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Focus: Environment and water reform in Western Australia

28 July 2006

In this issue: We look at the latest changes to the Environmental Protection Act 1986 (WA) and the state's ambitious water reforms.

Environmental reform in Western Australia

In brief: Senior Associate Robyn Glindemann reviews the latest round of proposed amendments to Western Australia's Environmental Protection Act 1986 (WA) which come hot on the heels of the 1 July 2006 merger of the Department of Environment and the Department of Conservation and Land Management to form the new Department of Environment and Conservation.

Background

The West Australian Environment Minister, Mark McGowan, released a discussion paper mid-July outlining significant proposed changes to the Environmental Protection Act 1986 (WA) (the EP Act).

The minister states that the proposed amendments, which are part of the second major review of the EP Act, are designed to 'improve the workability and enforceability of the legislation by building upon the strong enforcement and regulatory base that already exists in the EP Act'.

We review some of the more significant changes.

Increase of maximum penalties and introduction of minimum penalties

The New South Wales Government recently increased the maximum penalties for the most serious environmental offences to $5 million. It is proposed that a similar penalty level be introduced into the EP Act. The new maximum penalty for causing pollution or environmental harm (unintentionally or with criminal negligence) would be raised from $500,000 to $1 million for individuals, and from $1 million to $5 million for corporations. The current maximum period of five-years imprisonment for individuals found guilty of the most serious offences would remain unchanged.

Further, it is proposed that minimum penalties for Tier 1 offences be set at 10 per cent of the maximum penalty. Therefore, a corporation found guilty of causing serious environmental harm under section 50A(2) of the EP Act would face a maximum penalty of $2.5 million and a minimum penalty of $250,000 if found guilty. Penalties for Tier 2 and Tier 3 offences, and for offences under the Environmental Protection Regulations, would increase substantially from current levels.

Introduction of civil penalties

The South Australian Parliament recently amended that State's Environmental Protection Act 1993 to permit the application of civil penalties to certain environmental offences. A similar regime is proposed for Western Australia in relation to certain Tier 1 and Tier 2 offences.

Under a revised EP Act, the CEO of the Department of Environment and Conservation would have the option of choosing a civil penalty for certain offences depending on the nature and extent of the contravention and the resultant harm to the environment, and the offender's record of compliance with the EP Act. It is proposed that a range of civil penalties would be negotiated with industry. The scope of the existing modified penalty provisions in the EP Act (sections 99A-P) would be narrowed to simple administrative breaches.

Narrowing of the 'due diligence' defence

The due diligence defence in s74(1a) would be limited to matters that are not wholly within the control of the person charged. Currently, the charged person must show they took 'reasonable precautions and exercised due diligence to prevent the commission of the offence'. 

Reporting greenhouse gas emissions

WA's Greenhouse Strategy 2004 requires the development of a greenhouse gas reporting scheme for the state. It is proposed that the provisions to legally require greenhouse gas emitters to report their emissions be contained in regulations to be made under the EP Act. The regulations power in the EP Act would be amended to allow such regulations to be made.

Change of proponents under Part IV

New provisions are proposed to deal with situations where an approved proposal is implemented following impact assessment under Part IV of the EP Act and the identity of the proponent should be changed (eg following a sale and purchase of the project to a third party). Under the proposed provisions, the approval of the Environment Protection Authority (EPA) or the Environment Minister would be required before a project proponent can be released from its obligations to implement the approved proposal under Part IV in favour of a third party.

The transferor would have to state that the transferee believes on reasonable grounds that the transferee has the financial capacity to implement the project, and provide information about the transferee's financial capacity and a certificate of compliance audit in relation to the proposal. Other proposed changes to Part IV of the Act include termination and withdrawal of proposals that have been referred to the EPA.

Details of all the proposed amendments are set out in a public discussion paper which is open for public comment until 18 August 2006. A draft Bill incorporating the proposed amendments is expected this year.

A draft blueprint for water reform in Western Australia

In brief: Western Australia has embarked on an ambitious water reform agenda with the release this month of the Draft Blueprint for Water Reform in Western Australia, one of several new discussion papers released by the state's Water Reform Implementation Committee. Senior Associate Robyn Glindemann reviews the flagged changes.

Background

The Water Reform Implementation Committee (the Implementation Committee) was established following the WA Government's response to the wide-ranging 2003 review of water use and irrigation practices in the state. The Government's response effectively formed the basis of a new water reform agenda. The Implementation Committee was formed to advise the Government on the water reform program.

The Implementation Committee has now released a Draft Blueprint for Water Reform in Western Australia and five supporting directions papers for public comment.

The blueprint sets out the Implementation Committee's aims for water reform.

  • Changing the water entitlement system.
  • Facilitating water trading.
  • Implementing water metering.
  • Recovering water resource management costs.
  • Land and water planning for the longer-term protection of agricultural land.
  • Increasing self-management of water resources.
  • Investment in water use efficiency.

The Implementation Committee notes further information or public comment is required in several areas before it can advise the Government. The blueprint contains a number of specific questions posed by the Implementation Committee and invites comment on the proposals in general.

The proposals set out in the blueprint are not only consistent with the State Water Strategy (and the proposed Policy Framework for a new State Water Plan ) and the outcomes of the Irrigation Review described above, but also comply with the requirements of the National Water Initiative (NWI). Compliance with the NWI is another significant driver for the state's water reform agenda.

Some of the Implementation Committee's observations and key proposals are set out below.

Proposed changes to the water entitlement system

The development of water resource management plans for the state's water resources is a priority and either forms the basis of, or is a necessary precondition for, implementing many of the proposed reforms outlined in the blueprint.

As a new water management plan is finalised, existing water licences would be replaced with a three-pronged entitlement system comprising:

  1. a water access entitlement which describes the volume of water allocated to the 'licensee'. The access entitlement would be defined as a unit share of a consumptive pool;
  2. a site use approval; and
  3. a works approval.

Water access entitlements would be registered on a Torrens-style register – although further input is sought on whether the register should confer indefeasible title.

Water access entitlements would have a maximum 40-year term, with an option to extend the term if certain conditions are met and the relevant water resource management plan permits it.

Water trading

Water trading in the state will remain restricted until water use is comprehensively licensed, metered and allocation limits are set. At present, licences are only required in areas proclaimed under the Rights in Water and Irrigation Act 1914 (WA). Many of the state's surface water resources are not subject to a licensing regime and less than 5 per cent of water licences are metered.

The lack of interconnection between rivers and groundwater areas would also restrict trade. Trade in groundwater resources is restricted by the relative lack of information and knowledge about individual aquifers. However, water trading would likely benefit the state's southwest where competition for water is higher. In the Implementation Committee's view there is no evidence from other water markets that water trading would encourage speculative investments in water and thereby increase costs.

Metering

Under the current regime, if a water licence allocation is equal to or greater than 500 ML/year, the licensee is required to be metered. The Implementation Committee suggests this threshold be dropped to 50 ML/year. At this lower level, 93 per cent of water abstraction would be metered (up from the current level of 5 per cent of abstraction).

While the Implementation Committee believes water users should ultimately bear the cost of metering, it is looking for feedback on the most appropriate ways to manage the transition (in particular, the large up-front costs of installation).

Water use efficiency

The Implementation Committee proposes new allocations of water be restricted to a level below a determined sustainable yield and should be distributed through an auction or tender process. Water trading by individuals to the Water Corporation should be facilitated through agreements.

For the state's mining industry, the Committee suggests research into new technologies for dust suppression and replacing water as a suppressant. It also advocates allocating sufficient funds to the Department of Water to establish a data management system to provide strategic information to the industry.

The Department of Water is coordinating a series of public workshops to discuss the blueprint and submissions on the blueprint must be received by close of business on 15 September 2006. The blueprint and supporting directions papers can all be downloaded from the WA Department of Water website. We are tracking these developments and will provide further updates later in 2006.

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