Introduction

This audit assessed if the Department of Water and Environmental Regulation (DWER) and local government entities (LG entities) effectively regulate the unauthorised discharge of minor pollutants by businesses that do not require a licence (operators).

We focussed on the activities of DWER’s Compliance and Enforcement Directorate, which is responsible for administering environmental legislation. Its activities include monitoring, audit and compliance inspections and investigation of complaints and incidents.

We also audited the City of Wanneroo and the City of Armadale. These LG entities were selected because they have varying degrees of interaction with DWER in the regulation of minor pollutants.

Background

Businesses handle a range of materials that can harm the environment and public health if not managed appropriately. During a 2014 audit, we found that small to medium sized businesses were a significant source of pollutants entering and impacting the health of the Swan and Canning river systems.[1] We also found that preventing pollution is generally more cost effective than treating it.

The key legislation that operates to prevent and control pollution is the Environmental Protection Act 1986 (EP Act). The EP Act has subsidiary legislation including the Environmental Protection (Unauthorised Discharges) Regulations 2004 (UDRs). The State Government introduced the UDRs in response to a report[2], which found that light industrial premises present a significant pollution risk. This is due to the cumulative impact of small discharges and the potential for accidents to cause pollution. The UDRs list specific materials, such as detergents, petrol, sewage, dark smoke, animal waste and paint, which must not be discharged into the environment by any business. For the purposes of our audit, we refer to these types of materials as minor pollutants.

DWER is the principal environmental regulator in Western Australia and is responsible for administering the EP Act and promoting and monitoring compliance.  It operates under a set of established regulatory principles to guide its activities (Figure 1).

We referred to these principles throughout the audit to evaluate the regulatory effectiveness of DWER and LG entities.

All types of businesses are required to comply with the EP Act and its subsidiary legislation, including the UDRs. However, the extent of their obligations varies depending on the nature of the premise and its production or design capacity. We have compared piggeries of different sizes to demonstrate this (Figure 2). 

In April 2020, the Environmental Protection Amendment Bill 2020 was introduced to Parliament. It aims to streamline regulatory processes for the protection of the environment. The Bill proposes a change to the current licensing regime, where licences are no longer restricted to premises and can be granted to the person who has the care, control and responsibility for the activity. The potential shift from regulating premises to activities, may in the future result in additional operators needing a licence.

DWER’s current regulatory approach

DWER’s draft Compliance and Enforcement Policy indicates that it focuses on those matters that pose the greatest risk to public health, the environment and water resources. Businesses licensed under the EP Act and the Environmental Protection Regulations 1987 are the focus of DWER’s regulatory activities because it considers that these licensed businesses are of a higher pollution risk as they are included in Schedule 1 of the Environmental Protection Regulations.

Licensed businesses must comply with certain conditions set by DWER. Licence conditions are designed to protect the environment and public health from emissions and discharges. If the business does not obtain a licence or does not comply with set conditions it commits an offence under the EP Act. Licensed businesses are also subject to periodic compliance inspections and are required to submit annual compliance reports to DWER. DWER assesses and reports its performance against its regulatory activities associated with licensed businesses and is also able to recoup costs through licensing fees.

In contrast, operators are subject to less regulatory scrutiny. Operators are the focus of our audit, given they are more likely to operate in light industries, handle minor pollutants and contribute to cumulative pollution risks.

LG entities’ involvement

Although DWER is the State’s environmental regulator, protecting the environment is a shared responsibility for all levels of government, business and the community. The Local Government Act 1995 broadly recognises that LG entities play a role in protecting the environment for current and future generations. LG entities also must ensure their own operations comply with the EP Act.

LG entities that choose to enforce the EP Act and its subsidiary legislation can participate in DWER’s Authorised Officer Program (AOP). Authorised officers (AOs) have powers of entry, can monitor compliance, investigate alleged breaches of the EP Act and undertake enforcement action. DWER, in collaboration with a small number of metropolitan LG entities, also runs the Light Industry Program (LIP); an educational program designed to engage operators and promote compliance with the UDRs.

Conclusion

DWER is not effectively regulating the unauthorised discharge of minor pollutants by operators, and LG entities are not obligated to under the Environmental Protection Act 1986.  DWER’s current regulatory approach focuses on complaint and incident management which limits opportunities to prevent and mitigate risks posed by operators.

There has been some proactive work by DWER and LG entities to identify and engage with operators through the Light Industry Program and the Authorised Officer Program. However, LG entity participation in both programs is voluntary. At the time of our audit, only 9 of 148 LGs took part in joint inspections with DWER through the Light Industry Program and just under half of all LG entities participated in the Authorised Officer Program. Low participation by LG entities and DWER’s reliance on complaints to identify non-compliance creates a regulatory gap that increases the risk offences by operators will go undetected. Operators may commit a wide range of offences from unauthorised discharges of minor pollutants to pollution, therefore, regulatory responses must be proportionate to the risks they present.

[1] Office of the Auditor General (2014). Our Heritage and Our Future: Health of the Swan Canning River System. https://audit.wa.gov.au/reports-and-publications/reports/heritage-future-health-swan-canning-river-system/auditor-generals-overview/

[2] Department of Environment and Swan River Trust (2005). Stormwater Management Manual for Western Australia: 7 Non-structural controls (pg 179 – 180). https://www.water.wa.gov.au/__data/assets/pdf_file/0003/1677/84958.pdf