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Land contamination can occur at industrial sites

The duty to report land contamination doesn’t always fall to the polluter

The duty to report land contamination falls to the landowner regardless of whether the contamination occurred during their period of ownership. When remediation is required, the polluter-pays principle is applied in the first instance, but when it comes to reporting contamination the site owner is responsible for notifying the EPA.

By giving the duty to report contamination to landowners, the EPA is able to identify and manage land contamination regardless of whether the polluter can be found. This is a pertinent point when dealing with legacy contamination as it is not always possible to identify the polluter or practical to pursue them.

When duty to report obligations are triggered, voluntary or enforced clean-up actions can add significant costs and time delays to redevelopment projects. Failing to report contamination is not a good avoidance strategy as substantial fines can result. The best way to understand the environmental liabilities of a site and proactively manage them, is to seek sound due diligence before purchase or redevelopment.

Legislative framework

Under the current legislative framework, there are two key acts that enable the NSW EPA to manage land contamination and pollution:

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

Contamination and pollution are not the same

Contamination and pollution have separate legal meanings and must be distinguished to ensure an appropriate legal response when incidents arise. The main difference between contamination and pollution is that contamination is usually linked to historic activities while pollution is the actual or likely consequence of a spill, leak or other deposit of a toxic substance.

For example, if a contaminant is detected in groundwater or soil from a past activity, this would be classified as contamination. However, if a contaminant was being used on a site and it entered, or was likely to enter, groundwater or soil, this would be treated as pollution.

The EPA uses the CLM Act’s duty to report provisions to deal with highly contaminated sites that pose an unacceptable risk to human health and the environment. Remediation of less serious contamination that does not pose an unacceptable risk is usually addressed through the planning and development process managed by local councils.

Who is responsible for reporting contamination?

Duty to report requirements for land contamination are set out in Section 60 of the CLM Act which states that the duty to report falls to the polluter or landowner. It is important to note that the landowner carries this duty regardless of who contaminated the land and whether it was contaminated during their period of ownership.

Hefty fines can be applied for not reporting contamination. A corporation can receive a penalty up to $1,000,000 with a further $77,000 applied to each day the offence continues.

Duty to report pollution

When it comes to pollution, the duty to report extends beyond the owner to anyone carrying on an activity on the premises where the pollution incident occurred. This includes employees and agents acting on behalf of others in addition to the owners and/or occupiers of a site. Failure to notify a pollution incident can lead to a penalty of up to $2,000,000 for a corporation with a further $240,000 for each day an offence continues.

When does contamination need to be reported?

To establish whether contamination is present on a site, a review of the site’s activities and history should be undertaken. This is best performed by a suitably qualified environmental consultant, however, signs of contamination may be present in physical features of the site. For example, excavation may uncover buried asbestos or an underground storage tank or there may be evidence of chemical spills, bad odours or vegetation die off. If there is uncertainty about whether contamination warrants notification to the EPA, a detailed site investigation must be undertaken by an experienced environmental consultant.

The duty to report provisions of the CLM Act kick in when contamination is detected above defined levels. These thresholds are included in EPA guidelines and the NEPM (National Environment Protection (Assessment of Site Contamination) Measure). When significant contamination is identified this must be reported to the NSW EPA “as soon as practicable after the person becomes aware of the contamination”. By contrast, a pollution incident must be reported immediately.

Ignorance is not an excuse

Avoiding a technical investigation cannot be used as a means of avoiding a duty to report. This is because the CLM Act states that a duty to report arises when a landowner or person whose activities have contaminated the land:

  • is aware of the contamination; or
  • should reasonably have become aware of the contamination.

The following factors are taken into consideration when determining whether a person should reasonably have become aware of contamination:

  • a person’s abilities, experience or qualifications;
  • whether the person could reasonably have sought advice that would have made them aware of the contamination; and
  • the circumstances of the contamination (eg. site history or use, evidence of contamination, etc).

EPA actions

When the NSW EPA receives notification of contamination under section 60 of the CLM Act it has the option to declare the land to be “significantly contaminated”. Such a determination occurs on a case-by-case basis and then allows the EPA to:

  1. Apply management “orders” to assess, remediate or monitor the land.
  2. Approve proposals for voluntary management of the land.
  3. Negotiate with landowners about appropriate solutions.
  4. Issue a clean-up or prevention notice under the POEA Act.
  5. Undertake educational or public awareness programs to minimise the impact of the contamination.

Protect yourself

Duty to report provisions of the CLM Act can have significant implications when buying or developing industrial land. Good due diligence should involve an environmental site assessment to quantify what obligations and liabilities will arise for a proposed change of land use. For further information and advice contact Ben Pearce at bpearce@geo-logix.com.au.

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