In his book, Making Peace With the Planet (1990), well-known environmentalist Barry Commoner gives evidence that, despite more than twenty years of public agitation, legislation, and the use of economic and market instruments, the environment in the USA has improved very little. Similarly, in NSW, despite 20 years of environmental regulation and charges, fish and other marine organisms in near-shore Sydney waters have accumulated organochlorines in levels far above the National Health and Medical Research Council's (NH&MRC) maximum residue limits. Fishing bans are in place in various places throughout NSW, including Port Kembla (where BHP discharges its wastes) and Homebush Bay in Sydney. Bathing water quality in the Hawkesbury River has declined markedly.

This case study examines the history of direct regulation by the State Pollution Control Commission, (SPCC), responsible for environmental regulation from 1972 to 1991, and (in the next article) the use of economic instruments by the Sydney Water Board to control industrial waste discharges into the sewers. (The newly formed Environmental Protection Authority (EPA) has now taken over the responsibilities of the SPCC.)

Direct regulation by the SPCC

When the Clean Waters Act was established in NSW in 1970 to clean up the state's rivers and waterways, the government was careful to ensure that the legislation would 'cause minimum hardship to industries and services which need to use areas of water for waste disposal' (Sydney Morning Herald, 12 March 1969). The legislation was based on the concept of assimilative capacity, and did not aim to eliminate pollution but rather to keep it within controllable levels. It stated that:

where a degree of pollution is unavoidable because of the need to dispose of sewerage and industrial wastes, it is permitted in a controlled fashion designed to meet the needs of the community as a whole. (NSW Legislative Assembly 1969)

Each waterway was to be classified according to its use. For each classification there would be a standard of water quality set which would imply acceptable pollution levels for that waterway. Once a waterway was classified, a polluter would need a licence to discharge waste into it. The licence would specify the nature, quality and quantity of waste that could be discharged. In other words, classification of the waterways determined the degree to which a body of water could be polluted.

When the NSW Clean Waters Act and Regulations came into force at the end of 1972, six classifications for waterways were prescribed:

S&emdash;specially protected waters

P&emdash;protected waters

C&emdash;controlled waters

R&emdash;restricted waters

O&emdash;ocean outfall waters

U&emdash;underground protected waters

The particular classification a waterway was to get would depend on a balance of costs and benefits; it would take account of amenity values, and the requirements of industry and government to use the waterway for waste disposal. It was a system with built-in flexibility which did not require firms to install the best practicable technologies unless the SPCC deemed it absolutely necessary.

The Clean Waters Regulations established in 1972 contained the legal conditions for each classification. For ocean waters they required:

• wastes are so discharged that the rate and volume or the nature, and concentration thereof will not adversely affect beaches …
• wastes are not to be discharged into these waters
  1. unless the wastes are visually free from grease, oil and solids and free from settleable matter …
• wastes are not to be discharged if the resulting concentration of wastes in the waters&emdash;
  1. is or is likely to be harmful, whether directly or indirectly, to aquatic life or water-associated wildlife;
  2. gives rise or is likely to give rise to abnormal concentrations of the wastes in plants or animals; or
  3. gives rise to or is likely to give rise to abnormal plant or animal growth.

At the end of 1975, new regulations were introduced which made it an offence for anyone to discharge wastes into waterways without a licence, whether or not those waters were classified. Classification was virtually abandoned in 1979. The SPCC claimed that the work of classification was labour intensive and could not be continued in the face of staff cutbacks. Another unstated reason was that classification of waterways such as the harbour and the ocean would have required the SPCC to set licence conditions that the water board would not have been able to meet.

The SPCC claimed that, despite the absence of classifications, it still set standards for the water quality to be achieved in each waterway. However, the abandonment of classification in NSW increased the flexibility and discretionary powers of the SPCC. It was able to treat firms on the same waterway differently, and set licence conditions without reference to legally mandated and publicly debated water quality criteria. Given the SPCC's lack of independence from government, its effectiveness in pollution control depended very much on the policy priorities of the government of the day.

The Clean Waters Act forced a few industries to install rudimentary pre-treatment equipment where it was not too expensive. But little would have been achieved in the Sydney area had it not been for the massive diversion of industrial wastes from Sydney's rivers to its sewerage system. Paul Landa, when Minister for Planning and Environment, boasted in a letter to O. H. Miller, dated 21 November 1978, that trade wastes from over six thousand factories had been connected to the sewerage system from the commencement of the Clean Waters Act in 1972 up to the end of 1978.

The rivers were therefore cleaned up at the expense of the ocean and bathing beaches. Rather than increasing licence conditions and getting individual firms to install more effective pollution control measures, the SPCC took the easy way out and diverted the pollution to other areas of the environment that were assumed to be less sensitive.

A new classification system was drawn up in 1989. It specifies water quality goals and objectives which are guidelines for decision-makers rather than legal standards or statutory limits that have to be met. The new classification system is to be administered by the EPA, and it is proposed that a similar classification system be the basis of national water quality criteria.

The stated rationale given for revising the classification system was that the old system did not work for non-point sources of pollution; it did not specify particular uses or allow flexibility in the choice of the set of uses for a waterway, and it did not provide incentives for water quality improvements because classifications were set to suit existing uses. Regarding the latter point, it was argued that the old classification system was 'perceived in some quarters as an invitation to pollute up to a certain level' (SPCC 1989a). Yet the new classification is unlikely to produce a better situation.

The new classification system, like the old one, assumes that there should be different levels of protection for different waterways, and that these should be decided on the basis of cost&endash;benefit considerations, the assimilative capacity of the waterway and the existing environmental conditions. The existing environmental conditions might include biological properties of the area, the uses to which the waters are put and the actual despoiling that has already been suffered. By these means, a degraded area might warrant less protection than a pristine one.

The classification system is to occur in two stages. In the first stage, two broad levels of protection will be established. (In the second stage, catchments and subcatchments will be classified in consultation with the public.) Level 1 protection is maximum protection for pristine waterways that have not been degraded. There are thought to be very few of these in NSW&emdash;mainly headwaters of streams, rivers in natural parks, and places where few people go. The classification says that these waters should not receive any waste discharges.

Level 2 protection is a 'practical level of protection for modified aquatic ecosystems'. Since there is almost no toxicity data for local species of fish and other organisms, water quality standards are derived from data on overseas species (mainly from North America). Even these data are inadequate, because they are mostly based on tests for concentrations of particular pollutants that will immediately kill the organism rather than those that will harm them, affect their breeding patterns or kill them in the long term.

The response of environmentalists to the new classification system was scathing. In a joint position paper issued when the system was proposed, the Total Environment Centre, the Nature Conservation Council, the Australian Conservation Foundation, the National Parks Association, Stop The Ocean Pollution and Friends of the Earth all called for the system to be withdrawn and completely redrafted, because it would result in degradation of water quality and associated environmental values. Their critiques is shown below:

How the classification system fails to protect the environment

1. Classification favours developers

   There is an inbuilt bias in the classification system favouring development against protection of environmental qualities.

2. No viable avenue for triggering stage two classification

   The Discussion Paper provides no credible reasons to explain why developers and total catchment management committees will have any interest in moving beyond stage one of the classification process.

3. Water quality protection not guaranteed

   No mandatory controls are proposed, so any legislative amendments can not guarantee further protection and/or enhancement of environmental values.

4. Stage one does not provide a relevant environmental context

   The generalised geographical zones make a nonsense of ecological parameters. Another effect of the stage one classification will be to downgrade protection of pristine streams. Polluting development in virgin catchments will easily meet the less strict prescribed goals and objectives.

5. Pollution will be legitimised

   A stage one classification will suggest to land use managers and the SPCC that the community is not serious about protecting affected streams and consideration of the goals and objectives will be treated as a mere procedure.

6. Independent assessment of waterway values

   In order to protect environmental quality an independent environmental body should assess waterway values. This body should not be the SPCC or EPA which is responsible for pollution abatement.

7. Retain class O for ocean discharge

   The classification of ocean waters will be redefined under the proposed changes to the Clean Waters Regulations, breaking the Government's promise that Class O would remain unchanged.

8. Ambiguities of the SPCC proposals

   The proposed waterway classification system is unclear … The economically based human use criteria should not be used to describe pristine natural waterways.

   Source: ACF, NCC, NPA, STOP, TEC & FOE 1991.

A group of scientists have identified the following weaknesses with water quality standards in Australia in general:

• Water quality criteria rely on the extrapolation of lethal concentrations to so-called 'safe levels'.
• Pollutants are usually mixtures, interaction between pollutants occurs and synergism/antagonism may affect result [sic].
• Single species toxicity testing is not always applicable to predicting the response of whole ecosystems.
• Water quality criteria ignore the possible effects on biota from consumption of their food in which the pollutant may be concentrated (bioaccumulation).
• No consideration is made of the biologically active form of the pollutant (speciation) nor the prevailing conditions which may influence uptake (eg salinity, temperature etc).
• Water quality criteria do not take into account that inputs of the pollutant may not be continuous but intermittent.
• Rarely is consideration given to contaminants in sediments. (Maher et al. 1992, p. 36)

The SPCC discussion paper (1990c) admits many of these problems. However, the SPCC has not taken a precautionary approach in the face of these huge uncertainties. For example, under the Clean Waters Regulations, wastes were not to be discharged into the ocean if they were likely to be 'harmful' to aquatic life or water-associated wildlife or cause 'abnormal concentrations' in plants or animals. The new classification scheme defines 'harmful' and 'abnormal concentrations' according to schedules.

In the case of 'abnormal concentrations' in plants and animals, schedule 13 sets out limits on how much toxic waste in the fish is to be considered abnormal. It does this in a table entitled 'Criteria for protection of human consumers of edible fish'. This table sets out the residue levels of toxic materials in edible portions of the fish that should not be exceeded to be safe for human consumption. This has nothing to do with what might be considered abnormal for fish by marine biologists. The first sign that abnormal concentrations are occurring usually occurs in the liver of the fish&emdash;yet the livers are not edible and would not be covered by these criteria.

This is despite the discussion paper on the new classification system stating that :

It must be kept in mind, when considering the ecological consequences of pollution, that an ecosystem involves complex interactions between biological and abiotic components. Consequently, interference with a given element or process may have unexpected and far reaching consequences for other elements and processes within the system.

This is often overlooked by those who advocate only the protection of species directly useful to people in isolation from the associated aquatic community. (SPCC 1990b, p. 52)

Licences and enforcement

The SPCC, which was supposed to regulate the Sydney Water Board and what it discharged into the ocean, was dependent on the board to take the industrial waste diverted from the rivers. It claimed in 1978 that:

The existence of a well planned major sewerage system which discharges via ocean outfalls and serves the industrial areas of the basin, and the cooperation of the Metropolitan Water Sewerage and Drainage Board in accepting increased loads of industrial wastes, has made the implementation of point source control effective from the outset. (Clean Waters Advisory Committee business papers, 9 March 1978, held by the EPA)

The SPCC's dependence on it obviously gave the water board a measure of power in their dealings with one another, and made it very difficult for the SPCC to regulate the board's discharge of industrial waste into the oceans. The licences for the water board's main ocean outfalls were indicative of the SPCC's inability to regulate the board. They specified that sewage should be subject to existing treatment processes rather than specifying effluent quality to be achieved. There were no limits on toxic waste, bacterial or viral concentrations set down in these licences until 1989.

The weakness of the SPCC in the face of industrial and government polluters can also be partly explained by the composition of the board that controlled it. It was made up of four government representatives, including one from the Sydney Water Board, plus government appointees representing primary industry, secondary industry, commerce, the Shires Association, local government, recreational activities and conservation. (The first appointee representing conservation when the SPCC started out was the NSW Manager of ICI, and the director had previously been a director of Caltex Oil and manager of Australian Oil Refineries.) There has been criticism that the composition of the SPCC and the committees that advised it led to a conservative bias. It was also pointed out in parliamentary debates at the time the legislation went through that the groups represented had a vested interest in pollution and that, although individual representatives of various government departments might be dedicated and devoted, they were bound as public servants by the terms of their employment and by ministerial directions.

Limited powers and lack of staff always dogged the SPCC. In 1987, it only had five inspectors in Sydney to make sure that no-one was discharging without a licence and that those with licenses were keeping to their licence conditions. The SPCC was increasingly forced to deal with this problem by getting polluters to monitor themselves. In its 1988 annual report, the SPCC outlined a new system of self-monitoring aimed at shifting the prime responsibility for environmental monitoring of discharges from itself to the polluters.

The Sydney Water Board has been monitoring itself for years and still does. It was only after the adverse publicity about fish contamination in 1989 that the SPCC finally placed limits on a few toxic substances in water board licences. The licenses issued in May 1989 set maximum concentrations for the five toxic substances in the effluent: mercury, chlordane, HCB, BHC and heptachlor&emdash;those that had shown up in very high levels in fish in bioaccumulation studies.

Other toxic substances remained unregulated, because there was no evidence of them causing a major problem. This policy was a reactive rather than an anticipatory one, choosing to act after a problem occurred rather than to prevent the build-up of toxic materials in advance.

By July 1989, the licences had been changed so that those maximum levels for the five toxic substances had become median levels. (See Table 13.1.) In other words, they only had to be met half the time. This use of a median is incomprehensible in terms of environmental protection. Bioaccumulation of these substances in marine life depends on the total volumes being discharged, and yet a median limit only refers to the less worrying half of the total flow.

Table 13.1. Licence conditions for Sydney's outfalls, July 1989.

Pollutant	Quarterly median (micrograms/litre)
BHC (Benzene hexachloride)	0.06
Chlordane	0.01
Heptachlor	0.006
HCB (Hexachlorobenzene)	0.1
Mercury	0.5 (now 2.0 at Malabar)

Source: SPCC 1989b, p.3.

The licence for the Malabar sewage treatment plant which came into force on 1 July 1990 was loosened by raising the limit for mercury by four times. This was done to accommodate an agreement between the Sydney Water Board and ICI. The licence for the North Head sewage treatment plant which came into force at the same time allowed not only more grease and oil into the ocean, but also more solids&emdash;which means more viruses and heavy metals.

Similarly, when a 1989 report found that more than half of the water board's inland sewage treatment facilities were not complying with their licence conditions, those conditions were relaxed 'to ensure licence compliance' (SPCC 1990, p. 52). The licences were adjusted to fit the existing level of pollution. The loosening of licences, not only for the water board but also for private companies such as BHP and Caltex, is part of the new EPA's policy of basing licence conditions on 'immediately achievable reality' or 'prosecutable reality'. The idea is that licence limits should be relaxed where equipment installed 'could not, when efficiently operated and maintained, meet the limits' (Court 1990, p. 1) Rather than licence limits representing targets or performance contracts, they would represent what the polluter was in fact already equipped to achieve.

Recently, this approach to licensing was challenged in the courts. Environmental activist A. J. Brown took the EPA to the Land and Environment Court for the licence it granted to Australian Pulp and Paper Mills (APPM) to discharge into the Shoalhaven River. Among other things, Brown alleged that the EPA had acted illegally and irresponsibly in considering the economic consequences to APPM in deciding to loosen its licence (Susskind 1992). In his judgement that the case was in the public interest and should go ahead, Justice Stein pointed out that the challenge might affect a large number of licences in NSW. Brown lost the case.

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