Environment Protection Authority v Port Kembla Copper Pty Ltd
[2003] NSWLEC 256
•10/31/2003
>
Land and Environment Court
of New South Wales
CITATION: Environment Protection Authority v Port Kembla Copper Pty Ltd [2003] NSWLEC 256 PARTIES: PROSECUTOR
DEFENDANT
Environment Protection Authority
Port Kembla Copper Pty LtdFILE NUMBER(S): 50012 of 2002, 50013 of 2002, 50014 of of 2002 CORAM: Pain J KEY ISSUES: Prosecution :- plea of guilty - consideration of penalty - breach of licence condition - brown spotting LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 s 3A, s 21A
Fines Act 1996 s 6
Protection of the Environment Operations Act 1997 s 64, s 241CASES CITED: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357;
Camilleri's Stockfeeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683;
Environment Protection Authority v Coggins [2003] NSWLEC 111;
Environment Protection Authority v Port Kembla Copper Pty Ltd [2001] NSWLEC 174;
Environment Protection Authority v Port Kembla Copper Pty Ltd [2001] NSWLEC 223;
Maxwell v The Queen (1995) 184 CLR 501;
R v Holder [1983] 3 NSWLR 245;
R v Nicholls (1991) 57 A Crim R 391;
R v Olbrich (1999) 199 CLR 270;
R v Sharma (2002) 54 NSWLR 300;
R v Thomson; R v Houlton (2000) 49 NSWLR 383;
R v Visconti [1982] 2 NSWLR 104;
State Pollution Control Commission v CSR Ltd (1992) 75 LGRA 1;
Veen v The Queen [No 2] (1987 - 1988) 164 CLR 465DATES OF HEARING: 03/07/2003, 10/07/2003 (written submissions), 14/07/2003 (written submissions), 02/09/2003 (written submissions), 09/09/2003 (written submissions), 16/09/2003 (mention) DATE OF JUDGMENT:
10/31/2003LEGAL REPRESENTATIVES: DEFENDANT
PROSECUTOR
Mr S Rushton SC
SOLICITORS
Environment Protection Authority
Mr P Tomasetti (barrister)
with Mr I Hemmings (barrister)
SOLICITORS
Corrs Chambers Westgarth
JUDGMENT:
IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES
50112 of 2002
50113 of 2002
50114 of 2002
31 October 2003Pain J
- Prosecutor
PORT KEMBLA COPPER PTY LTD
ACN 076 258 976
- Defendant
1. The Defendant operates a copper smelter at Port Kembla, New South Wales. The Defendant has pleaded guilty to three offences under s 64(1) of the Protection of the Environment Operations Act 1997 (the PEO Act) that between 19 and 27 February 2002 (50112 of 2002), on 7 March 2002 (50113 of 2002) and on 31 July 2002 (50114 of 2002) it contravened the following condition of its environment protection licence:
- Brown Spotting
L8.3.1 There must be no increase in the rate of "brown spotting" beyond the boundary of the premises above the established background level
Note
- The "background level" of the rate of brown spotting beyond the boundary of the premises has been established by the applicant in their letter to the EPA of 23 June 2000, and approved by the EPA to be zero, that is, no brown spotting occurred prior to the commissioning period.
2. The maximum penalty for a corporation for each of these offences is $250,000. All three offences are strict liability offences and by its pleas of guilty the Defendant has admitted the essential legal ingredients of the offences.
Facts
3. The cause of the pollution in the February offence is different to that for the March and July 2002 offences, which have the same cause. While there was no Statement of Agreed Facts proffered by the parties, the Prosecutor provided an outline of facts the content of which was not disputed by the Defendant apart from two paragraphs. I will refer to this as it provides a useful summary of the background to these offences.
4. There has been a smelter on this site since 1908. In 1996 development consent was granted for the development of the current smelter subject to a number of conditions. The development consent required that there be no brown spotting beyond the boundary of the premises. The EPA licence had a similar provision which is set out at par 1 above. At the time the Defendant took over the plant in 1997, it was the Defendant's intention to undertake work on the design of the plant to eradicate problems which cause brown spotting so that it could comply with the requirements of the development consent and the environment protection licence issued by the Prosecutor.
5. The Defendant has a Brown Spot Monitoring Program which requires regular inspections of concrete plates (monitoring plates) to see if they are impacted by brown spots. Locations for the plates have been established at numerous points outside the Defendant's premises. The Prosecutor undertook its own brown spot monitoring at slightly different locations outside the Defendant's premises.
19 - 27 February 2002 offence
6. On 20 February 2002 Mr Craig Patterson, an EPA officer, undertook his regular inspection of the Prosecutor's monitoring plates. He found 15 new brown spots of various sizes (less than 1mm to 5mm in diameter) on seven of the eight monitoring plates. On 21 February 2002 the Prosecutor received a report from the Defendant notifying the Prosecutor that a leak of sulphur trioxide had developed in the Intermediate Cooler and that this leak was responsible for the visible plume from the main stack on 20 February 2002. On 27 February 2002 Mr Patterson again undertook his weekly inspection of the monitoring plates. Again seven of the eight monitoring plates had new brown spots of various sizes (less that 1mm to 5mm in diameter) since the last inspection, being 86 spots in total.
7. On 1 March 2002 the Prosecutor requested the Defendant to submit an incident report and this was received on 25 March 2002. The report stated that a leak of sulphur trioxide had developed in the Intermediate Cooler which caused corrosion of the stainless steel duct work leading to the main stack. Parts of this corrosion product passed through the ducting and into the main stack. The smelter was taken off-line and the leak repaired when the sulphur trioxide leak was identified. The Defendant reported they undertook brown spot monitoring on 26 February 2002 and detected a moderate increase in the rate of brown spotting, which was likely to be attributable to the leak. To prevent further brown spotting the section of ducting from the Intermediate Cooler to the main stack was disconnected and blanked off. The Defendant received one complaint about brown spot fallout from a local resident about this incident.
7 March 2002 offence
8. The Prosecutor submitted that this was the most serious of the three offences with which the Defendant was charged. Following receipt of complaints on 7 March 2002 Mr Patterson investigated brown spotting in the area around the Defendant's premises. It was clear there had been significant brown spotting during the previous night. A number of vehicles were observed with a significant number of dark green and brown spots ranging in size from less than 1mm up to approximately 8mm in diameter. The acidity of the substance on one of the vehicles was tested and determined to be highly acidic, having a pH of 1. There were also a significant number of brown spots on the Prosecutor's monitoring plates that had been deposited overnight. The plates most affected were those downwind of the smelter during the period of the incident.
9. The owner of premises at 4 Third Avenue, Port Kembla also experienced extensive fallout on his property including on the roofs of his shed, dog kennel, house, garage and undercover area, a wooden bench, a bird bath, his letterbox and a gate into his driveway. The spots ranged in size from approximately 1mm to 20mm in diameter and the substance when tested had a pH of 1. Premises at 61 Third Avenue, Port Kembla were also inspected by the Defendant's staff and the Prosecutor's staff where a fine black/grey ash-like substance was seen floating on the surface of the water in the pool and a number of large rusty coloured stains (greater than 5mm) were observed on the bottom of the pool. There was also spotting on pavers around the pool and on two white concrete seats at the end of the pool. A number of spots were also observed on a car on those premises. Spotting in the pool at 47 Third Avenue Port Kembla was also observed, including a large number of brown spots ranging in size from 5mm to 10mm in diameter. The Prosecutor estimates that the approximate area affected by brown spot fallout that occurred on 7 March 2002 was 0.14 km2.
10. On 3 April 2002 the EPA received an incident report titled "Brown Spotting Incident 6 - 7 March 2002" from the Defendant. The affidavit evidence of Mr Wilson, the Defendant's Operations General Manager, was that the reason this incident occurred was due to moisture, put into the gas stream by the tailgas scrubber, condensing on the internal walls of the acid plant stack and corroding the stack over time. It was this material which was carried and deposited beyond the site boundary. The tailgas scrubber was installed in December 2001 at a cost of $4.5 million and is designed to scrub sulphur dioxide from the tail gas to lower sulphur emissions. The Defendant stopped the smelter and washed the inside of the acid plant stack as soon as the cause of the brown spotting was found.
11. The Defendant received about 113 complaints in relation to the incident of which 76 were assessed to be as a result of the Defendant's operations. The Court was presented with affidavits obtained from numerous residents from the affected areas of Port Kembla attesting to the volume and extent of the brown spotting on their properties. These affidavits attest to the discomfort and anxiety caused to residents as a result of being exposed to the brown spotting as well as the nuisance caused by damage to property.
12. The Defendant has spent $112,800 in compensation for property damage as a result of the March incident. It publicised the incident in the local community and offered to rectify damage caused.
31 July offence
13. The July offence had the same cause as the March offence but was far less severe. A greasy green material deposit was noticed outside the Defendant's premises on 31 July 2002 in a visual inspection by the Defendant's employee which indicated that the material was likely to have come from the acid plant stack. The smelter was brought off-line and an internal wash of the acid plant stack was undertaken.
14. The brown spotting caused by corrosion in the acid plant stack on 31 July 2002 was restricted to a small localised area. No formal complaints were received and the Prosecutor's monitoring plates were not impacted.
Evidence relied on
15. In relation to the February 2002 offence the Prosecutor relied on the affidavits of its Environment Protection officers Mr Craig Patterson sworn 26 July 2002 and Mr Bruce Blunden sworn 26 July 2002
16. In relation to the 7 March 2002 offence the Prosecutor relied on the affidavits of Mr Craig Patterson sworn 26 July 2002 and Mr Bruce Blunden sworn 26 July 2002. It also relied on the affidavits of various residents who live in the proximity of the smelter, namely the affidavits of Mr David Gilmore sworn 21 June 2002, Ms Helen Hamilton sworn 21 June 2002, Mr John Roach sworn 21 June 2002, Mr Russell Onley sworn 21 June 2002, Ms Kylie Gilmour sworn 21 June 2002, Mr Bradley Hurst sworn 21 June 2002 and Ms Caroline Elliot sworn 24 June 2002.
17. In relation to the 31 July 2002 offence the Prosecutor relied on the affidavits of Mr Craig Patterson sworn 24 September 2002 and Mr Bruce Blunden sworn 11 September 2002.
18. The Defendant relied on the affidavits of Sherree Woodroffe, the Defendant’s Environmental Superintendent, sworn 20 May 2003, Mr Ian Wilson, the Defendant’s Operations General Manager, sworn 20 May 2003 and 13 August 2003, and Dr Phillip Crisp, chemist, sworn 26 May 2003 in relation to all of the offences. In relation to the 7 March 2002 offence the Defendant also relied on the affidavit of Mr Leigh Lemmon, one of the Defendant’s environment officers, sworn 22 May 2003.
Evidence in relation to environmental harm
19. The evidence of the Prosecutor was that brown spotting can cause unsightly stains and reduce the visual amenity of concrete; necessitate the addition of strong chemicals to water in swimming pools to remove stains from the bottom and sides of the pool; lead to corrosion of steel underlying the surface of Colourbond sheeting on roofs and fences; damage the paintwork of valuable items of property such as cars; require painted surfaces to be repainted; stain clothing such that the stain will not wash out.
20. Section 3A and s 21A of the Crimes (Sentencing Procedure) Act 1999 commenced operation on 1 February 2003 and apply in this case, according to the Prosecutor. Section 3A provides:
- 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.
21. The Defendant argued that s 3A and s 21A did not apply because under cl 45 of Sch 2 of the Crimes (Sentencing Procedure) Act 1999, the transitional provisions, a plea of guilty was accepted before 1 February 2003. This means the previous provisions apply and not s 3A and s 21A. The Defendant argued that entering a plea of guilty on 11 December 2002 satisfied the wording in cl 45 of "accepted a plea". The Prosecutor argued that cl 45 was not satisfied when the Defendant entered a plea because that was not necessarily the point at which the Court accepted the plea of guilty. It also relied on Environment Protection Authority v Coggins [2003] NSWLEC 111 where Cowdroy J held that a plea is not "accepted" until sentence is passed on the accused by the Court relying on Maxwell v The Queen (1995) 184 CLR 501. This will necessarily happen after 1 February 2003 in this case. I consider I should follow Cowdroy J in Coggins. Accordingly s 3A and s 21A apply in this case as no plea of guilty was accepted by the Court before 1 February 2003.
Section 3A(a) - adequate punishment
22. In relation to s 3A(a) the Prosecutor submitted the maximum penalty available for an offence reflects the "public expression" by Parliament of the seriousness of the offence. The maximum penalty of $250,000 indicates the gravity of the offence as perceived by the community. The Court must determine the relative seriousness of the offence so that the penalty imposed approximately correlates to the scale of penalty set by the legislature from zero to the maximum (see Camilleri's Stockfeeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 per Kirby P). There was significant environmental harm occasioned by each offence, particularly in relation to the March offence.
23. The Prosecutor argued that the three offences are serious. All were foreseeable consequences of the Defendant's operations and reflected an absence of proper precautions being taken by the Defendant. All three offences were clear breaches of the Defendant's development consent and environment protection licence. The three offences involved a substantial "breach of public trust". Reliance was placed on Environment Protection Authority v Port Kembla Copper Pty Ltd [2001] NSWLEC 174 at [23] and [24], where Pearlman J adopting the approach of Cripps J in State Pollution Control Commission v CSR Ltd (1992) 75 LGRA 1 at 4 - 5, held that "a contravention of a pollution licence involves a breach of trust".
24. The February offence occurred as a result of a failure of a heat exchanger (Intermediate Cooler) in the Hitachi - Zosen primary converter of the sulphuric acid plant. The cracks found in the Intermediate Cooler were clearly foreseeable. The incident was similar to that reported by the Defendant to the Prosecutor in relation to a brown spot incident on 12 June 2001. The Defendant received a penalty infringement notice on that occasion. The Prosecutor argued this showed that such an event had occurred previously during the commissioning of the plant and accordingly there should have a been a monitoring system/backup system in place to ensure no further environmental harm. Reliance was placed on the affidavit of the Defendant's expert Dr Crisp (par 118). (the Defendant argued that the equipment which failed in June 2001 was much older than the Intermediate Cooler concerned in the February offence. The Intermediate Cooler in the February offence was new and the advice of the Defendant's consultants was that no problems would eventuate for several years. Furthermore, the failure was latent.
25. The March offence was also said to be foreseeable by the Prosecutor. The 304 stainless steel used in the ductwork of the acid plant stack was susceptible to corrosion by sulphuric acid, which was probably exacerbated by the practice of passing the waste gas through a wet scrubber immediately before it entered the stack. This may have increased the water content of the gas stream and encouraged the formation of sulphuric acid. The July offence was closely related to the March offence and the incident occurred despite stack washing having been introduced in order to reduce the likelihood of recurrence of the problem. The Prosecutor also relied on a risk assessment on the scrubber conducted by the Defendant's expert consultant which stated that the risk of corrosion of the stack was moderate, meaning the event should occur at some time.
26. All of these submissions are also considered under s 241(a), (b) and (c) of the PEO Act and I deal with these at par 40 - 54.
27. The Prosecutor argued the penalty should reflect the need for specific deterrence in this case relying on Veen v The Queen [No 2] (1987 - 1988) 164 CLR 465 at 477:
- The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. …
28. The Prosecutor submitted the Defendant has a significant and relevant prior criminal history. The Defendant was convicted on 2 August 2001 of five offences under s 64(1) of the PEO Act concerning breaches of its environment protection licence between 23 February 2000 and 12 March 2000: Environment Protection Authorityv Port Kembla Copper Pty Ltd [2001] NSWLEC 174. The Defendant was also convicted of another environmental offence against s 120(1) of the PEO Act on 28 September 2001: Environment Protection AuthorityvPort Kembla Copper Pty Ltd [2001] NSWLEC 223. In addition a Penalty Infringement Notice for a breach on 12 June 2001 was issued for a contravention of the same licence condition as is the subject of the current charges. The Prosecutor submitted the offences are not uncharacteristic aberrations. The Defendant has manifested a continuing attitude of disobedience of the law.
Section 3A(c) - protection of the community
29. The Prosecutor submitted there was a significant need to protect the community from this particular Defendant. The local community has a legitimate expectation that the development consent and Condition L8.3.1 of the Defendant's environment protection licence would be complied with. The Defendant's conduct has given rise to substantial property damage. The affidavits of various residents demonstrate there is significant and understandable community resentment, annoyance and anger as a result of the damage caused by the brown spotting.
Section 3A(d) - rehabilitation of the Defendant
30. The Prosecutor argued there was little likelihood of rehabilitation given the criminal history of the Defendant. Leniency in the current sentence is unlikely to lead to reform. Particular reliance was placed on Environment Protection Authorityv Port Kembla Copper Pty Ltd [2001] NSWLEC 174 where Pearlman J stated that there had been leniency because the offence was caused during the commissioning period of the smelter. This situation no longer applies to the Defendant.
Section 3A(e) - accountability of the offender
31. The Prosecutor argued that the penalty should adequately reflect the offence and be a true punishment rather than be seen as part of the operational costs of polluting the environment beyond the terms of the Defendant's environment protection licence. Reliance was placed on Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359 per Mahoney JA.
Section 3A(f) - denouncement of the Defendant's conduct
32. The Prosecutor submitted there is no reason in principle why in cases of serious environmental offences the Court should not act to publicly denounce the defendant's conduct by imposition of a substantial fine: see R v Nicholls (1991) 57 A Crim R 391 at 395.
Section 3A(g) - harm done to the victim and community
33. The Prosecutor submitted there was particular need to reflect the harm done to the community in the penalty imposed upon the Defendant because of the significant damage to the property of local residents. It is appropriate for the Court to take into account the community's resentment, annoyance and anger as a result of the ongoing damage caused to property together with anxiety from living in an area exposed to brown spotting. This material is also relevant under s 241 and I will consider it in that context.
Section 21A(1) of the Crimes (Sentencing Procedure) Act 1999
34. Section 21A(1) of the Crimes (Sentencing Procedure) Act 1999 requires the Court to take into account aggravating factors, mitigating factors and other objective or subjective factors that affect the relative seriousness of the offence. There are no aggravating factors relied on by the Prosecutor which are not covered by the matters in relation to s 241 of the PEO Act and other matters referred to below. Matters in mitigation under s 21A(3) are dealt with later in this judgment.
35. The Defendant's counsel relied on R v Olbrich (1999) 199 CLR 270 in submitting that any facts in dispute must be proved beyond reasonable doubt by the Prosecutor. This underpinned a submission made by the Defendant that the Prosecutor had not put on any affidavit evidence disputing the evidence of Ms Woodroffe, Mr Wilson, or Dr Crisp, the Defendant's expert. Their evidence is that the Defendant has undertaken substantial measures to ensure compliance with the Defendant's environment protection licence, that expert consultant's advice had been obtained and followed and substantial sums had been spent in doing so. The Defendant is well aware of its environmental obligations and has taken substantial steps to meet them. While there has been a failure in the Defendant's system resulting in pollution offences it has not been due to negligence or lack of care on the Defendant's part. The Defendant should not be unfairly penalised in excess of what is appropriate in these circumstances.
Matters under s 3A of the Crimes (Sentencing Procedure) Act 1999 not otherwise considered under s 241 of the PEO Act
36. Section 3A of the Crimes (Sentencing Procedure) Act 1999 provides that the Court may impose a sentence on an offender for the purposes specified therein. As I have already stated, the matters the Prosecutor has raised under s 3A(a) and (g) relate to matters considered under s 241(1) of the PEO Act. The matters raised under s 3A not otherwise raised under s 241 of the PEO Act are s 3A(b) - (f). I will deal with s 3A(b) at par 37 - 38. I do in relation to the balance of matters raised under s 3A, consider the offender should be made accountable for its actions (s 3A(e)).
Section 34A(b) - deterrence
37. It is appropriate to give consideration to general deterrence in environmental offences of this nature. The Prosecutor has made a strong submission that there is a need for specific deterrence in relation to this Defendant because of the prior criminal record of the Defendant before this Court (see par 27 - 28). The Defendant submitted there is no need for specific deterrence, particularly as the Defendant has suspended its operations at the smelter due to financial difficulties.
38. I find it difficult to conclude given the evidence presented by the Defendant that there is a continuing attitude of disobedience to the law as referred to in Veen. The prior criminal record of the Defendant is apparent in that it is convicted of five offences for breach of a licence condition, a different one to that before me, and one offence of water pollution. The Defendant operates a large and complex smelter at its site. If it follows the expert advice of its consultants in implementing pollution control measures yet still has problems because of the complexity of those operations so that it is unable to prevent all pollution occurrences those circumstances do not necessarily show an attitude of disobedience to the law. The evidence of the Defendant's general manager and environmental superintendent supports the conclusion that the Defendant has not taken a continuing attitude of disobedience of the law in my view. I do not therefore think specific deterrence is required to be factored into the penalty.
Section 241 of the PEO Act
39. Section 241(1) sets out matters which are required to be taken into consideration in imposing a penalty so far as they are relevant. Environmental harm is not a legal ingredient of the offences but as environmental harm has resulted from the breaches of the environment protection licence the subject of the offences a number of the matters under s 241(1) are relevant.
(a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence
Prosecutor’s submissions
40. The Prosecutor's submissions are that the definition of harm in the dictionary to the PEO Act is clearly met by the discharge to the atmosphere from the Defendant's premises in relation to all three offences. The immediate consequence of emissions from the Defendant's site was significant, particularly in relation to the March and July offences, and caused substantial damage to local property, some of which damage is permanent.
Defendant’s submissions
41. The Defendant did not disagree with the Prosecutor's overall submissions but did submit that in relation to the February offence the extent of harm was small. The Defendant agreed that there had been extensive environmental harm in relation to the March offence, but submitted in relation to the July offence that once again the level of environmental harm had been small.
42. There was environmental harm within the meaning of the PEO Act in relation to all three offences. The evidence of the Prosecutor clearly shows that the environmental harm caused by the March offence was significant. The environmental harm caused by the February and July offences was small.
(b) the practical measures that may be taken to prevent, control, abate or mitigate that harm
Prosecutor’s submissions
43. The Prosecutor argued the Defendant could have and should have done more to ensure that toxic substances did not leave the site. Reliance was placed on the Defendant's expert, Dr Crisp, in his affidavit sworn 26 May 2003 where he outlined a number of recommendations which could be taken to prevent a recurrence.
Defendant’s submissions
44. In relation to the February offence, after the incident the smelter was taken off-line to repair the suspected cause of the February offence and brought back on-line on 21 February 2002. This equated to a financial loss to the Defendant of approximately $115,000. The Defendant was also required to employ additional staff to make repairs.
45. Since the March incident the Defendant has installed inspection ports at the acid plant stack to enable viewing and effective cleaning of the entire acid plant stack. It commenced a manual washing process after the March incident and this has been superseded by an automatic washing system. The Defendant has incurred the cost of installing the automatic washing system in June 2002 of $135,325. The acid plant stack has also been externally insulated at a cost of $430, 345.
46. The Defendant stopped the operation of the smelter after the July offence on 31 July 2002 to start the washing system and prevent further discharge resulting in a loss of $17,000. The weekly washing of the acid plant stack commenced in March is continuing. There has been no brown spot incident since July 2002 resulting from the operation of the acid plant stack suggesting that control measures have been successful.
47. I consider that immediate practical measures were taken following upon each incident and there were no particular further measures the Defendant could have taken to abate or mitigate the harm caused. These were measures, according to the Defendant's expert consultant, which can be taken (and are being taken) to prevent a recurrence of the circumstances giving rise to these offences. This does suggest there were practical measures which could have been implemented to prevent and control the harm caused which the Defendant failed to implement.
(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
Prosecutor’s submissions
48. The test of foreseeability is objective so that the fact that Mr Wilson, the Defendant's Operations General Manager, was surprised by the offences being committed is irrelevant. In relation to the February offence, the Defendant's own prior experience in relation to intermediate coolers should have alerted the Defendant to the possibility a similar event might occur in the future. In relation to the March offence (to which the July offence is related), the use of 304 stainless steel for the acid plant stack, which is susceptible to corrosion by sulphuric acid, suggests that in circumstances where a wet scrubber was used immediately before waste gas entered the stack, the possibility of a toxic discharge was clearly foreseeable.
Defendant’s submissions
February offence
49. In relation to the February 2003 offence, the uncontested evidence of the Defendant is that the intermediate cooler was a relatively new piece of equipment which had been designed and installed correctly according to the expert advice received by the Defendant. No affidavit evidence has been put on by the Prosecutor to suggest otherwise.
50. In relation to the February offence the Defendant's evidence was that the intermediate cooler is a sealed piece of equipment that requires the plant to be shut down before examination of the equipment can begin. It cannot be visually inspected on a regular basis, it requires technical expertise to examine its operation. It is usual practice for such pieces of equipment to be inspected on a yearly to every two year basis as the Defendant does.
March offence
51. The Defendant relied on the affidavit evidence of Ms Woodroffe, its environmental superintendent, who was involved with the installation of the scrubber at the acid plant stack. She testified that she was involved in various hazard studies undertaken as part of its risk management system at the time including a risk assessment and HAZOP facilitated by Hatch Associates Pty Ltd. Her evidence is that the control measures listed in the risk assessment of the scrubber were in place and adhered to at all material times by the Defendant.
July offence
52. In relation to the July offence it was the evidence of Ms Woodroffe that between the March and July offences the insulation of the acid plant stack had been progressing and the acid plant stack was washed on a weekly basis. It had been washed immediately before the July offence on 27 July 2002. The measures taken by the Defendant had been successful in ensuring no brown spotting between March and July 2002.
Finding
53. I note in relation to the March and July offences, that the risk assessment which the Prosecutor sought to rely on in stating there was moderate risk also stated the likelihood of corrosion of the stack was unlikely, meaning the event could occur at some time. The precise import of these statements in the Defendant's risk analysis report is unclear, but I also note that it is the uncontested evidence of Ms Woodroffe that the control measures listed in the Defendant's risk assessment of the scrubber were in place and adhered to at all times by the Defendant.
54. The evidence of the Defendant's operational staff and experts is not contested by the Prosecutor. That evidence discloses, as the Defendant submitted, that the Defendant has taken all necessary steps recommended by its consultants in relation to the plant. I do not accept that because the Defendant's own expert has recommended that steps be taken to avoid a repeat of the events giving rise to these offences that these events and the harm arising from them were necessarily foreseeable. The onus is on the Prosecutor to prove beyond reasonable doubt that the person who committed the offence could reasonably have foreseen the harm caused by the commission of the offence. I do not consider this onus has been discharged.
(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence,
55. There is no doubt, nor is it disputed, that the Defendant had complete control over the causes which gave rise to the offences.
56. Section 241(1)(e) is not relevant.
57. Section 241(2) provides that any other factors relevant to sentencing may be taken into account. In Environment Protection Authority v Port Kembla Copper Pty Ltd [2001] NSWLEC 174 Pearlman J followed a long line of authority in this Court that an important consideration to be taken into account under s 241(2) is the seriousness of each offence because each involves a breach of the trust reposed in the defendant to carry out its operations within the limits set out in the licence (at [25]). Pearlman J held that each of the licence breaches in the matter before her were serious because it was a breach of public trust (at [27]). I consider I must also take this into account.
Even-handednessOther general sentencing considerations not covered by s 3A of the Crimes (Sentencing Procedure) Act 1999 or s 241 of the PEO Act
58. When imposing a penalty a Court should have regard to the principle of "even-handedness": see R v Visconti [1982] 2 NSWLR 104 at 107. The primary matters to consider are five offences previously committed by the Defendant for breaching its environment protection licence. The Defendant was fined $60,000 for the first offence, $20,000 for the second offence, $16,000 for the third offence, $12,000 for the fourth offence and $8,000 for the fifth offence (Environment Protection Authority v Port Kembla Copper Pty Ltd [2001] NSWLEC 174). I should note these are not directly comparable on the facts as the offences resulted in air pollution but not brown spotting.
Totality
59. Both the Prosecutor and Defendant submitted that the principle of totality should be applied in relation to the overall sentence given the close time frame of the offences in this matter, albeit it with conflicting submissions as to how it should apply.
60. In Camilleri's Stock Feeds Kirby P at 703 cited with approval a passage from the judgment of Street CJ in R v Holder [1983] 3 NSWLR 245 at 260, which explained the totality principle as follows:
- … the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary … in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences.
61. In my view it is necessary to consider the February incident separately to the March and July incidents as it involved different parts of the smelter and is not connected on the facts. I regard the latter two incidents as closely related as they involve failure of the same equipment and are relatively close together in time. I will apply the principle of totality to the assessment of the March and July offences.
Mitigating factors
62. There are a number of mitigating factors that should be taken into account to reduce the penalties to be imposed.
Means of the Defendant to pay
63. Under s 6 of the Fines Act 1996, in the exercise of its discretion to fix the amount of any fine, the Court is required to consider such information regarding the means of the accused as is reasonably and practicably available for the Court's consideration and such other matters as, in the opinion of the Court, are relevant to the fixing of that amount. The Defendant did not submit it did not have the capacity to pay, but submitted s 6 of the Fines Act 1996 was not limited to that. The Defendant submitted the Court should consider the Defendant's means to pay and the impact a penalty may have upon the Defendant to pay because its Operations General Manager, Mr Wilson, gave evidence that the company was suffering financially due to poor market conditions and operational difficulties. It was the Defendant's evidence that a high fine would create a significant impact on the Defendant's business. After submissions on sentence had been presented to the Court on 3 July 2003, the Court was informed that the Defendant intended to suspend its operations from September 2003 and all employees were to be made redundant. This was said to further impact on its capacity to pay a high fine.
64. According to Mr Wilson's evidence, the Defendant's budget for operating costs for 2003 are $86 million and it has invested some $750 million in the plant. The submissions concerning capacity to pay are difficult to assess as I do not have before me information which relates to capacity to pay other than the relatively general financial information in Mr Wilson's affidavit. While the smelter is experiencing financial difficulties at present, the Defendant has substantial assets. I do not consider it appropriate to take into account its means to pay.
65. Section 21A(3) of the Crimes (Sentencing Procedure) Act 1999 sets out numerous matters the Court is required to take into account in mitigation, not all of which are relevant here.
Other mitigating factors
Guilty plea (s 21A(3)(k))
66. The Defendant pleaded guilty at the earliest opportunity. A plea of guilty entitles the Defendant to a discount in penalty under s 22 of the Crimes (Sentencing Procedure) Act 1999 in the range of 10-25%: R v Thomson; R v Houlton (2000) 49 NSWLR 383; R v Sharma (2002) 54 NSWLR 300. I consider that the Defendant pleaded guilty so early that it is entitled to a substantial discount as there is a significant utilitarian benefit resulting from the early plea of guilty.
Section 21A(3)(m) - cooperation with the Prosecutor
67. There has clearly been cooperation with the Prosecutor at all relevant times by the Defendant in relation to the investigation and clean up by the Defendant following all three offences.
Section 21A(3)(i) - contrition and remorse
68. The Defendant has expressed contrition and remorse for all three offences in the extensive affidavit of its Operations General Manager, Mr Wilson. I accept the Defendant has adequately expressed contrition and remorse in this matter. There is also evidence that the Defendant has responded quickly to all the incidents. It is clear from the affidavit evidence, which I accept, that the Defendant has responded promptly to all three offences once drawn to its attention, if not already known (the July incident was detected by the Defendant's employee). The Defendant on each occasion has stopped the smelter as soon as the offence became known to prevent further brown spotting and implemented control measures to prevent further incidents. It has suffered a financial loss in doing so. It has been open with the community, particularly in relation to the March incident which it publicised in the local media and has paid compensation in relation to claims lodged by the affected people. All complaints received have been attended to, with no suggestion to the contrary by the Prosecutor. In that regard the Defendant has acted immediately and responsibly.
69. The Defendant has agreed to pay the Prosecutor's costs of $25,000.
Penalty
70. In my opinion, the circumstances of the offences and the matters I am required to consider under the Crimes (Sentencing Procedure) Act 1999 and s 241 of the PEO Act and taking into account maters relevant to mitigation to warrant a penalty of $15,000 for the first offence and $75,000 for the March offence. Applying the totality principle to the July offence and noting that it is a relatively minor offence I impose a fine of $5,000.
71. The Court orders that:
1. The Defendant is convicted of the offence with which it is charged.
2. The Defendant is fined the sum of $15,000 in matter no 50112 of 2002 to be paid to the Registrar of the Court within 28 days of today's date.
3. The Defendant is fined the sum of $75,000 in matter no 50113 of 2002 to be paid to the Registrar of the Court within 28 days of today's date.
4. The Defendant is fined the sum of $5,000 in matter no 50114 of 2002 to be paid to the Registrar of the Court within 28 days of today's date.
5. The Defendant must pay the Prosecutor’s costs of the proceedings against it in the sum of $25,000.
6. The exhibits may be returned.
6
12
3