Australia: Countdown to CLERP 9 Crackdown on Environmental Reporting
Last Updated: 4 March 2004

The Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Bill 2003 (Cth) (CLERP 9) will come into force as of 1 July 2004 (subject to any amendments), increasing the emphasis on environmental performance as a key reporting concern and a key corporate governance issue for all listed public companies, according to John Taberner, environmental law partner at Freehills.

'Before the original Corporations Act came into force on 1 July 1998, Australian companies had not been subject to mandatory reporting requirements in terms of their environmental performance,’ said Mr Taberner. ‘The 1998 Act did provide for disclosure in a director’s report of performance in relation to environmental regulation, but the proposed section 299A in CLERP 9 significantly increases the requirements for listed public companies to report on all matters that could impact a company’s future financial prospects.

‘Information will need to be included in corporate reports which will allow shareholders to make an informed assessment of the operations of a company, its financial position and business strategies, and its prospects for future financial years, and environmental performance will be an increasingly crucial component.

‘Significant environmental issues that may require disclosure could include climate change and greenhouse emissions issues, access to future water resources, or increased salinity resulting from a company’s activities.’

If companies fail to take all reasonable steps to comply with The Corporations Act they will receive a civil penalty provision, and if a court makes a declaration that the relevant provision has been breached, ASIC can seek a pecuniary penalty order or a disqualification order. Amendments proposed by CLERP 9 relate to existing enforcement provisions, including those relating to director’s reports. For example, the maximum amount of a pecuniary penalty order is proposed to be $200,000 for an individual and $1 million for a corporation.

Mr Taberner advises companies to plan ahead to make the changes required.

‘Companies should start seeking advice and conducting environmental audits in order to identify what existing and future environmental matters may require inclusion in their director’s report. They should also identify and develop methods of representing and reporting those matters and reviewing their future reports to ensure compliance with the provisions.’

For more information contact Freehills:

John Taberner, Partner, 02 9225 5427, email

Sarah Elfick, Public Relations Co-ordinator, 02 9225 5105, email

With 1000 lawyers, including 210 partners, and over 1900 staff across Australia and South-East Asia, Freehills is recognised as one of the leading Australian commercial law firms by independent legal guides and directories. Freehills has offices in Sydney, Melbourne, Perth, Brisbane, Hanoi, Ho Chi Minh City and Singapore, and correspondent firms in Jakarta and Kuala Lumpur.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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