Environment Protection Authority v BlueScope Steel (AIS) Pty Limited

[2004] NSWLEC 400

Land and Environment Court

of New South Wales

CITATION:	Environment Protection Authority v BlueScope Steel (AIS) Pty Limited [2004] NSWLEC 400
PARTIES:	PROSECUTOR Environment Protection Authority DEFENDANT BlueScope Steel (AIS) Pty Limited
FILE NUMBER(S):	50020 of 2004
CORAM:	Talbot J
KEY ISSUES:	Prosecution :- plea of guilty - serious offence - aggravating and mitigating factors taken into account
LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999 s 21A(2), s 21A(3)(m) Protection of the Environment Operations Act 1997 s 64(1), s 241, s 241(1)(a), 241(1)(b), 241(1)(c), 241(1)(d), 241(2)
CASES CITED:	Environment Protection Authority v ADI Ltd [1999] NSWLEC 14, unreported
DATES OF HEARING:	20/07/2004
DATE OF JUDGMENT:	07/27/2004
LEGAL REPRESENTATIVES:	PROSECUTOR Mr D Jordan (Barrister) SOLICITORS Environment Protection Authority DEFENDANT Ms J M Jagot (Barrister) SOLICITORS Mallesons Stephen Jaques

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Talbot J

Tuesday, 27 July 2004

50020 of 2004 Environment Protection Authority v BlueScope Steel (AIS) Pty Limited

JUDGMENT

Introduction

1 Talbot J: BlueScope Steel (AIS) Pty Ltd (“BlueScope”) is charged with an offence contrary to section 64(1) of the Protection of the Environment Operations Act 1997 (‘the PEO Act”) in that it was the holder of a licence, a condition of which was contravened on 14 March 2003.

2 Following an amendment to the summons on 19 May 2004, BlueScope entered a plea of guilty.

3 The condition contravened is condition O2.1(a), which provides as follows:-

All plant and equipment installed at the premises or used in connection with the licensed activity:
(a) must be maintained in a proper and efficient condition; and
(b) …

4 BlueScope is a wholly owned subsidiary of BlueScope Steel Limited (ACN 000 011 058). On 17 November 2003, BHP Steel Ltd changed its name to BlueScope Steel Ltd. This meant BHP Steel (AIS) Pty Ltd also changed its name to BlueScope Steel (AIS) Pty Ltd. BlueScope, the defendant, operates Steelworks in the heavy industrial area of Port Kembla on a site occupying 742 hectares.

5 The allegation against the defendant is that it failed to maintain an electrical circuit breaker in a proper and efficient condition, thereby causing an arc flashover resulting in a severe voltage disturbance. Furthermore, it failed to keep six of the batteries supplying power to the Uninterruptible Power Supply (“the UPS”) associated with coke oven batteries in a proper and efficient condition, thereby failing to ensure the UPS would work as required.

6 In 1995 and 1996, BlueScope replaced the pilot light system for the Coke Ovens bleeders with the installation of an electrical ignition system. The electrical power supply for the newly installed No. 4, 5 and 6 Coke Ovens bleeder igniters was connected to the UPS.

7 An UPS is a device which is designed to provide a continuous and conditioned power supply, which includes supplying electrical power in the event of a mains power supply blackout. The UPS has 32 12-volt batteries arranged in a single string, which is the typical configuration for UPS batteries. The single series string arrangement means that if any one of the batteries is defective with high impedance, then the UPS will not, inter alia, supply power from the battery pack to the electric igniters. When purchased in 1991, the UPS was consistent with technology at that time. In 1991, BlueScope expected that the battery life of the UPS would be seven years. BlueScope introduced a work practice of changing the batteries for the UPS on a four-year cycle to protect the integrity of the UPS. In late 1999, the UPS batteries were changed as required by the four-year cycle battery replacement. In March 2003, the batteries were less than four years old. There are no in-built systems within the UPS to regularly monitor the conditions of the batteries.

8 Investigations by BlueScope after the power failure revealed that two of the thirty-two batteries in the UPS had high impedance (meaning they were unable to supply power) and a further four batteries were in a poor state of charge.

9 At the time of the incident, work was progressing on the installation of a facility to change over power supply from the UPS to a second UPS (“UPS 2”) that had recently been installed and had a battery management system.

10 The coke making process at the Coke Ovens operates continuously and, in the event of a disturbance to the power supply, continues to generate raw coke ovens gas from the coke ovens. A loss of power supply causes a loss of steam supply, which causes a loss of suction, which means it is necessary to vent and combust this raw gas. This is done with a number of “bleeders” which are opened using stored pneumatic energy.

The relevant operation

11 The majority of the electrical energy consumed at the Steelworks is drawn from the local supply authority, Integral Energy Australia. The supply comes via five incoming lines (“incomers”) from the Integral Energy Springhill Substation, to the high voltage transmission and distribution network at the Steelworks (“the 33 kV network”). The 33 kV network consists of the five Integral Energy incomers, four 33 kV substations, 33 kV cables interconnecting the substations and all 33 kV outgoing circuits. The four 33 kV substations at the Steelworks are as follows:-

· No. 2 Blower Station Substation A;

· No. 2 Blower Station Substation B;

· Hot Strip Mill Outdoor Substation; and

· Oxygen Plant Substation.

12 Each substation has mechanical switching devices called circuit breakers, which are used to distribute and control electrical energy throughout the high voltage electrical network. At the Oxygen Plant 33 kV substation (commissioned in 1987) these mechanical switching devices are 13 gas insulated circuit breakers of a type that uses sulfur hexafluoride gas (“SF6 gas”) for insulation.

13 The incident involved electrical circuit breaker 6-99 (“CB 6-99”), which is located within the Oxygen Plant Substation. The insulation performance level of the circuit breaker depends on maintaining an adequate level of SF6 gas pressure, which must be monitored. Additional gas must be injected into the circuit breaker if the pressure falls below a certain level. BlueScope maintains a small stock of portable SF6 gas cylinders for the purpose of topping up SF6 gas filled equipment if the pressure falls below an acceptable pressure. SF6 gas is used infrequently and in very small quantities at the Steelworks. Gas cylinders containing SF6 gas and others containing nitrogen were stored within the Oxygen Plant Substation.

The incident

14 At 11.30 pm on 13 March 2003, a 90 per cent low-pressure alarm came on for CB 6-99 due to a slow leakage of SF6 gas. In response to the low pressure alarm, the Power Control Officer (“PCO”) in charge at the time called in a High Voltage Technician to attend the Steelworks to re-pressurise CB 6-99. The technician left his home and attended the Steelworks for that purpose, arriving after midnight. At 12.50 am on 14 March 2003, a PCO placed CB 6-99 in a condition acceptable to re-establish the circuit breaker’s gas pressure to normal. Specifically, the circuit breaker was opened and isolated. The technician then proceeded to re-pressurise the circuit breaker to normal pressure in accordance with the manufacturer’s instruction except he used what he thought to be a cylinder of SF6 (but which was later identified as dry nitrogen) to re-pressurise CB 6-99 to normal pressure.

15 At a debriefing meeting at 7:15am the next morning, namely 14 March it became apparent to the employees involved in the debrief that dry nitrogen gas had been used to re-pressurise CB 6-99 instead of SF6 gas. The employees took immediate steps to refill CB 6-99 with SF6 gas. This corrective action was inserted into the existing day’s work schedule. This was the first time that such a corrective action (namely to evacuate an SF6 gas filled circuit breaker) was required to be carried out in the 16 years that this type of circuit breaker has been in use at the Steelworks. Later analysis has shown that the SF6 /nitrogen mixture did not present a hazard to the safe operation of the circuit breaker. It was readily able to withstand the applied voltage of 33 kV without breakdown. This was not known by those involved at the time.

16 During normal operation CB 6-99 is racked in, that is fully connected and plugged into the 33 kV busbar at the Oxygen Plant Substation.

17 When the High Voltage Technicians commenced the re-gassing of CB 6-99, the circuit breaker was not racked out, as it should have been. Consequently, there were still live conductors at 33 kV present within CB 6-99.

18 Hoses and gauges were connected to CB 6-99 for the purpose of evacuation of the SF6 /nitrogen gas mixture from CB 6-99 to allow the re-gassing with pure SF6 gas.

19 The evacuation of the SF6 /nitrogen gas mixture caused the gas pressure within CB 6-99 to reduce. This had the effect of lowering the dielectric strength within the circuit breaker chamber. The lowered dielectric strength resulted in an electric arc flashover inside CB 6-99 at approximately 9.36 am. The electrical arc flashover which terminated on the metallic enclosure was of a sufficient duration to melt a hole of about 25 mm diameter in the enclosure. The damage sustained required substantial repairs before the circuit breaker could be returned to service.

20 The result of the arc flashover in CB 6-99 was a severe voltage disturbance and a loss of four of the five Integral Energy incomers. This resulted in an electrical power supply blackout to major processing plants across the Steelworks, including the Coke Ovens.

The consequences

21 When the Steelworks power supply failed, this was rapidly followed by loss of steam supply and hence the exhauster machines, which draw raw gas away from the Coke Oven Batteries, ceased operation. When the coke ovens raw gas pressure increased on Nos. 4 and 5 Coke Ovens Batteries, this would normally have been followed by an automatic action to open the raw gas bleeders and then ignite the raw coke ovens gas. This did not occur due to the failure of the UPS to supply power to activate the process and ignite the bleeders. On No. 6 Coke Oven Battery, the bleeders were opened manually. The electrical igniters did not operate because the UPS did not supply power. The manual ignition system was employed to ignite the coke ovens gas vented through the bleeders. Employees of BlueScope ignited emissions from all of the bleeder discharge points at the Coke Ovens manually, in accordance with established procedure. Approximately 30,700 Nm3 (cubic metres at one atmosphere pressure and 0oC temperature) of raw coke ovens gas was discharged to atmosphere. It is estimated a total volume of 338,000 Nm3 of raw Coke Ovens gas would have been discharged to atmosphere if the bleeders had not been lit.

22 UPS 2 that was in the process of being installed, was sufficiently advanced for loads to be transferred to it. That allowed UPS power to be restored to Nos. 4, 5 and 6 Coke Ovens Batteries.

23 Raw coke ovens gas was discharged intermittently to atmosphere from various discharge points at Coke Ovens Batteries Nos. 4, 5 and 6 between 9.42am and 12.30pm on 14 March 2003. Raw coke ovens gas contains carbon monoxide and smaller quantities of benzene, toluene, ammonia, xylene, hydrogen sulphide, hydrogen cyanide and coarse particulates. Approximately 60,000 Nm3 of semi clean blast furnace gas was discharged to atmosphere. Approximately 15,500 Nm3 of black smoke was emitted while No. 24 Boiler was being restarted after the power outage.

24 Three minor discharges of liquid occurred as a consequence of the outage.

Environmental harm

25 The key visible indication of the loss of power supply to the Steelworks was the bleeding of raw coke ovens gas from the coke ovens plant.

26 Dr Robert Kenyan, Senior Occupation Physician at WorkCover NSW, has provided expert opinion evidence on environmental harm as a consequence of the air omissions and summarises his findings as follows:-

Summary

The reports, affidavits and scientific literature that I have reviewed support the following conclusions ;

The contaminants escaping from the waste gas stacks (discharge points) at the BHP plant contain hydrogen sulphide, hydrogen cyanide, ammonia, other volatile organic compounds and solid particles. The most acutely toxic of the gases is hydrogen sulphide.

The dilution ratio of the gases from the coke ovens at a distance 3 km downwind from the point of emission is in the order of 100,000. No associated acute health effect would be expected at these high dilutions and resultant low concentrations of the gaseous contaminants.

No long-term health effects would be expected to be associated with transient short-term exposures of the type that may have arisen from the BHP incident on 14 March 2003.

Individuals with a particular sensitivity to atmospheric contaminants due to a pre-existing medical condition, for example asthma, could experience an exacerbation or acute respiratory effect caused by low-level pollution. There is no evidence, of which I am aware, that such health effects were experienced related to the BHP incident.

The dilution ratio of the stack gases from the blast furnace at a distance 2.2 km downwind from the point of emission is in the order of 27,000. No associated health effect would be expected at these high dilutions, and resultant low concentrations of the gaseous contaminants.

Solid particles in the stack discharges would cause visible pollution and are likely to give rise to a “tarry” odour but direct health effects are extremely unlikely.

Modelling of stack gas pollutant dispersion could be improved with more precise information however this would be unlikely to influence the conclusions regarding probability of adverse health effects occurring.
Conclusion

It is my opinion that it is very unlikely that adverse health effects would be likely to result from off plant (i.e. residential) exposure to the abnormal (unflared) stack gases, discharged in relation to the incident at the BHP plant on 14 March 2003.

27 The prosecutor expressly acknowledges that the liquid emissions did not result in any significant adverse environmental harm.

Remedial action

28 The defendant has implemented a number of measures since 14 March 2003 in an attempt to prevent a re-occurrence of the same incident. These include the following:-

(1) The 33 kV network has been re-configured so that the effect of an incident such as that which occurred on 14 March 2003 is confined. A Steelworks wide blackout now cannot occur following such an electrical fault;

(2) Operations and maintenance procedures and work practices associated with SF6 gas have been reviewed, modified and implemented;

(3) A procedure for the storage, labelling and handling of gas cylinders specific for electrical substations has been implemented.

(4) Warning signs have been erected;

(5) Personnel have undertaken specific training courses;

(6) Installation of a separate (back-up) UPS power supply to the bleeder instrumentation and igniters has been completed;


(7) Maintenance procedures for cokemaking UPS systems have been enhanced to meet the relevant Australian standards, including quarterly load testing of battery performance; and

(8) Emergency procedures in the cokemaking plant have been reviewed and enhanced following the incident.

The prosecutor’s submissions

29 Mr Jordan emphasises the following matters to be taken into account, pursuant to s 241 of the PEO Act, for the purposes of sentencing:-

(1) The defects in the procedures and training for re-gassing of circuit breakers at the time of the incident are very serious;

(2) There were no direct written procedures or instructions in place to deal with the particular procedure at the time;

(3) The gas cylinders were not adequately labelled;

(4) The manner in which the event transpired showed that employees were not adequately trained in relation to the re-gassing procedures;

(5) The failure to maintain a critical UPS is serious; and

(6) The steps open to be taken to prevent the occurrence were available as demonstrated by the measures taken since the date of the incident.

30 Specifically, in relation to the matters the Court is required to address, pursuant to s 241 of the PEO Act, Mr Jordan submits as follows:-

Section 241(1)(a)

31 Although the extent of harm was limited to a visual impact and adverse health affects were highly unlikely in the circumstances, nevertheless, the environment was degraded.

Section 241(1)(b)

32 The measures taken since the incident show that there were practical measures available to the defendant to prevent, control, abate or mitigate the harm that occurred. The existence of UPS 2 in the process of being utilised to allow additional maintenance activities on the UPS involved in the incident is demonstrative of a practical measure that should have been initiated earlier.

Section 241(1)(c)

33 The development of UPS 2 clearly shows that the defendant had recognised the need to alter the design to allow additional maintenance activities and, accordingly, it had already foreseen the prospect of failure.

Section 241(1)(d)

34 There can be no issue that the defendant had complete control over the causes that gave rise to the offence, particularly having regard to the matters referred to in respect of s 241(1)(b) and s 241(1)(c).

Section 241(2)

35 It is not necessary to establish environmental harm to substantiate a charge pursuant to s 64(1) of the PEO Act that any condition of a licence has been contravened. The holder of a licence has a heightened responsibility to carry on its operations within the parameters set by the licence (Environment Protection Authority v ADI Ltd [1999] NSWLEC 14, unreported). There is a significant public interest in prevention of harm to the environment. This interest, of course, is to be balanced, as the licensing system does, against the necessity for business to be carried on in a manageable way. The defendant, BlueScope, carries on an important industry employing a significant number of people and makes a major contribution to the economic welfare of the country. As I said earlier, I am not prepared to employ the phrase “breach of trust” to identify the nature of the defendant’s responsibilities. Nevertheless, a contravention of a condition of a licence must be regarded as a serious matter.

The defendant’s submissions

36 The defendant asks the Court to take the following matters into account in considering the appropriate sentence:-

(1) The immediate and largely effective steps taken to mitigate the environmental harm by igniting the manual system and notification to the prosecutor;

(2) The comprehensive investigation carried out into the causes of the incident and the co-operation with the investigators in that regard; and

(3) BlueScope entered a plea of guilty on the first opportunity it had to do so;

(4) The responses and remedial measures undertaken to avoid, as far as practicable, any future re-occurrence have been thorough and prompt;

(5) The prior convictions in relation to the Steelworks at Port Kembla must be understood in the context of the large industrial undertaking;

(6) The company has demonstrated that it is committed to environmental improvement and protection of the environment as a matter of priority;

(7) The incident occurred as a regrettable coincidence of human error and technological design limitations;

(8) The only real applicable aggravating factor to be taken into account pursuant to s 21A(2) of the Crimes (Sentencing Procedure) Act is the record of prior convictions; and

(9) There are a number of applicable mitigating factors, which are set out below.

Agreed matters to be taken into account - Mitigating factors

37 The parties have agreed the following matters are relevant for the purpose of s 21A(3)(m) of the Crimes (Sentencing Procedure) Act 1999 (“the Crimes (Sentencing Procedure) Act”).

38 BlueScope notified the Environment Protection Authority (“the EPA”) immediately after the incident.

39 During the investigation, BlueScope has fully co-operated with the EPA and provided information and documentation within the requested time. BlueScope has on numerous occasions made its employees available to respond to questions put by the EPA when requested.

40 During the incident, on 14 March 2003, BlueScope accompanied Dennis Pascall of the EPA around BlueScope’s site to inspect the effects of the incident and to ensure the EPA understood the incident and the steps taken by BlueScope to manage the incident.

41 On 14 March 2003, the EPA requested an incident report in accordance with condition R3.3 of BlueScope’s licence. BlueScope provided an interim incident report on 4 April 2003 and a comprehensive report on 13 June 2003. The report contained responses to questions that the EPA requested.

42 On 21 and 27 March 2003 and 19 September 2003, BlueScope hosted visits to the site by Mr Pascall and the EPA’s external expert in order to assist them in their fact finding.

43 On 29 April 2003, BlueScope hosted a visit to its site by Mr Pascall and legal representative Ms Ann Butler.

44 On 19 August 2003, Mr Pascall and the EPA’s external expert witnessed the disassembling and subsequent examination of CB 6-99 at Alstom’s high voltage workshop at Rocklea, Brisbane. Alstom is the Australian agent for EIB circuit breakers.

45 On 28 October 2003, BlueScope was issued with a notice under the PEO Act for information and records in respect of the incident. On 21 November 2003, BlueScope supplied extensive information and records in response to this notice.

46 On 3 December 2003, BlueScope was issued with a notice under the PEO Act for information and records in respect of the incident. On 22 December 2003, BlueScope supplied extensive information and records in response to this notice.

47 The EPA has made other verbal and written requests for information and documentation during the course of the investigation. At all times BlueScope has co-operated with the EPA and provided responses when requested.

48 BlueScope has co-operated with the EPA during the investigation of the incident and in the preparation of a Statement of Agreed Facts.

49 BlueScope has agreed to pay the prosecutor’s costs as agreed or assessed.

50 BlueScope pleaded guilty to the charge on 19 May 2003. The parties accept that this was the first reasonable opportunity for BlueScope to do so.

Background information in respect of the Steelworks operation

51 The Steelworks is a fully integrated iron and steel making plant, which in the 2002/2003 financial year produced more than five million tonnes of steel. At September 2003 BlueScope directly employed 3,722 people and provided work for approximately 2,100 contractors at the Steelworks and is one of the largest employers in the Illawarra region.

52 Electricity is one of the main energy sources used at the Steelworks. The Steelworks consumes more electric power than the rest of the Illawarra, with power requirements similar to those of a city of approximate population of 300,000. The high voltage system is monitored twenty-four hours a day, seven days a week and involves 37 full-time employees. Annual expenditure on operations, repairs and maintenance of High Voltage equipment is approximately $6 million.

53 The High Voltage Technicians are employees of BlueScope, being a separate group dedicated to the maintenance of high voltage equipment. The High Voltage Technicians are trained and accredited in high voltage safe work practices by accredited training bodies, such as Integral and Optec. The High Voltage Technicians are also trained and accredited in BlueScope’s procedures titled “Isolation for Personal Protection”, “Job Safety Management” and the “High Voltage Safety Rules”. In addition, BlueScope’s High Voltage Technicians work with the manufacturer’s engineers when installing new high voltage equipment not previously installed at the Steelworks.

54 The Power Control Officers (“PCOs”) are a separate group of qualified electrical engineers who monitor and control the operation of and access to the high voltage transmission and distribution network. PCOs are also trained and accredited. The PCOs manage the access to high voltage equipment for inspections, maintenance and repairs of equipment.

55 Integral Energy audits BlueScope’s High Voltage system in areas such as maintenance, operations and equipment. Integral Energy’s last audit dated 25 September 2003 concluded that BlueScope had suitable systems and processes in place to manage the maintenance of their high voltage equipment.

56 It must be acknowledged that BlueScope carries on a highly developed industrial process that involves a high level of potential to cause significant environmental harm if it is not operated in a proper and efficient manner.

57 There is no suggestion that the defendant does not take its responsibilities to the environment seriously. The incident which led to the present charge did not involve wanton or reckless behaviour.

58 Mr Jordan made a submission on behalf of the EPA, as prosecutor, that as the holder of a licence under the PEO Act, the defendant has a duty in the nature of a public trust not to cause pollution, otherwise than to the extent authorised by the licence. I have previously expressed reservations about attempting to equate the duty of a licence holder to an obligation arising out of a public trust. I accept that the operator of an industrial undertaking in the nature of that conducted by the defendant has a high responsibility to protect the environment from harm as a consequence of its operations. The legislation recognises the level of this duty by providing that a breach of the Act attracts strict liability. Condition O2.1 of the licence sets an absolute standard that places a strict obligation on the licence holder. The conditions of the licence reflect the nature and extent of the duty imposed upon the licence holder. I would prefer to find the strict obligations of the defendant within the terms of the licence, rather than seeking to extract some abstract principle out of an implied public trust.

59 The Court is satisfied in this instance that CB 6-99 was not maintained in a proper and efficient condition contrary to condition O2.1(a) of the licence. Furthermore, by failing to keep six of the 32 batteries installed in the UPS for Nos. 4, 5 and 6 Coke Ovens Batteries in an efficient condition, the defendant was in breach of condition O2.1(a). It is significant, however, that when the arc flashover occurred and the power supply went down, employees promptly engaged procedures that limited the extent of adverse impact upon the environment. Nevertheless, it must be recognised that there was a large volume of unburnt raw coke ovens gas discharged and that the discharge caused a visual impact and had the potential to cause mild irritation and potentially lethal consequences. It is fortunate that adverse health affects would be unlikely to result as a consequence of the specific incident.

Contrition and remorse

60 The Court accepts the evidence that the defendant company takes its obligations to the community and the environment seriously. Significant resources have been committed to measures designed to prevent a re-occurrence. I am satisfied that the defendant strives to meet its environmental responsibilities. Its health, safety, environmental and community policy aspires to achieve zero harm to people and it is committed to the efficient use of resources, reducing and preventing pollution and product stewardship.

61 In a letter to the Court the company’s Vice President – Technology and Environment, states that the company is embarrassed by the fact that it is again before the Court and acknowledges that this position is not acceptable.

Crimes (Sentencing Procedure) Act 1999 s 21A

62 Although the defendant has a record of previous convictions, this record needs to be understood and appreciated in the context of the operations and the nature of them, as already discussed. The loss or damage caused by the offence was not substantial and the defendant, which generally should be regarded as a person of good character, has shown remorse for the offence. A plea of guilty has been entered and that plea was made at a time which entitles the defendant to a substantial discount on penalty. Account is to be taken of the assistance by the company to the EPA, as already explained.

Sentence

63 I take into account all of the above-mentioned facts and circumstances which demonstrate the seriousness of the offence on the one hand and those which mitigate or exculpate the defendant on the other. I find that the offence is not in the most serious category, nor is it trivial or inconsequential. Although the offence was unintended, it was not unforseen and the defendant cannot be discharged from responsibility for any of the blame.

64 The concepts of specific deterrence and general deterrence are taken into account in order to remind the defendant of its obligations and to demonstrate to others that environmental offences are matters that will be taken seriously by the Court.

65 Taken overall and nevertheless recognising the potential consequences, the extent of the actual emissions can, in the context, be regarded as being for a short duration and fortunately there was no actual harm other than visual impacts.

66 The ability of the defendant to take practical measures to avoid or mitigate the consequences must be approached on the basis that the defendant operates a highly technical, complicated and vast industrial undertaking that depends on the proper and efficient functioning of many facets of the plant used in the process of steel making. The incident occurred notwithstanding internal vigilance on the part of the company and its employees and external auditing and monitoring by Integral Energy and even the EPA. The latter recognises that BlueScope understands and accepts its responsibilities to the environment. This is further demonstrated by the level of co-operation afforded to the EPA by the defendant in respect of the investigation and the implementation of remedial measures.

67 I am not prepared to accept the ultimate submission made by Ms Jagot, on behalf of the defendant, that the objective features of the offence place it towards the lower end of the scale of seriousness. Although the subjective features of the defendant’s conduct weigh heavily in its favour, nevertheless, the offence itself is serious and the incident was not trivial or insignificant. I regard it as a major incident. However, the procedures in place and the diligence of the company’s employee’s once the incident occurred prevented the offence from becoming more serious.

68 I find that the defendant breached condition O2.1(a) of its licence and thereby caused a discharge to atmosphere and water. The consequences did not involve any direct environmental harm except by way of a visual impact.

69 After taking into account the seriousness of the offence, the nature of the incident, the consequences, mitigating factors, the early plea of guilty, the remorse of the defendant and the overall circumstances under which the steel making plant operates, together with the record of prior convictions, I have determined that an appropriate penalty is $70,000.

Orders

70 The Court makes the following formal orders:-

(1) The offence the subject of the charge in the summons is proved.

(2) I find the defendant guilty of the charge in the summons and the defendant is convicted.

(3) The defendant is ordered to pay a penalty by way of monetary fine in the sum of $70,000.

(4) By consent, the defendant is ordered to pay the costs of the prosecutor.

(5) The exhibits may be returned.