FACT Sheet – Environment Protection and Biodiversity Conservation Act 1999
Managing Environmental Risk in Infrastructure Development
Introduction
It is a Defence requirement to comply with Commonwealth environmental legislation including the
Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). Significant amendments to the
EPBC Act commenced on 19 February 2007. The amendments were wide ranging and impact Defence in its
capacity as a landholder, occupier and user.
Purpose
The purpose of this Fact Sheet is to highlight new provisions affecting the liability of Defence as the landholder
when engaging contractors to manage infrastructure development contracts. The responsibilities of the
contractor and subcontractors are also examined.
Landholder Responsibility
If Defence owns, occupies or leases land, then Defence is a landholder. Defence will be responsible as a
landholder for the acts of others on Defence land which cause a significant impact on matters of National
Environmental Significance, cause a significant impact on the environment of Commonwealth land or
contravene a condition attached to an Approval. Defence will be liable as Landholder if it:
 knew that or was reckless or negligent as to whether persons on its land were breaching the EPBC Act;
and
 is found to have been in a position to influence the conduct of that person in relation to the breach of the
EPBC Act (for example, under a contract or Lease); and
 failed to take all reasonable steps to prevent the contravention.
Defence may avoid liability as Landholder by demonstrating that all reasonable steps were taken to prevent the
contravention. In assessing whether Defence took all reasonable steps a court will have regard to:
 what action, if any, Defence took to ensure the other person had an appropriate system (e.g. an
environmental management system) in place for managing the environmental impacts of their activities;
and
 what action Defence took upon becoming aware that there was a substantial risk of a breach of the EPBC
Act.
This means that Defence as Landholder has a statutory obligation to ensure that its contractors, licensees and
lessees:
 have management systems in place to prevent their activities from having a significant impact on the
environment on Commonwealth land or on matters of National Environmental Significance;
 obtain and comply with any necessary approvals and conditions of approvals, and Environmental
Clearance Certificates (ECCs);
 have response procedures in place to effectively respond to environmental incidents.
Defence as the Landholder must also have systems in place to respond to any environmental incidents on its
land whether or not Defence personnel caused the incident (see fact sheet on managing environmental
incidents). Defence must also ensure its employees and contractors are informed about the conditions of any
approval and ECCs.
Proposals for Infrastructure Development Contracts
The selection of a Contractor with appropriate skills, experience and a sound environmental performance
history will be an important step in discharging Defence's landholder liability. With this in mind, requests for
proposals for infrastructure development contracts should include:
1
FACT Sheet – Environment Protection and Biodiversity Conservation Act 1999
 a requirement for relevant demonstrated skills and expertise to undertake the Works. Consider whether
specialist personnel are required, resource requirements and what limitations should be imposed on the
selection and use of subcontractors;
 a demonstration of environmental performance history (including in managing sub-contractors), including
of parent companies and directors (where appropriate);
 demonstrated procedures and systems for environmental management and for meeting industry standards.
Contract terms
Defence can take specific steps (in addition to those outlined at paragraph 7 above) to discharge its
responsibility for the actions of the Contractor and/or sub-contractors. These include ensuring the contract
requirements address the following:
 requiring the Contractor to comply with the EPBC Act and comply with any Approvals relating to the
works, including ECCs;
 requiring the Contractor to ensure all subcontractors comply with the EPBC Act and comply with any
Approvals relating to the works, including ECCs;
 requiring the development of a contract specific Environmental Management Plan for review by Defence
(or its agent, the Contract Administrator) and which:
O
is in a form that satisfies Defence that the Contractor has an appropriate system in place to
identify and manage environmental risks and in particular EPBC compliance;
O
contains a procedure for the review and updating of the Environmental Management Plan;
O
requires training and induction for personnel and subcontractors in environmental compliance
and performance requirements;
O
contains mechanisms to encourage continuous improvement;
O
references an appropriate emergency response system and the capacity to implement that system
if required; and
O
demonstrates procedures for the monitoring of environmental performance and the reporting of
incidents or non-compliance with environmental requirements of the contract and Environmental
Management Plan, breaches of Statutory Requirements or complaints.
 audit protocols for assessment of compliance with the EPBC Act and the Environmental Management
Plan;
 the use of and reporting against environmental compliance and performance indicators to assess
contractor performance;
 provision for Contractor accountability to Defence for compliance with the EPBC Act and the
Environmental Management Plan, including the provision of audits to Defence, performance management
and environmental performance assessment;
 requiring the Contractor to ensure all sub-contractors are aware of the Environmental Management Plan
and have demonstrated an ability to comply with the Environmental Management Plan;
 requiring the Contractor have procedures in place for managing the selection of subcontractors;
 requiring the Contractor to notify Defence of any latent conditions once it becomes aware of any such
conditions;
 measures to rectify any adverse environmental condition caused by the contractor's activities. These
measures may include step in rights or rights to direct rectification works; and
 an acknowledgement that the Contractor warrants it has assessed and informed itself of risks assumed
under the Contract and for a design and construct contract consider whether it should require that the
specification complies with Approvals and the ECC.
2
FACT Sheet – Environment Protection and Biodiversity Conservation Act 1999
Contract administration
Measures available to Defence to demonstrate administration of the contract consistent with its landholder
responsibilities include:
 advising the Contractor of any Approvals;
 advising the Contractor of any ECCs that relate to the land or services and requiring the Contractor to
advise engaged sub-contractors of relevant Environmental Certificates of Compliance;
 the provision by Defence to the Contractor of all data, documents and information available about the
conditions on, in, under or in the vicinity of the site that may be relevant to environmental conditions or
risks or the effect of the performance of the works on the environment (for example information on
endangered fauna or site contamination) and procedures which have been identified through the Defence
Environmental Management System;
 procedures for review of the Environmental Management Plan, including benchmarking;
 keeping the contractor up to date with any additional or changed information on environmental aspects;
 ensuring the Defence Environmental Management System covers contractor activities;
 providing a forum for environmental risks, incidents and performance to be discussed with the contractor;
and
 procedures for Defence to respond to non compliance by the contractor.
Proposals for Public Private Partnerships (PPP)
If Defence remains the owner of the land, Defence will have landholder liability and the comments above are
relevant. In the case where Defence is not the owner of the land, but rather a PPP arrangement is in place that
provides for Defence to lease or occupy the land then Defence will be a landholder under the definition in the
EPBC Act and will share liability with the owner of the land. In such circumstances Defence should in addition
to the matters addressed above, consider the following:
 The project agreements should require the PPP Company to comply with the EPBC Act and Approvals
and ECCs.
 Due diligence material provided to the PPP Company by Defence should include any Approvals for the
land, including conditions and any information Defence has about the environmental conditions of the
land and adjoining land, matters of National Environmental Significance and environmental risks.
Defence should consider procedures to provide the PPP Company with updated information during the
term of the agreement.
 Defence will need to be satisfied that the PPP Company has appropriate procedures and systems to
manage the environmental effects of its activities. Defence may consider a requirement for an
environmental management system or a specific environmental management plan. The adequacy of the
environmental management system or environmental management plan will need to be considered by
Defence.
These procedures will at least need to address:
 procedures for update and review of environmental management instruments;
 compliance audits;
 provision of audits to Defence; and
 procedures for notification of Defence and relevant authorities in the event of environmental incidents.
The Defence environmental management system will need to address PPP Company risks and response
procedures in the event that Defence becomes aware of a potential breach of the EPBC Act by the PPP
Company.
3
FACT Sheet – Environment Protection and Biodiversity Conservation Act 1999
Definitions
The following definitions apply for the purposes of this Fact Sheet:
(a) Approval: The approval of the Minister for Environment and Water Resources under Chapter 4 of the
EPBC Act for the taking of an action which would otherwise be unlawful.
(b) Controlled action: An action taken in relation to a Part 3 provision without approval under Part 9.
(c) EPBC Act: Environment Protection and Biodiversity Conservation Act 1999 (Cth).
(d) Landholder: An owner, lessee or occupier of land.
(e) Latent Conditions: Ground conditions on site, excluding ground conditions resulting from inclement
weather wherever occurring, which differ materially from those which should have been anticipated
by a prudent, competent and experienced contractor if it had informed itself of the risks assumed
under the contract.
(f) A matter of National Environmental Significance is
(i)
the ecological character of a declared Ramsar Wetland;
(ii)
the world heritage values of a declared World Heritage property;
(iii)
the national heritage values of a National Heritage place;
(iv)
a listed migratory species;
(v)
listed threatened species or communities;
(vi)
the environment in a Commonwealth marine area;
(vii)
the environment on Commonwealth Land;
(viii)
the environment in a Commonwealth Heritage place outside the Australian
jurisdiction;
(ix)
a nuclear action; or
(x)
an action prescribed by the Regulations.
(g) Minister: The Minister for Environment and Water Resources.
(h) Third party action: An action by a non Defence person including a contractor or other person
authorised to be on Defence land.
(i)
Works: Includes all the contractor's activities to be performed under an ID contract.
Further Information
For further information contact Director Environmental Impact Management, Estate Policy and Environment
Branch on (02) 6266 8067
4