Corporate law needs to factor in environmental damage

June 16, 2025

It is a mistake to allow corporations to be formed with a directive that their directors should only “act in the[ir] companies’ best interests” (as the corporate law now does).

Nearly all of Australia’s corporations make money without severely harming the environment. It’s time for Australia’s Parliament to impose an obligation on directors of all companies to make sure their company doesn’t cause severe harm. This can be achieved by adding just 11 words to their existing duty “to act in the best interests of the corporation". Those words are, “but not at the expense of severe damage to the environment".

If those words had been in the law prior to Woodside’s application , it is highly unlikely that the application would have even been filed. If it had, the minister would have had grounds to reject it.

Even passing such an amendment today will make the directors reconsider the project and further drilling. Just as importantly, it will make directors of all companies screen future investments to ensure that all new facilities will not cause severe damage to the environment, regardless if no other law would prohibit it .