Posted on March 15, 2024 by Katie Mortimer and Stuart Simington 9

Bill to Increase Penalties for POEO Act Offences & Give Additional Powers to the EPA Introduced into NSW Parliament

Yesterday, the NSW Government introduced the Environment Protection Legislation Amendment (Stronger Regulation and Penalties) Bill 2024 (Bill). The Bill proposes the most significant amendment to the Protection of the Environment Operations Act 1997 (POEO Act) since its commencement. 

The Bill is intended to address gaps in legislation that have been identified by the Environment Protection Authority’s (EPA) recent investigations into asbestos-contaminated mulch in New South Wales. It was stated in the Bill’s Second Reading Speech that: ‘These gaps have been present for many years; the asbestos situation across New South Wales has made them starker. The Government went to the election with the promise of an EPA “with teeth”. This is our first step in strengthening environmental regulation.’

The Bill proposes a number of changes. This post explains the proposed increase in maximum monetary penalties for waste offences and 3 significant powers that would be given to the EPA to issue recall notices, preliminary investigation notices and public warning statements.

Increase in Monetary Penalties

The Bill proposes to increase maximum monetary penalties for offences against the POEO Act.

Maximum penalties are proposed to double for all Tier 1 offences (save for offences committed by an individual negligently):

• For corporations, the maximum penalty for an offence committed wilfully is proposed to change from $5 million to $10 million, with the maximum penalty for an offence committed negligently doubling from $2 million to $4 million,
• For individuals, the maximum monetary penalty for offences committed wilfully will double from $1 million to $2 million. The maximum term of imprisonment of 7 years will not change.

Maximum penalties will also double for the Tier 2 offences of:

• polluting land,
• unlawfully transporting or depositing waste,
• the use of place as a waste facility without lawful authority,
• the unlawful disposal of asbestos waste,
• the causing or permitting of the re-use or recycling of asbestos waste,
• supplying false or misleading information about waste to another person in the course of dealing with the waste.,
• not complying with a notice to use approved GPS tracking devices on waste transportation vehicles.

Penalty notice offence amounts are also proposed to increase. The Second Reading Speech stated that the Bill’s intention is to prevent these fines being factored into the ‘cost of doing business’. Some penalty notice offences will increase to $30,000 for corporations for a first offence and $45,000 for a second offence.

Offences relating to resource recovery orders and exemptions are proposed to move from the Protection of the Environment Operations (Waste) Regulation 2014 to the POEO Act and increase. The maximum penalty for a corporation will be $2 million, or $4 million for offences involving asbestos.

The Second Reading Speech explains that the increase in monetary penalties ‘are designed to ensure the maximum penalties remain fair and proportionate to the harm that environmental crimes can cause.’ It is accepted that the maximum penalty for an offence demonstrates the seriousness with which Parliament views the offence and is significant in determining the objective seriousness of an offence. Ultimately however, for offences prosecuted in the Land and Environment Court and Local Court, the appropriate sentence to be imposed is left to the discretion of a Judge or Magistrate. The increases proposed in the Bill do not guarantee that particular monetary penalties will be enforced. 

Environmental Recall Notices

The Bill proposes to insert a new Part 4.2A to the POEO Act, that would allow the EPA to recall materials across a supply chain. The proposed new powers for the EPA are significant and could result in onerous obligations being placed on supply chain participants.

The EPA presently lacks powers to recall materials that may pose risk. New Part 4.2A will allow the EPA, with the approval of the Minister, to issue a recall notice if in the EPA’s opinion, one or more of the following grounds apply:

(a) either—
     (i) a substance poses a potential risk of harm to human health or the environment, or
     (ii) a particular use of, or activity involving, the substance poses a potential risk of harm to human health or the environment,
(b) a substance— 
(i) is required by environment protection legislation or a national environment protection measure to comply with a prescribed standard or other specific requirements, and
(ii) does not comply with the standard or other requirements,
(c) environment protection legislation has been contravened,
(d) another matter prescribed by the regulations.

Recall notices will apply to ‘supply chain participants’ who may be identified by name or be a class of persons. Proposed section 94D sets out what roles the participant may have. These are broad and include:

(a) producing, generating, processing or reprocessing the substance, including processing or reprocessing the substance with other substances or by mixing the substance with other substances, or
(b) selling, distributing, transporting, supplying, resupplying or storing the substance, or
(c) receiving or processing the substance, whether or not to supply the substance to another person, or
(d) making the substance available or providing the substance to another person.

Supply chain participants who are the subject of a recall notice may be required to take numerous actions, set out in proposed section 94E. These include:

• to stop supplying the substance, or a particular batch of the substance, immediately or within a specified time,
• to recover the substance from another person,
• to sample, test, remediate or dispose of the substance, or move it to a specified location,
• to give information and records to the EPA about the supply chain for the substance,
• if substances cannot be recalled from a person who has received a supply, to take actions which may include securing the substance at its current location, or taking action or giving information to the person to prevent or minimise the likelihood of the substance causing harm to human health or the environment,
• to publish warnings,
• to control the movement of the substance,
• to not produce the substance,
• to not supply the substance to another person (if the supply chain participant has received supply).

The Bill also provides for a process of voluntary recall to be initiated, if a supply chain participant considers it necessary or appropriate.

If the Bill is passed, failure to comply with a recall notice without a reasonable excuse will be an offence that carries a maximum penalty of $500,000 for an individual and $2 million for a corporation, with daily penalties applying.

Costs of Compliance

A supply chain participant who receives a recall notice must pay their own costs of compliance. They will not be prevented from seeking to recover costs or making another claim for damages or compensation for which they are entitled under the POEO Act or other legislation.

The Bill allows the EPA or other public authority to take action required under a recall notice in specified circumstances, including if the EPA directs a public authority to do so. The EPA or public authority may recover its costs of doing so from the supply chain participant who received the recall notice.

The Bill provides that actions that are required under a recall notice will not require development consent or other approval under the Environmental Planning and Assessment Act 1979, if those actions ordinarily require consent or approval.

Public Warning Statements

The Bill proposes new section 319B to the POEO Act, giving the EPA power to make public statements providing warnings and information about specified matters. The Second Reading Speech states that:

The bill will amend the POEO Act to give the EPA greater powers to warn the public about dodgy operators and matters of concern. Public warning powers are already available under fair trading and food safety legislation to protect the people of New South Wales, and it makes sense to extend this to environment protection legislation. For example, people hire waste removal companies to cheaply dispose of waste, not knowing these businesses or individuals have a record of illegally disposing of this waste on public land or that of innocent landholders. A “name and shame” power will allow the public to be notified of activities or people that are subject to complaints or have been involved in pollution incidents. This also helps to level the playing field for the majority of operators that are doing the right thing.

Amongst other matters, section 319B allows the EPA to make public statements about:

• substances or activities it ‘reasonably suspects’ of contributing to a pollution incident or is being carried out in an environmentally unsatisfactory way,
• an activity, person, substance or other matter that, in the EPA’s opinion, is of environmental concern, including if the EPA suspects there is a potential risk of harm to human health or the environment,
• complaints received by the EPA under environmental protection legislation in relation to a matter.

The EPA may only make public warning statements if satisfied that doing so is in the public interest.

Exclusion of Liability 

There are obvious implications of a person or corporation being named in a public warning statement or recall notice.

The Bill proposes a new section 35A be inserted to the Protection of the Environment Administration Act 1991 that provides no liability is incurred by the Crown and no personal liability is incurred by a ‘protected person’ for a statement made or issued in good faith in a public warning statement or a recall notice. Liability includes ‘liability for defamation’. The term ‘protected person’ is already defined in section 35 and includes all people involved in the functioning of the EPA and its staff.

In addition, section 35A(2) provides that:

(2) No liability is incurred by a person for publishing in good faith—
     (a) a statement referred to in subsection (1), or
     (b) a fair report or summary of the statement 

Preliminary Investigation Notices 

Finally, the Bill proposes to strengthen the EPA’s investigation powers by allowing the EPA to issue preliminary investigation notices (Notices).

A Notice may be issued orally or in writing if the EPA reasonably suspects any of the following circumstances (relevant circumstances) may exist or have existed at premises:

(a) circumstances that may pose a potential risk of harm to human health or the environment from—
     (i) a substance, or
     (ii) the deposit of waste or substances suspected of being waste,
(b) a pollution incident.

Notices may be issued to the owner or occupier of the premises, or a person ‘who has caused or contributed to, to any extent, the relevant circumstances which are the subject of the notice’. The Notice recipient may be required to assist the EPA to investigate whether the relevant circumstances exist, and if so, determine the nature and extent of the relevant circumstances and any harm or risk of harm to human health or the environment. This may require the person to:

• collect samples of a substance and have them tested and analysed,
• provide a report about substance testing or analysis to the EPA,
• preserve or prevent the disturbance of a specified substance or location at premises for a period of time specified in the Notice

The Bill proposes that in specific circumstances, the EPA may take action to comply with Notices, and then recover costs from the Notice recipient.

Debate on the Bill has been adjourned. The first print of the Bill is available here: Environment Protection Legislation Amendment (Stronger Regulation and Penalties) Bill 2024 

To discuss this post please contact Katie Mortimer on 8235 9716 or Stuart Simington on 8235 9704.