Environmental liabilities—what are clean-up liabilities?
Environmental liabilities—what are clean-up liabilities?

The following Environment practice note provides comprehensive and up to date legal information covering:

  • Environmental liabilities—what are clean-up liabilities?
  • Broad scope of clean-up liabilities
  • How do clean-up liabilities arise?
  • Actual, contingent and latent liabilities
  • What does clean-up involve?
  • Key clean-up liabilities
  • Other clean-up liabilities

Environmental liabilities—what are clean-up liabilities?

Clean-up liabilities are legal and financial obligations to remediate pollution or contamination pursuant to:

  1. statute, eg a pollution incident which causes environmental damage

  2. civil disputes, eg damages for common law nuisance or negligence

  3. contract, eg an environmental indemnity

Pollution incidents and other activities that trigger clean-up liabilities may also result in prosecution, director and officer liability, and reputational damage.

Practitioners should consider clean-up liabilities when:

  1. undertaking environmental due diligence in corporate, property or financial transactions

  2. advising on company reporting and environmental accounting

  3. advising on transferring environmental liabilities, such as contaminated land, from one entity to another

  4. advising on pollution incidents

Broad scope of clean-up liabilities

Clean-up liabilities are not just limited to remediation liabilities for contaminated land under Environmental Protection Act 1990, ss 78A–78YC (Part IIA) (EPA 1990). They are much broader, ranging from environmental indemnities to remediation notices for environmental damage.

Importantly, many clean-up liability regimes overlap. For example, the environmental damage regime may apply instead of, or in addition to, existing environmental regimes. It aims to prevent and remedy environmental damage to land, water, and protected species and habitats.

Where liability regimes overlap, the regulator(s) must choose which enforcement regime to use. In the case of land contamination for instance, enforcing authorities should only impose liability under Part IIA where there is no better solution for dealing with the contamination, ie it is an

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