Environment Protection Authority v Fulton Hogan Pty Ltd - [2008] NSWLEC 268

No judgment structure available for this case.

Reported Decision: 163 LGERA 345

Land and Environment Court

of New South Wales

CITATION: Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268

PARTIES:
APPLICANT:
Environment Protection Authority
RESPONDENT:
Fulton Hogan Pty Ltd (formerly FRH Group Pty Ltd)

FILE NUMBER(S): 50040 of 2007

CORAM: Biscoe J

KEY ISSUES: Environmental Offences :- sentence - polluting waters of river during connection of dam to river at the end of dam upgrade works - pollutant sediment laden waters containing soil, earth, clay or similar inorganic matter - factors to be taken into account on sentencing - principle that an offender cannot be sentenced for a more serious offence.

LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 (NSW), s 3A, 21A, 23(1)
Environmental Planning and Assessment Act 1979 (NSW)
Protection of the Environment Operations Act 1997 (NSW), ss 3(1), 91, 114, 116(1), 120, 241, 246, 248, 250(1)(e)
Snowy Hydro Corporatisation Act 1997 (Cth)
Snowy Hydro Corporatisation Act 1997 (NSW)
Snowy Hydro Corporatisation Act 1997 (Vic)

CASES CITED: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357
Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234
Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304
Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683
Director of Public Prosecutions (Cth) v Said Khodor El Karhani (1990) 21 NSWLR 270
Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278
Environment Protection Authority v Barclay Mowlem Construction Ltd [1998] NSWLEC 304
Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732
Environment Protection Authority v Cleary Bros (Bombo) Pty Ltd [2007] NSWLEC 466
Environment Protection Authority v Coe Drilling Australia Pty Limited [2005] NSWLEC 719
Environment Protection Authority v CSR Building Products Limited [2008] NSWLEC 224
Environment Protection Authority v Daryl McCarthy Constructions Pty Ltd [2000] NSWLEC 223
Environment Protection Authority v Duke Eastern Gas Pipeline Pty Limited [2002] NSWLEC 84
Environment Protection Authority v G. Pezzimenti & Sons Pty Ltd [1994] NSWLEC 6
Environment Protection Authority v Gosford City Council (1997) 95 LGERA 338
Environment Protection Authority v Hochtief AG and Thiess Pty Limited [2007] NSWLEC 177
Environment Protection Authority v Integral Energy Australia Pty Ltd [2006] NSWLEC 141
Environment Protection Authority v Lithgow City Council [2007] NSWLEC 695
Environment Protection Authority v Nalco Australia Pty Ltd [2007] NSWLEC 831
Environment Protection Authority v Nowra Chemical Manufacturers Pty Ltd [2008] NSWLEC 187
Environment Protection Authority v Sell & Parker (2006) 149 LGERA 209
Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264
Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368
Environment Protection Authority v Timber Industries Ltd [2001] NSWLEC 25
Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299
Hardt v Environment Protection Authority (2007) 156 LGERA 337
Hoare v The Queen (1989) 167 CLR 348
Markarian v The Queen (2005) 228 CLR 357
R v Carroll [2008] NSWCCA 218
R v Dodd (1991) 57 A Crim R 349
R v Henry (1999) 46 NSWLR 346
R v Hoerler (2004) 147 A Crim R 520
R v McNaughton (2006) 66 NSWLR 566
R v Slattery (1996) 90 A Crim R 519
R v Thompson; R v Houlton (2000) 49 NSWLR 383
R v Whyte (2002) 55 NSWLR 252
The Queen v De Simoni (1981) 147 CLR 383
Veen v The Queen (1979) 143 CLR 458

DATES OF HEARING: 10-13/06/08

DATE OF JUDGMENT:
22 September 2008

LEGAL REPRESENTATIVES:
PROSECUTOR:
Mr T. Howard
SOLICITORS:
Department of Environment & Climate Change
DEFENDANT:
Mr D. Williams SC and Mr R. Beasley
SOLICITORS:
Minter Ellison

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BISCOE J

22 September 2008

50040 of 2007

ENVIRONMENT PROTECTION AUTHORITY v FULTON HOGAN PTY LTD (FORMERLY FRH GROUP PTY LTD)

JUDGMENT

1 HIS HONOUR: The defendant, Fulton Hogan Pty Ltd, which at the relevant time was called FRH Group Pty Ltd (FRH), pleads guilty to the charge that, from about 30 July 2006 and continuing until about 2 August 2006, it polluted waters at Jindabyne contrary to s 120(1) of the Protection of the Environment Operations Act 1997 (POEO Act). Section 120 provides:

pollute

2 The offence relates to series of related incidents which occurred over the charge period during the final stages of a major construction project being carried out in, and immediately downstream of, the Jindabyne Dam, known as the spillway upgrade and outlet works. A component of the Snowy Mountains Hydro-electric Scheme, the Jindabyne Dam at Lake Jindabyne holds back waters of the Snowy River. The pollutant was sediment laden waters containing soil, earth, clay or similar inorganic matter. The polluted waters (the subject of the charge) were a stretch of the Snowy River approximately 15 kilometres downstream of a permeable silt curtain, which was the sole sediment control. FRH carried out the works which introduced the pollutants into the waters.

3 FRH’s principal Snowy Hydro Limited (Snowy Hydro) has pleaded guilty to an identical charge arising out of the same incident. The two proceedings were heard concurrently and I sentence Snowy Hydro in a separate judgment: Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264. There is a large common body of agreed facts in both cases. However, the evidence in each case was not identical and this has led to some findings in one case which are absent or inconsistent with findings in the other case. That is the inevitable consequence of having to decide each case only on the evidence in that case without regard to the evidence in the other.

4 The main issue is one of characterisation of FRH’s conduct in the period before and during the incident. The prosecutor submits that FRH and Snowy Hydro are equally culpable for failing to prevent and control the incident.

BACKGROUND
FRH

5 FRH is a major civil contracting company which operates in the road construction, quarrying, civil construction, infrastructure and land development sectors.

The spillway upgrade and outlet works

6 The passage of the Snowy Hydro Corporatisation Act 1997 (NSW), the Snowy Hydro Corporatisation Act 1997 (Vic) and Snowy Hydro Corporatisation Act 1997 (Cth) was followed by the Snowy Water Inquiry, which considered the environmental effects of the Snowy Mountains Hydro-electric Scheme, including river flows, catchment management and Snowy River rehabilitation. The Snowy Water Inquiry resulted in the formulation of heads of agreement between the New South Wales, Victorian and Federal governments, which had among its environmental objectives the improvement of the environment of the Snowy River. The heads of agreement detailed the need for environmental releases of water (environmental flows) from Lake Jindabyne to the Snowy River downstream of Jindabyne Dam.

7 The dual purposes of the spillway upgrade and outlet works were, first, to enable environmental flows to be delivered to the Snowy River (through the outlet works) and, secondly, to provide increased spillway capacity in the event of extreme floods (through the construction of an auxiliary spillway). The construction of the spillway upgrade and outlet works was an obligation imposed upon Snowy Hydro under its Snowy Water Licence which was issued on corporatisation pursuant to the Snowy Hydro Corporatisation Act 1997 (NSW).

8 The outlet works carried out as part of the spillway upgrade and outlet works included:

9 The plunge pool as constructed is 18 metres deep and has a volume of approximately 76 megalitres. It was excavated at the base of the spillway in the Snowy River on the downstream side of the Jindabyne Dam and was designed to dissipate energy resulting from extremely large environmental flows during spillway releases and cone valve releases once the new outlet was completed.

10 While the spillway upgrade and outlet works were being undertaken, Snowy Hydro maintained, as an environmental control, an environmental release flow of approximately 96 megalitres per day via a siphon outlet which discharged water from Lake Jindabyne to a point on the Snowy River located downstream of the outlet works. This flow was often called “the riparian flow”.

11 The final stages of the works included commissioning of the plunge pool by physically connecting it to the downstream waters of the Snowy River. To achieve the connection, the plunge pool was filled, two temporary coffer dams were removed, and the earthen material next to the plunge pool was excavated to form an outlet channel to connect the plunge pool to the downstream waters. The shape and dimensions of the outlet channel were important because they had to match the shape and dimensions of the Snowy River watercourse. It was during the process of physical connection of the plunge pool to the Snowy River that the pollution occurred.

12 Until the plunge pool commissioning works were completed, the commissioning works on the mini hydro and the outlet valves could not take place, and the riparian flow could not be re-directed through the plunge pool.

13 One of the two temporary coffer dams required to be removed was a rock coffer dam. Its purpose was to prevent the waters of the Snowy River flowing back into the plunge pool construction site. Behind the rock coffer dam was a depression which functioned as a sediment basin (Sediment Basin 4). Behind that, next to the plunge pool construction site, was a clay coffer dam. Over the top of the clay coffer dam was a haul road so that construction traffic could cross the Snowy River.

14 Because the coffer dams were temporary works, Snowy Hydro did not pay as much attention to them as it did to permanent works.

15 The pollutant which entered the waters of the Snowy River downstream of the construction site comprised soil, earth, clay or similar inorganic matter:

Contract between Snowy Hydro and FRH

16 On 7 April 2004 Snowy Hydro, as principal, entered into a construction contract for the spillway upgrade and outlet works with Belmadar Constructions Pty Ltd. Later, Belmadar constructed the two coffer dams and the haul road. With effect from 1 December 2005, the contract was novated so that FRH took the place of Belmadar as contractor.

17 In the contract, Snowy Hydro emphasised that pollution in the Snowy River was a major concern to it. Under the contract, Snowy Hydro, through its Superintendent, had power to demand from FRH a method statement and a risk management assessment for the works relating to removal of the coffer dams. It also had the power to give directions to FRH in relation to those works including in relation to the prevention and control of pollution. No such method statement or risk assessment was demanded or provided. Snowy Hydro gave some directions in relation to the works, but gave none in relation to the prevention or control of pollution until Wednesday 1 August.

18 The terms of the contract included the following:

The Contractor shall note that pollution in the Snowy River and Lake Jindabyne is a major concern to the Principal and the Superintendent will enforce the requirements for Soil Conservation and Erosion Controls rigidly;

(c) all works would be carried out in accordance with the development approval and an environmental management plan prepared by the contractor, which was to be submitted to the Superintendent for approval. That was to be a plan which described the measures which would be taken by the contractor to avoid adverse environmental impacts, in each specific location of works under the contract (Section E Specification cl 1.13, Section D Conditions cll 9.31 and 14.3). Among the matters to be included in the environmental management plan were details of the site specific controls to be adopted to ensure environmental requirements were met; details of the resources proposed to be used to manage environmental issues; details of water quality discharge requirements; details of each environmental issue and impacts; and risk assessment of each potential impact using the appropriate Australian Standard (Section E Specification cl 2.15);
(d) FRH was obliged to immediately report to the Superintendent all safety and environmental incidents, accidents and potential hazards. If such an incident occurred, the Superintendent could direct all works on site to be suspended (Section D Special Conditions cl 9.5);

(e) FRH was obliged to satisfy all legislative requirements including the requirements of the POEO Act: (Section C General Conditions cl 11.1, Section D Special Conditions cl 9.3.3);

(f) the “Superintendent” under the contract was a Snowy Hydro executive, Mr Brett Jones (Section C General Conditions cl 1);

(g) FRH was required to carry out and complete the works under the contract “in accordance with the Contract and directions authorised by the Contract” (Section C General Conditions cl 2.1). Directions could be given by the Superintendent or by the Superintendent’s representative (Section C General Conditions cll 20 and 21). The Superintendent’s powers of direction included a power to direct FRH to suspend the carrying out of any works if the Superintendent was of the opinion that it was necessary because of an act, default or omission of FRH (Section C General Conditions cl 33);

(h) formal progress meetings between Snowy Hydro and FRH were to (and did) take place on a weekly basis (Section D Special Conditions cl D.7);
(i) the contract contains a number of clauses whereby FRH agrees to indemnify Snowy Hydro.

Snowy Hydro’s active role

19 Snowy Hydro had an active role in the construction project. It dealt with regulators and members of the public. It had its own site office on the construction site. It normally had personnel present every working day except Sundays. There was constant communication and collaboration between Snowy Hydro and the contractor in relation to the construction program, including weekly progress meetings and day to day discussions. There were discussions between Snowy Hydro and its contractor in respect of the particular works which caused the pollution. Snowy Hydro directed the contractor in respect of the carrying out of those works. The plunge pool outlet channel, which was the pollution conduit, was excavated by the contractor to the specifications of Snowy Hydro. The specifications were not pre-determined by contract drawings but were dictated on site by Brian Mayhew (Snowy Hydro’s Structures and Dam Safety Manager and Construction Manager for this project) whilst the works were being carried out. Mr Mayhew reported to Brett Jones, Snowy Hydro’s Superintendent.

20 Snowy Hydro utilised the services of two or three full time site inspectors. The site inspectors spent most of their time on the site monitoring and inspecting the works carried out by the contractor in order to examine compliance with the contract and the environmental management plan.

21 One of the site inspectors was Ian McCann, who gave evidence for the prosecution. Mr McCann was aware that the excavation of the coffer dams and haul road was to commence on 28 July 2006. His role in respect of that excavation was to ensure that the width and depth of the channel joining the plunge pool and the Snowy River was achieved. Mr McCann was not aware of any written plans or specifications for that task. It was his understanding that the works were to be completed to the satisfaction of himself and Mr Mayhew, to whom Mr McCann reported on a daily basis both verbally and in reports. It was Mr Mayhew who would give him direction in the works that he was to carry out. In addition to the site inspectors, other Snowy Hydro site employees regularly inspected works being carried out by FRH.

Development application, assessment and approval

22 In 2003, Snowy Hydro submitted a development application to Snowy River Shire Council to carry out the spillway upgrade and outlet works. The development application was supported by two Statements of Environmental Effects (SEE). The SEE noted that the Snowy River Inquiry had identified the section of the Snowy River downstream from the Jindabyne Dam to the junction with the Delegate River as highly degraded (p 118). The SEE noted that potential adverse impacts would generally be restricted to the construction phase and included potential erosion and sedimentation during and immediately following activities that disturbed the land surface or were carried out within water bodies. The SEE stated that “These potential impacts are of particular importance” (p 119).

23 The development application proposed that a water quality guideline of less than or equal to 150 NTU be adopted for water discharged into the Snowy River. A water quality guideline of less than or equal to 50 NTU was proposed for 150 metres upstream of the construction activities on the surface of Lake Jindabyne.

24 Turbidity expressed as NTUs (nephelometric turbidity units) is a measurement derived from the degree to which light is able to penetrate the water column. It is relevant to note that the measurement of total suspended solids (TSS) is an alternative to the measurement of turbidity for the purpose of determining the degree or concentration of solids suspended in a water column. The concentration of TSS is expressed in milligrams per litre (mg/L) and is a measurement of the weight of solids in milligrams per litre of water.

25 In accordance with the scheme for integrated development under the Environmental Planning and Assessment Act 1979 (EPA Act), various approval bodies were forwarded copies of the development application and invited to provide general terms of approval to the council. One of the approval bodies was the Environment Protection Authority (EPA).

26 Over the next few months there were communications between Snowy Hydro and the EPA concerning water quality guidelines. As FRH was not privy to them, I do not propose to set most of them out.

27 By letter to Snowy Hydro dated 3 December 2003, the EPA issued its general terms of approval. They were provided by the EPA in contemplation of like conditions being inserted in the environment protection licence by way of licence variation. In respect of discharges to downstream waters, conditions 2.1.2 and 3.2 of the general terms of approval specified discharge limit points to the Snowy River immediately downstream of each “pollution control structure that discharges” from the Jindabyne Dam and spillway premises, to which a discharge concentration limit of 30mg/L of TSS applied. That was a more stringent water quality criterion than Snowy Hydro’s previously proposed 150 NTU (see [23] above). I do not consider that the silt curtain (located downstream of the plunge pool and coffer dams) could be described as a “pollution control structure that discharges” from the premises.

28 The EPA issued its final (amended) general terms of approval on 16 February 2004. They were relevantly in the same terms as the general terms of approval referred to above, although the discharge limit was stated to be 30mg/L of TSS “plus ambient background”.

29 On 17 February 2004, the council issued its development consent to Snowy Hydro for the spillway upgrade and outlet works. The EPA’s general terms of approval were incorporated in the consent.

Environment protection licence

30 In 2004, Snowy Hydro’s existing environment protection licence was amended so that it extended to, and imposed controls over, the carrying out of the spillway upgrade and outlet works. The definition of "premises" in the amended environment protection licence included the construction site downstream of the Jindabyne Dam wall where the plunge pool and the temporary coffer dams were to be constructed. The environment protection licence required the licensee to comply with s 120 of the POEO Act, except as may be expressly provided in any other condition of the licence.

31 The environment protection licence did not permit polluted waters to be discharged from the plunge pool outlet works into the Snowy River. The only point at which the licence permitted pollutants to be discharged to the Snowy River from the construction site was at Point 17, which was the final point for the treatment of stormwater retained on the site. Point 17 was located at the end of an erosion gully, flowing into the Snowy River from Sediment Basin No 3, a little downstream from the silt curtain. At Point 17 the licence permitted a 30 mg/L ambient percentile concentration of TSS.

32 As with condition 6.6 of the EPA's general terms of approval, the amended environment protection licence had a condition (E4) requiring Snowy Hydro to prepare a construction management plan for the Jindabyne Dam spillway premises, which had to be provided to and approved by an EPA Regional Manager prior to the commencement of construction. The construction management plan was required to include:

33 In June 2005, the environment protection licence was varied to remove condition E4, as the construction management plan had been submitted and approved by the EPA on 15 July 2004, as described below.

34 In May 2004 Snowy Hydro sent to the EPA a letter which enclosed what it described as an “Environmental (Construction) Management Plan as required under Consent Condition 6.6 of the EPA’s General Terms of Approval for the above project (and draft amendment to the Environment Protection Licence..)”.

35 That plan was in fact entitled “Environment Management Plan”. It had been prepared by Belmadar, as required under its contract with Snowy Hydro. When the plan was being developed, Snowy Hydro was regularly consulted and given the opportunity to comment on its contents.

36 The environmental management plan included a “Water Control Plan”. The environmental management plan indicated that the contractor’s construction activities had “the potential to impact on water quality both directly and indirectly”, and that the plan’s objectives were to both “limit erosion and sedimentation” and “limit impacts on nearby receiving waters”. A safety measure which the environmental management plan required to be in place for the entirety of the project was as follows:

A silt curtain will be positioned within Jindabyne Lake during the construction activities adjacent to water. The silt curtain will be erected to prevent sediment runoff into the Lake… The design implemented for the project is based upon industry standard which has been found effective in similar applications. Results of monitoring will determine if more controls are required.

37 There was no pollution incident in Jindabyne Dam involving sediment. As part of “General Mitigation Measures”, the Water Control Plan also provided for “Silt curtaining [of] all the areas with a potential for receiving runoff” and “Constant risk assessment and taking pre-empting actions to contain and address the risk of affecting the Water quality”. In relation to the rock coffer dam, the Water Control Plan provided that the following practices were to be put in place:

38 The environmental management plan, at section 4.3.1 included a table under the heading "Water Quality Management Plan, Key Performance Indicators" which comprised information under three columns: "Parameter", "Threshold" and "Measurement Location". The table included an entry identifying turbidity as the parameter, identifying <150 NTU as a threshold and identifying various measurement locations described as "Discharge points to stream and rivers (prior to mixing)”. The table also included an entry identifying total suspended solids as a parameter and identifying a threshold of <30mg/L plus ambient background at various measurement locations. The only relevant measurement location in both entries was “3B”. It was in the same location as Point 17 referred to in the environment protection licence (discussed at [31] above). The integrated development consent, including the EPA’s general terms of approval, was annexed to environmental management plan.

39 By letter dated 9 June 2004 to Snowy Hydro, the EPA approved the commencement of project works conditional upon the supply of further information by 28 June 2004. The letter stated that:

The DEC considers that it would be appropriate to base turbidity performance criteria on the Australia and New Zealand Environment and Conservation Council (ANZECC) Guidelines (2000) rather than the trigger value of 150 NTU proposed by SHL. The ANZECC Guidelines recommend a turbidity level of 2-25 NTU for the protection of aquatic ecosystems in upland rivers. However, compliance with the Total Suspended Solids discharge limit of 30mg/L + ambient is the DEC's primary responsibility.

40 By letter dated 15 July 2004 to Snowy Hydro, the EPA stated: "The DEC has reviewed the additional information for the [Construction Management Plan] and considers that this information, together with the CMP, satisfies the requirements of condition E4". The EPA requested that an updated environmental management plan containing the information provided in the letter of 28 June 2004 be forwarded to the EPA.

41 In September 2004, Snowy Hydro sent a consolidated version of the environmental management plan to the EPA. The plan was updated in March 2005. The table in section 4.3.1 (the Water Quality Management Plan) was the same for all versions of the environmental management plan. The development consent, including the EPA's general terms of approval, was also annexed to all versions of the environmental management plan.

42 It does not appear that FRH was privy to these communications between the EPA and Snowy Hydro.

WORKS PRIOR TO COMMISSIONING OF THE PLUNGE POOL

43 The spillway and upgrade outlet works included a new water intake channel and intake tower at the dam wall in Lake Jindabyne. In order to enable construction of the intake tower, the structure had to be kept dry. This was achieved by the emplacement of a temporary clay coffer dam in Lake Jindabyne at the entrance of the inlet channel (referred to as the intake channel coffer dam). This was separate to the temporary clay and rock coffer dams located downstream of the plunge pool. Upon completion of the construction of the intake tower, the intake channel coffer dam was removed to enable water to flow into the new intake water channel.

44 The outlet works were designed so that water from Lake Jindabyne entering the intake tower could discharge to the plunge pool either through two large cone valves or by a different route via the mini hydro building, which included a submerged discharge valve. They were designed so that water could also discharge into the plunge pool, if necessary, via the existing spillway when the water level permitted.

45 On or around 21 July 2006, commissioning works were commenced in which, for the first time, waters from the new intake tower were released into the plunge pool via the submerged discharge valve. This was done for the purpose of testing the transit of water via that route and, also, to commence filling the plunge pool. The filling of the plunge pool in this manner occurred intermittently over the period from 21 July to 1 August 2006 inclusive when the plunge pool was connected to the downstream waters of the Snowy River. Minutes of a progress meeting between FRH and Snowy Hydro personnel on 21 July 2006 recorded: “Plunge Pool Outlet Channel – FRH asked to what depth the channel needs to be excavated to. SHL confirmed that it needs to be to rock as discussed previously”.

46 The purpose of filling the plunge pool was to bring it up to a level which was fairly close to (but lower than) the level of the waters in the Snowy River downstream prior to completing the removal of the clay and rock coffer dams, which would connect the plunge pool to those downstream waters. This was to prevent a situation from arising where, if the level of water in the plunge pool was much lower than the level of the downstream water in the Snowy River at the time of connection (which it would have been had the plunge pool not been filled, having been excavated to a depth of 18 metres), the differential pressure (water pressure being higher where the water level is higher) would cause a rapid backflow of water from the downstream Snowy River into the plunge pool, possibly causing erosion. FRH initiated the filling of the plunge pool as part of the works under the contract. Snowy Hydro authorised and controlled the release of the water through the submerged discharge valve.

47 A significant volume of the water released into the plunge pool via the intake tower and mini hydro during the period from 21 July to 1 August 2006 was turbid, discoloured water. That water discharged from the submerged discharge valve. The presence of earthen material suspended in this water was, or was likely to have been, due to the fact that, during the removal of the intake channel coffer dam, clay and possibly other earthen material from the coffer dam was released and entered into and settled in the intake channel tower. This earthen material was then subsequently entrained and discharged through the submerged discharge valve into the plunge pool when the plunge pool was filled.

48 Additional sediment would have been entrained and discharged into the plunge pool during the same process by reason of the fact that the waters discharged from the submerged discharge valve flowed into the plunge pool via an earthen channel (lined with rock) and then cascaded down the wall of the plunge pool in a location where the wall comprised a considerable amount of earthen material in addition to rock.

49 At the time the plunge pool commission works were commenced there was a doubled over silt curtain in place across the Snowy River downstream of the rock coffer dam. This was the only sediment control in place.

CIRCUMSTANCES OF THE OFFENCE
Friday 28 July 2006

50 At a meeting on Friday 28 July 2006 between Snowy Hydro officers and FRH officers, the excavation of the plunge pool outlet channel was discussed. The Snowy Hydro officers present at the meeting were Brett Jones (Snowy Hydro’s Superintendent under the contract), Brian Mayhew (Structures and Dam Safety Manager and Construction Manager for this project) and Michael Thornton (Project Engineer for the FRH works). The FRH officers present were Scott Macklin (Construction Manager), Ken Casley (Project Manager), Michelle Rafferty (Project Engineer) and Vincent Moscolo. The minutes record: “Commence rehab and open up plunge pool outlet channel”.

51 Prior to the meeting Mr Macklin had discussed the sequencing of the works with Scott Suthern, FRH’s earthworks foreman. Mr Macklin cannot recall a conversation at the meeting during which methodology for the works was discussed. However, given the proximity of the Snowy River to the plunge pool channel, he considers that it would have been highly unusual if methodology had not been discussed. Mr Macklin also says that it would have been very unusual for Mr Jones, Mr Thornton or Mr Mayhew (all of Snowy Hydro) not to question him at this meeting as to the sequencing of the works. I do not regard this evidence as sufficient to establish that the methodology was discussed or that there was any such questioning.

52 Mr Macklin recalls, and, I accept, that (a) at the time of this meeting “we” (by which I understand him to mean FRH) had decided that the first works to be undertaken were to be the shaping of the river between the plunge pool and the haul road; (b) at either the progress meeting held on 21 or on 28 July, either Mr Mayhew or Mr Jones of Snowy Hydro agreed to keep the water level in the plunge pool below the invert of the proposed channel so that as much excavation as possible could be carried out in the dry.

53 It was the intention and understanding of Snowy Hydro and FRH that these works would be completed on or about 1 August 2006. However, there were no penalties payable if the works were not completed by that date.

54 On Friday 28 July, FRH began the excavation of the proposed channel between the plunge pool and the downstream Snowy River on the plunge pool side of the clay coffer dam and haul road. The works included excavation of a channel to connect the plunge pool to the River. Scott Suthern, the FRH earthworks foreman, was present. There were two excavators (one 30 tonne and one 75 tonne) excavating earth and loading it into two large dump trucks, also driven by FRH personnel. The trucks dumped the earth in a stockpile location.

55 There were no environmental controls in place on the plunge pool side to control the migration of sediment into the waters of the plunge pool.

56 Ian McCann was present on site as a Snowy Hydro site inspector. His role was to ensure that the width and depth of the channel joining the plunge pool and the River were achieved.

57 The works on this day were in the dry. There was no noticeable discolouration of water. Snowy Hydro raised the depth of the plunge pool slightly but to a level well below the excavation point of the channel in the plunge pool.

Saturday 29 July 2006

58 The excavation of the plunge pool side of the haul road, including excavation of the channel to connect the plunge pool to the River, continued on Saturday 29 July 2006.

59 Brian Mayhew (Snowy Hydro) directed Scott Macklin (FRH) with respect to the depth, width and profile of the channel to conform to a profile determined by Snowy Hydro to be appropriate. Ian McCann had a number of conversations with Brian Mayhew, Scott Macklin and Scott Suthern (FRH). Mr McCann at one stage said to Mr Macklin: “The depth of the channel is too shallow. We need you to make it deeper." Mr Macklin replied: "We can make that deeper." Mr Macklin recalls Mr Mayhew insisting that the channel be excavated to rock level, which at first Mr Macklin thought would be at a similar level to the downstream profile of the river, but which in fact was much deeper.

60 Ian McCann observed the depth and shape of the channel being excavated to connect the plunge pool to the Snowy River.

61 Other works that were conducted in relation to the removal of the coffer dams included the shaping/excavation of the banks of the Snowy River to provide a solid base from which the excavators could operate.

62 At the time that excavation of the outlet channel was carried out on 28 and 29 July 2006, there was discoloured water in the plunge pool.

63 Mr Macklin’s evidence was that the rock coffer dam in the most downstream area could not be removed last because, inter alia, the road to the rock coffer dam would be too steep to cart wet material out and because FRH did not want to disturb the edges of the river further than was necessary.

64 All the works on the Saturday were in the dry. There was no noticeable discolouration of water. Snowy Hydro raised the plunge pool to a level one metre below the invert of the channel to the river. On several occasions Mr Macklin asked Mr Mayhew if the depth and shape of the channel was satisfactory and he advised Mr Macklin that excavation needed to be to rock level – which was approximately four metres below water level – and for the channel to be excavated to a width similar to the width of the platypus pool.

65 Mr Mayhew and Mr McCann agreed at the end of the day that the earthworks on the plunge pool side had been completed to a satisfactory level; that is, that the channel’s width and depth had been achieved to the desired level.

Sunday 30 July 2006

66 On the morning of Sunday 30 July, FRH commenced excavation works within the Snowy River to remove the rock coffer dam to the level of the Snowy River bed. They were wet works - below the water line. These works were carried out by Scott Suthern (the sole FRH excavator operator) and two other FRH employees (who were operating trucks).

67 About one hour after commencing removal of the rock coffer dam, Mr Suthern observed discoloured water downstream of the silt curtain. It was a brown colour. He informed his immediate supervisor, Scott Macklin, who instructed him to continue digging. Mr Macklin also saw colloidal material downstream of the silt curtain.

68 Mr Suthern continued excavating the rock coffer dam until about 3:30pm, which was the scheduled knock-off time. Most, if not all, of the rock coffer dam had been removed by that time. Sediment continued to enter the Snowy River while Mr Suthern was carrying out these work.

69 Earlier, because of the discolouration of the water and the close proximity to the Snowy River, Scott Macklin called Elise Stone, who was his wife, and asked her to attend the site as soon as possible to take a sample of the discoloured water. She attended ten minutes later. She later told him that she had recorded a sample downstream of the silt curtain of 16 NTU.

70 Mr Macklin recalls that Brett Jones of Snowy Hydro arrived on site during the afternoon. Mr Macklin told Mr Jones that they had noticed some discolouration to the water, that he was concerned about the turbidity and that Elise Stone had taken a sample which was about 16 NTU. Mr Jones said “Good, just keep digging”. That evidence was uncontested and I am prepared to accept it in this case.

71 At about 4pm Mr Macklin arranged for Elise Stone to take further samples which ranged between 16 NTU and 50 NTU. He considered the situation was under control because he believed (mistakenly) that the limit specified in the environmental management plan was 150 NTU.

Monday 31 July 2006

72 On Monday 31 July 2006 excavation works were carried out to remove the remainder of the rock coffer dam, and then to commence removal of further material from the clay coffer dam.

73 Mr Macklin arrived on site at about 7am. He noticed there was no discolouration on either side of the silt curtain. About one hour after digging had recommenced, he noticed the water had again become discoloured.

74 Ian McCann arrived on site at 7:30am. He noticed that excavation works had been carried out the previous day where the rock coffer dam had been and that most of it had been removed. He saw FRH personnel had already commenced works. The 75 tonne excavator was carrying out wet works in the Snowy River. Mr McCann observed discolouration of the Snowy River both within the silt curtain area and, to a lesser extent, downstream on the Snowy River side of the silt curtain. He became aware that there had been an incident involving the discoloured water entering the Snowy River the previous day. The sediment from the excavation works continued to build up during the course of the morning. He saw it as his role to report this type of incident to his immediate supervisor.

75 The plunge pool commissioning works continued the whole day. The sediment and discolouration downstream of the silt curtain continued to increase during the day. Later in the day, the colour in the water downstream of the silt curtain was consistent with the colour of the water between the coffer dam and the silt curtain.

76 A sample was taken by Elise Stone of FRH in the plunge pool and inside the silt curtain. The sample in the plunge pool had an in situ level of 108 NTU. The sample taken inside the silt curtain had a level of 405 NTU. During the morning she left two messages on the voicemail of Mr Endersby of Snowy Hydro, in which she reported on the turbidity of the plunge pool, but did not mention that there was pollution downstream of the silt curtain.

77 After the samples had been taken by Elise Stone, Mr Suthern, Mr Macklin and she had a discussion in relation to increased controls and the possibility of moving a second silt curtain into place and turning off the riparian flow.

78 After a conversation between Mr Macklin and either Mr Mayhew or Mr Thornton, the silt curtain was adjusted with the object of ensuring that it was operating effectively and works were re-commenced. The removal of the rock coffer dam was completed and FRH commenced work on the haul road above water level.

79 During the removal of the coffer dams on Sunday 30 and Monday 31 July 2006, sediment laden water containing soil and earth or similar inorganic matter, and/or liquid that contained soil and earth or similar inorganic matter moved from that part of the Snowy River upstream of the silt curtain to that part of the Snowy River downstream of the silt curtain.

Tuesday 1 August 2006

80 On Tuesday 1 August FRH employees continued the excavation and removal of the clay coffer dam.

81 When Mr Macklin first arrived on site, to the best of his recollection the discolouration of water from the previous day had disappeared. FRH commenced digging out the haul road above and below water level.

82 Between 10am and 10:50am, a Snowy Hydro employee or employees took a number of in-situ turbidity readings. The reading between the coffer dam and the silt curtain was 19 NTU. The reading in the plunge pool was 250 NTU. Readings at sites W2 and W3 (downstream from the silt curtain) were 7 NTU.

83 At approximately 10:15am a local resident, Mr Bruce Hodges, contacted the Department of Environment and Climate Change (DECC) and reported a pollution incident. Mr Hodges was a local landowner whose property was located approximately 3km downstream from Jindabyne Dam. At around the same time, Mr Hodges also contacted Snowy Hydro and complained that there was mud in the Snowy River flowing past his property. The Snowy Hydro Construction Manager, Mr Mayhew, returned his call. Mr Hodges informed Mr Mayhew that he had contacted the EPA and Snowy River Shire Council. Mr Mayhew was not at the site at the time of this phone call but travelled to the site shortly afterwards.

84 Mr Mayhew contacted Mr Jones, the Snowy Hydro Superintendent, to discuss the matter. Mr Mayhew also contacted and informed an employee of the council of the complaint received by Snowy Hydro; that it was being investigated by Snowy Hydro; and that the environmental releases from Jindabyne Dam to the downstream part of the River may be temporarily stopped if needed to reduce any impacts. The council indicated that it would monitor for any issues at the water supply off take at Dalgety, which was downstream.

85 Around mid morning a council officer attended in relation to the complaint. Elise Stone showed the council officer the works that had been carried out. Mr Macklin says the council officer appeared satisfied with the works and protection measures that were in place.

Connection of plunge pool to Snowy River on Tuesday 1 August 2006

86 At approximately midday on Tuesday 1 August, as a result of the continuing excavation works, FRH completed the excavation of all of the earthen and clay material between the plunge pool and the downstream waters of the Snowy River, breached the clay coffer dam/haul road and thereby connected the waters of the plunge pool with the downstream waters of the River. At the time that the plunge pool was connected to the Snowy River at around midday on Tuesday 1 August 2006, the water in the plunge pool was turbid and the plunge pool was close to being full.

87 Initially, upon the connection being effected, the water downstream of the plunge pool was higher than the water level in the plunge pool. As a result, the water from the River flowed upstream into the plunge pool.

88 At approximately 1:25pm Snowy Hydro took a reading of 11 NTU at site W3. At approximately 1:30pm, Snowy Hydro took a reading of 24 NTU at site W2. Sites W2 and W3 were some way downstream from the silt curtain.

89 By approximately 3pm, after the level of the water in the plunge pool had equalised with the level of the water in the River, water from the plunge pool flowed downstream. The water downstream of the silt curtain became increasingly discoloured. This was due to the presence of suspended solids and/or water containing suspended solids, which had migrated from the upstream work site.

90 At around 3.30pm Snowy Hydro employees and FRH employees met and discussed options for improving controls for the work, including the following:

91 Samples were taken by Elise Stone in the plunge pool at approximately 4pm. They had an in situ level of 168 NTU.

92 Employees of Snowy Hydro took a number of photographs which show the excavation work to connect the plunge pool to the River, the initial upstream flow of the River into the plunge pool and the equalisation of the water level between the River and the plunge pool.

93 FRH adjusted the silt curtain between 2pm and 4pm in the afternoon.

94 At about 4:15pm, DECC officers arrived at the Jindabyne Dam construction site. They inspected the site where works had been undertaken to excavate the coffer dams with representatives of FRH and Snowy Hydro. The DECC officers observed that the River was discoloured. They also observed a floating silt curtain, located about 10 metres downstream from where the excavation works were being undertaken. A number of water samples were collected by the DECC officers for analysis of TSS concentration and turbidity, as follows:

(a) at 5:09pm a sample a few metres downstream of the silt curtain approximately 400m below the Jindabyne Dam wall had an NTU level of 58 and a TSS level of 56 mg/L.
(b) at 5:20pm a sample in the same area had an NTU level of 50 and a TSS level of 45mg/L.
(c) at 5:25pm a sample in Cobbin Creek (downstream of the silt curtain) was less than 3 NTU and less than 3 mg/L.
(d) at 5:40pm a sample upstream of the silt curtain showed 78 NTU and 75mg/L TSS.
(e) at 5:45 pm a sample directly downstream of the silt curtain showed 18 NTU and 19mg/L TSS.
(f) at 6:40pm a sample on the upstream (northern) side of the Jindabyne Dam wall showed 3.6 NTU and less than 3 mg/L TSS.

95 Mr Macklin says, and I accept, that later in the afternoon or in the evening, he conversed by phone with either Mr Mayhew or Mr Jones, during which they discussed available options including another silt curtain and turning off the riparian flow. They asked Mr Macklin to enquire who was available early next day so that the channel could be completed. They also advised Mr Macklin that a second silt curtain should be installed as an extra environment protection measure .

Wednesday 2 August 2006

96 On Wednesday 2 August when Mr Macklin arrived on site at 6:30am, he observed no discolouration of water downstream of the silt curtain. Shortly after 6:30am, excavation work on the clay coffer dam recommenced, initially above the water level. Excavation continued underwater with FRH regularly stopping excavation to reassess the water conditions.

97 Between approximately 8am and 8:30am Snowy Hydro took samples of 15 NTU at W2 (downstream of the silt curtain), 32 NTU upstream of the silt curtain and 195 NTU in the plunge pool. By 9:30am discoloured water was observed downstream of the silt curtain.

98 At approximately 9.30am, following discussion between Snowy Hydro and FRH and at FRH's request, Snowy Hydro stopped the environmental releases from the siphon outlet. This was done so that FRH could adjust the silt curtain to improve its effectiveness. Mr Macklin gave evidence, which I accept, that he requested Snowy Hydro to turn off the riparian flow as, in his opinion, it was greatly increasing the risk of sediment escaping through the silt curtain. Snowy Hydro staff were present all morning monitoring the work.

99 Between approximately 9:30am and 10am, after the environmental releases were stopped, there was a slow movement of water from the plunge pool into the River downstream of the silt curtain, with a corresponding increase in discolouration downstream of the silt curtain.

100 Between 10am and 10:20am, Snowy Hydro took samples of 350 NTU between the coffer dam and the silt curtain and 84 NTU at W2 (downstream of the silt curtain). At 10:30am Elise Stone took a sample in the plunge pool at an in situ level of 116 NTU and again at 11:45am at an in situ level of 122 NTU.

101 At approximately 10am, Brian Mayhew (Snowy Hydro) directed FRH to stop all work below water level as the silt curtain did not appear to be effective. The direction was made because it was considered that FRH was not meeting the requirement under their contract to do their work specifically without harm to the River.

102 Between 9am and 12:25pm, FRH moved and then installed an additional silt curtain downstream from the existing silt curtain.

103 At approximately 12:30pm, DECC officers returned to the works site. They observed that the River was discoloured with no discernable colour difference upstream and downstream of the silt curtains. They took the following water samples, which were later analysed and found to have the following properties:

104 Between approximately 1pm and 1:20pm, Snowy Hydro took a sample of 190 NTU between the coffer dam and the silt curtain, 250 NTU at W2 and

105 Later that day, DECC officers undertook an aerial investigation of the Snowy River by helicopter. They observed discoloured water in areas of the River up to approximately 15km downstream of the Jindabyne Dam wall.

106 At approximately 12:30pm Mr Mayhew instructed FRH to cease all excavation under water and to dig the remainder of the channel section just above water level whilst the riparian flow was turned off and the water level was low. FRH complied until it began to get dark. Snowy Hydro then turned on the riparian flow which raised the water level above the bench. It was agreed between FRH and Snowy Hydro that no further excavation would occur below water.

Events after Wednesday 2 August 2006

107 From Thursday 3 August to 17 October 2006 (with the exception of some Sundays) Snowy Hydro carried out water testing in the plunge pool and at various locations along the Snowy River. Snowy Hydro also conducted inspections of the Snowy River by helicopter.

108 On Thursday 3 August, Snowy Hydro took a sample of 93 NTU in the plunge pool (lab results 35 NTU; 24 mg/L TSS) and samples from various locations downstream of the silt curtains:

109 On Friday 4 August 2006, DECC issued Snowy Hydro with a clean-up notice pursuant to s 91 of the POEO Act (Clean-Up Notice No. 1). The notice required Snowy Hydro to prepare a mitigation report in respect of the impact caused by the pollution incident, to provide a copy of the report to DECC by 7 August 2006 and not to release water from the plunge pool and the area of soil disturbance associated with the removal of the coffer dam unless its turbidity value was less than 20 NTU.

110 On Monday 7 August 2006, Snowy Hydro submitted a mitigation report to DECC as required by Clean Up Notice No. 1. The mitigation report detailed what had occurred and advised DECC that ongoing investigation and assessment of possible mitigation measures was continuing. The report favoured continuation of the release of water through the environmental release siphon at the maximum rate of 96 ML/day. A summary of the water quality data obtained by Snowy Hydro was also provided to DECC.

111 Commencing on 8 August 2006, a number of consultants retained by Snowy Hydro began to investigate and provide advice as to the best way of dealing with the sediment in the River, the effects of the pollution of the River and as to the best way of mitigating those effects. One was Dr Chris Gippel, a fluvial geomorphologist. He was engaged to inspect the Site and the River and to provide advice. He inspected the area on 8 August and provided his advice on 11 August 2006.

112 On 8 August 2006 Snowy Hydro responded in writing to a suggestion by DECC that one potential mitigation option may be the release of a flushing flow from Lake Jindabyne. Snowy Hydro confirmed that the release of water from Lake Jindabyne had been considered but had not been implemented because the dam release valves were upstream of the plunge pool and that such a flushing flow would cause further suspended material to be released from the plunge pool. Snowy Hydro indicated that it was prepared to release such a flow if required by DECC, subject to various matters being resolved, and that it was continuing to consider other mitigation options. The letter also noted that as at midday on 8 August there was some remaining turbidity but no discernable slug of discoloured water in the River.

113 Snowy Hydro continued to investigate possible treatment of the plunge pool, including the use of flocculation and sand filtration.

114 On 10 August, Snowy Hydro received and reviewed a letter from DECC indicating that DECC was anxious to see a flushing flow delivered to the River downstream of Jindabyne Dam as a matter of urgency. DECC requested that Snowy Hydro provide a strategic flushing flow package and plunge pool treatment plan by Tuesday 15 August 2006.

115 On 15 August, Snowy Hydro forwarded a "Report on Strategic Flushing Flow Package And Plunge Pool Treatment Plan For Jindabyne Dam Outlet Works" to DECC examining options and making recommendations for:

116 Photographic evidence shows that by 17 August, three separated silt curtains were in place downstream of the plunge pool. The placement of multiple silt curtains appears to have been effective as a control to prevent the migration of sediment downstream from the plunge pool.

117 On 18 August DECC issued a second Clean-Up Notice pursuant to s 91 of the POEO Act (Clean-Up Notice No. 2). Clean-Up Notice No. 2 required Snowy Hydro to treat all the water in the plunge pool in such a manner as to ensure that from 11 September 2006 the plunge pool could be put into regular operation without polluting waters.

118 On 29 August, Snowy Hydro responded to Clean Up Notice No. 2. While noting that it had been Snowy Hydro's preferred option to allow the plunge pool to settle without the use of flocculant, Snowy Hydro submitted a proposal to dose the plunge pool with a lox-toxicity polymer flocculent. An application to vary the environment protection licence was also submitted to permit the addition of the flocculent to the plunge pool.

119 On 1 and 6 September, telephone conferences were held between Snowy Hydro and various government departments in order to develop a whole-of-government response to the turbidity events. On or around 16 September 2006 FRH commenced commissioning of the cone valves.

120 On 18 September, an amended environment protection licence was issued by DECC. The amendment required the monitoring of turbidity three times per day within a given time period at both a new plunge pool discharge point and an ambient point in Lake Jindabyne from 18 September 2006 to 31 October 2006. Turbidity limits were established at the discharge point from the plunge pool of either 20 NTU, or background plus 5 NTU, whichever was greater.

121 On 20 September, the former Department of Natural Resources, as owner of the water within Jindabyne Dam, issued Snowy Hydro a formal notice about revised September and October environmental release regimes from Jindabyne Dam. The terms of this notice were agreed to by Snowy Hydro prior to the issuance of the notice.

122 On 22 September, Snowy Hydro monitored turbidity results in the Jindabyne Dam and plunge pool including the results of the Cone Valve Tests and Water Quality Tests. Maximum turbidity levels at the new discharge point of the plunge pool into the River was 15 NTU. This was within the new environment protection licence threshold of 20 NTU.

Planning and risk assessment

123 The SEE did not expressly refer to the potential for the waters of the Snowy River to be polluted during the process of connection to the plunge pool. However, FRH was required to carry out a risk assessment pursuant to the environmental management plan. FRH did not prepare or submit to Snowy Hydro any written specific method statement, risk assessment or a turbidity management plan for the plunge pool commissioning works (i.e. the removal of the clay coffer dam/haul road and the rock coffer dam, and the excavation of the channel to connect the plunge pool to the waters). However, the Safe Work Method Statement generally addressed the issue of preventing sediment from entering the Snowy River.

124 Prior to carrying out the plunge pool commissioning works, FRH personnel (Mr Macklin and Mr Suthern) had a discussion as to how the works were to be carried out. Also, FRH personnel (Mr Macklin, Mr Casley and Ms Rafferty) held a meeting in which they attempted to identify risk and to adopt an approach which would minimise those risks. There was no record made of either the discussion between Mr Macklin and Mr Suthern nor of the discussion which occurred at the meeting Mr Macklin attended with Mr Casley and Ms Rafferty.

125 As previously noted, there were no environmental controls in place other than a silt curtain and the riparian flow. Apart from observing that the silt curtain was in place, neither FRH nor Snowy Hydro checked or assessed the silt curtain before any works were done to remove the temporary coffer dams and connect the plunge pool to the River.

126 Snowy Hydro did not request from the contractor and did not receive a method statement or risk assessment for the plunge pool commissioning works and did not undertake its own risk assessment.

127 Snowy Hydro employees observed some of the excavation works every day between 28, 29 and 31 July and 1 and 2 August 2006 and, according to the evidence of Mr Macklin (which I accept), also on 30 July when Mr Jones was present.

128 Snowy Hydro had the following procedures in place or took the following steps in order to check that the contractor complied with the contract in relation to environmental compliance obligations, in particular, and that environmental matters were being appropriately managed:

(a) Snowy Hydro retained a third party to draft the Environmental Management and Safety Plan Framework and attached that to the contract;
(b) Snowy Hydro retained the contractor on the basis of its experience in large scale civil construction projects, including work in and around water and relied on that contractor’s expertise;
(c) through the contract, Snowy Hydro required the contractor to prepare the environmental management plan and carry out the works in an environmentally responsible manner and in accordance with the development approval, the environmental management plan and all relevant law;
(d) Snowy Hydro reviewed drafts of the environmental management plan;
(e) Snowy Hydro received safe work method statements from the contractor;
(f) Snowy Hydro reviewed monthly progress reports from the contractor dealing with environmental issues, including water quality monitoring;
(g) Snowy Hydro representatives attended progress meetings at which the environment was a standing agenda item and raised or discussed any environmental issue as appropriate.

129 FRH’s main submissions may be summarised as follows:

(a) FRH recognises that its actions had the potential to cause environmental harm. This was contrary to its intentions and endeavours. It considered it had in place adequate means of preventing the pollution offence that occurred. It was wrong about that;
(b) however, the offence:

(i) caused no more than minor or transitory harm into an already degraded river system;
(ii) involved a spill of natural sediments rather than toxic materials;
(iii) did not occur as a result of gross negligence or recklessness, and was not deliberate;
(iv) occurred at a time when FRH was engaged in a construction project with the principal object of rejuvenating the Snowy River;
(v) was committed by a large construction company that previously had an unblemished record;

(c) consequently, the offence is at the low end of the range of seriousness.
(d) to the extent that sentences should reflect the moral outrage of the community, reasonable members of the community would not expect FRH to receive a large (or any) financial penalty in addition to the significant costs and potential costs it has already suffered.

130 The objects of the POEO Act relevantly include the following (s 3(1)):

131 FRH has acted so as to compromise the objects of the Act by failing to protect the quality of the environment to the extent that the sediment travelled the 15 km stretch of the Snowy River, the subject of the charge. However, FRH submits in effect that those objects have not been greatly compromised by the commission of the offence having regard to the evidence of expert witnesses that it caused no more than minor or transitory harm in an already degraded river system.

132 A stern policy against pollution lies behind the legislation. In Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359 Mahoney JA held:

The community has adopted a stern policy against pollution. The legislative scheme requires that proper, and strict, precautions be taken by those whose activities may cause proscribed pollution. The quantum of the fines which may be imposed evidences this: for the present offence, a maximum fine of $125,000 [now $1 million] was available. The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur.
…
The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that in many cases care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur.

Precautions may be costly. The cost of precautions to avoid pollution will no doubt become accepted, in due course, as an ordinary cost of operating in an industry where, absent precautions, pollution may occur… The fine should be such as will make it worthwhile that the cost of precautions be undertaken. As the learned judge indicated, in the present case, in order to prevent pollution of the river, it was necessary, inter alia, that the company delay spraying until the conditions were appropriate for it. No doubt that delay cost money. Ordinarily, the fine to be imposed should be such as to make it worthwhile that costs of this kind be incurred.

133 The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 as follows:

3A Purposes of sentencing

134 Section 21A(1) provides:

(1) General

135 Section 21A(2) and (3) list aggravating and mitigating factors which the Court is required to take into account. The aggravating factors are inapplicable in the present case and are mostly inapplicable to environmental offences (apart from whether the offender has a record of previous convictions). A number of the mitigating factors are applicable in the present case.

136 Section 241 of the POEO Act requires the Court to consider five objective gravity matters (so far as they are relevant):

241 Matters to be considered in imposing penalty

137 The sentence must reflect both the objective circumstances and the subjective circumstances of the offence: Veen v The Queen (1979) 143 CLR 458 at 490. The penalty should be determined by an instinctive synthesis of all the relevant objective and subjective circumstances: Markarian v The Queen (2005) 228 CLR 357 at [37], [39], [66] and [73].

138 There are two components to the assessment of the objective gravity of an offence: an examination of the precise acts or omissions or the offender; and the consequences of those acts or omissions: R v Carroll [2008] NSWCCA 218 at [39]. The objective gravity of the offence fixes the upper limit of proportionate punishment: Hoare v The Queen (1989) 167 CLR 348 at 354, cited in R v McNaughton (2006) 66 NSWLR 566 (CCA) at [15] (see also [25]) and Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at 258 [162] per Preston CJ. The Court of Criminal Appeal has held that the objective gravity of the offence also fixes the lower limit of proportionate punishment: R v McNaughton at [15]; R v Whyte (2002) 55 NSWLR 252 at [156] – [158]; see also Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 at 324 – 325 [139] – [140] (Preston CJ). This appears to indicate that the role of subjective factors lies between the upper and lower limits dictated by the objective gravity of the offence. The seminal authority cited in McNaughton and Whyte for the proposition that the objective gravity of the offence also fixes the lower limit of proportionate punishment is R v Dodd (1991) 57 A Crim R 349 at 354 where in a joint judgment Gleeson CJ, Lee CJ at CL and Hunt J said (omitting some citations):

Veen (No 2)

139 The first quoted sentence concerns the fixing of the maximum sentence by reference to the objective gravity. As to the last quoted sentence, the observation may be ventured that it falls short of saying that the objective gravity of the offence fixes the lower limit of the sentence. However, the contrary is authoritatively established by McNaughton and Whyte.

Defendant cannot be sentenced for more serious offence: negligence

140 A strict liability offence that was committed negligently or intentionally will be objectively more serious than one committed non-negligently or unintentionally: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 (CCA) at 700; Environment Protection Authority v Lithgow City Council [2007] NSWLEC 695 at [35].

141 The prosecutor submits that FRH was negligent in:

(a) failing to carry out a proper risk assessment for the works;
(b) failing to provide a detailed method statement;
(c) failing to install effective controls to prevent pollution of the Snowy River; and
(d) working and continuing to work with the knowledge that the works were polluting the river.

142 For the reasons given in my separate contemporaneous judgment in relation to Snowy Hydro, I have concluded that it would be an error of law to make a finding of negligence and to take it into consideration as an aggravating factor: Environment Protection Authority v Snowy Hydro [2008] NSWLEC 264 at [139] – [151]. To do so would be to sentence FRH for an offence with which it has not been charged, contrary to the principle in The Queen v De Simoni (1981) 147 CLR 383 at 389; namely, the offence under s 116(1) of the POEO Act of negligently causing a substance to escape in a manner likely to cause harm to the environment.

Maximum penalty

143 The maximum penalty is the expression by parliament of the seriousness of the offence: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 (CCA) at 698.

144 In Director of Public Prosecutions (Cth) v Said Khodor El Karhani (1990) 21 NSWLR 270 at 380, the unanimous Court of Criminal Appeal (Kirby P, Campbell and Newman JJ) held:

As in all matters of sentencing for offences provided by statute, it is essential first to determine the maximum sentence which may by law be imposed. Not only does this identify any alternatives provided by Parliament. It indicates to the Court, in a general way, the seriousness with which Parliament, representing the people, has viewed the offence.

145 The potential seriousness of an offence under s 120 of the POEO Act is reflected in the maximum penalty, which for corporations was increased fourfold to $1 million on 1 May 2006. There is a further penalty of $120,000 for each day the offence continues. In the present case, the prosecutor did not submit that I should impose a daily penalty and I do not propose to do so.

146 The sharp increases in the maximum penalty indicates a legislative intention that the existing sentencing patterns are to move sharply upwards: R v Slattery (1996) 90 A Crim R 519 at 524 per Hunt CJ at CL. However, it does not follow that for every offence after the date of increase, the increase in penalty will be by the same multiple as the increase in the maximum penalty. Offences of low criminality remain offences of low criminality even if the maximum penalty is increased: Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 at 312 (CCA) approving Environment Protection Authority v Timber Industries Ltd [2001] NSWLEC 25 at [33] (Pearlman CJ).

147 Since the increases in maximum penalties in 2006 there have been three sentences imposed for tier 2 offences under the POEO Act (see s 114) and they reflect a distinct upward movement: Environment Protection Authority v Nalco Australia Pty Ltd [2007] NSWLEC 831; Environment Protection Authority v Nowra Chemical Manufacturers Pty Ltd [2008] NSWLEC 187; and Environment Protection Authority v CSR Building Products Limited [2008] NSWLEC 224. Nalco was a low criminality offence involving no actual harm, resulting in the making of a s 250(1)(e) order to the value of $50,000 plus a publication order. In Nowra, a toxic substance stored in breach of licence conditions leaked, resulting in actual environmental harm. The Court made a s 250(1)(e) order to the value of $100,000 plus a publication order. In CSR, the Court characterised the offence, a chemical spill, as a “mid-range” offence, and fined the defendant $280,000 plus $83,407.09 in cleaning up and investigation costs pursuant to ss 246 and 248 of the POEA Act.

Environmental harm

148 Objective gravity is also measured by whether there has been any actual environmental harm and, if so, its seriousness: s 241(1)(a) POEO Act. Ordinarily, the more serious the environmental harm the higher the penalty: Camilleri’s at 701, Environment Protection Authority v Integral Energy Australia Pty Ltd [2006] NSWLEC 141 at [68].

149 The level of environmental harm was assessed in a unanimous joint report prepared in 2008 by experts representing Snowy Hydro (Dr Gippel, Dr Marchant and Mr Hardwick) and experts representing the prosecutor (Professor Erskine and Professor Norris). The report set out the following questions and answers:

Sediment questions

It is likely that about 20% of the sediment discharged would have been deposited in the Snowy River in the 27 km between Jindabyne Dam and Dalgety.

Turbidity levels were low in comparison to the initial release (<20 NTU compared to 150 NTU for the spill). However, the flow volume was greater and the total load may have been higher and included other sources (bank, biofilm stripping and other organic matter etc.). An approximate estimate is 7 tonnes, which is still low in comparison with loads that might be moved during flood events (> 12,000 MLd-1). Flood flows are much higher than the flushing flow of 300-1,200 MLd-1 over 8 days .

Biological/ecological questions

Against a background of an already degraded river it is difficult to determine a clear effect in the biota that could be attributed to the sediment spill in the pre-existing data and those collected after the spill.

Without prior degradation the methods employed would have been likely to have detected a short-term effect on stream invertebrates, especially close to the dam wall.

No evidence because no data were collected during the spill.

None observable that could be contributed to the sediment spill.

As noted in 1. above, at most minor and short term.

There is a lot of evidence in the scientific literature that sediment has marked detrimental effects on aquatic fauna, especially in cases of chronic sediment addition. However, several studies (including Australian studies) have shown short-term responses, both degradation and recovery.

The fauna immediately downstream of the Dam (several kilometres) has been shown to be degraded because of the dam, reduced flows and land use. Degradation continues further downstream also because of land use and lack of fencing of a degraded riparian zone.

150 The overall conclusion reached by the experts was:

Given the pre-existing degraded state of the river, the investigations could not clearly detect environmental harm resulting from the sediment spill on aquatic invertebrate communities. Any effects are likely to have been minor and short term (<4 months) and short distance (upstream of Dalgety). There are indications that the flushing flow mobilized some sediment that had deposited from the spill and improved invertebrate communities.

151 Thus, the commission of the offence caused actual environmental harm. It is likely that between 4 and 11 tonnes of sediment was discharged into the Snowy River as a direct consequence of the commission of the offence, and a further 7 tonnes as a consequence of the release of the flushing flow as a measure to address the impact occasioned by the commission of the offence. The discharge of the sediment caused discernible pollution of approximately 15 kilometres of the Snowy River. The nature of the harm was degradation of the water quality and diminution in the aesthetic quality of the Snowy River.

152 By virtue of the offence having directly caused actual environmental harm, the offence is aggravated: Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278 at 294.

153 On the other hand, the environmental harm was minor, short term and over a relatively short distance on an already degraded section of the Snowy River. Although the degraded state of receiving waters is not a mitigating factor, it is relevant to the assessment of the harm or likely harm caused by the commission of the offence: Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 at [149]; Environment Protection Authority v Hochtief AG and Thiess Pty Limited [2007] NSWLEC 177 at [19]. The prosecutor points out that the SEE which accompanied the development application noted that the platypus was recorded in 2003 in the pool and reed bed immediately downstream, suggesting that that environment had some quality of sensitivity. However, no platypus was recorded in the then current survey for the SEE. Nor was any mention made of the platypus in the experts’ joint report, where one would expect to find a reference if it was a significant consideration as at the date of the incident. I am therefore disinclined to attach much weight to the platypus consideration. Also, it appears from information in a letter dated 18 September 2003 from Snowy Hydro to the council that the level of pollution was comparable with pollution caused by a serious storm event.

154 Although there was potential for greater environmental harm and notwithstanding that the pollution continued over some days, overall I consider that the environmental harm was in the relatively low range.

Practical measures

155 A factor which bears on the objective gravity of an offence is the practical measures that may be taken to prevent, control, abate or mitigate the harm to the environment: s 241(1)(b) POEO Act.

156 Christopher Alsop gave expert evidence for the prosecution, which I accept. Mr Alsop produced photographs showing the effectiveness of multiple silt curtains to control the escape of sediment and turbidity into a waterway on other projects. Mr Alsop considered that for a project of this nature there should have been a risk assessment which included a management plan and establishment of controls. Simple controls which he says would probably have reduced the turbidity generated to a non-visible level – but which were absent in the present case – include an impermeable skirt to prevent particles passing through the silt curtain; aggregate filled tubes sewn to the vertical ends of the silt curtain contoured to the banks on each end to seal against leakage around the ends; and removal or limitation of the influence of agitation sources (from the riparian flow).

157 Mr Miller, FRH’s chief executive officer, gave evidence that, having considered the incident, FRH intends to adopt the following practice on any future occasions when FRH conducts wet works and a silt curtain is to be used:

158 I do not think that this proposed practice goes far enough in that it makes no provision for more than one silt curtain.

159 The prosecutor submits that there were simple practical measures which FRH could and should have taken, the most obvious of which was to cease excavation works and defer connection of the plunge pool to the Snowy River until such time as steps had been taken to:

(a) significantly reduce the level of turbidity in the plunge pool;
(b) ensure that controls were in place downstream which would prevent pollution of the downstream waters of Snowy River. The silt curtain was manifestly ineffective and this should have been obvious to FRH prior to commission of the offence. It was amateurish: a silt curtain tied by ropes to bushes and not extending across the full width of the river. This is apparent from the photos taken of it on 1 August 2006. A more professional system should have been installed involving more than one silt curtain – the sort of system observable both in the examples and photographs provided by Mr Alsop and in the photographs of the system later put in place downstream of the plunge pool; and
(c) submit a written risk assessment and method statement to Snowy Hydro before carrying out the works. The risk assessment should have extended to an assessment of the risk associated with filling of the plunge pool with waters discharged from the intake tower. Mr Macklin’s oral evidence demonstrated that FRH did not appreciate that sediment had become entrained in the intake tower during the commissioning of that plant when the temporary coffer dam in the lake was removed.

160 FRH submits that:

161 I accept the prosecutor’s submissions. Even if there is doubt whether the silt curtain extended the width of the river, it is clear that it was not properly secured to the banks. Only one silt curtain was in place until 2 August when a second curtain was installed which, with the readjustment of the first curtain, was effective to contain the sediment. The effectiveness of a system involving more than one silt curtain is clear from the photographic evidence.

Foreseeability of risk of harm

162 A factor bearing on the objective gravity of the offence is the extent to which the offender could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence: s 241(1)(c) POEO Act.

163 In my view, FRH could and should reasonably have foreseen that the removal of the coffer dams could result in the release of sediment into the Snowy River below the silt curtain, thus causing harm to the environment. The absent prior risk assessment should have identified the risk, which eventuated. By 29 July 2006, it was obvious that the plunge pool was turbid and virtually full. By that date it was foreseeable, and there was a high risk, that the connection of the plunge pool to the downstream Snowy River would have the consequence that turbid water in the plunge pool would migrate downstream. It was also apparent prior to the connection of the plunge pool to the Snowy River that the silt curtain was not working in such a way as to prevent the downstream migration of suspended sediment.

Control over the causes

164 A factor bearing on the objective gravity of the offence is the extent to which the offender had control over the causes that gave rise to the offence: s 241(1)(d) POEO Act.

165 FRH concedes that to the extent that it was the contractor, and performed the plunge pool commissioning works, it had control over most of the works. However, it submits, Snowy Hydro inspected and had power to give directions in relation to the works, gave no directions to FRH to do anything differently, gave specific directions to dig a deeper channel and to keep digging after discolouration was first noticed. FRH submits that from the time discolouration was first noticed, Snowy Hydro was “calling the shots”. Additionally, if the riparian flow was a contributing factor, that was beyond FRH’s control.

166 In my opinion, FRH had equal control with Snowy Hydro over the causes that gave rise to the offence. FRH was responsible for the implementation of effective controls to prevent pollution. It carried out the works. It had an obligation not to pollute waters and had the right to refuse to carry out works which would cause pollution.

Complying with orders

167 FRH was not complying with orders of an employer or supervising employee. Thus, s 241(1)(e) of the POEO Act does not apply in its terms. However, FRH points to the uncontradicted evidence in this case of Mr Macklin, which I am prepared to accept, that on Sunday 30 July 2006 FRH was directed by the Snowy Hydro Superintendent, Brett Jones, to “keep digging” after Mr Jones had seen that the works were causing pollution.

168 The prosecutor submits that this does not diminish FRH’s culpability: Environment Protection Authority v Coe Drilling Australia Pty Limited [2005] NSWLEC 719 at [139] – [142] where Preston CJ held:

139 …All persons under a contract, whether a principal or a contractor, are obliged to obey the law, including in this context, the statutory obligation under the POEO Act not to pollute waters. The fact that one party to a contract refuses to take action to avoid breaching the law, here to avoid pollution of waters, does not exculpate or relieve another party from its obligations to comply with the law.

140 Here both parties were on notice that there was a highly foreseeable risk that pollution of waters would occur if the contract was performed in the manner originally proposed. Practical alternatives were available to avoid that risk. Both parties were obliged to comply with the law including the statutory obligation under the POEO Act not to pollute waters.

141 In the circumstances, this required both parties either to agree to one of the alternatives suggested by the defendant or otherwise not to perform the contract as originally specified. A failure by the principal, MCW, to pursue one of the suggested alternatives of action could in no way relieve the defendant as the contractor from its obligation to comply with the law, including the statutory obligation not to pollute waters under the POEO Act. If the principal would not agree to pursue one of the suggested alternative means of installing the pipe, the contractor was obliged not to perform the contract as originally specified. There was no legal conundrum.

Axer Pty Ltd v Environment Protection Authority

169 FRH concedes that both parties were obliged to obey the law but submits that there is a distinction in that FRH did not think it was disobeying the law or was about to breach it. I do not accept the submission. FRH’s obligation to obey the law included the statutory obligation not to pollute waters, of which it should have been aware. It was also a term of FRH’s contract that it was obliged to satisfy all legislative requirements, including the POEO Act. The risk of pollution of the river by reason of continuation of the works was apparent at the time Mr Jones gave his direction.

Reasons for commission of offence

170 The objective seriousness of an offence may also be measured by reference to the reasons for its occurrence: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366 per Badgery-Parker J. There were no deliberate, commercial reasons for the commission of this offence.

Conclusion

171 Overall, I conclude that FRH’s offence is of moderate objective seriousness.

SUBJECTIVE FACTORS
State of mind of offender

172 A relevant subjective factor in a strict liability offence such as this is the state of mind of the offender: Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [201] – [208]; Hardt v Environment Protection Authority (2007) 156 LGERA 337 at [53]. FRH did not intend to pollute the Snowy River. Ironically, it was engaged in the tasks of rejuvenating the degraded Snowy River, in respect of which it was otherwise successful. It thought that there were adequate environmental controls in place and the polluting event took it by surprise.

Awareness of its contractual obligations

173 FRH must be taken to have been aware of its contractual obligations, which are analysed at [18] above. They included an obligation to satisfy the requirements of the POEO Act.

Awareness of obligations under the POEO Act and environment protection licence

174 FRH must be taken to have been aware that it was an offence to pollute waters unless authorised to do so pursuant to an environment protection licence. Mr Macklin in oral evidence effectively conceded this.

175 Mr Macklin’s evidence was that he believed that FRH was entitled to discharge turbid water into the river provided it was inside the turbidity limit of 150 NTU. He said this belief was based on his understanding of the information in section 4.3.1 of the environment protection licence. In my opinion, the terms of the licence environment protection licence are sufficiently clear, and FRH should have known, that no discharge of pollutants into the Snowy River was permitted (save for discharge of treated water from Point 17, being a point located downstream of the construction site at the end of an erosion gully flowing into the Snowy River from Sediment Basin No 3). In the circumstances, I do not consider that a mistake such as this by a major civil contracting company such as FRH is excusable. It is not a mitigating factor.

176 FRH must be taken to have been aware of the assessment of potential impacts set out in the SEE accompanying the development application. It was supplied to the contractor by Snowy Hydro. The SEE:

to control soil loss at the construction site and minimise any associated increases in water turbidity downstream – blanketing sediments can be particularly harmful to aquatic invertebrates (an important food source for the platypus)

Awareness of requirements for plunge pool connection

177 FRH was aware that the connection of the plunge pool to the Snowy River would necessitate the removal of the coffer dams and earthen material. It was aware that this was a critical time in respect of potential pollution for the Snowy River because the connection would create a conduit between the construction site and downstream waters after a long period of physical separation.

Awareness of turbidity of plunge pool waters

178 In July 2006, FRH personnel were present during the commissioning of the submerged discharge valve and witnessed the release of a large volume of highly turbid water into the plunge pool. It changed the colour of the plunge pool from a light green colour to a muddy brown colour. In the period between 21 July and 29 July 2006, FRH was aware that the suspended particles in the plunge pool were not settling out of the water column to any significant degree. FRH thus knew that this large body of turbid water would presently be connected with the downstream river.

Awareness of sediment control – a silt curtain

179 For a considerable period prior to connection of the plunge pool waters and the downstream river, FRH was aware that the only sediment control in place was one silt curtain. It was also aware that it had not submitted a method statement or risk assessment in relation to the works.

180 Mr Macklin gave evidence that he had confidence in the effectiveness of the single silt curtain to control migration of sediment from the construction site. In the absence of a submission to the Superintendent and consideration of a risk assessment, I do not think that his confidence was well founded. It also appears to be inconsistent with FRH’s installation for a time in 2004 of an additional silt curtain in this location. An email of 15 September 2004 from Mr Endersby of Snowy Hydro to Mr Macklin indicates that FRH was aware that there had been problems with respect to water quality downstream of the rock coffer dam in September 2004 and had at that time agreed with Snowy Hydro to install an additional silt curtain. A photograph taken in August 2004 in that location appears to show only one silt curtain in that location. A photograph taken on 22 September 2004 appears to show two silt curtains in that location.

181 Mr Macklin’s perception that a similar type of silt curtain had earlier been effective in preventing sediment migration in Lake Jindabyne was a fragile basis for his belief that the subject silt curtain would be effective to prevent migration down the river. He agreed that the two situations were fundamentally different because of the riparian flow and consequent turbulence. There were also other differences. Any such confidence should not have survived the events of 30 July and the subsequent days when it became apparent that the silt curtain was not working effectively.

Awareness of pollution: 29 July – 2 August

182 On Sunday 30 July, FRH knew there were elevated levels of turbidity downstream of the silt curtain. Nevertheless, Mr Macklin instructed Mr Suthern to keep digging. On Monday 31 July, when FRH carried out further excavation works, FRH was aware that discolouration downstream continued to increase as the day progressed – later in the day becoming quite turbid.

183 On Tuesday 1 August, prior to connection of plunge pool to river, FRH was aware from early morning that there was slight discolouration in the water of the Snowy River downstream of the silt curtain. It was aware that a complaint had been made by a downstream property owner and it had cause to believe that this was a consequence of the works because it had seen turbid waters migrating downstream since 30 July. Nevertheless it continued the connection works. After the plunge pool was connected to the Snowy River at about midday on 1 August, and the water levels of the Snowy River and plunge pool had equalised, FRH was aware that the downstream waters of the Snowy River became progressively more polluted, but continued with the works. On Wednesday 2 August, FRH was aware that there had been serious pollution of the river. But works continued until they were directed to stop by Mr Mayhew at approximately 10am.

Prior good character

184 FRH’s lack of prior convictions and good character are mitigating factors: Crimes (Sentencing Procedure) Act 1999, s 21A(3)(e) and (f); Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at 271 [251]. FRH is a good corporate citizen. It has engaged in various environmental initiatives including environmental training and auditing, working with the community to minimise effects of its activities, and implementing sustainable development.

Plea of guilty

185 FRH’s guilty plea is a mitigating factor: Crimes (Sentencing Procedure) Act 1999, s 21A(3)(k). It was entered at the earliest possible moment. It is common ground that this should be reflected by discounting the penalty it would otherwise incur by the full amount of 25 percent allowed for early pleas: R v Thompson; R v Houlton (2000) 49 NSWLR 383.

186 Remorse is a mitigating factor to be taken into account in accordance with s 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999, which provides:

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

187 FRH has expressed remorse which demonstrates that it has genuine insight into how it came to offend, has provided evidence that it has accepted responsibility for its actions, and has acknowledged the damage caused. Its chief executive officer has said that FRH regards this incident as a serious blot on its otherwise untarnished reputation and is determined that it will not be involved in a breach of the environmental laws again. Its remorse in these circumstances is a mitigating factor: Crimes (Sentencing Procedure) Act 1999, s 21A(3)(i). Its expressions of remorse have weight given that they were expressed by the chief executive officer and that four senior executives of FRH were present during the sentencing hearing: Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 at 338 [214]. The early guilty plea is also a demonstration of remorse. FRH has also demonstrated remorse by its conduct in response to the incident to which I refer to below in the context of individual deterrence.

Cooperation with authorities

188 FRH has cooperated to a high degree with the investigation of the offence and its own prosecution. This should be reflected in a significant discount on penalty: Crimes (Sentencing Procedure) Act 1999, s 23(1).

189 The purposes for which a court may impose a sentence includes deterring others from committing similar offences: s 3A(b) Crimes (Sentencing Procedure) Act 1999. In Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [139] – [140] Preston CJ said (citations omitted):

The sentence must serve the purpose of general or public deterrence. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only light punishment will be imposed.

190 A fine needs to be large enough to make it worthwhile that the cost of precautions be taken, to outweigh any gains and so as not to appear as a mere licence fee for illegal activity: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359-360; Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 at 341 [229]; Environment Protection Authority v Sell & Parker (2006) 149 LGERA 209 at 215 [26].

191 FRH submits that general deterrence is of less weight than usual with environmental offences having regard to the fact that the incident involved not dangerous or harmful material per se, but natural sediment; and that it has not been established that any, or any significant environmental harm occurred.

192 In my opinion there is still a need for a firm general deterrent. The penalty should act as a general deterrent for others who engage in earthen and construction activities with potential water pollution consequences, even if their activities are of a different nature and scale.

INDIVIDUAL DETERRENCE

193 The purposes for which a court may impose a sentence includes deterring the defendant from committing similar offences: s 3A(b) Crimes (Sentencing Procedure) Act 1999. Although FRH has not provided the Superintendent with an incident report in accordance with its contractual obligations, its conduct, particularly after the incident, satisfies me that individual deterrence is not a particularly weighty consideration. It has made efforts to analyse what went wrong and to ensure that nothing like this happens again. It has demonstrated insight into its offending. I have referred at [157] above to the future practice that FRH, having considered the incident, intends to adopt in relation to silt curtains. FRH also intends to ensure that all works with which it is involved receive more comprehensive environmental consideration than has occurred in the past. This will be achieved by continuing to improve the results of auditing of its environmental management systems and by increasing the education given to all its staff on recognising potential risks to the environment and delivering the requisite knowledge to ensure such risks are minimised.

194 Since the incident FRH has adopted a range of pro-active risk management strategies to assist in decreasing the likelihood of it being responsible for another environmental incident.

DAILY PENALTY

195 As noted at [145] above, the prosecutor does not press for and I do not propose to impose a daily penalty. The penalty should, however, take into account that the offending occurred on all four days during which the incident occurred.

COSTS

196 FRH submits that it should not receive a large (or any) financial penalty in addition to the costs and potential costs it has already suffered. In the circumstances of this case, I do not think that its costs of the proceedings are a significant consideration. By “potential costs” FRH means that Snowy Hydro has claimed on FRH for a large amount of money arising from the incident under contractual indemnity provisions. Assuming that such a contractual liability is a relevant circumstance – as to which it is unnecessary to express an opinion – I do not propose to take it into consideration in the present case because FRH has not conceded, and it has not been established, that it is under any such liability: cf Environment Protection Authority v Cleary Bros (Bombo) Pty Ltd [2007] NSWLEC 466 at [165] (Lloyd J).

EVEN-HANDEDNESS AND PARITY

197 Consistency in sentencing is an important objective in a rational and fair system of criminal justice: R v Henry (1999) 46 NSWLR 346 at [12] per Spigelman CJ. In Markarian v The Queen (2005) 228 CLR 357 at 371 the High Court held that: “[T]here is no single correct sentence. And judges at first instance are to be allowed as much flexibility in sentencing as is consonant with consistency of approach and as accords with the statutory regime that applies” (footnotes omitted). Regard should be had to comparable cases to see if they disclose a general pattern of sentencing: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 (CCA) at 701-702. However, it is sometimes difficult with environmental crimes to obtain guidance from decisions where sentences have been imposed for the same type of offence. This is because of the wide range of factual circumstances comprising environmental offences and the need to tailor sentences to the individual circumstances of the case. In that context, in Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 at 312 [35] the Court of Criminal Appeal held that: “Even discriminating reference [to other cases] is likely to be of no utility because the facts in cases such as the present will almost always be peculiar to the individual case”.

198 An additional complicating factor when comparing other decisions in the case of environmental crime is the frequency with which the maximum sentences have increased. In R v Hoerler (2004) 147 A Crim R 520 at 529 [35] Spigelman CJ said:

Prior cases and Judicial Commission statistics do not often determine a range appropriate for a particular offence. They reflect what was regarded as appropriate in the wide variety of circumstances of those particular prior cases. Whether or not a sentencing pattern can be said to have emerged requires consideration of the whole body of sentences. It is unlikely that any such pattern can be said to have been established unless there have been a significant number of cases covering a wide variety of objective circumstances. Unless that is so, the cases would not encompass the relevant range of objective criminality.

199 Sentencing statistics for criminal matters dealt with by the Land and Environment Court are now available in graphical form on the Judicial Information Research System (JIRS). I have been referred to JIRS statistics. For offences against s 120(1) of the POEO Act in 35 cases between 2002 and 2008, 80 percent of the fines were in the range of $10,000 to $60,000, with the mid-point about $30,000. JIRS statistics for 17 cases in that period where the levels of environmental harm were found to be low show that 80 percent of the fines were in the range of $20,000 to $60,000. However, in both sets of statistics most of the fines were imposed before the maximum penalty was increased fourfold on 1 May 2006.

200 The JIRS database was interrogated as to cases with the following characteristics: co-operation, contrition, prior good character, costs awarded, early guilty plea, low objective seriousness, foreseeable harm to the environment, practical measures, control over causes, negligence and low environmental harm. The result yielded only one case, which was Environment Protection Authority v Nalco Australia Pty Ltd [2007] NSWLEC 831, in which a s 250(1)(e) order of $50,000 was imposed. That case was discussed at [147] above, as were Environment Protection Authority v Nowra Chemical Manufacturers Pty Ltd [2008] NSWLEC 187 (s 250(1)(e) order of $100,000) and Environment Protection Authority v CSR Building Products Limited [2008] NSWLEC 224 (fine of $280,000). All were cases of tier 2 offences where the sentences were imposed after the maximum penalties were increased in 2006. The circumstances of these cases were so different that they provide little assistance in the present case.

201 I also referred to a number of other cases of pollution of waters caused by introduction of soil or sediment from construction activities decided between 1994 and 2006: Environment Protection Authority v G. Pezzimenti & Sons Pty Ltd [1994] NSWLEC 6 (Pearlman J); Environment Protection Authority vGosford City Council (1997) 95 LGERA 338 (Pearlman J); Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368 (Lloyd J); Environment Protection Authority v Barclay Mowlem Construction Ltd [1998] NSWLEC 304 (Talbot J); Environment Protection Authority v Daryl McCarthy Constructions Pty Ltd [2000] NSWLEC 223 (Bignold J); Environment Protection Authority v Duke Eastern Gas Pipeline Pty Limited [2002] NSWLEC 84 (Cowdroy J); Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732 (Preston CJ). In about half, the penalty imposed was 10 percent or more of the maximum penalty. These cases have been of limited assistance given the different and unusual circumstances of the present case and the need to tailor sentences to individual circumstances.

202 I have had regard to the sentence which I am concurrently imposing on Snowy Hydro in my separate judgment. After allowing for differing circumstances and the differences in the evidence, I have concluded that the same sentence should be imposed on both Snowy Hydro and FRH.

CONCLUSION

203 In my opinion, in all the circumstances, and after discounting for all mitigating factors including a 25 percent discount for the early plea, the appropriate sentence is a fine of $100,000. FRH has agreed to pay the prosecutor’s costs of the proceedings in the agreed sum of $84,289.00 and investigation costs under s 248 of the POEA Act in the agreed sum of $1,897.50.

204 The orders of the Court are as follows:

Protection of the Environment Operations Act 1997

Citations

Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268

Most Recent Citation

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Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Beltrame [2023] NSWLEC 18

Environment Protection Authority v Maules Creek Coal Pty Ltd [2022] NSWLEC 33

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Statutory Material Cited

6

Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264

Veen v The Queen [1979] HCA 7

Markarian v The Queen [2005] HCA 25

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CITATION:	Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268
PARTIES:	APPLICANT: Environment Protection Authority RESPONDENT: Fulton Hogan Pty Ltd (formerly FRH Group Pty Ltd)
FILE NUMBER(S):	50040 of 2007
CORAM:	Biscoe J
KEY ISSUES:	Environmental Offences :- sentence - polluting waters of river during connection of dam to river at the end of dam upgrade works - pollutant sediment laden waters containing soil, earth, clay or similar inorganic matter - factors to be taken into account on sentencing - principle that an offender cannot be sentenced for a more serious offence.
LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999 (NSW), s 3A, 21A, 23(1) Environmental Planning and Assessment Act 1979 (NSW) Protection of the Environment Operations Act 1997 (NSW), ss 3(1), 91, 114, 116(1), 120, 241, 246, 248, 250(1)(e) Snowy Hydro Corporatisation Act 1997 (Cth) Snowy Hydro Corporatisation Act 1997 (NSW) Snowy Hydro Corporatisation Act 1997 (Vic)
CASES CITED:	Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Director of Public Prosecutions (Cth) v Said Khodor El Karhani (1990) 21 NSWLR 270 Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278 Environment Protection Authority v Barclay Mowlem Construction Ltd [1998] NSWLEC 304 Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732 Environment Protection Authority v Cleary Bros (Bombo) Pty Ltd [2007] NSWLEC 466 Environment Protection Authority v Coe Drilling Australia Pty Limited [2005] NSWLEC 719 Environment Protection Authority v CSR Building Products Limited [2008] NSWLEC 224 Environment Protection Authority v Daryl McCarthy Constructions Pty Ltd [2000] NSWLEC 223 Environment Protection Authority v Duke Eastern Gas Pipeline Pty Limited [2002] NSWLEC 84 Environment Protection Authority v G. Pezzimenti & Sons Pty Ltd [1994] NSWLEC 6 Environment Protection Authority v Gosford City Council (1997) 95 LGERA 338 Environment Protection Authority v Hochtief AG and Thiess Pty Limited [2007] NSWLEC 177 Environment Protection Authority v Integral Energy Australia Pty Ltd [2006] NSWLEC 141 Environment Protection Authority v Lithgow City Council [2007] NSWLEC 695 Environment Protection Authority v Nalco Australia Pty Ltd [2007] NSWLEC 831 Environment Protection Authority v Nowra Chemical Manufacturers Pty Ltd [2008] NSWLEC 187 Environment Protection Authority v Sell & Parker (2006) 149 LGERA 209 Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264 Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368 Environment Protection Authority v Timber Industries Ltd [2001] NSWLEC 25 Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 Hardt v Environment Protection Authority (2007) 156 LGERA 337 Hoare v The Queen (1989) 167 CLR 348 Markarian v The Queen (2005) 228 CLR 357 R v Carroll [2008] NSWCCA 218 R v Dodd (1991) 57 A Crim R 349 R v Henry (1999) 46 NSWLR 346 R v Hoerler (2004) 147 A Crim R 520 R v McNaughton (2006) 66 NSWLR 566 R v Slattery (1996) 90 A Crim R 519 R v Thompson; R v Houlton (2000) 49 NSWLR 383 R v Whyte (2002) 55 NSWLR 252 The Queen v De Simoni (1981) 147 CLR 383 Veen v The Queen (1979) 143 CLR 458
DATES OF HEARING:	10-13/06/08
DATE OF JUDGMENT:	22 September 2008
LEGAL REPRESENTATIVES:	PROSECUTOR: Mr T. Howard SOLICITORS: Department of Environment & Climate Change DEFENDANT: Mr D. Williams SC and Mr R. Beasley SOLICITORS: Minter Ellison