21 June 2018

The transformation of environment protection legislation in Victoria

This article was written by Mark Beaufoy.

The Environment Protection Amendment Bill 2018 was introduced into Parliament by the Victorian Environment Minister, the Hon. Lily D’Ambrosio MP yesterday (20 July 2018). Today the Minister and DELWP commenced consultation on the Bill with industry groups and professional associations which will continue as the Bill is debated in Parliament in the next sitting days in late July.

The Bill has been described as a ‘once in a generation reform’ and ‘world leading’ and, certainly, in its current form the Bill represents a transformation of Victoria’s environment protection legislation. The reforms change the focus of the current Act from managing the consequences of pollution to prevention and reducing the risk of harm. The reforms are all intended to encourage a preventative approach modelled on occupational health and safety legislation and provide EPA Victoria with the regulatory tools and powers to become a strategic and proactive modern regulator.

If the Bill is passed by Parliament, it is intended to commence on 1 July 2020. This will allow time for the reform of hundreds of subordinate instruments (regulations, policies and guidelines, and the development of new compliance codes and environmental reference standards) which will be required under the new legislation and to give time for industry to prepare and transition to the new regime.

The Bill is part of a package of reforms including the Environment Protection Act 2017 which was passed and received Royal Assent on 24 October 2017. The new Act provides for a new governance structure for EPA and introduces a new objective for EPA ‘to protect human health and the environment by reducing the harmful effects of pollution and waste’. This Act is intended to commence on 1 July 2018.

The reforms seek to implement the recommendations of the Independent Inquiry into EPA Victoria (May 2016) and the Government response (January 2017) which supported most of the Inquiry’s 48 recommendations (see our earlier updates on the Inquiry and Government response). In some areas, the Bill goes further than was anticipated including the introduction of mandatory reporting obligations in relation to contaminated land and third party rights to bring civil proceedings to restrain environmental breaches.

Significant changes

The most significant reforms in the Bill include:

  • general environmental duty - the introduction of a general environmental duty to minimise the risk of harm to human health or the environment from pollution and waste, so far as is reasonably practicable. Unlike similar duties in other state and territory legislation, a breach of this general duty in Victoria will be subject to civil or criminal penalties (of up to $1.6M for a corporation);
  • permissions - a new approach to licensing which increases the level of control as the complexity and extent of risk increases. The greatest level of control will be through licences (development licences and operating licences), and then permits and registrations. Licences are to be subject to regular reviews (at least every five years) and will no longer be granted indefinitely. New powers are also being granted to allow EPA to prohibit particular persons from engaging in certain activities;
  • waste management - a new waste management framework with new duties, offences and increased penalties particularly in relation to industrial waste. A new general environmental duty will require waste producers to identify and implement reasonably practicable means to avoid waste generation or reduce the risks associated with the management of waste;
  • contaminated land - new duties to manage contaminated land and notify contaminated land to the EPA, including a duty to notify people affected by contamination. The trigger and timing for notification of contaminated land is as soon as practicable if the contamination may pose a significant risk to human health or the environment;
  • environmental audits - a new environmental audit regime which allows for rapid, lower cost assessment by a Preliminary Risk Screening (PRS) and a scalable assessment audit based on risk;
  • pollution incident notification - a new duty to notify pollution incidents as soon as reasonably practicable and a duty to take action to respond to harm caused by the pollution incident;
  • regulatory tools - new regulatory tools include new notices (improvement, prohibition, investigation and environmental action notices) (which will replace the current clean up notices and pollution abatement notices), site management orders allowing for long term management of sites and voluntary better environmental management plans. Notices will subject to more transparent mechanisms for internal review and review by VCAT;
  • public register and information sharing - the development of a new EPA public register which will increase transparency and the sharing of information, including data on permit applications, permits, emissions and compliance data (subject to privacy and commercial confidentiality) and authority for EPA to share information with other regulators (such as councils and WorkSafe);
  • penalties - significant new penalties including a new aggravated breach offence (involving intention or recklessness) with penalties up to $625,000 and/or five years imprisonment for an individual and a fine of up to $3.2M for a corporation. The Bill also introduces a civil penalties scheme alongside criminal penalties giving EPA more flexibility in enforcement action based on a less onerous standard of proof. Liability of officers of bodies corporate is retained from the existing Act, and a new offence of ‘accessorial liability’ for officers has been introduced.
  • third party ‘community’ rights – which will allow courts, on application by an individual or community group with standing, to enforce the new legislation where EPA has not acted.

Important details in relation to the operation of the legislation are included in definitions and guidance to be provided in relation key definitions and concepts in the Bill, including ‘reasonably practicable’, ‘harm’ (in relation to human health or the environment), ‘material harm’, ‘minimising risk of harm’, ‘significant risk of harm’, ‘contaminated land’, ‘pollution’, ‘waste’ and ‘notifiable contamination’ and ‘notifiable incidents’.

A renewed discipline in environmental risk management

Some of the EPA’s current programs, such as the major industries (MI) audit program, are being carried out in line with EPA’s expectations of the general preventative environmental duties which are to be introduced in the reform legislation. The MI program will have conducted detailed audits and issued multiple clean up and remedial notices at more than 40 sites (MHF and licensed) over 2017 and 2018.

General preventative environmental duties and new EPA powers and regulatory requirements require a renewed discipline in environmental risk management and due diligence. Recent EPA MI audits have highlighted gaps in licence compliance and environmental management systems, and lack of action on some facility audit recommendations. These audits have increased the focus in actually understanding what EPA licence conditions require and what EPA’s expectations are in its licence assessment and management guidelines.

Good, technical due diligence to identify and controls risks, ongoing training, having management systems in place and ensuring they are complied with, are still the best ways to reduce environmental legal risks.

The new legislation will now require business to take this preventative action and significantly raise the consequences (in investigation, notices, orders, and penalties) if those requirements are not met.

We will be following the Bill closely as it is debated in Parliament and we will hold a series of workshops for our clients on the new legislation. If you would like to attend one of those workshops or discuss the implications of the new Bill in detail, please contact Mark Beaufoy.

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