The liquidators for Linc Energy have launched a legal challenge to the Queensland government’s environmental protection order on its operation near Chinchilla, claiming liquidated companies should not need to comply.
Former Linc Energy chief executive Peter Bond was issued with the order in May, requiring him to take steps to rehabilitate contaminated soils at the Hopeland underground coal gasification site and decommission most of the associated dams.
It was the first time the government had used its chain of responsibility environmental laws, designed to ensure that taxpayers were not left with the clean-up bill.
But PPB Advisory, Linc's liquidators, has begun challenging the order in court, claiming it shouldn't need to comply because it is in liquidation.
"It is important the environment department has appropriate enforcement tools to go after companies that fail to appropriately rehabilitate disturbed sites," Environment Minister Steven Miles said on Tuesday.
The matter will return to court on November 22.
The company went into voluntary administration in April and the following month it was revealed creditors were owed $289 million.
Mr Bond is one of five former Linc executives facing charges of breaching environmental laws over the operation.
They face sentences of up to five years in prison if convicted, while the company itself is also facing five environmental charges and a total maximum penalty of over $8.8 million.
A government probe was launched after four workers fell ill at the site with suspected gas poisoning and an expert study found permanent acidification of nearby soil.