Remote resorts can lose big bucks for back-of-house neglect

By Simmonds & Bristow

Water is an essential component of life, and for the 100 plus remote resorts in Australia and the South Pacific, providing fresh water and treating wastewater is a unique challenge.

Australia boasts some of the most beautiful off-grid locations in the world. Hidden resort gems, located in some of these areas, far away from the hustle and bustle of city life, offer guests an unparalleled experience combining the beauty and wonder of nature with relaxation in comfortable and sometimes luxurious accommodations with fine dining.

For these hospitality businesses, the focus is always to operate and maintain a great holiday experience front-of-house. Even highly experienced hospitality managers can be presented with back-of-house challenges they might not have encountered in an urban environment.

It's something the typical hospitality business manager isn't trained to deal with.

Without years of experience in managing water and wastewater operations as part of an accommodation complex, they may not understand how to comply with local drinking water and effluent water regulation requirements.

Unfortunately for these establishments, this vulnerability is known to the government departments responsible for environmental licencing in each state. They can be a target for compliance investigations and actions.

If your resort obtained an environmental authority or licence to operate water and wastewater facilities as part of its development application, and its recommendations or terms aren’t embedded in your operations and maintenance program, to be actioned or followed through on a regular basis, you have reason to be concerned.

It is known that in the aftermath of COVID-19 many resorts faced financial difficulties, or at least had to introduce some cost management measures to survive. Back-of-house operations can be seen as something that is allowed to drift, and even run down. This is particularly true for resorts using irrigation to land as a dispersal method for treated wastewater.

These systems are quite common for remote resorts as they are a sustainable solution to treating wastewater. They seem like a “set and forget” solution, right? Not so. Getting the balance of nutrients right for the specific soil type, drainage rate, and types of vegetation is a highly tuned operation requiring design by experienced environmental engineers and scientists, and oversight by experienced water management personnel, to maintain balance.

Once an irrigation plan is in place, taking into account flow rates, nutrient content, the spread of nutrients over an area, the rate of absorption by soil and plants and the ongoing integrity of system hardware (pipes, pumps etc), is highly dependent on regular checks and analysis because things can change over time.

Pipes can corrode and nozzles can block, leading to overwatering in some areas and underwatering in others. Rain, or lack of it, can alter the concentration of nutrients.

Non-compliance can not only have a detrimental impact on the environment, it can damage the reputation of a business that is promoting a pristine natural setting as core to its attraction.

Significant costs to mount a defence, and potentially, significant penalties, are just a part of the inconvenience to your business.

As a resort manager, it is crucial to be aware of the potential consequences of non-compliance with environmental regulations.

What happens if a business is hit with compliance or enforcement action from a state government environmental regulatory authority?

1. In the first instance, the business will receive a lot of paperwork that they have to read, understand, and respond appropriately to; a time-consuming task highly likely to distract from dayto-day business. Typically, they will need to collect a lot of data and make a case to help the department understand why they are not culpable or should not bear the maximum penalty. A lawyer will most likely be required to help them write this up. This response document can run to multiple (20 or so) pages, incurring legal fees easily in excess of $20,000, more likely circa $50 to $100,000.

Unless the response to regulator allegations document is fulsome, (always factual and truthful), and shows clearly that the regulatory authority has incorrect information in making an allegation in its first notice, it will then issue an allegation that they intend to prosecute, requiring the preparation of a defence. Experts will need to be sourced to demonstrate why you should not be penalised heavily, or at all, or that the situation is not as bad as the regulatory authority has estimated, or that it is easily rectified.

3. After all of this, the authority in question might take the view that they can see you are trying, but they want you to try harder, so they will issue an Environmental Protection Order which outlines the problem you must fix, within a specified timeframe. Note: They will not tell you how to fix it. They will direct you to secure the services of an independent consultant (a consultant satisfactory to them), to evaluate the issue and report back. The qualified person must inspect the problem and write a report outlining what needs to be done. The consultants' report may be anywhere between $10 to $20K, and the cost of implementation can run from $50K to many hundreds of thousands of dollars.

4. The (mandatory) response to a full prosecution can cost $500K, easily. Again, you will need to source expert witnesses and the matter will be protracted in court over many sessions whilst every piece of evidence is thoroughly investigated. During this process the distraction and stress of management and staff involved in the defence effort can be extreme, to the point of risking the closure of businesses.

Case study: Managing compliance the right way

A well-known country resort situated just steps away from World Heritagelisted forests, glistening waterfalls and breathtaking bushwalks was subject to a compliance finding by a state government environmental regulatory authority.

The resort owns and operates its own water and wastewater treatment facilities and is responsible for providing both safe and reliable drinking water to meet health regulations and Australian Drinking Water Guidelines, and treating wastewater (treated sewage) to a standard that permits disposal of treated water sustainably by irrigation.

As part of those obligations, they needed to manage the risk relating to drinking water safety, water supply security and continuity, as well as compliance with strict environmental licence conditions for wastewater treatment and disposal.

The resort is licensed under the Environmental Protection Act to operate and maintain their wastewater treatment plant. The resort’s authority to release treated wastewater for irrigation was limited to a discharge of a specific cubic meterage per day at particular water quality standards as a condition under their license.

It was found that the resort’s wastewater treatment facility (undetected by experienced resort managers) had released treated wastewater during rain events, due to the aging of some of the network and treatment infrastructure. Despite a willingness to contract someone to undertake operations and maintenance work, there was a lack of availability of suitably trained and experienced operators in their remote location. This made it hard for them to stay on top of wastewater quality compliance, including full preparation to deal with high flows, due to heavy rain events.

Like many hospitality and tourism businesses, the resort management's focus simply wasn’t on what was going on in the wastewater treatment plant, storage ponds and back paddock. It wasn’t until they were compelled to seek specialist help that they realised they were non-compliant, and the environmental regulator was asking questions.

After this event they decided a preventative approach would be best, contracting a department-approved water expert to provide light touch ongoing support, budgeted as part of their ongoing operations.

This approach has seen confidence restored in their operation by the regulatory authority, getting them off the radar for further scrutiny. Additionally, they no longer had to worry about sourcing these skills locally. If they continue with this approach, they will avoid the costs and disruptions associated with non-compliance, ongoing, and, if a mishap occurs, they will be able to rectify quickly before any major impacts occur, and they will be able to demonstrate a proactive approach.

The important thing to note is, it is never too late to get on the front foot, no matter how much ‘trouble’ you think you might get into for letting things go for too long.

Compliance can be costly, but it is nowhere near as costly as non-compliance, if it is discovered that you allowed a situation not only to develop but worsen. Regulatory authorities can be punitive, but they are committed to working with business managers to ensure that compliance is achievable and sustainable, and are proven to be very collaborative towards businesses that make an effort to get in front of it.

Resources

For Queenslanders, the DES has prepared a guide specifically for resorts and accommodation parks to help them manage their legislative compliance requirements: https://environment.des. qld.gov.au/__data/assets/ pdf_file/0024/87333/sewagetreatment-plants-factsheet.pdf

All State Government Environmental regulators will have similar tips, tools and resources.

Simmonds & Bristow have prepared a quick 8 question Quiz to test your general awareness of compliance obligations: https://www.simmondsbristow. com.au/ea-monitoring-quiz/