21 December 2010
NSWs contaminated land laws are discouraging developers from investing new money to fix up dirty sites, according to a new policy paper released by the Urban Taskforce. The paper, titled Cleaning Up, argues that the public interest is not being well served by the existing arrangement. (The paper is available here.)
The Urban Taskforces chief executive, Aaron Gadiel, said that the Contaminated Land Management Act doesnt distinguish between modern day property developers and historical polluters.
This is poor public policy, Mr Gadiel said.
Not because its unfair, but because it leaves dirty sites unremediated and under-utilised.
Mr Gadiel said the law was intended to be tough on polluters when it was introduced in the 1990s.
Theres nothing wrong with that, he said.
But in 2008, the law was re-written to also target new property developers who seek to remediate an old site.
Contaminated land laws are unique, because they allow governments to toughen standards and retrospectively apply them to sites previously remediated by property developers.
The government is now free to walk away from voluntary remediation arrangements agreed between regulators and property developers.
The government can ratchet up the obligations as much as it wants on historical polluters, Mr Gadiel said.
Those companies cant change the past, so theyre sitting ducks for new government regulation.
However, a property developer who has no historical association with a site has a choice.
If the regulation is too harsh and the risks are too great, a property developer will decide not to get involved.
The Urban Taskforce argues that contaminated land laws should recognise this reality and provide two levels of regulation.
There should be a very tough set of retrospective rules for the polluters of the past, Mr Gadiel said.
The second stream of regulation should be more modest, ensuring that there arent unquantifiable risks for new developers who want to clean up contaminated sites.
Mr Gadiel said this was the approach was envisaged in the 1996 NSW government green paper.
Similar measures have been implemented in parts of the United States such Michigan, Minnesota and Massachusetts – and in the European Union.
The Urban Taskforce paper suggests two specific reforms.
Firstly, property developers should only have to meet contemporary standards when remediating land and not unpredictable future standards.
Secondly, environmental regulators should issue certificates of completion if theyre satisfied that a developer has done everything it can to fix up a site. This would protect the developers from future clean-up liabilities.
If the government wants to see more infill development, the problems with existing contaminated land laws will need to be tackled, Mr Gadiel said.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.