Points to consider to mitigate risk
Checklist of actions:
These points are discussed in further detail below.
Is there an environmental representative at the table
Businesses will be making many decisions about the allocation of personnel and financial resources, including how or when to scale down operations and, in some cases, whether operations can be pivoted to produce other products which may assist in the COVID-19 crisis.
In our experience, the risk of an incident is higher during such times of rapid change. Standard operating procedures which have been developed and refined over a long period of time may not currently be applicable. New and untested impacts and risks may arise as a result of the changes.
When discussing the COVID-19 response and any management of change issues, it is critical that a senior environmental specialist is involved in those discussions. To do otherwise is to heighten the risk that key environmental impacts, approvals and statutory requirements are overlooked or misunderstood and, consequently, increases the risk of an incident or other non-compliance occurring.
Crisis and business continuity plans
Most businesses are having regard for their crisis and business continuity plans at this time. Those plans should include a risk management plan, an analysis of business impacts (for example, identification of key assets, sources of revenue, resources, suppliers and risks), a contingency plan and a recovery plan.
It is common for such plans to focus primarily on the human health and financial aspects of the organisation, with specific incident response plans focussing on environmental impacts. However, it is important that environmental risks, impacts and obligations are an integral part of your wider business continuity plan. As detailed below, various environmental regulators have publically stated that they expect businesses to have and implement business continuity plans to ensure compliance with all environmental requirements are complied.
To the extent that your business continuity plan does not already (or adequately) address these issues, it will be necessary to work this through ‘on the run’ (with appropriate environmental subject matter input) and then ensure the plan is updated to reflect the lessons learnt from this process. Some of the matters to be considered are set out below.
Analyse business activities
Ensure you identify all of the business activities that might be impacted by COVID-19 related restrictions and business impacts and environmental risks associated with those. Try to contemplate all things that may occur, however unexpected they may be. Assess how you will manage those risks. Have a concrete plan for managing those risks and contingencies.
Review all primary and secondary environmental approvals
Environmental approval conditions will impose requirements in relation to things such as contaminant release limits, hours of operation, monitoring and reporting. It is also highly likely that approvals will require compliance with secondary management plans, such as construction environmental management plans and site management plans. These secondary plans should not be overlooked when carrying out this step. This is particularly so in the case of environmental incident response and management plans, which will provide for notification and escalation to particular people within your organisation.
Conduct an audit of these requirements and assess the extent to which compliance will be impacted by the COVID-19 crisis. On the basis that you will still be expected to comply with these requirements, determine how you will do so. What resources do you need to deploy? Do you have people with the right environmental expertise on the ground or able to be contacted? If you do not have sufficient working and/or onsite staff to ensure compliance, how are you going to resource these functions?
In the case of an incident response and management plan, it is particularly important that those people with formal roles are contactable, in good health to fulfil their role and able to attend site if necessary. It is worth nominating others by way of contingency in the event of an incident or illness.
Duty to notify
The EP Act imposes various obligations to notify DES of environmental harm.2 Like all environmental obligations, these duties still apply throughout the COVID-19 crisis.
Depending upon the circumstances, the timeframe within which notification must be made is 24 hours after becoming aware of the event or as soon as reasonably practicable after becoming so aware.
Notification must also be made unless the person ‘has a reasonable excuse’. The ‘reasonable excuse’ defence is also available for a range of offences under the EP Act, including in relation to the compliance of a clean-up notice or a direction notice.
The term ‘reasonable excuse’ is not defined in the EP Act and whether it is possible to demonstrate the existence of a reasonable excuse will depend on the circumstances. Whilst you may be able to show that it was not possible to notify within time because of restrictions or impacts associated with the COVID-19 crisis, we expect that such a defence is only likely to be accepted in very limited cases.
COVID-19 related travel and social distancing restrictions may mean that DES officers are not able to travel to undertake site audits and investigations. It is likely that DES will take a risk-based approach to monitoring, focussing on higher risk industries and entities and incident responses.
What will happen if, during this time, an offence is committed? Is DES likely to take any enforcement action and if so, what kind of action is it likely to take?
In its letter to all regulated entities, DES has made it clear that while environmental obligations must be complied with, it will ‘consider these difficult circumstances as part of its existing discretion when making enforcement decisions and that it will continue its risk-based regulatory approach focussing on environmental harm and serious non-compliance’.
We can also draw on its approach in other circumstances as offering guidance on how it might deal with non-compliance today. During the 2010-2011 floods in Queensland, we saw (for example) that the water storage capacity of some mines were exceeded, leading to the uncontrolled release of contaminated water into the environment. It was evident that the regulator was understanding of attempts to manage those waters, including by temporarily allowing controlled releases. At the same time, however, it did take prosecution action against those entities it considered had not properly prepared for the flooding – including by not allowing sufficient capacity in water storage areas.
Therefore, the impacts of the COVID-19 crisis should not be seen to be a blanket excuse for non-compliance. DES will still be looking to see that reasonable and practical steps had been taken and will not excuse situations where releases or other incidents are caused by a failure to take appropriate steps or by previously unrectified conditions which have been exacerbated by the event.
The DES Enforcement Guidelines inform the decision about whether, and if so, what enforcement action to take in relation to a non-compliance. A range of enforcement options are open to DES, from warning letters to criminal prosecutions. The choice of enforcement options depends on a range of considerations, including:
- The seriousness of the contravention
- The actual or potential impact of the offence
- The level of culpability of the alleged offender, including whether the risk was foreseeable and whether the impact could have been prevented by following accepted industry standards
- The financial or other benefit received as a result of the contravention
In the event that DES is considering enforcement action, it may be possible to make submissions to DES that the non-compliance was due to COVID-19 related impacts which were outside of your control and could not have been prevented by accepted industry standards and taking all reasonable and practicable measures. The need to document all decisions discussed above will be critical here in order to be able to support your submissions. As stated above, given the unusual circumstances facing businesses around the state, DES is likely to keep an open mind about any such submission.
In the event that prosecution action is taken by DES, it may still be possible to refer to such matters either by way of a defence (depending upon the offence alleged) or in mitigation of penalty in an endeavour to persuade a court to impose a penalty on the lower end of the range.
Executive officer liability
What role do board members and other top managers have in ensuring environmental compliance? What does non-compliance mean for those at this level of the organisation?
The executive officers of a corporation must ensure that that the corporation complies with the EP Act.3 If a corporation commits an offence against the EP Act, each of the executive officers commits an offence, namely, the offence of failing to ensure the corporation complies with the EP Act4.
Members of the governing body of the corporation are executive officers, together with any person who is concerned with, or takes part in the management of, the corporation whatever that person’s position title and whether or not the person is a director of the corporation5.
It is a defence for an executive officer to prove:
- If the officer was in a position to influence the conduct of the corporation in relation to the offence, that the officer took all reasonable steps to ensure the corporation complied with the relevant provision of the EP Act; or
- The officer was not in a position to influence the conduct of the corporation in relation to the offence.
At a board and management level, it is therefore critical to consider the impacts of COVID-19 on environmental compliance and take all reasonable steps to ensure compliance with environmental requirements. This will not only assist the corporation in achieving compliance but could also protect individual executive officers from personal liability.
Statutory emergency options
There are a range of statutory measures open to allow regulated entities to deal with potential non-compliances caused or contributed to by the COVID-19 crisis.
The three key measures are:
- Temporary emissions licences
- Emergency directions
- Transitional environmental programs
The first two of these options appear on their face to be more appropriate for addressing the immediate environmental impacts of natural events such as flooding, cyclones, bushfires or industrial accidents rather than a public health crisis such as COVID-19. Transitional environmental programs may also not be fit for purpose given the uncertainty surrounding how long COVID-19 restrictions will stay in place or whether, if lifted, they will be required to be imposed again in the future.
This is not to say they couldn’t also be used in the COVID-19 crisis if the circumstances are right and DES has not ruled out the use of any of these statutory tools.
Temporary emissions licence (TEL)
A TEL permits the temporary relaxation or modification of the following requirements where they relate to the release of a contaminant into the environment:
- Particular conditions of an environmental authority
- Particular requirements or conditions of a transitional environmental program6
A TEL can only be applied for in response to an applicable event, which is an event, or series of events, either natural or caused by sabotage, that was not foreseen or was foreseen but, because of a low probability of occurring, it was not considered reasonable to impose a condition on the authority to deal with the event or series of events.7
Applications for a TEL may only be made by the holder of an environmental authority or Transitional Environmental Program (TEP) in anticipation of an applicable or event or in response to one.8
When deciding whether to grant the TEL, DES will consider (amongst other matters):
- The extent and impact of the applicable event, including the potential economic impact of granting or not granting the TEL
- The character, resilience and values of the receiving environment
- The likelihood of environmental harm and any measures necessary to minimise the harm
- The likelihood that the release will adversely impact the health, safety or wellbeing of another person
- The cumulative impacts of all releases authorised or directed under the EP Act, including releases under other TELs that have been issued or applied for
- The public interest9
While the EP Act does not specify the length of time for which a TEL can remain in place, the DES Guideline: Temporary Emissions Licences (TEL Guideline) states that:
- The instruments are intended to be short term.
- As a general guide, it is unlikely that the immediate response to an event should take longer than three months.
- If the environmental authority has conditions that are inappropriate for the longer term, the applicant should lodge an application to amend the conditions of the environmental authority.
The TEL Guideline also gives some examples of when a TEL might be appropriate, which include (relevantly):
- When monitoring and reporting requirements related to contaminant releases cannot occur due to an applicable event preventing safe access; and
- To allow a waste transfer station to release contaminants (such as noise and odour emissions) associated with the acceptance of a volume of materials greater than its environmental authority and/or for extended periods of time outside normal operating hours.
Further, the TEL Guideline makes it clear that this process is not intended to encourage speculative TEL applications in circumstances where other statutory processes might be appropriate (TEP or an amendment to an environmental authority).
The following examples are given:
- If a reasonably foreseeable type of event (such as the recurrence of average wet seasons) was not foreseen due to an oversight, and the event is not imminent, the operator should apply for a TEP or an amendment to address this on a permanent basis; and
- If the applicable event is not imminent but rather the operator is simply speculating that such an event might possibly occur in the future, this is not considered to be in anticipation of an applicable event.
It is possible to condition the TEL to commence at a time in the future, for example, at a certain date or upon a particular triggering event occurring. However, if a specific situation is currently developing and may occur in the foreseeable future but is not yet certain, the TEL Guideline recommends that a draft TEL be prepared and discussed with DES but not submitted until it is reasonably clear that the TEL will, in fact, be needed.
It is strongly arguable that the COVID-19 crisis is an ‘applicable event’ for the purposes of these provisions. We would expect that DES would be looking to ensure that any TEL applicant has taken all reasonable steps to comply with the relevant provisions of their environmental authority but that impacts of the COVID-19 will mean that it will not be possible to do so.
A TEL cannot retrospectively authorise previous releases to the environment. Therefore, it is important to have careful consideration to the future foreseeable impact that might arise from management of the COVID-19 crisis.
DES must decide the TEL applications within 24 hours. Therefore, the TEL Guideline states a TEL application must not be submitted without discussing it first with DES staff.
An authorised person may issue an emergency direction to a person to take stated reasonable action within a stated reasonable time, including to release a contaminant into the environment.10 They may be used, for example, where an uncontrolled release of a contaminant will have a greater environmental impact than smaller controlled releases.
While such a direction may be issued unilaterally by the authorised person, it is also possible for a person to request that DES issue an emergency direction to them.
Emergency directions may be issued when the authorised person is satisfied on reasonable grounds that an emergency exists. An emergency exists if:
- Either human health or safety is threatened or serious or material environmental harm has been caused or is likely to be caused; and
- Urgent action is necessary to protect the health or safety of persons, prevent or minimise the harm or rehabilitate or restore the environment because of the harm.11
A person who takes an action in compliance with an emergency direction does not commit an offence against the EP Act merely because the person takes the action.12
Before issuing an emergency direction, the authorised person will consider whether there are any alternative measures that can be used, such as a TEL.
Transitional environmental programs (TEPs)
Transitional environmental programs are specific programs that, when complied with, achieve compliance with the EP Act for the activity to which the TEP relates by doing one or more of the following:
- Reducing the environmental harm caused by the activity
- Detailing the transition of the activity to an environmental standard
- Detailing the transition of the activity to comply with a condition of an environmental authority for the activity or a development condition13
The DES Guideline: Transitional environmental programs (TEP Guideline) states that:
- TEPs are a useful tool to use when it is known what needs to be done to achieve a solution to an environmental problem and the solution is likely to take a long period of time.
- Therefore, a TEP is not considered appropriate where an emergency situation exists.
- TEPs could be used where an operator of an activity is unable to meet effluent discharge limits because of a number of mitigating factors.
- TEPs are not appropriate where you are not in compliance because of a choice or decision that you have made about managing your environmental risk (e.g. you have chosen to under-invest in a control measure and that control measure fails).
- TEPs may not be appropriate where you have been in non-compliance with the EP Act for an extended period or where the TEP will seriously undermine the environmental outcomes you are required to achieve.
Talk to the regulator
If you have a concern about the extent to which you can comply with your environmental obligations, it is important to raise these concerns with DES as early as possible. This will allow a transparent discussion about what measures have been taken, what measures are not able to taken (and why) and what compliance options might be open. It will also allow DES to identify industry-specific or state-wide issues that may be able to be addressed by a departmental or whole of government approach.
Document these interactions with DES, including by way of email with your DES officer contact. This will give you the comfort you might need that you are acting appropriately or it could be evidence in any civil or criminal enforcement action that might be taken in future.
In the event that you are currently operating under a statutory notice, such as an environmental protection order or environmental evaluation, COVID-19 restrictions may make it difficult to comply with the timing imposed in them. If this is the case, approach DES as early as possible before the deadline to explain the reason for the delay and to attempt to agree an extension.
We understand that DES will shortly release a new template to allow notification of actual or potential non-compliances where COVID-19 related factors are involved. In the meantime, DES asks that any concerns be raised via the pollution hotline (firstname.lastname@example.org or 1300 130 372) if you do not have a regular DES contact.