Rules and Regulations

The handshake agreement

Waste Management Review speaks with Gavin Shapiro, Hones Lawyers Partner, about changing regulation in the C&D sphere.

After a spate of regulatory changes, the NSW EPA published two guidance documents to help the construction and demolition industry strengthen procurement and contract processes around waste disposal.

While not legally binding, the documents serve as a compliance guide for procurement officers and construction principals, with the aim of ensuring appropriate construction and demolition (C&D) waste disposal.

General guidance points include understanding waste streams, questioning quotes that appear too low, checking council development consent and environment protection laws and having clear roles and responsibilities for operators managing waste.

Gavin Shapiro, Hones Lawyers Partner and environmental law specialist, says while the guidelines don’t hold regulatory weight, they do offer useful instruction.

“There’s sound advice in the documents, and while I don’t agree 100 per cent with everything, I think it’s a good effort from the EPA to jolt industry in a positive direction,” he says.

“That said, from my experience, the only thing that pushes parties towards compliance is legal penalties and consequences. Legislation is the big stick the EPA has to wave around to incentivise compliance.”

Gavin notes that the guidelines, Construction and Demolition Waste: A Management Toolkit and Owner’s Guide to Lawful Disposal of Construction and Demolition Waste, follow earlier revisions to C&D waste standards in NSW.

Coming into effect 15 May 2019, the EPA’s Standards for Managing Construction Waste were designed to ensure waste facilities handling C&D implement appropriate processes and procedures to minimise human health and environment risks posed by asbestos.

Under the revised standards, waste facilities dealing with C&D are required to implement a two-stage inspection process to ensure unpermitted waste does not enter the facility.

In an additional layer of legal complexity, the May 2019 standards followed another set of revisions from November 2018.

As the more substantive of the two, the 2018 amendments include restrictions on exhuming waste at current or former landfills and increased penalty notice amounts for asbestos waste offenders.

As reported in Waste Management Review, the standards were devised after multiple investigations and industry feedback, and data analysis revealed a range of ongoing issues in the C&D waste sector.

In a 2016 consultation paper, the NSW EPA noted “poor processes” pose a risk to the community and resource recovery rates.

Issues highlighted include poor inspection and screening processes that failed to remove contaminants from mixed C&D, negligent handling and unprocessed waste sent for non-compliant disposal.

The quick succession of regulatory reforms, paired with the “need” to release detailed guidance documents, highlights an issue of scale for one of Australia’s fasted growing resource recovery sectors.

STRONG RECOMMENDATIONS

Tip three of the EPA’s owner’s guide “strongly recommends waste owners enter into a written contract with the contactor that established waste transport and disposal requirements”.

Tip three goes on to suggest that owners ensure any subcontractual arrangements are in accordance with the contact. While it may seem straightforward, according to Gavin, dodgy waste contracts are a significant issue in the construction sphere.

“There’s two problems. First, construction site principals often sign one contract with the head contractor. The head contractor then subcontacts to a demolition contractor, and the demolition contractor sub-subcontracts to a waste transporter,” Gavin explains.

“It’s very uncommon for the principal to contract with a waste transporter, and realistically, I don’t anticipate that the EPA’s new guidelines will change that – it’s just not how these projects work.”

The second and potentially more challenging problem, Gavin says, is demolition contactors and waste transporters often don’t sign written contracts.   

“It’s often a handshake agreement, which is something I’ve always advised clients against,” he says.

“Pushing parties to sign written contracts and subsequently seeing clear, stringent requirements enforced would be a big positive.”

Despite efforts to encourage to written contracts, Gavin says the “handshake agreement” is an ingrained part of construction culture.

“It’s just the thing that’s always been done – there’s a feeling that if an operator needs a written contract, they don’t trust the other party,” he says.

“But with so many incidents of waste offences and high potential liability, it’s a part of the culture that needs to change.”

Under the NSW Protection of the Environment Operations Act (POEO), waste generation from C&D sites, including soil and demolition waste, must be disposed of or reused lawfully.

As such, waste owners and waste transporters may both be guilty of an offence when waste is transported to a place that cannot lawfully function as a waste facility. This is the most common form of noncompliance and subsequent prosecution in the waste industry, Gavin says.

The POEO provides a defence for waste owners if the owner can establish the offence was due to causes out of their control and that they exercised due diligence.

Gavin notes however that no-one has successfully argued that defence in NSW for 30 years. He jokes that to successfully mount that defence, an owner would have to prove someone broke into their property, took materials offsite and transported them.

“In all seriousness, a waste owner would have to demonstrate such a high level of due diligence and best practice, plus prove they had no ability to control the waste management process,” he says.

“Fulfilling both those criteria is exceedingly difficult.”

While he believes much of the guideline advice is sound, Gavin cautions against the idea that principals should develop direct contractual relationships with waste transporters. He adds that given the scale of many of the projects in question, direct contracts can introduce untenable legal liability.

Another issue, Gavin says, is that recent C&D reforms have significantly increased risk for facility operators.

“It’s a tug of war between a genuine desire to see environmental protection through heavy regulation and growing resource recovery rates,” he says.

“Finding a middle ground between the two is the million-dollar question.”

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Extinguishing risk: EPA Victoria

Waste Management Review explores the Victorian EPA’s amended policy for combustible recyclable and waste materials and a training partnership to support it.

A recent spate of waste fires has highlighted the questionable storage and management practices of some Victorian resource recovery facilities.

While the issue spurred proactive responses from government and the private sector, significant media attention has resulted in public scrutiny.

Figures from Department of Environment, Land, Water and Planning reveal more than 100 recycling facility fires occurred in Victoria over the last 10 years, with the largest costing the Victorian Government over $110 million.

In 2017, a Coolaroo facility fire burned for 20 days before it was extinguished, causing significant human health and environmental problems. This resulted in community evacuations, with facility staff and the public also requiring medical treatment.

Following the fire, the Victorian Government established a Resource Recovery Facilities Audit Taskforce. The group was tasked with inspecting resource recovery facilities across the state to tackle stockpiles that might pose a fire risk. Since July 2017, the taskforce has conducted 628 inspections at 169 sites, issuing 186 notices and 35 sanctions.

The extremity of the Coolaroo fire reaffirmed the importance of proper material storage and prompted the Victorian Government to revise its Waste Management Policy for Combustible Recyclable and Waste Materials in 2018.

Organisations such as SKM Services have been issued with notices in line with the policy in mid-2019 to stop accepting combustible waste until compliance was achieved.

Danny Childs, EPA Resource Recovery Audit Taskforce Manager, says the waste and recycling industry is going through a period of momentous change.

“EPA’s message is clear: community and environment first. Compliance and enforcement efforts against waste crime and illegal industrial and chemical waste stockpiling will continue to be a major priority,” Danny says.

“In parallel, EPA has ramped up its work with industry to increase compliance understanding and risks that must be managed.”

Waste Management Review explores the amended Waste Management Policy and a training partnership with the Victorian Waste Management Association (VWMA).

At the VWMA 2019 State Conference, Miranda Tolmer, EPA Victoria Industry Guidance Unit Manager, discussed the combustible waste policy, its supplementary guideline report and steps towards compliance.

The EPA Waste Management Policy for Combustible Recyclable and Waste Materials was designed to enforce stringent safety standards in an attempt to address the rogue operators adversely affecting the sector’s reputation. Additionally, as with all EPA policies, it is based on the authority’s broader duty to protect human health and the environment.

Noncompliance can result in sanctions under the Environment Protection Act 1970.

Following the policy amendment, the EPA released a complementary set of compliance guidelines in October 2018.

Miranda said the guidelines, developed in consultation with the Country Fire Authority and Metropolitan Fire Brigade, aim to support compliance and educate operators on their legal responsibilities.

The guidelines stress the significance of understanding fire hazards associated with waste storage and management activities, while also outlining steps to reduce risk.

During her presentation, Miranda named five key risk assessment concepts including previous occurrence, frequency, changes in operational conditions, changes in environmental conditions and behaviour.

Accompanying each concept are guiding questions operators can ask themselves in order to assess their facilities risk potential.   

Besides previous occurrence for example, the guideline report asks – has a fire occurred in your industry, and if so, what were the consequences?

“Assessing incidents or near misses provides an understanding of the context in which the incident occurs,” the report reads.

According to the guideline report, assessing this question provides a good indication of how to prevent the issue in the future.

“It is also important to not just consider your site, but think about all occurrences across industry,” the report reads.

The guideline lists a number of operator responsibilities to achieve compliance including ensuring new buildings and refurbishments meets requirements of local planning and building authorities, signing off on essential safety measures and actively involving employees in site safety.

Site managers must also respond to all fire prevention notices and comply with relevant Victorian occupational health and safety legislation. The policy applies to all waste and resource recovery facilities regardless of size, with only licensed waste tyre storage premises and licensed landfills excluded.

Additionally, the policy states that operators are responsible for minimising harm caused by fires irrespective of how they start. If a fire starts on nearby bushland and travels to a facility for example, operators are still liable for managing resulting harm potential.

EPA guidelines suggest operators develop a risk register, where they can document a hazard and potential causes, before examining the likelihood and consequences for the business itself and wider community.

“Identifying hazards and assessing risk is an ongoing exercise. Risk assessment involves developing an appreciation of the scale of potential consequences, and the relative likelihood of those consequences should an event occur,” the report reads.

“Understanding the consequence and likelihood of a hazard can support and inform the selection, development and application of controls.”

Miranda highlighted the hierarchy of controls as a useful prioritisation framework for the identification and selection of control measures.

The hierarchy prioritises eliminating the hazard, followed by substituting the hazard and engineering controls. If those mechanisms aren’t effective, the hierarchy outlines administering controls through training and protective equipment.

Miranda said risk analysis must also be accompanied by an assessment of the practicality and feasibility of each control option. She added that the primary consideration for applying controls should always be the practicality of implementation.

“Risk controls should be adopted in line with a cautious approach that considers the site’s capacity, inventory, location and proximity to sensitive land uses,” Miranda said.

Specific risk prevention measures include activity separation, such as separating drop off, processing and storage areas to prevent contamination and hot loads entering combustible spaces.

Furthermore, early detection devices such as thermal probes to monitor storage temperature, video smoke detection and flame detection, regular inspections, routine equipment servicing and adequate waste supply are encouraged.

“Whether additional actions are required depends on existing fire risk management at each site, but could include improved work procedures, maintenance and training to minimise ignition, changing the volumes and way waste material is stored and improving firefighting capabilities,” Miranda said.

WORKSHOPPING THE ISSUE

To educate industry on the amended policy, the EPA held five Combustible Recyclable and Waste Materials Guideline implementation workshops in the first half of 2019. The workshops involved discussions with recycling and landfill operators on steps to take to reduce the risk of fire.

Sessions took participants through a virtual facility tour, identifying various risks and controls that needed to be identified, and remedial actions operators could take.

Members of the Country Fire Authority also provided advice on fire management and emergency preparedness.

Matt Peake, EPA Executive Officer Resource Recovery Gippsland, says the Gippsland workshop was a great opportunity for the growing region. Gippsland’s population is projected to increase by 25 per cent by 2030, bringing higher levels of waste generation with it.

“Our [Waste and Resource Recovery] implementation plan has identified that to meet the needs of our community, we need to assist industry and local government to continuously improve the performance of waste and resource recovery infrastructure and services in the region,” Matt says.

“Understanding how to comply with new regulation is critical in ensuring community expectations are being meet, and that these essential services are reliable.”

During her conference presentation, Miranda said the amended waste policy is less prescriptive than the original.

She added that the new policy has a greater focus on working with industry to provide flexible options and individualised solutions.

That said, VWMA Executive Officer Mark Smith says the guidelines are somewhat ambiguous, with differing expectations and interpretations resulting in non-compliance. He adds that operators are often unaware of their level of compliance.

Mark says this uncertainty can lead to situations where well-intentioned operators are punished, when the focus should be on those operators that intentionally circumnavigate the system.

Since then, the EPA has partnered with VWMA to develop a training program to assist guideline implementation and alleviate industry confusion.

Mark says the program is modelled off the guidelines, with a focus on tangible action rather than broad concepts.

“VWMA wants to ensure industry understands the guidelines so we can all work together to mitigate fire risk,” Mark says.

“It’s all about transferring awareness into action to support a thriving industry sector.”

Mark says the program is designed to support policy compliance, while also holding organisations like the EPA to account in the delivery of prescribed outcomes.

“We need the policy to work with and around industry so we can achieve the best environmental outcomes without compromising individual business needs,” Mark says.

The risk-based training program will help participants identify, quantity and develop plans and processes to manage risk.

Mark says to achieve this, operators must both understand inherent risks and document them.

“The whole process needs to be transparent and open, government and the private sector must come together to address this problem,” Mark says.

“VWMA and the EPA recognise the need to promote better practice through a shared commitment to drive industry leadership in the preventative management of combustible recyclable and waste material.”

Mark says participating in the training program will demonstrate a waste and resource recovery operator’s willingness and commitment to identify and manage risk.

“We aim to support members and the waste and resource recovery sector to reduce the frequency, scale and severity of fires at waste and resource recovery facilities,” he says.

Mark says the program is being developed through stakeholder consultation and is expected to commence in September.

Looking forward, Danny says the EPA’s regulatory powers will be strengthened from 1 July 2020, following implementation of the new Environment Protection Act.

The reform represents the most significant change to Victoria’s environmental regulatory regime since the introduction of the Environment Protection Act 1970.

The new legislation is focused on preventing risks, rather than managing harm after it has occurred, and is modelled on occupational health and safety legislation.

Danny says the changes will modernise the EPA’s inspection and inquiry powers and introduce strong regulatory duties across the whole waste supply chain, from generators and transporters to receivers of waste.

Changes include significant increases in maximum fines and penalties, such as potential jail time for repeat illegal dumping offences and stronger fit and proper person requirements.

Danny says strengthened proper person requirements mean undesirable operators can be prevented from holding a permission and/or be excluded from undertaking specified activities.   

“Preventing environmental harm is at the core of this act and in an Australian first, the act will introduce a general preventative environmental duty that is criminally enforceable,” Danny says.

One of the most significant changes to the act is the general environmental duty.

“The general duty will require people conducting activities that pose risks to human health and the environment to fully understand risks and take reasonable steps to eliminate or minimise them,” Danny says.

This article was published in the September edition of Waste Management Review. 

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Calls for Queensland EPA

An independent survey of 67 Waste and Recycling Industry Queensland members has recommended an inquiry into the performance of the Department of Environment and Science.

Queensland Economic Advocacy Solutions (QEAS), an independent market research firm, was commissioned to electronically survey members of Waste and Recycling Industry Queensland (WRIQ) on the performance of the waste industry regulator – the Department of Environment & Science (DES).

Responses throughout November and December 2018 were received from 67 members representing 70 per cent of the membership employing 4556 Queenslanders. The resulting QEAS Queensland Environmental Regulator Survey 2018 was produced.

The crucial repercussions of the document highlighted concerns towards the effectiveness of the Environmental Services and Regulation (ESR) Division and its ongoing relationship with the sector.

The WRIQ roadmap for ESR improvement highlights a need to improve consultation, education, set clear goals, targets and expectations and improve expertise and ESR resourcing. Other key recommendations are to offer consistent advice and improved response times and that ESR be independent of politics.

WRIQ members overwhelmingly believe Queensland’s DES and ESR responsibilities to be important. But 42 per cent disagreed or strongly disagreed that the ESR was reviewing legislation and policy and compliance frameworks well. Almost 70 per cent of respondents disagreed or strongly disagreed that ESR were taking a proportionate and consistent compliance and enforcement program and working collaboratively with government, industry and community groups.

Rick Ralph, WRIQ Chief Executive Officer, says that it’s unprecedented that 70 per cent of the industry with 45,000 employees were so universal in their scathing criticism of the regulator.

Rick says that there is a fundamental disconnect between regulators focused heavily on penalising operators.

“The regulator makes the rules and that’s their policy – it’s all about enforcement. They don’t offer any solutions. When something gets too hard, they are fundamentally ineffective in understanding the economic impacts of an unregulated environment,” Rick says.

In terms of where the regulator is performing well, select WRIQ members had positive feedback on their dealings with individual officers, but singled out the systematic flaws in the regulatory strategy.

Across the board, survey respondents rated the performance of ESR as poor to average, with an 85 per cent negative rating for problem solving, 86 per cent negative for stopping illegal dumping and 77 per cent criticising the decisions as being unsound, not evidence-based, and illogical.

The wide range of feedback segments covered consistency and confidence, drivers of actions, the Odour Busters program, resourcing and expertise, rogue operators and accountability and compliance versus education.

The Queensland Government’s Odour Busters taskforce was established to deal with nuisance odours in the Swanbank area.

The Odour Abatement Taskforce, also known as Odour Busters, was intended to operate from a local base at Redbank Plains to crack down on offensive odours and other environmental concerns in the area for 12 months in 2018.

One respondent asked why no findings had been published, with vague information on social media.

Rick says that industry and ESR need to actually commission a training program with industry so that officers understand what best practice looks like. Where complexities happen in regulation, there is a process of review to sort out the problem.

Criticism was also drawn at the ability of the regulator to conduct site audits and promote better compliance, and that inspections were part of a structured audit and compliance program rather than reactions to community sentiment.

One of the key recommendations of the report was a complete overhaul of the system for the government to act swiftly and produce an independent investigation into the current system. The goal would be to install an independent EPA, with four in five respondents indicating their support for such an agency.

According to Rick, an EPA should have an independent board.

“That authority then has clarity, purpose and a relationship with the industry and it actually works with the industry to find solutions, not just penalise,” Rick says.

“Universally where there’s been an EPA, it’s shown to be the model that actually works.”

He adds that the Victorian EPA’s modernisation showed how important it was to reinvigorate old structures with contemporary models, while stopping short of making recommendations on a Queensland structure and leaving it to an independent review.

WRIQ put a 10-point plan to the minister and is now waiting for a formal response from the director general. The 10-point plan is focused on building a commercial level playing field on how the industry is managed and non-adversarial. The plan includes that ESR establish an internal reference panel with an independent chair. It also advocates for a third-party review into ESR management and the independent review into environmental regulation.

“The environment minister has agreed to establish a working group and we have provided every Queensland minister with a copy of our report calling upon them to support the environment minister in overhauling the performance of the state’s regulator.

“Regrettably, not a single minister has acknowledged that correspondence and in terms of government engagement with its stakeholders, this lack of support is challenging for our members,” Rick says.

He says the review into ESR at DES should be conducted this year in order to prevent its politicisation in the 2020 election.

A DES spokesperson said it takes its role as Queensland’s environment regulator seriously and works closely with all industry stakeholders.

The spokesperson said that the department will take prompt enforcement action on industry members not compliant with their obligations.

“The Odour Abatement Taskforce is a twelve-month program, being undertaken to address odour and other environmental nuisance issues within the Swanbank Industrial Area.”

It said DES is undertaking a comprehensive education program to help improve compliance.

Queensland Government Environment Minister Leeanne Enoch said the DES recently underwent a restructure following machinery of government changes in 2018.

This has seen the creation of a new waste branch within the department specific to waste and resource recovery. She said the feedback from WRIQ will be considered by the department and help the government improve its stakeholder engagement.

This article was published in the May edition of Waste Management Review.

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