Consultation opens on new Circular Economy Regulations: Mitigating risks to essential waste services

Introduction

The waste, recycling and resource recovery sector has in recent years been affected by changes in national and international policy, emergencies causing impacts to human health and the environment and supply chain failures involving significant operators and facilities.

The Risk Regulations are the next tranche of regulations proposed to be made under the Circular Economy (Waste Reduction and Recycling) Act 2021 (CEWRR Act) which came into operation on 1 July 2022. The Risk Regulations will facilitate the implementation of the statutory risk, consequence and contingency planning framework in the CEWRR Act that seeks to share the management of risks between industry and government.

The Risk Regulations are relevant to the Victorian waste, recycling and resource recovery sector, particularly large operators or those who have government contracts which would be considered to be ‘essential services’ under the Risk Regulations.

We have previously provided updates on the CEWRR Act which discuss:

• the aims of the Circular Economy (Waste Reduction and Recycling) Bill, available here; and
• the introduction of the Victorian Recycling Infrastructure Plan and new Circular Economy Risk Consequence and Contingency Plans (CERCC Plan) available here.

The Proposed Risk Regulations

The Risk Regulations prescribe:

• a definition for essential waste, recycling or resource recovery services (Essential Services) to give effect to the duty under the CEWRR Act to minimise risks of failure, disruption or hindrance of a service;
• a definition of a ‘Responsible Entity’ and the additional responsibilities that Responsible Entities attract; and
• the matters relating to the obligations in relation to the content and preparation of:

• a Responsible Entity’s ‘Risk, Consequence and Contingency Plan’ (RCC Plan); and
• Recycling Victoria’s CERCC Plan.

What is an essential waste recycling and resource recovery service?

The Risk Regulations prescribe which waste, recycling and resource recovery services are proposed to be classified as Essential Services, set out in Table 1 of Schedule 1 and include certain:

• Landfill services;
• Hazardous waste services;
• Residual waste services;
• Thermal waste to energy services;
• E-waste services;
• Long term waste containment services;
• Construction and demolition waste services;
• Metal recycling services;
• Municipal resource recovery centre and transfer station services;
• Recycling services (co-mingled);
• Organics services;
• Public waste services;
• Secure waste destruction services;
• Recycling services (glass); and
• Container deposit scheme services.¹

Providers of Essential Services are subject to the new duty established under section 74 of the CEWRR Act to minimise so far as is reasonably practicable, the risk of serious failure, disruption or hindrance of that essential service (Failure, Disruption or Hindrance Duty). Duty holders are required to comply with the Failure, Disruption or Hindrance Duty to reduce the risks of service disruptions. Failure to comply with this duty is an offence punishable by 500 penalty units (currently $96,155) for a natural person, and 2500 penalty units (currently $480,775) for a body corporate.

What is a “Responsible Entity” and what obligations do they have?

The Risk Regulations prescribe a subset of Essential Services which are proposed to be defined as a ‘Responsible Entity’²  and accordingly be the subject of higher levels of regulation and oversight of risk consequence and contingency planning.

An Essential Service will be a ‘Responsible Entity’ if:

• They hold 20 per cent or more of the Victorian market share for:

• that service;
• a component of that service
• that service for a type of waste; or

• the entity holds government contracts related to that service worth over $50 million; or
• the entity provides services under ongoing arrangements or at regular intervals in three or more ‘declared regions’.³

Responsible Entities will be required to prepare annual RCC Plans (discussed below) under section 74F of the CEWRR Act that meet the prescribed requirements set out under the Risk Regulations. The requirements include ensuring the Responsible Entity:

• takes the actions and contingency measures within the timeframes specified in the RCC plan;
• employees carry out their roles and responsibilities as detailed in the RCC Plan;
• monitors and manages inherent and residual risks as detailed in the RCC Plan; and
• monitor and evaluate the implementation of the RCC Plan.

Failure to comply with the requirements of a RCC Plan is an offence for a Responsible Entity. ⁴

RCC Plans

The Risk Regulations set out the required content for RCC Plans, which includes amongst other things:

• Description of waste services provided by the Responsible Entity;
• Demonstration of how the entity meets the Responsible Entity criteria;
• Details of notifications provided to Recycling Victoria;
• The names of other entities that provide or receive services under ongoing arrangements that are related to the delivery of the Essential Service;
• Details of the identified risks of serious failure, disruption or hindrance to the provision of the Essential Waste, including assessment of:
• the likelihood and consequences of it occurring; and
• the gravity of the risk based on its likelihood and consequences;
• Details of when and how the actions and contingency measures to prevent and minimise risk of failure, disruption or hindrance to the Essential Service will be taken; and
• Steps taken for the monitoring and management of any inherent and residual risks remaining following actions or contingency measures that are being taken to prevent or minimise identified risks.⁵

When a business that operates an essential service becomes or ceases to be a ‘Responsible entity’ they must notify Recycling Victoria.⁶  Failure to notify Recycling Victoria is an offence with a penalty of 60 units (currently $11,538.60) for a natural person and 300 units (currently $57,693) for a body corporate.

For businesses that operate an Essential Service but do not meet the definition of ‘Responsible Entity’, the Failure, Disruption or Hindrance Duty will still apply.

CERCC Plan

The Risk Regulations also provide additional detail on the content of Recycling Victoria’s CERCC Plan, required to be prepared annually under section 74B of the CEWRR Act.

The CERCC Plan will identify risks of serious failure, disruption or hindrances, identifying financial risks to Victoria’s circular economy transition and consequences of the risks (such as the severity of harm).

The Risk Regulations provide that the CERCC Plan will include any information held by Recycling Victoria regarding the total volume of waste managed in Victoria for each—

• essential waste, recycling and resource recovery service;
• component of the essential waste, recycling or resource recovery service;
• type of waste relating to the essential waste, recycling or resource recovery service; and
• the period to which the information relates.⁷

Next steps

Consultation closes on 12 September 2023. You can participate in the consultation by filling out an online form on Engage Victoria’s website here.

Following the preparation and publication of a formal response to public comment, DEECA intends to submit the new regulations to the Governor in Council in November 2023, with the final Risk Regulations to come into effect on 1 December 2023.

How we can assist you

If you would like more information on how the Risk Regulations might affect your existing operations or future projects, or would like assistance with preparing a submission to DEECA, please contact a member of our Environment and Planning team.