Game Changing Reform to NSW Environment Protection Laws
Authors' Note: The Environment Legislation Amendment Bill 2021 (NSW) was passed by NSW Parliament without amendment and commenced on 4 March 2022. Accordingly, the reforms discussed in this publication have now come into effect.
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The NSW Government has introduced the Environment Legislation Amendment Bill 2021 (NSW) (Bill) which proposes wide ranging reforms to NSW environmental laws to enable the NSW Environment Protection Authority (EPA) to "crack down" on environmental offenders.
The Bill makes good on Minister Matt Kean's commitment to ensure that "the book [is] thrown at anyone who has done the wrong thing". While the EPA has made it clear that the reforms are "aimed solely at those who deliberately choose to circumvent the law", the amendments proposed by the Bill will materially increase environmental liabilities for all NSW operators.
This article outlines the key reforms proposed by the Bill which will amend a raft of environmental legislation, including the Protection of the Environment Operations Act 1997 (NSW) (POEO Act) and Contaminated Land Management Act 1997 (NSW) (CLM Act) and include:
- the creation of new environmental offences;
- increasing the penalties for a number of existing offences;
- increasing the powers of the EPA and other environment regulators to hold to account those perceived to be responsible for pollution or contamination and to enforce environment protection licence conditions;
- enabling the EPA to recover profits arising from the commission of environmental offences and the cost of remediating contaminated land from related bodies corporate and directors and managers of offending corporations; and
- making it easier for the EPA to prove certain environmental offences.
The Bill is expected to be debated by Parliament in early 2022 and, if passed, will result in the largest overhaul of NSW environmental laws in over five years.
Key Reforms
| Description | Analysis | |
| Greater Liability for Directors, Managers and Related Bodies Corporate |
to receive or accrue a monetary benefit as a result of certain proven environmental offences by a company.
to repay monetary benefits accrued as a result of certain proven environmental offences by a company. |
If passed, the Bill will significantly increase potential liability of those concerned in the management of companies (including related bodies corporate) who commit environmental offences or fail to comply with environment protection notices in NSW.
The proposed measures are not entirely unique to NSW. Queensland passed "chain of responsibility" environment legislation in 2016 and put it to use in the long-running Linc Energy matter. |
| New EPA Powers to Regulate Contaminated Land |
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The new reforms demonstrate the importance on engaging with the EPA at an early stage and on an ongoing basis in relation to contaminated land. If passed, the Bill would enable the EPA to take strong and proactive action without agreement even before it determines that the land is "significantly contaminated" and warrants contamination. |
| New Offence of Giving False or Misleading Information to the EPA |
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This new false and misleading information offence is significant because it applies regardless of whether the information was provided:
The new offence is an apparent response to the decision in Environment Protection Authority v Eastern Creek Operations Pty Limited [2020] NSWLEC 182, where the defendant successfully resisted an EPA prosecution which alleged that the provision of false or misleading information by establishing that the notice in response to which the information was provided was legally invalid. |
| Higher Maximum Penalties for Some Environmental Offences |
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The Second Reading Speech states that maximum penalties have been increased so that "they reflect the true cost of the crime" |
| Increased Liability for Suspected "Contributors" to Pollution |
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These new provisions are likely to be of significant concern, as they enable the EPA to issue clean-up notices requiring alleged contributors to pollution incidents to clean-up all of the pollution, at its cost. This has the potential to lead to the unintended result that:
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| Expanded Environmental Licensing Powers |
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The proposed power to impose restrictions on use and public positive covenants to enforce licence conditions is material as, currently, licence condition only bind the holder of the environment protection licence. The changes proposed will enable the EPA to legally enforce conditions against land owners or occupiers, even if the activity regulated by the environment protection licence was conducted by a former land owner or tenant. The EPA will now be able to take a deeper look at the overall environmental compliance history of an entity in licensing decisions, meaning that it will be even more important for corporations, directors and managers to maintain a strong environmental compliance history. |
| Consistent Court Powers including for Cost Recovery |
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The Bill proposes to have more consistent provisions across environment protection legislation in terms of the orders a court can make in relation to offenders, and the cost recovery that the EPA can seek from the Court. |
| New Offence to Delay Authorised Officers |
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This is an apparent response to the McClelland and Turnbull matters which involved the assault or delay of environment protection officers. The new offence is significant because the EPA would not be required to prove that the relevant delay or obstruction was willful, and so a person could be held liable for unintentional delays or obstructions. |
| Expanded Prohibition Notice Powers |
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Currently, the Minister can only issue prohibition notices requiring occupiers or persons to cease carrying on an activity. The Bill proposes to enable the Minister to prohibit occupiers of a class of premises or a class of persons from carrying on an activity. This would enable the Minister to shut down all of the premises of so-called "rogue operators", if recommended to do so by the EPA. While it is likely to be rarely (if ever) used, the expanded power could potentially be relied on by the Minister where a pattern of non-compliance is identified across a specific industry or across multiple premises of one organisation. |
| Administrative Reforms to EPA |
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The EPA is generally regarded as an "independent" regulator, and the proposed reform formally reduces Ministerial control of the EPA thereby increasing its independence. The Bill also includes some additional measures regarding board appointments to achieve greater diversity of collective skills, including expertise in human health and Aboriginal cultural values. |
Public Consultation on POEO Act Regulations
In addition to the reforms contemplated by the Bill, the EPA is currently consulting on the following regulations under the POEO Act:
- Protection of the Environment Operations (Clean Air) Regulation 2021 (NSW); and
- Protection of the Environment Operations (General) Regulation 2021 (NSW).
Each of these regulations:
- were remade with only minor amendments earlier this year, to avoid automatic repeal under the Subordinate Legislation Act 1989 (NSW); and
- will be substantively amended in 2022. The EPA has committed to carrying out consultation on the proposed changes in 2022.
Implications
The reforms contained in the Bill demonstrate how important it is for all businesses which operate in NSW, and their related bodies corporate, directors and managers to:
- take environmental compliance very seriously; and
- work effectively with the EPA to address any pollution and contamination issues.
The K&L Gates environmental team is very experienced in assisting with environmental regulatory investigations and enforcement action, and will be carefully tracking the progress of the Bill and the proposed changes to the regulations under the POEO Act.
This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. Any views expressed herein are those of the author(s) and not necessarily those of the law firm's clients.
