Consequences of Breaching Environmental Law in Malaysia
Introduction to environmental law enforcement
Malaysia’s objective towards having a comprehensive legislation in relation to the environment is manifested by the enactment of the Environmental Quality Act 1974 (“EQA”). The EQA is the primary legislation dealing with environmental protection and enforcement in Malaysia.
The Department of Environment (“DOE”) is a government agency responsible for ensuring compliance with the provisions of the EQA and initiating enforcement proceedings in the event of a breach. One of the roles of the OE is to conduct annual checks on factories which discharge industrial effluents. The DOE will obtain a sample of the industrial effluents and test it to ensure the parameters of the effluents comply with the provisions of the EQA and its relevant subsidiary legislation, the Environmental Quality (Industrial Effluent) Regulations 2009 (“Regulation”).
The Sweet Home Case
In reference to an article published in the New Straits Times on 28 May 2013 entitled “Court hikes fine for company for flouting environmental laws”, the annual checks conducted by the DOE on the industrial effluents of the company, Sweet Home Candied Products Sdn Bhd (“Sweet Home”) showed that the industrial effluents contained: (a) Biochemical Oxygen Demand of 2300mg/l concentration, which exceeded the 20mg/l limit by 115 times; and (b) Chemical Oxygen Demand of 5300mg/l concentration, which exceeded the 80mg/l limit by 66 times. These concentration levels were alarmingly excessive. The DOE also discovered that Sweet Home’s Water Waste Treatment Plant was faulty and unrepaired.
The DOE immediately commenced legal proceedings against Sweet Home for breach of the EQA and the Regulation. Also, the DOE served a notice on Sweet Home, requiring it to remedy its breach of the EQA and the Regulations by repairing its Water Waste Treatment Plant, pursuant to Section 31(2) of the EQA. Sweet Home however failed to remedy its breach and was subjected to further legal proceedings for breach of Section 31(2) of the EQA.
The Double Bite
The public should be aware of the two-fold consequence of being charged for noncompliance of the EQA. First, the wrongdoer may be liable for the primary breach of the EQA. Second, the wrongdoer may be liable for breach of non-compliance of the notice to remedy the primary breach. The general penalty for breach of any provision of the EQA is a fine not exceeding RM10,000 and/or imprisonment for a period not exceeding 2 years. A breach of Section 31(2) of the EQA warrants a fine not exceeding RM25,000 and/ or imprisonment for a period not exceeding 2 years. In addition, the offender shall pay a further fine of RM1,000 per day so long as the offence continues.
Separately, note that where an offence against the EQA or Regulation has been committed by a company, the director or those acting in such capacity shall be deemed to be guilty of that offence unless he proves that the offence was committed without his consent.
Directors should be diligent and conscientious in ensuring that the company is managed in accordance with the provisions of the EQA. As mentioned above, a breach of the EQA could be penalised by imprisonment, hence a director of a company may be subject to imprisonment.
In the case of Sweet Home, the Malaysian Court imposed a fine of RM100,000 for a primary breach and failure to remedy such breach.
Summary
Environmental issues ought not to be taken lightly as the DOE together with the Malaysian courts are committed to enforce the EQA. The wrongdoer may be exposed to the following liabilities: (a) primary breach of the EQA; and (b) breach of the Section 31(2) notice to remedy. Also, the company directors may be subject to liability as if they committed the breach. Companies are urged to ensure that they have an effective monitoring system of their environmental compliance and cooperate with the DOE in the event of a breach.
Better be safe than sorry, consult a lawyer to learn more here.
