Jet Group Australia Pty Ltd v Environment Protection Authority

[2017] NSWLEC 1588

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Jet Group Australia Pty Ltd v Environment Protection Authority [2017] NSWLEC 1588
Hearing dates:	7,8 August 2017
Date of orders:	19 October 2017
Decision date:	19 October 2017
Jurisdiction:	Class 1
Before:	Brown C and Bish C
Decision:	1. The appeal is upheld. 2. Environment Protection Licence for the carrying out of a scheduled activity at 76 Nomad Road, Toronto, NSW is approved subject to the conditions in Annexure A. 3. The exhibits are returned.
Catchwords:	ENVIRONMENT PROTECTION LICENCE: Category 1 activity – composting – water pollution - leachate management – financial assurance as security – appropriate licence conditions
Legislation Cited:	Environmental Planning and Assessment Act 1979 Land and Environment Court Act 1979 Protection of the Environment Operations Act 1997
Cases Cited:	Jensen v Lake Macquarie City Council [2015] NSWLEC 1572 Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133, 146 LGERA 10; (2006) 67 NSWLR 256
Texts Cited:	Department of Environment and Conservation, NSW: Composting and Related Organics Processing Facilities Environmental Guidelines 2004; Environment Protection Authority Victoria: Designing, constructing and operating composting facilities Guidelines, 2015 and 2017; Australian and New Zealand Guidelines for Fresh and Marine Water Quality. Volume 1. The Guidelines. National Water Quality Management Strategy; NSW Environment Protection Authority: Setting financial assurance amounts regional waste compliance non-landfill waste premises.
Category:	Principal judgment
Parties:	Jet Group Australia Pty Ltd (Applicant) Environment Protection Authority (Respondent)
Representation:	Counsel: Mr M. Astill (Applicant) Mr C. Norton (Respondent)   Solicitors: Hicksons Lawyers (Applicant) Environment Protection Authority (Respondent)
File Number(s):	2016/154052
Publication restriction:	No

Judgment

1. COMMISSIONERS: This is an appeal against the deemed refusal of an Environment Protection Licence (EPL) to operate a composting, resource recycling and waste storage facility at Lot 91 DP 755207, being 76 Nomad Road, Toronto (the site). The applicant appeals under s 287 of the Protection of the Environment Operations Act 1997 (POEO Act) against the Environment Protection Authority’s (EPA) deemed refusal of an application for an EPL under s 53 of the POEO Act. Composting and resource recovery are both activities declared to be scheduled activities in Sch 1 of the POEO Act.

2. The applicant seeks an EPL for to carry out scheduled activities in the course of operating a resource recovery facility; specifically,

"Composting - 20,000 tonnes per annum green waste and 8000 tonnes per annum of additives - soil, sand, fly ash etc to produce mulch and compost as per resource recovery exemptions and 593 orders to raw mulch, pasteurised mulch and compost including AS44SA Category organics only"

3. The appeal was subject to mandatory conciliation between 26 September 2016 and 30 March 2017, under s 34 of the Land and Environment Court Act 1979 (the Court Act). As no agreement was reached, the conciliation conference was terminated pursuant to s 34 (4)(b), and the proceedings dealt with later pursuant to s 34 (2) b)(ii).

4. The parties agree that an EPL can be issued for the proposed operation on the site, however the parties disagree on the conditions to be attached to the EPL. The areas of dispute still remaining after the submission of further information from the applicant are:

the specification for the leachate liner for the operations area and leachate dam, and

the appropriate financial assurance as security against environmental harm.

Background

5. On 22 February 2016, the EPA received an email attaching an Order made by the Land and Environment Court, in proceedings Jensen v Lake Macquarie City Council [2015] NSWLEC 1572 that indicated that development consent has been granted for a resource recovery facility (composting) on the site, subject to conditions.

6. On 7 April 2016, the EPA sent a letter to the applicant noting that the previously submitted application could not be progressed because further information, completion of the application form and payment of the prescribed licence fee was required.

7. On 8 April 2016, the applicant commenced these proceedings.

The site

8. The site is Lot 91 in DP 755207 and is located west of Lake Macquarie, approximately 2.5 km from Toronto, and 2 km west of Kilaben Bay. The land slopes towards the north-east. The operational area is approximately 7 ha of the 23 ha lot. It surrounded by forest area, and bisected by unnamed creek lines that drain to the north and east, into an unnamed creek that flows into Kilaben Bay.

9. The site is currently operating (and has been operating for 11 years) as a resource recovery and waste storage facility, with the last 6 years also undertaking composting. The volume of compost and green waste processed at the site is approximately 28,000 sqm since 2014. The site operation consists of:

• operational area covering 33,000 sqm, located in the centre of the site, where mulching is contained;

• office/administration/office, located in the southern area of the site;

• Area 1 which is located in the north of the site where three onsite dams are contained and which collect leachate and stormwater runoff from the site. Discharge from dams 1 and 2 flows into the larger dam 3, which acts as an overflow into an unnamed intermittent creek that flows into Kilaben Bay;

• Area 2 which is located to the south of the site includes the main haul road and undeveloped terrain, and

• Area 3 which is located east of the site beyond the site, down-slope of the operational area and drained by water from the site into the unnamed intermittent creek that flows into Kilaben Bay.

Statutory controls

10. Section 45 of the POEO Act states:

45 Matters to be taken into consideration in licensing functions

In exercising its functions under this Chapter, the appropriate regulatory authority is required to take into consideration such of the following matters as are of relevance:

(a) any protection of the environment policies,

(b) the objectives of the EPA as referred to in section 6 of the Protection of the Environment Administration Act 1991,

(c) the pollution caused or likely to be caused by the carrying out of the activity or work concerned and the likely impact of that pollution on the environment,

(d) the practical measures that could be taken:

(i) to prevent, control, abate or mitigate that pollution, and

(ii) to protect the environment from harm as a result of that pollution,

(e) any relevant green offset scheme, green offset works or tradeable emission scheme or other scheme involving economic measures, as referred to in Part 9.3,

(f) whether the person concerned is a fit and proper person (as referred to in section 83),

(f1) in relation to an activity or work that causes, is likely to cause or has caused water pollution:

(i) the environmental values of water affected by the activity or work, and

(ii) the practical measures that could be taken to restore or maintain those environmental values,

(g) in connection with a licence application relating to the control of the carrying out of non-scheduled activities for the purpose of regulating water pollution-whether the applicant is the appropriate person to hold the licence having regard to the role of the applicant in connection with the carrying out of those activities,

(h) in connection with a licence application-any documents accompanying the application,

(i) in connection with a licence application-any relevant environmental impact statement, or other statement of environmental effects, prepared or obtained by the applicant under the Environmental Planning and Assessment Act 1979

11. Section 48 of the POEO Act states:

48 Licensing requirement-scheduled activities (premises-based)

(1) Application of section This section applies to scheduled activities where Schedule 1 indicates that a licence is required for premises at which the activity is carried on.

(2) Offence A person who is the occupier of any premises at which any such scheduled activity is carried on is guilty of an offence, unless the person is, at the time that activity is carried on, the holder of a licence that authorises that activity to be carried on at those premises.

12. Other documents raised during the hearing are:

Composting and Related Organics Processing Facilities Environmental Guidelines 2004 (NSW Composting Guidelines)

Guidelines for ‘designing, constructing and operating composting facilities’ (Victorian Composting Guidelines), June 2017

ANZECC Freshwater criteria (Australian and New Zealand Guidelines for Fresh and Marine Water Quality. Volume 1. The Guidelines. National Water Quality Management Strategy (ANZECC freshwater guidelines)

The permeability of liners for the operations area and leachate dam

13. The Court heard expert evidence relating to leachate and groundwater from Mr Chris Bozinovski, for the applicant and Mr Anthony Dixon for the EPA.

14. In relation to water pollution risk and mitigation options, the applicant engaged Douglas and Partners (DG report) in 2011 to assess the pollution risk at the site where composting was proposed, and where other activities such as mulching had previously been undertaken. The DG report consisted of drilling three shallow bores up to 8.8 m depth, 14 excavated test pits up to 2.8 m depth, sample dam water sample (on 11 Dec 2012) and infiltration testing at three sites. The study indicated that there are two groundwater systems beneath the site, a shallow and a regional system. Groundwater samples (p 25 of the DG report) were taken from all three wells at time of construction, which showed, Well 2 having elevated nickel, and Well 3 with elevated ammonia levels, compared to ANZECC freshwater guidelines.

15. Water sample taken in March 2016 by the applicant (Exhibit C) were from three surface water locations in the unnamed creek, up-gradient and down-gradient of the site. The site located down-gradient of Dam 3, showed elevated levels of arsenic, zinc and slightly elevated ammonia, compared to ANZECC freshwater guidelines.

16. Mr Bozinovksi describes part of the site as underlain by a locally discontinuous perched and intermittent shallow aquifer within the unconsolidated sediments consisting of sand, clay and silt. The permeability of these sediments ranged between 2.5 x10-6 m/s and 6.9 x 10-8 meters/second (m/s). He stated that the permeability of these unconsolidated sediments are ‘similar’ to the minimum requirements for a leachate liner permeability of 1 x 10-7 m/s. The DG report cited by Mr Bozinvoski indicates that this shallow aquifer has water levels of 1.25 to 1.8 m depth, and a thickness up to 8.8 m, that discharges to the unnamed creek, north-east of the site.

17. Mr Bozinovski states that the deeper, regional aquifer within the (weathered) sandstone/conglomerate is the basement geology in part of the site, and which potentially recharges to Kilben Bay, although this was not explored as part of the DG report. The sandstone is at or close to the surface beneath the operations area. Mr Bozinovski contended that due to the ‘low permeability’ of the basement geology (although not tested onsite nor verified with studies produced as evidence) may potentially act as an effective ‘barrier’ beneath a leachate liner in the operations area. Mr Bozinovski further suggested that as the slope of the land surface is steeper than that modelled by Mr Dixon; the rate of infiltration beneath the operations area would result in higher volumes of runoff into the dam, thereby reducing potential for leachate infiltration in this area.

18. Mr Bozinovski agreed with Mr Dixon that water pollution has occurred beneath and extending beyond the site due to historic operation, resulting in subsurface leachate infiltration from the existing dams, however he did not agree with Mr Dixon on the extent of the pollution risk to receiving waters. He contended that the presence of elevated contaminant levels in shallow wells (Wells 2 and 3) and the unnamed creek, sampled on 2011 and 2016, , suggested that pollution is limited in the shallow perched aquifer and nearby creek. He further contended that as there are no ‘observed’ impacts to identified downstream users, ‘no sensitive catchment receptors’, and supported by the fact that the EPA have not previously issued a notice to remediate this site, there is no rational need to use a higher environmental standard for leachate control design than the minimum requirements established in the NSW Composting Guidelines 2004.

19. The DG report (p10) indicates that a search of groundwater users in 2011, found that 12 registered bores were located within a 1km radius of the site, the closest being 50-100 m, to the east. The study was unable to obtain any detail on the use or construction details on the majority of these bores, except a domestic bore drilled to 5.73 m, located 500 m east-north-east of the site. The status of these bores is unknown.

20. Mr Bozinovski agreed with Mr Dixon that there is potential for gas build-up beneath the leachate liner, that could have the effect of causing the liner to bubble (referred to as a ‘hippo’ or ‘whale’ effect) and thereby resulting in reduced storage volume within Dam 3; potentially increasing the need for overflow. He also agreed that a gas relief layer could be used to reduce this effect, although he proposed that there are ‘other methods’ that could be as effective and less costly although no specific methods were stipulated. Mr Bozinovski suggested that the possibility of other methods would depend on the size of the ‘hippo’ and could be detailed further in the Construction Environmental Management Plan (CEMP).

21. Mr Bozinovski stated that only the NSW Composting Guidelines are applicable for consideration at this site. Any suggestion that the Victorian Composting Guidelines are relevant, even though newer, do not relate to the situation in NSW and should be rejected.

22. Mr Bozinovksi indicated that the applicant would need a further 18 months from the date of the EPL, to better understand the hydrological and hydrogeological conditions, and that would better inform the understanding of potential water pollution risk, design of the leachate control system and support remediation of any observed impact. He suggested that further groundwater and surface water monitoring could be used ‘to catch the leak before it went too far’, and that this should form a component of contingency planning to mitigate impact. He is also of the view that there is sufficient hydrogeological and water quality data, at and around the site, to provide a basis to support the minimum design requirement in the NSW Composting Guidelines, of 600 mm compacted clay layer with permeability of 1 x 10-7 m/s, for both the operational area and leachate Dam 3. A 100 mm cover layer of material was suggested over the liner for protection of its integrity.

23. Mr Bozinovksi stated that as they are only seeking an EPL at this stage and that the CEMP could be developed after a period of 18 months to allow more detailed site specific data collection that would inform the required design of the leachate control system.

24. Mr Bozinovski provided a cost estimate (Exhibit A) to install a range of different leachate control systems at the site, including those proposed by the applicant and the EPA. He agreed that the lower permeability leachate liner as proposed by the EPA would result in a higher cost. The cost estimate for the applicants design (1 x 10-7 m/s liner) is $214,515 and the EPA’s suggested design (1 x10-9 m/s liner) is $1,287,090. Further to this, Mr Bozinovski suggests that costs could be reduced by using existing clay soils onsite or where appropriate (such as in the operational area), the sandstone basement rock could be utilised as a natural barrier below the leakage liner. This could then be supported by an appropriate groundwater monitoring system to facilitate mitigation of any offsite water pollution impacts.

25. Mr Bozinovski believes that there is sufficient understanding of the hydrogeological conditions beneath and around the site to ‘make an opinion’ on the applicability of the minimum requirements for a leachate control system at the site, for the operations area and Dam 3.

26. Mr Dixon position is that there is insufficient hydrogeologic information for the site to provide an understanding of baseline conditions. He agreed with Mr Bozinovski that the regional aquifer held a lower risk, however he disagreed that the current land uses had lowered the ‘groundwater sensitivity’ of the area. He was unable to define the beneficial use for this groundwater around the site.

27. Mr Dixon was also not of the same opinion as Mr Bozinovski that the sandstone geology could feasibly be used as an effective barrier to leachate infiltration into the regional aquifer. Mr Dixon notes that a study undertaken for a nearby waste disposal facility at Awaba for the Centennial Coal Environmental Impact Assessment in 2010, determined the permeability of the sandstone geology in the order 5.8 x 10-7 m/s. He also notes that the Awaba site is licensed for composting and waste disposal (Exhibit B), and has a ‘double liner’ beneath the leachate dam, although the operational area is not lined; this may contribute to pollution through leachate infiltration.

28. To mitigate the potential environmental risk to receiving waters, Mr Dixon applies the ‘precautionary principle’ in the design of the leachate control system at the site. He states that as information on the hydrologic/hydrogeologic characteristics of the site is very limited based on two water samples between the period 2011 and 2016, and the presence of existing water pollution potentially sourced from the site under ‘existing’ conditions, then a lower leachate liner permeability is required, in the order of 1 x 10-9 m/s. Mr Dixon states that ‘prescriptive liner’ conditions, as provided in the Victorian Composting Guidelines, are required to mitigate the potential, and as yet poorly defined, risk of water pollution. He noted that whilst older more established composting sites had not generally adopted the more stringent leachate liner control standards, newer composting development sites have often adopted a concrete pad across the operational area to minimise leachate infiltration. Mr Dixon considers that a minimum of 1 year’s monitoring of both groundwater (quarterly intervals) and surface water (monthly intervals) would be required to properly assess the hydrological/hydrogeological characteristics of the site, and the potential risk of water pollution. Mr Dixon is of the opinion that without such a period of data, the lower leachate liner permeability is required to mitigate the risk.

29. To support his position, Mr Dixon utilises a model, United States Hydrological Evaluation of Landfill Performance, to facilitate his understanding of the potential leakage volumes under different scenarios using the input data provided from the DG report and subsequent discussions with Mr Bozinovski. The model results (Exhibit 3) suggest it is most sensitive to permeability, and that under the minimum requirement for a leachate liner (permeability of 1 x 10-7 m/s), the estimated leachate leakage would be approximately 2.5 Megalitres/annum (ML/a), and with a liner permeability of 1 x 10-9 would be 1.8 ML/a, which is similar to a geosynthetic clay liner (GCL) with 1.8 ML/a estimated leakage. He further states that these estimates were likely to be conservative as the volume of infiltration across the operational area from the irrigation of leachate was not considered in this model.

30. Mr Dixon accepts that the NSW Composting Guidelines are appropriate for use in NSW; the Victorian Composting Guidelines provide a more up to date and ‘better industry standards’ for management of leachate control. He indicates this was applicable for this site due to the existence of water pollution and need to apply the precautionary principle due to lack of understanding of the water dynamics. He states that the operational area and leachate control for Dam 3 be underlain by either, a 600 mm thick compacted clay layer with permeability of 1 x 10-9 or a GCL. A 100 mm cover layer of material is suggested over the compacted clay layer for protection of its integrity.

13. Mr Dixon considers that a delay of 18 months before a CEMP could be developed (with the design of a leachate control system based on groundwater and surface monitoring data gathered during this time) is unacceptable. It also noted that as Mr Bozinovski explained, a further 18 month delay in the completion of a leachate control system would be necessary to allow tendering and construction design/installation. Mr Dixon notes that that the applicant was required, as part of its previous general terms and conditions in 2011, to undertake water monitoring, and this was not undertaken.

14. Overall, approval of an EPL, and permitting a delay of up to 3 years for the data gathering, design, contracts to construct and the installation of the leachate control system is unacceptable. The applicant has not demonstrated over the last five years a willingness to gather relevant data to inform the CEMP, despite recommendations of their own commissioned studies.

Findings

33. The experts agree that the site is already subject to existing water pollution due to the historic operation of composting and potentially other activities, and that there is insufficient data to understand the hydrological and hydrogeological regime at the site. The parties also agree that a leachate liner is required beneath the operational area and Dam 3. The experts disagree whether the permeability of any leachate barrier should be 1 x 10-7 m/s (Bozinovski) or 1 x 10-9 m/s (Dixon). While the approach of Mr Bozinovski is consistent with the NSW Composting Guidelines, Mr Dixon maintains that the lack of baseline data for the site requires a more conservative approach.

34. While the experts do not agree on whether there is sufficient data to assess water pollution risk, or hydrological/hydrogeological understanding to inform the adoption of the ‘minimum requirements’ for design of a leachate control system, we agree with Mr Dixon. We also accept the NSW Composting Guidelines are the appropriate standard to consider the question of permeability and that the exceedance of the standards can be justified because of the absence of data to determine the hydrological/hydrogeological characteristics of the site.

35. The presence of ammonia and nickel in groundwater and surface waters down-gradient of the site, that exceeds the ANZECC freshwater guidelines, indicates that water pollution is occurring from activities at the site. The two sampling events between 2011 and 2016 provide insufficient understanding of the future potential risk to receiving waters (and users) should leachate continue to be discharged into the groundwater system. We are satisfied that there is a risk of water pollution from the site and that potential adverse impact to groundwater users/receiving waters should be mitigated.

36. The NSW Composting Guidelines (at p 41) requires a water assessment plan should be produced to inform design and environmental protection. Relevantly, it states:

Water assessment plan

Before site establishment, a comprehensive hydrological investigation of both the site and the surrounding groundwater and surface water bodies would have been conducted (see Appendix A). This preliminary water assessment of the site establishes the background characteristics of the groundwater and surface water bodies that may be at risk from the composting and related organics processing facility. This information therefore forms the basis for ongoing management and assessment of water at the site.

A water assessment plan … needs to be developed to enable the occupier to detect any water pollution at the premises …. A water assessment plan should document the background characteristics of water (established during the preliminary water assessment of site) and describe (where relevant) the discharge points and monitoring points. It should also identify indicator parameters and limits for each indicator parameter that can be used to detect early indications of possible water pollution.

… frequency of monitoring specified below:

Surface water bodies (such as rivers, creeks and dams): Representative samples must be collected quarterly and tested for total suspended solids and the indicator parameters selected in the water management plan (see Appendix D).

Groundwater: All groundwater monitoring bores and lysimeters must be sampled quarterly by a suitably qualified person. This frequency can be relaxed if it can be demonstrated that there are no seasonal effects after data have been collected for five consecutive years. Tests should be taken with a representative sample for all the indicator parameters selected in the water management plan

37. We accept that the applicant has not undertaken a ‘comprehensive hydrological investigation’ that sufficiently ‘document(s) the background characteristics of water’, and finds that the installation of a limited water monitoring approach that does not intersect the basement geological aquifer, with only one period of groundwater sampling in 2011, and one period of surface water sampling in 2016, is not sufficient to meet the requirements of a Water Assessment Plan.

38. The DG report (p 3) states:

…the existing subsurface profile does not meet the minimum design requirements of the guidelines as it is of insufficient thickness in areas of the site and marginally too permeable. However based on the presence of the underlying sandstone and conglomerate bedrock, and the nature of the composting activity (Category 1..), the risk of pollution to the regional groundwater through soils and bedrock underlying the operational area was considered to be low to moderate.

39. The assessment of the bedrock as having a potentially moderate risk of pollution from this activity suggests that the underlying sandstone has some potential risk. We are satisfied that the applicant has not produced sufficient evidence to support the consideration of the sandstone geology having sufficient permeability to act a barrier to leachate infiltration beneath a liner of higher permeability, such as 1 x 10-7 m/s.

40. It follows, in our opinion, that the lack of scientific certainty on the extent and consequence of water pollution emanating from site, invokes the precautionary principle and leads the Court to reject the assertion of the applicant that there is sufficient evidence to assess the water pollution risk as minimal and therefore adopt ‘minimal requirements’ for design of a leachate control system.

41. The precautionary principle is one of the principles of ecologically sustainable development. As stated in Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133, 146 LGERA 10; (2006) 67 NSWLR 256 (at 113).

113 …There are numerous formulations of the precautionary principle but the most widely employed formulation adopted in Australia is that stated in s 6(2)(a) of the POEO Act. This provides:

“…If there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

In the application of the precautionary principle, public and private decisions should be guided by:

(i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment, and

(ii) an assessment of the risk-weighted consequence of various options”.

42. We accept that in order to reduce the potential risk of water pollution from the site to receiving waters, the precautionary principle is activated. We accept the evidence of Mr Dixon that the “threats of serious or irreversible environmental damage” are justified and can only be addressed through the imposition of the more rigorous permeability criterion suggested by Mr Dixon given the lack of baseline data on which to make any learned decisions on protecting groundwater from leachate infiltration.

43. For these reasons, we reject the assertion by the applicant that the ‘minimum requirements’ established in the NSW Composting Guidelines are appropriate for the design of the leachate control system at the site. We acknowledge that the adoption of the more stringent permeability (1 x 10-9 m/s) for the leachate liner beneath both the operational area and Dam 3, is appropriate in the particular circumstances of this case.

Financial assurance as security

44. The Court received expert relating to financial assurances from Mr Steven James, from the EPA and Mr Damien Jensen, the site manager for the applicant’s operation. Mr James and Mr Jensen agree on the application of a financial assurance as security to mitigate environmental harm however disagree on the amount of security to remediate potential environmental harm in the event that the applicant is, for whatever reason, unable to undertake this work.

45. Section 86(6) to (10) states:

(6) A development consent may be granted subject to a condition, or a consent authority may enter into an agreement with an applicant, that the applicant must provide security for the payment of the cost of any one or more of the following:

(a) making good any damage caused to any property of the consent authority (or any property of the corporation) as a consequence of the doing of anything to which the consent relates,

(b) completing any public work (such as road work, kerbing and guttering, footway construction, stormwater drainage and environmental controls) required in connection with the consent,

(c) remedying any defects in any such public work that arise within 6 months after the work is completed.

(7) The security is to be for such reasonable amount as is determined by the consent authority.

(8) The security may be provided, at the applicant’s choice, by way of:

(a) deposit with the consent authority, or

(b) a guarantee satisfactory to the consent authority.

(9) The security is to be provided before carrying out any work in accordance with the development consent or at such other time as may be agreed to by the consent authority.

(10) The funds realised from a security may be paid out to meet any cost referred to in subsection (6). Any balance remaining is to be refunded to, or at the direction of, the persons who provided the security.

46. Mr James, in his current acting managerial role with the EPA, has the delegation authority to impose financial conditions on licences. The financial assurance is required to mitigate impact with costs associated to make the site safe and remediate pollution. Mr James asserts in his affidavit that the risks associated with the site relate to fire and water pollution, and a financial assurance in the order of $200,000 is appropriate. The estimate for the financial assurance for this site was based on an internal EPA waste compliance operational guideline, ‘Setting financial assurance amounts regional waste compliance non-landfill waste premises’ (undated and authored), for a ‘medium’ sized facility.

47. Mr James considered that a financial assurance would be necessary to reduce/divert/contain contaminated water, in addition to remove and dispose of waste/leachate offsite. In cross-examination, Mr James stated that he had observed smoke in the compost heap previously (August 2016) at the site, which was raised to Mr Jensen for his attention however no further action was taken by EPA. He estimated that should a fire occur at the site, in the compost heap, up to 20,000 tonnes of green waste would have to be removed. The current waste levy is $130/tonne plus transport costs, therefore under a worst case scenario, the cost would be $2.6m. Consequently, the $200,000 sought by the EPA would not cover the full cost of remediation.

48. Mr James advised that the nearby Awaba composting operation carries a similar risk, however has no financial assurance has been imposed primarily because it is managed by a statutory authority (the council), whom have a low risk of ‘walking away’ from remediating the site.

49. Mr Jenson, explained that the fire referred to by Mr James was handled without the need for offsite waste disposal, as the creation of ash caused by the fire is a by-product that can be used and ‘turned within the windrow’, in the composting operation. He explained that the production of ash from any fire would likely be utilised within the composting operation onsite. The applicant suggested a financial assurance to the value of $40,000 would be more appropriate for this site.

Findings

50. The applicant provided no evidence regarding its financial viability or potential for hardship to pay the $200,000 financial assurance suggested by the EPA, Similarly, the applicant did not present any basis for the $40,000.

51. We agree with the applicant that the risk from fire can be appropriately managed onsite with ash resulting from any fire able to be incorporated into the composting process. Therefore, offsite disposal of waste resulting from a fire on the site was not considered a relevant factor in the calculation of a financial assurance.

52. Despite prior knowledge of existing water pollution emanating from the site, the applicant has made little effort to understand the potential impact to receiving waters and users, nor to remediate the water pollution. We find that remediation of water pollution is a factor that should be considered in the calculation of a financial assurance. However, we accept that undertaking an adequate assessment of the risk to users and receiving waters, and removal of heavy metals such as nickel found at the site plus potentially other contaminants not yet well understood and which could result in considerable cost for remediation.

53. For this reason, we agree with the EPA that a financial assurance of $200,000 should be set for this development to mitigate and protect from potential environmental harm.

Orders

54. The Court orders are:

1. The appeal is upheld.

2. Environment Protection Licence for the carrying out of a scheduled activity at 76 Nomad Road, Toronto, NSW is approved subject to the conditions in Annexure A.

3. The exhibits are returned.

__________

G Brown

Commissioner of the Court

___________

S Bish

Commissioner of the Court

Annexure A - slip rule 200218 (497 KB, pdf)

Amendments

20 February 2018 - Pursuant to UCPR 36.17, the slip rule, amend orders of 19 October 2017 [so that Condition O6.2C]

Decision last updated: 20 February 2018