The expansion of corporate work health and safety and environmental enforcement in Australia

Significant changes to work health and safety (WHS) and environmental laws are progressively being introduced across Australian jurisdictions with the express aim of making it easier for regulators to prosecute corporations for serious offences while at the same time making it harder for corporations to avoid the costs of non-compliance.

What are the key changes that are likely to result in heightened levels of enforcement activity from regulators and how can corporations mitigate their exposure?

Compliance with work health and safety (WHS) and environmental laws continues to be an area of increasing criminalisation and scrutiny. However, even with the availability of existing serious offences (such as those involving reckless or wilful conduct) and the introduction of new serious offences (such as industrial manslaughter), to date there have only been a handful of successful prosecutions against corporations for such offences.

It is primarily for this reason that significant changes to WHS and environmental laws – including bans on certain insurance arrangements, the introduction of new environmental offences and enforcement tools, and substantial increases to maximum penalties – are progressively being introduced across Australian jurisdictions.

‘Watering down’ of existing serious WHS offences

Existing serious offences under WHS laws are being progressively amended across Australian jurisdictions to include alternative fault elements that are easier for prosecutors to prove.

In some jurisdictions,^[1] prosecutors now have the option of seeking to prove either the objective fault element of negligence or the intentional fault element of recklessness for serious offences. In a criminal law context, reckless conduct is intentional and generally requires the prosecution to prove a conscious choice by a duty holder to take an unjustified risk (a state of mind). Negligence, however, is an objective fault element, and does not require state of mind to be proved. Arguably, this makes negligence an easier element to prove than recklessness.

Again, these changes which have the effect of ‘watering down’ the fault elements for existing serious offences will improve a regulator’s ability to prove essential elements of the offences. These changes to WHS offences align with environmental offence provisions in various Australian jurisdictions, including the Commonwealth,^[2] Western Australia^[3] and Queensland,^[4] where negligence has expressly been a component of fault for some time.

Introduction of new offences, duties and powers

A number of new WHS and environmental offences, duties and powers have also been, or are proposed to be, introduced across Australian jurisdictions. The most significant new offences under WHS laws are the industrial manslaughter offences, which have now been introduced in all Australian jurisdictions, other than Tasmania (where relevant amendments are still before the Parliament). In addition to carrying significant penalties, some jurisdictions^[5] also allow for alternative verdicts to be returned by a Court in proceedings for an industrial manslaughter offence.

This is intended to serve as another incentive for prosecutors to commence proceedings for the more serious offence of industrial manslaughter, as a verdict can still be returned for a less serious offence (subject to evidence proving that offence) if the Court is not satisfied an industrial manslaughter offence has been proved.

New offences, duties and powers have also been introduced to environmental laws, expanding the enforcement toolkit available to regulators. These include:

• at the Commonwealth level, those proposed to be introduced by the stage two environmental legislation reforms, including:
  
  
  • new Environment Protection Orders and expanded scope for environmental audits; and
    
    
  • the establishment of a new independent Commonwealth environmental protection agency, Environment Protection Australia, which is to be a ‘tough cop on the beat’;
    
    
• in New South Wales, new offences for the illegal dumping of litter or waste, along with expanded NSW Environment Protection Authority enforcement tools, which include two new types of Environment Protection Notices (being Preliminary Investigation Notices and Recall Notices), an expanded scope for Clean-up Notices and a new power to issue public warning statements; and
  
  
• in Queensland, new Environmental Enforcement Orders, along with a new standalone duty to restore the environment where an incident involving contamination resulting in unlawful environmental harm has been permitted or caused, and an offence for failing to comply with the general environmental duty where that failure causes, or is likely to cause, serious or material environmental harm. These reforms bring Queensland more into line with the regime in Victoria where a positive duty to manage contaminated land and an offence for failing to comply with that State’s general environmental duty have been in place since 2021.

Increasing penalties and prohibitions on WHS insurance

Alongside the changes discussed above, harsher penalties continue to be introduced to reflect the seriousness of WHS and environmental breaches.

The maximum penalties attaching to WHS offences have dramatically increased across most jurisdictions, with the highest maximum penalty available against a corporation currently sitting at A$25 million. Mechanisms to continually increase the maximum penalties for offences under WHS laws have also been adopted in some jurisdictions.^[6] Likewise, bans on insurance (including contractual indemnity arrangements) against penalties for breaches of WHS offences are also being progressively adopted across jurisdictions,^[7] with the aim of ensuring that financial consequences are borne directly by a corporation, rather than being shifted to insurers.

Maximum penalties attaching to environmental offences in New South Wales have also recently risen, while the most dramatic increase is proposed to be introduced at the Commonwealth level, where penalties up to A$780 million could be imposed for the most serious offences under the EPBC Act. These penalty reforms align penalties for serious environmental offences with the civil penalty regimes for serious corporate and financial crimes under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). The increased penalties reflect a significant shift in recognising the potential seriousness of environmental crime.

Key takeaways

The changing regulatory landscape will almost inevitably lead to an increase in enforcement activities by regulators under applicable WHS and environmental laws.

Regulators will be keen to use the recent and ongoing legislative changes to their full force, and this will include an increase in regulatory action against corporations that are not prioritising compliance with WHS or environmental laws, exposing them to the potential imposition of significant penalties.

Employers who prioritise their WHS and environmental performance and compliance should ensure their management systems and processes are appropriately calibrated to take account of these changes.

^{[1] Section 31 of the Model Work Health and Safety Act has been amended to include both fault elements, with these changes having already been adopted in the Commonwealth, South Australian, Australian Capital Territory and New South Wales jurisdictions. Amendments are currently before the parliament in Queensland. Other harmonised jurisdictions may also adopt this amendment in due course.}

^{[2] See sections 494 and 495 of the EPBC Act.}

^{[3] See, for example, sections 49 and 50 to 50B of the Environmental Protection Act 1986 (WA).}

^{[4] In Queensland offences committed ‘wilfully’ attract higher penalties, that term being defined to include ‘gross negligence’.}

^{[5] Alternative verdicts are currently available for industrial manslaughter offences in the Commonwealth, Western Australia, Australian Capital Territory, Northern Territory and South Australia jurisdictions. Amendments to introduce alternative verdicts for industrial manslaughter offences have been passed in New South Wales and are currently before the parliament in Queensland.}

^{[6] The Model Work Health and Safety Act has been amended to include tiered monetary penalties for offences. These changes have been adopted in the Commonwealth jurisdiction. New South Wales has also adopted a formula for annually increasing the amount of a penalty unit for WHS offences.}

^{[7] WHS insurance is now banned in the Queensland, New South Wales, Australian Capital Territory, South Australia, Victoria and Western Australia jurisdictions. Amendments to introduce a ban on WHS insurance have been passed in South Australia.}