Analysis of Relevant Principles of the Law and Whether the Law Is in Need of Reform - Example

Analysis of Relevant Principles of the Law (EP Act 1994, Qld) and Whether the Law Is In Need Of Reform Name: Institution: Instructor: Course Code: Submission Date Introduction Effective management of a business legal environment is very important even as organizations are currently operating amidst continually revolving competitiveness. An organizations legal environment has the potential of improving an organization’s operations if well managed and bestow upon it competitive advantages (Vickery, Pendleton, and Flood, 2012). Indeed Siedel and Haapio (2010) and bird (2010) acknowledge that while the regulatory environment may be perceived by some as an impediment to business operations, if well managed, it has the potential of enhancing the competitive advantage of a business as well as ensuring that any legal requirements are complied to whilst managing any arising risks. The mining industry is one of the oldest and significant contributors to the world economy. Within the Queensland economy, the annual value of the mining industry is more than $ 16.02 billion with the industry contributing about 7% to the state’s gross national product, and employing over 84,000 people (McNamara, 2009, PP.3). However, such mining activities can also have significant impact on the environment contaminating air and water from toxic compounds, removing vegetation, as well as disrupting the landscape. Formal environmental regulations and legislations to protect the environment from damage and pollution play a critical role in regulating how the mining industry operates. Such environmental laws provide the legal environment upon which organizations dealing in the mining business have to operate by. In order to understand how environmental law impacts the mining industry in Queensland, this paper explores relevant principles of environmental law that impacted one of the mining companies in Queensland, and further analyses whether the law is in need of reform. History of Australian Environmental Laws Prior to 1960s, environmental law was nonexistent in Australia. Modern environmental law rose as a result of private legal actions to control pollution and damage to the environment as well as a result of increased public awareness of the need conserve resources as well as maintain human health (Vickery, Pendleton, and Flood, 2012). Hence environmental law developed as a result of environmentalism efforts from various groups of individuals. In Australia, the very first wave of environmental consciousness happened in the 1960s, with the very first policy instituted in 1972 in New South Wales which required environmental impact assessment to be done to assess the impact that any activity would have on the environment before commencement of the activity. This policy was further adopted by the Federal government to apply to other states including Queensland (Preston, 2007). With this policy, the environmental protection (Impact of Proposals) Act of 1974 was developed to ensure full compliance with environmental impact assessment in commonwealth land in Australia. Afterwards States began developing their own environmental legislations, for instance, Victoria’s Environment Effects Act of 1978, New South Wales Environmental Planning and Assessment Act of 1979 giving State governments the mandate to undertake environmental impact assessment. These new laws led to a rise in regulatory activities affecting the environment in Australia (Preston, 2007). The trend in environmental regulation was rather than abandoning earlier legislations, newer layers of legislations would be added on top in terms of amendments. Furthermore, legislations in Australia have significantly been impacted by the international environmental law. For instance, the international convention in the protection of world heritage of which Australia took part in 1972, listed World Heritage sites that needed to be protected and conserved. This led to the development of the Australia Heritage Commission Act of 1975, which sought to conserve and improve the heritage sites within the country, both cultural and natural. However, a major controversy between the Tasmanian government and the federal government ensured over the declaration of Tasmanian Wilderness as national heritage (Commonwealth v Tasmania (1983) 158 CLR 1), since the Tasmanian government sought to construct a hydroelectric dam in Franklin River which would impact the heritage. This resulted to enactment World Heritage Properties Conservation Act of 1983 (Preston, 2007). This new Act however faced a lot of challenges from state governments with regard to its validity. For instance, the Queensland government strongly opposed the marking of Tropical Forests in Daintree region as a natural world heritage. Such disputes led to increased debates and campaigns on environmental law, and subsequently a more cooperative approach between the state governments and the commonwealth governments was adopted. Hence with increased discussions and consultations Acts such as the World Heritage Properties Conservation Act 1983 and the environmental protection (Impact of Proposals) Act of 1974 were repealed and environmental law become more consolidated and rationalized in the form of The Environment Protection and Biodiversity Conservation Act of 1999 (EPBC Act) (Preston, 2007). The EPBC Act is currently the bed rock upon which the Australian Federal Government ensures environmental regulation. The Act primarily focuses on matters of National environmental importance, while states have their own legislations that take care of environmental issues of state and local significance. In essence, therefore, the key role of the EPBC Act is to protect and conserve Australian biodiversity, and protect resources or the environment, especially where matters are critical and are of national concern. Over the years EPBC has been amended to cater for changing needs with the latest amendments having been done in 2010 to add protection of Mako and Porbeagle sharks from recreational fishing (Australian Government, 2012). Environmental laws in Australia are structured into Federal, State and Local government laws. However, the biggest role in environment legislation mainly lies with the State government, with only small parts delegated to local governments. Serious cases of national importance are often dealt with from a federal standpoint and legislations, and in specific using EPBC. As noted by Smith (2009:1) environmental laws in Australia have evolved overtime to be more inclusive with the legal processes shifting from reactive to proactive, and from protecting to managing. Environmental Law Concerns in Queensland As noted above, it is the State governments that have biggest role and mandate in dealing with environmental legal issues. The environmental regulation of mining in Queensland is mainly governed by Environmental Protection Act 1994 (EP Act) and may also be regulated by the commonwealth government under the EPBC Act 1999 or other relevant laws as the Environment Protection (Sea Dumping) Act of 1981 (McNamara, 2009). However, the commonwealth legislations are mainly relevant where the environmental damage and impact was significant enough to be a matter of national importance in environmental protection (Environmental Defenders Office, 2011:3-4). Other than that, the Queensland government is actually the one that deals with any environmental problems due to mining using the state legislation. A noted, mining is a key industry in Queensland. However, it brings with it key environmental concerns such as air and water contamination from toxic compounds, poisoning of vegetation due to toxic substances that land on plants, as well as disrupting the landscape. These are the main environmental concerns that the EPA 1994 legislation seeks to protect Queensland from. Within Queensland, normally the regulation of mining is a combined responsibility of both Department of Environment and Resource Management (DERM) and the Department of Mines and Energy (DME) where DERM is responsible for regulating environmental concerns with respect to mining activities, while DME regulates licensing of mining (Environmental Defenders Office, 2011). The Queensland environmental legal system draws its objective from the Brundtland’s report where the Report advocates for ecologically sustainable Development where the focus is on improving the quality of life all around. For mining activities within Queensland, organisations need to ensure they have complied with the required laws; they need to ensure that they have the necessary licence of operation, comply with the set laws as well as ensure any serious environmental harm is immediately reported to the Queensland government (McGrath, 2011). This helps in regulating and preserving the environment as well as ensures an efficient working environment for businesses. Environmental Protection Act 1994 Environmental Protection Act 1994 is the main legislation that regulates environmental impacts within the mining industry in Queensland. The development of this Act was influenced by Brundtland’s Report where the concept of environmental sustainability played a major role. The development of this Act took a number of years which included several rounds of public consultation. The provisions of the Act, with regard to mining in the State, enables the general public to object to application of mining activities, including development approvals of mining activities. The provisions also allow third parties to seek restraint orders against certain mining activities, with the leave of the court. The inclusion of third party restrain orders in the Act was as a result of the commission of Inquiry into the conservation, which recommended direct public participation in Queensland environmental regulation at suitable points in the decision making and implementation processes. In this case, all islanders had the right to seek injunctions towards organisations thought to be having negative effects on the environment. However, the legislation has mechanisms through which only genuine cases are handled. In such cases, the courts “require a security deposit for costs”, which prevents an individual from seeking an injunction to damage another person (McNamara, 2009). Overview of Great Australian operations PTY LTD The Great Australian operations PTY LTD is an Australian mining company established in 2008 dealing in the mining and export of copper. The company has leased 10,000 hectares of land in Cloncurry region, located East of Mount Isa, North West Queensland, where their main copper mine is located. The company’s copper mine referred to as Great Australia copper mine, is one of the many mines found in this region. Other mines in the region include: Flamingo copper mine, black fort copper mine which is much smaller than Great Australia copper mine, gilded, a rose gold mine, Mt Freda, a yellow gold mine and Jessievale mine. Of recently, the Great Australian operations was fined $135,000 fine by the courts for contaminating the local Creek. The company was accused for dumping contaminated toxic storm water in to storm water ponds which leaked into the Coppermine creek, an important Cloncurry River tributary. While the contamination did not leak into the river, vegetation and aquatic life in and around the creek were destroyed by the toxic pollutants (Queensland Government, 2010). The Case Summary In the case of Great Australian operations vs. Queensland, the major issue of concern was that the Great Australian operations had contaminated the local creek. During the wet season of 2008/2009, contaminated stormwater around the Great Australia copper mine was transferred around the site which then gathered in storm water ponds. This contaminated the Coppermine Creek, destroying both vegetation and aquatic life in and around the creek. Furthermore, as the creek was an important tributary to the Cloncurry River, there were fears of possible contamination. However, the company acted fast to neutralise the acidic contaminants preventing further damage (Queensland Government, 2010; The Mining Advocate, 2010, pp.15). The key plaintive in this case was the State of Queensland which brought a case against the Great Australian Operations for both for environmental breach and contaminations, and lack of carrying out an environment impact assessment of transferring the storm water around the copper mine. In this case, the local law that was breached was the Environmental Protection Act 1994, while nationally the laws that were breached included the EPBC Act 1999 or other relevant laws as the Environment Protection (Sea Dumping) Act of 1981. However, since the impact of the environmental breach was not extensive as to attract national interest in environmental protection, the core law that was used to address the case was the Queensland Environmental Protection Act 1994 (Queensland Government, 2010; The Mining Advocate, 2010, pp.15). In this case, the company pleaded guilty and was found in breach of the Environmental Protection Act 1994 and fined $135,000. Furthermore, the company also took on the cost of cleaning up the creek; with the company removing contaminate material from the creek and pumping the toxic waters in out of the creek. Furthermore, DERM required that the company continue monitoring the recovery of the creek and the surrounding affected areas until 2014 (The Mining Advocate, 2010, pp.15). Analysis of relevant principles of the law and whether the law is in need of reform Challenges that Environmental Protection Act 1994 presents for organizations While environmental laws are crucial for ensuring a much clear way of producing goods and services, such laws have also presented a number of challenges to organisations and in specific mining businesses. One of the core challenges that businesses are faced with is integrating the various facets of environmental regulations into their corporate governance regime (Vickery, Pendleton, and Flood, 2012). Ong (2001) argues that for most businesses, environmental regulation has remained an external regulation aspect that organisations only comply with at the least minimum in order to avoid penalties. While environmental regulation helps in aligning an organisation’s conduct with society’s expectations, the scope for how the companies control environmental impacts is narrow and limited. This therefore requires organisations to continually take into account the environmental implications of their decisions and actions even when there may be no legal obligation for them to do so. The inclusion of third party restrain orders in the Act in which all islanders had the right to seek injunctions towards organisations thought to be having negative effects on the environment, may present a challenge to organisations. Where such allegations have no basis, an organisation’s reputation may be dragged in negative publicity. However, the legislation has mechanisms through which only genuine cases are handled. In such cases, the courts “require a security deposit for costs”, which prevents an individual from seeking an injunction to damage another person (McNamara, 2009). For most mining companies, the key challenges that they face with respect to adhering to the law include, water management at the general site, especially during wet seasons when the areas may be flooding, protection of the creek areas, containment of concentrates in the mine region, as well as operations of the tailings facilities in accordance with both the acid drainage potential of the facilities as well as the environmental regulations (McNamara, 2009). Furthermore, such mining companies are faced with various actions that they need to complete before they can be fully operational. For instance, EPA 1994 requires regular environmental audits and also requires environmental impact assessments to be carried before activities can be done. While such actions are important in ensuring environment safety, they tend to slow done the activities of such organisation as well as slowing down the decision making process. Some businesses have even found the environmental regulations and requirements to be quite expensive. For instance, in a recent event, miners in Queensland have recently raised concerns with regard to higher charges for environmental authority payments (The Mining Advocate, 2010). Objectives of the existing law The core objectives of the existing law: Environmental Protection Act 1994 is so as to protect Queensland environment, and ensure environmental sustainability as well as higher quality of life. As noted above, this legislation regulates environmental impacts within the mining industry in Queensland, thereby helps in maintaining the integrity of the place. The law requires that businesses, for instance mining organisations such as The Great Australian Operations, need to ensure that they have the necessary licence of operation, comply with the set laws as well as ensure any serious environmental has is immediately reported to the Queensland government (McGrath, 2011). Furthermore, such organisations need to undertake environmental impact assessments in any potentially risky activity as well as when starting out a new project. This helps in regulating and preserving the environment as well as ensures an efficient working environment for businesses. Factors influencing content of the law As noted above, the Environmental Protection Act 1994 was greatly influenced by Brundtland’s Report which advocated for sustainability. Hence one of the core and most important factors which influence the contents of the law, is environmental sustainability. The context of the contents of EPA 1994 (Qld) are developed based on the concept of ecologically sustainable development, in order to improve the quality of life and sustain a clean environment within Queensland. Other factors influencing contents of the law include the areas and scope that the Act seeks to protect, which range from water, air, waste management to noise. It also includes a clear definition of what environment entails and the various degrees of harm that may befall the environment and the intent to commit an environmental offence, all of which are also used to determine the degree of liability that is to be accrued to an individual responsible for causing environmental harm (McNamara, 2009; McGrath, 2011). In addition to these, another factor that determines the contents of the law includes precautionary principles where decisions need to be given careful consideration in making potentially environmentally impacting decisions. Within this factor there is also an issue of risk assessment of the impacts of various actions on the environment (Dixon, 2011). Content of the law The Environmental Protection Act 1994 is an important component in the Queensland environmental legislative system whose core purpose is to protect the environment and ensure sustainable development of the ecology. In order to ensure sustainability, the Act uses a number of tools including environmental protection policies, environmental duty, evaluation and audits, environmental protections orders as well as environmental authorities in the case of the mining industry (McGrath, 2011). The four core environmental protections policies under this Act include the Environmental Protection (Noise) Policy 2008, the Environmental Protection (Water) Policy 2009, the Environmental Protection (Air) Policy 2008, and the Environmental Protection (Waste Management) Policy 2000. These identify environmentally relevant activities (ERA) that impact the environment. For instance, mining, waste disposal, chemical manufacturing, oil refining, sewage disposal, among others (McGrath, 2011). The degree of environmental harm is described within this Act based on seriousness of the damage done and the fines that can be levied against such damages. Serious environmental harm for instance is deemed as one which significantly impacts the environment and causes actual or potential harm, especially to areas of high environmental value. The fine for such harm is an amount equal to or more than $50,000. On the other hand, material harm is negligible or trivial damage to the environment, with the fine for this ranging between $5000 and $50,000 (Bricknell, 2010). Furthermore, EP Act 1997 incorporates an aspect of wilfulness of the environmental harm where intention is examined. The harm can be unlawful or wilful actions or reckless and intentional actions. However the intention, the extent of damage is what mainly determines the severity of the fines. Intentional actions that cause serious harm to the environment tend to attract severe penalties than other offences of failing to comply. For instance, an organisation contravening an environmental condition for approval based on section 435 can be charged a fine of up to $150,000. Those who will unlawfully or wilfully cause serious harm based on sections 437 may range from $124,875 to $312,375 (Bricknell, 2010:32-34). Since the Great Australian operations was fined $135,000 for contaminating the Creek, then the damage must have been serious, while the environment damaged was valuable. EP Act 1994 also defined the concept of environmental duty in sections 319. In this case, general environmental duty requires that an individual or corporation not undertake any activity if can be harmful to the environment unless practicable and reasonable measures have been taken to minimise, mitigate or prevent the damage from occurring (McGrath, 2011). In this case therefore, an organisation or individual can only pursue a given activity if they have complied with environmental duty as stipulated. By taking practicable and reasonable steps to reduce or prevent damages to the environment, a person or organisation is able to avoid liabilities due to negligent or wilful damage to the environment. The idea of ‘reasonable and practicable’ care within the law is derived from the Donoghue v Stevenson case of negligence (McGrath, 2011). The Statute also defines the means through which various enforcement actions can taken against people or organisations that cause harm to the environment through pollution. These enforcement actions aside from were instituted to discipline offenders as well as discourage potential offenders from committing an environmental offence. The enforcement actions may include prosecution, notices and orders or directions (Vickery, Pendleton, and Flood, 2012). The infringement notices often institutes fines on the spot rather than go through prosecution and conviction processes. This though is only possible where the fine is paid within a certain timeframe after which if it has not been paid, court proceedings may be initiated. The notices are mainly given to minor one time offenders (McGrath, 2011: Bricknell, 2010). On the other hand, directions and orders are often given to halt or prevent a potentially harmful activity or an actual harmful activity. These orders prohibit, control, stop or abate the harmful activity. Where damage has already been done, the offender may be given direction to undertake rehabilitative measure or to clean up the environment as was the case with the Australian General Operations. In most cases DERM ensures that such orders are adhered to. Where extensive harm has occurred, license may be revoked, suspended or amended (Vickery, Pendleton, and Flood, 2012; Bricknell, 2010). Where licenses are amended, actions can be incorporate within the license that would enable an individual or organisation to attain compliance. In other cases, injunctive and civil orders can be provided by a court to prevent an organisation or individual from engaging in activities which are potentially harmful to the environment, or to order them to comply or cease conducting the activity (Vickery, Pendleton, and Flood, 2012). At times, offenders may be prosecuted through criminal or civil cases. This occurs in the case of negligent and wilful breach of the statute, and is often reserved for serious damage to the environment and breaches against laws (Bricknell, 2010). However, such prosecutions only occur where there is enough evidence, and reasonable possibility that the offender will be found guilty of environmental crimes. Impact of the law on businesses EP Act 1994 has a significant impact on businesses as it regulates most aspects of an organisation’s activities. In essence, any business strategies that are drawn up need also to implement environmental considerations at all stages of business development, right from innovation, extraction, development, logistics, marketing, to how a company disposes of its waste (Ong, 2001). Hence, environmental regulation has a strong impact in the corporate governance of organisations as businesses try to integrate, environmental protection in to their corporate strategies which are often focused on profit maximisation. With the EP Act protection of the environment, Queensland businesses have to ensure that the environmental risk management plan is effective enough to protect the company from potential liabilities. In an examination of environmental regulation across the world, Wijen and van Tulder (2011) found that the most stringent environmental regimes were found in developed countries, with Australia being among them. The impact of this on businesses is that businesses are constantly faced with higher costs of complying with environmental regulations, and most businesses have to have effective legal counsel to advice on ways to avoid liability under environmental regulatory regimes. While the EP Act enables businesses to understand what environmental risks they may be running in their businesses, hence help in preventing any liabilities, it also creates quite a complex regulatory regime with which businesses can manage the impact that their activities have on the environment. This is especially so with regard to criminal liabilities of the businesses with regard to environmental damage. While an operation or lack thereof causing material or serious harm to the environment is unlawful unless otherwise state by the Act, such harm does not result to criminal liability in itself. Criminal liability often arise when the criteria for material or serious harm to the environment has been attained and which can be reasonable proven. Where a company complied with environmental duty provisions, the company would not face criminal liability, but would only face strict liability charges (Fisher, 2000). With the new proposed amendments to EP Act 1994, Queensland businesses, businesses need to be prepared for stricter environmental regulations. The new proposed amendments to the EP Act seek to “expand the type of court orders” given out for various offences with regard to the environment, or increased factoring in of environmental costs into business costs for instance factoring in of fines into business costs, where businesses are required to report in their annual report such fines (Dixon, 2011). Businesses therefore have to assess and update their environmental risk management plans to ensure, they are in compliant with the required laws. Such environmental risk management strategies need to take into account the consequences of pollution such as destruction of flora and fauna, high clean up costs, property damage, damage to the company’s reputation and high cost o legal action as well as interruption of businesses. Indeed, over the recent past, a great concern for businesses has been the clean costs that may be incurred by businesses due to gradual pollution of smaller amounts over the years. Claims to such kind of pollution may run into millions of dollars especially since such small gradual pollution effects are often visible in the long term. A good case in point is Xstrata’s ongoing case with regard to long term lead exposure which has been alleged to be the cause of brain damage in children in the Mount Isa region (Mok, 2011). In such cases, even if no link between cause and effect is established, the company will still have incurred huge expenses in defending the allegations in court. Is there a need for Reform? While the EP Act does not hinder business activities especially in the mining industry, the regulation does impose increased risks to the activities of the mining operations, where if a business does not assess how even a small action impacts the environment, they may be held liable for environmental damages in the event of environmental harm. However, comparing the Act to other environmental Statutes in other developed countries such as the United States, or the European Union countries, the EP Act tends to be favourable to businesses. For instance, the principle of ‘polluter pays’ that is prevalent overseas, and the rules where parent companies are held liable for the actions of their subsidiaries tend to have with it heavy costs and fines for companies, hence restricting companies activity to an extent (Mok, 2011). Hence to a certain level, the EP Act is actually assisting to Queensland businesses while at the same time ensuring that such businesses maintain environmental integrity. In recent times though there have been calls for reforms on the basis that the EP Act is not stringent enough to deter environmental crimes. This is based on the a recent Environmental Crime in Australia Report which showed that environmental crimes in Australia have been on the rise with businesses willing to pay the fines charged (Bricknell, 2010; Dixon, 2011). Such proposed reforms include expanding the type of court orders given out for various offences with regard to the environment, as well as increasing inclusion of environmental costs into business costs, for instance inclusion of fines into business costs, which are to be reported in annual report (Dixon, 2011). Such reforms would the environmental regulation tougher on businesses. In essence therefore, rather than reforming the Act, DERM should ensure that the Act is effectively enforced by organisations, and those found wilfully harming the environment need be held liable to the full extent of the law. This would ensure that other business which are compliant still continue operating in the current regulatory regime, which is both strong in its protection of the environment, yet not stringent as to deter business activities. Conclusion In conclusion therefore, this paper has explored relevant principles of the EP Act 1994 environmental statute that impacted one of the mining companies in Queensland; Great Australian Operations PTY LTD, due to their act of polluting on the environmentally valuable creeks in Australia, and further analysed whether the law is in need of reform. From the paper, it can be noted that the core objectives of the Environmental Protection Act 1994 is to protect Queensland environment, and ensure environmental sustainability as well as higher quality of life. This legislation regulates environmental impacts within the mining industry in Queensland, thereby helps in maintaining the integrity of the place. Since the Act regulates most aspects of an organisation’s activities, it is imperative that any business strategies that are drawn up need also to implement environmental considerations at all stages of business development. Comparing this legislation to others across the developed world, EP Act 1994 was noted to be relatively favourable to businesses in Queensland. References Australian Government (2012). About the EPBC Act. Retrieved 12 September 2012 from http://www.environment.gov.au/epbc/about/index.html Australian Government (2012). History of the EPBC Act. 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