Environmental offences: NSW Criminal Court of Appeal decision broadens the definition of 'waste'

A recent NSW Criminal Court of Appeal (CCA) decision has significantly changed the interpretation and application of waste classifications and offences under the Protection of the Environment Operations Act 1997 (POEO Act). 

The decision in Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2019] NSWCCA 174:

• broadens the definition of 'waste' to include materials temporarily stored on a site;
  
  
• determines that any portion of asbestos within a stockpile of waste, no matter how small, is enough to classify the entire stockpile as 'asbestos waste';
  
  
• determines also that temporarily stockpiling material on land will trigger the scheduled activity of 'waste storage' under clause 42 of Schedule 1 of the POEO Act; and
  
  
• makes it clear that the burden of proof falls on defendants who assert that a resource recovery exemption applies in relation to obtaining lawful authority to operate a waste facility, and that strict compliance with the requirements of that exemption must be shown.

Background

The NSW Environment Protection Authority (EPA) initially prosecuted Grafil Pty Ltd (Grafil) in the NSW Land and Environment Court (LEC) under section 144(1) of the POEO Act for using land (Lot 8) as a waste facility without lawful authority.

The director of Grafil was also charged under the special executive liability provisions in the POEO Act.

Grafil undertook the business of sand extraction under a 1977 development consent on Lot 8. In 2009, Grafil was granted a development consent to extract sand on the nearby Lots 218 and 200, under Part 3A of the Environmental Planning and Assessment Act 1979 (EPA Act). This development consent included approval for the construction of access roads.

Between 29 October 2012 and 15 May 2013, Grafil accepted around 24,000–44,000 tonnes of material from recycling facilities and placed it in stockpiles on Lot 8. This material contained minor amounts of bonded asbestos and very small amounts of friable asbestos. Grafil claimed that the material was intended for future use as road base for the sand extraction operation. 

The key elements of the offence under section 144(1) are that an owner/occupier used land, or caused or permitted land to be used, as a waste facility without lawful authority. 'Waste facility' is defined in the POEO Dictionary as 'any premises used for the storage, treatment, processing, sorting or disposal of waste (except as provided by the regulations)'.

Under section 48 of the POEO Act, 'premises-based scheduled activities' require an Environment Protection Licence (EPL). Scheduled activities include both 'waste disposal by application to land' and 'waste storage'. Grafil claimed that it was not required to obtain an EPL because of exemptions in clauses 51 and 51A of the Environment Operations (Waste) Regulation 2005 (Waste Regulation).

The LEC at first instance found that Grafil was not guilty of operating a waste facility without lawful authority.

The Appeal

The EPA appealed this decision to the CCA, alleging the LEC’s decision contained various legal errors. The CCA, in remitting the matter to the LEC for re-determination, made a number of findings, including that:

1. The material stockpiled by Grafil was 'waste' within the meaning of the POEO Act

• At first instance, the LEC was unable to find the material had been applied to land, drawing a distinction between temporary storage/stockpiling and 'application' (based on the ordinary dictionary meaning of 'application' as being for some special purpose). Accordingly, the LEC Judge determined that the stockpile was not 'waste'.
  
  
• The CCA held that the LEC had misconstrued the definition of 'waste', and it was not open on the facts to find that the stockpiles had not been 'applied to land'. The CCA held that there had been 'deposition on the land' within the meaning of the Waste Regulation, which meant that the material had been 'applied to land' and therefore the stockpile was 'waste'.

2. The stockpiling triggered two scheduled activities under Schedule 1 of the POEO Act, requiring an EPL

• The LEC initially held that as the scheduled activity of waste disposal (application to land) had not occurred, no EPL was required. However as the CCA held that the LEC had erred in determining that the stockpile was not waste, it followed that a scheduled activity of 'waste disposal by application to land' had in fact occurred.
  
  
• The LEC had also held that stockpiling of materials on Lot 8 was not the scheduled activity of 'waste storage' under clause 42 of Schedule 1 of the POEO Act, because a distinction should be made between temporary stockpiling and the storage of waste. The CCA held this was erroneous and that there was no justification for understanding the words 'storing' and 'storage' as excluding the temporary stockpiling of material. On the facts found by the LEC, a scheduled activity of waste storage had occurred. 

3. The requirement to obtain EPLs was not displaced by the exemptions under clauses 51 and 51A of the Waste Regulation, and Grafil bore the burden of proving the exemptions applied

• The Waste Regulation allowed for two exemptions: the 'continuous process' recovered fines exemption and the excavated natural material exemption. These operated so that if certain conditions were met, a person carrying out a scheduled activity was not required to obtain an EPL.
  
  
• The CCA held that the LEC had wrongly decided that Grafil fell within the exemptions, because:
  
  
  • section 144(2) of the POEO Act reverses the ordinary burden of proof that rests with the prosecutor, as the express language used indicates that the matter of lawful authority is one the defendant must prove. Grafil accordingly had to prove that it fell within the exemptions; and
    
    
  • the LEC had incorrectly held that the ordinary approach to interpreting legislation did not apply to the exemptions. On an ordinary reading of the exemption notices, the fact that Grafil could not meet the preconditions should have precluded it from relying on the exemptions.
    
    
• As the exemptions did not apply to Grafil, an EPL was required to carry out each scheduled activity.
  
  

4. Even the minor amounts of asbestos meant that the stockpiles were to be classified as 'asbestos waste'

• The LEC had initially held that:
  
  
  • while asbestos was present in the stockpiles, it was of a relatively small amount; and
    
    
  • whether a stockpile of material can be considered 'asbestos waste' is a matter of 'fact and degree [and] must depend on the nature of the waste and the volume'.
    
    
• The CCA rejected this view, holding that whether waste contains asbestos is not dependent on the absolute amount of asbestos in the waste, or the relative proportion of the amount of asbestos to the volume of the waste. The objectives of the POEO Act include protecting human health and the environment, and even small amounts of asbestos can pose unacceptable risks to both health and environment. So the activity conducted on Lot 8 should have been found to trigger the 5 tonne limit in clause 42(3)(a) of Schedule 1 of the POEO Act for the storage of asbestos waste, meaning that an EPL was required. In other words, the presence of any form of asbestos in the stockpiled material, whatever the amount, infected the entire stockpile.