Australia: Contamination and pollution incidents in NSW: what is the difference and what are your duties?

IN BRIEF - DEVELOPERS SHOULD SEEK LEGAL AND ENVIRONMENTAL ADVICE TO HELP MANAGE RISK, PROTECT THE ENVIRONMENT AND SAFEGUARD LAND VALUES

When dealing with land contamination there needs to be both consideration of the legal definition of "contamination" as well as "pollution incident". These words are legally defined terms and there are differences between the concepts of "contamination" and "pollution incidents" that need to be closely analysed to ascertain one's responsibilities under NSW legislation when confronted with either.

This article explains the legislative framework in NSW that deals with contamination and pollution incidents. We explore:

• What is the difference between contamination and pollution incidents?
• Who has a duty to report contamination and pollution incidents to a government authority?
• When does a duty to report contamination and pollution incidents arise?

PFAS IN THE SPOTLIGHT BUT OTHER FORMS OF CONTAMINATION INCLUDE PETROL SPILLS AND BURIED ASBESTOS

Last year raised considerable uncertainty and fear surrounding the extent of contamination caused by the use of per- and poly-fluoroalkyl substances (PFAS) chemicals across Australia. The risk (if any) posed to human health caught the attention of:

• the public
• the media
• lawyers
• environmental scientists, and
• Federal and state (for example, NSW, QLD, VIC) governments.

However, PFAS are but one form of contamination that needs to be managed properly to avoid harm to the environment. Other types of contamination include petrol spills and buried waste such as asbestos. As urban redevelopment continues to make way for new housing, environmental law obligations will need to be at the front and centre of due diligences for development, and activities that may lead to pollution or contamination.

CONTAMINATION AND POLLUTION INCIDENTS LEGISLATIVE FRAMEWORK AND REGULATORY AUTHORITIES IN NEW SOUTH WALES

There are two key pieces of legislation that deal with contamination and pollution incidents.

1. Contaminated Land Management Act 1997 (NSW) (CLM Act)
2. Protection of the Environment Operations Act 1997 (NSW) (POEO Act)

The regulatory authorities responsible for exercising the powers within these acts are generally the NSW Environment Protection Authority (NSW EPA) and local councils.

WHAT IS THE DIFFERENCE BETWEEN CONTAMINATION AND POLLUTION INCIDENTS?

Contamination is different to pollution. It is important to distinguish the two so that the correct legislative requirements are used to deal with the situation at hand.

"Contamination of land" is defined in section 5 of the CLM Act to mean:

"Pollution incident" is defined in the Dictionary of the POEO Act to mean:

One obvious difference between the two concepts is that contamination of land requires the presence of a contaminated substance, whereas a pollution incident is based on the actual or likelihood of pollution occurring. To provide an example, where a contaminant is found in groundwater, surface water or soils from a historical use, this would be treated as contamination. On the other hand, if a contaminant was used and it entered or was likely to enter groundwater, surface water or soils, this would be treated as a pollution incident.

However, whether a particular incident leads to contamination of land or a pollution incident is not always legally straightforward and requires careful consideration of the facts of the matter.

WHO HAS A DUTY TO REPORT CONTAMINATION?

Section 60 of the CLM Act identifies who is responsible for reporting contamination. The responsibility lies with:

• a person whose activities have contaminated the land
• an owner of land that has been contaminated whether before or during that owner's ownership

While those persons mentioned above have a duty to report contamination, the duty is only triggered where the criteria identified in section 60(2) of the CLM Act are met. The criteria in section 60(2) of the CLM Act deals with, amongst other things, the potential for the substance to spread, the level of the contaminant, as well as referring to other thresholds that must be met. The technical nature of the criteria means sometimes expert evidence from a suitably qualified environmental consultant is required to determine whether the duty to report contamination has been triggered.

The NSW EPA has also prepared Guidelines on the Duty to Report Contamination under the Contaminated Land Management Act 1997 (dated September 2015) to assist in determining whether the duty arises. These Guidelines should be used by the environmental consultant.

There are different maximum penalties that apply to persons who do not comply with the duty to report contamination with the highest being $1,000,000 for a corporation whose activities have contaminated land and a further $77,000 for each day the offence continues.

WHO HAS A DUTY TO REPORT CONTAMINATION?

Section 60 of the CLM Act identifies who is responsible for reporting contamination. The responsibility lies with:

• a person whose activities have contaminated the land
• an owner of land that has been contaminated whether before or during that owner's ownership

While those persons mentioned above have a duty to report contamination, the duty is only triggered where the criteria identified in section 60(2) of the CLM Act are met. The criteria in section 60(2) of the CLM Act deals with, amongst other things, the potential for the substance to spread, the level of the contaminant, as well as referring to other thresholds that must be met. The technical nature of the criteria means sometimes expert evidence from a suitably qualified environmental consultant is required to determine whether the duty to report contamination has been triggered.

The NSW EPA has also prepared Guidelines on the Duty to Report Contamination under the Contaminated Land Management Act 1997 (dated September 2015) to assist in determining whether the duty arises. These Guidelines should be used by the environmental consultant.

There are different maximum penalties that apply to persons who do not comply with the duty to report contamination with the highest being $1,000,000 for a corporation whose activities have contaminated land and a further $77,000 for each day the offence continues.

WHO HAS A DUTY TO REPORT A POLLUTION INCIDENT?

Section 148 of the POEO Act identifies who is responsible for reporting a pollution incident. Where a pollution incident occurs in the course of an activity, so that material harm to the environment is caused or threatened, a duty to notify relevant authorities may arise for:

• a person carrying on the activity
• a person engaged as an employee in carrying on the activity
• an employer who is notified of an incident by an employee or who otherwise becomes aware of a pollution incident
• an occupier of the premises on which the pollution incident occurs
• any person engaged in carrying on an activity as an agent for another

Relevant authorities that may need to be notified include:

• NSW EPA
• Local council
• Ministry of Health
• SafeWork
• Fire and Rescue

Section 152 of the POEO Act makes it an offence to fail to notify relevant authorities of a pollution incident. The maximum penalty for a corporation is $2,000,000 and in the case of a continuing offence, a further penalty of $240,000 for each day the offence continues. The maximum penalty for an individual is $500,000 and in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues.

However, it must also be noted that section 151 of the POEO Act removes the duty to report a pollution incident if the person is aware the incident has already come to the notice of each relevant authority.

WHEN DOES THE DUTY TO REPORT CONTAMINATION ARISE?

Section 60(4) of the CLM Act requires a person who has a duty to report contamination to notify the NSW EPA "as soon as practicable after the person becomes aware of the contamination."

As set out above, there are normally technical investigations that need to be undertaken, most likely by a suitably qualified environmental consultant, before a duty to report the contamination is triggered. However, this cannot be assumed and the technical criteria cannot be used as a means of defeating one's duty to report contamination.

This is because section 60(5) of the CLM Act states:

Section 60(9) of the CLM Act states the matters that are to be taken into account in determining when a person should reasonably have become aware of the contamination. Those matters are:

1. the person's abilities, including his or her experience, qualifications and training,
2. whether the person could reasonably have sought advice that would have made the person aware of the contamination,
3. the circumstances of the contamination.

The above matters must be considered together in assessing whether a duty to report contamination exists.

WHEN DOES THE DUTY TO REPORT A POLLUTION INCIDENT ARISE?

The provisions determining when a duty to report a pollution incident exists are very different to those for the duty to report contamination.

Section 148 of the POEO Act states that the duty to report a pollution incident arises:

The use of the word "immediately" rather than "as soon as practicable", that is used for the duty to report contamination of land, creates a sense of urgency for reporting pollution incidents. The amount of time that it takes for a person to report a pollution incident can be used to determine whether or not that person complied with their duty, if it arises, to report a pollution incident. It can also be a factor in determining any penalty that may be issued for a pollution offence, together with any steps that are taken to mitigate the offence.

When reporting a pollution incident, detailed information identified in section 150 of the POEO Act must be provided. This includes information on:

1. the time, date, nature, duration and location of the incident,
2. the location of the place where pollution is occurring or is likely to occur,
3. the nature, the estimated quantity or volume and the concentration of any pollutants involved, if known,
4. the circumstances in which the incident occurred (including the cause of the incident, if known),
5. the action taken or proposed to be taken to deal with the incident and any resulting pollution or threatened pollution, if known,
6. other information prescribed by the regulations.

Section 150(3) of the POEO Act goes further to create an ongoing duty to report additional information immediately, as it comes to light. How one is supposed to notify the relevant authorities is dealt with in clause 101 of the Protection of the Environment Operations (General) Regulation 2009 (NSW) that requires verbal notification to each relevant authority that is then to be followed up in writing within seven days of the date of the pollution incident.

DEVELOPERS SHOULD CONSIDER SEEKING PROFESSIONAL GUIDANCE ON THEIR DUTIES TO REPORT

There are two separate duties to report both contamination of land and pollution incidents. The duties depend on the events that have or may have occurred.

In some cases there will be ambiguity surrounding whether there is a duty to report or not. Indeed, there may be uncertainty if the substance is an emerging contaminant, which means that its effects on the environment or human health are unclear. The NSW EPA describes PFAS as an "emerging contaminant" on its website under PFAS investigation program information.

In these situations, it is important to remember to seek professional guidance to:

• Protect yourself. You need to know whether you could be held to be liable for contamination or pollution and what your obligations may be in both the short and long term.
• Protect your land. Doing what is right for the environment will also safeguard the value of your land to the extent possible.

These uncertainties can be navigated through legal and environmental advice. This will in turn mitigate regulatory risk, as well as help to ensure that the environment is protected and land values are safeguarded.

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.