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A thoroughly modern monitor

Feature Articles

Cite as: Cite as: March 2012 86 (03) LIJ, p.48

Criticism of the EPA led to a wide-ranging investigation of its policies and procedures. It now plans to implement all 119 recommendations in the resulting report.

By Peter George and Emily Long

In June 2010 the Victorian Environment Protection Authority (EPA) commissioned a review of its compliance and enforcement activity. This was partly in response to criticisms raised by the Victorian Ombudsman and Auditor-General in 2009 and 2010 respectively, that the EPA was not adequately handling its responsibility to enforce and ensure compliance with the Environment Protection Act 1987 (Vic) (EP Act).

After a comprehensive consultation, in February 2011 the EPA released a 425-page report called Compliance and Review: A review of EPA Victoria’s approach. The report, by Stan Krpan, makes a range of criticisms of the EPA and puts forward 119 recommendations, with an overarching aim of turning the EPA into a “modern regulator” – that is, a regulator that is:

  • ‌targeted;
  • ‌proportionate;
  • ‌transparent;
  • ‌consistent;
  • ‌accountable;
  • ‌inclusive;
  • ‌authoritative; and
  • ‌effective.

The CEO of the EPA, John Merritt, has confirmed that the EPA will implement all 119 recommendations.

The purpose of this article is to provide a snapshot of the proposed reforms and a sense of what we can expect from the EPA. Before doing so, however, we will briefly look at the criticisms in the report about the way that the EPA has been operating.

CRITICISMS IDENTIFIED

The report makes a range of criticisms of the EPA which can be summarised into four key areas, or themes:

Alacrity – a failure to regulate with gusto: The EPA has neglected its role as an environmental regulator and failed to engage in sufficient enforcement activity, including systematic and regular monitoring.

Clarity – uncertainty as to jurisdiction, obligations and attitudes: The role and responsibility of the EPA is unclear, in that:

  • ‌the EPA’s jurisdiction is uncertain. In instances where there is regulatory overlap (i.e. more than one authority can regulate) there is confusion as to which one should take responsibility;
  • ‌neither EPA staff nor those regulated under the EP Act (regulated parties) clearly understand the obligations of regulated parties. This undermines compliance; and
  • ‌there is little clarification of the EPA’s attitude and likely response to certain issues, making it difficult for regulated parties to adopt policies and procedures with any certainty that the policies and procedures will satisfy their obligations.

Contributing to these issues is a failure by the EPA to disseminate information that clarifies obligations and supports reliable, institutional approaches to issues.

Proportionality – the EPA has not followed a risk-based model: The EPA has failed to “target” compliance and enforcement towards issues that are of the greatest concern, and enforcement activity has not been proportional to the culpability of the offender and/or the risk of harm to health and the environment.

Transparency – a lack of data collection and dissemination to guide enforcement activity: There has been insufficient and inadequate data collection, analysis and dissemination of matters such as the comprehension by licence holders of their obligations, compliance and the deterrent effect of enforcement actions.

Each of the report’s recommendations seek to deal with one or more of these key issues.

AREAS FOR IMPROVEMENT

While dealing with these key issues, the recommendations also reflect a range of areas for improvement. To provide a snapshot of the recommendations, we have identified five main areas.

Area one: What is compliance?

Several recommendations focus on clarifying obligations, a necessary forerunner to improving compliance and enforcement.

Some examples are recommendations that the EPA:

  • ‌provide plain English guidance to clarify the meaning of key terms such as “pollution”, and “environmental hazard”;
  • ‌clarify the hierarchy, purpose and legal status of the more than 1000 EPA publications that deal with standard setting and compliance, as well as an unknown number of “small-p policies” that are undocumented. It suggests the EPA clearly articulate how its publications fit together (what they are, what their legal status is and what hierarchy applies to them) and ensure that all policies are documented; and
  • ‌provide short and simple interpretive guidance in relation to legislative instruments, State Environment Protection Policies and possibly other standards. These “EPA positions” would be akin to Australian Taxation Office rulings, being binding statements of opinion or interpretations of law as well as an articulation of how the EPA intends to exercise its discretion.
Area two: Who is responsible for regulating what?

The report emphasises that there is uncertainty around the borders of the EPA’s jurisdiction, particularly in instances of regulatory overlap. For example, local government has powers under the Public Health and Wellbeing Act 2008 (Vic) (PHWA) in relation to “nuisances”, which “are, or are liable to be, dangerous to health or offensive” (s58). This includes “nuisances” arising from or constituted by, for example, water or rubbish (s58(2)). A “nuisance” under the PHWA can also be an offence under the EP Act, but because neither Act deals with the issue of overlap, there is discretion as to which authority takes regulatory responsibility.

The report therefore makes recommendations that focus on clarifying the EPA’s jurisdiction and making it easier to anticipate who will act in instances of shared jurisdiction. For example, the report recommends that the EPA “clearly outline its jurisdiction” in a plain English guide. This would deal with air, water, land, noise, odour and litter.

Area three: Reporting process

The EPA receives pollution reports from both operators of licensed premises (who have reporting requirements) and the public. These are an important source of compliance data. Several recommendations are directed at improving the reporting process.

The report says there is a “widespread belief that a failure to notify is not followed up by EPA” and that this “undermines the willingness of some businesses to diligently report incidents” (p48). Although consultations have suggested that not all operators satisfy their reporting obligations, records are not kept in a form that enables comparison between reports made by licensed operators and reports made by the public. To deal with this, and thereby enable the EPA to more easily identify and then act on non-compliance, it is recommended that there be improved data collection and analysis.

Area four: Engaging the community and communicating non-compliance

Some recommendations are directed at increasing community engagement and publicly reporting non-compliance. The aims are to promote community confidence, increase incident reporting rates and strengthen deterrence.

In this context the report recommends a significant increase in the material published by the EPA, which would include publications clarifying such matters as compliance strategies and plans, as well as details of all non-compliances, including details regarding the outcomes of all prosecutions.

Of interest is the recommendation that in prosecutions the EPA should seek to have s67AC of the EP Act applied. Section 67AC enables courts which have found a person guilty of an offence to require the person to take action to publicise the offence, as well as any environmental consequences of it, penalties imposed as a result and/or orders made.

Area five: Using data to support a risk-based model

An overarching recommendation is that the EPA adopt a risk-based model in relation to licensed and non-licensed premises. The report makes the point that, as a preliminary step, the EPA must be able to determine who or what poses the greatest risks – and this requires better collection and analysis of data.

The report also suggests that insufficient attention has been paid to non-licensed premises (which, the report points out, “often need more education, support and advice” about their legal obligations (p94)).

A REVISED POLICY

As mentioned above, the EPA enforcement policy was the subject of criticism by the Victorian Ombudsman and Auditor-General. The criticisms included that the policy:

  • ‌lacks detail, making it difficult for authorised officers to apply it consistently and fairly;
  • ‌lacks guidance on appropriate penalties and enforcement responses;
  • ‌is incoherent; and
  • ‌fails to address the need for accountability and consistency in decision making.

The report suggests that the EPA adopt and publish a revised Compliance and Enforcement Policy which is at Appendix 12.1 to the report. It sets out, among other things:

  • ‌principles to guide the EPA, being the characteristics of a “modern regulator” described above;
  • ‌a risk-based regulatory model;
  • ‌a “regulatory approach” with six elements – education, setting standards, providing compliance support, monitoring compliance, enforcing law, and beyond compliance;
  • ‌an approach to monitoring, detection and investigation of non-compliance;
  • ‌compliance and enforcement measures; and
  • ‌sanctions that can be enforced, and when they will be enforced.

In many respects, the policy encapsulates the range of the report’s recommendations. What is particularly notable is that it seeks to do so in an accessible format that has as its aim the promotion of transparency; consistent and fair decision making; confidence in the regulator; community participation; and deterrence.

In June 2011 the EPA published its new compliance and enforcement policy. The policy is substantively the same as the draft policy described in the report.

In addition, as part of its compliance and enforcement framework, the EPA released in November 2011 a new, separate remedial notices policy to govern the application of pollution abatement notices, minor works pollution abatement notices, and clean up notices.

CONCLUSIONS

The overarching theme of the report is clear: the EPA had, to an extent, lost its focus on enforcement and compliance and requires redirection to become a modern, risk-based regulator.

The recommendations in the report suggest that the EPA is likely to:

  • ‌become a more aggressive prosecutor and a more diligent investigator meaning that previously unnoticed breaches may now be detected and acted on;
  • ‌focus on the regulated parties which present the greatest risk to the environment;
  • ‌encourage or require businesses to become more active in self-monitoring and compliance activities;
  • ‌develop clearer, more transparent policies and procedures with the aim of making it easier for businesses to understand their obligations and the consequences of non-compliance; and
  • ‌promote community participation by taking its “community engagement” and education functions more seriously and making itself and the law more accessible.

The EPA has announced that it is working through all 119 recommendations included in the review and that all recommendations are due to be completed by 30 June 2015.




PETER GEORGE is a partner in the environment and planning team at Minter Ellison, and practises in all aspects of environment law. EMILY LONG was in the Minter Ellison environment and planning team and is now a solicitor at the Aboriginal Family Violence Prevention & Legal Service.

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