On February 24, 2022, the New South Wales Parliament passed a bill to change five key pieces of environmental law. The amendments are far-reaching and will have significant implications for the liability of directors and companies for environmental offences. The amendments also strengthen the ability of the New South Wales Environmental Protection Authority to hold violators to account.
- the Environmental Legislation Amendment Bill 2021 (New South Wales) (Invoice) amends five environmental legislative acts.
- Key changes include extending liability for environmental offenses to corporate entities and related directors, strengthening dumping and contamination management laws, lowering the threshold for issuing clean-up notices and prevention notices, and the establishment of the NSW Environment Protection Authority (APE) more independent and qualified.
- The bill has significant implications for the liability of directors and managers for environmental violations and for the powers of the EPA.
Overview of the bill
The bill primarily amends five environmental laws:
- Environmental Protection Operations Act 1997 (New South Wales) (POEO Law);
- Contaminated Land Management Act 1997 (New South Wales) (CLM Law);
- Pesticides Act 1999 (New South Wales) (Pesticides Act);
- Radiation Control Act of 1990 (New South Wales) (RC law); and
- Environmental Protection Administration Act of 1991 (POEA Law).
The main changes are summarized below.
Extend liability for environmental offenses to related legal persons and directors
The second reading speech notes that some companies use complex corporate structures to avoid cleanup and compliance costs.
To address this issue, the bill amended the POEO Act, CLM Act, Pesticides Act and RC Act so that if a company is found guilty of an environmental offence, the prosecutor can obtain a court order that one of the following persons or another entity the court deems appropriate pay to the EPA an amount representing the monetary benefit the person obtained as a result of the violation:
- a related legal entity (as defined in the Companies Act 2001 (Cth)) of the condemned company; and
- a person who is or was a director of the convicted company or its related body corporate at the time of the offence.
The bill also makes it an offense under each statute for the aforementioned persons to receive monetary benefits as a result of the commission of an environmental offense proven by a corporation.
Strengthening Spill and Contamination Management Laws
The bill makes various changes to ensure that those responsible for spills or contamination are held accountable. These include:
- amend section 143 of the POEO Act to extend the offense of unlawful transport or dumping of waste to the owner of a vehicle involved in the transport of waste;
- the introduction of a new Section 307A in the POEO Act to allow the EPA to impose use restrictions or public positive commitments on land for the purpose of enforcing a condition of a protection license of the environment (EPL) or the suspension, revocation or waiver of an EPL; and
- amending the POEO Act, the CLM Act, and the RC Act so that the financial capacity of a licensee or the recipient of a management order is a basis upon which the EPA may require the provision of security financial.
Lowering of the threshold for issuing cleaning notices and prevention notices
The bill amends Section 46 of the CLM Act so that the EPA can issue cleanup and prevention notices not only with respect to lands that have been found to be significantly contaminated, but also lands for which the EPA was notified under s. 60 of the CLM law.
As the second reading speech indicates, this allows the EPA to respond quickly to active pollution while contaminated land assessments are underway, which can take several months.
Make the EPA more independent and competent
The bill amends Section 13 of the POEA Act so that the EPA is no longer subject to the control and direction of the Minister of Energy and Environment. Instead, the minister can only issue instructions that are “general in nature” and not related to a specific matter being considered or determined by the EPA, such as a decision to pursue criminal or related charges.
The bill also amends section 15 of the POEA Act so that, when recommending persons for appointment to the EPA board, the minister must take into account the desirability of the board have skills and experience in human health, compliance and regulatory and Indigenous cultural values. , in addition to the areas of skills and experience already prescribed by law.
The bill is in line with current trends to update environmental legislation and expand the scope of liability for environmental offenses. For example, in Queensland, the Environmental Protection (Chain of Custody) Amendment Act 2016 (Qld) has effectively pierced the corporate veil by expanding the range of people and companies that can be issued an environmental protection order. This applies in situations where the company is unable to meet its environmental obligations and was introduced in response to financial difficulties at sites such as the Yabulu Nickel Refinery.
The Bill will become law and come into force upon receiving Royal Assent.
Once in force, the bill will have significant implications for all directors and companies that conduct activities that may give rise to environmental liability, as it will increase the risk of successful regulatory action by the EPA.