Environmental Legislation Update - Victoria

On 1 July 2021, the amended Victorian Environmental Protection Act 2017 (Vic) (EP Act) will finally come into effect, after its implementation was twice delayed by COVID-19. The EP Act, as amended by the Environmental Protection Amendment Act 2018 (Vic) (Amendment Act), represents a seismic change to the environmental law regime in Victoria. The reforms are centred on prevention of pollution and harm minimisation, with a focus on risk identification and management.  

The EP Act introduces new compliance and reporting requirements, and strengthens the EPA’s investigative powers and increases the penalties for wrongdoing. By now, Businesses should have processes and procedures in place to identify, mitigate, manage and report pollution as part of their overall risk management strategy.

Johanna Kennerley, a Partner of Carter Newell Lawyers with a significant environmental practice, sets out the most impactful changes to the Victorian environmental regime(1) : 

• A new General Environmental Duty (GED) – The cornerstone of the reforms creates an obligation on a company or an individual to minimise risks so far as reasonably practicable for activities that may cause harm to human health or the environment from waste and pollution. The GED is modelled on Victoria’s Occupational Health and Safety (OHS) law, meaning that if you already have a management system for OHS risks in place, you may be able to use this framework and process to create a management system for the GED.
  
  At a minimum, the GED requires specific Business Policies, likely under an Environmental Management System (EMS), which: 
• contemplates and minimises ‘harm’ to human health and the environment from operations; 
• considers the handling and storage of waste; and 
• provides a management strategy for pollution and waste incidents. 

The definition of ‘harm’ in the reforms is broad, meaning that a wide range of operations and activities will require consideration.

• Pollution Duties - New duties on individuals and businesses for ‘pollution incidents’: 
• a positive duty to take action to respond to harm (or potential harm) to human health or the environment caused by a pollution incident; and 
• a duty to notify the EPA of ‘notifiable incidents’ as soon as practicable after becoming aware of the notifiable incident.4 The penalty for this provision is just over $32,000 for an individual and just over $160,000 for corporations.
   
• Contamination Duty – A new duty to manage contaminated land and minimise risks of harm to human health and the environment from contamination. This duty will require you to be aware of any potential contamination incidents and to obtain independent advice from a contaminated land expert about whether this contamination poses a risk of harm to human health or the environment. If there has been notifiable contamination (defined in Regulations 8-12), you must report it to the EPA.
   
• Waste Management - The new regime for waste management will be a risk-based, tiered framework introducing ‘priority waste’ and ‘reportable priority waste’ (previously only industrial waste). The industrial waste provisions will provide a clearer supply chain focus from classification to transport and finally to receipt (location). The EPA is currently developing a waste tracking system to facilitate this new approach. There is also a new ‘category D’ for contaminated soils. 
   
• Public Rights of Review - The EP Act will introduce statutory third-party enforcement rights by giving ‘Eligible Persons’ (an individual or community group with standing) the ability to bring an enforcement action for contravention of the EP Act.
   
• Permissions Scheme Policy - The new legislation will introduce two new types of permissions (permits and registrations) in addition to the existing licencing regime, creating a tiered approach in favour of the existing ‘one size fits all’ approach. 
   
• Sanctions and Penalties - Across the board, sanctions and penalties have been increased with an aim to hold environmental polluters accountable. In some circumstances, if a company commits an offence, an Officer of the company will also commit an offence if the Officer failed to exercise due diligence to prevent the commission of the offence. In addition, the EPA may direct a body corporate to comply with an order or notice given to a related or associated entity.

Two key pieces of subordinate legislation to support the EP Act are in the final drafting stages: Environmental Protection Regulations and Environmental Reference Standard (ERS). ERS are a new tool setting out community expectations around ambient air, ambient sound, land and water (surface water and groundwater). 

With the introduction of the new environmental laws in Victoria, and other jurisdictions reviewing their own regimes, there is no better time to consider environmental liability insurance as part of your overall risk management strategy. Environmental liability insurance can play a role in protecting your business against legal liabilities arising from pollution incidents. Coverage can include first party and third party clean-up costs, third party loss for environmental damage, natural resource damage, property damage and bodily injury, and Directors & Officers’ personal liability for clean-up.  

Marsh’s Environmental Practice are your environmental risk advisors and can help you identify your environmental exposures, assist with risk management strategies and provide insurance risk transfer solutions.

1.       https://www.carternewell.com/page/Publications/2021/ready-set-go-victorias-environmental-reforms-are-commencing-in-july/

The information contained in this publication provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Insureds should consult their insurance and legal advisors regarding specific coverage issues. All insurance coverage is subject to the terms, conditions, and exclusions of the applicable individual policies. Marsh cannot provide any assurance that insurance can be obtained for any particular client or for any particular risk. LCP 21/189