The full force of Victoria's Environment Protection (Amendment) Act 2006

By Megan Schroor.

Key Points:
The Environment Protection (Amendment) Act 2006 introduced a number of new provisions which were designed to compel Victorian businesses to operate in the most environmentally-friendly way possible. While the majority of the Act came into effect almost a year ago, the full impact of the amendments will only be felt in the second half of this year.

When the Environment Protection (Amendment) Act 2006 came into force on 30 August 2006 it represented a step towards the Victorian Government's goal of achieving an environmentally sustainable future for the State as envisaged in the strategic document Our Environment, Our Future – Victoria's Environmental Sustainability Framework 2006. The Act was not however only a response to increasing concern over environmental sustainability; like the recent review of NSW's State Environmental Planning Policy for mining, petroleum and extractive industries, it could be seen as a further response to the major resources boom currently occurring across Australia.

While the majority of the Act came into effect almost a year ago, the full impact of the amendments will only be felt in the second half of this year.

Some key changes which may have a significant impact on industry in the coming months are:

• the new requirement for any person or company undertaking a "scheduled activity" to prepare an Environment and Resource Efficiency Plan (or "EREP");
• simplifications to the licensing structure, including replacing the six categories of scheduled premises with one generic term and adding to the list of premises prescribed in the Regulations as scheduled premises; and
• major hikes in landfill levies for the disposal of industrial waste.

EREPs – increasing efficiency/decreasing waste

The new Division 4A in Part III of the Environment Protection Act 1970 now requires any person or company undertaking a "scheduled activity" to prepare an Environment and Resource Efficiency Plan which:

• describes the resource usage and/or disposal of waste off-site generated by the activity
• outlines a plan to reduce this usage or waste disposal
• sets out timeframes for implementing the plan; and
• describes how the plan will be monitored and for how long it will be in operation.

The practical effect of this new scheme is that by 2008, the 250 largest industrial and commercial energy and water users in the State will be required to investigate water and waste reductions opportunities in the format of EREPs.

Scheduled activity to be defined according to threshold limits

A scheduled activity is defined as:

"the use of environmental resources in excess of the threshold prescribed for resources of a kind prescribed for the purposes of this definition; or the disposal of waste off-site from a premises in excess of the threshold prescribed for wastes of a kind prescribed for the purpose of this definition."

Draft regulations and guidelines which will set these threshold limits are expected to be available for comment in August 2007. While the EREP provisions are technically in force, it is not until the regulations and guidelines are finalised that the true impact of the EREP scheme will be felt.

Occupier must register and submit an EREP for approval

If the activity is a scheduled activity, the occupier of the premises at which a scheduled activity is being undertaken must:

• register with the Environment Protection Authority ("EPA")
• prepare and submit an EREP to the EPA for approval. Unless a whole exemption applies, failure to prepare an EREP is an offence carrying a penalty of $32,229
• where required by the EPA, prepare and submit a revised EREP to the EPA for approval; and
• once approved, implement the EREP within its specified timeframes, failing which a penalty of $32,229 may be imposed.

Under the new scheme, if a person becomes the occupier of a premises which is the subject of an EREP and the scheduled activity continues after the change of occupation, the EREP will become the responsibility of the new occupier from the day on which that person becomes the occupier.

Making it easier for business

Importantly, the EPA has acknowledged that an EREP should "focus strongly on identifying and pursuing financially beneficial actions for environmental resource use efficiency and will be made up of actions that pay for themselves within three years or less, providing strong financial returns for businesses."

Further, if an organisation is already taking steps to reduce its resource consumption then those efforts will be recognised. Accordingly, the EREP scheme does not apply to broadacre agricultural primary production, including irrigated primary production, as a significant amount of work is already being undertaken to encourage resource efficiency in this area.

The Act allows companies with multiple sites that trigger the EREP thresholds to prepare and register a single EREP covering all the sites, provided each site is addressed in sufficient detail – generic plans will not be accepted.

Simplifying licensing

The Act introduced three key initiatives to improve the operation of works approvals and licences, namely:

• empowering the EPA (at the request of the licensee) to amalgamate two or more licences for different premises held by the same licensee into a single corporate licence
• requiring licence holders to submit an annual performance statement which includes an analysis of performance against the provisions of the licence; and
• simplifying the definition of "scheduled premises".

On 1 July 2007, one "scheduled premises" replaced the six categories

As of 1 July 2007, one general definition of scheduled premises replaced the six definitions of scheduled premises that existed under the old legislation. A scheduled premises is now defined as any premises:

• prescribed by regulation; or
• which is of a class prescribed by regulation as a premises at or from which—
  • waste is, or is likely to be, discharged, emitted or deposited to the environment;
  • noise is, or is likely to be emitted;
  • waste is, or substances which are a danger or potential danger to the quality of the environment or any segment of the environment are, reprocessed, treated, stored, contained, disposed of or handled; or
  • any activity is conducted which creates a state of potential danger to the quality of the environment or any segment of the environment.

The Act also clarifies that the occupier of a scheduled premises must not, among other things, do any act or thing which is likely to cause an increase or change in waste from the premises, a change in method or equipment used to process waste, an increase in noise or a state of potential danger.

Scheduled premises prescribed by regulation

The Environment Protection (Scheduled Premises and Exceptions) Regulations 2007 also came into force on 1 July 2007. These regulations prescribe various premises as scheduled premises including new categories of premises in relation to carbon geosequestration, water desalination plants, on site retention of 1,000 cubic metres contaminated soil in an engineered facility, road tunnel ventilation systems and premises with soil or ground water contamination in respect of which a notice has been issued under the Act requiring long term management. These latter premises may be required to provide financial assurance to ensure that there are adequate funds available for the ongoing management of site contamination, notwithstanding changes in land ownership.

In accordance with the transitional provisions, an occupier of a new category of scheduled premises for which a licence is required, is exempt from being licensed until 31 December 2007. If an application for a licence is made before 1 January 2008, however, the occupier may continue the process or activity until a decision is made by the EPA on the application to either issue or refuse to issue a licence.

Landfill levy increases for hazardous waste

Another change that came into force on 1 July was the significant increase in industrial waste landfill levies for hazardous waste. The Act replaced the "one size fits all" levy with a system of determining the levy according to the hazard level of the waste to be deposited to landfill. The EPA's goal in increasing landfill levies was to "mak[e] treatment and avoidance of waste more attractive than landfill" (according to the media release).

The new levies, as they now appear in Schedule E of the Environment Protection Act, are:

Note: Category A waste (highest hazard) must be treated or immobilised before being sent to landfill.

In July 2008 the levy for Category B wastes will increase to $250 per tonne, and Category C wastes to $70 per tonne. These increases mean that companies will either need to significantly re-evaluate their waste management policies or face huge costs.

Conclusion

The primary goal of the Environment Protection (Amendment) Act was to encourage industry to operate in a more environmentally friendly manner. To a certain extent, the EPA has demonstrated an awareness of the need to balance the new regulatory reforms with the commercial reality of business. By limiting the scope of enforceable actions in EREPs to actions which can pay for themselves within three years, the EPA is endeavouring to ensure energy efficiency can coexist with economic efficiency. It is yet to be seen how industry will cope with the full range of new regulatory requirements.

Thanks to Rebecca Wilcock for her help in writing this article.

For further information, please contact Sallyanne Everett.