Case Study: Tenant-Owned UPSS Infrastructure Advisory
Many airports, logistics facilities and industrial assets contain underground petroleum storage systems (UPSS) owned and operated by tenants. While this structure is common, responsibility for managing environmental risk does not disappear simply because the infrastructure is tenant-operated.
LRE has recently been assisting with advisory services relating to tenant-operated fuel infrastructure at an operational airport. The review highlighted a common issue encountered across ageing fuel assets: incomplete compliance records, inconsistent environmental monitoring programmes and uncertainty regarding whether regulatory obligations are actually being met.
Under the NSW Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2019, the person responsible for a UPSS is legally required to ensure the system complies with the Regulation. Where lease, ownership or operational arrangements are complex, determining who has management and control of the system is critical. If lease arrangements fail, tenants vacate, or operational responsibilities become unclear, environmental liabilities and the cost of managing contamination can ultimately revert to the landowner.
A key requirement under the Regulation is the preparation and implementation of a Fuel System Operation Plan (FSOP). The FSOP is a mandatory, site-specific document that outlines how the system is managed, maintained and monitored to prevent, detect and respond to fuel leaks. The FSOP must be kept onsite, maintained up-to-date and readily accessible to the lessor, site personnel, and regulatory authorities.
Key Components of an FSOP
Under the Regulation, a FSOP should include:
details of the loss monitoring system used for the UPSS
an incident management procedure for leaks and spills
maintenance details and a maintenance schedule for the system
current as-built drawings, or a best-available approximation where older records are incomplete
a site plan showing tanks, pipework, buildings, fences, gates, drainage, services, unsealed areas and groundwater monitoring wells
relevant design, installation and operational standards and specifications
an inventory of staff induction and incident management training
details of the person responsible for the UPSS, including a 24-hour contact
details of the landowner, where different from the person responsible
land title particulars
access and security details for the system
groundwater monitoring or alternative leak detection records
details and certification of any tank abandonment or decommissioning
the location of records required under the Regulation.
UPSS Regulatory “Must Haves”
In addition to maintaining and implementing a compliant FSOP, UPSS operators should also be able to demonstrate:
compliant leak detection and/or groundwater monitoring systems are operational
documentation confirming routine monitoring, maintenance and integrity testing are being completed
suspected leaks and pollution incidents are notified to the Appropriate Regulatory Authority where required
environmental records are retained for the required statutory periods
decommissioning and remediation works are completed, validated and reported appropriately
environmental responsibilities between tenant and asset owner are clearly defined and understood.
In LRE’s experience, one of the biggest risks for asset owners is not necessarily confirmed contamination, but the gradual breakdown of compliance management over time. Records become fragmented, consultants change, monitoring programmes lose continuity and infrastructure ages without periodic independent review.
For landlords and airport operators, this can create significant exposure during lease renewals, redevelopment works, transactions, regulator review, pollution incidents and tank decommissioning works.
Importantly, even where contamination has not been confirmed, an inability to demonstrate compliance with the Regulation can itself become a material operational and commercial issue.
LRE regularly assists clients with:
UPSS compliance reviews
FSOP preparation, reviews and gap assessments
groundwater and surface water monitoring programmes
contamination investigations associated with fuel infrastructure
remediation strategy advice
lease entry and exit environmental assessments.
Understanding where compliance gaps exist before a problem emerges is often the difference between proactive environmental management and a costly remediation project.
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