Environment Protection Authority v Land Foam Australia Pty Ltd
[2013] NSWLEC 128
•09 August 2013
Land and Environment Court
New South Wales
Medium Neutral Citation: Environment Protection Authority v Land Foam Australia Pty Ltd [2013] NSWLEC 128 Hearing dates: 5-6 August 2013 Decision date: 09 August 2013 Jurisdiction: Class 5 Before: Biscoe J Decision: (1) The defendant is convicted of the offence against s 48(2) of the Protection of the Environment Operations Act 1997 as charged. (2) The defendant is fined the sum of $3,000. (3) Pursuant to s 257B of the Criminal Procedure Act 1986 the defendant is to pay to the Registrar of the Court, for payment to the prosecutor, the prosecutor's costs of the proceedings as agreed or assessed. (4) The exhibits may be returned.
Catchwords: ENVIRONMENTAL OFFENCES - sentencing - occupying premises at which a scheduled activity was carried out when the defendant did not hold an environment protection licence contrary to s 48(2) Protection of the Environment Operations Act 1997 - extraordinary circumstances reducing objective seriousness of the offence. Legislation Cited: Criminal Procedure Act 1986 s 257B
Crimes (Sentencing Procedure) Act 1999 ss 3A, 21A
Environmental Planning and Assessment Act 1979 s 91
Protection of the Environment Operations Act 1997 ss 3, 6, 43(b), 48, 52, 55, 96, 241 Schedule 1
Protection of the Environment Operations (Clean Air) Regulation 2010
Protection of the Environment Operations (General) Regulation 2009 cl 47
Protection of the Environment Operations (General) Regulation 1998 cl 44Cases Cited: Environment Protection Authority v Eco Cycle Materials Pty Ltd and Scanlan [2003] NSWLEC 63
Environment Protection Authority v Hines [2004] NSWLEC 107
Environment Protection Authority v Unomedical Pty Ltd (No 4) [2011] NSWLEC 131Texts Cited: Australian Code for the Transport of Dangerous Goods by Road and Rail (7th edition) Category: Sentence Parties: Environment Protection Authority (Prosecutor)
Land Foam Australia Pty Ltd (Defendant)Representation: COUNSEL:
M Higgins (Prosecutor)
J P He, director (Defendant)
SOLICITORS:
Office of Environment & Heritage (Prosecutor)
N/A (Defendant)
File Number(s): 50631/11
Judgment
This is a sentencing hearing. The defendant, Land Foam Australia Pty Ltd, has pleaded guilty to one charge that between about 1 March 2010 and 12 September 2010 it committed an offence against s 48(2) of the Protection of the Environment Operations Act 1997 (POEO Act) in that it occupied premises at 26 Forthorn Place, St Marys (the Premises) at which a scheduled activity was carried out when it did not hold an environment protection licence (EPL) under the POEO Act that authorised that activity to be carried on at the Premises.
The "scheduled activity" is particularised as: "Chemical production: toxic substance production" as described in cll 8(1) and 8(2) of Pt 1 of Schedule 1 to the Act. Clause 8(2) declared "toxic substance production" to be a scheduled activity and defined that expression to include capacity to "use" more than one tonne of toxic substances per annum. "Toxic substances" are defined in Schedule 1 to the POEO Act to include Toluene Diisocyanate (TDI) and Methylene Chloride (MeCl). During the charge period, the defendant used much more than one tonne per year of TDI and MeCl to manufacture foam without an EPL.
The defendant applied to the Environment Protection Authority (EPA) for an EPL on 26 May 2010. It was granted subject to conditions on 2 December 2010.
On 22 October 2009 the defendant lodged a development application (DA) with the local council for the manufacture, forming, storage and distribution of foam products at the Premises. For reasons addressed below, the processing of the DA was delayed, the DA was discontinued and a second DA was lodged in March 2010. It was granted on 23 November 2010. As it was integrated development, the council's notice of determination recorded that on 27 October 2010 general terms of approval for the development were provided by the Department of Environment, Climate Change and Water (DECCW), of which the EPA was part, in accordance with ss 43(b), 48 and 55 of the POEO Act. In the evidence, references to the EPA and DECCW are interchangeable.
There is a statement of agreed facts. The prosecutor also called evidence from three EPA officers. One was Mr Gregory Abood, the lead EPA investigator, who gave evidence of meetings with Mr Jian Ping He, the defendant's controlling shareholder and a director who was in charge of its day to day operations. The meetings were on 19 October and 8 December 2009 and 5 March 2010. The other two EPA officers were Ms Audrey Yim who gave corroborative evidence of the meeting on 8 December 2009, and Mr Rodney Fox who gave corroborative evidence of the meetings on 19 October and 8 December 2009. The prosecutor also called evidence from Mr John Mullane of Mullane Planning Consultants, who acted for the defendant in applying in 2009 and 2010 to the local council for development consent to carry on its activities at the Premises.
The defendant did not have legal representation at the sentencing hearing because of financial difficulties. Mr He said that in 2012 it ceased trading. The defendant was represented at the sentencing hearing by Mr He who was the defendant's only witness. Mr He does not speak English. He speaks Mandarin. His evidence and submissions were received through an interpreter. Because of his language difficulties, I am concerned as to whether he was able to adequately represent the defendant's interests in the proceedings. There is some relatively minor divergence between his evidence and the evidence of EPA officers as to what was said at their meetings. A member of the defendant's staff who was not an accredited translator acted as interpreter at the meetings. I have some concern about the adequacy of the interpretation and whether, consequently, the EPA officers fully understood what he said and he fully understood what they said.
POEO ACT
Sections 43(b) and 48 of the POEO Act require an EPL for "scheduled activities":
43 Types of licences
Environment protection licences may be issued for the following purposes:
...
(b) to authorise the carrying out of scheduled activities at any premises, as required under section 48,
...
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.
"Scheduled activities" are set out in Schedule 1 to the POEO Act, which during the charge period provided:
Schedule 1 Scheduled activities
(Section 5)
Note. Parts 1 and 2 of this Schedule list the activities that are scheduled activities for the purposes of this Act (see sections 48 and 49). Part 3 defines various words and expressions that are used in Parts 1 and 2.
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).
Note. Section 48 (2) provides that the occupier of premises at which such an activity is carried out is guilty of an offence unless he or she holds a licence that authorises the activity to be carried out at those premises.
(2) However, such an activity is not premises-based if it is carried out by means of mobile plant.
Note. But see clause 47 by operation of which activities carried out by means of mobile plant are declared for the purposes of section 49.
...
8 Chemical production
(1) This clause applies to the following activities:
...
toxic substance production, meaning the commercial...using of...toxic substances, but not including:
(a) pesticides and related products (toxic substances) production, or
(b) pharmaceutical and veterinary products production, or
(c) soap and detergents (toxic substances) production.
(2) Each activity referred to in Column 1 of the Table to this clause is declared to be a scheduled activity if it meets the criteria set out in Column 2 of that Table.
Table
Column 1
Column 2
Activity
Criteria
...
...
toxic substance production
capacity to ...use more than 1 tonne of toxic substances per year
Schedule 1 includes the following definitions:
toxic substance has the same meaning as it has in the Transport of Dangerous Goods Code.
Transport of Dangerous Goods Code means the document called the Australian Code for the Transport of Dangerous Goods by Road and Rail (7th edition) approved by the Ministerial Council for Road Transport and published by the Commonwealth Government from time to time.
Under the Australian Code for the Transport of Dangerous Goods by Road and Rail (7th edition), a toxic substance is defined as follows:
2.6.1 DEFINITIONS:
Class 6 is divided into two divisions as follows:
(a) Division 6.1: Toxic substances
These are substances liable either to cause death or serious injury or to harm human health if swallowed or inhaled or by skin contact;
...
The Australian Code for the Transport of Dangerous Goods by Road and Rail (7th edition) includes a Dangerous Goods List, which lists substances including substances that fall within the category of toxic substances. They include TDI and MeCl.
Prior to 28 April 2008 the use of toxic substances was a scheduled activity under Schedule 1. Schedule 1 was amended so that between 28 April 2008 and 30 April 2009, the use of toxic substances was no longer a scheduled activity. Schedule 1 was amended again so that with effect from 29 May 2009, the use of toxic substances was once again a scheduled activity.
Importantly, however, there was what may be called a "period of grace" in which an EPL to use a toxic substance was not required. The period of grace was a prescribed period of nine months from 29 May 2009 to 28 February 2010, plus the period before final determination of any EPL application made before the end of that period: s 52 and the regulations thereunder. Section 52 provides:
52 Commencement of licensing requirements
(1) If, because of the enactment or the amendment or replacement of Schedule 1, it would become necessary for a person to be authorised by a licence to continue to carry out any work or activity, a licence is not required until the later of the following:
(a) the end of the prescribed period after the commencement of Schedule 1 or of the amendment or replacement,
(b) the relevant licence application (if any) made before the end of that period by the person has been finally determined.
...
Clause 44 of the Protection of the Environment Operations (General) Regulation 1998 and from 29 May 2009, cl 47 of the Protection of the Environment Operations (General) Regulation 2009 provided that for the purposes of s 52(1)(a) the prescribed period is nine months.
Under s 6 of the POEO Act, the EPA is the appropriate regulatory authority for the purposes of that Act. Accordingly, an application for an EPL was to be made to the EPA.
EXTRAORDINARY CIRCUMSTANCES
In my view, this offence would not have been committed except for extraordinary circumstances for which some responsibility should be shouldered by the EPA, Mr John Mullane who was the defendant's planning consultant, and the local council. These extraordinary circumstances greatly reduce the objective seriousness of the offence. They are to be considered in light of the fact that Mr He, the defendant's controlling shareholder, director and person in charge of operations, does not speak English.
The defendant made an EPL application to the EPA on 24 May 2010. It was granted on 2 December 2010.
As noted above at [12] - [13], under the POEO Act there was a "period of grace" in which it was not an offence for the defendant to use these toxic substances without an EPL. The period of grace was for nine months from 29 May 2008 to 28 February 2010, plus, if an EPL application was made by 28 February 2010, the further period before the application was finally determined.
Thus, if the defendant had lodged an EPL application by 28 February 2010, it would not have committed this offence.
The reason the defendant did not lodge the EPL application until after the period of grace had expired was that it did not know about the period of grace.
Surprisingly, neither did the EPA, by its investigating officers, or Mr Mullane.
Because of the EPA's ignorance of the period of grace, EPA officer Mr Abood during the period of grace repeatedly and erroneously told Mr He that the defendant was then committing an offence by using these toxic substances without an EPL. On 26 November 2009 the EPA sent the defendant a warning letter for doing so in October 2009. On 23 December 2009 the EPA unlawfully issued the defendant with a penalty infringement notice in the sum of $1500 for breaching s 48 by using the toxic substances earlier in December without an EPL, which the defendant paid. The issue of the penalty infringement notice was unlawful because it was not an offence at that time for the defendant to use the toxic substances without an EPL.
To their credit, the EPA officers tried to be helpful to the defendant and advised Mr He during the period of grace, as did Mr Mullane. But because they were ignorant that there was a period of grace, they failed to inform the defendant of that critical fact. I have no doubt that if they had known, they would have told Mr He.
If the defendant had known about the period of grace, then I have no doubt that it would have taken the simple step of lodging an EPL application by 28 February 2010, thus automatically extending the period of grace until final determination of the application. Consequently, this offence would not have been committed. Thus, the omission to take that simple step has had a serious consequence.
In my view, in the circumstances the EPA and Mr Mullane bear some responsibility for the defendant's ignorance of the period of grace and for the defendant's consequential failure to take the simple step of making an EPL application by 28 February 2010.
Further, according to the evidence of Mr Abood, it was the practice of the EPA to send a warning letter to an alleged offender; then (if the conduct continued) to issue a penalty infringement notice; and finally (if the conduct continued) the EPA might commence proceedings such as these. In the present case, during the period of grace and because the EPA officers were ignorant of the existence of the period of grace, the EPA wrongly followed the first two procedures during the period of grace. Had it followed those procedures not then but after the period of grace, then there would be a substantial prospect that these proceedings would not have been commenced because by the time those two procedures had run their course the EPL would have been issued.
The final extraordinary circumstance concerns the conduct and delay of the local council in relation to the defendant's DA. Mr Abood told the defendant during the period of grace that an EPL could not issue unless the council granted development consent. The defendant, with the assistance of Mr Mullane, lodged a DA with the council in October 2009. It was not until 22 December 2009 that the council wrote to Mr Mullane contending that the proposed development also constituted designated development (as well as integrated development) and therefore the DA had to be accompanied by an environmental impact statement (EIS). The council wrote that the DA should therefore be withdrawn and a new DA lodged for designated development. On 5 January 2010 Mr Mullane informed Mr He of this and told him that the DA would have to be withdrawn and an EIS prepared to accompany a new DA at a cost of about $50,000 in order to secure planning approval and obtain an EPL. Naturally, Mr He was not happy; but he told Mr Mullane to go ahead. On the same day Mr Mullane wrote to the council withdrawing the DA and indicating that an EIS would be lodged by 1 July 2010. In relation to the EIS, Mr Mullane on 18 January 2010 lodged an application requesting the requirements of the Director-General of the Department of Infrastructure, Planning and Natural Resources. By this time he understood, as he indicated in the application, that an EPL was required. However on 12 February 2010, as a result of representations by Mr Mullane, the council wrote to him accepting that it was not designated development and inviting him to lodge a new DA. On 18 March 2010 the council wrote to Mr Mullane acknowledging receipt of the second DA on 17 March and stating that it was integrated development under s 91 of the Environmental Planning and Assessment Act 1979 (EPA Act) requiring an approval from DECCW under s 43(b), 48 and 55 of the POEO and an EPL. The council obtained that approval in October 2010. And in November 2010 the council granted development consent.
The point is that except for the council chopping and changing as to whether it was designated development in the period from October 2009 to February 2010, there would have been a substantial prospect that the development consent would have been granted before expiry of the period of grace on 28 February 2010, certainly much earlier than it was, with the consequence that an EPL would have issued much earlier than it was, and quite possibly by expiry of the period of grace on 28 February 2010.
OTHER EVIDENCE
Between 2003 and 2007, the defendant carried on the business of commercial foam manufacturing at other premises. From about March 2008 it commenced manufacturing foam at the Premises, which it leased.
During the charge period, the defendant used 118 tonnes of TDI and 13 tonnes of MeCl and had the capacity to store much more. During the charge period, it sold at least 67 tonnes of foam products manufactured at the Premises, using TDI and MeCl, to about 30 commercial customers, totalling at least $2 million in sales.
During the charge period, the defendant received from suppliers about 135 tonnes of TDI and over 14 tonnes of MeCl. In response to a statutory notice under s 96 of the POEO Act directing it to remove all toxic substances from the Premises, the defendant returned to suppliers in September 2010 17 tonnes of TDI and 1 tonne of MeCl.
On 19 October 2009, EPA officers Mr Abood and Mr Fox met with Mr He at the Premises. An employee of the defendant interpreted. Mr He indicated that he had recently made foam and needed to do so otherwise they would have to shut down. Mr Abood showed relevant parts of the POEO Act to Mr He. Mr He indicated that the defendant used more than one tonne of TDI a year and did not yet have development consent. According to Mr Abood, he said words to the following effect to Mr He:
You don't have a licence from us or consent from Council. You need both to operate, before you operate you need to hold a licence for toxic chemical production...you need to hold a licence if you use or have the capacity to use more than 1 tonne of TDI per year...do you use more than 1 tonne of TDI a year?
According to Mr He, he asked Mr Abood how he could get a licence and Mr Abood said: "You need to have the council consent to the DA first and then you can apply for a licence from us".
Given that Mr He speaks no English and did not have the assistance of an accredited interpreter when meeting with EPA officers, I accept that that was the impression created in his mind the by words that Mr Abood used as translated to him.
On 26 November 2009, the EPA send a letter to Mr He warning him of his obligations under the POEO Act. The letter said that at an EPA inspection on 19 October 2009, Mr He indicated that he had in October 2009 been manufacturing foam using TDI and MeCl; that, as Mr He was aware, they were classified as toxic substances and use of more than 1 tonne of them per year made them a scheduled activity; that the defendant's failure to hold a licence at the time it carried out the scheduled activity was a breach of s 48; and that the EPA could not issue the defendant with a licence until it provided a copy of its planning consent to carry out the scheduled activity. The letter stated that an application form to apply for a licence was enclosed. Mr Mullane replied by letter on 2 December 2009 stating (inter alia) that the DA was an integrated application.
On 8 December 2009, EPA officers Mr Abood, Mr Fox and Ms Yim visited the Premises and spoke to Mr He. An employee of the defendant interpreted, who was not an accredited translator. Mr He indicated that they had last made foam on 4 December. According to Mr Abood, and I accept, the conversation included words to the following effect:
Mr Abood: "
"...the law is set so that your plant and activity is approved before you use it. It must be approved before you can use it."
Mr He:
"We need to hold on to our customers and if we don't we will go into liquidation, we close up if we don't run. Is there anything we can do to run the foam?".
Mr Abood:
"You need for the plant to get approval first, you need consent from council and you definitely need a licence from the EPA before you can make foam. It is the law now. You have operated a number of times without this, with the latest one being last week, I'll contact you to tell you of our decision on what we plan to do. We will work with council to do as much of the work to get your licence as we can".
According to Mr He, and I accept, the conversation included words to the following effect:
Mr Abood:
"You need to have the council's consent first before we can give you a licence".
Mr He understood that he could only obtain a licence after the DA was approved.
As noted above at [22], on 23 December 2009 the EPA wrongly issued a penalty infringement notice to the defendant for breach of s 48 of the POEO Act in the sum of $1500, which the defendant paid.
The tortuous progress of the defendant's DA and Mr Mullane's role in that regard have been outlined above at [27]. As at late December 2009 Mr Mullane had not formed a view as to whether the defendant required an EPL. But by 18 January 2011 he understood, as a result of a conversation with a council officer, that an EPL was required. He remained unaware of the period of grace.
On 28 January 2010, Mr Mullane told Mr Abood that he was confident the development was not designated development and that he would receive development consent which would then enable the EPL to be issued. Mr Abood said DECCW would have to proceed with action to have production cease because there was no current development consent.
On or about 5 March 2010, Mr Abood, other EPA officers and Mr Mullane met with Mr He at the Premises. The interpreter was an employee of the defendant who was not an accredited translator. Mr Abood said that the defendant needed a licence; that the defendant received a penalty infringement notice for operating without a licence; and that the EPA could not issue a licence until the council DA was approved. Mr He asked whether there was an interim consent the council would give while the DA was done; and Mr Abood said that regardless of any interim arrangements, the defendant needed to hold a licence.
This was the first time Mr He realised he had to make a separate licence application. He engaged another consultant to make that application, which was lodged on 24 May 2010.
As mentioned earlier, the council granted development consent on 23 November 2010 and an EPL was issued on 2 December 2010. Both were subject to conditions.
The EPA inspected the Premises on a number of occasions in 2010 and issued notices requiring the defendant to take certain actions, with which the defendant complied. After obtaining the EPL, and in response to regulation by the EPA under the EPL, the defendant (a) installed two additional spill response kits; (b) placed appropriate warning signage in chemical loading and storage areas; (c) acquired and used magnetic covers for drains; and (d) improved the tidiness of the Premises so as to significantly reduce odours and fumes associated with the operation. After an inspection by the EPA in April 2011, the EPA directed the defendant to attach breather pipes and vapour recovery equipment from chemical tanks to the air emissions control equipment, in order to further minimise emissions of TDI and MeCl. Other changes were made to the operation, as set out in the conditions to the development consent and the EPL.
During a recorded interview on 28 January 2011, Mr He indicated that the defendant continued to use toxic substances during the charge period so as to not be forced to close down, so as to not lose customers, and so as to be able to continue to provide employment.
SENTENCING CONSIDERATIONS
The sentence should reflect both the objective seriousness of the offence and the subjective circumstances of the defendant. It is necessary to consider the objects of the POEO Act in s 3, the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (CSP Act), the matters required to be taken into account under s 241 of the POEO Act, and the provisions of s 21A of the CSP Act directing attention to aggravating and mitigating factors.
Section 3 of the POEO Act sets out its objects including the following:
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,
...
Section 3A of the CSP Act sets out the purposes of sentencing:
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.
The prosecutor submits that the purposes in s 3A(a), (b), (e) and (f) are relevant in this case. I agree.
Section 241(1) of the POEO Act provides:
(1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant):
(a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence,
(b) the practical measures that may be taken to prevent, control, abate or mitigate that harm,
(c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence,
(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence,
(e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee.
OBJECTIVE CIRCUMSTANCES
Extent of harm or likely harm to the environment
TDI is defined as a principal toxic air pollutant under the Protection of the Environment Operations (Clean Air) Regulation 2010. TDI is toxic to humans and animals and has acute and chronic effects on human health. TDI is liable to cause death or serious injury or to harm human health if swallowed, inhaled or if it comes in contact with skin. TDI is very toxic if inhaled. Contact with skin may cause permanent injury if not immediately treated. Air concentrations of TDI of 2.5 parts per million (ppm) are considered immediately dangerous to life or health. TDI air concentrations of 0.3 to 0.7 ppm have been associated with high incidence of illness. Repeated exposure at or less than 0.2 ppm (well below the odour threshold) results in sensitisation, with symptoms including wheezing chest, tightness and severe fluid retention. TDI is a suspected human carcinogen.
MeCl is a toxic air pollutant. MeCl is toxic to humans and animals and has acute and chronic effects on human health. MeCl is toxic to humans by inhalation, harmful if swallowed and absorption through the skin can elicit a toxic effect. Poisoning is rare, but most often occurs through inhalation. Severe toxic effects can include central nervous system depression, delerium and seizures, liver damage, kidney damage and failure, lung fluid retention and bleeding and heart dysrthymia.
The prosecutor submits that the offence caused actual harm in that TDI and MeCl were emitted into the environment. However, as the prosecutor concedes, the quantities emitted are not known and may not have been above WorkCover guidelines. I am not satisfied that it has been proved that the commission of the offence has caused actual harm to the environment.
I accept, as the prosecutor submits, that there was some potential for harm to the environment by reason of the potential for spilled toxic substances to enter the waterway adjacent to the Premises. In that regard: (a) in July 2010 the EPA determined that the goods receipt and despatch area where toxic substances were received had a stormwater pit that drained to the adjacent creek; and (b) in April and May 2011 some improvements were requested by the EPA of the defendant in order that the Premises complied with conditions of the EPL.
Practical measures that may be taken to prevent control, abate or mitigate that potential harm
The defendant could have prevented the potential harm arising from the offence by ceasing to operate until it had an EPL. This would probably have caused the defendant to go into liquidation or its business to collapse. Given the extraordinary circumstances analysed earlier, this would have been a harsh result. There needs to be taken into account that if the defendant had taken the simple administrative step of lodging an EPL application by 28 February 2010 instead of three months later, the statutory period of grace would have continued until final determination of the application, which would have included the charge period. Obviously, in such a case the legislature was not concerned, through the EPL system, to prevent actual or potential harm to the environment.
Foreseeability of potential harm
The potential harm arising from the defendant continuing operations was foreseeable.
Extent to which the defendant had control over the causes that gave rise to the offence
The defendant had control over the causes that gave rise to the offence in that it could have ceased operating.
Financial reasons
The defendant had financial reasons for continuing to operate and thereby committing the offence in the charge period; namely, not to go into liquidation, not to close down and not to lose customers and skilled employees.
Undermining the regulatory system
In principle, an offence such as this undermines the integrity of the regulatory system. However, in the extraordinary circumstances analysed earlier, those responsible for administering and advising as to the regulatory system in this case bear some responsibility for the occurrence of the offence.
State of mind
The defendant committed the offence intentionally.
Objective seriousness
The maximum penalty for the offence is $1 million: s 48(2)(a) POEO Act. The prosecutor does not seek a daily penalty. The maximum penalty is the public expression by Parliament of the seriousness of the offence. However, there is a broad spectrum of conduct that can give rise to an offence under s 48. In my view, the extraordinary circumstances of the case analysed earlier at [16] - [28] lead to the conclusion that this offence by the defendant is of low objective seriousness.
DETERRENCE
General deterrence is a significant consideration in environmental offences. However, in the extraordinary circumstances of this case analysed earlier, I consider that there is little need for general deterrence. I do not consider that there is any need for personal deterrence. The extraordinary circumstances of the case and the sincere remorse expressed by Mr He on behalf of the defendant satisfy me that the prospect of any further similar offence is highly unlikely.
SUBJECTIVE CIRCUMSTANCES
Prior record
There is no suggestion of a prior record of criminal conviction. The prosecutor suggests that there should be taken into account the defendant's use of the Premises without a development consent. Although it forms part of the context, that is an offence with which the defendant has been neither charged nor convicted and I do not think it should be given weight when determining the penalty.
CHARACTER
Insofar as Mr He may be regarded as the defendant's directing mind and will, he impressed me as a person of very good character who sincerely intends to abide by the law in the future.
Remorse
Before me the defendant through Mr He convincingly demonstrated sincere remorse.
Plea of guilty
The defendant has pleaded guilty. The utilitarian value of a plea of guilty is generally assessed in the range of 10-25 per cent discount on sentence. The primary consideration is the timing of the plea. In the present case, the plea of guilty was entered in October 2012, about a year after the prosecutor's evidence was served and after seven mentions and two interlocutory hearings. I assess the utilitarian value of the plea as a 15 per cent discount on sentence.
Cooperation
In addition to pleading guilty, the defendant cooperated with the prosecution in agreeing on a statement of facts and did not contest the prosecution's submission that it should be ordered to pay the prosecutor's costs.
COSTS
I propose to order the defendant to pay the prosecutor's costs as agreed or assessed.
PARITY IN SENTENCING
The prosecutor referred to two cases of offences under s 48(2) decided in 2003 and 2004 when the maximum penalty was $250,000 for a corporation and $120,000 for an individual: Environment Protection Authority v Eco Cycle Materials Pty Ltd and Scanlan [2003] NSWLEC 63 (company fined $26,000 and individual director $5,000) and Environment Protection Authority v Hines [2004] NSWLEC 107 (individual fined $14,000). The prosecutor also referred to Environment Protection Authority v Unomedical Pty Ltd (No 4) [2011] NSWLEC 131, an air pollution case, where the maximum penalty for a corporation was $1 million and the corporation was fined $90,000 and ordered to pay costs of $140,000. I consider that the circumstances of the present case are so extraordinary that these cases do not provide assistance.
APPROPRIATE PENALTY
In my opinion, the appropriate penalty is a fine. In determining the amount of the fine, I take into account that the defendant will have to pay the prosecutor's costs. I have not been provided with an estimate of those costs but they must be substantial given the extent of the prosecutor's evidence and the interlocutory disputation to which I have referred. Having regard to the extraordinary circumstances considered above at [16] - [28], I consider that the amount of the fine should be very much smaller than otherwise would be the case. I determine that the appropriate fine is $3,500, which I reduce by 15 per cent for the utilitarian value of the plea of guilty and round to $3,000.
ORDERS
The orders of the Court are as follows:
(1) The defendant is convicted of the offence against s 48(2) of the Protection of the Environment Operations Act 1997 as charged.
(2) The defendant is fined the sum of $3,000.
(3) Pursuant to s 257B of the Criminal Procedure Act 1986 the defendant is to pay to the Registrar of the Court, for payment to the prosecutor, the prosecutor's costs of the proceedings as agreed or assessed.
(4) The exhibits may be returned.
Decision last updated: 12 August 2013
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