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Australia – Proposed Temporary Emissions Licences – Plugging The Regulatory Gap?

 31 August, 2012

 

Legal News & Analysis – Asia Pacific – Australia – Environment 

 

In brief

 

  • The Department of Environment and Heritage Protection is considering introducing a new statutory tool that would allow it to better respond to emergent events.
  • The “temporary emissions licence” would, in certain circumstances, temporarily authorise emissions not otherwise permitted under the relevant environmental authority or development approval.
  • While potentially a useful tool, there are a number of additional factors that may make operators hesitant to use it.
  • In any event, the concept is in its very early stages.

 

In a discussion paper released for comment last month, the Department of Environment and Heritage Protection (DEHP) proposed a new statutory tool it says will help it better respond to emergent events like the 2011 Queensland floods.

 

The proposed “temporary emissions licence” – aimed at bridging a regulatory “gap” identified during the floods – is intended to give both the DEHP and industry better scope to manage an appropriate response to emergency events.

 

What is a “temporary emissions licence”?

 

According to the DEHP’s discussion paper, a temporary emissions licence is a statutory tool that could be used to authorise temporary emissions that would otherwise be a contravention of the relevant environmental authority or development approval.

 

Intended for use in response to emergent events such as flooding, or in the immediate post-emergency response, the licence is intended to be a “flexible tool for quick decisions…to manage emissions as part of the response to an emergency”.

 

Importantly, the proposed licence aims to “fill the gap in regulatory tools to respond to emergent events” identified during the Queensland Floods Commission of Inquiry (QFCI). Transitional environmental programs (TEPs) were the DEHP’s “mechanism of choice” for dealing with water releases during the 2011 floods. However, the QFCI’s final report highlighted a number of deficiencies in that approach.

 

In an attempt to address those issues, the temporary emissions licence is proposed to:

 

  • allow for timely decisions;
  • be capable of grant pre-emptively; and
  • provide a temporary exemption from offence provisions.

 

How would I get one?

 

As with other applications under the Environmental Protection Act 1994 (Qld), an application for a temporary emissions licence would need to include enough information for the DEHP to make a decision.

 

While the specific content requirements are yet to be finalised, the discussion paper notes that the temporary emissions licence is a tool designed for “quick decisions on limited criteria”. Relevant considerations are proposed to include the extent and impact of the emergent event, the likelihood of the event occurring, and cumulative impacts of the proposed emissions with other authorised releases.

 

However, because of the proposed decision-making timeframes – the discussion paper indicates essentially a 24-hour turnaround – the full regulatory requirements and standard criteria will not need to be considered.

 

Where sufficient information is not supplied, the discussion paper indicates the DEHP may grant the licence for a shorter time than requested, and/or for less emissions than requested.

 

The discussion paper also indicates an intention to make the licences “fully flexible” – able to be “granted on a moment’s notice, but…also…amended or withdrawn quickly” – to allow for changes where additional information becomes available. This “flexibility” does create some potential risks for industry (for example, in relation to the certainty of the licences), and it will be instructive to see how this issue is dealt with in any proposed legislative amendments.

 

What else do I need to know?

 

While the proposed temporary emissions licence could be a useful tool for industry in managing its response to flooding or other emergent events, there are a number of additional factors that would need to be carefully considered before applying for such a licence.

 

Grant of a temporary emissions licence will trigger a conditions review

 

According to the discussion paper, the grant of a temporary emissions licence is “evidence that the conditions of the environmental authority or development approval are not sufficient to plan for emergency events of this nature”. The grant of a temporary emissions licence will therefore be a trigger for the DEHP to review those parts of the approval affected by the licence, to ensure the conditions are adequate to deal with foreseeable emergency events in the future.

 

In our experience, operators are generally hesitant to “open up” existing approvals for unilateral review or amendment by the DEHP. Consequently, the potential for a temporary emissions licence to trigger a review of approval conditions is likely to be a significant factor in deciding whether the tool will be used.

 

A temporary emissions licence will not authorise prior non-compliance

 

The temporary emissions licence will only override the relevant approval conditions or statutory requirements during the term for which it is granted. Unlike a combined program notice and TEP, under the current proposal a temporary emissions licence could not be used to authorise past unauthorised emissions.

 

More generally, it is also important to remember that a temporary emissions licence – like a TEP – will not prevent the DEHP from taking enforcement action for any non-compliances not specifically authorised by the licence.

 

A temporary emissions licence will not be granted for foreseeable, ongoing or routine emissions

 

According to the discussion paper, “[t]he department’s position is that the conditions of the environmental authority should be amended, where possible, to address foreseeable events”. Where emissions are “foreseeable”, or “ongoing or routine”, a temporary emissions licence will not be available and the usual amendment process will apply.

 

The discussion paper does not provide any guidance on what might be considered “foreseeable”, “ongoing” or “routine”, and it is not clear how the concept may be applied to, for example, the successive significant wet seasons Queensland has experienced over the last few years.

 

Temporary emissions licence considered an aggravating factor

 

The discussion paper indicates that the DEHP will consider the grant of a temporary emissions licence as an aggravating factor both in the decision to take compliance action, and in submissions on penalty during a prosecution. This will be an important consideration where there are, for example, prior non-compliant releases that may be the subject of enforcement action.

 

Where to from here?

 

At this stage, the temporary emissions licence is in its very early stages, with the DEHP seeking comments from peak industry bodies last month.

 

While the proposal is a positive step towards addressing the regulatory “gap” in tools available to assist industry in preparing for, and recovering from, emergent events such as flooding, there are a number of factors that may make operators hesitant to use it. We will continue to keep you updated as this proposal progresses.

 

Lessons

 

  • If introduced, the temporary emissions licence would be an additional regulatory tool available to assist industry in preparing for, and managing its response to, emergent events such as flooding.
  • However, companies would need to carefully consider their options before applying for a temporary emissions licence and take account of all relevant additional factors. In any event, the concept is still in its early stages and formal legislative amendment is likely to be some way off.

 

 

For further information, please contact:

 

John Briggs, Partner, Ashurst

john.briggs@ashurst.com

 

 Paul Wilson, Ashurst

paul.wilson@ashurst.com

 

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