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)