Commencing on 11 January 2013, the Miscellaneous Acts Amendments (Directors’ Liability) Act 2012 (NSW) (“the Act”) will significantly impact how various corporate criminal offences, including environmental offences, which are the subject of this bulletin, are pursued and prosecuted.
The Act brings into effect a number of changes including those that will reverse the position of who bears the onus of proof applicable to corporate offences. The onus of proof which was previously borne by the defendant directors and managers in over 1000 corporate offences will now apply to only 150. In the remaining 850 offences, now categorised as “executive liability offences”, the onus will be shifted back to the prosecution.
The Act also categorises corporate offences attracting director liability in to 3 types:
1) Executive liability offences;
2) Special executive liability offences; and
3) Accessory offences.
Executive liability offences, which relate to more minor environmental offences, will require prosecutors to gather greater evidence than was previously needed in considering whether or not to commence proceedings against offending directors or managers.
We anticipate a reduction in the number of prosecutions for the less serious executive liability offences, however the inclusion of accessory offence provisions will mean that prosecutors are empowered with a whole new category of potentially wide liability offences to pursue. As a result, we are likely to see prosecutors relying more heavily upon their powers of investigation in pursuit of offenders.
The situation remains unchanged for serious environmental offences, now categorised as “special executive liability offences”. Therefore directors and managers of corporations need to remain ever vigilant of their responsibilities under various pieces of legislation because their direct and indirect acts and omissions may expose them to criminal sanctions.
Executive Liability Offences
Prior to the Act, defendant directors and managers were required to prove they were not in a position to influence the conduct of the corporation, and had undertaken all reasonable steps to prevent the commission of the offence. The prosecutor now bears the onus of proving that the person was in a position to influence the conduct of the corporation, and failed to take all reasonable steps to prevent the commission of the offence.
Offences affected by this amendment are now categorised as executive liability offences.
Offences contained in the Threatened Species Conservation Act, Heritage Act, Native Vegetation Act, Environmentally Hazardous Chemicals Act, and Protection of the Environment Operations Act (“POEO Act”) have been affected by the amendments, and are now classified as executive liability offences.
Examples under the POEO Act include:
(a) failing to comply with a clean-up notice (s91);
(b) failing to comply with a prevention notice (s94);
(c) noise pollution offences (s141); and
(d) supplying false or misleading information about waste (s14AA).
Special Executive Liability
While relatively minor offences under the POEO Act have been reclassified as executive liability offences, the onus of proof position applicable to more serious offences is unchanged. These more serious offences have been distinguished from executive liability offences and categorised as special executive liability offences.
In effect, defendant directors and managers will be taken to have contravened the relevant provisions of the POEO Act unless they can satisfy the court that they were not in a position to influence the contravening conduct of the corporation, and had used all due diligence to prevent such contravention.
Examples of special liability offences under the POEO Act include:
(a) failing to comply with conditions of an environment protection licence (s64);
(b) failing to comply with a prohibition notice (s102);
(c) willful or negligent disposal of waste, causing harm to the environment (s115);
(d) water pollution offences (s120);
(e) land pollution offences (s142A); and
(f) failing to uphold one’s duty to notify when pollution incidents occur (s152).
In addition to special executive liability and executive liability offences, the Act now enables prosecutors to pursue directors and managers who are an accessory to a corporate offence. A director or manager is considered an accessory if he or she:
(a) aids, abets, counsel or procures the commission of the corporate offence, or
(b) induces, whether by threats or promises or otherwise, the commission of the corporate offence, or
(c) conspires with others to effect the commission of the corporate offence, or
(d) is in any other way, whether by act or omission, knowingly concerned in, or party to, the commission of the corporate offence.
The Act allows an accessory offence to be charged in addition to any corporate offence, irrespective of whether it is committed by the corporation, a special executive liability offence or an executive liability one.
Some of the Acts which will now contain accessory offences are Contaminated LandManagement Act, National Parks & Wildlife Act, Native Vegetation Act, Threatened Species Conservation Act and POEO Act.
To get specialist advice from one of our lawyers with environmental prosecution and enforcement expertise, contact Simone Brew or Keli Law on 9806 7477.