Recent prosecution highlights the significant costs that can flow from causing environmental harm

Companies, and their directors and officers, can face significant financial penalties in relation to environmental incidents.

A Brisbane company recently pleaded guilty to breaching a condition of an environmental authority. For a period of four hours in May 2014, approximately 80 to 90 tonnes of catalytic dust was released from the defendant’s petroleum refinery and settled on 25,000 vehicles that were stored nearby.

The Wynnum Magistrates Court imposed a penalty of $20,000 (which was minor, since the maximum penalties that could have been imposed are $530,100 for an individual and $2,650,500 for a corporation). However the penalty pales in comparison to the $756,888 the company was required to spend cleaning up the resultant environmental harm. The company was also ordered to pay investigation and legal costs totalling $8,652.

Even in this case, where there was no long term environmental damage, the company cooperated with the regulator, had no previous convictions, and pleaded guilty, it is clear that the accumulated costs following environmental harm can be substantial.

The Department of Environment and Heritage Protection (DEHP) has access to a wide range of enforcement options including:

• warning notices and letters;
• infringement notices imposing a penalty;
• administrative notices and orders regarding actions that must be taken to remedy the effects of an offence;
• court orders to compel a party cease actions and remedy the effect of an offence;
• enforceable undertakings as an alternative to prosecution;
• prosecution; and
• suspension or cancellation of permits, licences or authorities.

The DEHP will consider the level of culpability and whether the offence is repeated or ongoing in deciding which enforcement option to pursue. If an accident occurs that causes or is likely to cause environmental harm, it is important to get legal advice as soon as possible because what you say and do can be used as part of any prosecution.

Typically, enforcement action will be taken against a company for the actions of its employees and agents, however, where the environmental harm is caused by an act demonstrably outside the scope of employment then DEHP may pursue an individual instead.

Where it can be established that a director or officer had knowledge of an event and showed an intention to engage in the act or omission, it is likely the DEHP will take enforcement action against that director or officer. Similarly, if an individual was negligent or reckless in respect of an act or omission, or failed to monitor and assess risks associated with the company’s activities then enforcement action may be taken.

You should also be aware that, following the recent commencement of the Environmental Protection (Chain of Responsibility) Amendment Act 2016, environmental protection orders can be issued to not only directors and officers but also to related bodies corporate, executive officers, secured parties, mortgagees, financiers, shareholders, and ‘related persons’, such as holding companies and landowners.

If you have any questions about how environmental obligations apply to you or your company, and how you can mitigate the risks, please contact Leanne O’Neill.