The new Labor government is yet to release details regarding many of its environmental policies. However, as Labor holds environmental protection as one of its key values,1 it is likely that it will take a proactive approach to environmental compliance and enforcement.
In this article, we highlight two reforms that were recently introduced under the former LNP government regarding environmental compliance and enforcement. These concern the increase in penalties for environmental offences resulting from a prosecution or the imposition of a penalty infringement notice (PIN).
Given Labor’s 'green' values, it is likely these changes will accord with the new government’s approach to environmental protection and enforcement.
By considering the practical implications of those reforms, it is clear that the cost of eco-crime in Queensland is on the rise and, more than ever before, environmental compliance is becoming not only a ‘social licence to operate’ issue but a commercial necessity.
Increased maximum penalties for environmental offences
As of 7 November 2014, maximum penalties significantly increased for a range of offences under the Environmental Protection Act 1994 (Qld) (EP Act). For some offences, this has resulted in more than a 300% increase in the maximum penalty. For instance, where the maximum penalty for a wilful contravention of a condition of an environmental authority was previously $1,138,500, it is now $3,557,810. Some other examples of the new maximum penalties for some offences are set out below.
click here to view table.
The deterrence argument
When explaining the justification behind increasing maximum penalties for certain environmental offences, the then Minister for the Environment, Andrew Powell, stated that 'strong penalties are necessary to emphasise the seriousness of offences and deter environmental wrongdoers'.3
This argument is frequently applied by governments when increasing maximum penalties for environmental offences. In New South Wales for instance, Bob Debus, the then Minister for the Environment referred to the increase in maximum penalties for environmental offences (in particular, maximum penalties for Tier 1 offences rose from $1,000,000 to $5,000,000) in the second reading speech for the Protection of the Environment Operations Amendment Bill 2005 (NSW) and said:
“This Bill will increase the fines and penalties in the Act to maintain their original deterrent value… These increased fines will send a strong message to potential polluters that they will be caught and they will be punished”.
Sherryl Garbutt, the then Minister for the Environment, also cited deterrence as a key reason for increasing maximum penalties under the Environment Protection (Enforcement and Penalties) Act 2000 (Vic) in the second reading speech of this legislation.4
Encouraging imposition of higher penalties
On face value, increasing maximum statutory penalties to deter potential offenders appears to be a reasonable and justified measure. However, if courts had previously tended to impose higher fines for environmental offences – that is, closer to the maximum limit – it is possible that a deterrent effect may have been achieved without the need for the legislature to increase the maximum limits.
On this basis, in addition to the deterrence justification, such reforms by legislatures may be an attempt to encourage courts to increase the penalties they impose for environmental offences. Historically, prosecutions for environmental offences in Queensland have resulted in the imposition of financial penalties well below the maximum allowed. For example, of the nine companies that were successfully prosecuted under the EP Act in 2011-2012, seven received fines of $100,000 or less,5 despite the maximum penalties for these offences ranging from $220,000 to $1,650,000. In 2013-2014, only three of the 14 finalised prosecutions resulted in fines in excess of $100,000.6 In that year, $150,000 was the highest fine imposed.7
In her article ‘Recent Developments in Sentencing for Environmental Offences’,8 Justice Rachel Pepper of the New South Wales Land and Environment Court considers this trend. She suggests it may stem from the fact that environmental prosecutions are generally heard in the lower court system (in Queensland, this is by a Magistrate) where the judges of such courts may not have specialist training or experience in environmental law. Justice Pepper concludes that this often results in lower and inconsistent fines being imposed than if the matter was heard in a higher court which may be more equipped, in both the judge’s training and experience, to determine an environmental prosecution.9
Another factor may be that the community’s views and values regarding environmental crime have changed over recent decades. In the past, the imposition of relatively low fines for environmental offences may have been seen as reasonable and consistent with community expectations. However, as the public becomes increasingly more environmentally aware and the media’s coverage of environmental issues becomes all-pervading, people often want harsher punishment for environmental offenders.
Although the maximum penalty for an offence is merely one factor a judge takes into account when sentencing, it does provide him/her with an objective measure of the seriousness of the offence. Accordingly, increasing the maximum penalty for environmental offences is likely to cause a court to find that such offences warrant a higher penalty than it would have imposed under the previous maximum limits.
Penalty infringement notices
In the past, penalty infringement notices (PINs) have been used by the Department of Environment and Heritage Protection (EHP) as a low cost enforcement tool as PIN recipients generally elect to pay the PIN amount rather than risk a prosecution.
The reforms relating to PINs for environmental offences may change the way PINs are used by the EHP and also change the way recipients respond to them.
When PINs may be issued
PINs are governed by the State Penalties Enforcement Act 1999 (Qld) and can be issued in relation to prescribed offences under a number of Acts and Regulations. Those prescribed offences are listed in the State Penalties Enforcement Regulation 2014 (Qld) (SPE Regulation).
In relation to the environmental offences, the EHP’s Enforcement Guidelines state that they are a way of responding to ‘minor breaches of legislation… which warrant some form of sanction, but which are not serious enough to warrant a prosecution’. These guidelines set out a number of principles which are to guide the EHP when deciding whether to issue a PIN. For instance, a PIN should only be issued where the facts of the offence are apparently indisputable and where the breach is not ongoing.
In reality, the vast majority of PINs are issued for the offence of contravening a condition of an environmental authority. This was illustrated in the financial year 2013-14, when 119 of the 167 PINs issued under the EP Act were in relation to this offence.10
Responding to a PIN
When a PIN is issued, payment of the penalty:
- does not result in a conviction being recorded against the recipient; and
- guarantees that the recipient cannot be prosecuted for the offence for which the PIN was issued.
However, if a person disputes the PIN, they must notify the EHP that they elect to have the matter heard by the Magistrates Court. In that instance, the EHP will then consider whether to commence a prosecution against the PIN recipient for the offence for which the PIN was issued. If the prosecution is successful, the court may impose a fine up to the maximum amount for the offence, which may be significantly higher than the penalty under the PIN. Further, a conviction may be recorded.
In practice and as noted above, PINs are generally a low cost enforcement option as PIN recipients generally elect to pay the PIN amount rather than risk a prosecution. This is often the case even when a PIN recipient considers that the facts and circumstances surrounding the alleged offence do not, in fact, amount to a breach. However, the legal costs and commercial risks associated with a prosecution can persuade a person that paying the PIN amount is preferable to challenging it.
Changes to PIN penalties
The SPE Regulation commenced on 1 September 2014, replacing the State Penalties Enforcement Regulation 2000 (Qld). The SPE Regulation increased the penalty under a PIN for a range of environment and planning offences, including offences under the:
- EP Act,
- Queensland Heritage Act 1992 (Qld),
- Nature Conservation Act 1992 (Qld),
- Water Act 2000(Qld),
- Waste Reduction and Recycling Act 2011 (Qld),
- Coastal Protection and Management Act 1995 (Qld), and
- Sustainable Planning Act 2009 (Qld).
The new penalties under a PIN have been introduced to reflect the increased maximum penalties for those offences under the EP Act.
The increased penalty under a PIN for a number of relevant offences is set out in the table below.
Click here to view table.
Effect of increasing penalties
PINs are generally a low cost enforcement option as PIN recipients generally elect to pay the PIN amount rather than risk a prosecution. This was certainly the case when the PIN amount was $2277. However, now that it has increased, in many cases to $11,385, it is potentially less likely that the vast majority of PIN recipients, particularly those who consider the PIN to be unjustly issued, will still opt to pay the PIN on the sole basis that it outweighs the costs and risks of a prosecution. That said, this fact alone is unlikely to affect the EHP’s decision to issue a PIN, as the department can still exercise discretion as to whether to prosecute a person if they challenge the PIN.
A fact that may increase the number of PINs issued for environmental offences is if the EHP has significant budgetary pressures, which it appears to have had over recent years and there is little to suggest that this situation will change under the new Labor government.11 In that case, the EHP may be more inclined to issue PINs as a first instance, low cost enforcement option rather than institute costly and resource-hungry court proceedings, where there is no guarantee of success. The increased PIN amounts may even contribute to this, as the payment of each PIN will reap higher returns now than before the penalty increase.
Among the many legacies left by the LNP government, the reforms that have resulted in an increase to penalties for environmental offences, both due to a prosecution or under a PIN, may have significant implications for business. Certainly, it increases the potential costs associated with committing an environmental offence and for that reason, it heightens the importance of environmental compliance.