Last updated: October 2018

Introduction

Australia’s environmental, contamination and planning laws have undergone and continue to undergo significant change, with new legislation in all jurisdictions – including laws that specifically respond to climate change. This, combined with changing policies and practices among various regulatory authorities – particularly in relation to enforcement – means that environmental, contamination and planning laws affect day-to-day business operations far more than they once did.

For investors looking to acquire or establish a new business in Australia, it is essential to identify the applicable laws, policies and procedures, to determine the business’s obligations and environmental responsibilities.

Generally speaking, environmental, contamination and planning legislation is a state and territory matter, with limited involvement at the federal level. However, federal laws are playing an increasingly important role in environmental regulation, and divergent legislation can cause significant difficulties in interpretation across state and territory borders. Even within the same jurisdiction, the various approval requirements may introduce considerable duplication of environmental, contamination and planning considerations.

Most Australian jurisdictions contain extensive appeal provisions that allow for appeals initiated by third parties. Some appeal processes provide a merits review forum, while others are strictly limited to the identification of legal errors in the decision-making process.

Federal laws

Federal laws usually give effect to environmental obligations under international treaties, or are triggered when the relevant undertaking requires federal involvement. For example, the activity may take place on federal land, or potentially affect a matter of national environmental significance.

The primary federal legislation, the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act), principally applies to proposals involving matters of ‘national environmental significance’, being those that affect world heritage properties; national heritage places; wetlands of international importance; listed threatened species and ecological communities; migratory species; Commonwealth marine areas; nuclear actions (including the mining of uranium); and water resources, in the context of coal seam gas and large coal mining developments.

The EPBC Act also generally covers environmental, planning and heritage matters.

Under the EPBC Act, directors may be found civilly – or in some instances criminally – liable for offences if they are in a position to influence the conduct of the company; they failed to take reasonable steps to prevent the contravention; and they knew that the offence would be committed, or were reckless or negligent as to whether it would be.

Other specific federal legislation may apply if the proposed undertaking involves Indigenous heritage, nuclear safety, the import and export of particular waste products, or offshore petroleum activities. Federal legislation may also require compliance with uniform standards – such as the National Environment Protection Measures and regulations on the transportation of dangerous goods – that are supported by complementary state and territory legislation.

Where federal environmental legislation applies to a particular business or activity, this will be in addition to any relevant state or territory obligations. In some situations, differences in thresholds and listing criteria may mean the environmental considerations at a federal level are significantly different to those imposed at the state or territory level.

There are some situations when proposals will involve joint federal and state assessment. The Federal Government’s One-Stop Shop initiative aims to create a single environmental approval process for nationally protected matters. This initiative would simplify the approval process for businesses and reduce regulatory costs. It is worth noting that implementation of the One-Stop Shop initiative is still ongoing, and bilateral agreements between the Commonwealth and each of the states and territories are yet to be finalised.

State and territory laws

The states and territories have different laws, policies and practices relating to environment, contamination and planning, each varying in terms of their provisions, complexity and focus.

Decisions relating to the environment, contamination and planning involve considerable exercise of discretion. It is common for decision-making processes at the state or territory level to make reference to decisions or standards within other Australian jurisdictions, especially when the jurisdiction in question has a known policy or data gap. It is important to take care when applying decisions and standards across jurisdictions, due to the differences that exist in the overarching legislative frameworks.

State and territory environmental protection laws

Environmental offences

State and territory environmental laws create various environmental offences – under a general environmental duty to avoid pollution, or specific offences involving environmental harm to biodiversity factors, waters, air or land. Due to the expansive definition of ‘environment’, legislation may also impose offences for amenity impacts such as the generation of noise, odour, dust or electromagnetic emissions.

All state and territory jurisdictions contain provisions for directors and persons involved in the management of a corporation to be held personally liable under environmental offences provisions.
This deemed liability for breach of environmental legislative obligations is subject to various specific defences in respect of personal liability for the offence of a body corporate.

Licensing and permits

Environmental legislation may prescribe that certain businesses – or businesses that undertake specific activities – require approvals or licences from environmental regulatory authorities. Within certain limits, having gained such an approval may act as a defence to a pollution offence.


Environmental impact assessments

All states and territories have a statutory authority responsible for protecting the environment. Approvals and licences issued by those authorities determine how an activity may be carried out, and may impose obligations in the form of conditions.

Conditions can require the business to put limits on emissions and discharges; make financial assurances for compliance with the environmental obligations imposed under the licence; undertake monitoring and public reporting; or provide offsets or pay licence fees calculated according to the quantity of pollutants generated by the activity. State and territory legislation may impose more specific obligations for activities that have or may have an impact on threatened fauna or flora; Indigenous and non-Indigenous heritage; water resources; waste; and hazardous chemicals and dangerous goods. Further approvals or permits may be required under this secondary legislation. 

The form and detail of the impact assessment process for new developments varies greatly between the states and territories. Depending on the type of development, an assessment may be undertaken within the local, state or territory government, or by a specific statutory authority or independent assessment panel. In certain circumstances, assessment at the federal level may be required instead of – or in addition to – assessment at a lower level. 

State and territory contamination laws

Most Australian jurisdictions have legislation addressing the reporting, classification and management of land contamination, and the parties responsible for it.

Initial responsibility is usually cast on the person whose activities are likely to cause or have caused the contamination. In some circumstances, other classes of persons – such as an owner or occupier of land – may bear some legal responsibility for contaminating that land (as a result of changing the land use, for example).

This may have repercussions for the acquisition of land; for corporate entities that own or have owned contaminated land; or the contractual obligations of parties when leasing land.

Whether land is contaminated may also affect whether that land is suitable for particular uses. As such, it may introduce obligations to investigate, remediate, monitor or control contamination – including in compliance with legally enforceable directives from environmental regulators.

In terms of land tenure agreements as well as acquisition, contamination concerns often involve contractual warranties and releases and associated issues, which should be considered early in any negotiation process.

State and territory planning laws

Businesses in Australia that use or develop on land may also be required to secure planning approvals. Planning legislation in all states and territories controls development, subdivision and building, and the manner in which they may be carried out.

Planning approval requirements may be removed or limited for some public works and under some project-specific forms of legislation, and the processes for gaining planning approval may overlap with those for cultural heritage or Indigenous heritage approvals.

Planning approval requirements depend on the zoning of the relevant parcel of land and the nature of the business to be conducted. In some jurisdictions, landowners can initiate the rezoning process; in others only local, state or territory government authorities can do so.

Planning legislation usually allows for public participation in the assessment process by requiring public consultation or advertising before any decision is made. Inquiries and public hearings may also form part of the assessment process, and third parties may have the right to appeal to the courts or a tribunal – although not in all state and territory jurisdictions.

Invariably, planning approvals for major infrastructure projects are subject to conditions regulating the manner in which the development can be carried out and operated. Conditions may also require financial or other contributions, such as dedication of land or provision of ecological offsets. As such, the conditions attached to a planning approval can have significant implications for how business may be conducted during and even after the development phase.

Environmental due diligence

For investors looking to acquire or establish a new business in Australia, it is essential to identify the applicable laws, policies and procedures, to determine the business’s obligations and environmental responsibilities.

It is also essential to identify potential risks and liabilities that the business may have under environmental, contamination, planning and related laws.

Appropriate due diligence can help identify those obligations, responsibilities and risks.

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