Waste - A critical 2024/5 due diligence issue

2 min. read

If you had to pick one issue that is a recurring headache for environmental management in most Australian businesses it’s waste.

Partly, this is due to the broad range of waste types that an organisation may have and the specific legal compliance requirements for handling each of them.

Perhaps more importantly, it is because the legal regime for waste management is particularly complex. 

This Environment Express article provides a quick overview of the legal regime for waste management and some suggestions for management action in 2024/5.

A complex legal regime

Each Australian jurisdiction has its own different waste laws. So if you are a large organisation operating in multiple jurisdictions, developing appropriate compliance approaches to deal with waste can be complicated.

Waste laws are seldom found in a single piece of legislation. Requirements for waste handling may be found in:

• environment protection legislation of a jurisdiction (e.g. the Protection of the Environment Operations Act 1997 (NSW))

• specific waste legislation enacted by a jurisdiction (e.g. the Waste Reduction and Recycling Act 2011 (QLD))

• circular economy legislation (e.g. Circular Economy (Waste Reduction and Recycling) Act 2021 (Vic))

• Federal waste export legislation

• International laws (e.g. Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal)

Workplace health and safety legislation may also be highly relevant.

Common challenges

A key difficulty with waste regulation in Australia is that concepts relating to waste and disposal (which principally come from environmental and pollution control laws) have not kept pace with emerging laws on circular economy. If implemented successfully, circular economy principles should ideally mean that waste should be capable of reuse in an ongoing “cycle”. However, more often than not, there are regulatory barriers to re-use and confusion about defining when a material is a “waste” and when it ceases being a “waste” (a very challenging task as evidenced by caselaw on waste such as Dasma Environmental Pty Ltd (ACN 144 694 780) v Environment Protection Authority [2022] VSCA 248; and Environment Protection Authority v Terrace Earthmoving Pty Ltd [2013] NSWCCA 180).

This is particularly important for business operations that use materials that are supplied from another entity’s waste stream.

Even if you get crystal clear on whether a material is a waste or not, the process for classification of waste and the task of defining the specific obligations for handling, transport and disposal of waste are not for the faint-hearted.

Contemporary best practice

Given the risks arising from wastes (both in terms of penalties for contraventions of environmental protection legislation and the potential risks to human health and the environment), it is an area which benefits from focussed due diligence.

Contemporary best practice is to ensure that all parts of the materials supply chain are periodically reviewed to ensure that wastes are identified and managed in a legally compliant and risk-managed manner.  

A comprehensive review should consider the potential for waste to exist throughout the supply chain. It could include identifying:

• any materials and products coming to your sites that might fall within the meaning of “waste” and ensuring that your sites are lawfully able to receive those materials (including through environmental and planning approvals);

• wastes generated on-site and understanding how those materials should be stored and handled, including any re-use options;

• all wastes that are to be disposed of off-site and ensuring that they are appropriately classified and transported to a lawful place;

• checking the contractual and documentary evidence about the arrangements of waste management services providers to undertake appropriate supply chain due diligence on where wastes are actually disposed to, or recycled.

Due diligence reviews

Waste laws, like all environmental protection laws in Australia are criminal in nature. Contravention of waste laws can result in corporate liability for offending entities and/or personal liability for the directors and officers of an entity through established deemed liability provisions.

A key defence for directors and senior managers in organisations in relation to waste offences, is the due diligence defence (also called “all reasonable steps” defence, depending on jurisdiction).

Amongst other things, this necessitates the implementation of an appropriate environmental management system (EMS) to identify applicable laws and establish measures to prevent contraventions.

Whilst many Australian entities now have mature EMSs, in 2024/5 organisations should consider re-visiting their particular arrangements for materials handling and wastes to ensure compliance. Contextually, waste management is an area of continued focus for regulatory enforcement, as well as “low hanging fruit” for prosecution due to the visibility of waste offences, including through the increased use of aerial and drone imagery by environmental regulators. The recent waste investigation into asbestos in mulch, is one of the reasons why on 14 June 2024, the maximum penalties under the Protection of the Environment Operations Act 1997 in NSW were doubled from $5,000,000 to $10,000,000 for the most serious offences.

Next steps

If you would like any assistance with waste-related legal matters, including assistance with due diligence requirements please contact us.

Guthrie Legal is pleased to provide bespoke legal briefings in relation to waste regulation and compliance. Gabrielle has a wealth of experience in this area and has addressed the Australian Environment Business Network Waste Conferences for a number of years.

If you have any questions about this topic, or to discuss support for an upcoming transaction, please get in touch.

The legal stuff

All the information in this article and on this website and any downloads are intended only to provide a summary and general overview on matters of interest. 

It is not intended to be comprehensive nor does it constitute legal advice or establish a lawyer - client relationship.  Whilst attempts have been made to ensure that the content is current, Gabrielle Guthrie and Guthrie Legal do not guarantee its currency. You should always seek independent legal or other professional advice on specific cases and before acting or relying on any of the content.