Environment Protection Authority v Causmag Ore Company Pty Limited

[2009] NSWLEC 164

Land and Environment Court

of New South Wales

CITATION:	Environment Protection Authority v Causmag Ore Company Proprietary Limited [2009] NSWLEC 164
PARTIES:	PROSECUTOR Environment Protection Authority DEFENDANT Causmag Ore Company Proprietary Limited
FILE NUMBER(S):	50025 of 2009
CORAM:	Pain J
KEY ISSUES:	PROSECUTION :- sentence - breach of environment protection licence condition - failure to maintain filter bags in proper and efficient manner in order to prevent escape of dust - no environmental harm other than short-term amenity impacts - reasonably serious failure to properly maintain filter bags - resulting harm reasonably foreseeable - whether defendant continued production for commercial reasons while on notice of licence breach - two previous convictions for similar offences - mitigating factors - consideration of defendant's means to pay - publication order and order for contribution to environmental project made
LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999 s 3A, 21A, 22, 23 Clean Air Act 1961 s 14 (repealed) Environmental Offences and Penalties Act 1989 (repealed) Environmental Planning and Assessment Act 1979 Evidence Act 1995 s 87(1)(b) Fines Act 1996 s 6 Protection of the Environment Operations Act 1997 s 64, 241, 250
CASES CITED:	Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 EPA v Barnes [2006] NSWCCA 246 Environment Protection Authority v BHP Steel (AIS) Pty Limited (NSWLEC, Talbot J, 19 April 2000, unreported) Environment Protection Authority v BHP Steel (AIS) Pty Ltd [2003] NSWLEC 46 Environment Protection Authority v Causmag Ore Company Pty Ltd [2000] NSWLEC 20 Environment Protection Authority v Coastal Recycled Cooking Oils Pty Limited [2008] NSWLEC 242 Environment Protection Authority v Delta Electricity [2009] NSWLEC 11 Environment Protection Authority v Douglass (No 2) [2002] NSWLEC 94 Environment Protection Authority v Forgacs Engineering Pty Limited [2009] NSWLEC 64 Environment Protection Authority v Incitec Limited [2003] NSWLEC 381 Environment Protection Authority v Lithgow Coal Company Pty Ltd [2003] NSWLEC 430 Environment Protection Authority v Rethmann Australia Environmental Services [2003] NSWLEC 351 Environment Protection Authority v Shoalhaven Starches Pty Ltd [2003] NSWLEC 107 Environment Protection Authority v Virotec International Limited [2002] NSWLEC 110 Environment Protection Authority v Werris Creek Coal Pty Ltd; Environment Protection Authority v Holley [2009] NSWLEC 124 Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77 Hoare v R (1989) 167 CLR 348 R v Rahme (1989) 43 A Crim R 81 R v Sharma (2002) 54 NSWLR 300 R v Thomson; R v Houlton (2000) 49 NSWLR 383 Veen v The Queen [No. 2] (1988) 164 CLR 465
DATES OF HEARING:	21 September 2009 22 September 2009 (written submissions) 23 September 2009 (written submissions)
DATE OF JUDGMENT:	24 September 2009
LEGAL REPRESENTATIVES:	PROSECUTOR Mr S Flood INSTRUCTED BY Department of Environment, Climate Change and Water DEFENDANT Mr M Arch (solicitor) INSTRUCTED BY Concordia Pacific

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

24 September 2009

50025 of 2009 Environment Protection Authority v Causmag Ore Company Proprietary Limited

JUDGMENT

1 Her Honour: The Defendant Causmag Ore Company Proprietary Limited is charged with committing an offence against s 64(1) of the Protection of the Environment Operations Act 1997 (the POEO Act) from about 30 March 2008 to 23 April 2008, at or near Young in New South Wales, in that it was the holder of Environment Protection Licence 942, condition O2.1(a) of which was breached. That condition provides:

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;

2 Section 64 states:

64 Failure to comply with condition
(1) Offence
If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence.
Maximum penalty:
(a) in the case of a corporation—$1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or
(b) in the case of an individual—$250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.
…

3 The manner of breach was a failure to maintain plant known as the Luhr bag house at the Defendant’s licensed premises in a proper and efficient condition by failing to repair and/or replace filter bags and/or fabric filters in the bag house that had become damaged, deteriorated, torn, heavily caked and/or worn out.

4 The period of the breach commenced from 30 March 2008, a date the Prosecutor says the Defendant should have been aware that there was a breach of the licence. On that date an employee of the Defendant, Mr Kumar, inspected the filter bags in the Luhr bag house and determined that new bags needed to be installed. It ends on 23 April 2008 when there was an emission of dust from the premises which landed on surrounding property. All the filter bags were replaced in the following days.

5 The Defendant pleaded guilty to the offence on 10 July 2009 and has therefore admitted the essential elements of the offence. The offence is one of strict liability so that mens rea is not an element of the offence. It is necessary to determine the appropriate sentence in this matter.

6 The maximum penalty applicable to offences under s 64(1) of the POEO Act is $1 million for a corporation with a daily penalty of $120,000 for each day the offence continues. The penalty for this offence was increased to $1 million from $250,000 in May 2006. The maximum daily penalty did not change.

7 The parties usefully agreed a Statement of Agreed Facts (the SOAF). The essential elements of this are as follows:

Background

…

…

The process

Processes at the Plant for the Control of Emissions to the Atmosphere

…

…
Inspection at the Hall Residence of 23 April 2008

Inspection of the Causmag Plant – 23 April 2008

“… the broken bag house is called the Luhr. It is connected to the rotary kiln.”

Inspection of the Causmag Plant – 24 April 2008

EPA Inspection of 1 May 2008

Torn bags

[ The size of the holes in the 22 bags are set out in a table in the SOAF which summarised the number of holes and their size. Sizes ranged from 1cm to 44cm of varying widths.]

“On 30 March 2008, the Luhr bag house was inspected by removing two rows of bags, which totalled 22 bags. I inspected the 22 bags and found them to be in poor condition as they were past their lifespan. I was concerned about the matter because dust was coming out of stack of the rotary kiln. That is why we inspected the Luhr bag house at the end of March because I saw dust coming out of the stack. After the inspection I knew that all the bags need changing to stop the dust. I spoke to Mr Rao about this after the inspection and then also sent him an email about the inspection and the need to change the bags.”

Date Period of Stoppage Total Period

2 April 2008 6:00 a.m. – 8:00 a.m. 2 hrs

7 April 2008 9:00 a.m. – 10:00 a.m. 1 hr

7 April 2008 4:30 p.m. – 5:30 p.m. 1 hr

9 April 2008 4:00 a.m. – 9:00 a.m. 5 hrs

12 April 2008 5:30 a.m. – 7:30 a.m. 2 hrs

14 April 2008 11:00 a.m. – 1:50 p.m. 2 hrs 50

15 April 2008 2:20 a.m. – 5:30 a.m. 3 hrs 10

15 April 2008 11:20 a.m. – 5:30 p.m. 6 hrs 10

18 April 2008 12:00 a.m. – 12:30 p.m. 12 hrs 30

20 April 2008 1:20 a.m. – 2:00 p.m. 12 hrs 40

21 April 2008 2:55 p.m. – 4:30 p.m. 1 hr 35

Prosecutor’s evidence

8 John Court, an environmental engineering consultant, was engaged by the Prosecutor in November 2008 to provide an expert opinion concerning whether the Defendant was maintaining its plant and equipment in a proper and efficient manner on or around 23 April 2008. Mr Court inspected the Causmag Plant on 28 January 2009 and inspected the filter bags from the Luhr bag house that had been seized by an officer of the Prosecutor Stefan Press on 1 May 2008 (SOAF par 55-65). He prepared a report dated 4 June 2009.

9 In the executive summary of his report Mr Court identified the following principal actions for proper and efficient maintenance of the filter which were not taken:

(a) Causmag operated the filter bags beyond their expected life and continued operation after being aware that the bags were in poor condition; when the bags were removed for replacement many had large holes and many were completely clogged with an impenetrable cake of solid material, confirming the consequences of operating beyond the life of the bags;

(b) Instruments for monitoring pressure differential and particle emissions, important indicators of performance, were producing atypical readings, but this did not lead to checking of instrument performance or recalibration;

(c) From 2007 the pressure differential had fallen significantly suggesting there may have been gas leaks in the filter with losses of dust due to bypassing, but this was not investigated;

(d) From 2007 the particulate emission concentrations recorded were well in excess of levels expected from this type of fabric filter and indicated in the Audit, but this was not investigated;

(e) Regular checking of the bags in the filters ceased to be recorded from March 2006 until the defective bags were replaced in April 2008; and

(f) There are doubts about the effectiveness of assembly of the replacement bags in the filter since seal leakage was still evident in January 2009 as well as inadequate fitting of the compressed air piping for filter cleaning.

10 He concluded that the filter cloth simply wore out due to the repeated stresses to which it was subjected in cleaning and the Luhr filter began passing increasing amounts of dirty gas through substantial holes in the bags from mid-2007. Charring was probably a subsidiary cause of deterioration. In relation to some of the bags which were described as being badly caked or clogged with white material which had cemented onto the filter surface, Mr Court stated that he had rarely seen fabric filter bags so heavily coated. He stated that to allow a fabric filter to deteriorate to the degree the Luhr filter had before replacement was not consistent with proper and efficient operation or maintenance of such equipment.

11 An affidavit of Stefan Press affirmed 26 March 2009 was read in part for the Defendant. Mr Press, as regional operations officer for the Prosecutor, attended the Defendant’s premises on 23 April 2008. Mr Press was approached by a man who introduced himself as Mr George Bornen. He stated he was a sales executive of the Defendant and that it would not be a problem for Mr Press to have a look around the premises. Mr Press introduced Mr Bornen to David Winfield and Sharon Peters, officers of the Prosecutor. Mr Press later overheard Mr Bornen saying to Mr Winfield that the dust was coming from one of the bag houses, that the bags needed changing and that the company would not stop to change them because of sales orders which needed to be filled.

12 On 30 January 2009 Mr Press conducted an interview with Yogendra Nagar, deputy general manager of operations for the Defendant. The record of interview was tendered by the Prosecutor. The Prosecutor relied on answers given by Mr Nagar in the record of interview as demonstrating that there was a commercial imperative behind the decision to continue operation of the plant after dust emissions were observed. This commercial imperative was the satisfaction of customer orders. The record of interview was also relied on by the Prosecutor as showing that there had been insufficient maintenance of the filter equipment by the Defendant.

Defendant’s evidence

13 An affidavit of Aditya Jhunjhunwala sworn 11 September 2009 was read for the Defendant. Mr Jhunjhunwala has been the managing director of the Defendant since 1 July 2009. He states that his father, Surendra Jhunjhunwala, is the chairman of the Defendant and served as the managing director prior to Mr Jhunjhunwala. The Defendant is a wholly-owned subsidiary of Orind Australia Pty Ltd. Mr Jhunjhunwala’s family are the sole shareholders of Orind Australia. He states that the Defendant obtains raw magnesium carbonate which it processes into magnesium oxide. It obtains the raw material from the Young Mining Company Pty Ltd which, like the Defendant, is a wholly owned subsidiary of Orind Australia. Twelve people are employed by Young Mining and 21 are employed by the Defendant, together forming the largest single employer in the Young Shire Council area. Mr Jhunjhunwala states that the Defendant has operated the plant since at least 1958. It was purchased by Orind in 1997 as was Young Mining. Both companies were not performing well financially and Orind purchased the companies seeking to revive them. Over $2 million has been invested in new equipment. The owners have foregone salaries and commissions and not taken any dividends in order to keep the Defendant operating. Mr Jhunjhunwala and members of his family have provided interest-free loans to both companies in the sum of $125,000. Mr Jhunjhunwala left a job in California in May 2008 after he was informed by his father that gas supplies to the plant had been cut due to default in payment. He sought to assist his father, who was under severe stress, in matters related to the company. Mr Jhunjhunwala states that he has attempted to obtain a bank loan of $2.5 million in order to refurbish the plant and equipment of the Defendant and Young Mining. If obtained, he intends to spend a considerable amount of money on new equipment for dust extraction and control.

14 Mr Jhunjhunwala states that the Defendant employs a resident director responsible for day-to-day management of all operations at the Defendant’s plant including supervision of the kilns and the two bag houses used to control the emission of dust. At the time of the offence Mr TBK Rao was the resident director. After Mr Rao’s departure from the company and from Australia, Mr Isidore Thumma has been in that position since 12 November 2008. Mr Jhunjhunwala expresses contrition and remorse on behalf of the Defendant in relation to the offence. He recognises the Defendant’s duty to comply with its licence and ensure equipment associated with the control of air emissions is operated properly and efficiently, particularly because of the close proximity of the plant to residents. He states that the Defendant admits full responsibility for the breach of its licence.

15 Mr Jhunjhunwala attests that the Defendant is prepared to accept a publication order made by the Court pursuant to s 250(1)(a) of the POEO Act. Since the offence, Mr Jhunjhunwala states that the Defendant has prepared and will implement a “Bag House Maintenance Protocol” to ensure filter bags are functioning properly. This protocol has been prepared with regard to the recommendations of the Prosecutor’s expert Mr Court. The protocol prepared by the Defendant was annexed to Mr Jhunjhunwala’s affidavit.

16 In oral evidence, Mr Jhunjhunwala stated that an amendment of one of the provisions in the protocol relating to replacement of filters was made on 14 September 2009, several days after the preparation of his affidavit. The amended protocol was tendered by the Defendant (exhibit 1).

17 Mr Jhunjhunwala stated that he was confident that employees would comply with the protocol which included giving power to production workers to shut down the plant if required without having to first speak with a supervisor. He interviewed a number of the Defendant’s personnel and considered all the affidavits already prepared in these proceedings before attesting to the new protocol in his affidavit. Since the offence was committed, Mr Jhunjhunwala also stated that he had spoken to the workers and their union about the prosecution and the need to comply with the licence conditions. He has made the protocol available and stated that new employees are informed of their responsibilities in relation to complying with the licence.

18 Mr Jhunjhunwala also gave oral evidence about the structure of the Defendant company and its holding company Orind Australia. His uncle’s holding company which is incorporated in Hong Kong purchased the Defendant in 1997. His uncle was chairman and managing director of the Defendant but employed someone else to manage the day to day affairs of the business. In 2004 there was a division of assets between family members. Management of the Defendant was transferred from Mr Jhunjhunwala’s uncle to his father. A full legal transfer was completed in 2004. Mr Jhunjhunwala states that he is committed to improving the profitability of the plant which is required if it is to continue operating. He expects this may take between 5 and 10 years. Alternatively a private investor willing to take over the operations may be found. Mr Jhunjhunwala stated that the financial losses that have accrued have been independent of the prosecution. A fine of more than $100,000 would cause Mr Jhunjhunwala to liquidate the company.

19 Yogendra Nagar swore an affidavit dated 9 September 2009 which was read for the Defendant. Mr Nagar has been the deputy general manager of operations at the Defendant’s plant since 25 February 2008. This position includes supervision of the Defendant’s two kilns. Mr Nagar states that on 23 April 2008 at approximately 9.00am he observed dust being released intermittently into the air for approximately three to five seconds followed by a period of about ten minutes where there were no emissions. This pattern repeated observations made on 21 April 2008 and 22 April 2008 (see SOAF par 76-77). On 23 April 2008 at 4.30pm operation of one of the kilns was discontinued so that the filter bags in the Luhr bag house could be changed. Operation was resumed on 27 April 2008. Mr Nagar annexed to his affidavit records of dust recovered from the plant’s bag houses. In January 2008 a total amount of 119 metric tonnes was recovered (21.88 kg/hr), in February 120 metric tonnes was recovered (266.075 kg/hr), in March 2008 142 metric tonnes was recovered (305 kg/hr) and in April 2008 121 metric tonnes was recovered (223.66 kg/hr). Mr Nagar states that the Defendant maintains records concerning the inventory of finished magnesium oxide which it has at the end of each month as well as orders for the product that are received. At 31 March 2008 the Defendant had an inventory of 1203 metric tonnes of finished magnesium oxide at its plant. During the whole of April the Defendant received orders for 690 metric tonnes of product. Mr Nagar attests that it was not necessary for the Defendant to operate its kilns during the period 31 March 2008 to 23 April 2008 in order to fulfil purchase orders that it had received prior and that there was sufficient finished magnesium oxide to fill all the orders. The manufacturer of the fabric filter bags used in the Luhr bag house states in a document provided to the Defendant and annexed to Mr Nagar’s affidavit that the typical bag life may be anywhere from three months to five years depending on bag house and system design and the nature of the dust being handled.

20 Mr Nagar was cross-examined by the Prosecutor on the issue of whether there were commercial considerations in continuing to operate both kilns up until 23 April 2008. He was new in his job having commenced in late February 2008. He was then learning about the plant’s production processes and saw his role as ensuring that his daily production targets were met. He was involved in ensuring the kilns were running at capacity. The Defendant was required to produce enough material to meet customer orders which was based on information provided by marketing personnel. During April the kiln was running with a constant output. During March Mr Nagar stated that he became aware through discussions with the marketing manager and the director that there was excess stock in the hoppers. No discussion was had about stopping the production line. Mr Nagar wanted to keep running the plant in order to achieve his production targets and learn more about the process of production as he was new in his job. Extra stock would be sold to future customers. Referring to his statement in the record of interview with Mr Press that there was a tight manufacturing schedule, Mr Nagar stated that this was in the context of Mr Nagar wanting to learn about production and meet personal production targets.

21 An affidavit of Bipin Pandey sworn 11 September 2009 was read for the Defendant. Mr Pandey has been the finance and administration manager of the Defendant since 3 January 2009. The Defendant pays more than 90 per cent of Young Mining’s expenses. The Defendant produces magnesium oxide which is used principally in the animal health industry as an animal feed supplement. The product is also sold for use in a variety of industrial applications. The two companies together employ 33 people and pay around $1.85 million in wages and superannuation each year. They also rely on the services of a number of local businesses. Mr Pandey states that the Defendant has encountered difficult market conditions since 2002 caused in part by drought. In 2003, 2005 and 2008 the Defendant recorded net losses, some of which were substantial. In 2004, 2006 and 2007 and during the first half of 2009 moderate profits were recorded. Mr Pandey states that the Defendant and Young Mining have together recorded net losses in 2003, 2005, 2006, 2007, 2008 and during the first half of 2009. Mr Pandey attests to the Defendant having significant debts including a tax liability of more than $1 million. Young Mining is also in debt. Due to defaults in the payment of gas and electricity invoices, gas and electricity supplies to the Defendant were disconnected from mid May 2008 to early July 2008. Mr Pandey states that the Defendant has been forced to take loans from staff members on several occasions and some staff have accepted delayed payment of their salaries. Mr Pandey attests that the Defendant does not have capacity to pay a substantial fine. A substantial fine could force the Defendant to cease trading.

22 Prem Kumar swore an affidavit on 14 September 2009 which was read for the Defendant. Mr Kumar was maintenance supervisor of the Defendant from May 2005 until September 2008. He states that in late March 2008 he observed dust being emitted from the stack serving the rotary kiln at the Defendant’s plant. The emissions he saw were intermittent and he describes them as very mild. On 30 March 2008 Mr Kumar directed that 22 of the filter bags in the Luhr bag house at the plant be replaced. He did not recall observing any holes in these new filter bags. After the bags were replaced he continued to observe intermittent emissions of dust in early April 2008. He describes these emissions as mild and occurring only during a purging cycle. He did not observe any heavy emissions of dust. The emissions occurred for a period of a few seconds every few minutes and were minor puffs of dust. Mr Kumar attests to sending an email to Mr Rao, resident director of the Defendant’s plant at the time, on 7 April 2008 when Mr Rao was on leave (returning 10 April 2008) (SOAF par 67).

Purposes of sentencing

23 Section 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) sets out the purposes of sentencing as follows:

3A Purposes of sentencing

The purposes for which a court may impose a sentence on an offender 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.

24 The Prosecutor submitted that paragraphs (a), (b), (e), (f) and (g) were relevant.

Relevant sentencing considerations

25 The CSP Act (in particular, Pt 3 Div 1) contains provisions relevant to sentencing procedures. Section 21A of the CSP Act sets out aggravating, mitigating and other factors to be taken into account in sentencing. Section 22 requires the Defendant’s early guilty plea to be taken into account. Pursuant to s 23 the Court may also impose a lesser penalty than it would otherwise impose, having regard to the degree to which the Defendant has assisted, or undertaken to assist, law enforcement authorities in the prevention, detection or investigation of, or in proceedings relating to, the offence concerned.

26 An appropriate sentence is to be determined after consideration of each of these matters bearing in mind that:

…a basic principle of sentencing law is that a sentence…imposed by a court should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances (see Veen v. The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465, at pp 472, 485-486, 490-491, 496).

per Hoare v R (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ).

27 Another relevant factor is consideration of the statutory scheme in which the offence provision appears. In terms of the statutory scheme, the importance of complying with licences issued under the POEO Act has been recognised by this Court on numerous occasions. In Environment Protection Authorityv IncitecLimited [2003] NSWLEC 381 McClellan J observed at [49], in relation to specific deterrence for a second offender, that:

A licence provides a privilege, permitting the holder to pollute within the terms of that licence. It carries with it an obligation to ensure that any pollution is kept within the parameters provided by the licence conditions.

28 Considering s 241 of the POEO Act, Pearlman J in Environment Protection Authority v Shoalhaven Starches Pty Ltd [2003] NSWLEC 107 emphasised that contravention of a pollution licence involves a breach of public trust. Her Honour stated at [49]:

The defendant is entrusted, by its pollution licence, to pollute and that places it in a special category so far as other members of the public are concerned. But that permission is conditional upon the standards and limits specified in the pollution licence.

29 Section 241(1) of the POEO Act identifies the following factors to be taken into consideration in imposing a penalty for offences committed under that Act (so far as they are relevant):

(a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence

30 The SOAF identifies agreement on environmental harm as follows:

1. The failure by Causmag to maintain the filter bags in the Luhr bag house resulted in the emission of white coloured dust from the stack through which exhaust gases are discharged to the atmosphere from the Rotary Kiln on 23 April 2008.
2. Dust was emitted from the stack serving the Rotary Kiln during the night of 22-23 April 2008 and on 23 April 2008.
3. Dust that was emitted from the stack was deposited on the Hall property, on Mr Hall’s car, on additional cars parked on Calabash Street, and on the exterior of the units across the road from the Hall Residence. The extent of those dust deposits was not documented.
4. There is no evidence that dust emitted from the stack was deposited at any other location.
5. The only complaint that was made to the EPA concerning dust emissions from Causmag’s Plant during the period from 30 March 2008 to 23 April 2008 was that by John Hall on 23 April 2008.
6. After it received the complaint that was made by John Hall on 23 April 2008, Causmag offered to pay for the cleaning of both Mr Hall’s car and the exterior of the Hall Residence. However, Mr Hall and his mother declined to accept this offer.
7. Causmag paid the cost of cleaning the other cars that were parked on Calabash Street on 23 April 2008 on which dust was present.

31 Environment is broadly defined under the POEO Act as

environment means components of the earth, including:
(a) land, air and water, and
(b) any layer of the atmosphere, and
(c) any organic or inorganic matter and any living organism, and
(d) human-made or modified structures and areas,

and includes interacting natural ecosystems that include components referred to in paragraphs (a)–(c).

32 “Harm to the environment” is defined as:

harm to the environment includes 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.

33 The Prosecutor submitted that over the charge period there was potential for dust emissions to cause harm to the physical amenity of members of the general public by settling on personal property such as dwellings and motor cars. As identified in the SOAF at par 29-45 dust settled on the Hall’s house and car, and they complained. It also settled on other properties but there were no complaints. These visual and physical amenity impacts from the emission of dust was harm to the environment, albeit akin to nuisance.

34 The Defendant submitted the environmental harm was low as the dust was benign causing no harm to animal or human health or the environment or to property. It was a localised nuisance. The extent and duration of emissions from the stack was not severe. Mr Hall said he observed the stack for 10 minutes on the morning of 23 April 2008 and saw intermittent emissions occurring continuously for 30 seconds out of every minute. Mr Nagar’s evidence is that he saw intermittent emissions on the same morning for 3 to 5 seconds every 10 minutes. Mr Press of the EPA did not see any emissions when he attended the plant at 3.15pm. It is conceded there were further unquantified depositions on the night of 22 April 2008 which resulted in the light layer of dust on the Hall residence and car and other cars.

Finding

35 Apart from brief amenity or nuisance impacts on some houses and cars next to the Defendant’s premises, there is no environmental harm. The level of harm is very low given that magnesium oxide is not harmful to animals or humans. The amount of dust deposited was not substantial, as appears from the photographs tendered with the SOAF.

(b) the practical measures that may be taken to prevent, control, abate or mitigate that harm

Prosecutor’s submissions

36 There were practical measures that could have been taken to ensure the Luhr bag house was maintained in a proper and efficient condition. These included more regular checking of the filter bags in the bag house. According to the Defendant’s records prior to 30 March 2008 the bags had not been checked since March 2006. From 30 March 2008 employees told the Defendant’s management of the need to change the bags but nothing happened until the EPA became involved on 23 April 2008. The bags were not changed for commercial reasons as the Defendant had orders to fill, as stated by Mr Nagar in the record of interview tendered in the proceedings. Alternatively there was no reason to continue production as there were enough bags to entirely replace the defective bags in the Luhr bag house and the company was operating generally 24 hours 7 days a week. There were some stoppages in the charge period and changes could have been made in those periods of time.

Defendant’s submissions

37 The Defendant admits that this offence could have been prevented by replacing all the filter bags in the Luhr bag house within two years of the date they were last installed, that is May 2005. Mr Court’s recommendations concerning the monitoring of particulate emissions in the exhaust gas stream of the rotary kiln and the pressure differential in the Luhr bag house are accepted.

38 Prompt action was taken to abate and mitigate harm by the Defendant as the rotary kiln was stopped at 4.30pm following the complaint being received from Mr Hall at 10.00am. All remaining used filter bags were replaced by new bags installed in the Luhr bag house over the period 24-27 April 2008. The cost of car cleaning was paid by the Defendant and offers made to the Halls to pay their clean up costs.

Finding

39 There was a reasonably serious failure to properly maintain the filter bags in the Luhr bag house given Mr Court’s report (summarised at par 8-10) on the large number of torn bags and the amount of material caked on these. Mr Court also identifies instrument failures in relation to the measuring of differential pressure and particle emissions which were not followed up. An adequate maintenance procedure including regular replacement of the bags would have prevented the harm caused. The Defendant accepts that more should have been done to replace the bags and monitor measuring equipment. It now has in place measures or is intending to, to ensure that appropriate action is taken, according to the evidence of its managing director Mr Jhunjhunwala. That includes replacing the filter bags every two years in the most recently amended maintenance procedures to be implemented.

40 As submitted by the Defendant in par 38 above, and accepted by the Prosecutor, there was prompt action once dust was emitted on 22 and 23 April 2008 to stop operations at 4.30 pm on 23 April 2008 and replace the old filter bags in the Luhr bag house.

(c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence

41 The Prosecutor submitted that the harm caused was foreseeable. The Defendant has been prosecuted previously for similar conduct. As set out in the SOAF at par 90:

90. On 18 February 1994 Causmag was convicted for an offence against section 14(3) of the Clean Air Act 1961 and fined $3,000 by Young Local Court. This offence occurred at the time when the Plant was being operated by the previous owner of Causmag, Devex.

42 In September 2000 the Defendant was convicted of an offence under s 14(3) of the Clean Air Act 1961 (repealed) and was fined $20,000 by this Court (Environment Protection Authority v Causmag Ore Company Pty Ltd [2000] NSWLEC 205). At the relevant time the maximum penalty for an offence under section 14(3) of the Clean Air Act was $125,000. Causmag was charged that it had “processed materials in such a manner as to cause or increase air pollution from” the plant that it operated. The charge related to an incident that occurred on 17 May 1999 which involved the emission of dust from the stack that discharges exhaust gases from the rotary kiln. The dust was deposited on cars that were located in a nearby car yard. Talbot J held at [24] that the underlying cause of the incident was that at least three bags used in the bag house were defective, which in turn allowed dust to leak through the seals of the bags, thereby resulting in the emission of dust from the stack.

43 The Defendant should have been aware that regular maintenance was not being done on the bag filters. It was foreseeable these would deteriorate with use and fail to work so that dust would be emitted from the premises. Employees were aware of potential problems from 30 March 2008.

44 The Defendant accepts that it was reasonably foreseeable that the failure to operate the Luhr bag house in a proper and efficient manner would result in the emission of dust. I should note that this was not accepted in the context of this being a further similar offence by the Defendant, which issue I deal with later in the judgment.

(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence

45 The Defendant accepts that it had complete control over the causes giving rise to the offence.

(e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee.

46 This provision is not relevant.

Other objective circumstances

47 The Prosecutor submitted there were aggravating circumstances given the two earlier convictions of the same Defendant as set out at par 41-42, per s 21A(2)(d). Further under s 21A(2)(o) that the offence was committed for financial gain is a relevant aggravating factor. In relation to the offence being committed to obtain financial gain, the Prosecutor relied on a hearsay statement of Mr Bornen, sales executive of the Defendant, to Mr Whitfield of the EPA on 23 April 2008 as recorded in the affidavit of Mr Press of the EPA. I allowed this statement to be read as an exception to the hearsay rule under s 87(1)(b) of the Evidence Act 1995 (having ruled that Act applied to this evidence on the Defendant’s application). That statement was that production continued in order to fill customer orders despite the filter bags needing to be changed. The evidence is also that the rotary kiln was stopped at 4.30 pm on 23 April 2008 which is the same day as the complaint of Mr Hall at 10.00am and of the DECC officers’ visit to the Defendant’s premises. Production was not started again until all the bags were replaced some days later on 27 April 2008.

48 As identified in Mr Nagar’s affidavit evidence the Defendant had a substantial inventory of finished material as at 31 March 2008 that was more than sufficient to fulfil orders then received. Mr Nagar was cross-examined about the record of interview with Mr Press which was tendered by the Prosecutor. In the record of interview he referred on several occasions to the need to keep the plant operating in order to fill customer orders or words of similar effect. In cross-examination he stated that his main concern in giving answers was that he was seeking to keep the plant running as he was new in his job at that stage, having commenced in late February 2008, and he was anxious to learn all that he could and also demonstrate that he was competent.

49 The Prosecutor also submitted that the objective circumstances of the offence were serious because of the time period of the offence. The Defendant’s management was on notice as at 30 March 2008 from Mr Kumar that the bags in the Luhr needed inspection (SOAF cl 66) and this did not occur until there was a release of dust on 22-23 April 2008 outside the premises. The Defendant submitted that the emails from Mr Kumar and Mr Thirgood referred to in par 67-69 of the SOAF do not suggest that the Defendant was aware that there were significant emissions of dust from the Luhr bag house. There was little prior evidence of any problem as the Defendant’s employees had observed only very minor emissions from the stack prior to 23 April 2008. Nor were they aware that emissions from the plant were impacting on the physical amenity of any person outside the property.

50 When the evidence, is considered including that the period of the charge is 25 days, I conclude that the offence was carried out to some extent for financial gain. On this basis and in light of Mr Court’s report concerning the seriously degraded state of the filter bags and other system failures he identifies, the objective circumstances of the offence are reasonably serious. That finding is tempered however by the fact that the environmental harm caused is very low and the Defendant took prompt steps to rectify the situation once dust was emitted.

Maximum penalty

51 In setting a penalty the Court should have regard to the maximum penalty applicable, as this is an expression of the seriousness Parliament attributes to the offence: see Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at [698] and [701] respectively that:

The task of a court is to assess the relative seriousness of the offender’s particular offence in relation to a worst case for which the maximum penalty is provided…

..the more serious the lasting environmental harm involved the more serious the offence and, ordinarily, the higher the penalty.

52 The maximum penalty is $1 million with a maximum daily penalty of up to $120,000 for each day the offence continued. The period of the offence is 25 days giving a potential maximum penalty of $3 million.

General deterrence

53 Section 3A(b) CSP Act states that one of the purposes for a court in imposing a sentence is to prevent crime by deterring offenders. Sentences imposed in relation to environmental offences must embrace powerful considerations of general deterrence: see Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357, per Badgery-Parker J at 367. In Axer, Mahoney J stated at 359:

The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur.
Specific deterrence

54 An offence under s 64(1) is serious, attracting strict liability, and so general and specific deterrence are to be reflected in a penalty for breach: Environment Protection Authority v Rethmann Australia Environmental Services [2003] NSWLEC 351 at [46].

55 In Veen v The Queen [No. 2] (1988) 164 CLR 465 at 477 the majority judgment of Mason CJ, Brennan, Dawson and Toohey JJ stated that past criminal behaviour is relevant in sentencing:

to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law .

56 The prior convictions, one in the local court and one is this Court are set out at par 41-42. The Prosecutor argued that specific deterrence was an important factor in light of these to ensure the Defendant complied with its licence conditions in the future.

57 The Defendant argued that the prior convictions were not relevant because the current management was not in place in 1999 when the previous offences were committed and there was a different holding company which was the owner. As referred to by the Prosecutor, in Environment Protection Authority v Virotec International Limited [2002] NSWLEC 110, a prosecution for the pollution of waters under s 120 of the POEO Act, a similar submission was made. Talbot J considered at [50]:

the subsequent change in the principals and the direction of the company’s philosophy and objective were admirable. Nevertheless it must be held accountable for its past actions and prior convictions must be considered in light of Veen v The Queen (No 2)

58 I consider that is the correct approach to this corporate defendant also as it is the same legal entity that has prior convictions. These convictions are relevant to sentence. The Defendant’s solicitor spent some time in submissions distinguishing this case but it appears to be a generally similar offence committed by the same Defendant albeit ten years ago.

59 The Defendant argued specific deterrence was not a relevant factor because positive steps have been taken to ensure that there is no recurrence, as is clear from the evidence of the managing director Mr Jhunjhunwala. He has attested to the steps to be taken to ensure there is no repeat of the offence and attached a new maintenance procedure to his affidavit. These adopt measures recommended by Mr Court in his report. I accept these submissions of the Defendant and further note that the prior conviction before this Court was ten years ago. I do not consider this Defendant manifests a continuing attitude of disobedience of the law.

Mitigating factors

60 There are a number of mitigating factors that should be taken into account to reduce any penalty as provided for in s 21A(3) of the CSP Act.

Guilty plea - s 21A(3)(k), s 22 CSP Act

61 The Defendant pleaded guilty at an early opportunity, being the third mention of this matter before the Court. A plea of guilty entitles the Defendant to a discount in penalty under s 22 of the CSP Act in the range of 10-25 per cent: R v Thomson; R v Houlton (2000) 49 NSWLR 383; R v Sharma (2002) 54 NSWLR 300. In recent decisions of this Court in Environment Protection Authority v Werris Creek Coal Pty Ltd; Environment Protection Authority v Holley [2009] NSWLEC 124 at [89] and Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77 at [100] there has been a reduction of the discount for penalty where a guilty plea has not been entered at the first available opportunity though still entered early in the proceedings. In this case the plea was entered on the next occasion the matter was in Court, once all the evidence of the Prosecutor was filed so that the Defendant was properly informed of the matters to be relied on. I consider the plea was entered at the first available opportunity and the Defendant is entitled to the full discount on penalty.

Contrition and remorse – s 21A(3)(i) CSP Act

62 The Defendant has expressed contrition and remorse through the affidavit of Mr Jhunjhunwala and accepts full responsibility for the breach of the licence condition. The Defendant also offered to publish an apology to the public in a newspaper in Young in accordance with s 250(1)(a). I accept that expression of remorse on behalf of the Defendant (s 21A(3)(i) CSP Act).

Assistance to law enforcement authorities – s 21A(3)(m) CSP Act

63 There has been full cooperation with the Prosecutor in relation to the offence including the giving of interviews by three employees and the provision of extensive records. There has been extensive co-operation in relation to the preparation for this hearing as evidenced by the SOAF.

Whether likely to reoffend - s 21(3)(g) CSP Act

64 The Defendant submitted that it is unlikely to reoffend in light of the evidence of Mr Jhunjhunwala concerning the maintenance procedures to be undertaken. These include the regular replacement of filter bags in the Luhr bag house every two years, keeping comprehensive records concerning the dates when filter bags are changed and the anticipated useful life of replacement bags as indicated in the manufacturer’s guidelines, the periodic ceasing of operation of the rotary kiln every two months to enable inspection of the filter bags and their replacement if necessary, the monitoring of various operating parameters of the Luhr bag house to ensure that the filter bags are functioning properly, the monitoring of the exhaust gases from the rotary kiln which are discharged into the atmosphere and implementation of procedures to record and promptly investigate complaints from the public concerning dust emissions from the stack. I accept that evidence.

Character – s 21A(3)(f)

65 The Defendant is of good corporate character as is clear from the affidavit of the managing director concerning the size of the company’s workforce in Young. That demonstrates that the company has a commitment to the community of Young, having operated in the area for 50 years as one of the largest employers and the substantial financial commitment made to the business. The present owners of the Defendant have maintained their commitment to employment of Young residents with substantial efforts to ensure the viability of the company. This has included significant investment into the business, the sacrifice of salaries and dividends and the giving of interest free loans in order to keep the company viable.

Section 6 Fines Act 1996

66 Section 6 of the Fines Act 1996 provides:

6 Consideration of accused’s means to pay

In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider:
(a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and
(b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount.

67 The Defendant relies on s 6 of the Fines Act to argue that its parlous financial state should be considered in the setting of any penalty. This is demonstrated in the evidence of Mr Pandey’s affidavit as summarised above at par 21. The written and oral evidence of Mr Jhunhunwala also attests to the considerable financial difficulties the company has experienced over several years and the measures that have had to be taken to keep the company afloat, including loans from its employees.

68 The Prosecutor stated that once it is determined that a fine be imposed, the correct procedure in assessing the magnitude of the fine is to be determined by reference to the gravity of the offence for which it is imposed. If satisfied that the offender would be unable to pay the amount determined it may reduce it to take account of the offender’s means and impecuniosity, per R v Rahme (1989) 43 A Crim R 81 at 87. If the gravity of the offence is serious a lack of capacity to pay a fine is not the most important factor, rather that is the need for deterrence and punishment, per Environment Protection Authority v Douglass (No 2) [2002] NSWLEC 94 per Lloyd J at [15]-[16].

69 I consider the financial circumstances of the Defendant should be taken into account in setting the penalty as the circumstances of this matter, while serious, do not suggest the Defendant’s means to pay should not be considered. The circumstances of this Defendant are different to those in Douglass (No 2) which concerned a more serious breach of the Environmental Offences and Penalties Act 1989 (now repealed).

Evenhandedness

70 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. This principle must always be applied subject to the particular circumstances of the case before the Court.

71 In Environment Protection Authority v Delta Electricity [2009] NSWLEC 11, which was referred to by the Defendant, I imposed a penalty of $45,000 in circumstances where there was a breach of a licence condition requiring the defendant to maintain its premises in a condition which minimised or prevented the emission of dust from a large flyash mound. There was no actual harm to the environment but there was potential for harm to the amenity of members of the general public by dust settling on personal property such as motor cars. This potential for harm was not substantial. No dust left the premises of the defendant. The defendant, a large statutory corporation, had committed no prior environmental offences. In Delta Electricity I considered a number of other cases concerning dust emissions as follows.

72 In Environment Protection Authority v BHP Steel (AIS) Pty Limited (NSWLEC, Talbot J, 19 April 2000, unreported) Talbot J found the defendant company guilty of contravening a similar licence condition to that in Delta requiring prevention of dust emissions from a stockpile. The water spray system used to dampen the stockpile surface did not operate adequately in the windy conditions and dust emissions occurred. A resident of the area reported feeling coal dust blowing into his face when visiting the site and a complaint was made of dust “covering everything”. The potential for harm was reasonably foreseeable to the defendant. The defendant had received pollution infringement notices on at least two occasions due to a history of difficulties with the watering system that the company was aware of. In addition, the potential for harm was self-evident. On the issue of the defendant contracting out management of the stockpile, Talbot J stated that the defendant company was owner of the site and operator of the colliery so had ultimate control and responsibility for meeting the obligations under the licence. In considering the penalty, Talbot J noted that the company had been convicted of 29 environmental offences but considered this in light of the extent of its operations. Its efforts to implement remedial measures after the offence and its early guilty plea were also considered. Talbot J was satisfied that the penalty should be in the lower range and the defendant was fined $14,000. The maximum penalty for the offence at the time was $125,000.

73 Environment Protection Authority v BHP Steel (AIS) Pty Ltd [2003] NSWLEC 46 per Lloyd J related to the same site after another failure to control dust emissions. The computerised dust suppression system failed after planned maintenance which did not restore sufficient pressure to the hoses. In considering the penalty to impose, Lloyd J noted that the failure of the system did not lead to actual environmental harm or the likelihood of environmental harm. However the defendant’s implementation of further controls after the offence demonstrated that the defendant could have prevented the breach. Lloyd J considered the defendant’s early guilty plea, the low chance of recurrence and its good environmental record in light of the company’s extensive operations. The defendant was fined $30,000. The maximum penalty for the offence at the time was $250,000.

74 In Environment Protection Authority v Lithgow Coal Company Pty Ltd [2003] NSWLEC 430, the defendant company contravened a licence requiring the company to prevent dust emissions from the site. The offence was a result of unexpectedly forceful winds and a failure on the part of the defendant to remove dust material effectively. Talbot J recognised the unusually close proximity of a pre-existing township created a heightened responsibility upon the defendant to avoid the harm and so the offence was not in the lowest range. Talbot J recognised the defendant’s early plea of guilty, its co-operation with the investigation, the absence of any prior offences and the company’s expression of remorse in mitigation. Talbot J also considered the absence of a real prospect of re-occurrence of the offence after precautionary steps had been taken. The defendant was fined $30,000. The maximum penalty enforceable at the time for a corporation was $250,000.

75 The Defendant’s solicitor referred to Environment Protection Authority v Forgacs Engineering Pty Limited [2009] NSWLEC 64 as being similar to this case. In Forgacs the defendant failed to comply with a licence condition that activities at the premises be conducted so as to not to cause dust emissions. Grit blast dust escaped from the defendant’s dry dock facility into the surrounding waters and on to boats berthed at a nearby marina. Shade cloth intended to prevent the dust escaping did not cover the whole of the operation site and grit had been supplied which was able to escape through the cloth. There was no evidence of actual ecological harm despite the high toxicity of the dust material to marine organism at low concentrations. There was actual short-term harm relating to the amenity impact on the boat owners. The harm caused by the particles which escaped as a result of incomplete covering of the ship was reasonably foreseeable. An order pursuant to s 250 of the POEO Act with a cost of $45,000 was made and the defendant was ordered to pay the prosecutor’s costs of $20,883.

76 An important difference between many of these cases and this matter is that the offence period is over several days.

Prosecutor’s costs

77 The Defendant has agreed to pay the Prosecutor’s costs of $26,500. Given the parlous state of the Defendant’s finances the amount of costs for which it is liable should be taken into account in the setting of any penalty as per Kirby J (Mason P and Hoeben J concurring) in EPA v Barnes [2006] NSWCCA 246 at [88].

Orders under s 250(1) POEO Act

78 The parties agree that a publication order ought be made under s 250(1)(a) in accordance with agreed text that can be incorporated into an order. As submitted by the Prosecutor this serves the general sentencing procedure of general deterrence and makes the Defendant accountable by the acknowledgment and publication of the conviction. There is some disagreement about where the notice should be published. The Defendant wants to publish in a local newspaper in the Young area alone to save costs, the Prosecutor wants publication in the more expensive Sydney Morning Herald and the Australian Financial Review. The Prosecutor submitted that the cost of a publication order should not be considered in determining what penalty if any should be imposed because such an order is made in addition to rather than instead of any penalty, per McClellan J in Environment Protection Authority v Incitec Limited at [58]-[59].

79 Publication in the local newspaper is sufficient publicity in my view to achieve the purposes of notification of the offence.

80 An order for payment of money in stages to Young Shire Council for the Victoria Street Landfill Rehabilitation Project has been proposed by the Defendant and is supported by the Prosecutor. The cost of that project as proposed by the Defendant is $45,000 which would be payable in instalments over three years. Such an order is able to be made under s 250(1)(e) of the POEO Act. Such an order is appropriate in order to achieve the objects of the POEO Act in relation to rehabilitation of the environment. An order requiring the Defendant to include in any future reference to its funding of the project that it is a result of the Defendant’s conviction will also be made.

81 Orders made under Pt 8.3A are in addition to any penalty imposed, pursuant to s 244(2).

82 In light of all the objective and subjective circumstances I think that the Defendant’s penalty should be $20,000 which incorporates an amount of $12,500 for a daily penalty of $500 per day.

Orders

83 The Court orders that:

1. The Defendant is convicted of the offence with which it is charged.

2. The Defendant is fined the sum of $20,000 to be paid to the Registrar of the Court within 28 days of today's date.

3. Pursuant to s 250(1) of the Protection of the Environment Operations Act 1997, the Defendant, within 28 days of this order, is to place a notice in the first 12 pages of the early general news section of the Young Witness at a minimum size of 8cm by 12cm in the form of Annexure A.

4. The Defendant, pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, is to pay the Young Shire Council the following amounts to fund the Rehabilitation of Victoria Street Landfill Project. The payments to Young Shire Council shall be made in accordance with the following schedule:

(i) $15,000 is to be paid by 15 October 2010, in equal monthly instalments of $1,250. The first such payment shall be made by 15 October 2009, with each instalment thereafter being payable by the 15th day of each succeeding month.

(ii) $15,000 is to be paid by 15 October 2011, in equal monthly instalments of $1,250. The first such payment shall be made by 15 October 2010, with each instalment thereafter being payable by the 15th day of each succeeding month.

(iii) $15,000 is to be paid by 15 October 2012, in equal monthly instalments of $1,250. The first such payment shall be made by 15 October 2011, with each instalment thereafter being payable by the 15th day of each succeeding month.

5. All future references by the Defendant to its funding of the Rehabilitation of Victoria Street Landfill Project shall be accompanied by the following passage (pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997):

Causmag’s funding of the Rehabilitation of Victoria Street Landfill Project is part of a penalty imposed on Causmag by the Land and Environment Court after it was convicted of breaching a condition of its environmental protection licence, by failing to maintain the Luhr bag house at its Plant in Young, New South Wales, in a proper and efficient condition, an offence against s 64(1) of the Protection of the Environment Operations Act 1997.

6. The Defendant is to pay the Prosecutor’s costs of the proceedings of $26,500.

7. The exhibits may be returned.

ANNEXURE A

CONVICTION FOR BREACH OF ENVIRONMENT PROTECTION LICENCE – CAUSMAG ORE COMPANY PROPRIETARY LIMITED

On 24 September 2009, the Land and Environment Court of New South Wales found CAUSMAG ORE COMPANY PROPRIETARY LIMITED (ACN 004 301 517) guilty of one offence against the Protection of the Environment Operations Act 1997, in that it contravened a condition of its environmental protection licence.

The offence occurred from 30 March 2008 to 23 April 2008. CAUSMAG ORE COMPANY PROPRIETARY LIMITED contravened a condition of its environmental protection licence by failing to maintain the Luhr bag house at its Plant in Young, New South Wales, in a proper and efficient condition by failing to repair or replace filter bags that had become damaged, deteriorated, torn, heavily caked or worn out.

CAUSMAG ORE COMPANY PROPRIETARY LIMITED was prosecuted by the Environment Protection Authority, part of the Department of Environment, Climate Change and Water (NSW). CAUSMAG ORE COMPANY PROPRIETARY LIMITED pleaded guilty to the charges.

On 24 September 2009 CAUSMAG ORE COMPANY PROPRIETARY LIMITED was convicted and fined $20,000 for the offence against the Protection of the Environment Operations Act 1997 and ordered to pay $45,000 to Young Shire Council for the Revegetation of Victoria Street Landfill Project

.

This notice is placed by order of the Land and Environment Court and is paid for by CAUSMAG ORE COMPANY PROPRIETARY LIMITED.