The purpose of the Environmental Protection Act 1994 (Qld) (EP Act) is to protect Queensland’s environment and prevent environmental harm. The duties and obligations imposed by the EP Act are significant, and liability for non-compliance attaches to a broad range of potential offenders.
Companies are, of course, responsible for managing their environmental obligations. However, under the EP Act, the Department of Environment and Science may ‘pierce the corporate veil’ and impose personal obligations on ‘executive officers’ – broadly defined to include any person who is concerned with or takes part in the company’s management. Recent case law has confirmed this includes receivers, administrators or liquidators who assume control of the company.
Risks for receivers, administrators and liquidators are heightened when a company is involved in activities subject to high levels of environmental regulation, such as mining and industrial uses. This risk may be exacerbated where a company has a history of management issues or procedural failings, making it difficult to ascertain whether environmental obligations have been met.
While receivers, administrators and liquidators may not be liable for breaches that occurred before their appointment, they may be responsible for ensuring that past breaches are remedied, such as cleaning up contamination. They must also ensure that reasonable steps are taken to comply with environmental obligations, including any environmental approvals or statutory notices (such as Environmental Protection Orders or Clean Up Notices).
Reasonable steps to comply with environmental obligations may include engaging an appropriately qualified environmental consultant, providing training to all employees on their environmental obligations and implementing strict risk management procedures.
Receivers, administrators and liquidators must actively ensure that they meet their environmental responsibilities to avoid a significant fine or (in extreme cases) a prison sentence.