Environment Minister Gabrielle Upton has recently announced that New South Wales will become the first state in Australia to implement a framework requiring environmental offenders to hand over the monetary benefits they obtain through criminal activity .
The powers to make orders requiring offenders to pay monetary benefits acquired as a result of environmental offences already exist under key pieces of environmental legislation. For example, section 249(1) of the Protection of the Environment Operations Act 1997 (POEO Act) provides that the Land and Environment Court and Supreme Court may impose such an order. In addition, section 249(3) of the POEO Act provides that the regulations may prescribe a protocol to be used in determining the appropriate amount of the monetary benefit acquired by the offender.
To this end, the NSW Environment Protection Authority (EPA) has now published Guidelines on recovering monetary benefits from environmental offenders (Guidelines). The Guidelines aim to provide a more consistent, transparent and efficient approach to recovering monetary benefits and address:
- why monetary benefits should be recovered
- when the EPA will seek monetary benefit orders
- how the EPA determines what should have been done to comply
- how the EPA investigates and calculates monetary benefits
- how non-accountants can calculate monetary benefits
- how the EPA reconciles requests for monetary benefit orders with other court orders.
The EPA has also released the Non-Compliance Economic Assessment Tool (the NEAT Model) which is accompanied by the NEAT Model User Guide, both of which are available on the EPA website. The NEAT Model is a calculator tool which uses the method set out in the Guidelines to calculate monetary benefits.
The introduction of this framework is said to have the effect of deterring prospective offenders from engaging in environmental crime, whilst simultaneously operating as an incentive for operators to take proper precautions to prevent their occurrence.
The benefits targeted by the framework encompass not only illegal profits generated within the course of business, but also those gains that arise from avoiding or delaying making payments in order to comply with relevant environmental legislation.
Specifically, the EPA have stipulated that a monetary benefit can be obtained by:
- reducing capital costs, including equipment and infrastructure costs
- reducing operational costs, including labour hire, consultants fees and energy costs
- generating illegal profits through methods such as operating without a licence or approval; and/or
- gaining an illegal competitive advantage, including where offenders are able to lower prices due to the savings made by failing to pay compliance costs.
To illustrate, waste may be unlawfully disposed of in order to avoid payment of disposal costs such as the waste levy. By way of example, NSW Police recently uncovered 17,000 tonnes of asbestos contaminated waste which had been removed from Green Square and unlawfully disposed of at a Central Coast property .
Where it is determined that an offender has gained a monetary benefit, the EPA will begin investigating the precise nature of the benefit that has been obtained before deciding whether or not to seek a monetary benefit order. In making this determination, the following will be considered:
- the nature and environmental impact of the breach
- environmental performance of the offender
- environmental performance of the industry
- the nature of the offender.
Ultimately, however, it will be for the Court to decide whether or not such an order should be imposed upon an offender, depending on the facts and circumstances of the case.
The EPA will be reviewing the initial outcomes of cases where monetary benefits orders are sought in order to determine whether or not the approach taken needs to be refined or extended so as to capture a greatest number of offenders.