What are my Environmental Risks?
This is the most common question we get asked, and you may have numerous environmental risks you aren’t aware of. For example:
- Is there neighbouring land with the contamination that could impact your site?
- Is your tenant implementing their environmental management plan?
- Are your spill response procedures adequate?
- Can your operations mobilise existing contamination?
- Could historical operations conducted at your site pose a contamination risk?
- Are your assets being properly maintained and managed?
- Are you buying a site where there could be contamination risk?
- Are you meeting your general duty under environmental law to identify and manage your environmental risks?
As a landowner, license holder, mortgagee/lender, future property purchaser, tenant, or future developer, you could have environmental liabilities under environmental law, whether you are the original polluter or the “Occupier” of the site.
Marsh Environmental and Environmental Earth Sciences (EES) has partnered to launch an innovative service, for a fully qualified Environmental Consultant to undertake:
- A Phase 1 Environmental Site Assessment (or a limited Phase 1 option); and
- Prepare an Environmental Management Plan
To help you identify and manage your environmental risks, which in turn, could help reduce your costs and liability exposures. The service has been negotiated for a pre-agreed fee. Refer to our brochure below for more details.
Following this, Marsh Environmental will prepare a paper outlining the pollution cover under your current insurance program and highlight key gaps in cover that can be insured under an Environmental Liability Insurance program free of charge. Should you choose to proceed with Marsh to place Environmental Insurance on your behalf, you as a client will be charged a fee and Marsh will be paid a commission for arranging the insurance.
What is a Phase 1 Assessment?
Phase 1 Environmental Site Assessments are investigations undertaken by environmental consultants to determine any potential contamination issues with your land (or target). This highly specialised form of assessment typically involves consultants visiting the site and adjacent areas, exploring historical databases and aerial photographs, conducting interviews with previous landowners or users and reviewing planning documentation. The data collected allows environmental consultants to accurately analyse and assess the potential for previous site contaminants as well as determine whether present or planned future activities could also result in contamination.
Site investigations of this kind are useful for due diligence, compliance, or site developments. They’re also often requested by insurers when negotiating the best cover for your requirements.
What are the threats you may need to be aware of?
For Buyers of Property:
Phase 1 Site Assessments are important to understand your environmental risks. For example, the absence of a Phase 1 site assessment could potentially mean you’re not getting the full picture before settling on a new property or participating in land redevelopment. If contaminants are found after the property has been purchased, or any unknown pre-existing contaminants have become mobilised during the course of your activity, you could potentially be liable for any costly clean-ups that may eventuate.
For Property Owners, Tenant's, Directors and Officers and Mortgagees or Lenders:
Environmental Regulators can require individuals or companies to investigate and clean-up pollution conditions which cause or threaten to cause material harm to the environment (including within buildings) or human health. The ‘polluter pays’ principle applies, however, who caused the pollution is not always clear, or the liable parties may no longer exist or can’t be found. In this case, the “Occupier,” being site owners, tenants, landlords, future purchasers and mortgagees/lenders, can be made liable for the pollution.
For Property Owners:
A Phase 1 assessment can also cross-check your tenant’s operations, minimizing pollution exposures for “Occupiers.” Phase 1 Site Assessments can potentially mitigate the risk, allowing the development of appropriate strategies to ensure compliance, aid transactional negotiations, maintain asset value, minimise pollution and obtain appropriate environmental liability insurance for unforeseen pollution.
What is the potential impact?
Phase 1 Site Assessments can provide great benefit to organisations with environmental liabilities. As an example, imagine you’re a large retailer who has just purchased a former commercial property in Melbourne, with the hopes to develop the site. You engage an Environmental Consultant to review a few old documents associated with the purchase.
The documents turned out to be laboratory results, associated with soil samples collected and analysed by the former site owner. Your Environmental Consultant undertook a limited review of the results to provide you with an understanding of what the documents meant and its implications. This review identified the presence of complex and persistent organic compounds in the soil, leading to a more thorough intrusive site investigation to understand the nature and extent of the issue. This investigation encountered significant contamination across the site, meaning the site is now required to be regulated by the Environmental Protection Authority and you, as the new owner, are liable for a cleanup cost of millions of dollars.
While this hypothetical example allowed the client to understand their environmental risks and liabilities post-acquisition, the significant cost involved could have been avoided or reduced had an Environmental Consultant been engaged earlier. Whether present before a purchase, caused by on-site operations or potentially even adjacent site operations, assessing the environmental conditions on a site prior to the transaction could prevent a significant financial liability to your company.
For more information on our environmental offering, download our brochure below.
