Documents obtained under freedom of information laws reveal the department considered a criminal prosecution against Adani over the omission, but decided the prospect of a conviction was limited.
The ABC revealed in 2015 Adani's Australian CEO, Jeyakumar Janakaraj, was the director of operations at a Zambian copper mine when it discharged toxic pollutants into a major river.
The mining company, KCM, later pleaded guilty to four charges, including polluting the environment and wilfully failing to report it.
Mr Janakaraj was not charged, but the 2009 annual report of KCM's parent company said he was "responsible for overall operations of KCM".
After the ABC's 2015 report, the Environment Department launched an investigation, demanding to know why Adani had not revealed Mr Janakaraj's history with KCM during the approval process for Adani's proposed Carmichael coal mine in Queensland.
Under the Environmental Protection and Biodiversity Act, the environmental history of corporate executive officers must be disclosed to the department.
A compliance report prepared for the department's investigation found: "Adani Mining Pty Ltd may have been negligent in that; when requested in August 2015, it failed to disclose a complete account of its executive officers in relation to environmental matters."
But the report said it, "may not be in the public interest to invest significant additional resources to pursue a criminal prosecution when it is unclear that the oversight was done negligently in order to mislead the department and the minister".
The department recommended Adani be "cautioned". But the company has told the ABC it never received any caution from the Government and that it fully cooperated with the department on the matter.
"For one of the most controversial environmental projects we've seen in Australia, what will be the world's biggest export coal mine, you'd expect a watertight environmental approval process and we don't have that," said Ben Oquist, the executive director of the progressive thinktank The Australia Institute.
"These documents show [Adani] may have been negligent and that a prosecution was considered. That said, this is a strong case that the environmental assessment needs to reviewed."
But while finding that the company may have been negligent, the department said that even if it had known of Mr Janakaraj's history it would have been, "unlikely to have materially influenced the advice provided by the department to the minister prior to his decision" to approve the Carmichael project.
This month, the Opposition called for an investigation into Adani over concerns the company submitted an altered laboratory report as part of an appeal against a fine for contaminating sensitive wetlands.
Abbot Point Bulkcoal Pty Ltd, operated by Adani, was fined $12,000 by the Queensland Government for spilling coal-laden water during Cyclone Debbie in 2017.
Adani has denied any tampering with samples, saying it provided accurate information about the run-off from its Abbot Point operation.