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Compliance Risk Management A practical and a legal perspective

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1 Compliance Risk Management A practical and a legal perspective
National Environmental Law Association State Conference – 1 September 2017

2 Introduction A practical and legal perspective of compliance risk management at current issue points in project lifecycle. Approvals in approvals Commencement Compliance management Michael Based on EPBC Act with examples drawn from land development, but should be applicable to other jurisdictions (e.g. EP Act, DMP legislation) DEE compliance program (2016) – focused on WA land development (‘historically sector with greatest non-compliance’) Risk – acknowledge incentives to be fixated on compliance are low – no prosecutions (although investigations undertaken and breach notices issued), agencies have limited resources to investigate Importance of compliance (other than strictly legal) - reputational – agencies take into account company’s environmental history  – increased burden in subsequent approval applications, seeking variations etc Public reputation (social licence) Other stakeholders, e.g. board, investors, banks Governance incentives Audits Reporting

3 Approvals in approvals
Condition-setting ‘The person taking the action may thin native vegetation (…). The total thinning … of the 214 housing lots … must not exceed 112,350 plants suitable for foraging for Black Cockatoos’ Timing, e.g. failure to publish subsidiary plans – condition often separate to plan condition ‘ …the person taking the action must publish the Plans referred to in these conditions of approval on their website…within 1 month of being approved by the Minister or being submitted under condition 10 Jeremy EPBC Act land development focus (DEE ‘historically sector with greatest non-compliance’) Euphoria of approval Common issues Condition-setting, extra example The person taking the action must rehabilitate ha to provide foraging habitat...of the following areas in (POS): ha within POS ha within POS 28 Timing – especially related to commencement (MV to discuss more later)

4 Approvals in approvals
Third parties ...the approval holder will...obtain approval from the Minister (for sub-plans)...Clearing planned for stage 2 will not proceed until the appropriate approvals have been obtained Offsets Handover ‘To the satisfaction of’ or ‘on the advice of’ Jeremy Clarify term 3rd party 3rd party/Offset The proponent shall provide funding to a party approved by the CEO for development and implementation of a Management Plan in accordance with the following schedule $150,000 prior to expansion of mining outside Area A; and $150,000 within two months of disturbing more than 50 hectares outside Area A, or three years after commencement of mining outside Area A, whichever is the sooner. 3rd party/handover Within 5 years of the date of this approval, the person taking the action must provide funds to the DEC to assist in the management of Regional Open Space following the transfer of the land as described in conditions 10(b). The funding must be adequate for the DEC to maintain or improve the quality of Carnaby's Black Cockatoo habitat retained in Regional Open Space (as marked in red and labelled 'Retain' in Attachment B) for at least 20 years. The person taking the action must consult with the DEC, in determining the amount of necessary funding to achieve the aims of this condition. Once the funding has been provided to the DEC, the person taking the action must provide written evidence of this to the Department.

5 Approvals in approvals
Conflict with other agency/regulatory requirements (Management plan to include) A commitment for at least 50% of plantings of trees and shrubs in street-scaping to consist of plants know to be primary feeding plants for Carnaby’s Black Cockatoo. Habitat…is to be retained for conservation purposes in perpetuity. Clearing of local native trees and understorey vegetation in the corridor must not occur. The conservation corridor is to be rehabilitated only with (Carnaby’s species). Jeremy Land dev – local government Street-trees/ landscapes – LGA aims (growth patterns, safety, aesthetics, shade), masterplans approved by LGA not aligning with approval Bushfire - State Planning Policy 3.7 (planning in bushfire prone areas) Refer to ‘condition-setting’! Often changing local setting (e.g. bushfire policy)

6 Approvals in approvals
Subsidiary management plans Ensure ‘implementable’ EPBC revised management plan condition The approval holder may choose to revise a management plan approved by the Minister under conditions 10 and 12 without submitting it for approval under section 143A of the EPBC Act, if the taking of the action in accordance with the revised plan would not be likely to have a new or increased impact Jeremy Inconsistencies within management plans (avoid duplicate sections) (management table – biannual monitoring, monitoring table – annually in spring) “Should” versus “shall”, “if necessary” Separate actions from context (use tables) Identify timing (and responsibility) New EPA instruction/template good format (more ‘implementable’, easier to check/audit) Stages – Target “If construction is immediately adjacent to the PRR, temporary and/or permanent delineation measures^ must be installed along the entire stage boundary and at least 50 m from the edge of the stage clearing footprint, prior to clearing of that stage” Action: “Clearly mark CBC habitat proposed to be retained (as indicated on Figure 2) on construction drawings and delineated by survey pegs and/or temporary fencing along the entire stage boundary.”

7 Commencement Substantial commencement: Objective analysis
Whether approval lapses depends on condition and regime: Planning – can apply to extend before or after expiry Ministerial statements: The authorisation to implement the proposal shall lapse and be void within 5 years after the date of this statement if the proposal is not substantially commenced; or The proponent shall not commence implementation of the proposal after X date, and any commencement, prior to this date, must be substantial. EPBC Act: if, at any time after 5 years from the date of this approval the person taking the action has not substantially commenced the action, the person must not substantially commence the action without the written agreement of the Minister. Michael

8 Commencement Failure to notify commencement Ministerial statements:
Any commencement of implementation of the proposal, on or before X date, must be demonstrated as substantial by providing the CEO with written evidence, on or before X date. EPBC Act approvals: Within 30 days after commencement, notify Department. Michael

9 Compliance management
Compliance tracking Obligation details ID Approval Agency Obligation Task Timing Evidence 1 EPBC 2011/XX DEE Within 30 days after commencement.... Notify DEE Within 30 days DEE correspondence Jeremy Availability of subscriber platforms – reliance on data input accuracy and updates, reliance on understanding of team in field Obligation - the exact (even if there typos – this is what has been formally approved) text from the condition of approval, management plan action etc.

10 Compliance management
Compliance tracking Tracking details Status Responsibility Phase Frequency Category 1st reminder 2nd reminder Deadline PM Pre-commencement Once only Scheduled - external 18-Nov-14 11-Dec-14 18-Dec-14 Jeremy Scheduled - internal requirement Scheduled - external requirement Design/planning - Pre-commencement to get approval. Induction (Procedural) - Tasks that need inclusion in an induction package. Inspection (Procedural) - Onsite inspection by contractors, should be recorded. Record keeping (Procedural) - Maintenance of records. Procedure (Procedure) - Specifications e.g. weed control, planting trees (according to correct methodology). Regulator direction - Ministerial direction. Status Date completed Documentary record Notes CLD 17-Dec-14 C_001 N/A

11 Compliance management
Project team Ensure key people and contractors understand primacy of approval, including figure attachments – early warning on desired changes, consistency between approved plans and other plans Induction / pre-commencement review Jeremy Engineering and design, planning, landscaping, rehab contractors all have potential to make changes and undertake actions which may be inconsistent with requirements of the approval Avoid retrospective action to come into compliance

12 Audits Legal/technical Internal reviews and audits
Due diligence and reasonable precautions. Legal professional privilege. Internal reviews and audits Internal audits – early, allow remedial actions prior to statutory reporting period Record-keeping check Corporate-level reviews – report to board, identify systematic issues, focus project managers on responsibility to directors Michael Jeremy Internal audits – early, allow remedial actions prior to statutory reporting period bring into compliance - unless unavoidable – e.g. missed deadline, over-clearing) Record-keeping check - critical, need to be sufficient (e.g. endorsed, dated, linked to obligation, correct timing)

13 Reporting Mandatory reporting
Within 3 months of every 12 month anniversary of the commencement of the action, the person taking the action must publish a report on their website addressing compliance with each of the conditions of this approval, including implementation of any management plans as specified in the conditions. Verification – review of evidence (what should exist, what does exist, why the difference, the impact) The person taking the action must maintain accurate records substantiating all activities associated with or relevant to the conditions of approval Jeremy Sufficient evidence: 1) Records (best), 2) auditor observation (independent visual verification) , 3) interview (needs additional verification– good to test understanding, but best to validate with documentary and/or observation)

14 Reporting Mandatory reporting Endorsement
EPBC Act In making this declaration, I am aware that sections 490 and 491 of the...EPBC Act make it an offence in certain circumstances to knowingly provide false or misleading information or documents. The offence is punishable on conviction by imprisonment or a fine, or both. I declare that all the information and documentation supporting this compliance report is true and correct in every particular.  I am authorised to bind the approval holder to this declaration and that I have no knowledge of that authorisation being revoked at the time of making this declaration. Jeremy Director liability EPA – CAPs, CARs, Form 2 endorsement (Statement of Compliance) EP Act I...(full name and position title) declare that I am authorised on behalf of... (being the person responsible for the proposal) to submit this form and that the information contained in this form is true and not misleading. DWER (DER) AACRS require similar endorsement

15 Conclusion and questions?
Approvals in approvals: plans Commencement Compliance management Audits Reporting


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