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The Environment Protection (Amendment) Act 2006 (Vic) was passed on 24 August 2006 and makes significant changes to the Environment Protection Act 1970. These changes will have significant ramifications for business, particularly those engaged in waste-related activities, and are summarised below.
The five most significant changes introduced by the Environment Protection (Amendment) Act
- broadening of the EPA’s (Environmental Protection Agency) powers to direct a corporation to accept responsibility for clean-up and ongoing management liability of its subsidiary, associate or related entity;
- introduction of a new Environment and Resource Efficiency Plans Scheme;
- establishment of a Metropolitan Waste Management Group to replace the four existing regional waste management groups;
- introduction of a differential landfill levy for prescribed industrial waste disposal based on the classification of the waste; and
- modernising of licensing provisions by providing for the amalgamation of licenses for multiple premises, which will simplify annual reporting requirements.
1. Broader EPA enforcement powers
The amending Act has broadened the EPA’s enforcement powers concerning contaminated land. The EPA can now require a parent company to undertake clean up and ongoing site management on behalf of a subsidiary, related or associated entity, thereby effectively piercing the corporate veil. This amendment could result in liability for environmental clean-ups being imposed on parent companies for historical contamination caused or contributed to by their subsidiaries. However, this power is limited, and will depend on the extent of control that the parent company had at the relevant time, whether reasonable steps were taken to prevent contamination, and whether the parent company, and/or its directors, knew or ought to have known of the contaminating activity.
The amending Act also removes the defence that a director or person concerned in the management of a corporation had no knowledge of a contravention of the Act by a relevant corporation.
The amending Act also introduces voluntary enforceable undertakings as an alternative to the EPA bringing prosecutions against polluting companies. A voluntary enforceable undertaking is a negotiated agreement between the EPA and an offender relating to a breach of the Act or Regulations. The EPA can seek a court order for compliance with the undertaking. The main benefit for companies of this mechanism is that it will enable companies that have breached the Act to negotiate with the EPA to avoid criminal prosecution, its associated legal costs and negative PR ramifications.
2. Environment Resource and Efficiency Plans Scheme
Under the Environment Resource and Efficiency Plans Scheme, Victoria’s 250 largest commercial and industrial consumers of water and energy will have to explore resource efficiency and waste reduction opportunities, and to prepare environmental and resource efficiency plans for approval by the EPA.
Although the scheme will recognise organisations who are already taking action through existing programs, all large resource consumers will be required to register with the EPA and report on their achievements. The scheme also provides for offences for those organisations that do not participate. The details of the plans and other obligations will be expanded upon in the Regulations to the amending Act which are yet to be released.
3. Metropolitan Waste Management Group
From 1 October 2006, a single Metropolitan Waste Management Group will replace the four metropolitan regional waste management groups currently in operation. One of the key functions of the group will be to assist councils to procure multi-council regional waste services. The group will be required to create a broad waste management and resource recovery framework. It will be funded through the landfill levy distributions currently allocated to the four regional groups.
4. Introduction of a differential landfill levy
The levies for disposal of prescribed industrial waste have been increased and categorised to reflect the different health and environmental risks associated with each waste type. From 1 July 2007, the following levies will apply:
Class B or higher prescribed industrial waste - increase from $30 per tonne to $130 per tonne
Class C or lower prescribed industrial waste (excluding asbestos) - new levy of $50 per tonne, and
Asbestos - remains at $30 per tonne to encourage safe handling and disposal.
The additional levy funds will be reinvested to facilitate improvements in recycling and to develop cleaner technologies. The levy increase is also intended to serve as a transitional pricing signal to industry to avoid the high cost of long-term containment (when it becomes available).
5. Modernising of Licensing and Reporting Regimes
From 1 July 2007, a company will be able to apply for a single “corporate licence” as opposed to the current system which requires the a company to get separate licences for each of its premises. This change is intended to streamline the licence application process for multi-premises operators and to reduce the duplication of costs and resources in servicing several licences. The amending Act also introduces standardised reporting requirements against a “performance statement” which is a single, annual performance report to be signed off by the licensee. This will replace the licence-based reporting requirements that previously existed , which were onerous and duplicative. The performance statement must alert the EPA to any non-compliance with licence conditions.
There is also a new provision which protects companies against “self incrimination”, whereby the details provided by the licensee in the performance statement cannot be used as evidence (providing that the information is not false). This is intended to encourage full and honest disclosure by licensees.