Environmental issues on corporate transactions

Legal advice in relation to environmental issues, where it is given on a corporate transaction, will require a commercial assessment of the environmental responsibilities taken on, or to be taken on, by the client and any actual or contingent risks and liabilities that may arise from them, including:

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any potential impact on the value of assets (eg as a result of remediation in relation to environmental matters or other clean-up costs)
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any likely operational issues (eg due to the transfer, suspension or revocation of an environmental permit or other necessary licence)
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any consequential costs of compliance (eg the necessity to upgrade to plant and equipment to comply with environmental responsibilities), and
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any reputational risks (eg incidents of pollution or the perception of poor environmental or sustainability performance adversely affecting share prices)

Environmental liabilities

There are various types of environmental liabilities that could be associated with a company. These include:

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clean-up liabilities—costs associated with site investigations, remediation and monitoring as a result of regulatory action, third party claims, permit requirements or contractual obligations
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regulatory liabilities—fines, imprisonment, civil sanctions, regulatory enforced remediation, prohibition

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