Offsets framework

Framework for implementation of offset programs under the Contaminated Land Management Act 1997

Under the Contaminated Land Management Act (CLM Act) the Minister for the Environment (the Minister) can enter into offset arrangements with a person responsible for 'significant contamination'[1]. The person can implement the offset as a means of mitigating the impact of contamination on the community affected by the contamination.

Importantly, offsets are not an alternative to the remediation and management of significant contamination required under the CLM Act.

Offsets are developed on a case-by-case basis depending on the particular situation. This framework ensures that the providers of offsets and the recipients of the benefits of offsets have certainty about the circumstances under which offset programs can be considered.

Key elements of an offset program under the Contaminated Land Management Act 1997

The Office of Environment and Heritage[2] (OEH) has a duty to address any contamination that it considers significant enough to warrant regulation under the CLM Act. OEH must ensure that all necessary actions are carried out under the provisions of the CLM Act, and any offset program must complement this fundamental requirement.

There are a number of general principals for implementing offset arrangements. These principals are as follows:

  • Offsets do not preclude the need for remediation/management of significant contamination.
  • Offsets are considered necessary when remediation may take many years to achieve the expected outcomes.
  • Offsets can only be sought from persons responsible for significant contamination, not landowners or notional landowners (e.g. financiers).
  • Offsets do not include direct financial compensation (i.e. no monetary handouts).
  • Offsets do not replace affected parties' legal rights to seek damages from those parties responsible for their loss.
  • Offsets must be able to mitigate the loss of utility of a resource caused by the contamination (e.g. use of groundwater). They should also consider retention of public access to a community resource and establishment of an alternative habitat for affected plants and animals.
  • Specific proposals would be developed on a case-by-case basis.
  • The person responsible for significant contamination needs to have financial capabilities to implement the offset program or a means of providing an acceptable surety.

Development of any offset programs will require consultation with affected parties.

Process for developing offset programs

Offsets can only be proposed by the persons responsible for the significant contamination and they are undertaken on a voluntary basis.

Development of any offset program would require careful consideration by the responsible persons and would involve close consultation with affected parties including landowners, the local council and community. It may also be necessary to consult on a wider basis depending on the circumstances.

Other considerations

There are no penalties associated with the non-compliance with an offset program. However, civil proceedings may be brought against the responsible person if assistance is not provided in accordance with the agreed offset arrangements.

Entering into offsets may benefit the person responsible for significant contamination by enhancing corporate image and building relationships with the community.

Cases of voluntary offset programs for contaminated sites

A number of cases exist where persons responsible for the contamination are voluntarily mitigating the impacts of contamination and loss of utility of a resource caused by contamination. These include:

Contaminated groundwater

Extensive groundwater contamination has prevented the use of domestic bores by nearby residents. Along with requirements to remediate the groundwater, the responsible company provided the affected local community with water tanks, free of charge, as a means of mitigating the loss of use of the groundwater.

Contamination around a former lead smelter

Airborne contamination has impacted on residential properties around a former lead smelter. OEH was not in a position to formally regulate the site. The informal offset program allowed the responsible company to clean up these properties which resulted in lower lead levels.

Examples of potential offset programs

A number of hypothetical situations where offset programs could be utilised are listed below:

Impacts on regional potable water supply (surface/groundwater)

Offset programs could involve the person responsible for significant contamination installing an alternative water supply, subsidising connections to alternative supplies (e.g. mains connections, augmentation of reticulation systems), installing treatment systems, or tanking in potable water.

Loss of irrigation water for recreational areas

Offset programs could involve the person responsible for significant contamination installing a water treatment/reuse facility.

Contamination imposes additional costs on developing land

Offset programs could involve the person responsible for significant contamination providing an independent site auditor (as a site audit statement is often a development consent requirement for contaminated land), or arranging for contaminated soil removal and disposal.

Restricted access to public facilities due to contamination

Offset programs could involve the person responsible for significant contamination providing like-for-like facilities in alternative locations (e.g. boat ramps, playing fields, parks and gardens).

Impacts on ecological communities

Offset programs could involve the person responsible for significant contamination providing assistance in the protection of similar communities in alternative areas, or restoring similar ecological communities.

[1] If land is contaminated and the contamination is significant enough to warrant regulation, the OEH may declare the land to be 'significantly contaminated land'.

[2] OEH exercises certain statutory functions and powers (including those set out in the Contaminated Land Management Act 1997 and the Protection and Environment Operations Act 1997) in the name of the Environment Protection Authority (EPA).

Page last updated: 31 May 2011