NSW proximity principle repeal: Environment Protection Authority set to repeal the proximity principle as part of reform of the Waste Regulation

The NSW EPA has announced its intention to repeal the problematic ‘proximity principle’. The proximity principle was introduced in 2014 as part of an overhaul of the NSW waste management regime (please see our previous article setting out the detail of these reforms) and has been the subject of criticism and litigation since that time. This recent announcement is also intended to be implemented as part of a number of broader reforms for the management of construction and demolition (C&D) waste.

The EPA released its consultation paper ‘Minimum Standards for Managing Construction and Demolition Waste in NSW’ in October 2016 (Paper). The Paper proposes a suite of amendments to the Protection of the Environment Operations (Waste) Regulation 2014 (NSW) (Waste Regulation), with some minor amendments to the Protection of the Environment Operations Act 1997 (NSW) (POEO Act).

The most significant proposed amendment is the repeal of the proximity principle from the Waste Regulation. This is the principle set out in the current clause 71 of the Waste Regulation that prohibits the transport of waste for disposal beyond 150km from the place of generation. Specifically, it is an offence to transport waste to a lawful disposal facility by motor vehicle for more than 150 km from the place of generation, unless:

• the waste is transported to one of the two lawful disposal facilities nearest to the place of generation; or
• the lawful disposal facility is located in another state or territory where the border crossing is beyond 150km from the place of generation.

Defences to an alleged breach of these provisions (but notably not exceptions) include where the waste:

• was not deposited at the place to which it was transported; and
• was transported to the place for the purposes of any of the following and those activities can lawfully be carried out at the place:
  • recovering or re-using that waste at the place;
  • recovering energy from that waste at the place; or
  • treating or processing that waste at the place for the recovery, re-use or recycling of the waste (whether or not at the place).

A further significant amendment, intended to counter the repeal of the proximity principle, is placing an obligation on occupiers of levy-liable waste facilities who wish to claim a transported waste deduction to provide evidence of the lawfulness of the receiving facility to use the waste for the relevant purpose. This reform will apply to all intermediary facilities, including transfer stations and intermodal facilities, and will therefore capture the growing practice of using existing rail transporters to transport waste. The lawfulness will be proved by evidence of the required planning consent, environmental licence and that the recipient has received the same waste.

The EPA has stated that this reform is 'not significant', on the basis that these are appropriate risk management practices that levy liable waste facilities 'should currently be undertaking'. It is likely, however, that this new, express obligation on the occupier of these facilities will go some way to closing the loop on compliance which the EPA struggled with under the proximity principle.

The release of the Paper comes at the same time as two other relevant developments regarding the interstate transport of waste.

The first is that the much publicised proceedings in the Federal Court challenging the constitutional validity of the proximity principle have been settled. The proceedings were commenced on 24 December 2015 by a number of waste companies against the State of NSW, the EPA and other entities alleging that clause 71 of the Waste Regulation was irrelevant to the transportation of waste by rail and, in any event, was invalid due to constitutional issues.¹

The second is the announcement by the EPA that it is seeking to progress the development of nation-wide controls to prevent the long-distance transport of waste. As reported in the press and confirmed by our own consultations with industry, the EPA has commenced discussions with other states and territories to consider the feasibility of imposing nation-wide controls to prevent the long-distance transport of waste. The combination of this announcement, with the broader reforms for C&D waste, means that the impact of the repeal of the proximity principle may not be as simple as it first appears.

The majority of the changes proposed in the Paper are to the Waste Regulation. These are summarised below.

The two primary proposed changes to the POEO Act are:

• Clarifying that the on-site application of hazardous waste, restricted solid waste, more than 10 tonnes of asbestos waste and more than 5 tonnes of or 500 waste tyres will not automatically constitute land pollution. This will help to facilitate standard on-site remediation works undertaken by industry; and
• Clarifying some of the waste licensing categories, including:
  • Waste storage facilities – will be amended to include facilities where waste is received from off-site, sorted and/or transferred from one vehicle to another or unloaded from a vehicle. This will specifically include intermodal facilities; and
  • Energy-recovery facilities – will be amended to clarify the circumstances in which a resource recovery exemption is required for a facility that is also required to be licensed for energy recovery.

The proposed changes are intended to commence on 1 March 2017. Submissions to the EPA on the Paper are due by Thursday 17 November 2016. We would be delighted to assist you with preparing a submission to the EPA on the impact of the proposed changes on your business. Members of our team can be contacted here.