Important changes to Site Audit Scheme - what are they and why should you care?

Site Auditors play a critical role in ensuring that contaminated land is properly investigated, remediated and managed in New South Wales. The involvement of a Site Auditor is often required when contaminated, or potentially contaminated, land is:

  • Redeveloped;
  • Sold;
  • Leased; and/or
  • Formally regulated under the Contaminated Land Management Act 1997 (CLM Act).

On Friday, 20 October 2017, important changes to the Site Audit Scheme came into effect, as a consequence of the gazettal of a new version of the Contaminated Land Management – Guidelines for the NSW Site Auditor Scheme (Site Auditor Guidelines) and changes made to the prescribed form of Site Audit Statement. 

WHAT'S CHANGED?

The key changes to the Site Auditor Guidelines include:

  • Site Auditors must always check that contamination by per- and poly-fluoroalkyl substances ("PFAS") has been considered in the site assessment, and compliance with this requirement is to be specifically confirmed in the Site Auditor's report
  • Site Auditors are expressly required to check that waste generated at the site has been taken to a facility lawfully able to receive that waste. If it appears to the Site Auditor that this is not the case (after relevant enquiries have been made), the Site Auditor must note this in the site audit report, and will likely also need to notify the EPA; and
  • If compliance with an Environmental Management Plan (EMP) is a condition of a Site Audit Statement, a Site Auditor must specify in the Site Audit Statement whether that plan requires the operation and/or maintenance of an active management system or requires maintenance of a passive management system only

Unlike the draft forms circulated in May 2017, the new Site Audit Statement form still has a Section A and Section B (and there is no Section C, as was previously proposed). However, Section A  now has two subcategories, namely:  

  • Section A1 – used to determine land use suitability for a specified use, without conditions.
  • Section A2 – used to determine land use suitability, subject to compliance with an EMP.

In Section A2 Site Audit Statements, Site Auditors must discuss the purpose and requirements of the EMP, and how it "can reasonably be made legally enforceable". However, exactly how an EMP can be made legally enforceable, particularly in circumstances where the site is not regulated under the CLM Act, nor the subject of a development consent, continues to be unclear. Site Auditors are directed by the new Site Auditor Guidelines to seek the advice of the EPA or local council regarding this issue. In our experience, more specific legal advice is required. 

Section B of the Site Audit Statement form has also changed, primarily to clarify that a Section B Site Audit Statement can be used to determine:

  • The appropriateness of a site testing plan, to determine if groundwater is safe and suitable for its intended use; and
  • Compliance with an approved voluntary management proposal or management order issued under the CLM Act.

Section B Site Audit Statements can continue to be used to certify that:

  • Contamination has been appropriately identified and delineated;  
  • An investigation plan, a remediation plan or a management plan is appropriate; and
  • Land can be made suitable for a particular use (or uses), if managed or remediated in accordance with a specified plan.

WHAT DOES THIS MEAN FOR YOU?

Carrying out remediation works?

The importance of ensuring that any waste generated in the course of remediation works is appropriately reused onsite, or taken to a facility which is lawfully able to receive that waste, is now even more important. If this is not the case, then the Site Auditor may be obliged to notify the EPA. In addition, the non-compliance will be noted in any site audit report prepared following the completion of the remediation works. In the case of a statutory site audit, a copy of that report will be provided to the EPA.

Buying or selling contaminated land?

Contracts for the sale of a contaminated site often contain "contingent conditions precedent", which make the completion of the transaction contingent on a Section A Sit Audit Statement being obtained. The changes to the Site Audit Statement form highlight the importance of specifying in the contract, not only the use for which the site is to be suitable, but also whether the certification to be provided by the Site Auditor can be the subject of conditions, and if so, the nature of those conditions. 

Investigating PFAS contamination?

Even if you do not think that PFAS is an issue at your site, the Site Auditor is required to check whether the site has been assessed for PFAS contamination. As such, whether a site may have been impacted by PFAS should be considered at an early stage, and specifically assessed in a report provided to the Site Auditor.

Demonstrating that an EMP is capable of being legally enforced?

In circumstances where a site is not the subject of regulation under the CLM Act or a development application, it can be difficult to demonstrate that an EMP is capable of being legally enforced. The options include requiring compliance with the EMP in a contract for sale, lease, option deed or site access deed, or where there is no counterparty, a deed poll.  For sites which are the subject of an Environment Protection Licence which is in the course of being surrendered, consideration could also be given to requesting that the EPA include a condition regarding the EMP in the approval of the surrender application.

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.

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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.

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