Monetary benefit orders

The EPA can seek a court order requiring an offender to pay back the monetary benefits they obtained from committing the offence.

Section 249 of the POEO Act states:

Orders regarding monetary benefits

(1)  The court may order the offender to pay, as part of the penalty for committing the offence, an additional penalty of an amount the court is satisfied, on the balance of probabilities, represents the amount of any monetary benefits acquired by the offender, or accrued or accruing to the offender, as a result of the commission of the offence.

(2)  The amount of an additional penalty for an offence is not subject to any maximum amount of penalty provided elsewhere by or under this Act.

(2A) The regulations may prescribe a protocol to be used in determining the amount that represents the monetary benefit acquired by the offender or accrued or accruing to the offender.

(3)  In this section:

monetary benefits means monetary, financial or economic benefits.

the court does not include the Local Court.

This section has been in the POEO Act 1997 since it commenced. It has been amended since then, but the main purpose of the section has remained unchanged.

The effect of this section is:

• The monetary benefit amount only needs to be proved on the balance of probabilities.

• An order for monetary benefits can be in addition to any other orders the court makes as part of the ‘penalty package’ such as imposing a fine, ordering a publication order or ordering the payment of the prosecutor’s legal and investigation costs.
• The size of a monetary benefit order is not limited by the maximum penalty for the relevant offence.
• Monetary benefit orders cannot be made by local courts.

For the purposes of section 249(2A), a Protocol for calculating monetary benefits has been prescribed under clause 101A of the Protection of the Environment Operations (General) Regulation 2009 (see “How does the Court calculate monetary benefits?” below).

A standard method for calculating monetary benefits is contained in the Protocol for calculating monetary benefits (PDF 669 KB).

The EPA engaged appropriate experts to develop the Protocol and it has also been peer reviewed by independent experts.

On 25 January 2019 the Protection of the Environment Operations (General) Regulation 2009 was amended by the Protection of the Environment Operations (General) Amendment (Calculating Amount of Monetary Benefits) Regulation 2019. This amendment formally prescribes the Protocol as the method for calculating monetary benefits (see new clause 101A). The Protocol was published in the NSW Government Gazette on 1 February 2019.

If you are convicted of an offence in the Land and Environment Court, the EPA will advise you if it intends to seek a monetary benefits order as part of the penalty for the offence. This advice would generally be delivered during preparation for a sentencing hearing, if not earlier.

The EPA will need to provide evidence on:

• The amount of avoided or deferred costs and illegal profits.
• The financial status of the offender and their operations.
• Dates of non-compliance, compliance and assessment.

Some of this evidence is simply facts that need to be proved. For example

• How much does a bund cost to install at the time the offender should have been compliant?
• At what date should the offender have come into compliance?
• What costs did the offender incur in earning the illegal revenue?

Some of this evidence is more technical and will require expert opinion. For example

• What was the total monetary benefit calculated?
• How was the monetary benefit calculated?

And some evidence will require expert opinion in some cases but not in others, depending on the complexity of the case.For example

• What was the least cost mode of compliance?
• What was the defendant’s marginal tax rate?
• What was the defendant’s rate of return?

The EPA is always open to considering relevant and robust evidence that relates to any aspect of a case it is prosecuting when provided in a complete and timely manner.

The earlier the material is provided to the EPA the more scope there is for proper consideration of the material.

Counter evidence provided by the defendant will need to be in a form that enables its accuracy to be verified and tested. In many cases this may need to be presented as part of a sworn affidavit or in some other form of admissible evidence.  There may be occasions where raw data (such as bank statements, pay roll receipts) may be an acceptable starting point.

If the defendant’s counter evidence relies on an expert opinion, it should comply with the standard court rules for expert witness evidence regardless of whether it is in final affidavit form or not. For example, the expert will need to outline their qualifications and work experience that qualifies them to provide the expert opinion and clearly disclose the reasons for their opinion. 

There has been no change to the EPA’s regulatory powers to recover monetary benefits. The EPA is applying a more consistent, transparent, and efficient approach to recovering monetary benefits.

Recovering monetary benefits improves the fairness of our regulatory system for those who have done the right thing. It levels the playing field so compliant operators are not disadvantaged compared to their less scrupulous competitors or competitors with poor management practices.

The EPA will review the outcomes of the first few cases in which a monetary benefits order is sought. It will then consider refining and extending the approach to a wider series of cases and regulatory functions.

Initially, yes. The EPA proposes to seek monetary benefit orders, where appropriate, in criminal prosecutions under the POEO Act in the Land and Environment Court. 

After the approach has been used for several cases in the Land and Environment Court, the EPA will consider whether the NEAT Model could be useful in other EPA work. For example, in a broader range of cases and informing negotiations of enforceable undertakings or clean-up notices.

It will depend on the facts of the specific incident.

The EPA is unlikely to pursue monetary benefits in cases where you have taken reasonable precautions and an accident or unfortunate combination of events beyond your control led to the offence. 

However, if an accident occurs and you had some control over the factors that could have prevented the accident, then depending on all the facts and whether you are convicted of an offence by the court, the EPA may consider it appropriate to pursue a monetary benefits order as part of the penalty for the offence.

The EPA has always had the power to seek a monetary benefit order. It would be reasonable to use this standardised approach on an offence that was committed prior to the EPA announcing our intention to recover monetary benefits.

The EPA will follow the Guidelines on Recovering Monetary Benefits from Environmental Offenders (PDF 460KB) when making a decision about whether to pursue a monetary benefit order in a case.

The EPA has communicated this message to key stakeholders and at industry forums during its early consultation on this work.

The US EPA has been recovering monetary benefits in its regulatory work since the 1980s. The EPA use the ‘BEN Model’ to calculate monetary benefits for their criminal and civil and administrative regulatory work.

The NEAT Model (© Environment Protection Authority Victoria 2019) is largely modelled on the approach used by the US EPA.

Other Australian EPA’s and environmental regulators are at various stages of introducing recovery of monetary benefits to aspects of their criminal prosecution and civil penalty work.

The NSW EPA has been working with other Australian jurisdictions on monetary benefits approaches over many years through the Australasian Environmental Law Enforcement and Regulators network (AELERT). The NSW EPA has been working closely with EPA Victoria, in particular.

No. The ability to request the court to make an order for the recovery of monetary benefits exists in other pieces of NSW legislation. Most of these provisions are the same or very similar to section 249 of the POEO Act.

The EPA administers the following Acts, which also have monetary benefit provisions:

• Contaminated Land Management Act 1997 (section 95A)
• Dangerous Goods (Road and Rail Transport) Act 1991 (section 51)
• Environmentally Hazardous Chemicals Act 1985 (via section 213(2) of the POEO Act)
• Ozone Protection Act 1989 (via section 213(2) of the POEO Act)
• Pesticides Act 1999 (section 98)
• Radiation Control Act 1990 (section 23A)
• Waste Avoidance and Resource Recovery Act 2001 (via section 213(2) of the POEO Act). 

Legislation administered by other NSW agencies that have monetary benefit provisions are:

• Biodiversity Conservation Act 2016 (section 13.24) 
• Biosecurity Act 2015 (section 297)
• Crown Land Management Act 2016 (section 11.15) 
• Environmental Planning and Assessment Act 1979 (section 9.56(2A))
• Local Government Act 1993 (section 490C),
• Mining Act (section 378ZD)
• National Parks and Wildlife Act 1974 (section 204)
• Petroleum Onshore Act 1991 (section 125ZG)
• Water Management Act 2000 (section 353F)

The EPA has had the power to recover monetary benefits since the introduction of the POEO Act, however we are now applying a more standardised approach for calculating and recovering monetary benefits in appropriate cases.