Whilst contamination risks for buyers and developers of contaminated land attract a lot attention,* the general position of land owners and occupiers can be overlooked.
Owners and occupiers, particularly councils and those with several properties in their portfolio, are often unsure about what they could and should be doing to minimise their risk and cost exposure with regard to contamination. No development may be planned. No imminent sale proposition may exist. The lease may have years to run.
Should we be comfortable? In short, no.
Top tips: back to basics
Here are my three top tips for owners and occupiers***
- Get a grip on the basics – where are your sites? (the jurisdiction may affect the contamination management regime) and what is known about contamination? If you don’t know the answer to the latter, engage an environmental consultant and lawyer to help you develop a sensible plan for investigating any contamination. Such a plan will take into account considerations such as the invocation of legal professional privilege and/or use of voluntary environmental audits and legal notification requirements relating to notifying contamination to the environment regulators.
- Understand where your legal risk is coming from: regulatory requirements and civil liability. Exercise due diligence. Although perhaps not immediately apparent, environmental law may impose legal requirements (and offences) in relation to pollution and contamination management and liability (on-site and off-site). You may also be at risk from civil claims for damages by people affected by contamination, and your handling of it. Claims arising from negligence, nuisance and trespass are, in my opinion, becoming “live” issues for many clients. Don't be fooled by the lack of case law - such cases are often settled out of court. Finally, what is your contractual exposure to liability, under leases, licences and other commercial contracts (e.g. for the supply or storage of a potentially contaminating product)?
- Create a smart plan to manage your risk, prioritise sites and budget for any investigation or remediation works, given the risks identified. Keep a watching brief on factors that could affect your risk profile, such as residential encroachment, delineation of areas for investigation of emerging contaminants, and of course, any sales and purchases of land in your portfolio.
I recently addressed industry landowners and occupiers, councils, and regulators at the Australian Environment Business Network’s Managing Contaminated Land Workshop. In October, I also presented to contamination professionals at the Australasian Land and Groundwater Association’s “When things go legal” session. The contemporary risk landscape for dealing with contamination is changing** and those who take prudential steps to understand and manage their risk, will in my view, fair better than those who adopt a business as usual or “do nothing” approach.
Aside from any upcoming regulatory changes (which would be reason enough to warrant reviewing contamination risk), there are often solid practical reasons to take early action. First, contamination dealt with at an early stage may be cheaper than attempting to investigate and remediate contamination down the track (depending of course on the type of contamination). Second, if you were not the original polluter of the land, there may be recourse to recover damages from the original polluter (or another party), but such cases are often time-limited, so delay does not assist you.
Strategic thinking and a comprehensive understanding of your risks may significantly help to minimise cost and legal exposure. For an abridged version of my recent presentation on this topic click on the link below.
Click here to view the presentation.