Water industry activities create environmental risks that are regulated by Victoria’s Environment Protection Authority (EPA). The cost of upgrading sewerage networks and treatment facilities to reduce these risks can be very high and will ultimately be borne by customers. Reducing these risks involves trade-offs with higher water service prices which need to be managed carefully over time.
The Environment Protection Act 2018 (EP Act) establishes a General Environmental Duty (GED) that requires all entities to adopt ‘reasonably practicable’ measures to prevent harm to the environment and human health. In contrast to more prescriptive compliance standards, this duty follows the ALARP principle¹ for safety in creating a more flexible, risk-based standard of environmental performance. Under this approach, the way water corporations make decisions and prioritise actions to discharge their GED will be subject to great scrutiny.
Under the EP Act the water industry may develop guidelines, policies and codes of practice that show how the industry will comply with the GED. An industry-led approach to developing these tools will support the industry to assess, manage and mitigate environmental risks. It will reduce the risk of arbitrary compliance and enforcement action, and it will support constructive engagement between regulators, the industry and with other stakeholders (local councils, catchment management authorities, etc.) to manage the price implications of addressing environmental risks.
¹ The ALARP (“as low as reasonably practicable”) principle requires the residual risk to be reduced as far as reasonably practicable.
A clear understanding of what is required to fulfil the GED under the EP Act
A well-defined policy framework that supports effective environmental performance across the industry in a cost-efficient manner
- The water industry is committed to preventing harm to health and the environment and will build on its strong track record of environmental management.
- The implications of the compliance obligation created by the GED for water prices should be carefully considered by all stakeholders.
- The industry seeks genuine dialogue with the EPA to achieve the industry’s objective of meeting its environmental obligations in a cost-effective way.
- Industry-led guides and codes of practice are needed to support water corporations to meet the requirements of the GED and provide a framework to engage with stakeholders about investment in environmental outcomes.
Environment Protection Authority (EPA)
Essential Services Commission (ESC)
Serving our customers and communities (affordability)
Responsible environmental stewardship (sustainability)
Good governance (efficiency)
Leadership and innovation (collaboration and partnership, continuous improvement)