementing risk-management procedures; (ii) handling and storing substances; and (iii) providing sufficient information, supervision and training to reduce risks.3 Failure to implement these standards could be a breach of the GED.
  • The Bill also provides additional guidance to businesses involved with the design, manufacture, installation or supply of a substance, plant or equipment (businesses with a higher risk of causing environmental harm).4
    Breach of this duty could attract civil and/or criminal penalties of up to $1.6 million, based on the current amount of penalty units.5
  • If breach of the GED is committed intentionally or recklessly, the potential penalties escalate to up to five years' imprisonment and fines of up to $3.2 million.6 This figure may rise, on annual review of the penalty unit.
  • While a similar duty is contained in Queensland environmental legislation,7 a breach of the Queensland duty does not lead to civil and/or criminal penalties.

Duties in relation to pollution incidents
  • Two new duties imposed on individuals and companies in relation to 'pollution incidents':
    • duty to notify the EPA of 'notifiable incidents' (this is a civil penalty duty);8 and
    • duty to take action to respond to harm caused by a 'pollution incident'.
  • 'Pollution incident' means: an incident or a set of circumstances that causes a leak, spill or other unintended or unauthorised deposit or escape of a substance as a result of which pollution has occurred or is occurring (but does not include emission of noise).
  • 'Notifiable incident' means: a pollution incident that causes or threatens to cause material harm, or a notifiable incident otherwise prescribed by regulations (which have not yet been prepared).

Waste-management duties
  • The Bill replaces the waste-management framework contained in the EP Act with a new, risk-based, tiered framework.
  • A new concept of 'priority waste' is created to capture specific hazardous industrial waste and specified municipal and industrial waste that have resource recovery, recycling and reuse potential.9
  • Entities with management or control of priority waste must:
    • properly classify priority waste;10
    • contain priority waste in a manner that prevents its escape;11
    • isolate priority waste in a manner that ensures resource recovery remains practicable;12 and
    • take all reasonable steps to identify and consider alternatives to waste disposal.13
  • Definition of 'industrial waste' is modified to mean any waste arising from commercial, industrial, or trade activities or from laboratories, or waste that is prescribed to be industrial waste.14
  • The Bill proposes streamlining the industrial waste duties required under the current regime, so that they address 'the problem of unlawful depositing or disposal of industrial waste by imposing obligations on persons who have management or control of industrial waste'.15
  • Breach of these duties could result in civil penalties,16 and in certain circumstances, criminal penalties.

Contaminated land duties
  • Introduces the new concept of 'contaminated land'. Land will be contaminated if there is waste, a chemical substance, or a prescribed substance present on or under the surface of land, or if the waste, chemical substance, or prescribed substance is present in a concentration that creates a risk of harm to human health or the environment.17
  • New duty to manage contaminated land18 requires persons or entities in management/control of land to appropriately minimise risks of harm to the environment and to human health, including by doing the following:
    • identifying, investigating and assessing any contamination a person should reasonably know about;
    • undertaking reasonably practicable measures to minimise risk of harm to human health and the environment from the contamination, including undertaking clean-up activities; and
    • notifying people who may be affected by the contamination.
  • The EPA is expected to provide guidance on how to meet the obligations under the duty to manage contaminated land.19
  • New duty requiring a person or entity in management or control of land that is subject to 'notifiable contamination' to notify the EPA as soon as reasonably practicable if they become aware of, or ought reasonably to have been aware that, land has been contaminated and may pose a significant risk to human health or the environment. The concept of 'notifiable contamination' will be further developed in regulations, but until such regulations are created, 'notifiable contamination' refers to contamination that is likely to cost more than $50,000 to remediate.
  • Breach of these duties could result in civil penalties.

Other reforms

Permissions

The Bill would revoke the current site licensing regime and would introduce three tiers of site-based permissions: registrations, permits and licences. The purpose of this reform is to allow for proportionate controls to be imposed based on the nature of the risks. The Bill imposes a framework that seeks to regulate the granting of permission for particular activities, with the various permissions operating as follows:

Tier 1: Registrations
  • For activities that pose a lower risk and where simpler, standardised controls are sufficient to mitigate environmental risk.
  • Automatically granted upon receipt of an application.
  • Expires after five years.20

Tier 2: Permits
  • For medium-high risk activities with low complexity.
  • Permits subject to generally standardised assessment processes.
  • Expires after five years.21

Tier 3: Licence
  • For complex activities that require the highest level of regulatory control to manage their significant risks to human health and environment.
  • Development licences required for development activities, including construction of certain plants or equipment or the development of prescribed development activity; operating licences for prescribed operating activities.22
  • Will be subject to regular review and will no longer be granted indefinitely.
Better environment plans

An additional reform proposed by the Bill is the introduction of 'better environment plans'. These plans are intended to 'enable persons to develop innovative ways to comply with' legislation or 'to exceed compliance with' legislation by facilitating 'voluntary collaboration'.23

Under the proposed legislation, a 'better environment plan' will be deemed as having satisfied the relevant duty or obligation under the legislation to which the plan responds, if the plan:

  • 'makes provision for how the participant performs the duty or satisfies the obligation; and
  • the participant complies with the better environment plan to the extent that the plan makes provision for performing that duty or satisfying that obligation.'24

Failure to comply with the 'better environment plan' could result in suspension, removal or revocation of the plan by the EPA.

It is expected that the EPA will issue guidelines issued by the EPA in relation to these better environment plans.25

Enforcement and regulation

Increased penalties

As part of the increased sanctions, the Bill also introduces a transitional duty (which will be phased out after four years) in relation to material harm.26 A person must not engage in conduct that results in material harm to human health or the environment as a result of pollution or waste. This material harm offence is complementary to the GED, which means:

  1. a person who complies with the GED will not be liable for a contravention of the material harm offence; and
  2. a person charged with breaching the GED will not also be charged for a breach of the material harm provisions.27

The purpose of having this transitional offence is to ensure 'that the scheme can deal with environmental harm from the first day it commences'.28

More effective investigation, performance and compliance

Under the Bill, licence holders will have to make environmental information more available to the EPA. The information the EPA holds will be available to the public (unless it is restricted for privacy, security, legal or public safety reasons).
The EPA can share this information with other regulators and use the information in considering regulatory decision (such as granting a licence).

Site management orders

The Bill would also equip the EPA with an additional regulatory tool, the 'site management order', which can be issued if the EPA 'reasonably believes that long-term management of the site is necessary because land on the site is contaminated or there is harm or a risk of harm to human health or the environment from pollution or waste.'29

  • A person subject to a 'site management order' may have to undertake to:
  • develop or implement a plan for managing environmental risks on the site;
  • install management infrastructure or monitoring equipment;
  • carry out monitoring activities;
  • conduct a specified course of action if a specified event occurs;
  • carry out long-term or passive remediation actions.30

A 'site management order' operates for the period specified by the relevant order, and may operate indefinitely.31

Environmental audit

The Bill would implement reforms to the environmental audit process by replacing the current 'one-size-fits-all assessment process' with a more flexible process. It would do so by introducing:32

  • Preliminary Risk Screen Assessment (PRS): this is based on a desktop study and site inspection, to determine if a more detailed audit is necessary. This codified process is similar to the non-statutory risk screening process commonly required in the planning process; and
  • Scaled audit: this is to assess and manage the risks of harm to human health and the environment from contamination or industrial activities, and are expected to be more cost effective than current audits.

Importantly, the separate concepts of a 'section 53V audit' and a 'section 53X audit' will be abolished and replaced with the single, more flexible, auditing mechanism.

New community rights for Victorians

The Bill introduces a new right for community members who are 'eligible persons' to apply directly to court for civil orders restraining a breach of an environmental duty, without EPA involvement. An 'eligible person' is defined to mean a person who is affected by the contravention or non-compliance, or a person who has the leave of the court to make the application.33) In the latter case, the court may only give leave for a third-party civil application where:

  1. the application would be in the public interest; and
  2. the applicant requested the EPA take action but the EPA did not take such action within a reasonable time.34
Next steps

The Victorian Government has indicated the proposed legislation is, if passed, intended to take effect from 1 July 2020,35  with full implementation to take place by no later than 1 December 2020.36

In advance of these reforms coming into force, all organisations would benefit from reviewing their internal procedures and practices for compliance in anticipation of the more extensive environmental protection duties proposed under the new regime.

In many cases, the implications of the new legislation will be far-reaching, and a fresh approach to environmental risk management will be required.

If you require advice in relation to the impact of the Bill on your business, please contact Jillian Button.

Footnotes

  1. Department of Land Water and Planning, Fact Sheet: Environment Protection Amendment Bill 2018 (Factsheet) 1.
  2. Environment Protection Amendment Bill 2018 (Vic) (the Bill), proposed s 25(1) of the Environment Protection Act 2017.
  3. The Bill 2018 (Vic), proposed s 25(4).
  4. The Bill, proposed s 25(5).
  5. The Bill, proposed s 25(2).
  6. The Bill, proposed s 27(1).
  7. Environment Protection Act 1994 (Qld), s 319.
  8. The Bill, proposed s 32.
  9. The Bill, proposed s 138.
  10. The Bill, proposed s 139(1).
  11. The Bill, proposed s 139(2)(a).
  12. The Bill, proposed s 139(2)(b).
  13. The Bill, proposed s 140.
  14. The Bill, proposed s 3.
  15. Explanatory Memorandum for the Environment Protection Bill 2018 (EM), 73.
  16. The Bill, proposed s 134.
  17. The Bill, proposed s 35.
  18. The Bill, proposed s 39.
  19. Factsheet.
  20. The Bill, proposed s 85.
  21. The Bill, proposed s 81.
  22. The Bill, proposed s 74.
  23. The Bill, proposed s 180.
  24. The Bill, proposed s 186.
  25. The Bill, proposed s 188.
  26. The Bill, proposed pt 3.3.
  27. EM 32.
  28. Factsheet, 4.
  29. The Bill, proposed s 275(1).
  30. The Bill, proposed s 275(7).
  31. The Bill, proposed s 275(8)
  32. EM, 3.
  33. The Bill, proposed 308(1).
  34. The Bill, proposed 308(2).
  35. The Bill, proposed s 2(4).
  36. The Bill, proposed s2(4).