Andrews Government responses to the EPA Inquiry

On 18 January 2017, the Andrews Government formally released the much anticipated response to the findings from the Independent Inquiry into the Environment Protection Authority Victoria (EPA).  The Inquiry was released in May 2016 and examined a range of matters relating to the EPA’s role, duties, powers and regulatory tools, the Victorian community and industry’s expectations of the EPA as its environmental regulator, and the EPA’s governance structure and funding mechanisms.

Partner, Meg Lee, and lawyer, Linda Choi reported on the findings of the EPA Inquiry in May 2016. Click here to read the findings.

Here they provide an overview of the Government’s response and its reform agenda.

What key recommendations are supported by Government?

Consistent with the interim response provided in May last year, the Government has confirmed support or support in principle for all 48 recommendations made in the Inquiry.  Importantly, it supports:

• reforms to governance through a ‘comprehensive overhaul’ of the Environment Protection Act 1970 (EP Act) and modernisation to include general preventative duty to protect the Victorian environment against pollution and waste impacts (recommendations 5.1 & 12.1). The Government proposes to achieve this by legislating the recommended establishment provisions within the EP Act rather than creating a separate EPA (Establishment) Act (recommendation 5.2);
• the establishment of a Chief Environmental Scientist role under legislation (recommendation 6.1) by beginning the process of recruiting an interim Chief Environment Scientist early this year;
• clarifying the EPA’s role in greenhouse gas management by establishing the appropriate statutory instruments (recommendation 8.2);
• better integration with other agencies by commencing work this year to identify and implement the appropriate statutory mechanisms which will require local councils to seek EPA’s advice in strategic planning processes and strengthen land use planning mechanisms to maintain buffer to conflicting land uses and better manage health, safety and amenity impacts (recommendations 10.1);
• clarifying compliance and enforcement powers by expanding and increasing the range and severity of sanctions (recommendation 13.3);
• changes to the funding model by developing and implementing a new funding model for the EPA that provides greater revenue certainty and stability and to reduce reliance on funding sources with conflicts of interest (recommendation 21.10).

Other key recommendations from the Inquiry that the Government support in principle are:

• the establishment of a ‘high level’ Environment Protection (Integration and Coordination) Act to improve coordination and collaboration across the government on environment protection and associated public health issues (recommendation 7.1).  The Government intends to consider a range of legislative models and non-legislative mechanisms before committing to this reform;
• the strengthening and formalising of EPA’s role in mining regulation under the Mineral Resources (Sustainable Development) Act 1990 including making the EPA responsible for compliance and enforcement of the environmental conditions in mining licences (recommendation 17.1).  The response suggests that this will be achieved by establishing clear and easy to use environmental standards under the EP Act;
• redesigning the Municipal and Industrial Landfill Levy to better meet its regulatory objectives (recommendation 21.2).  The Government will review the design of the levy as part of a broader mix of policy and programs;
• amending s33B(1) to clarify the test for third party standing for review of decisions under the EP Act so as to reflect section 5 of the Victorian Civil and Administrative Tribunal Act 1998 (which is essentially an “interests affected” test, where interests are defined broadly to include interests of any kind and is not limited to proprietary, economic or financial interests) (recommendation 7.4).  The Government intends to investigate whether and how this can be achieved without creating uncertainty across the legislation; and
• amending the EP Act to allow third parties to enforce breaches of the EP Act through the courts (rather than through VCAT), in a similar way to the way in which third parties can enforce the planning schemes and in the same way as is allowed in South Australia, New South Wales and Queensland (recommendation 7.5).  Similar to recommendation 7.4, the Government will further investigate before making any decisions.

How will the Government implement the reform agenda?

The Government has committed a total of $45.5 million to begin the reform process over the next 18 months which will include:

• appointment of an interim advisory Board to guide the EPA through the reform process;
• $4.8 million for expanding specialist environmental public health capability in the EPA to better manage environmental health risks in the State;
• $2.1 million for commencing the appointment process for a Chief Environmental Scientist and boosting EPA’s research capabilities;
• $4.8 million for establishing a pilot program of local council environment protection officers to respond more effectively to local issues affecting liveability and amenity;
• $6.5 million for developing a prosecution strategy and increased resources to hold polluters to account;
• $3.3 million for developing better information management through a digital platform; and
• $1.5 million for strengthening the EPA’s strategic role in land use planning.

What will this mean for industry?

Based on the proportion of funding allocated, the Government’s response clearly prioritises the Victorian community’s concerns and criticism of the EPA’s management of industrial pollution, waste management and air quality monitoring, particularly in light of the Hazelwood mine fire.

However, it also appears to be a balanced response and one that would be generally welcomed by industry. Industry should benefit from the Government’s support for reforms to governance and formally involving the EPA in strategic planning decisions regarding rezoning of land to ensure appropriate buffers are maintained and industry is protected from encroachment of sensitive uses.

The Government has also ameliorated any potential negative impact on industry by deferring the making of decisions on the proposal to reform the third party standing rules for appeals against works approval and licensing decisions and to allow third parties to enforce breaches of the EP Act.  From industry’s perspective, this proposal potentially posed a significant change and concern as this is something which has traditionally been seen as a role for the expert regulator, given the often complex and scientific nature of evidence required in such matters.

The Government’s response to the Inquiry can be found here.