Environment Protection Authority v Elf Farm Supplies Pty Ltd

[2017] NSWLEC 60

Land and Environment Court

New South Wales

Medium Neutral Citation:	Environment Protection Authority v Elf Farm Supplies Pty Ltd [2017] NSWLEC 60
Hearing dates:	21 November 2016
Date of orders:	30 May 2017
Decision date:	30 May 2017
Jurisdiction:	Class 5
Before:	Sheahan J
Decision:	See orders in paragraph [108]
Catchwords:	ENVIRONMENTAL OFFENCES – sentence – plea of guilty by the holder of an environmental protection licence which caused process water containing ammonia to be discharged into a creek – breach of s64 of the Protection of the Environment Operations Act 1997 (POEO Act) – contravention of licence condition – breach of s120 of the POEO Act – failure to carry out licensed activities in a competent manner – pollution of waters – environmental harm caused or likely to be caused – potential for harm to aquatic organisms – moderately foreseeable risk of harm – sentencing principles –objective seriousness – offender had total control over the causes of the harm – subjective circumstances – early plea of guilty – demonstrated contrition and remorse – no record of relevant prior convictions – offender agreed to pay the Prosecutor’s costs – high level of co-operation with the Prosecutor – specific and general deterrence – offender ordered to pay amount of fines towards revegetation projects and to publicise offence and sentence in newspapers
Legislation Cited:	Crimes (Sentencing Procedure) Act 1999 Criminal Procedure Act 1986 Environmental Planning and Assessment Act 1979 Protection of the Environment Operations Act 1997
Cases Cited:	Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v BGP Properties Pty Limited (2006) 145 LGERA 234; [2006] NSWLEC 34 Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Environment Protection Authority v Baiada Poultry Pty Ltd (2008) 163 LGERA 71 Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289 Environment Protection Authority v Barnes [2006] NSWCCA 246 Environment Protection Authority v Custom Chemicals Pty Ltd [2016] NSWLEC 146 Environment Protection Authority v Geoff Robinson Pty Ltd; Environment Protection Authority v Robinson [2011] NSWLEC 14 Environment Protection Authority v Orange City Council [1995] NSWLEC 103 Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103 Environment Protection Authority v Robinson [2004] NSWLEC 629 Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80 Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299; [2006] NSWLEC 419 Environment Protection Authority v Wattke; Environment Protection Authority v Geerdink [2010] NSWLEC 24 Filippou v The Queen [2015] HCA 29 Markarian v R [2005] HCA 25; (2005) 228 CLR 357 Mathews v Goulburn Wool Processors, NSWSC, Smart J, 6 November 1986, unreported Muldrock v The Queen [2011] HCA 39 Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66 R v Holder; R v Johnston [1983] 3 NSWLR 245 R v Olbrich (1999) 199 CLR 270 R v Thomson, R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 Sgroi v R (1989) 40 A Crim R 197 Tolson v Roads and Traffic Authority of New South Wales [2012] NSWLEC 170
Category:	Principal judgment
Parties:	Environment Protection Authority (Prosecutor) Elf Farm Supplies Pty Ltd (Defendant)
Representation:	Counsel: Mr P English, barrister (Prosecutor) Ms S Duggan, SC (Defendant)   Solicitors: Office of Environment and Heritage (Prosecutor) Hicksons Lawyers (Defendant)
File Number(s):	2016/150033 (formerly 2016/50423)2016/149985 (formerly 2016/50422)

Judgment

Introduction

1. The Defendant company (“EFS”) pleaded guilty to two strict-liability environmental offences, and a sentencing hearing was conducted on 21 November 2016.

2. The Prosecutor (the “EPA”), was represented by Mr P English of counsel, and the Defendant by Ms S Duggan, SC.

3. The Prosecutor relied on a Statement of Facts to which the Defendant agreed (“SAF” – Exhibit P1).

4. In addition, the Prosecutor did not object to the reading by the Defendant of two affidavits supplementing the SAF – one by Neil Cockerell, its General Manager of eleven years’ standing, and one by Alan Tyler, its Maintenance Manager, an employee of ten years’ standing. Both deponents had been specifically involved in relevant events.

5. By agreement between the Defendant and the Prosecutor (Tp1, LL20 – 26), and with leave of the Court, the two summonses were amended at the beginning of that hearing to better define the charges:

The Section 64 Offence

6. The charge in matter 2016/150033 is that the Defendant company breached s 64(1) of the Protection of the Environment Operations Act 1997 (“the POEO Act”), between 12 and 21 May 2015 inclusive, by being the holder of Environment Protection Licence (“EPL”) 6229, a condition of which was “contravened by a person”, “at or near ... 108 Mulgrave Road, Mulgrave”.

7. Section 64(1) provides:

(1)   Offence

If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence.

Maximum penalty:

(a)   in the case of a corporation—$1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or

(b)   in the case of an individual—$250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.

8. The relevant licence condition, numbered “O1.1”, provided:

O1   Activities must be carried out in a competent manner

O1.1   Licensed activities must be carried out in a competent manner.

This includes:

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

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

9. The amended summons for this charge particularises the “manner of breach” in these terms:

The Defendant failed to carry out its licensed activities at the Licensed Premises in a competent manner, in that it caused a pump to be switched on and operated in order to transfer "process water", containing ammonia, from a dam, through a hose, onto the surface of a paddock in the following circumstances:

i.   The discharge end of the hose was positioned in an open field at the top of a slope that sloped down towards waters;

ii.   The paddock surface was waterlogged or otherwise unable to receive the process water when it was discharged through the end of the hose;

iii.   The process water discharged to the surface of the paddock and that did not infiltrate the paddock surface for disposal, was not otherwise captured;

iv.   No one was monitoring the discharge end of the hose between about 12 and 21 May 2015 to check that all the pumped process water was infiltrating the surface of the paddock;

v.   No one was monitoring the paddock to ensure that all discharged process water was infiltrating the surface of the paddock;

vi.   No one was monitoring areas downstream or downslope of the paddock to ensure that the pumped process water was not present at those locations;

vii.   There were no written procedures or checks to be followed when operating the pump;

viii.   There were no written procedures or checks to be followed to ensure that the pumped process water did not flow over the surface of the paddock;

ix.   Staff involved in switching on the pump had not been adequately trained.

As a consequence, the defendant caused process water containing ammonia to discharge out of the end of the hose and ultimately flow off the Licensed Premises into South Creek between approximately 19 May 2015 and 21 May 2015.

The Section 120 Offence

10. The charge in matter 2016/149985 is that the Defendant company committed an offence against s 120(1) of the POEO Act, by polluting waters at or near 108 Mulgrave Road, Mulgrave, between about 19 to 21 May 2015 inclusive.

11. Sections 120 and 123 provide:

120   Prohibition of pollution of waters

(1)   A person who pollutes any waters is guilty of an offence.

Note. An offence against subsection (1) committed by a corporation is an offence attracting special executive liability for a director or other person involved in the management of the corporation—see section 169.

(2)   In this section:

pollute waters includes cause or permit any waters to be polluted.

...

123   Maximum penalty for water pollution offences

A person who is guilty of an offence under this Part is liable, on conviction:

(a)   in the case of a corporation—to a penalty not exceeding $1,000,000 and, in the case of a continuing offence, to a further penalty not exceeding $120,000 for each day the offence continues, or

(b)   in the case of an individual—to a penalty not exceeding $250,000 and, in the case of a continuing offence, to a further penalty not exceeding $60,000 for each day the offence continues.

12. The following particulars are contained in the amended summons for this charge:

a.   Waters

A natural drainage gully located to the north of a dam known as the "Overflow Dam" (Overflow Dam) at the Licensed Premises, then downstream, in a generally westerly direction along a drainage gully to a small dam and downstream to a channel that leads to and includes South Creek.

b.   Pollutant

Process water containing substances including Ammonia.

c.   Manner of breach

The Defendant was the occupier of the Licensed Premises at which the Pollutant was stored in the Overflow Dam, and the Defendant operated, and/or caused the operation of, a pump adjacent to the Overflow Dam. As a result the Pollutant was pumped through a hose, it discharged from the end of the hose onto the surface of a paddock at the Licensed Premises and it descended into the Waters.

Generally

13. The two charges concern the Defendant’s “irrigation of liquid onto a paddock”, as a result of which that liquid ultimately flowed into “receiving waters including South/Wianamatta Creek” (Prosecutor’s submissions par 2).

14. The offending liquid is described by the Prosecutor (par 3) as “an odorous browny/black liquid high in Ammonia”.

15. The s 120 offence involved the discharge of the liquid along a water channel and into the Creek, and the s 64 offence relies on a failure by the Defendant to carry out activities “in a competent manner”, such that the liquid was irrigated onto the surface of a paddock, not infiltrating the surface but flowing off the premises to the creek.

16. The Defendant being a corporation, the maximum penalty for each offence, is a fine of $1M: ss 123(a) and 64(1)(a).

17. In each case the Prosecutor specifically seeks, in addition to the imposition of an appropriate penalty, an order for its costs, pursuant to s 257B of the Criminal Procedure Act 1986, and also such orders “as the Court thinks fit”, pursuant to Part 8.3 of the POEO Act.

18. The Defendant agrees to pay the Prosecutor’s costs, as agreed or assessed, and the Prosecutor estimates them to be approximately $50,000 (SAF81, and Tp10, LL30 – 33).

19. In respect of Part 8.3 orders, the Prosecutor seeks both a publication order, pursuant to s 250(1)(a) (SAF83), and an order, pursuant to s 250(1)(e), that any penalty be paid to Hawkesbury City Council to fund revegetation works on the subject creek (SAF82). The total cost of the nominated project is in the order of $157,950 (SAF tab 16, and Tp11, LL8 – 21).

The Defendant’s Business

20. The Defendant’s business at 108 Mulgrave Road involves “composting waste products to produce a mushroom substrate used by mushroom farmers throughout Australia” (SAF 2(b), and see Tolson v Roads and Traffic Authority of New South Wales [2012] NSWLEC 170, at [38] – [45]).

21. As described in the SAF (par 3), and by Cockerell (par 2):

The Defendant’s process involves mixing materials received at its premises with water to form the mushroom substrate which is then sold to mushroom farmers. The substrate consists of the following approximate contents:

•   Water (creek 85% & town water 15%) - 75%

•   Straw - 13.8%

•   Chicken manure - 8.1%

•   Gypsum - 1.6%

•   Cottonseed - 1.4%

•   Feather meal - 1%

22. The Defendant’s Environmental Management Strategy, dated May 2012 (“EMS” – in Annexure 3 to the SAF), notes (p1.1) that the plant has operated at that Mulgrave site since 1981, and (p2.1) that it is located at the upper edge of the South Creek flood plain, approximately 300m east of South Creek, containing a fluvial soil landscape, and constructed on clean fill.

23. The Defendant’s managing director, Rob Tolson, has ultimate responsibility for the operation, assisted by Cockerell (p3.1), and the process is described in detail.

24. The EMS has a specific chapter on Environmental Management (ch 5), and annexes a water management plan (not included in the SAF), as well as the EPL (annexure 2 to the SAF).

25. It notes (p5.1) that condition 14 of the Defendant’s project approval (annexure 4) specifies that the plant “must comply with s 120 ... except as expressly provided by an [EPL]” (see also Cockerell pars 6 to 8).

26. EPL 6229, first issued 1 August 2000, includes Operating Conditions, the key one of which for the present case (“O1”) I have already set out above ([8]).

27. The EPL’s “Limit Condition” L1 provides:

L1   Pollution of waters

L1.1 Except as may be expressly provided in any other condition of this licence, the licensee must comply with section 120 of the [POEO] Act.

28. The Court’s understanding of the SAF, and of the two staff affidavits, is assisted by the annotated map (at Annexure 1 of the SAF), which shows (SAF 1):

(A)   the “Western Dam”, with a “pump” shown on the northern edge, and, north of the dam, a “reedy area”, then an “earthern berm”, and the “inundated area”, and, further north, the balance of the “irrigation field”. (Cockerell (par 5) describes the irrigation field as a flood plain inundated in periods of high rainfall, with a natural spring at its eastern edge);

(B)   running to the west of the reedy area, a “9 inch pipe”, then a “stormwater drainage channel”, running via a “stormwater pond”, to the “point of entry” at the bank of the creek;

(C)   the “Elf buildings” to the east;

(D)   a “stormwater pipe” and a “raised pad”, between the dam area and the Elf buildings:

(E)   nine EPA sampling points (S1 to S9 – see SAF 50).

(F)   a “lay-flat hose”, joining the pump to the inundated area.

The Agreed Facts

29. The factual background of the subject incident is fairly (but briefly) summarised by the Prosecutor in its written submissions (pars 6 – 10).

30. However, in fairness to the Defendant, much of the SAF should be recorded in this judgment ([31] to [44] following):

31. The Dam and Irrigation Field (SAF 4 to 16 – see also Cockerell pars 9 to 22)

The Western Dam – typical usage

4   The Western Dam is typically used to collect any surplus waters from a recycling pit, otherwise referred to in the EPL as a leachate collection pit (the Pit), on the Premises, as follows.

5   Any waste waters from the mushroom substrate production process are captured in the Pit within the Premises and are normally reused in the production process. The Pit has a 29m³ capacity, and is configured to a 1 in 10 year flood event in accordance with an Environmental Management Strategy (EMS) for the operations. The EMS was prepared in accordance with a Major Project Approval under the former Part 3A of the Environmental Planning & Assessment Act 1979 dated 11 January 2012 for the expansion of the Premises. If process water, rainwater, stormwater or runoff water fills the Pit above capacity, surplus waters are directed via a small weir to the Western Dam. A copy of the EMS is at Annexure 3. A copy of the Part 3A Approval is at Annexure 4.

6   The Pit is typically emptied every week and cleaned fortnightly as per the EMS. Pursuant to the conditions of the EPL, the Defendant must remove solid material from the Pit screen daily when water is flowing to the Pit (wet weather or bale wetting). Additionally, the Defendant must de-sludge the Pit (if sludge is present) at least fortnightly and keep a record. The Prosecutor does not allege this didn't occur.

7   Waters entering the Pit will typically contain the ratios of constituents described in paragraph 3, save that the straw is filtered out before the water enters the Pit. According to the Defendant's General Manager, "Waters leaving the recycling Pit will typically contain predominantly stormwater, although it cannot be ruled out that some trace elements of the components described in paragraph [3] (except for straw) are present".

8   When waters flow from the Pit to the Western Dam, they are a brown to dark brown colour, which the Defendant's General Manager understands to be caused by tannins in the straw. The Defendant's General Manager described the odour of those waters has (sic) having a rich fertiliser smell like blood and bone, an organic smell, but not a toxic smell - an organic liquid fertiliser smell.

9   The Western Dam otherwise :

•   receives rainfall directly falling into the Western Dam;

•   receives any seepage that naturally comes out of the immediately surrounding area;

•   receives any seepage waters from a pipe from the eastern side of the Western Dam buried under a layer of fill installed in preparation for expansion works;

•   does not receive piped stormwater.

10   Water in the Western Dam is either pumped back to the production process, or is disposed of by irrigation to the Irrigation Field pursuant to the EPL. The Western Dam is kept as empty as possible so as to prevent it from becoming an odour source. Waters in the Western Dam at the commencement of April 2015 were returned to process, and the Western Dam was effectively empty by 14 April 2015. However, despite the above, the Western Dam always has a level of water in it due to the fact that not all of the water can physically be pumped out of it.

11   On 21-23 April 2015, the premises experienced significant rainfall. Unbeknown to the Defendant, an underground pipe, which was subsequently discovered to have been broken by contractors on site, allowed floodwaters to enter the Western Dam, in addition to the rain water which fell directly there. As the floodwaters receded on 27 April, the pipe was discovered and was immediately plugged, leaving the Western Dam containing stormwater, rainwater and process water from the Pit.

12   Prior to the storm event of 21-23 April, the Defendant had been keeping the Western Dam level low by intermittently pumping water back up into the composting process as (Dam levels) required. However, in April 2015, the Defendant was conducting investigations into product quality issues. As part of these investigations, the Defendant did not want to introduce new elements into the process that might impact on quality of product. Given that the Western Dam levels had risen significantly with floodwaters caused by the storms, it was decided not to return the Western Dam waters to process, as the effect of floodwaters on process was not known. Therefore, the Defendant decided to lower the Western Dam levels by irrigating the Western Dam water onto the surface of an area of the Premises.

13   The area of the Premises selected to receive irrigated waters from the Western Dam was, as is identified on the map at Annexure 1, the "Inundated Area"– rather than the area identified as "Irrigation Field". The reasons for this are as follows. On previous occasions when waters from the Western Dam had been irrigated, the Defendant had used the Irrigation Field. However by April 2015, the irrigation pump that had been used to irrigate to the Irrigation Field had become redundant due to modification of the pumps used to supply creek water to the process facility. The new supply pipeline to the Irrigation Field had yet to be installed. In addition, contractors were carrying out earthworks on the Earthen Berm which were scheduled to be completed prior to installing the new supply pipeline to the Irrigation Field.

Irrigation Process – Irrigation Field

14   On previous occasions when waters from the Western Dam had been irrigated the Irrigation Field had been used. The typical process for doing so was that the relevant employee of the Defendant would inspect the Irrigation Field to assess if it could receive and retain the waters to be deposited there. If so, the water would be pumped to the Irrigation Field.

15   There was no written procedure in place to direct how this irrigation was to be carried out, nor was there any written procedure in place so as to ensure irrigation did not ultimately give rise to water pollution.

16   According to the Defendant's General Manager, since he commenced his employment with the Defendant in 2005 he has not been aware of any pumping of water from the Western Dam to the Irrigation Field giving rise to any escape of water to South/Wianamatta Creek.

32. The May 2015 events (SAF 17 to 25 – see also Cockerell pars 19 to 25)

Irrigation process – Inundated Area

17   Water from the Western Dam was pumped to the Inundated Area on Tuesday 12, Thursday 14, Monday 18, Tuesday 19 and Thursday 21 May 2015.

18   At the relevant time, to pump water out of the Western Dam the Defendant used a pump called an "Aussie Pump" QP40T. It has a maximum capacity of 1,800 litres per minute if measured with a 27m head.

19   On each occasion, Mr Tyler set up the Pump so that it pumped water from the Western Dam to the Inundated Area. Mr Tyler and the General Manager of the Defendant looked at the Inundated Area and chose a spot which they thought would be the best place for all the water to soak into the land. He then also moved the hose line to the chosen spot and started up the Pump and let it run until it was out of fuel. However, neither Mr Tyler nor the General Manager of the Defendant checked the pump or the pumping after it had commenced on each occasion – including to ensure the surface of the Inundated Area had not become waterlogged or that there wasn't any surface runoff from the Inundated Area including into the Stormwater Channel or the Creek.

20   For the pumping to the Inundated Area in May, the Pump had a 100m hose which reduces maximum capacity, and was operated below full throttle to avoid disturbance of the ground at the end of the hose. It is estimated that the pump was operating at about 400 litres per minute, for 4 hours on each occasion. When the Defendant's General Manager was interviewed in September 2015 he estimated that 2 million litres of liquid had been pumped out of the Western Dam and irrigated onto the Inundated Area in the week prior to and including 21 May 2015. However, in a subsequent statutory notice response dated 25 November 2015 the Defendant revised that figure down to between 450,000 and 480,000 litres, based upon a calculation of the volume of waters removed from the Western Dam and the flow rate of the pump.

21   Before irrigation started, the Inundated Area was inspected to assess where the waters might be best distributed, so as to ensure absorption into the ground. The discharge hose was moved around the Inundated Area to dry areas as observed. When the pumping commenced, Mr Tyler and or the General Manager of the Defendant watched the flow to see where it went, and to observe that it did indeed enter the ground. If any of the waters was seen to run towards the reeds at the south end of the Inundated Area the Pump was turned off, and a new satisfactory location selected before pumping recommenced. On 19 and 21 May, the hose was situated in the north east corner of the Field.

22   However, after these checks had been completed and after pumping commenced, the Defendant did not continually check whether the surface of the Inundated Area had become waterlogged or whether there was surface runoff from the Inundated Area. Neither did the Defendant have in place a formal or informal system to check whether the surface of the Inundated Area had become waterlogged or whether there was surface runoff from the Inundated Area.

23   None of the Defendant's staff, including those responsible for irrigating the Inundated Area, had any formal training or qualifications, including scientific or engineering training, regarding the assessment of irrigation fields or the irrigation of wastewater. However, the Defendant's General Manager says he has irrigation experience having looked after the irrigation for the Defendant generally in the past.

24   The waters pumped from the Western Dam to the Irrigation Area were browny/black in colour.

25   None of the waters pumped from the Western Dam to the Inundated Area was (sic) observed by staff of the Defendant to go beyond the boundaries of the Inundated Area, other than on 21 May 2015, where water was observed flowing along the reeds in the south west corner of the Inundated Area and then to the Stormwater Drainage Channel. However:

-   as above the Defendant's staff were not continually monitoring the pumping on each occasion that it occurred;

-   neither was there a system in place to ensure such monitoring occurred.

[Tyler sets out in his affidavit (par 9) his work diary notes for the period 12 to 21 May. For 19 May he says: “Our General Manager, Mr Neil Cockerell and I looked at the irrigation area and chose a spot which we thought would be the best place for all the water to soak into the land. I then also moved the hose line to the chosen spot. I then started up the pump and let it run until it was out of fuel”. For 21 May he says: “I moved the hose into a different location so that water would be absorbed by the ground, and then started the pump up, leaving it to run until it was out of fuel. However on this occasion officers from the EPA arrived on site to inspect the pumping. They took about an hour or so to carry out inspections and take samples before they asked us to turn off the pump. Mr Cockerell asked me to turn it off so I did straight away.”]

33. The EPA investigation (SAF 26 to 49 – see also Cockerell pars 23 to 32)

19 May 2015 – 21May 2015

26   On Monday 18 May 2015 EPA Officer Damien Rose received notification through the EPA's complaint management system, that a neighbour of the Defendant had called the EPA's Pollution Line on 16 May 2015 regarding an alleged discharge from the Premises into South/Wianamatta Creek.

27   Another EPA Officer, Mr George Orel, attended the Premises on 16 May 2016. At that time Mr Orel did not observe any significant discharge of material into South/Wianamatta Creek from the Premises.

28   On Tuesday 19 May 2015 Mr Rose was allocated a second EPA Pollution Line complaint in which the same neighbour alleged that on 18 May 2015 he saw liquid discharging from the Premises into South/Wianamatta Creek.

21 May 2015 - Prosecutor's investigation

[Cockerell deposes (par 26) that “[a]t no time before 21 May 2015 did I observe any waters from the Lay-flat Hose leave the Inundated Area or enter the Reedy Area, or proceed past the Earthen Berm along the Stormwater Channel”, and Tyler deposes (par 10) that “[a]t no stage did I ever see any water flowing from the irrigation area into the drainage channel which crosses the floodplain, other than on 21 May”.]

29   Mr Rose and EPA Officer Mr Joshua Madden entered the Premises at about 11.20am on 21 May 2015 for the purpose of investigating the allegations regarding discharges of liquid from the Premises into South/Wianamatta Creek. The General Manager of the Defendant, Mr Cockerell accompanied Mr Rose and Mr Josh Madden as they inspected the Premises. All three gentlemen walked through the Premises to a raised pad situated adjacent to the substrate plant buildings on the Premises where Mr Rose observed the areas marked on Annexure 1, being the Irrigation Field, the Inundated Area, the Reedy Area, the Western Dam, the Earthen Berm, the Lay-flat Hose, the Stormwater Drainage Channel, the Stormwater Pond and South/Wianamatta Creek.

30   At that time Mr Rose heard a sound he recognised as being typical of a medium size combustion engine pump.

31   He saw the Lay-flat Hose running from the Western Dam and discharging a large volume of brown/black liquid to the Inundated Area. Once the liquid had come out of the end of the Lay-flat Hose, it was fanning out across the surface of the Inundated Area.

32   The three gentlemen walked down off the raised pad and down around the northern edge of the Inundated Area. Mr Rose did not walk through the Inundated Area as it was inundated with sheet flow liquid that was discharging from the end of the Lay-flat Hose to the surface of the paddock and then flowing downslope to the Earthen Berm. He saw that the sheet flow of liquid was then running downslope along the base of the Earthen Berm. At that location he could see ripples on the surface of the liquid. The liquid then flowed further downslope towards the Stormwater Drainage Channel. A photograph taken at this location is Annexure 5.

33   The three gentlemen walked along the Earthen Berm in a generally southerly direction - following the flow of the liquid. Mr Rose saw the liquid pass into the Reedy Area. At that time Mr Cockerell realised the water may be flowing to the creek so stated he would turn off the Pump, but was instructed by Mr Rose to leave it on so as to enable the EPA to conduct an investigation of the alleged pollution incident.

34   As the Earthen Berm was constructed across the stormwater drainage channel, a 9" pipe had been installed at its toe to allow stormwater to pass through the Earthen Berm. Mr Rose observed that the browny/black liquid that he had seen earlier was flowing into this pipe. He looked on the other side of the Earthen Berm and observed the browny/black liquid flowing out of the 9" pipe back into the Stormwater Drainage Channel. The browny/black liquid was flowing out of the pipe at a high velocity. The Stormwater Drainage Channel was full of the browny/black liquid.

35   Mr Rose and Mr Josh Madden walked in a westerly direction along the Stormwater Drainage Channel. Mr Rose saw that the same browny/black liquid was flowing in the Stormwater Drainage Channel at a similar volume to that running along the bottom of the Earthen Berm he observed earlier. A photograph taken at this location is Annexure 6.

36   At this location Mr Rose noticed that the grass area surrounding the Stormwater Drainage Channel was saturated with a clear coloured liquid. This surrounding liquid was distinctly different to the browny/black liquid flowing down the Stormwater Drainage Channel from the Inundated Area.

37   At this location the browny/black liquid in the Stormwater Drainage Channel then flowed into the Stormwater Pond that was approximately 20 metres by 15 metres in size. As Mr Rose walked around the stormwater pond he noticed it contained the same browny/black liquid. He saw that the Stormwater Pond was overflowing with the same browny/black liquid flowing out into the next downslope section of the Stormwater Drainage Channel. The browny/black liquid was flowing at a similar rate as that flowing in the previous upslope section of the Stormwater Drainage Channel. A photograph taken at this location is Annexure 7.

38   Mr Rose and Mr Joshua Madden followed the stormwater drainage channel in a westerly direction, from the location of the stormwater pond to the top of the bank of South/Wianamatta Creek. From the top of the bank of South/Wianamatta Creek Mr Rose observed browny/black liquid flowing down the bank, over a series of small drops, then into the creek. A photograph taken at this location is Annexure 8.

39   At each point where the browny/black liquid dropped down the bank, it formed a very small pool that had approximately 30cm high white foam. Mr Rose formed the opinion, based on his professional experience, including inspecting and regulating waste and sewage premises where leachate ponds are present, that the white foam was likely formed by the agitation of organic material dissolved within the browny/black liquid as it dropped down the bank.

40   Mr Rose and his colleague Mr Madden climbed down the bank of South/Wianamatta Creek. As Mr Rose climbed down the bank, he saw the browny/black liquid flowing into the pale brown coloured creek water.

41   The water around the Point of Entry was discoloured for approximately two metres before the two different liquids, one being the browny/black liquid and the other being the pale brown coloured creek water, mixed together. There was a similar mass of white foam at the point of entry of the liquid to the creek as that which Mr Rose had seen earlier up on the creek bank. A photograph taken at this location is Annexure 9. Standing at that location Mr Rose did not see any other source of liquid flowing into the creek.

42   Mr Rose and Mr Madden then retraced their steps from the creek bank towards the Western Dam.

43   At the Western Dam, Mr Rose, Mr Madden and Mr Cockerell walked to the northern bank. Mr Rose saw the dam contained a large volume of browny/black liquid.

44   From the northern bank of the Western Dam, Mr Rose saw and heard a pump operating which was located near the bottom of the northern bank of the Western Dam. A photograph taken at this location is Annexure 10.

45   Mr Rose saw that the pump was attached to a portable frame with a fuel line running to a detached fuel tank. He saw that the pump was collecting liquid via a short hose that had been placed within the dam itself. This liquid passed through the pump, into a long lay-flat hose, that ran from the pump to the Inundated Area. A photograph taken at this location is Annexure 11.

46   The colour of the liquid within the Western Dam was browny/black. It looked the same as the liquid flowing from the end of the lay-flat hose pipe, along the stormwater drainage channel and ultimately into the creek. There was a brown froth scum on the surface of the liquid in the Western Dam.

47   Mr Rose tested the flow of liquid being pumped through the Lay-flat Hose by standing on the hose about 10 metres after it had left the Pump. It did not flatten under his weight but remained fully turgid, as it was moving liquid from the Western Dam and discharging it out the end of the Lay-flat Hose onto the surface of the Inundated Area. A photograph taken at this location is Annexure 12.

48   As Mr Rose walked along the top of the Inundated Area he noticed the Stormwater Pipe that he had seen on previous inspections. The Stormwater Pipe collects stormwater from the eastern section of the Premises where various buildings are located. The Stormwater Pipe is designed to discharge stormwater from the buildings on the Premises, into the Reedy Area, then into the Stormwater Drainage Channel. At that time he checked and saw that there was no liquid flowing out of the Stormwater Pipe.

49   Mr Rose and Mr Joshua Madden then walked from the Inundated Area up the raised pad area. Mr Joshua Madden took a photograph from this raised pad, showing the Western Dam, the end of the Lay-flat Hose, the Inundated Area, the Reedy Area, the Earthen Berm and the Stormwater Pond. A photograph taken at this location is Annexure 13.

34. The EPA Sampling (SAF 50 to 53)

50   Samples were collected of the browny/black liquid by the EPA Officers, in accordance with approved EPA sampling techniques, at the following locations identified on Annexure 1:

S1- browny/black liquid flowing out of the end of the Lay-flat Hose;

S2- toe of the Earthen Berm;

S3- end of 9" pipe at western edge of the Earthen Berm;

S4- entry to the Stormwater Pond;

S5- outlet of the Stormwater Pond;

S6- top of the bank of South/Wianamatta Creek;

S7- Point of Entry;

S8- 4 metres south of S7; and

S9- 20 metres north of S7.

51   Samples S2-S7 had the same browny/black colour and were flowing at the same rate as the liquid discharging out of the end of the lay-flat hose at S1.

52   At location S7, the browny/black liquid entered the creek and mixed with the pale brown creek water. There was white froth on the surface of the creek water where the browny/black liquid flowed into the creek. The plume of browny/black liquid was approximately two metres in radius prior to dissipating into the milky coffee coloured creek water. A photograph taken at this location is Annexure 14.

53   Other than S7, there were no other locations along the Creek where liquid was flowing into the creek from the Premises or from any other location.

35. The Clean-up (SAF 54 to 56)

54 At about 12.45pm Mr Rose gave Mr Cockerell, as the representative of the Defendant, a verbal clean up direction pursuant to s.93 of the POEO Act as follows:

(a)   turn the pump off;

(b)   stop all future pumping of liquid that may flow to South/Wianamatta Creek;

(c)   any pumping of liquid from the Western Dam must be to either the approved irrigation area or a facility that can lawfully receive it;

(d)   immediately notify the EPA if there is any further discharge of the liquid in the Western Dam to South/Wianamatta Creek; and

(e)   nominate a person to ensure the pump is not used for pumping out in a manner that may pollute waters.

55   The requirements of this verbal order were immediately and fully complied with.

56   The verbal clean-up notice was later formalised via a written clean-up notice issued by the EPA which the Defendant immediately complied with.

36. The Prosecutor had samples S1 to S9 analysed, to assess harm to the environment (SAF 57 to 64):

Harm to the environment

57   Samples S1-S9 were subsequently analysed by the Office of Environment and Heritage's Lidcombe Laboratory and Sydney Water's Monitoring Services.

58   As part of the analysis, an ecotoxicology test on the water flea was undertaken. This involves assessing the potentially harmful effects of the samples to juveniles of freshwater water flea. The water flea is exposed to various sample concentrations and the number of water flea immobilised (immobilisation is considered similar to lethality) is counted.

59   Dr Katelyn Edge of the EPA was subsequently engaged to provide an expert opinion in relation to the S1-S9 analysis sample results, including whether the incident the subject of these proceedings gave rise to any actual or potential harm to the environment.

60   Dr Edge prepared a table summarising the S1-S9 results as follows:

Map of premises sample reference	Description	pH	Ammonia-N (mg/L)	Water quality guideline (mg/L Ammonia-N) ͣ	Toxic to waterflea	Toxic to marine bacterium
S6	Top of bank	8.0	148	0.9	Yes	No
S7	Mixing into creek	7.7	26.7	1.32	Yes	No
S8	Creek 4m South (upstream)	7.7	0.5	1.32	No	No
S9	Creek North 20m (downstream)	7.6	0.2	1.47	No	No

61   Dr Edge concentrated her analysis on S6-S9 as those sample (sic) were most representative of the material that entered South/Wianamatta Creek.

62   Dr Edge concluded that no evidence was available to her indicating that the escape of waters caused actual harm to the environment.

63   Dr Edge found:

a.   sample S6 caused immobilisation in 100 % of exposed water flea. Immobilisation is considered similar to mortality. The sample would need to be diluted 4-8 times to avoid these acute toxic effects on water flea;

b.   sample S6 was high in conductivity (4000 µS/cm) and contained concentrations of ammonia known to cause toxicity to aquatic organisms. The concentrations of ammonia were 164 times higher than the water quality guideline for ammonia as a toxicant;

c.   sample S7 caused immobilisation in 100% of exposed C. dubia (Ecotox 1 Test Report 201500144). When diluted by a factor of two (50% concentration), this sample was not acutely toxic to C. dubia;

d.   sample S7 had concentrations of ammonia known to cause toxicity to aquatic organisms. Concentrations of ammonia were 20 times higher than the water quality guideline for ammonia as a toxicant.

64   Given the above, Dr Edge concluded that:

a.   the alleged discharge into South Creek/Wianamatta Creek created the potential for harm to aquatic organisms;

b.   the potential for harm would have been restricted to less than 20 metres from where the discharge entered South/Wianamatta Creek.

37. On 27 May 2015, the Prosecutor carried out a follow-up inspection (SAF 65 to 66):

65   On 27 May 2015 Mr Joshua Madden and Mr Rose drove to the Premises. Mr Rose observed:

(a)   the Western Dam appeared to have the same volume of liquid in it as when he left the premises on 21 May 2015. He observed that the Pump was not operating, although it was still located on the northern bank of the Western Dam;

(b)   there was some brownish liquid in the Stormwater Drainage Channel, however, it was mainly clear. This liquid did smell like the browny/black liquid that Mr Rose had observed on 21 May 2015,

(c)   saw that the content of the Stormwater Pond had changed. It was now a clear liquid;

(d)   at S6, a small volume of the same brownish liquid, as was in the Stormwater Drainage Channel, flowing down the bank and residual amounts of brownish liquid in the small pools as had been observed on 21 May 2015. No foam on the surface of the small pools was observed;

(e)   at location S7, a minor amount of the same brownish liquid was trickling into South/Wianamatta Creek. No foam on the surface of the creek where the brownish liquid was entering the creek was observed.

66   As discussed above, as a result of the 21 May 2016 inspection, the Prosecutor issued a written Clean Up notice number 1530938 dated 28 May 2015 to the Defendant. The terms of this notice were immediately and fully complied with.

38. Changes made by EFS since the incident (SAF 68 to 76 – see also Cockerell pars 33 to 40):

68   Prior to the incident, the Defendant did not have any documented procedures in place in respect of the irrigation of liquid from the Western Dam and the management of any overland flow from the Irrigation Area or the Inundated Area. In addition, the Defendant's staff had no formal training or qualifications regarding the assessment of irrigation fields or the irrigation of wastewater.

...

69   Since 21 May 2015, the Defendant has reviewed its procedures for pumping waters from the Western Dam with a view to instituting:

•   regular documented procedures ("Farm Dam Pumping Procedure") to follow aimed at preventing discharge to South/Wianamatta Creek;

•   increased supervision of pumping works, especially when pumping to paddock;

•   renewed efforts to notify the EPA before pumping takes place;

•   training of staff before they are involved in pumping; and

•   back up methods for disposing of waters if the Western Dam cannot be pumped to either paddock or process.

70   The Defendant's revised Farm Dam Pumping Procedure is annexed to this document as Annexure 15.

71   The Defendant's revised Farm Dam Pumping Procedure requires staff involved in pumping to examine the discharge location in the paddock before, during and after pumping occurs. If prior inspection reveals it is apparent that the paddock is not suitable to receive the water, the services of an independent hauler are available for removal of the water.

72   The Defendant has not pumped any water to the Inundated Area since 21 May 2015. It waited until the works on the Earthen Berm were completed before resuming pumping. In accordance with the verbal direction given on 21 May 2015 and direction 4.3 of the EPA's clean up notice dated 28 May 2015 the Defendant has only pumped waters to the Irrigation Field west of the Earthen Berm.

73   The Defendant has also dug furrows in the Irrigation Field to facilitate the absorption of water into the ground rather than flowing into the creek. These furrows end at a fence which is situated between 64 and 92 metres from the bank of South/Wianamatta Creek to further minimise the possibility of waters entering the creek.

74   The Defendant now conducts formal training of staff involved in pumping and maintains a register of training of staff relating to pumping. Although it did not do so at the time of the Incident, it also notifies the EPA of when pumping occurs, as required by condition R4 of its EPL.

75   The Defendant has also engaged an Environmental Manager with qualifications in Environmental Planning and Applied Science (Environmental Management), to assist in the development of improved environmental practices at the facility. The Environmental Manager has the role of reviewing all the Defendant's environmental practices and impacts and advising the company on how to comply with relevant laws in its day to day operations, and of developing documented protocols for environmental management.

76   In relation to pumping of waters from the Western Dam the responsibilities of the Environmental Manager include:

•   risk analysis in pumping and irrigation procedures;

•   development of procedures to address risk and prevent water pollution;

•   revision of Farm Dam Pumping Procedure; and

•   updating and conduct of training procedures.

39. The new Farm Dam pumping procedure (SAF 70 to 71, annexure 15 to SAF, and Annexure “A” to Cockerell) provides:

1.   Check current conditions of discharge area, (i.e. points iv and vi below) before proceeding.

2.   If conditions are adequate for pumping the Operations Manager notifies EPA, in accordance with license, before pumping.

3.   If dam is full and conditions for pumping to paddock is (sic) not adequate, the contracted vacuum tanker below is required to remove the water and dispose to a licensed waste facility.

a.   Taylor Excavations and Haulage – ...

4.   Senior Manager will authorise a worker, trained in this procedure, to proceed to pump dam water in accordance with this procedure and document authorisation in register. (EFS.ENV.003)

5.   Worker to document in register the following:

a.   Pump start/finish date and time;

b.   Task and Observations such as

i.   Walking pump out area;

ii.   Check discharge valves;

iii.   Flow rates

iv.   Ground saturation before and during pumping

v.   Water approaching and flowing past ''limit fence"

vi.   Weather conditions before and during pump out.

Pumping procedure

1.   Secure a full 20L jerry can of unleaded petrol in the back of the work ute.

2.   Drive down to dam pump via designated driveway.

3.   Fuel up pump tank from jerry can and prime pump.

4.   Check discharge manifold valves are in correct position

5.   Start pump and check its operation correctly

6.   Walk to discharge area and check all valves and flow rates

7.   Monitor conditions throughout the shift and document observations in register.

8.   Turn off discharge valves when water level in each furrow is full.

9.   Turn pump off when monitoring can't be conducted (i.e. end of shift) and before water level overflows end of all furrows at limit fence (discharge paddock fence line).

10.   If Worker monitoring the pump out leaves site, the pump must be turned off prior or a handover of monitoring responsibility written in register.

Evidence on Sentencing matters

40. The balance of the SAF (67, and 77 to 83) deals with sentencing matters.

41. As recorded in the SAF (at 67 – my emphasis):

The Defendant by its employees has fully co-operated with the Prosecutor in the investigation of the incident and has willingly participated in three interviews, one under direction, and provided all documents requested by the Prosecutor as it is required to do so pursuant to Chapter 7 of the POEO Act.

42. SAF 77 records:

From at least 2003 the Defendant was aware of the requirements of conditions L1.1 and O1.1 of the EPL and the obligations of s. 120 of the POEO Act which prohibits the pollution of waters.

43. In respect of SAF 77, there was an additional fact, agreed orally between counsel for the parties, that (Tp1, LL43 – 46, and p2, LL11 – 22):

... there were three letters which brought those requirements to the attention of the offender. One of those letters dealt with the licence condition and all three dealt with the s 120 offence and the period of those letters was between 2003 and 2012 [or 2013].

44. SAF 78 to 83 record:

Penalty Notices

78   Odour surveys by EPA officers have resulted in 4 Penalty Infringement Notices being issued against the company, as follows, all of which have been paid without contest:

•   8 August 2016 No. 3085779869 $8,000;

•   8 October 2015 No. 3085777788 $8,000;

•   14 August 2014 No. 3085774827 $1,500;

•   14 August 2014 No. 3085774818 $1,500.

79   The Defendant has expressed remorse for the incidents in question. [Cockerell deposes (par 7) to approval EFS has obtained for a major capital project to help avoid emission of odour.]

Guilty Pleas

80   Entry of a plea of guilty avoided a hearing. There has been utility in the pleas of guilty.

Costs

81   The defendant has agreed to pay the Prosecutors' costs as agreed or assessed.

S.250 Orders and Penalty

82   In lieu of payment of a fine the Defendant has agreed to submit to a Court order requiring payment of the equivalent of a fine to Hawkesbury Council for revegetation works on South/Wianamatta Creek as per the Council letter at Annexure 16.

83 In addition, the Defendant has agreed to a publication order pursuant to s250(1)(a) in the form attached at Annexure 17.

45. Cockerell deposes (pars 41 to 43), relevant to sentencing:

41   EFS is extremely aware of the need to address issues arising from its presence in the community at Mulgrave and beyond. We have a commitment to continue supply of substrate to our customers, who account for 72% of mushrooms supplied to the NSW market and about 27% to the Australian market. This means that a significant number of people derive their livelihood from our manufacturing – not just our immediate employees, but those who work on the customers' farms and those in industries which provide services to us and our customers.

42   All this means that EFS is keen to contribute to the well-being of the community overall. To this end EFS annually supports the Hawkesbury Agricultural Show, Windsor Rugby League Club, Hawkesbury Valley Rugby Union Club and the Hawkesbury District Basketball Association amongst other charities and Community Service providers.

43   Integral to this community awareness is management of the environment and the health of the public, and we have made significant achievements in environmental management and improvement. In the last couple of years, odour emissions have become a focus of much attention from the community and the EPA. Odour surveys by EPA officers have resulted in 4 Penalty Infringement Notices [See SAF78 quoted above]. ...

46. Cockerell also deposes (par 44 – emphasis added):

44   I am instructed that EFS deeply regrets the incidents that gave rise to these proceedings, and Annexure D is a letter from one of EFS's directors with respect to the company's position.

The annexed letter is addressed “to whom it may concern”, is dated 6 September 2016, and says:

TO WHOM IT MAY CONCERN

Water pollution incident in May 2015

I am a director and shareholder of Elf Farm Supplies Pty Ltd.

On behalf of Elf Farm Supplies Pty Ltd I acknowledge that:

•   between 12 and 21 May 205 (sic), the company's irrigation of waters from the main storage dam on site to adjacent land was conducted in a manner less competent than demanded by both the circumstances at the time of irrigation and the need for environmental protection generally; and

•   in so doing, the company occasioned the passage of dam waters into South/Wianamatta Creek between 19-21 May 2015. The waters contained levels of substances which I understand had the potential to cause harm to the environment, although I am advised that, thankfully, no harm was likely to have occurred.

I acknowledge that these actions amounted to a breach of section 64(1) and section 120(1) of the Protection of the Environment Operations Act 1997.

This is a matter of deep regret to myself, and to my fellow director and management team, and to the company as a whole. We wish by this letter to express our sincere remorse for the events that took place.

I established the enterprise here at 108 Mulgrave Road in 1981, and have always endeavoured to operate the company as it grew in a manner which respects both the natural environment and the community in which we operate. I am a resident of the Hawkesbury area myself and fully appreciate the beauty and importance of a healthy river system. I am most upset that the actions of my company have in some way threatened the health of South/Wianamatta Creek.

Immediately upon learning of the incident, the Board instructed management to co-operate fully and openly with the EPA in its investigation of the matter, and to develop measures to avoid any repeat of the incident.

To this end, the Board has instructed management to take whatever actions are needed to ensure that such an event does on (sic) occur again. This includes the development of improved and properly documented procedures for disposal of dam waters by field irrigation, and the implementation of comprehensive training of staff involved in such activities.

The Board has also authorised the engagement of a suitably qualified Environment Manager who has commenced work. His role encompasses oversight of all the company's operations from an environmental point of view, and specifically includes ensuring that our practices of irrigation of dam water to paddock will never again allow unauthorised waters to enter South/Wianamatta Creek, but will always be conducted to a level of competence required by our EPA licence and the health (sic) the Creek.

Yours sincerely,

Rob Tolson, AM JP

Director Elf Farm Supplies Pty Ltd

Sentencing Principles

47. Section 3A of the Crimes (Sentencing Procedure) Act 1999 (“the CSP Act”) sets out the following purposes of the sentencing process:

(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.

48. In the present case, the Prosecutor submits, and the Court agrees, that purposes (a), (b), (e), (f), and (g) are the most relevant.

49. Each offence charged in the present case carries a maximum penalty of $1million, indicating the Parliament’s view of their seriousness: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (“Camilleri”) (1993) 32 NSWLR 683, at 698.

50. The Court must be “evenhanded” in dealing with offenders. While every case turns on its own particular facts, objective and subjective, the Court can often find similarities with earlier decisions.

51. The High Court has said that appropriate sentencing requires an “instinctive synthesis” of the relevant objective and subjective circumstances of the offending and the offender: Markarian v R [2005] HCA 25; (2005) 228 CLR 357, and Muldrock v The Queen [2011] HCA 39.

52. In determining the objective seriousness of an offence, s 241(1) of the POEO Act requires the Court to take into account the following factors (emphasis added):

(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.

(Factor (e) is not relevant in the present case.)

53. Bentley v BGP Properties Pty Limited (“Bentley”) (2006) 145 LGERA 234; [2006] NSWLEC 34 held that the following additional factors are also relevant to the question of objective seriousness:

1. the nature of the offence;

2. the maximum penalty prescribed;

3. the offender’s state of mind in committing the offence; and

4. the offender’s reasons for committing it.

54. The concept of harm (see s 241(1)(a) above – [52])) is central to these sentencing principles, and has been the subject of much judicial consideration.

55. I am content to adopt the following summary provided by the Prosecutor (subs pars 44 to 47):

44. The phrase "Harm to the environment' is defined in 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."

45.   As stated by Preston CJ in Environment Protection Authority v Waste Recycling and Processing Corporation [(“Waste Recycling”) (2006) 148 LGERA 299; [2006] NSWLEC 419], at [145]-[146] and [147] and [149]:

"Harm can include harm to the environment and its ecology. Harm to an animal or plant not only adversely affects that animal or plant, it also affects the other biota that have ecological relationships to that animal or plant: [Bentley], at [174].

...

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."

46.   The meaning of "likely to be caused to the environment” was considered in the matter of Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66 at [44]:

"In considering the harm likely to be caused to the environment, it is to be noted that the word "likely" in this context has been held to mean "a real or not remote chance or possibility regardless of whether it is less or more than a fifty per cent chance" (Mathews v Goulburn Wool Processors, NSWSC, Smart J, 6 November 1986, unreported)"

47.   With respect to potential harm, Preston CJ in [Waste Recycling], at [145] stated:

"Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account: Axer Pty Ltd v Environment Protection Authority [(“Axer”)] (1993) 113 LGERA 357 at 366, and [Bentley] at [175]."

56. Whereas the objective gravity of the offence establishes both an upper and a lower limit for the penalty, "the subjective mitigating features should never produce a sentence that fails to reflect the gravity of the incident, or the objectives of punishment, which include both retribution and deterrence": Waste Recycling, at [140].

57. Those matters adverse to an offender must be established by the Prosecutor beyond reasonable doubt, while the onus on the offender in arguing matters favourable to it is on the balance of probabilities: R v Olbrich (1999) 199 CLR 270; Filippou v The Queen [2015] HCA 29 (at [64] and [66]).

58. Section 21A of the CSP Act sets out a range of aggravating and mitigating factors to be considered in appropriate cases, and subsequent sections amplify some of them.

59. Section 21A relevantly provides:

21A   Aggravating, mitigating and other factors in sentencing

(1)   General

In determining the appropriate sentence for an offence, the court is to take into account the following matters:

(a)   the aggravating factors referred to in subsection (2) that are relevant and known to the court,

(b)   the mitigating factors referred to in subsection (3) that are relevant and known to the court,

(c)   any other objective or subjective factor that affects the relative seriousness of the offence.

The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law.

(2)   Aggravating factors

The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows:

...

(g)   the injury, emotional harm, loss or damage caused by the offence was substantial,

...

(i)   the offence was committed without regard for public safety,

...

(o)   the offence was committed for financial gain,

...

The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence.

(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,

...

(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),

...

(k)   a plea of guilty by the offender (as provided by section 22),

...

(m)   assistance by the offender to law enforcement authorities (as provided by section 23).

(4)   The court is not to have regard to any such aggravating or mitigating factor in sentencing if it would be contrary to any Act or rule of law to do so.

(5)   The fact that any such aggravating or mitigating factor is relevant and known to the court does not require the court to increase or reduce the sentence for the offence.

...

60. The most relevant of the nominated aggravating factors in this case are the questions of harm and financial motivation, while the most relevant mitigating factors, as acknowledged by the Prosecutor (subs par 13), are the offender’s guilty pleas, and its demonstrated contrition and remorse.

61. In the present case, two offences arise out of the same events, the water pollution being directly caused by conduct in breach of the EPL condition.

62. In those circumstances, the Court must arrive separately at a penalty for each, in this case fines, and then consider whether the total aggregate sentence should be reduced, by applying the “totality” principle, to reflect properly the total overall criminality of the offender’s conduct; see R v Holder; R v Johnston [1983] 3 NSWLR 245, at 260; Sgroi v R (1989) 40 A Crim R 197, at 203; Camilleri, at 704; Environment Protection Authority v Barnes (“Barnes”) [2006] NSWCCA 246, at [43] – [46]; Environment Protection Authority v Wattke, Environment Protection Authority v Geerdink [2010] NSWLEC 24, at [98]; and Environment Protection Authority v Orica Australia Pty Ltd(the Nitric Acid Air Lift Incident) (“Orica-Nitric Acid”) [2014] NSWLEC 103, at [224] to [249].

63. The Defendant advanced (par 33) the definition of the totality principle by the High Court in Pearce v The Queen [1998] 194 CLR 610, at p 623 [40]:

To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.

64. As noted by Pepper J in Environment Protection Authority v Geoff Robinson Pty Ltd, Environment Protection Authority v Robinson [2011] NSWLEC 14, at [128]:

... care must be taken to ensure that any adjustment of individual sentences does not cause the aggregate sentence not to reflect the total criminality of the individual offenders' conduct or the sentence for any individual offence to become disproportionate to the objective gravity of that offence.

The Objective Seriousness of Each Offence

The Water Pollution Offence

65. The Prosecutor puts the objective seriousness of the s 120 offence “at the top of the low range, given the environmental harm caused” (subs par 11).

66. The following objectives in s 3 of the POEO Act are relied upon by the Prosecutor in regard to this offence:

(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 and cleaner production,

(ii)   the reduction to harmless levels of the discharge of substances likely to cause harm to the environment,

(iia)   the elimination of harmful wastes,

(iii)   the reduction in the use of materials and the re-use, recovery or recycling of materials,

(iv)   the making of progressive environmental improvements, including the reduction of pollution at source,

(v)   the monitoring and reporting of environmental quality on a regular basis,

(e)   to rationalise, simplify and strengthen the regulatory framework for environment protection.

...

67. Pollution of waters “directly undermines the object of the POEO Act”: Environment Protection Authority v Baiada Poultry Pty Ltd (2008) 163 LGERA 71, at [23]. Here the waters polluted were primarily the South/Wianamatta Creek, but also the stormwater drainage channel (Prosecutor’s subs par 23).

68. The pollution in this case was directly caused by conduct which also amounted to contravening a condition of the EPL (Prosecutor’s subs par 25, and [61] above).

69. In short, the Prosecutor submits that the Defendant departed from its normal practices and procedures, without an adequate supervision plan (Tp5, LL34 – 45, p6, LL16 – 25, and p7, LL35 – 36), and without adequate visual checking (Tp6, LL33 – 36, and p7, LL29 – 30).

70. The Defendant concedes that approximately 200,000L of polluted water was discharged (Tp14, LL3 – 20), but argues (subs 14, 15 and 24) that its failure flowed from an unusual combination of circumstances which its usual, sufficient, practices were inadequate to meet.

71. State of mind is not a relevant consideration for the s 120 offence: see Orica-Nitric Acid, at [139], and the Prosecutor’s concession at Tp8, LL6 – 9. However, the Defendant was clearly on notice, for a significant period, of the potential for water pollution, and breaching of EPL conditions (Tp6, LL39 – 42).

72. The question of harm (a factor in each of sections 241(1)(a), 21A(2)(g), and 21A(3)(a)) is addressed in the SAF (see [36] above).

73. Dr Edge, for the Prosecutor, concluded that there was no available evidence that the escape of waters caused any actual harm, but there was the potential of harm to aquatic organisms within no more than 20m from the point where the discharge entered the creek.

74. The Prosecutor submits (par 51, and Tp9):

Given the period of time over which the pollution occurred, the toxicity of the pollutant, the significant source volume of liquid from which a portion polluted waters and the length of creek that was polluted, the harm caused can be considered to be “substantial” within the meaning of section 21A(2)(g) of the CSP Act (EPA v Sydney Water Corporation [2015] NSWLEC 80 at [62]). This is an aggravating factor.

75. In terms of practical measures to abate/mitigate harm (s 241(1)(b), entities which operate in the environment are under a positive obligation to take proper precautions to avoid pollution, and to arrange their business activities accordingly. Axer, at 359.

76. The Prosecutor submits (par 55) that EFS could have installed a more adequate pump, or implemented “a system of continual checking “in respect of absorption of the waste liquid in/by the Inundated Area”, or paid for waste water to be trucked off-site to an appropriate, presumably licensed, facility (Tp7, LL38 – 43), but (par 66) failed to do so.

77. Clearly, the actual or likely harm in the present case was, as the Prosecutor submits (par 57, and Tp7, LL11 – 14), “moderately” foreseeable (s 241(1)(c)).

78. Relying on SAF13 to 19 ([31] – [32] above), the Prosecutor submits (par 58):

... after choosing a suitable location for the pump to disperse the waste liquid onto the Inundated Area, the Offender allowed the pumping to continue until the pump ran out of fuel. The anticipated results of this pumping of liquid at the rate of 400 litres per minute to a previously unutilised irrigation field at the Premises must have been largely unknown to the Offender. In the circumstances, to mitigate against the prospect of subsequent environmental harm, it would have been logical for the Offender to thoroughly monitor the saturation levels at the Inundated Area so as to reduce the risk of a pollution event caused by water logging. As explained above, this was not done.

79. In terms of s 241(1)(d), the offender, as owner of the plant and the premises, and holder of the EPL, had total control of the causes of the offences (Prosecutor’s subs par 59), but displayed an indifference, amounting to negligence, in the face of a known and obvious risk (Tp7, LL32 – 34).

80. Preston Ch J said, in Waste Recycling, at [173]:

... An offence is objectively more serious if the commission of the offence and the risk of harm occasioned by the commission of the offence, are foreseeable and there are practical measures that could be taken to prevent, control, abate or mitigate the occurrence of the offence or the harm, but those practical measures are not taken.

81. In the present case the Prosecutor submits (par 62) that this principle applies, to increase the objective seriousness of both offences.

82. I turn, now, therefore, to a few specific remarks about the s 64 offence.

The Licence Condition Offence

83. The Prosecutor (subs 35 to 40) puts to the Court that the objective seriousness of the s 64 offence is “moderate”, submitting that it was committed negligently, in that there was “indifference to an obvious risk”:

36.   Here, it is submitted that there was such indifference to an obvious risk. The Offender pumped waste liquid to a section of its property that did not ordinarily receive this substance in the course of its normal operations. In the absence of first installing a suitable pump capable of pumping waste liquid to the Irrigation Area, the Offender should have implemented a more thorough system of checks to ensure that the dispersed liquid was suitably absorbed at the new location.

...

40.   In the absence of installing an adequate pump capable of transporting waste liquid to the Irrigation Area, if the Offender had properly monitored the flow of water onto the Inundated Area it would have discovered that its initial checks were not adequate and that surface runoff to South / Wianamatta Creek was occurring. Given the absence of such a system, the Defendant could not have had any reasonably held positive belief that its system of checks was adequate.

84. The Prosecutor submits (par 41) that such negligence aggravated the objective seriousness of the licence condition offence.

85. The Prosecutor asks the Court (pars 42 – 43) to infer that EFS’s “commercial interests exceeded its aspiration to comply with the terms of its EPL”, such that it did not spend the resources necessary to update its pumping system and monitor it, or to have its waste liquids disposed of at a licensed facility.

86. While behaviour which may later give rise to charges is often undertaken to save money or improve profit, I am not satisfied, in the present case, that the Defendant was motivated by financial factors (s 21A(2)(o)) in committing either offence.

87. On the question of harm, in the context of the s 64 offence, the Prosecutor submits (pars 52 – 53):

52.   The failure to carry out irrigation in a competent manner caused the water pollution. This offence caused the same extent of potential harm as that caused by the water pollution offence.

53.   In Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289, Preston CJ held at [99] that "if contravention of a licence condition results in harm to the environment, the contravention is thereby an aggravated offence."

88. My analysis above of the s 241(1) factors ([72] – [81]) applies equally to this offence.

89. I turn, therefore, next, to those subjective factors which must be “instinctively synthesised” with the objective factors so far identified.

Subjective Factors

90. The offender has no record of relevant prior convictions, but has received the four penalty notices, for odour matters, to which I have referred above (SAF78, and [44] above).

91. The Prosecutor accepts:

1. (par 70(a)) that the Defendant should receive a 25% discount for its guilty pleas: R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309;

2. (par 70(b)) that the Defendant’s high level of co-operation with the Prosecutor should be taken into account; and

3. (Tp8, LL28 – 34) that the Defendant has evidenced its contrition and remorse “by the plea of guilty, ... by the settling of the [SAF], ... by [its] response to the clean-up notice [and] ... by the agreement for a publication order and also an agreement that any fine ... be made payable to Hawkesbury Council”.

92. On the other hand, the Defendant has agreed;

1. to pay the Prosecutor’s costs, as yet undetermined, but estimated by the Prosecutor to be in the order of $50,000;

2. to accede to a publication order; and

3. to accede also to an order to pay the amount of any fines towards revegetation works on the creek (Prosecutor’s subs pars 78 to 81).

93. These matters are to the Defendant’s credit.

94. The Prosecutor has reservations about the defence submission that EFS is unlikely to offend again.

95. The Prosecutor notes (Tp8, LL39 – 46) that:

... the new pumping procedures do not preclude pumping to the inundated area; they don’t allow for that barrier in between the paddocks to prevent possible water flow through that drainage channel. Your Honour will see under “pumping procedure” there’s a cl 7 which requires staff to monitor conditions throughout the shift and document observations in register. With respect, that doesn’t specify the intervals by which such checks should be made, and in my submission is lacking in specifics to ensure that a further incident will not occur in the future.

96. Mr English submits (Tp9, LL1 – 2) that the defence hasn’t satisfied its onus on this point, but he accepts that EFS intends not to re-offend.

Consideration

97. In respect of purpose (b) in s 3A ([47] above), namely, “deterrence”, I agree with the Prosecutor (subs par 63) that in the present case, the penalty imposed on EFS “should serve the function of both general and specific deterrence”, to ensure that proper precautions are taken on all occasions to ensure pollution does not occur: Axer, and Camilleri, at 701.

98. In this regard, nominal fines do not suffice: Bentley, at [140].

99. The penalty imposed must be sufficient to encourage the offender and others to comply with the law, and so prevent the risk of harm to the environment: Environment Protection Authority v Robinson [2004] NSWLEC 629, at [30].

100. As EFS continues to operate in a manner which contemplates irrigation, the Prosecutor rightly submits (pars 67 – 68) that the offender needs to be specifically deterred from neglecting its “overriding responsibility to conduct its business in accordance with the conditions of its EPL, so as not to cause pollution”.

101. The Prosecutor identified (pars 76 – 77) several recent cases involving s 120 and/or s 64, including, and since, Pepper J’s decision in Orica-Nitric Acid, in which Her Honour examined many earlier decisions.

102. I have considered all the cases brought to my attention in written and oral submissions, by both Prosecutor and defence, and also Environment Protection Authority v Custom Chemicals Pty Ltd [2016] NSWLEC 146, in which a major sentence was imposed for a s 120 offence, on the day after I reserved this decision.

Conclusion

103. While there is no case directly comparable with the present (Tp18, L49), there are, among all the cases relied upon, several where both s 120 and s 64 offences resulted in fines, or orders in favour of worthy projects, as well as costs and publication orders.

104. I am satisfied that the s 120 offence should be considered to sit at the top of the lower end of the “scale” of seriousness, and the s 64 offence at the bottom end of the medium/moderate section of that “scale”: Environment Protection Authority v Orange City Council [1995] NSWLEC 103.

105. Those conclusions would suggest that each offence should result in a fine just above or just below 10% of the maximum (i.e. $100,000 out of $1M), bearing in mind the burden on the Defendant of its own costs, a costs order, and the costs of a publication order: see Barnes, at [78] and [88].

106. The Court must apply discounts for mitigating subjective features, including 25% for the guilty pleas, and, say, 10% for remorse, procedural and training reforms etc., and then some further adjustment for the principle of totality (say 15% off each fine).

107. Commencing with fines of $90,000 for the s 120 offence, and $110,000 for the s 64 offence, the result would be fines of $45,000 and $55,000, respectively, translated into orders in favour of the nominated environmental project in the total sum of $100,000.

Orders

108. The orders of the Court will, therefore, be:

1. In matter number 2016/150033:

1. the Defendant is convicted of the charge brought in the amended summons; and

2. the Defendant is ordered to pay $55,000 to Hawkesbury City Council by way of a contribution, pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, towards the project known as the South Creek Riparian Restoration Project, details of which are set out in Annexure ‘B’ to this judgment.

2. In matter number 2016/149985:

1. the Defendant is convicted of the charge brought in the amended summons; and

2. the Defendant is ordered to pay $45,000 to Hawkesbury City Council by way of a contribution, pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, towards the project known as the South Creek Riparian Restoration Project, details of which are set out in Annexure ‘B’ to this judgment.

3. The Defendant is ordered to pay the Prosecutor’s costs, on a party-party basis, as agreed or assessed.

4. The Defendant is ordered, pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997, at its expense, to place a notice in the terms set out in Annexure ‘A’ to this judgment, within the first five pages of the Hawkesbury Gazette and the Hawkesbury Courier by no later than 30 June 2017. The notice is to be a minimum size of 10cm x 18cm.

5. Exhibit P1 will be retained in the Court file.

Annexure A (148 KB, pdf)

Annexure B (96.5 KB, pdf)

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Decision last updated: 30 May 2017