Victoria's new environmental protection reforms and the national state of play: part three

In anticipation of the commencement of significant amendments to the Environment Protection Act 2017 (Vic)[1] (EP Act) on 1 July 2021, Corrs’ Environment and Planning team examines key elements of the new regime and compares them to the approaches taken in other Australian jurisdictions in a series of Insights.   

This article examines the new duty to manage contaminated land which encourages greater transparency and information sharing about the contamination status of land and, as such, underpins a shift in the negotiating positions of parties on contamination risks in property transactions.

Victoria’s new duty to manage contaminated land

The duty to manage under the New EP Act provides that a person in management or control of contaminated land must minimise risk of harm to human health and the environment from the contaminated land so far as reasonably practicable. Details of what it means to be in ‘management or control’ of land are outlined in part two of this series.

Not all land is ‘contaminated land’ merely because of the presence of a waste or chemical substance. The waste or substance would need to satisfy the test under the New EP Act which requires the concentration to be above background levels and to create a risk of harm to human health or the environment.

For the purposes of implementing the new duty to manage, the New EP Act specifies the following non-exhaustive list of ways in which risks may be minimised:

• identification of any contamination that the person knows or ought reasonably know of;
  
  
• investigation and assessment of the contamination;
  
  
• provision and maintenance of reasonably practicable measures to minimise risks of harm, including undertaking clean-up activities where reasonably practicable;
  
  
• provision of adequate information to any persons that the person in management or control of the contaminated land reasonably believes may be affected by the contamination; and
  
  
• provision of adequate information to enable any person reasonably expected to become a person in management or control of the land to comply with the duty to manage it.

The EPA has confirmed that this list sets out a hierarchy of measures to manage contamination risks.  While the EPA’s expectations regarding the implementation of such measures are yet to be finalised, draft guidance reiterates that risk minimisation requires risks to be eliminated wherever practicable, and otherwise reduced, through measures such as in situ treatment or in some cases lawful disposal, engineering controls and administrative controls such as training, site induction, contamination monitoring and information sharing.

This presents a significant shift from the current regime under the Environment Protection Act 1970 (Vic) which, in the absence of a statutory notice or controls imposed through licence conditions, essentially leaves it to owners/occupiers of land to determine what, if any, measures they might implement to avoid the offences of causing pollution. The current regime also imposes no positive disclosure obligations in favour of incoming owners/occupiers (other than where a statutory remedial notice has been issued or statutory audit prepared).  

As knowledge of contamination risks on a site increases, so too does the EPA’s expectation about how it will be managed. While known contamination risks will need to be managed to minimise the risk of harm, this will not necessarily mean that clean-up is required in every case or that the EPA will need to be notified. Each site will need to be considered against the relevant statutory tests to see what actions need to be taken.[2]   

Draft EPA guidance provides that sharing of ‘adequate information’ is required where it can reduce risks of harm from contamination present on a site or migrating off-site to those who may otherwise be exposed.  Each situation will need to be considered on a case-by-case basis to determine if information sharing is necessary and to whom.

Where ‘adequate information’ is to be provided to any person who may be affected by the contamination, the New EP Act confirms this includes:

• sufficient information to identify the contamination;
  
  
• the results of contamination investigations or assessments undertaken; and
  
  
• the risks of harm to human health and the environment from the contamination.  

In terms of incoming persons who will be in management or control of contaminated land, the New EP Act does not confirm precisely what ‘adequate information’ is to be provided.   Rather, the requirement is simply that the information enables that incoming person to comply with the duty to manage the contaminated land. The scope of what is considered ‘adequate information’ will likely be the subject of judicial consideration soon enough.

The requirements to provide ‘adequate information’ operate alongside the separate obligation to disclose copies of any Site Management Order or other statutory enforcement notices in a Vendor’s Statement in a sale of land context.  Such information will also be accessible via the EPA’s new Public Register.  

Despite the uncertainties identified above, it is clear that the new disclosure regime will shift the expectations of contracting parties to a more transparent baseline position about the current contamination status of land when they undertake due diligence and negotiate contracts.  

Relevantly, if the duty to manage contaminated land is breached, it does not constitute an offence or civil penalty provision in itself. This differs to most of the other new duties under the New EP Act. However, this does not mean that non-compliance is inconsequential.  

Given the concept of minimising risk of harm so far as reasonably practicable is entrenched in the duty to manage and the general environmental duty, it is quite possible that non-compliance with the duty to manage would overlap with a breach of the general environmental duty which can be subject to civil and criminal penalties.   

Also, the New EP Act provides for a range of enforcement powers which could be deployed where the duty to manage contaminated land is contravened, including the suspension or revocation of permissions held by the person, the issue of statutory notices and application to the courts for a civil remedy (which can include injunctive-like relief as well as compensation orders).      

A further noteworthy feature of the new duty to manage is that reasonable costs of complying with the duty are recoverable against the original polluter. This is a further significant shift under the New EP Act as cost recovery by an innocent occupier is only available under the current regime after a clean-up notice has been issued.   

Whilst the new recovery right is welcomed, and certainly helps to encourage pro-active management of contamination risks, there is a question as to how readily this right will be exercised given it depends on a court order being obtained to secure the costs as a debt payable.

Queensland

While a general environmental duty applies in Queensland as an overarching requirement to prevent or minimise environmental harm, which generally aligns with the approach under the New EP Act in Victoria, there is no positive ‘duty to manage’ contaminated land. However, under the Environmental Protection Act 1994 (Qld) the regulator (the Department of Environment and Science) is empowered to issue clean-up notices requiring people (including an owner or occupier of a place where a contamination incident occurred) to deal with contamination even if they did not cause it.  

When selling land, owners are required to give notice to prospective purchasers of certain environmental matters depending on the relevant circumstances. Those matters include whether the land is on the contaminated land register or environmental management register (or has been issued a show-cause notice about including land on the registers), or the land is the subject of a clean-up notice.

New South Wales

Unlike the new position in Victoria, there is no formal ‘duty to manage’ contaminated land in NSW.

However, much like in Queensland, an owner or occupier of land (including a public authority) can be made responsible for remediating contamination, even if they did not cause the contamination in the first place.

There is also no specific statutory requirement under NSW environmental law to disclose contamination to incoming purchasers, managers or operators of the land. However, contracts for the sale of land are required to annex a local council planning certificate which discloses contamination where it has been notified to the NSW EPA and the NSW EPA considers the land is significantly contaminated, or where the contamination is subject to the NSW EPA’s regulation. Otherwise, purchasers are required to undertake their own due diligence to determine the extent of any contamination affecting the land.

Western Australia

Consistent with the position in NSW, there is no formal duty to manage contamination in Western Australia. However, the Contaminated Sites Act 2003 (CS Act) requires owners or occupiers to report their contaminated site to the CEO of the Department of Water and Environmental Regulation (CEO) within 21 days of discovering the contamination. This duty may also apply to a person who knows or suspects that they have caused or contributed to contamination. If land is classified as ‘contaminated – remediation required’, a hierarchy then applies as to who will be responsible for its remediation.  

When a site is identified as possibly contaminated, the CEO is empowered to issue an investigation notice setting out requirements to ensure a site is investigated, monitored and assessed.  

The contamination status of a site may be communicated via a memorial on the certificate of title, although this is only required for certain types of classifications and remedial notices. The CS Act also sets out disclosure obligations to prospective owners, mortgagees and lessees for sites that have been classified as contaminated or remediated for restricted use, or in relation to which a notice has been issued.

What will the new duty to manage mean for Victorians?

Victorians will need to carefully consider the impact of the duty to manage contaminated land in a number of contexts.

• Organisations should carefully consider their landholdings and any information which should prompt suspicion of contamination. Any subsequent assessment and investigation should be proportionate to the risk and extent of contamination suspected or identified.
  
  
• If not the polluter, consider whether the polluter is known and whether court action to recover the costs of compliance with the duty to manage is worth pursuing.
  
  
• The new ‘adequate information’ disclosure regime must be carefully considered on a case-by-case basis in any property transaction.
  
  
• Given the new regime is geared towards greater transparency in the sharing of information about the contamination status of land, parties negotiating sale of land contracts, leases, licences, access agreements, construction contracts, site management agreements and consultant contracts will likely come to the negotiating table with new expectations about the allocation of contamination risks through warranties, releases and indemnities.