Contaminated sites - should I report?

Under section 11(4) of the Contaminated Sites Act 2003 (CS Act) the following people have a duty to report to the Department of Environment and Conservation (DEC) any known or suspected contaminated sites:

• the owner (including mortgagee in possession) or occupier of a site;

• a person who knows or suspects they caused or contributed to a contaminated site; and

• an auditor that is engaged to provide a report that is requested for the purposes of the CS Act in respect of the site.

Further, pursuant to section 11(3) of the CS Act reporting must occur:

• within 21 days after the day on which the contamination was known; or

• if contamination is suspected, as soon as it is reasonably practical to do so.

The penalty associated with noncompliance of this section can be $250,000 (plus a daily penalty of $50,000). 

Consequences of reporting

Once a site has been reported to the DEC and assessed, it will receive a classification pursuant to Part 2 Division 2 of the CS Act which will, in turn, be registered as a memorial on the title to the land.

There are six classifications that may be registered on the title to the land, which include:

• possibly contaminated - investigation required;

• not contaminated - unrestricted use;

• contaminated - restricted use;

• remediated for restricted use;

• contaminated - remediation required; or

• decontaminated.

Each classification carries with it a different level of obligation, but ultimately the simple act of registering a memorial on the title to the land, for any of the classifications outlined above, may impact on the value of the land and possibly hinder the ability to transfer the land to a third party at a later date.

What is a contaminated site?

Section 4 of the CS Act defines ‘contaminated’ in respect of land, water or a site as 'having a substance present in or on land, water or site above background concentrations that presents, or has the potential to present, a risk to human health, the environment or any environmental value.'

According to this definition the presence of contamination on a site does not automatically trigger the requirement to report for the purposes of the CS Act.  In order for the site to be regarded as contaminated it must present or have the potential to present:

• a risk to human health;

• the environment; or

• an environmental value (i.e. such as a wetland, coastline, forest, etc.).

To meet the requirement of the definition, it is critical that there is not only a source, but also an environmental receptor (either on or off-site) and a pathway or means for the contaminant to translocate to the receptor. 

For example, if the soil on a site contains asbestos, it is undoubtedly the case that contamination is suspected.  However, if the asbestos is present at a concentration below industry guidelines and there are no pathways to any sensitive environmental values/receptors on or off the site then it is unlikely that the site would be regarded as contaminated for the purposes of the CS Act.

Determining contamination

Contamination is not always obvious to the naked eye and it is possible that a site may be contaminated even if it appears to be vacant land.  To provide guidance on this issue the Potentially Contaminating Activities, Industries and Landuses guidelines (Dec 2004) published by the DEC (Guidelines) outlines a list of land uses that may result in contamination for the purposes of the CS Act, including for example sites that have been used for petrol stations to market gardens.  However, even if a site has been used previously for one or more purposes listed in the Guidelines, it does not necessarily mean it is ‘contaminated’ for the purposes of the CS Act, requiring it to be reported to the DEC. 

In the ordinary course, contamination of a site can be confirmed by an environmental consultant by way of undertaking a Preliminary Site Investigation or Detailed Site Investigation.  However, this exercise can be costly and therefore it is important in the first instance to seek legal/environmental advice to ascertain if the minimum obligations under the CS Act apply to the land. 

Importantly, early advice with regard to strategy will not only assist in providing certainty with regard to any obligation to report a site, but will also lay the foundations for the scope of works to be undertaken by the environmental consultant, in the event that the site is to be reported and/or cleaned up.

If you would like to know more about the obligations under the CS Act or to discuss duties to report a contaminated site, please contact partner, Craig Wallace or associate, Shauna Mounsey.