Environment Protection Authority v Incitec Ltd

[2000] NSWLEC 18

Land and Environment Court

of New South Wales

CITATION:	Environment Protection Authority v Incitec Ltd [2000] NSWLEC 18
PARTIES:	PROSECUTOR Environment Protection Authority DEFENDANT Incitec Limited
FILE NUMBER(S):	50039 of 1999
CORAM:	Sheahan J
KEY ISSUES:	Environmental Offences :- Plea of guilty - environmental harm - air pollution - mitigation
LEGISLATION CITED:	Environmental Offences and Penalties Act 1989
CASES CITED:	EPA v Orange City Council (50045 of 1995, 23 June 1995)
DATES OF HEARING:	16/12/99, 17/12/99
EX TEMPORE JUDGMENT DATE :	12/17/1999
LEGAL REPRESENTATIVES:	PROSECUTOR Mr C Leggat (Barrister) SOLICITORS: EPA DEFENDANT Mr Ian Lloyd QC SOLICITORS: Minter Ellison

JUDGMENT:

IN THE LAND AND Matter No: 40079 of 1999

ENVIRONMENT COURT Coram: Sheahan J

OF NEW SOUTH WALES 17 December 1999

ENVIRONMENT PROTECTION AUTHORITY

Prosecutor

v

INCITEC LTD

Defendant

JUDGMENT

1. The defendant is a long established company tracing its origins in the chemical industry back to 1862. It is also long established at the relevant location, having begun operations at Kooragang Island near Stockton and Newcastle in 1964.

2. The company runs large plants and has long experience in making, using and handling dangerous substances, including ammonia.

3. This is its first appearance in this court on an environmental offence although my attention has been drawn to the issue of three penalty infringement notices, within a three week period in 1996, in respect of incidents relevantly similar to the one involved in these proceedings.

4. It is alleged that an offence was involved in an incident on 10 June 1998 when a large amount of ammonia gas was discharged under pressure into the air at Kooragang Island and caused some impacts in the Stockton area.

5. The summons was issued on 9 June 1999 and the company pleaded guilty on 6 October 1999. I accept Mr Lloyd’s submission on the company’s behalf that this was the earliest reasonable time in which to make that plea, and I also accept his comment that the Prosecutor’s case relies heavily upon the opinions held and expressed by Mr Court, opinions which could well have been seriously contested by defending the proceedings.

6. In the end analysis the cooperation between the parties has extended to substantial agreement on the facts and relevant circumstances which the Court must weigh in arriving at the appropriate penalty to impose.

7. The Prosecutor puts the case at the “ medium ” section of the “ scale ” helpfully enunciated by Stein J in EPA v Orange City Council (50045 of 1995, 23 June 1995), ie 30-60% of the maximum, but Mr Lloyd puts the matter at the lower end, ie 10-30% of the maximum.

8. Wherever the Court’s mind might settle, a substantial discount needs to be applied to take account of :

1. The early plea, and agreement to pay the Prosecutor’s costs.
2. The defendant’s contrition, and its remedial initiatives.
3. The defendant’s co-operation with the Prosecutor, and
4. The defendant’s practical concern for those affected by the incident.

9. It seems now to be common ground that the discharge resulted from the effects of dust in a valve control mechanism causing a pressure valve not to open, with the result that the pressurised gas exited the system through a safety valve elsewhere. This occurred during a regular but occasional operation called “ start up ”, which takes several days.

10. While the remedial reaction of staff was instinctive and very rapid, some 333 kg of pure ammonia gas was discharged in 13 seconds.

11. It was detected at a residential complex in Stockton, some 2.1km away, over a 30minute period.

12. Certainly one lady suffered a moderately severe asthma attack over 2 days as a result, and one other staff member went to hospital.

13. Such consequences are not what has been called “ classic ammonia symptoms ”, such as nose and throat irritation, but they are not unusual, they are foreseeable, and they are verified by the modelling, of which evidence has been given. Five minutes at the proven likely concentration on the ground at Stockton would cause this routine irritation.

14. The defendant has implemented various strategies to prevent a recurrence of this incident. These are detailed in the agreed statement of facts, and their substantial costs are set out in Mr Lloyd’s written submissions.

15. However, the crucial structural elements of that programme could well have been implemented prior to this incident, at relatively modest cost.

16. It is clear that possible ammonia discharge, even if not in the circumstances leading to this discharge, and to this charge, was in the contemplation of the defendant prior to the incident. The defendant indeed had been fined for one in November 1996.

17. I am satisfied, however, that the company had environmental management systems in place, even if they were not brought together in one protocol.

18. I am also satisfied that some relevant reviews and actions were commenced well prior to the incident.

19. The cost of those reviews, etc. exceeds $1.25M, whereas the cost of the small relief valve was a mere $28,500, and that of the necessary alarms $200.

20. In all these circumstances the defendant should be convicted of the offence with which it is charged.

21. It does not escape any of the four relevant tests in s 9 of the Environmental Offences & Penalties Act and its successor provision in the new legislation.

22. There was potential of serious environmental harm, and there was actual environmental harm. What will now prevent a recurrence could easily and cheaply have been done beforehand.

23. The company was aware of the high risk of dust in such systems and could have foreseen such a mishap.

24. Against these considerations I have weighed the mitigating factors which I have earlier mentioned and the fact that such an incident was unprecedented in the company’s long history.

25. I have decided that the appropriate penalty to impose is 20% of the maximum, namely a fine of $25,000.

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

1. The defendant is convicted of the offence with which it is charged.
2. The defendant is fined an amount of $25,000, payable within 28 days of today’s date.
3. The defendant is ordered to pay the Prosecutors’ costs which have been agreed at an amount of $13,000, within 28 days of today’s date.
4. The exhibits will be retained, except for the photo Exhibit D2 , which may be returned.