Regulatory position statement

A common understanding of our regulatory approach.

The NSW Environment Protection Authority (EPA) has prepared this regulatory position statement to

set out a common understanding of our responsive and risk-based regulatory approach
outline the environmental risk management principles used by the EPA.

This statement supports the consistent application of our regulatory approach across the areas that the EPA regulates.

The EPA’s purpose

The EPA protects our environment and the community. As the primary environmental regulator for NSW, the EPA works with business, government and the community to reduce pollution and waste in order to mitigate adverse impacts to the environment.

The EPA’s objectives under the Protection of the Environment Administration Act 1991 include to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, reduce the risks to human health and prevent the degradation of the environment.

The EPA’s vision, priorities and strategies are set out in our Strategic Plan 2017-21.

A responsive and risk-based approach

The EPA applies a responsive and risk-based approach to its regulatory functions. As an organisation regulating a diverse range of activities that have the potential to impact on the environment and human health, it is important that the EPA maintains consistency in the application of its regulatory approach.

The EPA defines a responsive and risk-based approach as

Responsive regulation	The EPA implements an escalating response to environmental issues and non-compliances based on a range of factors such as the nature, significance and impact of the issue or non-compliance as well as the compliance history and attitude to compliance of the offender. Any action taken by the EPA aims to ensure that the environmental impacts detected are minimised, contained or made good, and the sanction applied reflects the seriousness of the incident and acts as a deterrent to re-offending.
Risk-based regulation	The EPA makes informed decisions that ensure its compliance and enforcement activities focus on the largest risks to the environment and human health and target those businesses and people least likely to comply. The EPA’s risk-based approach includes A corporate planning framework that is evidence-based, iterative, inclusive and prioritises the allocation of resources towards the highest risk and emerging issues. Each layer of the planning framework sets out the functions, direction, programs and milestones for a range of regulatory responsibilities. A risk-based licensing approach that aims to ensure that all environment protection licensees receive an appropriate level of regulation based on past performance and the environmental risk of the activity the licensee is undertaking. The use of tailored regulatory approaches for dangerous goods, radiation and pesticides licences; forestry and waste regulation; incident classification and management; and other areas of regulatory responsibility. These approaches are the result of international and national frameworks, standards and processes, or are specifically developed for the EPA to consistently, effectively and efficiently exercise its regulatory functions. The EPA identifies a wide range of risks, including a subset related to environmental regulation and human health. This approach is consistent with the EPA’s approach to enterprise risk management as well as the NSW Treasury guidelines on risk management and the Australian/New Zealand Joint Standard on Risk Management (AS/NZS ISO31000:2009). The EPA’s enterprise risk management framework is overseen by senior executives and the EPA Finance, Audit and Risk Committee.

Responsive regulation

The EPA implements an escalating response to environmental issues and non-compliances based on a range of factors such as the nature, significance and impact of the issue or non-compliance as well as the compliance history and attitude to compliance of the offender.

Any action taken by the EPA aims to ensure that the environmental impacts detected are minimised, contained or made good, and the sanction applied reflects the seriousness of the incident and acts as a deterrent to re-offending.

Risk-based regulation

The EPA makes informed decisions that ensure its compliance and enforcement activities focus on the largest risks to the environment and human health and target those businesses and people least likely to comply.

The EPA’s risk-based approach includes

A corporate planning framework that is evidence-based, iterative, inclusive and prioritises the allocation of resources towards the highest risk and emerging issues. Each layer of the planning framework sets out the functions, direction, programs and milestones for a range of regulatory responsibilities.
A risk-based licensing approach that aims to ensure that all environment protection licensees receive an appropriate level of regulation based on past performance and the environmental risk of the activity the licensee is undertaking.
The use of tailored regulatory approaches for dangerous goods, radiation and pesticides licences; forestry and waste regulation; incident classification and management; and other areas of regulatory responsibility. These approaches are the result of international and national frameworks, standards and processes, or are specifically developed for the EPA to consistently, effectively and efficiently exercise its regulatory functions.

The EPA identifies a wide range of risks, including a subset related to environmental regulation and human health. This approach is consistent with the EPA’s approach to enterprise risk management as well as the NSW Treasury guidelines on risk management and the Australian/New Zealand Joint Standard on Risk Management (AS/NZS ISO31000:2009). The EPA’s enterprise risk management framework is overseen by senior executives and the EPA Finance, Audit and Risk Committee.

Refer to the EPA Compliance Policy for further information on the EPA’s regulatory system and its approach to regulation, compliance and enforcement.

Environmental risk management

In undertaking its regulatory functions, the EPA implements environmental risk management.

The EPA defines environmental risk as

Environmental risk	Environmental risk is the effect of uncertainty on the objectives of the EPA. Uncertainty arises when there is potential for an event to occur that would have an effect on the EPA’s ability to protect, restore and enhance the quality of the environment, reduce risks to human health, or prevent degradation of the environment. Environmental risk is generally expressed as the consideration of the likelihood of an event occurring and the consequence of the event with respect to harm to human health and the environment. The factors the EPA considers when assessing environmental risk are tailored to the area of regulatory responsibility as specialised interpretations of risk are sometimes necessary for the areas that it regulates.

Environmental risk

Environmental risk is the effect of uncertainty on the objectives of the EPA.

Uncertainty arises when there is potential for an event to occur that would have an effect on the EPA’s ability to protect, restore and enhance the quality of the environment, reduce risks to human health, or prevent degradation of the environment.

Environmental risk is generally expressed as the consideration of the likelihood of an event occurring and the consequence of the event with respect to harm to human health and the environment.

The factors the EPA considers when assessing environmental risk are tailored to the area of regulatory responsibility as specialised interpretations of risk are sometimes necessary for the areas that it regulates.

The EPA assesses environmental risk in a manner consistent with the principles defined by the Australia/New Zealand Joint Standard on Risk Management (AS/NZS ISO31000:2009)

Creates value	Contributes to the demonstrable achievement of objectives and improved outcomes for the environment and human health.
An integral part of organisational processes	Integrated into the responsibilities of management as well as planning and project management.
Part of decision making	Assists decision makers to make informed choices, prioritise actions and distinguish among alternative courses for action.
Explicitly addresses uncertainty	Takes account of uncertainty, the nature of uncertainty, and how it can be addressed.
Systematic, structured and timely	Undertaken in a systematic, timely and structured manner.
Based on the best available information	Inputs to the process are based on the best available information as well as accounting for the limitations of that information.
Tailorable	Tailored to the EPA’s internal and external context and risk profile.
Takes human factors into account	Recognises the capabilities, perceptions and intentions of internal and external stakeholders that can facilitate or hinder the achievement of objectives.
Transparent and inclusive	Involvement of stakeholders at multiple levels that is appropriate and timely, allows proper representation and assists in defining appropriate risk criteria.
Dynamic, iterative and responsive to change	Continually senses and responds to change as internal and external drivers change context and knowledge, and monitoring and review of risks takes place.
Facilitates continual improvement	Forms part of a structured approach to improve risk management.

Towards consistent regulation

The EPA is committed to being a regulator that applies its responsive and risk-based approach and implements environmental risk management in a consistent manner. This commitment assists the EPA to

focus on the largest risks to the environment and human health and targets those businesses and people least likely to comply
effectively implement an escalating response to environmental issues and non-compliances, where compliance and enforcement outcomes are consistent and predictable for similar circumstances.
deliver on its objectives to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, reduce the risks to human health and prevent the degradation of the environment.