Sustainability Due Diligence

Sustainability Due Diligence is a new area for R2A. It applies the concept of due diligence to all future generations to ensure all reasonable practicable precautions are in place for projects and plans that have longer term implications.

The essential aspect of due diligence as a defence against negligence is that foreseeable harm to neighbours should be appropriately managed. If the concept of neighbours is extended to include all future neighbours then the possibility of a sustainability due diligence argument arises. That is, that provided a proposed project or plan is not prohibitively harmful to both present and all future neighbours, and that provided all reasonable practicable precautions have been provided to protect all these neighbours for all reasonably foreseeable issues, then the project ought to proceed. This would be a positive demonstration of sustainability due diligence.

Such a definition is consistent with that of the Infrastructure Sustainability Council of Australia:
Infrastructure sustainability can be defined as infrastructure that is designed, constructed and operated to optimise environmental, social and economic outcomes over the long term.

If the Aral Sea and Lake Chad are taken as examples, the benefits associated with the diversion of the rivers for irrigation should have been balanced out against (or at least taken into consideration) with the environmental and social costs of the lakes drying up. As much could be said of Australia over allocating water from the Murray-Darling basins. The tendency is to do that which provides returns within a commercial investment period (typically 3 to 5 years?) especially at a state level, and ignores the larger collective issues and what might happen when a big rare event occurs, for example, a 10+ year drought.

The key steps for a due diligence argument are:

  • A completeness argument as to why all key plausible critical issues were identified
  • Identification of all physically possible precautions for each plausible critical issue, and lastly
  • Identification of which precautions in the circumstances are reasonable, balancing the significance of the risk vs. the effort required to achieve it (cost, difficulty and inconvenience and what other conflicting responsibilities the defendant may have).