Environment Protection Authority v Ecolab Pty Ltd
[2002] NSWLEC 206
•11/29/2002
Reported Decision: (2002) 123 LGERA 269
Land and Environment Court
of New South Wales
CITATION: Environment Protection Authority v Ecolab Pty Limited [2002] NSWLEC 206 PARTIES: PROSECUTOR
DEFENDANT
Environment Protection Authority
Ecolab Pty LimitedFILE NUMBER(S): 50049 of 2002 CORAM: Cowdroy J KEY ISSUES: Prosecution :- pollution of waters LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999, s 22
Protection of the Environment Operations Act 1997, s 120(2), s 123(a), s 241CASES CITED: Axer Pty Ltd v Environment Protection Authority (2001) 113 LGERA 357;
Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304;
Cameron v R (2002) 187 ALR 65;
Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683;
Environment Protection Authority v Rail Infrastructure Corporation [2002] NSWLEC 37;
Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66;
R v Thomson; R v Houlton (2000) 49 NSWLR 383;
R v Sharma (2002) 54 NSWLR 301;
State Pollution Control Commission v White Wings Limited (unreported, Land and Environment Court, 1 November 1991)DATES OF HEARING: 21/10/2002 DATE OF JUDGMENT:
11/29/2002LEGAL REPRESENTATIVES:
PROSECUTOR
Mr P Barley (Solicitor)SOLICITORS
Environment Protection AuthorityDEFENDANT
SOLICITORS
Mr R Wilcher (Solicitor)
Baker & McKenzie
JUDGMENT:
IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES
50049 of 2002
29 November 2002COWDROY J
- Prosecutor
- Defendant
Introduction
1 The Environment Protection Authority (“the EPA”) charges Ecolab Pty Limited (“the defendant”) with an offence against s 120(2) of the Protection of the Environment Operations Act 1997 (“the POEO Act”). Section 120(2) of the POEO Act, extant at the date of the offence, provided that “A person must not cause any waters to be polluted”.
2 The defendant has pleaded guilty to the charge and agreed to pay the EPA’s costs in the amount of $12,000. Accordingly, only the issue of penalty remains to be determined by the Court.
The Offence
3 The incident giving rise to the charge (“the spillage”) occurred on 6 June 2001 at 6 Hudson Avenue, Castle Hill (“the premises”) at which the defendant operated a factory and warehouse. At 12.30 pm on that day a contractor to the defendant, Mr Carl Allegra had transported drums of chemicals to the defendant’s premises on his truck. Mr Allegra was unloading a 1,000 litre tank of a liquid containing 12.5 per cent sodium hypochlorite (“bleach”) with a forklift truck when, as a result of impact, a protruding valve on the tank was torn off causing the tank to rupture. Between 500 and 600 litres of bleach flowed from the tank and entered a stormwater drain. Preventative action was taken when an employee of the defendant took control of the forklift and moved the container into a position where the leakage was stemmed. The spillage was then reported to a senior employee on the premises who in turn informed Mr Ken Blee, the defendant’s Operation’s Manager. The bleach travelled through the stormwater drain into unnamed creek in the vicinity of Salisbury Road, Castle Hill (“the creek”).
The Defendant’s operations
4 The defendant operates a business manufacturing products for the soap and detergent industry. These operations involve handling of various dangerous chemicals. At all relevant times the defendant possessed the required environment protection licence to undertake its activities.
5 During the course of business at the premises bulk chemicals are despatched and received daily. The warehouse located on the premises is used for the purpose of storing, despatching and receiving raw materials, finished goods and mechanical components. Access to the warehouse is through an adjacent concrete driveway. Along the length of the driveway are six open grates each of which is connected to a stormwater drain. Trucks and other transport vehicles load and unload various materials on a concrete manoeuvring area outside the warehouse which is provided with drainage. Such drainage leads directly into the stormwater drain. No bunding existed at the time of the incident to prevent any spillage of liquid from the manoeuvring area entering the stormwater drains.
6 The stormwater drainage system continues underground for a distance of approximately 1.3 kilometres before discharging into the creek. The creek thereafter continues for about 150 metres as a series of ponds and riffle zones. The flow is then directed through two square underground concrete stormwater drains for 50 metres before reaching a larger watercourse named Cattai Creek.
Remedial measures
7 When Mr Blee arrived at the site of the spillage, Mr Allegra was hosing the driveway with water in an attempt to keep the bleach away from the drains leading to the stormwater. Mr Blee instructed him to turn off the hose and find ‘Drysorb’ bags stored inside the warehouse. These bags, which are intended to absorb liquid spills, were then placed in the stormwater drains. More Drysorb bags were taken to the creek and used to form a dam five to ten metres downstream of the stormwater outlet pipes to contain the bleach to the upper section of the creek.
8 The spillage was reported to Ms Danielle Playford of the EPA at approximately 2.15 pm on 6 June 2001. Ms Playford was asked by an employee of the defendant whether the spillage should be reported to Hazmat, a branch of the NSW Fire Brigade dealing specifically with hazardous materials. Ms Playford advised the defendant this would not be necessary but that a private waste management company should be requested to assist in the clean up operation. Accordingly, the defendant arranged for Collex (a waste management company) to provide a vacuum tanker. Ms Playford contacted Baulkham Hills Shire Council and requested council officers attend the premises and supervise the clean up operations.
9 Council officers attended the creek and observed that the temporary dam of Drysorb bags was leaking. Ms Playford also attended and gave instructions that a second dam was to be constructed around 15 metres downstream of the first dam. Shortly thereafter the Collex tanker arrived and began pumping water from the pond above the first dam.
10 On 7 June 2001 the pumping of water from the creek continued and additional tankers were provided to assist in the pump-out. On 8 June 2001 Ms Playford observed the levels of bleach in the creek were still high and she was concerned that if rainfall occurred contaminated water would migrate downstream. Accordingly, Ms Playford contacted a colleague at the EPA and was informed that addition of a chemical, namely sodium thiosulphate, into the waters would neutralise the bleach. Ms Playford then contacted the NSW Fire Brigade and with their assistance sodium thiosulphate was added to the creek. Within 20 minutes of such chemical being added the concentration of bleach was lowered to acceptable levels.
Findings as to Penalty
11 Section 241 of the POEO Act lists several considerations which the Court is to take into account in imposing penalty. The relevant considerations are as follows:-
- (1) (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) …
- (2) The court may take into consideration other matters that it considers relevant.
Extent of Environmental Harm (s 241(1)(a))
12 Expert evidence was tendered by Mr Moreno Julli for the EPA and Mr Paul Anink for the defendant in relation to the assessment of environmental harm occasioned by the offence. After conferring the experts were able to reach consensus on the extent of the harm likely to have been caused by the offence. They have prepared a document (Exhibit H), which together with their respective reports constitutes an Agreed Statement of Evidence on this issue.
Original Condition of the Creek
13 In assessing the extent of environmental harm it is necessary for the Court to consider the modified state of the environment: see Environment Protection Authority v Rail Infrastructure Corporation [2002] NSWLEC 37 at par 80. Such inquiry requires a comparison of the condition of the creek before and after the contamination event.
14 Findings that the pre-existing condition of the creek was polluted do not serve to mitigate the defendant’s conduct: see State Pollution Control Commission v White Wings Limited (unreported, Land & Environment Court, 1 November 1991). As Bignold J observed in that decision: “...a Defendant discharging effluent into a degraded waters is not to be given any advantage by way of mitigation simply because the receiving waters are in a degraded state.” Nevertheless, it is important to determine the condition of the receiving waters in order to assess the extent of the environmental harm occasioned by the pollution.
15 The Court accepts Mr Anink’s uncontradicted evidence that prior to the spillage the water quality of the creek, and the sub-catchment of which it forms a part, were generally of poor quality. Various indices cited by both experts including pH, dissolved oxygen content, faecal coliform content and nutrient content support such conclusion. Further, large aquatic life would have difficulty accessing the creek as it is sourced almost exclusively by concrete stormwater drains. Although tadpoles, snails and worms were found in the creek the Court draws the inference the creek did not originally support a substantial diversity of macroscopic aquatic life.
Effects of Contamination
16 The contamination resulted in an extremely high chlorine concentration of up to 800mg/L in the worst affected portion of the creek (“the impact site”). Such concentrations were 266,000 times greater than those considered appropriate to achieving a 95% protection rate of aquatic species. The concentration of bleach at the impact site was sufficient to kill almost all forms of aquatic life present in that portion of the creek. Chlorine concentrations of 1.3 to 1.5 mg/L were detected in Cattai Creek 50 metres downstream of its confluence with the creek. Such concentration, while not nearly as destructive as those found at the impact site, are also likely to have had some effect on aquatic fauna.
17 Testing was conducted to determine the effect of the contamination on the diversity of aquatic life in the creek. A comparison was then made with a reference pond unaffected by the contamination. Subsequently various dead aquatic fauna were found in the creek including tadpoles, aquatic beetle larvae and worms. The tadpoles were later identified as being of the Peron’s Tree Frog (Litoria peronii).
18 By 26 June 2001 the creek was again supporting live aquatic macro invertebrate fauna at least as viable as the fauna in the reference pond, with the exception of Peron’s Tree Frog. However, the experts agree the lack of Peron’s Tree Frog could probably be explained by seasonal variations as the tests were conducted in winter when numbers of the frog are usually low. These results suggest that macro invertebrate fauna in the creek had recovered from the contamination.
19 Observations were also made of fungal growth and moss containing a bleached appearance up to 40 metres downstream of the impact site. The Court was not provided with evidence concerning the recovery of such flora.
20 There was no long term water quality impact resulting from the spillage. The bleach caused a pulse (that is a short-lived) disturbance in water quality which had no significant residual chemical impact by 26 June 2001.
21 In summary, the Court accepts that the diversity of macro invertebrate aquatic life and water quality of the creek have recovered to its original state. However, considering the potential harm which might have been caused, as a required by s 241(1)(a) of the POEO Act the Court concludes that environmental harm was likely to have been occasioned by the offence (for the meaning of ‘likely’ in this context see Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66). The bleaching of rocks, moss and fungus may have some indeterminable consequences on the long-term health of the creek.
- Practical measures that maybe taken to prevent, control, abate or mitigate that harm (s 241(1)(b))
22 In assessing penalty the Court must consider both the preventative measures which could have been implemented before the contamination, and the remedial measures which were taken after the contamination.
Preventative measures
23 The Agreed Statement of Facts establishes that well before the time of the offence the EPA had recommended to the defendant that it carry out basic preventative measures to avoid harm from any chemical spill of the kind which are the subject of these proceedings. On 2 November 2000 EPA officer Mr Sean Hardiman visited the premises and conferred with Mr Adam Maxwell (the defendant’s Production Quality Control Supervisor) and Mr Michelle Zorzi (also one of the defendants employees). Mr Hardiman said words to the following effect to Mr Maxwell following a discussion of the existing site arrangements:-
- “That’s really not appropriate. As I just said to Michelle Zorzi, this driveway drains directly to these stormwater pits. Any spill of liquid will make its way into the stormwater and pollute waters. You really need areas that are bunded with a wall that will contain any liquid that might spill.
24 Mr Hardiman also had a conversation with Mr Zorzi in which he said:-
- I’ve just spoken to Adam about the need to have bunded areas where you are loading and unloading chemicals. I’d recommend to you too to look into the issue because at this stage there is no protection from any spills or accidents. You break a drum and there is nothing at the moment to contain the spill.
Accordingly, the defendant was placed on notice of the risk to the environment from any spill occurring on the driveway.
25 On 6 November 2000 Mr Hardiman and another EPA officer, Mr Stephen Durrington, conducted a dye test in the defendant’s stormwater drain and found as follows:-
- The dye study also confirmed that the drain discharged to the unnamed creek tributary of Cattai Creek.
Whether the details of the study were conveyed to the defendant is not clear from the evidence. However, Mr Durrington said to the defendant’s Asia Pacific President, Mr David Brett, words to the following effect:-
- This is not acceptable as any spillage that did occur during these operations could result in pollutants entering the stormwater system. The company should carry out all activities inside the factory area or construct a bunded area outside for these operations. The cooling tower located outside the building was leaking and also should be located within a bunded area.
26 Finally, on the 15 of November 2000, Mr Hardiman had a conversation with Mr Zorzi in which he said:-
- Like I’ve said before, I’m concerned about your area on the driveway. It needs some bunded areas to protect the stormwater drains. Steve is also concerned about the cooling tower being where it is and the possibility of it leaking to stormwater.
27 The Court views this evidence as critical in assessing the degree of the defendant’s culpability. The defendant had been forewarned of the risk of pollutant escaping into the stormwater. Further the defendant had been advised of two distinct options for addressing the foreseeable deficiency. It could have created bunding around the outdoor area used for storage, despatching and receiving of goods. Alternatively it could carry on loading and unloading operations inside the factory where bunding existed.
28 The defendant claimed that it intended to construct the bunding after rectifying a defective effluent pit. However, such excuse is patently inadequate. Relocating the defendants loading operations into the factory as recommended could have been arranged forthwith, and would have served as an interim solution. The defendant should have acted promptly to take all practical measures necessary to reduce the risk of environmental harm once it had been identified, and it failed to do so.
Post-spillage control and remedial measures
29 Neither Mr Allegra nor the defendant’s employee was aware of any procedure which was to be followed in the event of a spill. All those present should have been instructed to take effective and immediate action. The confusion which followed the spillage indicates the lack of a well established emergency response procedure. The Court finds that the defendant should have done more to ensure that at least its own employees were adequately trained.
30 The defendant promptly notified the EPA of the spillage and thereafter complied with its instructions. However, the failure of the defendant to consider the neutralising agent which ultimately proved to be effective, is surprising, particularly in view of the nature of the defendant’s business. Sodium thiosulphate was only added to the creek on the third day after the spillage.
31 The defendant asserts that if Hazmat had been notified on the day of the spillage (as the defendant suggested to the EPA) the neutralising agent may have been added sooner, thereby minimising the pollution. Accordingly, the defendant claims that it should not be punished for harm which resulted from such delay. The Court rejects this suggestion. At all times the defendant was in possession of the neutralising agent, and was a reasonably experienced user of chemicals.
Foreseeability of harm (s 241(1) (c))
32 The defendant concedes the spillage and consequential contamination was reasonably foreseeable, especially in light of warnings it had received from the EPA.
Extent of control over causes giving rise to the offence (s 241 (1) (d))
33 Mr Allegra, whose act directly caused the spillage, was an independent contractor and not an employee of the defendant. As principal of C & S Transport Mr Allegra has been providing delivery services for the defendant as a contractor for approximately six years. The majority of Mr Allegra’s work is for the defendant. Usually when Mr Allegra arrives on the premises the defendant’s staff unload his truck. On this occasion, however, Mr Allegra began unloading the containers himself because the defendant’s staff were otherwise occupied.
34 In Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 the New South Wales Criminal Court of Appeal held that the penalty imposed against the company should reflect lack of personal fault since the employee responsible for the incident was acting contrary to specific instructions. The present circumstances are distinguishable in that Mr Allegra’s actions, although unusual, were not contrary to any instructions given to him by the defendant.
35 Whilst Mr Allegra’s actions were the proximate cause of the spillage such an incident was foreseeable and preventable. Had the defendant built bunding as instructed by the EPA or ordered that loading activities were to be carried on inside the factory the contamination of the creek would probably have been averted. The defendant had ultimate control over provision of protective measures which could have averted such risk.
Previous Environmental Incidents
Other relevant considerations
36 Prior to these proceedings the defendant had never been convicted of any offences relating to the environment. The EPA did issue the defendant with a Penalty Notice on 21 December 2000 over an incident which resulted in a discharge of wastewaters to the stormwater system and receiving waters of Cattai Creek.
Revised Procedures
37 The defendant has implemented various reforms in its operational procedures to avoid a repetition of the spillage and subsequent contamination of the creek. Employees have been instructed to undertake loading and unloading operations within the bunded warehouse area. Only smaller vehicles that are able to manoeuvre inside the warehouse are permitted to undertake these activities. In addition the tanks now used to store the chemicals do not have protruding valves which are susceptible to damage. Further, the defendant is relocating its manufacturing activities to another site.
Costs already incurred
38 The defendant has incurred expenses of $23,585.60 in management of the spill. Additionally, the defendant has agreed to pay the EPA’s costs of these proceeding in the amount of $12,000.
Penalty
39 The maximum penalty applicable for a water pollution offence committed by a corporation is $250,000 pursuant to s 123(a) of the POEO Act. In Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683, Kirby P (as he then was) observed at 698:-
- While it is the function of the Court itself to assess the seriousness of the offence in question, the maximum penalty available for an offence reflects the ‘public expression’ by parliament of the seriousness of the offence: R v H (1980) 3 Crim R 53 at 65.
40 His Honour noted that by ascribing a large penalty, parliament was intending to demonstrate the gravity with which the community regards the offence. The maximum penalty in this case indicates the seriousness of the offence.
Plea of Guilty
41 The defendant entered a plea of guilty at an early stage in the proceedings and has thereby assisted the prosecution. The defendant also co-operated fully with the EPA’s investigations and a number of the defendant’s employees voluntarily gave statements concerning the offence. The defendant has also expressed contrition and remorse for the consequences of its actions. The utilitarian value of a plea of guilty will generally entitle a defendant to a discount in penalty: see Section 22 of the Crimes (Sentencing Procedure) Act 1999; see also R v Thomson; R v Houlton (2000) 49 NSWLR 383 (especially at 416-417); Cameron v R (2002) 187 ALR 65; R v Sharma (2002) 54 NSWLR 301.
General and Specific Deterrence
42 General deterrence is an important consideration in pollution offences such as the present. In Axer Pty Ltd v Environment Protection Authority (2001) 113 LGERA 357 the New South Wales Court of Appeal said at 359:-
- In the end, the object of the legislation is to prevent pollution and to do this, inter alia, by the deterrent effect of a substantial fine and by, in consequence, persuading the industries concerned to adopt preventive measures
43 The Court of Appeal further stated (at 359), that fines should be sufficient to ensure the cost of implementing precautionary measures is a worthwhile expense.
44 Having regard to all the above factors the Court considers that a penalty of $40,000 is applicable, which will be reduced to $30,000 in view of the plea of guilty.
Orders
45 The Court makes the following Orders:
2. The defendant is fined the sum of $30,000 to be paid within three months.
1. The defendant is convicted of the offence as charged.
3. The defendant pay the prosecutor’s costs of $12,000.
4. The exhibits be returned.
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