The Protection of the Environment Operations Act 1997 (NSW) (the Act) grants the Environmental Protection Agency (NSW) (EPA) the power to consider whether a person applying for or operating under an Environment Protection Licence (EPL) is a "fit and proper person".

Kim Glassborow.

The EPA must consider whether a person is a fit and proper person when exercising licensing functions; including when the EPA issues, transfer, varies or reviews a licence.

During the currency of the licence, if the EPA holds the opinion that the holder of an EPL is no longer a fit and proper person, they also have the power to suspend or revoke the licence (Section 79(5)(f) of the Act).

Fit and proper person test

Under Section 83 of the Act, the EPA may consider, in relation to the body corporate, a director of the body corporate and any other person concerned in the management of the body corporate:

  1. Whether the person has contravened any environment protection legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation; 

  2. The person's record of compliance with the environment protection legislation; 

  3. Whether, in the opinion of the EPA, the management of the activities under the relevant licence are not or will not be in the hands of a technically competent person; 

  4. Whether, in the opinion of the EPA, the person is of good repute, having regard to character, honesty and integrity; 

  5. Whether the person, in the previous 10 years, has been convicted in NSW or elsewhere of an offence involving fraud or dishonesty; 

  6. Whether the person, during the previous three years, was an undischarged bankrupt or applied to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounded with his or her creditors or made an assignment of his or her remuneration for their benefit; 

  7. Whether the body corporate is the subject of a winding up order or has had a controller or administrator appointed during the previous three years; 

  8. Whether the person has demonstrated to the EPA the financial capacity to comply with the person's obligations under the licence or the proposed licence; and
  9. Whether the person is in partnership, in connection with activities that are subject to a licence or licence application, with a person whom the EPA does not consider to be a fit and proper person.

The EPA may disregard contraventions listed above having regard to the seriousness of the contraventions, the length of time since they occurred, and other matters that appear relevant to the EPA.

Always Recycling Pty Ltd v Environment Protection Authority [2012] NSWLEC 1170

In this case, Mr Matta, the director of Number 1 Excavation and Demolition (NSW) Pty Ltd (No 1) and Always Recycling Pty Ltd (Always) appealed the deemed refusal of his application to transfer a licence from No 1 to Always.

The EPA initially claimed that the licence transfer application should be refused because Always was not a fit and proper person since it had not demonstrated the financial capacity to comply with its obligations under the licence (see item eight, above).

Following a joint report by an accountant and waste levy compliance officer for the EPA regarding the financial capability of Always, the EPA accepted that Always was a fit and proper person in relation to its financial capacity.

The EPA agreed not to press any other factor (listed above) as a basis for refusing the transfer of the licence, however it submitted those factors were relevant to how the proposed transfer of the licence should occur (i.e. what conditions should be imposed). The court agreed, pointing to the fact that under the Act, an EPL relates to a specific person, unlike a development consent which relates to the land. The court took this to mean that the identity, and, where relevant past conduct of an EPL holder are relevant factors in considering whether an EPL should be transferred and the conditions which should be imposed on such a transfer.

Considerations that pointed to whether Always was a fit and proper person, including its record of compliance with environment protection legislation and whether the management of activities or works will be in the hands of a technically competent person were considered in determining the conditions which should be imposed on the transfer of the licence.

The fact that Mr Matta was issued numerous penalty notices as a director of No 1, and his position as director during No 1's previous failures to comply with licence conditions, led the court to impose conditions to improve overall management.

Financial assurance

The fit and proper person test relates to determining the amount of financial assurance. The EPA must be satisfied that the amount of financial assurance is justified, having regard to the environmental record of the proposed holder of the licence.


The question of whether you or your company is a fit and proper person pervades all stages of obtaining and operating under an EPL.

While the EPA has broad power to determine whether or not, in its opinion, you are a fit and proper person, taking the matter to a conciliation conference or hearing before the court can help you find a reasonable solution and negotiate conditions that limit the extent of the EPA's power.

Kim Glassborow is a partner at G&B Lawyers specialising in planning and environmental law with a particular interest in waste management issues. She is also Inside Waste's Legal Eagle columnist. Contact: