The EPA's site audit statement revolution - are you ready?

The NSW Environment Protection Authority (EPA) is planning to increase the number, and change the types, of Site Audit Statements (SASs) that can be issued under the Contaminated Land Management Act 1997.

The EPA's proposed changes will have widespread implications, including for past, current and future transactions and developments involving contaminated land.
 
The proposed changes are relevant to landlords, tenants, developers, consent authorities and lenders who deal with contaminated land.

What is likely to change?

Currently, there are two types of SASs, namely:

  1. Section A SAS: used to certify that a site is suitable for a particular use. Currently, statements can be issued with or without conditions; and
  2. Section B SAS: commonly used by Site Auditors to certify that a site can be made suitable for a particular use, subject to compliance with a remediation action plan, or other form of management plan.

These two types of SASs are known and well understood by those who regularly deal with contaminated land. However, they are poised to change.
 
The EPA is discussing with key stakeholder groups, including Site Auditors, the introduction of a new approved form for SASs which will contain three sections, which are summarised below.

Site Audit Statement

When can this be used

Section A

Section A is only to be used when a site is suitable for a specified use, without the need for compliance with any conditions. As a practical matter, this will severely restrict a Site Auditor's ability to issue a Section A SAS, particularly for complex sites.

 

Section B

In addition to certifying that a site can be made suitable for a specified land use, Section B will now allow a Site Auditor to provide a broad range of certifications, including in relation to:

 

  • the nature and extent of contamination;
  • the appropriateness of investigation/remedial action/management plans;
  • whether or not there has been compliance with a voluntary management proposal or management order; and
  • the appropriateness of a site testing plan to determine if groundwater is suitable for its intended use.

Section C

Section C is to be used when a site is suitable for a specified land use, subject to compliance with an Environmental Management Plan (EMP).

 

There does not appear to be any scope for conditions to be imposed other than by way of an EMP.
 
This means that EMPs will need to be developed, when previously simple conditions could have been used.  

 

What does this mean for you?

The EPA's proposed changes will transform the current system of Site Audits, as well as the meaning of previously well understood, and frequently used, terms.
 
This means that:

  • Vendors and purchasers need to review and, in some circumstances, amend any agreements for the sale of contaminated land which contain a requirement that a Section A SAS be obtained prior to settlement.
  • Landlords and tenants should consider if the change in terminology has the potential to  increase the scope of any remediation works required at the end of their lease.
  • Consent authorities need to re-think their policies and standard conditions of consent for the development and remediation of contaminated land and set out the circumstances in which the new Section C SAS will, and will not be, acceptable.
  • Developers need to carefully review existing and future consent conditions requiring a Section A SAS in light of the proposed change in terminology. For many sites it will be extremely costly and time consuming, and in some cases just not possible, to obtain the "new" Section A SAS.
  • Lenders frequently require a Section A SAS as a pre-condition to financing. However, under the new system this standard may be too high. Lenders will need to develop policies for when the new Section C SAS will, and will not be, acceptable.
Elizabeth Wild

Knowing the law is not enough – our value is in delivering our clients a commercial and practical solution.

Elizabeth Wild Partner

Liz is a member of the Board. She is a specialist in all areas of environmental law, with a particular focus on contamination and pollution. Liz is also the Head of our Property, Environment and Planning practice and recognised by her clients, peers and legal directories as a leader in her field.

Our clients call upon Liz to help them tackle environmental issues such as negotiating the sale and purchase of contaminated sites and obtaining planning and environmental approvals for the remediation and development of contaminated land. She also advises on environmental due diligence, licensing and compliance issues and pollution law, as well as drafting and implementing environmental management systems.

One of Liz's career highlights has been acting for Jeffman Pty Limited in an action it successfully brought against the NSW Environment Protection Authority in the first ever legal challenge under the Contaminated Land Management Act 1997 (NSW).

Liz acts for large manufacturing companies, government agencies, listed property trusts and property developers.  Her clients include Sydney Trains, RMS, Orora and the Department of Defence.

">
see my profile
Sarah Mansfield

Solving problems is my favourite part of the job.

Sarah Mansfield Senior Associate

Sarah is a specialist environment and planning lawyer, with extensive transactional, litigation and advisory experience. Sarah advises and acts for government authorities, land owners, developers and financial institutions on matters related to contaminated land, pollution, waste, vegetation and planning and environmental approvals.

Sarah's recent advisory and transactional experience has involved complex transactions and financing agreements related to contaminated land, land remediation and rehabilitation projects and the redevelopment of industrial sites. In assisting her clients with these matters, Sarah has represented her clients in complex commercial negotiations and assisted her clients in discussions with regulators, financers and stakeholders.

Sarah is also an accomplished litigator, representing landowners, investors, local governments, developers and stakeholders in a range of disputes involving contaminated land, contentious developments and incompatible land uses. Sarah also has extensive experience representing defendants in criminal proceedings under the Protection of the Environment Operations Act 1997 and equivalent interstate legislation.

">
see my profile