Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (No 3)

Case •

[2020] NSWLEC 90

•

15 July 2020

Land and Environment Court


New South Wales

Medium Neutral Citation: Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (No 3) [2020] NSWLEC 90
Hearing dates: 12-16 February, 19-23 February 2018, 26-28 February, 1-2 March 2018, 12-16 March 2018, 15 April 2020
Date of orders: 15 July 2020
Decision date: 15 July 2020
Jurisdiction:Class 5
Before: Pain J
Decision:

See pars [50] and [52]

Catchwords:

PROSECUTION – defendant company liable for the offence under s 144 of the Protection of the Environment Operations Act 1997 of unlawful use of land as waste facility

PROSECUTION – defendant company director liable under executive liability provision for same offence as defendant company

Legislation Cited:

Criminal Procedure Act 1986 (NSW) s 247J

Environmental Planning and Assessment Act 1979 (NSW) former Pt 3A

Protection of the Environment Operations (Waste) Regulation 2005 (NSW) regs 3B, 41, 42, 51, 51A

Protection of the Environment Operations Act 1997 (NSW) ss 3, 5, 48, 143, 144, 169, 198, 203, 191, Pt 7.4 (s 203), ss 216, 286, Sch 1 (cll 1, 39, 42, 49, 50), Dictionary

Cases Cited:

Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2018] NSWLEC 99

Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (2019) 238 LGERA 147; [2019] NSWCCA 174

Category:Principal judgment
Parties:

Proceedings 16/157886
Environment Protection Authority (Prosecutor)
Grafil Pty Ltd (Defendant)

Proceedings 16/157995
Environment Protection Authority (Prosecutor)
Robert Mackenzie (Defendant)
Representation:

COUNSEL:
P English (Prosecutor)
T Howard SC and C Ireland (Defendants)

SOLICITORS:
Environment Protection Authority (Prosecutor)
Johnson Winter & Slattery (Defendants)
File Number(s): 16/157886, 16/157995

Judgment

  1. In Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2018] NSWLEC 99 (EPA v Grafil) I found the Defendants not guilty of charges under ss 144(1) and 169(1) (executive liability provision) of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act) respectively. Grafil Pty Ltd (Grafil) was charged under s 144(1) which states that it is an offence for an occupier of land to use it for a waste facility without lawful authority. Mr Robert Mackenzie (Mr Mackenzie) was charged under s 169(1) who, as a director of Grafil, was taken to have contravened s 144(1). The charges related to the deposition of material on land (Lot 8) at Salt Ash near Williamtown from around 29 October 2012 to around 15 May 2013.

  2. Following a stated case to the Court of Criminal Appeal (CCA), Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (2019) 238 LGERA 147; [2019] NSWCCA 174 (Grafil CCA) a number of findings to questions stated determined that I had incorrectly decided a number of issues. The CCA held at the conclusion of its judgment that both matters should be remitted for redetermination by the trial judge in light of the findings in the stated case.

  3. As a result of the CCA findings the Defendants accept that they are not able to mount any defence to the charges against them. The Defendants do not press for the redetermination of any matter, consider that all findings of fact made at first instance can stand and accept that I should make findings of guilt in relation to their liability for the respective offences. It is necessary to make any findings of guilt in light of the facts found in EPA v Grafil informed by the findings of law in Grafil CCA.

Section 144 offence

Protection of the Environment Operations Act 1997 (NSW)

  1. All references to legislation are to the version in force during the charge period as follows:

Chapter 1 Preliminary

…

3 Objects of Act

The objects of this Act are as follows:

(a)   to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development,

…

(g)   to assist in the achievement of the objectives of the Waste Avoidance and Resource Recovery Act 2001.

…

5 Scheduled activities

(1) Listing of activities The activities listed in Schedule 1 are scheduled activities for the purposes of this Act.

…

Chapter 3 Environment protection licences

…

Part 3.2 Licences required for scheduled development work and scheduled activities…

48 Licensing requirement—scheduled activities (premises-based)

(1) Application of section This section applies to scheduled activities where Schedule 1 indicates that a licence is required for premises at which the activity is carried on.

(2) Offence A person who is the occupier of any premises at which any such scheduled activity is carried on is guilty of an offence, unless the person is, at the time that activity is carried on, the holder of a licence that authorises that activity to be carried on at those premises.

Maximum penalty:

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

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

…

Chapter 5 Environment protection offence

…

Part 5.6 Land pollution and waste

…

Division 3 Waste offences

…

  1. Unlawful transporting or depositing of waste

  2. Offence If a person transports waste to a place that cannot lawfully be used as a waste facility for that waste, or causes or permits waste to be so transported—

    (a)   the person, and

    (b)   if the person is not the owner of the waste, the owner,

    are each guilty of an offence.

    Maximum penalty—

    (a)   in the case of a corporation—$2,000,000 (if the offence involves asbestos waste) or $1,000,000, or

    (b)   in the case of an individual—$500,000 (if the offence involves asbestos waste) or $250,000.

    …

  3. Proof of lawfulness In any proceedings for an offence under this section the defendant bears the onus of proving that the place to which the waste was transported can lawfully be used as a waste facility for that waste.

…

144 Use of land as waste facility without lawful authority

  1. A person who is the owner or occupier of any land and who uses the land, or causes or permits the land to be used, as a waste facility without lawful authority is guilty of an offence.

    Maximum penalty:

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

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

  2. In any proceedings for an offence under this section the defendant bears the onus of proving that there is lawful authority to use the land concerned as a waste facility.

…

Part 5.9 General offences

…

169 Liability of directors etc for offences by corporation—offences attracting special executive liability

  1. If a corporation contravenes, whether by act or omission, a provision of this Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision, unless the person satisfies the court that:

    (a)   (Repealed)

    (b)   the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or

    (c)   the person, if in such a position, used all due diligence to prevent the contravention by the corporation.

(1A)   For the purposes of this section, each of the following provisions attract special executive liability:

…

(p) section 144 (1),

…

…

  1. I note that the charge period is 29 October 2012 to 15 May 2013. The version of s 169 quoted above was in force from 11 January 2013 to 30 May 2013 and therefore covered the latter part of the charge period. Two other versions of s 169 were in force from 31 March 2012 to 31 December 2012 and 1 January 2013 to 10 January 2013 covering the earlier part of the charge period. The differences between these versions do not have any material impact on this matter.

  2. Other relevant sections follow:

Chapter 9 Miscellaneous

Part 9.1 Exemptions

…

286 Exemptions by regulation

  1. The regulations may exempt, or provide for the exemption of:

    (a)   any person or class of persons, or

    (b)   any premises or class of premises, or

    (c)   any area or class of areas, or

    (d)   any activity or class of activities, or

    (e)   any other matter or thing or class of matters or things,

from any specified provision or provisions of this Act or the regulations, in such circumstances (if any) and subject to such conditions (if any) as may be specified or referred to in the regulations.

  1. The power to make regulations under this section is not limited by section 284.

    1. The terms “waste” and “waste facility” are defined in the dictionary of the POEO Act (Dictionary) as follows:

In this Act:

…

waste includes:

(a)   any substance (whether solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such volume, constituency or manner as to cause an alteration in the environment, or

(b)   any discarded, rejected, unwanted, surplus or abandoned substance, or

(c)   any otherwise discarded, rejected, unwanted, surplus or abandoned substance intended for sale or for recycling, processing, recovery or purification by a separate operation from that which produced the substance, or

(d)   any processed, recycled, re-used or recovered substance produced wholly or partly from waste that is applied to land, or used as fuel, but only in the circumstances prescribed by the regulations, or

(e)   any substance prescribed by the regulations to be waste.

A substance is not precluded from being waste for the purposes of this Act merely because it is or may be processed, recycled, re-used or recovered.

waste facility means any premises used for the storage, treatment, processing, sorting or disposal of waste (except as provided by the regulations).

  1. Schedule 1 of the POEO Act provides:

Schedule 1 Scheduled activities

Part 1 Premises-based activities

1 Application of Part

  1. For the purposes of section 48, any activity that is declared by this Part to be a scheduled activity is taken to be an activity for which a licence is required for the premises at which it is carried out (the activity is premises-based).

…

39 Waste disposal (application to land)

  1. This clause applies to waste disposal by application to land, meaning the application to land of waste received from off site, including (but not limited to) application by any of the following methods:

    (a)   spraying, spreading or depositing on the land,

    (b)   ploughing, injecting or mixing into the land,

    (c)   filling, raising, reclaiming or contouring the land.

  2. However, this clause does not apply to an activity that involves any of the following:

    (a)   sites inside the regulated area that, over any period of time, receive from off site a total of no more than 200 tonnes of the following waste (and no other waste):

    (i)   building and demolition waste only,

    (ii)   building and demolition waste mixed with virgin excavated natural material,

    ...

  3. The activity to which this clause applies is declared to be a scheduled activity.

  4. For the purposes of this clause, 1 litre of waste is taken to weigh 1 kilogram.

…

42 Waste storage

  1. This clause applies to waste storage, meaning the receiving from off site and storing (including storage for transfer) of waste.

….

  1. The activity to which this clause applies is declared to be a scheduled activity if:

    (a)   more than 5 tonnes of hazardous waste, restricted solid waste, liquid waste, clinical or related waste or asbestos waste is stored on the premises at any time, or

    …

    (c)   more than 2,500 tonnes or 2,500 cubic metres, whichever is the lesser, of waste (other than waste referred to in paragraph (a) or (b)) is stored on the premises at any time, or

    (d)   more than 30,000 tonnes of waste (other than waste referred to in paragraph (a) or (b)) is received per year from off site.

  2. For the purposes of this clause, 1 litre of waste is taken to weigh 1 kilogram.

…

Part 3 Definitions

Division 1 Waste classifications

49 Definitions of waste classifications

  1. In this Schedule:

    …

    special waste means any of the following:

    …

    (b)   asbestos waste,

…

Division 2 Other definitions

50 Other definitions

  1. In this Schedule:

    …

    asbestos means the fibrous form of those mineral silicates that belong to the serpentine or amphibole groups of rock-forming minerals, including actinolite, amosite (brown asbestos), anthophyllite, chrysotile (white asbestos), crocidolite (blue asbestos) and tremolite.

    asbestos waste means any waste that contains asbestos.

    …

    1. Salt Ash is located in the Port Stephens local government area (Port Stephens LGA). The Port Stephens LGA is listed as a “regulated area” as specified in Sch 1 of the POEO Act.

Protection of the Environment Operations (Waste) Regulation 2005(NSW)

  1. Relevant provisions in the Protection of the Environment Operations (Waste) Regulation 2005 (NSW) (Waste Regulation) provide:

Part 1 Preliminary

…

3B Definition of “waste”

  1. For the purposes of paragraph (d) of the definition of waste in the Dictionary to the Act, the following circumstances are prescribed:

    (a)   in relation to substances that are applied to land, the application to land by:

    (i)   spraying, spreading or depositing on the land, or

    (ii)   ploughing, injecting or mixing into the land, or

    (iii)   filling, raising, reclaiming or contouring the land,

    (b)   in relation to substances that are used as fuel, all circumstances.

  2. Subclause (1) (a) does not apply where the substances concerned are either bulk agricultural crop materials or manure.

…

Part 4 Management of special wastes

42 Special requirements relating to asbestos waste

  1. This clause applies to any activity that involves the transportation, disposal, re-use or recycling of any type of asbestos waste, regardless of whether the activity is required to be licensed.

  2. A person who carries on an activity to which this clause applies must comply with the requirements specified in this clause in relation to the activity concerned.

Maximum penalty: 400 penalty units in the case of a corporation, 200 penalty units in the case of an individual.

  1. The requirements relating to the transportation of asbestos waste are as follows:

    (a)   bonded asbestos material must be securely packaged at all times,

    (b)   friable asbestos material must be kept in a sealed container,

    (c)   asbestos-contaminated soils must be wetted down,

    (d)   all asbestos waste must be transported in a covered, leak-proof vehicle.

  2. The requirements relating to the off site disposal of asbestos waste are as follows:

    (a)   asbestos waste in any form must be disposed of only at a landfill site that may lawfully receive the waste,

    (b)   when asbestos waste is delivered to a landfill site, the occupier of the landfill site must be informed by the person delivering the waste that the waste contains asbestos,

    (c)   when unloading and disposing of asbestos waste at a landfill site, the waste must be unloaded and disposed of in such a manner as to prevent the generation of dust or the stirring up of dust,

    (d)   asbestos waste disposed of at a landfill site must be covered with virgin excavated natural material or other material as approved in the facility’s environment protection licence:

    (i)   initially (at the time of disposal), to a depth of at least 0.15 metre, and

    (ii)   at the end of each day’s operation, to a depth of at least 0.5 metre, and

    (iii)   finally, to a depth of at least 1 metre (in the case of bonded asbestos waste or asbestos-contaminated soils) or 3 metres (in the case of friable asbestos material) beneath the final land surface of the landfill site.

  3. A person must not cause or permit asbestos waste in any form to be re-used or recycled.

  4. In this clause:

    bonded asbestos material means any material (other than friable asbestos material) that contains asbestos.

    friable asbestos material means any material that contains asbestos and is in the form of a powder or can be crumbled, pulverised or reduced to powder by hand pressure when dry.

    …

Part 6 Miscellaneous

…

51 General provisions relating to exemptions

  1. The EPA may grant an exemption under this clause if authorised to do so by any provision of the Act or by another provision of this Regulation.

  2. An exemption may be granted in relation to:

    (a)   any person or class of persons, or

    (b)   any premises or class of premises, or

    (c)   any area or class of areas, or

    (d)   any activity or class of activities, or

    (e)   any other matter or thing or class of matters or things.

  3. An exemption granted under this clause may be a general exemption or a specific exemption.

  4. A general exemption may be given by way of notice published in the Gazette. A specific exemption may be given after an application is made to the EPA.

…

  1. An exemption under this clause is subject to such conditions as may be imposed by the EPA.

  2. In giving an exemption under this clause, the EPA may, in relation to a general exemption, and must, in relation to a specific exemption, identify a person (or class of persons) to whom the exemption relates (the responsible person).

  3. A general exemption may be amended or revoked by the EPA by way of notice published in the Gazette.

…

  1. If an exemption is given under this clause for which a responsible person is identified, the responsible person must comply with the conditions to which the exemption is subject.

Maximum penalty: 400 penalty units in the case of a corporation, 200 penalty units in the case of an individual.

51A Exemptions relating to certain waste

  1. This clause applies to:

    (a)   waste that is waste by virtue of paragraph (d) of the definition of waste in the Dictionary to the Act, and

    …

  2. The EPA may from time to time grant an exemption under clause 51 that exempts a person or class of persons from any one or more of the following provisions in relation to an activity or class of activities relating to waste to which this clause applies:

    (a)   the provisions of sections 47–49 and 88 of the Act,

    (b)   the provisions of Schedule 1 to the Act, either in total or as they apply to a particular type of activity,

    (c)   the provisions of Part 3 and clauses 45 and 47 of this Regulation.

…

  1. In EPA v Grafil I referred to three resource recovery exemptions made under regs  51 and 51A of the Waste Regulation: The “Continuous process” recovered fines exemption September 2010 (CPRF exemption), the Excavated natural material exemption 2012 (ENM exemption) and the Batch process recovered fines exemption September 2010 (BPRF exemption). It is not necessary to refer to the latter two in this judgment. In the course of EPA v Grafil the ENM exemption became no longer relevant to the s 144(1) charge as noted at [239]. The BPRF exemption is also not directly relevant to the charges. It provided context in EPA v Grafil at [473]-[476] which need not be considered in this judgment.

  2. The CPRF exemption provides:

PROTECTION OF THE ENVIRONMENT OPERATIONS (WASTE) REGULATION 2005 - GENERAL EXEMPTION UNDER PART 6, CLAUSE 51 AND 51A

The “continuous process” recovered fines exemption September 2010

Name

  1. This exemption is to be known as “The ‘continuous process’ recovered fines exemption September 2010”.

Commencement

  1. This exemption commences on 13 September 2010. “The ‘continuous process’ recovered fines exemption April 2010” which commenced 1 April 2010 is revoked from 13 September 2010.

Duration

  1. This exemption is valid until revoked by the Environment Protection Authority (EPA) by notice published in the Government Gazette.

Legislation

  1. Under the Protection of the Environment Operations (Waste) Regulation 2005 (the Regulation):

    4.1.   Clause 51 authorises the EPA to grant an exemption in relation to any matter or thing including an activity or class of activities, and

    4.2.   Clause 51A authorises the EPA to exempt a person or class of persons from any of the following provisions in relation to an activity or class of activities relating to certain waste that is to be land applied or used as a fuel:

    • the provisions of sections 47 to 49 and 88 of the Protection of the Environment Operations Act 1997 (the Act),

    •   the provisions of Schedule 1 to the Act, either in total or as they apply to a particular activity, and

    •   the provisions of Part 3 and clauses 45 and 47 of the Regulation.

Exemption

  1. In this Notice of Exemption:

    5.1.   The responsible person listed in Column 1 of Table 1 is exempt from the provision/s listed in Column 2 of that table but only in relation to activities involving the relevant waste and only where the responsible person complies with the conditions referred to in Column 3 of the table.

    However, this Notice of Exemption does not exempt the responsible person from the provisions specified in Column 2 where the relevant waste is received at premises that are, despite this exemption, required to be licensed for waste disposal (application to land) activities under the provisions of the Act.

    5.2.   Where a responsible person complies with the conditions of this Notice of Exemption, the activity referred to in Schedule 1 from which that person is exempt is taken to be a non-scheduled activity for the purposes of the Act.

Table 1

Column 1

Column 2

Column 3

Responsible person

Provisions from which the responsible person is exempt

Conditions to be met by the responsible person

Processor

section 48 of the Act in respect of clause 39 of Schedule 1 to the Act

all requirements specified in section 7, 8, 10 and 11

Consumer

section 48 of the Act in respect of clauses 39 and 42 of Schedule 1 to the Act

section 88 of the Act

clause 47 of the Regulation

all requirements specified in section 7,9,10 and 11

This Notice of Exemption is a general exemption for the purposes of clause 51(3) of the Regulation.

Definitions

  1. In this Notice of Exemption:

    Characterisation means sampling and testing that must be conducted on the “continuous process” recovered fines for the range of chemicals and other attributes listed in Column 1 of Table 2.

    “Continuous process” recovered fines means a soil or sand substitute with a typical particle size of less than 9.5 mm that is derived from the processing of mixed construction and demolition waste including residues from the processing of skip bin waste.

    Composite sample means a sample that combines 5 discrete sub-samples into a single sample for the purpose of analysis.

    Consumer means a person who applies, causes, or permits the application to land of “continuous process” recovered fines within the definitions of “application to land” in accordance with the Act. The consumer may be the landholder responsible for the land to which recovered fines are applied.

    Processor means a person who processes, mixes, blends, or otherwise incorporates “continuous process” recovered fines into a material for supply to a consumer.

    Relevant waste means “continuous process” recovered fines that meet the requirements of Section 7.

    Routine sampling means sampling and testing that must be conducted on the “continuous process” recovered fines on an ongoing and regular basis.

    Validation means ensuring that test results comply with the conditions of this exemption prior to supply to a consumer or another processor who does not blend or alter the nature of the “continuous process” recovered fines.

General conditions

  1. This Notice of Exemption is subject to the following conditions:

    7.1.   The chemical concentration or other attribute of the “continuous process” recovered fines listed in Column 1 of Table 2 must not exceed any of the following:

    7.1.1.   the absolute maximum concentration or other value listed in Column 4 of Table 2,

    7.1.2.   for characterisation tests, the maximum average (based on the arithmetic mean) concentration or other value listed in Column 2 of Table 2, and

    7.1.3.   for routine tests, the maximum average (based on the arithmetic mean) concentration or other value listed in Column 3 of Table 2.

    7.2.   The "continuous process" recovered fines can only be applied to land for the purposes of construction or landscaping. This approval does not apply to any of the following applications:

    7.2.1.   Construction of dams or related water storage infrastructure,

    7.2.2.   Mine site rehabilitation,

    7.2.3.   Quarry rehabilitation,

    7.2.4.   Sand dredge pond rehabilitation,

    7.2.5.   Back-filling of quarry voids,

    7.2.6.   Raising or reshaping of land used for agricultural purposes, and

    7.2.7.   Construction of roads on private land unless:

    (a)   the relevant waste is applied to land to the minimum extent necessary for the construction of a road, and

    (b)   a development consent for the development has been granted under the relevant Environmental Planning Instrument (EPI), or

    (c)   it is to provide access (temporary or permanent) to a development approved by a Council, or

    (d)   the works undertaken are either exempt or complying development.

Processor responsibilities

  1. The following conditions must be met by the processor for this exemption to apply:

    8.1.   Sampling must be undertaken in accordance with Australian Standard 1141 Methods for sampling and testing aggregates (or equivalent). Sampling and information on sample storage and preparation must be detailed in a written sampling plan. A record of weekly sampling times and other operational information should be kept on-site.

    8.2.   The “continuous process” recovered fines must be sampled according to the requirements listed Column 1 and Column 2 of Table 3.

    8.3.   Where there is a change in inputs that is likely to affect the properties of the “continuous process” recovered fines, characterisation must be repeated. Blending of any materials into “continuous process” recovered fines after sampling as required in Table 3 would be regarded as a change in inputs.

    8.4.   Characterisation samples can be used for routine testing and subsequent calculations.

    8.5.   Processors must keep a written record of all characterisation and routine test results for a period of three years.

    8.6.   Records of the quantity of “continuous process” recovered fines supplied to the consumer and either the consumer's name and address or the registration details of the vehicle used to transport the “continuous process” recovered fines, must be kept for a period of three years.

    8.7.   The processor of “continuous process” recovered fines must provide a written statement of compliance to the consumer with each transaction, certifying that the “continuous process” recovered fines complies with the relevant conditions of this exemption.

    8.8.   The processor of “continuous process” recovered fines must make information on the latest characterisation and routine test results available to the consumer or the EPA upon request.

    8.9.   The processor of “continuous process” recovered fines must use due diligence to ensure that the relevant waste is utilised in applications that are consistent with the conditions of this exemption.

Consumer responsibilities

  1. The following conditions must be met by the consumer for this exemption to apply:

    9.1.   Records of the quantity of the “continuous process” recovered fines received by the consumer and the suppliers' name and address must be kept for a period of three years.

    9.2.   The relevant waste must not be applied in or beneath water including groundwater.

    9.3.   The consumer must land apply the relevant waste within a reasonable period of time.

Chemical and other material property requirements

  1. This Notice of Exemption only applies to “continuous process” recovered fines where the chemical and other attributes listed in Column 1 of Table 2 comply with the chemical concentrations and other values listed in Column 2, Column 3 and Column 4 of Table 2, when analysed according to test methods specified in Column 5 of Table 2.

Table 2

Column 1

Column 2

Column 3

Column 4

Column 5

Chemicals and other attributes

Maximum average concentration for characterisation

(mg/kg “dry weight” unless otherwise specified)

Maximum average concentration for routine testing (mg/kg “dry weight” unless otherwise specified)

Absolute maximum concentration (mg/kg “dry weight” unless otherwise specified)

Test

Method specified within Section

1. Mercury

0.5

No testing required

1.5

12.1

2. Cadmium

0.5

No testing required

1.5

12.2

3. Lead

100

100

250

12.2

4. Arsenic

20

No testing required

40

12.2

5. Chromium (total)

60

60

150

12.2

6. Copper

70

70

200

12.2

7. Nickel

40

No testing required

80

12.2

8. Zinc

250

250

600

12.2

9. Total Organic Carbon

5%

No testing required

10%

12.3

10. Electrical Conductivity

2.5 dS/m

2.5 dS/m

3.5 dS/m

12.4

11. pH*

7.5-9

7.5-9

7.0-10

12.4

12. Total Polycyclic Aromatic Hydrocarbons (PAHs)

20

No testing required

80

12.5

13. Benzo(a)pyrene

1

No testing required

6

12.5

14. Total Petroleum Hydrocarbons (TPHs) C6-C9

80

No testing required

150

12.6

15. Total Petroleum Hydrocarbons (TPHs) C10-C36

800

No testing required

1600

12.6

16. Individual Chlorinated Hydrocarbons

Not applicable

No testing required

1

12.7

17. Individual

Organochlorine Pesticides

Not applicable

No testing required

1

12.8

18. Individual

Polychlorinated Biphenyls (PCBs)

Not applicable

No testing required

1

12.9

19. Glass, metal and rigid plastics

0.1%

0.1%

0.3%

12.10

20. Plastics – light flexible film

0.05

0.05%

0.1%

12.10

21. Proportion (by weight) retained on a 0.425 mm sieve

80%

No testing required

90%

12.11

22. Proportion (by weight) retained on a 9.5 mm sieve

Not applicable

No testing required

5%

12.11

23. Proportion (by weight) retained on a 26.5 mm sieve

Not applicable

No testing required

0%

12.11

*Note: The ranges given for pH are for the minimum and maximum acceptable pH values in the “continuous process” recovered fines.

Sampling and testing requirements

  1. This Notice of Exemption only applies to “continuous process” recovered fines sampled according to the requirements in Table 3.

Table 3

Column 1

Column 2

Column 3

Column 4

Characterisation frequency

Routine sampling frequency

Once off sampling frequency

Validation

One composite sample per fortnight.

One composite sample to be collected each week.

5 composite samples to be collected in a 5 week period for assessing “Maximum average concentrations” (in Table 2, Column 3).

Not applicable.

Not required.

Test methods

  1. All testing must be undertaken by analytical laboratories accredited by the National Association of Testing Authorities, or equivalent. All chemicals and other attributes listed in Column 1 of Table 2 must be measured in accordance with the test methods specified below:

    12.1.   Test methods for measuring the mercury concentration in “continuous process” recovered fines:

    12.1.1   Particle size reduction & sample splitting may be required.

    12.1.2   USEPA SW-846 Method 7471B Mercury in solid or semisolid waste (manual cold vapour technique), or an equivalent analytical method with a detection limit < 20% of the stated absolute maximum concentration in Table 2, Column 4 (i.e. 0.3 mg/kg dry weight).

    12.1.3   Report as mg/kg dry weight.

    12.2.   Test methods for measuring chemicals 2-8 in “continuous process” recovered fines:

    12.2.1   Particle size reduction & sample splitting may be required.

    12.2.2   Sample preparation by digestion using USEPA SW-846 Method 3051A Microwave assisted acid digestion of sediments, sludges, soils, and oils (or an equivalent analytical method).

    12.2.3   Analysis using USEPA SW-846 Method 6010C Inductively coupled plasma - atomic emission spectrometry, or an equivalent analytical method with a detection limit < 10% of the stated absolute maximum concentration in Table 2, Column 4 (i.e. 25 mg/kg dry weight for lead).

    12.2.4   Report as mg/kg dry weight.

    12.3.   Test methods for measuring the total organic carbon content in “continuous process” recovered fines:

    12.3.1   Method 105 (Organic Carbon). In Schedule B (3): Guideline on Laboratory Analysis of Potentially Contaminated Soils, National Environment Protection (Assessment of Site Contamination) Measure 1999 (or an equivalent analytical method).

    12.3.2   Reporting as % total organic carbon.

    12.4.   Test methods for measuring the electrical conductivity and pH in “continuous process” recovered fines:

    12.4.1   Sample preparation by mixing 1 part recovered fines with 5 parts distilled water.

    12.4.2   Analysis using Method 103 (pH) and 104 (Electrical Conductivity). In Schedule B (3): Guideline on Laboratory Analysis of Potentially Contaminated Soils, National Environment Protection (Assessment of Site Contamination) Measure 1999 (or an equivalent analytical method).

    12.4.3   Report electrical conductivity in deciSiemens per metre (dS/m).

    12.5.   Test method for measuring PAHs and benzo(a)pyrene in “continuous process” recovered fines:

    12.5.1   Analysis using USEPA SW-846 Method 8100 Polynuclear aromatic hydrocarbons (or an equivalent analytical method).

    12.5.2   Calculate the sum of all 16 PAHs for total PAHs.

    12.5.3   Report total PAHs as mg/kg dry weight.

    12.5.4   Report benzo(a)pyrene as mg/kg.

    12.6.   Test method for measuring TPHs in “continuous process” recovered fines:

    12.6.1.   Method 506 (Petroleum Hydrocarbons). In Schedule B (3): Guideline on Laboratory Analysis of Potentially Contaminated Soils, National Environment Protection (Assessment of Site Contamination) Measure 1999 (or an equivalent analytical method).

    12.6.2.   Report C6 – C9 as mg/kg.

    12.6.3.   Report C10 – C36 as mg/kg.

    12.7.   Test methods for measuring chlorinated hydrocarbons in “continuous process” recovered fines:

    12.7.1.   Analysis using USEPA SW-846 Method 8021B Aromatic and halogenated volatiles by gas chromatography using photoionization and/or electrolytic conductivity detectors (or an equivalent analytical method).

    12.7.2.   Measure the following chlorinated hydrocarbons: carbon tetrachloride, chlorobenzene, chloroform, 1,2-dichlorobenzene, 1,4-dichlorobenzene, 1,2-dichloroethane, 1,1-dichloroethene, 1,2-dichlorothene, dichloromethane (methylene chloride), 1,1,1,2-tetrachloroethane, 1,1,2,2-tetrachloroethane, 1,2,4-trichlorobenzene, 1,1,1-trichloroethane, 1,1,2-trichloroethane, trichloroethene, vinyl chloride and hexachlorobutadiene concentrations.

    12.7.3.   Report individual listed chlorinated hydrocarbons as mg/kg.

12.8.   Test methods for measuring organochlorine pesticides in “continuous process” recovered fines:

12.8.1.   Analysis using USEPA SW-846 Method 808IB Organochlorine pesticides by gas chromatography (or an equivalent analytical method).

12.8.2.   Measure the following organochlorine pesticides: aldrin, alpha BHC, beta BHC, gamma BHC (lindane), delta BHC, chlordane, DDT, DDD, DDE, dieldrin, endrin, endrin aldehyde, heptachlor, heptachlor epoxide, hexachlorobenzene, methoxychlor and endosulfan (includes endosulfan I, endosulfan II and endosulfan sulphate).

12.8.3.   Report individual listed organochlorine pesticides as mg/kg.

12.9.   Test methods for measuring the PCBs in “continuous process” recovered fines:

12.9.1.   USEPA SW-846 Method 8082A Polychlorinated Biphenyls (PCBs) by gas chromatography (or an equivalent analytical method).

12.9.2.   Measure the following PCBs: Aroclor 1016 (CAS Registry No. 12674-11-2), Aroclor 1221 (CAS Registry No. 11104-28-2), Aroclor 1232 (CAS Registry No. 11141-16-5), Aroclor 1242 (CAS Registry No. 53469-21-9), Aroclor 1248 (CAS Registry No. 12672-29-6), Aroclor 1254 (CAS Registry No. 11097-69-1), Aroclor 1260 (CAS Registry No. 11096-82-5).

12.9.3.   Report individual listed PCBs as mg/kg.

12.10.   Test method for measuring 19-20 in “continuous process” recovered fines:

12.10.1.   NSW Roads & Traffic Authority Test Method T276 Foreign Materials Content of Recycled Crushed Concrete (or an equivalent method), using a 2.36 mm sieve.

12.10.2.   Report as %.

12.11.   Test method for measuring 21-23 in “continuous process” recovered fines:

12.11.1.   NSW Roads & Traffic Authority Test Method T106 Coarse particle distribution in road construction materials (by dry sieving) and T107 Fine particle distribution in road construction materials (or an equivalent method).

12.11.2.   Report as %.

Exemption Granted

Mark Gorta,

Manager, Waste Management Section

Environment Protection Authority

by delegation

Notes

The EPA may amend or revoke this exemption at any time. It is the responsibility of the generator, processor and consumer to ensure that they comply with all relevant requirements of the most current exemption. The current version of an exemption will be available on the EPA website: gazetting this general exemption, the EPA is exempting the relevant waste from the specific requirements of the Act and Regulations as stated in this exemption. The EPA is not in any way endorsing the use of this substance or guaranteeing that the substance will confer benefit.

The use of exempted material remains subject to other relevant environmental regulations within the Act and Regulations. For example, a person who pollutes land (s142A) or water (s120), or does not meet the special requirements for asbestos waste (clause 42), regardless of having an exemption, is guilty of an offence and subject to prosecution.

For the purposes of arrangements between a generator, a processor and a consumer, a “transaction” is taken to mean the contractual agreement between the two parties which specifies the exchange of waste material from one party to another. A “statement of compliance” must be in writing and be provided with each transaction.

The conditions set out in this exemption are designed to minimise the risk of potential harm to the environment, human health or agriculture, however, neither this exemption nor these conditions guarantee that the environment, human health or agriculture will not be harmed.

The consumer should assess whether or not the exempted material is fit for the purpose the material is proposed to be used and whether this use will cause harm. The consumer may need to seek expert engineering or technical advice.

This exemption does not apply to any material received at a premises that is required to be licensed for waste disposal (application to land) activities under the provisions of the Act. This exemption does not remove the need for a site at which processing occurs to be licensed, if required under Schedule 1 of the Act.

This exemption does not alter the requirements of any other relevant legislation that must be met in utilising this material, including for example, the need to prepare a Material Safety Data Sheet (MSDS).

Regardless of any exemption provided by the EPA, the person who causes or permits the application of the substance to land must ensure that the action is lawful and consistent with the development consent requirements of the land.

All records required to be kept under this exemption must be made available to authorised officers of the EPA upon request.

Failure to comply with the conditions of this Notice of Exemption may constitute an offence under clause 51 of the Regulation and the responsible person will be required to comply with the normal regulatory provisions.

Evidence

  1. The extensive evidence relied on by the Environment Protection Authority (EPA) is set out in EPA v Grafil at [25]-[233], including 24 affidavits itemised in [27]. As outlined in the EPA’s amended prosecution notice under s 247J of the Criminal Procedure Act 1986 (NSW), the evidence consisted of affidavits, expert reports, surveillance logs, photographs, emails and records of interviews (ROIs) (at [25]). Rather than simply insert [25]-[233] into this judgment, a summary follows. The summary does not replace the evidence set out and the findings of fact made in EPA v Grafil.

Development history

  1. The development history of Grafil’s operations was set out at [28]-[31]. Grafil conducted operations on Lot 8 and Lot 102 DP 1017462 (Lot 102). An Australian Securities and Investments Commission (ASIC) business name search showed that Grafil traded under the name Macka’s Sand and Soil Supplies (Macka’s Sand and Soil), the registered business address of which included Lots 8 and 102. Lot 8 benefited from a development consent granted in 1977 (the 1977 consent) for the extraction of sand. Grafil was issued environment protection licence (EPL) 12108 for Lot 8 on 31 May 2005, permitting it to conduct “land based extractive activity” and “crushing grinding or separating works” to operate as a sand mine.

  1. Evidence relating to Macka’s Sand Pty Ltd (Macka’s Sand) at [32]-[38] was referred to in the affidavits of Mr Holm, executive director of resources assessments and compliance with the Department of Planning and Infrastructure and Mr Wickham, governance manager of Port Stephens Council (the Council) as well as the ROI of Mr Mackenzie. Macka’s Sand was incorporated on 29 November 2006. Its operations involved extracting sand on Lot 218 DP 1044608 (Lot 218) and Lot 220 DP 1049608 (Lot 220) which was then processed by Grafil trading as Macka’s Sand and Soil. Macka’s Sand was issued EPL 13218 for Lots 218 and 220 on 30 November 2009, subsequently varied on 19 January 2012 and 1 February 2013. Macka’s Sand obtained a Pt 3A approval under the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) on 20 September 2009 for major project 08-0142 known as “Macka’s Sand Project”. The approval allowed for the extraction of sand on Lots 218 and 220 and the creation of access roads on several other lots. The approval was modified on 30 September 2013 and 15 March 2016. Mr Mackenzie participated in two ROIs with EPA officers on 15 May 2013 and 11 June 2014 about his intention to use the materials in Stockpiles 1 and 2 for a road, summarised at [380]-[381]. Mr Bruce Mackenzie also made reference to using the material for a road in his ROI on 30 June 2014, at [382]. In his ROI with the EPA dated 11 June 2014 Mr Mackenzie stated that the primary business of Grafil and Macka’s Sand was the supply of sand and sand products to the Sydney region. The development history of Grafil and Macka’s Sand was reiterated at [551]-[556].

  2. Grafil’s dealings with the EPA and the Council from 2009 to March 2013 were outlined at [39]-[47], including the affidavit of Mr Jamieson, regional operations unit head with the EPA and correspondence exchanged between the EPA, Grafil, Umwelt (Australia) Pty Ltd (Umwelt) on behalf of Grafil, and the Council, as well as a ROI of Mr Jamieson director of Umwelt.

EPA investigation of Grafil

  1. Evidence of the EPA’s investigation of Grafil concerning the deposition of material on Lot 8 in Stockpiles 1 and 2 was outlined at [48]-[101]. The investigation resulted from a larger EPA investigation known as “Operation Trojan” about which various EPA officers gave oral evidence and were cross-examined, at [48]-[50]. Evidence of surveillance operations relating to Lot 8 was outlined from [51]-[61], including inter alia surveillance logs, photographs and video footage and the affidavits of Mr James, unit head waste compliance and former investigator with the EPA and Mr Bourne, senior operations officer with the EPA. The search and seizure of records operation at Lot 8 on 15 May 2013 was outlined at [62]-[94] as detailed in the affidavit and oral evidence of EPA officers Ms Moore, Mr Bourne, Mr James, Ms Rose, Ms Bell, Ms Groves and Ms Withnall (authorised officers have powers of entry and search under Pt 7.4 of the POEO Act, including to seize anything that the authorised officer has reasonable grounds for believing is connected with an offence under s 198(2)(h)). In his affidavit, Mr Bourne said that he conducted a ROI with Mr Mackenzie during the operation on 15 May 2013.

  2. Further evidence of the investigation related to the seizure of documents from Grafil (at [85]-[89]), issuing of clean-up notices to Mr Mackenzie and Grafil (at [90]-[91]), a related search and seizure of records operation at Mr Mackenzie’s accountant’s office on 15 May 2013 (at [92]), and other visits by EPA officers to Lot 8 on 16, 17 and 22 May 2013, 12 and 13 June 2013, 3 July 2013, 23 August 2013, 23 December 2013 and 11 September 2014 (at [93]). A search and seizure of records operation at premises of the Bingo Group (Bingo) on 15 May 2013 was detailed in the affidavit and oral evidence of Mr Wade, investigator with the Office of Environment and Heritage, at [94]-[98]. Interviews conducted with Mr Gilder, Mr Sneddon, Mr Maddox, Mr Mulligan, Mr Papworth, Mr Jamieson of Umwelt, Mr Ryan, Mr Bruce Mackenzie, Mr Sarkis, Mr Butler, Mr Mackenzie, Mr Foxman and Mr Scarlis under s 203 of the POEO Act were outlined at [99]-[101].

Sources of material

  1. The sources of material in Stockpiles 1 and 2 brought by various transporters principally from four processors of building waste were identified at [102]-[182]. Notices issued to the transporters under s 191 of the POEO Act to obtain records and information, as outlined in the affidavit of Ms Moore, senior operations officer with the EPA, were detailed at [102]-[106]. Evidence of the transporters was summarised at [107]-[131] consisting of: (i) the affidavits of Mr Mulligan, director of Mullown Pty Ltd and Mr Sneddon, former director and owner of AH & PJ Sneddon Bulk Haulage Pty Ltd; and (ii) ROIs of Mr Gilder of Bulk Logistics Pty Ltd, Mr Maddox of Maddox Haulage Pty Ltd and Mr Papworth of BD & RA Papworth Pty Ltd. Affidavit evidence of Mr Mulligan and Mr Ulizzi, managing director of Aussie Skips (NSW) Pty Ltd (Aussie Skips), relevant to a notice prepared by Mr Mackenzie under s 143 of the POEO Act dated 17 July 2008 was outlined at [132]-[135].

  2. Evidence of the processors was outlined at [136]-[161] including affidavits, cross-examination and interviews of Mr Ulizzi, Mr Ryan, landfill operator and former recycling sales manager with Bingo, Mr Foxman, formerly of Botany Building Recyclers Pty Ltd (BBR) and Mr Scarlis of KLF Holdings Pty Ltd (KLF). Affidavit evidence of Mr James and Ms Moore detailing the issuing of notices under s 191 of the POEO Act to the processors seeking records and information was summarised at [162]-[168]. Ms Moore explained the collation of primary records received in response to the s 191 notices and was extensively cross-examined on that topic at [169]-[182].

Nature of material in Stockpiles 1 and 2

  1. The nature of the material in Stockpiles 1 and 2 was set out at [183]-[234]. The investigation of Lot 8 on 27-30 October 2015 attested to by various EPA officers and detailed in three technical reports was outlined at [182]-[184]. The Salt Ash Waste Investigation Report which had the purpose of determining whether the stockpiles on Lot 8 were compliant with the physical and chemical criteria in the resource recovery exemptions, as well as oral evidence of the author Ms Blefari of AECOM, were summarised at [185]-[195]. Affidavit and oral evidence of Mr Dean, environmental scientist with AECOM responsible for sampling and analysing material from 42 test pit locations, was outlined at [196]-[198]. The Salt Ash Waste Assessment – Geotechnical Investigation Report (Geotechnical Report) and evidence of Mr Walker and Mr Fifield, engineering geologists with AECOM, were summarised at [199]-[204]. Mr Walker’s evidence was expanded at [390]-[393]. The Geotechnical Report he authored contained laboratory testing of bulk samples taken from the two stockpiles on Lot 8. He concluded that the material in Stockpiles 1 and 2 may have been suitable to be compacted and used for a road. The material in Stockpile 1 was highly variable and was possibly not suitable for use even after winning. Stockpile 2 was less variable and was more likely be suitable for use in a road (at [390]).

  2. The expert evidence of Dr Martens, civil and environmental engineer at Martens & Associates Pty Ltd, was identified at [205] with further consideration of issues raised in his report summarised at [259]-[260], [285]-[287], [386]-[389], [447]-[449] and [464]-[466]. Broadly, Dr Martens’ evidence addressed whether the material in Stockpiles 1 and 2: (i) had altered the environment of Lot 8; (ii) had complied with the CPRF and ENM exemptions; (iii) was fit for the purpose of building a road; (iv) was of sufficient quantity for building a road; (v) was “applied to land”; (vi) posed a risk to human health; and (vii) would pose a risk to human health if removed.

  3. On the suitability of the material for a road, Grafil tendered the expert report of Mr Mostyn, principal of Pells Sullivan Meynik Engineering Consultants, at [394]-[402]. Mr Mostyn considered that if the material underwent a process of winning before it was compacted it would sufficiently homogenise the materials so that they could be used for a road (at [395]).

  4. Evidence of Mr Brunskill and Mr McClenahan, registered surveyors with Brunskill McClenahan & Associates concerning the topography of Lot 8 was outlined at [206]-[216].

  5. The affidavit and extensive oral evidence of Dr Prifti, unit head within the Waste Strategy and Innovation section of the EPA, was summarised at [217]-[233]. Topics addressed in Dr Prifti’s evidence included inter alia whether the material in Stockpiles 1 and 2 complied with the CPRF or ENM exemptions and whether material taken from three recycling centres to Grafil complied with the CPRF exemption. Dr Prifti found that the material in Stockpiles 1 and 2 did not comply with the CPRF exemption due to the presence of asbestos inter alia (at [220]), and that the material in Stockpile 1 also exceeded the maximum concentrations for cadmium, lead, nickel and mercury (at [221]). Dr Prifti found that the material in Stockpiles 1 and 2 also did not comply with the ENM exemption and that the ENM exemption would not exempt a person from complying with reg 42(5) of the Waste Regulation (at [222]). Stockpiles 1 and 2 exceeded the chemical maximums for various chemicals including lead, zinc and petroleum hydrocarbons. On whether the material taken from three recycling centres to Grafil complied with the CPRF exemption, Dr Prifti found that Aussie Skips exceeded the maximum concentrations for lead and pH, that samples taken by KLF did not comply with the frequency characteristics for the routine characterisation sampling under the CPRF exemption, and that BBR did not take samples in accordance with the frequency requirements (at [225]-[227]).

Resource recovery exemptions

  1. This and the following paragraph are repeated from EPA v Grafil at [236]-[237]. Resource recovery exemptions for recovered fines and ENM have been created under regs 51 and 51A of the Waste Regulation most recently in 2010 and 2012. The ENM exemption refers to “consumer” and “generator” in the dictionary to the exemption in Condition 6 whereas the dictionary to the CPRF exemption refers to “consumer” and “processor”. A “consumer” is defined in identical terms in both exemptions save for the reference to either ENM or recovered fines in the respective exemptions. A “generator” for the purpose of the ENM exemption is defined as “…a person who generates excavated natural material for supply to a consumer.” A “processor” for the purpose of the CPRF exemption is defined as “…a person who processes, mixes, blends, or otherwise incorporates ‘continuous process’ recovered fines into a material for supply to a consumer.”

  2. Before, during and after the charge period, processors being principally four recycling facilities (Bingo, KLF, Aussie Skips and BBR) received waste often in skip bins from building sites. This material was sorted and processed to create recovered fines (KLF, Aussie Skips and BBR) and ENM (Bingo) where possible. The processors are forbidden under their EPLs to receive asbestos. The Court does not understand it is disputed that all of the processors have asbestos management plans directed to removing asbestos. The resource recovery exemptions require detailed sampling and testing for certain chemicals and particle size in the CPRF exemption (Conditions 8, 10, 11, 12 CPRF exemption) and chemicals in the ENM exemption (Conditions 8, 10, 11, 12 ENM exemption). ENM must not contain asbestos according to the ENM exemption (Condition 6). The processors must certify to consumers that the processed material is recovered fines or ENM which meets the exemption testing requirements and chemical concentration and particle size criteria (Condition 8.7 CPRF exemption, Condition 8.5.2 ENM exemption). As a result, the material can be supplied to consumers under the exemptions. Consumers receive the material often via transporters as in this case. They must comply with certain requirements as to the use and placement of the material specified in the resource recovery exemptions. If the resource recovery exemptions apply, no EPL is required by consumers for storage or disposal of the material as waste.

Section 144 offence (proceedings No 16/157886)

  1. The three elements of the offence under s 144(1) were identified in [3]-[5] of EPA v Grafil. As to the first element, that Grafil was the occupier of Lot 8, Grafil admitted that it occupied the land on which the offence was alleged to have occurred. As to the second element, that Grafil used Lot 8 as a waste facility, Grafil did not admit that the land was used as a waste facility during the charge period. As to the third element, that the use of Lot 8 as a waste facility was without lawful authority, Grafil did not admit that the use of the land was without lawful authority during the charge period. On the issue of lawful authority (third element), in addition to whether necessary authority under the POEO Act was held by Grafil, also relevant is the issue of whether necessary authority (development consent) under the EPA Act was held by Grafil.

Second element

  1. In EPA v Grafil at [255] I identified in relation to the second element that the charge required proof beyond reasonable doubt that, firstly, the material placed on Stockpiles 1 and 2 on Lot 8 in the charge period was waste and secondly that Grafil used Lot 8 as a waste facility. Grafil did not dispute that material had been brought to Lot 8 during the charge period by transporters paid by, principally, four processors of building waste Aussie Skips, Bingo, BBR and KLF. The volume of material delivered to Lot 8 was in the range of 24,000-44,000 tonnes (at [247]). Due to deficiencies in the Prosecutor’s evidence outlined at [241]-[245] of EPA v Grafil a more precise figure was not able to be determined.

  2. The issues considered in EPA v Grafil in relation to the first issue of whether the material was waste required consideration of the definition of “waste” in the Dictionary of the POEO Act being categories (a), (b), (c) and (d). The EPA submitted that the material was waste as defined in the Dictionary, relying on principles of statutory construction and the evidence of Dr Martens. Grafil submitted the material was not “waste” as defined in the POEO Act. I held the material in Stockpiles 1 and 2 was not waste at [264]-[284].

  3. In relation to whether the material was applied to land or temporarily stockpiled, the EPA relied on the evidence of Dr Martens inter alia. Grafil relied on the ROIs of Mr Mackenzie and Mr Bruce Mackenzie that the material was temporarily stockpiled for later use as a road base for a proposed access road to the sand extraction facility at Lot 218, as summarised at [290]. I held at [291]-[300] that the material was not disposed of by application to land so that Sch 1 cl 39 of the POEO Act did not arise as a matter of statutory construction and on the facts found.

  4. The issues that arise for determination in relation to the second element of s 144(1) of whether Lot 8 was used as a waste facility during the charge period as a result of Grafil CCA are:

  1. Was the material supplied and placed in Stockpiles 1 and 2 in the charge period within the meaning of “waste” in the Dictionary to the POEO Act and/or reg 3B(1)(a) of the Waste Regulation (questions 2 and 5 of stated case)? According to Grafil CCA considered at [90]-[114], finding at [115]-[132], the material supplied and placed was waste, as defined in the legislative scheme.

  2. Was the material applied to land or temporarily stockpiled on Lot 8 (questions 2 and 5 of stated case)? According to Grafil CCA considered at [133]-[152], finding at [153]-[157], the material was applied to land for the purposes of Sch 1 cl 39 of the POEO Act.

  3. Was the scheduled activity of “waste disposal by application to land” in Sch 1 cl 39(1) of the POEO Act carried out in the charge period (questions 3 and 4 of stated case)? According to Grafil CCA, considered at [159]-[169], finding at [170]-[174] the scheduled activity of application of waste to land occurred in the charge period.

  4. Was the scheduled activity of waste storage in Sch 1 cl 42 of the POEO Act carried out in the charge period (questions 6 and 7 of stated case)? Considered in Grafil CCA at [175]-[186], finding at [187]-[198], the activity of waste storage as identified in Sch 1 cl 42 was carried out. The stockpiling of waste on Lot 8 fell within the statutory description of the scheduled activity of waste storage in cl 42.

  1. As a result of these findings in Grafil CCA the second element of the s 144(1) offence of use of land as a waste facility has been established by the EPA.

Third element – authority under POEO Act

  1. The third element of the offence, concerning whether Grafil had lawful authority to use Lot 8 for the deposition of waste (on the assumption that waste was deposited, contrary to my finding on the second element in EPA v Grafil) required a consideration of whether and how the CPRF exemption applied. The EPA submitted that by virtue of ss 5(1) and 48 of the POEO Act and cll 39 and 42 of Sch 1 of the POEO Act, “waste disposal by application to land” and “waste storage” are scheduled activities for which an EPL is required for any premises at which those activities are carried on. Under s 48 a person is required to be the holder of an EPL that authorises the carrying out of a scheduled activity on premises. Clauses 39 and 42 of Sch 1 to the POEO Act are two scheduled activities which require an EPL by virtue of s 48. In order to be exempt from s 48 and cll 39 and/or 42, the requirements of Conditions 7, 9, 10 and 11 inter alia of the CPRF exemption must be complied with.

  2. The onus of proof of elements of an offence under s 144(1) was considered at [321]-[337] where I concluded that the EPA bore the onus of proving that the resource recovery exemptions did not apply. I considered the construction of the CPRF exemption in light of reg 42 of the Waste Regulation (asbestos waste) holding that reg 42 was not relevant to the construction of the CPRF exemption at [346]-[351]. I considered whether processor or consumer responsibilities under the CPRF exemption included the exclusion of asbestos at [352]-[372] finding that reg 42 of the Waste Regulation is not relevant to the charge under s 144(1). I identified at [370] the difficulty for a consumer who receives CPRF exemption certified material from a processor which contains asbestos.

  3. I considered the consequence of breaches of the CPRF exemption at [373]-[433], concluding that the EPA had not established beyond reasonable doubt that Condition 7.2.7 (construction of road on private land) had not been complied with in the charge period.

  4. In relation to the record-keeping requirement placed on a consumer by Condition 9.1, I found that there was no compliance with that requirement by Grafil, concluding that did not result in the CPRF exemption not applying at [440]-[445].

  5. Compliance with Condition 9.2 of no deposition on water as required by a consumer was considered at [446]-[454], holding that the EPA had not established that the condition was not complied with beyond reasonable doubt.

  6. Compliance with conditions of the CPRF exemption concerning chemical and physical attribute requirements in Conditions 7, 8, 10, 11 and 12 were considered at [455]-[500], holding that the EPA had not proved beyond reasonable doubt that material was non-compliant with the chemical concentration limits in the CPRF exemption sent to Lot 8 by the processors in the charge period. I found that Grafil was a consumer under the CPRF and ENM exemptions at [501]-[507]. I held that no EPL was required by Grafil in the charge period at [508].

  7. The extent of asbestos in Stockpiles 1 and 2 was considered at [509]-[536].

  8. In relation to the third element of the offence under s 144(1), issues that arise as a result of Grafil CCA are:

  1. The onus of proof of the third element in the context of resource recovery exemptions issued under regs 51 and 51A of the Waste Regulation lies on the Defendant to prove that it had lawful authority to use Lot 8 as a waste facility by operation of the resource recovery exemptions so that the use was a non-scheduled activity for which no EPL under the POEO Act is required. Grafil bore the onus of proving the facts which brought its case within the terms of the CPRF exemption, including proving it had lawful authority to use the land as a waste facility according to Grafil CCA, considered at [210]-[220], and held at [221]-[229] (question 8 of stated case).

  2. The question whether Grafil was a consumer within the meaning of the resource recovery exemptions did not need to be answered due to earlier findings, at [307]-[308] (question 12 of stated case).

  3. The statutory construction of the resource recovery exemptions was considered (at [230]-[255]) and the correct approach to construction was identified (at [256]-[274]) (question 1 of stated case). The effect of non-compliance by Grafil with the record-keeping conditions imposed on consumers by Condition 9.1 of the CPRF exemption was considered at [275]-[285], Grafil CCA finding that failure to comply with conditions imposed on consumers, here failure in record-keeping by Grafil, means that the CPRF exemption could not apply for Grafil’s benefit in the charge period as found at [286]-[298] (question 11 of stated case).

  1. As a consequence of the findings in Grafil CCA, Grafil was not exempt from the provisions of s 48 of the POEO Act in relation to cll 39 and 42 of Sch 1 of the POEO Act. Consequently, an EPL under the POEO Act was required by Grafil during the charge period and Grafil did not have one.

Third element – authority (development consent) under EPA Act

  1. The third element of the s 144(1) offence also requires that Grafil demonstrate that it had lawful authority, meaning development consent under the EPA Act for temporary stockpiling of material in Stockpiles 1 and 2 during the charge period. The relevant facts concerning development consents are set out in EPA v Grafil at [551]-[556] which identify that Grafil had a 1977 development consent under the EPA Act and Macka’s Sand had a Pt 3A approval issued in 2009. I concluded that development consent was held during the charge period, at [550]-[572].

  2. Grafil CCA considered at [336]-[362], finding at [363]-[377], that the temporary stockpiling on Lot 8 was not ancillary to the 1977 development consent or the original Pt 3A (EPA Act) approval (question 15 of stated case). Consequently, Grafil did not have the required lawful authority under the EPA Act for the purpose of s 144(1) during the charge period.

  3. The third element of the s 144(1) offence has been established by the EPA.

Continuing offence proved

  1. In EPA v Grafil I found that a continuing offence had not been proved at [528]-[535]. In Grafil CCA at [379]-[387] the issue of whether the EPA had established a continuing offence in the charge period was considered. As found in Grafil CCA at [388]-[394], a continuing offence has been proved beyond reasonable doubt by the EPA (question 13 of stated case).

No time bar to commencement of proceedings

  1. Grafil submitted that the charge was time-barred under s 216(1) of the POEO Act as it was not brought within the three year limitation period since the EPA had not proved non-exempt waste was deposited on or by 11, 12, 13 or 14 May 2015. The evidence relied on by the EPA in relation to those dates is set out at [536]-[549] in EPA v Grafil. At issue was whether the EPA had demonstrated on the evidence that relevant material being waste was deposited on either 11, 12, 13 or 14 May 2015. I found that the s 144(1) charge had not been brought in the three year limitation period at [536]-[549].

  2. The issue was discussed in Grafil CCA at [395]-[406]. The offences were not time-barred according to Grafil CCA at [407]-[408] (question 14 of stated case).

Asbestos waste

  1. An additional issue of whether the material in Stockpiles 1 and 2 is asbestos waste was also considered at [509]-[526] where I held it was not. Question 10 in Grafil CCA considers what asbestos waste is. When relisted before me the EPA initially pressed for redetermination of whether the waste in Stockpiles 1 and 2 is asbestos waste. It is unnecessary that I do so. A finding on whether the waste is asbestos waste is not essential to the elements of the offences charged, as identified in Grafil CCA in determining that it was unnecessary to answer question 9 of the stated case at [331]-[333]:

  1. The EPA contended that the trial judge erred in finding that cl 42 of the Waste Regulation operated entirely separately from the exemptions granted under cll 51 and 51A of the Waste Regulation and that the presence of asbestos in the stockpiles was irrelevant to whether the “continuous process” recovered fines exemption applied. Yet, in its submissions on submitted question 9, the EPA essentially agreed with the result of the trial judge’s finding, although not with the reasoning for reaching those findings.

  2. The EPA submitted that the exemptions granted under cll 51 and 51A of the Waste Regulation do not exempt a responsible person from the special requirements relating to asbestos waste provided for by cl 42 of the Waste Regulation. That can be accepted, however the trial judge did not hold to the contrary. Grafil was not charged with committing an offence against cl 42 of the Waste Regulation. Hence no one argued, and the trial judge did not need to decide, that the exemptions granted under cll 51 and 51A of the Waste Regulation exempted Grafil from complying with cl 42 of the Waste Regulation.

  3. The trial judge’s comment that the presence of asbestos in the stockpiles is irrelevant to whether the “continuous process” recovered fines exemption applied was legally and factually correct. If the facts so established, that exemption could apply to exempt a responsible person from the licensing requirement in s 48 of the POEO Act in respect of cl 39 and 42 of Sch 1 to the POEO Act (under section 5.1) and make the activity carried out by the responsible person a non-scheduled activity (under section 5.2). But such exemption would not affect the operation of cl 42 of the Waste Regulation, which applies to any activity involving, amongst other things, the disposal of asbestos waste, “regardless of whether the activity is required to be licensed” (cl 42(1)). The trial judge did not hold to the contrary.

Conclusion on s 144(1) offence

  1. Grafil is liable for the s 144(1) offence (proceedings No 16/157886) with which it is charged.

Section 169 offence (proceedings No 16/157995)

  1. Mr Mackenzie has been charged with an offence under s 169(1) of the POEO Act on the basis of executive liability as a director of Grafil. Section 169(1) provides that a director of a defendant company is taken to have contravened the same provision as that company. I found that Mr Mackenzie was not guilty in EPA v Grafil at [575]. Mr Mackenzie accepts that as a result of findings in Grafil CCA he should be found liable for the offence under s 169(1) with which he is charged. No reliance is placed on s 169(1)(b) or (c).

Conclusion on s 169 offence

  1. Mr Mackenzie is liable for the s 169(1) offence (proceedings No 16/157995) with which he is charged.

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Decision last updated: 16 July 2020

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