Environment Protection Authority v State of New South Wales (Department of Environment, Climate Change and Water)

[2010] NSWLEC 67

Reported Decision: 174 LGERA 19

Land and Environment Court

of New South Wales

CITATION:	Environment Protection Authority v State of New South Wales (Department of Environment, Climate Change and Water) [2010] NSWLEC 67
PARTIES:	PROSECUTOR Environment Protection Authority DEFENDANT State of New South Wales (Department of Environment, Climate Change and Water)
FILE NUMBER(S):	50070 of 2009
CORAM:	Pain J
KEY ISSUES:	PROSECUTION :- guilty plea - consideration of offence by a government agency - breach of licence condition - failure to operate equipment in proper and efficient manner in accordance with licence conditions - objective and subjective factors relevant to sentence considered
LEGISLATION CITED:	Catchment Management Authorities Act 2003 Crimes (Sentencing Procedure) Act 1999 s3A, s10, s21A, s22, s23 Criminal Procedure Act 1986 s257B Protection of the Environment Operations Act 1997 s61(1), s241 Public Sector Employment and Management Act 2002
CASES CITED:	Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278 Environment Protection Authority v Causmag Ore Company Proprietary Limited [2009] NSWLEC 164 Environment Protection Authority v Coastal Recycled Cooking Oils Pty Limited [2008] NSWLEC 242 Environment Protection Authority v Delta Electricity [2009] NSWLEC 11 Environment Protection Authority v Forestry Commission of New South Wales [2004] NSWLEC 751 Environment Protection Authority v Incitec Limited (2003) 131 LGERA 176 Environment Protection Authority v Lithgow City Council [2007] NSWLEC 695 Environment Protection Authority v Shoalhaven Starches Pty Ltd [2003] NSWLEC 107 Environment Protection Authority v Snowy Hydro Ltd (2008) 162 LGERA 273 Environment Protection Authority v Sydney Water Corporation Ltd (1999) 102 LGERA 232 Environment Protection Authority v The Crown in right of New South Wales [2002] NSWLEC 52 Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299 Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 Hoare v R (1989) 167 CLR 348 R v Gallagher (1991) 23 NSWLR 220 R v McNaughton (2006) 66 NSWLR 566 R v Sharma (2002) 54 NSWLR 300 R v Thomson; R v Houlton (2000) 49 NSWLR 383 The Queen v De Simoni (1981) 147 CLR 383 The Queen v Olbrich (1919) 199 CLR 270 The Queen v SZ [2007] NSWCCA 19 Veen v The Queen [No. 2] (1988) 164 CLR 465 WorkCover Authority of NSW (Inspector Keelty) v Crown in the right of the State of NSW (Police Service of NSW) (No 3) (2002) 112 IR 141
DATES OF HEARING:	3 May 2010
DATE OF JUDGMENT:	6 May 2010
LEGAL REPRESENTATIVES:	PROSECUTOR Mr D Buchanan SC SOLICITOR Crown Solicitors Office DEFENDANT Mr T Howard SOLICITOR Department of Environment, Climate Change and Water

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

6 May 2010

50070 of 2009 Environment Protection Authority v State of New South Wales (Department of Environment, Climate Change and Water)

JUDGMENT

1 Her Honour: The Defendant is charged with an offence against s 64(1) of the Protection of the Environment Operations Act 1997 (the POEO Act) on 17 November 2008 in that it was the holder of an environment protection licence a condition of which was breached, namely that it failed to operate equipment in a proper and efficient manner.

2 The State of New South Wales (Parks and Wildlife Group of the Department of Environment and Climate Change), the Defendant, had an environment protection licence under Ch 3 POEO Act for the operation of the Perisher Valley sewage treatment plant (the STP). Condition O2.1 provided –

All plant and equipment installed at the premises or used in connection with the licenced activity:

(a) must be maintained in a proper and efficient condition; and
(b) must be operated in a proper and efficient manner.

Note: The requirements of O2.1 apply to the whole of the premises, including the reticulation system

The licensed activity was sewage treatment.

3 As at 17 November 2008, the Department of Environment and Climate Change was established pursuant to the Public Sector Employment and Management Act 2002 as a department of the Government of New South Wales. The Department is currently named the Department of Environment, Climate Change and Water (DECCW). As at 17 November 2008 (and continuing today), the Parks and Wildlife Group of the Department (PWG) operated as the National Parks and Wildlife Service of NSW. The Government is part of the Crown in right of the State of New South Wales. The Crown in right of the State of New South Wales is a corporation sole. It is capable of being prosecuted, convicted and sentenced in these proceedings; see WorkCover Authority of NSW (Inspector Keelty) v Crown in the right of the State of NSW (Police Service of NSW) (No 3) (2002) 112 IR 141 at [2], Environment Protection Authority v The Crown in right of New South Wales [2002] NSWLEC 52 at [3]-[4].

4 The Defendant has pleaded guilty and has therefore admitted the essential elements of this offence. The offence is one of strict liability so that mens rea is not an element of the offence.

5 The maximum penalty applicable to offences under s 64(1) of the POEO Act is $1 million for a corporation. The penalty for this offence was increased to $1 million from $250,000 in May 2006.

Agreed Statement of Facts

6 The parties have tendered an Agreed Statement of Facts (ASOF) as follows.

…
The Sewage Treatment Plant
3. Since about 1980 a Sewage Treatment Plant has operated in the Perisher Valley. The Plant is located at Perisher Creek Road, Perisher Valley (the “Premises”) within Kosciuszko National Park.
4. The Plant services the villages of Perisher Valley, Smiggin Holes, Guthega and Blue Cow, located in the National Park.
5. As at 17 November 2008, the State of New South Wales (Parks and Wildlife Group of the Department of Environment and Climate Change) owned and operated (and continues to own and operate) the Perisher Sewage Treatment Plant.
6. The Plant operated with three operators on a roster. The operators were supervised by the Water and Wastewater Supervisor, Mr Chris Foley, who reported to Senior Engineer, Mr Mark Rigoni. On 17 November 2008, Mr Rigoni and Mr Foley were located off the premises at the Parks and Wildlife Group’s Municipal Services Unit in Perisher Valley. The Manager of the Unit was Mr Andrew Logan.
…

Operation of the Plant
10. Raw sewage from the resort areas is conveyed to the Plant via a network of pipes and pump stations.
11. When operating normally, high quality treated effluent from the Plant discharges into Perisher Creek.
12. Perisher Creek waters then enter the Perisher Range Aqueduct approximately 2km downstream of the Perisher STP. Water from the aqueduct discharges into Snowy Hydro’s Guthega Dam. In the winter months some water is extracted from the aqueduct for snowmaking activities at Mt Blue Cow, after which it also ends up in the Guthega Dam. Water from Perisher Creek would remain in the Dam for some months before discharging. Water from Guthega Dam is then used to generate power at the Guthega Power Station, after which it goes into the Island Bend Dam, via the Snowy River.
13. The Plant is an 8000 Equivalent Persons (EP) treatment plant. After primary treatment (screening), the secondary treatment process utilised by the Plant is an Intermittently Decanted Extended Aeration (IDEA) system (explained below). Secondary treated effluent is then tertiary treated by ultraviolet light disinfection prior to its discharge into Perisher Creek.
14. There are three separate IDEA tanks at the STP. During peak loads in winter, after passing through the inlet works, raw sewage is distributed to between the three IDEA tanks via a flow divider (the “splitter box”) – essentially a large gate valve. In summer when loads are small, raw sewage is typically treated in a single IDEA tank. The sludge from this tank is then used to “seed” the other tanks prior to winter loads.
15. The process cycle of the IDEA comprises aeration, settlement and decant. Within a single tank, sewage undergoes clarification, aeration and solid liquid separation. This treatment process relies on the sewage being exposed to a blanket of biologically active sludge (bacteria) in both an aerobic and anoxic state. This treatment (along with the limited chemical dosing of alum) results in a reduction of Biochemical Oxygen Demand, Solids, Nitrogen and Phosphorus in the sewage and an increase in clarity.
16. Secondary treated effluent is decanted from the IDEA tanks into a catch-balance pond prior to its discharge to Perisher Creek through the tertiary treatment process, the ultraviolet light disinfection chamber (UV chamber).
17. The purposes of the catch-balance pond are to catch by settling out any carry over of solids that may have been discharged from the IDEA tanks in the event of a process perturbation or failure and to balance the flow to the UV chamber and the Creek. Effluent and material in the pond can be returned to the plant for treatment.
18. The efficient operation of the IDEA tanks relies on the sludge blanket being maintained below a prescribed depth within the tanks. This ensures that sludge is not carried over into the catch-balance pond and UV system following decanting of secondary treated effluent.
19. In the normal course of the Plant’s operation, the volume of the biologically active sludge will increase as the biological population increases and additional organic material is added to the system from the sewage. Accordingly, active sludge is “wasted” or transferred into sludge holding tanks.
20. There were two (waste) sludge storage tanks – one of 600 KL capacity and the other being 1200 KL. The contents of the sludge tanks are aerated to keep the sludge fresh during storage, particularly in the winter months. On a regular manual basis throughout Winter, aeration is turned off, the tanks’ contents are allowed to settle and then, to create more space in the tanks, supernatant which accumulates on the top during settling is decanted. The decanting is done by lowering a pump into the supernatant contained in the tank. The cycle of aeration, settling and decanting continues until sludge dewatering operations. As part of the annual sludge dewatering operations, once the supernatant has been decanted, the sludge can be dewatered and then removed and transported to sludge drying beds at a site some distance from Perisher.
21. The pipework at the Plant allowed the decanted supernatant to be pumped either to the decant pit and thence to Perisher Creek via the catch-balance pond and the UV chamber, or to be sent back into the treatment process via the splitter box or the lift pump station in the Plant’s inlet works.
22. Since the supernatant might contain elevated levels of nutrients which could adversely affect the Creek, it was both practice and in accordance with written procedure, when supernatant was decanted from the sludge storage tanks to return the supernatant to the beginning of the treatment process, that is the splitter box or the lift pump station. By being returned to the treatment works in the Plant, the decanted supernatant would undergo full biological and chemical treatment prior to being sent to the catch-balance pond, then to the UV disinfection chamber and then discharged to Perisher Creek. If any sludge carry-over occurs under normal treatment protocols, the sludge is typically captured in the catch-balance pond where it can be recovered for treatment within the Plant.
23. The Plant is located in an environmentally sensitive area and operates under a range of challenging constraints such as being snow-bound during winter and subjected to shock loads during peak holiday periods.
24. A consequence of the plant being snowbound during winter is that waste sewage sludge generated during the winter months must be stored at the premises until it can be removed in spring/summer (the period when this incident occurred).
25. With the onset of the warmer months and reduction in load at the plant, the sludge is pumped from the tanks, dewatered and transported from the site. It is as part of this process that the supernatant is removed and returned to the secondary treatment cycle.

The Incident
26. On 17 November 2008, one of the operators at the Plant was Mr Pat Freeman. He had been employed there for three years and had worked in the waste water industry for twelve years. Mr Freeman had the following qualifications in relation to sewage treatment:

a Certificate in sewage treatment activated sludge (November 2000, Department of Land and Water Conservation);
Certificate in Operation of Chemical Dosing Systems For Water Treatment Works (NSW Department of Land and Water Conservation, July 2001);
Certificate in Operation of Water Treatment Works (NSW Department of Land and Water Conservation, October 2002); and
Certificate 3 in Water and Wastewater industry (December 2003, NSW TAFE).

27. On 17 November 2008, Mr Freeman, decided to decant supernatant from one of the (waste) sludge storage tanks. He did this by lowering a pump into the 600 KL tank. Instead of pumping the supernatant back to the splitter box or inlet works within the Plant for further secondary treatment, Mr Freeman decided to direct the supernatant to the decant pit (which ordinarily discharged to the catch-balance pond) and the UV chamber, prior to discharge into Perisher Creek.
28. Mr Freeman did this in one of two ways. Either he opened a valve within the pipe infrastructure within the Plant so supernatant from the sludge storage tanks would be pumped directly to the decant pit. Alternatively, although substantially less likely, the valve was for some unknown reason already set (opened) so as to discharge fluid pumped from the tank into the decant pit and Mr Freeman did not change that setting (or close the valve) to ensure the decanted liquor went back into the Plant. It was not normal practice to have the valves open or set in this way.
29. On this day, (17 November 2008), the catch-balance pond had been taken “off line” for cleaning. Consequently, anything discharged from the sludge storage tanks to the decant pits by-passed the catch-balance pond and went directly to the UV disinfection chamber for tertiary treatment and thence the discharge pipe into Perisher Creek.
30. Mr Freeman told investigators he was not sure whether he opened that valve, or it was already open when he arrived at work. However, he was aware that it was open and he intended to direct the supernatant to Perisher Creek. Mr Freeman also told investigators he was aware that the catch balance pond had been taken "off line" for cleaning, but that it was not in his mind at the time.
31. Mr Freeman made this decision without authority, instruction, guidance or the knowledge of his supervisor or management. His action was contrary to standard, approved, operational practice. The Plant’s Operational Environmental Management Plan chapter on “Sludge Handling” said that the supernatant transfer pumps transfer supernatant from the tanks “to the wet well of the sewage lift pump station” – a reference to the Plant’s inlet works.
32. Further, the Municipal Services Unit’s Water & Wastewater Operations Circular No 3 stated:
the change request form is to be used to seek approval for any changes outside the listed operating ranges.
Mr Freeman did not seek approval to depart from the standard practice as required by Water & Wastewater Operations Circular No 3 .
33. There is conflicting evidence as to whether Mr Freeman tested the supernatant before it was discharged. On 27 November 2008, Mr Freeman sent Mr Rigoni an incident statement in which he stated “On Monday 17/11/2008 I took a sample from waste tank 600 at 11:00 and tested it in the lab at PVSTP. The results met licence requirements for ammonia, phosphorus, pH, and nitrates. At approximately 11:30 I ran a pump from the waste tank pumping clear effluent to the discharge point 65. At approximately 15:00 I checked the effluent stream and found it be clear. I then left the pump running on the float switch and left the treatment plant.”
34. When interviewed on 31 March 2009, Mr Freeman told investigators he thought the supernatant looked clear and thus was safe to release. Mr Freeman told investigators that before decanting the supernatant he tested the pH of the supernatant and the concentrations levels of phosphorous, ammonia and nitrate. When Mr Freeman was asked by investigators why he chose not to send the supernatant to the splitter box (i.e., back to the beginning of the process for further secondary treatment) and rather chose to send it directly to the decant pit (i.e., for tertiary treatment only in the UV disinfectant chamber prior to discharge to Perisher Creek), Mr Freeman stated that from the testing that he did, he decided that it met the licence requirements.
35. When Mr Foley was interviewed on 18 May 2009, he told investigators that on the day after the incident (that is, 18 November 2008) Mr Freeman told Mr Foley that he did not test the supernatant.
36. Mr Logan was also interviewed on 18 May 2009. Mr Logan told investigators that Mr Freeman told Mr Logan that he had tested the supernatant at 11:30am or some time before 11:30 am on 17 November 2009. Mr Logan did not state when Mr Freeman had provided him with this account.
37. Mr Freeman told investigators he had set float switches on the pump to ensure that it turned off when the fluid level reached the bottom of the supernatant and above the top of the sludge in the tank. He turned on the pump at approximately 11.00 am. Mr Freeman told investigators that he checked the supernatant at the point where it was discharging. Mr Freeman said that since it was clear, he believed it was safe to release. Mr Freeman did not inform anyone else that the pump was operating. He left the Plant at approximately 3.00 pm. The pump was still operating. Mr Freeman said that at that time he observed clear supernatant being pumped to the decant pit.
38. At approximately 4.10 pm, Mr Logan, the Manager of Municipal Services, happened to be at the Plant discharge pipe at Perisher Creek. He saw “cloudy water” being discharged. Mr Logan rang Mr Rigoni, the Municipal Services Unit’s Senior Engineer. Mr Rigoni responded immediately and, in the company of the Plant electrician, investigated. Upon investigation, supernatant from the 600 KL waste sludge storage tank was in the process of being pumped directly into the decant pit, bypassing the catch-balance pond and discharging through the UV disinfection chamber into Perisher Creek. The evidence is conflicting as to whether, before the pump was turned off, it was sucking up sludge as well as supernatant. Mr Rigoni said that what he saw was not clear liquid being pumped. Mr Freeman said that he set the lower float valve in the tank near the bottom of the layer of supernatant and above the sludge layer. Mr Logan stated that there was a floating scum sitting on the top of the surface of the tank. He stated that is was not a solid layer and he could clearly see a layer of liquid underneath in which the pump was sitting and he did not get the impression it was pumping sludge.
39. The pump was switched off by the plant electrician at approximately 4.45 pm. The duration of the discharge was about 5 hours and 15 minutes.
40. The exact volume of the discharge is not known. However, in its response to a s 193 POEO Act notice, the Parks and Wildlife Group calculated that 151 KL of partially treated effluent was discharged into the Perisher Creek. The discharge consisted of a mixture of sewage sludge and its supernatant.

Parks and Wildlife Group’s immediate response to the Incident
41. At about 5.40pm Mr Rigoni telephoned Nigel Sargent, the Environment Protection Authority’s Regional Manager of the South East Region, to report the incident. Mr Rigoni and Mr Logan also notified relevant authorities which potentially could be affected by the discharge. Mr Rigoni reported the incident to the EPA’s Pollution Incidents hotline on 18 November 2009 and provided the EPA with a written report of the incident on 24 November 2008.
42. The EPA conducted Interviews about the incident with each of Mr Freeman, Mr Rigoni, Mr Foley and Mr Logan.
43. On 2 December 2008 and 5 February 2009, the EPA issued s 193 POEO Act notices to the State of New South Wales (Department of Environment and Climate Change) to provide information and/or records.
44. The Parks and Wildlife Group provided responses to the notices dated 12 December 2008 and 25 February 2009.
45. In the response dated 25 February 2009, the Parks and Wildlife Group stated that on 17 November 2008 partially treated effluent was discharged from a sludge storage tank at the Perisher Valley Sewage treatment Plant into Perisher Creek for a period of approximately 5 hours and 15 minutes. …

Recorded procedures, training and instruction
48. There were three documents which governed the operation of decanting of supernatant from the sludge holding tanks. These were -

o chapter 9 of the Plant’s Operational Environmental Management Plan (OEMP);
o the Municipal Services Unit’s Water & Wastewater Operations Circular No 1 (26 November 2007);
o Water & Wastewater Operations Circular No 3 (10 July 2008).
49. Chapter 9 of the OEMP was entitled on “Sludge Handling”. The chapter said, twice, that the supernatant transfer pumps transfer supernatant from the tanks “to the wet well of the sewage lift pump station” – a reference to the inlet works to the treatment plant. Mr Freeman said he “may have” seen the chapter. Referring to the OEMP , Mr Foley told investigators “there were a few things where it was lacking” but that it explained the whole process. Mr Foley also stated that the operators knew where the OEMP was and they knew as operators that they needed to sit down and read it.
50. At the time of the incident, there was no formal training on the OEMP itself. However, the operational staff received extensive on the job training where they learn the practices and protocols of the Plant which are written down in the OEMP. In addition, the staff participated in toolbox meetings and attended regular STP operator staff meetings where issues and procedures were discussed.
51. Water & Wastewater Operations Circular No 1 and Water & Wastewater Operations Circular No 3 both required log sheets for testing to be completed daily by operators carrying out the testing. Mr Freeman told investigators that he did not record the results of the testing which he told investigators he had conducted before commencing to pump from the sludge storage tank.
52. As noted above, Water & Wastewater Operations Circular No 3 also required operators to fill out that a change request form to seek approval for any changes outside the listed operating ranges.
53. Mr Freeman said he had seen the Water and Wastewater Operations Circular No 3 . As noted above, Mr Freeman did not inform anyone of his intention to discharge supernatant to the Perisher Creek instead of returning it to the Plant and did not submit a change request form prior to his actions on 17 November 2008.

Management and supervision
54. Mr Foley, the Water and Wastewater Supervisor, told investigators that Mr Freeman had said to him –

‘I’ve just effed up’. He said that, ‘I just wasn’t thinking, I was just rushing around. I was by myself. I’m trying to get all this done and I’ve got the testing here’. This is what he was saying to me. ‘I had so much to do. I just didn’t think what I was doing’. He said, ‘I just didn’t.
55. Mr Foley also told investigators –
What I’ve stressed and I’ve stressed strongly to my engineer and the management is that I’ve always wanted to have an operator with Pat [Freeman]. I don’t really like him working solely on his own because he’s not really up to process standards. As far as trying to follow things through, at times he just gets a bit muddled with it. So I’ve always had either Geoff or Peter with Pat while he’s operating. Like I said, I’ve been to management on several occasions saying that I really need Pat to sort of more or less come up to speed a bit more. I don’t want him working on his own.
56. Mr Foley then told investigators –
[Pat Freeman’s] good, you know, (inaudible) good worker. He’s keen to get out there and get it done. He’s not a lazy person by any means. You know, he knows his job, what he’s got to do and he’ll get out there and do it. He just a little bit, like I said before, like as far as confidence goes, as solely running the whole system by himself, was a little bit backwards. That’s why I’ve always wanted to have another operator with him and that’s why I’ve stressed to senior management above me about that issue. As for testing and carrying out of his duties, yes, fine. He will do the job and do it well. He can be a little bit stressed if it comes pressure, like a little bit full on and we’ve got to hurry up and get things done. But overall, no, Pat’s been a good operator. It’s just a one-off thing that he’s done. But yes, overall, yes, a good operator, but, yes, just need a little bit more probably supervision.
57. Mr Foley reported to Mr Rigoni, senior engineer for the Municipal Services Unit. Mr Rigoni could not recall any previous performance issues raised in relation to Mr Freeman’s work prior to the incident.
58. The main document in place to ensure the proper and efficient management of the Plant was the OEMP. At the time of the incident, new staff would be introduced to the OEMP and made aware of the importance of the document but there was no induction checklist to ensure operators had read and understood the OEMP.
59. Apart from the OEMP , the Defendant used the following documents to manage work procedures for the Plant:
a. Internal Water and Wastewater Operation Circulars which outline procedures and protocols to be followed and are issued to Water and Wastewater staff when a new procedure or protocol is implemented.
b. Daily diary and record sheets which record the operating data for the Perisher Valley sewage treatment plant.
c. Monthly Perisher Valley Sewage Treatment Plant status report to the Manager Resorts as to whether licence conditions were being met. This report outlines sample result and details of current and future works at the Perisher Valley Sewage Treatment plant.
60. The three documents which governed the operation of decanting of the supernatant form the sludge holding tanks have been referred to at paragraph 48. However, there was not a specific written work procedure to the effect that a process such as pumping waste sludge supernatant must be monitored to ensure that sludge is not also decanted.
61. Plant operators were mainly introduced to the methods and procedures for operating the Plant and performing their duties through on the job training. They and their supervisors ran the plant on the basis of accumulated knowledge rather than written standards and procedures. There was no formal system for measuring operators’ competencies. Staff performance and task performance was addressed through informal discussions.

Environmental effects
62. Perisher Creek is part of the high quality alpine catchment system However, prior to commission of the offence, and subsequently, that part of Perisher Creek which is below the Perisher Village, the car park and the Plant, is in a somewhat degraded condition.
63. Condition L3.1 of the Defendant’s Licence sets 90 percentile concentration limits for potential pollutants. That is, over the full 12 month reporting period, 90% of the samples taken must meet the specified parameters set out at L3.1 of the Licence.
64. The Defendant took samples along Perisher Creek as requested by the EPA daily between 17 November and 20 November 2008. The samples were analysed for the parameters listed in the Defendant’s Licence.
65. By comparison with the parameters set in condition L3.1 of the licence, the results of analysis of samples taken at the discharge point (Point 1) on the date of the commission of the offence (17 November 2008) and the following day (18 November 2008) were as follows –

Pollutant stipulated in condition L3.1	90 th percentile concentration limit *	Reported result of analysis of sample on 17.11.08	Reported result of analysis of sample on 18.11.08
Nitrogen (total)	10 mg/L	13 mg/L	0.34 mg/L
Phosphorus (total)	0.3 mg/L	1.5 mg/L	0.02 mg/L
Faecal coliforms	200 colony forming units per 100 ml	Pres. count: 410 CFU/100 ml ** Conf. count: 330 CFU/100 ml	Pres. count: < 1 CFU/100 ml ** Conf. count: < 1 CFU/100 ml
Total suspended solids	15 mg/L	48 mg/L	< 2 mg/L
Biochemical oxygen demand	10 mg/L	16 mg/L	< 2 mg/L
Nitrogen (ammonia)	2 mg/L	2.3 mg/L	0.02 mg/L

* The dictionary to the Licence defines “percentile [in relation to a concentration limit of a sample]” to mean that “a percentage (eg, 50%) of the number of samples taken that must meet the concentration limit specified in the licence for that pollutant over a specified period of time.” The relevant period was the reporting period, that is a period of 12 months (dictionary to licence). The number of samples required to be taken in a reporting year was 16 (condition M2.3).

** “Pres. Count” is the Presumed Count for Coliform Forming Units (CFU), ie a preliminary assessment of the bacteria when it is cultivated which provides an indication of the types of bacteria which are present in the sample. After a period of time, the sample is reassessed and the CFU numbers are Confirmed (thus “Conf. Count”). This is the actual number of CFU/100 ml and the number which is to be relied upon as the final result.
66. Samples taken at three monitoring points further downstream on 17 November 2008 showed no exceedences of licence parameters.
67. Analysis results of the samples taken on the 3 days following the incident (18, 19 and 20 November 2008) at point 1 and each of the three downstream sampling points, did not exceed the stipulated concentration-based limits.
68. Compliance with the 90 percentile concentration limits set out in the Licence is determined by the number of samples that meet the concentration limit specified in the licence for that pollutant over a specified period of time. The relevant reporting period under the Licence is a period of 12 months (dictionary to licence). The number of samples required to be taken in a reporting year was 16 (condition M2.3). When the sample results taken between 17 and 20 November 2008 are added to the other sample results taken over the 12 month reporting period, the Defendant met the parameters set in Condition L3.1.
69. In July 2009, Dr Janice Miller, a Senior Environmental Scientist, Sustainable Rivers Audit leader at the Department of Environment, Climate Change and Water, visited the Plant. Dr Miller prepared a report dated 6 November 2009.
Parks and Wildlife Group’s longer term response to the Incident
70. As a result of the incident, the Parks and Wildlife Group stated that the following measures have been implemented to prevent a recurrence of the incident:

(a) Plant operators have been informed about the incident and instructed that they are not to carry out the practices that lead to the pollution event on 17 November 2008. They have been educated on the reasons why and the potential consequences of these practices.
(b) Locks have been installed on various valves to ensure the incident will not occur again. The Supervisor, Water and Wastewater, Senior Engineer and Manager have the only keys to the locks.
(c) The Operation and Environmental Management Plan has been updated to ensure there is a clearer procedure for managing sludge tank supernatant and to make it clear that supernatant is not to be discharged to the decant pits.
(d) The operators have been informed that all changes in treatment processes are to be approved by the Water and Wastewater Supervisor or the Senior Engineer.
(e) One of the three operator positions has been changed to a Senior Operator with responsibility for day to day operational decisions in conjunction with the Water and Wastewater Supervisor.

7 The Prosecutor’s summary of the ASOF is that it establishes that the usual practice was, and the STP’s written procedures contemplated, that when decanting supernatant from the STP’s sludge storage tanks the supernatant should be pumped back into the STP’s inlet works for further treatment. (The Defendant emphasised that the supernatant had been subject to secondary treatment at that point) The pipework, however, allowed the option also of sending the supernatant to Perisher Creek via:

the decant pit, then
the catch-balance pond, then
the UV chamber.

8 The significance of the catch-balance pond was that if any sludge carry-over occurs under normal treatment protocols, the sludge is typically captured in the catch-balance pond where it can be recovered for treatment within the STP.

9 It was the usual practice to send the supernatant back to the inlet works for further treatment because it might contain elevated levels of nutrients which could adversely affect Perisher Creek.

10 On 17 November 2008, Pat Freeman, an operator employed by the Defendant, decided to decant supernatant of sewage sludge from a 600 KL waste sludge tank. He did not pump it to the inlet works of the plant. Instead, a valve on a line to the decant pit from the pump being used by Mr Freeman to decant supernatant was, to his knowledge, either opened or left open. That is, Mr Freeman intentionally set the pump to pump supernatant from the sludge storage tank to Perisher Creek.

11 The material pumped was subjected to ultra-violet light in the UV chamber for disinfection before going into Perisher Creek. However, it was not detained in the catch-balance pond. This was because the pond was off-line for cleaning. Had the pond not been off-line, the material pumped would have been detained and, when detected, could have been pumped back into the STP. On 17 November 2008, Mr Freeman knew the pond was off-line.

12 Mr Freeman told investigators he had tested a sample from the tank before pumping it. He said he had tested the sample for ammonia, phosphorus, pH, and nitrates. Ammonia, phosphorus and nitrates were three, but three only, of the parameters set by the licence for discharges to Perisher Creek. Mr Freeman stated that, from the testing that he did, he decided that the supernatant met licence requirements.

13 Mr Freeman told investigators he had set float switches on the pump in the sludge storage tank to ensure that it turned off when the fluid level reached the bottom of the supernatant and above the top of the sludge in the tank. He turned on the pump at about 11.00 am. Mr Freeman told investigators that he checked the supernatant at the point where it was discharging. Mr Freeman said that since it was clear, he believed it was safe to release. Mr Freeman did not inform anyone else that the pump was operating. He left the STP at approximately 3.00 pm. The pump was still operating. Mr Freeman said that at that time he observed clear supernatant being pumped to the decant pit.

14 At approximately 4.10 pm, Mr Logan, the Manager of the PWG Municipal Services Unit in Perisher Valley, happened to be at the plant discharge pipe at Perisher Creek. He saw what he described as “cloudy water” being discharged. Mr Logan rang Mr Rigoni, the Municipal Services Unit’s Senior Engineer.

15 Upon investigation, supernatant from the 600 KL waste sludge storage tank was in the process of being pumped directly into the decant pit, bypassing the catch-balance pond and discharging through the UV disinfection chamber into Perisher Creek. The evidence is conflicting as to whether, before the pump was turned off, it was sucking up sludge as well as supernatant. Mr Rigoni said that what he saw was not clear liquid being pumped. Mr Freeman said that he set the lower float valve in the tank near the bottom of the layer of supernatant and above the sludge layer. Mr Logan stated that there was a floating scum sitting on the top of the surface of the tank. He stated that it was not a solid layer and he could clearly see a layer of liquid underneath in which the pump was sitting and he did not get the impression it was pumping sludge.

16 The pump was switched off by the plant electrician at approximately 4.45 pm. The duration of the discharge was about five hours and fifteen minutes.

Defendant’s evidence

17 An affidavit of Sally Barnes, affirmed 27 April 2010, states that she is the Deputy Director General of PWG which has been part of DECCW since September 2003. She identifies the broad functions of PWG which includes amongst others :

…
d. Developing, implementing and reviewing operational policy, programs and procedures pertaining to the protected area system and wildlife management.
…

l. Undertaking state of the parks reporting and the development of management effectiveness indicators.
m. Managing marine parks and aquatic reserves.

18 Ms Barnes also identifies that PWG is responsible for the care, control and management of the NSW Alpine Resort areas, including the provision of services including water, waste water, garbage and in-resort roads.

19 Ms Barnes states that she recognises and regrets the commission of the offence constituted a failure on the part of DECCW to comply with the environment protection licence. She also states the event has caused “genuine distress and concern” among the management and staff of PWG. On behalf of senior management of PWG she expresses a firm commitment to avoid any recurrence of the circumstances that lead to the offence.

20 Ms Barnes summarises the environmental performance of the STP and regular monitoring of environmental impact. She describes the establishment in 2002 of the Perisher Range Resorts Environmental Management System facilitated by DECCW which identifies, manages, and ultimately reduces environmental impacts in the area. Since 2002 PWG has completed twelve pollution reduction programs including studies into Perisher Creek, nutrient removal within the STP, sewerage system wide investigations and construction of assets such as the sludge storage facility and alum storage area. She identifies a specific pollution reduction program initiated in 2008 for inflow reduction and sewer reticulation rehabilitation works which has included $1 million spent on upgrading parts of the sewerage system with further works to be completed in the coming years.

21 Ms Barnes provides a summary of improvements to the operation of the STP involving assessment of treatment plant processes and capital investment to improve system robustness. These have included the new sludge storage facility in 2002, improvements in the feed program to increase the biomass in the STP, and an assessment in 2005/2006 of the existing hydraulic and biological loads on the STP. She states additional expenditure on plant capital in excess of $1 million is planned in 2010/2011 for projects such as a new balance tank and UV disinfection unit.

22 Ms Barnes states that she has personally overseen the implementation of preventative measures taken since the incident. She states that PWG has comprehensively reviewed the circumstances surrounding the commission of the offence and further developed and refined its operational practices and procedures and improved staff induction and training. These include immediate adjustments to plant operational security, a review of the Operation Environment Management Plan (OEMP) to ensure there is a clearer procedure for sludge tank management, and an active involvement of senior management with strengthened plant management and improved staff training. She states that DECCW has voluntarily cooperated with all aspects of the Environment Protection Authority (the EPA) investigation.

Relevant sentencing considerations

23 The purposes of sentencing are identified in s 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) and include to ensure the offender is adequately punished (s 3A(a)), to make the offender accountable for its actions (s 3A(e)) and to denounce its conduct (s 3A(f)).

24 An appropriate sentence is to be determined after consideration of the objective and subjective matters relating to the offence bearing in mind that:

…a basic principle of sentencing law is that a sentence…imposed by a court should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances (see Veen v. The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465, at pp 472, 485-486, 490-491, 496).

per Hoare v R (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ).

25 In Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [163] and Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 at [110] relevant factors to determine the objective gravity of an offence were identified for offences under the Environmental Planning and Assessment Act 1979 (the EP&A Act). The factors include the maximum penalty, the objective harmfulness of the defendant’s actions, the reasons for the commission of the offence and the state of mind of the offender. These factors are also relevant to offences under the POEO Act. Another relevant factor is the statutory scheme in which the offence provision appears.

Protection of the Environment Operations Act 1997

26 Section 3 of the POEO Act outlines the objects of the Act. The relevant sections are s 3(d)(i), (ii), (iia) and (iii) which provide:

The objects of this Act are as follows:
…

(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,
…

27 The licence issued to the Defendant in accordance with the POEO Act contained objectives which reflect those in s 3 in the specific context of the licence:

A5 Objectives of this licence

A5.1 The objectives of this licence are to:
(a) prevent as far as practicable sewage overflows and sewage treatment plant bypasses;
(b) require proper and efficient management of the system to minimise harm to the environment and public health; and
(c) require practical measures to be taken to protect the environment and public health from sewage overflows and sewage treatment plant effluent.

28 The importance of complying with environment protection licences issued under the POEO Act has been recognised by this Court on numerous occasions. In Environment Protection Authorityv IncitecLimited (2003) 131 LGERA 176 McClellan J observed at [49], in relation to specific deterrence for a second offender, that:

A licence provides a privilege, permitting the holder to pollute within the terms of that licence. It carries with it an obligation to ensure that any pollution is kept within the parameters provided by the licence conditions.

29 Considering s 241 of the POEO Act, Pearlman J emphasised that contravention of a pollution licence involves a breach of public trust in Environment Protection Authority v Shoalhaven Starches Pty Ltd [2003] NSWLEC 107. Her Honour stated at [49]:

The defendant is entrusted, by its pollution licence, to pollute and that places it in a special category so far as other members of the public are concerned. But that permission is conditional upon the standards and limits specified in the pollution licence .

30 Both parties addressed the operation of the De Simoni principle (that a defendant is not to be sentenced for an offence with which it has not been charged: The Queen v De Simoni (1981) 147 CLR 383) in the context of the making of findings under s 241 of the POEO Act. They referred to Environment Protection Authority v Snowy Hydro Ltd (2008) 162 LGERA 273 where Biscoe J addressed the impact of s 241(1) upon the operation of the De Simoni principle when sentencing for an offence of pollute waters where a question arose as to whether the offence occurred through negligence. As I do not consider that this issue arises in relation to the findings I might make under s 241 in light of the ASOF I do not need to further set out the parties’ submissions.

31 There were contested facts the Prosecutor asked the Court to find beyond reasonable doubt, where these were adverse to the interest of the Defendant (that being the onus of proof identified in The Queen v Olbrich (1919) 199 CLR 270 at 281 [25]).

Section 241(1) of the POEO Act

32 Section 241(1) of the POEO Act identifies the following mandatory factors to be taken into consideration in imposing a penalty for offences committed under that Act (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

33 The evidence on environmental harm in the ASOF is set out at par 62-69. Paragraph 69 refers to the report of environmental scientist Dr Miller. She concludes in her report that the discharge possibly had a short-term impact on the aquatic ecosystem of the receiving water of Perisher Creek. No data is available in that period but scientific literature indicates that pollution sensitive taxa would have been affected. There were no long term impacts of the discharge with recovery of any sensitive taxa by sampling undertaken in February 2009. Given the degraded condition of the receiving environment and the short exposure time the impact was less serious.

34 The Prosecutor submitted that the evidence of environmental harm is limited to the results of sampling at the discharge point after the incident, and the opinion of Dr Miller, prepared after the incident. The sample analysis results show elevated levels of nutrient chemicals and faecal coliforms in the samples taken at the discharge point of the STP on 17 November 2008.

35 The STP is located in an environmentally sensitive area, in a national park. Dr Miller’s report informs the Court, however, that Perisher Creek was not a pristine environment. The section of Perisher Creek upstream of the STP but downstream of Perisher resort and carpark is itself in a somewhat degraded condition (report par 29). There are impacts on Perisher Creek both upstream and downstream of the STP which are from sources independent of the STP (par 25).

36 The Defendant did not press its written submission that the Court should not take into account as a circumstance relevant to likely environmental harm the possible impact of a discharge to waters which did not contravene the discharge limits in L3 of the licence.

37 It did emphasise that the operation of the STP meant that the supernatant had been subject to secondary treatment in the Intermittently Decanted Extended Aeration (IDEA) at the time it was directed from the sludge pit to the decant pit and from there for UV treatment before entering Perisher Creek. While the proper process if followed would have returned the supernatant to the inlet tank for further secondary treatment the supernatant was a treated product when released into Perisher creek.

Finding

38 There is no evidence of actual environmental harm. The likelihood of harm caused to the environment is low, as found by Dr Miller. Her evidence is accepted by both parties. The possibility of harm arising when the samples taken were within the long term parameters in the licence was ultimately accepted by both parties. The samples at the licensed discharge point in Perisher Creek taken as referred to in the ASOF showed higher levels on the day than the quality parameters in L3 in the licence. The percentile limits imposed under the licence over 12 months were not exceeded by the discharge. Samples taken downstream of the discharge point on 17 November 2008 did not show elevated levels of the substances sampled, confirming any potential impact was localised. The state of the receiving environment in Perisher Creek at the discharge point is not pristine due to additional upstream development, as identified in the Prosecutor’s submissions.

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

39 By its plea, the Defendant admits that the pump used by Mr Freeman and the pipework and valve which were operated in this case were not operated in a proper and efficient manner. The primary reason this occurred was a failure of management, including training and supervision, or at least an absence of management and supervision to the degree required to operate the plant without breaching the licence.

40 While there is evidence Mr Freeman told a superior, Mr Rigoni, that, before starting pumping on 17 November 2008, he had tested the material in the sludge tank and it did not exceed licence parameters (ASOF par 33), this should not be accepted. The reasons are:

(a) this account is self-serving;
(b) this account was given on 27 November 2008 when providing a written explanation. Earlier, the day after the event, Mr Freeman had told a more immediate superior, Mr Foley, that he did not test the supernatant (par 35);
(c) although aware of Water & Wastewater Operations Circular No 3 which required that operators record the results of such tests, there were no results recorded of such testing (par 51, 53);
(d) if any testing had been conducted of the supernatant in the sludge storage tank it would have produced results similar to if not exceeding those obtained by analysis of the samples taken at the Creek discharge point after the discharge had ceased. Those results all exceeded the licence parameters.

41 Those parameters were, as Mr Freeman said, only for pH, phosphorous, ammonia and nitrate. He did not say he tested for other parameters such as faecal coliforms.

42 It can confidently be concluded that Mr Freeman lied when he asserted he had tested the supernatant before commencing pumping. This casts doubt on other self-serving statements he made, such as those to investigators that (ASOF par 37):

(a) he checked the supernatant discharging when he started pumping and it was clear;
(b) he checked the discharge when he left the plant at 3.00 pm and he saw clear supernatant being pumped to the decant pit;
(c) he had set float switches on the pump to ensure that it turned off when the fluid level reached the bottom of the supernatant and above the top of the sludge in the tank.

43 There is reason to doubt those assertions. At some time after Mr Freeman left for the day, when they saw the liquid being pumped and being discharged, Messrs Rigoni and Logan said the fluid was respectively “not clear” and was “cloudy” (ASOF par 38). This could mean any of a number of things:

(a) when Mr Freeman saw it being discharged, the supernatant was not clear;
(b) Mr Freeman failed to set the float switch on the mobile pump so it would cut out when the level of fluid in the tank reached the bottom of the supernatants and the top of the sludge;
(c) by no later than 4.10 pm, what was being discharged was not just supernatant but was at least supernatant and sludge.

44 The relevant facts are that:

(a) Mr Freeman felt he did not have enough time to do what was required of him in his job (ASOF par 54);
(b) although his supervisor could not recall previous performance issues (ASOF par 57), Mr Freeman was known to be “not up to process standards” and to require supervision (ASOF par 55-56);
(c) while there were toolbox meetings and operators learned their duties “on the job”, there was no induction checklist to ensure operators had read and understood the OEMP (ASOF par 50, 58, 61);
(d) there was no formal system for measuring operators’ competencies (ASOF par 61);
(e) there was not a specific written work procedure to the effect that a process such as pumping waste sludge supernatant must be monitored to ensure that sludge is not also decanted (ASOF par 60).

45 The practical measures the Defendant could have taken to avoid committing the offence were:

(a) putting in place procedures to measure operators’ competencies;
(b) providing closer supervision of Mr Freeman;
(c) providing sufficient resources to ensure that an operator in the position of Mr Freeman on 17 November 2008 did not feel that he did not have enough time to perform his tasks and to give thought to the performance and consequences of the performance of those tasks;
(d) providing specific training to Mr Freeman as to how to decant supernatants from the sludge holding tanks, and how not to decant;
(e) providing management and training as to operators not leaving pumps operating when finishing duty for the day;
(f) providing directions to operators, whether by a specific statement in Chapter 9 of the OEMP or otherwise, that:
except with the specific approval of a manager, waste sludge supernatant was not to be pumped anywhere other than to the inlet works;
except with the specific approval of a manager, waste sludge supernatant was not to be pumped to the decant pit at a time when the catch-balance pond was off-line;
operators pumping waste sludge supernatant must monitor the process to ensure that sludge was not also decanted;
except with the specific approval of a manager, operators conducting a waste sludge supernatant pumping operation were not to leave the STP while the operation was continuing.

Defendant’s submissions

46 Firstly, the Defendant submits that Mr Freeman’s statements regarding his assessment and testing of the supernatant prior to discharge and his belief that it complied with licence parameters should be accepted as a factor relevant to mitigation. If so, then it is the case that important practical measures were taken to prevent the decanting of the supernatant so as to cause any environmental harm.

47 Secondly, the Court should distinguish the position of the Defendant and the position of its employee Mr Freeman on the question of what practical measures should reasonably have been taken. This is consistent with the approach taken by the New South Wales Court of Criminal Appeal in Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304, where the Court considered the issue of a local council’s culpability when an offence was caused by the deliberate actions of an employee of the Council, taken without the Council’s authority.

48 This offence was caused by the actions of Mr Freeman, an experienced operator. He had hitherto been considered a good operator, albeit one whose immediate supervisor considered he needed a greater degree of supervision, when he decided to decant supernatant in a manner which was contrary to the standard operating procedures which applied under the Defendant’s OEMP.

49 The Prosecutor’s submission that the primary reason for the offence was a failure of management, including training and supervision overstates the position. This was not a case where there was any systematic failure, whether of management or otherwise. Rather there was an error of judgment made by an experienced operator who acted contrary to written operating procedure.

50 It is evident that locks could have been placed on the valve to physically prevent anyone other than the key-holder having the capacity to pump from the sludge storage tanks to the decant pit, a measure which was promptly taken after the incident.

51 It is also accepted that formal training, which has now been improved, was not optimal at the time of the commission of the offence, but to the extent that there was any perceptible deficiency in training it can only have had a very tenuous causative link to the circumstances in which the offence was committed. The fact that much of the training was on the job training is not to impugn it.

52 While the Court may accept that the Defendant could have done better in relation to training and supervision of Mr Freeman, there was no gross failure, nor any systemic failure. Accordingly, the culpability of the Defendant is at the low end of the spectrum.

Finding

53 I will first consider in relation to s 241(1)(b) whether any measures were taken at the time the offence was committed to prevent environmental harm. The ASOF at par 33-37 identifies the measures Mr Freeman said that he took at the time he decided to pump supernatant to the decant pit. The Prosecutor submitted that I should conclude that Mr Freeman lied when he told investigators in writing and orally that he had conducted testing of the supernatant and found that it was acceptable for certain parameters before allowing it to go to the decant pit. There is no evidence such as the recording of results that he did such testing and he made inconsistent statements about doing the testing. The Prosecutor bears an onus of establishing that matter beyond reasonable doubt. Such a finding was also said to undermine Mr Freeman’s evidence of other measures (par 37 ASOF) he took of observing that the supernatant was clear and setting a float pump in the sludge tank.

54 The Prosecutor’s case is based on alleging a failure of the Defendant to properly train the employees who manage the STP and that the supernatant should have been directed back to the inlet tank for further secondary treatment in accordance with the usual process. Whether Mr Freeman lied when he said he tested the supernatant before directing it to the decant pit seems peripheral to those matters the Prosecutor needs to establish for its primary case.

55 Conversely, the Defendant submitted that I should find on the balance of probabilities that the Defendant did undertake testing of the supernatant before causing it to be sent to the decant pit. If found this would be a mitigating factor as it shows the offence was less serious because measures to protect the environment were taken at the time of the incident.

56 The issue arises of whether there is enough evidence to reach a conclusion, whether on the Prosecutor’s or the Defendant’s case, in any event. The only evidence before me is the ASOF which records that there are conflicting statements made by Mr Freeman to investigators, whom he told in writing and orally that he did test the supernatant beforehand, and to his supervisor Mr Foley shortly after the incident. Mr Foley told investigators several months later that Mr Freeman told him he did not test the supernatant (ASOF par 35). I am not able on the basis of this material alone to make any finding about whether Mr Freeman lied when he told investigators that he tested the supernatant in the absence of any objective fact which can throw light on any of the inconsistent statements.

57 It follows from that conclusion that I do not accept the Prosecutor’s submission (par 42) that other aspects of Mr Freeman’s evidence concerning measures taken to minimise adverse environmental outcomes, such as observations that the supernatant was clear and the setting of float pumps in the sludge tank to prevent the discharge of sludge (detailed in par 37 ASOF) are also not reliable and should not have any weight attributed to them. I consider the Defendant can rely on this evidence that some measures were taken by Mr Freeman to minimise environmental harm at the time of the incident but cannot rely on his testing of the supernatant as a mitigating factor.

58 At a more general level of plant operation and training there were measures in place aimed at environmental protection although these were insufficient to prevent the occurrence of the circumstances giving rise to the offence. The ASOF par 48, 51 and 52 identifies that there were procedures in place dealing with environmental management as detailed in the OEMP and the Water and Wastewater Operations Circular No 1 and 3. According to the ASOF Mr Freeman was aware of these documents including that Circular No 3 required operators to fill out a change of request form in order to seek approval for a change from the operating ranges. There was some training of staff (ASOF par 49, 50) but training was generally on the job (ASOF par 61).

59 The Defendant referred to Cabonne where Giles JA (Hulme and Adams JJ concurring) at [28]-[34] distinguished between the corporate employer and the actions of its employees in relation to whether there had been an intentional disposal of raw sewage by a council worker where that intention was attributed to the council by the trial judge. That was held to be an error in the context of an offence concerning the pollution of waters. As observed by Giles JA at [30] at issue was the possible failures in the training and management of the defendant council of its employee rather than attributing to it the intentional behaviour of its employee. In that case the employee deposited sewage from a tanker at an unauthorised site contrary to specific instructions to use only three other specified sites. That employee was otherwise reliable and experienced. The same can be said of Mr Freeman but for the reservations expressed by Mr Foley as set out in par 54-57 of the ASOF that he required further supervision. As identified in the previous paragraph there were measures in place to attempt to deal with the operational risks of the STP which were not unfortunately followed by the employee.

60 A further consideration under s 241(1)(b) is the taking of practical measures after the incident to prevent or mitigate the harm. The Prosecutor submitted a number of measures could have been in place to avoid the specific incident as detailed in its submissions (par 45). The evidence of Ms Barnes identifies a number of these have been implemented as she identifies the extensive measures taken since the incident specifically in response to this incident, including improvements in training and awareness raising about the OEMP amongst all staff. One of the documents tendered by the Defendant was a form all employees are now required to sign acknowledging that they are aware of the OEMP, inter alia. A number of measures implemented are summarised in the ASOF at par 70.

61 Ms Barnes also identifies the measures taken generally in relation to the upgrading of the STP such as the implementation of twelve pollution reduction programs since 2002 and the upgrading of processes and practices within the STP at substantial cost. The Defendant has clearly implemented substantial environmental programs at the STP before and after the incident to improve the environmental performance of the STP in general and to ensure the avoidance of such incidents in the future through better staff training and specific mechanical changes to plant and equipment.

(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

62 There are two aspects to the issue of foreseeability (recognised in Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278 at [106]-[107]). One is the foreseeability of the commission of the offence. The other is mandated by s 241, 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 (s 241(1)(c)).

63 For the reasons given in relation to the practical measures that could have been taken prior to the incident (par 44-45), the offence itself was foreseeable. Where the commission of a regulatory offence such as this is foreseeable, the culpability of the Defendant is greater than in a case where the commission of the offence was not foreseeable.

64 Turning to the foreseeability of the harm likely to be caused by the offence, the plant the subject of the licence condition was a mobile pump and valve and piping in a sewage treatment works located in a sensitive environment, in the middle of a national park. The licensed discharge point was to Perisher Creek. The harm likely to be caused to the environment by the contravention of a licence condition to operate such plant used in connection with the licensed activity in a proper and efficient manner is obvious (cf Environment Protection Authority v Sydney Water Corporation Ltd (1999) 102 LGERA 232 at [68]).

Defendant’s submissions

65 While at an abstracted level it can be said that if equipment is not operated in a proper and efficient manner there is a risk of harm to the environment, the degree of risk was low. Further it was not readily foreseeable that a person in the employ of the Defendant who is an experienced employee would depart from the OEMP without obtaining approval as required by Circular No 3 as Mr Freeman did. The distinction referred to by Giles JA in Cabonne is applicable in this context.

Finding

66 In relation to foreseeability of the incident, in light of the position of employer and employee in this case I accept the Defendant’s submission that it is relevant to distinguish between the two in relation to foreseeability of the incident, as was done by analogy in Cabonne in relation to the attribution of an employee’s intention to the employer. The difficulty of an employer foreseeing that an experienced operator would deviate from standard practice of which he was aware is a relevant consideration in considering whether an incident was foreseeable. In this case this factor has less significance for this Defendant in light of these circumstances.

67 In relation to foreseeability of harm, I note that there was no actual environmental harm and a low risk of harm so that this factor is less significant in this case. Nevertheless, as found in Environmental Protection Authority v Sydney Water Corporation at [68] the Defendant as the responsible authority must be regarded as being in a position to foresee the harm if the plant is not maintained in an efficient condition.

(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence
Prosecutor’s submissions

68 The Defendant had complete control over the causes that gave rise to the offence.

Defendant’s submissions

69 At a superficial level the Defendant had control over the causes, in the sense that it was the Defendant’s STP and the Defendant’s staff fall under control of the Defendant. However, one must logically turn back to the circumstance that Mr Freeman made a decision on his own to act contrary to standard procedure. If his actions were not readily foreseeable, it cannot tenably be said that the Defendant had complete control over the causes that gave rise to the offence.

70 I find that the Defendant is vicariously liable for the actions of its employee and did have control over the causes giving rise to the offence.

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

71 This subsection is not applicable.

72 The level of seriousness of the offence in relation to the factors in s 241 is relatively low.

Other objective circumstances
Culpability

73 Regard must be had to the culpability of the Defendant and the individual circumstance which led to the commission of the offence including the reason the offence was committed, Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 per Badgery-Parker at 366. While the offence was committed intentionally by Mr Freeman in that he intended the supernatant to be sent to the decant pit, there was no intention to cause environmental harm and nor were there commercial reasons for the offence being committed. The Defendant’s culpability as his employer is low in the circumstances where the employee’s intentional act is not shared by his employer, but rather points to failures in the education and training procedures for that employee (as found in Cabonne). The Defendant’s culpability is at the low end of the possible spectrum.

74 There are no aggravating factors as specified in s 21A of the CSP Act.

Maximum penalty

75 In setting a penalty the Court should have regard to the maximum penalty applicable, as this is an expression of the seriousness Parliament attributes to the offence: see Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at [698] and [701] respectively that:

The task of a court is to assess the relative seriousness of the offender’s particular offence in relation to a worst case for which the maximum penalty is provided…

..the more serious the lasting environmental harm involved the more serious the offence and, ordinarily, the higher the penalty.

76 The maximum penalty is $1 million for a corporation and has been since 2006. In Snowy Hydro at [155] Biscoe J observed:

The sharp increases in the maximum penalty indicates a legislative intention that the existing sentencing patterns are to move sharply upwards: R v Slattery (1996) 90 A Crim R 519 at 524 per Hunt CJ at CL.

77 At [32] of Environment Protection Authority v Coastal Recycled Cooking Oils Pty Limited [2008] NSWLEC 242 I observed:

The maximum penalty for a corporation under s 64(1) of the POEO Act was increased from $250,000 to $1 million on 1 May 2006. See Pearlman J in Environment Protection Authority v Timber Industries Ltd [2001] NSWLEC 25 where the penalty in question doubled, also referred to by Lloyd J in Caltex at [63] in relation to the appropriate approach where this occurs. At [33] her Honour states:
That does not mean, however, that the court should simply impose a penalty effectively twice that which the Court would have imposed had the offence been committed before the coming into force of the POEO Act on 1 July 1999. Rather, the proper approach of the court must be to assess the relative seriousness of the particular offence in relation to a worst case for which the maximum penalty of $250,000 is now provided; that is, the penalty to be imposed is that which correlates upon the scale of penalty set by the legislature from zero to the maximum.

78 I will take into account these considerations in setting the penalty in this matter in light of the fourfold increase in the maximum penalty in 2006.

General/specific deterrence

79 Section 3A(b) of the CSP Act states that one of the purposes for a court in imposing a sentence is to prevent crime by deterring offenders. Sentences imposed in relation to environmental offences must embrace powerful considerations of general deterrence: see Axer per Badgery-Parker J at 367. In Axer, Mahoney J stated at 359:

The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur.

80 There are additional attributes of this Defendant which require consideration in the context of both general and specific deterrence. The Defendant is part of the Crown in an area which is responsible for environmental protection. It is operating an STP and can be considered to be well aware of its environmental responsibilities. As an entity of the Crown it should also be setting an example given those responsibilities of responsible environmental management particularly in a sensitive alpine environment. Relevant observations were made in Environment Protection Authority v Forestry Commission of New South Wales [2004] NSWLEC 751 where Cowdroy J stated at [34]:

The Court is satisfied that an element for general and specific deterrence is warranted in view of two matters. …Secondly, the nature of the undertaking of the defendant requires a high degree of care in the fulfilment of its operations. For this reason there is a need for specific deterrence to remind those in authority of a need to observe maximum safeguards for the environment.

81 Specific deterrence was referred to in Veen v The Queen [No. 2] (1988) 164 CLR 465 at 477 as being relevant to a defendant who displays:

uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law .

82 The Defendant accepted that specific deterrence was relevant given its ongoing obligations to operate the STP but did not accept that it had manifested an attitude of disobedience to the law. While it had a prior conviction for a pollution offence from the STP (Environment Protection Authority v The Crown in right of NSW), that was a number of years ago and many measures to prevent another polluting event have been taken since. The particular circumstances of this case show that it was a one-off unfortunate circumstance which is very unlikely to be repeated and I would not characterise this Defendant as showing a continuing attitude of disobedience to the law because of that prior conviction. Nevertheless, specific deterrence because of the identity of the Defendant and its responsibilities is an important consideration in this particular matter.

Prior conviction (s 21A(3)(e) CSP Act)

83 As referred to above the Defendant has a previous conviction from 2002 resulting from the operation of the same premises for the pollution of Perisher Creek (Environment Protection Authority v The Crown in right of NSW). A penalty of $30,000 was imposed. The maximum penalty was $250,000 at that time.

84 The Prosecutor submitted, and I accept, that because of the provisions of s 21A(4) of the CSP Act, the reference to prior convictions in s 21A(2)(d) of the CSP Act, the provision setting out the aggravating factors that are required to be taken into account in sentencing, does not authorise a use to be made of prior convictions in sentencing in a way different to that authorised by Veen (No 2) (R v McNaughton (2006) 66 NSWLR 566 per Spigelman CJ at [32], McClellan CJ at CL, Grove, Barr & Bell JJA agreeing). In Environment Protection Authority v Lithgow City Council [2007] NSWLEC 695, Preston J identified the law relevant to the consideration of prior convictions (at [46]):

Prior criminality cannot be used to impose a sentence which is greater than the upper boundary of a proportionate sentence set by the objective gravity of the offence: Veen v R [No 2] (1988) 164 CLR 465 at 477. Nevertheless, prior criminality can still legitimately take into account in fixing where, within the boundaries set by the objective circumstances, a sentence should lie. Prior criminality is relevant to show whether the offence is an uncharacteristic aberration or whether the offender has manifested a continuing attitude of disobedience to the law. If the latter, the purposes of retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted: Veen v R [No 2] (1988) 164 CLR 465 at 477; Weininger v R (2003) 212 CLR 629 at 640 [32]; R v McNaughton (2006) 66 NSWLR 566 at 572 [18], 574 [26].

Mitigating factors

85 A number of mitigating factors should be taken into account to reduce any penalty, as provided for in s 21A(3) of the CSP Act.

Guilty plea - s 21A(3)(k), s 22 CSP Act

86 The Defendant pleaded guilty at the earliest opportunity on 5 February 2010, the first return date of the summons. A plea of guilty entitles the Defendant to a discount in penalty under s 22 of the CSP Act in the range of 10-25 per cent: R v Thomson; R v Houlton (2000) 49 NSWLR 383; R v Sharma (2002) 54 NSWLR 300. The Prosecutor accepts that there has been a guilty plea at the earliest opportunity. There should be a large discount on this basis.

Contrition and remorse – s 21A(3)(i) CSP Act

87 The Defendant has expressed remorse through the affidavit of Ms Barnes affirmed 27 April 2010 and I accept that expression of remorse on behalf of the Defendant.

Assistance to law enforcement authorities – s 21A(3)(m), s 23 CSP Act

88 There has been full cooperation with the Prosecutor in relation to the offence, once reported, and in relation to the preparation for this hearing as evidenced by the ASOF. According to the Prosecutor, once the mandatory considerations set out in s 23(2) are taken into account, it is clear that this is not a significant level of assistance. In any event, except where the assistance is future assistance, it is not necessary to quantify any discount for assistance to the authorities separately from the discount for an early plea (R v Gallagher (1991) 23 NSWLR 220; The Queen v SZ [2007] NSWCCA 19).

Evenhandedness

89 The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty. This principle must always be applied subject to the particular circumstances of the case before the Court. The parties did not refer to any other cases which have considered s 64(1) of the POEO Act since the increase in penalty in 2006. There have been few cases since the fourfold increase in the maximum penalty in May 2006, and none with similar facts to this matter in that they did not concern activities related to water treatment and I would characterise them as generally less serious than this matter. There are too few cases to suggest a sentencing pattern at this stage.

90 In Environment Protection Authority v Delta Electricity [2009] NSWLEC 11 the defendant pleaded guilty to breaching a condition of an environment protection licence for failing to maintain premises in a condition which minimised or prevented the emission of dust from the premises. Causes included inadequate management and staffing. The defendant pleaded guilty, was convicted and fined $45,000. No actual environmental harm resulted from the offence.

91 In Environment Protection Authority v Coastal Recycled Cooking Oils the defendant pleaded guilty to two offences contravening a condition of its environment protection licence in that it did not operate a storage tank known as the “balance tank” in a proper and efficient manner by failing to close a lid on the tank without delay following cleaning of the tank, and also by failing to maintain an automatic cut-off valve. One of the offences was the result of employee error and was held to have a minor, short-lived amenity impact (at [28]). The other offence was attributed to plant malfunction. The offence had minimal environmental impact, was not serious and the defendant’s culpability was low (at [34]). Without proceeding to conviction the first charge was dismissed pursuant to s 10(1)(a) of the CSP Act. The defendant was convicted on the second charge and was ordered to make a payment of $18,000 to the Hunter-Central Rivers Catchment Management Authority (for the purpose of a weed management project to address serious weed infestations in the local area) pursuant to s 250(1)(e) of the POEO Act.

92 In Environment Protection Authority v Causmag Ore Company Proprietary Limited [2009] NSWLEC 164 the defendant pleaded guilty for a licence breach being the failure to maintain plant in a proper and efficient condition by failing to repair and/or replace filter bags that had become damaged, deteriorated, torn, heavily caked and/or worn out. It was held that the objective circumstances of the offence were reasonably serious, however the environmental harm caused was low and the defendant took prompt steps to rectify the situation once dust was emitted. The defendant pleaded guilty, was convicted and fined the sum of $20,000 and an order for the publication of a notice of conviction under s 250(1)(a) of the POEO Act was made. The defendant was also ordered to pay an additional $45,000 over three years to the Young Shire Council to fund the Rehabilitation of Victoria Street Landfill Project, pursuant to s 250(1)(e) of the POEO Act. The Court further ordered all future references by the defendant to its funding of the nominated rehabilitation project be accompanied by a conviction disclosure statement pursuant to s 250(1)(a).

93 The Prosecutor referred to Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299 a pollution of waters offence (also a Tier 2 offence as is the offence in this matter) where a fine of $75,000 was imposed, the maximum penalty being then $250,000. A pump at a landfill site was left on which resulted in toxic pollutants from a storage tank entering a creek and resulted in substantial environmental harm. That case was more serious than this matter given the far greater environmental harm caused, as reflected in a substantial penalty given the maximum penalty then available.

Section 250(1)(e) order

94 Section 250(1) of the POEO Act states:

(1) Orders

The court may do any one or more of the following:
…
(e) order the offender to pay a specified amount to the Environmental Trust established under the Environmental Trust Act 1998, or a specified organisation, for the purposes of a specified project for the restoration or enhancement of the environment or for general environmental purposes,

95 The Defendant has proposed the making of a s 250(1)(e) order to the effect that payment is made to the Southern Rivers Catchment Management Authority (the CMA) for the purpose of riparian rehabilitation and exotic tree removal along approximately 15km of the Thredbo River between Bullocks Flat and Lake Jindabyne. This is opposed by the Prosecutor because the Defendant supports that CMA according to the Defendant’s annual report. Consequently there will not be any punishment as required by s 3 of the CSP Act as there will be no hardship or general deterrence to this Defendant resulting from the order being made. This was because the possibility that the funding that would otherwise be paid to the CMA by the Defendant would be reduced by the amount specified in an order had not been ruled out by the Defendant.

96 After the sentence hearing a letter from the General Manager for the CMA dated 4 May 2010 was filed by the Defendant which records the sources of funding for that body. These do not include the Defendant which acts solely as a conduit for the CMA’s funding via its finance branch. The CMA is a separate entity for State budget and finance processes. It is established under the Catchment Management Authorities Act 2003 as an independent statutory authority. The Prosecutor’s concerns can also be alleviated by an appropriately worded order such as that proposed by the Defendant. I consider it is appropriate to make such an order for a specified amount that accords with the amount of penalty I would otherwise be inclined to impose. The amount of $80,000 is appropriate.

97 I note that agreement has been reached concerning the payment of the Prosecutor’s costs by the Defendant in the sum of $65,000. Such costs are payable under s 257B of the Criminal Procedure Act 1986.

Orders

98 The Court orders that:

1. The Defendant is convicted of the offence with which it is charged.

2. (a) Pursuant to section 250(1)(e) of the Protection of the Environment Operations Act 1997, the State of New South Wales (Department of Environment, Climate Change and Water) is to pay the Southern Rivers Catchment Management Authority the amount of $80,000 for the purpose of riparian rehabilitation and exotic tree removal along approximately 15 km of the Thredbo River between Bullocks Flat and Lake Jindabyne as set out in exhibit 2.
(b) The Defendant is to pay the amount as external funding and the amount is not to replace or reduce the operational funding that the Defendant otherwise provides to the Southern Rivers Catchment Management Authority.
(c) The amount is to be paid to the Southern Rivers Catchment Management Authority within 30 days.
3. The Defendant to pay the Prosecutor’s costs of the proceedings of $65,000.
4. The exhibits may be returned.