Lender Liability – Workplace Health and Safety Laws

It is a matter of concern for equipment financiers that workplace health and safety (WHS) legislation (previously referred to as Occupational Health and Safety legislation) may make financiers under lease and hire-purchase facilities responsible for the safe use and maintenance of financed plant, equipment, materials or substances; and for health and safety incidents arising from use of a financed asset.  This may result from the financier being the “owner” or “supplier” of the asset under WHS legislation and codes of practice which, until recently, differed slightly in each jurisdiction.  In most cases, a financed asset does not come into the possession or control of the financier, so there is little opportunity for it to influence plant safety, work practices or WHS outcomes in general.

Since 2008, the Federal government has been promoting national harmonised WHS laws via the Workplace Relations Ministers’ Council and COAG.  AELA aims to ensure that WHS laws include “passive financier” provisions so that the provision of finance does not, of itself, attract WHS obligations.  To this end, AELA lobbied to ensure that the model harmonised laws include passive financier provisions, similar to those that have been in place in some jurisdictions for some time.  It was anticipated that the model laws would be adopted by all jurisdictions by 2013.  However there remain exceptions in the case of Victoria and Western Australia; and Queensland is reviewing the legislation to consider potential changes.  The current position is that all jurisdictions, apart from Western Australia, have passive financier provisions under their current legislation.  AELA will continue to put the case for these provisions to be included in each jurisdiction and maintained where currently in place.

Lender Liability – Environmental Penalties and Remediation

The implementation of legislation for the protection of the environment across Australia has continued for some years. The work of government has been at two levels: the development of legislation with respect to remediation of contaminated sites and the development of modern pollution control laws.  Representations by AELA have focused on the issue of lender liability. Of particular concern is the potential for financiers to be made liable for the remediation of contaminated sites and for the clean-up and abatement of polluting activities not caused by them.  AELA has promoted the development of appropriate passive financier provisions in legislation dealing with land contamination to protect lenders which enforce their security over land and equipment for the purposes of debt recovery but are not involved in its day-to-day management or maintenance.  AELA continues to monitor government activity in this and related areas, with the objective of ensuring enactment and maintenance of appropriate passive financier provisions.