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13 November 2002GOVERNMENT-OWNED CONTAMINATED SITES PRESENT A MAJOR FINANCIAL RISK TO THE STATEContaminated sites either owned or controlled by public sector agencies pose a serious and significant financial risk to government and purposeful measures are urgently required to facilitate their identification, assessment, remediation and future management, according to WA Auditor General Des Pearson. Mr Pearson outlines his concerns in a report tabled in Parliament today, forewarning that the “management of contaminated sites is going to be a challenging, long-term and costly issue for government and its agencies”. His report acknowledges that whilst many agencies are currently tackling the numerous complex issues involved with varying degrees of success and that proposed contaminated sites legislation will certainly make a difference, the “financial risk to government exists regardless”. Recent contaminated site clean-up costs incurred by government have been as high as $17.5million in the case of the former East Perth Gas Works, $16million for the former fertiliser plant at Minim Cove in Mosman Park, and even relatively simple cases such as fixing up several bush sites near Dwellingup where drums containing oil and 2,4,5-T were buried could cost up to $500,000. In addition to such potentially high remediation costs, government also faces further uncertain financial obligations through significantly reduced land values (as evidenced in the old Causeway Bus Depot site recently falling in value by nearly $9million because of the presence of land contamination) and public liability exposures via possible litigation if contaminated sites that pose a threat to human health or the environment are not identified, or identified but not properly managed. The risk to agencies of having unidentified contaminated sites within their property portfolios is the hidden environmental or human health harm that these sites may be causing; and even if these unknown contaminated sites do not pose immediate threats to human health or the environment, they may still present a significant financial liability. The problems that can occur with identified sites are highlighted in the report through a case study of the events surrounding the asbestos contamination of the Burswood railway reserve, recently the subject intense media scrutiny. Adding to the problems for agencies is that there is currently no authoritative definition of a ‘contaminated site’ within Western Australia to assist in their identification, and therefore the question of actually how many contaminated sites government owns or controls cannot be reliably estimated – however, in 1997 the Department of Environmental Protection conservatively estimated that there are at least 1,500 contaminated sites (both government and privately owned) on the Swan Coastal Plain alone. And the issues will not go away, says the Auditor General, as the “future demands for improved environmental performance from public sector agencies – whether imposed by growing financial liabilities, increasing community expectations, more prescriptive environmental legislation, stricter industry standards or other means – are likely to increase rather than decrease”. Essentially, Mr Pearson’s report examines the ability of 10 public sector land-holding agencies to identify the contaminated sites under their ownership or management control and to assess any associated health, environmental and financial risks that they may face. Agencies that are responsible for large numbers of sites and are active in property dealings, says the report, are exposed to increased land contamination risks, and therefore the public sector as a whole, and some individual agencies, have a high-risk exposure to land contamination. Eight out of the 10 agencies own or control more than 500 sites (the Department of Land Administration alone has responsibility for about 58,000 sites), with these eight agencies also actively involved in property acquisition and disposal. Six of the agencies are also active in leasing land to tenants, each of them owning more than 200 currently leased properties, with some of these properties leased to one or more tenants for decades – these older leases often not protected with clear environmental lease clauses, nor having assessments of suspected land contamination undertaken before lease commencement. Overall the examination concluded that two agencies had management policies, practices and systems in place that were consistent with best practice for the identification of contaminated sites and the assessment of associated risks, with the remaining eight agencies meeting best practice to varying degrees, in differing areas.
Ends/.
Media Contact: Peter Villiers, Manager Reporting and Communications |
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