As the cost to manage environmental issues continues to increase, access to trusted environmental data is critical.

Environmental risks are commonly excluded from policies and commonly overlooked or not perceived, this is particularly true for contamination and pollution risks.

These risks and the potential consequences can be costly if they are unknown or not managed appropriately, which can result in health related, environmental, financial and reputational damage.

What is Environmental Due Diligence?

Unknown environmental liabilities can be a burden for businesses with devastating consequences if not identified and mitigated in advance. Damages can cost up to millions of dollars, draining resources over many years. A few examples of these types of liabilities may include:

  • Underground Storage Tanks (USTs)
  • Historical contaminating activities undertaken on the property (i.e. engineering workshops, dry cleaning, fuel merchants)
  • Historical landfilling
  • Sites known to have issues or environmental licences for operation (various EPA registers)

Some of the more recent cases include:

• A chemical factory fire in Melbourne where the environmental risks were not appropriately measured. It resulted in explosions with uncontrolled projectiles, toxic air pollution and many workers compensation claims. Costs are still unknown but likely to be in the millions.

• Another case was a large dry cleaning facility, where previously unknown risks resulted in both on and offsite soil and groundwater contamination, costing over $3 million in remediation and $12 million lost by a developer in built apartments that could not be sold.

• And a costly $1,479,576 damages paid out for a residential property approval that was found out to be contaminated by previous industrial activity.

Adding to these contamination risks, liabilities with natural hazards such as flooding and fire, can lead to the consequences being magnified.

In many cases, due to lack of information and ease of data accessibility, environmental liabilities are often unknown and difficult to understand by non-specialists. Information available on public registers, such as the EPA registers, can be hard to interpret as there are many disparate sources.

Then there is much data that can be mined from old documents, maps and directories. This type of data provides valuable information on historic site use and the potential for issues. As an example, historical site use as a dry cleaner or service station can be revealed in this way. The site may have been redeveloped several times and underground storage tanks and previous contamination can remain. What about next door or close to the site? Contamination from surrounding properties is a very real issue and unless the polluter can be identified and found, may also result in your liability. The site next door may have received several penalties from the EPA for improper chemical storage (or other issues). More companies and individuals need environmental liability insurance and the cover needs to ensure their potential liabilities are known or suspected.

 Assessing Risks

Conducting environmental due diligence to uncover these liabilities is traditionally a formal process that assesses a property for potential risk of contamination and usually is only conducted for large commercial property transactions. Conducting a full assessment is an expensive and time consuming process.

How can you assess these potential risks more easily, cost effectively and quickly allowing for rapid initial property transaction decisions?

In many cases, a pre-screening exercise is all that is required to provide the base information to assess risks. It’s quick, cost effective and highlights major issues associated with a property. An example is the Enviro-Screen report by Land Insight & Resources (LIR), the report provides information on and off site for many potential liabilities.

LIResources use data analytics, technology and their extensive background in contaminated site assessment to research, catalogue and identify a range of current and historical site data relating to potential contaminating land use practices and other environmental risks.

Our data is the most comprehensive and accurate on the market. Using LIR ensures you are aware of important potential environmental liabilities – giving you confidence in the actions required to mitigate risk.