Class action settled but PFAS issues far from resolved

A lack of strategic oversight of highly complex per-and poly-fluoroalkyl substance (PFAS) contaminations creates uncertainty for all parties and may hinder management progress. This is not dissimilar to the early days of asbestos regulation and management.

Nevertheless, this article provides practical answers to some frequently asked PFAS management questions, including due diligence enquiries and contractual considerations.

Context

On 27 February 2020, an ’in-principle’ settlement was reached between the Australian Government and residents of three communities which had their groundwater contaminated by toxic firefighting foams used at defence bases until the early 2000s.

While the resolution of this case is welcomed by many, it does little to clarify the legal position of those who have used or been affected by PFAS, including: 

• developers;
• earthmoving contractors;
• local government (carrying out public sector work, as decision-maker, particularly in the planning sphere and, in some cases, as the lessor of land); and 
• land-owners and operators of facilities where PFAS has been used or accepted.

These groups are none the wiser about how they should go about dealing with PFAS contamination and whether they should prepare to undertake, or defend, litigation. 

Obvious comparisons can be made between the early regulation of asbestos and the advent of the regulation of PFAS. It is fair to say that initial regulation of asbestos lacked coordination between State agencies and council responses across a number of different issues and in a range of circumstances. 

For example, in 1990, an inquiry into the presence and usage of asbestos in Victoria was conducted.  The Victorian Occupational Health and Safety Commission’s Inquiry Report,  ‘Asbestos, an inquiry: usage in Victoria, substitutes and alternatives’[1] noted, among other things, that there was a general trend towards the substitution of non-asbestos friction materials for asbestos materials (although the trend was weaker in some markets) because of market forces and regulatory pressure in the US and other countries.  

However, the Inquiry also stated it was evident that progress towards the elimination of the use of asbestos would be enhanced by regulatory measures.

That Inquiry also noted that it was evident that various basic facts about asbestos usage in Victoria were not known. 

Reports into the regulation and trends dealing with asbestos provide insight into a lack of wide-spread understanding about PFAS and any associated regulatory and strategic weaknesses.

A lack of strategic oversight, coordination and understanding of the possible role State and local governments should play also lies at the heart of many concerns about PFAS regulation and response in Queensland.  

The lack of strategic oversight should also be seen against the background of common law claims, which might lay in negligence, nuisance, trespass and breach of statutory duty. Where there are legal regulatory gaps, class actions or individual claims may fill the void – making for uncertainty in business, industry and town planning. This, of course, is never ideal.

This Insight explores the gaps in the regulatory regime to date, provides some guidance to frequently asked questions on how best to manage contamination and raises the types of matters that ought to be considered when drafting contracts.

An introduction to PFAS

PFAS are man-made carbon and fluorine-based chemicals that have, for the last 50 or so years, been widely used because they can make products non-stick, water repellent, and fire, weather and stain resistant. Some examples of their use is in carpets and cook-ware and, of course, fire-fighting foams.    

PFAS are highly persistent, highly mobile and bio-accumulates in humans and animals in the environment.  

An Intergovernmental Agreement on the Environment was made in 1992 between the Commonwealth and all States and Territories and one of its objectives[1] is the establishment of nationally consistent environmental standards.

In accordance with, and following that Intergovernmental Agreement and complementary legislation, the Commonwealth, States and Territories are now all signatories to an agreement (Intergovernmental Agreement on a National Framework for Responding to PFAS Contamination) that supports collaboration and cooperation between the parties to respond consistently and effectively to PFAS contamination. (Revisions to the Agreement came into effect on 7 February 2020.  However, Queensland and Victoria have not yet signed the revised agreement). 

This agreement identified, among other things, key areas for action to increase national consistency in responding to PFAS contamination as including:

• Following standard processes and existing guidance material to identify, investigate and manage PFAS contamination on government-owned sites, or on sites where government activities have resulted in PFAS contamination; and 
• Applying the January 2018 PFAS National Environmental Management Plan (NEMP), as endorsed by the Heads of EPAs in Australia and New Zealand and agreed by Environment Ministers.

The NEMP recommends a precautionary approach to be adopted in dealing with PFAS.  Human exposure should therefore be minimised.  

A version 2.0 consultation draft of the NEMP was released on 1 March 2019 and has now been finalised. PFAS NEMP v2.0 was agreed by the Heads of the EPAs in October 2019. It has since been endorsed by Environmental Ministers and is being implemented in a number of jurisdictions. Curiously, Victoria and Queensland have not yet endorsed it.  

Interestingly, between drafts: 

• PFOA Recreational Water Quality Guideline value changed from 5.6 to 10.0 µg/L based on changes in the assumption for the frequency and likelihood of exposure during recreational activities.
• The PFOA Human Investigation Level A (Residential with garden/accessible soil) was going to be 0.3 mg/kg, but remains at 0.1 mg/kg. 
• The Ecological Soil Guideline recognises that traditional land use categories are not relevant to ecological risks, and therefore a single guideline value is now applicable to all land uses, not just public open space (for direct exposure). 
• Biota Guideline values and Ecological Water Quality Guideline values remain the same as the draft PFAS NEMP v2.0.
• Sections 10 (On-site stockpiling, storage and containment), 11 (Transport of PFAS-contaminated material) and 12 (Reuse of PFAS contaminated materials including soils and water) is similar to the respective sections in the consultation draft, but PFAS NEMP v2.0 contains more detail.  

The reuse of PFAS-contaminated soils remains subject to State and territory oversight but PFAS NEMP v2.0 provides guidance by way of a decision tree[2] but it does not address the use of PFAS contaminated soil in agriculture which would self-evidently entail higher risks that require specific assessment.

The reuse of PFAS contaminated water must not occur until consultation with the relevant regulators has taken place. While reuse options include irrigation of non-edible crops it does not include the irrigation of edible crops and is silent on irrigation of feed for farm animals whose products will be consumed by people. 

Rather, the PFAS NEMP v2.0 notes that contact ought to be made with the regulator before a proposal for reuse on agricultural land is made. However, what mechanisms, if any, will be employed to ensure that edible crops are not rotated onto the land which has been irrigated with PFAS contaminated water, or that livestock bred for consumption or product will not graze on that land in the future?

The PFAS NEMP 2.0 is a living document and, accordingly, will be informally regularly reviewed to align with scientific research, technical developments and lessons learned from experiences in managing PFAS contamination. However, the next formal review is due in 2023.

Queensland environmental regulatory response 

While Queensland’s policy documents generally provide that the NEMP guides jurisdictions in implementing mechanisms for the regulation of PFAS, including transport, treatment and disposal, in reality the NEMP provides little guidance as to how government agencies should actually regulate PFAS contamination and management.

The Queensland Government has developed a PFAS Contamination Protocol, which provides key principles in managing legacy stocks and contamination at sites controlled by Queensland government agencies. 

The Department of Environment and Science (Department) has also issued waste tracking obligations for PFAS in Queensland and most recently updated the application form for a disposal permit for contaminated soil to include reference to the NEPM (if PFAS contaminants might be present) and the Victorian EPA soil sampling guidelines.

Under section 319 of the Environmental Protection Act 1994, the Department also prepared an Operational Policy – Environmental Management of Firefighting Foam dated 7 July 2016. This document set out the Department’s expectations as to how fire-fighting foams containing PFAS were to be phased out by 7 July 2019.  

While not phasing out these foams by 7 July 2019 in non-compliance with this operational policy is not in of itself an offence, if there was an incident and fire-fighting foams containing PFAS were released into the environment, then proving a defence of compliance with the general environmental duty would be difficult.

As with the NEMP, these documents do not provide general guidance to PFAS testing and management. Ultimately, where guidance values are ’somewhat certain’ and not interim values, following the guidance provided by the NEMP will likely constitute compliance with an entity’s general environmental duty under the Environmental Protection Act 1994 and/or compliance with associated policy documents.   

Until acceptance criteria are settled all we have in a practical sense is the NEMP’s current values. This position, is of course, complicated by the fact that the Queensland State Government has not yet endorsed and implemented PFAS NEMP v2.0. While compliance with the NEMP might be sufficient for governmental regulatory and enforcement action, it leaves an uncertain position from a civil point of view. In time we expect the PFAS NEMP v2.0 to be endorsed and applied.

Queensland planning regulatory response 

From a planning perspective, there is little guidance. The State Planning Policy (SPP) provides that the State Interest – emissions and hazardous activities, must be appropriately integrated in planning and development outcomes.  

Amongst other things, activities involving the use, storage and disposal of hazardous materials and prescribed hazardous chemicals, are to be managed to minimise the health and safety risks to communities and individuals. Sensitive land uses are to be protected from the impacts of previous activities that may cause risk to people or property including former landfill and contaminated land.

This nebulous reference to hazardous activities and contaminated land ought to be read against the background that when dealing with impact assessable development applications, the assessment manager (often the local government) can have regard to “any other relevant matter”.[3] Subject to the nature of the development, risks to human health and the environment arising from PFAS contamination are a “relevant matter”.

Further, it may not be so easy to merely rely upon discretion and consider PFAS as not relevant. Should Council approve certain developments where the land is, or may become, impacted by PFAS, there is a real risk that additional people may be exposed to PFAS if Council approves new development on known contaminated sites. This may make Council vulnerable to claims including for negligence[4] and breach of statutory duty.

To make themselves less vulnerable to litigation, local governments may wish to consider amending their planning schemes. Without strong scientific evidence as to adverse impacts of PFAS, at this point in time, amendments need not be overly onerous and may focus on requiring developers to, for example, make more detailed enquiries and give assurances about past uses or activities or to provide information on the geohydrology of the site.

Accordingly, local governments should take reasonable care to prevent harm being caused to people because of impact assessable developments approved by it. What that “reasonable care” looks like and what is the scope of its statutory duty in a planning context are the unanswered, and difficult, questions.  

As noted earlier, the recent settlement of the PFAS defence class action gives limited guidance. It clarifies that land-owners and operators of facilities where PFAS has been used need to be careful as they may be found negligent for “damage” suffered; that damage may not necessarily be for personal injuries but may be broader to capture reduced property values or damages associated with impacted water infrastructure such as bores.

It is interesting to note that documents filed as part of the class action propose that the settlement of the PFAS class action does not exclude any present or future claims for personal injury. Some in the legal community anticipate class actions for personal injury will eventually be commenced against the Commonwealth.

While the abovementioned class actions appear to have resolved, a fresh class action has been filed in respect of PFAS contamination from the Royal Australian Airforce base at Pearce in Western Australia. There is a prospect that this matter may resolve in a more expeditious manner following the outcome of the previous class actions.

Background to class action

Residents from Williamtown in New South Wales, Oakey in Queensland and Katherine in the Northern Territory had each brought class actions, which contended that the Department of Defence was liable for depressed land values and business outlooks.

The residents’ groundwater was found to be contaminated following the use of PFAS which were widely used in firefighting foams at nearby defence bases.

In summary, the properties were not fit for purpose, and because of the stigma of the contamination, the property values had collapsed.

This case is clearly important because the Commonwealth Government has recognised the communities were adversely affected by the PFAS.  

It is understood that the Department of Defence has committed to remediating the Army Aviation Centre Oakey. What that actually means, given PFAS is difficult to treat and dispose of, is yet to be fully established.

However, as part of the Department’s response to manage the PFAS contamination (and its liability exposure) it has:

• provided alternative drinking water to properties otherwise reliant on contaminated bores in the areas surrounding the Army Aviation Centre Oakey, and RAAF Bases Williamtown, Tindal and Pearce;
• installed a number of water treatment plants at the RAAF Base Williamtown, the Army Aviation Centre Oakey and Katherine; and
• reduced the migration of PFASin surface and groundwater by:
  • excavating approximately 200mm of sediment from approximately three kilometres of open drains at Williamtown;
  • removing and disposing of 12,000 cubic metres of contaminated soil at Army Aviation Centre Oakey; and
  • stockpiled soil associated with construction redevelopment projects.

This case and growing community awareness may pressure the States and Territories to provide better guidance as to the ways it expects all stakeholder to manage the PFAS risk. Time will tell.

While as seen above there are a number of agencies and various ’guidance’ documents available, there is no whole-of-government, integrated strategic plan for coordinating the agencies’ responses to PFAS issues. Given that gap the following are some frequently asked management queries.

Frequently asked management questions 

• What desktop analysis should I undertake?
• What sort of contamination management options are available?
  • Can I back-fill trenches with (or containing) PFAS material?
  • Can I store PFAS contaminated material on-site?
  • Can I dispose of PFAS in trade waste?
  • Should I expect conditions dealing with PFAS in impact assessable development approvals?
• Should contracts specifically reference PFAS?

Desktop investigations 

When undertaking due diligence, for example, for the purchase or development of a site, specific instructions ought to be given to the relevant consultants to consider whether any current or historical land uses of the subject and adjoining sites may be associated with PFAS contamination. So not just fire stations or sites which have been subject to past fires or fire-fighting training exercises but also sites where other PFAS associated land uses may have occurred such as: 

• textile manufacturing;
• paper mills;
• chemical manufacturing;
• landfills; and 
• metal plating.

If potential for PFAS contamination is identified by the desktop assessment, then PFAS should be included in the suite of contaminants tested for in both soil and groundwater.  In some cases, it may also be appropriate to test for PFAS precursors which can combine to form PFAS in the environment.

At present, most sampling is tested by laboratories to the limit of reporting (LOR) currently recognised in the NEMP – i.e. 0.01-0.05 ug/L for water, 1-5 ug/kg for solids and 5-20 ug/kg for biosolids.  

PFAS NEMP v2.0 states that the limit of reporting may be affected by the presence of other contaminants in individual samples that cause analytical interferences that raise the achievable limit of reporting. This is more likely to occur when dealing with soil, waste, biosolids and biota samples.  

The requirement for ultra-low limit of reporting depends on the sample type. It is also worth noting that not all Australian laboratories have low limit of reporting capabilities.

It is also worth noting that some approaches taken interstate have a lower LOR for solids– i.e. 4 ug/kg solids. Most laboratories can test to 4ug/kg. Consideration of testing to this lower threshold is appropriate in order to better safe-guard legal interests appears prudent.

Contamination management options

If the sampling confirms elevated PFAS levels, it will be important to:

• understand the need to monitor PFAS precursors. Some treatment processes may transform precursors creating an apparent increase in PFAS following remediation;
• understand the volume of contaminated soil likely to require excavation (where possible, over estimate);
• identify potential opportunities for on-site reuse (e.g. encapsulation below road, use in re-graded road verges) and ensure the site is hydrogeolocially appropriate:
  • on-site reuse is generally an acceptable practise unless ongoing containment presents unacceptable risks or on-going management.
  •  so, for example, backfilling a burial plot is likely be appropriate, so long as the plot is more than 2m above the seasonal groundwater level. Backfilling a service trench may also be appropriate but not if the loosening of soil creates a pathway to sensitive receptors.
  • relocation on-site must be in such a way as to not allow the contamination to migrate into surrounding soil, water or groundwater.
  • consider a leachate and stormwater run-off system if stockpiling on-site.
• consider whether any excess volume is likely to require off-site disposal. If so, this may trigger requirements for a soil disposal permit, compliance with waste tracking obligations, use of licensed transporters, disposal at licensed landfills and payment of the landfill waste levy.[5] 
• consider whether obtaining a trade waste approval for say, leachate, is feasible and appropriate. Be aware that in Queensland, a trade waste approval is essentially a statutorily mandated commercial agreement.[6] Service providers are not compelled to accept leachate and can do so on a conditional basis if it chooses as the grounds for conditions are broad.[7]
• be aware that when dealing with impact assessable development, assessment managers are increasingly likely to consider PFAS issues and condition accordingly. What that will look like is still to be seen but a well drafted development application with supporting materials may go some way to help shape the assessment authority’s decision.
• consider whether there are any disclosure obligations under the Environmental Protection Act 1994 (Qld).
• consider whether this information ought to be included in any applications for regulatory approval, i.e. development approvals.  

Contractual considerations

It is likely that PFAS considerations will increasingly be included in contracts so all parties ought to be aware of current practises but also likely changes in the regulatory environment and to make appropriate contractual accommodation.  

It may be necessary to address a range of matters including the allocation of risk for PFAS contaminated sites including changes in the law or policy positions.

Until such time as the NEMP is enshrined into State legislation, any contamination specific Environmental Performance Requirements should refer to the NEMP (as amended from time to time).  

Concluding remarks

A recurring theme during the Queensland Ombudsman’s investigation into the regulation of asbestos was a lack of coordination between different agencies and councils in situations where their jurisdictional spheres met or overlapped. In some areas of asbestos regulation there was significant confusion about agency and council responsibilities, overlap between agencies and councils, and a number of areas where no agency or council claimed responsibility. There seems to be a similar lack of cohesion in the regulation of PFAS.

Without some strategic oversight and better linkage between environmental and planning requirements as well as better investigation into disposal and management of PFAS, it is clear some agencies and councils will have difficulty understanding the scope of their role and responsibilities or the jurisdiction of other each other.

Poor interagency communication and communication with the public about asbestos contributed to difficulties in managing asbestos issues, particularly in natural disasters.

Better dialogue, now, between various State departments and local governments may go some way to ensuring mistakes associated with the regulation of asbestos don’t recur in the PFAS regulation sphere.

There is clearly significant public interest in ensuring that the framework for PFAS regulation in Queensland operates in an effective and efficient manner, without duplication, gaps or confusion about roles or responsibilities. 

We await the Victorian and Queensland responses which may clarify management of PFAS in those States, namely, whether the PFAS NEMP v2.0 will be adopted soon.

In the meantime, it is important for any entity dealing with PFAS affected sites, or adjoining sites, where relevant:

• to be vigilant in their due diligence; 
• to be clear in giving instructions to consultants, including what to test (i.e. soil and groundwater; where to test and the level of reporting);
• to be aware of management constraints when dealing with PFAS, including whether on-site or off-site disposal is a feasible option; 
• to make provisions in contracts about PFAS and who is responsible for risk associated with its management; and
• to be deliberate and thorough in assessment of impact assessable development (which may involve planning scheme amendments in order to provide transparency and ensure consistency in decision making).

Time will tell whether the recent class-action matter will be the impetus for State agencies and local governments to take action to ensure that PFAS regulation occurs in a more coordinated and strategic fashion, with greater linkages between different regulatory agencies.