News & Blog Posts · Energy & Climate

The Chain of Responsibility Bill, ensuring those who profit from resources clean up their mess

01 April, 2016

This Bill seeks to amend the Environmental Protection Act 1994 (Qld) to enhance environmental protections and give the Queensland Department of Environment and Heritage Protection (DEHP) more powers to help avoid State liability for environmental damage from sites operated by companies in financial difficulty.

The Environmental Protection (Chain of Responsibility) Amendment Bill 2016 was introduced in the Queensland Parliament on 15 March 2016. This Bill seeks to amend the Environmental Protection Act 1994 (Qld) to enhance environmental protections and give the Queensland Department of Environment and Heritage Protection (DEHP) more powers to help avoid State liability for environmental damage from sites operated by companies in financial difficulty.

The need for this bill has been highlighted recently through the financial downturn and environmental threats posed by sites such as the Yabulu Nickel Refinery and the Texas Silver Mine. As quoted from the Bill’s explanatory notes:

"Urgent amendments are required to ensure that the Department of Environment and Heritage Protection can effectively impose a chain of responsibility so that these companies and their related parties bear the cost of managing and rehabilitating sites…Without additional powers in the EP Act, there is a risk that the State will incur operational and financial responsibility for sites in financial difficulty."

Some of the key features in the Bill are:

  • providing DEHP with the power to issue environmental protection orders to a party that has some relevant relationship to the company that is in financial difficulty where there is a risk of, or existing, environmental harm occurring (for example a parent company or executive officer);
  • enabling the amendment of environmental authorities (EA) by DEHP on the transfer of the EA to require the provision of a financial assurance or bond;
  • the power to compel persons associated with companies in financial difficulty, including employees, to answer questions in relation to alleged offences committed; and
  • providing more powers to DEHP to access information for evidentiary purposes.

Case study example: Queensland Nickel Yabulu Refinery

The Yabulu refinery, previously operated by Queensland Nickel, sits in close proximity to the Great Barrier Reef Marine Park and World Heritage Area. Queensland Nickel went into voluntary administration in January 2016, causing significant job cuts and leaving concerns that tailings dams reportedly containing potentially toxic matter were left without sufficient staff to manage the environmental risk posed by these dams.[1] No financial assurance was held by DEHP for the refinery.

Ownership was transferred to Queensland Nickel Sales.[2] Without passage of this Bill, DEHP would have limited power to ensure that those who profited from the refinery are held accountable for any environmental harm that the activities may cause, and DEHP may therefore incur responsibility for managing this potential harm.

This Bill will ensure that persons ‘related’ to a company, for example, a person who has received financial benefit from the company’s operations or been in a position to influence the company’s environmental conduct, can be issued with an environmental protection order (EPO) to ensure that person funds or undertakes the necessary activities to avoid or remediate environmental damage from the activities. The power helps to ensure that DEHP does not incur the financial debt and resource burden of remediating or avoiding any potential environmental harm from the refinery’s operations.

The Bill assists in ensuring that companies and directors take their environmental obligations seriously and cannot bypass these obligations or escape financial liability through selling or trading out of their activities prior to fulfilling their responsibilities.

Retrospective elements

The Bill contains elements that are retrospective, meaning that they may operate with effect to circumstances that occurred prior to the passing of the Bill. These elements include, for example, requiring employees to answer questions in relation to an offence that might have taken place prior to the commencement of the Bill, as well as allowing DEHP to issue an environmental protection order for an offence that took place prior to the commencement of the bill.

While there is a general principle that legislation should not operate retrospectively, retrospectivity is allowed when drafting or amending legislation where it is needed to achieve a policy objective and where any potential adverse effects on individual rights are outweighed by the public interest.

The retrospective elements of this bill are fulfilling policy objectives of ‘facilitating enhanced environmental protection’ and ‘avoiding the State bearing the costs of managing and rehabilitating sites in financial difficulty’, and are seen to be necessary for the public interest in providing for environmental protection measures to help avoid environmental harm from abandoned or poorly managed sites operating under an EA surrounding these objectives.

If the Bill did not provide for these retrospective elements, DEHP may not have sufficient power to ensure that environmental harm or risk of environmental harm which is in existence prior to the passing of the Bill is avoided or remediated by the appropriate related person, and to avoid Government liability for this harm. These elements fit within the necessary requirements for retrospectivity and are therefore seen to be appropriate and necessary.

Queensland Government commended

EDO Qld commends the Queensland Government for taking strong action to prevent environmental harm, and State liability for this harm, being incurred through the irresponsible operations of some players in the resources sector. This legislation is essential for safeguarding Queensland against the repercussions of the steady downturn of the mining sector.

Environmental Defenders Office Queensland (EDO Qld) gives a strong legal voice to the environment when needed most.

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