Sustainable development obligations in Australia

Throughout Australia, there is increasing awareness of environmental issues and a demand for more sustainable development and practices. This has meant both an increase in opportunities for investment in sustainable development, and more stringent environmental controls.

Australia’s constitution shares power between the federal government and the state and territory governments such that the state and territory governments pass their own laws, except on matters exclusive to the federal government.

At federal level, the Commonwealth Environment Protection and Biodiversity Conservation Act 2000 regulates development which has a significant impact on matters of national environmental significance. The act covers world heritage properties and the nuclear industry (including uranium mining), and is becoming increasingly important in major mining and infrastructure projects.

However, as the constitution contains no specific power to legislate with respect to land, most environmental controls are imposed not at a federal level, but by state or territory legislation. While the detail of controls can vary substantially, the major underlying principles, which are set out below, are relatively uniform.

Regulation of development

In Australia, the zoning of land and control of development is primarily the function of the state and local governments. Typically, land use is controlled by the division of land into zones. Depending on the zoning of land, a particular development may be permitted without regulatory approval; only permitted with regulatory approval; or prohibited. For example, land in an urban area may be zoned as residential, and only certain kinds of dwellings and associated infrastructure may be allowed with development consent from the applicable local council. The details of the controls vary from state to state.

It is an offence to carry out development without the appropriate approvals, and significant penalties may apply.

Pollution and waste disposal

There are comprehensive pollution and waste disposal laws in most parts of Australia. Typically, an environment protection licence (pollution licence) is required to authorize water pollution or for certain discharges or other impacts such as noise or vibration, or to carry out specific activities listed in the legislation. Pollution licences impose discharge limits and regulate the polluting activity in some detail.

Pollution licences are generally granted by the relevant state or territory’s environment protection authority (EPA). Each EPA periodically reviews the performance of licence holders. Managers or directors of licence holders may be required to certify compliance with relevant licence conditions on an annual basis.

A breach of a licence condition or of a control imposed by legislation is an offence. Significant penalties, including substantial fines and imprisonment, can be imposed by the environmental courts for major pollution offences.

Waste disposal is similarly regulated, and disposal to licensed landfills or facilities is generally required. A specific provision of a licence may also require prevention and clean up. Each state has reporting obligations for certain incidents of pollution that may occur.

Contaminated land

Where there is contaminated land, regulatory authorities will generally require it to be cleaned up where there is risk to the health of people or to the environment. Where clean-up and prevention orders are served, it is an offence not to comply with them. The costs of complying with such orders may in some cases be recovered from the original polluter, if that person or entity can be located.

Contaminated land issues are particularly relevant where residential development is taking place on land previously used for commercial, industrial or certain agricultural or institutional purposes. In those circumstances, particular care needs to be taken to understand the history and condition of the site.

Risk and liability containment issues become important where contaminated land is concerned, necessitating careful drafting of contracts for the purchase and sale of contaminated land.

Climate change regulation

The Australian government signed up to the Kyoto Protocol in 2007, and ratified it in March 2008. Australia has committed to reducing national greenhouse gas emissions to a level equivalent to 108% of 1990 levels by 2008-2012.

The Australian government is proposing a range of domestic measures to address climate change. The core policy measure is the proposed emissions trading scheme known as the Carbon Pollution Reduction Scheme, or CPRS. CPRS legislation was introduced into the senate for the second time in November 2009 and rejected on 2 December 2009. The legislation has since been revised and was introduced again into parliament on 2 February 2010.

The National Greenhouse and Energy Reporting Scheme (NGERS), which will underpin the CPRS, has already commenced. NGERS requires certain corporations to report greenhouse gas emissions, energy consumption and energy production from their facilities on an annual basis.

These measures provide opportunities for businesses which are able to source energy from renewable sources, and for those that are engaged in activities that reduce greenhouse gas emissions or store carbon such as plantation forests and geo-sequestration.

Green buildings

In Australia, sustainable building design is regulated both at a state and federal level.

The Building Code of Australia sets out minimum energy efficiency requirements for all new buildings and major refurbishments in Australia.

There are other acts made by the federal parliament which indirectly regulate the greening of new and existing commercial buildings. The Energy Efficiency Opportunities Act 2006 aims to improve the identification, evaluation and implementation of energy efficiency opportunities by businesses that consume a large amount of energy.

The National Greenhouse and Energy Reporting Act 2007 requires companies which emit certain levels of greenhouse gases, or which produce or consume certain amounts of energy, to register with the National Greenhouse and Energy Register and to report their emissions annually.

Michael Wadley heads Blake Dawson’s China Practice.

PC Feng is a legal consultant in Blake Dawson’s Shanghai office.