Litigation risks for business and government
– Successful proceedings brought in 2018 by the Environment Council of Central Queensland against the Federal Minister for the Environment, relating to the level of environmental assessment to be undertaken for a proposal to clear 2,100 ha of native vegetation on Kingvale Station in the Great Barrier Reef catchment area 65 – Successful Administrative Appeals Tribunal (AAT) proceedings brought by Humane Society International in April 2019 against the Great Barrier Reef Marine Park Authority in relation to their use of lethal shark drumlines to control shark populations on the Reef 66 Government and business can also be the subject of litigation by businesses impacted by environmental pollution incidents caused by government or industry. For example, there is presently a class action being heard in the Supreme Court of Queensland on behalf of fisheries interests against the Gladstone Ports Corporation in which the claimants seek substantial damages for losses alleged to have been caused by inappropriately conducted port dredging operations. Part of the expansion involved dredged sediment being held a bunded reclamation area. This bund was designed to hold the
sediment and prevent it from escaping into surrounding waters due to the likely presence of various contaminants. It is alleged that the bund had defects and did not successfully contain the dredge, leading to catastrophic losses to themarine environment and consequential losses for a large portion of the Queensland seafood industry participants. While the dredging was conducted in State- controlled waters, the damage spread into the Great Barrier Reef World Heritage Area. As a result, the activities said to have caused the losses are subject to a complex web of overlapping State, Federal and World Heritage (i.e. international treaty) obligations, as both Queensland legislation and Federal legislation implementing treaty obligations applies. Climate change risk generally has also become a more prominent issue for Australian companies in recent years. There is increased pressure on directors (particularly those in industries likely to be negatively affected by climate change) to consider such risks in the context of their director’s duties and to ensure the company makes appropriate disclosures in its annual report.
Inadequate disclosure of climate change risks in annual reports could expose directors and senior management to litigation risk arising from activist shareholders pursuing legal action against Australian listed companies and regulatory scrutiny from Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC). Tourism and other industries with exposure to environmental damage occurring on the Reef may be impacted by changing shareholder expectations. These risks are highlighted by the recent memorandum by Noel Hutley SC on the obligations of directors 67 , as well as recent advice from the ASIC 68 andAustralian Stock Exchange 69 supporting increased disclosure of climate related risks.
67 https://cpd.org.au/wp-content/uploads/2019/03/Noel-Hutley-SC-and-Sebastian-Hartford-Davis-Opinion-2019- and-2016_pdf.pdf 68 https://asic.gov.au/about-asic/news-centre/find-a-media-release/2019-releases/19-208mr-asic-updates-guidance-on- climate-change-related-disclosure/ 69 https://www.asx.com.au/documents/regulation/cgc-principles-and-recommendations-fourth-edn.pdf
66 Humane Society International (Australia) Inc and Department of Agriculture & Fisheries (Qld)  AATA 617
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