Contaminated land laws in NSW Implications of proposed changes Nick Thomas, partner 22 October 2008

Contaminated land laws in NSW

Implications of proposed changes

Nick Thomas, partner

22 October 2008

What we will cover today• How does the law deal with contamination?

• legislation• common law• contract

• Implications of proposed CLM Act changes• land management• transactions • development projects

• Proposed CLM Act changes and sustainability

Contamination and the law• Legislation

• contamination management → CLM Act • regime for investigation / remediation • duty to notify EPA• certification and activities of auditors

• pollution control → POEO Act • water pollution • land pollution • waste licensing and offences

Contamination and the law (cont.)

• pollution control → POEO Act (cont.)• clean up orders • duty to report pollution incidents

• environmental assessment → Planning Act, EPBC Act • trade practices (esp. s.53A)

• Law of torts• negligence → duty of care• nuisance → interference with use and enjoyment of land

Contamination and the law (cont.)

• Contract• allocation of risk (indemnities etc)• arrangements for clean up • conditions precedent/subsequent • warranties• ongoing obligations

Proposed changes - land management

• Reporting contamination - constructive awareness • proposed regulations and guidelines for thresholds• broad concept of "ought reasonably to have known"

• person's abilities (experience, qualifications, training) • whether could reasonably have sought relevant advice• "circumstances of the contamination"

→ higher duty on those with more resources or in-house expertise?

Proposed changes - land management (cont.)

• Reporting contamination (cont...)

→ increase in number of sites notified

→ bigger budgets for contamination assessments and advice

→ increase in number of regulated sites

→ bigger remediation budgets

→ more disputes about contamination?

Proposed changes - land transactions

• Broader risk of EPA regulatory action • new threshold - more subjective

→ more uncertainty - harder to allocate risks?

• Broader range of "appropriate persons"• target those "responsible", not just those "principally responsible"

→ more potential for multiple targets

→ more stakeholders interested in risk allocation

Proposed changes - land transactions (cont.)• Preliminary investigation orders

→ again raises the stakes for allocating contamination risk

• More information available

→ makes due diligence more worthwhile!

• Changes to duty to report • "compliance with laws" warranty?

Proposed changes - development projects

• Harder to anticipate EPA regulatory action

→ project planning (and timelines) more difficult?

• integration of investigation and remediation processes

→ lower threshold for remediation powers

→ likely to reduce red tape

Do the changes promote sustainability?

• ESD requires integration of economic and environmental considerations

• Will it be the "polluter" paying?

• Enhanced inter-generational equity (through cleaning up more sites)

• What about intra-generational equity?

• Take care not to lose risk-based approach (NB. precautionary principle)