Environment Protection Waste Reform Amendment Bill

Remarks on the Environment Protection (Waste Reform) Amendment Bill.

Second Reading

Adjourned debate on second reading.

(Continued from 9 August 2017.)

The Hon. J.M.A. LENSINK: I rise to make some comments in support of this piece
of legislation, which has had quite a significant period of gestation, arising out of concerns within the
EPA and the waste sector about clamping down on certain practices which have helped certain
operators to avoid paying waste levies, and there are a number of other measures within the bill to
tighten up other areas of compliance. I will talk briefly about some of the history of this.

The Hon. J.M.A. LENSINK: In 2015, there had been yet another fire at one of the
facilities at Wingfield. Details are yet to be confirmed, because I think at some stage these matters
were before the courts, but it has certainly been our understanding that that arose because there
were certain materials being stockpiled. Some of these materials, particularly when they are in large
quantities, can be quite combustible and allegations have certainly been made that materials were
stockpiled at certain facilities because that was a way to avoid paying waste levies.

For those who do not necessarily understand how the current system works, the various
operators who collect materials which are meant to be recycled—turned into other materials and then
find other markets—are brought to particular facilities in regional areas. Those are transfer stations,
and they pay a levy, from what I understand, once the materials leave those particular facilities. There
is obviously a gate fee that people pay to drop off the materials, so some of the operators have been
collecting handsome gate fees, then never having to pay fees to the EPA because they basically
leave them on site, which is clearly subverting the intention of this legislation.

So, following the fire at Wingfield in 2015, the Liberal Party said it would refer this matter to
a parliamentary committee. We deemed that the Environment, Resources and Development
Committee was the correct committee, so that did a short examination, but I will give credit where
credit is due: the EPA conducted its own quite extensive consultation, including summits and the
production of at least one extensive consultation paper, and so here we have the legislation before
us.

At times, the waste industry can be more divided than The Real Housewives of New Jersey,
but I have not had any complaints on this particular piece of legislation, so I am satisfied that, by and
large, the industry is in furious agreement that it should proceed. The amendments will better
regulate, simply speaking—a lot of the EPA legislation is quite technical—the flow of material through
various operations. There is a concept of approved recovery resources, which is very important to
that. There are also further penalties for illegal dumping.

The other key reforms target unauthorised stockpiling. I think those are the key concepts that
are contained within the legislation. With those comments, I do have a couple of specific questions
that I will raise at clause 1. I look forward to the debate on the bill.

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation,
Minister for Water and the River Murray, Minister for Climate Change): I rise to close
the debate at the second reading stage. I would like to thank the Hon. Michelle Lensink for her
contribution, and the Liberal Party's indication of support for the legislation. I would also like to thank
those who have not made a contribution but have been engaging with the bill through briefings with
my office and the EPA, and also for their indication of support for the legislation.

As the Hon. Michelle Lensink mentioned, this bill has been developed collaboratively with
industry over the last two years. It contains numerous important reforms that will provide the
necessary underpinning to enable the EPA to implement important waste reforms, as well as
providing improved tools for dealing with excessive stockpiling, waste levy avoidance, illegal dumping
and contraventions of the Environment Protection Act.

The bill supports the economic and environmental health benefits that we want for our state.
The state government wants to unlock future potential and drive innovation in the waste management
and resource recovery sector that is already a billion dollar industry for our state, employing nearly
5,000 people. We seek to continue to lead the way in demonstrating that we can both protect our
environment, but support businesses and jobs growth at the same time. In fact, they go hand in hand.

I thank the waste and resource recovery sector—the industry is a very strong industry, it
works proactively together, particularly engaging with government and local government—for their
strong support for this bill and other reforms that are being pursued. These reforms will support the
South Australian government in continuing to lead the way in waste management and resource
recovery. The state has a very proud record in this regard, and we think we can go to further
strengths. I commend the bill to the chamber, and look forward to the committee stage.

Bill read a second time.

Committee Stage

In committee.
Clause 1.

The Hon. J.M.A. LENSINK: Could the minister outline how the alterations to measuring and
applying the levy to volumes of waste will take place in practice compared to what it does now? I
understand that under the present situation, the levy is applied when the volumes leave a particular
facility, but I understand that one of the significant changes is that it will be when they enter that
particular facility. So, could the minister outline how the operational changes will alter?

The Hon. I.K. HUNTER: Essentially, the honourable member's grasp of it is right. The levy
applies when waste is disposed of, at the point of disposal and not previously. This is partly the
problem we are trying to address, because that means if people do not dispose of the waste they do
not pay a levy, which means they may be induced to stockpile inappropriately. The real raison d'etre
for this bill is to actually increase the flow of material through the system, either to recycling or to
landfill, whatever the end result is, in a faster way.

In terms of the detail, I have some advice that I will put on the record for the honourable
member and those she talks to. As I said, the clause will assist in better managing stockpiling and
complements other work that has been done in sections 3 and 10 of the act. Stockpiling materials
obviously creates several problems. One is the distortion of competition in the markets, and this is
one that is not often grappled with. This distortion occurs where a business can legally stockpile
significantly more material than a competitor, thereby being able to defer costs and gain a commercial
advantage. This is one of the major complaints that industry has brought to the government and why
we are addressing it through this process.

Another is the legal accumulation of a very large volume of stockpiled material that can
involve large clean-up costs later on if the site is, for example, abandoned, or if a business goes into
liquidation. Eventually the taxpayer is effectively left with the clean-up process. The EPA currently
has limited opportunities to uniformly impose limits on the amount of material that can be stockpiled,
and can only impose limits where materials pose a clear environmental harm or risk. That does not
take into consideration those other things I have just mentioned.

Limits can usually only be imposed when a business is seeking to renew their licence or
environment authorisations. That can build in some significant delays, and the EPA is restrained from
acting quickly. For example, if the EPA determined that it would be inappropriate to store more than
a certain amount of material, currently the only way this limit could be imposed on businesses storing
that material is when the licences come up for renewal, and for some licences that could be as long
as four and a half or five years.

We argue that the EPA is currently restrained from acting quickly and can apply these new
limitations only when those licences come up for the renewal process. This bill allows them to act
more quickly. This means that some businesses would have this limit imposed sooner while others
would not need to comply until their licences were renewed, and then you fast come to the problem
of not having a level playing field for industry. As I said, this could mean a difference of up to 5 years.

To address this issue the government, through this amendment, is proposing to provide the
EPA with the ability to impose conditions across all licence holders, regardless of when the licence
is due for renewal. This will support the fairness and certainty we have been asked to provide to the
industry. If adopted, this clause—we are talking about clause 17, which amends section 45—
Conditions—will allow the EPA to make changes to impose or vary existing maximum stockpiling
limits. The EPA would only be able to exercise this ability if it considered the measure necessary to
help promote better material flow through the waste management process.

Again, this allows the EPA some flexibility to better respond to changing market conditions.
For example, if the price of metals dropped significantly the EPA could respond by increasing the
amount of scrap metal such businesses could store. Of course, they would have to take into regard
any environmental considerations. That recognises the value of helping minimise cost pressures
during difficult trading periods, and is the flexibility the industry has asked us to provide. The EPA
will consult with stakeholders and the community when reviewing the setting of the circumstances
under which the EPA will amend licence conditions, and will also seek to work with industry when it
is identified that current stockpiles are excessive.

The amendments we are proposing with this legislation also finetune the penalty system for
breaching licence or environmental authorisation conditions. They involve the introduction of
expiation fees and default penalties, which are slightly different from the current situation. These
amendments also reflect the proposed abandonment of divisional penalties under the act and the
resumption of monetary penalties. Expiation fees will be set by regulation and applied to particular
conditions. Where breaches of condition, other than reporting deadline conditions, do not have an
expiation fee set, the fee will be $1,000.

These amendments, which are changes to the current day-to-day operation, are essentially
about giving the EPA flexibility to respond to industry's requests and providing a level playing field,
as well as giving it the ability to impose limitations more quickly than it otherwise could. At the moment
it can do that only when licences are renewed.

The Hon. J.M.A. LENSINK: I thank the minister for that explanation. The flip side to this is
that, while the amendments to section 45 are welcomed, there may be some unintended
consequences. One of the other complaints that we have not really talked about as yet in relation to
the legislation is that we get complaints from operators who think the EPA can at times be too heavyhanded, or be using its discretion, perhaps, to make an example of a particular operation. Can the
minister provide some details as to how the EPA will come up with some guidelines that will perhaps
guide industry, which I think he touched on in his last response, in particular for the protection of
smaller operators?

The Hon. I.K. HUNTER: My advice is that we will approach this in a concerted effort to
consult with industry and stakeholders. We will be publishing compliance and performance
approaches so that everybody understands we are all coming from the same place. A right of appeal
to the ERD Court will be built in for all licence holders. Essentially, to answer those two questions, I
will advise the chamber that we will develop these guidelines as we do the regulations, which will
drive the outcomes we are seeking, in accordance with our established policies of talking to the
industry and consulting.

There are a couple of issues here that we need to talk about. In terms of the small operator,
they will be impacted, I suppose, at the highest level in terms of the financial assurances the EPA
might put in place around stockpiling conditions. We expect—and this will need to be tested on the
basis of the data we have before us about the volume of waste that is dealt with by small operators—
that they will not be impacted. Because of the small amounts, they will be relatively irrelevant for
small operations or readily able to be avoided by proper site management. Again, that is to get a
better outcome.

As a further safeguard, as I said, licence holders have a right of appeal to the ERD Court
against any proposed licence condition, so that only reasonable and practical solutions are going to
be pursued. However, we would rather front-end that and work with industry to make sure that we
get reasonable and practical solutions, rather than wait for an appeals process. The EPA has a good
track record of consulting with stakeholders in regard to developing workable regulations.

In terms of the issues around stockpiling conditions, the act already allows the EPA to require
financial assurances, so that is not new but it pertains to where environmental harm risks justify it.
The waste reform bill before us proposes to expand the circumstances in which these conditions can
be required to also cater for, as I mentioned in my closing speech, abandonment or liquidation of a
company and abandonment of a site, leaving a large and expensive clean-up operation for the state
or local government.

It is also around material flow risks that can pose burdens on our community; for example,
fire risks, as we saw a few months ago at a facility in Victoria. Irrespective of what the material type
is and where abandoned materials may not pose a direct safety risk, it can cost many hundreds of
thousands of dollars for the community to accept responsibility due to high waste volume. So,
managing stockpile volumes is of critical importance, not just for day-to-day operations but also future
risk to the community.

Circumstances in which a financial assurance or a stockpiling condition would be imposed
in any of the cases I briefly touched on would be pursued in accordance with the EPA policies as
they currently exist, or as they will exist with this bill passing. These policies have yet to be developed,
and they can only be developed with the industry because they are the ones that will be able to give
us advice about whether the policies are practical and whether they will work and get the outcomes
that we seek with this legislation.

I am advised that financial assurances are only imposed by the EPA where they are justified.
Currently, it is by environmental risk, but if this bill is successful it will also add to that abandonment
issues—sites being abandoned by companies or companies going into liquidation—or the material
flow risks of that site. Of course, it must be proportional to the risk, otherwise the ERD Court would
have something to say about it.

Those are the safeguards built-in in terms of increasing the remit away from just
environmental health issues towards those further two issues that I talked about, as well as the right
of appeal to the ERD Court should a small operator be caught by this. However, our expectation is,
looking at the data we have on the operations of small operators, that they would not be impacted in
a negative way by this legislation.

The Hon. J.M.A. LENSINK: In relation to the financial assurances, can the minister give us
some idea of what is the order of magnitude of those at the moment and whether, following the
passage of legislation, that is likely to change?

The Hon. I.K. HUNTER: The types of assurances that are in play at the moment—and the
honourable member may remember that I just said that in fact the act already gives the EPA an ability
to do this—I am advised all relate to landfill currently. They are in place to provide for their ultimate
safe closure.

You can imagine a landfill site operated as a private enterprise closing down, not having
provided for safe closure, leaving and exposing the community to risk. The financial assurances are
in place to provide for that. They range from about $50,000 to just over $1 million, I imagine,
depending on the size and the relative risk associated with the landfill.

What we propose to do, though, is to emulate the situation in New South Wales and Victoria
where they have a published policy about what that range of assurances will be, who would pay for
them, why they would pay for them and what the risk profiles are. We will be developing a document
to make available to the industry so they understand what the assurances are meant to do, what the
range would be and what the risk parameters are.

The Hon. J.M.A. LENSINK: I thank the minister for that response. In relation to proposed
new section 88A, which relates to authorised officers investigating illegal dumping, we do see from
time to time these stories in the media about various acts of illegal dumping of asbestos and other
fairly undesirable materials. Are these amendments envisaged to tackle those sorts of incidents, or
are there other specific issues, other than roadsides, that these powers are aimed at?

The Hon. I.K. HUNTER: I thank the honourable member for the further question about the
authorised officers and their additional powers. Yes, asbestos is clearly one of those issues but not
the only one. The honourable member will recall that we have now taken the levy off of asbestos.
So, what might have been a small discouragement to proper disposal has been removed. The large
cost of dealing with asbestos is to have qualified asbestos removalists remove the asbestos from a
property, wrap it up appropriately and take it to an authorised dump.

We have done what we could in terms of removing the levy on asbestos. In terms of the
further powers, really what we are trying to tackle here is illegal dumping. It gives our officers an
ability, where they suspect there is a risk—they may go to past practices, past legal cases or indeed
to the type of waste we are talking about; that is a matter for officers to determine based on their data
and records—they have the power to enter a site and leave some special high-tech equipment
around the material that will be dumped, which could be later traced. We are talking about microdots
or something like that—the sort of things that are sprayed underneath the chassis of high-end cars;
that sort of thing.

The reason we are doing this, of course, is that there are a lot of difficulties in actually
completing a legal case against suspected dumpers. The points of law that are taken sometimes do
not enable us—or there may be insufficient witness evidence, for example—to complete an
investigation through the process to a final court outcome that we would like to see. We are trying to
give some powers to the authority, or the authorised officers, I should say, that will allow us to address
these issues.

The reforms are essentially these. Firstly, the bill seeks to clarify that an offence of illegal
dumping includes disposal of waste. You might think that is common sense, but our lawyers advise
us that we need to put that word in. Secondly, the reforms will hold a registered owner of a vehicle
responsible for illegal dumping from the vehicle in a similar way that speeding offences caught on
camera hold the vehicle owner responsible unless the owner provides a statutory declaration to the
contrary nominating the person who is responsible. This also replicates provisions in the
Local Nuisance and Litter Control Act, which we passed last year.

Thirdly, the bill seeks to increase the powers of authorised officers to enter premises to mark
waste, as in the situation that I just outlined. Finally, the reforms will empower the EPA to use a
tracking device to track waste if suspected illegal dumping of that waste may occur.

Clause passed.

Remaining clauses (2 to 32), schedule and title passed.

Bill reported without amendment.