As we enter a new year, it is timely to review environmental compliance to manage the risk of significant enforcement and prosecution actions being taken for non-compliance.
The Queensland Department of Environment and Heritage Protection (DEHP) is increasingly focussed on environmental compliance and enforcement. As the ‘regulator’ under the Environmental Protection Act (EP Act) and other environment related legislation, DEHP is placing greater emphasis on policing and enforcement.
The Minister for Environment and Heritage Protection, the Honourable Andrew Powell, has repeatedly made it clear that the failure to comply with environmental conditions set by the State Government is taken seriously and the Government will pursue any company found to be doing the wrong thing.
The Queensland Government’s commitment to take action in response to environmental breaches is demonstrated by the following prosecutions, which are amongst a number of actions finalised in late 2013:
- Cougar Energy fined $75,000 for releasing a cancer causing chemical into ground water at its coal gasification trial project near Kingaroy;
- A mine operator fined $120,000 following a release of mine affected water during the 2011/12 wet season in far north Queensland. The mine owner was separately fined $80,000 in relation to the same discharge;
- An earth moving company fined $45,000 over unauthorised spills of waste oil and diesel at Yarwun Quarries near Gladstone. The quarry owner was also separately fined $45,000;
- Queensland Alumina Limited fined $125,000 and had a conviction recorded for causing serious environmental harm by allowing the release of caustic aerosol spray which damaged vehicles and nearby houses;
- Rio Tinto fined $35,000 for breach of an environmental condition at its Yarwun alumina refinery by failing to allow enough storage in its Residue Management Area dam.
Lessons for business and industry
Whilst each of these cases turned on their own facts and circumstances, there are a number of issues which should be heeded by business and industry in relation to their operations.
Know and understand your obligations
Environmental authority holders and those operating under environmental approvals should ensure that they fully understand the scope and nature of approvals (including conditions) and comply with relevant obligations.
Many compliance issues arise due to misunderstanding or a lack of awareness of relevant conditions of environmental approvals with a common offence prosecuted by DEHP being the failure to comply with an environmental authority, which has a maximum penalty of $1,100,000 for a corporation, or $220,000 or 2 years’ imprisonment for an individual.
Given the potential complexity and technical nature of environmental approvals, it is imperative that obligations are properly understood. This includes ensuring that relevant management, employees and contractors are also aware of these obligations and that appropriate training and systems are in place to achieve compliance.
This is particularly important because many environmental prosecutions have been taken by DEHP in circumstances where no actual environmental harm has been caused but relevant persons nonetheless failed to comply with environmental approvals.
Properly install and maintain equipment
The failure to properly install or maintain equipment is a common cause of unauthorised discharges to the environment that have resulted in prosecution. Take care to ensure that operations are designed and managed in accordance with environmental approvals.
In particular, if design or operational requirements imposed by approvals are ambiguous or inconsistent, clarification should be sought from DEHP and, if necessary, changes made to approvals.
Ensure contingency measures are in place
Another common issue that has resulted in prosecution is the failure to have adequate mitigation measures in place to manage incidents (for example, bunding around chemical or waste storage areas).
While an unauthorised discharge may result in prosecution even where the discharge has not caused environmental harm, the containment and management of contaminants should still be a priority as the nature and extent of environmental harm caused will be a significant factor in sentencing.
Significant penalties apply for causing serious environmental harm with the maximum penalty being $2,290,750 for a corporation, or $458,150 or 5 years’ imprisonment for an individual. Managing activities to prevent environmental harm should therefore be a key focus.
Don’t ignore the regulator
Under DEHP’s compliance and enforcement policies, prosecution is typically a ‘last resort’ and there are a range of tools and actions available to deal with compliance issues that provide the opportunity for early resolution and can avoid prosecution action being taken.
Many prosecutions occur in situations where owners and/or operators have been given repeated warnings and opportunities to modify their conduct to ensure compliance, but have failed to do so.
For example, in a number of cases DEHP issued Environmental Protection Orders (EPOs) that were ignored and so not complied with. The failure to comply with an EPO is itself an offence under the EP Act and such non-compliance has been the basis for several prosecutions with the maximum penalty for contravening being $1,100,000 for a corporation, or $220,000 or 2 years’ imprisonment for an individual.
Fines are only part of the costs
As demonstrated by the prosecutions referred to above, environmental offences can result in substantial financial penalties being imposed by the Courts. Furthermore, in addition to the court imposed fines, defendants are often ordered to pay the prosecutor’s legal and investigation costs, which themselves can be substantial.
The penalties imposed by the courts are in addition to any clean-up or mitigation costs, such as equipment upgrades or the redesign of facilities that may be incurred by business and industry to ensure operations are made compliant.
What to do
When dealing with environmental compliance, prevention is better than cure and there are substantial benefits in ensuring that operations are compliant with environmental approvals.
This, however, is not necessarily a simple exercise given the complexity of some approvals and situations where multiple approvals may apply to particular operations or sites.
Environmental authority holders and operators can take several practical steps to promote compliance and minimise risk, including:
- Identify all environmental approvals applying to their operations and review conditions to ensure these are consistent with current operations;
- Review approvals and conditions to ensure there are no ambiguities or inconsistencies and seek clarification or changes where necessary;
- Ensure required mitigation measures and management plans are in place and up to date;
- Check that appropriate systems and training are in place to ensure that relevant persons are aware of requirements;
- Review processes and systems for responding to incidents, including investigation and reporting.