department of defence...accordance with the defence security manual as appropriate. first edition...

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DEPARTMENT OF DEFENCEENVIRONMENT AND ENGINEERING BRANCH

DIRECTORATE OF CONTAMINATION ASSESSMENT, REMEDIATION &MANAGEMENT

Contamination Management Manual

Annex AGuidance on Property Transactions, Redevelopment and

DivestmentJuly 2019, Amended August 2019

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© Commonwealth of Australia 2018This work is copyright. Apart from any use as permitted under the Copyright Act 1968, nopart may be reproduced by any process without prior written permission from theAustralian Government Department of Defence.Announcement statement - may be announced to the public.Secondary release - may be released to the Australian Government Department ofDefence, its contractors and their equivalents in United States of America, Canada, NewZealand and Great Britain.All Defence information, whether classified or not, is protected from unauthoriseddisclosure under the Crimes Act 1914. Defence information may only be released inaccordance with the Defence Security Manual as appropriate.First edition 2018

SponsorDirectorate of Contamination Assessment, Remediation and Management

DeveloperEnvironment and Engineering Branch

Issued byAlison Clifton with the authority of Assistant Secretary Environment and EngineeringBranch

Effective DateMarch 2018

Amendment Date

Amended by DCARM, August 2019

Review DateAugust 2020 or when changes to processes require an update

Amendments to the document can be proposed as required. Proposals for amendment ofthis document are to be forwarded to:

Director of Contamination Assessment, Remediation and ManagementEmail: [email protected]

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Quick Reference GuideWhy is this an issue for Defence?

Mandatory RequirementsThe following requirements are mandatory when undertaking project work related to propertytransactions, redevelopment or divestment:

Consideration of contamination risk and management at each stage of the Asset Life Cycle,namely Planning, Acquisition, Development, Operation and Divestment.

Use the checklists for property acquisition (Appendix A), property leasing (Appendix B), propertydevelopment (Appendix C) and property divestment (– Checklist for PropertyDivestmentAppendix D).

For land acquisition, undertake a level of contamination assessment during the due diligenceprocess that is commensurate with the risk. Refer to Section 4.2.2 for the levels of assessment.

Where Defence is the lessor of a site, establish a baseline (via environmental sampling andanalysis) and consider a “make good” clause, or alike, in the lease agreement.

Disclosure to third parties of known property contamination prior to the lease or divestment of aDefence property, e.g. provision of recent and relevant site assessment reports to prospectivepurchasers.

Data and reports generated as part of property transaction, redevelopment and divestmentactivities are to be captured in the Garrison Estate Management System Environmental FactorManagement – Contaminated Site Record (GEMS EFM – CSR).

Engagement of a legal services provider from the Defence Legal Services Multi User Panel, todevelop, review and have appropriate input into property acquisition, lease and divestmentagreements.

Further information Checklists for Property Acquisition (Appendix A), Leasing (Appendix B) Development (Appendix

C) and Divestment (Appendix D).

Defence Contamination Management Manual.

HSE RiskHealth, safety andecological risks may arisefrom contaminationdepending upon the nature,extent and concentration ofthe contaminant andexposure pathway.

Commercial RiskEntering into a propertypurchase or lease agreementwithout having undertakenappropriate environmentaldue diligence may exposeDefence to a future clean-upliability and reputational risk.

Defence CapabilityProject delays and remediationcosts associated withmanaging unexpectedcontamination during propertyre-development can have asignificant impact to Defencecapability and operations.

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Table of contentsQuick Reference Guide ................................................................................................ iAbbreviations............................................................................................................... v

1. Introduction .........................................................................................................61.1 Background..........................................................................................................................6

1.2 Purpose................................................................................................................................6

1.3 Estate and Infrastructure Life Cycle Phases .......................................................................6

1.4 Defence Documentation ......................................................................................................7

2. Regulatory Overview...........................................................................................82.1 Overview ..............................................................................................................................8

2.2 Accredited Environmental (Contaminated Land) Auditors.................................................11

2.3 Property Transactions........................................................................................................11

3. Projects and Contamination..............................................................................133.1 Defence Projects Overview ...............................................................................................13

3.2 Case Studies......................................................................................................................13

3.3 Case Study 1: Acquisition of a property where contamination exists................................14

3.4 Case Study 2: Leasing of a Defence property...................................................................15

3.5 Case Study 3: Site redevelopment and unexpected finds................................................16

3.6 Case Study 4: Divestment of a property where contamination exists ..............................17

4. Contamination Risk and Management .............................................................. 184.1 Overview of risk management ...........................................................................................18

4.2 Acquisition..........................................................................................................................20

4.3 Development......................................................................................................................21

4.4 Leasing (Operate and Maintain) ........................................................................................22

4.5 Divestment .........................................................................................................................24

4.6 Mandatory Requirements ..................................................................................................26

5. Data and Reporting........................................................................................... 275.1 GEMS EFM – CSR ............................................................................................................27

5.2 Geographic information systems .......................................................................................27

5.3 Contamination Liability Reporting ......................................................................................27

6. References........................................................................................................28

Figure indexFigure 1-1 Overview of Defence Environmental Documentation and Annex B ....................................7

Figure 4-1 Capability & Asset Lifecycle – Contamination Management .............................................19

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AppendicesAppendix A – Checklist for Property Acquisition

Appendix B – Checklist for Leasing Land

Appendix C – Checklist for Development of Defence Land

Appendix D – Checklist for Property Divestment

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AbbreviationsAbbreviation Meaning

AFFF Aqueous film forming foam

ASBINS Asbestos in soils

ASC NEPM National Environment Protection (Assessment of Site Contamination) Measure1999 (Cth) (NEPC 2013)

CRAT Contamination Risk Assessment Tool

CSR Contaminated Site Record

DCARM Directorate of Contamination Assessment, Remediation and Management

DEHPD Directorate of Environment and Heritage Policy Development

DEPAC Directorate of Environmental Planning, Assessment and Compliance

DEQMS Defence Estate Quality Management System

DIP Defence Infrastructure Panel

DRN Defence Restricted Network

EE Defence Environment & Engineering Branch

ECC Environmental Clearance Certificate

EHM Environment and Heritage Manual

EMR Environmental Management Record

EPA Environment Protection Authority

EPBC Act Environment Protection and Biodiversity Conservation Act 1999 (Cth)

ESM Environment and Sustainability Manager

GEMS EFM – CSR Garrison Estate Management System Environmental Factor Management –Contaminated Site Record

GEMS GDL Garrison Estate Management System – Data Load Tool

GIS Geographic Information System

HSE Health, Safety and Environment

LOCR Legal Obligation & Compliance Registers

NEPC National Environment Protection Council

NEPM National Environment Protection Measure

NSIMS National Spatial Information Management System

PM Branch Property Management Branch

PM/CA Project Manager / Contract Administrator

PPMM Pollution Prevention Management Manual

SafetyMan Defence Work Health and Safety Manual

Stage 1 PSI Stage 1 Preliminary Site Investigation

Stage 2 DSI Stage 2 Detailed Site Investigation

WHS Act Work Health and Safety Act 2011 (Cth)

WMPC Act Waste Management and Pollution Control Act 1998 (NT)

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1. Introduction1.1 Background

Defence manages a large property portfolio that contains a number of contaminated sites as alegacy of past industrial and military activities and practises.

This document provides guidance on managing risks associated with contamination during theacquisition, leasing, redevelopment and divestment of Defence land/property. It should be usedin combination with other relevant property management tools, which are available on theDefence Estate Quality Management System (DEQMS) and the Garrison and EstateManagement System (GEMS).

In this guidance document, contamination refers to existing chemical contamination of soil,water and sediment associated with:

Historical/past industrial and military activities and practises that have now ceased.

On-going operational activities where a recent incident (e.g. spill or leak) has resulted incontamination, but the operation at the area, or in the facility, is continuing.

The management measures used to address both historical and recent contamination arecommon, however, the timeframe by which the measures are implemented may differdepending on the degree of risk posed by the contamination to human health and theenvironment.

1.2 Purpose

The purpose of this document is to assist Defence personnel, and contractors acting on behalfof Defence, in managing risks associated with contamination during the acquisition, leasing,redevelopment and divestment of Defence land/property.

The information in this document:

Is not intended to be legal advice or replace project and site specific advice foracquisition, divestment or leasing. The reader is directed to the Property ManagementBranch (PM Branch) for assistance with these matters.

Relates to environmental (e.g. soil, water and sediment) contamination and not to thecondition of buildings or structures (e.g, the presence of hazardous building materials).The reader is directed to the Work Health and Safety Group for assistance with thesematters.

1.3 Estate and Infrastructure Life Cycle Phases

Defence has a series of business processes and procedures to manage Estate andInfrastructure Life Cycle Phases across the Defence estate. These processes and procedurescover the planning, acquisition, development, operation (in-service) and divestment of assets.

An overview of the Estate and Infrastructure Life Cycle Phases is available at:http://www.defence.gov.au/estatemanagement/lifecycle/OperateMaintain.asp

Contamination management considerations should be integrated with each phase of the Estateand Infrastructure Life Cycle to reduce liability and risk, to current and future land users, thecommunity and the environment.

Further guidance on techniques for management of contamination through each phase of theEstate and Infrastructure Life Cycle is presented in Section 3.

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1.4 Defence Documentation

This guidance document is an Annex to the Defence Contamination Management Manual andsupports compliance with site contamination management policy as detailed in the DefenceEnvironment and Heritage Manual. An overview of where this Annex fits into the Manual ispresented in Figure 1-1.

Figure 1-1 Overview of Defence Environmental Documentation and Annex A

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2. Regulatory Overview2.1 Overview

Defence and its contractors must operate to comply with all Commonwealth legislation,including the Work Health and Safety Act (WHS Act), Environmental Protection and BiodiversityConservation Act (EPBC Act) and the National Environmental Protection (Assessment of SiteContamination) Measures (NEPM). Reference can be made to the Defence Legal Obligationsand Compliance Register (LOCR) found on Defence Estate Quality Management System(DEQMS).

Defence may not be subject to State and Territory law in all situations. Whether or not Defenceis bound by State and Territory law is a complex issue and legal advice must be obtained toconfirm whether a particular State or Territory law is applicable to Defence. Defencecontractors must comply with relevant State or Territory laws.

Guidance relating to the assessment of site contamination is outlined in the NationalEnvironment Protection Council (NEPC) 1999 (Cth), National Environment Protection(Assessment of Site Contamination) Measure (NEPM) as amended in May 2013.

2.1.1 NEPM

The National Environment Protection (Assessment of Site Contamination) Measures 1999 (Cth)(the ASC NEPM) was made under the National Environment Protection Council Act 1994 (Cth).The ASC NEPM is the national guidance document for the assessment of site contamination inAustralia. It is given effect by the National Environment Protection Measures (Implementation)Act 1998 (Cth) for the Commonwealth and individual legislation and guidelines in each Stateand Territory.

The National Environment Protection Council (NEPC) agreed to vary the NEPM by approvingan amending instrument to the ASC NEPM in 2013.

All assessments of site contamination on the Defence Estate are to be undertaken inaccordance with the recommended process and guidance provided in the ASC NEPM.

The purpose of the ASC NEPM is to establish a nationally consistent approach for theassessment of site contamination; to ensure sound environmental management practices by thecommunity, including regulators, site assessors, site contamination consultants, environmentalauditors, landowners, developers and industry parties.

The desired outcome of the ASC NEPM is to provide adequate protection of human health andthe environment, where contamination has occurred, through the development of an efficientand effective national approach to the assessment of site contamination.

The ASC NEPM and schedules are available for download through the NEPC website. TheASC NEPM Toolbox contains additional information including calculators, spreadsheets andother supporting documents to assist with application of the amended ASC NEPM.

A NEPM compliant, Stage 1 Preliminary Site Investigation (Stage 1 PSI) involves:

Establishing a site history to identify the characteristics of the site (such as the locationand layout of the site, the building construction on the site, the geological setting, currentand past uses and activities and heritage considerations).

A site inspection.

Interviews with site representatives.

Where required, intrusive soil and/or groundwater sampling that is conducted as part of thepreliminary investigations should be confined to areas where potential contamination activitiesmay have occurred, consistent with the site history based sampling plan.

Refer to theNEPM forguidance ontheinvestigationandassessment ofsitecontamination

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A further NEPM compliant, Stage 2 Detailed Site Investigation (Stage 2 DSI) may be required todelineate the extent of any contamination identified through the Stage 1 investigation and toinform site management, acquisition, leasing or divestment strategies.

2.1.2 Work Health and Safety Act 2011 (Cth)

The Work Health and Safety Act 2011 (Cth) (WHS Act) commenced in 2012 and is regulated byComcare, a Commonwealth Government agency that works in partnership with the Safety,Rehabilitation and Compensation Commission. The WHS Act provides for a nationallyconsistent framework to protect workers and other persons against harm to their health andsafety through the elimination or minimisation of the risks so far as reasonably practicable.

Under the WHS Act, employers must take all reasonably practicable steps to ensure the healthand safety of its employees and those who are at or near a workplace under the employer'scontrol. This means that Defence and its contractors have obligations to protect the health andsafety of workers and others operating within the vicinity of contaminated land that is on or nearto a workplace under Defence control.

Model Codes of Practice administered by Safe Work Australia provide practical guides toeliminate and minimise the risks to health and safety as required under the WHS Act.

Any controls outlined in the Defence Work Health and Safety Manual (SafetyMan) must beimplemented when managing contaminated materials.

2.1.3 Environment and Heritage Manual

The Environment and Heritage Manual (EHM) (2019) describes the agreed approach toenabling Defence capability through long-term sustainable management of the environment.The EHM provides instruction and policy guidance for all Defence personnel and contractors onDefence’s legislative obligations and stewardship goals in line with the Defence EnvironmentalPolicy and Environmental Strategy 2016-2036.

The Defence Environment and Heritage Manual is an administrative policy framework documentthat applies to all Defence personnel.

The EHM is divided into 13 chapters addressing:

Chapter 1 – Environment and heritage management in Defence

Chapter 2 – Environmental assessment and approval

Chapter 3 – Heritage management

Chapter 4 – Domestic biosecurity

Chapter 5 – Native species and communities

Chapter 6 – Soil management

Chapter 7 – Bushfire management

Chapter 8 – Pollution prevention

Chapter 9 – Site contamination management

Chapter 10 – Estate water management

Chapter 11 – Estate energy management

Chapter 12 – Waste minimisation and management

Chapter 13 – Estate climate adaptation

Each chapter links back to a Strategic Aim of the Defence Environmental Policy and providessupporting documentation to support the implementation of the policy.

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2.1.4 Environment Protection and Biodiversity Conservation Act 1999 (Cth)

The Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) is theAustralian Government’s central piece of environmental legislation. It provides a legalframework to protect and manage matters of national environmental significance.

The EPBC Act protects:

The environment, where actions proposed are on, or will affect Commonwealth landand the environment; and

The environment, anywhere globally on land and water, where a Commonwealthagency – including the Department of Defence – are proposing to take an action.

The EBPC Act also protects nine matters of national environmental significance:

World heritage properties

National heritage places

Wetlands of international importance (Ramsar wetlands)

Listed threatened species and communities

Listed migratory species

Commonwealth marine areas

The Great Barrier Reef Marine Park

Nuclear actions (including uranium mining)

A water resource in relation to coal seam gas development and large coal miningdevelopment.

Defence uses a comprehensive environmental impact assessment and approval program tounderstand and manage the impacts of its activities on the environment and heritage, and toensure compliance with the EPBC Act.

Under the Defence Environment and Heritage Manual, the Director of Environmental Planning,Assessment and Compliance (DEPAC) is the Defence technical authority for determiningcompliance with the EPBC Act. All matters that may trigger the EPBC Act are to be referred toDEPAC.

DEPAC undertakes a self-assessment against the Significant Impact Guidelines 1.1 and 1.2published by the Department of the Environment and Energy to determine if a ‘significantimpact’ EPBC Act protected matter is likely. The self-assessment process considers the natureand extent of contamination and if the presence, disturbance, removal or remediation of existingcontamination is likely to have a significant impact on EPBC Act protected matters. Where asignificant impact to the environment is ‘likely’ the action must be referred to the Minister for theEnvironment and Energy to make a determination on whether a proposed action is a ‘controlledaction’.

For more information with regard to the EPBC Act refer to http://www.environment.gov.au/epbc/.

2.1.5 Off-site migration

The Defence Project Manager should obtain professional advice to inform the reporting andmanagement of any contamination that is found to have migrated off-site into a State/Territoryjurisdiction. Delineating the nature and extent of the off-site contamination will assist Defence toimplement appropriate mitigation measures and to manage any legal implications. A list of thevarious State and Territory environmental agencies can be found in the Defence ContaminationManagement Manual. Any interaction with State or Territory environmental regulators must onlyoccur after first consulting the Property Management Branch, the Directorate of Contamination

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Assessment, Remediation and Management (DCARM) and if applicable the Environment andSustainability Manager (ESM).

2.1.6 Defence Legal Obligations and Compliance Register

Defence and its contractors must operate to comply with all Commonwealth legislation,including the WHS Act, EPBC Act and the NEPM. In addition, Defence and its contractorsshould be generally familiar with the legislative and other regulatory requirements associatedwith the site activities undertaken relevant to the State or Territory in which the site is located.Contractors must comply with State and Territory laws where applicable. Reference can bemade to the Defence Legal Obligations and Compliance Register (LOCR) on DEQMS.

2.2 Accredited Environmental (Contaminated Land) Auditors

An Accredited Environmental (Contaminated land) Auditor is an individual who has beenaccredited by the regulatory authority in a particular State or Territory as an ‘expert’ in the fieldof contaminated land management and can provide independent assurance that the site hasbeen assessed appropriately and /or has been made suitable for a specified land use.

An Accredited Environmental (contaminated land) Auditor is engaged when Defence arerequired to interact with a state/territory regulator and/or when an Environmental Audit isrequired. An Environmental Audit can be undertaken by a state based AccreditedEnvironmental (contaminated land) Auditor when a formal independent opinion as to thecontamination status of the land is required to manage contamination liabilities such as tofacilitate a property divestment.

Where the property in question is Commonwealth land, a Statutory Environmental Audit,administered by the States and Territories is not applicable. In these cases, Defence may wishto request a non-statutory audit from an accredited Environmental (Contaminated Land) Auditor,especially where a site presents a high risk for contamination.

A Technical Advisor (TA) is generally an Accredited Environmental (Contaminated land)Auditor (as per above) and can provide independent assurance that the site has been assessedappropriately and /or has been made suitable for a specified land use.

Defence should consider engaging an accredited auditor in the role of a TA for properties thatwill be retained by Defence over the longer term but where remediation is likely to be required tosupport a change in land use to a more sensitive land use or where there is a risk of off-siteimpacts from existing contamination. A TA will undertake the activities expected of auditorsunder formalised auditor schemes but a TA will not liaise or report to the State and Territoryregulators, unless requested to do so by Defence. They are engaged to provide advice toDefence, the Project Manager/Contract Administrator (PMCA) and/or the environmentalpractitioner on the appropriate actions to achieve the remediation objectives. If a TA or Auditoris appointed for the site, the TA/Auditor will normally be appointed at the commencement of theStage 2 Detailed Site Investigation.

Refer to Section 3.14 of Annex B for further information in relation to the engagement of a TA oran Environmental (Contaminated Land) Auditor.

2.3 Property Transactions

Although the contaminated land regulatory framework differs between States and Territories,there are some overarching principles that apply in the context of managing contamination riskon Defence property. These include:

Appropriate due diligence to assess contamination risks must be conducted in planningof all Defence activities through the capability life cycle phases, including propertyacquisition, leasing, redevelopment, estate maintenance and divestment.

To managepotentialfuture liabilityfor Defence –including post-transactionclaims andreputation riskassociatedwithcontaminationrisks a Stage 1PSI and / orStage 2 DSI canbe undertaken.

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Disclosure to third parties of known property contamination prior to the lease ordivestment of a Defence property, e.g. provision of recent and relevant site assessmentreports to prospective purchasers.

The liability for contamination will in most cases lie with the polluter. However, theCommonwealth as an owner, lessor or lessee of land can, through no action by theCommonwealth, be exposed to risk of liability for pollution by a third party (e.g. fromcontamination migrating from an adjoining property, from the illegal dumping of waste orpollution caused by a licensee).

For Commonwealth interagency transfers, Defence may consider engaging the servicesof an accredited Contaminated Land Auditor, or Technical Advisor (for low riskdivestments), to provide independent assurance that the site has been appropriatelyassessed and is suitable for the agreed future land uses.

For transfer or divestment of Commonwealth land to the States, Territories or localgovernment agencies, planning authorities will consider the contamination status of landwhen assessing applications for development of land. Where the audit system applies,the planning authorities will use Environmental (Contaminated Land) Auditors to provide areport on the suitability of land for its proposed use. In some jurisdictions, planningauthorities may note on the title that a site was formerly contaminated or has beenremediated. In these situations, it is at the discretion of the government agency acquiringthe land as to whether an Auditor is appointed; it is not a requirement of Defence at thetime of transaction.

For transfer or divestment of Commonwealth land to a third party (e.g. developer, privatebuyer or other non-government entity), The Contract of Sale (the Contract) will requirethat the Purchaser satisfies themselves that they have either undertaken their own duediligence, or are satisfied with the information contained in Defence due diligencematerials. The divestment process would generally involve a Stage 1 PSI and / or Stage 2DSI which is then referred to in the contract. For higher risk property sales, where forexample there is known significant contamination, Defence may involve of an accreditedEnvironmental (Contaminated Land) Auditor to provide independent assurance that thesite has been appropriately assessed.

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3. Projects and Contamination3.1 Defence Projects Overview

Defence maintains a large property portfolio and engages in a range of simple to complex,property acquisitions, property leasing (as Lessor or Lessee) activities, redevelopments anddivestments to support operational capability. Risks associated with these activities include:

Health Safety & Environment (HSE) Risk – Historical site activities can causecontamination which depending on the nature, extent and concentration of thecontaminant and the exposure pathway may pose a human health risk to future site users,particularly where the site changes to a more sensitive land use (e.g. commercial torecreational or residential).

Commercial Risk – Entering into a property acquisition, divestment or lease agreementwithout having undertaken some level of environmental due diligence may exposeDefence to a future clean-up liability and/or reputational risk.

Defence Capability – Project delays and remediation costs associated with managingunexpected contamination during property re-development can have a significant impactto Defence capability.

3.2 Case Studies

Case studies are provided below to highlight the contamination risks related to the acquisition,leasing, redevelopment and divestment of Defence land. These case studies highlight thepotential risks, management measures and sources of further information available to addressthese contamination issues.

These case studies are hypothetical examples only and are not based on actual events.

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3.3 Case Study 1: Acquisition of a property where contaminationexists

3.3.1 Scenario

Defence (buyer) was negotiating the acquisition of a site with a StateGovernment entity (vendor) for use as a Close Training Area. As partof the acquisition process, Defence commissioned a Stage 1 DSI andStage 2 DSI which identified a significant number of legacy wastesites within the property. The legacy waste sites, which were bothburied and exposed, contained fill, burnt car bodies and hazardousbuilding materials (e.g. asbestos fragments).

The subsequent Remediation Action Plan objective was to make thesite suitable for its ongoing commercial/industrial land use and toinform the preparation of a remediation cost estimate. The costs forremediation of the legacy waste sites was estimated at $3M and thisvalue was used to negotiate a reduction in the purchase price.

3.3.2 Risks

Commercial Risk – Entering into a property transaction (i.e. leasingor purchase), having completed an appropriate level of environmentaldue diligence, allows Defence, and the Lessee/Vendor, to understandthe potential clean-up cost (contingent liability) that Defence mayneed to carry into the future and any remedial actions required tomake the site suitable.

In addition, when an appropriate contamination assessment isundertaken, the findings/information can be used in the negotiation ofthe purchase price and in the planning of future Defence or lessee activities or the developmentof the acquired property.

HSE Risk – Without appropriate site assessment to delineate contamination, site activities mayhave commenced in the legacy waste areas resulting in the exposure of Defence personnel orcontractors to site contamination.

3.3.1 Key considerations and management measures

Does the vendor have any previous environmental and/or contamination assessments forreview and do these reports identify the presence, nature and extent of contamination inaccordance with Defence due diligence requirements?

What is the contamination status of the site and is it suitable in its current condition for theproposed Defence activity?

If contamination exists, has it migrated and is it impacting off-site?

If contamination exists, can a remediation cost estimate be prepared, and used innegotiation of the purchase price? This work might be commissioned by Defence, thevendor or a combination of both.

3.3.2 More information

GEMS EFM – CSR

Environment and Sustainability Manager (ESM).

Checklist for Property Acquisition (Appendix A).

Why is this an issue?Environmental due diligenceprior to site acquisitionreduces the potential forexposure of Defencepersonnel to a human healthrisk and any on-goingcommercial liability.

How can I manage it?Prior to acquiring a propertyundertake an appropriatelevel of environmental duediligence.

More information Checklists in Appendix A Annex D – Legacy Waste

Sites ESM GEMS EFM – CSR

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Annex D Legacy Waste Sites.

3.4 Case Study 2: Leasing of a Defenceproperty

3.4.1 Scenario

A former Defence administration building, in a regional town centre,was identified as being suitable for refurbishment and use as arecreation/educational facility.

Following refurbishment, Defence as the lessor, entered into a leaseagreement with a private educational services provider as the Lessee.Defence and the lessee had a number of lease agreements nationally.

As part of an organisation-wide risk management exercise the lesseecontacted Defence six months into the lease period to requestinformation about former site uses for all of their Defence leased sites.

Defence undertook a Stage 1 PSI, with limited sampling, and identifiedlow-level contamination (associated with lead-based paint) in thesurface soils associated with a number of the buildings.

Defence undertook additional landscaping and building rectificationworks and provided alternative accommodation to the Lessee whilst therectification works were undertaken.

3.4.2 Risks

HSE Risk – Even in an urban setting historical site activities can cause contamination whichmay pose a human health risk to future site users; particularly where the site use changes to amore sensitive land use (i.e. commercial to educational / residential).

Commercial Risk – Entering into a property transaction (i.e. leasing or acquisition) withoutconducting an appropriate level of environmental due diligence may expose Defence, and theLessee/Vendor, to human health and/or commercial and reputational risks.


Is there existing relevant documentation such as Stage 1 PSI and/or a hazardous buildingmaterials survey/conditions report available that clearly identifies the presence/absenceof soil/groundwater contamination or hazardous building materials? If not, is a Stage PSIrequired?

Is a change in land use proposed for the site/property (for example transition fromcommercial to a recreational or residential land use)?

Is a baseline contamination investigation (e.g. soil and groundwater quality) required priorto leasing the site to inform development of any make good clauses?

Has Defence disclosed to the lessee what is known about contamination on the site andis the lessee’s intended use consistent with suitable future land uses given the status ofcontamination?


GEMS EFM – CSR

Checklist for Leasing Land (Appendix B)

Environment and Sustainability Manager (ESM)

Why is this an issue?Absent or inadequateenvironmental due diligenceprior to entering a leaseagreement may exposeDefence, or it’s Lessee, to ahuman health, commercialand/or reputational risk.

How can I manage it?Undertake an appropriatelevel of environmental duediligence prior to entering alease agreement.

More information Checklist in Appendix B GEMS EFM – CSR ESM

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3.5 Case Study 3: Site redevelopment and unexpected finds

3.5.1 Scenario

Construction of an engine-testing bay is proposed for a vacant siteadjacent to an active RAAF base runway. Construction is scheduledover eight weeks and has been compressed to meet testing andcommissioning timeframes for the new aviation asset.

A Defence contractor has been engaged to construct a concrete slabfor establishment of the engine-testing bay. Excavation works on thevacant land has identified waste material in the subsurface below theproposed slab footprint, including oil and grease containers, fragmentsof asbestos sheeting and exploded ordnance waste. The wastematerial is likely to be from historical uncontrolled filling.

Construction is halted whilst the health, safety and environmental risksare assessed and remediation is planned and implemented. Thisincreases project costs, adds two months to the construction scheduleand causes impact to Defence capability.

3.5.2 Risks

HSE Risk – Commencing design and construction activities withoutadequate characterisation of the ground conditions may exposeconstruction workers, and adjacent site users, to a human health risk.

Defence Capability Risk – The project delays and remediation costsassociated with managing unexpected contamination duringconstruction of a strategic asset can have a material impact to Defencecapability.


Is an Environmental Clearance Certificate (ECC) required?

Has a Preconstruction Contamination Assessment beenconducted to identify potential contamination issues within theconstruction footprint?

Is contamination likely to exist that would warrant a Stage 2 DSI (including sampling andanalysis) to define the extent of contamination relevant to the development? Cansampling be conducted to characterise the soil/fill quality prior to excavationcommencing? Has the GEMS EFM – CSR been reviewed?

Have appropriate disposal permits been obtained (where required) through the localregulatory framework if off-site disposal of excavated spoil/ wastes is required?

How will the movement of excavated material be tracked from its origin (e.g. RAAF Base)to its final destination (e.g. licensed landfill)? Are project waste tracking forms available?


Checklists for development of Defence Land (Appendix C)

GEMS EFM – CSR

Environment and Sustainability Manager (ESM)

DCMM Annex C Stockpiles and Reuse of Excavated Material

DCMM Annex D Legacy Waste Sites (Landfills)

Pollution Prevention Management Manual, Annex 1H - Solid Waste Storage and Handling

Why is this an issue?Inadequate characterisationof ground conditions cancause material projectdelays/cost overruns andaffect Defence capability.

How can I manage it?Prior to construction: Site investigations to

identify potentialcontamination issues.

Establishment ofremedial andcontaminationmanagement measures.

Early flagging ofpotential contaminationissues.

More information Checklist in Appendix C GEMS EFM – CSR ESM DCMM Annex C

Stockpiles DCMM Annex D Landfills PPMM Annex 1H Solid

Waste Storage andHandling

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3.6 Case Study 4: Divestment of a property wherecontamination exists

3.6.1 Scenario

The divestment of a vacant, surplus, Defence owned barracksproperty in the Northern Territory has been approved by Government.The divestment strategy commits to achieving an open market salewithin 12 months. An existing Stage 1 PSI report identified former fuelfacilities, historic building demolition sites and landfilling as potentialsources of contamination risk on the property. The divestmentstrategy proposes an “as is, where is” sale.

3.6.2 Risks

Commercial Risk – Entering into a property transaction (i.e. sale),having completed an appropriate level of environmental due diligence,allows Defence and the purchaser, to understand the potential clean-up cost (contingent liability) that the purchaser may need to carry intothe future, and any remedial actions required to make the site suitablefor future use.

In addition, when an appropriate contamination assessment isundertaken, the findings can be used in the negotiation of the saleprice.

HSE Risk – Without appropriate site assessment to delineatecontamination, site activities may result in exposure of future siteusers to contamination.


What is the contamination status of the site and is it suitable inits current condition for the proposed future use?

Stage 2 DSI investigation works should occur outside of the wet season in the NorthernTerritory. Timing of the works will need to be considered in the divestment strategy.

If contamination exists, has it migrated and is it impacting off-site?

Consideration shall be given to asbestos in soils (ASBINS) due to the prior land use.What will be the best strategy to manage in soils?

If contamination exists, can a remediation cost estimate be prepared, and used innegotiation of the sale price? This work might be commissioned by Defence, thepurchaser or a combination of both.

Does Defence hold relevant information on the contamination status of the land whichshould be disclosed to the Purchaser?


GEMS EFM – CSR

Environment and Sustainability Manager (ESM).

Checklist for Property Divestment (Appendix D).

Why is this an issue?The presence or extent ofcontamination may limit theintended or potential futureuse and sale price of theproperty.Absent or inadequateenvironmental due diligenceprior to divestment mayexpose Defence or thepurchaser to a humanhealth, commercial and/orreputational risk.

How can I manage it?Prior to divesting a propertyundertake an appropriatelevel of environmental duediligence.

More information Checklists in Appendix D RESO GEMS EFM – CSR

Why is this an issue?The presence or extent ofcontamination may limit theintended or potential futureuse and sale price of theproperty.Absent or inadequateenvironmental due diligenceprior to divestment mayexpose Defence or thepurchaser to a humanhealth, commercial and/orreputational risk.

How can I manage it?Prior to divesting a propertyundertake an appropriatelevel of environmental duediligence.

More information Checklists in Appendix D ESM GEMS EFM – CSR

4. Contamination Risk and Management4.1 Overview of risk management

As detailed in Section 3 there are a number of critical contamination managementconsiderations that should be integrated into the stages of the capability and asset life cycle.

Where contamination on a property is confirmed or is considered likely, an intrusive Stage 2 DSIis usually warranted to assess the level of risk and liability. The types of contaminationassessment to be considered at each stage of the capability life cycle are detailed further in thesection below.

Checklists for the various stages of the capability and asset life cycle are provided inAppendix A to D. Where required, DCARM is available to assist in reviewing the suitability of thecontamination risk management documentation prepared as part of property transactions.

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Figure 4-1 Capability & Asset Lifecycle – Contamination Management

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4.2 Acquisition

4.2.1 General

When acquiring property, Defence should undertake a level of contamination assessmentduring the due diligence process that is commensurate with the risk. The appropriate level ofassessment will depend on a number of factors including the likelihood that contamination ispresent, the nature of the contamination and the sensitivity of the proposed future use. IfDefence is acquiring a site with potential contamination it is advisable to quantify the extent andnature of contamination to inform an understanding of the potential contamination liabilities thatmay impact the value and future use of the site.

All property acquisition activities must be conducted with consideration of:

The risk of contamination from current and past uses of the property or any adjacentproperty, and its likely nature and extent.

The location of the property with respect to potential sensitive receptors (e.g. residentialcommunities, schools, waterways or groundwater resources).

A checklist for Property Acquisition is included in Appendix A and provides a list of potentialcontamination issues that should be considered when acquiring a property.

4.2.2 Types of Assessment

Contamination assessments can range from a desktop review, Stage 1 PSI that includes a siteinspection, and possibly limited sampling, to a Stage 2 DSI that involves intrusive environmental(e.g. soil and groundwater) sampling.

An in-house desktop review or Stage 1 PSI is generally appropriate for a greenfield or low risksite (e.g. small residential) with no known potentially contaminating historic uses. If the site orsurrounding sites have been subject to activities that may cause contamination, for exampleunderground storage tanks or demolition of a building containing hazardous building materials(e.g. asbestos, lead paint), a Stage 2 DSI may be warranted.

When acquiring a property, Defence should determine whether previous contaminationassessment work has been undertaken at the site and, if so, the reports should be obtainedfrom the vendor and reviewed.

Depending on the level of contamination risk, vendor due diligence reports or contaminationreports commissioned by the vendor should not be solely relied upon as these reports may belimited in scope. In some cases, a further environmental investigation funded by Defence maybe warranted.

Independent review of any assessment reports can be sought from a member of the Directorateof Contamination Assessment, Remediation and to verify suitability of the land for intendedfuture use.

Further guidance on the type of assessments is provided in the Defence ContaminationManagement Manual – Annex B.

4.2.3 Accredited Environmental (Contaminated Land) Auditor

In some instances, Defence may engage an Accredited Environmental (Contaminated Land)Auditor or TA to obtain a formal opinion as to a site’s contamination status prior to acquisition.

Refer to Section 2.2 for further background on Accredited Environmental (Contaminated Land)Auditors.

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4.3 Development

4.3.1 General

Defence has a well-defined site selection process for guiding development of Defence land:

http://www.defence.gov.au/estatemanagement/lifecycle/SiteSelection/Default.asp

The contamination management principles that apply to development of a Defence site aresimilar to those described for acquisition (Section 3.3.2) or the leasing of property (Section 4.2),however there will be a greater reliance on Defence internal procedures and information relatingto the contamination status of the site, e.g. GEMS EFM – CSR.

The user must consider all the issues that are identified in the Checklist for Development ofDefence Land (Appendix C) when Defence land is being altered or redeveloped for ongoinguse. Consideration of the National Waste Policy must be included in scoping where anyredevelopment may generate waste materials (eg demolition to cut/fill and stockpiling).

Early consideration of contamination issues during the site selection process is important toidentify whether the land is suitable for its proposed use. This includes consideration of theusers of the land and surrounding areas.

The following information must be identified early in the development planning process:

Timeframes – there may be additional assessment or remediation work required beforeconstruction can commence.

Development Plan – certain areas of a contaminated site may have specificmanagement requirements. For example, if contaminated soil is retained on site it mayneed to be enclosed with capping, paving or concrete.

Building Design – the effects of contamination may need to be considered in buildingdesigns and material selection. For example, if shallow groundwater is contaminated thenbuilding features such as basements or footings may require specific attention duringdesign and construction, or if vapour contamination is an issue, the building may need toincorporate vapour barrier systems.

Development Feasibility – all of the above factors, and others that may arise, have thepotential to affect the overall feasibility of the development. If timing is a criticalcomponent of the decision to go ahead with a development then it is important to ensurethat contamination issues are considered early and are incorporated into the overalldevelopment plan.

4.3.2 Contamination considerations

In the context of contamination risk, key considerations for redevelopment of a site include:

What is the nature of the development?

When undertaking development or construction work on a contaminated or potentiallycontaminated site, it is important to understand how the development will be designed,constructed and used so that any contamination can be appropriately planned for and managedover the short term and the longer term.

What is known about the contamination status of the land?

The GEMS EFM – CSR should be referred to for available contaminated site records andassociated reports for Defence owned and leased properties.

A review of existing information and obtaining additional supplementary data to fill informationgaps, will assist Defence to understand the contamination status of a proposed developmentsite and enable Defence to determine if the proposed land use is appropriate and that users of

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the site will not be exposed to any unacceptable risks arising from contamination duringdevelopment or into the future.

Defence Project Managers must undertake an appropriate level of contamination investigation(Section 4.2.2) if no previous information is available via the GEMS EFM - CSR.

If contamination is present, will it change the planned development?

If the site is not suitable for its proposed use in its current state, then Defence may choose toselect another site (if possible) or choose to implement remedial or contamination managementactions to make the site suitable for its intended use.

4.4 Leasing (Operate and Maintain)

4.4.1 General

Defence should understand a property’s contamination status prior to the commencement of alease agreement (as a lessee or lessor) so that an appropriate risk allocation between Defenceand the Lessee/Lessor may be achieved.

The GEMS EFM – CSR should be referred to for available contaminated site records andassociated reports for Defence properties where Defence is a prospective Lessor.


Types of assessments associated with a lease agreement include:

A baseline contamination investigation prior to the commencement of the lease.

A contamination investigation at lease termination, or lease renewal, to compare the sitecondition against the baseline investigation.

As with property acquisitions (Section 4.2.2), investigations to inform lease arrangements mayrange from a visual inspection to an intrusive risk based, investigation including sampling andanalysis of soil and groundwater samples.

4.4.3 Defence as Lessor

Where Defence leases land to another party the following must be considered:

Does Defence know the contamination status of the site?

What are the proposed activities of the lessee (tenant) and are they compatible with thecurrent contamination status?

Does the lessee have adequate pollution prevention measures in place that areappropriate for the activities it intends to carry out at the site?

Should there be a requirement that the lessee notifies Defence in the event of any spillsor escapes of hazardous chemicals?

Should there be a requirement that the lessee undertake a baseline contaminationinvestigation/hazardous building survey prior to lease commencement and prior to expiryof the lease.

Should there be a requirement for the lessee to undertake remediation of anycontamination it causes or contributes to.

Understanding the contamination status of the land will enable Defence to:

Undertake full disclosure of known contamination to the lessee.

Avoid leasing land for uses or activities that are incompatible with the contaminationstatus of the property or which may present an unacceptable risk to Defence.

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Establish the baseline condition in which the site needs to be returned to Defence on theexpiry of any lease and agree on any associated make good clauses in the leaseagreement.

A detailed checklist for Leasing Land is provided in Appendix B.

If no site information is available via the GEMS EFM – CSR, or the regional Defence personnel,Defence should consider undertaking an investigation (Section 4.2.2).

It is important that the lease agreement specify how the site condition will be monitored andassessed, and how any identified contamination will be managed or remediated for the durationof the lease and to inform end of lease responsibilities, particularly where lease activities poseany risk of being a new source of contamination or of disturbing any existing contamination.

Defence will require the lessee to report, investigate and remediate any contamination it causesduring the term of the Lease.

Where lease clauses differ to standard clauses, they are to be subject to legal review andadvice.

4.4.4 Defence as Lessee

When leasing land from another party Defence must consider:

Is the contamination status of the site known?

Is the site suitable for the intended purpose?

Is there a requirement for Defence to return the site to pre-lease conditions?

Are there any regulatory or contractual restrictions on the use of the property or anyrequirements to notify in relation to spills or releases?

These considerations are important to enable Defence to:

Ensure that Defence capability is not limited or restricted by an incompatiblecontamination status.

Ensure that Defence can plan and obtain funding for any necessary remediation tofacilitate capability requirements.

Ensure that the liability status of the lessor and Defence as lessee are clearly establishedwhere contamination is known to occur.

Establish the baseline condition in which the property needs to be returned to the lessorupon cessation of the lease.

A detailed checklist relevant to when land is being leased by Defence for its own use is providedin Appendix B.

The suitability of the site for Defence’s proposed use and Defence’s ability to comply withenvironmental clauses in a lease may be affected if a site is contaminated or potentiallycontaminated.

The lease agreement may include environmental clauses such as the requirement to return thesite to pre-lease conditions as well as removal of infrastructure installed by Defence during thelease term. Any such clause must be subject to legal review so that Defence fully understandsthe risk allocation and generally it is preferable that such obligations reference specificenvironmental requirements (for example returning to a nominated land use) rather than beinggeneric and open to broad interpretation.

Defence should identify and maintain appropriate pollution prevention measures to reduce therisk of Defence activities causing contamination during the term of a lease. Specific technicalguidance for preventing pollution from common Defence activities is available within thePollution Prevention Management Manual (PPMM) for:

Annex 1A - Acid Sulfate Soils Management

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Annex 1B - Copper Chrome Arsenate Treated Timber

Annex 1C - Fire Fighting Foam Management

Annex 1D - Fuel and Chemical Storage and Handling

Annex 1E - Liquid Waste Storage and Handling

Annex 1F - Maintenance and Cleaning Activities

Annex 1G - Open Burning Grounds and Incineration

Annex 1H - Solid Waste Storage and Handling

Annex 1I - Stormwater Management

Annex 1J - Wastewater Treatment Plants

Annex 1K - Heavy Metals on Live Firing Ranges

Annex 1L – Routine Water Quality Monitoring

These guidance documents are available at:http://www.defence.gov.au/estatemanagement/Governance/Policy/Environment/Pollution/implementation.asp

4.5 Divestment

4.5.1 General

All Defence property divestments must be undertaken in accordance with the CommonwealthProperty Disposal Policy. The full policy is available on the Department of Finance website at:http://www.finance.gov.au/property/lands-acquisition/commonwealth-property-disposal-policy.html.When preparing Commonwealth property for market, Defence completes environmental duediligence activities having regard to its obligations under the Environment Protection andBiodiversity Conservation Act 1999 (Cth) (EPBC Act) and the National Environment Protection(Assessment of Contamination) Measure 1999 (Cth) (ASC NEPM). Due diligence activities mayinclude identifying the presence of heritage and biodiversity values and/or contamination (e.g.Stage 1/Stage 2 DSI). These due diligence assessments inform Defence’s divestmentstrategies and support disclosure to Purchasers.It is Defence practice to disclose known existing contamination through the provision of recentand relevant site assessment reports to prospective purchasers, through the provision ofinformation in the Contract of Sale for individual property transactions. The GEMS EFM – CSRshould be the starting point for accessing available existing data and reports associated with aDefence site.

Refer to Section 2.3 for Defence’s overarching principals for managing contamination risk in thecontext of a property transaction.

When divesting of a property, Defence should undertake a level of contamination assessmentduring the due diligence process that is commensurate with the risk. The level of assessmentwill depend on a number of factors including the likelihood that contamination is present and thesensitivity of the proposed future use or current/future surrounding uses. If Defence is divestingof a site with actual or potential contamination it is advisable to confirm the presence and toquantify the extent and nature of contamination to inform an understanding of the potentialcontamination liabilities that may impact the suitability for future uses and the divestmentstrategy.

All property divestment activities must be conducted with consideration of:

The risk of contamination from current and past uses of the property or any adjacentproperty, and its likely nature and extent

The location of the property with respect to potential sensitive receptors (e.g. residentialcommunities, schools, waterways or groundwater resources).

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A checklist for Property Divestment is included in Appendix D and provides a list of potentialcontamination issues that should be considered when divesting of a property.


Contamination assessments can range from a desktop review, Stage 1 PSI that includes a siteinspection, and possibly limited sampling, to a Stage 2 DSI that involves intrusive environmental(e.g. soil and groundwater) sampling.

An in-house desktop review or a Stage 1 PSI is generally appropriate for a greenfield or low risksite (e.g. small residential block) with no known potentially contaminating historic uses. If thesite or the surrounding sites have been subject to activities that may cause contamination, forexample underground storage tanks or demolition of a building containing hazardous buildingmaterials (e.g. asbestos, lead paint), a Stage 2 DSI is usually warranted to define the natureand extent of contamination on the Defence property.

When divesting of a property, Defence should determine whether previous contaminationassessment work has been undertaken at the site and the currency of any previousinvestigation. Additional contamination investigation may be warranted on a site if the existingreports were completed prior to the 2013 revision of the ASC NEPM.

Where no investigations have been conducted it may be possible to negotiate the conduct of anenvironmental investigation jointly with a prospective vendor, particularly in the case of a prioritysale to a State or Territory government. However, the Commonwealth should not relyexclusively on vendor due diligence reports or contamination reports that are commissionedonly by the vendor as those may be limited in scope.

Further guidance on the type of assessments that can support property divestments areprovided in the Defence Contamination Management Manual.

4.5.3 Accredited Environmental (Contaminated Land) Auditor

Independent review of any vendor investigation reports can be sought from an AccreditedEnvironmental (Contaminated Land) Auditor or a TA on the Defence Environment and HeritagePanel (DEHP). These specialists can verify the suitability of the investigation for establishing ifthe site is suitable for current/intended land uses and/or to verify if the land is suitable for itsintended future land uses.

In some instances, Defence may engage an accredited Environmental (Contaminated Land)Auditor to obtain a formal opinion as to a site’s contamination status prior to divestment. Thismay be undertaken to provide information to market or may be advisable when divesting of landthat will be developed for sensitive land uses, that was subject to contaminating activities andwhich Defence has remediated prior to sale.

Refer to Section 2.2 for further background on Accredited Environmental (Contaminated Land)Auditors.

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4.6 Mandatory Requirements

As a matter of policy, the following steps are expected to be taken for the management of actualor potentially contaminated land associated with property transactions, redevelopment anddivestment:

1. Consideration of contamination risk and management at each stage of the Asset Life Cycle,namely Planning, Acquisition, Development, Operation and Divestment.

2. Review of the GEMS EFM – CSR.

3. An appropriate level of contamination assessment as part of the due diligence process forthe purchase or divestment of land by Defence to identify contamination and to quantify theextent and nature of contamination and any associated liabilities.

4. Consideration of whether there are any approvals in respect of the site that relate tomanagement of contamination (e.g. ECCs) and conduct work in accordance with therequirements of any ECCs.

5. Use of checklists for property acquisition (Appendix A), property leasing (Appendix B),property development (Appendix C) and divestment (Appendix D).

6. Where Defence is the lessor of a site, establishment of a baseline condition for the site(visual or via collection of environmental information and data) and inclusion of a “makegood” clause in the lease agreement, where appropriate.

7. Engagement of an accredited Environmental (Contaminated Land) Auditor to make adetermination on the suitability of the site for its intended future use prior to its divestmentfor higher risk property sales, including those that are remediated prior to sale and on theopen market.

8. Checking whether statutory disclosures of contamination must be made in the jurisdictionthat applies to a property divestment.

9. Disclosure to prospective purchasers of known property contamination prior to entering alease or divesting of a Defence property, e.g. provision of recent and relevant siteassessment reports to prospective purchasers.

10. Legal review of all property acquisition, lease and divestment agreements.

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5. Data and Reporting5.1 GEMS EFM – CSR

Data and reports generated as part of the investigation and assessment of contamination mustbe captured in the GEMS EFM – CSR.

The GEMS EFM – CSR is the database used to capture environmental information across theDefence estate, and provides access to historical contamination investigation reports forDefence properties. Contaminated site records are geo-referenced and they can be accessedby Defence personnel or contractors with Defence Restricted Network (DRN) access.

Contractors/Consultants working on behalf of Defence must provide reports, updated andcompleted GEMS Data Load Tool (GDL) (for new or existing CSR’s), CRAT, ESdat and GISfiles relating to contamination to their Defence point of contact, Project Manager or ESM whowill be responsible for auditing and validating submissions and ensuring the upload ofinformation into the GEMS EFM – CSR.

Refer to the Defence Contamination Management Manual, Annex L – Data Management.

5.2 Geographic information systems

All mapping Geographic Information System (GIS) data is required to be provided to Defence inthe National Spatial Information Management System (NSIMS) metadata format. The DefenceNSIMS metadata tool is available through an online search and on DEQMS.

Refer to the Defence Contamination Management Manual, Annex L – Data Management.

5.3 Contamination Liability Reporting

Defence is obliged to include in its financial reporting the costs or provisions that should bemade or its liability for contamination in accordance with AASB 137 – Provisions, ContingentLiabilities and Contingent Assets. Defence uses a contamination liability decision tool to provideguidance in identifying whether Defence has a legal or constructive obligation to manage and/orremediate contamination for properties that have recorded contaminated site records andwhether Defence is likely to incur a cost because of that obligation. Financial provisions orcontingent liability may be recorded for properties that are owned and operated by Defence,leased or occupied by Defence or that Defence leases to others. Defence does not have ageneral legal obligation to remediate contamination on land that it disposes, however, theDefence Project Manager must consider if a provision or contingent note should be recorded forcontaminated sites that are disposed, in consultation with DCARM and legal advice.

For example, a provision should be recorded where:

Defence has contractually agreed to accept liability for contamination on land that isdisposed (e.g. where Defence has agreed in a sales contract to conduct remediation or topay for or indemnify a purchaser for costs of remediation). The period for liability will bewhat has been agreed.

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6. ReferencesDefence Estate Quality Management System (DEQMS), Estate & Infrastructure Life CyclePhases [http://www.defence.gov.au/estatemanagement/lifecycle/default.asp].

Defence Pollution Prevention Management Manual and Annexes:

Annex 1A - Acid Sulfate Soils Management

Annex 1B - Copper Chrome Arsenate Treated Timber

Annex 1C - Fire Fighting Foam Management (not yet finalised)

Annex 1D - Fuel and Chemical Storage and Handling

Annex 1E - Liquid Waste Storage and Handling

Annex 1F - Maintenance and Cleaning Activities

Annex 1G - Open Burning Grounds and Incineration

Annex 1H - Solid Waste Storage and Handling

Annex 1I - Stormwater Management

Annex 1J - Wastewater Treatment Plants

Annex 1K - Heavy Metals on Live Firing Ranges

Annex 1L – Routine Water Quality Monitoring

NEPC 1999, National Environment Protection (Assessment of Site Contamination) Measure1999 (Cth) (NEPC 1999, 2013 amendment) [http://nepc.gov.au/nepms/assessment-site-contamination].

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Appendices

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Appendix A – Checklist for Property Acquisition

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Checklist for Property Acquisition

Site History1. Assess the likelihood of contamination being present at the site.

Is it possible that the property was used for activities that caused contamination? (e.g.above or below ground fuel storage, waste disposal, chemical storage/manufacture, oldcattle/sheep dips etc.)

What are the adjacent land uses and is it possible activities on these sites are, or havebeen, a source of contamination?

Have any contamination assessments been undertaken? If yes what are their findings?

If an assessment has been undertaken, is it adequate (e.g. what was the scope of theassessment)?

Has a historical title / land and dangerous goods registers searches been conducted for thesite, as it may contain notification of contamination?

Is the site listed on a State contaminated sites register? e.g. the Contaminated LandRegister (CLR) or Environmental Management Register (EMR) in QLD.

2. Are there any contamination management controls over the land?

For example, does a Site Management Plan (QLD) or Environmental Improvement Plan(ACT) or Environmental Improvement Program (TAS) or Remediation Order (NSW)Pollution Abatement Notice or Clean Up Notice (VIC) apply to the site?

3. Ascertain from the vendor or relevant environmental agency whether any of the following havebeen issued or apply to the site (noting that the information available varies betweenjurisdictions):

Clean-up notices

Prevention notices

Prohibition notices

Investigation orders

Remediation orders

Environmental authorities

Environmental protection orders/notices

Environmental performance agreements

Environmental improvement programs/plans

Environmental (or Site) Audits

Notice on title

This checklist provides a list of potential contamination issues that should be considered whenDefence is procuring a property. This section should not be considered as legal advice - for specificlegal issues Defence legal should be consulted.The list is not exhaustive and may require technical support or advice to complete. For support,please contact the Directorate of Contamination Assessment, Remediation and Management(DCARM).

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Environmental setting1. Do the environmental characteristics of the site increase contamination risks (e.g. permeable

surface soils/geology, shallow groundwater, adjacent to a sensitive water body) or renderremediation difficult (e.g. site access and locality) if contamination is identified?

Suitability and Defence capability1. Does the presence of contamination limit future uses of the property?

This information will inform the strategic planning and property management planningprocesses.

Some types or levels of contamination may be acceptable for some land uses. If the propertycontains areas of contaminated soil, is the property still able to be used for its currentdesignated use, or any future uses without compromising safety or the environment?

2. Will remediation work need to be carried out prior to any purchase? If so what are theimplications for development and use of the property?

3. Will validation or approvals need to be procured from the State or Territory or referral under theEPBC Act to authorise use of the property?

4. Is the land subject to an environmental audit overlay under the State/Territory legislation (e.g.VIC, SA and NT) which requires an audit to be obtained if a land use change or certain worksare proposed?

5. Does a site management plan (QLD) or environmental improvement plan (ACT) or program(TAS) or conditions resulting from an environmental (contaminated land) audit (VIC) exist orneed to be prepared and approved to carry out existing or future uses of the property?

6. Has any government agency (Council or environmental agency) advised on the suitability of theland for any particular uses having regard to the contamination? Have any site suitabilitystatements or notices been issued (e.g. Section 49 notices on title in NSW)?

7. Are there any development approval conditions, including under the EPBC Act, which relate tocontamination (such as a requirement for an Environmental or Site Audit prior to constructioncommencing)?

Liability1. If a site is contaminated, has the liability for the contamination been fully valued and taken into

account in the purchase price?

2. Is there a need for any particular clauses in the purchase contract relating to liability fromexisting contamination including possible management and remediation requirements? Inparticular Defence should consider the following matters before it signs a contract:

Is Defence satisfied that sufficient investigations of contamination have been completed?What is the scope of the investigations completed, what do the investigations conclude andhow certain are the conclusions? Has there been an environmental audit that certifies thesuitability of the land for use?

If Defence is not satisfied, will it or the Vendor undertake those investigations beforesettlement? Is there sufficient time for an environmental audit?

Will the contract allow Defence to undertake pre-settlement investigations ofcontamination? In that case, if contamination is found, will Defence want to proceed withthe purchase?

Who is to bear the risk of any contamination (the Vendor or Defence?);

Are any indemnities from the Vendor required? What warranties does Defence require fromthe Vendor? Will a warranty or indemnity adequately manage the risk to Defence ofcontamination?

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Is the land subject to a Financial Assurance (e.g. QLD), and is this adequate to carry outworks that might be required? In this case what are the arrangements for release of thatFinancial Assurance?

Will the vendor conduct any necessary remediation prior to settlement? If so what conditionof the land will Defence accept?

Are there any risks of contamination to adjoining property or sensitive environments?

Who is responsible for obtaining any necessary approvals for any remediation works?

DisclosureThe following statutory disclosure requirements are a guidance only. The requirements are subject tolegal review:

1. QLD: The Vendor is required to give notice in writing before contract is executed where the landis registered on the Environmental Management Register (EMR) or the Contaminated LandRegister (CLR) and provide details of any site management plan for the land where applicable.The Vendor is also required to notify the purchaser of any notices Defence has received thatrelate to the following:

a show cause notice;

notice to conduct or commission a site investigation;

remediation or clean up notice;

notice that a site management plan is being prepared or is required to be prepared for thesite; and

notice that the land is the subject of an order under s458 Environmental Protection Act1994 (Qld) ("EP Act (QLD)") (order to enter land to investigate or conduct work). (s408, EPAct (QLD)).

2. NSW: A Vendor is required to attach prescribed documents to the contract of sale. TheConveyancing (Sale of Land) Regulation 2017 prescribes that a property certificate be includedwith the contract of sale. This certificate will disclose the following as at the date the certificate isissued:

whether the land is significantly contaminated land

whether the land is subject to a management order

whether the land is the subject of an approved voluntary management proposal

whether the land is subject to an ongoing maintenance order

whether the land is the subject of a site audit statement.

3. NT: An owner who is divesting of land that is subject to a pollution abatement notice must,before selling the land, notify in writing the vendor; and the EPA (s112 Waste Management andPollution Control Act 1998 (WMPC Act).

4. VIC: Defence is to be notified by the Vendor if the Vendor has received specific notices (i.e. aPollution Abatement Notice) (s60A Environment Protection Act 1970 (EP Act (VIC)). A vendorunder a contract of sale of land must give the purchaser, before signing the contract, a signedstatement that includes information prescribed in the Sale of Land Act 1962. Although thelegislation does not expressly prescribe that the statement is to include information regarding alisting on the Register of Contaminated Sites, it would be prudent for Defence to disclose alisting on the Register.

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5. WA: Defence is to be notified by the Vendor where an environmental protection notice affectsthe land (s67 Environmental Protection Act 1986 (EP Act (WA)) and notice at least 14 days priorto completion where the land is classified as contaminated - remediation, required,contaminated - restricted use, remediated for restricted use; or that is the subject of aninvestigation notice, a clean-up notice; or a hazard abatement notice. (Section 68 ContaminatedSites Act 2003).

6. SA: The vendor of land must, at least 10 clear days before the date of settlement serve astatement in the form prescribed in the Land and Business (Sale and Conveyancing) Act 1994.The form will disclose to the purchaser environmental information relating to the property,including the following:

clean-up order that is registered in relation to the land

clean-up authorisation that is registered in relation to the land

site contamination assessment order that is registered in relation to the land

site remediation order that is registered in relation to the land

notice of declaration of special management area in relation to the land (due to possibleexistence of site contamination)

notice of prohibition or restriction on taking water affected by site contamination in relation tothe land

After acquisition and as outlined above, Defence should consider whether it has any obligations tonotify the State environmental agency of any contamination it has identified in the acquisition process.

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Appendix B – Checklist for Leasing Land

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Checklist for Leasing Land

Defence as lessorThe following relates to scenarios where land is leased from Defence.

Has a baseline assessment been completed?

Does Defence know the contamination status of the property?

Information on how to determine the contamination status of a Defence property via aStage 1 PSI or Stage 2 DSI, as required depending on the risk profile of the property.

Does the lease agreement ensure that the tenant is responsible for contamination itcauses during the term of the lease?

Does Defence know the prospective lessee’s credit rating?

This is important to ensure that lessee will be able to cover any clean-up costs that theymay be responsible for prior to termination of the lease. Is security warranted?

Have specific disclosure requirements for the relevant State or Territory been taken intoaccount?

It is prudent for Defence to disclose to the Lessee any information it holds aboutcontamination of the leased land.

The following statutory disclosures are a guideline only:

1. QLD: Defence is required to give notice in writing to the Lessee if the land is registered on theContaminated Land Register (CLR) (s407, EP Act (QLD)).

2. NT: Defence is to notify the lessee where a relevant instrument affects the land (e.g. a pollutionabatement notice) (s112 WMPC Act).

3. VIC: Defence as lessor is to notify the lessee of receipt of specific notices (i.e. pollutionabatement notice) (s60A EP Act (VIC)).

4. WA: under the EP Act (WA) Defence is to notify the lessee where an environmental protectionnotice affects the land (s67 EP Act (WA)) and notice at least 14 days prior to completion of theleasing transaction, where the land is classified as contaminated - remediation, required,contaminated - restricted use, remediated for restricted use; or that is the subject of aninvestigation notice, a clean-up notice; or a hazard abatement notice. (Section 68 ContaminatedSites Act 2003).

This checklist contains a list of potential issues, constraints and opportunities related tocontamination, for consideration for leased properties. This section should not be considered aslegal advice – for specific legal issues Defence legal should be consulted.

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Defence as lesseeThe following relates to scenarios where Defence leases land from another party:

Does Defence know the contamination status of the property?

Information on how to determine the contamination status of a Defence property via aStage 1 PSI or Stage 2 DSI is provided in the contamination toolbox.

Does the Defence activity to be conducted on the leased property have the potential tocause contamination? How is this risk to be managed?

This is important for contamination management planning to limit any Defence costs forclean up on termination or completion of the leased land.

Is a baseline assessment required before occupation?

What are the requirements for disclosure, investigation of contamination and remediationduring the term of the lease and prior to expiry of the lease term?

Have specific disclosure requirements for the relevant State or Territory been taken intoaccount?

The following statutory disclosures are a guideline only:

5. QLD: The lessor is required to give notice in writing to the Lessee if the land is registered on theContaminated Land Register (CLR) (s407, EP Act (QLD)).

6. NT: Defence is to notify the lessee where a relevant instrument affects the land (e.g. a pollutionabatement notice) (s112 WMPC Act).

7. VIC: The Lessor is to notify the lessee of receipt of specific notices (i.e. pollution abatementnotice) (s60A EP Act (VIC)).

8. WA: under the EP Act (WA) the Lessor is to notify the Defence where an environmentalprotection notice affects the land (s67 EP Act (WA)) and notice at least 14 days prior tocompletion of the leasing transaction, where the land is classified as contaminated -remediation, required, contaminated - restricted use, remediated for restricted use; or that is thesubject of an investigation notice, a clean-up notice; or a hazard abatement notice. (Section 68Contaminated Sites Act 2003).Also, note that in some States and Territories there is a duty tonotify the relevant environmental agency of any actual or threatened environmental harm or theexistence of contaminated land or contaminated groundwater or free phase hydrocarbon ispresent. This duty may arise after the site has been leased.

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Appendix C – Checklist for Development of DefenceLand

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Checklist for Development of Defence Land

Review of available contamination information1. Check Defence records and databases for contamination information relating to the proposed

development site:

Is the site listed on the GEMS EFM – CSR?

Does the GEMS EFM – CSR entry indicate potential or identified contamination?

Is a Stage 1 PSI or Stage 2 DSI required?

Has a Stage 1 PSI or Stage 2 DSI been undertaken?

Is there chemistry data available in the Defence ESdat?

Does the Stage 1 PSI or Stage 2 DSI recommend additional work?

If further work is required, what is the timeframe?

2. Check publically available records to identify whether adjoining land may have a potentialsource of contamination that could impact Defence land.

3. Are there any Defence management controls over the land?

Is there a limitation on future uses of the site?

Is there a contamination management plan in place for the site?

Are there any ECC's that relate to contamination management for the site?

Are there any EPBC Act approvals relevant to management of contamination on the site?

Development characteristics

4. What is the nature of the proposed development?

Residential? Low density or high density?

Commercial? e.g. office space or service providers on site (e.g. shops)

Industrial? e.g. manufacturing or other activities such as maintenance workshops.

Other Defence-specific land use scenario?

Will it involve basement or other sub-surface facilities?

Impact of contamination on development plan

5. Does the presence of any identified contamination prevent or hinder the proposed usedfollowing development?

Have the appropriate soil, groundwater or vapour levels been identified from the relevantguidance?

This checklist provides a list of potential contamination issues that should be considered when Defenceis considering redevelopment of an existing Defence site. This section should not be considered aslegal advice – for specific legal Defence legal should be consulted .The list is not exhaustive and may require technical support or advice to complete. For support, pleasecontact the Directorate of Contamination Assessment, Remediation and Management (DCARM).

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Does the Stage 1 PSI or Stage 2 DSI indicate a potential risk to health of site users?

Will any remediation work (Stage 3 and 4) need to be carried out prior to or in conjunctionwith development? If further work is required what is the timeframe?

If remediation work is required what approvals are required? Consider whether EPBC Actapproval is required. Consider if an ECC is required.

Consider whether any notifications required under Statute.

Consider whether a referral is required under the EPBC Act.

6. Does the presence of contamination mean the development plan or design needs amendment?

Are there areas of contaminated soil that must not be disturbed, or that must remaincovered with paving?

Is there groundwater contamination present that may affect built structures such asbasements or foundations?

Is there groundwater contamination present that may produce a vapour risk in buildings onsite?

Is the development itself likely to impact migration pathways or exposure of other land orwaters to contamination?

7. Will any contamination management actions impact project timeframe?

8. Will the construction management plan need to include contamination management items?

Pollution prevention

9. Will the proposed development include any infrastructure that has potential to cause pollutionduring its life?

Fuel tanks or other chemical storage?

Firing range?

Workshops & maintenance?

Airfields?

Fire Training?

The above are common examples of Defence activities that may cause pollution/contamination.

10. Have pollution prevention principles been adequately incorporated into the developmentdesign?

For guidance on management of Defence activities to prevent pollution refer to the PollutionPrevention Manual (hyperlink) and Guidance Documents (hyperlink).

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Appendix D – Checklist f