Environment Protection Authority v Centennial Newstan Pty Ltd
[2010] NSWLEC 211
•25 October 2010
NEW SOUTH WALES LAND AND ENVIRONMENT COURT
CITATION:
Environment Protection Authority v Centennial Newstan Pty Ltd [2010] NSWLEC 211
PARTIES:
PROSECUTOR
Environmental Protection Authority
DEFENDANT
Centennial Newstan Pty Ltd
FILE NUMBER(S):
50039 of 2009
CATCHWORDS:
ENVIRONMENTAL OFFENCES :- sentence – factors to be taken into account on sentencing – pollute waters – discharge over five days of sediment-laden waters from pipeline leading from underground coal mining site into creek – prior conviction for similar offence – early plea of guilty – general and specific deterrence – appropriate to make alternative order in lieu of fine – order to pay specified amount for purposes of local ecosystem enhancement program – publication order
LEGISLATION CITED:
Crimes (Sentencing Procedure) Act 1999 s 3A, 21A, s 23
Protection of the Environment Operations Act 1997 s 3, s 120, s 241, s 248(1), s 250
Threatened Species Conservation Act 1995
CASES CITED:
Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357
Baumer v The Queen [1988] HCA 67; (1988) 166 CLR 51
Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234
Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683
Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280; (2008) 163 LGERA 71
Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268; (2008) 163 LGERA 345
Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732
Environmental Protection Authority v Snowy Hydro [2008] NSWLEC 264; (2008) 162 LGERA 273
Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299
Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357
R v McNaughton (2006) 66 NSWLR 566
R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383
Veen v The Queen (No.1) [1979] HCA 7; (1979) 143 CLR 458
Veen v The Queen (No. 2) (1988) 164 CLR 465
CORAM:
Craig J
DATES OF HEARING:
5 May 2010
JUDGMENT DATE:
25 October 2010
LEGAL REPRESENTATIVES
PROSECUTOR
G B Furness (Barrister)
SOLICITORS
Gordon Plath, Department of Environment, Climate Change and Water
DEFENDANT
N J Williams SC
SOLICITORS
Blake Dawson
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALESCRAIG J
25 October 2010
50039 of 2009 Environment Protection Authority v Centennial Newstan Pty Ltd
JUDGMENT
HIS HONOUR: The Newstan Colliery at Fassifern, south of Newcastle, is a colliery of some antiquity. Underground coalmining has been undertaken at the Newstan mine since 1887. Under its present stewardship, mining has ceased but that only occurred in April 2009.
In August 2008, longwall mining at Newstan was proceeding. It was then that an incident occurred, resulting in the pollution of an unnamed creek, the waters of which ultimately flow into Lake Macquarie.
The defendant, Centennial Newstan Pty Ltd, is presently, and was at the time of the incident, the owner and operator of the Newstan Colliery. It has pleaded guilty to an offence against s 120(1) of the Protection of the Environment Operations Act 1997 (the POEO Act) in that between 18 August 2008 and 22 August 2008 it polluted waters, namely the unnamed creek to which I have referred. A hearing on sentence having been held, it is now necessary to determine the appropriate penalty for the offence.
Section 120 of the POEO Act provides:
“120 Prohibition of pollution of waters
(1)A person who pollutes any waters is guilty of an offence.
(2) In this section:
pollute waters includes cause or permit any waters to be polluted.”
Operation of the Newstan Colliery until 2002
For many years the Newstan colliery was operated by instrumentalities of the State. For present purposes, it is only necessary to refer to the fact that in 1993 the State owned corporation to which the colliery was transferred was Powercoal Pty Ltd (Powercoal). At that time, Powercoal held all of the State’s coal mining assets. While underground mining was the source of coal supplied from the Newstan Colliery, surface infrastructure supported the operation of a number of facilities. These included a coal handling plant, a coal washery, several tailings and water management storage facilities, together with a haul road and bi-directional rail loop.
In 1976 the operation of the Newstan Colliery was conducted by a statutory predecessor to Powercoal, namely Elcom Collieries Pty Ltd (Elcom). The latter corporation had become aware of water seeping from an adit to former mine workings into a nearby residential area known as Blackalls Park. That seepage was occasioning nuisance to residents in that area. In order to alleviate the nuisance, Elcom embarked upon the task of constructing a pipeline (“the Pipeline”) in a subsidence crack above a coal seam so as to capture water that would otherwise migrate towards the adit and divert it to an unnamed creek which was an upstream tributary of a creek known as Stony Creek. The task of Pipeline construction was completed in 1976. The unnamed creek is that referred to in the present charge.
The installation of the Pipeline involved significant civil engineering works. It was installed at depth and was buried, except for its outlet which passed through a headwall constructed close to the bed of the unnamed creek.
At its upper or inner end where it is located to capture groundwater, the invert of the Pipeline is 16.6 metres below ground surface. At this depth the Pipeline is inaccessible for all practical purposes. Located near to its inner end is a pump. That pump has the capacity to control the groundwater level relative to the invert of the Pipeline by pumping groundwater to a dam or dams on the surface.
Until 1996, coal tailings from the coal washing plant were directed to a tailings dam or dams located on the mine site. As the volume of these tailings increased, so the area required for tailings disposal also increased. Recognising the need to limit the area required for further tailings disposal, Powercoal developed a plan that would avoid the need for this ever-increasing surface area.
It proposed to disposal of tailings and mine water through bore holes leading to old underground workings in a disused coal seam. The area of intended disposal was hydraulically connected to the area in which the inlet to the Pipeline was located.
Powercoal subjected its proposal to risk assessment prior to implementation. In a report prepared in April 1996, the displacement of existing water within the mine workings by the increased volume of water and tailings proposed to be deposited in those workings was recognised. So also was the possibility that this displacement would result in discharge into Stony Creek through the Pipeline. Having recognised that possibility, the report continued -
“Due to the distance and unknown condition of underground roadways, residence time of the tailings and water from the bores is unknown, however given the nature of tailings flow, storage area and distance it is unlikely that these flows will directly reach the discharge point. However the displacement of water in the workings may occur. Generally flow from this point only occurs in exceptional and extended rain events. As this is the only point the water can discharge from the workings a weekly inspection to determine, flow, pH, conductivity and NFR will be undertaken. Monitoring these parameters will enable determination of any change in the water flow or quality.”
Powercoal implemented its tailings disposal proposal in 1997. Tailings in the form of a slurry with a 30 percent solids content were directed through two bore holes into the old mine working areas. It seems that the monitoring recommended in the risk assessment report was undertaken for a time but ceased in 1998 following reports that “only clean water” was discharged via the Pipeline into the unnamed creek above Stony Creek.
Subsequently, Powercoal proposed to extend underground coal mining at the Newstan Colliery and to upgrade surface facilities. For this purpose it sought development consent from the Minister. As it was required to do, it prepared an environmental impact statement (the EIS) in support of its application. The process of discharging coal tailings slurry underground and its consequence for discharge from the Pipeline was identified and discussed in that document. It states (at p 3.24):
“Mine and slurry water pumped underground will eventually build up and discharge from the seam outcrop at a constructed discharge point in the catchment of Stony Creek. The length of flow path, the undulating bed profile of the old mine workings and the extensive storage time, will prevent discharge of suspended material or other contaminants. Regular monitoring of discharges from the constructed discharge point is undertaken (refer to section 5.3).”
Notwithstanding the reference to section 5.3 of the EIS in that passage, it is accepted by the parties that section 5.3 refers neither to the Pipeline discharge point nor to any monitoring having taken place at that discharge point.
On 14 May 1999, the Minister granted conditional development consent to Powercoal for the Newstan Life Extension Area Project (the LEA development consent). Condition 4.1(a) of the consent required that before commencing construction of any new surface facilities, Powercoal was required to prepare a water management plan in consultation with nominated government agencies, including the prosecutor, and to do so to the satisfaction of the Director-General of the then Department of Urban Affairs and Planning. A plan prepared in apparent conformity with that condition was provided to the Director-General in November 1999. It is not suggested that the water management plan then submitted did not meet the requirement for “satisfaction of the Director-General”.
Neither condition 4.1 of the LEA development consent nor any other condition of that consent required that a water management plan include reference to the Pipeline or the monitoring of discharges from it at the unnamed creek. Moreover, the water management plan prepared by Powercoal in apparent compliance with the development consent contained no such consideration.
As I have earlier indicated, monitoring occurred in the unnamed creek at the discharge point from the Pipeline between October 1996 and July 1998. This involved weekly monitoring but apparently with no record of any “dirty water” discharge during that time. Indeed, the evidence reveals that there is no recorded instance of dirty water discharging from the Pipeline into the unnamed creek from 1976, when the Pipeline was installed, until the incident which gave rise to the present charge against the defendant. This is the case notwithstanding the existence of records demonstrating that ground water within the mine workings rose above the level of the invert of the Pipeline on many occasions following its installation.
Operation of Newstan Colliery: post 2002
The defendant is a subsidiary company of Centennial Coal Company Limited (Centennial Coal). In 2002 Centennial Coal acquired all of the assets of Powercoal when the NSW Government submitted Powercoal’s assets for sale by tender. The assets acquired by Centennial Coal included the Newstan Colliery. The defendant was the corporate vehicle identified by Centennial Coal to operate the newly acquired Colliery.
Following acquisition in 2002, the defendant continued the tailings and water management practices for the Newstan Colliery that had been adopted by Powercoal. Those practices included the storage of tailings and mine water in the old underground mine workings; the monitoring of the underground water level via the bores located in the seam hydraulically connected to the Pipeline inlet, and otherwise implementing the 1999 water management plan that had been prepared in accordance with the LEA development consent.
It was not until 2007 that the defendant ceased the underground disposal of tailings into the old mine workings. Instead, it developed a surface storage facility which involved the retention of solids at the surface and the pumping of decanted water from those solids into the underground mine workings. This facility was developed and constructed by the defendant at a cost of $7.35M.
At the time of mine acquisition in 2002, Powercoal held Environment Protection Licence 395 (EPL 395) issued under the provisions of the POEO Act. EPL 395 was transferred to the defendant following acquisition. It was required to be held because the activities carried out at the Newstan Colliery are “scheduled activities” within the meaning of the POEO Act, involving the operation of coal mines, coal works and waste facilities/coal wash landfill.
By notice given to it in February 2008, the defendant was required by the prosecutor to prepare and submit by 30 June in that year a revised water management plan. The requirement for that plan included the following:
“b) A revised water balance and water storage plan for both the northern and southern sectors of the premises that has the following objectives;
i)Minimising all water discharges from the premises at any time by efficient water management methods, such as maximising all opportunities for on-site water use, spray irrigation and water storage;
ii)Minimising all discharges of ‘dirty water’ from the premises at any time;
iii)Ensuring that activities undertaken by the mine do not pollute waters.
…
The EPA will use the information in the RWMP to further revise the water discharge and monitoring conditions in the licence.”
In compliance with that requirement, the defendant submitted a revised water management plan to the prosecutor on 30 June 2008. That plan made no reference to the Pipeline or the monitoring of water at its discharge point.
While the underground intake point of the Pipeline is within the area covered by EPL 395, the discharge point is not. It has not been a licensed discharge point under any environment protection licence.
From the time of acquiring the Newstan Colliery, the defendant embarked upon a process of site and process improvement. Prior to the incident giving rise to the present offence, it had commenced expanding existing sediment dams as well as improving pumping infrastructure in order to reduce the likelihood of discharge from those dams. In addition, it had undertaken the works previously mentioned of establishing new facilities for the above ground storage of coal fines. Not only did that involve the establishment of storage facilities, as such, but also facilities enabling the separation of solids from water in slurry, thereby reducing the volume of material pumped for underground storage or disposal. Surface water management structures were also established.
On 19 April 2009, longwall mining at the Newstan Colliery ceased. In the following month, the colliery was placed on a care and maintenance regime.
The pollution incident
At about 8:30 am on 18 August 2008, an employee of the defendant reported that dirty water was flowing in the unnamed creek or tributary of Stony Creek. That dirty water was observed to be flowing from the discharge point of the Pipeline into the creek. The discharge of dirty water continued until the afternoon of 22 August 2008.
The plume of dirty water was observed on 18 August to extend for a distance of between 800 and 900 metres downstream from the Pipeline discharge point. The water was dark grey to black in colour, the depth of that colour becoming less as the plume extended downstream. Over the ensuing days the discolouration receded upstream, with the water gradually becoming grey and then brown as the sediments settled within the creek.
Although accurate calculation of the volume of material discharged is not possible, the defendant accepts that over the period from 18 to 22 August, somewhere between 1.4 megalitres and 1.8 megalitres of sediment-laden water discharged from the Pipeline into the creek. It is also estimated and accepted by the defendant that somewhere between 6 tonnes and 14.6 tonnes of sediment were contained within the water that was discharged.
At the point at which the Pipeline discharged to the unnamed creek, the creek was approximately 3 metres wide. About 20 metres downstream, the creek broadened into a wetland area of about 2 hectares. This area contained a vegetation community identified as Swamp Sclerophyll Forest on Coastal Floodplains which is an endangered ecological community within the meaning of the Threatened Species Conservation Act 1995. The dark grey to black plume within the creek extended into and through this wetland area. Beyond the wetland the sediment-laden waters were observed to extend to the confluence of the unnamed creek with Stony Creek and for a further distance downstream of that point.
It is accepted by the parties that, in time, most of the particulate matter discharged from the Pipeline settled from the water body within the 20 metre section of the creek below the discharge point and in the wetland area. These two elements of the creek acted as a trap for the bulk of that material. The consequence was that in the 20 metre section of creek below the discharge point, sediments of up to 40 centimetres in depth were measured while in the wetland area the depth of settled sediment was between 5 and 20 centimetres.
As would be apparent, discharge from the Pipeline into the unnamed creek occurred because the level of groundwater within the old mine workings rose above the invert level of the Pipeline. However, the cause of the sediment content carried by that water is not known. The defendant suggests and the prosecutor accepts that it may have occurred by reason of “a geological event” that occurred in the underground workings at the colliery. One such event posited by the defendant is the collapse of a roof or pillar in the old mine workings, resulting in coal particles becoming suspended in the groundwater. Monitoring records kept by the defendant show that the groundwater level had been above the invert level of the Pipeline since February 2008.
Response to the incident
Upon discovery of the dirty water discharge into the unnamed creek, the defendant’s response was both immediate and, as the prosecutor accepts, appropriate. The defendant immediately commenced water quality monitoring at a location upstream of the discharge point and also at two locations downstream of that point. Having assessed that the source of dirty water was at the inlet to the Pipeline, pumping of decant tailings water into the underground workings ceased and measurement of underground water levels was undertaken. As a result of these measurements, the nearby pump was operated in an endeavour to lower the level of groundwater in the old mine workings. This pump was operated at its maximum rate of 288,000 litres per hour.
Shortly prior to midday on 18 August, a senior environmental officer in the employ of the defendant notified the prosecutor of the incident. Later that same day the Department of Primary Industries was notified for the purpose of arranging a meeting between officers of that Department and employees of the defendant to discuss measures appropriate to address remedial action.
On 19 August, employees of the defendant met with officers of both the prosecutor and the Department of Primary Industries. Together they made inspections along the unnamed creek from the Pipeline discharge point down to the confluence of the creek with Stony Creek and beyond in order to observe the extent of the pollutant plume. Discussion was also had with those officers as to the most appropriate means of managing and ultimately abating the discharge.
On 20 August 2008, the defendant sought expert assistance from GHD, consulting engineers, to formulate mitigation and clean-up strategies. That initial consultation was followed by a visit to the site by experts from that organisation where strategies were formulated and those strategies discussed with officers of the prosecutor. Equipment necessary to implement those strategies was identified and on 21 August both mitigation and clean-up works commenced. These involved the construction of a temporary weir, installation of sediment fences and the use of a “sucker truck” to remove dirty water. Some 82 local residents were also advised by letterbox drop of what had occurred and of the measures being taken to address the problem. The local government authority responsible for the area, namely Lake Macquarie City Council, was similarly advised.
As I have earlier indicated, discharge of dirty water from the Pipeline continued until 22 August. The defendant proceeded with mitigatory, clean-up and rehabilitation works until 21 November 2008. During this time, local residents, Lake Macquarie City Council and the prosecutor were kept abreast of progress. Following an inspection of the area by officers of the prosecutor on 25 November 2008, the defendant was advised that both clean-up and rehabilitation works had been satisfactorily undertaken, with the result that no further work was required. A final letter box drop to local residents in January 2009 confirmed that work was complete.
Observations and measurements
When the unnamed creek was inspected on 19 August by Hamish Rutherford, an officer of the prosecutor, he observed that in the vicinity of the Pipeline discharge point the sediment-laden water was black-grey in colour and had an appearance consistent with suspended coal fines. The dark grey to black turbid plume then observed by Mr Rutherford extended approximately 5 metres upstream of the discharge point as well as a considerable distance downstream. About 5 metres downstream from the discharge point Mr Rutherford placed his hand into the waters of the creek and upon removal observed that his hand was covered in fine black sludge. Near to the edge of the creek he was able to feel a layer of fine sludge on the creek bed which, when scooped to the surface, showed it to be a fine black sludge similar to the material suspended in the waters of the creek.
Mr Rutherford returned to inspect the creek on 21 August. Observation of the creek proximate to the discharge point of the Pipeline revealed a plume of similar colour to that which had been observed on 19 August although of a slightly lighter shade. It was also observed that the water level in the creek had reduced by between 5 and 10 centimetres, leaving a thin layer of black sludge material on the creek bank.
When Mr Rutherford returned on 25 August he observed that the waters of the creek in the vicinity of and downstream of the discharge point appeared to be relatively free of turbidity, unlike the position that pertained on his prior visits. He was able to observe the bed of the creek and noted that a black sediment had settled over it.
In the period during which the discharge from the Pipeline into the creek was closely observed, a number of water samples were taken both by the defendant and by the prosecutor. These samples were subjected to laboratory testing and the results made known by each party to the other. There is no issue between the parties as to these results.
Relevantly, the defendant sampled water in the creek upstream of the discharge point as well as a short distance downstream from that point on each of 18, 19 and 20 August. The prosecutor sampled at about the same points on 19 December. As would be apparent, the upstream point was selected to provide background levels in the creek, unaffected by the discharge from the Pipeline. Among the measurements to which each sample was subjected were measurements for both total suspended solids (TSS) and turbidity (expressed as NTU). A table reflecting the results for those analytes appears below -
Analyte Site Newstan
18 - 20 Aug 08
DECC
19 Aug 08
Range Median TSS
(mg/L)
Upstream 16 - 150 19 16 Discharge
location /5m
downstream
414 - 6000 922 850 Turbidity Upstream 20 - 81 23 26 (NTU) Discharge
location /5m
downstream
315 - 3990 774 750
It is to be observed that if the median figure from the defendant’s analysis is compared to the results of the prosecutor’s analysis, there is no difference of significance between them. In fact, for two of the three measurements downstream of the discharge point the median figure of the defendant is higher than that analysed by the prosecutor. The range of measurements from the defendant’s analysis is also of importance.
The impact of the pollutant
The impact which the pollutant had upon the environment is the subject of evidence by Paul Rendell, a senior environmental scientist employed by the prosecutor. His evidence is not challenged by the defendant. Mr Rendell visited the site of the incident on 21 August 2008 in company with Mr Rutherford. It will be remembered that at this time discharge from the Pipeline was still taking place. Following that visit and at the request of the prosecutor, Mr Rendell prepared a report which is the source of the evidence that I am about to recount.
With the benefit of his site inspection, involving both the unnamed creek and Stony Creek at and below the confluence of the two creeks, Mr Rendell observes:
“17.Based on the general appearance of the two creeks, the intact nature of the riparian vegetation and the amount of bushland in the catchment, I would expect a creek system of this sort, in the absence of an incident such as this, to support a variety of freshwater aquatic organisms, in particular aquatic invertebrates. Aquatic invertebrates are all animals without backbones. They include insects, crustaceans, molluscs and worms. Some are too small to be visible to the naked eye.”
Some qualification to the generality of this statement later appears in his report when he states:
“40.From a more general perspective there are dirt roads and tracks in the area that are likely to contribute pulses of milky or brown coloured turbid water to the creek during and immediately after wet weather at places both upstream and downstream of the discharge point. This may mean organisms that are particularly sensitive to pulses of suspended particulate matter are uncommon or no longer occur, at least in some sections of the Creek. However, I would still expect a variety of aquatic organisms to be present.”
Again, with the benefit of the site inspection during the occurrence of the polluting event, Mr Rendell observed that the “pool” or stretch of creek immediately downstream of the discharge point, together with the wetland area, acted as traps for the particulate matter. This had the consequence that the bulk of that matter would have settled out of the water body within those two areas.
Mr Rendell was provided with the water sample test results. These results extended both to chemical as well as physical analysis. Having considered these results in the context of his site visit, he expressed the opinion that the principal environmental concern with the pollution incident was “associated with the physical as opposed to chemical properties of the particulate matter.” He indicated that from a chemical perspective the water and particulate matter that had been discharged “were essentially benign.”
Mr Rendell next addressed the capacity of suspended particulate matter to cause environmental harm. In his report he wrote:
“25. Water with a large amount of suspended particulate matter has a cloudy or turbid appearance and has potential to cause environmental harm. The harm may occur either as a result of the solids being in suspension or the solids subsequently settling out on the bottom of the water body.
26.When in suspension, particulate matter may cause harm in a range of ways including:
• Clogging of feeding apparatus
• Impairment of respiration
•Reduction in the supply or quality of food available to organisms, for example, by causing a lower density of prey items or causing organic food material to be coated or contaminated with inorganic/mineral matter
•Changes in behaviour, for example, leading to departure/avoidance of the affected part of the water course by some organisms
• Reduction in light penetration resulting in reduced growth of algae and large aquatic plants.
27.Waters with a high level of solids in suspension also have a reduced aesthetic value.
28.When the solid matter settles out on surfaces, including the beds of waterways, harm may be caused by the smothering of aquatic organisms and/or their habitats and food sources.”
The total suspended solids and turbidity levels that are summarised in the table to [42] above were next addressed by Mr Rendell. He said:
“37.In my opinion, the TSS and Turbidity levels reported above for the discharge location and 5 metres downstream, are high and have potential to cause environmental harm of the sort described above at paragraphs 26 – 27
…
43.In my opinion, the depths of particulate matter deposited upstream of the causeway in the pool and wetland were significant and have potential to smother food sources, habitat and aquatic organisms not readily able to avoid or escape from accumulated particulate matter.”
His overall conclusion was expressed as follows:
“45.In my opinion, adverse effects of the sort described in paragraphs 26, 28 and 43 on aquatic organisms were likely in the Creek for a distance of about 200 to 300 metres downstream of the discharge, that is, from the discharge point down almost as far as the causeway. This opinion is based on the levels of suspended particulate matter found in the vicinity of the discharge point and the amounts of settled particulate matter found in the pool downstream of the discharge and in the wetland.”
No opinion was expressed as to the likely time for recovery from the polluting incident. However, Mr Rendell did express an opinion as to when recovery is likely to have commenced. In that regard he said:
“47.In the wetland, which was not subject to remedial action, I would expect recovery to have commenced soon after the discharge ceased. This would occur as leaf litter and organic material accumulated and as re-colonisation took place. Similarly, in the pool downstream of the discharge, I would expect recovery to have commenced soon after remediation was complete.”
Reference in the last quoted paragraph to “remedial action” and “remediation” requires brief explanation. Action taken by the defendant included not only the use of a “sucker truck” to remove dirty water from the creek but also involved the vacuum extraction of sediment from the edge and bed of the creek, at least in that section of it both upstream and downstream of the discharge point through to the wetland. However, no such cleaning of sediments from the wetland was undertaken as it was considered that action of that kind had the potential to occasion more harm than the deposition of the sediments had occasioned. The decision to refrain from taking remedial action of that kind in the wetland area was a decision supported by the prosecutor.
The defendant’s evidence
Apart from the defendant’s participation in the preparation of the Statement of Agreed Facts tendered at the hearing and upon which I have based the recitation and findings of fact that I have made, the defendant also relied upon the affidavit evidence of Ms Donna Dryden who was employed by Centennial Coal in the position of General Manager, Environment and Sustainable Development. After detailing a brief history of coal mining at the Newstan colliery, the history and purpose of installation of the Pipeline, the acquisition of coalmining assets of Powercoal by Centennial Coal and the circumstances surrounding the pollution incident which commenced on 18 August 2008, Ms Dryden deposed to a number of matters relevant to the defendant’s conduct, as it bears upon the penalty to be imposed upon it. For present purposes, those matters may be summarised as follows:
(i)aside from consultant’s fees paid to GHD, the defendant expended approximately $250,000 on clean-up and rehabilitation between 18 August 2008 and late November in that same year;
(ii)since November 2008, the defendant has adopted the practice of continuous water level monitoring of groundwater in the vicinity of the Pipeline invert and has also reinstated the practice of monthly water quality monitoring at the Pipeline discharge point;
(iii)GHD was retained to develop a ground water flow model through the old mine workings as a result of which the consultants recommended a rate of extraction of ground water which would maintain it at a level of 2 metres below the invert level of the Pipeline, thus affording a “margin of safety”;
(iv)that recommendation was incorporated into a revised water management plan submitted to the prosecutor for approval;
(v)the revised water management plan has been further amended so as to reflect a comprehensive and detailed water management plan for the entire site. It has sought approval from the prosecutor to amend EPL 395 so as to increase the volume of water it is entitled to discharge from the site at existing licensed discharge points;
(vi)since August 2008, the defendant has incurred or is committed to incurring expenditure approximating $2.33M on improving water management systems at the Newstan Colliery.
Ms Dryden indicated that the defendant carries out its activities under the Centennial Coal Environmental Policy which commits Centennial Coal and its related companies “to continual improvement in environmental management and performance.” That Policy is a document signed by the board members of Centennial Coal. The objective expressed in that document is one to conduct its business “in an efficient and environmentally responsible manner that is compatible with the expectations of our shareholders, government and the community.” One of the strategies for achieving the expressed objective is the ongoing implementation of an Environmental Management System that integrates environmental management into the way in which the business of the company operates.
An Environmental Management System (the EMS) has been formulated and adopted by the defendant for operation of the Newstan Colliery. Its purpose is expressed to be the provision of “an effective management system to identify and control potential environmental impacts to achieve compliance with environmental legislation and regulatory requirements applicable to Newstan Colliery.” The EMS has been tendered in evidence before me. It is a detailed document identifying procedures, requirements and controls appropriate to fulfil its stated purpose.
Finally, Ms Dryden acknowledged, on behalf of both the defendant and Centennial Coal, responsibility for the pollution incident and apologised on behalf of those companies for the discharge and its environmental impact. In support of the apology tendered on behalf of the defendant, she drew attention to its acknowledgment of responsibility from the outset, its constant communication with the prosecutor both during and following the incident and its voluntary communication with the local community involving four letter box drops between 21 August 2008 and January 2009. She also listed both charitable donations and charitable works undertaken by the defendant in and for the local community, spanning the period from February 2005 to August 2009.
None of this evidence is challenged by the prosecutor.
Sentencing considerations
The general context in which a sentence in any matter is to be considered is identified in s 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act). The purposes of sentencing there enacted include:
“(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,
…
(e)to make the offender accountable for his or her actions,
(f) to denounce the conduct of the offender, and
(g)to recognise the harm done to the victim of crime and the community.”
Section 21A of that same Act requires that both aggravating and mitigating factors identified in the succeeding subsections of that section also be taken into account.
Of particular relevance to the present offence are the provisions of the POEO Act. The objects of that Act are identified in s 3(1). Relevantly, those objects include the following:
“(a)to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development,
…
(d)to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following:
(i) pollution prevention …
(ii)the reduction to harmless levels of the discharge of substances likely to cause harm to the environment … ”.
Both the objects expressed in s 3 of the POEO Act and its operative provisions reflect what has been described as the community adoption of “a stern policy against pollution” (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 per Mahoney JA at 359). In that same case, his Honour observed:
“The legislative scheme requires that proper, and strict, precautions be taken by those whose activities may cause proscribed pollution.”
Of particular significance to the imposition of penalty in the present matter are the provisions of s 241 of the POEO Act. That section provides as follows:
“241 Matters to be considered in imposing penalty
(1)In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (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,
(b)the practical measures that may be taken to prevent, control, abate or mitigate that harm,
(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,
(d)the extent to which the person who committed the offence had control over the causes that gave rise to the offence,
(e)whether, in committing the offence, the person was complying with orders from an employer or supervising employee.
(2)The court may take into consideration other matters that it considers relevant.”
It is with these statutory provisions and principles in mind that I approach the determination of the appropriate penalty in this case. It is one that must reflect both the objective circumstances and subjective circumstances of the offence (Veen v The Queen(No. 1) [1979] HCA 7; (1979) 143 CLR 458 at 490). Ultimately, that penalty should be determined by an instinctive synthesis of all the relevant objective and subjective circumstances (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357).
Objective gravity of the offence
The maximum statutory penalty for an offence is of significance in determining the seriousness of the particular offence under consideration. In Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Kirby P observed (at 698):
“ … the maximum penalty available for an offence reflects the ‘public expression’ by parliament of the seriousness of the offence … . 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 maximum penalty for an offence against s 120 of the POEO Act by a corporation is $1,000,000: s 123. That maximum penalty for a corporation was increased from $250,000 by amendment to s 123 with effect from 1 May 2006. The fourfold increase in the penalty indicates a legislative intention that existing sentencing patterns are to move upwards (R vSlattery (1996) 90 A Crim R 519 at 524). Clearly enough, that maximum penalty is to be considered in the context of a range of circumstances giving rise to an offence against the section but nonetheless indicates the seriousness with which the legislature regards an offence involving the pollution of waters.
The objective gravity of the offence has two principal components: the precise acts or omissions of the offender and the consequences of those acts or omissions (Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280; (2008) 163 LGERA 71 at [22]).
I have already recited the provisions of s 241 of the POEO Act. The matters identified in paragraphs (a) to (d) of subsection (1) are of present relevance. It is to those matters that I now turn.
Actual or likely environmental harm
An appropriate principle to be applied in the present context is that the more serious the lasting environmental harm or likely harm involved in the incident under consideration, the more serious the offence and, ordinarily, the higher the penalty (Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority at 701). The seriousness of that harm is not mitigated by the fact that the waters into which the pollutant was discharged were at the time of discharge already disturbed or modified (Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419); (2006) 148 LGERA 299 at [149].
The phrase “harm to the environment” is defined in the Dictionary to the POEO Act to include -
“any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any Act or omission that results in pollution.”
The discharge of between 1.4 megalitres and 1.8 megalitres of sediment-laden water containing between 6 and 14.6 tonnes of sediment into the unnamed creek, clearly altered the creek and its immediate environment and had the effect of degrading that environment. Not only was that alteration and degradation an aesthetic effect, extending some 800 to 900 metres downstream from the discharge point, but the discharge also had the environmental consequences or likely consequences indicated in the evidence of Mr Rendell. The relevant detail of that evidence has already been set out at some length.
It is true, as the defendant submitted, that no evidence was adduced indicating that dead organisms were observed in the creek after the event nor was evidence adduced of any vegetation dieback. However, the absence of such evidence does not demonstrate an absence of harm. As was observed by Preston J in Environment Protection Authority v Waste Recycling and Processing Corporation (at [147]):
"Harm can be direct or indirect, individual or cumulative. Activities that contribute incrementally to the gradual deterioration of the environment, even when they cause no discernible direct harm to human interest, should also be treated seriously.”
The harm which the evidence revealed through the report of Mr Rendell is essentially likely harm. That likely harm was occasioned not only through the high turbidity level in the creek over a number of days, but also by the depth of sediment that ultimately settled in the bed of the creek both within the “pool” immediately downstream of the discharge point and within the wetland area. That harm was potentially more serious when it is noticed that the sediments flowed into and then settled within the wetland area populated by an endangered ecological community. Ultimately, that harm is best described in paragraphs 37, 43 and 45 of Mr Rendell’s report which I have set out in full at [50] and [51].
No evidence was led as to the time within which, if at all, recovery from harm occasioned to the environment in and around the creek might be expected. However, Mr Rendell did indicate in his report that the process of recovery was likely to have commenced “soon after the discharge ceased” in the wetland area, while recovery in the “pool” between the discharge point and the wetland was expected to have commenced “soon after the remediation was complete”. I infer from these statements that long term harm was not anticipated. Nevertheless, it is to be remembered from my earlier recitation of the facts that “remediation” work continued until 21 November 2008, that is disturbance to the local environment was continuing for a little over three months after discharge of pollutant from the Pipeline was first observed.
It is clear that the incident gave rise to the potential for serious environmental harm. However, taking into account all the matters to which I have referred, particularly the evidence of Mr Rendell, I consider that the environmental harm, particularly in the long term, was in the relatively low range. I accept the submission made on behalf of the defendant to that effect.
Practical measures
As is explicit in the provisions of s 241(1)(b) of the POEO Act, a factor bearing upon the objective gravity of an offence is the practical measures that may be taken to prevent, control, abate or mitigate the harm to the environment. Both the Statement of Agreed Facts and the addendum to it (Exhibit B) include acknowledgment by the defendant that there were practical measures which, if taken or implemented by it, would be likely to have avoided, and certainly would have mitigated, the harm to the environment occasioned by the events of August 2008.
The practical measures which could have been taken to prevent the harm to the environment which was occasioned are agreed between the parties. It is accepted that a number of measures and projects undertaken by the defendant since the incident of August 2008 would, if taken prior to that incident, be likely to have avoided its occurrence. The inadequacy of controls and procedures that ought to have been in place prior to the incident are summarised in an addendum to the Statement of Agreed Facts (Exhibit B) as follows:
“Prior to the Incident:
(a)Newstan’s controls and procedures to manage water at the Colliery were inadequate;
(b)underground water levels should have been monitored at least monthly and checked more regularly during and following heavy rainfall;
(c)there were inadequate procedures for managing the impact of high rainfall events on the water levels in the Old Workings;
(d)Newstan had not carried out hydrogeological modelling to better understand the water balance of the Old Workings and their interaction with the surface;
(e)Newstan had not carried out any risk assessments in relation to discharge from the Pipeline, and relied on risk assessments undertaken by Powercoal;
(f)there were no emergency response controls and procedures in place to deal with a discharge of sediment-laden water from the Pipeline; and
(g)Newstan could have installed a water management control structure or other structure to contain or divert sediment at the discharge point or downstream of the discharge point. In order to do so, it is likely that Newstan would have recquired approval.”
In the context of likely prevention of the incident, Newstan acknowledges (Exhibit B) that in summary it ought to have:
“(a)undertaken a comprehensive review of the water management practices at the Colliery, including identifying the key risks to be targeted for monitoring and management;
(b)revised its water management plan in respect of the Colliery, including to reflect and mitigate against the identified risks;
(c)implemented appropriate monitoring to ensure that controls and procedures are followed, and to assess any environmental impact from water management practices at the Colliery; and
(d)continually improved its controls and procedures in relation to water management.”
The acknowledgement of inadequacies on the part of the defendant are all made in the context of works that were being undertaken by the defendant to improve the operation of the Newstan Colliery, being those works to which reference has already been made in [20] and [25].
As I have recorded at [32], discharge of groundwater from the Pipeline into the unnamed creek had been occurring for some time prior to observance of the dirty water discharge on 18 August. Discharge inevitably occurred once the groundwater level within the old mine workings rose above the level of the Pipeline invert. Once the defendant established on 18 August that the elevated groundwater level was the cause of discharge from the Pipeline, the actions taken by it to abate the harm were, as I have earlier recorded, both immediate and appropriate. Its first step was to operate the groundwater pump at maximum capacity in an endeavour to lower the level of groundwater as quickly as possible. The prosecutor does not suggest any other means which could have been deployed to reduce that level any more quickly than occurred. Nonetheless, flow of sediment-laden water from the Pipeline continued for a further four days.
The endeavours of the defendant to mitigate the harm occasioned by the dirty water discharge are not called into question by the prosecutor. The steps taken by the defendant immediately after becoming aware of the incident and then over the period until November 2008 have earlier been set out. Throughout that period regular reports were provided to the prosecutor, including twice daily reports by telephone between 20 August and 5 September 2008. As the Statement of Agreed Facts records -
“57.Newstan worked closely with DECCW officers, including Hamish Rutherford, to design and implement the management and clean-up initiatives which were adopted in response to the Incident. Prior to their implementation, each of these initiatives were discussed with, and agreed to by, DECCW.”
In summary, there were a number of practical measures that could and should have been taken to prevent harm to the environment of the kind that occurred as the result of the Incident. However, once the preventable incident had, in fact, occurred, abatement and mitigatory measures adopted by the defendant were appropriate and adequate to the task.
Foreseeability of risk of harm
At a level of generality, it is appropriate to observe that the holder of an environment protection licence is clearly on notice of the possibility of harm to the environment occasioned by any of the activities which it carries out on the site to which that licence relates. As the holder of EPL 395, the defendant ought clearly to have been on notice of such a possibility. More particularly, that licence allowed only two water discharge points from the Newstan Colliery site, neither of which related to the Pipeline.
The reasons for and history of the installation of the Pipeline were known to the defendant. It was apparently aware of the risk assessment carried out by Powercoal in 1996 directed to discharge from the Pipeline (see [11]). It was also aware of the terms of the EIS prepared in November 1998 in which the Pipeline and discharge point were discussed (see [13]).
Following its acquisition of the Newstan Colliery in 2002, the defendant continued, until 2007, the underground disposal of tailings and mine water. After tailings disposal in that manner ceased, decant water from the surface tailings storage facility continued to be pumped into the old mine workings.
No doubt this process of underground storage was a reason for the monitoring of ground water levels near the inlet to the Pipeline. The defendant’s monitoring records show that these groundwater levels were regularly above the inlet level of the Pipeline. These elevated levels should have alerted the defendant to the likelihood that water would enter the Pipeline and then discharge at its outlet to the unnamed creek. Indeed, a record of interview conducted on behalf of the prosecutor with the defendant’s mine manager indicates that in late 2007 he was told by the defendant’s environmental co-ordinator at the site that water was discharging through the Pipeline.
While accepting the foreseeability of sediment-laden water discharging from the Pipeline, the defendant directs attention to two facts which its submits lessen the seriousness of its failure to take preventative action against the occurrence of that foreseeable event. First, it points to the text of the 1998 EIS which states that “the undulating bed profile of the old mine workings and the extensive storage time, will prevent discharge of suspended material or other contaminants.” However, it will be remembered that the quoted passage is immediately followed by a statement to the effect that discharges from the Pipeline are the subject of regular monitoring (see [13]). No regular monitoring of that point was carried out by the defendant.
Secondly, the defendant points to the fact that at no time between installation of the Pipeline in 1977 and 18 August 2008 was the discharge of dirty water from the pipeline ever recorded. The evidence reveals that to be a correct statement of fact. However, that fact detracts little from the need for the defendant properly to have addressed the foreseeable risk of harm. As Mahoney JA observed in Axer Pty Ltd v Environment Protection Authority at 359:
“The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that in many cases care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur.”
Control over causes
As the owner and operator of the Newstan Colliery as well as the holder of EPL 395, the defendant had complete control over the operation of the Pipeline and any pollutants that were capable of being discharged from it. The defendant accepts this to be the case but says that it did not have control over the event which gave rise to the sediment load in the water discharged from the Pipeline. It points to the possible “geological event” that may have been the cause of sediment in the groundwater which was discharged through the Pipeline.
While the defendant’s explanation that the cause of sediment in water discharged from the Pipeline is unknown, but is explainable by the posited geological event, it is not necessary for it to have foreseen the precise event causing the pollutant to escape in order to determine that the defendant had control over the causes which gave rise to the offence (cf Environment Protection Authority v Baiada Poultry Pty Ltd (at [32]). Moreover, I would have thought that the risk of geological instability in disused old mine workings into which large volumes of sediment-laden water had been pumped was a risk against the occurrence of which precautions would need to be taken.
Reasons for commission of the offence
A factor by which the objective seriousness of an offence may be measured are the reasons for its occurrence. In the case of the present offence, it was not committed deliberately and the defendant gained no commercial advantage by the commission of the offence. It occurred because the defendant failed to have in place a system to prevent or control the discharge of pollutants from the Pipeline.
Conclusion on objective gravity of the offence
Having regard to the nature of the offence; the high maximum penalty; the extent of harm to the environment; the practical measures able to have been taken to prevent harm, coupled with the actions of the defendant in controlling, abating and mitigating that harm; the reasonable foreseeability of harm likely to be caused by the commission of the offence; the extent to which the defendant had control over the causes that gave rise to the offence and the absence of deliberate commercial motive in committing the offence, I conclude that it is an offence of moderate objective gravity or seriousness.
Subjective factors
When determining the penalty appropriate to be imposed for this offence, I am required to take account of those factors personal to the defendant which mitigate the seriousness with which the conduct of the defendant should otherwise be considered. So much is required by s 21A(3) of the CSP Act.
Prior criminality
The defendant has one prior conviction for an environmental offence. As is recorded in Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732, the defendant pleaded guilty before the Chief Judge to the commission of an offence against s 120(1) of the POEO Act in that on 13 February 2005 it polluted waters. It was then convicted of that offence and ordered to pay the sum of $50,000 to the Hunter-Central Rivers Catchment Management Authority for the purpose of undertaking bushland and stream rehabilitation works. That sum was ordered to be paid in accordance with s 250(1)(e) of the POEO Act in lieu of the imposition of a fine. The defendant was also ordered to pay the prosecutor’s costs in the sum of $28,000 as well as being required to bear the cost of a publication order under s 250(1)(a).
That offence also occurred as the result of operations carried out at the Newstan Colliery site. At the time, the defendant was carrying out auger mining in addition to underground longwall mining. The auger mining operation involved substantial surface disturbance, necessitating implementation of a detailed soil and water management plan. Site works were not carried out in accordance with that plan. They were inadequate to control erosion and run-off from the site. During storms that occurred between 10 and 13 February 2005, catchment dams overtopped, resulting in sediment-laden waters discharging into a creek and then into Lake Macquarie.
The significance of a prior conviction in the context of sentencing was the subject of observation by Preston J in Environment Protection Authority v Baiada Poultry Pty Ltd where his Honour said:
“46Prior criminality has been held not to be part of the objective circumstances of the offence. The boundaries of proportionate sentence are set by the objective circumstances which do not encompass prior convictions: R v McNaughton (2006) 66 NSWLR 566 at [24], [60], [73], [76] and [81]. Prior convictions, therefore cannot be used to impose a sentence which is greater than the upper boundary of a proportionate sentence set by the objective gravity of the offence: Veen v The Queen (No. 2) (1988) 164 CLR 465 at 477; Baumer v The Queen (1988) 166 CLR 51 at 57-58.
47Nevertheless, prior criminality can still legitimately be taken into account in fixing where, within the boundaries set by the objective circumstances, a sentence should lie. Prior criminality is relative to show whether the offence is an uncharacteristic aberration or whether the offender has manifested a continuing attitude of disobedience to the law. If so, the purposes of retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted: Veen v The Queen (No. 2) at 477; R vMcNaughton at [126].”
A record of prior convictions can be an aggravating factor: s 21A(2)(d) of the CSP Act. The defendant submits that with only a singular prior conviction, that provision is not enlivened. The prosecutor does not contend to the contrary and I am therefore prepared to accept that the prior conviction of this Court should not be considered as an aggravating factor. I am also prepared to accept that the defendant’s conduct does not “manifest a continuing attitude of disobedience to the law”. Nonetheless it is a factor necessary to be noticed when considering specific deterrence as a factor informing the appropriate penalty. Clearly, close attention to the implementation of proper and effective controls upon the discharge of water from any source at the Newstan Colliery needs to be at the forefront of the defendant’s attention.
Good character
At a superficial level, it may seem incongruous to follow recognition of the commission of a prior environmental offence of the same kind as that presently being considered with a discussion of the good character of the defendant. However, aside from the blemish of a prior conviction, a defendant who is otherwise able to adduce evidence of good character should not have that evidence ignored as a subjective and mitigating factor. Consideration of that good character is consistent with s 21A(3)(f) of the CSP Act.
There is evidence that the defendant has acted as a good corporate citizen. In the context of its contribution to the community, detailed evidence has been led from Ms Dryden of the donations that it has made to local schools and community projects. Donations have also been made towards works or works have been undertaken by the defendant, without charge, on environmental projects, including environmental improvement works. In addition to contributions from the defendant itself, its parent company, Centennial Coal, has made annual sponsorship contributions approximating $100,000 to environmental improvement and other initiatives within the Lake Macquarie community. These sponsorship contributions have been made during 2008 and 2009.
Apart from its good works in the local community, the defendant has also taken positive steps to improve the environmental performance of its activities on the Newstan Colliery site. Specific works directed to this end include cessation of the practice of storing or disposing of coal tailings underground and the provision of the aboveground facility to store those tailings at a cost of $7.35M. Other works which it has carried out or to which it is committed for improvements on the colliery site are identified in [53].
In terms of the environmental responsibility that the defendant has endeavoured to demonstrate, I do not overlook the detailed evidence given by Ms Dryden of the adoption and application of the Centennial Coal Environmental Policy and the EMS adopted under that policy for operation of the Newstan Colliery. That evidence is summarised at [55] – [56].
Early plea of guilty
The defendant entered a plea of guilty to the offence charged at the first available opportunity. That fact must be considered in mitigation: ss 21A(3)(k) and 22 of the CSP Act. It is entitled to the benefit of a full discount of 25 percent for that plea (R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152]).
Contrition and remorse
Remorse for the commission of the offence with which the defendant has been charged is expressed in the evidence of Ms Dryden. That expression of remorse is objectively supported by the fact that senior executives of Centennial Coal were present in Court during the sentence hearing. Their attendance was intended to demonstrate that remorse.
Further objective demonstration of that remorse is to be found both in the conduct of the defendant once the discharge of dirty water was observed on 18 August 2008 and also by its communication both with the prosecutor and with the community at large, reporting upon the incident and keeping the community informed as both clean-up operations and remedial action progressed. As I have earlier recorded, it expended approximately $250,000 in undertaking both clean-up and rehabilitation operations between August and November 2008. In addition, it sought and acted upon the expert advice of GHD so as to address its response to the incident.
From the outset it acknowledged responsibility for the incident as well as responsibility for the environmental damage that it is likely to have occasioned, made manifest by the rehabilitation works that it undertook. In short, it has amply demonstrated that its remorse is a mitigating factor to be considered conformably with s 21A(3)(i) of the CSP Act.
Assistance to authorities
The defendant’s co-operation with authorities in relation to the management and clean-up of pollutant resulting from commission of the offence was forthright and fulsome. Its notification of the incident when discovered on 18 August was prompt and thereafter it worked closely both with the prosecutor and officers of the Department of Primary Industries in its endeavours to address the consequences of the incident. That level of consultation and co-operation has earlier been detailed.
Upon discovery of the dirty water discharge and the likely source of black sediment, the defendant’s immediate response was to consider blocking the Pipeline so as to bring an immediate stop to the discharge. However, recognising the purpose that had informed the Pipeline’s initial installation, namely the avoidance of water seepage to residential properties in Blackalls Park, it quickly appreciated that blocking the Pipeline had the potential to divert the water to that location. The decision not to block the Pipeline was one taken in consultation with the prosecutor and is an example of the co-operation necessary in order to address the problem being confronted.
The co-operation by the defendant with authorities extended to the provision of written reports to the prosecutor as well as participation, through its solicitor, in the preparation of the Statement of Agreed Facts and its addendum, both tendered for the purpose of the sentence hearing.
These matters are required to be recognised favourably to the defendant, conformably with the provisions of ss 21A(3)(m) and 23 of the CSP Act.
The appropriate sentence
The imposition of a sentence serves a number of purposes. As the provisions of s 3A of the CSP Act indicate (see [59]), these purposes include retribution and denunciation, as well as deterrence, both specific and general.
General deterrence
The need for general deterrence when fixing an appropriate penalty is an important consideration in the sentencing process. That penalty must be sufficient to deter others who, by oversight or inadequacy in process systems, run the risk of committing an offence against the POEO Act in the hope that should an oversight or inadequacy be exposed, only nominal penalties will be imposed.
An object of the POEO Act is to prevent pollution. A means by which this is achieved is the imposition of penalties that are sufficiently substantial to encourage industry to adopt preventative measures (Axer Pty Ltd v Environment Protection Authority). As Preston J observed in Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234 at [140], offenders will not be deterred from committing environmental offences if only nominal fines are imposed.
This is not a case in which it could be said that there is nothing more that the defendant could have done to avoid the commission of the offence. While it is not a case of human error or failure to follow procedures, the offence occurred because of a failure to take precautions and implement systems which would have avoided commission of the offence. The necessity for those engaged in mining activities to implement systems so as to ensure that water pollution does not occur is a message that needs to be given by the imposition of an appropriate penalty. That message is best given by the imposition of a penalty that contains an appropriate element of general deterrence.
Specific deterrence
The prosecutor submits that by reason of the prior offence for which the defendant was convicted, weight should be given to specific deterrence in this matter. It points to the circumstance that it was an offence committed from activities at the Newstan Colliery; it involved inadequate measures to control water discharge from the site; it resulted in harm to the environment in close proximity to that impacted by the present offence; it involved harm that was foreseeable, and it was recognised that there were practical measures that could have been taken to avoid the harm that occurred.
The prosecutor further submits that in the context of the prior conviction and in the scale of the defendant’s operations, it should have been aware of the risks of pollutant discharges from its site and the obligations that it had to prevent pollution. In the present context, the defendant’s failure to investigate the consequence of groundwater levels elevated above the inlet to the Pipeline by regular monitoring of discharges identified the need to reflect a significant component for specific deterrence in the penalty imposed.
While I accept that a component for specific deterrence needs to be included in the penalty, I do not accept that component need be as significant as the prosecutor’s submissions imply. While the defendant does not resile from its acceptance of responsibility for the offence to which it has pleaded guilty, it does point to three circumstances of present relevance. First, it identifies the fact that the Pipeline had been used since 1977 without any reported pollutant discharge from it. Secondly, it identifies the fact that although the Pipeline was discussed in the 1998 EIS, no condition of development consent required the discharges be addressed. Thirdly, it points to the fact that in all water management plans prepared in accordance with that consent and in consultation with the prosecutor, no such plan identified the need to address the Pipeline or its discharge point into the unnamed creek.
In consequence, so the defendant submits, it is understandable that it had not given any specific consideration to the Pipeline while at the same time it was implementing substantial works and expenditure upon the improvement of water management systems at the Newstan Colliery (see [54]). In short, the defendant submits that the particular circumstances involved in the offence, coupled with the large scale measures that it was undertaking to address water discharge from its site generally, indicate that specific deterrence should not be a significant component of the penalty.
Parity
The principle of even-handedness or parity in sentencing requires the Court to have regard to the general pattern of sentencing for offences of the kind being considered. However, care must be taken in assaying that task, as the wide divergence of facts and circumstances leading to the imposition of particular penalties in a given case exemplify the basis upon which this care is to be exercised.
It seems to me, as a starting point, that regard should be had to the prior offence committed by the defendant to which I have earlier referred. That offence involved a discharge of sediments of somewhere between 1.1 and 2 tonnes. The suspended solids in and turbidity of the discharge waters was described as high, being measured at 230 milligrams per litre and 1200 NTU respectively. By comparison, the present offence involved a discharge of sediment estimated to be somewhere between 6 and 14.6 tonnes. Total suspended solids ranged between 414 and 6,000 milligrams per litre while turbidity ranged between 315 and 3,990 NTU. While the physical conditions of the creek affected by the earlier offence were found to be affected by the turbid waters, it was also found that organisms would not have been harmed or viability of populations of those organisms reduced by the increased turbidity. The offence was described as being of medium objective seriousness.
The subjective circumstances of the defendant considered when determining the penalty for the previous offence were similar to those involved in the present case with the important exception that on the previous occasion the defendant was able to point to the absence of any prior conviction. This circumstance together with the observations of the effect of the pollutant in the present case, indicate that the present offence should be regarded more seriously than the prior offence. I should add that the penalty imposed for the prior offence included a discount for an early plea. Importantly, the primary penalty of $50,000 in that case was imposed at a time when the maximum penalty for the offence by a corporation was $250,000.
In Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273, Biscoe J was required to determine the penalty to be imposed following a plea of guilty to an offence against s 120 of the POEO Act. Snowy Hydro was responsible for carrying out spillway upgrade and outlet works associated with the Jindabyne Dam located on the Snowy River. It engaged a contractor to carry out some of the required works. In a series of related events occurring over four days, somewhere between 4 and 11 tonnes of sediment were discharged into the Snowy River as a result of the works which the contractor was carrying out. This sediment comprised soil, earth, clay or similar inorganic matter. It was accepted that environmental harm was minor and short term while the offence was described as being “of moderate objective seriousness”. Snowy Hydro was fined the sum of $100,000 and also ordered to pay the prosecutor’s legal costs in the sum of $84,289 as well as its investigation costs in the sum of $1897.50.
The fine imposed upon Snowy Hydro reflected an allowance of a 25 percent discount for its early plea of guilty. The subjective circumstances considered also reflected the fact that it had no prior convictions for an environmental offence; that it had devoted considerable resources to mitigating the harm occasioned and that it had fully co-operated with the prosecutor.
The contractor to Snowy Hydro was convicted of the identical offence arising from the same circumstances as those that gave rise to the prosecution of Snowy Hydro: Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268; (2008) 163 LGERA 345. A fine of $100,000 after allowing discount for an early plea was also imposed upon that defendant who had no prior convictions.
I was referred to a number of cases involving conviction for offences against s 120 since the penalty for that offence was increased to its present level on 1 May 2006. None of them involved pollution of waters by the discharge of sediments. Some involved the discharge of effluent while others involved the discharge of chemicals. After taking account of the objective and subjective circumstances of each case, net penalties or their equivalent, leaving aside cost orders, ranged between $25,000 and $280,000. By reason of the various circumstances in which the offences were committed and the subjective circumstances peculiar to each defendant, these nine cases have been of very limited assistance in the determination of the penalty appropriate in the present case. The two cases of greater assistance are the prior conviction of the defendant in respect of the subject site and the Snowy Hydro decision.
Conclusion as to penalty
Synthesising the objective circumstances of the offence, its objective gravity and the subjective circumstances of the offender, I consider that, subject to discount, an appropriate penalty to be imposed would be the sum of $150,000. To this sum I would apply a discount of 30 percent
resulting in a penalty of $105,000. In fixing this sum, I take account of the fact that the defendant has agreed to pay the prosecutor’s costs in the sum of $28,500 and also to pay its investigation costs agreed in the sum of $10,000 (cf s 248(1) of the POEO Act).
Type of penalty that should be imposed
Both the prosecutor and the defendant submitted that this is a case in which it is appropriate for the Court to make an order under s 250(1)(e) of the POEO Act. Evidence has been tendered of a program adopted by Lake Macquarie City Council for improvement works to water quality as well as aquatic and terrestrial ecosystems throughout its local government area. This program includes ecosystem enhancement operations in the Stony Creek catchment. A total cost of $115,000 is estimated for this work. A contribution by the defendant towards this work is appropriate in lieu of the imposition of a fine.
The prosecutor has also sought, and the defendant has agreed, that there should be a publication order made under the provisions of s 250(1)(a) of the POEO Act. This order requires that the publication take two forms. The first is as to the form of public notice to be published in newspapers identified by the prosecutor and the second requires that the defendant record the commission of the present offence when public reference is made by it to its funding of the Lake Macquarie Ecosystem Enhancement Program in the Stony Creek catchment. The defendant accepts the making of an order in both forms. I agree that such an order is appropriate.
Orders
The orders that I make are therefore as follows:
1.The defendant is convicted of the offence against s 120(1) of the Protection of the Environment Operations Act 1997, as charged.
2.Pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, the defendant is ordered to pay to Lake Macquarie City Council, within 28 days of this order, the sum of $105,000 to fund the Lake Macquarie City Council’s Ecosystem Enhancement Operations Program in the Stony Creek catchment.
3.The defendant, at its expense, and pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 must, within 28 days of this order, place a notice in the first 12 pages of the early general news section of the Sydney Morning Herald newspaper and also in the Newcastle Herald newspaper at a minimum size of 10 cm x 20 cm in the form of Annexure ‘A’.
4.All future public references by the defendant to its funding of the Lake Macquarie City Council’s Ecosystem Enhancement Operations Program in the Stony Creek catchment must be accompanied by the following passage:
“Centennial Newstan Pty Limited’s funding of the Lake Macquarie City Council’s Ecosystem Enhancement Operations Program in the Stony Creek catchment is part of a penalty imposed on the company by the Land and Environment Court after it was convicted of polluting waters, namely an unnamed waterway and Stony Creek, an offence against s 120(1) of the Protection of the Environment and Operations Act 1997.”
5.The defendant must pay the prosecutor’s costs, as agreed in the sum of $28,500 within 28 days of this order.
6.The defendant, pursuant to s 248(1) of the Protection of the Environment and Operations Act 1977, must pay the prosecutor’s investigation expenses, as agreed, in the sum of $10,000 within 28 days of this order.
7. Exhibits may be returned.
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Annexure ‘A’
CENTENNIAL NEWSTAN PTY LIMITED
Guilty of polluting watersOn 25 October 2010, the New South Wales Land and Environment Court found Centennial Newstan Pty Limited (“Centennial Newstan”) guilty of polluting waters at Fassifern NSW. The offence occurred between 18 August 2008 and 22 August 2008 inclusive.
The pollution occurred when Centennial Newstan failed to prevent approximately 1.4 to 1.8 megalitres of sediment-laden waters discharging from the Pipeline connected to the old underground workings of Newstan Colliery, Wakefield Road, Fassifern. The sediment-laden water entered an unnamed watercourse and flowed into Stony Creek. The sediment-laden waters extended 800-900 metres downstream of the discharge point.
Centennial Newstan pleaded guilty to the charge.
On 25 October 2010, Centennial Newstan was convicted and ordered by the Land and Environment Court to:
1.pay $105,000 to Lake Macquarie City Council, for its Ecosystem Enhancement Operations Program;
2. pay the prosecutor’s costs of $28,500;
3. pay the prosecutor’s investigation costs of $10,000; and
4. place this publication notice (paid for by Centennial Newstan).
Centennial Newstan was prosecuted by the EPA, part of the Department OF Environment, Climate Change and Water (NSW).
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