Malouf still pushing Waste Incinerator in Western Sydney

Ian Malouf’s The Next Generation Pty Ltd (TNG Pty Ltd) has not given up on its proposal to build a waste incinerator at Eastern Creek. Despite a seven year long community campaign opposing his plan and a new NSW regulation gazetted in July, which many believed would stop the project, he continues to push his project through the courts.

In 2019, Malouf launched an appeal against the NSW Independent Planning Commission’s (IPC) refusal of his application. The IPC, a nearby landowner Jacfin Pty Ltd and Blacktown Council are opposing the appeal. The appeal is listed for hearing on September 4, 2023. ( You can read more about the background to the case in our last post.)

While the appeal has been slowly moving forward, the NSW LNP government has been developing a Waste to Energy policy position. This resulted in the NSW Waste to Energy Infrastructure Plan that was finalised in 2021. In February 2022, the government published a draft regulation that appeared to restrict waste to energy operations to four regional precincts. TNG assumed that this would mean that its project could be blocked and lobbied the government to revise the regulation in a way that would allow its project to be approved. They argued that that if it was passed, the regulation would be invalid. Nevertheless, the Perrottet government proceeded to pass the regulation into law in July 2022.

The parties opposing the appeal then filed fresh documents in the appeal that argued that the new regulation prohibited the project as it was not in one of four regional precincts. TNG responded by beginning a separate case in the Land and Environment Court, challenging the validity of the regulation.

This challenge was heard in the NSW Land and Environment Court in October and the Chief Judge Preston delivered his judgement on November 24. He found: “Next Generation has not established that the Thermal Energy from Waste Regulation is in excess of the regulation-making power.” In other words, he found the regulation is valid, dismissed TNG’s case and ordered it to pay court costs.

Many of those interested in the issue assumed that TNG would now finally give up on its appeal. So far, this has turned out to be incorrect. In this post, we attempt to explain why it’s not game over for Malouf.

TNG lawyer tells Court that appeal continues

Community Environment Monitoring attended the Appeal case management hearing in the NSW Land and Environment Court on Friday, December 2. The purpose of this hearing was to finalise the timetable for experts’ reports and conferences about those reports that will take place before the hearing. Both sides are conducting new air quality modelling and health impacts investigations.

Not long after the hearing began, the Commissioner asked if the judgement in the ‘validity’ case had been delivered. The lawyers explained that the judgement had been delivered and the applicant (TNG) had lost. She then asked whether that would affect the proceedings. TNG’s lawyer explained that TNG was considering an appeal and its position in relation to the case.

The rest of the hearing was about the schedule of experts’ reports. TNG is beginning fresh air quality modelling in January 2023 and other experts on both sides are locked in. Expert evidence is costly to both sides. Consultants set aside time well in advance. But Malouf is hugely wealthy as a result of his waste and real estate activities and so may be prepared to risk even more court costs.

Community disappointment

Anti-incineration campaigners were jubilant when they heard that TNG had lost its challenge to the regulation. Local politicians, both LNP and Labor, have told them the regulation banned incineration in the region. Uncertainty around the project means that incineration will once again be on the political agenda in Western Sydney as NSW goes to the polls in March 2023.

What is going on?

One thing is certain – the Perrottet government plans to develop a waste to energy industry in NSW. The Labor opposition’s position is less clear. Labor did not support a Greens bill to ban waste to energy in NSW in 2020.

The misunderstanding about the consequences of TNG losing the case shows how careful one should be in judging a situation before a court case is finished.

According to its lawyer, TNG has not decided whether to appeal. On that basis alone, it would not withdraw its appeal. If they don’t appeal, they could still withdraw.

But it is also possible that even though they lost the case so comprehensively, Malouf can see a way through. The regulation set up four precincts –

The regulation then sets up some exemptions ( TNG does not seem to meet them) and then states: The need for any additional energy from waste infrastructure precincts will be determined by future needs analyses to be conducted in 2025 and 2030. If additional precincts are required, they will only be considered where they meet the principles set out in the Infrastructure Plan and the requirements of the Regulation.

This seems to leave a door open for more projects in 2025 and 2030. However the regulations state that these would be restricted to old mine sites, former thermal energy projects and Special Activation and Regional Precincts ( which are outside Greater Sydney).

The explanation to the regulation also states that any project not approved by July 2022 is ruled out.

The EPA’s regulation certainly conveyed a strong message that the EPA is opposed to incineration in the Greater Sydney basin. But regulations can be easily changed, which leaves communities living around the incinerator very nervous. They know that Sydney’s waste industry is heavily concentrated in the city’s West and that waste is increasingly becoming an environmental, economic and political issue.

Land and Environment Court Chief Judge Preston’s judgement seemed like a win for the opponents of Malouf’s proposal. But there is another reason why it might be too soon for opponents to finally assume the battle is over.

There are two paragraphs in the ‘validity’ proceedings which have left some well informed community members involved with the issue feeling very uneasy.

TNG’s Waste to Energy proposal is a ‘State Significant’ project – what difference could this make?

Preston waited until the end of his judgement to deal with the trcky issue of State Significant proposals. In pars 62 and 80 of his judgement, there is a reference to the Environmental and Assessment Act prevailing (overriding) the POEA Waste to Energy regulation if it is approved State Significant Infrastructure.

As you can see from Ian Malouf’s original application to NSW Planning, his project is State Significant Development.

If a proposal is State Significant is approved, according to Section 4.42(e), it must be granted an environmental protection licence. In other words if the the Land and Environment Court upheld its appeal, the NSW EPA would have to grant it a licence to operate.

TNG had argued that one of the reasons why the regulation was invalid was that it was inconsistent with provisions in these provisions of the NSW Environmental and Planning Assessment Act. Near the end of his judgement, Preston addresses this point.

I conclude with the second inconsistency claimed by Next Generation – the inconsistency between the requirement in s 145 of the Thermal Energy from Waste Regulation for refusal of an application to issue a licence in the circumstances specified in s 145 and the requirements in provisions of the EPA Act (ss 4.42, 4.50 and 5.24) for approval of an application to issue a licence in the circumstances specified in those provisions. There may be circumstances where these provisions of the Thermal Energy from Waste Regulation and the EPA Act are in conflict, but that conflict is readily able to be resolved by determining which provision is to prevail in the event of inconsistency. On a proper construction, the provisions of the EPA Act prevail over s 145 of the Thermal Energy from Waste Regulation in the event of inconsistency.

In other words, the Thermal Energy from Waste Regulation is valid but to the extent that it is inconsistent with the EPA Act, the EPA Act trumps the regulation.

It seems that Preston has not ruled out Malouf’s chances altogether.

This means that Malouf’s appeal against the IPC’s refusal of his application is still on foot. For the time being, we recommend caution in drawing any firm conclusion about whether or not TNG still has any chance of building its incinerator.

CEM will update the community if we get more information. This post has been edited since it was first published.

Malouf’s TNG appealed against Preston’s decision – read what happened here.

You will find an earlier report with more background here.

Note : Malouf’s Waste to Energy Incinerator proposal is right next door to Bingo’s massive Dial a Dump facility which includes a giant landfill and waste recycling facilities. Bingo is a subsidiary of Macquarie and Malouf is a director of the Macquarie subsidiary that manages the Dial-a-Dump waste facility. Dial-a-Dump was owned by Malouf until 2018. Read more reports about Bingo and Dial-a-Dump here.