Claire Smith and Alice Brennan delve into the detail of some of the recommendations of the independent review of the NSW Resource Recovery Framework and potential implications for the circular economy.
Dr Cathy Wilkinson (former CEO of the Victorian EPA) has released her anticipated independent review of the NSW Resource Recovery Framework.
Commissioned by the EPA, the objective of the review was to examine the existing NSW waste and resource recovery framework and to provide recommendations to the EPA on:
• how well the framework protects the environment and human health from the inappropriate use of waste;
• how well the framework achieves beneficial resource recovery and facilitates circular economy outcomes, including pathways for innovation;
• the EPA’s ability to take appropriate regulatory action to protect the environment and human health under the framework; and
• the framework’s transparency, clarity and enforceability.
The review noted that the original resource recovery framework had been set up in 2008 to facilitate the reuse of certain recovered waste for land application or fuels. It also noted that there was friction between the environment and safety objectives of the framework and the need for flexibility to support innovation and a smooth transition to a circular economy. The review made 22 recommendations across four key areas:
1. improved administration and decision-making;
2. the definition of waste and enhancing the regulatory framework;
3. enabling high-quality materials to facilitate circularity; and
4. improving approaches to known and emerging contaminants.
The Recommendations
Outcome 1: Improved administration
and decision-making
A key criticism the EPA has faced is the handling of the revocation of the mixed waste organic material (MWOO) exemption in 2018. The 24-hour notice period for the MWOO ban, together with the lack of transparency and reasons for the decision, highlighted the need for the resource recovery regime to be put on a similar footing to environmental and planning approval regimes. Wilkinson made nine recommendations based on her consultation with stakeholders including that the EPA should:
• Publish clear and comprehensive guidance materials for the application and assessment of orders and exemptions.
• Better documentation and explanations on how the EPA makes decisions on orders and exemptions and ensure that the sector and broader community is aware of the EPA’s considerations to provide confidence that the rationale is credible and sound.
• Establish and publish a clear process for the issuing and revocation of general orders and exemptions. This should include investigating options for revocations, including thorough stakeholder engagement.
• Seek the advice of independent technical experts through establishing an expert panel and publishing a clear protocol for constituting such group/s.
• Investigate options for an internal review process for certain decisions on resource recovery orders and exemptions.
These recommendations were clearly influenced by the MWOO debacle. While the proposed reforms are a step in the right direction, further mechanisms to bring the resource recovery regime up to date with current approval regimes, such as deemed refusal periods and appeal rights, would also have been welcomed.
Outcome 2: Considering the definition of waste and enhancing the regulatory framework
Arguably, one of the biggest bugbears of recent times has been the Criminal Court of Appeal’s broad interpretation of the legal definition of waste in the long running case of EPA v Grafil. The advancement of the circular economy has been slowed by the ongoing “what is waste?” debate through the courts. The Grafil cases also exemplified the risks faced by consumers accepting recovered materials (and, consequently, the development of those markets), as well as the need to make producers more responsible for the recovered product they sell. Against this backdrop, it was pleasing to see the review make a number of recommendations including that:
• The EPA should investigate a pathway to enable an “end-of-waste” outcome for suitable common, low-risk recovered materials to better enable reuse, particularly for remanufacturing while ensuring the EPA can still address environmentally problematic and undesirable uses and dumping of those materials.
• If the EPA implements an “end-of-waste” outcome, the EPA should review relevant elements of the resource recovery framework and associated guidance materials to ensure language appropriately reflects the transition of waste to resources.
• The EPA should investigate whether some activities that use, process and/or store recovered materials should be excluded from certain aspects of the waste regulatory framework to reduce administrative and regulatory burdens and enhance circular outcomes.
A further issue is the lack of a formal “innovation pathway” for pilot or trial resource recovery projects, which impacts investment in, and development of, the circular economy in NSW. Importantly, the review recommends that the EPA should work with relevant agencies across government to develop a resource recovery innovation pathway to support the development, demonstration and assessment of new and innovative technology and processes.
Outcome 3: Enabling high-quality materials to facilitate circularity
The review identified that one of the key principles of a circular economy is to keep materials, products and services circulating within the economy for as long as possible. Consultation with stakeholders identified a strong focus on expanding the EPA’s focus and role from infrastructure and end-product standards to other enablers of a circular economy. This included collaborative partnerships with industry, data availability and transparency, as well as promoting a shared responsibility for circularity throughout the supply chain. Given the stakeholder desire for increased EPA engagement in this area, recommendations centred on the EPA’s own Regulatory Strategy 2021-2024. The review recommended that:
• The EPA should review the role and application of the NSW waste classification system to the resource recovery sector.
• As part of a regulatory plan for the waste and resource recovery sector, the EPA should investigate ways to enhance protections for consumers of recovered resources and place greater responsibilities on waste generators and processors. This could include through compliance campaigns targeting resource recovery orders and exemptions and other safeguards.
• The EPA should investigate opportunities for the increased collection and publication of resource recovery data that could assist in the transition to a circular economy, including collection and publication of the generators and processors operating under a resource recovery order.
These recommendations, if implemented, would help to improve confidence and integrity in the resource recovery market and the circular economy.
Outcome 4: Improving approaches to known and emerging contaminants
The discussion in this part of the review centred on the challenge between setting the right contaminant regulatory limits within the resource recovery framework to encourage the most efficient use of resources while also minimising environmental harm. The Grafil cases had found that a single fragment of asbestos (regardless of type or size) in a recovered aggregate stockpile would mean that the whole stockpile was “asbestos waste” having regard to the definition of asbestos waste in the Protection of the Environment Operations Act. This approach was inconsistent with the work health and safety regime and the approach taken to managing and remediating asbestos contamination under other NSW environmental legislation. While stakeholders requested more flexibility in dealing with contaminants, the report recognised that the human health risks of asbestos are serious and need to be adequately managed. The review recommended that:
• A scientific expert external to the EPA should review and provide advice on the NSW approach to management of asbestos contaminants in waste and recovered materials. The review should include, but not necessarily be limited to, the protection of human health and the environment and consideration of opportunities and constraints of beneficial reuse.
• Taking into account the advice of the external scientific expert, the EPA should consider how existing approaches to management of asbestos contaminants in waste and recovered materials could be improved.
• The EPA should implement a program to proactively investigate emerging contaminants and better engage with stakeholders regarding emerging contaminants.
It is hoped that the EPA will seriously consider implementing these recommendations to ensure that an appropriate level of risk is applied when considering how to regulate contaminants in recovered products to protect human health and the environment and provide more consistency across environmental, safety and remediation regulatory frameworks.
What’s next?
The 2021 CSIRO circular economy roadmap for waste management in Australia emphasised that there are three primary enablers to achieve a circular economy:
• consistent governance,
• market development; and
• zero waste culture.
Wilkinson’s report provides practical recommendations based on consultation with a range of stakeholders to assist the EPA with achieving a fit-for-purpose resource recovery framework. However, this is only one of the enablers of a circular economy. It will be incumbent on all parts of state and local government to help drive market development through data sharing, sustainable procurement and development of new recycled and recovered product standards, as well as a zero-waste culture through better education programs and enforcement mechanisms. Waste levy reforms that divert more money back into the resource recovery sector to assist with these enablers, as well as more Commonwealth product stewardship schemes, would further supercharge the circular economy and preserve Australia’s natural resources.
Claire Smith is a Strategic Legal Advisor on ESG, Energy, Water and the Circular Economy for Clayton Utz. Alice Brennan is a lawyer at Clayton Utz.