Earlier this week, ACAPMA attended a meeting called by the South Australian Environment Protection Authority (EPA) together with other industry stakeholders.
At the meeting, senior government representatives advised that the SA Government had recently passed legislation that will allow the SA EPA to introduce a licence fee for service stations in that State – with a view to raising a total of $1.5M per year to support ongoing enforcement activities targeting contaminated sites within the service station industry.
Given that the legislation for the funding had already been ratified by the SA Parliament, the purpose of the meeting was to seek feedback on the structure of the proposed licence fee – and to foreshadow a proposal to introduce associated licence conditions that would require service stations to manage their sites within a UPSS ‘Code of Practice’.
“While the legislation for the licence fee raising had been passed without industry consultation, the SA EPA stressed that they were keen to consult with the industry around both the structure of the fee and any likely licence conditions, in advance of the 1 January 2020 commencement”, said ACAPMA CEO Mark McKenzie
Discussions on the structure of the fee centred around whether the fee would be levied on a flat basis for all service stations, or whether there was a need to adopt a tiered fee that took account of the size of the site in market terms (The SA EPA heard arguments from industry about the merits of both approaches and no decision was reached during the meeting, with the EPA intending to consult further before finalising an approach by mid March 2019)
If the fee was to be levied on a flat basis, ACAPMA estimates that the annual fee would likely be in the order of $2400 per site per year.
“While the licence cost is likely to be relatively modest, our concern is to ensure that the SA EPA does not introduce licence conditions for UPSS management that dramatically increase the cost of doing business and/or create unnecessary complexity for both regulators and industry – as has occurred in NSW”, said Mark
“To date, there are two examples of government working with our industry for the prevention of contamination of soil and groundwater at service stations – and ACAPMA’s clear preference is the approach that has been used in Victoria over the past 4 years”, continued Mark
The Victorian approach promoted good practice with respect to the monitoring of UPSS systems in a manner that was wholly consistent with the ACAPMA Best Practice Guideline for loss monitoring at fuel retail outlets (see: http://www.acapma.com.au/wp-content/uploads/2017/09/ACA127_BPG_UPSS.pdf)
NSW, on the other hand, prescribed the installation of costly infrastructure that has substantially increased compliance costs for service stations operating in that state and introduced a complex enforcement regime that is the subject of considerable confusion amongst industry and regulators alike.
These are business costs that ultimately flow through to the customer and there is no evidence that the NSW approach delivered better outcomes than Victoria in respect of contaminated sites in the fuel retail industry.
“Our industry has an absolute obligation to ensure that we take all reasonable steps to prevent contamination of soil and groundwater at and around our fuel retail sites”, said Mark
“It is important, however, that actions targeting this obligation are as cost-effective as possible and do not result in onerous and unworkable legislation that simply fills government coffers without delivering positive environmental outcomes”, concluded Mark
ACAPMA understands that the SA EPA is currently preparing to conduct a mailout to all service stations in South Australia to advise them of the proposed licence fee and the industry consultation that will take place over coming months in respect of same.
For its’ part, ACAPMA will continue to engage in the consultation process with a view to promoting a least cost regulatory approach that seeks to minimise the risk of environmental contamination from service stations sites in South Australia.
Further information on this development will be communicated to members as it comes to hand.