03 Apr 2020

Draft Victorian EPA Guidelines – The new operating license & the general environmental duty for licence holders

By Damien Gardiner, Emily Flynn and Robert Stilling

The EPA's latest guidance materials drive home the importance of having in place properly developed systems, and contain useful suggestions for achieving this.

On 30 March 2020, the Victorian Environment Protection Authority (EPA) released draft guidance:

  • on the scope and purpose of new operating licences; and
  • for licence holders, addressing the new general environmental duty (GED).

These guidelines relate to the new environmental regime in Victoria, which will come into force on 1 July 2020 following the commencement of amendments to the Environment Protection Act 2017 (Vic), and the introduction of new subordinate instruments and other supporting materials (New Regime).  

Premises that are licensed under the Environment Protection Act 1970 (Vic) (1970 Act) will be impacted by these new changes.  Operators of such premises, which currently hold licences issued under the 1970 Act (Old Licences) are encouraged to become familiar with the new draft EPA Publications 1850 and 1851, which provide guidance to assist licence holders prepare for the commencement of the New Regime.

As a general observation, there has never been more emphasis in Victoria than now upon ensuring that environmental management systems and processes are comprehensive, targeted, proportionate, calibrated and documented.  The EPA's latest guidance materials drive home the importance of having in place properly developed systems, and contain useful suggestions for achieving this.

EPA'S latest guidance – operating licences and the GED

What materials have been released?

Draft EPA Publication 1850 provides guidance in relation to new EPA operating licences which will be issued under the 2017 Act (Operating Licences). It identifies how Operating Licences will differ from Old Licences, and explains the new format. It also outlines EPA's approach to reviewing the conditions of Operating Licences.

Draft EPA Publication 1851 provides guidance on how licence holders can implement or comply with the GED. It is designed to guide licence holders through the process of developing a documented approach to ensuring the risks associated with their activities are eliminated or minimised as far as practicable, in accordance with the GED.

Who do the draft guidelines apply to?

If a premises is licenced under the 1970 Act, and operations and activities will continue beyond 1 July 2020, the draft guidelines will apply. This is because Old Licences will be rolled over into Operating Licences under the 2017 Act. The GED applies more generally, and a failure to comply with the GED in the course of conducting a business or undertaking will be an offence under the 2017 Act. 

What is the GED and how will it impact licence holders?

The introduction of the GED is a central element of the New Regime. It applies to all Victorians, and a breach of the GED by industry and business will be an offence under the 2017 Act. The GED requires any person who is engaging in an activity that may pose a risk of harm to human health or the environment from pollution or waste, to minimise those risks so far as reasonably practicable. It is the main mechanism by which the regulatory focus is moving from a model based upon prohibition and control (through licencing), to a framework based upon the identification of environmental risks, and the control of those risks through the imposition of more general duties.

What is the difference between Old Licences issues under the 1970 Act and Operating Licences under the 2017 Act?

The focus of Old Licences issued under the 1970 Act is upon the premises in relation to which the licences have been issued, as opposed to an activity. In contrast, Operating Licences will focus more upon activities rather than premises.

The format of Operating Licences will differ from Old Licences, and there will be greater emphasis on licence holders identifying and managing environmental risks arising from authorised activities. This differs from Old Licences, which typically contain prescriptive point-source controls. They also commonly contain general conditions relevant to amenity issues such as odour, dust, noise and general waste management requirements. Such conditions will no longer be included as general conditions, as these matters will be addressed through the GED (discussed below). However, more specific requirements dealing with these matters may be included, where appropriate in particular circumstances, through sectorial or site-specific conditions.

Operating Licences will consist of three main sections, being:

  • the inclusion of seven standard conditions covering matters such as a requirement to develop and implement Risk Management and Monitoring Programs (RMMP), reporting and record keeping (previously the Annual Performance Statement), notification (including notifying EPA of environmental incidents or non-compliances, or changes to licence holder details, including insolvency) and decommissioning. RMMPs are an important tool for achieving and demonstrating compliance with the GED, and more detail in relation to them is included below;
  • sectorial and site-specific conditions tailored to particular industries or businesses (as necessary). Such conditions may include specific discharge limits for particular pollutants, which will operate in parallel with the underlying GED; and
  • conditions related to financial assurance.

This structure will likely result in Operating Licences being shorter in form and more generalised than current licences. This is primarily because the seven standard conditions will encompass a very broad range of regulatory matters, with more prescriptive, sectorial/site-specific licence conditions only included where necessary. Furthermore, some of the more prescriptive content in the Old Licences will now be captured by the GED, and other duties under the 2017 Act.

What is a RMMP, and what will it need to contain?

The new standard RMMP condition to be included in Operating Licences will require a clear management process to be developed and implemented to identify and mitigate risks, which will assist in demonstrating compliance with the GED. More specifically, a RMMP must:

  • identify all risks of harm to human health and the environment reasonably arising in respect of licensed activities; 
  • identify ongoing control and environmental performance measures to address identified risks;
  • develop systems for measuring and recording risk control and performance outcomes; and
  • set objectives to achieve general environmental performance improvements.

Publication 1851 contains detailed guidance on how to prepare RMMPs, including:

  • the development of a conceptual site model which identifies potential environmental risks, impacts and sensitivities;
  • the identification of operational controls and environmental performance requirements/outcomes, which may be drawn from multiple sources such as the EPA's Environment Reference Standards, industry or other standards and codes of practice;
  • defining roles and responsibilities of key personnel;
  • developing appropriate monitoring programs and record keeping measures; and
  • documenting the RMMP, and providing for its continual improvement. RMMPs will need to be prepared, documented in writing and made available to the EPA on request.

The standard RMMP condition will replace the general condition in Old Licences which requires risk-based monitoring programs to be developed to determine compliance with the conditions in Old Licences. The new RMMP condition will go further than this, and require a more holistic consideration of environmental risks arising from an activity, whether they are specifically dealt with in the Operating Licence or not.

Will the shorter-form Operating Licences mean less regulatory oversight by the EPA?

No. None of this means that the compliance burden will be reduced. Indeed, there will be much greater emphasis now upon ensuring that systems and processes are sufficiently adequate to meet the GED and other duties under the 2017 Act, and to ensure that risks of harm to human health or the environment from pollution or waste have been minimised so far as reasonably practicable.

While the new format Operating Licences represent a shift away from the more prescriptive approach under the Old Licences, the EPA will continue to closely regulate and oversee the environmental performance of industries and businesses undertaking licensed activities. In particular, standard conditions requiring RMMPs to be developed and made available to the EPA will give the EPA greater visibility of risks arising from activities, and more oversight of those risks.

What insight to the draft guidelines give in relation to the GED and future Operating Licences?

Perhaps more than anything else, Publication 1851 emphasises the critical importance of adopting a "hands-on" approach in complying with the GED, and in developing systems and processes (such as RMMPs) in meeting the requirements of the GED.

Given the imminent commencement of the New Regime on 1 July 2020, operators of premises that currently hold and Old Licence, which will be transitioned to an Operating Licence, will need to start the process of preparing RMMPs. While there will be no general requirement to provide RMMPs to the EPA, they will need to be provided on request by the EPA. It is likely that such requests could be made in the course of compliance inspections or reviews or immediately following an environmental incident (such as a spill), and it will be important that RMMPs be available to produce immediately on request.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.