Feb 2011 Environmental Consulting and the Law

This seminar explored the NSW case where an environmental consulting company Orogen Pty Ltd and its director Mr Fish were convicted of an offence under the National Parks and Wildlife Act 1974 for causing damage to threatened species habitat (koala). Although the consultant did not actually commit the act of clearing the vegetation, their advice resulted in its removal and hence they were found to have caused the removal. This is the first known case of its type in Australia where an environmental consultant has been prosecuted (usually the landowner or developer or contractor would be pursued in the first instance).

The seminar featured presentations from Claire Smith, Partner at Clayton Utz based in NSW, Don Armstrong, Barrister & Solicitor, Private Practice in Battery Point and Leonard Fernandez, based at the Salamanca Chambers, in Salamanca .

Overview of the case

• A developer engaged Mr Fish to advise on the removal of vegetation for a new industrial lot in NSW which was about 10 hectares in size. It was a mixture of 4a industrial zoned land and 1a rural zoned land.
• Mr Fish conducted an environmental assessment and found a koala habitat corridor within the lot.
• Mr Fish subsequently set up his own consulting company, Orogen Pty Ltd. In its fee proposal, Orogen accepted responsibility for ensuring “legislative compliance” in respect of the clearing works.
• Mr Fish provided the advice that no consent was needed when clearing vegetation on industrial zoned land nor when clearing “non-protected regrowth” on 1a rural zoned land, as per the Native Vegetation Act 2003 (NV Act). In reaching this conclusion, Mr Fish reviewed online documentation prepared by the Department of Environment and Climate Change and consulted with the local Catchment Management Authority and the local Council. However, Mr Fish did not identify that it is an offence to damage any habitat of a threatened species under the National Parks and Wildlife Act 1974 (NPW Act). There are a number of defences for this offence (eg the clearing of non native vegetation which is permitted under the NV Act) however the defences do not apply to industrial land. Hence the removal of any vegetation, regrowth or not, on industrial zoned land without the required authorisation was unlawful.
• Mr Fish hired an expert arborist to give general advice as to whether vegetation on the rural zoned land contained non-protected regrowth for the purposes of section 19 of the NV Act. It concluded that although some non-protected regrowth was present, the land also contained mature trees which could not be cleared until the required authorisation was received. The report was then used by Orogen to determine which trees should be tagged as non-protected regrowth and which trees should be tagged as protected. The report was not designed to be used for this purpose and gave no clear guidance as to which specific trees should be tagged. The report only related to land zoned rural 1A and not to the land zoned industrial.
• Orogen employed an ecologist to tag non-protected regrowth (which Mr Fish had previously advised could be lawfully removed from rural land). The ecologist did not have expertise in this area. It was the first time he had ever been asked to judge the age of vegetation to identify regrowth.
• The trees were then removed by a contractor. Orogen were not on site during the operations.
• Mr Fish and Orogen were charged under the NPW Act for causing damage to the habitat of a threatened species. He pleaded guilty to the charge. The judge considered that the offence was on the low side of culpability given that Mr Fish showed remorse and there was no deliberate intent. She also noted that the legislation surrounding the removal of vegetation was confusing as it was part of three different Acts and the Department’s own factsheets did not identify how the Acts interacted.
• Mr Fish was fined $5,000 and Orogen $10,000. The maximum penalty is $110,000 or 1 year imprisonment. Mr Fish and Orogen were ordered to pay the prosecution costs of $105,000, to undertake a koala habitat mapping project at an approximate cost of $150,000 (Orogen offered to carry out this project and it was accepted by the Court) and was ordered to put advertisements in the Sydney Morning Herald and the newsletter of the Ecological Consultants Association of NSW.

What could Mr Fish/Orogen have done differently?

• Orogen could have undertaken a full and comprehensive legislative review at the initial stage to identify the links between the different legislation. Given the complex nature of the legislation, it may have been prudent for the developer or consultant to engage a lawyer to provide legal advice.
• Rather than agreeing to ensure “legislative compliance” for the clearing works, Orogen could have limited their scope of works to particular legislation.
• Orogen should not have used the expert arborist’s report in a way that it was not intended to be used.
• Orogen should not have hired an inexperienced ecologist without the necessary skills to perform the task.

What sets this case apart?

This case is the first known case in Australia where the definition of “cause” environmental damage has been expanded to include indirectly causing damage due to incorrect advice of a consultant. Typically in this situation legal proceedings would be undertaken against the developer or the tree removal contractor or landowner.

Since this case was concluded, there have been two examples where the expanded definition of “cause” has been adopted. In one case, an interior decorator was prosecuted (as well as the builder) relating to the complete demolition of a house that was subject to heritage protection provisions.

What can environmental consultants do to protect themselves?

• Limit the scope of works as much as possible. Limit the work to providing factual and technical information where possible and take care when interpreting legislation. Technically under the Legal Profession Act 2004 (NSW), only legal practitioners can engage in legal practice.
• Do not agree to ensure “legislative compliance”. By doing so, Orogen accepted an enormous amount of responsibility to identify and interpret various pieces of legislation. Ultimately this proved to be beyond their expertise as they failed to appreciate the links between the three different Acts. In this situation, instead of offering full legal compliance, Orogen could have agreed to identify areas of non-protected regrowth under the NV Act and koala habitat under the TSC Act. The advice becomes factual and technical information and does not delve into the grey area of providing legal advice and interpretation.
• Ensure that the Terms and Conditions are agreed to prior to being engaged by a client. Consider getting legal advice and do not blindly accept the standard Terms and Conditions of your client. The Terms and Conditions should include the scope of works, responsibilities of each party, limits of liability and it is good practice to also include project stages and timings. Aim to achieve a reasonable balance.
• Maintain appropriate Professional Indemnity insurance. Note, under the Competition and Consumer Act 2010 (Commonwealth), if the value of the services is under $40,000, then there is a limit of liability equal to the value of the contract. Note, of the Professional Indemnity policies reviewed (including the standard policy provided by Marsh to EIANZ members), no policies provided coverage for criminal proceedings (prosecution under Acts/regulations) as in this case. The policies only provided coverage for civil proceedings (eg disputes between a client and consultants). However, the likelihood of being subject to civil proceedings is much higher than criminal proceedings.
• Do not consult outside your area of expertise. Ensure you have appropriate internal procedures to ensure that personnel working on projects have sufficient skills and experience. Note, some clients are now specifying which people within a consulting firm can work on the project. Engage other consultants if part of the work is outside your area of expertise.
• Realise that you cannot rely on the disclaimer in the report and that you can still be prosecuted for giving incorrect advice.
What are the lessons for people who engage environmental consultants?
• Be clear about the scope of services sought and document this in the Terms and Conditions.
• Check the qualifications and experience of environmental consultants and insist that those persons perform the work.
• Be clear whether or not you warrant reliability of information supplied to the consultant.
• Do not accept the consultant’s standard contract.
• Beware of limitations in reports and ensure that the limitation/disclaimer is consistent with the Terms and Conditions agreed up front.

Environment Law in Tasmania

The key environmental legislation in Tasmania is the Environmental Management and Pollution Control Act (EMPCA). The Act defines environmental harm as “any adverse effect on the environment (of whatever degree or duration) and includes environmental nuisance”. The Act defines environmental nuisance as “the emission of a pollutant that unreasonably interferes with, or is likely to unreasonably interfere with, a person’s enjoyment of the environment”.

Under Section 53, a person who wilfully and unlawfully causes an environmental nuisance is guilty of an offence. The maximum penalty is 300 penalty units or $39,000. Similarly, under Section 50, a person who “causes serious environment harm” is guilty of an offence. The maximum penalty for a body corporate is $1.3 million or for a natural person, $325,000 or 4 years imprisonment (or both).

As the definition of “cause” has now been expanded in the Fish/Orogen case, an environmental consultant, who gives incorrect advice which leads to environmental harm or an environmental nuisance, could be open to prosecution. As noted above, the penalties in Tasmania are not insignificant.

Please note, the material in this summary are one person’s summary of the discussions at the seminar. It is not legal advice and should not be relied upon as such.