We previously blogged on the refusal of the Land and Environment Court (LEC) to declare that information compulsorily obtained under the Protection of the Environment Operations Act 1997 (Act) would not be used in a prosecution against a Company’s executives (Executives) for special executive liability offences.
The Executives appealed to the Court of Appeal. Before the appeal was heard, the Environment Protection Authority (EPA) conceded that s212(3) of the Act, which governs when information will not be admissible in criminal proceedings, extends to special executive liability offences. We question whether the EPA’s view is a ‘significant’ concession, or simply a re-statement of the law.
The EPA issued notices to a Company’s Director and Managers (the Executives) under s203 of the Act, requiring the Executives to nominate a place and time to attend and answer questions, or, attend at a specified place and time to answer questions (Notices).
The Company was being investigated for the unlawful transportation and disposal of waste.
Before answering questions in response to the Notices, the Executives requested an undertaking from the EPA that it would not ask questions relating to special executive liability offences, or prosecute them for such offences. The EPA refused to give the undertaking, stating it could not fetter its prosecutorial discretion in that way.
Because of this, rather than attend the interviews and object under s212(3) of the Act, the Executives sought a declaration from the LEC that any information they provided in response to the Notices on objection on the ground of self-incrimination, would not be admissible in any prosecution against them as individuals for a special executive liability offence under s169 of the Act.
Section 169 of the Act makes directors of a corporation, or people concerned in the management of a corporation, guilty of an offence if the corporation contravenes a provision of the Act which attracts special executive liability, unless the person can establish:
- they were not in a position to influence the conduct in relation to the contravention, or
- if they were in such a position, they used all due diligence to prevent the contravention.
Section 212(3) states that information or answers given by a natural person in compliance with with Chapter 7 of the Act (under which the Notices were issued) are:
‘not admissible in evidence against the person in criminal proceedings … if:
(a) the person objected at the time to doing so on the ground that it might incriminate the person, or
(b) the person was not warned on that occasion that the person may object to furnishing the information or giving the answer on the ground that it might incriminate the person.’
The Land and Environment Court’s Findings
The LEC found that since the Executives had not been charged with a special executive liability offence, they had no lawful excuse to refuse to answer questions as required by the Notices, on the basis their answers ‘may be used directly against them in future special executive liability criminal proceedings’ (see ).
The LEC found that it could not reach a concluded view of ‘what might be in hypothetical circumstances‘ and would not give an advisory opinion.
Proceedings in the Court of Appeal
The EPA’s concession
The Executives commenced the proceedings in the Court of Appeal (Court).
One month after the appeal was filed, the EPA wrote to the Executives stating that it had come to the concluded view that s212(3) of the Act makes information or an answer given under objection on the grounds of incrimination, ‘not admissible in evidence against the person in a prosecution of the person for an offence to which section 169 of [the PEO Act] applies.’ (Concession).
The parties agreed that the Concession satisfied the Appellant’s concern that the EPA may rely on information obtained via the Notices in special executive liability offences.
The Court did not consider whether the Concession was correctly given.
The controversy was not hypothetical
The Court did find that in the LEC the matters raised by the Executives were not ‘merely abstract or hypothetical questions’, but there was a real controversy as to whether the Executives were protected by the immunity in s212(3) of the Act, or whether the Executives could decline to answer questions under the Notice on the basis they had a lawful excuse to do so. This controversy was capable of being the subject of declaratory relief.
However in the circumstances that were now before the Court, following the Concession, there was no longer a dispute between the parties in relation to the Notices, and therefore there was no controversy ‘to be determined by the making of a declaration‘ .
Significance of the EPA’s concession
Some commentators have suggested that the Concession amounts to a significant reduction, or weakening of the EPA’s powers of compulsion under the Act.
We do not consider this to be the case.
The Concession simply accords with s212(3) of the Act, which clearly states that information is not admissible (where a person is compelled and an objection is made), ‘in criminal proceedings‘.
Before the Court, the parties agreed that a relevant element of a special executive liability offence, is that a corporation has contravened a provision of the Act that attracts special executive liability, and this element can be proved against the Executive by evidence admissible against that person (see ).
It follows that once an objection is given under s212(3) it is irrelevant whether a person is directly liable, or taken to be liable by virtue of special executive liability, as the information is not admissible against the person in any criminal proceedings.
What does matter is that the individual is the subject of a requirement under the Act and the person objects at the time to the answering questions, on the ground that the answers may tend to incriminate the person.
In our view the EPA’s refusal to provide the undertaking initially sought was appropriate in the circumstances and all that was required from the Executives was that they object to answering questions under s212(3).
Read the Court’s judgment in full here Fordham v Environment Protection Agency  NSWCA 167, and our previous blog on the Land and Environment Court’s findings here.
To discuss this blog, please contact Carlo Zoppo, Partner on 8235 9705.