Australian Solvent Recyclers Pty Ltd v Environment Protection Authority of NSW

[2000] NSWLEC 10

Land and Environment Court

of New South Wales

CITATION:	Australian Solvent Recyclers Pty Ltd v Environment Protection Authority of NSW [2000] NSWLEC 10
PARTIES:	APPLICANT: Australian Solvent Recyclers Pty Ltd RESPONDENT: Environment Protection Authority of NSW
FILE NUMBER(S):	10183 of 1999
CORAM:	Sheahan J
KEY ISSUES:	Appeal from Administrative Decision :- appeal concerning conditions of Waste Minimisation and Management Act licence
LEGISLATION CITED:	Waste Minimisation and Management Act 1995 Protection of the Environment Operations Act 1997
CASES CITED:	Nalor Pty Ltd v Bankstown City Council [1980] 2 NSWLR 630
DATES OF HEARING:	04/08/99-06/08/99, 09/08/99-13/08/99, 16/08/99, 17/08/99, 19/08/99, 20/08/99, 24/08/99, 25/08/99, 1/9/99
DATE OF JUDGMENT:	02/01/2000
LEGAL REPRESENTATIVES:	APPLICANT: Mr P J McEwen SC (Barrister) SOLICITORS: Levy Peatman RESPONDENT: Mrs J C Kelly (Barrister) SOLICITORS Environment Protection Authority

JUDGMENT:

IN THE LAND AND Matter No: 10183 of 1999

ENVIRONMENT COURT Coram: Sheahan J

OF NEW SOUTH WALES 1 February 2000

AUSTRALIAN SOLVENT RECYCLERS PTY LTD

Applicant

v

ENVIRONMENT PROTECTION AUTHORITY OF NSW

Respondent

JUDGMENT

Introduction

1. This appeal was lodged on 16 March 1999, pursuant to s 75(1) of the Waste Minimisation and Management Act 1995 (“ the WMM Act ”), by Australian Solvent Recyclers Pty Ltd (“ ASR ”), against conditions imposed by the Environment Protection Authority of NSW (“ EPA ”) on licence number 005661, as issued on 26 February 1999 (“ the 1999 licence ”).

2. Apparently there were earlier proceedings between the same parties in November 1998 in relation to a notice, pursuant to s 58 of the WMM Act, which varied licence 005661, as in force from 26 February 1998 to 26 February 1999 (“ the 1998 licence ”) ( Exhibit E7 ). Those proceedings were resolved by consent orders in February 1999, but that Court file was not tendered during these proceedings.

3. Section 75(1) of the WMM Act provides:

A person (other than a public authority) who is aggrieved by a decision of the EPA regarding:

(a) the refusal to grant a licence, or the granting of a licence subject to conditions, or

(b) the revocation or suspension of a licence, or

(c) the amendment of the conditions of a licence, or

(d) a notice under section 39 (Contravention of IWRPs),

may appeal to the Court against the decision.

The hearing

4. At the hearing of this appeal the Court heard evidence on behalf of ASR from:

· Mr Barry Purdy, Managing Director, ASR;

· Mr Stephen Smith, Director, Southern Environmental Pty Ltd (consultant to ASR);

· Mr Dale Cable, Research and Development Manager, ASR;

· Mr Sasha Vlastelica, Director, Industry and Environment Consultants Pty Ltd

· Mr Simon Leake, Scientific Officer and Director, Australian Soil Technology Pty Ltd and Director and Proprietor, Sydney Environmental and Soil Laboratory Pty Ltd; and

· Ms Rhonda Pearson, Secretary, ASR.

5. Evidence was given on behalf of the EPA by:

· Mr Alan Ritchie, Manager of the Dangerous Goods Unit, EPA;

· Mr Christopher Kelly, Manager of Compliance Audit Unit 1, EPA;

· Mr Kenneth Hardy, Environment Protection Officer, EPA;

· Miss Danielle Playford, Environment Protection Officer, Sydney Waste Section, EPA;

· Mr Damien Macinante, Principal Legal Officer, Legal Branch, EPA;

· Mr Mark Gifford, Principal Officer, Sydney Industry Section, EPA; and

· Mr Paul Fuller, Principal Technical Officer, Waste Processing, EPA.

6. The Court also had the benefit of an inspection, in the presence of both parties, of both the St Marys site and a somewhat similar site at Wilberforce (that site being particularly relevant only because of the then current dispute about a condition of the 1999 licence, concerning financial assurance).

The facility

7. ASR has operated a hazardous waste facility in Links Road, St Marys (variously referred to as No.38 or No.60) since 1 August 1996, but the site was previously operated by KH Dixon (No. 4) Pty Ltd (“Dixon”) as a solvent waste facility for at least 25 years.

8. ASR accepts solvent wastes, including, amongst other things, batches of failed paint and gunwash. A “pot still” is used to process such dirty or contaminated solvents, and where possible, the solvent component is saved and sometimes reused. The other primary activity occurring on site is the use of “autoclaves” which treat waste in 44 gallon drums leaving a residue of inert substances. The residue is then either stored on site or disposed of elsewhere.

9. Central to this hearing was a third on-site process, namely the use of a bioremediation “pile”, which is comprised of woodchips and green matter, (Exhibit A38), and selected nutrients, upon which contaminated waters are placed.

The ICAC

10. There was some reference during the hearing to proceedings before the Independent Commission Against Corruption (“ICAC”).

11. It appears that Mr Raymond Smith, who was formerly the EPA regulatory officer responsible for the ASR site, has been under investigation, but, although the final report of Commissioner Stowe QC had not been finalised, the Court heard oral evidence that there was no implication against ASR.

12. Mr McEwen SC, counsel for ASR, strongly refuted any suggestion of impropriety on behalf of his client in respect of the ICAC matter.

13. However, he asserted that the ICAC investigation provided some impetus for the EPA’s review of ASR’s licence, which, in turn, resulted in this appeal. Mr McEwen believes the ICAC investigation resulted in the EPA’s not approaching the review of ASR’s licence in its ordinary regulatory way. He accused the EPA of becoming suspicious, intransigent and uncooperative regarding ASR.

14. It should be noted that the “Smith” referred to in this judgment is the witness Stephen Smith and not the said Raymond Smith (who took no part in the proceedings).

The 1999 conditions appealed

15. Seven conditions of the 1999 licence (a copy of which was attached to the Class 1 application) were raised in ASR’s Statement of Issues filed 27 April 1999, but, by the commencement of the hearing, three of those disputed conditions (8, 10, and 17.3) had been agreed between the parties, with four (1.1, 7, 9, and 18.2(a)) remaining in dispute.

16. Early on the fifth day of hearing, the parties informed the Court that they had agreed on condition 7 of the 1999 licence, to the effect that the requirement for bunding with a capacity of 25% of the total volume of stored waste would apply, but only in respect of 8,000 drums. ASR had stored some 16,500 drums on site, but admits that the optimum number of stored drums is 8,000, the number which, importantly, became the target of a drum reduction programme, currently in place and due to be completed by 26 February 2000.

17. Condition 9 of the 1999 licence was also agreed between the parties late on the fifth day of hearing, subject to some debate about timeframes. This condition related to the stacking height of all drums and intermediate bulk containers, and a tiered system of stacking from the bund walls was agreed to by the EPA on the basis that it would prevent any fallen drums landing outside the external bund walls.

18. On the seventh day of the hearing, condition 18 of the 1999 licence, relating to financial assurance, was substantially agreed, although there remained a current of some conjecture between the parties, during the rest of the hearing, as to whether the assurance should be provided by this family-owned company in the form of a bank guarantee, or by some other means.

19. Two differing versions of the agreed conditions were eventually tendered in the proceedings (Exhibits A40 and E18), and I will deal with them at the end of this judgment.

The major dispute to be adjudicated

20. The bulk of hearing time concerned the only condition imposed on the 1999 licence which remained in dispute, namely condition 1.1, and the context created for the condition by the bioremediation process, which ASR maintains is integral to its management of the subject site, and to the range of work carried out there.

21. ASR complains that, although the EPA usually puts to licence holders drafts of any proposed amendments of licence terms, it did not do so in the case of the 1999 licence, despite the “quite dramatic” changes proposed. The 1999 licence, in the form from which this appeal has been brought, was delivered personally to ASR on 2 March 1999.

22. ASR’s 1997 licence (Exhibit E8) had provided, in Condition 1:

Limit Conditions
1. Except as may be provided by any other condition of this Licence, only the following waste(s) may be accepted at this facility:
1.1 contaminated solvents, such as solvent based paints, turps based paints, white spirits, water based solvents and water based prints.

23. Condition 2 listed the “ classes ” of waste which “ must not be accepted at the depot ” and included:

2.6 contaminated soil.

24. ASR’s 1998 licence ( Exhibit E7 ) had provided, in Condition 1:

Limit Conditions
1. Except as may be provided by any other condition of this licence, only the following waste(s) maybe accepted at this facility:
1.1 contaminated solvents, solvent based paints, water based solvents, water based paints and grease trap wastes.

25. Condition 2 listed again the “ classes ” not to be accepted, but “ contaminated soil ” was not included. Instead, at the end of Condition 2 the following was added:

Note: - contaminated soil may be received and stored on the premises but approval in writing by the EPA must be obtained prior to treatment and/or disposal. (Emphasis added.)

26. Condition 1 of the 1999 licence now under appeal relevantly provides in this regard, only as follows:

Limit Conditions
1. Except as may be provided by any other condition of this licence, only the following waste(s) may be accepted at the licensee’s premises:
1.1 waste solvents, solvent based paints, water based solvents and water based paints.

27. In the 1999 licence there is no condition specifying any “ unacceptable wastes ”, and there is no “ Note ” attached, regarding soil or anything else.

28. It is important to note that the licence does not , and does not purport to, regulate any bioremediation processes occurring on site; in condition 1.1 it merely limits the types of waste that may be accepted on the site by ASR.

29. ASR seeks, in this appeal, to have condition 1.1 amended so that “ contaminated soils capable of being bioremediated ” and “ oily waters ” may be accepted at the St Marys premises.

The Bioremediation Process at ASR

30. It has been a consistent objective of ASR to recycle hydrocarbons for beneficial re-use. The purpose of the bioremediation pile at the subject site is stated (in Exhibit A13 ) to be:

to better use selected fluids which contain in some cases significant quantities of nutrients and vital trace elements which can be remediated into a product which can be beneficially recycled.

31. In his affidavit dated 3 August 1999, Cable stated (par 6) that the pile serves two purposes:

(a) It bioremediates the contaminants from on site. These contaminants include the water fractions left over from the distillation of alcohols, the water soluble glues, the polyvinyl acetate glues, and potentially contaminated storm water from the bunded areas..
(b) The following products are brought on-site to remediate in the bioremediation pad: crushed wooden pallets, wood waste and green waste shredded…

32. In his affidavit of 27 July 1999 Stephen Smith said that the pile is “ utilised to treat bio-degradable residues as well as contaminated stormwater ”.

33. In his oral submissions (25.8.99 T55 L15-17) Mr McEwen, on ASR’s behalf, put it succinctly:

… our objective is to recycle hydrocarbons by way of bioremediation on a pile of green matter with the objective of producing compost which can be used beneficially on land…

34. Contaminated storm water (surface run-off from the site contains solvents, owing to spills on the site) and other oily waters are mixed with the pile. The bulking with chipped green waste and woodchip products is essential to maintain aerobic conditions through the natural convection of air. Aeration is therefore essential, and an operator turns the pile to ensure that oxygen is not a limiting factor to the process. The pile then begins to deteriorate, with the temperature rising and being maintained by the increased biological activity. Water is a major requirement of the biological processes that break down the complex carbon molecules, and is applied by the operator.

35. ASR maintains that the level of contaminants, specifically hydrocarbons within the range of C10 to C36, is reduced in the pile through microbial action, and that beneficial use can be made of the material from the pile for agricultural purposes. The process is “aerobic” in nature - the naturally occurring bacteria in the green waste comprising the pile break long carbon chain molecules into shorter (and therefore safer) molecules.

36. Smith gave evidence that hydrocarbons within the C10-C36 range would take around 30 days to break down within the bioremediation pile. In other words, if a hydrocarbon molecule could be marked, he would not expect to be able to find that molecule in the same form 30 days later.

37. The pile itself would be expected to stay on site for up to 2 years.

38. If contaminated stormwater and oily water were not placed on the bioremediation pile, they would have to be trucked to the Lidcombe Disposal Depot and deposited there at a substantial fee.

39. Cable maintains that the level of acceptance of the processes of bioremediation in Australia is lower than the rest of the world, in particular the USA. He referred several times during his oral evidence to voluminous amounts of scientific information available which, he said, shows the effectiveness of bioremediation.

40. ASR had previous experience with bioremediation when it contracted with BHP Australia to bioremediate large amounts of contaminants in situ at Port Kembla. The contaminants included steel rolling oil, tallows from all animal species, engine oils and greases amongst other wastes generated by the steel industry.

41. ASR used its pile at the St Mary’s site between March 1998 and May 1999, and relied on its results as evidence of the company’s ability to manage and operate an effective bioremediation pile on site. The pile itself was removed on 10 May 1999 and accepted by Applied Soil Technology Pty Ltd (“ AST ”). AST then “ land applied ” the material at “ Hillview ”, a farm owned by two of the directors of AST, in Silverdale (see Exhibit A21 ) at a rate of 14-15 tonnes per hectare. The material was spread on existing pasture and ploughed in before oats were planted and other fertilisers added. The Hillview property currently has a Pollution Control Act licence to accept food wastes.

The EPA’s attitude to bioremediation at ASR

42. ASR sought EPA approval under the Pollution Control Act 1970 for its bioremediation activity, and the EPA issued Pollution Control Approval 003589 dated 19 December 1997. (Copies of this approval are annexed to several affidavits filed in the proceedings.)

43. However, by way of a letter from the EPA dated 16 February 1999 (Exhibit A1) ASR was informed that the bioremediation pile did not “require the authority of a pollution control approval issued pursuant to section 17K of the Pollution Control Act.” The letter further stated:

However, the EPA is of the view that conduct of the bio-remediation activities described in the information supplied with your application dated 17 November 1997 for the instrument, need to be considered in terms of the regulatory requirements of the Waste Minimisation and Management Act 1995. It is recommended that you obtain your own legal advice in this respect.

44. As Mr McEwen SC points out, the EPA has never taken any steps to stop bioremediation on the site or impose conditions upon it. In his affidavit of 27 July 1999 Smith relied on EPA “ approval … to treat contaminated soils brought to the site ”.

45. Mrs Kelly, counsel for the EPA, admitted in her final submissions that the EPA “ accepts ” the process of bioremediation in general terms. However, the EPA disputes that a bioremediation pile existed on this site prior to ASR taking it over, and disputes ASR’s contentions regarding the success of the process on the site.

The Relevant Legislative Scheme

46. The Protection of the Environment Operations Act 1997 (“the POEO Act”) commenced on 1 July 1999.

47. As these proceedings relate to the amendment of a licence, the Court’s task is not to review the decision of the statutory authority, but to determine, on a merits basis, whether an amendment to the current licence is warranted, and, if so, under what conditions, if any. Nalor Pty Ltd v Bankstown City Council [1980] 2 NSWLR 630.

48. Part 3 of Sch 1 of the POEO Act defines “waste” as having the same meaning as in the WMM Act, which provides:

“waste” includes:

(a) any substance (whether solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such volume, constituency or manner as to cause an alteration in the environment, or

(b) any discarded, rejected, unwanted, surplus or abandoned substance, or

(c) any otherwise discarded, rejected, unwanted, surplus or abandoned substance intended for sale or for recycling, reprocessing, recovery or purification by a separate operation from that which produced the substance, or

(d) any substance prescribed by the regulations to be waste for the purposes of this Act.

A substance is not precluded from being waste for the purposes of this Act merely because it can be reprocessed, re-used or recycled.

49. Part 3 of Sch 1 to the POEO Act provides that:

industrial waste means any non-liquid waste that is:

(a) specified in Part 1 of the following Appendix, or

(b) otherwise assessed and classified as industrial waste in accordance with the procedures set out in the Waste Guidelines.

Waste Guidelines means the document called Environmental Guidelines: Assessment, Classification and Management of Non-Liquid Wastes issued by the EPA and in force as at 1 July 1999.

50. Exhibit E11 is a copy of the document entitled “Environmental Guidelines: Assessment Classification and Management of Liquid and Non-liquid Wastes” (my emphasis). Whilst the title description on the exhibit does not exactly equate to that in the Act, I quote from Exhibit E11 at page ii:

Environmental Guidelines: Assessment, Classification & Management of Liquid and Non-liquid Wastes is a combination of Environmental Guidelines: Assessment, Classification and Management of Non Liquid Wastes (1997) and the product of consultation on Draft Environment Guidelines for Assessment, Classification and Management of Liquid Wastes (1998). Its provision will take effect from 1 July 1999.

51. Clearly Exhibit E11 is the relevant document that is referred to as the Waste Guidelines in the POEO Act. I will accordingly refer to this document as the “ Waste Guidelines ”.

52. Table A4 on p 67 of the Waste Guidelines provides for different categories of non-liquid waste. Relevantly, waste is classified as:

·

“ industrial waste ” if it has a concentration of between 10,000 and 40,000 mg/kg of C10-C36 petroleum hydrocarbons;

· “ solid waste ” if it has a concentration of between 5,000 and 10,000 mg/kg of C10-C36 petroleum hydrocarbons; and

· “ inert waste ” if it has a concentration of less than 5,000 mg/kg of C10-C36 petroleum hydrocarbons.

53. Section 4.4 of the Waste Guidelines is entitled “ Disposal of classified non-liquid wastes ”, and provides that industrial waste may only be disposed of at an “ Industrial Waste Landfill”. Rather unhelpfully, an “industrial waste landfill ” is defined in the Glossary to be a landfill “ licensed under the Protection of the Environment Operations Act 1997 to accept waste that is classified or assessed as industrial waste...”. The relevant class of solid waste may be disposed of only in a Solid Waste Class 2 landfill, which is defined in the Glossary as a “ landfill that accepts wastes that are classified or assessed as solid waste in accordance with ... these guidelines...”.

The waste management hierarchy

54. Section 4.8 of the Waste Guidelines provides:

4.8 Good management practices for all classes of waste
Waste is a resource, with reuse, recycling reprocessing and processing being strongly preferred options over disposal , as has been made clear in the establishment of the waste management hierarchy.
4.8.1 Waste Separation
It makes good sense to keep various components of a waste stream separate whenever practicable, both from financial and conservation points of view. For example:

· Industrial, hazardous or Group A waste (which may be a very small fraction of the total waste), when mixed with other wastes, can turn all the waste into industrial, hazardous or Group A waste - this can result in much higher management costs.

· Recyclable waste, when kept separate from other waste, can generate income (for example, metals, clean office paper and so on) rather than incur a disposal cost.

· The fewer the types of waste materials that are mixed together, the easier it is to assess and classify the waste.

· Some types of waste may have lower disposal costs than others (for example, metals, clean office paper, recyclable solvents and oils) if they are kept separate.

4.8.2 Reuse, recycling or reprocessing of liquid and non-liquid waste

The EPA is encouraging all sections of industry to develop voluntary standards, giving criteria for the beneficial reuse of waste generated either without any treatment or with processing, reprocessing or treatment. If the standards are proven by the proponents to be environmentally sound, the EPA may consider endorsing these beneficial reuse criteria. This will enable such materials to be removed from the waste stream, and will conserve virgin natural resources.

The EPA has identified three major issues that should be carefully addressed and documented in proposals of criteria for beneficial use. These are:

· that the use of a waste should provide measurable benefits to the environment, such as the conservation of natural resources

· that cost-effective higher-order uses of the waste according to the Waste Management Hierarchy are not available

· that the single or repeated use of the waste in the manner proposed will not result in either immediate, delayed or cumulative damage to the local or overall environment. (Emphasis added.)

55. The waste management hierarchy referred to in section 4.8 is described in s 3 of the WMM Act as being:

· avoidance

· re-use

· recycling and reprocessing

· disposal

56. Mr McEwen SC, on behalf of ASR, contends that the merits of ASR’s operations and this application are reduction in waste, beneficial recycling of waste, reduction in transportation of waste (e.g. to Lidcombe), reduction in costs of waste disposal, and reduction in the need for landfill disposal sites.

The arguments presented

57. Much of the 14 days of hearing time, followed by a series of written submissions, was taken up with arguments which the court in some instances now sees as peripheral to the central question involved in this appeal.

58. For example, there was some discussion of whether ASR enjoys necessary and current planning consents, and/or existing use rights in respect of the bioremediation process.

Legality of Process?

59. In this regard, s 50 of the POEO Act provides:

I. Licensing of development controlled under EP&A Act

This section applies to development that cannot be carried out without development consent under the Environmental Planning and Assessment Act 1979 . This development is called controlled development in this section.

II. Licence to be concurrent

A licence that relates to controlled development must not be granted by the appropriate regulatory authority, unless development consent has been granted for the controlled development. However, this section does not prevent the consideration of a licence application by the appropriate regulatory authority before development consent is granted.

III. Existing use

Without limiting the above, this section does not apply to the extent that development consent is not necessary under the Environmental Planning and Assessment Act 1979 because of an existing use.

60. Annexure “ D ” to Smith’s affidavit dated 29 June 1999 was a letter from Southern Environmental to Penrith City Council, which stated:

As the EPA have questioned the existence of a Council Approval of the Bio-remediation Process my clients ask that a letter from Council be forwarded to them recognizing (sic) the Existing Use Rights.

61. The EPA relied on this letter to demonstrate that “ whether or not there are existing use rights has not been determined by council ” (p 1 of the EPA’s written submissions), and submits that, therefore, in the absence of a council approval, the Court may not endorse the existing bioremediation process. The EPA’s submission, with respect, is misdirected. Annexure “ D ” does not show that existing use rights do not exist. It merely shows that the Council have yet to determine the question.

62. The need for, and/or existence of, an approval for the pile is not really relevant to the court in this hearing, as these Class 1 proceedings seek only approval to bring on to the site certain contaminated materials. The court, therefore, does not have to go beyond that. However, any history of bioremediation on this site could be relevant to the court’s task. Hence, some reference needs to be made to some of that evidence in order to put the key matters in context.

History of Bioremediation on the site?

63. Exhibit A8 is a bundle of aerial photographs taken in 1970, 1978, 1986, 1989, 1991, 1982, 1994 and 1998 (some of the dates were handwritten by Mr Cable, whose oral evidence was that a bioremediation pile has existed on site since at least 1970). Overlays were also tendered with the photos to indicate where there were existing bioremediation piles on the St Marys site.

64. Although I cannot be sure that the particular areas indicated to me on Exhibit A8 were bioremediation piles, Exhibit A7 , a report from Douglas Partners Pty Ltd entitled “Report of Validation Assessment” refers to the bioremediation pile existing on site since at least January 1992. There is also the Pollution Control Act approval for the bioremediation pile granted by the EPA in December 1997. It, therefore, seems that the EPA has been, or should have been, aware of the bioremediation pile for at least 2 years and probably for 7 or 8 years.

Variation of Licences and Conditions?

65. This appeal arises from the EPA’s decision to impose stringent and specific restrictions on its renewal of ASR’s licence.

66. Section 58 of the POEO Act provides:

(1) The appropriate regulatory authority may vary a licence (including the conditions of a licence).

(2) A variation includes the attaching of a condition to a licence (whether or not any conditions have already been attached), the substitution of a condition, the omission of a condition or the amendment of a condition.

(3) A licence may be varied on application by the holder of the licence or on the initiative of the appropriate regulatory authority.

(4) A licence may be varied at any time during its currency, including on its being transferred to another person.

(5) A licence is varied by notice in writing given to the holder of the licence.

(6) If:

(a) the variation of a licence will authorise a significant increase in the environmental impact of the activity authorised or controlled by the licence, and
(b) the proposed variation has not, for any reason, been the subject of environmental assessment and public consultation under the Environmental Planning and Assessment Act 1979,
the appropriate regulatory authority is to invite and consider public submissions before it varies the licence.

67. No application has been made to vary ASR’s licence to authorise any bioremediation process. The only application before the court (standing in the regulatory shoes of the EPA) is for approval to bring certain non-included materials within the licence.

68. It would appear that oily waters have been put on the bioremediation pile for some time, and contaminated soils were specifically included in the 1998 licence. The EPA has now precluded the importation onto the site of such materials, but, despite the terms of s 58(6), there would seem to me to be no bar to the court determining the question of amendment of the conditions to the current licence on the merits .

Adequacy of information?

69. Essentially the EPA says that it has insufficient information to enable it to adequately assess the bioremediation process on the ASR site. It contends that it (and, on appeal, the court) needs to make such an assessment before it can/will allow these additional inputs to the process, and impose appropriate conditions on ASR’s licence.

70. There was a plethora of evidence regarding information which has passed between ASR and the EPA, and ASR contended strenuously that all necessary information was at all material times readily available to the EPA.

71. ASR contends that the EPA had access to adequate information as a consequence of the following events or circumstances, and that, prior to this hearing, the EPA never complained that not all the information it required had been produced:

· the site’s long and relevant history, including earlier licences and approvals granted by the EPA.

· frequent visits by various EPA officers and regular reports provided (at least since February 1999) by ASR

· access to the Douglas Partners 1992 Report ( Exhibit A7 ) commissioned by Dixon.

· ASR’s November 1997 “ Bio-Remediation Proposal ” (annexure “ L ” to Cable’s affidavit dated 27 July 1999) in support of the application dated 21 November 1997 for the Pollution Control Authority (No.003589) granted (apparently unwisely, if not wrongly) by the EPA on 19 December 1997.

· the EPA’s knowledge of, and involvement with, ASR’s work with BHP, and of other sites where hydrocarbons are/were successfully bioremediated.

· ASR’s submission of an Operations Management Plan in 1997 ( Exhibit A15 ) and of an Environmental Management Plan ( Exhibits A13 c.f. A14 ).

· the EPA’s licensing of waste generators and regulation of waste transporters who service the site (see Exhibit A16 ).

· material ASR produced to ICAC ( Exhibit A36 ) and in the earlier proceedings with the EPA.

· meetings between ASR, Smith, and the EPA, between 12 November 1998 and 8 February 1999, which meetings were followed by the provision and explanation (by Smith to Playford) of voluminous documentary material.

· exchanges of correspondence, such as in February 1999 ( Exhibit A1 ).

72. The EPA counters that it has been, and remains, generally critical of ASR’s management of the site, as evidenced by the issue of seven penalty infringement notices, and that it has frequently sought the necessary information in a form in which it can be properly evaluated.

73. The EPA complains that information provided to it by, or available to it about, ASR does not show the constitution of the pile nor the composition of the materials put upon it, in particular their nature and concentrations. No relevant sampling is carried out and reported to the EPA. The first “ mass balance ” exercises regarding the site were done in the course of the oral evidence before the Court in this appeal, but there has never been any requirement for ASR to do mass balances in the ordinary course of business, nor to record analyses of components or concentrations of inputs to the pile.

74. ASR asserts that bioremediation really became an issue for the EPA officers only when the 1999 licence was sent out.

75. Gifford summarised what the EPA requires (in par 58 of his affidavit 21 June 1999) as follows:

In order to determine whether the Applicant should be licensed to accept contaminated soils capable of being bioremediated and oily waters, the EPA requires:

· a description of the source of the waste streams and a comprehensive outline of the chemical makeup of each type of waste,

· details of the research that has been conducted to ascertain the types of waste that can be remediated,

· a step by step outline of the process that remediates the waste,

· representative samples of the waste after the remediation has been conducted,

· details of the processing and monitoring methods for the activity,

· details of pollution control mechanisms associated with the activity, and

· details of quality control for the activity.

76. Cable acknowledged (in par 4(dd) of his affidavit 27 July 1999) that such information had been requested of ASR, but he claimed that Gifford “ has not displayed the necessary expertise to interpret the answers ”, and relied simply on ASR’s 1997 submission (Annexure “ L ” to the affidavit).

77. The EPA may well have known something of the processing of contaminated soil and/or oily waters on the site, but Dixon was apparently treating only soil which became contaminated on the site, and no licence or approval ever included importation of oily waters. I am satisfied that ASR has been receiving oily waters; so their bioremediation on site would constitute a breach of ASR’s licence.

78. The EPA asserts that it could not, and so the Court on this appeal cannot, perform their duties adequately without the information which is now assembled as a result of this hearing, and, further, that such information should lead to a refusal of ASR’s application, because the contents of the soils and waters ASR puts on its pile remain unclear, and there is no regime in place to pre-test such inputs.

79. The EPA asserts that it cannot be expected to go searching for and through documents in various locations - “ detective work ”, as Mrs Kelly called it - to trace what is happening or intended on a licensed site.

80. Further, the EPA asserts that it is an unscientific and inadequate response to the EPA’s task to extrapolate information regarding one site (e.g. a petroleum refinery) to another site (e.g. a solvent recycler), and/or to accept someone’s opinion rather than objective information on relevant matters.

81. The EPA’s position is that the pile is “ industrial waste ”; it is opposed to any expansion of the materials which may be put upon it; and it says the pile should not be moved without the appropriate permit, regardless of the published views of the Department of Agriculture, and ASR’s insistence that it twice put the EPA on notice that the pile would be moved to Silverdale.

82. ASR counters that all of the EPA’s concerns can be adequately met and addressed by the imposition of appropriate conditions. Fuller, in his oral evidence, appeared to agree with that, but the EPA formally retreated from that position ( Exhibit A23 ).

Does the pile work?

83. Fuller’s evidence, on day 10 of proceedings, was that the EPA was not sure if the bioremediation process on ASR’s site was actually working. He questioned the fact that different materials were being added to the pile, which may be incompatible, preventing the break-down of contaminants.

84. ASR relied on the previous bioremediation pile, which was on site between March 1998 and May 1999, as evidence that the bioremediation process it carries out on this site has worked, and will continue to work, effectively.

85. However, a sample of the pile, taken sometime before 26 March 1999 (“ the final pre sample ”), showed a concentration of 14,300 mg/kg of C10-C36 hydrocarbons. If so, the pile would appear to come within the “ industrial waste ” category in accordance with the Waste Guidelines, described above.

86. The EPA maintained, therefore, that the only appropriate method of disposal of the bioremediation pile was to store it in an industrial waste landfill.

87. The evidence of Cable and Smith, on ASR’s behalf, was that they “ knew ” that the pile was working, due to its temperature, and the visible water vapour coming from it, as a result of the biological activity going on in the pile, which was breaking down the C10-C36- hydrocarbon molecules.

88. This evidence was refuted by Fuller, who stated that the temperature and water vapour could be a result of the break down of green matter in the pile.

89. A mass balance, which attempted to reconcile the amount of C10-C36 molecules in the pile, before contaminants were added, against the amount after the contaminants were added, was suggested by Mr Fuller as the only appropriate way to ascertain whether the bioremediation pile was working.

90. A mass balance exercise was completed by Smith during his oral evidence ( Exhibit A32 ). He later confirmed and/or altered some of the figures and assumptions to ensure greater accuracy.

91. Smith’s mass balance exercise took into account:

· the inputs into the bioremediation pile, specifically, the existing contamination at September 1998, the contaminated stormwater from the site, and other material added to the pile; and

· the outputs, being the residual material taken off site in May 1999.

92. The final result of Smith’s mass balance exercise showed that there was a net decrease in the C10-C36 hydrocarbons of 44.44% between March 1998 and March 1999.

93. Smith was cross-examined extensively on his mass balance exercise, and Fuller also gave evidence regarding it, refuting some of the evidence given by Smith. In particular, the EPA referred to Exhibit E19 , which is an extract from Part 14 of the Federal Register of the US Environmental Protection Agency, entitled “ Final National Pollutant Discharge Elimination System Storm Water Multi-Sector General Permit for Industrial Activities ”.

94. The Court is aware that this mass balance exercise does not include the period between March 1999 and May 1999 as no samples were taken over that period.

95. Smith’s evidence is that, as C10-C36 hydrocarbons take around 30 days to break down, their concentration would be further reduced during the approximately 10 (sic) week period from when the last sample was taken from the pile until the pile was removed from the site.

96. Both Cable and Smith gave cogent oral evidence that the pile continued to work after the sampling date until it was removed. I found their experience and/or qualifications relevant, and of a high standard, and their arguments persuasive, and they withstood searching cross-examination, whereas this was the first time Fuller has given any technical advice on bioremediation of hydrocarbons. Also, the criticism of Smith’s “ extrapolation ” from other sites is answered by the fact that his prior experience extended beyond the petroleum industry.

97. After considering the evidence before me, I am satisfied that the bioremediation process practised by ASR, supervised by Cable with the advice of consultants, effectively breaks down C10-C36 hydrocarbons.

The proper classification of the pile

98. The correct classification of the bioremediation pile near or at the end of its “ life ” has been a matter of some conjecture before the Court. The experts could not agree as to whether the material in the “ spent ” pile was or was not appropriately classified as “ waste ”.

99. Simon Leake of AST is an appropriately qualified and experienced expert in “ waste to land ” issues (Exhibit A21 ). In his statement and oral evidence he referred to the pile material variously as “ compost product ”, soil remediator, soil improver, soil conditioner, and the like. He favours a broad definition of the word “ waste ”, which he defined as an “ inappropriately allocated resource ”.

100. He had the ASR pile material tested by NATA registered laboratories, when he was approached by ASR in March 1999 to take the pile. When the results were made known he “ cleared the product for acceptance by AST ” and had it applied to pasture and cropping land at a rate of “ around 20 day tonnes per hectare ”.

101. Leake’s report and statement of evidence ( Exhibit A21 ) relevantly state as follows:

Aliphatic hydrocarbons (Total petroleum hydrocarbons or TPHs) are at around 14,400 mg/kg being mostly in the medium to heavy molecular weight fractions (fats, heavy oils, and greases). There is no available guideline from the EPA to assess the safety of this level. Hydrocarbons are not priority pollutants and are not mentioned in the available guidelines for assessing contaminated sites, these compounds being non toxic and of no toxicological concern for human, animal, or environmental health.

There are several factors that mitigate against any concern over the land application of the ASR compost product -

1. A 10 week [sic] hiatus would have resulted in further degradation and decline in the hydrocarbon level.
2. Most vegetation based mulch, used as a bulking agent in this bioremediation exercise shows, in my experience, around 2,000 to 5,000 mg/kg of hydrocarbons extractable by solvents (the basis of the test) due to the presence of natural waxes, resins, turpenes, and hydrocarbons (eg eucalyptus and other essential oils).
3. At an application rate of 20 dry tonnes/ha a dilution ration of about 1:100 occurs in the surface 150mm of soil. Thus the actual soil level achieved, at worst, would be around 144mgTPH/kg of soil.
4. A safe application rate for oils and greases is considered to be around 1.5% (15,000 mg/kg) of surface soil mass per annum (Overcash and Pal 1972)[sic - 1979]. AST has used this criteria for many years and this has been recently encapsulated in the NSW EPA Review of Proposed Regulatory Regime for Land Application of Organic Wastes in NSW Undated Notification to Stakeholders) August 1999. Table Attached.

My view is that a level of 144 mg/kg of hydrocarbons in the soil, contrasted with a permissible loading rate, proposed by the EPA, of 15,000 mg/kg, is so low that no further consideration of environmental safety should occur. The literature also points to significant benefit to soil structure and aggregate stability from the land application of moderate amounts of oils and greases (Overcash and Pal 1979).

It is very highly probable in my view that the actual rate of application was lower than this due to factors 1 and 2 above.

The area of land to which the product was applied is now supporting an above average crop of forage oats for cattle feed.

I am of the opinion that the product was not waste when utilised, but a composted soil improver which is not a regulated product. I remain of the opinion that, should a view be adopted that the product was waste, the utilisation of this product was perfectly safe and beneficial in the context in which it was used.

102. Notwithstanding the strong and positive impression made by Leake, the Court is limited by the legislative definitions and provisions in respect of “ waste ”. See par 48 above.

103. In his written submissions, Mr McEwen stated that the material from the bioremediation pile was not waste. He based this on the fact that it did not fit into any of the categories of waste provided in the definition. Mrs Kelly’s written submissions in reply disagreed with this assertion, saying that the bioremediation pile fell within sub-paragraphs (a), (b) or (c) of the statutory definition. I agree with Mrs Kelly’s submissions.

104. Clearly the material from the bioremediation pile falls within sub-paragraph (a) of the statutory definition of waste, it being a solid substance that is deposited in the environment in such volume constituency or manner as to cause an alteration in the environment. This is obviously the purpose of its reuse, albeit beneficial (for example, the land application of the material on the Hillview farm at Silverdale). The material also falls within sub-paragraphs (b) and (c) of the definition.

105. Having established that the material is waste, the next relevant question for the Court is the appropriate category in which to classify the waste. Referring to the bioremediation pile that existed on site between March 1998 and May 1999, the last sample taken of the pile falls within the category of “ industrial waste ”. The evidence of Smith and Cable indicates that the level of C10-C36 hydrocarbons was substantially lower when the material was land applied by AST.

106. There was a question during proceedings as to whether the appropriate sample could be moist material, that is material that still contains water, or material that has been dried. This is a significant factor, as, for example, Exhibit A35 demonstrates.

107. In this particular sample, the moisture content was 45.8%. Mr McEwen SC submits that the concentration of the material in the bioremediation pile was therefore around half of that reflected in the results ( Exhibit A9 ).

108. Fuller told the Court that the standard procedure was to conduct testing on samples after they had been dried. This was to ensure that the generator of waste could not merely dilute the waste by adding water before testing, thereby affecting the concentration and the classification of the waste. I must accept Fuller’s view in this regard, as allowing dilution of the sample before testing would defeat the purpose of the test itself.

109. I have come to the conclusion that these facts, whilst interesting, and relevant to the question of whether ASR’s bioremediation pile procedures actually work, are not relevant to the real question before the Court.

110. The classification of any waste going off site is not a real issue in these proceedings. The question is, rather, whether the Court, stepping into the shoes of the relevant public authority, will allow the amendments to conditions which have been sought by the applicant, especially those limiting what can go on to the site.

111. The classification of the material which formed part of some earlier bioremediation pile is not of much relevance to that question. It is a question of fact, which must be decided according to the Technical Appendix 1 to the Waste Guidelines, and on a case-by-case basis. It is not my function to declare that some bioremediation pile, which could be materially changed, and/or is yet to come into existence, will fall within a certain classification of waste.

112. I accordingly come to no useful conclusion with respect to this question.

Conclusions

Condition 1.1?

113. Given the quite limited function of the court as this matter finally unfolded I am satisfied that condition 1.1 should be amended as sought by the applicant.

114. ASR’s recycling and reuse of waste materials provides measurable benefits to the environment, and so to the community.

115. There is a reduction in the volume, transportation and disposal costs of waste, and in the area of landfill required, and there is also the proven beneficial land application of the material contained in the bioremediation pile, however it be classified.

116. ASR’s desire to beneficially reuse the material fits within the third level of the waste management hierarchy, namely the recycling and reprocessing of material, and there are no higher order uses available for the relevant materials. This is a preferable option to the fourth level, disposal.

117. The single or repeated use of wastes in the manner adopted and proposed by ASR have not been shown to result in any immediate, delayed or cumulative damage to the local or overall environment.

118. I am satisfied that the standards proposed and adopted by the applicant are environmentally sound.

119. Consequently, the proposal put forward by the applicant falls within the criteria provided by section 4.8.2 of the Waste Guidelines (see par 54 above).

120. The EPA has ample powers to deal with whatever takes place on this site, including its power to vary or reformulate licence conditions, and regulate the appropriate constitution of any material taken off the site.

121. I have, accordingly, decided to uphold this appeal.

Other conditions of the licence?

122. As adverted to already in this judgment, some disputed conditions of the subject licence were “ agreed ”, either prior to the hearing or as it progressed.

123. However, no “ without prejudice ” conditions were tendered until just before oral submissions were made on the last day, when Exhibits A40 (being ASR’s version of the “ agreed conditions ”) and E18 (being the EPA’s version of “ agreed conditions ”) were tendered.

124. The differences between the two versions relate to the amount of time that ASR should be given to comply with some of its new licence conditions (Nos.8, 9(b), and 10), and a discrepancy between the parties as to the amount of the minimum monthly deposit required as part of the financial assurance (18.2).

125. Mr McEwen accepted the EPA’s suggested wording of condition 18.2, and the court allowed the presentation of further oral evidence on questions of timing. The consistent and strong evidence given by Smith was that it was simply not possible for ASR to comply with the timeframe sought by the EPA.

126. I am not satisfied, on the balance of probabilities, that the applicant can comply with the EPA’s suggested timetable. I have, therefore, adopted ASR’s version of those three conditions within the Court’s orders, subject to some adjustment of dates to accommodate the delay in delivering this judgment.

127. The drum reduction programme is due to be completed by 26 February 2000, which date is fast approaching, so I believe the parties should have liberty to apply in respect of those conditions.

The question of costs

128. This has been a most unusual case and both sides have raised issues of costs at various stages of the hearing.

129. Accordingly, although this is a Class 1 matter, I will expressly reserve all questions of costs.

Orders

130. I therefore make the following orders:

1. The Appeal is allowed.

2. Conditions 1.1, 7, 8, 9, 10, 17.3 and 18.2 of Waste Minimisation and Management Act licence number 005661 dated 26 February 1999 are amended in accordance with Appendix “A” to this judgment.

3. The parties are granted liberty to apply in respect of the amendments embodied in Appendix “A”.

4. All questions of costs are reserved.

All exhibits may be returned, with the exception of Exhibit A40.

AUSTRALIAN SOLVENT RECYCLERS PTY LTD v ENVIRONMENT PROTECTION AUTHORITY OF NSW - No. 10183 of 1999

APPENDIX “A”

The conditions attached to Waste Minimisation and Management Act Licence No.005661 issued 26 February 1999 are amended as follows:

Condition 1.1 amended to read:

“waste solvents, solvent based paints, water based solvents, water based paints, oily waters, and contaminated soils capable of being remediated”.

Condition 7 amended to read:

“All bunding on the Licensee’s premises, excluding the bunding required for the above ground storage tanks, must collectively be capable of containing at least 410,000L (litres) of waste(s) or other material(s). The bunded areas (including the floor of the bund) must be impervious to the waste(s) in the drums and containers used for the storage of waste(s) or other material(s) (materials being those associated with the activity that is the subject of this Licence)”.

Condition 8 amended to read:

“All drums and containers used in the storage of waste(s) or other material(s) must not be stored closer than 1.5 metres from any bund wall, unless it is a bund wall that separates two bunded areas that contain compatible waste(s) or material(s). The drums along the southern boundary must be moved to comply with this by 29 February, 2000”.

Condition 9 amended to read:

“(a) All drums and Intermediate Bulk Containers (IBCs) that are stored more than one drum or one IBC high must be stored on pallets.
(b) All drums and IBCs stored on pallets must be stored:
(i) not more than two pallets high on the row of pallets closest to the external bund walls;
(ii) not more than three pallets high on the second row of pallets back from the external bund walls; and
(iii) not more than four pallets high on the third row of pallets back from the external bund walls.
The drums along the southern boundary must be stored as above by 31 March 2000.
‘External bund wall’ means any bund wall on the Licensee’s premises that is not a bund wall that separates two drum storage areas.”

Condition 10 amended to read:

“All above ground storage tank(s) must be located within a bunded area which is capable of containing 110% of the total volume of the largest tank within the bunded area. The bunded area (including the floor of the bund) must be impervious to the waste(s) in the tank(s) by 31 March 2001.”.

Condition 17.3(a) amended to read:

“remove and lawfully dispose of all drums (full, partially full or empty) and other containers (excluding above ground storage tanks) from the Licensee’s premises.”.

Condition 18.2 amended to read:

“The financial assurance must be in the following form:

(a) an irrevocable and unconditional guarantee from a bank, building society or credit union in favour of the Environment Protection Authority (‘the guarantee’) in the amount of $182,500 (one hundred and eighty two thousand five hundred dollars) to be provided in the following manner:
(i) $25,000 (twenty five thousand dollars), within 7 working days of 25 August 1999, and then
(ii) increased by depositing at least $6,600 (six thousand six hundred dollars) by the first day of each month from 1 September 1999, so that the guarantee is increased by at least $6,350 (six thousand three hundred and fifty dollars) per month, until the guarantee reaches $182,500 (one hundred and eighty two thousand five hundred dollars).
(b) an insurance policy that provides not less than $500,000 (five hundred thousand dollars) cover in respect of any single claim whereby the insurer agrees to indemnify the insured and no other party, for the costs and expenses of carrying out site remediation work required by the conditions of this licence”.