McR update: Chain of Responsibility

WHO SHOULD READ THIS

• Investors, owners, operators and decision-makers of projects with an environmental impact in Queensland.

THINGS YOU NEED TO KNOW

• The draft Chain of Responsibility guideline has been released for public comment.
• Five former executives of Linc Energy have been charged with various offences against the Environmental Protection Act 1994 (Qld).
• The Strong and Sustainable Resource Communities Bill proposes to ban underground coal gasification and encourage local and regional employment.

WHAT YOU NEED TO DO

• Consider providing comments on the draft Chain of Responsibility guideline and the Strong and Sustainable Resource Communities Bill.

Draft Chain of Responsibility guideline

On 14 November 2016, the Department of Environment and Heritage Protection (DEHP) released a draft statutory guideline regarding implementation of the Environmental Protection (Chain of Responsibility) Amendment Act 2016 (Qld) (CoRA).

The guideline is intended to clarify departmental decision making on matters such as whether a person has a relevant connection with a company, how regulators should decide whether to issue an environmental protection order (EPO) to related persons of the company, and which related persons to target.

Once it has been approved by regulation, the DEHP must have regard to the guideline when deciding to issue an EPO to a related person.

Some key principles from the guideline include:

• the issue of a CoRA EPO will be explored where enforcement against environmental authority holders or operators will not achieve restoration or rehabilitation of the environment, or the protection of the environment from harm
• being a related person does not of itself trigger the issue of a CoRA EPO. Culpability will be established prior to a related person receiving a CoRA EPO
• DEHP will only consider issuing an EPO to a related person where a company has avoided, or attempted to avoid, its environmental obligations
• there is no pre-determined order in which the DEHP will pursue related persons, and
• a security or bank guarantee will not be required under an EPO where it relates to the same matter for which financial assurance is already held and is sufficient to cover the cost of complying with the requirements of the EPO.

Relevant connection

One of the critical points to be addressed in the guideline is clarification regarding the circumstances under which a person will be considered to have a relevant connection with the company by virtue of a significant financial benefit. The guideline provides that:

• ‘significant’ means important, notable or of consequence, having regard to context
• relevant considerations include:
  • the proportion of the benefit relative to the total assets or benefit available from the activities carried out under the EA, or
  • the proportion of the benefit, relative to the costs of restoring or rehabilitating the environment, or protecting the environment from harm, and
  • only significant financial benefits from the period of time relevant to the causation (and, if relevant, mitigation) of the issue or incident being investigated will be considered.

The guideline provides specific examples of when the DEHP may determine that a person has a relevant connection on the basis of significant financial benefit. Similarly, examples are provided in relation to persons with a relevant connection on the basis of position to influence the company’s compliance with environmental obligations.

Importantly, if it is determined that the related person was not culpable for a matter, or was culpable but took all reasonable steps in the circumstances, the DEHP will not issue the person with an EPO.

Stakeholders should review the CoRA guideline and consider whether it provides sufficient comfort and clarification regarding the implementation of CoRA and the factors influencing a decision to issue an EPO to a related person.

The draft guideline is available for public comment until 5pm, 25 November 2016.

Former Linc Energy executives face prosecution

Five former executives of Linc Energy (including former CEO Peter Bond), former general managers and former chief operating officers have been charged in relation to environmental offences including failure to ensure the company complied with the Environmental Protection Act 1994 (Qld).

The company itself is also facing five charges of wilfully causing serious environmental harm.

The charges relate to alleged contamination caused by Linc Energy’s underground coal gasification operation near Chinchilla.

As investigations continue, it is possible that additional charges could be laid.

New Bill – Strong and Sustainable Resource Communities

The Strong and Sustainable Resource Communities Bill 2016 was introduced to Parliament on 8 November 2016. The Bill proposes to make various amendments to the Mineral Resources Act 1989 (Qld) including to:

• prohibit underground coal gasification activities
• prevent new large resource projects operating with 100% fly-in fly-out employees where nearby regional communities have a capable workforce
• prescribe a social impact assessment process for large resource projects, and
• require large resource projects to consider local residents for employment.

The Bill is open for public submissions until 10am, 12 December 2016. For more information click here.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.