An Introduction to Environmental Damages in Australia Justice Rachel Pepper ASEAN Chief Judges Roundtable on Environment 14 December 2014, Hanoi, Vietnam, Opening Remarks What Are Environmental Damages? 1 The assessment of environmental damages by Courts is a broad concept that can encompass a number of different legal outcomes. 2 In common law countries, damages may be ordered as the result of two general categories of liability in environmental cases: 1 a. liability in tort under civil law to compensate for harm done to another person or that person s assets, or their enjoyment of those assets; and b. liability to compensate governmental agencies, individuals or organisations for expenses incurred in preventative or remedial work in relation to expected or actual environmental harm. 3 Environmental damages are an important element of environmental law because they acknowledge the inevitable human impacts of environmental harm, recognising the intrinsic relationship between humans and their environment. 4 In many jurisdictions, this acknowledgment manifests itself in a right to healthy and clean environment, often constitutionally enshrined or located in national environmental legislation. 2 In some very rare jurisdictions, like Bolivia, the environment itself has legal personhood, and therefore, rights under which it can seek damages for harm occasioned to it. 3 Environmental Damages in Australia 5 In common law systems like Australia, the law is generally more adept at recognising liability in the first category. In the environmental domain, this may 1 Brian Jones, Deterring, Compensating, and Remedying Environmental Damage: The Contribution of Tort Liability, in Peter Wetterstein (ed), Harm to the Environment: the Right to Compensation and the Assessment of Damages (Oxford University Press, 1997) 11, 12. 2 177 of the world's 193 UN member nations recognise an environmental right through their constitution, environmental legislation, court decisions, or ratification of an international agreement: David R. Boyd, The Constitutional Right to a Healthy Environment (July- August 2012) Environment Magazine <http://www.environmentmagazine.org/archives/back%20issues/2012/july- August%202012/constitutional- rights- full.html> accessed 2/12/2014. 3 See, for example, the Framework Law on Mother Earth and Integral Development for Living Well (Ley Marco de la Madre Tierra y Desarrollo Integral para Vivir Bien) 2012 (Bolivia).
take the form of seeking civil law damages for torts of private nuisance like water pollution; 4 negligence by private corporations causing financial loss or human harm; 5 or the negligent exercise of statutory powers. 6 However, the common law is largely unable to grant civil law damages to individuals for environmental harm beyond proprietary or personal interests; to groups for collective environmental harm; or indeed to compensate the environment itself. This is a result of the common law s traditional focus on individual rights and interests, rather than harm to the environment in its own right. 6 7 It is difficult to successfully claim damages in environmental cases in Australia even when the proceedings are litigated through traditional torts mechanisms. Attempts to hold government authorities to account for environmental harm caused by the negligent exercise of statutory powers, or through a failure to exercise those powers, have enjoyed mixed success 7 and have been largely unsuccessful where it is argued that the failure to exercise the statutory power caused harm that could otherwise have been avoided. 8 This is because there is often a difficulty in proving that the public authority owed a duty of care to the plaintiff. 9 Attempts to Overcome the Limitations of Civil Proceedings in NSW: Criminal Proceedings 8 In New South Wales ( NSW ), the legislature has enacted statutes targeting the second category of liability (compensating government agencies, individuals and organisations for expenses incurred in remediating environmental damage) in an attempt to address the limitations of civil proceedings and the common law in general. Clean Up and Investigation Costs 9 Under the Protection of the Environment Operations Act 1997 ( the POEOA ), the appropriate State regulatory authority may bring criminal proceedings against 4 See, for example, Van Son v Forestry Commission of NSW (1995) 86 LGERA 108; Lawrence v Kempsey Shire Council (1995) 87 LGERA 49. 5 See, for example, Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520. 6 Linda Pearson, Chapter 10 Australia in Louis J Kotze and Alexander R Paterson, The Role of the Judiciary in Environmental Governance (Wolters Kluwer, 2009) 321, 334, citing G Bates, Environmental Law in Australia (LexisNexis Butterworths, 6 th Ed, 2009) 171; Andrew Harding, Do Public Interest Environmental Law and the Common Law Have a Future Together?, in David Robinson and John Dunkley (eds), Public Interest Perspectives in Environmental Law (Chancery Law Publishing, 1995) 218, 220. 7 See, for example, L Shaddock & Associates Pty Ltd v Parramatta City Council (1981) 150 CLR 225; Sutherland Shire Council v Heyman (1985) 157 CLR 424; Armidale City Council v Alec Finlayson Pty Ltd (1999) 104 LGERA 9. 8 See, for example, Graham Barclay Oysters Pty Ltd v Ryan (2002) 125 LGERA 1, where neither the local council nor the State authority was responsible or liable for injury caused by consumption of contaminated oysters. 9 Pearson, above n 6, 335. 2
individuals or corporate entities for breaches of environmental protection licences 10 and water 11 and air 12 pollution, amongst other offences. In relation to offences committed in contravention of the POEOA, the Land and Environment Court of New South Wales ( the Court ) is empowered to order the offender, if convicted, to pay the prosecutor s legal costs in the normal course. 13 But the POEOA also allows for additional costs orders that may be characterised as a variety of criminal damages. 10 For example, s 246 of the POEOA allows the Court to make an order for money to be paid to a public authority or an individual for costs incurred in the process of mitigating harm caused by the offender, rehabilitating the affected area, or for loss of, or damage to, property owned by the individual or authority at the time the offence was proved. 14 The Court can also make an order in relation to the costs and expenses incurred by the public authority in investigating the commission of the offence, pursuant to s 248. 15 11 Thus, in Environment Protection Authority v Buchanan (No 2) 16, s 246 of the POEOA was used to order the defendant to pay clean-up costs to both the prosecutor, the Environment Protection Authority ( the EPA ), and to the owners of the premises, Mr and Mrs Wong, who were leasing the premises to the defendant and had undertaken significant work at substantial cost in complying with a clean-up notice issued by the EPA. 17 12 The defendant had breached a condition of her environment protection licence in contravention of s 64(1) of the POEOA by storing hazardous waste in an incompetent manner at the chemical treatment facility of which she was the sole director. The clean-up costs ordered, $88,395.75 to be paid to the EPA and $375,933.43 to be paid to the Wongs, were significantly larger than the fine imposed on the defendant, which came to $39,500. 18 10 Protection of the Environment Operations Act 1997 (NSW) s 64(1). 11 Ibid s 120. 12 Ibid ss 124, 135, 135C. 13 Criminal Procedure Act 1986 (NSW) s 257B. 14 Section 247 allows for similar costs to be ordered in relation to costs incurred after the offence has been proven. 15 Note that the National Parks and Wildlife Act 1974, which creates offences relating to damage of Aboriginal cultural heritage, harm to threatened species and their habitats, and harm to protected fauna and endangered ecological communities, has equivalent provisions permitting the court to order compensation to those who have incurred costs of rehabilitation and investigation: National Parks and Wildlife Act 1974 (NSW) ss 201-203; Threatened Species Conservation Act 1995 (NSW) ss 141J- 141L. 16 [2009] NSWLEC 31; (2009) 165 LGERA 383. 17 Ibid at [87]. 18 Ibid at [122]. 3
Orders to Direct Moneys to Environmental Projects 13 Under s 250(e) of the POEOA, the Court can order that any penalty ordered against the offender be directed towards a specific environmental project. It is the only NSW statute that contains such a provision. Section 250(e) was recently employed in the decisions in Environment Protection Authority v Orica Australia Pty Ltd. 19 These proceedings were brought by the EPA against a company involved in the manufacture of chemicals, Orica Australia Pty Ltd ( Orica ). Orica pleaded guilty to nine separate offences that included several contraventions of Orica s environmental protection licence, pollution of waters, and failing to report a pollution incident as soon as practicable. In sentencing Orica in all seven proceedings, the Court ordered, in lieu of a fine, that Orica pay a total of approximately $760,000 to environmental projects. 20 Enforceable Undertakings 14 Under s 253A of the POEOA, the EPA is also able to accept an undertaking from a person or entity responsible for an actual or potential breach of the Act, which is then enforceable in the civil jurisdiction of the Court. Undertakings given under this provision often involve quite costly and labour-intensive clean-up processes, improvements to corporate practices in order to prevent future environmental damage and the payment of moneys to a specific environmental project. For this reason, they are an attractive alternative to litigation in terms of outcome and reduced legal costs. 15 For example, Namoi Cotton Co-operative Ltd ( Namoi ), a company responsible for cotton production in northern NSW, gave an undertaking to the EPA after it deposited cotton waste in a manner that caused it to flow into the Namoi River, leading to five alleged breaches of the Act. Namoi undertook to cease use of the site for depositing cotton waste, clean up the site in accordance with a clean-up management plan it had prepared, review and update its internal environmental policies and systems, undertake an environmental risk assessment of all of its 19 Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103; Environment Protection Authority v Orica Australia Pty Ltd (the Evaporator Incident) [2014] NSWLEC 104; Environment Protection Authority v Orica Australia Pty Ltd (The Jackhammer Incident) [2014] NSWLEC 105; Environment Protection Authority v Orica Australia Pty Ltd (the Hexavalent Chromium Incident) [2014] NSWLEC 106; Environment Protection Authority v Orica Australia Pty Ltd (the Ammonia Incident) [2014] NSWLEC 107; Environment Protection Authority v Orica Australia Pty Ltd (the Ammonium Nitrate Solution Spill Incident) [2014] NSWLEC 109; and Environment Protection Authority v Orica Australia Pty Ltd (the Botany Mercury Incident) [2014] NSWLEC 110. 20 These projects included, for example, the Hunter River Health Monitoring Program, responsible for determining the cumulative impacts of heavy industry on the health of the Hunter River, and the Stockton Cycleway Revegetation Works, responsible for counteracting erosion on the Hunter River foreshore: Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103 at [261(3) and (5)] and Environment Protection Authority v Orica Australia Pty Ltd (the Jackhammer Incident) [2014] NSWLEC 105 at [138(2)]. 4
operational sites in NSW, publish a notice about the alleged breaches in local newspapers, pay $100,000 to an environmental project in the area, and pay the EPA s legal and investigation costs in the order of $44,000. 21 Other Australian Jurisdictions 16 Jurisdictions outside of NSW have a range of different criminal provisions permitting the payment of money to those affected by environmental damage. While some provide only for compensation for loss of income, reduction in value of property, or costs incurred in minimising these losses, 22 others allow applicants to recover costs incurred in mitigating harm to the environment. 23 None outside of NSW allow for money to be directed towards environmental projects in lieu of fines. 17 In South Australia, the relevant environmental authority, as an alternative to prosecuting criminal proceedings, can make an application to the Environment, Resources and Development Court under s 104A of the Environment Protection Act 1993 (SA) to recover a civil penalty where the authority is satisfied that a person has committed an offence in contravention of the Act. The maximum penalty that can be ordered is the same as the criminal maximum penalty, but the contravention need only be proven on the balance of probabilities. 24 The advantage for the respondent is the removal of the stigma of criminal prosecution, but they can choose to opt out and be dealt with by criminal proceedings with its concomitant higher standard of proof should they so wish. 25 18 The environmental authority can even avoid having to apply to the Court by negotiating an out-of-court civil penalty. 26 The incentive for the authority is that recovering penalties of this nature is procedurally simpler, however it can only recover a maximum of $120,000, which is significantly below the maximum penalty provided, for example, for pollution offences in its criminal jurisdiction. 27 19 Under s 104 of the Act, the authority, and in some cases, individuals, can separately apply for compensation for damage to property and even exemplary damages if the Court considers that course appropriate, although no one has 21 NSW Environment Protection Authority, Undertaking to the Environment Protection Authority Given for the Purposes of Section 253A by Namoi Cotton Co- operative Ltd (16 July 2013) <http://www.epa.nsw.gov.au/resources/prpoeo/undertakingepa0012.pdf> accessed 3/12/2014. 22 See, for example, Environmental Protection Act 1994 (Qld) s 502(3) and (4). 23 See, for example, Environment Protection Act 1970 (Vic) s 65A and Environmental Management and Pollution Control Act 1994 (Tas) s 63 and Environmental Protection Act 1986 (WA) s 99Y. 24 Environment Protection Act 1993 (SA) s 104A(5). 25 Ibid s 104A(3)(a). 26 Ibid s 104A(1). 27 A person who causes serious environmental harm by polluting the environment intentionally or recklessly is liable to a $500,000 penalty and a corporation to $2,000,000. A person who pollutes the environment without intent is liable to $250,000 penalty and a corporation to $500,000: Environment Protection Act 1993 (SA) s 79. 5
successfully applied for exemplary damages under this provision. The effectiveness of s 104 is limited by the relatively narrow standing provision contained in s 104(7)(b), that requires a non-government applicant for s 104 orders to be a person whose interests are likely to be affected by the subject matter of the application, and s 104(7)(c), which grants standing to any other person with the permission of the Court provided the respondent has a case to answer, provided that it would not be an abuse of process, provided that it is likely the requirements in s 104 would be satisfied, and provided that the public interest would be served by such a claim. 28 20 In OneSteel Manufacturing Pty Ltd v Whyalla Red Dust Action Group Inc, 29 the Whyalla Red Dust Action Group ( Whyalla ) applied for a declaration that it had standing to bring an action on behalf of a group of individuals who lived and/or worked in an area near OneSteel Manufacturing Pty Ltd ( OneSteel ) s steelworks. Whyalla sought to restrain OneSteel from causing environmental harm through fugitive dust emissions and to recover damages on behalf of individuals who had suffered injury or loss or damage to property as a result of dust pollution. 21 The South Australian Supreme Court held that Whyalla was not a person whose rights were likely to be affected by the substance of the proceedings, because it could not point to any loss or damage occasioned to it. 30 The persons whose rights were affected were Whyalla s members but the Court held that an unincorporated association did not have standing just because its members were affected by the substance of the proceedings. 31 The orders would not affect the interests of Whyalla, except perhaps to satisfy its intellectual or emotional concern for the environment. 32 22 This case demonstrated that the standing provisions have limited the extent to which civil remedies are available under s 104. Anticipatory Damages Attaching Conditions to Planning Approvals 23 A recent development in the area of environmental damages in Australia is the practice of attaching conditions to planning approvals to pay a specified amount of money to an environmental fund in order to mitigate any future environmental 28 Ibid s 104(8) and (11). 29 [2006] SASC 114. 30 OneSteel Manufacturing Pty Ltd v Whyalla Red Dust Action Group Inc [2006] SASC 114; (2006) 145 LGERA 415 at [25]- [27]. 31 Ibid at [28]. 32 Ibid at [26]. The Court also found that OneSteel did not have a case to answer because of Whyalla s failure to specify a manner of contravention in its summons, so Whyalla did not have standing under s 104(7)(c) either: ibid at [45]- [49]. 6
harm the approval may cause. For example, in the decision of Tarkine 33, the Commonwealth Minister for Sustainability had approved a development proposal by a mining company that it develop and operate a mine in northwest Tasmania, provided the company donate significant funds to an organisation who maintained captive or insurance populations of the endangered Tasmanian devil in order to prevent extinction. 24 Section 134 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) permitted the Minister to attach the condition to the approval if he was satisfied that the condition was necessary or convenient for repairing or mitigating damage to a matter protected by a provision of Pt 3 of the Act for which the approval had effect. While the Federal Court found that the approval was invalid for other reasons, it held that the Minister was entitled to place the condition on the approval pursuant to that provision because [t]he use of an introduced population is capable of protecting, repairing or mitigating damage to the Tasmanian devil as a threatened species. 34 Conclusion 25 While in Australia courts cannot grant damages in the tort sense for environmental damage, there are means by which monetary penalties can be directed towards those responsible for environmental rehabilitation, or those who have suffered financial loss as a result of the commission of an environmental offence. 26 There is, however, room for greater use of civil damages for environmental harm in Australia. But to do so would necessitate legislative reform and the requisite political will to recognise environmental rights and broaden standing rules for such suits. With the civil law s continuing emphasis on the protection of property and personal rights, remedies that have developed in the criminal law may continue to be the most appropriate method of compensating for environmental damage occasioned by the acts of individuals and companies. 33 Tarkine National Coalition Inc v Minister for Sustainability, Environment, Water, Population and Communities [2013] FCA 694; (2013) 214 FCR 233. 34 At [74]. 7