Environment Protection Authority v Hunter Valley Energy Coal Pty Ltd

[2015] NSWLEC 120

Land and Environment Court

New South Wales

Medium Neutral Citation:	Environment Protection Authority v Hunter Valley Energy Coal Pty Ltd [2015] NSWLEC 120
Hearing dates:	30 July 2015
Decision date:	30 July 2015
Jurisdiction:	Class 5
Before:	Pain J
Decision:	See paragraph 57
Catchwords:	SENTENCING – plea of guilty as occupier of premises which emitted offensive odour in breach of s 129 of the Protection of the Environment Operations Act 1997 – unexpected change of wind direction just after blast short term amenity and minor health impacts – substantial mitigating factors
Legislation Cited:	Crimes (Sentencing Procedure) Act 1999 (NSW) s 3A of the Criminal Procedure Act 1986 s 257B Protection of the Environment Operations Act 1997 (NSW) s 3, s 21A, s 22, s 129(1), s 241, s 244, s 250
Cases Cited:	Bentley v BGP Properties Pty Limited [2006] NSWLEC 34; (2006) 145 LGERA 234 Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Elias v The Queen (2013) 248 CLR 483 Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289; (2006) 148 LGERA 278 Environment Protection Authority v BHP Steel (AIS) Pty Limited [2001] NSWLEC 214 Environment Protection Authority v Cargill Australia Limited [2004] NSWLEC 334 Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131 Hoare v R [1989] HCA 33; (1989) 167 CLR 348 Markarian v R [2005] HCA 25; (2005) 228 CLR 357 Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 R v Thompson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 Siganto v The Queen (1998) 194 CLR 656 Veen v R [1979] HCA 7; (1979) 143 CLR 458 Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465
Category:	Sentence
Parties:	Environment Protection Authority (Prosecutor) Hunter Valley Energy Coal Pty Ltd (Defendant)
Representation:	Counsel: Mr A Macdonald (solicitor) (Prosecutor) Mr T Howard SC (Defendant)   Solicitors: Office of Environment & Heritage (Prosecutor) Herbert Smith Freehills (Defendant)
File Number(s):	50118 of 2015

EX TEMPORE Judgment

Sentencing for plea of guilty for odour offence

1. The Defendant Hunter Valley Energy Coal Pty Ltd has pleaded guilty to one charge of being the occupier of premises at which scheduled activities were carried on and causing the emission of an offensive odour from those premises, on 19 February 2014, in breach of s 129(1) of the Protection of the Environment Operations Act 1997 (NSW) (the PEO Act).

Facts

2. The facts are set out in the Statement of Agreed Facts (SOAF) filed 2 July 2015, which became exhibit A.

Background

Hunter Valley Energy Coal Pty Ltd (HVEC) operates the Mt Arthur Coal mine (Mt Arthur Coal Complex), an open cut coal mine near Muswellbrook, in the Hunter Valley. HVEC is a subsidiary of BHP Billiton. To the north east of the Mt Arthur Coal Complex is an industrial estate known as the Thomas Mitchell Drive industrial estate (the Industrial Estate). Behind tab 1 of the Agreed Bundle of Documents is a map entitled “Mt Arthur Colliery Holding”. This map shows the Mt Arthur Coal Complex (in hatching). The Industrial Estate appears adjacent to the Mt Arthur Coal Complex at the top right hand side of the mine site.

HVEC holds an environment protection licence (EPL) under the Protection of the Environment Operations Act 1997 in respect of the mine site. The EPL does not permit the emission of any offensive odours.

Blasting in order to clear overburden and access coal reserves is an integral part of open cut mining activities. The term ‘blast’ refers to a single blast event, which may involve a number of individual shots being fired in quick succession in a discrete area of the mine. In 2014, HVEC conducted 202 blasts at the Mt Arthur Coal Complex.

Blasting may produce certain gases, known as blast fume. Some of the gases that may be produced by blasts are oxides of nitrogen (sometimes referred to as “NOx” or “NOx gases”), including nitrogen dioxide (NO2) and nitrogen oxide. NO2 gives blast fume a reddish orange colour and pungent odour.

The Department of Health advises that, for most people, any health effects from exposure to a blast fume are short-lived. Exposure to blast fumes may cause symptoms including:

(a) eye, nose and throat irritation and coughing,

(b) dizziness and headache,

(c) shortness of breath, and

(d)wheezing or exacerbation of asthma.

Serious lung inflammation (pulmonary oedema) has been known to develop several hours after exposure to very high levels of NO2.

The Department of Health advises people to avoid exposure to blast fume, to close windows and doors if exposed to blast fume and, if exposed, to use water to thoroughly wash their eyes and to clear their nose and throat.

Section 7.3.9 the Australian Explosives Industry and Safety Group Inc’s Code of Good Practice: Prevention and Management of Blast Generated NOx Gases in Surface Blasting provides information in respect of exposure to post-blast NOx gases and steps that should be taken if persons are exposed to such gases. Appendix 4 of that Code contains material which should be provided to a medical practitioner treating a person who has been exposed to NOx gases. Appendix 4 includes details about the health risks of NOx gases, as follows:

NOx irritates the eyes and mucous membranes primarily by dissolving on contact with moisture and forming a mixture of nitric acids. But this is not the only mechanism by which injury may occur. Inhalation results in both respiratory tract irritation and pulmonary oedema. High level exposure can cause methhaemoglobinaemia. Some people, particularly asthmatics, can experience significant broncospasm at very low concentrations.

The following effects are commonly encountered after NOx exposure:

ACUTE

Cough

Shortness of breath

Irritations of the mucous membranes of the eyes, nose and throat.

SHORT TERM

Pulmonary oedema which may be delayed for up to 4-12 hours.

MEDIUM TERM

R.A.D.S. (Reactive Airways Dysfunction Syndrome)

In rare cases bronchiolitis obliterans which may take from 2-6 weeks to appear.

LONG TERM

Chronic respiratory insufficiency.

High level exposure particularly associated with methhaemoglobinaemia can cause chest pain, cyanosis, and shortness of breath, tachapnea, and tachycardia. Deaths have been reported after exposure and are usually delayed. Even non irritant concentrations of NOx may cause pulmonary oedema. Symptoms of pulmonary oedema often don’t become manifest until a few hours after exposure and are aggravated by physical effort.

As at 19 February 2014, the impacts of blasting at the Mt Arthur Coal Complex were regulated primarily by:

(a) the EPL, condition L6 of which contained general provisions regulating blasting at the Mt Arthur Coal Complex; and

(b) Project Approval 09_0062 (Project Approval) granted under Part 3A of the Environment and Planning Act 1979 (NSW), conditions 10 to 17 of Schedule 3 of which included specific provisions regulating blasting at the Mt Arthur Coal Complex. A copy of the Project Approval is behind tab 2 of the Agreed Bundle of Documents.

Condition 17 of Schedule 3 to the Project Approval requires HVEC to prepare and implement a Blast Management Plan as approved by the Director-General of Department of Planning (now known as the Secretary of the Department of Planning and Environment (DPE)).

A Blast Management Plan was prepared by HVEC under condition 17 of Schedule 3 to the Project Approval. The Office of Environment and Heritage (and subsequently the Environment Protection Authority) (EPA) was provided with a copy of the draft Blast Management Plan for its review. The DPE approved the Blast Management Plan. A copy of the approved Blast Management Plan is behind tab 3 of the Agreed Bundle of Documents.

The approved Blast Management Plan includes a Blast Fume Management Strategy (now known as the Blast Fume Management Plan). The main reference document used in the development of the Blast Fume Management Plan was the Australian Explosives Industry and Safety Group Inc.’s Code of Good Practice: Prevention and Management of Blast Generated NOx gases in Surface Blasting (the Code). A copy of the Code is included behind tab 4 of the Agreed Bundle of Documents.

The Code states that:

The underlying causes of high NOx are fuel deficiency in the explosive or detonation reactions that do not continue to completion. There are many ways in which these conditions may arise.

In the absence of a single general cause or general solution, these guidelines should be viewed as an aid identifying the local cause of NOx and a prompt for possible ways to address these causes. It should be understood that, given the complexity of the problem and the inherent variability in the blasting environment, NOx events may still occur even after prevention and mitigating actions have been put in place. …

The Code includes a “Visual NOx Gases Rating Scale”, for the rating of blast fumes. On that Scale, the colour of blast fumes is assessed on a scale of 1 to 5, with 5 being for “red/purple gases”. Under the Code, the extent of gas is assessed as being “A” (“localised”), “B” (“medium”) or “C” (“extensive”, further described as “extensive generation of NOx gases across the whole blast”).

In addition to the Blast Management Plan and the Blast Fume Management Plan, HVEC also had the following procedures in place to control the impacts of blasting at the Mt Arthur Coal Complex (as at 19 February 2014):

(a) Blast Monitoring Program,

(b) Environmental Approval for Blasting (now known as the Pre-blasting Approval Procedure),

(c) Stemming Blast Holes Procedure,

(d) Drill and Blast Procedure,

(e) Shotfirers Daily Report,

(f) Blast Design Checklist,

(g) Measuring Procedure,

(h) Dewatering Blast Holes Procedure,

(i) Loading Bulk Explosives, and

(j) Blasting within 500 metres of Public Roads Procedure.

Events prior to the blast on 19 February 2014

In January 2014, HVEC began preparations for a blast in the northern area of the Mt Arthur Coal Complex. It gave the intended blast the identifying number “MCe2206/EG1_STH” (the Blast).

A total of 764 holes were drilled. On 28 and 29 January 2014, the drill holes were loaded with Fortan 10 and Fortan 13 (Heavy ANFO) explosives, with the exception of 7 holes which were loaded with Fortis 1.15 (emulsion). The blast holes were capped with stemming material (gravel), to prevent the ingress of water. HVEC did not use bag liners within the drill holes, which are another means of minimising the ingress of water.

The blast was ready to fire on 31 January 2014. However, the Blast Management Plan places restrictions on the type of wind conditions in which blasting may occur in order to minimise the potential for blast generated dust and/or blast fume to be blown towards neighbouring residential areas. Unfavourable wind conditions persisted from 31 January 2014 to 19 February 2014. In particular, on each of 7, 8 and 15 February 2014, HVEC began preparations for the Blast but the weather conditions became unsuitable.

Although weather conditions were suitable on 9 February 2014, because that day was a Sunday, approval from both the DPE under the Project Approval conditions and the EPA under the conditions of the EPL was required to authorise the Blast. HVEC sought approval from both the DPE and the EPA to fire the Blast on the Sunday. However, the DPE and EPA did not grant that approval, with the DPE advising that it would only consider a request to undertake blasting outside of the approved hours in the case of a safety hazard where no other option but to blast was available.

Similarly, although conditions were suitable for the Blast on Sunday 16 February 2014, HVEC did not seek approval from the DPE and the EPA, since it formed the view that, given the DPE’s response to the previous request, such approval was unlikely to be granted.

Between 29 January 2014 and the time of the Blast on 19 February 2014, the mine site received rainfall on nine days (including 1.2mm prior to 2.30pm on the day of the Blast), totalling approximately 42.4 mm.

HVEC workers inspected the blast holes for ingress of water on each day between when they were loaded and when the Blast took place, except for two days in that period. During these inspections only one hole was noted to be slumped. As per the Blast Fume Management Plan, slumping is an indicator that the explosive column has degraded. The explosive product was removed from the slumped hole.

The manufacturer’s recommended “sleep” time for the explosives used in the Blast (that is, the time between when explosives are loaded into the drill holes and when the blast takes place) is 21 days. However the Blast Fume Management Strategy notes that the manufacturer’s sleep time is used for guidance only, and shots will only be fired when the weather conditions are appropriate.

The actual sleep time in this instance ranged between 21 and 22 days (depending on when the explosives were loaded).

HVEC operates two automatic weather stations that comply with Australian Standard 2923-1987 Ambient Air – Guide for measurement of horizontal wind for air quality applications, one within the Mt Arthur Coal Complex (known as WS09) and one off-site about 7.5 km from the location of the Blast (known as WS10). Both weather stations measure wind speed and wind direction, which are recorded as 15 minute averages over the preceding 15 minutes.

The blast on 19 February 2014

On 19 February 2014, winds were predicted to be from the north west. These were expected to disperse any dust or fume from the Blast across the Mt Arthur Coal Complex.

The Industrial Estate is located to the east of the Blast location. When firing the Blast, there would have only been a risk that any blast fume generated would travel over the Industrial Estate if the wind was blowing from a westerly direction. Accordingly, had the wind remained blowing from a north westerly direction after the Blast, the blast fume would not have crossed the Industrial Estate.

At about 7.00am on 19 February 2014, HVEC carried out an initial risk assessment in respect of the Blast in order to investigate the potential for post-blast fumes and, if necessary, put in place appropriate control measures. That assessment indicated a possible level 3 (possible orange gas) fume event from the Blast.

At approximately 10.45am, HVEC reassessed weather conditions and considered that they were appropriate for the Blast to be carried out. Five other shots were fired between 11.49am and 12.03pm in an area immediately adjacent to the Blast.

At approximately 2.00pm, HVEC reassessed weather conditions and considered that they were appropriate for the Blast to be carried out. At 2.15pm, Mt Arthur Coal Complex’s WS09 weather station (WS09) recorded an average wind direction of 334 degrees (that is, blowing from the north north west) for the preceding 15 minute period. Had the wind continued to blow from a wind direction of 334 degrees, any fume from the Blast would not have travelled over the Industrial Estate.

The Blast was fired at 2.25pm. Between 2.15pm and 2.30pm, the wind was recorded by WS09 as continuing to blow from the north north west at a wind direction of 335 degrees, as an average for the preceding 15 minute period. The Blast produced a cloud of orange/red blast fume. Behind tab 5 of the Agreed Bundle of Documents are six photographs taken of the blast site, the Blast, and the fumes produced by the Blast.

The blast fume was classified by HVEC as “Level 5C” according to the “Visual NOx Gases Rating Scale” of the Code, as adopted by HVEC’s Blast Fume Management Plan.

Between 2.30pm to 2.45pm, WS09 recorded a change in average wind direction to 272 degrees, that is, blowing from the west for the preceding 15 minute period. The change in the average wind direction occurred after the Blast was fired and HVEC personnel observed that this wind change occurred after the Blast was fired. The wind blowing in the general direction from the west carried the blast fumes towards the Industrial Estate.

By 2.30pm, HVEC employees observed that the fumes were moving in an easterly direction; towards the Industrial Estate.

The fume from the Blast travelled in an easterly direction, crossing Mt Arthur Coal Complex’s EPL premise boundary at 2.42pm. The fume then travelled across Thomas Mitchell Drive and a southern portion of the Industrial Estate. The fume then dispersed over vacant property (owned by HVEC) on the other side of the Industrial Estate at approximately 2.50pm.

Notification of the EPA and other agencies

At 2.47pm, HVEC activated its Pollution Incident Response Management Plan.

At approximately 2.47pm, Rebecca Harcus, HVEC’s Acting Superintendent Environment – Execution, called the EPA’s Environment Line telephone service to report fume from the Blast had left the EPL premises boundary. Between 2.50pm and 5.00pm, Ms Harcus or other HVEC employees called the Public Health Unit in Newcastle, WorkCover, Muswellbrook Shire Council, NSW Fire and Rescue, Department of Planning and Infrastructure, Muswellbrook Hospital, Brook Medical Centre, Tristar Medical Group, Singleton Hospital and Burdekin Park Medical Centre, to inform them that the blast fumes had travelled off-site and to offer information about the health effects of such fumes.

At 5.43pm, HVEC issued a media release in respect of the blast to local newspapers and radio stations. A copy of that media statement is behind tab 6 of the Agreed Bundle of Documents.

On the morning of 20 February 2014, Asset President NSW Energy Coal, Mr Peter Sharpe, together with the General Manager Open Cut Operations, Mr Xavier Wagner, called 25 businesses located in the Industrial Area to provide information about the Blast and blast fume, and apologise for the disruption, concern and impact it caused.

HVEC received 14 complaints from persons in relation to the Blast. HVEC responded promptly to the complaints, provided information about the Blast, and advised those suffering physical symptoms to seek medical attention.

The effects of the blast flumes on workers in the Industrial Estate

Workers at Robinson Earthmoving

Mr Robert Eyre, Mr Warren Trevor and Mr Aron Hueston work at JE & J Robinson Pty Ltd (Robinson Earthmoving), on Wallarah Road, in the Industrial Estate. All were working there on the afternoon of 19 February 2014.

Mr Eyre is the foreman at Robinson Earthmoving. At about 2.30pm, he observed a thick orange fume of smoke hanging in the air above the Mt Arthur Coal Complex. Shortly afterwards, he noticed a haze hanging over the yard. He directed the other workers to leave the premises. While he was walking across the yard to a vehicle, Mr Eyre noticed a sharp, gunshot, sulphur-type smell. Mr Eyre and another worker drove away from the site and drove about 500m away.

Mr Eyre returned to the workshop at about 2.50pm, by which time the fume had moved away from that site. There was still a faint odour, which was however quite pungent in the workshop.

Mr Eyre experienced a sore throat the next day, from about 2am to about 7.30am.

At some time shortly before about 3pm, Mr Trevor felt several vibrations in the foundations of the workshop. Shortly afterwards, Mr Trevor saw an orange cloud approaching from a west-north-west direction. With the cloud, Mr Trevor experienced a strong, acrid, sulphur-type smell that filtered through the air conditioning. Mr Trevor perceived that the smell persisted until at least 5pm when Mr Trevor left work.

At about 2.30pm, Mr Hueston observed a cloud of fumes. When the cloud started to come into the yard, the workers shut the doors on the buildings and put dust masks on. Although Mr Eyre had told the workers to get into vehicles and drive out of the cloud, Mr Hueston decided not to, as doing so would have meant driving through the cloud. While the cloud was around the workshop, Mr Hueston noticed a sulphur-like smell, like rotten egg gas. When Mr Hueston went back into the workshop, his eyes were watering. Later that afternoon he developed a sinus headache, which lasted for about three hours.

Mr Hueston took a photo of the cloud, which is included behind tab 7 of the Agreed Bundle of Documents.

Workers at Wear Parts Services

Ms Colleen Kelly and Ms Cheryl Norman work at Wear Parts Services on Thomas Mitchell Drive, in the Industrial Estate. Both of them were at work on the afternoon of 19 February 2014.

At about 2.30pm, Ms Kelly heard a loud noise, like thunder. She looked out of the window towards the Mt Arthur Coal Complex and saw a red fume. The fume rolled across the ground at ground level. Ms Kelly called out to her colleagues and went outside her office. She took a number of photographs. While she was outside, Ms Kelly noticed a smell which was similar to one she had experienced from Bayswater Power Station but stronger. Once she noticed the smell, she stopped taking deep breaths and went back inside.

Inside the office, Ms Kelly and her colleagues closed the windows and turned off the air conditioning. By this point, they were surrounded by an orange fog. By about 7.30pm, Ms Kelly had a slightly sore throat, which developed into a cold.

Four photographs taken by Ms Kelly are included behind tab 8 of the Agreed Bundle of Documents.

Ms Norman went outside with Ms Kelly and observed a red fume coming across the road towards them from the direction of the Mt Arthur Coal Complex. Ms Norman smelt a fume odour, similar to ammonia. A couple of minutes after smelling the odour, Ms Norman experienced a scratchy, dry throat, which lasted the afternoon and evening. Ms Norman observed the fume and the smell to have disappeared by about 3.30pm.

Worker at CRT Maintenance

At the time of the Blast, Robert Gordon worked at the business CRT Maintenance, on Wallarah Road, in the Industrial Estate. He was at work on the afternoon of 19 February 2014. At about 2.30pm, he saw an orange cloud to the south or south-west. He noticed a gunpowder, acid smell. Later in the afternoon Mr Gordon experienced a sore throat. Mr Gordon took a photograph of the orange cloud, which is included behind tab 9 of the Agreed Bundle of Documents.

Worker at Muswellbrook Self Storage Units

Annette Gordon runs the business Muswellbrook Self Store Units on Strathmore Road, in the Industrial Estate. Ms Gordon was at work on 19 February 2014. At about 2.35pm, Ms Gordon noticed an orange fume and then observed the sky turn orange. She went outside and took a number of photographs. Ms Gordon smelt an odour, which she had trouble describing. Her eyes became sore and she later developed a sore throat. Her eyes and throat were still sore the next day.

One of the photographs taken by Ms Gordon on 19 February 2014 is behind tab 10 of the Agreed Bundle of Documents.

Causes of the fumes from the Blast

An internal investigation conducted by HVEC concluded that the basic causes of the Fume Event were:

There was no available system to accurately predict short term wind changes immediately following firing.

Explosive degradation in the blast resulted in the generation of blast fume.

HVEC concluded that the primary cause of the explosive degradation was contamination of the explosives in the blast holes, caused by rainfall (approximately 42.4 mm) falling on the sleeping shot. The other causes of the explosive degradation were that the stemming material did not fully prevent the ingress of water into the blast holes and that the explosive product used was not well suited for the level of water received during the sleep time.

The internal investigation conducted by HVEC concluded that:

(a) HVEC needs to review its current understanding of the practices to minimise explosive degeneration in order to select the optimum explosive products for reducing fume generation in areas sensitive to the community.

(b) Given the difficulty in ensuring nil fume ever being generated by blasting operations, HVEC needs to improve its weather prediction technology, and also its ability to exploit favourable weather opportunities, to prevent fume from leaving site and impacting on receivers.

(c) In the event that fume does leave site, HVEC needs to address its ability to respond to fume events impacting on surrounding landowners.

The following documents are also included in the Agreed Bundle of Documents:

(a) Blast Incident Report prepared by HVEC dated 28 February 2014 (not including attachments) (at tab 11),

(b) HVEC’s response to a notice to provide information and documents, served on HVEC by the EPA ,dated 27 August 2014 (not including attachments) (at tab 12),

(c) HVEC’s response to a notice to provide information and documents, served on HVEC by the EPA, dated 9 May 2014 (not including attachments) (at tab 13), and

(d) Document titled “Incident Investigation Report into Mce22o6EG1_STH Fume Event at Mt Arthur Coal 19 February 2014”, dated 25 February 2014 (at tab 14).

Changes implemented by HVEC in response to the blast

HVEC has undertaken a review of the factors that contributed to the blast and implemented the following measures with the aim of ensuring that a similar incident does not happen again:

(a) HVEC engaged a third party blasting expert to review existing blast processes to identify improved fume prevention measures.

(b) HVEC has updated the Blast Fume Management Plan.

(c) HVEC has completed an internal review of its pre-blasting approval procedures for the Mt Arthur Coal Complex so as to include:

(i) all specific factors required to initiate a blast including a review of the following:

1. fume history;

2. blast material;

3. explosive type;

4. sleep time;

5. rainfall during sleep time;

6. regional air quality monitors; and

7. measured wind speed and direction against modelled predictions, and

(ii) the use of a predictive fume model to show the expected path and dispersion of any fume.

(d) HVEC has updated its procedure for stemming blast holes to ensure stemming practices minimise water ingress through the top of the hole.

(e) HVEC now uses an emulsion-based explosive for blasts which are located in northern areas of the Mt Arthur Coal Complex.

(f) HVEC has improved the weather forecasting methods used at the Mt Arthur Coal Complex to allow greater certainty in predicting short-term wind direction changes prior to blasting including:

(i) implementing a review of weather forecast prior to loading blasts,

(ii) review of regional weather monitors prior to blasting to identify potential changes in wind direction,

(iii) the use of wind socks in the northern areas of the Mt Arthur Coal Complex to indicated wind direction, and

(iv) the release of balloons immediately prior to blasting for blasts which are located in northern areas of the Mt Arthur Coal Complex.

(g) HVEC has installed an additional weather station to improve the availability of meteorological data at the Mt Arthur Coal Complex.

(h) HVEC has updated its emergency response plan for blast events.

(i) HVEC has updated its community notification procedures, including by:

(i) registering with Muswellbrook Shire Council's blasting portal, which provides publicly available updates about planned blasting activities at the Mt Arthur Coal Complex,

(ii) including an article in its March 2014 community newsletter reminding residents of:

1. the Blast Management Plan,

2. the measures for coordinating with other mines regarding blast times, and

3. how to be included on the blast notification list for the Mt Arthur Coal Complex, maintained under the Blast Management Plan, so as to ensure that they are advised of upcoming blast times, and

(iii) including an article in the Muswellbrook Chamber of Commerce and Industry newsletter reminding local businesses and their employees to sign up to the blast notification list for the Mt Arthur Coal Complex, and

(iv) adding additional stakeholders to the blast notification list for the Mt Arthur Coal Complex.

Co-operation with the EPA

At all times, HVEC fully co-operated with the EPA’s investigation into the Blast, and provided the EPA with all the documents and information that they requested. …

Evidence

3. The Prosecutor tendered an Agreed Bundle of Documents (exhibit B), which contained, inter alia, a map of Mt Arthur Colliery Holding, the Defendant’s Project Approval dated 24 September 2010, the Blast Management Plan in place at the time of the offence and the Australian Explosives Industry and Safety Group Inc document entitled “Code of Practice: Prevention and Management of Blast Generated NOx Gases in Surface Blasting” (Code of Practice). Photographs taken by workers in the industrial estate, a copy of the media statement issued by the Defendant dated 19 February 2015, and a number of reports drafted by the Defendant following the fume event also formed part of exhibit B.

4. The Defendant tendered a resolution of the asset leadership team signed by the acting asset president on 21 July 2015 (exhibit 1) that formally expressed the Defendant’s regret for the fume event and confirmed its ongoing commitment to minimising the risk of any future fume events resulting from blasting at Mt Arthur Coal. The Defendant also tendered a document entitled “Environmental Approval for Blasting” (exhibit 2) that describes the procedure for how environmental approval is obtained for a blast at Mt Arthur Coal prior to it being fired. That document relevantly outlines the wind conditions under which blasting at Macleans Pit is permissible.

5. The Defendant read in part the affidavit of Mr Wagner, the Defendant’s general manager open cut operations, affirmed 29 May 2015. He was at the Mt Arthur Coal Complex at the time of the blast. Mr Wagner outlined the events of 19 February 2014 and identified a number of the changes implemented by the Defendant in response to the blast, which were also described in the SOAF. He describes in greater detail than the SOAF the updates to the Blast Fume Management Plan. Mr Wagner stated that he is aware of the health impacts and that he personally, and on behalf of the Defendant, wishes to express his deep regret. He apologised for the impact of the fume event on those affected. On 20 February 2014, Mr Wagner and Mr Sharpe, Asset President NSW Energy Coal, called businesses located in the industrial estate to apologise. Mr Wagner provided examples of the Defendant’s support for local not-for-profit community organisations, which have included support for a pre-school kindergarten expansion and redevelopment of a hospital emergency department.

Purposes of sentencing

6. The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) (the CSP Act), as follows:

3A Purposes of sentencing

The purposes for which a court may impose a sentence on an offender are as follows:

(a) to ensure that the offender is adequately punished for the offence,

(b) to prevent crime by deterring the offender and other persons from committing similar offences,

(c) to protect the community from the offender,

(d) to promote the rehabilitation of the offender,

(e) to make the offender accountable for his or her actions,

(f) to denounce the conduct of the offender,

(g) to recognise the harm done to the victim of the crime and the community.

7. The Prosecutor submitted that the purposes in par (a), (b), (f) and (g) are most relevant in these proceedings.

Objective factors

Statutory context

8. The Court may take into account the statutory context in which the offence was committed in determining the objective seriousness of the offence (Bentley v BGP Properties Pty Limited [2006] NSWLEC 34; (2006) 145 LGERA 234 at [51]-[71] and [168]-[172]).

9. The objects of the PEO Act are set out in s 3 and are as follows:

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,

(b) to provide increased opportunities for public involvement and participation in environment protection,

(c) to ensure that the community has access to relevant and meaningful information about pollution,

(d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following:

(i) pollution prevention and cleaner production,

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

(iia) the elimination of harmful wastes,

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

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

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

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

(f) to improve the efficiency of administration of the environment protection legislation,

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

10. The Prosecutor submitted that objects (a) and (d) are most relevant in these proceedings.

Maximum penalty

11. The maximum penalty for an offence under s 129(1) is $1,000,000 pursuant to s 132(a) of the PEO Act. In Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683, Kirby P stated at 698:

While it is the function of the Court itself to assess the seriousness of the offence in question, the maximum penalty available for an offence reflects the “public expression” by Parliament of the seriousness of the offence: R v H (1980) 3 A Crim R 53 at 65.

12. The maximum penalty was increased from $250,000 in May 2006.

Protection of the Environment Operations Act, s 241

13. Section 241 of the PEO Act sets out the matters to be considered by the court in imposing a penalty for an offence under that Act. The Court may take into consideration other matters that it considers relevant.

(a)    the extent of the harm caused or likely to be caused to the environment by the commission of the offence,

14. The Prosecutor submitted that the offence resulted in actual environmental harm. The Dictionary to the PEO Act defines “harm to the environment” as:

any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution.

15. The PEO Act defines “pollution” to include “air pollution”, which is defined as:

the emission into the air of any air impurity.

16. The Dictionary to the PEO Act relevantly defines “offensive odour” as:

an odour:

(a)    that, by reason of its strength, nature, duration, character or quality, or the time at which it is emitted, or any other circumstances:

(i)    is harmful to (or is likely to be harmful to) a person who is outside the premises from which it is emitted, or

(ii)    interferes unreasonably with (or is likely to interfere unreasonably with) the comfort or repose of a person who is outside the premises from which it is emitted,

17. The offence involved the emission into the air of air impurities, being the gases resulting from the blast. The offence therefore involved actual environmental harm (see also Environment Protection Authority v Cargill Australia Limited [2004] NSWLEC 334 at [8] – [9]).

18. In addition, there is evidence that the odour was both harmful to persons outside the Mt Arthur mine premises and that it interfered unreasonably with the comfort or repose of such persons (SOAF at par 40-53). The fumes had a significant impact on a number of persons on the industrial estate. The odour was highly offensive, being described as “a sharp, gunshot, sulphur-type smell” (SOAF at par 41), “a strong, acrid, sulphur type smell that filtered through the air conditioning” (SOAF at par 44), “like rotten egg gas” (at par 45), and “similar to ammonia” (SOAF at par 51). Three workers experienced a sore or dry, scratchy throat (SOAF at par 43, 49 and 51). Another witness described his eyes watering and another developed a headache (SOAF at par 45).

19. The Defendant accepts that the event caused actual harm to the environment as defined in the PEO Act and that the blast fume was significant. Those affected experienced relatively minor symptoms which resolved shortly afterwards (SOAF at par 40-53). There is no evidence that anyone required medical treatment or suffered long lasting health impacts. The environmental harm was transitory and therefore less harmful, relying on Kirby P in Camilleri’s Stock Feeds at 701. The harm was to amenity rather than human health. The blast dispersed within 25 minutes and dispersed over vacant property owned by the Defendant on the other side of the industrial estate. I agree with the Defendant that there is no evidence of any potential for serious impact on human health as a result of the blast fume.

(b)    the practical measures that may be taken to prevent, control, abate or mitigate that harm,

20. According to the Prosecutor there were a number of practical measures that the Defendant could have taken to prevent the blast fumes being blown over the industrial estate, as follows:

1. better weather forecasting methods, so that the wind direction at the time of a blast can be more accurately measured or forecast. At the time of the offence, the Defendant could only measure the average wind direction over a 15 minute period;

2. measures to prevent the ingress of water into blast holes; and

3. the use of explosive products better suited to wet conditions.

21. The Defendant submitted that it had practical measures in place aimed at controlling the impacts of blasting at the complex, implemented in accordance with the Blast Management Plan approved by Department of Planning and Environment (DPE) and provided to the Environment Protection Authority. These practical measures were complied with. A review after the incident has resulted in additional measures being implemented to ensure that a similar incident does not happen again. Numerous additional steps now taken are as outlined in the SOAF at par 59(b)-(i). The preventative measures identified by the Defendant are extensive and address inter alia the matters referred to by the Prosecutor.

(c)    the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence,

22. The Prosecutor submitted that the Defendant could reasonably have foreseen the harm to the environment which occurred as a result of the blast. The Defendant was clearly aware of the risks of blast fumes occurring. It had a detailed Blast Management Plan in place at the time of the offence (SOAF at par 10). It was also aware of the health risks of blast fumes, which are clearly set out in the Code of Practice (SOAF at par 7 and exhibit B at p 124 and following).

23. The Defendant was also aware that since the blast holes had been loaded with explosives, that 42 millimetres of rain had fallen. It must therefore have been aware of the risk that some of the explosives may have become degraded, which could have resulted in a fume event. Given that the wind was measured blowing from (as an average) a roughly north-westerly direction just before the blast (SOAF at par 29-30), it would not have taken a significant change in wind direction for the fumes to be carried over the industrial estate. This is in fact what occurred.

24. The Defendant accepted that at the time of the blast it was aware of the risk of causing a blast fume at the complex and it is therefore accepted that the risk was foreseeable and foreseen. The Defendant had sought to deal with that risk by having in place the Blast Management Plan as there is an inherent risk in blasting of incomplete combustion of the charge material which results in a fume. At a general level it was reasonably foreseeable that the fume would travel in the wind direction over the industrial estate if wind direction changed. The short term effects caused were foreseeable. For the harm to materialise the blast had to generate a fume. Secondly, the blast had to be blowing from a certain direction. The occurrence of a fume in the circumstances was reasonably foreseeable. The change in wind direction was not, given the wind data available at the time of the blast, as set out in the SOAF at par 25-30 showed a favourable wind direction up until the time of the blast. The change in wind direction occurred after the blast.

22. In Environment Protection Authority v BHP Steel (AIS) Pty Limited [2001] NSWLEC 214 Talbot J at [68] stated:

…the test of whether the defendant could reasonably have foreseen the harm caused requires something more than an appreciation of the mere possibility that the harm could occur.

26. The weather data available at that time of the blast indicated appropriate conditions for the blast and these were forecast to continue until 4 pm on the day on 19 February 2014. The change of wind direction was perceived by personnel as well as being recorded by the weather station. I accept that the change of wind direction was not entirely predictable and that the Defendant was essentially unlucky in relation to that aspect of foreseeability.

(d)    the extent to which the person who committed the offence had control over the causes that gave rise to the offence,

27. The Prosecutor submitted that the evidence establishes that the Defendant had complete control over the causes that gave rise to the offence. The Defendant operates the Mt Arthur mine (SOAF at par 1), it holds an environment protection licence in respect of the mine (SOAF at par 2) and all preparations for the blast were carried out by the Defendant (SOAF at par 15-16).

28. The Defendant accepts that it had control over the loading and firing of the blast but the events leading up to the timing of the blast were not under its control given the extended period of bad weather, inability to blast on two Sundays when conditions were favourable so that the sleep period recommended by the explosive manufacturer after the loading of drill holes (18 February 2014) could not be complied with. The longer than desirable sleep time meant there was greater opportunity for water ingress into the explosives. The Defendant could not control the weather leading up to the blast or on the day of the blast. The Defendant’s personnel checked the drillholes daily in the waiting period (SOAF at par 21) with only one hole identified as slumped (degraded).

29. I consider the Defendant had partial but not total control over the causes of the offence given the difficulties of wind prediction. It did generally have control over the causes of the blast fume being produced, the first relevant matter in causation.

(e)    whether, in committing the offence, the person was complying with orders from an employer or supervising employee.

30. This matter is not relevant to these proceedings.

Other matters (s 241(2))

31. The Prosecutor submitted that another relevant factor is the toxic nature of the blast fumes and the potentially serious impact on human health of NOx gases (SOAF at par 5-7). In addition, the scale of the fume event was very significant. It was rated at “Level 5C” according the rating scale of the Code of Practice (SOAF at par 31). This is the highest level on that scale (exhibit B at p 122, behind tab 4). The photographs taken by workers on the industrial estate also give an idea of the scale of the fume cloud (exhibit B at p 141–147). Mr Eyre, the foreman at Robinson Earthmoving, directed staff there to leave the site (SOAF at par 41). Ms Kelly, of Wear Parts Services, describes being “surrounded by an orange fog” (SOAF at par 49). As already identified earlier, there is no evidence of any sustained or serious impact on human health before me.

32. The Defendant submitted and the Prosecutor accepts that the Defendant took prompt action once the blast fume event occurred. It immediately notified the relevant government agencies, including the EPA, it notified local hospitals and medical centres, it issued a media release and notified complainants of possible health risks (SOAF at par 36-39). It also notified 25 local businesses.

Conclusion on objective seriousness

33. The Prosecutor submitted that, taking into account all of the matters above, the offence should be viewed as in the mid-range of objective seriousness. I agree with the Defendant that the offence is at the low end of the medium range.

Deterrence

34. The consideration of general deterrence in the context of environmental offences is important: Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289; (2006) 148 LGERA 278 at [65]–[68].

35. The Prosecutor submitted that general deterrence is an important factor in sentencing in these proceedings. In light of the Defendant’s good record and the subsequent measures taken to prevent a further fume incident, the Prosecutor does not submit that specific deterrence is a significant factor for consideration in sentencing. It does however appear that the Defendant will continue to carry out blasting and so it needs to ensure that such incidents do not happen again.

Subjective factors

36. Section 21A(3) of the CSP Act sets out mitigating factors to be taken into account in determining the appropriate sentence.

No prior convictions

37. The Defendant has no prior convictions for environmental offences.

Plea of guilty

38. Under s 22(1) of the CSP Act, the Court must take into account the fact that an offender has pleaded guilty. The Court of Criminal Appeal has stated that the appropriate range for such a discount is 10 to 25%: R v Thompson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152]. The Prosecutor acknowledges that the Defendant is entitled to a discount for its plea of guilty and that the Defendant entered a plea of guilty at the first available opportunity so is entitled to the full discount.

Assistance to investigating authorities

39. The Defendant cooperated with the EPA in the investigation. The Defendant has also cooperated by agreeing to a statement of facts for the purposes of sentencing.

Remorse and contrition

40. The media release issued by the Defendant on the day of the odour event apologised for the impacts resulting from the blast (SOAF at par 37).

41. On the morning after the odour event, then Asset President NSW Energy Coal, Mr Sharpe, together with the General Manager Open Cut Operations, Mr Wagner, called 25 businesses located in the Industrial Area to provide information about the odour event and apologise for the disruption, concern and impact that it caused (SOAF at par 38).

42. Mr Wagner of the Defendant has also expressed contrition and remorse for the odour event both personally, and on behalf of the Defendant (affidavit of Mr Wagner at par 36). A resolution passed by the Asset committee dated 21 July 2015 (exhibit 1) also expresses contrition and remorse for the incident.

43. The Defendant’s plea of guilty can also be taken into account as evidence of its remorse: Siganto v The Queen (1998) 194 CLR 656 at 663-664 per Gleeson CJ, Gummow, Hayne and Callinan JJ.

44. I accept the expressions of remorse made on behalf of the company particularly in light of the substantial efforts made on the day and the day after to notify the community of the event, its multiple expressions of regret and subsequent actions taken to improve blast management processes.

Company of good character

45. I accept that the Defendant has a firm commitment to minimising the impact of its operations on the local environment and community (affidavit of Mr Wagner at par 12-14). To this end, the Defendant informed the Court that it:

1. has a comprehensive Environmental Management System (EMS) that is consistent to the International Standard 14001:2004;

2. has prepared, implemented and tested a Pollution Incident Response Management Plan under the PEO Act; and

3. operates in accordance with BHP Billiton's Sustainability Framework, which includes a Sustainable Development Policy aimed at providing lasting social, environmental and economic benefits that are valued by the community,

46. The Defendant supports local not-for-profit community organisations and charities working in areas such as health, safety, training and education. Examples of such support include:

1. In 2013, the Defendant provided $1.1 million to Muswellbrook Pre School Kindergarten for its expansion project which has increased access to early childhood education in the local area. Since 2012, the Defendant has partnered with Muswellbrook South Public School to deliver the Warrae Wanni Pathways to School Program. The program is an early childhood education bridging program that aims to help local children, particularly Aboriginal and disadvantaged students, prepare to start kindergarten the following year.

2. The Defendant secured $2.5 million from BHP Billiton's Sustainable Communities fund for the redevelopment of Muswellbrook Hospital's Emergency Department, which officially opened to the public in early 2015.

3. Recognising its role in helping to build a resilient and sustainable Muswellbrook Shire, the Defendant established the four-year, $1.3 million Community Capacity Building Project, a three-way partnership with Muswellbrook Shire Council and Upper Hunter Community Services.

4. Through its Voluntary Planning Agreement with Muswellbrook Shire Council, the Defendant has contributed $500,000 annually towards community projects, including the redevelopment of Highbrook Park, construction of Sam Adams College at Muswellbrook TAFE and the revitalisation of Campbell's Corner.

5. The Defendant has been the proud sponsor of several local events, including Muswellbrook Race Club's Spring Racing Carnival, the Aberdeen Highland Games, the Muswellbrook and Upper Hunter Eisteddfod, the Upper Hunter Wine and Food Affair and the NSW Minerals Council's Health, Safety, Environment and Community conferences.

6. The Defendant is also a member of the Muswellbrook Chamber of Commerce and Industry and has been a long-time sponsor of their annual business awards.

Offence not planned

47. The Defendant did not deliberately cause the odour event, and had in place a number of measures, in accordance with a Blast Management Plan approved by the DPE, to prevent such an incident from occurring.

Unlikely to reoffend

48. The Prosecutor (Prosecutor’s written submissions at par 34) and the Court accept that the Defendant is unlikely to reoffend in the future given the steps now implemented. specific deterrence is not considered significant.

Comparable cases

49. The sentencing principle of evenhandness provides that like offences should generally receive like penalties subject always to recognition of the individual circumstances of a case. Cases involving the emission of an offensive odour under s 129(1) were summarised in Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131, by Pepper J, at [143] – [147], as follows:

143   First, in Environment Protection Authority v Nationwide Oil [2002] NSWLEC 201 the defendant company breached s 129(1) of the Act by allowing an odour to be emitted from its premises due to a spill of light gas oil, contrary to a condition of an environment protection licence. The defendant also breached s 120(1) of the Act. The maximum penalty under the Act at the time for each offence was $250,000. In taking into account the totality principal and the discount for an early guilty plea, the defendant was fined $50,000 for the s 129(1) breach, with a total fine of $80,000 for both offences. The defendant also agreed to pay the prosecutor's costs in the amount of $17,000.

144   Second, in Environment Protection Authority v Illawarra Coke Co Pty Ltd [2002] NSWLEC 21; (2002) 118 LGERA 451 the defendant was the occupier of premises at which a scheduled activity was carried on under an authority conferred by an environment protection licence. It caused the emission of an offensive odour on three separate occasions. The defendant was therefore charged with three breaches of s 129(1) of the Act. The maximum penalty at the time was $250,000. The odour was described as offensive and when particularly strong degraded the amenity of the environment causing headaches, nausea and irritating eyes and throats. The defendant was fined a total of $70,000 for all three breaches in circumstances where the defendant had one previous conviction, pleaded guilty at an early stage and cooperated with the authorities. The defendant was also ordered to pay the prosecutor's costs in the sum of $25,000.

145   Third, in Environment Protection Authority v Burrangong Meat Processors Pty Ltd [2003] NSWLEC 102 the company, which operated an abattoir in Young, was charged with four offences. The first offence involved a breach of s 64(1) of the Act, namely, that it contravened a condition of its environment protection licence by failing to operate its sewerage treatment system in a proper and efficient manner. This offence involved an excess of effluent being pumped through the system that produced offensive odours. The other three offences involved contraventions of s 129(1) of the Act on the basis that the defendant was the occupier of premises at which a scheduled activity was carried on under the authority of a licence and which caused an offensive odour to emanate from the premises. The Court considered that a fine of $50,000 was warranted for each offence, which was then reduced to a total penalty of $58,875 for all four offences taking into consideration the totality principle and mitigating factors, which included that the defendant had pleaded guilty and had agreed to pay $930,000 to undertake works aimed at minimising pollution. In imposing the penalty the Court took into account the fact that the defendant had a high level of culpability, the offences were foreseeable and there were practical measures that the defendant could have put into place to prevent the offences from occurring.

146   Fourth, in Environment Protection Authority v Cargill Australia Limited [2004] NSWLEC 334 the defendant pleaded guilty to an offence against s 129(1) of the Act being the emission of an offensive odour from occupied premises at which a scheduled activity, being a livestock slaughtering rendering plant, was carried on under the authority of a licence. The maximum penalty under the Act at the time was $250,000. The defendant was ordered to carry out a specified project under s 250(1)(c) of the Act being the provision of a park at the cost of $32,000 and to pay the prosecutor's costs in the sum of $40,000. The penalty was imposed in circumstances where there were practical steps that the defendant could have taken to prevent the emission of the odour, the offence was foreseeable, the defendant had control over the causes of the offence, the defendant pleaded guilty and the defendant had one prior conviction.

147   Fifth, in Environment Protection Authority v Shoalhaven Starches [2006] NSWLEC 685 the defendant was the occupier of premises at which scheduled activities were carried on under the authority of a licence and was found guilty of emitting offensive odours from waste water ponds on the premises in contravention of s 129(1) of the Act. The maximum penalty under the Act at the time was $250,000. In addition to being ordered to pay the prosecutor's costs in the amount of $235,000, the defendant was fined the sum of $125,000, ordered to place a publication notice and to carry out an environmental audit. This penalty was imposed in circumstances where the defendant pleaded not guilty, the odour was not toxic, the emission of the odour was reasonably foreseeable and the defendant had prior convictions.

50. It is necessary to note that all the cases referred to above were decided when the maximum penalty was $250,000. It has since been increased to $1 million. The parties have not been able to find any cases in this Court for breaches of s 129(1) of the PEO Act since the maximum penalty was increased. It is not appropriate that the intended penalty be multiplied fourfold in light of that increase. The maximum penalty is one of the factors to which I will have regard and does not constrain me to impose an inappropriately severe sentence as identified in Elias v The Queen (2013) 248 CLR 483 at (494-495).

Orders under Pt 8.3 of the PEO Act

51. Part 8.3 of the PEO Act sets out orders that a court may make in connection with offences. Such orders may be made in addition to any penalty that may be imposed and may also be made regardless of whether any penalty is imposed: s 244(1) and (2). Section 250 sets out particular orders a court may make. Such orders include:

1. an order requiring the offender to take specified action to publicise the offence (including the circumstances of the offence) and its environmental and other consequences and any other orders made against the person (s 250(1)(a)), and

2. an order requiring the offender to pay a specified amount to a specified organisation, for the purposes of a specified project for the restoration or enhancement of the environment or for general environmental purposes (s 250(1)(e)).

52. Section 250(2) of the PEO Act provides that the Court may, in an order under s 250, fix a period for compliance and impose any other requirements the court considers necessary or expedient for enforcement of the order.

53. The Prosecutor seeks orders under s 250(1)(a) and (e). It is appropriate to make these orders in the terms agreed by the Defendant.

Costs

54. The Prosecutor seeks an order for its costs under s 257B of the Criminal Procedure Act 1986 (NSW). The Defendant has agreed that it will pay these in the amount of $30,000.

Penalty

55. The Court must apply the instinctive synthesis approach by identifying all the relevant factors, discussing their importance and making a “value judgment as to what is the appropriate sentence given all the factors of the case”: Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 at [26] unanimously following Markarian v R [2005] HCA 25; (2005) 228 CLR 357 at [51] per McHugh J. The sentence must reflect all the relevant objective circumstances of the offences and subjective circumstances of the defendant: see Veen v R [1979] HCA 7; (1979) 143 CLR 458 at 490; Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472-473, 490-491. The sentence should not exceed what is “justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances”: Veen v The Queen (No 2) at 472, 485-486, 490 -491, 496; Hoare v R [1989] HCA 33; (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ).

56. The appropriate penalty in this matter in light of the objective and subjective factors identified above is $90,000 which I will reduce by 35% in light of the large number of mitigating factors identified by the Defendant. Instead of imposing $58,500 as a penalty I will make an order under s 250(1)(e) in the terms handed up by the parties.

Orders

57. The Court makes the following orders:

1. The Defendant is convicted of the offence as charged.

2. Under s 250(1)(a) of the Protection of the Environment Operations Act 1997 the Court orders the Defendant, within 35 days of the date of this order, to place a notice in the form of Annexure A, in the following publications, at a minimum size of a quarter page:

1. The Newcastle Herald;

2. The Singleton Argus;

3. The Muswellbrook Chronicle; and

4. ‘Coal Face’ magazine.

3. Under s 250(1)(e) of the Protection of the Environment Operations Act 1997, the Defendant is to pay the sum of $58,500 to Muswellbrook Shire Council, for the purpose of the Council’s 2016 Wood Smoke Reduction Program, as set out in Annexure B, within 28 days of the date of the Court’s order.

4. The Defendant to pay the Prosecutor’s costs of $30,000 under s 257B of the Criminal Procedure Act 1986.

5. The exhibits are to be returned.

****************

ANNEXURE A

Hunter Valley Energy Coal Pty Ltd convicted of pollution incident near Muswellbrook

Hunter Valley Energy Coal Pty Ltd (HVEC) has been convicted in the Land and Environment Court of NSW of an offence relating to the emission of an offensive odour, in breach of the Protection of the Environment Operations Act 1997.

HVEC, a subsidiary of BHP Billiton, operates the Mt Arthur coal mine, near Muswellbrook.

On 19 February 2014, HVEC carried out a blast at the mine. The blast resulted in orange/red, odorous fumes. Such fumes typically include gases known as oxides of nitrogen (or “NOx” gases). A change in the wind direction after the blast was fired blew the fumes over the nearby Thomas Mitchell Drive Industrial Estate, causing discomfort and some temporary health impacts to some workers on at the Estate.

HVEC has since put in place further measures in order to prevent a similar incident from occurring.

HVEC was prosecuted by the NSW Environment Protection Authority (EPA) in relation to the incident and pleaded guilty to the charge.

On 30 July 2015, the Land and Environment Court made an environmental service order that will require HVEC to pay $58,500 to Muswellbrook Shire Council for use in the Council’s Wood Smoke Reduction Program. The Court also ordered HVEC to pay the EPA’s legal costs.

This notice was paid for by HVEC as a result of an order of the Land and Environment Court of NSW.

ANNEXURE B

The Program is aimed at improving air quality in the Hunter Valley. Wood smoke is a significant contributor to particulate pollution and also contains a number of other pollutants and toxins. A significant source of wood smoke is burning solid fuel in a wood heater or open fireplace. The Program will assist in addressing this issue by community education about the health impacts of wood smoke pollution and how best to operate wood heaters and targeted cash incentives to replace wood heaters and fireplaces with cleaner alternatives

Council has agreed that the funds are to be allocated to the Program as follows (in this order of priority):

up to $10,000 to provide a community education program to promote the environmental health impacts of wood heaters and best practice operation to mitigate these impacts,

up to $10,000 on an advertising campaign for the Program promoting the 2016 wood-fire heater replacement incentive program, and

any remainder to be allocated to providing incentive payments for eligible applicants who switch to cleaner forms of heating and the Council’s costs in administering the Program.

Decision last updated: 31 July 2015