THE amendments to the Environmental Protection Act became law on November 19 – except those provisions relating to land clearing).
The Minister, under Part IV of the act or the CEO, under Part V, may require a proponent, licensee or person responsible for an authorisation – broadly defined under the act to including clearing permit, licence permit, approval or exemption – to provide a financial assurance.
A person who fails to comply with this requirement commits an offence under the act.
A financial assurance may be by way of a bank guarantee, bond, insurance policy or some other form of security approved by the CEO or the minister.
Before imposing a requirement to provide a financial assurance, the minister must have regard to:
p The degree of risk of pollution or environmental harm arising from the implementation of the project;
p The likelihood of the Department of Environment having to take some form of action under the act arising from implementation of the project; and
p The environmental record of the responsible person and other financial assurances required for the project.
Generally, obtaining financial assurance by way of bank guarantee or bank bond is a fairly straightforward procedure where there is sufficient security to satisfy the financial institution, that is either cash or other assets.
It is only in those projects where the financial security involves the successful completion of the project that the responsible person may have some difficulty fulfilling this type of requirement.
Gretta Lee, solicitor
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