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Amended NSW Environmental Legislation: Impact on director and manager liability

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Author: Michelle Leong

The Environment Legislation Amendment Bill 2022 (NSW) (Bill) came into effect on 4 March 2022 amending key environmental protection legislation[1].

The Bill’s reforms impact the liability of current/former directors and managers[2] for environmental offences by corporations and extend the enforcement powers of the Environmental Protection Agency (EPA).

This article highlights the Bill’s key amendments to the Protection of the Environment Operations Act 1997 (NSW) (PEO Act) relevant to directors and managers of a corporation.

Key amendments to the PEO act

Clean-up, prevention and prohibition notices

The EPA has power to issue supplementary clean-up and prevention notices to current/former directors and managers of a corporation and a related body corporate if a corporation has not complied with a previous environment protection notice.

The EPA may also recommend to the Minster for Environment and Heritage to issue a supplementary prohibition notice to any of the abovementioned persons if a corporation has not complied with a previous prohibition notice.

‘Fit and proper’ person

The EPA may consider the conduct of current/former directors of a corporation, or of a related body corporate, and a related body corporate, in determining whether a corporation is a ‘fit and proper’ person when making environment protection licensing decisions.

False or misleading information

Two new offences were introduced:

  1. Giving false or misleading information to the EPA is prescribed as an executive liability offence. A defence is available for directors and managers of a corporation who establish they took all reasonable steps to ensure the information was not materially false or misleading; and
  2. Knowingly giving false or misleading information to the EPA, which attracts the maximum penalty of a fine or imprisonment for 18 months, or both.

Proceeds of environmental crime

Across key environmental protection legislation it is an offence for the following persons to receive, acquire or accrue a monetary benefit resulting from the commission of an offence by a corporation:

  • a person who is, or was, at the time of the commission of the underlying offence, a director or manager of the corporation;
  • a person who is, or was, at the time of the commission of the underlying offence, a director or manager of a related body corporate; and
  • a related body corporate.

The EPA or a prosecutor can apply to the Land and Environment Court for the recovery of monetary benefits from any of the abovementioned persons who have benefitted from the commission of an offence by a corporation.

 

References

[1] Contaminated Land Management Act 1997 (NSW)

Pesticides Act 1999 (NSW)

Protection of the Environment Operations Act 1997 (NSW)

Radiation Control Act 1990 (NSW)

[2] A person involved in the management of the affairs of the corporation or body corporate.

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