Environment Protection Authority v Causmag Ore Company Pty Ltd

[2015] NSWLEC 58

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Environment Protection Authority v Causmag Ore Company Pty Ltd [2015] NSWLEC 58
Hearing dates:	23 March 2015
Date of orders:	24 March 2015
Decision date:	24 March 2015
Jurisdiction:	Class 5
Before:	Preston CJ
Decision:	Orders as set out at [137]-[138]
Catchwords:	OFFENCES AND PENALTIES – sentence – contravention of condition of environment protection licence – not carry out licensed activities in a competent manner – emission of dust from factory into atmosphere – objective seriousness of offence – dust deposited on properties in neighbourhood – actual environmental harm of low seriousness – practical measures not taken to avoid environmental harm – foreseeability of risk of environmental harm – emission of dust clearly foreseeable if practical measures not taken – full control over causes of commission of offence – low overall objective seriousness – subjective circumstances of offender – record of prior convictions – aggravating factor – early plea of guilty – offender’s genuine remorse for the offence – offender’s good corporate character – offender cooperated with authorities – appropriate penalty is a fine and publication order – evidence of corporate offender’s financial means insufficient to reduce amount of fine – offender ordered to pay prosecutor’s costs and prosecutor’s costs of investigation
Legislation Cited:	Crimes (Sentencing Procedure) Act 1999 ss 21A(2), 21A(3), 22, 23 Criminal Procedure Act 1986 s 257B Fines Act 1966 s 6 Protection of the Environment Operations Act 1997 ss 64(1), 241(1), 248(1), 250(1)(a), 250(1)(e)
Cases Cited:	Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; (1993) 82 LGERA 21 Environment Protection Authority v Barnes [2006] NSWCCA 246 Environment Protection Authority v Causmag Ore Company Pty Ltd [2000] NSWLEC 205 Environment Protection Authority v Causmag Ore Company Pty Ltd [2009] NSWLEC 164 Environment Protection Authority v Orica Australia Pty Ltd (The Nitric Acid Air Lift Incident) [2014] NSWLEC 103; (2014) 206 LGERA 239 Environment Protection Authority v Waste Recycling and Processing Corp [2006] NSWLEC 419; (2006) 148 LGERA 299 R v McNaughton [2006] NSWCCA 242; (2006) 163 A Crim R 381 R v Rahme (1989) 43 A Crim R 81 R v Thompson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 R v Wisbey [2001] NSWCCA 434 RCW v R (No 2) [2014] NSWCCA 190 Veen v The Queen (No 2) (1988) 164 CLR 465
Category:	Principal judgment
Parties:	Environment Protection Authority (Prosecutor) Causmag Ore Company Pty Ltd (Defendant)
Representation:	Counsel: Ms S Anderson (Solicitor) (Prosecutor) Mr P S Holland (Solicitor) (Defendant) Solicitors: Office of Environment and Heritage (Prosecutor) McCullough Robertson (Defendant)
File Number(s):	50775 of 2014
Publication restriction:	No

Judgment

1. Causmag Ore Company Pty Ltd (‘Causmag’) operates a factory at 2 Park Avenue, Young, producing magnesium oxide or magnesia. The production process generates large amounts of white dust containing magnesia and other substances including magnesium compounds.

2. Causmag holds an environment protection licence (Licence no 942) under the Protection of the Environment Operations Act 1997 (‘POEO Act’) for metallurgical activities. The manufacturing processes carried out at the factory are classified as “metallurgical activities”, specifically processing of metal (raw magnesium carbonate or magnesite) by heating, under sch 1 of the POEO Act. The heating of magnesite in kilns produces magnesia. Condition O1.1 of Causmag’s licence provided:

O1   Licensed activities must be carried out in a competent manner.

O1.1   This includes:

a)   the processing, handling, movement and storage of materials and substances used to carry out the activity; and

b)   the treatment, storage, processing, reprocessing, transport and disposal of waste generated by the activity.

3. On 25 September 2013, due to problems with the operation of the pollution control equipment for one of the kilns, the rotary kiln, white dust was emitted from the factory to the atmosphere. The emission of the dust was caused by Causmag failing to carry out the licensed activities in a competent manner, in contravention of condition O1.1 of its licence.

4. The Environment Protection Authority (‘EPA’) prosecuted Causmag for committing an offence against s 64(1) of the POEO Act in that Causmag contravened a condition of its licence. Causmag has pleaded guilty to the offence.

5. A sentence hearing was held yesterday. The Court’s task is to determine and impose the appropriate penalties for the offence.

The operation of the factory

6. Causmag has been producing magnesia at the premises since 1952. Raw magnesium carbonate (magnesite) is mined by a company called Young Mining Company Pty Ltd (‘Young Mining’) from a mine at Thuddungra, about 40 kilometres from Young. Young Mining, like Causmag, is a wholly owned subsidiary of Orind Australia Pty Ltd (‘Orind’). All of the raw magnesite mined by Young Mining is transported to Causmag’s factory for processing.

7. Causmag heats the raw magnesite in two natural gas-fired kilns or furnaces at around 1000 degrees Celsius to produce magnesium oxide (magnesia). The process is known industrially as calcination. The magnesia produced is cooled, crushed into a fine white powder, screened to various grades depending on the particle size, and packaged. The packaged magnesia is sold as an animal feed supplement and for use in industrial applications.

8. A substantial part of the raw magnesite and the processed magnesia is a fine white powder that generates airborne dust if exposed to wind or if moved.

9. The two kilns used by Causmag are known as the shaft kiln and the rotary kiln. The kiln relevant to the offence is the rotary kiln. It has been in operation since 1996.

10. Hot air is passed through the kilns and comes into contact with the magnesite solids and fines. The magnesite moves in a tumbling motion inside the rotary kiln as the air flows past them. Calcination of the magnesite from the tumbling motion and heat reduces the size of the magnesite solids. Abrasion of the solids from the tumbling motion creates further fines inside the rotary kiln.

11. Air contained in the combustion by-products, including fines, from the rotary kiln is passed through a recuperator to cool the gas before it is drawn up through a pollution control system consisting of two baghouse filtration systems. Exhaust gases from the rotary kiln are split between the two baghouses, which operate in parallel. The baghouses are referred to by their brand names, the Richardson baghouse and the Luhr baghouse. Both baghouses have been in operation since 1996.

12. Each baghouse contains numerous fabric filters, also referred to as bags or socks, which are mounted over wire cages or support frames. The bags of the Richardson baghouse at the time of the offence were about 3.15 m long with an 11.8 cm diameter. The baghouses operate using the same principle as domestic vacuum cleaners: the dirty gas is drawn under suction through a porous fabric surface and the dust is trapped on the fabric. The bags collect particulates from the exhaust gases from the kiln.

13. Baghouse filters operate in a cyclic manner, alternating periods of filtering and filter cleaning. Both the Luhr and Richardson baghouses require a regular high pressure pulse of compressed air to be applied to the bags to clean them of dust. The pulsing process is essential to prevent the bags caking with dust and so is essential for the baghouses to perform their pollution control function. This process is supposed to be carried out automatically while the baghouses are operating and is normally achieved by the application of a high pressure pulse of compressed air through a “venturi jet” mounted at the clean air exit from the bags. The pulsing process can be carried out manually at times when the automatic pulsing process is not working. The effectiveness of the manual pulsing is dependent upon adequate training and operation of the equipment by Causmag’s staff.

14. The regular pulse of high pressure air forces a large volume of filtered air back through the bag as a pulse, rapidly lifting the fabric surface away from, and then snapping it back onto, the wire frame on which it is held. This dislodges much of the dust held on the outside dirty surface of the bag. Dust blown off the bags falls to the bottom of the baghouse chamber and is discharged into 1 tonne bulk bags, which are replaced when they become full.

15. The Richardson and Luhr baghouses are capable of performing their pollution control function adequately, provided they are competently operated and maintained. Prior to the offence, Causmag had last inspected the Richardson and Luhr baghouses on 3 and 4 September 2013.

16. An induced draft exhaust fan is used to draw the combustion gases and dust from the rotary kiln through the baghouses. The induced draft fan also maintains the kiln under negative pressure.

17. A by-product of the processing of the magnesite is carbon dioxide which, together with other gases that are produced by the combustion of natural gas in the kilns, carries fine white dust particles of magnesite and magnesia. After the exhaust gases from the rotary kiln pass through the Richardson and Luhr baghouses, the filtered gas is discharged to the atmosphere through a stack located on the roof of the main factory building. Exhaust gases from the shaft kiln are emitted through a separate stack.

18. The filter dust from each kiln contains magnesium hydroxide, magnesia, magnesite, calcium oxide, iron oxide, aluminium oxide and silicone dioxide.

19. The automatic cleaning of the filter bags places stress on the fabric of the bags, caused by the repeated rapid lifting of the bags from, and the snapping back of the bags onto, the wire frame. Various factors can increase the stress placed on the bags, resulting in the development of abrasion holes in the bags. If holes develop, dust will bypass the filtration process through the holes in the bags.

20. Baghouse filters are designed to operate with an optimal pressure differential or pressure drop across the filter media from the dirty side (kiln side) to the clean side (stack side) of the filter. Maintenance of the designed pressure drop is essential if the system design flow conditions are to be met.

21. Differential pressure gauges in the Richardson and Luhr baghouses measure the differential pressure. A high differential pressure may indicate that the bags are becoming clogged or blocked and dust is building up in the baghouses. It may be caused by malfunction of the bag cleaning system, bag blinding, or high gas flow rates. This may reduce the capacity of the baghouses by causing strain on the bags, potentially causing a leak. A low differential pressure indicates potential leaks in the bags. If differential pressure moves outside a normal range, investigation of the pollution control equipment is required.

22. Causmag’s Monitoring and Measurement Control document dated 22 March 2002 lists the following monitoring requirements, amongst others:

1. visual monitoring the baghouse differential pressure at 2 hourly intervals;

2. differential pressure for Richardson and Luhr baghouses to be recorded every 2 hours in the shift log; and

3. continuous dust monitoring in stack - production manager’s computer.

The pollution incident

23. From 22 to 24 September 2013, the rotary kiln had been shut down for maintenance.

24. Prior to 8pm on 24 September 2013, the rotary kiln was restarted. A Causmag employee, Mr Jamie Foley, was the kiln operator on duty from 8pm on 24 September 2013. He was the only operator on shift over that period.

25. At about 9.30pm, feed of raw magnesite into the rotary kiln commenced. At about 10pm, Mr Foley noticed that it was getting dusty in the factory and so went outside to look at the stacks, but could not see any dust. At about 1.30am or 2am, Mr Foley again visually checked the stacks because the dust was getting very heavy in the factory. Mr Foley was not able to see any dust being emitted during the night as it was very dark outside.

26. According to Mr Foley, on the night of 24 September 2013, the differential pressure in the Richardson baghouse was elevated to be about 3.5 or 4 kilopascals (kPa), which was above the maximum differential pressure for the baghouse. Causmag’s operations manager, Mr Lex Kingma, advised that on the night of 24 September 2013, the differential pressure in the Luhr baghouse was also elevated (although the precise level was not recorded).

27. Causmag’s Monitoring and Measurement Control document noted, for each baghouse, that the optimum differential pressure was 1.2 to 1.3 kPa, the minimum differential pressure (with feed) was 0.8 kPa and the maximum differential pressure was 3.0 kPa. Mr Foley said that the differential pressure in the Richardson baghouse was usually about 0.8 or 1.0 kPa and the differential pressure in the Luhr baghouse was usually about 0.3 or 0.4 kPa.

28. In contravention of Causmag’s monitoring requirement, Causmag’s employees did not record the differential pressure reading (every two hours or at all) in the rotary kiln shift log either on the night of 24 September 2013 or in the morning of 25 September 2013.

29. The elevated differential pressure in each baghouse, and in the Richardson baghouse above the maximum differential pressure, indicated that the bags were becoming clogged or blocked and dust was building up in the baghouses.

30. The pulsing process ordinarily would clean the bags of built up dust. The pulsing process was supposed to be carried out automatically while the baghouses were operating. Normally, a card in the baghouse pulse cleaning system electronically controlled when the automatic pulser would pulse the bags. However, for two to three weeks before 24 September 2013, Causmag had been waiting for that card to be replaced. As a consequence, there was no automatic pulsing of the bags in either baghouse throughout this period.

31. The pulsing process could also be carried out manually at times when the automatic pulsing process was not working. Hence, during the two to three week period before 24 September 2013 when the automatic pulsing system was not working, Causmag employees had had to manually pulse the bags in both baghouses.

32. On the night of 24 September 2013, in response to the high differential pressure in the baghouses, Mr Foley went to the baghouses to manually pulse the bags to remove dust from them. However, he found that the “air lines” used to do the manual pulsing had been removed, so that he could not manually pulse the bags.

33. The consequence was that the high differential pressure caused by the bags being blocked with dust was not able to be reduced by either automatic or manual pulsing of the bags to remove the build-up of dust.

34. Mr Foley tried another means to remove the dust from the bag. He tried to “dump” the baghouses by temporarily closing off a butterfly clip on the induced draft fan to send a pulse through the bag. This removed a little bit of dust from the bags but not a great deal.

35. Mr Foley then tried to reduce the raw magnesite feed into the rotary kiln, but the dust kept getting worse.

36. Mr Foley’s shift finished at 4am on 25 September 2013 and he handed over operation of the rotary kiln to another Causmag employee, Mr Paul Gruber.

37. When Mr Gruber started his shift as kiln operator at 4am on 25 September 2013, he noticed it was quite dusty in the factory. He checked two air gauges to the baghouses, which were turned on. Mr Gruber then attempted to check the two differential pressure gauges to the baghouses, but found that one of them was not where it had been in the past. Mr Gruber did not know where it was so he could not check it. The evidence is unclear as to which baghouse the missing gauge related. Regardless of which gauge was missing, a complete set of monitoring data was not available to inform process operations on 24-25 September 2013.

38. At daylight (about 7am) on 25 September 2013, a Causmag employee, Amanda Clarke, who worked as a housekeeper/cleaner at the premises, went outside the main factory building on the premises and saw “quite a deal of dust” coming out of the stack from the rotary kiln. She saw the dust rise and be carried by the wind over quite a few houses. She saw a lot of dust out the back of the factory.

39. The dust emitted from the stack on 25 September 2013 came through the Richardson baghouse from the rotary kiln.

40. Ms Clarke immediately went inside the factory to inform the kiln operator, Mr Gruber, of the dust emissions. Mr Gruber shut down the kiln as soon as Ms Clarke told him that dust was being emitted from the stack. It appears this was shortly after 7am, possibly 10 minutes after the dust was first noticed by Ms Clarke.

41. Once the kiln was shut down, the dust emissions from the stack ceased. It is uncertain how long the stack had been emitting dust on this occasion.

42. At about 8am, Mr Kingma arrived at the factory after being advised of the dust emission. He turned on a third air tap for the baghouse pulse cleaning system for the Luhr baghouse, of which Mr Gruber had not been aware.

The causes of the pollution incident

43. The Protection of the Environment Operations (Clean Air) Regulation 2010, Schedule 4, sets maximum permissible standards of concentration of air impurities (emission limits) from scheduled premises for general activities and plant. The emission limit is based on the age of the plant. The applicable emission limit for solid particles from the rotary kiln at Causmag’s premises is 250mg per cubic metre.

44. Baghouse filtration is suitable technology for controlling particle emissions from the rotary kiln of the premises, provided that the baghouses are operated and maintained competently. Where a baghouse is designed, operated and maintained in a proper and efficient manner, particle controlled efficiencies greater than 99% are readily achievable.

45. Historic test results from the rotary kiln stack demonstrated that the Richardson and Luhr baghouses had the ability to control solid particle emissions in line with good environmental performance.

46. The dust emitted from the stack on 25 September 2013 came through the Richardson baghouse from the rotary kiln.

47. There were a number of failures by Causmag on 24-25 September 2013 that led to the dust emissions.

48. Prior to the evening of 24 September 2013, the automated pulsing system for the baghouses had been replaced, but Mr Foley had not been advised of this fact. Despite the automated pulsing system having been replaced, the air supply to the Luhr baghouse pulsing unit was left turned off, so that the bags were not being automatically pulsed and could not be manually pulsed because the air lines had been removed. Mr Foley realised when he found the air lines missing that the pulsing was not working, however, he did not know where to go to turn on the automatic pulsing system. Mr Foley had not been given any instructions, either verbal or written, in relation to checking the pulsing system for the baghouses.

49. The failure to supply compressed air to both baghouses prevented the filter bags in each baghouse from being properly cleaned. The bags were therefore not able to properly filter dust from the rotary kiln emissions. This caused increased stress on the remainder of the ventilation and filtration system and possibly impacted on the integrity of the bag seals in the Richardson baghouse.

50. There was a significant leak of dust from the Richardson baghouse as a result of one failed seal between the metal venturi and the metal top plate at the top of a bag. There were further two knife edge cuts or leaks in bags in the Richardson baghouse. Dust was emitted through these leaks and then to the stack.

51. An online real time dust measuring device or particle sensor had been fitted to the stack from the rotary kiln in mid-2000 to monitor combined particle emissions from the Richardson and Luhr baghouses. The monitoring system was designed to log continuous real time particle concentrations in milligrams per cubic metre, with readings from the sensor to be continuously displayed in the production manager’s office. However, the particle sensor had not been maintained, had not been recently recalibrated, and was not operating at the time of the emissions on 25 September 2013. Causmag does not know how long the sensor had not been working prior to that date, but it was at least a period of months. Even in the past when the sensor had been working, the system was not configured to provide a 24 hour log of data to allow problems to be identified over a period of time. The particle sensor was set up so that readings were shown only on a linked standalone computer that was in an office located in the administrative building of the factory, that was not easily accessible to Causmag operational staff working in the adjacent factory building.

43. In 2010, Causmag had installed an alarm intended to alert plant operators if the dust limit was exceeded. At the time of the offence, there were no warning systems or alarms functioning to indicate to, or warn, operators if there were increasing particulate emissions to the stack from the rotary kiln. No alarm or warning system for differential pressure levels was operational at the time of the offence.

44. It is not possible to visually inspect the bags whilst the kiln is running as the baghouses cannot be opened whilst the kilns are running. Thus, it is important to monitor the conditions in the baghouses by other means.

45. At the time of the incident, the only procedure used by Causmag staff to monitor whether there were any dust emissions was to go outside the main factory building and look up to see whether any visible dust was being emitted from the stack. The kiln was regularly operated 24 hours a day. It was very hard, if not impossible, to see dust emissions at night, except at the limited times when the lights were on at the nearby sports oval. There were substantial periods of time when emissions of solid particles from the stack would not be visible due to the absence of light. There was no continuous check on emissions at the time of the incident.

46. The monitoring undertaken at the premises on the morning of 25 September 2013 was inadequate for informing kiln process operations to minimise the emission of solid particles from the kiln stack. Kiln operators did not have access to real time process monitoring information to identify any upsets in the baghouses. Improvements in monitoring protocol and implementation could have aided in more rapid identification of process upset conditions to minimise the risk of elevated particulate emissions and facilitate a more rapid response to control elevated emissions from the premises.

47. Prior to the incident, employees had been continuously telling management about the dust problems on the premises and it being too dusty in the factory. Mr Foley said that despite wearing a mask at work for his entire shift, employees are “forever blowing like stuff out of your nose...I’m still blowing stuff out of my nose, like, when I’m starting shift again, like, after my days off.”

48. Causmag’s failure to maintain and operate the emission controls and monitoring equipment servicing the rotary kiln in a competent manner caused the elevated emission of particulate matter from the stack on 25 September 2013.

49. Causmag could have taken practical steps to reduce the emission of solid particles from the rotary kiln stack on 25 September 2013.

The dust emitted and its effects

59. The dust was emitted from the stack of the rotary kiln between 24-25 September 2013. The duration of the emission is unknown, but would have been less than about 9½ hours.

60. The Causmag factory is in very close proximity to residences and other businesses. Dust emissions from the stack can quickly travel a long way and effect neighbours as the dust is very fine, light and mobile.

61. White dust was observed covering motor vehicles at a Holden car dealership about 300 metres from the factory, a Mitsubishi car dealership about 400 metres from the factory, and a Ford car dealership about 500 metres from the factory.

62. Laboratory analysis of samples of dust taken by the EPA from motor vehicles at these car dealerships found that the dust was consistent with a mixture of dust of the nature sampled from beneath the Richardson baghouse (containing high concentrations of magnesium) and a smaller quantity of soil from the local area.

63. The evidence does not allow a definitive determination of whether the magnesium in the dust on the motor vehicles was emitted from Causmag’s stack during the emission on 25 September 2013 or whether it had been emitted into the environment from Causmag’s premises at an earlier time. There are no other premises in Young that process a magnesium material or that are potential sources of white dust containing magnesium.

64. As airborne dust, magnesium oxide causes nuisance and aesthetic problems for residents and business owners in Young, particularly nearby car dealers. In combination with moisture (such as dew or rainfall), magnesium oxide creates magnesium hydroxide, a mildly alkaline substance which sets hard like concrete. The environmental harm caused by this offence was the likely aesthetic and nuisance impacts of the deposition of dust onto objects and property.

65. Dust containing magnesium is more difficult, and takes more time, to remove by washing cars.

Objective seriousness of the offence

66. The objective circumstances of the offence in this case include: the maximum penalty for the offence; the extent of harm; the practical measures to prevent harm; the foreseeability of the harm; and the control over the causes giving rise to the offence.

Maximum penalty

67. The maximum monetary penalty for the commission of an offence against s 64(1) of the POEO Act by a corporation is $1 million: s 64(1) of the POEO Act. This significant penalty is a public expression of the New South Wales Parliament of the seriousness of the offence: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698; (1993) 82 LGERA 21.

Environmental harm

68. Section 241(1)(a) of the POEO Act requires the sentencing court to take into consideration, in imposing a penalty for the offence, “the extent of the harm caused or likely to be caused to the environment by the commission of the offence.”

69. The commission of the offence in this case caused actual environmental harm, in that dust was emitted into the atmosphere and was deposited on properties in the neighbourhood. The deposited dust caused a nuisance and other aesthetic impacts.

70. Causmag firstly submitted that it was lawful under its environment protection licence for Causmag to emit dust particles from the stack from the rotary kiln up to 250mg per cubic metre. The evidence did not enable a definitive determination of the amount of dust emitted from the stack from the rotary kiln or how long the emissions occurred over the night of 24-25 September 2013. The evidence did not establish, therefore, that, as a result of the incident, Causmag exceeded the applicable emission limit under its licence. I accept this first submission of Causmag.

71. Causmag secondly submitted that the evidence did not establish that there was any actual environmental harm as a result of this incident. This submission was based on the uncertainty of the evidence as to the amount and duration of the dust emissions, as well as the fact that the evidence did not prove definitively that the dust containing magnesium deposited on the cars of the three dealerships was emitted from Causmag’s factory during the incident or at some earlier time. I do not accept this second submission.

72. The evidence is clear that the operation of the factory on 24-25 September 2013 generated a lot of dust inside the factory. The failure of the dust filtration system meant that it was highly likely that dust was being emitted from the factory during this period. By daylight on 25 September 2013, “quite a deal of dust” was observed coming out of the stack from the rotary kiln and being carried by the wind over neighbouring houses. Whilst not all of the dust observed on the cars at the car dealerships might have been deposited on 24-25 September 2013, I find that some of it was undoubtedly deposited during the period of the incident.

73. Causmag thirdly submitted that if actual environmental harm did occur, it was of a relatively minor nature. The dust emitted was benign, causing no harm to animals or human health or to the environment. It was a localised nuisance. The evidence established that only nearby car dealerships were affected and then only for a relatively short period of time. The dust was able to be removed from the cars by washing. Causmag therefore submitted that the extent of the harm was low, at most at nuisance level. I accept this third submission of Causmag and find accordingly that the actual environmental harm caused by the commission of the offence was low.

Practical measures

74. Section 241(1)(b) of the POEO Act requires the sentencing court to take into consideration “the practical measures that may be taken to prevent, control, abate or mitigate that harm [to the environment].”

75. The causes of the pollution incident clearly established that there were practical measures that could have been taken to prevent the offence occurring and harm being caused to the environment.

76. To start with, the rotary kiln was restarted and operated on 24 September 2013 when neither automatic nor manual pulsing of the bags in the baghouses could be undertaken. The automatic pulser was not operating because the card that electronically controlled the automatic pulser needed to be replaced. Manual pulsing was not able to be done because the air lines used to do the manual pulsing had been removed.

77. The failure to supply compressed air by automatic or manual pulsing to both baghouses prevented the filter bags in each baghouse from being properly cleaned. The bags were therefore not able to properly filter dust from the rotary kiln emission. This caused increased stress on the remainder of the ventilation and filtration system, and possibly impacted on the integrity of the bag seals in the Richardson baghouse. There was a failed seal and there were leaks in the bags in the Richardson baghouse. Dust was emitted through these leaks and then to the stack.

78. The practical measure that could and should have been implemented by Causmag was to have ensured that the automatic and manual pulsing systems were properly functioning and not to have restarted and operated the rotary kiln when these pulsing systems were not operational.

79. Another cause of the pollution incident was the failure of the Causmag employees to monitor and record every two hours the baghouse differential pressures. Mr Foley did observe that the differential pressure in the Richardson baghouse, at least at one point during the night, exceeded the maximum differential pressure, but he did not record the levels every two hours throughout the night as he was required to do. The differential pressure in the Luhr baghouse was noted to be elevated during the night, but how elevated and when it was elevated, and for how long it was elevated, were not recorded. Mr Gruber did not make or record any monitoring observations of the differential pressures in the baghouses. Indeed, Mr Gruber did not know where one of the differential pressure gauges was located and hence did not check it.

80. Adequate training of the kiln operators as to the location of the differential pressure gauges and the need to regularly monitor and record the baghouse differential pressure, and the actual carrying out of regular monitoring and recording of the baghouse differential pressure, were practical measures that could and should have been taken. The recording every two hours of elevated differential pressure in the baghouses above the maximum differential pressure would have alerted the kiln operators to the build-up of dust in the bags in the baghouses and, given the non-operation of the pulsing system to pulse the bags to remove the dust, of the need to shut down the kiln.

81. Another cause of the pollution incident was the failure to monitor particulate emissions from the stack from the rotary kiln. The online real time dust measurement device or particle sensor that had been fitted to the stack from the rotary kiln had not been maintained or recently recalibrated and was not operational on 24-25 September 2013. Hence, the kiln operators were not provided with real time monitoring information that would have allowed them to detect increases in the particulate emissions by reason of the problems being experienced in the operation of the rotary kiln and the baghouses.

82. The rotary kiln should not have been restarted and operated without the particle sensor on the stack from the rotary kiln being operational. Hence, another practical measure that could and should have been implemented was to have maintained, recalibrated and operated the particle sensor on the stack from the rotary kiln.

83. At the time of the offence there were no warning systems or alarms functioning to indicate to or warn the kiln operators if there were increasing particulate emissions from the stack from the rotary kiln, and also no alarm or warning system for differential pressure levels that was operational. The installation and operation of alarms to warn operators of high or low differential pressure or increasing particulate emissions from the stack from the rotary kiln was another practical measure that could and should have been implemented. The activation of such alarms could have led to the shutting down of the rotary kiln where there was no other means of reducing the high baghouse differential pressure and the increased particulate emissions from the stack.

84. Common to all of these causes of the pollution incident was the inadequate training of the kiln operators to ensure that they were aware of the systems and the procedures in place to reduce the likelihood of such incidents occurring and, if they did occur, to take prompt and appropriate action to prevent the incidents continuing (such as shutting down the kiln). A practical measure that could and should have been taken, therefore, was adequate training of the kiln operators.

Foreseeability of harm

85. Section 241(1)(c) of the POEO Act requires the sentencing court to take into consideration “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.”

86. It was clearly foreseeable that, if the practical measures that I have identified above were not taken, a pollution incident of the kind that did occur would occur and that dust would be emitted from the stack from the rotary kiln.

Control over causes

87. Section 241(1)(d) requires the sentencing court to consider “the extent to which the person who committed the offence had control over the causes that gave rise to the offence.”

88. There is no doubt that Causmag had full control over the causes of the commission of the offence.

Conclusion on objective seriousness

89. Having regard to these objective circumstances, I find that the offence is at the lower end of the range of objective seriousness for offences of this type. The more significant factors are the foreseeability of the risk of harm and the existence of practical measures that could have been taken to prevent that risk of harm. However, as events turned out, the actual environmental harm caused was low and more of a nuisance than causing actual harm to human health or the environment.

Subjective circumstances of the offender

90. The subjective circumstances of Causmag include: its record of convictions; its early plea of guilty; its genuine contrition and remorse; its good corporate character; and its assistance to the prosecutor.

Record of convictions

91. Causmag does have a record of convictions and penalty notices for offences against the POEO Act.

92. The EPA has previously prosecuted Causmag three times for dust related offences at the premises:

1. For an offence in 1992, the EPA prosecuted Causmag in Young Local Court for a dust emission from the premises in breach of s 14(3) of the Clean Air Act 1961. On 18 February 1994, Causmag was convicted, fined $3,000 and ordered to pay legal costs of $1,700 and submit to the EPA an environmental management plan to minimise dust emissions and control noise emissions and stormwater runoff.

2. For an offence in 1999, the EPA prosecuted Causmag in the Land and Environment Court for processing materials in a manner such as to cause or increase air pollution in breach of s 14(3) of the Clean Air Act 1961. This offence related to defective filter bags in the Richardson baghouse which allowed dust to leak through the seals in the bags and be emitted from the stack from the rotary kiln. Dust was deposited on cars in the yard of Harden Geelan Holden. Causmag was convicted, fined $20,000 and ordered to pay the EPA’s costs of $11,000 (Environment Protection Authority v Causmag Ore Company Pty Ltd [2000] NSWLEC 205).

3. For an offence in 2008, the EPA prosecuted Causmag in the Land and Environment Court for contravening its licence in breach of s 64 of the POEO Act. This offence related to a failure to properly maintain filter bags in the Luhr baghouse. Causmag was convicted, fined $20,000, ordered to pay $45,000 under an environmental service order, and $26,500 in costs (Environment Protection Authority v Causmag Ore Company Pty Ltd [2009] NSWLEC 164).

93. The EPA has issued Causmag with the following penalty notices for dust related offences at the premises:

1. For an offence on 28 April 2011 of failing to deal with materials in a proper and efficient manner, causing air pollution in breach of s 126 of the POEO Act. Causmag paid this penalty notice.

2. For an offence on 17 May 2012 of failing to deal with materials in a proper and efficient manner, causing air pollution in breach of s 126 of the POEO Act. Causmag paid this penalty notice.

3. For an offence in April 2013 of failing to deal with materials in a proper and efficient manner, causing air pollution in breach of s 126 of the POEO Act. Causmag paid this penalty notice.

4. For an offence on 17 April 2014 of air pollution resulting from operation of plant as a result of a failure in an air compressor for the baghouses, in breach of s 124 of the POEO Act.

94. These prior convictions and penalty notices for offences do not form part of the objective circumstances of the current offence committed by Causmag. The boundaries of a proportionate sentence are set by the objective circumstances of the particular offence for which an offender is to be sentenced, which do not encompass prior convictions: R v McNaughton [2006] NSWCCA 242; (2006) 163 A Crim R 381 at [24], [70]-[73], [76], [81]. Nevertheless, prior convictions can still legitimately be taken into account in fixing where, within the boundaries set by the objective circumstances of the offence for which an offender is being sentenced, the sentence should lie. A significant record of prior convictions can be taken into account as an aggravating factor: s 21A(2)(d) of the Crimes (Sentencing Procedure) Act 1999, (‘CSP Act’).

95. Prior criminality is relevant to show whether the latest offence is an uncharacteristic aberration or whether the offender has manifested a continuing attitude of disobedience to the law. If the latter, the sentencing purposes of retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted: Veen v The Queen (No 2) (1988) 164 CLR 465 at 477.

96. Prior convictions are also relevant to determining the weight that should be given to particular purposes of sentencing, particularly individual deterrence. Punishment may need to be increased for persistent offenders, such as by increasing the severity of the sentence (the quantum of the fine), in order to deter the individual offender from reoffending.

97. Causmag’s record of previous convictions and penalty notices for offences of a similar kind to the offence for which it is to be sentenced this time demonstrate a history of failing to adequately manage dust emissions from the factory since 1992. The causes of the air pollution do differ in each instance, but the common theme is a recurrent failure to carry out its licensed activity in a competent manner. I consider that at least the three prior convictions for offences against the former Clean Air Act 1961 and the current POEO Act are an aggravating factor. They indicate that more weight may need to be given to the purpose of individual deterrence in sentencing Causmag for the current offence.

Early plea of guilty

98. Causmag entered a plea of guilty to the offence. The first return of the summons commencing the proceedings was on 7 November 2014. The matter was adjourned by consent to 5 December 2014, on which occasion Causmag entered its plea of guilty.

98. The prosecutor accepted that this should be considered as entering a plea of guilty at the earliest opportunity. This early plea of guilty maximises the utilitarian value of the plea of guilty to the criminal justice system and Causmag is entitled to the maximum discount of 25%: see s 21A(3)(k) and s 22 of the CSP Act and R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152], [160].

Contrition and remorse

100. Genuine remorse shown by an offender for the offence is a mitigating factor, but only if the offender has provided evidence that it has accepted responsibility for its actions and the offender has acknowledged any injury, loss or damage caused by its actions or made reparation for such injury, loss or damage (or both): s 21A(3)(i) of the CSP Act.

101. The existence of genuine contrition and remorse is also relevant to the weight to be given to individual deterrence and the prospects of rehabilitation of the offender: R v Thomson at [116]. Contrition by an offender can be associated with insight by the offender into the reasons for, or factors contributing to, the offending conduct. If an offender has insight into the offending conduct, there is a reduced risk of reoffending and a reduced need for a sentence to be imposed for the purpose of individual deterrence: R v Wisbey [2001] NSWCCA 434 at [31].

102. In Environment Protection Authority v Waste Recycling and Processing Corp [2006] NSWLEC 419; (2006) 148 LGERA 299 at [203]-[214], I suggested that actions underlining genuine contrition and remorse may take at least four forms:

First, the speed and efficiency of action to rectify any harm caused or likely to continue to be caused by the commission of the offence is the clearest indication of contrition and remorse. Where it occurs it justifies a reduction in the sentence...

Secondly, voluntarily reporting the commission of the offence and any concomitant environmental harm to relevant authorities indicates a genuine desire to act responsibly. Environmental regulation depends upon the integrity of persons making full disclosure. Voluntarily reporting breaches should therefore be acknowledged as a mitigating circumstance by the courts in sentencing...

Thirdly, the taking of action to address the causes of the offence, such as designing and installing improved pollution prevention and control systems, also indicates a genuine desire to act responsibly...

Fourthly, the personal appearance of corporate executives in court and their personal evidence outlining the company’s genuine regret and stating future plans to avoid repetition of such offences is an indication of genuine corporate contrition...”

103. In this case, Causmag firstly acted promptly and efficiently to prevent harm by the emission of dust after it visually observed dust emissions from the stack shortly after 7am on 25 September 2013. Causmag shut down the rotary kiln and the dust emissions from the stack thereby ceased. An hour later, Mr Kingma turned a third air tap on for the pulse cleaning system for the Luhr baghouse. Subsequently, I understand, the air lines for manual pulsing were replaced and the card to electronically control the automatic pulsar was replaced.

104. Secondly, Causmag voluntarily reported the incident to the EPA on 25 September 2013, the day after the incident. Although there was a delay of a day, and the EPA had already been notified of the emission of dust by complaints received from neighbours, Causmag did not know that complaints had been made. The voluntary reporting by Causmag was therefore an indication of a desire by Causmag to act responsibly.

105. Thirdly, Causmag has taken steps to improve its environmental management practices at the factory and thereby reduce emissions of dust. Causmag has attempted to address the causes of the offence and avoid repetition. Mr Aditya Jhunjhunwala, the managing director of Causmag, said that since the incidents, Causmag has taken the following measures:

1. On 26 February 2014, Causmag voluntarily agreed to undertake a comprehensive, three month, internal audit of its dust emission control system. The outcome of this audit was a draft environmental improvement plan (‘EIP’) to improve the plant, equipment and procedures at the factory. The draft EIP was submitted on 17 April 2014 to the EPA for discussion, with a view to including the EIP in Causmag’s licence as a pollution reduction program (‘PRP’). The EPA reviewed the draft EIP and converted it into an appropriate format for inclusion in the licence as a PRP. The EPA submitted its draft to Causmag on 4 August 2014. After discussions between Causmag and EPA, the EIP was included in the licence as a variation of the licence on 14 August 2014. The relevant section of the licence is “7 Pollution studies and reduction programs”. By the time of the variation of the licence, Causmag had already completed about half of the specified improvements in environmental management practices. Completion of all of the practices will minimise the risk of reoccurrence of the causes of the incident.

2. Causmag carried out retraining of, and provided procedure documents in relation to the standard operating procedure for the rotary kiln and shaft kiln to, all kiln operators.

3. Causmag carried out retraining of, and provided procedure documents in relation to the standard operating procedure for the Richardson, Luhr and Micropul baghouses to, all kiln operators.

4. Causmag provided neighbours with a copy of the Causmag internal newsletter advising of Causmag’s environmental management plan, and it has encouraged residents to contact Causmag if they have any concerns with Causmag’s operation.

106. Fourthly, the directors and senior management of Causmag have personally appeared in Court and two senior managers have given evidence outlining the company’s genuine regret for the offence and stating their plans to avoid repetition of the offence. The general manager of Causmag, Mr Aditya Jhunjhunwala, gave evidence, by way of affidavit, stating:

Causmag deeply regrets the incident and has taken the above additional measures to reduce the likelihood of future pollution incidents occurring at the site.

Causmag is committed to ongoing improvements of the plant to reduce chances of any future environmental incidents occurring. We are confident that these changes will significantly improve on Causmag’s environmental performance.

…

On behalf of Causmag, I wish to communicate to the Court the company’s sincere expression of contrition and remorse concerning the breach of the Protection of the Environment Operations Act 1997 (the Act) that has resulted in this prosecution by the EPA.

Causmag recognises that, as the holder of an Environment Protection Licence, it has a duty to the public to comply strictly, and at all times, with the requirements of the Licence.

Causmag also acknowledges that because its operations have the potential to result in the emission of dust to the atmosphere, that it has an obligation to ensure that the air pollution equipment that has been installed at the Plant for the purpose of controlling air emissions is operated in a proper and efficient manner.

Causmag further accepts that because a number of businesses are located in close proximity to its Plant, that it has a particular responsibility to ensure that its air pollution control equipment is operated in a proper and efficient manner, in order to prevent the risk of dust being emitted from the stack serving its kilns from being deposited on surrounding businesses and causing pollution and nuisance.

Causmag admits full responsibility for breaching the conditions of its Environment Protection Licence by failing to carry out the licensed metallurgical activities in a competent manner, in relation to the pollution control equipment to the rotary kiln.

Causmag expresses its sincere apology to the Court, to the EPA, and to the community of Young for having committed an offence against the Act.

107. In addition to Mr Jhunjhunwala, two other directors of the company attended the sentence hearing, Mr S K Jhunjhunwala and Mr H K Agrawala. Both of these directors flew from India to be present in court. Causmag’s senior finance and administration manager, Mr Bipin Pandey, also gave evidence about the company’s finances and attended the sentence hearing.

108. Causmag has also accepted responsibility to pay the EPA’s legal costs of bringing the prosecution (in the agreed sum of $30,000) and costs and expenses of investigation of the offence (in the agreed sum of $3,220).

109. Together, these actions indicate genuine contrition and remorse of Causmag for the offence and its consequences. They also indicate that Causmag has insight into the causes or factors contributing to the offending conduct and has taken, and is taking, meaningful action to address these causes and factors. If Causmag continues to take such action, the likelihood of Causmag reoffending is reduced: see s 21A(3)(g) of the CSP Act. This would indicate that less weight needs to be given to individual deterrence in sentencing Causmag for the current offence.

Good corporate character

110. Causmag is of good corporate character: s 21A(3)(f) of the CSP Act. Mr Jhunjhunwala said that Causmag has, and will continue, to provide significant contributions to the Young Shire community. These contributions include:

a.   Employment of 34 staff totalling a spending of $1.92 million in annual wages [employed by both Causmag and Young Mining]. Young Shire Council estimated our contribution to the economy of Young at $3.25 million per year.

b.   Donations of $65,795 to charity and philanthropic organisations in the period 2010-2014, comprising 5.66% of the net profit earned by Causmag in this period. The same has been done anonymously and no favours or publicity have been accepted or solicited.

111. The mayor of Young Shire Council wrote a letter of reference for Causmag, confirming the importance of Causmag and the significant contribution to the economy of Young that Causmag makes.

Assistance to authorities

112. Causmag has cooperated with the EPA in the investigation and prosecution of the offence. Causmag voluntarily reported the incident, made its employees available for interviews to assist in the investigation of the offence, and agreed a comprehensive statement of facts (although the latter took some time). Such assistance to law enforcement authorities is a mitigating factor: s 21A(3)(m) and s 23 of the CSP Act.

Appropriate penalty

113. I take into account the objective seriousness of the offence, as mitigated by the subjective circumstances of Causmag, as I have outlined above.

114. I take into account the purposes of sentencing in s 3A of the CSP Act. The purposes of punishment, retribution and denunciation are relevant. There is a need for the Court, through the sentence it imposes, to ensure that Causmag is adequately punished for the offence, to hold it accountable for its actions, and to denounce the conduct of Causmag in proportion to the seriousness of the offence.

115. The sentence also needs to act as a deterrent, both to Causmag to prevent it from reoffending and to other persons to prevent them from committing similar offences.

116. For individual deterrence, there are factors that indicate that both more weight and less weight should be given to individual deterrence in sentencing Causmag for the offence. Causmag’s history of prior offending caused by inadequately controlling dust emissions from the factory indicates that greater weight needs to be given in sentencing Causmag for the current offence. If the sentences and penalties imposed for prior offences have not had the desired effect of deterring Causmag from reoffending, the sentence for the current offence may need to be increased (although staying within the boundary of a sentence that is proportionate to the objective seriousness of the current offence) in order to deter Causmag from reoffending. On the other hand, Causmag has shown genuine remorse for the offence, has insight into the offending conduct, and has taken steps to improve its environmental management of the factory. These indicate that Causmag is less likely to reoffend.

117. I consider that these contra indicators roughly balance each other, but some weight should still be given to the purpose of individual deterrence in sentencing Causmag for the current offence. The penalty imposed needs to remind Causmag of the need to continue to implement the improvements to the environmental management of the factory and to conscientiously comply with all requirements of its licence.

118. There is also a need for general deterrence. The sentence of the Court needs to operate as a general deterrent to prevent the commission of similar offences by other persons carrying on licensed activities who might be tempted to do so by the prospect that, if they are caught, only light punishment will be imposed. This factor is particularly relevant when imposing sentences for environmental offences of carrying out licensed activities without, or not in accordance with, an environment protection licence. The sentence should be of such a magnitude as to make it economically worthwhile to obtain and to comply with the licence, including incurring the cost of preventing pollution: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359-360 and Environment Protection Authority v Waste Recycling and Processing Corp at [229].

119. The EPA and Causmag have agreed that a publication order should be made under s 250(1)(a) of the POEO Act and have agreed on the terms of the publication order. I agree that a publication order should be made. Publicising sentences for environmental offences improves the effectiveness of sentences as a deterrent. This is particularly applicable to corporate offenders, who are susceptible to criminal stigma. It deters both the individual offender as well as other persons from committing offences of the kind publicised in the notice.

120. I have had regard to the sentences imposed by this Court in other cases involving breaches of an environment protection licence by corporate offenders, to which the parties have drawn my attention. I have considered the sentences imposed and the objective and subjective circumstances of the offences and offenders involved that led the sentencing court to impose those particular sentences. These cases include Environment Protection Authority v Orica Australia Pty Ltd (The Nitric Acid Air Lift Incident) [2014] NSWLEC 103; (2014) 206 LGERA 239 and the cases considered therein. I have also had regard to the sentences imposed on Causmag for prior offences, including the most recent sentence in Environment Protection Authority v Causmag Ore Company Pty Ltd [2009] NSWLEC 164 (where a fine and an additional order totalling $65,000 and legal costs of $26,500 were imposed).

121. The sentence I consider appropriate, having regard to the relevant objective and subjective circumstances and the purposes of sentencing, to be imposed on Causmag for this offence is not inconsistent with the sentences imposed in similar cases that provide a check or yardstick: RCW v R (No 2) [2014] NSWCCA 190 at [48].

122. In fixing the amount of the fine that should be imposed, the Court is required to consider the financial means of the offender to pay a fine, from such information as is reasonably and practicably available to the Court: s 6 of the Fines Act 1966. If the Court is satisfied that the offender would be unable to pay the amount of the fine determined by the Court to be otherwise appropriate, the Court may reduce the amount of the fine to take account of the offender’s means and impecuniosity: R v Rahme (1989) 43 A Crim R 81 at 87.

123. The fine may be only part of the penalty imposed on an offender. Consideration can also be given to other monetary amounts the offender may be ordered to pay, including the prosecutor’s legal costs of the proceedings and investigation costs: Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78]-[88]. In this case, Causmag will be ordered to pay to the EPA $30,000 in legal costs and $3,220 in investigation costs.

124. Causmag adduced evidence from Mr Jhunjhunwala and Mr Pandey of Causmag’s financial position. Mr Jhunjhunwala said that the equipment at the factory needs replacing to improve production output and environmental performance. Causmag has endeavoured to obtain finance to do so, but to date has been unsuccessful. One factor inhibiting financiers lending to Causmag has been the current prosecution against Causmag for breach of its licence. However, the resolution of this prosecution may remove this inhibiting factor.

125. Mr Pandey confirmed that two of the factors contributing to Causmag’s current financial difficulties are that the current equipment does not give sufficient output and the non-availability of finance to upgrade the equipment. Mr Pandey added two more factors: competition for Causmag’s product from low cost magnesia imported from China and unfavourable exchange rates which makes Causmag’s products expensive for overseas buyers.

126. Mr Pandey also explained that Causmag is required by its holding company, Orind, to fully meet all of the expenses of Young Mining in mining the raw magnesite as well as the fixed and variable costs of Orind. Mr Pandey noted that the current equipment of Young Mining also needs replacing and does not give sufficient output. Causmag would be required to meet the expenses of upgrading the equipment of Young Mining. Causmag’s financial difficulties are contributed to, therefore, by being required to pay the significant expenses of other corporate entities in the Orind group of companies.

127. Mr Pandey provided some financial statements for the financial years of 2010 to 2014. However, their evidentiary value was diminished by the fact that they were consolidated statements for the Orind group of companies (including Orind, Young Mining and Causmag), they were unaudited, and by the fact that the expenses of Causmag were elevated by reason of it being required to meet the expenses of Young Mining and the fixed and variable costs of Orind. For example, all of the expenses for “repair and maintenance - environmental” for the Orind group of companies is booked to the account of Causmag.

128. The provisional statement of financial position as at 31 December 2014 (the balance sheet) for Orind and its controlled entities also contained manifest errors. The column for Causmag’s non-current assets was evidently missing some non-current assets as the entries did not add up to the sub total of non-current assets given. The balance sheet also revealed that all loans and borrowings for Orind, Young Mining and Causmag (some $4 million) had been booked to the account of Causmag only.

129. Such corporate group accounting practices make it difficult for the Court to ascertain the true financial position of Causmag alone, uninfluenced by the decisions of Orind to burden Causmag with the expenses and loans of other entities in the Orind group.

130. The evidence of Mr Jhunjhunwala and Mr Pandey did not definitively establish that Causmag would be unable to pay a fine in any particular amount. At most, they expressed concern that Causmag might have some financial difficulties in paying a “substantial” fine, but what they consider to be a substantial fine was not explained.

131. I note that Causmag advanced the same concern about its financial position and incapacity to pay a substantial fine the last time that it was sentenced by this Court for an offence. Mr Pandey also gave evidence of Causmag’s financial position: see Environment Protection Authority v Causmag Ore Company Pty Ltd [2009] NSWLEC 164 at [21], [67]. The Court on that occasion did take into account the financial circumstances of Causmag in fixing the amount of the penalties imposed: at [69]. The Court fined Causmag $20,000 and ordered Causmag to pay an additional penalty under s 250(1)(e) of the POEO Act of $45,000, giving a total penalty of $65,000. In addition, Causmag was ordered to pay $26,500 in costs. Causmag did not adduce any evidence in these proceedings that it had had financial difficulties in paying these penalties and costs.

113. I consider that the evidence available to the Court about Causmag’s financial position is insufficient to justify reducing the amount of the fine that I consider is otherwise appropriate to impose, on account of Causmag’s financial circumstances. Causmag’s financial position may well be improved by Orind and Young Mining making less financial demands on Causmag or advancing funds to it.

114. Synthesising all of the relevant objective and subjective circumstances of the offence and this offender, and considering the purposes of sentencing, I consider that an appropriate fine is $110,000. This fine should be discounted by 25% for the utilitarian value of the plea of guilty. This amounts to $82,500.

115. In addition, Causmag should be ordered, under s 250(1)(a) of the POEO Act, to publicise the offence (including the circumstances of the offence) and the fine imposed and other orders made against it. The parties have agreed on the terms of the publication order that should be published in the appropriate local newspaper.

116. Causmag should be ordered under s 248(1) of the POEO Act, to pay the costs and expenses of the EPA incurred during the investigation of the offence, in the agreed amount of $3,220.

117. Finally, Causmag should be ordered, under s 257B of the Criminal Procedure Act 1986, to pay the EPA’s costs in the agreed amount of $30,000.

Orders

137. I make the following orders:

1. The defendant is convicted of the offence as charged.

2. The defendant is fined $82,500.

3. The defendant, pursuant to s 257B of the Criminal Procedure Act 1986, is to pay the prosecutor’s costs of the proceedings in the amount of $30,000.

4. The defendant, pursuant to s 248(1) of the Protection of the Environment Operations Act 1997, is to pay the prosecutor’s costs and expenses of investigation of the offence in the amount of $3,220.

5. The defendant, at its expense and pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997, must:

1. within 28 days of the date of this order, cause a notice in the form of Annexure ‘A’ to be placed within the first 5 pages of the Young Witness at a minimum size of 15 cm by 7.2 cm; and

2. within 35 days of the date of this order, provide to the prosecutor a complete copy of the page of the Young Witness on which the notice    appears.

138. Annexure ‘A’ will read as follows:

Causmag Ore Company Proprietary Limited convicted of breaching Environment Protection Licence.

On 24 March 2015, the Land and Environment Court of New South Wales found Causmag Ore Company Proprietary Limited (ACN 004 301 517) (“Causmag”) guilty of an offence under the Protection of the Environment Operations Act 1997, in that it contravened a condition of its environment protection licence by failing to carry out its licensed activities in a competent manner.

The offence occurred on 25 September 2013, when white dust was emitted from Causmag’s magnesia factory in Young. The emission resulted from Causmag’s failure to ensure that its pollution control equipment was properly functioning and its failure to adequately monitor and respond to conditions in the factory.

Causmag pleaded guilty to the charge.

On 24 March 2015, Causmag was convicted and ordered by the Land and Environment Court to:

1.   pay a fine of $82,500

2.   pay the prosecutor’s costs of $30,000

3.   pay the prosecutor’s investigation costs of $3,220; and

4.   place this publication notice (paid for by Causmag).

Causmag has previously been convicted of offences involving dust emissions from its Young factory in 1992, 1999 and 2008.

Causmag was prosecuted by the NSW Environment Protection Authority (EPA).

**********

Amendments

16 April 2015 - Addition to Catchwords. The word 'not' inserted into "emission of dust clearly foreseeable if practical measures not taken".

Decision last updated: 16 April 2015