Don’t wait for rescue: Legal risk management in the face of SA’s algal bloom

The heartbreaking scenes along shorelines in South Australia are the face of a major ecological and economic crisis. The widespread bloom of Karenia mikimotoi algae continues to impact coastal waters, marking the worst marine die-off ever recorded in the state, surpassing the 2014 Coffin Bay event.

The response is now being met with coordinated state and federal support. But even with funding on the way, the legal and operational risks for local businesses are very real.

While the environmental damage is staggering and generational on its own, the fallout is also being felt acutely by the businesses that depend on the sea: including family-run operators in aquaculture, fisheries, tourism and hospitality. Many now find themselves navigating not just lost income, but a growing tangle of legal and regulatory exposure. I’ve outlined some issues that business owners should be thinking about and taking proactive steps to address.

Both levels of government have pledged $14 million each – a combined $28 million emergency package to fund beach clean-ups, business relief (anticipated to be small business grants of around $10,000) and scientific research. The State Government has also announced fee waivers (see below), rural grants (up to $1,500 per rural household) and expanded environmental monitoring, while a Senate inquiry will examine long-term solutions.

The South Australian Government has also previously announced closures of affected fisheries and oyster leases, along with a $500,000 relief package covering licence fee waivers for fishers, aquaculture operators and charter businesses (April to June 2025). These measures offer some immediate support, but relief is not automatic. Applications must be made via PIRSA and relevant industry associations. In the meantime, businesses must stay on top of shifting regulatory obligations. Failure to meet new notification rules, water-quality standards, or updated licence conditions could result in permit suspension or cancellation.

Businesses should gather evidence of bloom-related impact (e.g. loss of catch, cancelled charters/tours, operational disruption) to support both state fee relief and future grant applications.

Forced closures and environmental health concerns have disrupted seafood supply chains, bookings and coastal tourism.

While some contracts contain force majeure clauses, many – particularly in hospitality or wholesale seafood – don’t include provisions that cover environmental disasters like algal blooms. Where those clauses are absent or unclear, businesses may be exposed to breach-of-contract claims for cancellations or non-performance. It's also a timely reminder to revisit business interruption policies, many of which exclude damage to live aquatic stock or naturally occurring events.

Beyond cancellations and legal exposure, businesses face real supply chain pressure. For seafood processors, wholesalers, exporters and retailers, the shutdown of fisheries and aquaculture leases means reduced product to move. That puts strain on long-standing customer relationships and downstream delivery obligations. Businesses that rely on consistent supply (e.g. supermarkets, restaurant groups, export buyers) may begin looking elsewhere, potentially locking in alternate sources or renegotiating volumes. Upstream, some operators may struggle to source feed or freight on short notice, particularly if suppliers are also impacted or cautious about exposure to the region.

Even businesses not directly impacted by the bloom may suffer from flow-on effects as logistics, cold chain capacity and buyer confidence tighten. Businesses should assess contract terms across the supply chain, both with suppliers and customers, to clarify liability for shortfalls, late deliveries or product substitution.

For businesses still operating near affected waters – such as cafés, beachside hotels and charter operators – health and safety duties now carry additional weight. There have been public reports of respiratory irritation caused by foamy aerosols near contaminated beaches. Operators should be thinking about taking reasonable steps to warn patrons of risks. This is an evolving landscape and unfortunately official guidance from government can sometimes come later than might be ideal – so business owners should be proactively thinking about these risks themselves.

For businesses operating in or near affected coastal waters, obligations under South Australia’s Work Health and Safety Act remain front and centre. Employers must take all reasonably practicable steps to ensure the health and safety of workers exposed to potential risks associated with the bloom, including airborne toxins and contaminated water. This may require new protocols around protective equipment, limiting access to certain areas or issuing updated health guidance. Failure to manage these risks could lead to staff sickness and absence and regulatory breaches.

For beachside tourism and hospitality operators, the bloom may trigger quieter seasonal trading conditions than usual. Even if your business isn’t directly affected by water quality or closures, visitor hesitation can lead to reduced bookings, fewer walk-ins and shorter stays. From a commercial perspective, it’s worth thinking ahead by reassessing ordering volumes, stock levels and staffing rosters. Consider seeking legal advice before scaling back casual hours or adjusting leave schedules. Strategic promotions or bundling deals might help maintain foot traffic, but the key is staying agile. The businesses that navigate this best will be those that plan not just for legal exposure, but for operational resilience.

• Review current contractual protections and ensure future contracts contain updated force majeure provisions that account for environmental disruptions.
• Check insurance coverage for business interruption and environmental loss.

• Coordinate around relief applications and permit extensions.
• Consider group-level advocacy or legal support where appropriate.

• Keep up with evolving guidance from PIRSA, EPA and WorkCover.
• Implement customer warnings and compliance with current advisories.
• Review and document WHS risk assessments.

South Australia’s algal bloom - which began in March and may last well into 2026 - is more than an environmental crisis. Beyond business, this crisis is touching everyday life. The impacts aren’t abstract – they’re reaching into the ecosystems, communities and animals we care about.

While government support is welcome, it often arrives late – and official warnings can lag behind the actual risk. Businesses can't afford to wait. Those that respond early, assess their own exposures and take steps to adapt – legally, operationally and commercially – will be far better placed than those relying on external rescue. This is one of those moments where proactive judgment matters more than waiting for instruction.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.