Liability for Environmental Damage Caused by the Release of ...

For Who’s Benefit? -
Evaluating Genetically Modified Organisms in Western Australia
from a Different Perspective
Conference held by Conservation Council WA
10 October 2002
Liability for Environmental Damage
Caused by the Release of Genetically Modified Organisms
Lee McIntosh
Solicitor, Environmental Defender’s Office (WA) Inc
1 Introduction
This paper explores who is liable for environmental damage caused by the release of
GMOs into the open environment. Specifically it considers:
Is any liability prescribed by the Gene Technology Act 2000 (Cth)
(“Commonwealth Act”) if the release of GMOs causes loss of biodiversity?
Is any liability prescribed by State law if the release of GMOs causes loss of
biodiversity?
Are GMO users liable at common law for any loss of biodiversity caused by their
use of GMOs?
Are government GMO regulators liable at common law for any loss of
biodiversity which is caused by the release of a GMO which that regulator
approved?
The paper concludes that any person who releases GMOs without authorisation will be
liable for some resultant damage to the environment. However, it is unlikely that any
person will be liable (either at common law or pursuant to any State or Commonwealth
legislation) for environmental damage caused by the authorised release of GMOs into the
environment.
2 Liability
for
environmental damage under the Gene Technology Act 2000 (Cth)
It is an offence under the Commonwealth Act to intentionally release a GMO into the
environment without a lawful authorisation such as a licence1. It is also an offence for a
person who has a licence which permits the release of a GMO into the environment to
breach a condition of that licence2. An offence will be an “aggravated offence” and
attract a higher penalty if the unauthorised release causes significant damage to the
environment3.
1 Gene Technology Act section 32
2 Gene Technology Act section 34
3 Gene Technology Act section 38
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The Commonwealth Act does not, however, impose liability upon GMO licence holders
for any damage caused to the environment or biodiversity as a result of an authorised
release of a GMO. That is, if a person has a GMO licence and acts in accordance with
that licence, the Act does not provide either:
1) that it is an offence to cause damage to the environment by an action pursuant
to that licence; or
2) that the licence holder is liable for any damage caused to the environment as a
result of an action pursuant to that licence.
The Act only imposes liability (by way of penalties for an offence) for an unauthorised
release of GMOs into the environment.
A licence may include a condition requiring that the licence holder be adequately insured
against any loss, damage, or injury that may be caused to human health, property or the
environment by the licensed release4. However, such a condition does not create any
liability for a licence holder beyond the licence holder’s existing liabilities at common
law. Therefore even if such a condition is imposed on a licence, the insurance will only
be payable if the licence holder is found liable for causing environmental loss or damage
pursuant to the common law.
3
Liability for offences under State legislation
The Environmental Protection Act Amendment Bill 2002 (WA) which is currently before
Parliament (“EP Amendment Bill”) proposes to amend the Environmental Protection Act
1986 (WA) (“EP Act”) in ways which may make it possible for GMO licence holders to
be held liable for environmental damage caused by the release of GMOs into the
environment. However, dues to the restraints of constitutional law applying to the
regulation of GMOs, it is arguable that the EP Amendment Bill applies to individuals but
not to corporations. As corporations will probably be the vast majority of licence
holders, this means that the provisions of the EP Amendment Bill will have a severely
restricted application to GMO licence holders.
3.1
Environmental Protection Act Amendment Bill 2002
The EP Amendment Bill proposes to amend the EP Act so that it is an offence to cause
“environmental harm”. “Environmental harm” means any direct or indirect harm to the
environment involving damage to native vegetation or alteration of the environment to its
detriment or degradation5. It is possible that environmental harm may be caused by the
licensed release of a GMO into the open environment. The EP Amendment Bill also
seeks to insert provisions into the EP Act which will allow the Chief Executive Officer of
the Department of Environmental Protection to order rehabilitation works or stop an
4 Gene Technology Act section 62 (3).
5 Section 29 of the EP Amendment Bill, proposed section 3A of the EP Act
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activity if environmental harm is being caused6. This means that it is possible that there
will be some liability for environmental damage caused by GMOs by virtue of the
“environmental harm” provisions in the EP Act. The Bill also proposes that prosecutions
under the EP Act for causing serious environmental harm and for corporations causing
material environmental harm may be brought at any time7. This means that actions may
be brought to impose liability for environmental harm notwithstanding some e
environmental damage may take some time to be realised.
The EP Amendment Bill also proposes to create a new tort known as “breach of notice”8.
Specifically, the Bill proposes that any person bound by an environmental protection
notice or a vegetation conservation notice who fails to comply with that notice, thereby
causing damage to property which is not owned by that person, may be liable to the
owner or occupier of the damaged land in respect of the damage. This tort could be used
to impose liability on GMO licence holders who release GMOs into the environment and
cause some environmental damage which is able to be quantified as damage to property.
3.2
The constitutional basis of the regulation of GMOs
Under the Commonwealth Constitution, the Commonwealth Parliament may only pass
laws with respect to certain matters listed in the Constitution. This is reflected in the
Commonwealth Act, which applies only to those matters falling within certain
Commonwealth heads of power, such as the actions of corporations and matters
involving interstate and overseas trade9. Any comprehensive regulation of GMOs
therefore relies upon the gaps in the application of the Commonwealth Act being
overcome by State laws. For example, all individuals who are not involved in interstate
or overseas trade and commerce must be regulated under State laws such as the Gene
Technology Bill 2001 (WA) (“State GMO Bill”) which is currently before State
parliament. The result of this is that some individuals may be subject to a different
regulatory regime than corporations.
3.3
Regulation of individuals - the State Bill and the State EP Act
Section 5 of the EP Act provides that whenever a provision of the EP Act is inconsistent
with a provision contained in another State law (such as the State GMO Bill), the
provision of EP Act will prevail. In addition, clause 15 of the EP Amendment Bill
provides that its provisions are in addition to, and not in substitution of, the requirement
of any other laws of Western Australia. The result of these provisions is that in relation
to GMO matters regulated by the State GMO Bill (for example, all GMO matters relating
to individuals who are not involved in interstate or overseas trade and commerce) the
provisions of both the State GMO Bill and the EP Act will apply. This means that any
individual who releases a GMO into the environment (whether pursuant to a licence or
6 Section 45 of the EP Amendment Bill, proposed section 65 of the EP Act
7 Section 131 of the EP Amendment Bill, proposed section 118 of the Act
8 Section 52 of the EP Amendment Bill, proposed section 73B of the Act
9 Gene Technology Act 2000 section 13
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not) and causes environmental damage will be able to be prosecuted under the EP Act for
causing environmental harm10. They will also be liable for the tort of breach of notice.
3.4
Regulation of corporations – the Commonwealth Act and the State EP Act
As noted above, the Commonwealth Act and the State Bill are together intended to form
a comprehensive code for the regulation of GMOs. However, as the Commonwealth Act
specifies that it operates with respect to corporations and those involved in interstate
trade or commerce11, a corporation and those involved in interstate or overseas trade and
commerce could argue that it is regulated, at least in part, by the Commonwealth Act. If
such an argument is accepted, issues of constitutional law become relevant.
It is a principle of constitutional law that a State law such as the EP Act is invalid if it is
inconsistent with a Commonwealth law12. A State law can be inconsistent with a
Commonwealth law for several reasons13, including:
1) If a Commonwealth law confers an immunity from liability under State law14;
or
2) If the Commonwealth intends to completely, exhaustively or exclusively
govern the particular conduct or matter to which it its attention is directed15. In
such an instance, the inconsistency results from the intention of the
Commonwealth Parliament to cover the field16.
The general terms of the Commonwealth Act do not assist in the determination of
whether the Commonwealth intends to 1) confer an immunity from prosecution under the
State EP Act or 2) completely, exhaustively or exclusively govern a particular aspect of
the licensing of the release of GMOs. While section 16 of the Commonwealth Act
provides that it is not intended to exclude the operation of any State laws provided that
the State law is capable of operating concurrently with the Commonwealth Act, there is
no guidance as to which State laws are in fact able to operate concurrently. The
Explanatory Memorandum to the Commonwealth Act also provides scant assistance. It
states that:
“the intention of these provisions is to ensure that existing and future legislation
(such as general environmental… legislation) continues to operate concurrently
with the Bill provided it is capable of doing so. However, where State legislation
is enacted that is inconsistent with the national scheme of regulation for GMOs, or
effectively establishes a dual licensing system, there is capacity for such laws to
be prescribed as not operating concurrently…”.
10 Note that licence holders may have a defence to causing environmental harm under the EP Act if they
can show that the release was “in accordance” with their licence – proposed section 74B of the EP Act.
11 Gene Technology Act 2000 section 13
12 Commonwealth Constitution section 109
13 See generally Halsbury’s Laws of Australia at 90 – Constitutional Law
14 Council of the Municipality of Botany v Federal Airports Corp (1992) 175 CLR 453 at 464
15 Ex parte McLean (1930) 43 CLR 472 per Dixon J at 483.
16 Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 at 489.
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It is unlikely that the Commonwealth Act could be said to completely, exhaustively or
exclusively govern the entire field of the regulation of GMOs. However, it is arguable
that the Commonwealth Act does intend to completely, exhaustively or exclusively
govern the circumstances in which licences can be issued, the assessment of whether a
licence should be issued (including whether the licensed release will involve a risk to the
environment) and therefore the enforcement of licences and imposition of liability for
damages caused by activities under licences. It is therefore arguable that the
Commonwealth Act covers the field in respect of any liability which may arise from the
issue of a licence to release a GMO into the environment. If such an argument is
accepted by the Courts, it would produce an unsatisfactory situation in which
corporations and those involved in interstate or overseas trade and commerce, which may
be presumed to be the vast majority of licence holders, are immune from EP Amendment
Bill such as prosecution for environmental harm, but individuals are not so immune. It
also means that the State provisions relating to rehabilitation orders and prescribing the
tort of breach of notice may not be able to be applied to environmental damage caused by
the licensed release of a GMO into the environment.
4
Common law liability for damage caused by release of GMOs into the
environment
There have not yet been any cases in Australia which determine whether liability exists at
common law for damage caused by the release of GMOs into the environment. Despite
this, it is clear that there are currently three possible common law causes of action which
may give rise to liability of a GMO licence holder for damage caused by the release of
GMOs into the environment. Those causes of action are trespass, negligence and
nuisance.
In summary, it is unlikely that licence holders would actually be found liable in common
law for environmental damage caused by a licensed GMO release in many cases. In any
event, even if a GMO licence holder were found liable, compensation would rarely be
available as damage to the environment as such damage is inherently difficult to quantify.
In particular, damages for loss of biodiversity inherently very difficult to quantify as the
law has not yet developed a mechanism to place a monetary value on the loss of a
species, let alone loss of species diversity.
4.1 Trespass
Trespass is committed if a person directly and intentionally causes some object to come
into contact with land without the consent of the landowner17. For example, if a person
deliberately plants GMO crops on another person’s property without their consent and
causes damage to that property, trespass will be made out. However, trespass is not made
out if interference with property is merely a consequence of a person’s act, rather than an
intrinsic part of that act. For example, if GMOs which are being used on a GMO licensed
property escape or blow onto another’s property, it is unlikely that there has been a direct
17 For a general discussion of the law relating to trespass, see Halsbury’s Laws of Australia at 415 - 330
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interference with the affected land. The blowing of the GMOs onto the affected property
is a consequence of GMO activity, but is not an intentional or direct part of it. It is
therefore unlikely to be trespass.
Actions in trespass may only be brought by those who own land or have an interest in the
land which is affected by the trespass. This means that unless a person owns or occupies
a particular parcel of land which is affected by a GMO, that person cannot sue a GMO
licence holder in trespass. Loss of biodiversity will rarely be confined to particular
parcels of land, and it will be very difficult to show there has been a loss of biodiversity
on one particular property. Even if a loss of biodiversity can be shown in respect of an
individual property, it is not likely that such a loss would be sustained in the 6 year period
in which claims for trespass must be brought18. Trespass will therefore rarely enable the
recovery of costs for loss of biodiversity caused by the release of a GMO.
4.2 Nuisance
Private nuisance is committed if a person’s use of land unreasonably interferes with
another person’s ordinary and reasonable use of land19. Unlike trespass, the interference
does not have to be direct and intentional – private nuisance is made out as long as the
interference is a reasonably foreseeable consequence of a person’s operations on their
land. For example, if it is foreseeable that the release of a GMO on some land could
unreasonably interfere with the use or enjoyment of other land, the GMO licence holder
will be liable in nuisance if they do not take actions to prevent wind or water transporting
GMO material off their land and onto other land.
A person may commit a nuisance if they own and occupy land, if they occupy land, or if
they adopt or continue a use of land. In addition, an owner of land who is not in
occupation of land may also be liable in nuisance if they expressly or impliedly authorise
the occupier to create the nuisance.
Only people who own or have an interest in land may bring an action in nuisance. That
is, unless a person owns or occupies a particular parcel of land which is affected by a
GMO, that person cannot sue a GMO licence holder in private nuisance. As noted above
in respect of actions for trespass, loss of biodiversity will rarely be confined to particular
parcels of land, and it will be very difficult to show there has been a loss of biodiversity
on one particular property. Even if a loss of biodiversity can be shown in respect of an
individual property, it is not likely that such a loss would be sustained in the 6 year period
in which claims for nuisance must be brought20. Actions in nuisance will therefore rarely
be useful to recover damages caused to the environment by the release of a GMO.
In addition to claims which may be brought in private nuisance, claims may be brought in
public nuisance. “Public nuisance” is occasioned when a person commits a nuisance
which endangers the health, property or comfort of the public generally or obstructs them
18 Limitations Act 1935 (WA) section 38.
19 For a general discussion of the law relating to nuisance, see Halsbury’s Laws of Australia at 415 - 615
20 Limitations Act 1935 (WA) section 38.
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in the exercise of their rights. Actions in public nuisance may only be brought by a
person who suffers damage to an extent over and above that of the general public, or by
the Attorney General. Actions in public nuisance therefore by no means provide a
comprehensive or sufficient remedy for loss of biodiversity caused by the release of
GMOs.
4.2.1 Defences to nuisance
The defences which are available to actions in nuisance further restrict the efficacy of
actions in nuisance to provide a remedy for environmental damage caused by release of a
GMO. For example, it is a defence to nuisance if a person “comes to the nuisance”.
Therefore, if a person commences activities next door to an existing GMO facility, that
person will have “come to the nuisance” and the GMO facility will probably not be liable
in nuisance if its activities impact on the new neighbour21.
Private nuisance is usually not made out if the affected land is used for a particularly
sensitive purpose. Nuisance does not protect all possible uses of land – it protects only
ordinary and reasonable uses of land. For example, if a GMO facility is operated next
door to a property used for general rural activities and those general activities are affected
by the release of the GMO, nuisance will be made out. However, if a GMO facility is
operated next door to a property used to a propagate and protect rare and exotic native
species and those species are adversely affected by the release of the GMO, private
nuisance may not be made out, as the affected land use is a particularly sensitive one.
Finally, it is also a defence to nuisance that a person has “statutory authority” to carry out
that nuisance if the nuisance is an inevitable result of that authority. For example, if the
damage caused to a neighbour’s property is an inevitable result of a licensed activity, the
defence of “statutory authority” would apply and the damage will not be actionable in
nuisance. However, if the damage is not inevitable, but merely a consequence of the way
the licence holder decided to carry out its activities, the defence of “statutory authority”
would not apply.
4.3 Negligence
Negligence will be made out if a person can show the following22:
1) a GMO licence holder had duty of care to manage its activities in a manner which
would not cause reasonably foreseeable damage to that person;
2) the GMO licence holder breached its duty; and
3) the breach of duty caused damage to the person.
4.3.1 Leading case - Perre v Apand
21 Problems obviously arise if a person moves to a nuisance but does not know that the nuisance is there.
For example, if the very fact that a GMO facility is operating is confidential, the new landowner has no
way of knowing that they have “come to a nuisance”. In such cases, the Court may well refuse to allow the
GMO licence holder to use the defence.
22 For a general discussion of the law relating to negligence, see Halsbury’s Laws of Australia at 300.
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The leading case in respect of negligence caused by activities on land which cause
damage to other land is Perre v Apand Pty Ltd23. In that case, Apand Pty Ltd supplied
diseased potato seeds to potato growers in South Australia (the Sparnons). As a result,
the Sparnons produced a potato crop which was infected with bacterial wilt. The Perres
carried on business growing and processing potatoes on properties within a 20 km radius
of the Sparnons’ property. The Perres ordinarily exported the bulk of the potatoes they
grew each year to Western Australia. Western Australia, however, prohibited the entry of
potatoes which had been grown, harvested, cleaned or packed within 20 km of a known
outbreak of bacterial wilt occurring in the previous five years. Therefore even though the
Perre’s crops were not infected with bacterial wilt, the Perres were unable to export their
crops to Western Australia and suffered significant financial losses as a consequence of
the outbreak of bacterial wilt on the Sparnons’ property.
The High Court found that Apand Pty Ltd was liable for the Perres’ losses in negligence
because:
1. Apand Pty Ltd appreciated the consequences of the spread of disease by contaminated
seed;
2. At the time of supplying seed to the Sparnons, Apand Pty Ltd knew or ought to have
known that the Perres grew and processed potatoes within 20 km of the Sparnons’
property and Apand Pty Ltd knew of the special requirements of Western Australia
with respect to importation of potatoes;
3. Apand Pty Ltd knew or ought to have known that the Perres exported potatoes to
Western Australia; and
4. The Perres had no way of appreciating the existence of the risk to which they were
exposed by the conduct of Apand Pty Ltd and had no way of protecting themselves
against that risk.
Solely on the basis of Apand Pty Ltd v Perre, it appears that a GMO licence holder would
be found liable in negligence for damage caused by the release of GMOs into the
environment. However, this is not the case, because the licensing process for GMOs
effectively denies a person the opportunity to prove that the GMO licence holder was
aware of the specific risks associated with the release of the GMO which have in fact
materialised.
4.3.2 Application of Perre v Apand to licensed GMO release
The Commonwealth Act provides that the Regulator must not issue a licence unless the
Regulator is satisfied that any risks posed by the activities proposed to be authorised by
the licence are able to be managed in such a way as to protect the health and safety of
people and the environment24. To determine whether to issue a licence, the Act provides
that the Regulator must prepare a risk assessment and a risk management plan which
specifically considers the protection of the health and safety of people and the
23 (1999) 198 CLR 180
24 Gene Technology Act section 56
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environment25. There are also provisions in the Act for monitoring GMO licence
activities26, and it is a condition of all licences that if the licensee becomes aware of any
unintended effects, it must inform the Regulator of those effects27. The Act therefore sets
up a comprehensive regime for the identification and assessment of the risks of a licensed
GMO activity, and a licence cannot be granted unless the Regulator is satisfied that the
risks will not eventuate. Yet in order to prove negligence, a person must prove that the
GMO licence holder was aware of the specific risks which have in fact materialised.
Therefore, in order to find a licence holder liable in negligence, a Court would have to
find that the risks were not assessed properly by the Regulator. The Courts would be
reluctant to replace the assessment of the risks of a GMO activity by the “expert”
Regulator with the Court's own assessment of the risks. It therefore appears that if a
person acts lawfully under their licence, it will be difficult to show that a license holder
has breached its duty of care by releasing GMOs into the environment.
If, however, a licence holder breaches a condition of its licence and causes damage by
virtue of that breach, it will probably be quite easy to show that the licence holder was
negligent. This is because the licence process specifically identifies the risks associated
with the licensed activity and mandates ways to manage those risks. It is therefore
unlikely that a Court would find that such risks were not foreseeable or preventable.
Accordingly, damages in negligence would probably be payable for any loss suffered by
a person due to a breach of a GMO licence condition.
4.3.3 Who can bring an action in negligence?
The only people who can bring an action in negligence are those whom it is reasonably
foreseeable would suffer damage by a breach of duty. For example, neighbouring
landowners or occupiers whose crops are affected by the release of a GMO into the
environment may bring an action for damage suffered. Such landowners may also bring
an action if the crops themselves do not suffer but the market does not accept the crop
because it has been grown near a GMO facility: see Perre v Apand Pty Ltd. However, it
will be difficult to bring an action in negligence based on damage to biodiversity or the
environment generally. The difficulty arises for two main reasons:
Damage to the environment or biodiversity is inherently very difficult to quantify –
the law has not yet developed a mechanism to place a monetary value on the loss of a
species, let alone loss of species diversity.
In negligence cases, the Court may decide that “policy reasons” should limit a
person’s liability. Such policy reasons include that a person should not be subjected
to a liability to an indeterminate class for indeterminate amounts (per Kirby J in Perre
v Apand28). In respect of GMOs, the Court would probably decline to find a duty of
care was owed to most members of the community to prevent environmental damage
as the community is an “indeterminate class of people”. A member of the community
will always be a member of an “indeterminate class of people” unless it was
25 Gene Technology Act Part 5 Division 4
26 Gene Technology Act section 64
27 Gene Technology Act section 65
28 paragraph 298
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foreseeable that that particular member of the community would suffer particular
damage.
4.3.4 Defence to negligence
A GMO licence holder’s liability in negligence will be limited if they can show that a
person who suffered damage contributed to their own damage in some way. For
example, if GMOs are washed onto a neighbouring property by reason of the fact that
that neighbour altered the path of a watercourse on their land, the neighbour’s damages
will be limited by their own contributory negligence. It is also a defence to negligence if
a person voluntarily assumes the risk of an activity. For example, if a GMO licence
holder warns a prospective purchaser that the land they are buying is next to GMO land,
and the purchaser later tries to sue the licence holder for damages suffered because their
land is next to GMO land, it is likely that the purchaser will not be able to recover any
damages, as they will have voluntarily assumed the risk they complain of.
5
Liability of Regulator under common law
Just as it is unlikely that a licence holder would be liable at common law for any
environmental damage caused by the licensed release of GMOs, it is unlikely that the
Regulator would be liable at common law for any environmental damage which results
from an activity which the Regulator authorised.
5.1
Liability of statutory authorities generally
It has generally been accepted in Australia that common law damages are not available
for non negligent and non intentional wrongful administrative decisions: Dunlop v
Woollahra Council29. A wrongful administrative decision is incapable, by itself, of
supporting a claim for damages. Therefore if a person suffers damage by reason only of
the Regulator issuing a licence to a person in circumstances where that person should not
have been issued with a licence (for example, because the person had previously been
convicted of an offence against the Commonwealth Act30, or because the Regulator uses
incorrect information about the proposed GMO activity) that person cannot, without
more, obtain any damages for any of the consequences of the person’s wrongful decision.
A person suffering damage due to a wrongful administrative decision must bear that
damage unless the circumstances of the wrongful decision fall within an established head
of liability for which damages is a remedy, such as misfeasance in a public office, breach
of statutory duty, or negligence.
5.2
Misfeasance of public office
Misfeasance in a public office is concerned with deliberate or intentional acts of
misconduct and depends upon proof of improper motive or targeted malice: Northern
29 (1982) AC 158 at 169
30 section 58 Gene Technology Act 2000 (Cth)
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