Environmental Protection (Chain of Responsibility) Amendment Bill 2016
Plain English Summary
Overview
This bill amends the Environmental Protection Act 1994 so that when a mining or industrial company collapses or walks away from a polluting site, the government can force the people and companies behind it to pay for the clean-up. It was introduced urgently after several high-profile failures including the Yabulu Nickel Refinery.
Who it affects
Parent companies, executive officers and landowners linked to mining and industrial sites face new financial and clean-up obligations. Queensland taxpayers and communities near abandoned sites are less likely to be left with the bill.
Key changes
- Environmental protection orders can now be issued to 'related persons' such as parent companies, directors and landowners, not just the company operating the site
- Related persons can be ordered to prevent harm, rehabilitate the land or provide a bank guarantee, and can be made jointly and severally liable
- A court cannot stay a decision on how much financial assurance a company must provide unless at least 85% of that amount has been lodged as security
- A court must refuse to stay an environmental protection order if there is an unacceptable risk of serious or material environmental harm
- Authorised officers can enter sites where the environmental authority has ended, and people can be compelled to answer questions about suspected offences (with use immunity)
Bill Story
The journey of this bill through Parliament, including debate and recorded votes.
▸Committee15 Mar 2016View Hansard
Referred to Agriculture and Environment Committee
The Agriculture and Environment Committee examined the Environmental Protection (Chain of Responsibility) Amendment Bill 2016, which aimed to extend environmental liability to related persons of companies that fail to meet their environmental obligations. The committee could not agree on whether the bill should be passed, but made six recommendations for amendments including removing provisions that could impose liability on landowners such as native title holders, requiring a statutory guideline for administering the 'related person' provisions, and consulting on executive officer liability thresholds. The government supported most recommendations and proposed amendments.
Key findings (5)
- The committee could not agree on whether the bill should be passed with proposed amendments
- The Queensland Law Society raised concerns that related persons could be made liable without it being established they contributed to or were aware of the company's non-compliance
- The committee recommended removing subsection 363AB(1)(b) to protect native title holders and farmers from being caught as 'related persons' through land ownership
- The committee recommended reducing the proposed 85% financial threshold for executive officer liability, with the government proposing to reduce it to 75%
- The government held approximately $7 billion in financial assurance at the time, with 9 mining operations deemed 'high risk'
Recommendations (6)
- The committee could not agree whether the Environmental Protection (Chain of Responsibility) Amendment Bill 2016 should be passed with the amendments proposed in the report.
- The committee recommends that the Minister consider amending clause 7 of the Bill to include other terms used in new Division 2 such as 'executive officer' and 'related person' to assist users of the legislation.
- The committee recommends that subsection 363AB(1)(b) in clause 7 be omitted from the Bill.
- The committee recommends that the Bill be amended to require the Minister to table in Parliament a statutory guideline that will stipulate the manner in which the Department of Environment and Heritage Protection will administer the provisions contained in clause 7 section 363AB.
- The committee recommends that section 363AC of clause 7 be amended to require that the administering authority may only issue an environmental protection order to a related person of a company if the authority has also issued an environmental protection order in the same terms to the company, where the company is still in existence.
- The committee recommends that the Minister directs his department to consult with the Queensland Law Society, Queensland Resources Council, the Queensland Environmental Law Association, the Association of Mining and Exploration Companies and other stakeholders, in relation to sections 522A and 535B of clause 15, to identify a less onerous percentage than the 85% proposed.
Committee report tabled
▸Second Reading21 Apr 2016View Hansard
▸8 members spoke6 support2 mixed
Introduced and defended the bill as Minister for Environment, arguing it was urgently needed to prevent companies from abandoning environmental obligations and leaving taxpayers with clean-up costs, while reassuring stakeholders that amendments addressed concerns about the related person test and landowner exclusions.
“This bill gives effect to community expectations that their government and their parliament will no longer tolerate companies simply closing their doors and leaving taxpayers to clean up after them.”— 2016-04-21View Hansard
Supported the bill's intent while noting significant concerns raised by stakeholders about the related person test, retrospective application, and removal of self-incrimination protections, but accepted the minister's assurance that amendments would address these issues.
“The LNP will not be opposing the amendments. We believe that mining and resource development should be undertaken responsibly and that companies need to be held to account to do the right thing and that taxpayers should not be exposed to environmental clean-up costs.”— 2016-04-21View Hansard
Supported the bill as committee chair, noting that virtually every stakeholder supported its intent even if they had reservations about particular provisions, and that the committee's recommendations would improve the bill's operation.
“Queenslanders also have very clear expectations of the role they expect government to play to ensure that businesses and companies that pollute and cause damage to the environment are held accountable for their actions and that they clean up whatever mess they make before they move on.”— 2016-04-21View Hansard
Supported the bill's objectives but expressed serious concerns about unintended consequences for investment, landowners, and the Yabulu nickel refinery community buyback proposal, warning the minister that the LNP would hold him accountable if the bill's consequences proved adverse.
“The LNP genuinely supports the objectives of this bill but we are also genuinely concerned about its unintended consequences and the seriousness of what those unintended consequences might be.”— 2016-04-21View Hansard
Passionately supported the bill to prevent Clive Palmer from walking away from his environmental responsibilities at the Yabulu nickel refinery, highlighting the devastating effects on Townsville and the risk of toxic contamination reaching the Great Barrier Reef.
“I will not allow someone like Mr Clive Palmer to walk away from his responsibilities to clean up the mess—as if he has not caused enough of a mess already in Townsville—that is the pending environmental disaster that is, or what is left of, the Queensland nickel plant in Townsville.”— 2016-04-21View Hansard
Supported the bill's intent as former environment minister but cautioned about the fine balance between environmental protection and investment certainty, warning of potential overreach and sovereign risk while taking the minister at his word that amendments would achieve the desired outcome.
“It is a very, very fine line that an environmental regulator must walk in ensuring that they hold sufficient financial assurance—that ability to ensure that the taxpayer does not get left with the bill if a company goes under.”— 2016-04-21View Hansard
Supported the bill as a North Queensland member, emphasising the risk posed by the Yabulu nickel refinery's tailings dam to the Great Barrier Reef and arguing that proper mechanisms were needed to prevent companies from leaving taxpayers with clean-up costs.
“The cost of remediating the Queensland Nickel site could be up to $100 million. This legislation is the next best thing to a time machine and, quite frankly, Queensland Nickel has already done enough damage in North Queensland without risking any possible damage to the Great Barrier Reef.”— 2016-04-21View Hansard
Supported the bill as Minister for Natural Resources and Mines, emphasising that it targeted only those seeking to avoid responsibilities and that a significant number of industry participants supported the fundamental proposition.
“The proposal embodied in the chain of responsibility bill is only aimed at those who seek to avoid their responsibilities; it is not aimed at the majority of mining companies who take responsibility for their operations.”— 2016-04-21View Hansard
▸In Detail21 Apr 2016View Hansard
Amendments 1-2 to clause 3: Expanded the trigger for amending environmental authority conditions on transfer to also capture situations where another entity becomes a holding company of the authority holder, not just direct transfers.
Amendments 3-10 to clause 7: Major amendments to the related person test, excluding underlying landowners from liability for resource activities on their land (except associated entities), requiring 'significant' financial benefit rather than any financial benefit, excluding native title agreements and conduct and compensation agreements from triggering liability, requiring the administering authority to consider statutory guidelines and whether the related person took all reasonable steps, and inserting a mandatory two-year review of the provisions.
Amendments 11-12 to clauses 13 and 15: Reduced the financial assurance threshold required for a stay of proceedings from 85 per cent to 75 per cent, in response to committee concerns that the original amount was too onerous.
Amendment 13: Inserted new section 548A empowering the chief executive to make statutory guidelines about how the administering authority decides relevant connections and whether to issue environmental protection orders to related persons, with guidelines to be approved by regulation and therefore disallowable.
Amendments 14-17 to clause 16: Refined the retrospective application of the bill to limit it to transfers that occurred during the transitional period (from introduction to commencement), rather than applying broadly to all past transfers.
Referenced Entities
Organisations
Programs & Schemes
Sectors Affected
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