Duty to notify contamination set to change

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Image:  EPA, West Footscray Fire

What is the issue?

At the present time, Victoria has the most limited duty to notify pollution or contamination.  That will soon change.

Currently, the obligation to report pollution or contamination is limited to environmental auditors engaged to undertake a statutory environmental audit where there is an imminent environmental hazard, and under some waste discharge licences issued under the Environment Protection Act 1970.

In addition, any annual report by directors submitted under the Corporations Act 2001 (Cth) must report on whether the entity’s operations have been subject to significant and particular state or Commonwealth environmental regulation and how the entity has performed.

From 1 December 2020, or sooner if proclaimed, Victoria will join other states in imposing a specific duty to report on ‘notifiable contamination’ to the EPA under the Environment Protection Act 2017 (new Act).  Notifiable contamination includes contamination for which the reasonable cost of action to remediate the land is likely to exceed $50,000.[1]

It would be prudent to obtain advice now on the duty to notify EPA of contamination before the new Act commences.  The new Act applies to land that is contaminated before or after commencement.[2]

What does it mean for me?

The new duty to notify contamination applies to a person in management or control of land.  EPA must be notified if the land has been contaminated by notifiable contamination as soon as practicable after the person becomes aware of the notifiable contamination, or reasonably should have become aware of the notifiable contamination.

The test of whether a person in management or control of land becomes aware, or reasonably should have become aware, of notifiable contamination is determined with reference to:

  • The person’s skills, knowledge and experience;
  • Whether the person could practicably seek advice regarding the contamination; and
  • Any other circumstances of the contamination.[3]

The duty applies to a person in management or control of land, including government land managers and corporate land managers.

The penalties are up to $19,342 for a natural person or $96,714 for a body corporate.  Significantly, the new Act purports to abrogate the privilege against self incrimination.[4]

What are the existing reporting duties?

Currently, all directors of companies (other than small companies limited by guarantee and small proprietary companies) required to submit an annual report under the Corporations Act 2001 (Cth) must give details of the company’s performance in relation to environmental regulation.[5]  This reporting obligation is triggered if the entity’s operations are subject to ‘any particular and significant environmental regulation’ under a law of the Commonwealth or of a State or Territory.[6]  The company’s performance must be detailed.

Accordingly, it would appear that any notification of significant contamination to the EPA under the new Act must also be reported on by directors in their annual report.

When does the new duty arise?

The circumstances in which a duty to notify a pollution incident arises was considered by the Land and Environment Court (NSW) [7] in a rare prosecution by the EPA for failure to notify a pollution incident.  The court considered that the duty to notify arose only when the defendant became aware that the clean-up operation would cost more than $10,000 with reference to the definition of material harm in the Protection of Environment Operations Act 1997 (NSW).  The defendant was found not guilty of the charge of failure to notify.  The court held that the respondent’s awareness of the bare fact that the pollution incident occurred did not trigger the duty to notify.

What are the next steps?

If you are concerned about a pollution incident, the discovery of contamination or legacy contamination it is prudent to obtain legal advice about your current and future reporting obligations and responsibilities.

Provision of false information is an offence under s 463 of the new Act, including concealing any materially relevant information or document.  This is an indictable offence which may also be heard and determined summarily.  The penalty is up to $80,595 for a natural person or up to $402,975 for a body corporate.[8]

[1] Section 37 Environment Protection Act 2017 (new Act)

[2] Section 38

[3] Section 40(3)

[4] Section 42

[5] Section 298 Corporations Act 2001 (Cth)

[6] Contravention of section 298 occurs when a director of the company, registered scheme or disclosing entity fails to take all reasonable steps to comply, or to secure compliance.  This is contravention of a civil penalty provision.

[7] Environment Protection Authority v Bulga Coal Management Pty Ltd (2014) 200 LGERA 235; [2014] NSWLEC 5.

[8] Calculated on the basis of the current penalty unit which may increase by the time the new Act commences.

© Eliza M Bergin 2019

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