Countdown to Victoria’s new era in environmental law: are you ready?

Insights3 May 2021

A new era in environmental law in Victoria will be introduced when significant amendments to the Environment Protection Act 2017 come into force on 1 July 2021.

A new era in environmental law in Victoria will be introduced when significant amendments to the Environment Protection Act 2017 come into force on 1 July 2021. It heralds a renewed focus on risk identification and management and new obligations to minimise impacts on human health as well as the environment. Are you ready? How do you ensure you and your organisation understand the new obligations? What do you need to put in place to implement appropriate management systems?

In a series of articles leading up to 1 July, we will explore the key new duties, the transition to the new licensing regime and an overview of the new Regulations and Guidance materials. In this first article, we look at the new General Environmental Duty (GED) and other new proactive duties in relation to pollution incidents and contaminated land. All companies that engage in activities that may give rise to a risk of harm to human health or the environment will need to do to update their management systems to focus on risk identification and minimisation.

The new General Environmental Duty

From 1 July 2021, section 25 of the new EP Act will impose a GED on persons (individuals and corporations) who are engaging in an activity that may give rise to risk of harm to human health or the environment from pollution or waste, to take steps to minimise those risks, so far as reasonably practicable.

For the first four years of operation of the new EP Act there is also a transitional form of the GED in section 28 that requires that a person must not engage in conduct that results in material harm to human health or the environment from pollution or waste. Section 28 is intended to work in a complementary manner to the GED in section 25 such that a person cannot be charged with breaching both sections for the same conduct. The intention is to provide time for companies to get systems in place to comply with the proactive steps to minimise harm from their operations.

The GED is modelled on the equivalent duty in Victoria’s OHS legislation. Those companies that already have a management system in place for OHS risks will find that the process of hazard and risk identification and minimisation is very similar.

Once risks and possible controls have been identified, the duty holder is then required to implement ‘reasonably practicable measures’ to eliminate or reduce the likelihood of those risks: see new section 6(2).

The new EP Act defines ‘harm’ broadly as ‘an adverse effect on human health or the environment (of whatever degree or duration)‘ and then goes on to include examples:

an adverse effect on the amenity of a place or premises that unreasonably interferes with or is likely to unreasonably interfere with enjoyment of the place or premises;
a change to the condition of the environment so as to make it offensive to the senses of human beings; or
anything prescribed to be harm for the purposes of the Act or regulations.

In our view, the definition sets a low bar of what is harm and therefore will capture a wide array of companies and operations within the duty.

Failure to comply with this duty could result in civil penalties of more than $330,000 for individuals and $1.6 million for companies, with those penalties doubling and the prospect of jail time for aggravated breaches. A breach of the transitional duty carries the same penalties. An aggravated breach of the GED carries penalties of double that amount and potentially a five-year jail term for individuals.

What do I need to do to comply?

Identify all the potential risks of harm to both human health and the environment arising from any pollution or wastes emitted from or handled in your operations.
Identify ways to eliminate or reduce the risks as far as practicable.
Implement controls and actions in your Environmental Management System (EMS) to minimise the risks of harm arising from the activities. If you don’t yet have an EMS, develop one that focuses on your key risks.
In determining the controls and actions you can take to minimise the risks, you should have regard to what is ‘reasonably practicable‘. The new EP Act defines this to include consideration of:
- the likelihood of those risks eventuating;
- the degree of harm that would result if those risks eventuated;
- what the person concerned knows, or ought reasonably to know, about the harm or risks of harm and any ways of eliminating or reducing those risks;
- the availability and suitability of ways to eliminate or reduce those risks; and
- the cost of eliminating or reducing those risks.

Ensure you provide training, information and appropriate supervision to all relevant staff and contractors who are handling or exposed to risks at your premises.

Duty to respond to pollution incidents

Section 31 of the new EP Act requires a person to take positive steps to deal with any pollution incidents. This is the first time the Victorian environment protection regime has mandated such action.

The provision requires that, if a pollution incident has occurred as a result of an activity (whether by act or omission) and the pollution incident causes or is likely to cause harm to human health or the environment, a person who is engaging in that activity must, so far as reasonably practicable, restore the affected area to the state it was in before the pollution incident occurred

The penalty for breach of duty is nearly $40,000 for an individual and nearly $200,000 for a company.

What do I need to do to comply?

Update your EMS to include an Incident Response Protocol that requires action to be taken to respond to any pollution incidents, spills, leaks or other unauthorised escapes.
Train your staff and contractors on the new Protocol.
Ensure you restore the environment as far as reasonably practicable to its prior state. You can have regard to the definition of reasonably practicable set out above.
Update your leases to ensure tenants are required to respond to incidents and report to you.

Duty to notify Authority of notifiable incidents

Section 32 of the new EP Act further requires a person to proactively tell the Authority about certain pollution incidents. The section provides that, where a person is engaging in an activity that results in the occurrence of a notifiable incident, the person must notify the Authority, as soon as practicable, after the person becomes aware or reasonably should have been aware of the occurrence of the notifiable incident, regardless of whether the incident is contained to a premises under the management and control of the person.

An incident is notifiable if it causes or ‘threatens’ to cause material harm to human health or the environment. This includes near misses.

The penalty for breach of duty is again nearly $40,000 for an individual and nearly $200,000 for a corporation.

What do I need to do to comply?

Update your EMS and Incident Response Protocol to include a description of when an incident is notifiable.
Understand and train staff on what is a notifiable incident. Require tenants to notify landlords as well as the Environment Protection Authority.
Include in your EMS and train staff to understand what the definition of ‘material harm‘ is. This is defined as harm that is caused by pollution or waste that:
- involves an actual adverse effect on human health or the environment that is not negligible; or
- involves an actual adverse effect on an area of high conservation value or of special significance; or
- results in, or is likely to result in, costs in excess of the threshold amount being incurred in order to take appropriate action to prevent or minimise the harm or to rehabilitate or restore the environment to the state it was in before the harm (being $10,000).

Duty to manage contaminated land

New section 39 requires that a person in management or control of contaminated land must minimise risks of harm to human health and the environment from the contaminated land so far as reasonably practicable.

Land is defined to be contaminated land in section 35 of the new EP Act if wastes or substances are present on or under the surface of the land:

in a concentration above the background level; and
at a level that creates a risk of harm to human health or the environment.

The Second Exposure Draft of the Environment Protection Regulations 2021 (Regulations), which will also commence on 1 July 2021, prescribe certain further actions in relation to the duty to manage contaminated land. For example, regulation 15 requires that any person in control of land where a non-aqueous phase liquid (NAPL) is present in soil or groundwater must so far as is reasonably practicable clean up that NAPL and, if the source is located on the land, remove or control the source of the NAPL.

What do I need to do to comply?

Carry out a self-assessment of your land portfolio to identify contamination that you know about or ought to know about.
Investigate and assess and obtain advice from a contaminated land consultant about whether the contaminants lead to a risk of harm to human health or the environment.
Implement and maintain reasonably practicable measures to minimise risk of harm to human health and environment, including undertaking clean up where this is reasonably practicable.
Provide information to persons, potential purchasers or occupiers about the contamination including any risks of harm to human health and the environment arising from that contamination.
Consider who the polluter may have been. Keep records and receipts of all expenditure in preparation for a claim against the polluter for reasonable costs of compliance with the duty.

Duty to notify EPA about contaminated land

New section 40 of the EP Act requires that a person in management or control of land must notify the Authority if the land has been contaminated by notifiable contamination as soon as practicable after the person becomes aware of, or reasonably should have become aware of, the notifiable contamination.

Notifiable contamination, in relation to contaminated land, means contamination that is:

prescribed notifiable contamination; or
contamination for which the reasonable cost of action to remediate the land is likely to exceed $50,000 or any other prescribed amount.

The Regulations then prescribe the circumstances as to what is notifiable contamination in regulations 8 to 12 including in relation to soil contamination, groundwater contamination, asbestos in soils, vapour inhalation pathways, and on-site retention of contaminated soil. For example, regulation 9 states that the presence of friable asbestos in or on soil is prescribed notifiable contamination.

The Regulations also set out what is exempt notifiable contamination, including for example where there is a stockpile of industrial waste at a premises licensed to receive industrial waste or where contamination remains on a site following the issuing of a Statement of Environmental Audit under the current 1970 Act.

The penalties for breach of duty are nearly $20,000 for an individual and nearly $100,000 for a company. In considering compliance with the duty, the EPA will have regard to the owner of the land’s skills, knowledge and experience and whether the person could practicably seek advice about the contamination.

What do I need to do to comply?

Investigate and seek advice on whether any contaminated land under your control or management contains notifiable contamination.
Notify the EPA in the prescribed form.
Update your lease arrangements to require tenants to notify landlords (and the EPA) of any notifiable contamination that occurs during the term of the lease and provide a copy of all notifications.
When purchasing new sites, review the new EPA Contaminated Land Register to identify whether the site has been subject to a contamination notification.

Further assistance and detail

The EPA has released and will continue to release guidance material for different industries about how the GED can be complied with in the relevant industry sectors. At a minimum, companies should be reviewing this guidance material and implementing the recommended steps to ensure compliance.

In addition, the Final Draft of the Regulations provide significant additional detail and prescribed information to support the interpretation of the EP Act.

Please contact us if you need any assistance with understanding the new duties or with preparing or updating your environmental management system in time for the 1 July 2021 commencement date.