NSW overhauls environmental legislation, expanding liability and strengthening enforcement powers

On 24 February 2022, the NSW Parliament passed a Bill to amend five key pieces of environmental legislation. The amendments are wide-ranging and will have significant impacts on the liability of directors and businesses for environmental offences. The amendments also strengthen the NSW Environment Protection Authority’s ability to hold offenders to account.

Snapshot

• The Environment Legislation Amendment Bill 2021 (NSW) (Bill) amends five pieces of environmental legislation.
• The key changes include extending liability for environmental offences to related bodies corporate and directors, strengthening dumping and contamination management laws, lowering the threshold for issuing clean-up notices and prevention notices, and making the NSW Environment Protection Authority (EPA) more independent and skilled.
• The Bill has significant impacts on director and manager liability for environmental offences and the powers of the EPA.

Overview of the Bill

The Bill principally amends five pieces of environmental legislation:

• Protection of the Environment Operations Act 1997 (NSW) (POEO Act);
• Contaminated Land Management Act 1997 (NSW) (CLM Act);
• Pesticides Act 1999 (NSW) (Pesticides Act);
• Radiation Control Act 1990 (NSW) (RC Act); and
• Protection of the Environment Administration Act 1991 (POEA Act).

The key changes are summarised below.

Extending liability for environmental offences to related bodies corporate and directors

The second reading speech notes that some businesses use complex corporate structures to avoid clean-up and compliance costs.

To address this issue, the Bill has amended the POEO Act, CLM Act, Pesticides Act and RC Act so that, if a corporation is convicted of an environmental offence, then the prosecutor can obtain a court order that any of the following persons or another entity the court considers appropriate pay to the EPA an amount representing the monetary benefit that the person obtained as result of the offence:

• a related body corporate (as defined in the Corporations Act 2001 (Cth)) of the convicted corporation; and
• a person who is or was a director of the convicted corporation or its related body corporate at the time of the offence.

The Bill also makes it an offence under each Act for the above persons to receive monetary benefits as a result of the commission of a proven environmental offence of a corporation.

Strengthening dumping and contamination management laws

The Bill makes various amendments designed to ensure that those responsible for dumping or contamination are held to account. These include:

• amending s 143 of the POEO Act to extend the offence of unlawfully transporting or depositing waste to the owner of a vehicle involved in transporting the waste;
• introducing a new s 307A into the POEO Act to allow the EPA to impose restrictions on the use of, or public positive covenants on, land for the purpose of enforcing a condition of an environment protection licence (EPL) or the suspension, revocation or surrender of an EPL; and
• amending the POEO Act, CLM Act and RC Act so that the financial capacity of a licensee or the addressee of a management order is a basis upon which the EPA may require financial assurance to be provided.

Lowering the threshold for issuing clean-up notices and prevention notices

The Bill amends s 46 of the CLM Act so that the EPA may issue clean-up and prevention notices not only in relation to land that has been declared to be significantly contaminated, but also land in relation to which the EPA has been notified under s 60 of the CLM Act.

As the second reading speech states, this enables the EPA to respond to active pollution quickly while contaminated land assessments are underway, which can take several months.

Making the EPA more independent and skilled

The Bill amends s 13 of the POEA Act so that the EPA is no longer subject to the control and direction of the Minister for Energy and Environment. Instead, the Minister may only give directions “of a general nature” and not relating to a specific matter being considered or determined by the EPA, such as a decision to institute criminal or related proceedings.

The Bill also amends s 15 of the POEA Act so that, when recommending appointees to the Board of the EPA, the Minister is to have regard to the desirability that the Board have skills and experience in human health, compliance and regulation and Aboriginal cultural values, in addition to the areas of skills and experience that were already prescribed by the Act.

Current trend

The Bill is consistent with current trends to update environmental legislation and expand the scope of liability for environmental offences. For example, in Queensland, the Environmental Protection (Chain of Responsibility) Amendment Act 2016 (Qld) effectively pierced the corporate veil by broadening the range of persons and companies who may be issued with an environmental protection order. This applies in situations where the company is not able to comply with its environmental obligations and was introduced in response to financial difficulties at sites such as the Yabulu Nickel Refinery.

Impacts

The Bill will become law and will immediately commence once it has received royal assent.

Once it commences, the Bill will have significant impacts on all directors and businesses that carry out activities that may give rise to environmental liability, as it will increase the risk of successful regulatory actions being taken by the EPA.

If you have any questions about the implications of the Bill for you or your business, please do not hesitate to give us a call.

By Peter Briggs, Partner, Tom Dougherty, Senior Associate and Zhongwei Wang, Solicitor

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