Largest overhaul of Environmental Regulation since 1970

In the largest overhaul of environmental legislation in nearly 50 years, the Victorian Government has released its long awaited re-write of environmental protection legislation. The Environment Protection Bill 2018 (Vic) (the Bill) was introduced into Victorian Parliament on Wednesday 20 June 2018. Gadens’ environment team has considered the key changes and impacts arising from the Bill.

Background

The Bill is the second tranche of legislative reforms which respond to an independent inquiry into the Environment Protection Authority (EPA). The first tranche of reforms were embodied in the Environment Protection Act 2017 (Vic) (2017 Act) which established a new governance structure for the EPA and expanded the EPA’s ambit to the protection of human health, as well as the environment.

Key Changes

The Bill will repeal the existing Environment Protection Act 1970 (Vic) (1970 Act), and amend the 2017 Act to include the new operative environment protection provisions.

Generally, the Bill requires duty holders to identify and understand risks, try to eliminate them (in the first instance) and if that is not possible, minimise the risks of harm to human health and environment. The framework is a well-known risk-based framework that has been in operation under the occupational health and safety law for many years so will be familiar to industrial operators.

The Bill will impose civil and criminal penalties for breach, depending on the severity of the breach.

We set out below some of the key changes arising out of the bill.

General Environmental Duty

The Bill will impose a new general environmental duty, modelled on occupational health and safety legislation:

A person who is engaging in an activity that may give rise to risks of harm to human health or the environment from pollution or waste must minimise those risks, so far as is reasonably practicable.

The breach of this duty is an offence if done in the course of conducting a business or an undertaking. The offence can be subject to a civil or criminal penalty. If the breach of this duty is aggravated, then higher penalties can apply. For a transitional period of four years after the commencement of the Bill, there will also be an additional transitional duty relating to material harm which is intended to complement the general duty and is presumably to give industry time to transition to the new approach.

According to Government, the approach taken in relation to duties enables the law to be adapted for scale. Lower risk businesses can meet the general duty with simple training, however, higher risk industries will require a more sophisticated approach to risk management.

As noted by the Hon Lily D’Ambrosio MP in the second reading speech, the general duty empowers the EPA to act proactively and will prompt business to consider their environmental risks and put in place preventative controls before incidents occur.

 Permissions

The Bill introduces a three tiered approach to approvals for industry: licences, permits and registrations.

A new classification has been introduced for activities which present a low to medium risk: ‘registration’. Where an activity meets the requirements for registration, upon receipt of an application, the EPA is taken to have granted registration for the activity subject to standards set of conditions. Such registration will remain in force for five years (unless a short period is prescribed for the activity or the registration is revoked). Further detail is required regarding which activities will be eligible for registration, however, this new classification is likely to reduce some administrative complexity for lower impact operations.

Under the new tiered system, medium risk activities will require permits and will be subject to a standardised assessment process. Higher risk activities will require a development licences (similar to the current works approval) or operating licence which are subject to a more involved assessment and bespoke conditions. The regulations will provide more details about the types of activities which fit into each tier of assessment.

New Notification Duties for Pollution and Contaminated land

The Bill includes a new duty to notify the EPA when pollution incidents occur “as soon as practicable” and a further duty to respond to the harm caused by a pollution incident. This change brings Victoria into line with other jurisdictions around Australia.

The Bill also introduces a variety of duties for those in the “management or control” of contaminated land (meaning both owners and occupiers) including:

• to minimise risks of harm to human health and the environment from the contaminated land;
• to notify the EPA as soon “as practicable” if land has been contaminated

Notably, the level of contamination requiring notification will be prescribed and include where the remediation costs are likely to exceed $50,000 – although this cost can be updated overtime.

The notification requirement arises after the person becomes aware of (or reasonably should have become aware of) the contamination. Similar to the 1970 Act, there will still be a statutory right to pursue the third party who is responsible for causing or contributing to the contamination of the land by civil claim.

New Audit Regime

The Bill introduces a preliminary risk screen assessment to assess the likelihood of the presence of contaminated land and determine whether an environmental audit is required and the scope of any such audit. This approach will mean there is an opportunity for a scaled audit system, without the need to always undertake a full environment audit, thereby reducing time and cost.

Another new initiative introduced under the Bill is the ‘better environment plan’. These voluntary plans can be prepared and applied to deal with a diverse range of circumstances. The plans are intended to enable participants to develop innovative ways to comply with the Bill, provide efficient and flexible approaches to address complex environmental problems involving multiple owners or multiple sites with similar risks, and facilitate voluntary collaboration with the EPA to improve environmental outcomes. It is understood that the BEPs could be used to manage a series of contaminated sites with risk based prioritisation of clean up responsibilities and timing.

Penalties, Remedies and Third Party Rights

New penalties and sanctions are introduced under the Bill. Under the Bill there are opportunities for a diverse range of enforcement options including enforceable undertakings, infringement notices, civil penalties, in addition to criminal prosecution.

Where there has been a breach of a provision in the Bill which is stipulated to be a civil penalty provision, the EPA has the option in addition, or as an alternative to a criminal proceeding, apply to the court for a civil penalty order in relation to the contravention.

Penalties have increased under the new Bill with the penalty for the aggravated breach of the general environmental duty being 20,000 penalty units (currently $3.17m) for corporations and 4,000 penalty units (currently $634,000) and/or 5 year in prison for individuals.

The Bill continues to provide for alternative options in sentencing such as orders for the funding of restorative projects, orders to undertake environmental audits and adverse publicity orders.

Under a new approach to enforcement, the Bill introduces new third party rights to seek civil remedies for breaches of the Bill. Under the new Part 11.4, people whose “interests are affected” by a contravention or non-compliance (or who have been granted leave by the court) will have the right to make an application to the Court for to restrain another person from engaging on specific conduct, or requiring that person to take specific action. In such an application, or in any proceedings for an offence, the Court may also make compensation orders. Previously, third parties have had a limited role under the 1970 Act as the philosophy was that the EPA was the regulator and the expert in scientific matters of proof.

What next

Once passed by Parliament, the key operative provisions are slated to commence on 1 July 2020 (and in any case by 1 December 2020). The delayed start is intended to give the Government time to draft the relevant subordinate instruments, but also to give industry time to adjust to the new preventative, risk based approach set out in legislation.

This new legislation, coupled with the significant funding injection to the EPA that has already been announced and allocated, is intended to bring Victoria to the forefront of environmental protection.

While this new proactive and preventative approach is a departure from the reactive approach in the 1970 Act, it is in keeping with the approach taken in other jurisdictions and in line with the Victorian occupational health and safety regime with which industry will be very familiar.

Authored by:

Meg Lee, Partner, Melbourne

Kate Kirby, Senior Associate, Melbourne