Focus
Key amendments to Chain of Responsibility Bill
as passed by Queensland Parliament
Resources
22 April 2016
WHO SHOULD READ THIS
Financial beneficiaries of
Queensland projects that
involve an environmentally
relevant activity including any
company which has a
subsidiary involved in
Queensland projects carrying
out this type of activity.
THINGS YOU NEED TO
KNOW
The Queensland Parliament
has passed the Chain of
Responsibility Bill.
Late on 21 April 2016, the Queensland Parliament passed the
\
Environmental Protection (Chain of Responsibility) Amendment Act
2016 (Act).
The Act amends the Environmental Protection Act 1994 (Qld) (EP Act) so that
an environmental protection order (EPO) enforcing clean up and rehabilitation
costs may be issued to a ‘related person’ of a company operating in breach of
an environmental authority. ‘Related person’ is widely defined to include those
determined to hold a ‘relevant connection’ – including on the basis of receiving
a financial benefit or being in a position to influence compliance.
The Environmental Protection (Chain of Responsibility) Amendment Bill 2016
(Bill) was amended during debate in Parliament last night before it was passed
as law. The primary function of the new law remains.
A key message for holding companies and other related persons is that they
must take ‘all reasonable steps’ to ensure environmental compliance and that
the operating entity has made adequate provision for clean up costs.
to the Bill before it was passed
All reasonable steps to ensure compliance
The clear intent of the Act is to expose holding companies and anyone else with
as law, reinforcing the need for
a ‘relevant connection’ to the costs of environmental non-compliance.
holding companies and other
In deciding whether to issue an EPO to a ‘related person’, the Department of
Key amendments were made
related persons to take steps
to understand and manage
their increased exposure to
environmental risks.
Environment and Heritage Protection (DEHP) may under the Act as passed
consider whether the related person took all reasonable steps to ensure the
operator both complied and made adequate provision for clean up costs. In
doing so, DEHP should have regard to the extent of the company’s ability to
influence the operator’s conduct.
We would expect in the resources space that the provision of financial
assurance (FA) should be considered by DEHP to be adequate provision for
clean up costs.
In short, ‘related persons’ must review their procedures and consider how they
would demonstrate if needed that they took ‘all reasonable steps’.
'Significant' financial benefit
The broadest category of ‘related persons’ under the Act remains those that DEHP determines hold a ‘relevant connection’
to the company that caused the harm.
It its original form, the Bill proposed that DEHP could make such a determination where satisfied:
 the person is capable of benefiting financially, or has benefited financially, from carrying out a relevant activity of the
company, or
 the person is, or has been at any time during the past two years, in a position to influence the company’s compliance
with the EP Act.
As passed, the Act has upped the ante such that DEHP must be satisfied that the person has or is capable of “signficiantly
benefiting financially”. While this provides little in the way of certainty, entities such as minority share-holders or short-term
beneficiaries of environmentally harmful activities may take some comfort from the intent heralded by the change.
Land owners
The Bill initially proposed to capture all owners of land on which a company carries out or has carried out a relevant activity.
As recognised in the Agriculture and Environment Committee report, this had the potential of holding a vast range of
persons accountable for a company’s obligations, or liable for a company’s financial responsibilities, where those persons
may not have been in a position to influence or have control over the activities of a company.
Concerned by the Bill were persons with interest in freehold land, native title parties, third party graziers or agriculturalists.
Land owners underlying resources projects (other than related entities of the operator) have been given a reprieve under
the Act as passed. Also let off the hook are those who are capable of or who have significantly benefited financially under
an agreement relating to native title or cultural heritage, under a compensation arrangement made pursuant to resources
legislation or under a make good agreement pursuant to the Water Act 2000.
FA as condition to grant of stay
Under the Act as passed, a decision about the amount of FA required under an environmental authority may not be stayed
by a Court unless at least 75% of the disputed FA amount, as calculated by DEHP, is paid. This means that a company that
disagrees with an FA decision will need to pay 75% of DEHP’s calculated amount while contesting the decision in Court.
2 year review
Interestingly, the Minister must under amendments to the Act review the operation of the new provisions within 2 years of
their commencement to determine whether they remain appropriate.
Guidelines
As passed, the Act requires DEHP to consider any relevant statutory guidelines when deciding whether or not to issue an
EPO. The development of guidelines under this provision will be key to industry’s understanding of this new environmental
exposure and how best to manage it.
For further information on any of the issues raised in this alert please contact:
 Tim Hanmore on +61 7 3233 8955
 Damien Clarke on +61 7 3233 8951
Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus 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.