Learn what financial assurances are and if you need one.
Financial assurances are a regulatory tool intended to prevent the Victorian community bearing the financial cost of cleaning up a site. A financial assurance works like a security deposit. By providing it, a duty holder assures EPA that if a site needs to be cleaned-up, funds are available.
The Environment Protection Act 2017 specifies that EPA may require a financial assurance:
The Regulations detail the permission activities that may need a financial assurance.
You may need a financial assurance as a condition of a development licence, operating licence or permit for activities including:
If you think you may need a financial assurance, we recommend you read Financial assurance for permissions and contaminated land management (publication 2002). This document details the laws about financial assurance.
Operators of landfills and waste resource recovery facilities need to submit a financial assurance proposal with their licence or permit application. The proposal should estimate the amount needed if the site has to be cleaned up or restored.
For help with your proposal, read Calculation of financial assurance for landfills, reportable priority waste (RPW) management and waste and resource recovery facilities (publication 2003). This document outlines EPA’s methods for calculating financial assurance for permits and licences.
In addition to the calculation method published by the Authority for financial assurance, the Environment Protection Act 2017 also requires that the Authority has regard to a reasonable estimate of costs of remediation and clean-up associated with a particular activity. EPA recognises that published guidance does not perfectly suit every activity or circumstance. In implementing the financial assurance program and where a specific permissioned activity has been deemed to require a financial assurance, the Authority can and does require evidence-supported financial assurance proposals from individual permission holders where the activity materially differs from that described by guidance.
For other prescribed permission activities, EPA will calculate the amount of financial assurance based on the information provided in the permission application.
EPA generally requires financial assurance in the form of a bank guarantee. Other forms of financial assurance may be appropriate in some circumstances. Forms of financial assurance (publication 1595) describes the types of financial assurance and when they’re acceptable.
EPA can make a claim on a financial assurance if:
If EPA makes a claim, we can require you to replace the amount of financial assurance.
Reviewed 10 January 2022