Posted on August 29, 2019 by Anna Sinclair and Stuart Simington
Restrictive LEC interpretation of the waste laws overturned by CCA
The NSW Court of Criminal Appeal (CCA) has overturned a controversial decision of the Land and Environment Court (LEC) concerning the waste laws in NSW. The decision confirms that any processed building and demolition waste temporarily stored on land for a later use will be “waste” and will constitute the use of the land as a “waste facility” unless an exemption applies. It also confirms that a strict interpretation of “asbestos waste” is to be applied, and that material with just one fragment of asbestos will be “asbestos waste“.
In Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v MacKenzie  NSWLEC 99, the EPA prosecuted Grafil Pty Ltd (Grafil) and its director for an offence against s144(1) of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act) that Grafil’s used land as a waste facility without lawful authority. Over a seven month period, Grafil received and stockpiled between 22,000 to 44,000 tonnes of material from four recycling facilities in Sydney. The material was primarily soil, but contained bricks, concrete, glass, tiles, plastics, metals and timber. Minor amounts of asbestos were detected in the material. The stockpiled material was to be later used for the construction of an access road.
Grafil and its director defended the charge on the basis that the stockpiles were temporary, and the material was to be used for the purpose of road construction. It also sought to rely on certain waste recovery resource exemption orders as the basis for it not needing an environment protection licence (and development consent) for the stockpiled materials.
The matter was originally dealt with by Justice Pain in the LEC. In summary, Pain J found that the processed building and demolition material was not “waste” and the land was not being used as a “waste facility” because the material was temporarily stored on land for a later use, and it was subject to resource recovery exemptions. Pain J also held that a stockpile of material will not be “asbestos waste” if it contains only minor amounts of asbestos. The trial judge’s decision departed from previous LEC authorities, particularly Environment Protection Authority v Foxman Environmental Development Services Pty Ltd  NSWLEC 105. It also significantly departed from how the EPA and local councils had been applying the waste laws and had significant implications for waste regulation in NSW.
The EPA requested that the CCA determine 15 questions of law. The LEC will now re-determine the case based on the CCA’s answers to these questions. The CCA’s key findings and principles are discussed below.
Was the stockpiled material “waste”?
The Dictionary to the POEO Act broadly defines “waste” as follows.
(a) any substance (whether solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such volume, constituency or manner as to cause an alteration in the environment, or
(b) any discarded, rejected, unwanted, surplus or abandoned substance, or
(c) any otherwise discarded, rejected, unwanted, surplus or abandoned substance intended for sale or for recycling, processing, recovery or purification by a separate operation from that which produced the substance, or
(d) any processed, recycled, re-used or recovered substance produced wholly or partly from waste that is applied to land, or used as fuel, but only in the circumstances prescribed by the regulations, or
(e) any substance prescribed by the regulations to be waste.
A substance is not precluded from being waste for the purposes of this Act merely because it is or may be processed, recycled, re-used or recovered.
The trial judge held that if material was “processed, recycled, re-used or recovered” it could only fall into the paragraph (d) of the definition. The CCA held that this was incorrect, and the paragraphs (a) to (e) of in the definition of “waste” were not mutually exclusive and material may fall within one or more of the paragraphs.
The trial judge also held that to fall within paragraph (d) of the definition of “waste” it had to first be established that the material was “applied” to the land, and then done in one of the circumstances prescribed by the regulations. Her Honour held that “application to land” requires more than the placement of material on land temporarily before the application to land for the intended purpose of road construction.
The CCA determined that the trial judge misconstrued the definition of waste under paragraph (d), and material will be waste if it is applied to land in the circumstances prescribed by the regulations. Here, the material was ‘deposited‘ on land in accordance with the circumstances prescribed, and therefore it was “waste“.
Was the land being used for the scheduled activities of waste disposal or storage?
The scheduled activity of “waste disposal (application to land)” under cl 39 of Sch 1 to the POEO Act is defined as “the application to land of waste received from off site, including (but not limited to) application by any of the following” methods, including “spraying, spreading or depositing on the land“.
The trial judge again applied a two-step inquiry and held that it had to first be established that there was “waste disposal by application to land“, and then that it was done by one of the specified methods. Again, the trial judge concluded that the application to land requires more than the placement of material on land temporarily before the application to land for the construction of a road.
The CCA held that the trial judge misconstrued this definition, and the scheduled activity of “waste disposal (application to land)” is conclusively and exhaustively defined. Here, the material was received from off site and applied by one of the prescribed methods – depositing to land – and therefore fell within the scheduled activity.
The CCA also took issue with the trial judge’s interpretation of the scheduled activity of “waste storage“, which means “the receiving from off site and storing (including storage for transfer) of waste”. The trial judge had found that this did not apply to the temporary stockpiling of material. The CCA held that the trial judge’s construction was inconsistent with both the ordinary meaning of “storage” and the statutory text and context in which the word “storage” is used. The ordinary meaning of “storing waste” can include the temporary storage of the waste pending transfer of the waste to another place to be used for another purpose.
The implication of the CCA’s decision appears to be that there is no meaningful difference in the licensing categories in Sch 1 of the POEO Act between the notions of ‘depositing‘ waste for temporary storage and ‘storage‘ itself.
Proving a lawful authority
Grafil also sought to defend the charge by relying on the resource recovery exemptions under the excavated natural material and “continuous process” recovered fines orders.
The CCA confirmed that in accordance with s144(2) of the POEO Act, the onus lies on the defendant to establish that the exemption permits use of the land as a waste facility. The CCA also held that on a proper construction of each notice of exemption, Grafil had to comply with all of the conditions of the order to rely on the exemption. As it failed to do this, the exemptions did not apply.
Was the stockpiled material “asbestos waste”?
“Asbestos waste” is defined under the POEO Act as “any waste that contains asbestos waste”. The trial judge found that the phrase “contains asbestos” was a matter of fact and degree depending on the nature of the waste and the volume. Here, only small amounts of asbestos had been found and an inference could not be made that asbestos was likely to be found throughout the entirety of the stockpiles, and therefore it was not “asbestos waste”.
The CCA disagreed with this interpretation, and found that the definition of asbestos waste does not depend on the absolute or proportionate amount of asbestos contained in the waste. If any amount of asbestos in present in the waste, then the stockpile is to be classified as asbestos waste. This wider construction of “asbestos waste” accords with the purpose of the regulation of asbestos waste, as very small amounts can cause harm to human health and the environment.
What are the consequences of this decision?
This decision is important for the EPA and local councils that regulate waste, and for producers and users of reprocessed and recycled material. However, as it largely restores the interpretation and application of the waste laws as understood prior to Pain J’s decision, the impacts of this decision should not be too significant.
This decision confirms that a lawful authority (eg a licence and/or consent under the Environmental Planning and Assessment Act 1979) is required for the temporary storage of recycled or processed material under the POEO Act, unless an exemption applies.
It also confirms that a strict interpretation applies to the definition of “asbestos waste”. Producers and users of reprocessed and recycled materials must ensure that there is no asbestos in their materials else it will be classified as “asbestos waste“, and any person that causes or permits asbestos waste to be re-used or recycled, or deposits asbestos waste on land commits an offence.
The CCA’s decision can be read in full here.
If you have any questions regarding this article please contact Anna Sinclair on 8325 9713 or Stuart Simington on 8235 9704.