Environment Protection Authority v CSR Ltd trading as CSR Woodpanels
[2001] NSWLEC 267
•10/26/2001
Land and Environment Court
of New South Wales
CITATION: Environment Protection Authority v CSR Ltd trading as CSR Woodpanels [2001] NSWLEC 267 PARTIES: PROSECUTOR
DEFENDANT
Environment Protection Authority
CSR Ltd trading as CSR WoodpanelsFILE NUMBER(S): 50080 of 1997 CORAM: Pearlman J KEY ISSUES: Environmental Offences :- tier 1 offence - penalty - discount for utilitarian value of plea of guilty LEGISLATION CITED: Environmental Offences & Penalties Act 1989 s 6(1), s 9 CASES CITED: CSR Ltd trading as CSR Woodpanels v Environment Protection Authority (2000) 110 LGERA 334;
Environment Protection Authority v CSR Ltd (t/as CSR Woodpanels) (1998) 45 NSWLR 357;
Environment Protection Authority v CSR Ltd (trading as CSR Woodpanels) (1999) 103 LGERA 161;
Environment Protection Authority v CSR Ltd (trading as CSR Woodpanels) [1999] NSWLEC 173;
Environment Protection Authority v CSR Ltd trading as CSR Woodpanels (Pearlman J, NSWLEC, 14 November 1997, unreported);
Environment Protection Authority v CSR Ltd trading as CSR Woodpanels (Pearlman J, NSWLEC, 18 December 1997, unreported);
Environment Protection Authority v CSR Ltd trading as CSR Woodpanels (2001) 114 LGERA 217;
R v Thomson (2000) 49 NSWLR 383DATES OF HEARING: 26/10/2001 EX TEMPORE
JUDGMENT DATE :
10/26/2001LEGAL REPRESENTATIVES: DEFENDANT
PROSECUTOR
Mr S J Rushton SC
SOLICITORS
Environment Protection Authority
Mr I S Lloyd QC
SOLICITORS
Mallesons Stephen Jaques
JUDGMENT:
IN THE LAND AND 50080 of 1997
ENVIRONMENT COURT
Pearlman J
OF NEW SOUTH WALES 26 October 2001
- Prosecutor
Defendant
1. The defendant, CSR Ltd trading as CSR Woodpanels, has been charged with an offence under s 6(1) of the Environmental Offences & Penalties Act 1989 which provides as follows:-
6(1) If a person, without lawful authority, wilfully or negligently causes any substance to leak, spill or otherwise escape (whether or not from a container) in a manner which harms or is likely to harm the environment:
(a) the person, and
(b) if the person is not the owner of the substance, the owner,
are each guilty of an offence.
2. The charge is that the defendant without lawful authority, negligently caused a substance to leak in a manner which harmed or was likely to harm the environment.
3. The defendant has pleaded guilty to that offence. The plea of guilty is an admission of the essential elements of the offence, and the Court’s task is only to deal with the question of penalty.
4. The parties have filed an agreed statement of facts from which I derive the following salient facts.
5. The premises of which the defendant was the owner are situated at Jepson Avenue, Tumut. At those premises the defendant conducted its pineboard business, that is, in particular, that it manufactured particle board and laminated medium density fibre board.
6. As part of its effluent system it constructed an earth dam in 1980 called the Blue Dam. Effluent from its manufacturing process was collected in the Blue Dam which was an open dam which also collected rainwater and stormwater run off. The effluent in the Blue Dam was sometimes pumped back to the furnaces for incineration and from time to time the effluent was used to irrigate land to the west of the Blue Dam. Generally, on an annual basis, the Blue Dam was emptied altogether and the resin accumulation scraped out.
7. In March 1992 employees of the defendant were carrying out excavation works on the premises and discovered that there was a leak in the Blue Dam. They had installed some test pits adjacent to the Blue Dam and the test pits filled with liquid of the same nature as the effluent which was in the Blue Dam.
8. The defendant told the local officer of the Environment Protection Authority (“the EPA”) and carried out a visual inspection of the area around the Blue Dam. Indeed, in the first half of 1992, it was observed that water was entering the Blue Dam by means of an underground spring, and both the EPA officer and the defendant’s employees continued to carry out their visual inspection.
9. The defendant did not however undertake any further testing to ascertain the nature of the leak, the extent of the leak or whether the Blue Dam itself was faulty. It could have installed piezometers on the boundary of the premises, but it did not do so and it continued to pump effluent into the Blue Dam.
10. In 1994 the owner of an adjacent property complained of contamination of a spring in that property and thereafter things began to move.
11. Ultimately the Blue Dam was decommissioned. A concrete storage dam was constructed to contain the effluent from the operations on the premises and a remediation programme was undertaken.
12. In the period, however, before that happened the leaking of the Blue Dam caused environmental harm. The effluent contained primarily urea formaldehyde and it leaked into the groundwater. The actual harm, as the agreed statement of facts sets out, was, firstly, the presence of contaminants in the groundwater, secondly, grass die back in the adjoining paddock, thirdly, black scum material covering an area of 40 to 50 square metres in the immediate vicinity of the spring on the adjoining property, fourthly, die back of riparian vegetation in Rifle Range Creek immediately downstream of that spring, fifthly, a reduction of macro invertebrates in the spring, most likely connected with contamination from the spring, and lastly, the loss of habitat due to the die back of riparian vegetation, the unsuitability of the spring for cattle watering and the associated unsuitability of part of the paddock for cattle grazing.
13. The offence with which the defendant is charged is a very serious offence. It carries with it a maximum penalty of $1,000,000.
14. The Court is required to take into account a number of matters in determining penalty. I refer in this connection to s 9 of the EOP Act which has been replaced by s 241 of the Protection of the Environment Operations Act 1997.
15. Firstly, the Court is required to take into account the extent of the harm caused or likely to be caused to the environment by the commission of the offence. I have outlined the harm. There was actual harm which continued over a period of some years commencing from the discovery in 1992 that the Blue Dam was leaking.
16. The second matter the Court is required to take into account is the practical measures which may be taken to prevent, control, abate or mitigate that harm. It is not in dispute that two practical measures could have been taken. The first was that piezometers could have been installed, which would have enabled the extent of the leak and the extent of the contamination to have been identified. The second was that, after the leak had been discovered in March 1992, the defendant could have replaced the Blue Dam with a concrete effluent storage pond. There is, however, another factor, and that is that until steps were taken from 1995 onwards, the Blue Dam was used in the effluent system of the defendant and effluent continued to be pumped into it.
17. Thirdly, the Court is required to take into account 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. There is in substance no dispute between the parties that the harm caused or likely to be caused could have reasonably been foreseen by the defendant. If the dam leaked, it was reasonably foreseeable that the effluent which leaked would go into the groundwater system under the surface of the soil.
18. Next, the Court is required to take into account the extent to which the person who committed the offence had control over the causes which gave rise to the offence. There is no doubt that the defendant had such control.
19. A number of matters were raised in mitigation. I turn to them before I consider the question of discount required by the application of R v Thomson (2000) 49 NSWLR 383.
20. The first matter in mitigation is the fact that the defendant had been considering a replacement effluent system, or an alternative system, before the leak occurred. From that fact I infer that the defendant had some understanding of the potentiality for harm and of its environmental obligations in that regard.
21. I take into account that the harm caused by the leaking of the Blue Dam has been remediated, and at considerable cost to the defendant. The agreed statement of facts sets out a figure $3,200,000.
22. I take into account the matters that are set out in a letter sent to this Court on 17 August 2001 by Mr P N Kirby, the managing director and chief executive officer of the defendant, in which the environmental initiatives, procedures and systems of the defendant are described at some length. I take into account that they exist and that they are complied with, or required to be complied with, by the management of the defendant.
23. I also take into account from that letter the defendant’s concern about the incident and its remorse that it occurred.
24. I take into account in mitigation that the defendant has agreed to pay a considerable amount of the prosecutor’s costs. That amount is $100,000.
25. There has been co-operation between the defendant and the EPA over the period in which the remediation took place and in which the decommissioning of the Blue Dam occurred, and I take that into account.
26. I am entitled to take into account any prior conviction of the defendant. The defendant has one prior conviction in relation to the premises at Tumut. It was convicted in the Local Court and fined $1,000. The defendant does not have a completely unblemished record as far as the premises are concerned, but certainly there is no evidence to suggest that it has a propensity to commit environmental offences. That is a factor which I take into account.
27. There is an issue of considerable dispute in this case. That concerns the question of the appropriate discount to be applied as a consequence of R v Thomson. Before I come to that, however, it is appropriate that I deal with the issue of where this offence rests in the scale of seriousness.
28. The legislature has set a scale with a maximum penalty of $1,000,000. That reflects the seriousness with which the legislature views offences of this kind. It is the duty of the Court to assess the offence and all the matters that arise in connection with it in that scale running from zero to $1,000,000. Undertaking that task leads me to conclude that an appropriate penalty in this case is 30 per cent of the maximum penalty, that is, $300,000.
29. This case has been before this Court and before the Court of Criminal Appeal on a number of occasions. Counsel for both parties have in their submissions today spoken of the number of occasions on which this case has been before this Court and they have each made reference to a number of pronouncements of both myself in this Court and of the Court of Criminal Appeal. I should therefore briefly outline the history of the proceedings.
30. On 14 November 1997, I delivered a judgment in relation to an application by the defendant that a notice to produce be set aside. I ruled against the defendant (Environment Protection Authority v CSR Ltd trading as CSR Woodpanels (Pearlman J, NSWLEC, 14 November 1997, unreported)).
31. Then there was a dispute about the furnishing of further and better particulars. On 18 December 1997 I directed the prosecutor to supply further and better particulars (Environment Protection Authority v CSR Ltd trading as CSR Woodpanels (Pearlman J, NSWLEC, 18 December 1997, unreported)).
32. Then, at the prosecutor’s request, I stated a case for the determination of the Court of Criminal Appeal. Its judgment was delivered on 19 November 1998 and it held, in answer to the stated case, that I had not erred in my earlier judgment (Environment Protection Authority v CSR Ltd (t/as CSR Woodpanels) (1998) 45 NSWLR 357).
33. The case came back again before me in April 1999. By that point, in fact, on 9 February 1999, the prosecutor had furnished particulars of the offence to the defendant. The case before me was an application by the defendant to have the summons struck out for want of sufficient particulars and an application by the prosecutor to have the summons amended. In my judgment of 5 May 1999 I did not strike out the summons but I did grant leave for an amendment to the summons (Environment Protection Authority v CSR Ltd (trading as CSR Woodpanels) (1999) 103 LGERA 161).
34. That was followed by an application by the defendant for me to state a case to the Court of Criminal Appeal. I dealt with that application on 4 June 1999 by deciding to state a case (Environment Protection Authority v CSR Ltd (trading as CSR Woodpanels) [1999] NSWLEC 173).
35. The stated case then went to the Court of Criminal Appeal. Its judgment was delivered on 20 September 2000 answering the stated case again by saying that I had not erred (CSR Ltd trading as CSR Woodpanels v Environment Protection Authority (2000) 110 LGERA 334)
36. Yet again the case came back in March 2001. At this time the prosecutor sought to amend the summons in connection with s 12(3) of the EOP Act. The defendant in response sought dismissal of the summons or a permanent stay. In my judgment of 5 June 2001 I allowed the amendment and I did not dismiss the summons (Environment Protection Authority v CSR Ltd trading as CSR Woodpanels (2001) 114 LGERA 217.
37. That is a long and tortuous history. It is an important factor in this case but it is not the matter which underpins the question of the amount of discount to be applied for the sake of the utilitarian value of the plea of guilty made by the defendant.
38. The gravamen of that issue is that the particulars which were furnished by the prosecutor on 9 February 1999 were held by me and confirmed by the Court of Criminal Appeal to be sufficient. I held (and it was confirmed by the Court of Criminal Appeal) that on that date the defendant was in possession of the particulars which would enable it to know how it should plead to the case, but, it did not plead until 26 July 2001.
39. In R v Thomson at p 418 the Court of Criminal Appeal expressed the opinion that the appropriate range for a discount for the utilitarian value of a plea of guilty is from 10 per cent to 25 per cent and it stated that there are two circumstances which would generally affect the appropriate level of discount in a particular case.
40. The first circumstance is the time at which the plea is entered. That circumstance does not, in my judgment, give a high discount in this case. It is my opinion that the plea was not entered at the earliest opportunity.
41. However, I do place some considerable weight on the second factor. The second factor is that the complexity of the issues about which evidence will have to be gathered and adduced affects the value of the plea of guilty. The greater the difficulty of assembling the relevant evidence, and the greater the length or complexity of the trial, the greater the utilitarian value of the plea. There is no doubt that this case, had it gone to trial, would have lasted a long time. The evidence would have been lengthy and complex and complex questions of fact and law would have arisen.
42. Taking into account all those matters, I am of the view that the appropriate discount to be applied is a discount of 20 per cent.
43. Accordingly, the appropriate penalty to impose upon the defendant is a penalty of $240,000.
44. I therefore make the following formal orders:-
(1) The defendant is convicted of the offence with which it is charged.
(2) I fine the defendant the amount of $240,000 to be paid to the Registrar of this Court within one month of today’s date.
(3) I order the defendant to pay to the prosecutor by way of costs an amount of $100,000.
(4) The exhibits may be returned.
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