New “General Environmental Duty” in Victoria, Australia

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Una Jefferson:  You’re listening to compliance insights by Nimonik, we discuss all things related to compliance with environmental health and safety and quality rules. I am Una Jefferson. Australian state of Victoria has just overhauled it’s environmental laws in a way that fundamentally changes the duties of companies and individuals towards the environment. Mark Beaufoy is a partner with King and Wood Mallesons and an expert on contaminated land law. He joined me to discuss the changes.

Una Jefferson:   So Mark Beaufoy, thank you very much for taking the time to talk to me. I really appreciate it. So these amendments to the environmental protection regime in Victoria, passed at the end of September, are the second step of an overhaul that’s been going on for a while. I think it began in 2017. So how big of a deal are these most recent changes?

Mark Beaufoy:  Thanks Una. They’re really significant. They are amendments. It’s the Environment Protection Amendment Act of 2018, which follows the 2017 amendment acts. The 2017 amendment act was really just to establish a new governance framework for the EPA in Victoria and to set some objectives for the EPA. The 2018 reform, are really a complete overhaul of the legislation. I think in some ways Victoria as a state had fallen behind the other jurisdictions in Australia and certainly fallen behind international practice. So the 2018 members amendments or a complete overhaul. So we’re really looking at completely new legislation. So the minister, when she introduced the legislation, described it as a once in a generation reform and world leading. And I think it is certainly that.

Una Jefferson:  And how much of this overhaul could we have foreseen based on these objectives and plans that were set out back in 2017?

Mark Beaufoy:  It’s interesting. We’ve had really not been practicing for nearly two decades, 20 years and probably for a decade at that time. Um, we have had in Victoria, unfortunately a series of inquiries by government regulators as well as some mind inquiries that were instigated by the EPA itself into its practices and its powers. And it found significant gaps in the system. And so when the current government was elected, um, they came in with a commitment to have a detailed inquiry independent inquiry into the EPA and then to implement the recommendations in that inquiry. So there was a detailed inquiry report which was over 400 pages and it had 40 something recommendations. So we knew for awhile that there was big change coming.

I think what shocked the industry was really the speed in which that reform occurred. After the inquiry, we basically got a new bill that was presented to parliament, really in its current form and then passed very quickly through the parliament. It was just a bill that went straight into parliament and surprisingly received very little debate and very little change when it was in parliament. So it basically got passed with all of the provisions that the government had included.

Una Jefferson:  Would you say that’s because there was a fair amount of consensus behind it?

Mark Beaufoy:  Look, I think so. I think, I think that, um, you know, I think everybody was aware that there were a lot of gaps in the system and this reform was required. In some senses as a practitioner based in Victoria, but having practiced in other jurisdictions, I felt, and I think other people felt that we were a bit of a pariah in our legislation. For example, we were the only jurisdiction in Australia that didn’t have mandatory pollution reporting and contaminated land reporting. And most other jurisdictions, including the smaller ones like South Australia and Tasmania had introduced those kinds of powers some time ago. So I think that there was some consensus. We have an election coming up here in Victoria in November. I would be surprised that, um, uh, this legislation is changed dramatically or amended or repealed if there was a new government introduced.

Una Jefferson:  Okay. So now I want to dive into the changes themselves and maybe a good place to start off is this general environmental duty and I’ve read some of the commentary and analysis of these amendments and this seems to be the most discussed. Um, so what is this general environmental duty and why does it matter?

Mark Beaufoy:  I think that is central piece of the legislation and I think it is fairly unique. I think there’s been a move in environmental law internationally and in Australia towards the concept of a general duty of care in relation to the environment. And there’s a number of other jurisdictions in Australia, Queensland, South Australia territories that do have environmental duties included in the legislation. But I think the way in which Victoria’s legislation has now adopted that duty is quite unique in that it is the central piece of the legislation which is subject to, if you don’t comply with that duty, civil and criminal penalties, whereas duties in other legislation are set up more as objectives. They’re not subject to penalties, but if you breach the duty and then you cause harm, then you are committing an offense under that legislation, whereas this duty doesn’t require, which is pretty significant and it’s a big change from what we’ve got now, which is essentially, um, pollution offenses.

So a more reactive approach under the current legislation. So if you cause pollution, then you could breach the act and you’d be subject to enforcement activity. But here you don’t have to actually cause pollution. You just have to not comply with the duty. So duty says that a person who’s engaging in activity that may give rise to risk of harm to human health and the environment from pollution and waste must minimize those risks so far as reasonably practicable. And there’s a whole list of things that you need to show to show that you’re complying with that duty, but for example, and they are things like having management systems in place, so environmental management systems, um, making sure that people are properly trained in them. Um, but if you don’t have those systems in place, then you breached the duty and you could be subject to enforcement under the legislation.

Una Jefferson:  Okay. So complying with this, this duty, um, how does it differ between different types of industries?

Mark Beaufoy:  Um, I think, I think it will, it will be a lot easier for large organizations to comply with this, duty, because this legislation is modelled and the government has said this in introducing the legislation that it’s modelled around work health and safety legislation in Australia and that is focused around a duty to protect workers, employees. Um, so organizations which have good rigorous studies on EHS system, so environment, health and safety systems will be able to adapt quite quickly to this legislation and bring their environmental components of their management systems up to speed. I think for small to medium organizations, it’s going to be a real challenge that what level of management systems do I need to put in place to comply with this duty. And so the government has actually given us a large amount of time for implementation.

So the legislation, although the act is passed, it doesn’t commence until, uh, until December 2020, and during that time the EPA is going to be producing a lot of guidance and policies and regulations which will assist in compliance. I would expect that, for example, they will be guidance from the EPA in relation to what kind of management system you should put in place depending on what industry sector you’re in and what kind of business you’re operating. So I think businesses need to keep engaged with that process over the next couple of years to really monitor what advice is being provided and then adapt accordingly.

Una Jefferson:  Right. Um, I, I want to come back in a minute to what you said about this being modelled on the occupational health and safety laws, but first, how much detail will be filled in by these regulations and compliance codes. Um, how, what are the stakes for those subsidiary instruments?

Mark Beaufoy:  I think is critical and really what we have at the moment is a very bold set of legislative obligations which create quite a lot of uncertainty about how you actually need to comply with them. And really over the next two years, EPA have a range of tools under this new legislation including things like position statements and compliance codes and regulations and policies that they will need to produce in consultation with the industry to, I suppose put flesh around the bones at what we’ve got at the moment. In fact, this afternoon I’m attending a workshop with industry and Department of Environment and EPA, and it’s the first of a number of workshops with professionals in the industry, uh, to, for the department and EPA on what we would expect to see in this guidance material.

Una Jefferson:  And what can we learn from the way these occupational or worker health and safety laws have been implemented and enforced?

Mark Beaufoy:  I think that there’s, there’s a lot of legal concepts that are very common, so concepts like raised no practicability, um, and uh, as soon as reasonably practical, these legal concepts have been divided in the courts and there’s lots of guidance in work health and safety legislation around how you balance the competing needs of taking a reasonable action, a reasonably practicable action to protect the employee health and safety, balanced against what is technically possible, the costs of doing so and a number of other factors.

Una Jefferson:  These amendments do create some new enforcement powers for the environmental protection authority, don’t they?

Mark Beaufoy:  They do, quite significantly. I sort of described this legislation as a regulator’s lolly shop. I mean, they’ve got everything that they want and which we see in other regulators legislation to enforce these provisions. So there’s a range of new notices, um, which they, which they can issue. Under our current legislation, we really have two major notices. They are pollution abatement notice and a clean up notice. The pollution abatement notice is subject to review by our merits review tribunal hearing in Victoria. And the cleanup notice however though isn’t subject to review. So Epa currently have an informal, uh, internal review process that’s published some information about it, but it’s not included in the legislation. Then if you want to challenge a clean up notice in Victoria, you have to go to the Supreme Court and argue that essentially the notices unlawful.

But under the new legislation, the EPA have six new notices, prohibition notices, notices to investigate environmental action notices, site management orders, and non-disturbance notices. And what’s interesting about all these notices is they will perform a different function, but the, um, they’re all subject to formal internal review, which is incorporated into legislation. So I think that while the EPA has been given a lot of power under this legislation, there are rights of businesses to review and holds EPA to account and so I would expect that there might be quite a lot more dispute in this legislation.

Una Jefferson:  Interesting. Okay. Um, we’re coming to the end of our time, but I want to just quickly get to the issue of land contamination that also seems to have been overhauled by these amendments. Um, what do these changes mean for existing pollution?

Mark Beaufoy:  They are really significant in this area. So as I mentioned, the, um, we currently don’t have a duty to notify contaminated land in Victoria, but all other jurisdictions have had that. With this legislation, there is a duty to notify contaminated land and there isn’t actually also executive and officer liability if you fail to exercise due diligence to prevent the commission of this offense. So you have to have a system in place at the commencement of this legislation to identify where you have contaminated land. And that means essentially land which breaches certain background levels or guidance levels and presents a risk to human health or the environment. So there’s a technical question and a legal question about notification, but I would expect on the commencement this legislation that they will be quite a lot of notifications. The other big thing in relation to contaminated land is that like the general environmental duty there is a broad duty to manage contaminated land and that applies to the person in management and control of the contaminated land and the duty is elaborated on in the legislation and it talks about things like identifying contamination that you know, reasonably know about, investigating and assessing it, managing it, including cleaning it up, and also importantly provision of adequate information to anyone that’s likely to be affected by the contamination.

So if you have offsite contamination, for example, that’s migrating through groundwater and it could impact upon someone, not only do you have common law duties to warn but you also now have a statutory duty to tell people about it and gives them the information, including reports associated with the assessment of the risk. So these are really significant new provisions which all businesses need to adjust to as the legislation commences.