Bills Digest No. 49  1998-99 National Environment Protection Measures (Implementation) Bill 1998

Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer and Copyright Details

Passage History

National Environment Protection Measures (Implementation) Bill 1998

Date Introduced: 25 November 1998

House: Senate

Portfolio: Environment and Heritage

Commencement: On Royal Assent

Purpose

The Bill provides for the application of certain State and Territory environmental protection laws to the Commonwealth and its agencies, in order to create a scheme of uniform national environmental standards. According to the Second Reading Speech presented with the Bill, the benefits of the scheme are that:

The Bill aims to apply 'National Environment Protection Measures' (NEPMs) to the Commonwealth and its authorities. These are part of a scheme of uniform national environment standards. This project was first agreed to at a political level in 1992, with the signing of the Intergovernmental Agreement on the Environment (IGAE). The first legislative step towards the creation of the scheme was the passage in 1994 of the National Environment Protection Council Act 1994 (Cth) (the NEPC Act) and complementary State legislation.(3)

According to the Second Reading Speech for the NEPC Act, the aim of the NEPMs is to harmonise and standardise national environmental protection standards. Additional aims listed are to give all Australians the benefit of equivalent environment protection and to ensure that investment decisions of business are not distorted by variations in environmental standards between Australian jurisdictions.

Another frequently cited objective of effective uniform national standards is deterrence of 'forum shopping'.(4) This is the phenomenon where certain industries might seek to establish their operations in the jurisdiction with the lowest environmental protection standards, in order to minimise the costs associated with compliance with higher standards prevailing in other States or Territories.

The Bill provides several methods by which the Commonwealth can implement NEPMs, in order that they will apply to the Commonwealth. These are by :

• applying certain State laws to Commonwealth places
• applying certain State and Territory laws to Commonwealth activities
• the making of regulations
• environmental audits or environmental management plans, and
• the use of existing Commonwealth laws.

The NEPC Act 1994 provides for the making of NEPMs related to seven particular environmental issues: air quality, water quality, noise standards, site contamination, hazardous waste, recycling, and motor vehicle emissions. The Bill aims to apply these NEPMs to the Commonwealth once they have been finalised.

Since the Bill was drafted, there have been major changes proposed to the existing Commonwealth environment laws. The government has decided on a reform of environmental legislation that will combine several Acts. The COAG decision listed seven matters of national environmental significance to include in the proposed legislation. The Environment Protection and Biodiversity Conservation Bill 1998 was introduced to Parliament on 2 July 1998, re-introduced on 12 November 1998 and is being considered by the Senate Environment, Communications, Information Technology and the Arts Legislation Committee, due to report in March 1999. The NEPM(I) Bill needs to be considered within the context of the EP&BC Bill.

Background

History of the Bill

On 21 October 1997, the National Environment Protection Measures (Implementation) Bill 1997 was introduced into the Senate of the 38^th Parliament. The second reading debate of the Bill was not completed when Parliament was prorogued.

On 19 November 1997, the Senate on the recommendation of the Selection of Bills Committee, referred the 1997 Bill to the Senate Environment, Recreation, Communications and the Arts Legislation Committee, which reported in March 1998. The Majority Report recommended the Bill proceed without amendment. The Minority Report by the Australian Democrats recommended significant amendments to the Bill and the Minority Report of the Australian Labor Party expressed serious concern with the Bill. This Report is briefly considered below.

The current Bill mirrors all the provisions of the 1997 Bill. Except for additional commentary in relation to the Committee's inquiry, this Bills Digest reiterates Bills Digest No. 113 1997-98.

Overview of History of Environmental Protection Mechanisms

The division of legislative responsibility between the Commonwealth and States set out in the Constitution has long caused some difficulty in securing effective or uniform environmental protection outcomes. Such difficulties were most recently alluded to in the 1996 Commonwealth State of the Environment Report, where the independent advisory panel commented:

The adoption of a policy of national uniformity in environmental protection standards in the 1990s appears to have been motivated by factors including a realisation by Australian governments that environmental problems cross State borders and need to be addressed on a nation-wide basis.

The Bill has been introduced at the same time as a number of reviews of the Commonwealth's environmental law regime, many of which are likely to present proposals for legislative reform. For example amendments to the Environment Protection (Impact of Proposals) Act 1974 have been proposed during the course of the present COAG Review of Commonwealth and State Roles and Responsibilities for the Environment.(6)

According to the Second Reading Speech delivered by Senator the Hon. Ian Campbell, the COAG review is to consider similar matters, including:

The review has already led to an announcement by COAG of 7 November 1997, in which the parties pledged improved compliance by the Commonwealth and the States with State environment and planning legislation .(8)

The Intergovernmental Agreement on the Environment (1992)

The NEPM project was agreed to in the IGAE of 1992. The IGAE is based on a model of 'cooperative federalism' in which, broadly, the Commonwealth pledged to reach agreement with the States on environmental matters by consensus. It promised to avoid taking unilateral action to override State government decisions, for example on World Heritage nomination.(9) Thus, the IGAE seeks to reduce conflict between the Commonwealth and State governments over the environment.

The IGAE is not a legally binding document.(10) An Attorney-General's advice, prepared by the Office of General Counsel in 1994, concluded:

Therefore, the Commonwealth could act unilaterally to create a uniform environment protection scheme. However, such an approach would breach previous political commitments.

The Bill is consistent with the broad approach of the IGAE of tending to rely upon on State legislation. This is partly in recognition of the lack of 'on the ground' experience and resources of the Commonwealth in environmental management and environmental law enforcement, when compared to State EPAs.

The National Environment Protection Council Act 1994

The National Environment Protection Council Act 1994 (Cth) (NEPC Act) and the corresponding package of complementary State 'mirror' legislation was enacted in order to implement commitments made in the IGAE to develop a range of uniform national environment protection measures. The NEPC Act specifically contains the full text of the IGAE within its Schedule 1, mentions 'the Agreement' in its Preamble, and refers to it throughout.

The NEPC Act creates the National Environment Protection Council (NEPC), a Ministerial Council, charged with the function of making NEPMs. It is also required 'to assess and report on the implementation and effectiveness' of NEPMs.(12)

The NEPC Act provides in s.14 for the making of NEPMs, which are measures relating to seven listed environmental issues. NEPMs are a disallowable instrument under s.21 of the NEPC Act. These measures are required by s.14(3) to comprise one or more of the following items : a standard, goal, guideline or protocol. Unless the NEPC Act is amended, it appears that NEPMs can only be made to confront the following seven problems:

• ambient air quality
• ambient marine, estuarine, and fresh water quality
• noise standards
• site contamination assessment guidelines
• hazardous waste impacts
• re-use and recycling of used materials, and
• motor vehicle noise and emissions.(13)

To date, draft NEPMs have been prepared on the following topics:

• the National Pollutant Inventory (NPI)
• air standards
• hazardous waste, and
• contaminated sites.

The making of NEPMs is constrained by a requirement to have regard to a range of social, economic and regional factors.(14) Among these are requirements to consider the following factors when making NEPMs:

• the environmental, economic and social impact of the measure, and
• any regional environmental differences in Australia.

The Environmental Impact of Commonwealth Facilities

The decision to bind the Commonwealth to NEPMs can be explained firstly by a desire to create consistency in the national scheme (which would be lost if the Commonwealth were not bound), and secondly, to address concerns about the environmental impacts of Commonwealth activities. The activities of Commonwealth and its authorities can have, and has had, a significant impact on Australia's environment. The Commonwealth owns, leases or occupies a small but significant proportion of Australia's total land mass. It owns land with a value of $7.75 billion, according to the ANAO.(15)

The Commonwealth operates a wide range of facilities, including some potentially contaminating land uses, such as:

The main environmental issues arising on Commonwealth lands include land contamination, storage of hazardous waste, and air, noise, and water pollution. It is not possible to catalogue all Commonwealth environmental impacts here. However, several examples have been selected, for the purpose of illustration:

• The National Transmission Authority in 1996 was storing over 33 tonnes of highly toxic poly-chlorinated biphenyl (PCB) material at its 500 sites throughout Australia, posing 'significant health and environment risks'.(17)
• There were 1060 identified unexploded ordnance (UXO) sites throughout Australia as at February 1996.(18)
• Defective environmental management practices identified by the Management Audit Branch of the Department of Defence in a 1995 review, cited by the ANAO, included the following problem areas in Airforce environmental management:
• failure to follow procedures for management of hazardous materials
• toxic wastes being stored and disposed of inappropriately
• discharge of contaminants into stormwater and possibly watertable
• poorly managed and uncontrolled disposal sites and in some cases inappropriate dumping of scheduled wastes posing a potential risk to personnel
• leakage/spillage around hazardous waste storage and disposal sites, and
• inadequate records for hazardous wastes and asbestos.(19)

At a minimum, evidence exists that the Commonwealth and its agencies can have significant impacts on the environment. The question then arises, as to the most appropriate means by which this impact is to be regulated.

Gaps in Commonwealth environment protection laws

Commonwealth legislation exists to address environmental issues in selected areas arising from Commonwealth activities including environmental impact assessment, heritage protection, and endangered species protection. However, there are many areas of environmental performance inadequately regulated by Commonwealth laws. In broad terms (and subject to some caveats) these include pollution control, contaminated land laws, and planning laws. These areas have been traditionally regarded as the province of State governments and legislatures.

For example, there is no Commonwealth legislation of general application which seeks to monitor, prevent and control environmental pollution from Commonwealth activities in the same as the Environmental Protection Acts of the States. Those Commonwealth Acts which touch upon pollution issues, such as the Ozone Protection Act 1989, Hazardous Waste (Regulation of Exports and Imports) Act 1989 and Environment Protection (Sea Dumping) Act 1981, can be characterised as dealing with matters on the periphery of the pollution control issues dealt with in State legislation.

If State laws do not apply because of claimed Commonwealth immunity, and there are no relevant Commonwealth laws, then the only applicable regime may be non-legislative policies, manuals, environmental management systems or guidelines. Many Commonwealth departments and authorities with potential to cause significant environmental impacts, such as Defence, already have in place substantial environmental management policies, plans and systems.

Regulation of the environmental impact of Commonwealth activities and places

An explanation for the Bill, aside from the desire to bind the Commonwealth to the scheme for the sake of consistency, has been the desire to fend off 'behind the scenes' criticism from State environmental regulatory agencies over deficiencies in Commonwealth environmental management and performance. The Commonwealth's unwillingness to be explicitly bound by all State environmental protection laws has long been subject to criticism by State governments. For example, State government comments received by the House of Representatives Standing Committee on Environment, Recreation and the Arts in March 1997 on the subject of Environmental Management of Commonwealth Land, were summarised as follows:

Such considerations, help to explain the presentation of the Bill. Its presentation is also consistent with the overall trend in environmental policy evident in the inclusion in the COAG's Communique of 7 November 1997 that the States and Commonwealth would work towards 'improved compliance by the Commonwealth and the States with State environment and planning legislation.'

Potential defects in the NEPM approach

The overriding purpose of the Bill is to bind the Commonwealth to NEPMs. The motivation is to give practical effect to a commitment of the Parliament in 1994 in s.7 NEPC Act to enact legislation to implement NEPMs in respect of activities that are subject to Commonwealth law, including activities of the Commonwealth and its instrumentalities.

A crucial point about the Bill is that it does not seek to bind the Commonwealth and its agencies to all relevant State and Territory environment protection laws. It merely aims to bind the Commonwealth to certain State laws, where those laws implement NEPMs. In 1994, a Victorian Parliamentary Committee considered and rejected the NEPM approach as a means of ensuring Commonwealth compliance with State environmental protection laws. It wrote:

The Committee, whilst describing the NEPM approach as 'sub-optimal', provided additional explanations for its point of view:

• a NEPM may constitute a goal, guideline, protocol or standard. As such, NEPMs may in effect be no more than statements of policy, that fall short of mandatory standards applicable to the rest of society under State legislation
• the categories of environmental matters listed in the IGAE as being within the power of the NEPC to establish NEPMs are limited and do not cover all areas of environmental concern, and
• NEPMs relate to ambient air and water quality and not to the quality of emissions from specific sources. This potentially makes it extremely difficult...for emissions from Commonwealth agencies to be subjected to EPA controls. It would also make it impossible for the EPA to effectively control the ambient levels if there are uncontrolled emissions entering the environment.(22)

The choice of a Ministerial Council structure for the NEPC scheme was criticised by Professor Bates of the Law Faculty of the University of Sydney who commented:

Similar is the argument that because of the difficulties in reaching consensus as to the content of national environmental standards, it is likely that the NEPC will be tempted to settle upon 'lowest common denominator' outcomes.

The effectiveness of the NEPM approach in achieving environmental protection goals will ultimately depend on the quality of the NEPMs themselves. This may be influenced by the following factors:

• The extent of exemptions (and the frequency of resort to them) for the Commonwealth and its agencies provided by the Bill eg., on the grounds of 'national security' and 'administrative efficiency', and
• Exemptions from the NEPC scheme posed by the use of State 'special projects' legislation to facilitate 'major projects'. Such legislation operates by excluding projects from the ambit of selected environmental protection laws.(24)

The question of Commonwealth immunity from State laws

Surrounding the Bill is a complex web of questions about the extent to which State environmental laws actually apply to the Commonwealth and its authorities. This has long been an area of legal confusion and uncertainty.

The importance of such matters becomes evident when the interplay of Commonwealth and State law leads to a situation where the environmental impacts of a Commonwealth activity are essentially unregulated, or are managed only by reference to non-binding departmental policies or guidelines.

It is helpful to review the law governing the application of State environmental laws to the Commonwealth, its authorities, and 'Commonwealth places'. In this area of law and practice, it is often asserted that the Commonwealth is immune from State environmental laws. However, one must identify the circumstances in which the notion of Commonwealth immunity from State laws is genuinely applicable, and those where it is not. This is especially important because of recent judicial decisions. These are complex legal matters, and it is difficult to consider every aspect in a paper of this type. Where it turns out to be the case that the Commonwealth is not bound by State laws, it is still open to the Commonwealth to enact legislation to bind itself to State laws. The present bill, to some extent, falls into this category of laws.

The starting point for an examination of the capacity of the States to effectively make laws that regulate the activities of the Commonwealth is the proposition that such capacity is limited by the Constitution. Three potential sources exist of Constitutional immunity of the Commonwealth from State laws. These are: the operation of s.52(i);(25) the operation of s.109 ('the inconsistency provision');(26) and the operation of a general implied immunity sometimes referred to as the Cigamatic immunity. This is an immunity founded in judicial interpretation of the Constitution based on the inherent qualities of Australia's federal system of government.(27)

The general position taken by the Commonwealth has long been that it is not bound by State environment protection laws, due to the operation of various immunities and the inconsistency provision of the Constitution. However, the High Court's decision of August 1997 in Henderson has considerably reduced the extent to which the Commonwealth and its agents can claim a broad Constitutional immunity from State laws.(28) The Court found that NSW residential tenancy laws applied to the activities of the Defence Housing Authority. A 6:1 majority rejected the broad proposition that the Commonwealth cannot be bound by State legislation. The Court laid down a general proposition that:

The question of binding the Commonwealth is determined partly by an examination of the scope of any clause within the particular State Act under examination which purports to bind the Crown to see whether it can be interpreted as also applying to the Crown in the right of the Commonwealth as well as the State.

It cannot be said that questions concerning the meaning and extent of any given possible inconsistency or immunity are straightforward. In some cases doubts will exist as to the extent of the Commonwealth law and thus, the degree to which State environmental laws will apply. If an immunity does in fact apply, it will fall to Commonwealth legislation or policy to provide the environmental protection framework. A case by case approach is necessary.(30)

There exist a number of potential sources of Constitutional immunity available to the Commonwealth which may render certain State environment protection laws inapplicable to the Commonwealth. However, the extent of these immunities has also been curtailed to some extent by the High Court's recent decision in Henderson. According to the Office of the Australian Government Solicitor:

Laws to relinquish immunity

Despite the existence of a number of potential sources of immunity, it is open to the Commonwealth to legislate to waive or confirm its immunity from State laws. The present Bill attempts to simultaneously waive immunities applying in some circumstances, and then to confirm immunities applying in other circumstances. (Refer to discussion of s. 9 of the Bill below at page *).

A law already exists to waive Commonwealth immunity from State laws in certain circumstances. It is the Commonwealth Places (Application of Laws) Act 1970 (the CPAL Act). The CPAL Act (referred to in the Bill) was enacted in order to apply, as Commonwealth law, the provisions of State law that are inapplicable by reason of s.52(i) of the Constitution. The motivating factor was the effect of a number of decisions of the High Court of 1970, which held that no State laws applied in Commonwealth places.(32) In such decisions, State occupational health and safety laws and criminal laws were held not to apply in Commonwealth places.

The CPAL Act provides that, as a general rule, provisions of State laws are to apply to Commonwealth places. Section 4(1) provides that the laws of a State at a particular time are made laws of the Commonwealth for Commonwealth places at that time.(33) However, the general rule created by s.4(1) is subject to a number of exemptions which raise complex legal questions.(34) The operation of the CPAL Act is limited by certain factors and does not provide universal 'coverage'.(35)

The application of State laws in a specific instance remains unclear.(36) When attempting to determine if State environmental laws apply to the Commonwealth in a given situation, and a case-by-case approach may be necessary in view of the uncertainty. Accordingly, the Australian Government Solicitor advised in a recent publication that to put the issue beyond doubt in a particular area, Commonwealth legislation is required.(37)

How does the Bill alter the application of State laws to the Commonwealth ?

In broad and general terms, the effect of the Bill is as follows:

2. The Bill removes the application of the CPAL Act (Cth) which operates to apply State certain environmental laws to the Commonwealth, but, notably, only where these are implementing a NEPM.

3. The Bill then selectively re-applies certain identified provisions of State environmental laws to the Commonwealth, in order to implement NEPMs.

4. The Bill does not attempt to apply provisions of all State environmental laws to the Commonwealth. It only applies State laws that are 'implementing a NEPM'. It only allows for their application by means of declarations (in Parts 2 and 3). The reach of these declarations may be limited by 'national interest' and other exemptions.

It is unlikely that the Bill will resolve the wider question of which State environmental laws will apply to the Commonwealth. The Bill only addresses this question peripherally, by subjecting the Commonwealth to specified provisions of State laws which purport to implement NEPMs. (see 'Main Provisions'). However, as the Bill chooses not to subject the Commonwealth to the majority of State environmental laws, in fact only addressing a small proportion of them, the larger questions and uncertainties about possible Commonwealth immunity from State environmental laws in a given situation are likely to persist.

As the Bill only attempts to exclude the operation of certain State environmental laws (those implementing a NEPM, where those provisions have not been 'accepted' by means of a declaration of the Environment Minister), then not all State environmental laws will have been excluded from potentially applying to the Commonwealth. It will still be necessary to apply Henderson to determine if Commonwealth immunity exists. A useful general rule from Henderson is that in the absence of an inconsistent Commonwealth law, it can be generally assumed that State laws may apply to the Commonwealth and its authorities.

This uncertainty is likely to be compounded by the operation of certain subject specific legislative confirmations of immunity (eg for airports), and by the operation of exemptions within the Bill.

A senior legal policy officer of a State Environment Protection Authority expressed the view that:

Laws to confirm or extend immunity in specific areas

The complicated legal landscape into which the Bill is entering is further complicated by a number of pre-existing statutory regimes conferring specific exemptions. These laws confer immunity from State environmental laws upon several specific Commonwealth authorities and activities. Such legislation applies to airports, telecommunications, Australian Defence Industries Ltd, and ANSTO.(39)

Note that the Bill in s. 5 includes the regulation of airspace, aviation and airports within its definition of 'matter of national interest'. The Second Reading Speech contained the following explanation for reliance upon this exemption in the context of airports, where Commonwealth legislation applies nationally:

Senate Environment, Recreation, Communications and the Arts Legislation Committee Inquiry

The Senate, on advice from the Selection of Bills Committee, referred the 1997 Bill to the Senate Environment, Recreation, Communications and the Arts Legislation Committee to examine:

• whether the Bill would in fact achieve its stated objective
• the effectiveness of the approach in the Bill in achieving environmental protection goals, and
• the extent and effect of exemptions provided to the Commonwealth by the Bill.

The Committee reported in March 1998 and indicated that evidence presented, including from State and Territory Governments, raised significant concerns with the operation of the Bill. These concerns particularly related to:

• the Bill's general scheme that State laws implementing NEPMs apply to Commonwealth activities not routinely, but only after a positive declaration at the discretion of the Commonwealth Environment Minister
• inadequate or inappropriate criteria for the exercise of the Minister's discretion in relation to State/Territory environmental laws
• the broad 'national interest' test for excluding the operation of State laws
• the weak enforcement regime established by the Bill, particularly the immunity granted to the Commonwealth from criminal liability, and
• the lack of strong accountability mechanisms, particularly the lack of clear obligation on the Commonwealth to monitor and report publicly on how well the goals of an environmental management plan are being achieved.

The majority of the Committee concluded that Environment Australia had provided sufficient information to counter such concerns and recommended the Bill proceed. Minority Reports by Senator Allison (Australian Democrats) and Senator Schacht (Australian Labor Party) reflected many of the concerns raised in evidence to the Committee. Senator Allison provided a range of proposed amendments in accordance with these concerns.

Main Provisions

The Bill is for a stand alone Act. However the Bill makes frequent use of terms and concepts contained within the National Environment Protection Council Act 1994. Thus it partly depends on the continued existence of that legislation, and of the complementary State legislation.

Section 4 provides a simplified outline of the Bill. The starting principle is as follows:

This rule is modified by the provisions of Parts 2, 3, 4, 5 of the Bill which provide for the application of State or Territory laws to Commonwealth activities or places. This is achieved in the Bill by means of:

• a declaration by the Environment Minister published in the Gazette ( ss.12, 17 in Parts 2, 3 respectively), or
• regulation (Part 4); or
• an environmental audit and environmental management plan (Part 5).

Section 5 contains a number of definitions. The key term, 'matter of national interest' is defined here.

Amongst the other definitions is a definition of 'Commonwealth place'. However, this definition is essentially a reference to the concept as contained within s.52(i) of the Constitution. Therefore it will be essential to have regard to case law in order to find a more exact definition of 'Commonwealth place'. It is generally agreed that such a place is where the Commonwealth holds the fee simple.(41) In Bevelon Investments v Melbourne Corporation the High Court ruled that a five year leasehold interest did not fall within the definition of Commonwealth place for the purpose of s.52(i). Three justices made non-binding remarks that a distinction should be drawn between long term or perpetual leases and shorter term leasehold interests and temporary occupations.(42)

An additional complicating factor is the question of which bodies are to be considered as part of 'the Commonwealth' in a given situation involving a question of possible immunity from State environmental protection laws. Section 5 contains a definition of 'Commonwealth authority'. The question of whether Commonwealth government business enterprises (GBEs) are considered an agent or emanation of the Crown in the right of the Commonwealth is a crucial one. (43)

Application of State laws to the Commonwealth

Section 9 is one of the most important provisions of the Bill. It modifies the operation of the Commonwealth Places (Application of Laws) Act 1970, where it would operate to apply State and Territory laws implementing NEPMs.

Recall that s. 4 of the Bill sets out the starting principle that:

The Bill provides that State laws which implement NEPMs are no longer to apply to the extent that they would by reason of the operation of the Commonwealth Places (Application of Laws) Act 1970. They are only to apply to Commonwealth activities and places to the extent permitted by the operation of the Bill. In other words, the Bill removes the application of State environmental laws from the Commonwealth and then reapplies it in a qualified and limited fashion.

Throughout Part 2, the term 'applied State laws' is employed. This is defined in s.5 as:

Section 10 creates an enforcement mechanism to apply in the event of contravention of applied State environmental laws. In essence, it is based on reports and recommendations. In summary, the reporting mechanism for violations is as follows:

• A State or Territory officer may serve a contravention report on Secretary or CEO of Commonwealth authority, with a copy to the Environment Secretary [10(3) or (4)]
• The Environment Secretary investigates and provides a written report to the Environment Minister; [10(5)]
• The Environment Minister makes a recommendation to the relevant Minister [10(6)], and
• The relevant Minister gives comments and a report on action taken ('if any') to the Environment Minister [10(7)].

In detail, the provisions are as follows. Subsection 10(3) provides that a state EPA officer may report contraventions to the Secretary or CEO of Commonwealth Department or authority. Subsection 10(4) is a mirror provision, for reporting by Territory EPA officers. Subsection 10(5) provides that the Environment Secretary must, upon receipt of a State officer's environment violation report, investigate the circumstances and provide a written report to the Environment Minister setting out any recommended action. The Secretary may, 'if he or she thinks it is appropriate to do so', prepare draft recommendations for action by the relevant Commonwealth Department or authority, and may give the relevant Secretary or CEO notice of the recommendations and seek comment upon them.

The enforcement mechanism incorporated in the Bill is complex and convoluted. It appears that a Commonwealth authority under investigation would not be bound to do anything other than respond to comments and recommendations. An alternative would have been to provide laws in Parts 2 and 3 of the Bill for criminal penalties and other enforcement provisions, such as improvement notices, similar to those contained in State environmental laws.

Other important provisions of s. 10 are as follows. Sub-section 10(1) provides that the Act binds the Crown in the right of the Commonwealth. However, notably, s.10(2) provides immunity for the Commonwealth from criminal prosecution. The Explanatory Memorandum states:

Parts 2 and 3 of the Bill aim to implement NEPMs by means of applied State legislation to Commonwealth places and activities, as opposed to Parts 4 and 5 which aim to apply NEPMs by means of Commonwealth regulations or environmental audits and management plans.

NEPM implementation - Commonwealth places

Part 2 of the Bill provides for the application of State laws to the activities of the Commonwealth and Commonwealth authorities in Commonwealth places. As discussed above, it will be necessary to have regard to the common law to determine what comprises a Commonwealth place. Part 2 is enforced via the reporting and recommendation mechanism created by s. 10 of the Bill.

Section 12 is the key provision of Part 2. It applies specified provisions of State laws by means of a declaration by the Environment Minister, published in the Gazette. Such a declaration can be made where that Minister considers it 'necessary' and 'desirable' that a particular provision of a State law applies to the Commonwealth for the purpose of implementation of a NEPM. The application of specified provisions of State laws under this section can be qualified by the making of regulations, so that the law applies subject to modifications, provided that consultation with 'appropriate officers' of the relevant State occurs. (ss 12(3) and 12(4)). A regulation making power is provided in s. 41.

Section 13 will further qualify the application of the selected provisions of State laws. The section provides six separate heads of qualification. Apart from those necessary to ensure the constitutional validity of the section, there are provisions stating that s. 12 is not to apply so as to require the Commonwealth to hold a licence, permit or other authorisation, or the preparation of an EIS. [However, the qualification in ss. 13(1)(b) includes the proviso 'except where the requirement is made for the purpose of implementing a NEPM'.] Section 13 contains an additional provision for the making of regulations to exclude the application of a provision of an applied State law, in either all Commonwealth places or a particular Commonwealth place, because of considerations 'relating to a matter of national interest'.

Section 11 provides an additional series of exemptions from the operation of Part 2, to apply in particular circumstances. It provides that s. 12 is not to operate to apply certain NEPMs to Commonwealth activities, if there is a declaration by the Environment Minister that:

• an alternative 'Commonwealth regime' exists for implementation of the NEPM, and
• the application of the NEPM, by means of that alternative Commonwealth regime is more appropriate than by means of applied State laws, because:
• 'the activity involves a specified matter of national interest', or
• 'for reasons of administrative efficiency'.

The Bill does not define the term 'an alternative Commonwealth regime'. It appears this phrase does not only refer to legislation and delegated legislation. In other words, a Commonwealth environmental policy or guideline with no legal status may nevertheless constitute 'an alternative Commonwealth regime' for the purposes of the Bill.

It is unclear whether a declaration made under this s.12 is a disallowable instrument. The Bill makes it clear that an order made under ss. 36(3) restricting or prohibiting entry into or search of exempt Commonwealth premises, is a disallowable instrument for the purposes of s.46A of the Acts Interpretation Act 1901.

The Bill does not define, or provide criteria for determining when reasons of 'administrative efficiency' exist. The Bill provides a definition of 'national interest', as discussed below.

The term 'Commonwealth authority' is defined within the bill at s. 5. It includes:

• bodies established for a public purpose
• bodies established by a Minister or the Governor-General, and
• companies (and their subsidiaries) over which the Commonwealth is in a position to exercise control.

National interest exclusion

The term 'matter of national interest' is defined in s. 5. In summary, it is defined to include matters concerning:

• Australia's foreign relations
• Australia's international obligations
• national security
• national defence
• a national emergency
• telecommunications activity authorised in Schedules 2, 3 and 4 of the Telecommunications Act 1997. These parts of that Act, (particularly in Division 7 of Schedule 3) provide telecommunications carriers with certain powers to install and maintain facilities with specific immunities from State environmental impact, land use and planning and heritage protection laws(44)
• management of aviation, airspace, or airports including aircraft noise and emissions, and
• any other matter agreed between the Commonwealth, States and Territories.

NEPM implementation - Commonwealth activities in non-Commonwealth places

Part 3 of the Bill provides for the application of State and Territory laws providing for the implementation of a NEPM to activities of the Commonwealth and Commonwealth authorities in non-Commonwealth places. Part 3 is enforced via the reporting and recommendation mechanism created by s. 10 of the Bill.

Section 17 is the key provision in Part 3. It applies State and Territory laws by means of a declaration by the Environment Minister, published in the Gazette, in much the same way as s. 12 of Part 2. Such a declaration can be made where it is considered 'necessary' and 'desirable' that a particular provision of a State or Territory law applies to the Commonwealth for the purpose of implementation of a NEPM.

Section 17 provides for State or Territory laws that implement NEPMs to apply to 'carrying on of an activity' by the Commonwealth or a 'Commonwealth authority'. The term 'Commonwealth authority' is defined within the bill at s. 5.

Section 18 qualifies the application of State and Territory laws as provided for in s. 17. Amongst the qualifications is the statement that s.17 is not to require a licence, permit or other authorisation, or require the preparation of an EIS, unless it is done for the purpose of implementing a NEPM.

Section 16 is similar to s.11 and provides exemptions from the operation of State laws on the basis of national interest or administrative efficiency.

NEPM implementation by regulation

Part 4 of the Bill provides for an alternative method of application of NEPMs to the Commonwealth - by the making of regulations. According to the Explanatory Memorandum:

A senior State Environment Protection Authority officer argued that it is more likely that Parts 4 and 5 of the Bill will be used in practice as the implementation method, because the processes contained therein are much less convoluted and less daunting than the processes set out under Parts 2 and 3 of the Bill.

Section 21 sets out the circumstances in which NEPMs are to be implemented by the making of regulations. For example, this may apply where the Environment Minister 'becomes satisfied that' the NEPM is not being implemented satisfactorily via the mechanism of applied State laws. A second circumstance is where exemptions, such as 'national interest' or 'administrative efficiency', have been applied under Part 2 or Part 3 to the Commonwealth place or activity.

Regulations may not be necessary if other Commonwealth laws already exist. Thus NEPMs may be implemented via existing Commonwealth environmental laws [ss. 21(1)(c)].

Sub-section (1) provides a list of circumstances in which NEPMs may be implemented by regulation. Sub-sections (2),(3),(4) provide for exclusions, based on 'national interest' considerations set out in ss. (4). Sub-section (5) provides the regulation making power. Subsection (6) establishes criminal penalties for breaches of regulations implementing NEPMs under Part 4. The maximum penalties provided are substantial, as follows:

• if the contravention by an individual causes harm to the environment: 2,000 penalty units, and
• if the contravention by an corporation causes harm to the environment: 10,000 penalty units.

Under s.4AA of the Crimes Act 1914 (Cth), one penalty unit is presently equal to $110.00.

The Explanatory Memorandum suggests why penalties of this magnitude were incorporated:

Because of the operation of s. 10(2), these penalties will not apply to the Crown in the right of the Commonwealth. However, according to the Explanatory Memorandum, the penalties will apply to Commonwealth government business enterprises(47) such as Australian Defence Industries. Note that because of the operation of s. 7, any activities carried out on behalf of Commonwealth government business enterprises (GBEs) by contractors will also be potentially subject to such criminal penalties. Section 7 provides that activities carried out by contractors are deemed to be included in the definition of 'the carrying out of an activity by the Commonwealth or a Commonwealth authority'.

Part 6 of the Bill provides a regime for ensuring the implementation of NEPMs where Part 4 or Part 5 have been chosen as the implementation method. This is discussed in greater detail below.

Environmental audits

Part 5 of the Bill provides for the implementation of NEPMs by means of environmental audits and environment management plans (Divisions 2 and 3 respectively). This is likely to arise in a similar situation to where Part 4 would apply (see discussion above), but where no regulations have been made, or are proposed to be made. Section 23 sets out the circumstances in which Part 5 is to apply. Section 23(1)(c) provides that Part 5 is to apply when the NEPM is not implemented by regulation or by another law of the Commonwealth in a way that the Environment Minister is satisfied will achieve appropriate environmental outcomes.

Section 24 obliges the relevant Minister to arrange for an environmental audit 'to be carried out for the purposes of the implementation of the NEPM' with respect to the Commonwealth. Section 25 defines 'environmental auditor', and requires that the person appointed must not be an officer or employee of the Department or authority concerned. The Bill does not prescribe qualifications required by the auditor. Section 26 sets out the required components of an environmental audit for the purposes of the Bill. It creates certain obligations on the auditor, and provides criminal penalties of up to 6 months imprisonment for the offence of concealing or failing to take into account relevant information or documents in the course of carrying out the audit. Section 27 requires the auditor to prepare a written report and to supply a copy to both the relevant Minister and the Environment Minister. The section obliges the auditor to ensure that statements included in the report are not false or misleading in a material particular. A breach of this obligation involves the commission of a criminal offence, again punishable by a maximum term of 6 months imprisonment.

The meaning of the term 'audit' in this Bill differs from the meaning of the term in the context of verifying the accounts of public companies. In a financial context, an audit involves third party verification of existing data, whereas this type of (environmental) audit merely appears to involve the generation of data. In that sense, it could be argued that a document produced pursuant to ss.24-27 is more a report, than an audit. It is not proposed in the Bill to create a scheme of compulsory environmental reporting which would then be subjected to an independent process of audit.

Nothing within sections 24-28 indicates explicitly that the audit report is to be made available to members of the public. However the Freedom of Information Act 1982 would apply, subject to exemptions.

Section 28 provides that the report of an environmental audit, or any information obtained during its production, is not to be admissible in evidence in any civil or criminal proceedings against the Commonwealth or Commonwealth authority where the audit report relates to the Commonwealth or a Commonwealth authority.

If this explicit protection did not exist then:

As a result, a significant disincentive to the conduct of environmental audits would exist, being the fear that environmental audit documents could be used in criminal proceedings against the authority or enterprise in question. However, some observers may ask whether it is appropriate that this shield apply to the Commonwealth.

Several other issues are relevant. First, it is notable that the Bill makes no reference to, nor does it provide a regime for the accreditation of environmental auditors.(49) In Victoria, the Environment Protection Act 1970 provides in s.57 for the creation of a scheme of accreditation of environmental auditors. Second, further questions may arise in relation to whether a obligation (statutory or otherwise) exists, for the Commonwealth to disclose the results of past audit reports in the course of sale of potentially contaminated Commonwealth land, in order to avoid liability for misrepresentation and misleading conduct.(50)

Environment management plans

Division 3 of Part 5 provides for the implementation of NEPMs by means of environment management plans (EMP), following a report from an environmental auditor appointed under Division 2. Section 29 provides that the relevant Minister must arrange the preparation of an EMP as soon as the audit report is received. Section 30 sets out the required contents of an EMP. These include objectives, an implementation timetable, performance indicators, community consultation requirements, and monitoring and reporting provisions. Section 31 sets out the duties of the environment manager, a person appointed by the Secretary or CEO of the relevant Commonwealth agency. This includes an obligation to supply a final copy of the EMP to the Environment Minister as well as the relevant Minister. The section contains no obligation to table EMP reports in the Parliament, nor to list their preparation in the relevant Department's Annual Report. However, ss. 31(1)(f) provides that unless exempted by regulation, copies of EMP reports are to be available for purchase by members of the public.

Part 6 of the Bill provides a regime for ensuring the implementation of NEPMs where Part 4 or Part 5 have been chosen as the implementation method. Section 32 creates an obligation on the relevant Minister to ensure the adequate implementation of the NEPM in these circumstances. The section further provides that the Environment Minister can request the relevant Minister to supply a written report explaining instances of inadequate implementation of the NEPM, and the action proposed to rectify the defect. Sub-section 32(5) provides an interesting 'shaming' provision, which empowers the Environment Minister to make and gazette a declaration that the NEPM has not been adequately implemented by a particular Commonwealth activity.

Review provisions

Part 7 of the Bill contains provision for administrative and judicial review of decisions made pursuant to the legislation. Section 33 provides for review by the AAT of certain 'reviewable decisions' (as defined in s.33). Section 34 provides for review by the Federal Court of certain civil matters.

Miscellaneous provisions

Section 35 creates an obligation on [State government] personnel entering or searching Commonwealth premises in the course of implementing NEPMs not to disclose information obtained. Failure to adhere to this obligation attracts a maximum criminal penalty of 2 years imprisonment.

Section 36 provides for restrictions on the entry to, or search of specified Commonwealth 'exempt premises'. These are premises so declared by regulation, based on 'national interest' criteria. If the premises are declared exempt, then applied State or Territory law authorising a search for the purposes of environmental law enforcement is inapplicable to the extent described in the regulation. The Environment Minister is empowered to make disallowable Orders, published in the Gazette, prohibiting or restricting subject to condition, the entry of certain persons authorised to enter and search by reason of applied State law. If a State or Territory officer enters or searches exempt Commonwealth premises in contravention of an Order or condition attached to an Order, this attracts a maximum criminal penalty of 2 years imprisonment.

Section 38 makes provision for cooperative arrangements with State and Territory Ministers for the implementation of NEPMs, and to give effect to the provisions of the Bill.

Section 39 is an annual reporting provision. If a Department or authority 'is responsible for the carrying on of an activity to which a NEPM applies', the responsible Minister must prepare annually a report about its implementation of the NEPM. The reports are to be supplied to the Environment Minister, who is to table them in Parliament. According to the Second Reading Speech delivered on 21 October 1997 by Senator the Hon Ian Campbell :

However, it is not immediately clear that annual reports on NEPM implementation will function as envisaged in the second reading speech. The section fails to contain a list of factors and considerations that must be incorporated in an Annual Report. Further it is arguable whether there exists a firm obligation to provide details of non-compliance with NEPMs.

Concluding Comments

Many will welcome the Bill as a step towards realising the important goal of nationally uniform environmental protection standards, even though it only addresses some of the issues arising from the environmental management practices prevailing within Commonwealth agencies and on Commonwealth places.

Some observers have drawn attention to the Bill's limitations. The provisions of the Bill which state that the Commonwealth and its agencies are not to be subject to criminal sanction under State law, and are not to be required to obtain permits, authorisations, or environmental impact statements under State law have received particular criticism.

The issue of the environmental performance of federal facilities and agencies is a significant one. It has sometimes been overlooked. The United States and Canada have both attempted to confront aspects of similar problems.

The Bill will apply selected provisions of State environmental laws to the Commonwealth in order to implement NEPMs. However, at this stage NEPMs can only be made on a limited range of subjects. The effectiveness of this Bill depends fundamentally on the quality of the NEPMs it implements, and the method by which that implementation is attempted.

Endnotes

2. Second Reading Speech, delivered by Senator the Hon. Ian Campbell (WA), 21 October 1997, at p. 6.

3. For background refer Department of Parliamentary Library, Bills Digest : National Environment Protection Council Bill, No.102 of 1994.

4. Ogle (1997), The Bush Lawyer : a Guide to Public Participation in Commonwealth Environmental Laws, Environmental Defender's Office Ltd, Sydney, p. 10.

5. Commonwealth of Australia (1996) State of the Environment 1996 : an independent report presented to the Commonwealth Minister for the Environment by the State of the Environment Advisory Council, CSIRO Publishing, at p. ES-9.

6. For further information refer Senator Hill, Address to NELA Annual Conference, Adelaide, 3 April 1997, and Senator Hill, Address to ACEL Annual Conference, Sydney, 9 October 1997. Text of both speeches available at Environment Australia internet site URL http://www.environment.gov.au.

7. Second Reading Speech, delivered by Senator the Hon. Ian Campbell (WA), 21 October 1997, at p. 2.

8. COAG Communique, 7.11.97.; Sydney Morning Herald, 8.11.97, p. 7.

9. For example, on World Heritage, in Schedule 8 of the IGAE, the parties agreed as follows : '3. The Commonwealth will consult with the relevant State or States, and use its best endeavours to obtain their agreement, on nominations to the World Heritage List.'

10. In Greenpeace v Redbank Power, Pearlman J of the NSW Land and Environment Court held that the IGAE was not binding upon decision makers, as it was a 'policy document only'. Greenpeace Australia Ltd v Redbank Power Co. Pty Ltd (1994) 86 LGRA 143 at 153.

11. Legal advice from Office of General Counsel, Attorney-General's Department, to DEST, 17 January 1994, cited in Toyne, Phillip (1994) The Reluctant Nation : Environment, Law and Politics in Australia, ABC Books, p. 180.

12. s.12 NEPC Act 1994.

13. The list is further qualified in that NEPMs on noise and motor vehicle emissions can only be made if 'differences in environmental requirements....would have an adverse effect on national markets for goods and services.'

14. s.15 NEPC Act.

15. ANAO (1996) Environmental Management of Commonwealth Land, Site Contamination and Pollution Prevention, Audit Report No. 31, p. 3.

16. ibid., p. 82. This list is based on larger list entitled Contaminated Land Valuation Practice Standard (1994) adopted by the Australian Institute of Valuers and Land Economists.

17. ibid., p. 62.

18. ibid., p. 40.

19. ibid., p. 27.

20. House of Representatives Standing Committee on Environment, Recreation and the Arts (1997), Environmental Management of Commonwealth Land: A review of Audit Report No.31 - Environmental Management of Commonwealth Land : Site Contamination and Pollution Prevention, March, 43pp., at p. 15-16.

21. Environment and Natural Resources Committee of the Parliament of Victoria, (1994) The Environmental Impact of Commonwealth Activities and Places in Victoria, p.xx.

22. ibid., p. 169.

23. Bates, op.cit., pp. 96-7.

24. Bates, G., op.cit., pp.135-141; Fisher, D.E. (1993), Environmental Law: Text and Materials, Law Book Co., pp. 40-44.

25. Hanks, P. (1996) Constitutional Law in Australia, 2nd edition, Butterworths, p.255-7; see also Svikart v Stewart (1994) 181 CLR 548 (5:2 decision; NT criminal code applicable to offence committed on RAAF base).

26. Botany MC v Federal Airports Corporation (1992) 175 CLR 453.

27. Commonwealth v Cigamatic (1962) 108 CLR 372 at 378; Dixon J in Uther v Federal Commissioner of Taxation (1947) 74 CLR 509 at 528; Trade Practices Commission v Manfal Pty Ltd [No.2] (1990) 97 ALR 231 at 239-240 per Wilcox J; (1990) 27 FCR 22 at 31.

28. Re The Residential Tenancies Tribunal of NSW and Henderson; Ex Parte Defence Housing Authority ('Henderson'), High Court of Australia, No.S75 of 1996, discussed in Australian Government Solicitor (1997), 'The Commonwealth's Implied Constitutional Immunity from State Law', Legal Briefing No.36, 30 August 1997.

29. Australian Government Solicitor (1997), 'The Commonwealth's Implied Constitutional Immunity from State Law', Legal Briefing No.36, 30 August 1997, p. 4.

30. ibid.

31. ibid., p. 5.

32. Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89 (NSW OH&S legislation inapplicable to accident on Commonwealth air base); R v Phillips (1970) 125 CLR 93 (WA criminal law inapplicable to acts on Commonwealth property acquired for public purposes); see also discussion in Newcrest Mining v Commonwealth (1995) 130 ALR 193 at 203, per Black CJ, Foster J. High Court Appeal reported at (1997) 147 ALR 42.

33. WA v Commonwealth (1995) 183 CLR 373 at 487.

34. Hanks, P. (1996) Constitutional Law in Australia, 2nd edition, Butterworths: p. 256.

35. ibid., p. 257.

36. ANAO, op.cit., p. 9; cites Senate Select Committee on the Dangers of Radioactive Waste, No Time to Waste, (April 1996), and Senate Standing Committee on Legal and Constitutional Affairs, The Doctrine of the Shield of the Crown (December 1992).

37. Australian Government Solicitor (1997), 'The Commonwealth's Implied Constitutional Immunity from State Law', Legal Briefing No. 36, 30 August 1997, p. 5.

38. Pers. comm., 18.11.97.

39. s.116(1) Telecommunications Act 1991, Telecommunications (Exempt Activities) Regulations 1991, s.122A Defence Act 1903, s.7A Australian Nuclear Science and Technology Organisation Act 1987, s.11A(2)(b) Civil Aviation Act 1988, r.9 Federal Airports Regulations 1992.

40. Second Reading Speech, delivered by Senator the Hon. Ian Campbell (WA), 21 October 1997, at p. 3.

41. Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89, R v Phillips (1970) 125 CLR: 93.

42. Bevelon Investments Pty Ltd v Melbourne Corporation (1976) 135 CLR 530; per Murphy J at 550, per Stephen and Mason JJ at 545.

43. McCorquodale, J. (1992) 'Immunity of Commonwealth Government Business Enterprises from State Laws', 66 Australian Law Journal 406.

44. Bills Digest (1997-98) No.87, pp. 28-30.

45. Explanatory Memorandum, p. 4.

46. ibid.

47. ibid., p. 16.

48. Gunningham and Prest (1993), 'Environmental Audit as a Regulatory Strategy: Prospects and Reform' 15(4) Sydney Law Review 492 at 500.

49. Gunningham (1993), 'Environmental Auditing: Who Audits the Auditors ?' 10 Environmental & Planning Law Journal 229.

50. Wilcher, R. (1997), 'Environmental Auditing as a Regulatory Strategy for the Sale of Contaminated Land in Australia', 14 Environmental & Planning Law Journal 181; ANAO, op.cit.

51. Second Reading Speech, 21.10.97, op.cit., p. 4.

52. This Digest reproduces work done by James Prest from an earlier version of this Bill introduced during the last Parliament. Mr Prest, at the time was an officer of the Department of Prime Minister and Cabinet on secondment to the Department of the Parliamentary Library.

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