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Introduction and First Reading

Bill introduced, on motion by Dr J.M. Edwards (Minister for the Environment and Heritage), and read a first time.

Second Reading

DR J.M. EDWARDS (Maylands - Minister for the Environment and Heritage) [12.23 pm]: I move -

That the Bill be now read a second time.

The history of European settlement in Western Australia has been founded on the development of the State's natural and agricultural resources. To support the agricultural, pastoral and resource extraction industries, a wide range of transport, infrastructure, chemical and heavy industries have been established. These industries have been of enormous benefit to the State, but unfortunately they have left a legacy. Spills, leaks and the disposal of wastes both on-site and off-site have led to a range of contaminated sites as diverse as the industries that created them.
Members will be aware of the Environmental Protection Amendment Bill that was recently passed by the House. That Bill has a number of new provisions to help ensure that no new contaminated sites are created from today's or tomorrow's industries. However, it is important that we have the appropriate tools to deal with the contaminated sites bequeathed to us by yesterday's industries. Presently there is a lack of information and we simply do not know which sites are contaminated. If contamination is suspected, there are inadequate powers to require the contamination to be investigated and cleaned up, and it is not clear who bears that responsibility. In the main, if a site is found to be contaminated, the present owner bears the cost and liability. The principle of buyer beware, or caveat emptor, applies. Even if it is known who caused the contamination, there is no power to require that person to accept responsibility consistent with the principle of polluter pays.

The Contaminated Sites Bill addresses all these deficiencies. It provides for the reporting, investigation and remediation of contaminated sites. It establishes a free public database of contaminated sites and a hierarchy of responsibility for remediation to ensure that, as far as possible, the polluter pays. It has powers to require action to be taken to investigate and clean up contamination. Under the Bill it is an offence to fail to disclose to a purchaser that a site is known to be contaminated. An independent contaminated sites committee will resolve disputes about the responsibility for remediation and appeals against decisions of the director general. A system of accredited contaminated sites auditors will be established. With this new suite of powers the Government will be able to ensure that all known and suspected contamination is identified, prioritised and remediated if it poses a risk to human health and the environment. The Bill has been developed over a number of years with extensive consultation. Much of it was drafted by the previous Government, and I look forward to the support of the Opposition for this innovative and long awaited legislation.

I will now scan through the Bill to highlight its key features. The object of the legislation, as outlined in clause 8, is to protect human health, the environment and environmental values by providing for the identification, recording, management and remediation of contaminated sites. One might ask: what is a contaminated site? It is important that the definition be broad enough to capture all forms of contamination that pose a problem, but not so broad as to lead to unnecessary bureaucracy where there is no risk. Therefore, the Bill uses a definition of "contaminated" in clause 4 that is risk based. It is not sufficient that a substance is present above a trigger level; there must also be some credible pathway by which it could pose a risk to human health or the environment. Therefore, clause 4(1) provides that -

"contaminated", in relation to land, water or a site, means having a substance present in or on that land, water or site at above background concentrations that presents, or has the potential to present, a risk of harm to human health, the environment or any environmental value.

The phrase "human health, the environment or any environmental value" is consistent with the new wording in the Environmental Protection Act 1986 as amended by the Environmental Protection Amendment Bill 2002. Indeed, most terms in the Bill take their meaning from the Environmental Protection Act.
The definition uses the word "potential". Mr Speaker, I will explain why this word is needed. It is an important function of the Bill to regulate the clean-up of sites in preparation for a change of land use. For example, if it is proposed to use an old industrial site for a kindergarten, it is necessary to clean up to the proposed new use and the potential harm associated with that use. It would be completely inappropriate to have to wait until the kindergarten was established so one could say, "Now there is an actual risk of harm, children are actually at risk, so we can act to clean up the contamination." With such a broad definition of the word "contaminated", there are some matters that need to be specifically excluded, and the Bill allows for exclusions by regulation. Some proposed exclusions include salt-affected land and land upon which a toxic substance is present as a result of the use of a fertiliser, herbicide or pesticide in accordance with the regulations or the manufacturer's instructions.

Clearly, it would be inappropriate for all farms or termite-treated dwellings to have to be reported as contaminated sites because of past lawful use of pesticides. However, it is not intended to exclude contamination resulting from spillage or the manufacture of pesticides and fertilisers. Unexploded ordnance is also to be excluded by regulation, as it is managed by another process.

The definition is intended to include radioactive and biological contamination. The owner of contaminated land has certain responsibilities under the Bill, so the definition of "owner" is significant. The Bill assumes that where crown land has been vested in a local government or other management body, that body is the owner for the purposes of the Act. If the management body failed in its management duty and the land became contaminated, it is preferable that that body, rather than the State, should bear the cost of remediation. However, there could well be cases in which it is neither fair nor reasonable for the management body to bear all of the responsibility. The Bill provides that a management body may seek a ruling on responsibility from an independent contaminated sites committee under clause 27(3).

The Bill ensures that all sites that are known to be or suspected of being contaminated are promptly reported. It will be an offence if certain people do not report a site they know or suspect to be contaminated within 21 days. The people required to report sites are the owner or occupier, the person who knows or suspects that he has caused contamination, and a contaminated sites auditor engaged for the purposes of the Act. As soon as the Act comes into effect there will be a rush of reporting, and it will not be practicable for this 21-day time line to apply immediately. Therefore, there will be a six-month grace period from the commencement of the Act during which time the delayed reporting of sites will not be an offence.

The Department of Land Administration is responsible for a huge land holding on behalf of the State. It would be impossible for that department to review its whole land-holding and associated historical records within six months to ensure that all the sites known or suspected of being contaminated are reported. For those few bodies that have such large land-holding portfolios, clause 12 provides that the director general may approve a program for the identification and reporting of sites over a longer time frame. To prevent people from abusing the reporting process to cast an unwarranted shadow over someone else's land, the Bill makes it an offence to report a site maliciously or without reasonable grounds to suspect contamination. Once a site is reported, the director general investigates the report to confirm that there are grounds to suspect contamination. If the report proves to be groundless, the site is classified as "report not substantiated" and no further action is taken. If there are grounds to indicate possible contamination, the site is classified as "possibly contaminated - investigation required". Once a full investigation has been carried out, it should be possible to confirm whether the site is contaminated, and, if so, how seriously. The site may then be classified as contaminated, and listed on the public database.

There are appeals against the director general's classification decisions, and these are dealt with by the independent contaminated sites committee. The director general maintains records on all sites, and these are all accessible. For sites that have been reported, but for which there is no confirmed contamination, anyone with an interest in a site may, for a small fee, get a summary of records held on that site. For sites where contamination has been confirmed, there is free public access to the database maintained by the director general. Once contamination has been identified, the issue most likely to delay clean-up is a dispute over the responsibility for remediation. In other States this is left to the parties to resolve by mutual agreement or through the common law. As a result, there can be long delays, and money ends up being spent on legal fees instead of on making the contaminated land safe again. In those circumstances, as I have mentioned, it is generally not the polluter but the present owner of contaminated land who is most likely to end up paying.

The Bill tackles this difficult issue by introducing a hierarchy of responsibility. In terms of this hierarchy, from the date the Act comes into operation, the polluter generally pays for contamination it caused. When contamination was caused before the Act came into operation, there is a question of retrospectivity. The Bill provides that the polluter is responsible if the contamination was caused by an act that, at the time it occurred, constituted an offence or contravened a law or an authority given under a law. When the present owner acquired the land before the Act came into effect, knowing it to be contaminated, the Act presumes that the price of the land took into account the presence of the contamination, and so the new owner is the person responsible.

It is possible that someone who has purchased industrial land, intending to use it for that purpose, will later decide to change the land use to, say, residential. In some circumstances this may lead to extra remediation costs because of the proposed change of land use. In such circumstances, the owner who is changing the land use pays those extra remediation costs.

Clause 28 provides that under certain restricted circumstances, directors and related companies may become responsible if the company that caused the contamination is deliberately made insolvent to avoid responsibility for remediation. Clause 29 spells out the circumstances in which the State is responsible for remediation. In general, these are when the State caused the contamination, or failed in its administration of this Act to identify the contamination, or when no-one else is responsible - for example, when a site has been abandoned and the polluter cannot be found. In this latter case, the site is an orphan site, and the site may be acquired or a charge put on the land to recoup the costs of investigation and remediation.

Under clause 33, the minister is to establish a contaminated sites committee. The committee is to consist of between one and five persons selected from a panel of names by the minister. The panel is to include at least one legal practitioner and one accredited contaminated sites auditor. There is flexibility in the number of members, so that members can be dropped or excuse themselves when there may be a conflict of interest. The committee may, of its own volition, or at the request of an interested person, make a decision as to who is responsible for the remediation of a contaminated site, in accordance with the hierarchy. Before making a decision, the committee must give notice to any people who would be made responsible under that decision, and invite submissions to the contrary. The committee then makes its decision, taking into account any submissions received, and notifies all those involved. There is no appeal against the committee's decision, except on a point of law, and those appeals are heard by the Supreme Court. The committee has a second role in dealing with appeals against decisions of the director general under the Act.

The Bill has strong teeth, but they will not be used in every case. Experience over recent years has shown that in a significant number of cases, those responsible for contamination accept that responsibility and voluntarily undertake the necessary investigation and clean-up. The Bill is written so as to encourage that responsible behaviour. However, when action is not taken voluntarily, the director general may issue notices to ensure action is taken.

There are three types of notice: a hazard abatement notice, an investigation notice and a clean-up notice. A hazard abatement notice may be issued when there is an immediate and serious risk of harm. It is intended to provide for prompt action, such as restricting access to the contaminated area to protect people or the environment from the immediate danger. If the person to whom a hazard abatement notice is issued fails to comply with it, the director general may take the necessary action and recover costs from this person. An investigation notice may be issued to require the recipient to investigate the nature and extent of suspected contamination and prepare a plan for remediation. A clean-up notice may specify in detail the actions to be taken to clean up the site, or it may require the recipient to implement an approved clean-up plan. It may also require monitoring to ensure the ongoing effectiveness of the remediation. This approach of more flexible notices is consistent with the changes to the provisions for pollution abatement notices made in the Environmental Protection Amendment Bill 2002.

A notice may be given to the person responsible for the remediation, or the person the director general considers to be the responsible person, or to the owner or occupier of the site. The notice is binding on the recipient, but if that person is not the responsible person, he or she may recover the costs of complying with the notice from the responsible person. There are also appeals against the director general's decision to give a notice to someone other than the responsible person.

In some instances contamination may be associated with premises operating under a licence or closure notice under the Environmental Protection Act. In those cases it is intended, in the first instance, to use powers under the licence or closure notice to ensure the contamination is cleaned up before the site is decommissioned, rather than issue an extra notice under this Act.

Part 5 of the Bill provides that if the responsible person, in seeking to comply with a notice, is refused access to the site by the owner or occupier without reasonable excuse, that owner or occupier commits an offence and may, if the committee so decides, become the responsible person and the person on whom the notice is binding. This means that there is a strong incentive for the owner or occupier to allow access for remediation. The rights of the owner or occupier are protected by a power to recover any losses suffered due to actions taken to comply with the notice, including losses due to the interruption of business.

Whenever a site is classified as contaminated or possibly contaminated, or a notice is issued in respect of a site, a memorial is placed on the title. This helps ensure that people dealing in land or making planning and other decisions are made aware of possible contamination concerns. The Bill provides that when a memorial is placed on land because it is contaminated or possibly contaminated, the planning authority must first seek and take into account the advice of the director general before approving a subdivision or development application. This ensures that the planning process is properly informed, but not unnecessarily delayed. The Bill does not constrain the planning authority to accept the advice of the director general. The planning authority retains the responsibility for its own decisions to approve land uses when land is known or suspected to be contaminated.

Division 4 of part 5 establishes the contaminated sites management fund. Moneys are paid into this fund from specific appropriations, recovered costs and charges and, at the discretion of the Treasurer, the sale of orphan sites and the payment of fees. Money from the fund is spent on the remediation of orphan sites and those for which the State is responsible through the operation of an exemption certificate, which I will explain shortly.

Part 6 of the Bill introduces certificates of contamination audit to certify that land is contaminated or that it has been cleaned up. In other States, accredited contaminated sites auditors commonly issue these sorts of certificates. However, experience has shown this to be inadequate. The Bill, therefore, provides an extra level of scrutiny.

When someone is complying with an investigation or clean-up notice, he is required to hire an accredited auditor to confirm that the notice has been complied with. That auditor must provide a mandatory auditor's report. Compliance with the notice is confirmed, not by the auditor submitting this report, but by the director general issuing a certificate of contamination audit and, if appropriate, changing the classification of the site. Before doing so the director general checks the work done under the notice, the results of any analysis and the content of the auditor's report to confirm compliance with guidelines and standards. In this way, while the independence of accredited auditors is important for the functioning of the Act, the identification of the nature and extent of contamination is subject to a further safeguard because the classification of sites is backed by not only the independence of the auditor but also the scrutiny of the department's experts.

A person who finds within the early years of operation of the Act that his land was contaminated without his knowledge before he acquired it can apply under division 2 of part 6 of the Bill for an exemption certificate. This is to be done by submitting to the contaminated sites committee a disclosure statement disclosing the nature and extent of the contamination that the person has identified, and for which he claims he is not responsible.

From the commencement of the Act, an owner has two years to give notice of an intention to submit a disclosure statement, and a further year to submit the statement. If the committee is satisfied, it issues the owner with an exemption certificate outlining the nature and extent of the contamination for which the owner is exempt from responsibility for remediation.

One of the important functions of the Bill is to ensure that information on known contamination is freely available. Under clause 67, the owner of land classified as contaminated or the subject of a notice must disclose in writing to potential new owners, mortgagees or lessees the fact of the classification or notice at least 14 days before the transaction is complete. Part 7 contains provisions for the accreditation of contaminated sites auditors. There are substantial penalties for providing false and misleading information in relation to accreditation or mandatory auditor's reports.

Part 8 contains the appeals provisions to which I have already referred. Appeals against the contaminated sites committee's decisions, on points of law only, are dealt with by the Supreme Court under division 1. Division 2 outlines how the committee is to deal with appeals against decisions of the director general. Part 9 has enforcement provisions similar to those in the Environmental Protection Act, and part 10 contains a number of other miscellaneous provisions also modelled on that Act. Clause 92 gives the director general the power to seek information on the existence of wells and the taking of underground water, to help to rapidly identify the extent of contaminated water plumes and to control the danger from use of contaminated ground water. Many provisions of this Bill are at the leading edge of contaminated sites legislation in Australia, so it is entirely appropriate that the operation and effectiveness of the Act be reviewed in five years, as provided for in clause 98.

Finally, the Bill has three schedules. The first lists the classifications and criteria for contaminated sites. Schedule 2 lists some things about which regulations may be made, and schedule 3 contains minor consequential amendments to related Acts.

The Contaminated Sites Bill 2002 represents the state of the art in legislation to manage our unfortunate legacy of contaminated sites. It provides the necessary powers to require contamination to be reported, investigated and cleaned up. It ensures that where there is contamination, those making decisions about the purchase and use of land have ready access to information about the contamination, and it resolves disputes about the responsibility for remediation so money is spent making our State safe rather than in legal disputation. This House has recently approved improvements to the Environmental Protection Act that will help to ensure no new contaminated sites are created. The Contaminated Sites Bill enables us to deal with the legacy of past failures and to ensure that the world we pass on to our children is a safer, cleaner place - a place of which we can be justly proud. I commend the Bill to the House.

Debate adjourned, on motion by Mr J.L. Bradshaw.