CHAPTER 2: ISSUES ARISING FROM THE AUDIT REPORT
The Development of a Commonwealth Policy
2.1 The development of a Commonwealth policy on the environmental management
of Commonwealth land was a key recommendation of the audit report. The
absence of a clear Commonwealth policy was viewed by the Australian National
Audit Office (ANAO) as a major constraint on departments and land managing
entities seeking to establish priorities and actions in line with best
practice.
2.2 The ANAO noted that the primary responsibility for policy development
on contaminated sites rested with the Commonwealth Environment Protection
Authority (CEPA). A policy position had been under consideration since
1993 but had not reached conclusion. Consequently, the ANAO recommended:
... that the Commonwealth Environment Protection Agency should,
as a matter of priority, develop a proposal for consideration by Ministers
to clarify the Commonwealth's policy position on Commonwealth contaminated
sites. [1]
2.3 The ANAO included a paper on the development of better practice as
an appendix to its report. A senior ANAO director suggested to the Committee
that, given the better practice guide they had provided and the work already
undertaken by officials, the effort required to develop a policy proposal
to be put to ministers would be minimal:
The EPA has done quite a lot of work in the area already, and
our view at this stage is that it really would not take a great deal more
to actually finalise the policy. [2]
2.4 The ANAO regarded the development of such a policy as an important
first step in improving the environmental management of land:
As we have said throughout the report and indicated in the attachment
which covers the better practice guide, a clear Commonwealth environmental
policy is the first stage to assist agencies in managing their environmental
responsibilities. So it really is a key issue. [3]
2.5 The ANAO took the view that the role of the CEPA was to make recommendations
to help the Government come to a policy position on the environmental
management of Commonwealth land. It did not consider that the CEPA's role
was to monitor the day-to-day practice of land managing agencies, as it
did not have the resources or the technical expertise to act as a watchdog.
The response of Environment Australia and other departments
2.6 The CEPA initially agreed with the ANAO's recommendation and in a
letter to the auditors in June 1996 indicated that it was appropriate
for the draft audit report to have identified the need for a formal policy
to guide Commonwealth land management entities in addressing environmental
management issues. [4] In that letter, however,
the CEPA warned that resource reductions might prevent it from carrying
out the responsibilities and tasks recommended by the ANAO. The CEPA subsequently
told the Committee that the auditors' recommendation would not be implemented:
In practice the EPA [Environment Protection Agency] is unable
to undertake the tasks recommended in the report following recent changes
to the EPA priorities. ... Continued EPA work on contaminated sites was
given a relatively low priority, given the strong land management responsibilities
of the states, and the primary responsibilities of land managing agencies
for Commonwealth contaminated sites. [5]
2.7 In October 1996 the CEPA, along with other environment units within
the Department of the Environment, Sports and Territories, was incorporated
into the newly created Environment Australia. The CEPA's functions are
now discharged by the Environment Protection Group within Environment
Australia. It is now a matter for Environment Australia to respond to
the recommendations put by the ANAO.
2.8 An officer of Environment Australia suggested to the Committee that
the development of a National Environment Protection Measure (NEPM) on
contaminated sites by the National Environment Protection Council (NEPC)
would negate any role that Environment Australia might play in implementing
the audit recommendation:
Assuming that the ... [National Environment Council] ... decides
at some time in the reasonably near future to develop a measure, in some
sense the role that is envisaged for my organisation in this report would
be one that is perhaps no longer needed because the rules under which
the Commonwealth agencies that own land would have to operate would be
established by that measure. Therefore, the role that is envisaged here
would be less crucial.
... the gap that might be created by my own agency stepping
back from an active role in this area will ultimately be filled, I think,
by the development of a national environment protection measure. [6]
2.9 Environment Australia explained that it had been involved with the
contaminated sites issue since 1993 in two separate areas. Firstly, it
was an active participant with the Australian and New Zealand Environment
and Conservation Council (ANZECC) and the National Health and Medical
Research Council (NHMRC) in revising the 1992 Australian and New Zealand
Guidelines for the Assessment and Management of Contaminated Sites. Secondly,
Environment Australia has also chaired a committee with other ANZECC agencies
to develop guidelines for attributing financial liability for contaminated
sites. However, the representative of Environment Australia told the Committee
that his organisation lacked technical expertise to provide any leadership
on contaminated sites issues:
... there would be limitations ... on the kind of leadership
advice we could offer ... much of the time the kind of advice that would
be needed would be technical advice on how to address a particular problem
at a particular site. By and large, we would be unlikely to have the depth
of expertise that would be needed to provide that kind of advice ... [7]
2.10 The audited departments supported the recommendation that the CEPA
develop a policy position on contaminated sites. [8]
The Department of Defence claimed that, although the department itself
has significant capacity in relation to contaminated sites, it is advantageous
to be able to consult with Environment Australia about environmental issues
and to have some input into environmental assessments. [9]
The Department of Transport and Regional Development (DTRD) agreed with
the recommendation for a Commonwealth policy but noted that the development
of NEPMs would outline agreed national objectives. [10]
2.11 The Government of New South Wales in its submission to the Committee
did not specifically discuss the possible role of Environment Australia,
but it did strongly support the development of a national policy and guidelines
for the environmental management of Commonwealth land. The submission
noted that the Commonwealth has endorsed the Intergovernmental Agreement
on the Environment (IGAE) and the NEPC, but 'has proven unwilling to operate
its facilities within NSW on a level playing field with State and private
sector operators'. [11] The Committee considers
that this commitment to a policy of cooperation, but failure to cooperate
in practice, is a contradiction in the Commonwealth's approach. This may
reflect a lack of coordination between the areas involved in policy development
and the agencies involved in land management. The approach advocated by
the ANAO could help overcome such contradictions.
2.12 The New South Wales Government concluded that it would be desirable
for the Commonwealth Government to develop a more systematic approach
to environmental management of all types of Commonwealth facilities. [12]
The Government of South Australia also supported the development of a
framework and direction for the application of best practice principles
in the environmental management of Commonwealth land. [13]
Similar views were expressed by the Governments of the Northern Territory
and the Australian Capital Territory. The Northern Territory Government
was concerned about the apparent lack of a common environmental policy
or regulatory regime for Commonwealth activities, [14]
and the Australian Capital Territory Government stated that the lack of
a clear Commonwealth policy in managing environmental matters on Commonwealth
land has a special impact in the ACT. [15]
The Victorian Government also supported the development of a Commonwealth
policy:
The lack of Commonwealth legislation or formal policy on its
contaminated sites has, in Victoria's experience, led to inconsistent
approaches to the management of contaminated sites by Commonwealth departments
and entities. [16]
2.13 The Victorian Government supported the move by Commonwealth entities,
including some of the audited agencies, to adopt and implement environmental
management systems. However, the Victorian Government explained that one
of the key commitments assumed by an organisation under environmental
management systems is to comply with all environmental standards and other
regulatory requirements. It considered that a comprehensive and integrated
policy framework is essential if the standard of Commonwealth environmental
management is to improve. [17]
2.14 The need for a clear Commonwealth policy was also identified by
Local Government bodies. The Local Government Association of Queensland
supported the need for the Commonwealth Government to develop a policy
position in relation to Commonwealth contaminated sites. [18]
The Western Australian Municipal Association suggested that 'the need
for a national Commonwealth policy for effective environmental assessment,
planning and management on its land emerges as a clear priority'. [19]
2.15 It appears that there is support from all levels of Government for
a coordinated Commonwealth policy. Given the difficulties Environment
Australia sees in implementing the ANAO's recommendation, it is necessary
to consider alternative approaches to the development of a consistent
Commonwealth approach to land management. The Committee is disappointed
that this need has arisen when it appears that a policy could be finalised
without much more work. The broad options include processes that do not
require Environment Australia to take the policy leadership role envisaged
by the ANAO, and the adoption by the Commonwealth Government of approaches
developed by the States and Territories.
Alternatives to Environment Australia developing a policy
a) Australian and New Zealand Guidelines for the Assessment and Management
of Contaminated Sites
2.16 The Australian and New Zealand Guidelines for the Assessment and
Management of Contaminated Sites [20] (ANZECC/NHMRC
Guidelines), which were published in 1992, form the basis for action in
relation to Commonwealth contaminated sites. Many Commonwealth and State
agencies follow these guidelines to assess and manage contaminated sites.
For example, the Australian Maritime Safety Authority (AMSA) stated that
it takes into account the ANZECC/NHMRC Guidelines while waiting for a
Commonwealth policy to be adopted. [21]
2.17 The ANAO considered that the ANZECC/NHMRC Guidelines were useful
in providing guidance once contamination had occurred, but broader environmental
management systems were needed to help to prevent pollution from occurring:
Although guidelines for the assessment and management of contaminated
sites provide officials with a broad framework for addressing contamination
once identified, Commonwealth land managing entities would benefit form
a well-developed environmental management system to prevent pollution
in the first place. This includes the need to enhance the disclosure of
site contamination information consistent with public sector accountability
requirements. [22]
b) ISO 14001
2.18 The International Standards Organisation (ISO) 14000 series of environmental
management standards describes the elements of an environmental management
system. The standards are voluntary and set out a process rather than
performance standards. A representative of the ANAO explained:
My understanding of ISO 14000 is that essentially it is a management
model rather than necessarily a prescriptive standard. So it gives a sense
of how you should go about it and a guide to management systems. My understanding
is that it is based on good management principles. It is does not actually
specify a degree of resource allocation. I guess a very diligent agency
might decide that it is risk averse and put in an enormous amount of money;
another agency might put in a lot less to address the problem. Without
some sense of guidance, agencies are really flying by the seats of their
pants in terms of what standards they should be aiming for. [23]
2.19 An environmental management system is defined by ISO 14001 as the
organisational structure, responsibilities, practices, procedures, processes
and resources for implementing and maintaining environmental management.
[24] Some Commonwealth agencies are considering
developing environmental management systems that comply with ISO 14001.
Australia Post's environmental management system is within the framework
of ISO 14001 and it is considering applying for certification of its environment
management system. [25] Telstra has substantially
completed implementing an environmental management system that is based
on ISO 14001. [26] The Department of Defence
has called for tenders to develop a corporate environmental management
system framework. The supplier will be developing the framework in accordance
with the ISO 14000 series. [27]
c) National Environment Protection Council
2.20 The IGAE was signed by the Ministers of Commonwealth, State and
Territory Governments and by a representative of the Australian Local
Government Association in 1992. The IGAE provides a statement of the principles
and policies that should be followed in the administration of environmental
matters and in negotiating arrangements between these bodies. It is, however,
not a legally binding document.
2.21 Schedule 4 of the IGAE covers the establishment of the NEPC, which
is a ministerial council made up of State and Territory environment ministers
and chaired by the Commonwealth Minister for the Environment. The NEPC
is charged with developing NEPMs which under Section 5 of Schedule 4 of
the IGAE, can provide general guidelines for the assessment of site contamination.
The Commonwealth National Environment Protection Council Act 1994 and
mirror State legislation establish the NEPC and empower it to make NEPMs
which, through complementary legislation, will apply as valid laws in
each jurisdiction.
2.22 At its first meeting in June 1996, the NEPC agreed to develop national
guidelines for the assessment of contaminated sites. It noted that the
ANZECC and the NHMRC had established a Contaminated Sites Technical Review
Committee to review existing ANZECC/NHMRC guidelines. As the review would
be relevant to the NEPC proposal, the NEPC decided to await the release
of the ANZECC/NHMRC review which was expected in first half of 1997. [28]
2.23 One of the reasons given by Environment Australia for withdrawing
from its leadership role in relation to contaminated sites was the establishment
of the NEPC. Environment Australia saw the NEPMs developed by the NEPC
as having the potential to provide clearer guidance to land managing agencies
in dealing with contaminated sites than it could. Environment Australia
considered that the States should be the leaders in the development of
NEPMs:
It would be my judgement that the development of a measure in
this area, which has a high technical component, is probably something
which is best suited to states and territories rather than the Commonwealth
purely because of that technical component where the states have much
more hands-on activity involved in the day-to-day regulation of matters
to do with contaminated land and are, therefore, more expert in things
like the setting of the levels of concern and things of that kind. [29]
Meanwhile, it was envisaged that Environment Australia would participate
in discussions related to NEPMs; the Commonwealth would not completely
absent itself from their development.
2.24 The ANAO considered that the NEPC could provide a valuable forum
to address outstanding site contamination issues and facilitate a national
approach to best practice. [30] The Department
of Defence was aware that the operations of the NEPC could have an impact
on its environmental management practices, particularly in the area of
contaminated site assessments. The department stated that it is committed
to complying with the NEPMs when they are developed. [31]
2.25 The development of NEPMs under the auspices of the NEPC may go a
long way to overcoming the problems caused by the lack of Commonwealth
policy and guidelines. This will not, however, be a total solution. The
New South Wales Government noted the limitations in this approach:
The primary role of NEPC is to develop goals, standards, protocols
and guidelines. In relation to contaminated sites matters, it is constrained
legislatively to dealing only with guidelines for the assessment and management
of contaminated sites. In general, it does not provide an appropriate
forum for addressing outstanding Commonwealth-State polices or programs
relevant to site contamination or broader environmental management of
Commonwealth land. [32]
d) Conclusion
2.26 The Committee views the alternative approaches discussed in this
section as important initiatives, but considers that they do not fully
address the need for a Commonwealth approach to the management of contaminated
sites and pollution prevention. There is still a requirement for an overarching
national policy on the environmental management of land.
Commonwealth - State Cooperation and Coordination
Commonwealth compliance with State and Territory legislation
2.27 Section 52 of the Constitution confers on the Commonwealth the exclusive
power to make laws concerning Commonwealth places, and effectively prevents
the States from making laws that would regulate activities of the Commonwealth
on Commonwealth land:
The Parliament shall, subject to this Constitution, have exclusive
power to make laws for the peace, order, and good government of the Commonwealth
with respect to -
- The seat of government of the Commonwealth, and all places acquired
by the Commonwealth for public purposes;
- Matters relating to any department of the public service the control
of which is by this Constitution transferred to the Executive Government
of the Commonwealth;
- Other matters declared by this Constitution to be within the exclusive
power of the Parliament.
2.28 Section 109 of the Constitution determines that Commonwealth laws
will override those of the States:
When a law of a state is inconsistent with a law of the Commonwealth,
the latter shall prevail, and the former shall, to the extent of the inconsistency,
be invalid.
2.29 The Commonwealth Places (Application of Laws) Act 1970 provides
that State laws apply to Commonwealth places, unless those places are
exempt from State laws under section 52 of the Constitution or are in
conflict with section 109 of the Constitution. The result is that the
application of the Act in a particular case is uncertain. For the purpose
of its audit, the ANAO took the view that State environmental legislation
does not apply to Commonwealth land, unless Court decisions or legal opinions
obtained on a case-by-case basis indicate otherwise. [33]
2.30 Most States have environment protection legislation in place which
is usually administered through State environment protection agencies.
Examples of environment protection legislation are South Australia's Environment
Protection Act 1993, and Queensland's Contaminated Land Act 1991 and Environmental
Protection Act 1994. The Northern Territory is developing a Waste Management
and Pollution Control Act which will be the primary legislation for controlling
the environmental management of land, site contamination and pollution.
It is also expected to be the vehicle for the implementation of NEPMs
when developed. [34] The Victorian Government
claimed that environmental management systems are a cornerstone of the
Victorian accredited licensee system established under the Environment
Protection Act 1970. The Victorian Act also establishes an independent
audit system for both contaminated land and industrial facilities. [35]
Equivalent environmental legislation relating to site contamination and
pollution prevention on Commonwealth land does not exist, except for environmental
assessments under the Environment Protection (Impact of Proposals) Act
1974.
2.31 Within the constraints of the Constitution, however, the Commonwealth
can legislate to confirm or forfeit its immunity from State and Territory
laws. Commonwealth agencies that are exempt from State and Territory laws
indicated to the Committee that they seek to observe the intent of State
and Territory laws whenever possible.
2.32 Australia Post is an example of a Commonwealth Government business
enterprise (GBE) that has been subject to State legislation since its
corporatisation in 1989. Representatives of Australia Post claimed that,
although this has imposed additional obligations on its property managers,
they have coped more than adequately with these obligations and have found
the State EPAs cooperative. [36] Australia
Post is faced with different requirements in each of the States and Territories.
It has responded by adopting its own procedures, with standards set at
such a level that they conform with the most stringent of the various
State or Territory requirements:
... our environmental vision and mission statement commits us
to pursue best environmental management practice in our type of service
industry, and so when we came to develop the environmental procedures
based on our legal obligations, we made the conscious decision that, wherever
possible, we would pick the strictest of any of the state requirements
and make that our national procedure. ...
It is not always possible because there are a large number of
requirements that are absolutely state-specific, particularly relating
to communication between the entity and the EPA. But, wherever possible,
we took the highest common denominator. [37]
2.33 An example of a provision that confirms immunity from State legislation
is the Telecommunications (Exempt Activities) Regulations 1991 which exempts
carriers from having to comply with certain State and Territory laws for
specified activities. Telecommunications carriers, however, must comply
with the Telecommunications National Code when carrying out exempt activities.
The Environment and Natural Resources Committee of the Victorian Parliament
(Victorian Committee), which conducted an inquiry into the environmental
impact of Commonwealth activities and places, recognised the merit of
a national code. It was concerned, however, that many of the requirements
of the code are substantially weaker than those of State laws. The Victorian
Committee recommended that the Commonwealth repeal the Telecommunications
(Exempt Activities) Regulations 1991. [38]
The Department of Communications and the Arts (DCA) did not agree with
the Victorian Committee because it was considered inappropriate that Telstra
should be placed under more legal obligations than other telecommunications
carriers. However, the department considered that it was in Telstra's
own interests to have regard to State and Territory laws in terms of its
corporate image and its ability to dispose of property in the future.
Consequently, 'Telstra endeavours to have full regard to State and Territory
environmental regulations at all times practical and certainly when human
health is suspected or identified'. [39]
2.34 The Federal Airports Corporation Act 1986 confers immunity from
State environment protection and planning laws on the Federal Airports
Corporation (FAC). The Victorian Committee recommended in its report that
the FAC's immunity be removed. [40] The FAC
considered that the broad regulatory framework established by the Airports
Act 1996 enables the Commonwealth to continue to regulate environmental
management at the major airports, even after they have been leased to
airport operators. The latter Act requires airport lessees at each airport
to submit proposed environmental strategies to the Minister for approval,
after public comment and consultation provisions have been complied with.
The Act also enables the Commonwealth Government to develop regulations
that establish environmental pollution standards and provides for the
enforcement of these standards. [41]
2.35 Defence activities are generally not subject to regulation by State
and Territory legislation, although the situation is in some doubt. The
New South Wales Government submitted that the law is not clear in relation
to defence facilities and suggested that in some cases State law applies
but in other cases it does not. [42] The Victorian
Government implies in its submission that because the Department of Defence
activities are not subject to State law these activities have had significant
adverse environmental impacts in Victoria. [43]
In its submission Defence claimed that it seeks to 'observe the intent
of relevant State and Territory legislation wherever possible and practicable'
as part of its practice to adopt a good neighbour policy. [44]
However, it pointed out that there are some activities associated with
the defence of Australia that it would be inappropriate to place under
the control of State legislation. [45]
The views of the States and Territories
2.36 It was submitted by States and Territories that the Commonwealth
should comply with their environment and planning legislation. [46]
The South Australian Government claimed that 'the adoption by Commonwealth
agencies of policies which bind them to State environmental legislation
is vital to the achievement of consistent environmental protection throughout
Australia'. [47] The Victorian Government considered
that the Commonwealth should subject all bodies within its jurisdiction
to the entire regime of State environment protection laws. [48]
The New South Wales Government explained that its aim is to see that the
environmental regulation of Commonwealth activities is improved, either
through State environmental legislation or by the Commonwealth itself.
[49]
2.37 The Northern Territory Government was also concerned at the lack
of a common environmental policy or regulatory regime for Commonwealth
activities. In this regard, compliance with Northern Territory legislation
would ensure consistency in environmental management. [50]
The Victorian Committee concluded that the Commonwealth should abide by
State laws:
The failure of the Commonwealth to ... comply with the requirements
of state environment protection and planning laws, the lack of equivalent
such laws in many cases at the Commonwealth level, and the inability of
the Commonwealth to implement and enforce effectively the controls that
it does have in place, means that the only effective alternative to ensure
adequate protection and planning of the environment ... is by Commonwealth
legislation to require Commonwealth compliance with such state laws. [51]
2.38 Local Government authorities also supported the view that the Commonwealth
should abide by State and Territory legislation. For example, the Western
Australian Municipal Association maintained that, until the Commonwealth
develops legislation or policies, the Commonwealth should be required
to meet relevant State and Local Government legislation. [52]
2.39 The ANAO found that the States can become frustrated with Commonwealth
agencies which are not required to comply with State standards:
We consulted quite extensively with state EPAs. Some of them
have been fairly unhappy with having to provide advice. From their perspective,
they felt they were having to provide free advice to Commonwealth agencies
who, at the end of the day, could agree or not agree to comply with those
standards. [53]
2.40 The Committee understands the concerns of the States and Territories
and considers that the Commonwealth, the States and the Territories should
all be conforming to the same legislative requirements and environmental
standards with respect to the prevention and remediation of site contamination
and to the disposal of land. However, a uniform approach will not be achieved
by the Commonwealth simply complying with different regulations and standards
in force in each jurisdiction. The different approaches of the Commonwealth,
States and Territories will have to be harmonised.
Review of Commonwealth-State roles and responsibilities for the environment
by the Intergovernmental Working Group
2.41 During the inquiry, the Committee's attention was drawn to the current
review of the Intergovernmental Committee on Ecologically Sustainable
Development's (ICESD) Working Group on Commonwealth-State Roles and Responsibilities
for the Environment. As part of its review, the ICESD Working Group will
be examining the issue of Commonwealth immunity from State and Territory
environmental and planning legislation.
2.42 The ICESD Working Group is chaired by Roger Beale, AM, Secretary
of the Commonwealth Department of the Environment, Sport and Territories
and includes representation from each State and Territory and the Australian
Local Government Association. The Working Group's report is expected to
be presented to the Council of Australian Governments in mid 1997.
2.43 The Committee considers that the work of the Working Group is fundamental
to the resolution of the problems caused by the lack of harmonisation
in environmental regulation and the need for better coordination and cooperation
between the Commonwealth and the States on environmental management. In
the light of this ongoing work, the Committee does not consider it appropriate
to take its own inquiries any further in this area.
Liability for costs of remediation
2.44 The differing standards and legislation across jurisdictions causes
uncertainty about the issue of who pays for the costs associated with
the remediation of contaminated sites. There is limited legislation to
address liability for contaminated Commonwealth sites and existing State
legislation is inconsistent.
2.45 The ANZECC released a paper on financial liability for contaminated
site remediation in April 1994. [54] The paper
builds on the approach of the ANZECC/NHMRC Guidelines and sets out agreed
national principles 'for attaching financial liability for the remediation
of contaminated sites'. The paper states that 'ANZECC Ministers are committed
to adopting these basic principles within which individual ANZECC members
may establish administrative and legal frameworks appropriate to their
jurisdictions'. [55] Environment Australia
was an active participant in the development of the guidelines, and claimed
that the issue of financial liability in addressing contaminated sites
was a key one:
... a strong, consistent and clear liability regime is probably
the single most important preventive step in the contaminated site area.
If someone knows that they are going to be held liable for anything they
do to a bit of land, that is a very good way of making them take great
care of their asset in terms of preventing contamination. [56]
2.46 The ANZECC paper examines the question of who is responsible for
the costs associated with remediation activities. Recommendations four
and five attribute financial liability to the polluter:
4. Governments should ensure that the polluter, where solvent
and identifiable, ultimately bears the cost of any necessary remediation.
5. Where the polluter is insolvent or unidentifiable, the person(s)
in control of the site, irrespective of whether that person is the owner
or the current occupier, should be liable, as a general rule, for the
costs of any necessary remediation. [57]
2.47 The New South Wales Government has adopted the ANZECC paper on liability
for contaminated sites and has made legislative proposals consistent with
recommendations in the paper. It agreed with the polluter pays principle
adopted in the ANZECC paper:
Where past or current uses have caused contamination of Commonwealth
land, the Commonwealth, as "the polluter", should be held responsible
for cleaning it up where this is required. [58]
The Australian Capital Territory Government is also moving to apply the
polluter pays principle and anticipates that the Commonwealth would pay
for remediation on land that it has polluted:
Where a contaminating or polluting activity is undertaken, in
relation to either affected Territory land, or land which is to become
Territory land, the ACT Government expects that the Commonwealth will
accept the financial and management responsibility to restore the affected
land to an appropriate state. [59]
2.48 The FAC described its view of liability for remediation and the
polluter pays principle:
Under the approach in the airports regulations there would be
a hierarchy. If somebody takes on a lease of a site and they pollute it,
they are the polluter. It is a polluter pays clean-up; that is fairly
clear. If the polluter cannot be found then the current land-holder ...
the person who has ownership of or who controls the land at the time tends
to be the next person that you look to. Then there is the hierarchy that
we will work through right down to the owner of the site,airport lessee.
[60]
2.49 The polluter pays principle can only be applied in this context
when the polluter is identified early in the land transfer process. The
South Australian Government highlighted the issue of liability for the
remediation of land, the ownership of which is to be transferred. It maintained
that, prior to any land being transferred by the Commonwealth to the State
of South Australia, there needed to be a clear understanding about the
environmental status of the land and agreement on the appropriate level
of and responsibility for remediation. [61]
The Municipal Association of Victoria took the same view. It also stressed
the need for Local Government to be kept informed about the environmental
condition of Commonwealth land, to allow municipalities to reconsider
land use planning strategies and to evaluate the full range of future
land uses. [62] The ANZECC paper noted the
importance of an open approach to exchanging information about sites when
financial risks are involved:
Where a subsequent owner has purchased a site on the basis of
full disclosure as to the contaminated status of the site, the financial
risk associated with the contamination should be accounted for by the
parties explicitly in the transaction. [63]
2.50 In practice, it appears that Commonwealth agencies adopt a variety
of approaches. The policy of AMSA, in relation to lightstation properties,
is to recover the cost of remediation from the purchase price paid by
the State. At the lighthouse stations the level of contamination generally
is quite low. The arrangement that AMSA makes with the States with respect
to which of them will remediate the site depends on the nature of the
contamination present. [64]
2.51 The FAC claimed that a due diligence process is undertaken to identify
the assets and liabilities of an organisation prior to the sale of a property.
[65] The Department of Administrative Services
assesses land contamination before selling its land and seeks to make
a return to the Commonwealth:
Within the industrial and special purpose estate, that estate
comes back to us from agencies when it is no longer surplus. We look to
do a contamination assessment on that property before it is sold, again
in line with its future usage and remediate it where possible. We try
to seek a balance between the return to the Commonwealth on the sale of
the property and the cost of remediation. [66]
2.52 The Committee considers that the Commonwealth should work to limit
its liability to remediate contaminated land. As part of the property
disposal program, the Commonwealth should seek to gain the highest possible
return from its sales. A coordinated risk management approach to the environmental
management of contaminated land and the transfer of land would help limit
contamination and confirm liability arrangements. As the ANAO stated,
such an approach:
would assist to maximise the return on surplus land scheduled
for disposal, maximise the flexibility of the Government to dispose of
surplus property at times suitable for budgetry purposes and minimise
avoidable costs to the budget from the remediation of contaminated land.
[67]
The Environmental Management of Land Occupied by Government Business
Enterprises
2.53 GBEs account for 40 per cent of the total value of Commonwealth
land. The DCA and DTRD have coordination and oversight responsibilities
over GBEs including Telstra, Australia Post, Australian National and the
FAC, as set out in the Accountability and Ministerial Oversight Arrangements
for Government Business Enterprises. These guidelines state that:
Ministers responsible for the oversight of GBEs exercise strategic
control consistent with their accountability to the Parliament and the
public, while Boards develop the business strategies and handle the day-to-day
management policies. [68]
2.54 The ANAO asserted that the primary mechanism by which departments
fulfil their GBE monitoring responsibilities is to examine the objectives
of GBEs contained in corporate plans. The ANAO believed that corporate
plans provide a good means to highlight key environmental issues. The
FAC and Telstra included references to environmental issues in their corporate
plans but Australian National and Australia Post did not. Australia Post,
however, referred to an environmental strategy in its 1994-95 annual report.
2.55 The ANAO found that departmental oversight of GBEs in terms of managing
environmental risks was patchy and inconsistent. It considered that departments
responsible for overseeing GBEs should provide clear advice about Government
expectations in relation to environmental management and reporting. The
ANAO made the following recommendation:
As part of GBE accountability and oversight process and in absence
of any other oversight mechanisms, Departments become more proactive in
overseeing GBE operations that impact on the environment (with particular
reference to contaminated sites) that are likely to affect the achievement
of GBEs' financial and environmental targets or expose GBEs or the Commonwealth
significant risk. [69]
2.56 Although DTRD agreed with the ANAO recommendation, it considered
that the day-to-day managing and monitoring of environment issues is the
responsibility of individual GBEs.
We, particularly, support in principle that part of the recommendation
which seeks reinforcement between Departments and portfolio GBEs ....
. (however) the day-to-day managing and monitoring of environment issues
is clearly the responsibility of the individual GBEs. They are best place(ed)
and best qualified to perform these functions. [70]
The department recognised that if there was a need for improvement in
environment standards in line with best practice, it would have greater
involvement with GBEs. However, the department's normal role was not to
try to second-guess day-to-day operations. [71]
2.57 DTRD agreed that the relationship between the Government and GBEs
is based on the corporate planning process.
We try to see corporate plans as the tip of the iceberg in the
sense that they are driven by considerations in the environment of the
organisation, not just commercial considerations. If we felt that a factor
in the environment in a general sense, not the environmental management
sense, had been left aside and had not been considered properly in putting
together that plan, it would be incumbent upon us to go back to the GBE
and say, `You have left something out.' [72]
DTRD also claimed that GBEs bring environmental matters to the Government's
attention in annual reports, and its officers who oversight the GBEs are
in regular contact with the GBEs. [73]
2.58 DCA stated that both Australia Post and Telstra had been asked to
keep the Minister informed of any environmental issues which are likely
to affect their financial or environmental targets, or to expose them
or the Commonwealth to significant risk. Australia Post asserted that,
because it is subject to State and local government legislation and has
accountability mechanisms in place under the Australian Postal Corporation
Act 1989, there is no need for an increased oversight role for the Department.
[74] Telstra is also responsible for ensuring
that it abides by environmental legislation, except where it has exemptions,
and by the National Telecommunications Code.
2.59 As noted above, GBEs advised that they are either subject to State
laws or endeavour to meet State requirements. Given the potential risk
to the environment and the possible extent of Commonwealth liability,
the Committee considers that the latter approach is not sufficient and
greater external scrutiny is required. As specified in the Accountability
and Ministerial Oversight Arrangements for Government Business Enterprises,
Ministers are accountable to the Parliament, and are therefore accountable
for the environmental management of land occupied by GBEs. This accountability
depends on monitoring by portfolio departments which, the Committee considers,
should maintain regular contact with GBEs and provide information and
assistance regarding Commonwealth best practices in environmental management.
Corporate plans and annual reports are good avenues for monitoring GBEs'
actions with respect to environmental management.
The Management of UXO Contamination
2.60 The Commonwealth's policy on unexploded ordnance (UXO) is governed
by the Commonwealth Policy on the Management of Land Affected by Unexploded
Ordnance. The policy was endorsed by the then Prime Minister in 1990 and
issued to all State Premiers and Chief Ministers in that year. The main
aims of the policy are to protect the public from the hazards associated
with UXO and to increase public awareness of these hazards.
2.61 The ANAO considered that the Department of Defence had been reactive
rather than proactive in its handling of UXO issues. Given the number
of UXO affected sites in Australia, the ANAO believed that the resources
devoted to achieving the Government's UXO policy objectives were inadequate:
In this area the Commonwealth does have a policy, but as a result
of the audit we were not convinced that defence resources allocated to
these issues are sufficient to achieve the Commonwealth government's unexploded
ordnance policy within a reasonable time frame. [75]
The ANAO recommended that the Department of Defence:
(a) review the priority given to addressing UXO contamination
of non-Commonwealth land;
(b) develop strategic and operational plans for dealing with
UXO issues that set site assessment priorities based on appropriate criteria,
allocate sufficient resources and include timetables for completion; and
(c) develop and finalise administrative procedures with state
jurisdictions for site assessments and agreed hazard reduction operations.
[76]
2.62 The Department of Defence made the following response to the ANAO's
suggestion that the department was being reactive rather than proactive
with regard to UXO issues:
With the nature of the issue, that is going to happen. Circumstances
will arise for which we did not have sufficient records. We are learning
as we go along. It is just the nature of the issue, quite frankly. It
is a bit reactive. But we are trying to improve our information and the
relationship with the various states so that it is less reactive and more
informative. I think we are getting there. [77]
2.63 The Commonwealth policy states that the Department of Defence is
to maintain a comprehensive record of sites confirmed as or suspected
of being contaminated by UXO. Defence claimed that the identification
of UXO contaminated sites is often impeded because few records were kept
of training activities on non-Defence land during World War II. However,
Defence has been building up its knowledge and records relating to UXO
sites since 1990, and it maintains a register of all known or suspected
UXO sites in Australia.
2.64 A program of UXO site assessments is currently being developed by
Defence in consultation with the Queensland Department of the Environment.
Defence also intends to develop a coordinated national approach to the
management of information which will assist in the assessment process
used to ascertain the nature and extent of UXO contamination, the options
for remediation works, and to advise on the future use of affected lands.
[78] The ANAO supported this approach, as did
the South Australian and the Australian Capital Territory Governments.
[79]
2.65 Because of the concentration of military activity in Queensland
in World War II, UXO is a major site contamination issue in that State.
At the time of the audit, there were 403 possible UXO contaminated sites
in Queensland, which according to the Queensland Department of Environment
equated to 9 848 individual lots of land. One officer (an army Major)
has been allocated full-time by Defence to assess UXO sites in Queensland.
At the time of the audit, only two Queensland reports had been finalised.
The ANAO claimed that at current resource levels, it will take more than
twenty years to complete reports on all currently known UXO sites in Queensland.
[80]
2.66 The Local Government Association of Queensland claimed that adequate
strategic operational plans had not been developed to ensure site assessments
are undertaken in an expeditious manner; this was thought to be indicative
of the lack of resources provided by the Defence to fulfil this responsibility.
The Association considered that 'as a matter of priority an urgent survey
should be undertaken of the remaining sites by the Department of Defence
to confirm the status of a possible UXO site'. [81]
2.67 The problem extends beyond Queensland, and the Victorian Government
submitted that the priority given by Defence to addressing UXO contamination
is inadequate. [82] Both the New South Wales
and the Northern Territory Governments indicated that the uncertainty
about the number and areas with UXO contamination causes dilemmas for
planning the development of land. [83] Defence
explained that it intends to provide adequate information to the States:
.. we have been building up our records with a view to providing
information to the states, assisting them with their future land use requirements,given
that the states are responsible for changes in land use. The intent is
to improve our records, on the one hand,that is an ongoing process which
we are doing now,and also to ensure that that information is conveyed
to the right authorities in the various states. [84]
2.68 The Commonwealth policy on UXO limits the Commonwealth's liability
for costly and time consuming operations to reduce the hazards of contamination.
The policy states that the Commonwealth is under no legal obligation to
commit resources to reduce known hazards associated with UXO contamination
where it never had, or has disposed of, a legal interest. The Commonwealth
may, however, determine that the level of UXO contamination is to be reduced,
depending on the extent of operations needed, cost sharing arrangements
and legal liabilities.
2.69 The costs of UXO hazard reduction operations are heavily dependent
on the nature and extent of UXO contamination, the terrain of the affected
land, and the extent to which it is necessary to reduce UXO hazards. Defence
explained that the Commonwealth has taken the position of not cleaning
up sites known to be contaminated because the same position would have
to be taken with all sites throughout Australia; the downstream cost could
be enormous. [85] Also, the department stated
that the general position taken by the Commonwealth has been that, if
compensation for UXO contamination of an area has been paid in the past,
no further compensation will be paid to present owners. [86]
2.70 Defence noted that extensive expertise for the management and clean
up of UXO contamination can be made available from the private sector
and that developers should carry the costs of remediation:
There is a legitimate case to suggest that if you are looking
at the real value of the land, it is the developer's responsibility, given
the profits that he is going to make. I would see it being the same as
having fault lines in the ground or rocks in the foundations. It is all
the liability associated with the developer. [87]
2.71 The Committee considers that the resources allocated by Defence
to assess UXO contaminated sites has been inadequate. The Committee supports
the intention of the Department of Defence to develop a national approach
to the management of information to assist in the assessment process.
This approach may require that further resources be allocated to assessing
UXO contaminated sites.
Criticisms of the Audit Report
2.72 Concern was expressed by the Department of Defence about the manner
in which opinions obtained from the Attorney-General were handled by the
ANAO. The legal advice dealt with the question of the Commonwealth's liability
for UXO contamination, and was passed on to Defence at the time that a
draft of the audit report was made available to Defence. Defence objected
that neither its Facilities and Property Division (responsible for preparing
the portfolio's response to the ANAO report) nor the Inspector General's
Division (the main auditing arm within Defence) were aware of the existence
of the Attorney-General's opinion until then. It was disappointed that
the ANAO did not make the information available to it during the process
of the audit. [88] The ANAO told the Committee
that they told Defence about the Attorney-General's opinion at the same
time as they gave Defence the draft audit report. The ANAO saw no reason
to pass the opinion on to Defence any earlier. However, it was available
on request and provided when the request was made. [89]
2.73 The Department of Defence also referred to the use of photographs
in the audit report. Defence claimed that the photographs had been included
with little explanation of their context and background, and as a result,
did not give sufficient information to enable informed judgments to be
made. The Facilities and Property Division of Defence was not aware of
the photographs until they appeared in the audit report. [90]
Defence also believed that the choice of photographs used in the audit
report lacked balance and was not demonstrative of the Defence portfolio's
land management and waste disposal activities. [91]
2.74 The ANAO found Defence's criticism surprising given that the photographs
were provided by Defence's own internal audit branch. The ANAO considered
that the photographs were representative and their inclusion in the audit
report was reasonable and objective. It is the ANAO's policy to include
photographs in its reports where they can cast some light on the issue
under consideration. [92]
2.75 The above points indicate to the Committee that there were a number
of breakdowns in the internal communications of the Department of Defence.
The Committee was concerned that the Facilities and Properties Division,
which is responsible for the issue of contamination, was not aware of
Defence's internal audit report. The Committee considers that the ANAO
has the right to use photographs which are representative of the issues
that they are reporting on. However, the ANAO should work cooperatively
with the departments that it audits. It should ensure that illustrative
material is representative, is presented in an appropriate context, and
does not seek to sensationalise the issues.
2.76 The Committee considers that further investigations into Defence's
criticisms of the audit report are not warranted as the issues appear
to have been resolved. However, the Committee does take the view that
the ANAO could have advised Defence as soon as it received legal advice
that had a bearing on Defence activities.
Footnotes
[1] Australian National Audit Office,
Audit Report No. 31 1995-96, Environmental Management of Commonwealth
Land: Site Contamination and Pollution Prevention, p 11.
[2] Transcript, 2 December 1996, p 93.
[3] Transcript, 2 December 1996, p 93.
[4] Letter from Mark Hyman, Waste Management
Branch, CEPA, dated 6 June 1996 (copy attached to submission from CEPA)
[5] Commonwealth Environment Protection
Agency Submission (No 3), p 2.
[6] Transcript, 4 November 1996, p 34.
[7] Transcript, 4 November 1996, p 35.
[8] Department of Administrative Services
Submission (No 4), p 4; Department of Communications and the Arts Submission
(No 5), p 1.
[9] Transcript, 7 November 1996, p 48.
[10] Transcript, 4 November 1996, p
4; Department of Transport and Regional Development Submission (No 1),
p 1.
[11] New South Wales Government Submission
(No 9), p 1.
[12] New South Wales Government Submission
(No 9), p 4.
[13] South Australian Government Submission
(No 7), p 1.
[14] Northern Territory Government Submission
(No 10), p 3.
[15] ACT Government Submission (No 11),
p 4.
[16] Victorian Government Submission
(No 13), p 2.
[17] Victorian Government Submission
(No 13), p 3.
[18] Local Government Association of
Queensland Submission (No 8), p 1.
[19] Western Australian Municipal Association
Submission (No 12), p 2.
[20] Australian and New Zealand Environment
and Conservation Council (ANZECC), National Health and Medical Research
Council (NHMRC), Australian and New Zealand Guidelines for the Assessment
and Management of Contaminated Sites, 1992.
[21] Department of Transport and Regional
Development Submission (No 1), p 3.
[22] Transcript, 2 December 1996, p
92.
[23] Transcript, 2 December 1996, p
95.
[24] Ian Ireland, 'An international
passport to doing business', Current issues briefs, Parliamentary
Library, April 1996, p 5.
[25] Transcript, 2 December 1996, p
89.
[26] Department of Communications and
the Arts Submission (No 5), p 2.
[27] Department of Defence Submission
(No 2), Submissions Volume, p 9.
[28] Environment Business, November/December
1996, p 4.
[29] Transcript, 4 November 1996, p
37.
[30] Australian National Audit Office,
p 14.
[31] Department of Defence Submission
(No 2), Submissions Volume, p 26.
[32] New South Wales Government Submission
(No 9), p 2.
[33] Australian National Audit Office,
p 9.
[34] Northern Territory Government Submission
(No 10), p 2.
[35] Victorian Government Submission
(No. 13), p 3 & 10.
[36] Transcript, 2 December 1996, p
88.
[37] Transcript, 2 December 1996, pp
88-89.
[38] Parliament of Victoria Environment
and Natural Resources Committee, The Environmental Impact of Commonwealth
Activities and Places in Victoria, November 1994, p 112.
[39] Department of Communications and
the Arts Submission (No 5), p 7.
[40] Parliament of Victoria Environment
and Natural Resources Committee, p 63.
[41] Transcript, 4 November 1996, p
13; Department of Transport and Regional Development Submission (No 1),
p 2.
[42] New South Wales Government Submission
(No 9), p 2.
[43] Victorian Government Submission,
(No 13), p 4.
[44] Department of Defence Submission
(No 2), Submissions Volume, p 26.
[45] Transcript, 7 November 1996, p
71.
[46] Correspondence from Premier of
Tasmania, dated 18 October 1996; Northern Territory Government Submission
(No 10), p 3; ACT Government Submission (No 11), p 2.
[47] South Australian Government Submission
(No 7), p 1.
[48] Victorian Government Submission
(No 13), p 9.
[49] New South Wales Government Submission
(No 9), p 1.
[50] Northern Territory Government Submission
(No 10), p 3.
[51] Parliament of Victoria Environment
and Natural Resources Committee, p 142.
[52] Western Australian Municipal Association
Submission (No 12), p 2.
[53] Transcript, 2 December 1996, p
96.
[54] Australian and New Zealand Environment
and Conservation Council (ANZECC), Financial Liability for Contaminated
Site Remediation, April 1994.
[55] ANZECC, p 2.
[56] Transcript, 4 November 1996, p
36.
[57] ANZECC, p 2.
[58] New South Wales Government Submission
(No 9), p 3.
[59] ACT Government Submission (No 11),
p 3.
[60] Transcript, 4 November 1996, p
15.
[61] South Australian Government Submission
(No 7), p 4.
[62] Municipal Association of Victoria
(No 6), p 1.
[63] ANZECC, p 8.
[64] Transcript, 4 November 1996, p
22.
[65] Transcript, 4 November 1996, p
7.
[66] Transcript, 4 November 1996, p
25.
[67] Australian National Audit Office,
p 16.
[68] Australian National Audit Office,
p 66.
[69] Australian National Audit Office,
p 70.
[70] Department of Transport and Regional
Development Submission (No 1), p 1.
[71] Transcript, 4 November 1996, p
4.
[72] Transcript, 4 November 1996, p
11.
[73] Transcript, 4 November 1996, p
10.
[74] Department of Communications and
the Arts Submission (No 5), p 5.
[75] Transcript, 2 December 1996, p
92.
[76] Australian National Audit Office,
p 49.
[77] Transcript, 7 November 1996, p
63.
[78] Department of Defence Submission
(No 2), Submissions Volume, p 24.
[79] Australian National Audit Office,
p 41; South Australian Government Submission (No 7), p 4; ACT Government
Submission (No 11), p 3.
[80] Australian National Audit Office,
p 47.
[81] Local Government Association of
Queensland Submission (No 8), p 2.
[82] Victorian Government Submission
(No 13), p 6.
[83] New South Wales Government Submission
(No 9), p 4, Northern Territory Government Submission (No 10), p 3.
[84] Transcript, 7 November 1996, p
53.
[85] Transcript, 7 November 1996, p
61.
[86] Department of Defence Submission
(No 2), Submissions Volume, p 23.
[87] Transcript, 7 November 1996, p
61.
[88] Department of Defence Submission
(No 2), Submissions Volume, p 30.
[89] Transcript, 2 December 1996, p
101.
[90] Department of Defence Submission
(No 2), Submissions Volume, p 29.
[91] Transcript, 7 November 1996, p
70.
[92] Transcript, 2 December 1996, pp
102-4.
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