19 December 2006
Key Points:
In a move to introduce new, tougher environmental accountability measures, WA's Environment Minister recently announced that from 1 January 2007 all new environmental licences will contain a condition requiring companies to submit environmental audit compliance reports detailing whether the company has complied with their licence conditions.
Bringing Western Australia in line with New South Wales, as of 1 January 2007 a new condition will be imposed on all new environmental licences requiring the licence holder to provide Annual Environmental Compliance Reports. The Reports will detail whether or not the licencee has complied with its environmental licence conditions throughout the year, and in the case of companies, must be signed by the principal executive officer or two directors.
In addition to requiring licence holders to incriminate themselves, this new condition has the potential to expose companies and their officers and seniors managers to prosecution if the Reports are found to contain inaccurate or misleading information.
Self-incrimination
While companies have no right against self-incrimination, nevertheless companies in Western Australia have until now had no positive obligation to admit liability. Where it may appear that a company has breached environmental laws it is generally obliged to report the potential contravention and to face a possible prosecution - but it is up to a court to decide if an offence has been committed on the basis of the case put forth by the State. In other words, innocent until proven guilty.
The proposed licence condition reverses that position. Companies (and their officers and senior managers) who are licence holders will now have an obligation to admit liability where they think that the company has breached a condition of their licence.
By having to report on their compliance status, in effect companies will be admitting to possible breaches in advance of a court determination. Draft guidelines recently issued by the Department of Environment and Conservation note that any statements made in the Compliance Report will be prima facia evidence of the facts represented.
Offence for providing false and misleading information
In addition to the requirement for incriminate itself, a company will expose itself to prosecution under section 112 of the Environmental Protection Act 1986 (WA) if a Report is found to be false or misleading in a material particular. It is also possible that an officer who signs off on a Compliance Report which he or she knows contains false or misleading information will also be exposed to personal liability under section 112 if the court considers the officer to be the "person" submitting the information to the Department.
Of course, should the company be prosecuted, under section 118 of the Environmental Protection Act officers and senior managers may be deemed liable and also prosecuted. There are only very limited defences to the deemed liability.
Conclusion
While New South Wales has had the power to institute, and has instituted, a similar condition in licences issued under the Protection of the Environment Operations Act 1997 (WA) for several years, this is a new initiative for Western Australia. Unlike NSW, this initiative is being instituted by the Minister without express power in the Environmental Protection Act.
Company officers need to be aware of and understand the consequences of signing a Compliance Report. Officers also need to make their managers and directors aware of these consequences so as to ensure that the information provided in Compliance Reports is sufficiently checked and verified. Accordingly, properly developed and instituted environmental management systems will become critical.
For further information, please contact Brad Wylynko.
