Posted on March 16, 2022 by Stuart Simington and Lachlan Penninkilampi
New Environmental Protection Regulations Released for Public Consultation
The NSW Environment Protection Authority (‘EPA‘) has released a draft Protection of the Environment Operations (General) Regulation 2022 (‘Draft Regulation‘) for public consultation.
The Draft Regulation proposes to remake the Protection of the Environment Operations (General) Regulation 2021 (‘2021 Regulation‘), which will be repealed on 1 September 2022.
The Draft Regulation will introduce a licence application fee, as well as amendments with significant consequences for extractive industries and very large bird accommodation facilities. It will also introduce a plethora of ‘non-significant‘ changes.
The Draft Regulation is the product of a review of both the 2021 Regulation and its 2009 predecessor, which was required under the Subordinate Legislation Act 1989 (‘SL Act‘) to ensure that the regulations remained relevant and effective.
In this post, we outline the Draft Regulation to help inform your decision about whether to make a submission.
Documents Released for Consultation
This document contains the legal provisions proposed to be made.
Regulatory Impact Statement (‘RIS‘)
The RIS is a document required under the SL Act. It details, amongst other things, the objectives, alternative options, and costs and benefits of the changes proposed in the Draft Regulation.
For those short on time, the EPA has released 2–3 page fact sheets about the Draft Regulation, the new licence application fee, and those amendments which have significant consequences for extractive industries.
Frequently Asked Questions
This document explains in short form many of the policy reasons why the EPA is making the changes proposed in the Draft Regulation. It also explains, at a high level and in plain English, how some of the proposed changes are expected to work.
Section Comparison Table
This document lists the sections of the 2021 Regulation and shows where they are proposed to be located in the Draft Regulation. This will be helpful to anyone who wants or needs to do a section-by-section analysis of the Draft Regulation.
Why a New Regulation So Soon?
Readers may be wondering why a new regulation is being proposed when the 2021 Regulation only commenced a matter of months ago.
The reason is that 2021 Regulation was a stop-gap measure. The 2021 Regulation’s predecessor, the Protection of the Environment Operations (General) Regulation 2009, was due to be repealed on 1 September 2021. According to the RIS, the EPA ran out of time to properly review the Regulation and propose the changes it wanted to make, which now appear in the Draft Regulation.
Analysis of the Draft Regulation
Purposes of the Changes
The stated purposes of the Draft Regulation are to (RIS p 1):
- ensure the provisions of the POEO Act can be implemented in an efficient and effective manner
- enable the EPA and other appropriate regulatory authorities to more fully recover their costs of administering the POEO Act and the POEO General Regulation by applying the user pays and polluter pays principles
- improve the strength and effectiveness of the POEO General Regulation
- clarify and simplify the POEO General Regulation
- refine definitions and improve the operation of Schedule 1 of the POEO Act
Significant Change: Licence Application Fee
Probably the most significant change proposed by the Draft Regulation is the introduction of a licence application fee.
This new fee is justified by the EPA as a means to recover the costs of assessing licence applications and developing licences. This, it is said, is in keeping with the ‘user pays‘ principle.
Currently, applicants pay an administrative fee upon application (being the first year’s administrative fee for the licence) and then a yearly administrative fee from the second year forward: 2021 Regulation ch 2.
If the Draft Regulation is made, applicants will pay the licence application fee and then a yearly administrative fee charged upon the approval of the application.
Further details of the licence application fee, including how it is to be calculated are contained in Division 2, Part 1, Chapter 3 of the Draft Regulation.
Significant Change: Extractive Industries
The Draft Regulation proposes to amend the POEO Act definition of ‘extractive industries‘ to include all activities that extract more than 30,000 tonnes or equivalent per year to require a licence, regardless of whether the purpose of extraction is for sale.
This means extractive activities which are not for the primary purpose of sale of the extracted material will be a ‘scheduled activity‘ under clause 19, Schedule 1 of the POEO Act, and require a licence under that Act. The EPA has justified the change on the basis that the operations have similar environmental risks and should be regulated consistently.
Also proposed is the introduction of a ‘conversion factor‘ in clause 19 for those extracting wet materials. The EPA proposes that, for the purposes of calculating whether an activity meets the licensing threshold, 0.65 cubic metres will be equivalent to 1 tonne.
These proposed changes would mean that people who carry out extractive activities not for the primary purpose of sale, or those who extract wet materials, will need to re-evaluate their licensing requirements under the POEO Act if the Draft Regulation is made.
Significant Change: Bird Accommodation
With bird accommodation facilities growing in size, the EPA has identified a need for administrative fees to be commensurably scaled.
The Draft Regulation proposes to amend the administrative fee framework for bird accommodation facilities in Schedule 1 of the Regulation to introduce a new size of operation category ‘More than 3,000 tonnes‘ (live weight capacity to accommodate). The administrative fee for a facility of this size will be 135 administrative fee units (AFUs), which is over 2.5x more than the fee for facilities with capacity between 1,000 and 3,000 tonnes.
This new category of bird accommodation facility is justified by the EPA on the basis that the environmental and human health risks are greater with very large facilities and that more oversight is generally required (for example, there may need to be a greater number of inspections or a greater number of complaints to deal with). The new fee category will, it is said, enable improved cost recovery by the EPA.
Part 9.4 of the POEO Act allows an environment protection licence to require a financial assurance from the licence holder, such as a bank guarantee.
The purpose of requiring a financial assurance is to provide accessible funds to an appropriate regulatory authority to carry out works if the licence holder does not do so, reflecting the ‘polluter pays‘ principle.
A condition requiring a financial assurance can only be imposed if the appropriate regulatory authority is satisfied of certain matters. Section 146(a) of the Draft Regulation proposes to prescribe the financial capacity of a licence holder as an additional matter. This matter is proposed to reduce the risk that public money will be required to carry out remedial works in the case of non-compliance.
National Pollutant Inventory (‘NPI‘)
The NPI is a nation-wide scheme which provides uniform information about the emissions of 93 different kinds of pollutants. To facilitate this, the 2021 Regulation requires facilities which use NPI substances above certain thresholds to report any emissions of those substances through the NPI (see Chapter 4).
The Draft Regulation proposes three changes to these regulations:
- Adding ‘annual substance usage‘ to the data collected by facilities (Draft Regulation s 117(1)). This data is often collected by the EPA anyway and is used to facilitate compliance checks of facilities. The EPA says that collecting the additional data will reduce the administrative burden, improve the quality of NPI reporting, better inform EPA policies, and improve the overall effectiveness of the NPI scheme.
- Introducing alternative emission estimate techniques for facilities and industry sectors (Draft Regulation s 121). This new regulation will allow alternative emission estimate techniques to be used across multiple sites or across an industry, obviating the need for site-by-site approval.
- Extending the timeframe for the EPA to consider an application for an approved estimation technique (Draft Regulation s 123(6)(a), (b)). The EPA considers that the current 60 day timeframe is inadequate, particularly when cross-agency consultation is involved. The proposal is to increase the timeframe to 90 days.
Indexation of Fees
The Draft Regulation proposes to continue the annual indexation of administrative fee units and assessable pollutant fees, update and continue the indexation of fees for environment protection notices, and introduce indexation of fees associated with vehicle testing and inspection. By doing so, the EPA says the fees can ‘adjust to influences‘ and ‘maintain a real value relative to other costs over time‘.
Other Non-significant Changes
The other changes proposed by the regulation include, amongst others:
- Removing pro-rata adjustments for administrative fees
- Aligning the thresholds, terms, and definitions for industry-related waste generative activities
- Increasing the penalty amount for failing to pay the cost of an environment protection notice
- Clarifying testing requirements for pollution incident response management plans
- Prescribing a penalty notice amount for selling buildings alarms that do not meet the requirements of the Protection of the Environment Operations (Noise Control) Regulation 2017
- Expanding the approved methods of pollution testing
- Removing ‘below threshold‘ fees (an anomaly in the current regulation)
- Minor amendments to clarify the definitions of marina and boat repairs, petroleum products, and fuel production in Schedule 1 to the POEO Act
All of the changes are explained in detail in the RIS.
Make Your Submission
Consultation is open until 5:00pm on 14 April 2022. The EPA will then review feedback and release a consultation report before finalising the Draft Regulation with any changes.
You can make a submission and access the documents released for consultation here.
If you would like to discuss this blog post, please contact Stuart Simington on 02 8235 9704 or Lachlan Penninkilampi on 02 8235 9719.