Insights

In brief - Reporting obligations of a polluter changed in November 2011

The amendments to the Protection of the Environment Operations Act 1997 changed the reporting obligations of a "polluter" on 11 November 2011. This affects anyone who holds an Environmental Protection Licence or whose activities may harm the environment with pollution.

Entities which have reporting obligations must take the changes into account so that they are not in breach of their reporting obligations with regard to polluting events.

The amendments arose from criticism of Orica's response to a recent industrial incident at Kooragang Island near Newcastle and other recent incidents.

Summary of main changes to Protection of the Environment Operations Act

  • Increase in the number of government authorities to be notified when a polluting event has occurred
  • Notification of pollution incidents must be immediate after a polluting event has taken place
  • Increase in the penalties for failure to give notice immediately of pollution occurring
  • All holders of an Environmental Protection Licence must prepare and implement a pollution incident response management plan
  • There will now be more circumstances when a mandatory environmental audit is required
  • Particular monitoring data which is required to be recorded by those who hold an Environmental Protection Licence may be accessed by the public
  • Further details will need to be recorded in the public register kept by the authorities

What you need to do when a pollution incident occurs

As soon as a pollution incident occurs that causes or threatens material harm to the environment, you must immediately notify:

  • the appropriate regulatory authority and the Environment Protection Authority (EPA)
  • the local authority for the area in which the pollution incident occurred, Ministry of Health, WorkCover authority, Fire and Rescue NSW and any other persons as directed by the EPA

Increased urgency in notification of pollution incidents

Before the changes to the Act, authorities had to be notified as soon as practicable after the pollution incident had occurred. There was no definition in the Act as to what constitutes "as soon as practicable", nor is there a definition under the amended Act of what time frame would constitute "immediately".

In the Kooragang Island incident, it took 16 hours before the relevant authorities were notified. Whilst there is no set procedure as to what a polluter needs to do, what this means now is that once an incident occurs, rather than waiting for all of the relevant information before notifying the EPA, the polluter should telephone the EPA immediately and then proceed with providing the relevant information shortly afterwards.

What is a "pollution incident"?

The legislation defines a pollution incident as:

"...an incident or set of circumstances during or as a consequence of which there is or is likely to be a leak, spill or other escape or deposit of a substance, as a result of which pollution has occurred, is occurring or is likely to occur. It includes an incident or set of circumstances in which a substance has been placed or disposed of on premises, but it does not include an incident or set of circumstances involving only the emission of any noise."

When is harm to the environment "material"?

Harm to the environment is material if:

  • it is not trivial, or
  • property damage plus the reasonable costs to take reasonable and practicable measures to prevent, mitigate or make good, will together exceed $10,000

It does not matter that the harm is caused only to your premises.

Significant penalties for failure to notify of pollution incidents

If you do not notify all of the relevant authorities, then you risk being penalised for an amount of $2 million for corporations, including a daily amount of $240,000 for each day the offence continues. The penalty is $500,000 for individuals and a daily amount of $120,000 for each day that the offence continues.

Pollution incident response management plan

If you hold an Environmental Protection Licence, then you must prepare a pollution incident response management plan which must be implemented and used in the event that a pollution event occurs in the course of any activity that materially harms the environment at the premises.

The plan must include the procedures to be followed when notifying of a pollution incident, a detailed description of the action to be taken and the procedures to be followed for co-ordinating with the notified authorities of what will be done to rectify the polluting incident. Failure to prepare a plan within six months of the Act exposes the company or an individual to penalties.

You must ensure that the pollution incident response management plan is kept at the premises to which the Environmental Protection Licence relates or where the relevant activity takes place and must also be tested at the premises.

The EPA may also require your organisation to prepare a pollution incident response management plan in relation to the activities at the premises. Failure to do this may result in penalties to the company or individual.

If your Environmental Protection Licence provides for particular monitoring requirements to be recorded, then those monitoring results may be made available to the public.

The EPA may also conduct a mandatory environmental audit if an activity has been carried out by an Environmental Protection Licence holder unsatisfactorily. This may particularly occur if the holder of the licence has been in breach of the Act on more than one occasion.

The EPA may also undertake an analysis of risk if it suspects that a pollution incident has occurred or is occurring and may require the relevant party to pay all of the costs incurred with this analysis.

Reputational and regulatory risk from pollution incidents

On top of clean up costs and severe financial penalties, corporations that do not comply with the new laws risk substantial reputational damage.

Orica's chief executive recently acknowledged:

''There's a lot of damage to the reputation of the company in that local community particularly, and in NSW, that's where it's most intense ... I don't know how to rectify that. The reality is we've just got to demonstrate a period of improved performance before that trust will be returned."

Polluters also risk a loss of licence.

Speaking in December 2011 in relation to the recent corrosive acid leaks at Orica's Port Kembla plant, Premier Barry O'Farrell was reported as saying: "...they'll only continue to keep their licence if they are able to abide by the state's environmental laws".

Educate your staff and create a manual of procedures

You must make everybody aware in your organisation of what is required when a polluting event occurs. The business should be reviewing its current internal controls and put together a manual of procedures, otherwise referred to as a pollution incident response management plan. This must be implemented and followed by those involved when a polluting event occurs so that all the necessary steps are followed.

This may include not only who to report to, but also who is to be involved if an incident happens, so that those involved know who to report to and how to react. This will avoid a company being exposed to the penalties now introduced by the Act for failure to comply.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal advice. Please seek your own legal advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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