Kingsbury, Anna --- "Funding the Remediation of Contaminated Land in Australia and New Zealand: The Problem of Orphan Sites" [1998] WkoLawRw 2; (1998) 6 Waikato Law Review 37

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Land contamination from the use of hazardous chemicals is a matter of public concern in both Australia and New Zealand. If not cleaned up, contaminated sites can pose serious long-term risks to health and to the environment.[1] There are now significant numbers of “orphan” contaminated sites, for which no party is clearly responsible. The arguments for clean up of such sites are compelling, but the legal and economic issues surrounding financial liability are commonly perceived as complex and uncertain, and neither the public nor the private sector exhibits much readiness to pay the costs. As a consequence, governments have been reluctant to take the difficult political decisions required, and the problems remain unresolved. Neither Australia nor New Zealand has a comprehensive approach to liability or to site remediation, either at national or at state level.

This article reviews and clarifies the issues surrounding financial liability for clean up of contaminated land in Australia and New Zealand, focusing particularly on orphan sites. It examines the existing legal regimes for apportioning liability, and argues that there is now an urgent need for a comprehensive national strategy for dealing with orphan site remediation in both countries.

II. CONTEXT: THE PROBLEM OF LAND CONTAMINATION

Land contamination typically derives from the use of hazardous chemicals and compounds in industrial and agricultural processes. Cleaning up contaminated land is an increasingly urgent and expensive problem, one which has received growing public attention internationally in the last three decades, as the extent of contamination has become known. In the United States, over 35,000 contaminated sites have been reported to the Environmental Protection Agency, and many more have been nominated as potentially contaminated. The average cost of a site clean up is estimated at between US$29 million and US$35 million.[2] In the United Kingdom, it is estimated that dealing with contaminated derelict land alone will cost at least GBP20 billion.[3] Similar situations exist in Europe.[4]

The problem in Australia and New Zealand is fortunately on a much smaller scale, although the precise number of sites is unknown.[5] The Australian and New Zealand Environment and Conservation Council (ANZECC) estimates that there are up to 10,000 such sites across Australia.[6] Other estimates suggest that there are 20,000 potentially contaminated sites in Victoria alone,[7] and it is estimated that in New South Wales there are 7,000 sites requiring clean up.[8] In New Zealand, 8,000 sites have been identified as potentially contaminated, of which 1,500 are thought to be high risk sites.[9] The cost of clean up of the high risk sites alone is estimated at NZ$600 million.[10]

Orphan sites are sites where contamination has occurred, and clean up is required, but where there is no solvent party liable to pay for remediation work. This may be because all potentially responsible parties are exempt from liability, because they cannot be located, or because they are insolvent or otherwise unable to pay.[11] While some orphan sites in Australia and New Zealand have been cleaned up, this has been on an ad hoc basis.[12] And there has until recently been very little detailed research work done on either methods of remediation or legal and policy frameworks for arranging and funding remediation.

III. POLICY ISSUES IN THE REMEDIATION OF ORPHAN SITES

In Australia, any approach to funding orphan site remediation should comply with the principles agreed in the May 1992 Inter-Governmental Agreement on the Environment (IGAE) and the December 1992 National Strategy for Ecologically Sustainable Development. Relevant agreed principles include:

(v) improved valuation pricing and incentive mechanisms, incorporating the polluter pays principle.[13]

The ANZECC considered the application of these principles to contaminated site remediation in its Position Paper of April 1994.[14] It set out the following principles as meeting these criteria:

(i) equity: the liability regime should seek to treat parties fairly and justly, with evenhandedness and impartiality;

(ii) effectiveness: the regime should minimise risks to human health and the environment and achieve the desired outcome of timely clean up to appropriate levels;

(iii) efficiency: the regime should ensure that the funds are directed to the maximum extent possible towards achieving the above outcome at the lowest possible cost to society. This will be reflected by a liability regime which reduces uncertainty to the maximum extent practicable, is administratively simple and consistent across jurisdictions. The regime should aim to discourage the need for litigation and other dispute resolution mechanisms, especially before remediation occurs, and minimise the need for commitment of public funds for this;

(iv) prevention of future pollution: the regime should ensure that polluters bear primary liability for remediation of sites they have contaminated, thereby discouraging future contamination.[15]

The New Zealand Ministry for the Environment issued a Discussion Document on contaminated sites management in November 1995, in which it also considered the policy objectives or principles which should underlie any liability regime for contaminated site remediation.[16] In the paper, the Ministry considered particularly the policy objectives to be achieved through any regime for funding of orphan site clean up.

The New Zealand Government agreed that funding options for clean up of orphan sites should be assessed principally on the basis of the following criteria:

These criteria broadly echo those in the ANZECC Position Paper, suggesting that there is agreement on policy objectives to be achieved. Implementation of these objectives is more contentious, as the principles are open to interpretation, and various stakeholders support alternative interpretations.

One difficulty acknowledged by the ANZECC is that there is potential for conflict between the goals of equity and efficiency. This conflict raises particular difficulties in the case of orphan sites, where the concern is the financial consequences of a past event.[17]

The goal of economic efficiency is forward-looking, in the sense that efficient allocation of resources is achieved where the costs of pollution are fully internalised, rational decisions can be made, and costs can be passed on to consumers. The success of this approach depends upon internalising externalities, such as free access to water and air, and minimising transaction costs, as might be associated with industry levies, for example.[18]

Thus, in the case of contamination, the goal of economic efficiency is in general harmony with the polluter pays principle. Where the polluter is liable for the costs of pollution, the polluter has an incentive to prevent pollution, and pollution costs can be internalised.

Retrospective polluter liability for contaminated sites arguably does not achieve this goal of economic efficiency, as the decision leading to the pollution has already been made. Costs cannot be internalised and passed on, except retrospectively.

But it is also arguable that making the polluter retrospectively liable for contamination does serve the goals of equity and distributive justice. The polluter caused the pollution, and it is just that the polluter should be at least partially liable for remediation, although liability may be shared with other beneficiaries.

In designing regimes for assigning liability and funding clean up, a balance should be struck between the competing goals of equity and efficiency. In so doing, sufficient flexibility should also be retained to avoid inequities for individuals.[19]

IV. IDENTIFICATION OF ORPHAN SITES: LIABILITY ISSUES

The number of sites classified as orphan will be determined by the regime for determining liability for clean up. And the cost of clean up will likewise vary, depending on the number of sites so classified. In both Australia and New Zealand liability for clean up can arise under common law, or by statute.

A. Common Law Liability

At common law, liability may arise under an action in negligence, in public or private nuisance, or under the Rylands v Fletcher [20] principle.

These remedies are limited in practice by the problems associated with all such actions, where plaintiffs require resources in order to get access to justice.[21] The remedies have other limitations in contaminated land cases.[22] They are open only to persons or land owners who suffer harm to property, and are not generally available to members of the public at large.

Negligence requires the plaintiff to establish that a duty of care is owed to the plaintiff by the owner or occupier, that that duty has been breached, and that there has been damage that is not too remote. A defence of reasonable care is available. Further, in land purchases, the seller owes no general duty to the buyer and is not generally liable to the buyer for contamination at the time of transfer.

In nuisance and Rylands v Fletcher actions, liability arises only for damage which is reasonably foreseeable.[23] Rylands applies only where there is a non-natural use of land.[24] In nuisance, successors in title are not responsible unless they are found to have adopted the nuisance, in which case there is a duty to mitigate.[25]

Rylands v Fletcher originally imposed strict liability. But the courts have demonstrated an increasing reluctance to impose strict liability for contamination at common law. As environmental law is perceived as being of growing public interest and importance, courts are preferring to leave it to parliaments to impose liability by legislation.[26] For these reasons, statutory frameworks for liability are generally more significant than common law liability.

B. Statutory Liability

1. Existing legislative schemes

A variety of legislative schemes for determining clean up liability currently exist in Australia and New Zealand. These schemes generally adopt the “command and control” approach to environmental regulation, prescribing behaviour rather than using market-based incentives and flexible contract-based mechanisms.[27]

The following table represents the existing liability for clean up of contaminated land in Australia and New Zealand.[28]

	QLD	SA	VIC	NSW	WA	TAS	NT	ACT	NZ
Polluter	Yes	Yes	Yes	Yes	Yes	N/A	N/A	N/A	Yes
Occupier	No	Yes	Yes	Yes	Yes				Yes
Owner	Yes	Yes	If occu-pier	No	Yes				Yes
Remed- iation Liability	Strict	Fault based	Abso-lute	Strict	Strict				?

(i) In New Zealand, there are differing views on whether liability under the Resource Management Act 1991 is retrospective, and whether liability is strict. The government has announced an intention to introduce legislation to establish a liability framework.[29]

(ii) New South Wales has proposed an amendment extending liability to controllers, including owners and mortgagees in possession.[30]

(iii) Tasmania has announced plans to legislate in line with the ANZECC recommendations.[31]

The variety of legislative schemes currently produce different outcomes, because of differences in the wording of the statutory provisions, and because of differing judicial interpretations. As a result, a site that would be classified as orphan in one jurisdiction would not be orphan in another. There is therefore an urgent need for a consistent approach in order to advance the prospects of remediation, and to provide certainty for industry and investors.

2. Issues in law reform

There is no national consistency in legislation in ANZECC jurisdictions, and a number of issues arise in developing a consistent regime.

Environmental statutes in Australia and New Zealand generally contain provisions assigning liability for future contamination of land,[32] which reduces the likelihood of future orphan sites (except arguably in the case of company asset stripping and insolvency).

Liability regimes for past contamination are more complex, and raise questions of retrospective operation of legislation. It is arguable that it is unjust to impose liability for activities which caused pollution where these activities were lawful at the time but do not meet today’s standards. This “lawful polluter” argument can be extended to suggest that, since governments and taxpayers allowed or in some cases promoted the polluting activities, they should therefore be liable for part or all of the cost of remediation.[33]

There is an obvious conflict between the lawful polluter argument and the polluter pays principle. As discussed, the polluter pays principle is most appropriate for the prevention of future pollution, rather than as a basis for holding polluters liable for remediating sites contaminated in the past. The ANZECC acknowledges that the polluter pays principle operates most effectively where environmental costs can be internalised by industry so that costs are reflected in the price of goods or services produced.

However, the ANZECC recommended polluter liability as “a clear message that social costs generated by polluters will be borne by polluters”.[34] The polluter, rather than the owner or occupier, should therefore be liable, even where some element of retrospectivity is involved. This does not mean that criminal liability will be imposed for previously lawful activity.[35]

The polluter pays principle means that, wherever possible, the actual polluter should “be the party held liable for remediation of contaminated sites, and associated costs, such as assessment and auditing”.[36] The principle is accepted by the ANZECC,[37] and statutory regimes generally assign liability to polluters in some form, although the precise interpretation of the principle varies across jurisdictions.[38]

Where the polluter cannot pay, other parties may be assigned liability for clean up. The current owner or occupier of the site can be liable for clean up. The ANZECC recommends that, “where the polluter is insolvent or unidentifiable, the person in control of the site, irrespective of whether that person is the owner or the current occupier, should be liable, as a general rule, for the costs of any necessary remediation”.[39] The rationale is that the owner or occupier has the legal power to arrange remediation, and would receive the most benefit from such remediation.

It has been argued that lenders should be liable for remediation, as financiers of the polluting activity, and as the party most likely to be in a position to pay for clean up. Lender liability was imposed in the United States under the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA),[40] based on the argument that those with the “deepest pockets” should fund clean up. Lenders are liable where they participate in the management of the debtor’s activities.[41] Canadian and United Kingdom legislatures have also made provision for lender liability.[42] In Australia and New Zealand, lender liability may arise under various legislative provisions.[43]

The banking and financial sectors oppose lender liability, arguing, inter alia, that:

(i) it will severely restrict available finance as lenders adopt a conservative approach, and the cost of finance will rise.

(ii) lenders are not regulators. Regulation is a government function. Lenders rely on government environmental approvals.

(iii) lenders are not insurers, and are not in a position to assess environmental risks.

(iv) lenders are not responsible for the contamination, and are generally not in a position to control environmental effects.[44]

The ANZECC recommends that lenders should not be liable where they act solely as the holder of a security interest in the site and have taken no steps to enforce that security. However, where they have either caused the contamination, or have assumed control of the site, they should be liable.[45]

It has been suggested that other third parties should be liable where they are involved in the management of the site, for example, lawyers, accountants, engineers and other professionals.[46] Such liability would depend on the level of involvement in the contaminating activities, and can be incurred under principles of professional negligence.[47]

In many cases, liability can attach to more than one party, raising the question of how such liability should be apportioned. In the United States under CERCLA, liability is joint and several, leading to widespread litigation between potentially responsible parties, and between parties and insurers, and parties and government.[48] As a result, remediation is delayed, and funds for remediation are diverted into litigation.[49] Typically, clean up of a site in the US takes 7-9 years.[50] A 1993 RAND Corporation study estimated that transaction costs account for 27% of total costs of clean up.[51] The United States model is therefore not seen as a desirable one to be followed in Australia and New Zealand.

The ANZECC recommends that liability between parties should be apportioned according to their contribution to contamination, and that this should be determined by the tribunal of fact. However, joining of other parties should not delay clean up, and must be subject to such action being taken first.[52] The ANZECC also recommends that there be a statutory right to recover clean up costs from other potentially liable parties.[53] It remains to be seen whether this approach might not also lead to extensive litigation, but, if it does, it will be after the clean up, so that the parties will not be motivated by a desire to delay.

There are different approaches which might be taken to determining liability by statute.

Under a fault-based approach, liability attaches where there is a duty of care, a particular standard of care is expected, and damage or harm is caused by intentional, reckless or negligent action. This is similar to common law negligence. Under this approach potentially responsible parties could escape liability if:

Thus, liability would be difficult to establish, as it is under common law, and there would consequently be more orphan sites. This approach would reduce the range of situations in which liability would arise. It consequently has support from industry groups,[54] but is not favoured by the ANZECC.[55]

An alternative is the risk-based approach to liability, whereby anyone receiving a benefit from contaminating activities would be potentially liable for remediation. Liable parties could therefore include lenders, and arguably the community as a whole. Risk-based liability is also referred to as the “beneficiary pays” approach.[56]

Combinations of risk and fault-based liability are also possible, so that, for example, liability is greater where there is an element of fault.

Strict liability is the approach favoured by the ANZECC for polluters, owners and occupiers.[57] Strict liability allows for quick determination of liability with reduced likelihood of litigation, and it applies the polluter pays principle. Strict liability also reduces the likelihood that sites will be orphaned. Appeal rights should exist for situations where strict liability is inequitable, for example, where a householder with limited resources has unknowingly bought contaminated land.

(i) governments should ensure that the polluter, where solvent and identifiable, is liable for remediation.

(ii) where the polluter is insolvent or unidentifiable, the person(s) in control of the site, irrespective of whether that person is the owner or the current occupier, should be liable. Parties should be liable according to the level of their contribution to the contamination.

(iv) owners, occupiers, polluters, or public authorities who undertake clean up have a statutory right of recovery of costs of clean up, from the polluter or others who exacerbated the situation.

(v) lenders holding security over a risk site should have a clear choice of courses of action, and liability will only attach if the lender assumes control of the site.[58]

The ANZECC recommendations are moderate, and strike a balance between equity and efficiency in allocating liability and identifying those sites which are orphan. The recommendations avoid the “deep pockets” approach adopted in the United States, and the likelihood of litigation inherent in joint and several liability. The recommendations should be implemented by legislation in the various jurisdictions, as a prerequisite to a national approach to remediation of contaminated lands and identification and remediation of orphan sites.

V. RESPONSIBILITY FOR FUNDING REMEDIATION OF ORPHAN SITES

There is continuing debate about who should fund remediation of orphan sites. In Australia, the issue is whether remediation is more appropriately a responsibility of Commonwealth, State or local governments. In New Zealand, a more limited debate centres around whether clean up is a central or local government responsibility.[59]

In Australia, environmental and land use issues are traditionally regarded as a responsibility of State government.[60] State governments are in the best position to assess the need for clean up, and the direct benefits of a clean up are principally experienced by the States.[61] Clean up would therefore appear to be a State responsibility.

However, the Commonwealth has increasingly assumed responsibility for environmental matters, relying, inter alia, on the external affairs, corporations, and overseas trade and commerce powers of the constitution.[62] More recent developments, such as the Inter-Governmental Agreement on the Environment 1992 and the establishment of the Commonwealth Environment Protection Agency and the National Environment Protection Authority, suggest an expanded Commonwealth role as States take a co-operative approach to environmental matters.[63]

The Commonwealth has not taken a national approach to clean up of orphan sites. But there are strong arguments that funding orphan site clean up is a national responsibility, based on principles of equity, uniformity, effectiveness and efficiency.

First, the cost of remediation is likely to be considerable.[64] It has been suggested that the revenue base of at least one State (South Australia) will be insufficient to raise the revenue required.[65]

Secondly, the Commonwealth government has constitutional powers to raise funds via taxation that are not available to State governments, and has administrative functions with the potential to influence polluter behaviour and provide incentives for remediation.[66]

Thirdly, contaminated sites are not distributed equitably across all jurisdictions. If States are to be responsible for revenue raising, the costs of clean up will not fall equitably across the country. However, this uneven distribution of sites is partly the result of historical factors, and partly the result of different legislative regimes establishing liability, so that a site that would be classified as orphan in one jurisdiction would not be orphan in another. This raises a difficulty if the Commonwealth is to fund clean up, as it could lead to inequities in the distribution of funds across States.[67] Because of this variation in liability regimes across ANZECC jurisdictions, the ANZECC recommended in 1994 that the means of providing funding for the remediation of orphan sites should be determined by each of the governments concerned.[68] A uniform approach to liability would therefore be a prerequisite for Commonwealth funding.

Fourthly, it is in the national interest that sites be cleaned up. All states and territories possess contaminated sites, and the effects of these sites are not necessarily contained within state boundaries. It is a national problem, and it is most effectively addressed consistently at a national level. [69]

Fifthly, assessment and guidelines for remediation are already being addressed on a national basis. Logically, funding could also be so addressed.[70]

Sixthly, consistent nationwide approach to liability for clean up would provide certainty for industry and business, especially for businesses which operate across jurisdictions.[71]

For the above reasons, it is argued that the Commonwealth government in Australia and the central government in New Zealand should be responsible for developing a consistent, equitable and efficient regime to be applied to the funding of remediation of orphan sites nationwide.

(i) governments should be responsible for ensuring that the necessary remedial action to minimise risks is taken in the case of orphan sites posing risks; and

(ii) means of providing funding for the remediation of orphan sites need to be determined by the governments concerned.[72]

The ANZECC stopped short of recommending a national scheme for funding clean up of orphan sites. This was not because a national scheme was seen as undesirable, but because of the expressed concern that, because jurisdictions differed in their liability regimes, any national scheme for funding clean up would be inequitable.[73] It is therefore arguable that a preferable solution would be a national scheme for both liability and clean up. Indeed, this was the professed aim of the ANZECC strategy for contaminated sites.[74]

VI. FUNDING REMEDIATION OF ORPHAN SITES

There are various options for funding clean up of orphan sites. All involve the establishment of a fund from which monies can be disbursed to pay for remediation as required. There is continuing debate about how such a fund should be constituted and administered.

A. Sources of Funds

1. Funding from consolidated revenue

Government could establish a fund using monies from consolidated revenue. These funds are raised by governments through a variety of mechanisms, the most significant of which are income and company taxes (and in New Zealand through goods and services tax).

Administrative and compliance costs of raising revenue in this way are very low. No new tax instrument is required, and the establishment of a new, separately administered fund may be unnecessary.

The use of consolidated funds for remediation would represent an acknowledgment that remediation is a community responsibility where the polluter cannot pay, and that the cost should be spread across the community as a whole. Spreading the tax burden in this way would minimise the impact on industry, and there would be little likelihood of individual or company behaviour being modified in a distortionary way.[75] This is the source of funds generally favoured by industry groups.[76]

However, the use of consolidated revenue is contrary to the polluter pays principle. It spreads the costs across the community rather than targeting polluters. It thereby provides no incentive for polluters to avoid future pollution, but rather subsidises inefficient industry practice, and does not encourage internalisation of costs.[77] Further, it sends a message that the community will eventually accept responsibility for remediation if industry does not.

2. Levy on industry

Revenue might also be raised through levies on industry. This option is frequently likened to the fund established to fund clean up of small oil spills. In Australia the fund was established by the Shipping Levy Act and the Shipping Levy Collection Act. Revenue is raised through a quarterly levy on the cargo capacity of ships, and collection is by Customs.[78] A similar model exists in New Zealand in the form of the Accident Compensation levies on industry which fund compensation for personal injury.[79]

One option would be a levy on industries or industrial processes which, by their nature, are likely to cause significant contamination problems. The fund would then be used to fund orphan site clean up, including the clean up of future sites where cost of remediation exceeds the resources of the polluting company.[80] Revenue would therefore be raised by a mechanism which targets the riskiest industries, encouraging the implementation of higher safety standards in those industries, and internalisation of the associated costs.

This form of levy requires a new form of tax instrument, has high administrative costs, and has high compliance costs for the industries concerned.[81] The ANZECC received little support for this option, the main support being from local government.[82] Industry groups argued that the effect of such a levy would be “good environmental performers paying for the misdeeds of bad performers”, with potential inefficiencies and lack of effectiveness as a result.[83] Osmers, however, argues that this concern could be minimised by imposing the levy on a sliding scale, depending on the standards or level of protection desired. This would also “have the positive effect of raising the industry’s standards of management and operation”.[84]

The second option for an industry levy is to impose a levy on chemicals and chemical products at their point of sale. This option targets those who benefit directly from the use of chemicals, whether industries or consumers.[85] The levy would be on a variable scale according to the level of risk associated with a particular chemical.[86] However, it does not provide an incentive to industry to improve standards of environmental performance.[87] The ANZECC suggested that this levy would be easily implemented.[88] However there may be high associated compliance costs which should also be considered.

A variant of this approach was presented in the New Zealand Ministry for the Environment discussion paper, where a unit charge on inputs or outputs of production is proposed. For example, a charge could be levied on chemical feedstocks, petroleum products, water or waste. However, administrative and compliance costs may be high where a new charge is involved, and revenue levels will be uncertain depending on factors such as efficiency of collection and possible substitutes for the product in the market.[89]

Unsurprisingly, there is little support among industry for a levy on chemicals. Industry is generally in favour of the use of consolidated revenue to fund clean up.[90]

A third option is for industry to establish a voluntary fund for orphan site remediation. This system is used in the Netherlands.[91] In most of the old States in Germany, a combination of state financing and voluntary industry levies is used.[92] However, this solution is resisted by industry in Australia and New Zealand. In Victoria, it has been consistently declined as it is seen as a mechanism whereby larger industries that are good environmental performers subsidise poorer performers.[93]

3. Combination of collection mechanisms

The forms of revenue raising discussed are not mutually exclusive. Combinations of industry levies and funding from general taxes and rates are also possible.[94]

For example, the Hazardous Substances Superfund in the United States is a congressionally established trust fund derived from a number of sources. Funds come from general appropriations, a special tax on petroleum and chemical products, an environmental tax on corporations, penalties and punitive damages from violators, costs recovered from responsible parties, and earned interest.[95] But the US superfund remains inadequate to meet the cost of remediation, so that the ultimate success of the remediation program relies on securing commitments from responsible parties.[96]

Other options have also been suggested at various times, such as an environmental lottery or an environmental trust.[97] Although some efforts have been made to pursue these options, they are unlikely to offer a viable national solution to orphan site remediation.

B. Administering and Allocating Funds

A fund could be administered centrally by government or contracted out to the private sector. A stand-alone fund could take a number of corporate forms, such as trust, company, state-owned enterprise or quango. Any of these structures could be used to allocate funds, as full subsidies, flat rate or matching grants, or risk and cost-adjusted grants.

Any system of allocation should be equitable, transparent, and avoid capture by industry or remediation contractors.[98]

VI. CONCLUSION

The urgent need for a national consistent approach to the problem of orphan site remediation is now clear. All that is now required is the political will to act. The ANZECC has produced useful recommendations on liability and the identification of orphan sites, which should be implemented by legislation. Once a consistent approach to liability is achieved, funds for remediation should be established by the Australian Commonwealth Government and by the New Zealand Government. Funding should be by a combination of industry levies and consolidated revenue, in accordance with the principles of equity and efficiency. Without such a national approach there seems little prospect that remediation will occur, and the risks to health and the environment will continue unabated.

[1] The Australian and New Zealand Environment and Conservation Council (ANZECC) defined a contaminated site as “a site at which hazardous substances occur at concentrations above background levels and where assessment indicates it poses, or is likely to pose, an immediate or long-term hazard to human health or the environment”. Background levels refer to ambient levels of a contaminant in the local area of the site under consideration (ANZECC and the National Health and Medical Research Council (NHMRC), Australian and New Zealand Guidelines for the Assessment and Management of Contaminated Sites (1992) 2).

[2] Greenwood, “Looking Ahead: Environmental Regulation - A Future?” in Boyle, A (ed) Environmental Regulation and Economic Growth (1994) 99, 125.

[3] Cridland, “Meeting the Cost of Environmental Regulation” in Boyle, supra note 2, at 233, 238.

[4] There are over 50,000 potentially contaminated sites in West Germany and over 100,000 in the Netherlands (ANZECC and NHMRC, supra note 1, 1).

[5] Rowe and Seidler “Introduction” in Rowe, G and Seidler, S (eds) Contaminated Sites in Australia: Challenges for Law and Public Policy (1993) xvii, xvii-xviii.

[7] Taylor, “Contaminated Sites in Tasmania” in Department of Environment and Planning and Stephenson EMF Consultants (eds), Contaminated Sites Conference Proceedings (1992) 3.

[8] Carter, “Hazardous Waste And Contaminated Sites: The North American Experience” in Department of Environment et al, supra note 7, 20-21.

[9] High risk sites are those which pose an actual or imminent significant adverse effect to human health and the environment (New Zealand Ministry for the Environment, Discussion Document on Contaminated Sites Management: Liability Issues, Management of Orphan Sites, Role of Local Government (1995) 2, 31). See also New Zealand Ministry for the Environment, Potentially Contaminated Sites in New Zealand: A Broad Scale Assessment (1992) 6.7.

[10] New Zealand Ministry for the Environment, Discussion Document, supra note 9, 31. See also New Zealand Ministry for the Environment, Potentially Contaminated Sites, supra note 9, 6.3.

[11] The ANZECC has considered issues of financial liability for clean up, including clean up of orphan sites. The ANZECC defines orphan sites as: “existing and future sites for which either: (i) those who might be liable for the contamination cannot be found, cannot pay clean up costs or no longer exist, or (ii) it has been decided by the government that the person(s) responsible or who otherwise might be liable for the contamination should not bear any of the costs of remediation; and in either case, the costs of remediation must be met in some other way determined by government” (ANZECC, Financial Liability for Contaminated Site Remediation: A Discussion Paper Prepared by the Australian and New Zealand Environment and Conservation Council (1993) 37).

[12] Osmers, “Cleaning Up Contaminated Land: Who Pays?” in Rowe and Seidler, supra note 5, at 181, 182. See also New Zealand Ministry for the Environment, Discussion Document, supra note 9, 31. Such ad hoc clean ups have mainly been undertaken where contamination poses a serious risk to public health. For example, the New Zealand Government has funded some clean up work at a Hanmer Springs children’s camp site which was found to be contaminated with timber treatment chemicals. In other cases, for example a former chemical factory site at Mapua, local authorities have agreed to share the costs of the clean up with the government. See Alice Taylor, “Government to Pay for Pollution Cleanup” Evening Post 8 July 1995, 8.

[13] Inter-Governmental Agreement on the Environment (1992) Schedule section 3.

[14] ANZECC, Financial Liability for Contaminated Site Remediation: A Position Paper (1994) 5.

[16] New Zealand Ministry for the Environment, Discussion Document, supra note 9.

[17] Callaghan, Catherine The Liability of Lenders for Remediation of Contaminated Sites Under the Resource Management Act 1991 (1995) 43.

[21] Shanahan, ‘The Scales of Justice are Twisted and Crooked: A Public Interest Law Perspective on Tort’ in Rowe and Seidler, supra note 5, at 149, 150.

[22] Palmer, “Contaminated Land Liability: UK and New Zealand Comparisons” (1996) 1(16) Resource Management Bulletin 201, 202; and Taberner “Civil Liability: Recent Statutory Measures’ in Rowe and Seidler, supra note 5, at 145-152.

[24] Non-natural use is open to various interpretative approaches. See Cambridge Water Co v Eastern Counties Leather plc [1993] UKHL 12; [1994] 2 AC 264, and Burnett-Hall, “Emerging Trends in Environmental Law” in Thomas, P (ed) Environmental Liability (1990)149, 153.

[27] Stewart, “The Future of Environmental Regulation” (1996) 15 Journal of Law and Commerce 585-595, and Bruce Pardy, Environmental Law: A Guide to Concepts (1996) 32-33. Note that there are some initiatives toward more flexible approaches, for example the Victorian Environment Protection Act provides for Accredited Licensees.

[29] New Zealand Ministry for the Environment, Discussion Document, supra note 9, 8-9; and Palmer, supra note 22, 203.

[32] Examples include Resource Management Act 1991 (NZ) and Environmental Protection Act 1970 (Vic).

[35] Ibid, at 8. In New Zealand, criminal liability would be contrary to the New Zealand Bill of Rights 1990 (New Zealand Ministry for the Environment, Discussion Document, supra note 9, at 9).

[38] The polluter pays principle is accepted by OECD nations (ANZECC, supra note 11, at 14).

[41] Mfodwo, “Current Developments in Lender Liability” in Rowe and Seidler, supra note 5, at 163, 164; Smith and Monaghan, “The Impact of Environmental laws on Transactions” in Thomas, supra note 24, 286-7; and Clark, S Lender Liability for Contaminated Sites Remediation: Some Recent Trends (1991).

[42] Ontario’s Environmental Protection Act RSO 1980 c.141 is an example. See Callaghan, supra note 17, 25-6, and Mfodwo, supra note 41, at 164.

[43] NSW, Victoria, Queensland and New Zealand legislation all have potential avenues for lender liability (Mfodwo, supra note 41, at 164). For example, in Victoria a mortgagee in possession who is, or appoints, a controller of the premises, may be liable as an “occupier” (Environment Protection Act 1970 (Vic) s4(3)).

[44] Australian Bankers’ Association, Position Paper: Banks and the Environment (1992).

[45] ANZECC, supra note 14, at 15. Victoria’s Environment Protection Act takes this approach.

[48] Saul and Janisson, “Contaminated Site Clean Up: Is Superfund the Answer?” (1994) 1(2) Butterworths Resource Management Bulletin 18, 19; Smith and Monaghan, supra note 41, at 284; Ludwiszewski, “Superfund: The United States Response to Hazardous Waste Sins of the Past” in Rowe and Seidler, supra note 5, at 62-63.

[51] Saul and Janisson, supra note 48, at 20; and Ludwiszewski, supra note 48, at 62-63.

[59] New Zealand Ministry for the Environment, Discussion Document, supra note 9, at 33-34.

[60] Fisher, D Environmental law: Text and Materials (1993) 45-47; and Osmers, supra note 12, 182.

[63] Ibid, at 50-51, and Inter-Governmental Agreement on the Environment (1992).

[64] In New Zealand it has been estimated that clean up of all high-risk sites will cost NZ$600 million, of which some NZ$200 million could conceivably be required for orphan sites (New Zealand Ministry for the Environment, Discussion Document, supra note 9, at 32).

[67] It is for this reason that the ANZECC recommends that funding should be determined by the governments concerned (ibid, at 14).

[69] In New Zealand, there is also concern that New Zealand’s “clean green” environmental image might be tarnished internationally by the existence of unremediated sites, with consequences for export and tourist industries (New Zealand Ministry for the Environment, Discussion Document, supra note 9, at 33.

[75] New Zealand Ministry for the Environment, Discussion Document, supra note 9, at 36.

[76] Australian Bankers’ Association, Position Paper: Banks and the Environment (1992) 7; ANZECC, supra note 14, at 22.

[79] New Zealand Ministry for the Environment, Discussion Document, supra note 9, at 36.

[81] New Zealand Ministry for the Environment, Discussion Document, supra note 9, at 36.

[89] New Zealand Ministry for the Environment, Discussion Document, supra note 9, at 35.

[92] Rehbinder, ‘Contaminated Sites in Germany’ in Rowe and Seidler, supra note 5, at 55.

[94] New Zealand Ministry for the Environment, Discussion Document, supra note 9, at 36.

[98] The US experience of overuse of private contractors and consequent abuses is documented by Latin, “Private Contractor (Mis)Use in the Superfund Program’ in Rowe and Seidler, supra note 5, at 200-204.

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