Environment Protection Authority v Bulga Coal Management Pty Limited
[2014] NSWLEC 55
•14 May 2014
Land and Environment Court
New South Wales
Medium Neutral Citation: Environment Protection Authority v Bulga Coal Management Pty Limited [2014] NSWLEC 55 Hearing dates: 14 May 2014 Decision date: 14 May 2014 Jurisdiction: Class 5 Before: Pain J Decision: 1. Bulga Coal Management Pty Limited is convicted of the offence as charged and fined $65,000.
2. Bulga Coal Management Pty Limited is to pay the Prosecutor's costs under s 257B of the Criminal Procedure Act 1986 as agreed or assessed.
3. Bulga Coal Management Pty Limited is to pay the Prosecutor's investigation costs pursuant to s 248 of the Protection of the Environment Operations Act 1997 as agreed or assessed.
Catchwords: ENVIRONMENTAL OFFENCES - sentence - plea of guilty to charge of water pollution from tailings pipe leak at coal mine - strict liability offence - low level of objective seriousness - mitigating factors considered Legislation Cited: Criminal Procedure Act 1986 s 247E
Crimes (Sentencing Procedure) Act 1999 s 3A, s 21A, s 22, s 23
Protection of the Environment Operations Act 1997 Ch 5, s 120, s 123, s 241Cases Cited: Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683
Cameron v R [2002] HCA 6; (2002) 209 CLR 339
Environment Protection Authority v Coal and Allied Operations Pty Ltd [2013] NSWLEC 134
Environment Protection Authority v M A Roche Group Pty Ltd [2013] NSWLEC 191
Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65
Environment Protection Authority v Peak Gold Mines Pty Limited [2013] NSWLEC 158
Environment Protection Authority v Pipeline Drillers Group Pty Ltd [2012] NSWLEC 18
Environment Protection Authority v Ravensworth Pty Limited [2012] NSWLEC 222
Environment Protection Authority v Sibelco Australia Limited [2011] NSWLEC 160
Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114; (2010) 174 LGERA 314
Environment Protection Authority v Tea Garden Farms Pty Ltd [2012] NSWLEC 89
Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299
Hoare v R [1989] HCA 33; (1989) 167 CLR 348
Markarian v R [2005] HCA 25; (2005) 228 CLR 357
Minister for Planning v Moolarben Coal Mines Pty Limited [2010] NSWLEC147; (2010) 174 LGERA 93
Muldrock v R [2011] HCA 39; (2011) 244 CLR 120
R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383
R v Visconti [1982] 2 NSWLR 104
Veen v R [1979] HCA 7; (1979) 143 CLR 458
Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465
Walden v Hensler [1957] HCA 54; (1987) 163 CLR 561Category: Sentence Parties: Environment Protection Authority (Prosecutor)
Bulga Coal Management Pty Limited (Defendant)Representation: Mr S Rushton SC (Prosecutor)
Mr T Howard SC (Defendant)
Environment Protection Authority (Prosecutor)
McCullough Robertson Lawyers (Defendant)
File Number(s): 51032 of 2012
EX TEMPORE Judgment
Sentencing of defendant
Bulga Coal Management Pty Limited (the Defendant) has pleaded guilty to a charge that it polluted waters in breach of s 120 of the Protection of the Environment Operations Act 1997 (PEO Act) at Broke, NSW between 7 and 10 October 2011. The offence is one of strict liability. A plea of guilty means that the Defendant admits the essential elements of the offence.
Section 120(1) states:
120 Prohibition of pollution of waters
(1) A person who pollutes any waters is guilty of an offence.
Note. An offence against subsection (1) committed by a corporation is an offence attracting special executive liability for a director or other person involved in the management of the corporation-see section 169.
(2) In this section:
pollute waters includes cause or permit any waters to be polluted.
Evidence
The Environment Protection Authority (the Prosecutor) tendered the Statement of Agreed Facts with the accompanying attachments (exhibit A) (SOAF) and the joint expert report of Mr Moreno Julli, called by the Prosecutor, and Dr Ross Smith, called by the Defendant, dated 13 May 2014 (exhibit B). The SOAF provided as follows (attachments omitted):
THE DEFENDANT
1. Bulga Coal Management Pty Ltd (ACN: 055 534 391) (the defendant) operates a coal mine located at premises at 779 Broke Road, Broke, near Singleton in New South Wales (the Premises).
THE OFFENCE
2. On 22 February 2013 the defendant pleaded guilty to an offence under section 120(1) of the Protection of the Environment Operations Act 1997 (the POEO Act), namely, that between about 7 October 2011 and 10 October 2011, it polluted waters. The waters were Nine Mile Creek (the creek)
BACKGROUND
RELEVANT FACTS REGARDING THE DEFENDANT
3. During the relevant period, the various personnel who worked at the Premises included Rodney de Groot, Brendan Lees, Paul Amidy, Wayne Bower and Ben Hiatt. Each person's employed position, reporting arrangements and relevant qualifications as at the date of the incident are also set out in the table in Attachment A.
THE ENVIRONMENT PROTECTION LICENCE
4. At all relevant times the defendant carried on the activity of coal mining at the Premises. The defendant is the holder of Environment Protection Licence Number 563 in relation to the Premises (the EPL). A copy of the EPL is Attachment B.
5. Part of the footprint of the EPL is shown on Attachment C by a dashed black and green line.
6. The EPL does not permit the pollution of the waters of the creek.
RELEVANT FACTS REGARDING THE PREMISES
7. Attachment C is an aerial photograph showing a portion of the Premises (the Map). The following features are marked on the Map:
· the Tailings Lines (referred to at paragraphs 18 to 24 below) as a red line;
· the coal conveyor, a conveyor belt for transporting coal, as a black line running from the south west to the north east (also depicted in Photograph 1 in Attachment D;
· mine roads, visible to the north and south of the coal conveyor as a white strip;
· the Western Containment Dam, as a brown polygon marked by the label "2. Tailings Containment Dam - Water sampling location);
· the creek, as a blue line; and
· the creek crossing, marked by the label "Creek Crossing" (Creek Crossing).
The creek
8. The creek is an intermittent waterway. The aquatic ecosystem in the creek includes: aquatic reed beds dominated by Spiny Rush (Juncus acutus) grading to Cumbungi (Typha cf. orientalis) and grasses; resident aquatic fauna such as midge larvae, snails, water fleas, water surface dwelling insects, up to seven species of frog, zooplankton crustaceans and fish.
9. Plants occurring in the general locality of the creek (and in some cases the area of the creek affected by the incident), include Central Hunter Grey Box - Ironbark Woodland (an endangered ecological community); Grey Box (Eucalyptus moluccana); Narrow leave Ironbark (Eucalyptus crebra); Bulloak (Allocasuarina luehmannii); Rough-barked apple (Angophora floribunda); Swamp Oak (Casuarina glauca); Sharp Rush (Juncus acutus).
10. The channel of the creek below the Creek Crossing is a low flow channel.
Coal Handling and Preparation Plant
11. At the Premises, coal is produced by removing upper layers of overburden and placing those in a dump. Coal is then removed and stockpiled. The stockpiled coal is then processed. The processed coal is transported by rail to port. Raw coal from both the surface operations and the underground operations is processed at the Coal handling and Preparation Plant (the CHPP). A photograph of the CHPP is Photograph 2 in Attachment D. The CHPP is shown on Attachment C labelled with the letters "CHPP".
12. The CHPP includes a coal washery (the Washery).
13. The Washery comprises two modules, Module One and Module Two. Each module has a thickener and a tailings line (the Tailings Lines).Module One and Module Two are separate, such that each of the lines can be operated independently.
14. Raw coal removed from the ground by mining is known as "run of mine coal". Run of mine coal includes rock from the mining process, some clay and some very fine coal particles. Run of mine coal is washed to remove the rock and fine coal particles.
15. Part of the washing process involves adding a substantial volume of mine water to the run of mine coal. The addition of mine water results in a lot of very fine material being rinsed from the course component of the coal and rock. The fine material that is rinsed is known as tailings (Tailings).
16. Tailings is comprised primarily of very fine clay and very fine coal particles, in general less than 0.1 millimetres in diameter. At the stage when the coal is first washed, the Tailings are in a very fluid form, mixed as they are with mine water.
17. Once rinsed, the fluid Tailings are sent to a thickener. At the thickener, the Tailings fluid is thickened with an anionic emulsifier (the Thickened Tailings), effectively reducing the volume of materials to be disposed of.
The Tailings Lines
18. From the thickener, the Thickened Tailings are pumped by centrifugal pump into the Tailings Lines. The Tailings Lines are constructed from poly pipe. At the time of the Incident, the Tailings Lines ran in parallel, also parallel to the coal conveyor belt, with each of the Lines being approximately 3.5 kilometers long. Most of the Tailings Lines are buried, however some sections are above ground. The Tailings Lines exit the Washery and rise to a highpoint, before dipping to the level of the creek and rising again to another high point.
19. The section of the Tailings Lines between the two high points referred to in paragraph 18 is approximately 550metres in length. The outside diameter of each pipe is 280 mm and the internal diameter of each pipe is 210 mm. The pipe walls are 35mm thick. The section of the Tailings Lines so described holds approximately 19,000 litres of coal tailings when the Tailings Lines are full. The total capacity of the Western Containment Dam when empty exceeds the volume of coal tailings held in this section of the Tailings Lines by greater than two orders of magnitude (see paragraph 26).
20. To address the contingency that there might be a problem with the Tailings Lines, such as a blockage or airlock in the Tailings Lines, the Tailings Lines are fitted with a T-Piece and additional pipe that allows the flow of materials in the Tailings Lines to be redirected (the T-Piece).
21. The Thickened Tailings passes through the Tailings Lines en route to a Tailings Dam. At the Tailings Dam, a flocculent is added, to further separate water from the Thickened Tailings. Once deposited at the Tailings Dam, water either evaporates, or is pump back to the CHPP, leaving solid tailings, which remain in situ in the Tailings Dam.
22. The flow rate of Thickened Tailings within the Tailings Lines is approximately 300 cubic metres per hour.
23. The Tailings Lines are fitted with a differential flow system which is calibrated every four weeks by a qualified contractor. The differential flow system is designed to detect major pipe breakages. The differential flow system is connected to an alarm in the control room at the Washery.
24. The alarm is designed to be triggered if there is a variation in the flow of tailings being pumped into the Tailings Lines compared with the flow of the tailings exiting the Tailings Lines.
The Western Containment Dam
25. The creek is bounded by two containment dams located to the north of the Tailings Lines, one on the eastern side and one on the western side (the Western Containment Dam). The purpose of the containment dams is to capture any material that leaks from the double skinned section of the Tailings Lines and to provide a point for relieving any blockages that form in the Tailings Lines. The T-Piece allows the contents of the Tailings Lines at that point to be redirected into the Western Containment Dam.
26. The capacity of the Western Containment Dam prior to the Incident was 906 000 litres, assuming a freeboard of 500mm below the lowest section of the dam walls.
27. The Western Containment Dam contains a low point in the northern dam wall. The low point leads to the creek via a channel (the Discharge Channel).
28. At the time of the Incident there was no level sensor system installed in the Western Containment Dam to monitor its level.
29. The northern mine road crosses the creek adjacent to where the Discharge Channel enters the creek, at the Creek Crossing. At all relevant times the Creek Crossing was boggy such that it was impassable to mine vehicles travelling on the northern mine road. A post incident photograph of the Creek Crossing with gravel added is Photograph 3 in Attachment D.
Maintenance
30. Employees within the CHPP carry out a regular schedule of eleven different inspections on a 24 hour basis, from 7:00 pm to 7:00 pm, as dictated by an inspection document signed off by the CHPP Superintendent (the inspection document). The date of the inspection, but not the time, is recorded on the inspection document.
Procedures for inspection of the Tailings Lines
31. The Tailings Lines and associated components including the T-Piece were subject to external visual inspections only, to assess their condition.
32. A visual inspection of the Tailings Line is one of the eleven daily inspections required by the CHPP inspection document. Once an inspection is completed, it is signed off by the Superintendent and the Team Leader. The inspection regime is such that an inspection must take place at least once in each 24 hour period, but the time of the inspection is at the discretion of the Team Leader CHPP on shift.
33. Inspections of the Tailings Lines are conducted by driving a 4WD along the mine roads that run parallel to the Tailings Line, to it's north and to it's south. The 4WD is fitted with a spotlight that can be swivelled by exiting the vehicle and manipulating it.
34. When driving along the northern mine road, it is difficult to see the Tailings Lines and the Western Containment Dam due to the placement and bulk of the coal conveyor. A walkway is constructed at the Creek Crossing, allowing access over the coal conveyor by foot from one side of the coal conveyor to the other. Photograph 4 in Attachment D shows the walkover.
35. Mr de Groot adopted a procedure of driving a vehicle along the northern and southern mine roads. The mine road to the north of the Tailings Lines was driven by Mr de Groot, to the end of the coal conveyor. His inspection would then involve driving back along the conveyor down the southern road. Prior to the Incident, the Creek Crossing on the northern mine road became impassable to vehicles. From this time, Mr de Groot employed the procedure of driving part way down the northern and southern sides of the tailings line.
36. Mr Brendan Lees, Step Up team leader CHPP only drove along the northern mine road, although prior to the Creek Crossing becoming boggy he would drive along both mine roads.
THE INCIDENT
37. On or shortly before 9 October 2011, a small hole developed in a T-piece in the Tailings Line. The function of the T-piece was to connect to the main Tailings Line a section of pipe which led to the Western Containment Dam. If there was a blockage in the main Tailings Line, the T-piece and the short connected pipe allowed tailings from the main line to be drained into the Western Containment Dam, which is constructed in a way that the drainage of tailings from the main line would not go into the creek.
38. The tailings slurry which discharged into the Western Containment Dam from the hole in the T-Piece mixed with the rainwater already present in the containment dam. The capacity of the Western Containment Dam was eventually exceeded and its contents overtopped a small section of the embankment of the dam which was lower than the rest of the embankment, resulting in a slow-flowing release of the tailings slurry mixed with the dam water down a short drainage gully and into the creek at a point just upstream (south) of the culvert leading underneath the coal conveyor and the adjacent access road.
39. Nine Mile Creek is an intermittent or ephemeral watercourse. The section of Nine Mile Creek into which the tailings slurry was discharged was dry at the time of the discharge. Mr de Groot described to Mr Bower at the time Mr de Groot noticed the discharge that, upstream of the discharge, the creek was mostly dry and there was no flow of water. The tailings slurry was deposited on the bed of the creek for a section of the creek which was about 250-280 metres long, located wholly within the premises.
40. Approximately 340 kilolitres of coal tailings were released into the creek at a ratio of about 61% supernatant to 39% solids (the Incident). The Pollutant travelled down an approximately 280 metres long section of the creek (the Reach). The solid component of the Pollutant was deposited on the bed of the creek (coal tailings). The depth of coal tailings in the creek was generally approximately 4-9 centimetres however in some areas was more than 30 centimetres.
41. At approximately 11:30 am on Sunday 9 October 2011, the defendant became aware of the presence of the Pollutant in the creek.
BACKGROUND TO THE INCIDENT
42. The CHPP plant was not operating from at least 5 October 2011 to 2:00 am on 8 October 2011, due to maintenance.
Events of Friday 6 October 2011
43. On 6 October 2011, Mr Wayne Stedman, Supervisor CHPP employed by the defendant , was on shift from 6:00 am.
44. On 6 October 2011, Mr Stedman conducted an inspection of the Tailings Lines around midmorning but did not see any leak of coal tailings from the Tailings Line into the Western Containment Dam or into the creek.
Events of Friday 7 October 2011
45. On 7 October 2011, Mr Stedman was on shift from 6:00am. Mr Stedman signed off on the inspection sheet as having completed the inspection. The inspection was likely completed midmorning.
46. On 7 October 2011, Mr Brendan Lees, the defendant's Step Up Team Leader in the CHPP was on shift from 6:00pm.
Events of Saturday 8 October 2011
47. On 8 October 2011, Mr Rodney de Groot, the defendant's Team Leader Coal Handling and Preparation Plant was on shift from 6:00 am.
48. Sunset on 8 October 2011 in the area of the Premises was at 7:02pm.
49. On 8 October 2011, Mr Lees was on shift from 6:00 pm.
50. At approximately 8:00pm, Mr Lees commenced an inspection of the Tailings Lines. Mr Lees inspected the Tailings Lines by driving the 4WD at approximately 40 kilometres an hour or less along the northern mine road parallel to the Tailings Lines. As a result of the boggy creek crossing, Mr Lees drove along the northern mine road to the Creek Crossing to inspect the Tailings Lines. Mr Lees did not drive along the southern mine road to inspect the Tailings Lines.
51. During the inspection Mr Lees did not notice anything out of the ordinary. Mr Lees signed off the inspection sheet as having completed the inspection. A copy of the inspection sheet for 8 October 2011 is Attachment E.
Events of Sunday 9 October 2011
52. At or about 10:30am on 9 October 2011, Mr de Groot commenced inspections.
53. At about 11:30am, Mr de Groot was going for a drive to inspect other areas of the site when he brought his vehicle to a point adjacent to the Creek Crossing. From this location, Mr de Groot saw the Pollutant in the creek at the Creek Crossing.
54. Mr de Groot then inspected the Western Catchment Dam and saw that the tailings slurry was overflowing the small section of the embankment of the Western Containment Dam . Mr de Groot ascertained that Thickened Tailings were being released into the Western Catchment Dam from the Tailings Line connected to Module One.
55. Mr de Groot saw that, at this point, the tailings slurry was flowing very slowly over the wash out area and very slowly down the drainage gully or "gutter" that led to the section of the creek immediately upstream (south) of the culvert under the coal conveyor and adjacent access road. He could not discern any flow downstream of the culvert.
56. Upon noticing the discharge, Mr de Groot immediately arranged for the CHPP control room to turn off the pumps to the Tailings Lines (so that no further tailings were being pumped into the Tailings Lines). He detected the hole in the T-piece. He quickly stopped the overtopping of the containment dam by placing earthen material on the small section of the embankment which was being overtopped, thus raising the height of that section of the embankment and blocking the overflow. Initially he did this by hand and then he called in his team of workers, who used shovels to make the blockage more robust.
57. Shortly after discovering the incident Mr de Groot described the flow of tailings into the creek bed to Mr Bower as "a trickle".
58. Mr de Groot made arrangements for sand bags to be delivered and placed across the creek bed in a position downstream of the affected section of the creek bed to ensure that the discharge was fully contained.
59. By about 12:15pm Mr de Groot had observed that:
a. an old dam downstream of where the tailings had entered the creek bed had captured all of the water that had separated from the tailings solids;
b. no ponds had been impacted for the length of the spill in the creek as it was a dry creek bed; and
c. that there were no signs of any harm to animals or plant life in the area of the spill, at least from what he had seen in his initial inspection.
60. Mr Bower attended the site on the Sunday afternoon. As he walked down the creek, the tailings did not come up over his work boots at any point. As Mr Bower walked down the creek bed, he noticed that there was a lot of "salt bush" in the creek and that, at its widest point, the tailings spanned about 5-6m in the creek. He saw that the tailings had settled out of the water and the water had run away into the downstream dam and the tailings that were left in the creek bed were slimy in appearance due to the clay content. He did not see any animals or wildlife activity in or near the creek.
61. Mr Bower arranged for some water samples to be taken to understand how far the water that had liberated out of the tailings had travelled down the creek.
CLEAN UP
62. On Sunday 9 October 2011, sucker trucks were engaged to remove coal tailings from the Western Containment Dam. The clean up of the Incident took approximately 10 days.
63. Commencing on Monday 10 October 2011, the defendant took the following actions:
· used a pump to remove water from the creek at the location marked "5." on the Map and that water was directed to a dirty water containment system on the Premises;
· sucker trucks were used to remove materials from the creek. No external water was introduced into the creek, but water recovered from the creek was used to make the coal tailings more mobile; and
· employees using shovels and wheelbarrows removed coal tailings from the creek.
64. In order to minimise the environmental impact of cleanup the defendant implemented the following measures:
· where the depth of tailings could be assessed with minimal stress/damage to reeds, this was done;
· where the depth of tailings was estimated to be greater than 300mm, removal of solids was considered appropriate and this was achieved either by flushing or suction deployment, taking care to minimise trampling or other damage to the reeds as far as possible;
· where the tailings solid depth was estimated to be less than 300 mm deep, and it was not able to be accessed and removed without such access causing damage to the reeds the tailings solids were left intact; and
· the health of reeds in areas with tailings solids remaining was monitored visually for evidence of chlorosis, leaf curl, wilting or dieback beyond that typical of other temporary streams in the area. Any such evidence of plant stress was used as a trigger for removal of the tailings solid even though some physical damage to the reeds would result, but as at 11 November 2011 no such evidence of plant stress was observed.
65. The defendant engaged contractors for the purposes of cleanup as well as using internal resources, including up to 20 employees at the one time.
66. The total internal cost to the Defendant of the clean-up of the incident was $94,550 and the total external cost of the clean-up was $193,440.
EPA INVESTIGATION
INSPECTIONS
67. On 10 October 2011, officers of the EPA inspected the Reach and Premises and took samples. Attachment F contains the results of that sampling.
68. The Prosecutor contends that the extent of coal tailings in the creek observed by Mr Clair and Mr Jefferson on 10 October 2011 is as set out in paragraphs 23 to 91 of the Affidavit of Clair, a copy of which is Attachment G and in paragraphs 10 to 24 of the Affidavit of Jefferson, a copy of which is Attachment H.
69. On 11 October 2011, the EPA made a formal request under condition R3 of the EPL for a report of the incident.
70. On 12 October 2011, officers of the EPA including Mr Clair, Ms Jefferson and Mr Moreno Julli inspected the Reach and Premises. The observations of Mr Clair are set out at paragraphs 97 to 125 of his affidavit and the observations of Ms Jefferson are set out at paragraphs 26 to 30 of her affidavit. Mr Julli made the observations and took samples as set out in paragraphs 19 to 42 of his Expert Report. A copy of Mr Julli's Expert Report is Attachment I.
71. On 17 October 2011, the EPA varied the EPL, requiring the defendant to complete cleanup of the Creek, assess possible impacts on the creek as a result of the Incident and review coal tailings management and alarm systems at the Premises. A copy of the varied EPL is Attachment J.
72. On 3 November 2011, EPA officers inspected the Reach and Premises.
73. On 22 November 2011, Mr Julli inspected the Reach and Premises. Mr Julli made observations as set out in paragraphs 43 to 54 of his Expert Report.
74. On 21 February 2012, EPA officers inspected the Reach and the Premises.
75. During the above inspections, the EPA officers took a number of photographs. Attachment K are photographs taken on 10 October 2011. Attachment L are photographs taken on 12 October 2011. Attachment M are photographs taken on 3 November 2011. Attachment N are photographs taken on 21 February 2012.
INTERVIEWS
76. On 7 November 2011, the EPA formally required a number of employees of the defendant, as well as a corporate representative of the defendant, for interview.
77. On 11 November 2011, the defendant provided the EPA with a report under conditions U3.1 and a report under U4.1 of the EPL. Copies of the reports are at Attachment O.
78. On 22 November 2011, EPA officers interviewed the following employees of the defendant: Mr Paul Amidy, Mr Wayne Bower, Mr Brendan Lees, Mr Rodney de Groot, Mr Wayne Stedman and Mr Gregory Mott.
79. On 23 November 2011, EPA officers interviewed Mr Paul Robertson, a contractor to the defendant.
80. On 22 November 2011, EPA officers interviewed Mr Stephen Hubert, the corporate representative nominated to speak as representative of the defendant.
DOCUMENTS
81. On 29 May 2012, the EPA issued a notice for information and records under section 193 POEO Act. On 8 June 2012, 13 June 2012, 27 June 2012 and 29 June 2012 the defendant provided a response to the notice.
82. On 29 August 2012, the EPA issued a second notice for information and records under section 193 POEO Act. On 14 September 2012, the defendant provided a response to the notice.
ENVIRONMENTAL HARM CAUSED BY THE INCIDENT - subject of joint expert report
PRACTICAL MEASURE TO PREVENT CONTROL ABATE OR MITIGATE HARM -POST INCIDENT MEASURES
83. By 21 February 2012, the defendant had installed level sensor alarms on both containment dams. Photographs of the level sensor alarms on the Western Containment Dam are shown in Photograph 5 in Attachment D. The first sensor level, being the lower of the two sensors, alerts the CHPP Supervisor by way of an alarm who then activates a visual inspection of the relevant containment dam. If necessary, water is pumped from the containment dam to lower its level. If the second sensor level, being the higher of the two sensors, is reached, the CHPP Supervisor is alerted by an alarm and the pumping of Thickened Tailings into the Tailings Lines from the Washery is automatically shut down to prevent possible overflow into the creek. The CHPP Supervisor must then activate a visual inspection of the containment dam before pumping through the Tailings Lines can recommence.
84. Shortly following the Incident and until such time as its investigations were completed and appropriate actions put in place to prevent any further incidents occurring, the defendant altered its Tailings Lines inspection procedures so that a visual inspection of the Tailings Lines was conducted every twelve hours by two people.
85. The steps referred to in paragraphs 83 - 84 above were steps which could have been taken prior to the Incident.
FORESEEABILITY OF HARM AND LIKELY HARM
86. A rupture developed in the T-Piece.
87. It was foreseeable that if a rupture developed in the T-Piece then tailings could flow into the Western Containment Dam
88. There were no level sensor alarms installed in the Western Containment Dam.
89. It was foreseeable that in the circumstances of a leak from the tailings lines which was insufficient to trigger the differential flow alarm and in the absence of level sensor alarms installed in the Western Containment Dam and if the T-Piece ruptured then tailings could flow from the Western Containment Dam into the creek.
The attachments referred to in the SOAF were before the Court.
The Defendant read the affidavit of Mr Wayne Bower, Manager of the CHPP at the Bulga Coal Complex, affirmed 1 May 2014. Mr Bower states that the tailings lines within the CHPP at the Bulga Coal Complex are fitted with a differential flow system which is made up of a flow meter at either end of the tailings line, inspected every four weeks by a qualified contractor. The differential flow system is designed to detect major pipe breakages. The differential flow system is connected to an alarm in the control room at the washery of the CHPP (par 3). The alarm is designed to be triggered at a variation of more than 50 cubic metres per hour for five minutes or more (par 4). Mr Bower describes why the alarm is set to be triggered at that level (par 5) and why it is not practical or feasible for the variation percentage to be set any lower than at this percentage (par 6). The differential flow system is designed to pick up only major tailings lines breakages and would not have picked up the slow leak in the tailings line which occurred during the offence (par 8).
Two flow meters which make up the differential flow system are located in close proximity to the pump at the start of the tailings line (par 9). If a flow rate of less than 150 cubic metres per hour is detected for more than 30 seconds a low flow alarm is activated (par 10). The low flow alarm indicates a potential problem at or before the pump, not in the tailings line at any point past the flow meter (par 11).
The Defendant read the affidavit of Mr Benjamin Hiatt, General Manager of the Bulga Coal Complex, sworn on 12 May 2014. Mr Hiatt sets out the environmental management system in place at the time of the offence (par 7-9), the actions taken on the date of the offence (par 10), the clean-up costs (par 11) and actions taken since the date of the offence (par 13-17). Actions taken to prevent the offence occurring again include, inter alia, change to inspections of the tailings line and the installation of level sensor alarms on the two containment dams (par 14). These measures were undertaken specifically in response to the offence (par 15). Mr Hiatt expresses sincere regret that the offence occurred (par 12, 18). Mr Hiatt has reviewed the circumstances of the offence and states that it is evident that the Defendant should have had level sensor alarms in the containment dams of the type that have been subsequently installed (par 19). Mr Hiatt also sets out the corporate good character of the Defendant through the contributions of Glencore, the Defendant's parent company, to the community in the Hunter region (par 21).
Purposes of Sentencing
Section 3A of the Crimes (Sentencing Procedure) Act 1999 (CSP Act) states the purposes for which the Court may impose a sentence on a defendant are as follows:
(a) to ensure that the offender is adequately punished for the offence,
(b) to prevent crime by deterring the offender and other persons from committing similar offences,
(c) to protect the community from the offender,
(d) to promote the rehabilitation of the offender,
(e) to make the offender accountable for his or her actions,
(f) to denounce the conduct of the offender,
(g) to recognise the harm done to the victim of the crime and the community.
The objective and subjective circumstances of the offence must be weighed up in the context of the legislative framework under the PEO Act.
The Court must apply the instinctive synthesis approach by identifying all the relevant factors, discussing their importance and making a "value judgment as to what is the appropriate sentence given all the factors of the case": Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 at [26] unanimously following Markarian v R [2005] HCA 25; (2005) 228 CLR 357 at [51] per McHugh J. The sentence must reflect all the relevant objective circumstances of the offence and subjective circumstances of the defendant: see Veen v R [1979] HCA 7; (1979) 143 CLR 458 at 490; Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472 - 473, 490 - 491. The sentence should not exceed what is "justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances": Veen v The Queen (No 2) at 472, 485 - 486, 490 - 491, 496; Hoare v R [1989] HCA 33; (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ).
Objective seriousness of water pollution offence
Nature of the offence
The nature of the offence is informed by the statutory scheme. The objects of the PEO Act include the protection and enhancement of the environment of New South Wales and prevention of degradation of the environment by the use of pollution prevention and cleaner production. Chapter 5 identifies a range of offences including s 120(1). That offence has an important role in achieving the objects of the PEO Act, as the Prosecutor submitted.
The PEO Act in s 241(1) identifies particular factors to be considered where relevant in sentencing for offences under that Act.
Section 241(1)(a) - The extent of the harm caused or likely to be caused to the environment by the commission of the offence
"Harm to the environment" is defined in the Dictionary to the PEO Act to include:
any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution.
Pollution is defined in the Dictionary of the PEO Act to include water pollution.
In Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 Preston J at [145] held:
Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account.
A joint report of two ecologists was tendered in which there was substantial agreement on the extent of harm resulting from the spill of tailings. The Prosecutor's summary of their report was accepted and I include it here in the interests of brevity. The experts have agreed as follows:
(a) The Creek in its entirety is an intermittent stream (with respect to stream flow), but we note that that perennial (persistent) water would likely be present within the Creek system;
(b) The incident caused a reduced diversity and abundance of macro invertebrates and micro invertebrates within the 280 metre reach at the time of the incident;
(c) The tailings resulted in smothering effects to habitat with adverse effects on fauna. The physical extent of tailings effects was limited to approximately 280 metres of affected reach. Tailings caused a severe reduction in macro invertebrates at the time of the incident compared with other sites with standing water (noting that sampling was carried out two weeks after the incident);
(d) There was actual harm to the environment caused by the incident. The entry of the tailings to the affected reach of Nine Mile Creek resulted in the smothering alteration and degradation of the Creek habitat and the immediate smothering of macro invertebrate organisms within the 280 m extent of the affected reach;
(e) The duration of these adverse effects was dependent on the occurrence of ameliorating natural water flow events, concurrent with movement of natural sediment in the Creek, sufficient to facilitate normal recruitment of aquatic organisms. The re colonisation by macro invertebrates and other aquatic organisms would be expected to then occur. The experts could not advise the court when these ameliorating flow events occurred but there was evidence collected and retained by Dr Smith, that 18 months after the incident on 26 March 2013, recovery by various macro invertebrates (including snails), micro invertebrates and algae had occurred in the affected reach by that time;
(f) Aquatic ecosystems in the Creek adapt to re colonisation of denuded habitat in order to persist through the natural hydrocycle that occurs in the Creek;
(g) The likely duration of the alteration to the Creek was limited to the length of an annual hydrocycle of the Creek.
(h) That within the affected reach at the time of the incident, the extent of harm caused by the deposition of material due to the input of tailings was more intense than would occur due to the natural hydrocycle and movement of stream sediments. However within the context of the capacity of the broader Nine Mile Creek system as a whole, the extent of the harm was within the capacity of the ecosystem to recover within the annual hydrocycle;
(i) The reduction of aquatic macro invertebrates in the upper two thirds of the affected reach, as a result of the incident, was within the range of natural changes likely to occur over an annual hydrocycle. That is, it would be expected aquatic macro invertebrate numbers to be reduced naturally during dryer periods due to the absence of sufficient moisture. With respect to the remaining lower third of the affected reach the experts did not know the likely moisture retention capacity of the wetland areas at the time of the incident and as such we could not provide comment on the relative reduction of macro invertebrates compared to an annual hydrocycle.
Actual harm was caused within the limited distance of 250-280 metres where smothering occurred. The effects will be removed over the annual hydrocycle. I agree with the Defendant's submission that the commission of the offence caused actual harm to the environment which was minor given the non-toxic discharge in a limited area within the mine site.
Section 241(1)(b) - Practical measures that may have been taken to prevent, control, abate or mitigate that harm
As identified in the SOAF at par 56-58 immediate measures were taken to prevent further harm by Mr de Groot and others as soon as the leak was detected on Sunday 9 October 2011 such as stopping the pumping of tailings, stopping the overtopping of the containment dam by placing earth on a small section of the embankment which had overtopped, and the placement of sandbags downstream of the affected area to ensure that the discharge was contained.
Additional systemic measures to prevent a similar occurrence were taken by the Defendant as identified in par 83-85 of the SOAF and as further identified in Mr Hiatt's affidavit.
The Defendant accepts that there were practical measures that could have been implemented but also identified that there were monitoring measures in place being differential flow alarms to detect leaks from the tailings lines which were designed to detect leaks of greater magnitude (flow rate) than that which occurred here. These systems are more fully explained in the affidavit of Mr Bower summarised above at par 4-5. They have now been modified and added to include a level sensor in the Western containment dam inter alia. Further measures are identified in Mr Hiatt's affidavit including the revision of drainage around the containment dams to prevent inflow, upgrading the creek crossing for vehicle access and change to inspections of the tailings line.
Section 241(1)(c) - The extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused by the offence
The Defendant accepted that it was reasonably foreseeable in the circumstances of the offence that the harm identified above would be caused.
Section 241(1)(d) - The extent to which the person who committed the offence had control over the causes that gave rise to the offence
The Defendant was the holder of an environment protection licence (EPL) in relation to the premises and was the occupier in both a practical sense and by virtue of s 258(2) of the PEO Act. The Defendant also managed the operations at the premises. The Defendant accepted that it had control over the causes of the commission of the offence.
Maximum penalty
The maximum penalty prescribed by the NSW Parliament for a breach of s 120(1) of the PEO Act is $1,000,000 for a corporation (s 123(a) PEO Act). Maximum penalties are reserved for the worst cases. The gravity of any particular offence should be measured by reference to the maximum penalty for the offence. A maximum penalty is a public expression by Parliament (and, by extension, the general community) of the gravity of the offence: Kirby P in Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 at 698.
Conclusion on objective circumstances
The circumstances of the offence are at the lower end of the range of objective seriousness.
Subjective circumstances
There are several mitigating factors which suggest that any penalties imposed should be reduced. These are identified in s 21A(3) of the CSP Act.
Early guilty plea
An early plea of guilty is a mitigating circumstance (s 21A(3)(k), s 22 of the CSP Act). The Defendant entered a plea of guilty to the charge on the third mention of the matter after a s 247E notice under the Criminal Procedure Act 1986 was provided by the Prosecutor. The Defendant submitted that the application of the full discount of 25 per cent for the utilitarian value of an early plea of guilty as stated in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152] is warranted. The utilitarian value of a plea is generally intended to reward an early plea which saves a prosecutor and the Court expenditure of time and money in case preparation and management. As the Defendant submitted in Cameron v R [2002] HCA 6; (2002) 209 CLR 339 and, in particular, the joint judgment of Gummow, Gaudron and Callinan JJ (at 345 [19] - [20]):
... a plea of guilty may be taken into account in mitigation for the reason that a plea of guilty evidences a willingness to facilitate the course of justice and not simply because the plea saves the time and expense of those involved in the administration of justice. That being so, the relevant question is not simply when the plea was entered but ... whether it was possible to enter a plea at an earlier time. The question whether it was possible for a person to plead at an earlier time is not one answered simply by looking at the charge sheet ... the question is when it would first have been reasonable for a plea to be entered.
The Defendant was justified in waiting for a s 247E notice from the Prosecutor which disclosed the case it must meet before entering the plea of guilty. I consider the maximum discount of 25 per cent is warranted.
The Defendant's co-operation with the Environment Protection Authority investigation
The Court is also required to take into account the assistance provided by the Defendant to law enforcement authorities (s 21A(3)(m), s 23 of the CSP Act). The Defendant has at all times co-operated with the EPA in its investigation of the incident.
No prior convictions
The Defendant has no prior convictions for any environmental offence in NSW: s 21A(3)(e) of the CSP Act.
Unlikely to reoffend
I consider the Defendant is unlikely to reoffend, a relevant matter under s 21A(3)(g) of the CSP Act.
Contrition and remorse
Mr Hiatt expresses remorse on behalf of the Defendant in his affidavit at par 12 and 18. The Defendant also acted promptly to prevent further harm when the leak was discovered, conducted an extensive clean up and put in place practical measures to prevent a recurrence. By these actions the Defendant also demonstrated its remorse, which I accept (s 21A(3)(i) of the CSP Act).
Further sentencing considerations
General deterrence
The Prosecutor submitted that the need for general deterrence is one of the main purposes of punishment. The offences should be seen in the broader context of pollution control; in that context general deterrence is important. Any penalty ultimately imposed on the Defendant must incorporate an element of general deterrence because:
(a) the objects of pollution control legislation require a substantial sentence to punish the Defendant, to deter others and to encourage full compliance with the relevant Act by the Defendant and others;
(b) the object of the legislation is to prevent pollution and to do this, inter alia, by the deterrent effect of a substantial fine and by, in consequence, persuading the industries concerned to adopt preventative measures;
(c) offenders will not be deterred from committing environmental offences by the imposition of nominal fines;
(d) a penalty for a breach must be sufficient to compel attention to the environmental issues to ensure that the Defendant, and others, are encouraged to comply with the law and that the environment is not exposed to risk of harm.
A clear message needs to be sent to other companies engaging in similar operations that positive steps must be taken to ensure water pollution does not occur. Minister for Planning v Moolarben Coal Mines Pty Limited [2010] NSWLEC 147; (2010) 175 LGERA 93 at [46] was relied on.
The Defendant accepted that general deterrence is relevant but submitted that for strict liability offences the penalty imposed should not place an unfair burden on community education citing Walden v Hensler [1987] HCA 54; (1987) CLR 561 at 570. The observations in Walden do not appear to apply in this matter.
Specific deterrence
The Prosecutor submitted that specific deterrence is a matter to which the Court should give weight. Specific deterrence is a purpose of sentencing under s 3A(b) of the CSP Act and has been considered relevant where a defendant continues in the same area of operation in which an incident has occurred. The Defendant accepted that some allowance for specific deterrence is warranted for the water pollution offence given that it continues to operate a coal mine at the premises but I also accept its submission that it had in place an environmental management system with the same principles as ISO 14,001. It has further enhanced its monitoring system in the manner outlined above since the offence. Less weight applies to this consideration in these circumstances.
Evenhandedness
The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty (R v Visconti [1982] 2 NSWLR 104). This principle must always be applied subject to the particular circumstances of the case before the Court (Hoare v R).
I have set out cases which both parties relied upon in earlier judgments such as Environment Protection Authority v M A Roche [2013] NSWLEC 191 at [54]-[58] inter alia. Some of the same summaries are repeated below. The Prosecutor relied in particular on Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65, Environment Protection Authority v Tea Garden Farms Pty Ltd [2012] NSWLEC 89, Environment Protection Authority v Sibelco Australia Limited [2011] NSWLEC 160, Environment Protection Authority v Ravensworth Pty Limited [2012] NSWLEC 222, Environment Protection Authority v Coal and Allied Operations Pty Ltd [2013] NSWLEC 134. They are cases concerning the discharge of sediment into waterways. The Defendant submitted this matter was less serious than Moolarben, that being in a category of more serious cases where the defendant failed to implement any measures to control sediment resulting in water pollution when clearing occurred. Additional cases referred to by the Defendant were Roche, Ravensworth, Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114; (2010) 174 LGERA 314, Sibelco, and Environment Protection Authority v Pipeline Drillers Group Pty Ltd [2012] NSWLEC 18.
Ravensworth concerned sediment laden water (approximately 1.64ML) being discharged into Bowman's Creek, a tributary of the Hunter River. The pollutant load on the day of the offence was total suspended particulates (TSS) at the discharge point 4,540 mg/pl, TSS in Bowman's Creek upstream was 23 mg/pl, TSS in Bowman's Creek downstream was 1,690 mg/pl. The Court found the actual harm was minimal ([30] and [43]), and the environmental harm was low ([33]). The Court found there were practical measures that could have been taken to prevent the harm ([34] -[35]), and that the harm was foreseeable ([37]). The defendant was found to have had a low level of culpability as the breach of the erosion and sediment control plan which led to the offence would have been adequate if it had been properly complied with by a contractor ([43]). This case was considered to be at the lower end of the low to moderate range of seriousness ([43]). The Court imposed a discounted fine of $50,000 ([72]). The defendant was ordered to pay the prosecutor's costs of $26,500 and investigation costs of $2,000 ([73]). The Court also made a publication order.
Coal and Allied Operations concerned sediment laden waters (6.8ML over five days) flowing from premises into a drainage channel which flows to Salt Pan Creek and Newport Farm Lagoon ([98]). The Court found there was no actual harm but there was short-term potential harm for two or three weeks following the incident ([103]). The environmental harm was assessed as low [103]. The Court found practical measures could have been taken to prevent the incident ([104]) and the harm was foreseeable ([105]). The defendant's remorse was considered as a subjective factor and the Court found that it showed remorse by implementing measures to improve sediment controls and having a proactive approach to the incident ([113]). The offence was found to be at the upper end of the spectrum of low objective seriousness ([108]). The Court imposed a discounted fine of $45,000 ([131]). The defendant was ordered to pay the prosecutor's legal costs of $51,000 and a publication order was made.
In Peak Gold Mines water contaminated with tailings from the defendant's gold mining processing plant discharged from the tailings dam during rainfall events into a clean water drain and remained onsite. The tailings were contaminated with cyanide and heavy metals. There was no evidence of actual harm to the environment. There was a low level of likely harm to wildlife that might come into contact with the contaminated water. Mitigating factors were an early plea of guilty, expression of remorse. The discharge was cleaned up, the defendant cooperated with the prosecutor and the defendant was unlikely to re-offend. A discounted fine of $50,000 was imposed.
Straits (Hillgrove) Gold concerned a defendant which undertook gold and antimony mining activities. Some 1,000 to 3,000 tonnes of toxic slime were released which spread 300m along a road, 200m over a grassed area and along a dry creek bed. No environmental harm apart from the presence of the toxic slimes was caused, and potential harm to the receiving waters was low (if it had reached the waters). A discounted fine of $50,000 was imposed.
Moolarben concerned sediment laden water comprised of soil, mud and clay being discharged into Bora Creek, an ephemeral stream which is more often dry than wet ([49]). There were four incidents of discharge, in three the quantity was unknown, in one it was estimated to be 16,200 L ([51] - [52]). The actual harm was limited to the visual effect of the discharges and the elevated levels of suspended solids, turbidity and nutrients ([57]). The potential harm arose from the degraded quality of the water that was discharged ([57]). The environmental harm, particularly in the long term, was found to be towards the lower end of the range ([58]). The Court found that the defendant was aware of the practical measures that could have been taken to prevent or mitigate harm ([59]). The harm was found to be foreseeable ([63]). Specific deterrence was warranted [96]. The offence was considered to be in the medium or mid-range objective gravity ([70]). A discounted fine of $105,000 was imposed with reduction of a head sentence of $150,000. Prosecutor's costs of $53,000 and investigation costs of $8,632 were ordered to be paid by the defendant. A publication order was also made ([105]).
The penalty in Pipeline Drillers was lower than the above matters reflecting the low level of seriousness of that matter. I do not consider it is relevant. I agree with the Defendant's submission that the circumstances in Moolarben are more serious than this matter. In that case there was a failure to implement any sediment control measures which resulted in the commission of the water pollution on four occasions.
Costs
The Prosecutor seeks and is entitled to its legal costs under s 257B of the Criminal Procedure Act which are not agreed at this stage. It also seeks an order for the payment of its investigation costs as provided for in s 248 of the PEO Act which are also yet to be agreed. I will order that these costs be payable by the Defendant as agreed or assessed.
Conclusion on penalty
Taking account of the objective and subjective factors relevant to this sentencing exercise I consider the penalty for the offence should be $100,000 reduced by 35 per cent to $65,000 in view of the mitigating factors identified above.
Orders
The Court makes the following orders:
(1) Bulga Coal Management Pty Limited is convicted of the offence as charged and fined $65,000.
(2) Bulga Coal Management Pty Limited is to pay the Prosecutor's costs under s 257B of the Criminal Procedure Act 1986 as agreed or assessed.
(3) Bulga Coal Management Pty Limited is to pay the Prosecutor's investigation costs pursuant to s 248 of the Protection of the Environment Operations Act 1997 as agreed or assessed.
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Decision last updated: 16 May 2014
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