Environmental Audit to Manage Legal and Financial Liability

Environmental legislation is changing rapidly throughout Australia at the present time, and with that change comes additional responsibilities for the mining and petroleum industries. Among the many changes that are being made are increased penalties for both criminal and accidental environmental impairment. The defences for criminal offences are limited and for other offences the laws may impose strict liability - in effect the offender is guilty until proven innocent. Mines may be included under contaminated land legislation, creating additional liabilities for clean-up, rehabilitation and long-term management. It is not unknown in Australia for the value of a mortgaged property to be less than the amount of the environmental liability acquired by a mortgagor in possession due to contamination of the site. An essential part of the management program for resource projects is now the regular conduct of an environmental audit, the results of which assist in the management of the legal and financial liabilities facing company directors and managers. The audit can also assist with negotiations with government agencies, staff, unions, insurers, Aboriginal and other community groups. An environmental audit may also help to ensure that companies are claiming the maximum allowable deductions for environmental works under the tax laws, and provide evidence in support of such claims. Environmental legislation affecting resource industries Environmental legislation in Australia is changing rapidly and can impose massive constraints, substantial administrative costs, and considerable liability on directors, managers and the corporation. Pollution control legislation Every State and Territory of Australia has a range of pollution control legislation contained in either individual acts relating to air, water, noise and land, or embodied in a single environment protection act. Pollution control legislation provides a critical management baseline for resource industries throughout Australia, often requiring the full-time attention of an environmental manager or an environmental department. In general, it is an offence to discharge effluents into water, or emit gases into the atmosphere above prescribed limits, cause noise above a regulated level, or contaminate land without a licence. A licence determines how much of a substance can be discharged, the location, the receiving environment, the quality, and the time at which discharges can be made or noise can be caused. Planning legislation Planning legislation controls where a project is located, how it will be constructed and operated, how large it is allowed to be, and what will happen once the project is completed. Development consents or approvals will generally contain a range of conditions controlling the preparation of the site, the construction of the facility and the way it is operated throughout its expected life time. Resource projects may be regarded under legislation as scheduled or designated developments requiring special treatment during the decision-making process. Under planning legislation, it is usual for resource projects to be subject to an environmental impact assessment process. Resource legislation Resource legislation specifically covering mining and petroleum in Australia, also contains requirements regarding protection of the environment during exploration for and extraction of minerals and oil. A mining or petroleum production lease usually contains numerous conditions regarding protection of the environment and rehabilitation of the site during and after the life of the extractive process.