Client Alert

On 10 December 2008, the NSW Parliament passed significant amendments to the Contaminated Land Management Act 1997 (NSW). While parts of the Act have commenced, many of the key provisions will not commence until guidelines and regulations are also prepared. These amendments result from a major review of the Act undertaken over the past five years. Responsibility for contamination is now broader than in the past. There is also a broader duty to report contaminated sites to the EPA.

There are six changes of particular importance:

• Past and present occupiers can be responsible for contamination. Currently, the Act enables the Department of Environment and Climate Change (DECC) to require clean up from the following persons only (in order): the person who had principal responsibility for the contamination, the owner or the notional owner. The amendments mean an occupier or person who carried out activities on land may also be responsible if the contamination occurred because the person failed to take reasonable steps to prevent the contamination of the land, or if they carried on the same activities as the polluter.

• The obligation to notify DECC of contamination over a certain threshold will be broadened significantly. At the moment, the obligation is only on the owner or the polluter if they become aware of the contamination. The provisions will be broadened to include an owner or polluter who “ought reasonably to have been aware of the contamination” by reason of, for example, their resources or the expertise available to them. Failure to report is an offence. The obligation will also be more precise, with guidelines and regulations specifying criteria above which reporting is required. These guidelines and regulations will not be finalised until later this year (a draft of the Guidelines on the Duty to Report Contamination is currently open for submissions) and therefore the real impact of the revised duty to report is unknown.

• For DECC to regulate the land, a “significant risk of harm” need not be established. The new test is "significantly contaminated land", which is any land where the EPA has reason to believe that contamination is significant enough to warrant regulation.

• Investigation and remediation orders have been replaced with preliminary investigation orders (which will see DECC taking a proactive role in investigating sites, but at the cost of the recipient of the order), management orders and ongoing maintenance orders. There is also a new form of management available via a voluntary management proposal. Unlike existing voluntary remediation orders, even if a person enters into a voluntary management proposal, the person can still be served with orders as new information comes to light about the site. This introduces significant uncertainty for owners, occupiers or prospective owners or occupiers of sites undergoing remediation.

• Offset arrangements are now possible where the Minister considers that it would not be practicable to remediate the contamination within a reasonable time (subject to some restrictions).

• DECC may register restrictive covenants or public positive covenants.

• There are less defences for directors and managers of corporations that commit an offence. It is no longer a defence for a director to say that he or she did not have knowledge of the offence.

There are other material changes introduced by the amendments, and the picture will not be complete until regulations and policies are developed.