Environment Protection Authority v Coastal Recycled Cooking Oils Pty Limited

[2008] NSWLEC 242

Land and Environment Court

of New South Wales

CITATION:	Environment Protection Authority v Coastal Recycled Cooking Oils Pty Limited [2008] NSWLEC 242
PARTIES:	PROSECUTOR Environment Protection Authority DEFENDANT Coastal Recycled Cooking Oils Pty Limited
FILE NUMBER(S):	50025 of 2008 and 50026 of 2008
CORAM:	Pain J
KEY ISSUES:	Prosecution :- strict liability - guilty plea - sentence - breach of environment protection licence condition - failure to operate equipment in proper and efficient manner in accordance with licence condition - insufficient evidence that odour offensive as defined in the Protection of the Environment Operations Act 1997 - odour affecting amenity - minimal environmental harm - whether s 10 Crimes (Sentencing Procedure) Act 1999 should apply - no aggravating factors - mitigating factors - whether publication order appropriate
LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999 s 3A, s 10, s21A Fines Act 1996 Marine Pollution Act 1987 Protection of the Environment Operations Act 1997 s 64(1), s 241
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 Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278 Environment Protection Authority v Biosolids Management [2004] NSWLEC 90 Environment Protection Authority v Burrangong Meat Processors Pty Ltd [2003] NSWLEC 102 Environment Protection Authority v Caltex Refineries NSW Pty Limited [2008] NSWLEC 194 Environment Protection Authority v Cargill Australia Limted [2004] NSWLEC 334 Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732 Environment Protection Authority v Rethmann Australia Environmental Services Pty Ltd (2003) 131 LGERA 422 Environment Protection Authority v Sell & Parker Pty Ltd (2006) 149 LGERA 209 Environment Protection Authority v Shoalhaven Starches Pty Ltd [2003] NSWLEC 102 Environment Protection Authority v Timber Industries Ltd [2001] NSWLEC 25 Newcastle City Council v Pace Farm Egg Products Pty Ltd (No 3) [2005] NSWLEC 423 R v Thompson; R v Houlton (2000) 49 NSWLR 383 Thorneloe v Filipowski (2001) 52 NSWLR 60; [2001] NSWCCA 213
TEXTS CITED:	Lawbook Co, Environmental Responsibilities Law (Update 72, July 2003) [13430]
DATES OF HEARING:	18 August 2008
DATE OF JUDGMENT:	22 August 2008
LEGAL REPRESENTATIVES:	PROSECUTOR Mr A Macdonald (Solicitor) SOLICITOR Environment Protection Authority DEFENDANT Mr J Maston SOLICITOR Moray & Agnew

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

22 August 2008

50025 of 2008, 50026 of 2008 Environment Protection Authority v Coastal Recycled Cooking Oils Pty Limited

JUDGMENT

1 Her Honour: The Defendant has pleaded guilty to two offences of contravening a condition of its environment protection licence under s 64(1) of the Protection of the Environment Operations Act 1997 (the POEO Act). The incidents giving rise to the offences occurred in March and May 2007. A plea of guilty means that the Defendant has admitted the essential elements of the offences. The maximum penalty since 1 May 2006 for this type of offence is $1 million, having previously been $250,000.

2 The condition of licence breached in both offences is condition O2.1 which provides:

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

3 For the March offence, the Defendant has admitted that it did not operate a storage tank known as the “balance tank” in a proper and efficient manner on 23 March 2007, by failing to close a lid on the tank without delay following cleaning of the tank. For the May offence, the Defendant has admitted that it did not maintain the dissolved air floatation tank in a proper and efficient manner by failing to maintain an automatic cut-off valve. The tank was fully bunded and no waste water escaped to the environment.

4 The Defendant carries on a business in factory premises at 87 Gavenlock Road, Tuggerah (the premises). A stainless steel merchant business, Anderson Stainless, is located to the southern side of the premises. The premises are located within an industrial area which is bounded by wetland. There are other industrial premises adjacent to the premises on its northern, southern and eastern side. The premises are bounded by wetland to the west.

5 The parties tendered a Statement of Agreed Facts (SOAF) for both offences which provides:

1. The Defendant is the holder of Environmental Protection licence No 4359 issued pursuant to s55 of the Protection of the Environment Operations Act 1997 for carrying on at the premises a scheduled activity of a waste facility (the Licence). The operations of the Defendant involve:

(a) collection of used cooking oils from retail and industrial food processors;

(b) delivery of oils to the premises;

(c) processing oils by heating in ovens to facilitate pouring;

(d) screening in order to remove suspended contaminates; and

(e) transporting the processed oil from the premises to be used in the production of bio-diesel (used as an additive to diesel engine fuel).

2. The processing of the cooking oil generates a wastewater component. That wastewater is transferred from the bulk tanks in the factory building to the wastewater treatment plant (located on the southern boundary of the premises). Once in the plant, the wastewater is allowed to settle over time to enable the cooking oil product and the wastewater component to separate. After separation, a plant operator manually decants the wastewater component from the bulk storage tanks.

3. Wastewater decanted from the bulk storage tanks is discharged into a concrete pit within the wastewater treatment room. That pit is covered with a metal plate and fitted with a float switch. When wastewater reaches the float switch, it is pumped into an oil/water separator within the wastewater treatment room. Wastewater is then pumped into a wastewater holding tank, referred to as the “balance tank” or “v-tank” (the balance tank).

4. The balance tank is located near the southern boundary of the premises. The balance tank is fitted with a dual high level alarm that operates visual and audible alarms within the production building if the wastewater reaches a level critical to overflow. The balance tank is surrounded by a concrete bund to prevent the escape of any substance in the event of an overflow.

5. Wastewater from the balance tank is then pumped to a dissolved air flotation tank (DAF) unit within the wastewater treatment room.

6. Wastewater from the DAF is pumped into an aeration tank which is located on the southern boundary of the premises. After passing through the aeration tank, the wastewater is pumped out and removed from the premises by a licensed liquid waste transporter.

Modifications to the trade waste water system prior to the incidents in March and May 2007

7. Prior to December 2005, the wastewater was discharged directly to sewer, under a trade waste licence with Wyong Shire Council. In December 2005 and April 2006, representatives of the Defendant met with the then Trade Waste Supervisor for the Council, Mr Vince Willis. As a result of that meeting, the Defendant was required to pump out wastewater and have it removed from the premises rather than discharging it to sewer. In addition, the Defendant took steps to improve its trade wastewater processing system.

8. In or around July 2006, the Defendant appointed SEPA Wastewater Treatment Pty Limited (SEPA) to design and construct a modified waste water treatment system including the supply and installation of a DAF tank at a cost of $133,885.50. SEPA went into administration on or around 10 November 2006 before the installation and commissioning of the DAF was complete.

9. In January 2007, the Defendant retained Aqua Separation Technologies Pty Limited (Aqua) to modify and improve the trade waste system. The Defendant, at the request of the Council, then engaged Integra Water Solutions to address issues associated with the SEPA DAF. That work was to commence on or around 7 June 2007.

10. As a consequence of the above, at the time of the incidents in March and May 2007, the trade wastewater could not be pumped into the Council’s sewer but was instead stored on the premises and removed by way of a licensed liquid waste transporter (known as a “pump out truck”).

11. Had SEPA fulfilled its contractual obligations there would have been no need to transport waste water from the plant by road tanker after November 2006. The events in March 2007 occurred in the course of pumping out waste water to be transported by road tanker from the premises. Furthermore, the events in May 2007 were largely caused by, among other things, a malfunction in the DAF.

The events of 23 March 2007

12. On 23 March 2007 at approximately 8.30am, Mr Craig Anderson from Anderson Stainless telephoned the Department of Environment and Conservation (DEC) to report an odour. Mr Anderson later described the odour as “like a really bad sewage or wastewater-like odour and was really strong and intense”.

At approximately 11am on 23 March 2007, Mrs Valle detected an odour and immediately sent staff of the Defendant to investigate. Those staff members immediately replaced the hatch on the balance tank, which had been left off during the tank had been cleaned with a pressure hose earlier that morning. Shortly after 11am, Mr Anderson made another call to Environment Line to report an odour. Mr Anderson later described the odour as “really foul”, “like a really strong and thick sewage or wastewater-type odour” and that the odour “was stronger and more intense” and the odour he had reported earlier that morning [sic].

13. On 30 March 2007, Defendant sent to the DEC an incident report. In that report, the Defendant, by its then Manager Mrs Valle:

(a) Accepted responsibility for the event and expressed regret;

(b) Explained that the incident had occurred as an employee of the Defendant failed to close the hatch or lid on the balance tank;

(c) That the Defendant had taken immediate steps to investigate how the error had occurred;

(d) That the individual responsible had been appropriately counselled.

14. On 10 April 2007, DEC served on the Defendant Notice Number 107190 which required the Defendant to nominate a corporation representative to answer questions in relation to the 21 March incident. On 16 April 2007, the Defendant informed DEC that Mrs Valle was the nominated representative.

15. Between 27 April 2007 and 4 May 2007, the DEC conducted interviews with not only Mrs Valle, the DEC nominated representative, but also those individuals involved in the Defendant investigation into the incident on 21 March 2007, namely:

(a) Ben Jones

(b) Steve Rogers

(c) Charlie Valle

(d) Kris Valle

(e) Josh Lewis

16. All of the above individuals answered, in detail, all questions put to them. Save for Mr Lewis, all of the above names had been provided to the DEC by the Defendant. At no time did the Defendant, or any of its employees or agents, deny that the balance tank lid had been left open after the tank was cleaned. All of the employees knew that the lid of the tank should have been closed.

Events of 21 May 2007

17. At 11.24am on 21 May 2007, the DECs environment line received a call from a representative of Anderson Stainless advising of an odour from the premises.

18. At approximately 11.45am on Monday, 21 May 2007, Hamish Rutherford from the DEC received a telephone call from Mr Anderson from Anderson Stainless. Mr Anderson complained of a smell. Mr Anderson described the odour as “absolutely putrid” and one of the worst odours he had experienced from the premises.

19. Mr Rutherford then telephoned the Defendant and informed Mrs Mary Peck, an employee of the Defendant, that the DEC had received a report of a smell and a report that the balance tank was overflowing. Mr Rutherford asked that if there was a problem with the tank then the Defendant should take photographs of it.

20. Ms Peck immediately inspected the balance tank and then proceeded to take several photographs of it.

21. Defendant employees then proceeded to clean up the overflow from the balance tank, sprayed deodoriser and took steps to reduce the level of liquid in the balance tank.

22. At approximately 1pm, Mr Rutherford arrived at the premises and was informed by either Mr Ray Anderson or Mr Craig Anderson from Anderson Stainless that the smell had almost completely abated.

23. Mr Rutherford inspected the balance tank and observed a small amount of watery liquid mixed with detergent at the base of the balance tank, contained by the bunded area. Mr Rutherford took several photographs of the tank.

24. Mrs Valle informed Mr Rutherford that:

(a) The balance tank had overflowed;

(b) The audible alarm that was meant to go off when the liquid in the tank reaches a certain level had failed;

(c) The visual alarm had gone off;

(d) The liquid overflow was wholly contained within the bund.

25. Mrs Valle showed Mr Rutherford the photographs of the tank and bund that had been taken by her and Mr Valle. Those photographs were subsequently provided to the DEC at Mr Rutherford’s request.

26. On 30 May 2007 the Defendant sent to the DEC an incident report. In that report, the Defendant, by its then Manager Mrs Valle:

(a) Accepted responsibility for the event;

(b) Explained that the DAF had malfunctioned which caused the retention of water in the balance tank;

(c) Admitted that the audible alarm on the balance tank had failed

(d) Set out the immediate steps taken by the Defendant to rectify the problem;

(e) Advised that the problem had been rectified within 30 minutes of receiving notification from the DEC;

(f) Advised that Defendant staff had been retrained in the appropriate procedures to prevent further incident.

27. On 4 June 2007, DEC served on the Defendant Notice Number 107190 which required the Defendant to nominate a corporation representative to answer questions in relation to the 21 May incident. On 5 June 2007, the Defendant informed DEC that Mrs Valle was the nominated representative.

28. On 3 July 2007 the DEC conducted an interview with Mrs Valle, the DEC nominated representative. During that interview, Mrs Valle answered, in detail, all questions put to her. Mrs Valle:

(a) admitted that the audible alarm had malfunctioned;

(b) admitted that, at the time of the incident, the Defendant had no written procedures in place for reacting to the visual alarm, although all relevant employees had been instructed orally to respond appropriately to the visual alarm;

(c) outlined the ongoing works to improve the trade wastewater system;

(d) admitted that even though there had been a previous incident, on 6 October 2006, where the audible alarm had failed, the Defendant had not put into place regular maintenance and checks to ensure the alarm was operating properly;

(e) admitted that at the time of the incident, the Defendant had no documented procedures in place with respect to the processing of wastewater at the premises; and

(f) Indicated that the Defendant were taking active steps to implement necessary procedures

Improvements to the trade waste water system after the incidents of March and May 2007

29. Following the incident on 21 May 2007, the warning light for the balance tank was moved to a location from which it could be more easily seen by staff in any part of the plant and staff were retrained in the appropriate procedures to be followed.

30. On 7 June 2007, Integra commenced works on the wastewater system. Those works did not ultimately improve the system. Accordingly, on 18 July 2007 the Defendant engaged Mr Lloyd Bushnell from Envirotechnic to assess the trade wastewater system and make recommendations. Mr Bushnell concluded that the SEPA, Aqua and Integra works had failed to improve the system. Without improvement, the Defendant would not be able to dispose of its waste water to the council’s sewer under a trade waste licence.

31. Mr Bushnell recommended an alternative filtration system which was successfully installed at a further cost of approximately $70,000 .

32. As part of the improvement process:

(a) the balance tank has been removed from the trade waste water processing system and is no longer in use;

(b) In April 2007 the Defendant obtained a trade waste licence from the Council which removes the need for a “pump out” of waste water (which was the procedure taking place when the balance tank hatch was left open);

(c) written operational procedures are being developed; and

(d) the Defendant has employed a new Manager, Mr Laurie Porter, a professional engineer with experience in managing operational environmental issues.

…
Financial position of the Defendant

33. Since June 2006, the Defendant has spent approximately $635,509.30 on trade waste equipment and systems in order to comply with the requirements of its licence. The financial position of the Defendant is such that the earnings generated have had to be utilised for capital purchases to resolve the wastewater problems.

Objective factors in sentencing

6 The Crimes (Sentencing Procedure) Act 1999 s 3A sets out various matters that have to be considered when sentencing as follows:

The purposes for which a court may impose a sentence on an offender are as follows:

(a) to ensure that the offender is adequately punished for the offence,
(b) to prevent crime by deterring the offender and other persons from committing similar offences,
(c) to protect the community from the offender,
(d) to promote the rehabilitation of the offender,
(e) to make the offender accountable for his or her actions,
(f) to denounce the conduct of the offender,
(g) to recognise the harm done to the victim of the crime and the community.

7 The Prosecutor submitted that subsections (a) (b) (e) and (f) are most relevant.

8 The Defendant submitted that there are no aggravating factors (s 21A(2)).

9 The POEO Act at s 241 sets out matters which the Court must consider when sentencing for offences under that Act.

Section 241(1)(a) - harm or likely harm to the environment

10 The Prosecutor submitted that the Defendant’s actions which constituted the offences led to the emission of odours. This was established by the evidence of the complaint from Mr Anderson, the neighbour, and his description of the smell together with the admissions in the incident report. These were highly unpleasant and could constitute an “offensive” odour under the POEO Act definition. Such odours constitute harm to the environment: see Environment Protection Authority v Cargill Australia Limted [2004] NSWLEC 334 per Pain J.

11 If I did not find that offensive odour had been emitted, the Prosecutor submitted that odour, which was unpleasant, had been emitted. This also satisfied the definition of environmental harm because odour was an air impurity which can give rise to air pollution. Harm to the environment is defined in the Dictionary of the POEO Act as follows:

"harm" to the environment includes any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution.

12 The Defendant submitted that the Prosecutor had not established the odours were offensive odours as defined under the POEO Act. Reliance was placed on Lloyd J in Environment Protection Authority v Caltex Refineries NSW Pty Limited [2008] NSWLEC 194 which involved a prosecution for failure to maintain equipment. His Honour held that the odours emitted in the case had an effect on amenity only and that actual environmental harm had not occurred. That case did not consider whether the odours were offensive odours.

13 I do not consider on the evidence before me, which is the two complaints to the then Department of Environment and Conservation (DEC) by the neighbour, Mr Anderson, that I should make a finding that an offensive odour was emitted as a result of these two offences. It is not an element of the charges. The facts in Cargill, a prosecution for the offence of emitting an offensive odour, suggest that far more evidence to establish that issue is needed. For example, in that case the Environment Protection Authority (EPA) conducted its own testing on several occasions to determine the extent of the odour from the industrial plant in question.

14 The Prosecutor has otherwise submitted that the emission of odour, which I accept was unpleasant to the neighbour, Mr Anderson, satisfied the definition of environmental harm in the POEO Act. Given the definition of “air impurity” to include “odour” and the definition of “air pollution”, this unpleasant odour comes within the definition of “harm to the environment”. In this case the only impact is of a transitory nature and it affected the amenity of Mr Anderson and possibly other persons if they were present at Anderson Stainless where the incident occurred.

15 The odour was of limited duration. For the March offence, the complaint register for Mr Anderson’s call refers to 8am for a while and then 8.30am to 8.43am. The second call on that day was at 11am. By 1pm, when the EPA officer arrived it had dissipated. For the May offence, the odour lasted no more than one and a half hours. The premises are in an industrial area separated from residences by a substantial wetland area. There is in these circumstances minimal environmental harm.

Section 241(1)(b) - practical measures to prevent environmental harm

16 The Prosecutor submitted that both offences could have been readily prevented. For the March 2007 offence, simply replacing the hatch on the balance tank as soon as cleaning was completed would have been sufficient. A procedure to ensure that the work of the employee was checked would also have ensured this was carried out. The Defendant’s general manager admitted that the May offence was due to the malfunction of safety and alarm systems in place on the balance tank. The audible alarm was not functioning and the visual alarm was not seen by employees inside the factory. The Defendant admitted that there was no regular maintenance of the audible alarm system in place.

17 The Defendant submitted that it was relying on a system designed by an independent specialist contractor, SEPA, which was employed in June 2006 and became bankrupt in November 2006 necessitating the employment of further contractors to do the work SEPA was unable to complete. Steps were already being taken at the time the offences occurred to improve the wastewater treatment system so that this could again be pumped to the Council’s sewer.

18 There were practical measures that could have been taken in relation to both offences by the Defendant in terms of the specific circumstances giving rise to both offences as identified by the Prosecutor. I accept that the Defendant was taking significant steps to overcome the overall problem with its waste water treatment system; see also Environment Protection Authority v Sell & Parker Pty Ltd (2006) 149 LGERA 209 at [25].

Section 241(1)(c)- foreseeability of harm

19 The Prosecutor submitted that the Defendant was aware of odour issues from its premises given the issue of two penalty notices for odour incidents in August and October 2006, three warning letters sent in relation to other incidents and two meetings between DEC officers and representatives of the Defendant in May 2006 and February 2007. There clearly was foreseeability of harm.

20 The Defendant argued that there was no harm and, to the extent there was, the Defendant was already taking substantial steps to deal with the problem at the time the offences occurred. Overall it has spent $635,509.30 on measures to improve the wastewater management system.

21 I consider the harm was foreseeable but, as already considered, the Defendant was taking action to deal with wastewater issues at the plant.

Section 241(1)(d) - control over causes of offence

22 The Prosecutor submitted that the Defendant controlled the operation at the premises at all relevant times. It is acknowledged in the SOAF that the cleaning of the balance tank, which required the removal of the hatch, took place in the course of a pump-out and that such pump-outs would not have been necessary had SEPA fulfilled its contractual obligations. The offence was a direct result of the actions of an employee of the Defendant in failing to replace the top of the tank. It had power to institute the necessary procedures to prevent incidents such as this occurring. It is also acknowledged in relation to the May offence that the build up of wastewater in the balance tank was a result of problems with the DAF unit. However it was within the Defendant’s power to ensure that its employees took appropriate action to ensure the alarms were working.

23 The Defendant argued that it was hard to see what more it could have done. For the March offence, its employees were all aware of the necessity of replacing the top of the holding tank. In relation to the May offence, the Defendant had identified the problems with the system, employed a reputable company, SEPA, to deal with it but that company installed an inadequate system and went into bankruptcy necessitating the employment of further contractors to fix up the problem.

Section 10 Crimes (Sentencing Procedure) Act 1999

24 The Defendant argued that s 10 of the Crimes (Sentencing Procedure) Act 1999 should apply to both offences. Section 10 relevantly provides:

(1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders:
(a) an order directing that the relevant charge be dismissed,
(b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years,
(c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program.
…
(3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors:
(a) the person’s character, antecedents, age, health and mental condition,
(b) the trivial nature of the offence,
(c) the extenuating circumstances in which the offence was committed,
(d) any other matter that the court thinks proper to consider.
…

25 The Defendant submitted that the offences are trivial in nature, albeit in relation to an important offence being the failure to comply with an environmental protection licence. The Defendant could not have done anything to avoid the March offence having instructed its employees about the need to replace the lid on the balance tank. The failure of the system for the May offence was due to the imperfect system implemented by the independent contractor which the Defendant was working to fix.

26 The Defendant is of good character. The offence is not a pollution offence, in contrast to Newcastle City Council v Pace Farm Egg Products Pty Ltd (No 3) [2005] NSWLEC 423 at [24]. Nor is there a breach of public trust, as discussed in cases such as Environment Protection Authority v Shoalhaven Starches Pty Ltd [2003] NSWLEC 107. No pollution is able to be emitted under the environment protection licence.

27 In Thorneloe v Filipowski (2001) 52 NSWLR 60; [2001] NSWCCA 213 the Court of Criminal Appeal ordered that a charge under the Marine Pollution Act 1987 be dismissed. Spigelman CJ stated at [76]:

His Honour found that the discharge of oil resulted from the order to pump given by the Chief Officer who was in effective command of the ship at the time. He gave that order without reference to the Master. His Honour said that if the Master had been asked, he would not have approved of the order. However, his Honour said that:

" While he must bear some responsibility, as the person who performed the relevant act, the real failure in this case is the failure to publish some policy manual, and to educate crew members in, and enforce, perfectly commendable policies such as forbidding bilge pumping in port.
Both the company and the Master have responsibilities in that regard." (at 226)

Finding on s 10

28 I consider that the March offence does warrant the application of s 10. It is a first offence and is trivial in nature, the Defendant is of good character and has worked to remedy the problems with its wastewater treatment system including spending substantial amounts of money for a company its size. I consider there are extenuating circumstances in that the employee, who knew better, left the top off the balance tank after cleaning it. The amenity impact on the neighbouring property as evidenced by the complaint from Mr Anderson for that day suggests the amenity impact was short lived.

29 I do not consider that s 10 should apply to the second offence. It is a second offence, following closely after the first offence in March involving the same tank. The circumstances are more serious given that the audible alarm did not operate and the visual alarm in the factory was not seen by any employees. There was an escape of material, fortunately all of it being contained in the bund around the balance tank. The odour was described by Mr Anderson in his complaint to the DEC as “absolutely putrid”. It lasted for up to one and half hours. This does not suggest a trivial offence or the existence of extenuating circumstances.

Appropriate sentence

30 I must now determine what is the appropriate level of penalty and whether orders ought be made under s 250 of the POEO Act for the May offence. In terms of general sentencing considerations, general deterrence is an important consideration for environmental offences; see 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 and more recently Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278 at [65]-[68].

31 The maximum penalty for a particular offence is a matter the Court should have regard to as that is an expression of the seriousness which Parliament attributes to the offence; Camilleri's Stock Feeds Pty.

32 The maximum penalty for a corporation under s 64(1) of the POEO Act was increased from $250,000 to $1 million on 1 May 2006. See Pearlman J in Environment Protection Authority v Timber Industries Ltd [2001] NSWLEC 25 where the penalty in question doubled, also referred to by Lloyd J in Caltex at [63] in relation to the appropriate approach where this occurs. At [33] her Honour states:

That does not mean, however, that the court should simply impose a penalty effectively twice that which the Court would have imposed had the offence been committed before the coming into force of the POEO Act on 1 July 1999. Rather, the proper approach of the court must be to assess the relative seriousness of the particular offence in relation to a worst case for which the maximum penalty of $250,000 is now provided; that is, the penalty to be imposed is that which correlates upon the scale of penalty set by the legislature from zero to the maximum.

33 Specific deterrence is also relevant in this matter according to the Prosecutor. While the Defendant has no prior convictions for environmental offences, it should have been well aware of the potential for contravention of its licence condition arising from its wastewater processing operations. I do not consider there is any need to take into account specific deterrence in the absence of prior convictions and given that the Defendant has spent substantial amounts to improve its wastewater treatment system. The balancing tank, the use of which gave rise to both offences, no longer exists.

34 In light of all the matters I must consider under s 241 the offence had minimal environmental impact, is not serious and the Defendant’s culpability is low.

Mitigating factors

35 The matters relevant to mitigation of penalty under the Crimes (Sentencing Procedure) Act are identified in s 21A(3)(a). Section 21A(3) provides:

(3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows:

(a) the injury, emotional harm, loss or damage caused by the offence was not substantial,
(b) the offence was not part of a planned or organised criminal activity,
(c) the offender was provoked by the victim,
(d) the offender was acting under duress,
(e) the offender does not have any record (or any significant record) of previous convictions,
(f) the offender was a person of good character,
(g) the offender is unlikely to re-offend,
(h) the offender has good prospects of rehabilitation, whether by reason of the offender’s age or otherwise,
(i) the remorse shown by the offender for the offence, but only if:
(i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and
(ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both),
(j) the offender was not fully aware of the consequences of his or her actions because of the offender’s age or any disability,
(k) a plea of guilty by the offender (as provided by section 22),
(l) the degree of pre-trial disclosure by the defence (as provided by section 22A),
(m) assistance by the offender to law enforcement authorities (as provided by section 23).

(a) Section 21A(3)(a) - In the case of both offences, once the Defendant became aware of the problem, it took prompt action to resolve it, in particular:

(i) In respect of the March 2007 offence, as soon as the Defendant became aware that the balance tank hatch had not been replaced, it replaced the hatch.

(ii) In respect of the May 2007 offence, as soon as the Defendant became aware of the overflow, it took action to remove the liquid from the bund and to deodorise the area. The odour had dissipated shortly afterwards. There was no escape of wastewater.

(b) Section 21A(3)(e) - The Defendant has no prior convictions for environmental offences.

(c) Section 21A(3)(f) – The Defendant is of good character given its environmentally beneficial activity and actions in cleaning up the wastewater treatment systems.

(d) Section 21A(3)(g) - The Defendant is taking steps to improve its wastewater treatment operations to reduce the prospect of future contraventions. It is unlikely the Defendant will reoffend given the substantial improvements made to the Defendant’s systems since the offence.

(e) Section 21A(3)(h) and (i) - The company has exhibited remorse in several ways:

(i) the sworn affidavit of the manager at the time expressly apologises and expresses regret and remorse for the events which occurred;

(ii) the company has imposed on itself the heavy financial burden to create a system and employ staff to ensure (at great cost) ongoing compliance;

(iii) there were present in Court at the hearing the Directors of the company, Mr Peter Peck and Mr Andrew Hill who also accept responsibility and express their apology and remorse for the events which occurred.

(f) Section 21A(3)(k)/s 22
The Defendant entered a plea of guilty to both offences at the earliest available opportunity, being the first calllover of the matter. The Defendant should have the full credit for a guilty plea. In R v Thompson ; R v Houlton (2000) 49 NSWLR 383 Spigelman CJ identified guidelines for weighing up early pleas of guilty at [160]. A discount of up to 25 per cent is appropriate in light of the utilitarian value of a plea. The earlier the plea the greater the utilitarian value. The maximum discount should apply in this case.

(g) Section 21A(3)(m)
The Defendant cooperated with officers of the Prosecutor in the course of the investigation and admitted responsibility for both offences.

36 The Defendant has agreed to an order that it pay the Prosecutor's costs of the proceedings in the agreed sum of $13,000.00.

Section 6 – Fines Act 1996

37 The Defendant’s counsel also made a submission under s 6 of the Fines Act 1996 that the Defendant was of limited means and this was a matter which should be taken into account in setting the level of penalty. No sworn evidence by an appropriate officer of the Defendant familiar with its financial position was provided, the more usual course in my view. Its counsel made submissions based on the latest balance sheet of the Defendant and the record of entries in the Defendant’s bank statement for its operating account which were tendered. These suggest the Defendant operates on a small profit margin. I was informed that the Defendant did not have an overdraft. The Defendant presently has some loans according to its balance sheet. I do not consider that I was adequately informed about the Defendant’s ability to raise and service a loan in the event that I impose a substantial penalty which the Defendant cannot immediately pay out of its operating account. I note that the Defendant has paid for over $600,000 of additional wastewater treatment equipment since June 2006, suggesting it is able to manage to raise large amounts of money if required. There is insufficient information about the company’s finances to enable proper consideration under s 6.

Evenhandedness

38 The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty. This principle must always be applied subject to the particular circumstances of the case before the Court.

39 The Prosecutor provided some cases which it said might be comparable. These were clearly in a more serious category than this case (Environment Protection Authority v Burrangong Meat Processors Pty Ltd [2003] NSWLEC 102; Environment Protection Authority v Shoalhaven Starches Pty Ltd, Environment Protection Authority v Ballina Shire Council). In Environment Protection Authority v Biosolids Management [2004] NSWLEC 90, a prosecution for breach of a licence condition which resulted in the release of grease trap waste and odour, there was held to be a real likelihood of harm (contamination of soil). The defendant was fined $10,000 and a publication order was made. In Environment Protection Authority v Rethmann Australia Environmental Services Pty Ltd (2003) 131 LGERA 422 a prosecution for breach of a licence condition in different terms to this matter occurred. Odour was emitted from a tanker truck and this was detected by numerous persons. A fine of $20,000 was imposed for the breach of the licence condition. All these cases were decided before the increase of the maximum penalty to $1 million on 1 May 2006. That was the maximum penalty in force when Caltex was decided. In that matter Lloyd J imposed a fine of $78,000.00 ($120,000 reduced for mitigating factors) and made no publication order. The circumstances of the case were more serious than this matter with odour being released from the defendant’s premises for six days and impacting on a large number of residents.

Penalty

40 In light of all these matters I consider the appropriate penalty should be in the lower range of $30,000. This should be reduced substantially in light of all the mitigating factors by 40 per cent to $18,000.

Order under s 250 of the POEO Act

41 The Prosecution is seeking orders under s 250(1)(a) and (e) of the POEO Act which provide:

(1) Orders The court may do any one or more of the following:

(a) order the offender to take specified action to publicise the offence (including the circumstances of the offence) and its environmental and other consequences and any other orders made against the person,

…

(e) order the offender to pay a specified amount to the Environmental Trust established under the Environmental Trust Act 1998 , or a specified organisation, for the purposes of a specified project for the restoration or enhancement of the environment or for general environmental purposes,

42 The s 250(1)(e) order sought is that the Defendant pay to the Hunter – Central Rivers Catchment Management Authority the Court ordered sum for the purpose of weed management project with Wyong Shire Council and the Parks and Wildlife Division of the Department of Environment and Climate Change to address serious weed infestations in the Tuggerah area, particularly those weeds impacting on Tuggerah Nature Reserve and the Old Pioneer Dairy property. The “EPA Guidelines for Seeking Environmental Court Orders” (in Lawbook Co, Environmental Responsibilities Law (Update 72, July 2003) [13430]) states that a publication order is appropriate when an order under s 250(1)(e), inter alia, is made; Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732 was also relied on.

43 The Defendant does not oppose the making of the s 250(1)(e) order but does oppose the making of the publication order. The impact on the Defendant’s business in terms of customer perception might be severe given that its business is an environmentally worthwhile activity of recycling used cooking oil for biofuels. The cost of the advertisement alone of up to $1,000 is substantial. The publication order should be made only if in lieu of any other penalty or order. In Caltex Refineries Lloyd J did not make a publication order as he considered that the defendant had demonstrated it was a responsible manager of its environmental performance. The observations of Lloyd J in Caltex made in refusing such an order also apply in this matter.

44 I consider the s 250(1)(e) order should be made but not the publication order under s 250(1)(a).

Orders

45 In matter 50025 of 2008 the Court orders that:

1. The offence is proved.

2. Pursuant to s 10(1)(a) of the Crimes (Sentencing Procedure) Act 1999 without proceeding to conviction the charge is dismissed.
3. The Defendant pay the Prosecutor’s costs of the proceedings as agreed or assessed.
4. The exhibits may be returned.

46 In matter 50026 of 2008 the Court orders that:

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

2. Pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997 the Defendant pay to the Hunter – Central Rivers Catchment Management Authority the amount of $18,000.00 for the purpose of weed management project with Wyong Shire Council and the Parks and Wildlife Division of the Department of Environment and Climate Change to address serious weed infestations in the Tuggerah area, particularly those weeds impacting on Tuggerah Nature Reserve and the Old Pioneer Dairy property.

3. The Defendant pay the Prosecutor’s costs of the proceedings as agreed or assessed.

4. The exhibits may be returned