QUEENSLAND-headquartered law firm Cooper Grace Ward is warning company officers, financiers, shareholders and other related people that they can now be personally liable for company breaches under the Environmental Protection Act 1994 (Qld).
On April 22, the Queensland Government passed the Environmental Protection (Chain of Responsibility) Amendment Act 2016 to drastically broaden the application of the Act.
According to Cooper Grace Ward co-founder David Grace, the amendments were triggered as a consequence of concerns that taxpayers may end up paying for the costs of environmental rectification works at the Queensland Nickel refinery near Townsville, as a result of the Clive Palmer-owned operator of the refinery being placed in administration.
Mr Grace said before the amendments, the Department of Environment and Heritage Protection could generally only issue an environmental protection order to companies or individuals who caused environmental harm or failed to comply with environmental conditions imposed by the Department under the Act.
Under the recent amendments, the Department can now issue an environmental protection order to related bodies corporate, executive officers, secured parties, mortgagees, financiers, shareholders, and ‘related persons’, such as holding companies and landowners.
“This means that parties that had no involvement in causing the environmental harm or failing to comply with environmental obligations can now be required to comply with environmental protection orders,” Mr Grace said. “The costs in complying with these orders, such as rehabilitating affected land, can be significant.”
Mr Grace said as the Department could consider matters arising prior to April 20, 2016, in determining “whether a person constitutes a related person, people who may be at risk should consider whether they have sufficient contractual protection under existing insurances, leases, sale contracts and joint ventures if environmental harm is caused”.
He said ‘at risk’ parties could minimise their exposure through appropriately drafted obligations in leases and other contractual arrangements.