Matt Hyatt, Senior Environmental Consultant at Australian firm MRA Consulting Group explains the amended New South Wales regulations to formally detail the method for calculating Monetary Benefit Orders (MBOs) which will confiscate profits gained from breaking environmental laws.
The NSW EPA can apply for MBOs to be imposed by the courts during sentencing. MBOs would be in addition to other penalties as their aim is to confiscate the financial advantage gained from breaking environmental laws. The most likely offence to be targeted by a MBO is operating above limits (e.g. for tonnes processed annually) specified in licence conditions.
There are currently cases before the NSW courts for waste facilities operating above their licence limits where a MBO is being pursued by the NSW EPA as a component of sentencing.
The NSW EPA defines monetary benefits as “the financial advantage that an offender gains from: avoiding or delaying spending money on complying with environmental legislation or earning profits that are a direct result of breaching environmental legislation”.
The NSW EPA has had this power since the introduction of the Protection of the Environment Operations Act but now has guidelines and a standard protocol on how to calculate the amount of the MBO. The guidelines list real-life examples of monetary benefits such as reduced capital costs (not installing required filtration units), reduced operational costs (not proving staff with appropriate training), illegal profits (operating over licence limits) and illegal competitive advantage (capturing greater market share with the savings from avoiding compliance costs).
The NSW EPA has also published the NEAT Model (Non-compliance Economic Assessment Tool Model) which is an Excel tool, developed by EPA Victoria, for non-accountants to run monetary benefit calculations.
With the publication of the MBO guidelines, protocol and the NEAT Model tool, MRA expects to see the NSW EPA increase the use of monetary benefits as a deterrent in the near future.
MBO’s have been in place in Queensland since 2011 under section 502 of the Environmental Protection Act 1994 (QLD) and will commence in Victoria on 1 July 2020 (Section 329 of the Environmental Protection Amendment Act 2018 (VIC)). Historically MBOs in QLD appear to be rarely implemented, similar to their previous use in NSW.
Following the introduction of clear guidelines, the NSW EPA has so far shown that it intends to pursue the full powers allowed by the POEO Act to confiscate all monies earned through the breaking of environmental laws. This greatly increases the financial risk for facilities and companies breaching legislation compared to current penalty notices and prosecutions which fall short of the financial advantage gained.
If you believe your facility may be operating outside of your licence conditions, seek legal or consulting advice as soon as possible to minimise the impact of a potential Monetary Benefit Order.
As always, Matt and the MRA team welcome your feedback on this, or any other topic at ‘The Tipping Point’.
BLOG: Australian Labor Party War on Waste a Step in the Right Direction
Mike Ritchie, managing director of MRA Consulting Group and a prominent advocate for waste reform in New South Wales has welcomed the Australian Labor Party to invest waste levy funds back into the circular economy
Why the Circular Economy Matters
Mike Ritchie explains why the circular economy matters and discusses why markets are currently holding back progress.
BLOG: Australian States Should Learn from Victorian Waste Management
Mike Ritchie explains why other Australian States should take a leaf out of the Victorian Government’s waste planning reforms.