Australia: NSW waste industry in the spotlight: How are waste operators in NSW regulated?

Last Updated: 11 October 2017
Article by Todd Neal and Katherine Edwards

IN BRIEF - ENSURE COMPLIANCE WITH APPROVALS OR RISK ENFORCEMENT ACTION

Waste operators and waste transport businesses in New South Wales should be aware of the regulatory environment surrounding their activities and the penalties that might arise from unlawful activities. We take a look at who the regulators are, their powers and responsibilities, and the implications for the waste industry.

REGULATION OF WASTE INDUSTRY ATTRACTS SIGNIFICANT PUBLIC INTEREST

The NSW waste industry has recently been thrown into the spotlight by a Four Corners investigation that aired on 7 August 2017, Trashed: The dirty truth about your rubbish. It exposed a number of serious issues within the $12.5 billion per annum waste industry and has resulted in calls for a national strategy to be developed to deal with the current state of the waste industry.

Three issues that are now at the forefront of the government's and the community's mind include:

  1. transport of waste generated in NSW to Queensland
  2. illegal dumping that is prevalent throughout communities
  3. illegal stockpiling of waste

The regulatory environment dealing with these matters is complex and includes statutes, regulations and various policies. While navigating the system can be time consuming and costly, so too can the rectification of breaches. To that end, given the increased enforcement budget of the NSW Environment Protection Authority (EPA) and the significant public interest in this issue, waste operators and waste transport businesses will need to be aware of the regulatory environment and the penalties that might arise from unlawful activities.

WHO ARE THE REGULATORY AUTHORITIES?

  • Local councils: The powers of local councils in respect of waste are primarily found in the Local Government Act 1993 (NSW) (LG Act) and the Environmental Planning and Assessment Act 1979(NSW) (EP&A Act). Councils are generally responsible for assessing development applications for the use of land for waste management or resource recovery facilities. In addition, councils also have illegal dumping units and environmental units to monitor land uses in the local area and to issue notices where necessary.
  • EPA: With respect to the waste industry, the EPA is responsible for assessing and determining Environment Protection Licence (EPL) applications. EPLs are required where a Scheduled Activity that is set out in Schedule 1 of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act) is carried on at a premises. It is the EPA's job to regulate these premises to protect the environment. The EPA's powers are generally set out in the POEO Act, as well as the Protection of the Environment Operations (Waste) Regulation 2014 (NSW) and the Protection of the Environment Operations (General) Regulation 2009 (NSW).
  • Department of Planning and Environment: The Department of Planning and Environment is responsible for approving larger, State significant development applications. However, their powers are still found in the EP&A Act. While the Department of Planning and Environment is involved with larger scale and more intense operations, there is still a significant amount of hands-on investigation work that is undertaken by this Department relating to the enforcement of conditions of consent.

WHAT POWERS DO REGULATORY AUTHORITIES HAVE?

Regulatory authorities conduct investigations to determine whether companies or individuals have committed an offence. Well known offences in the waste industry include the unlawful depositing of waste and the use of a premises without an EPL.

In conducting an investigation, regulatory authorities have the following powers:

Entry and search: There are equivalent powers under Part 7.4 of the POEO Act to section 119D and section 119F of the EP&A Act for authorised officers to enter premises for the purposes of investigations. A similar provision also exists under section 192 of the LGA.

Where an authorised officer lawfully enters a premises, that officer has the power to, for example, take samples, take photographs or videos, require records to be produced for inspection and copy records. The powers are broad, but not without limit.

Require information and records: More commonly used investigative powers are those that require persons to furnish any information and or records to the regulatory authority. Similar provisions can be found in Part 7.3 of the POEO Act and section 119J of the EP&A Act.

Formal requests for information or records are often drafted with significant breadth in an attempt to capture any and all relevant information that may assist a regulatory authority in their investigation. Careful consideration needs to be given as to whether documents held are within or outside of the scope of the formal request and whether they are lawfully able to be sought.

Formal interview: Regulatory authorities have the investigative power to require a person to answer questions. Similar provisions are contained in Part 7.5 of the POEO Act and section 119K of the EP&A Act. A regulatory authority may have a specific person or persons whom they wish to question, or alternatively, require a corporation to nominate a person authorised to answer questions on behalf of the corporation. A person who is to be interviewed by a regulatory authority should be well prepared and advised on what their rights are.

Enforcement action for offences: The legislative framework creates offences for persons who:

  • neglect or fail to comply with a requirement of the relevant piece of legislation without a lawful excuse
  • furnish information or do things in purported compliance with a requirement of the relevant piece of legislation knowing that it is false or misleading in a material respect
  • willfully delay or obstruct an authorised officer in the exercise of their powers

Prosecutions arise from a regulatory authority carrying out an investigation into whether an offence is likely to have been committed. The level of evidence required by the regulatory authority is dependent on the forum they intend to prosecute the matter in, i.e. the Local Court or the NSW Land and Environment Court. The burden of proof in criminal proceedings is "beyond reasonable doubt" which is higher than the standard required to be met in civil proceedings which is "on the balance of probabilities".

SUCCESSFUL PROSECUTIONS CAN PROVE COSTLY AS SEEN IN EPA V FOXMAN ENVIRONMENTAL DEVELOPMENT SERVICES, BOTANY BUILDING RECYCLERS AND FOXMAN

Some of the issues involved in the criminal prosecution of a waste matter were exposed in Environment Protection Authority v Foxman Environmental Development Services; Environment Protection Authority v Botany Building Recyclers Pty Ltd; Environment Protection Authority v Foxman [2015] NSWLEC 105.

The EPA successfully prosecuted six offences against the defendants in relation to the transportation and placement of waste on land.

The evidence that was relied on by the prosecutor was collected over a number of years, and included:

  • samples taken from the site
  • records of interviews undertaken with relevant persons
  • responses to statutory notices

In this case, the defendants were ordered to pay $390,000, plus investigation costs of $4,646 and the prosecutors' unknown legal costs, which are on average above $70,000 based on recent Judicial Commission statistics we have seen. The defendants were also ordered to pay for a notice to be placed in the Sydney Morning Herald and Inside Waste to inform the public of the outcome of the matter. In addition, the Court ordered Mr Phillip Foxman and Foxman Environmental Development Services Pty Ltd to remove or procure the removal of the illegally filled material.

Cases such as this demonstrate that those involved with the management of waste cannot afford to ignore the risks, and that processes and systems need to be in place to ensure compliance with the regulatory framework.

IMPLICATIONS FOR WASTE OPERATORS IN NEW SOUTH WALES

Penalties can range from an amount up to $15,000 for a penalty notice to hundreds of thousands of dollars in fines imposed by the Court, as well as the prosecutors' legal fees if successfully prosecuted.

Given the more inquisitorial nature of the powers available to regulators, it is important to ensure that the regulatory authority is acting within its powers. This requires a careful examination of the empowering legislation together with an analysis of the request or actions already undertaken by regulatory officers.

In this time of scrutiny for the NSW waste industry, and in particular given the renewed focus on enforcement amongst the EPA and Department of Planning and Environment, waste industry operators need to be aware of the powers and obligations available to regulatory authorities. It is trite to say but they need to ensure the correct approvals are in place and that their operations comply with these approvals or they run the risk of enforcement action being undertaken against them.a

Todd Neal
Environment
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Todd Neal
Katherine Edwards
 
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