Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd

[2010] NSWLEC 114

Reported Decision: 174 LGERA 314

Land and Environment Court

of New South Wales

CITATION:	Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114 This decision has been amended. Please see the end of the judgment for a list of the amendments.
PARTIES:	PROSECUTOR: Environment Protection Authority DEFENDANT: Straits (Hillgrove) Gold Pty Ltd
FILE NUMBER(S):	50017 of 2010
CORAM:	Biscoe J
KEY ISSUES:	ENVIRONMENTAL OFFENCES :- pollution of waters - sentencing considerations
LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999, ss 3A, 21A, 22 Fines Act 1996, s 6 Protection of the Environment Operations Act 1997 ss 120(1), 123(a), 241(1), 248
CASES CITED:	Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34, 145 LGERA 235 Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137, 168 LGERA 121 Environment Protection Authority v Albury City Council [2009] NSWLEC 169 Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280, 163 LGERA 71 Environment Protection Authority v Boral Australian Gypsum Ltd [2009] NSWLEC 26 Environment Protection Authority v Hanna [2010] NSWLEC 98 Environment Protection Authority v Ghossayn [2009] NSWLEC 181 Environment Protection Authority v Ramsey Food Processing Pty Ltd [2010] NSWLEC 23 Environment Protection Authority v Ross [2009] NSWLEC 36, 165 LGERA 42 Environment Protection Authority v Snowy Hydro Pty Ltd [2008] NSWLEC 264, 162 LGERA 273 Environment Protection Authority v State of New South Wales (Department of Environment, Climate Change and Water) [2010] NSWLEC 67 Environment Protection Authority v Transpacific Industries Pty Ltd [2010] NSWLEC 85 Environment Protection Authority v Waste Recycling and Reprocessing Corporation [2006] NSWLEC 419,148 LGERA 299 Environment Protection Authority v Wattke, Environment Protection Authority v Geerdink [2010] NSWLEC 24 Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77 Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66 R v Thames Water [2010] EWCAA (Crim) 202, (2010) 2 All ER 42 R v Thomson [2000] NSWCCA 309, 49 NSWLR 383 Veen v The Queen (1979) 143 CLR 458
DATES OF HEARING:	1 July 2010
DATE OF JUDGMENT:	2 July 2010
LEGAL REPRESENTATIVES:	PROSECUTOR: Mr P Barley SOLICITORS: Department of Environment, Climate Change and Water DEFENDANT: Mr T Hill SOLICITORS: Blake Dawson

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BISCOE J

2 July 2010

50017 of 2010

ENVIRONMENT PROTECTION AUTHORITY v STRAITS (HILLGROVE) GOLD PTY LIMITED

JUDGMENT

INTRODUCTION

1 The defendant, Straits (Hillgrove) Pty Limited, has pleaded guilty to one charge under s 120(1) of the Protection of the Environment Operations Act 1997 (POEO Act) that on 23 April 2009 at Hillgrove it polluted waters.

2 The defendant is now before the Court for sentencing.

3 Section 120 creates a strict liability offence, as follows:

“ 120 Prohibition of pollution of waters

(1) A person who pollutes any waters is guilty of an offence.
(2) In this section:

pollute waters includes cause or permit any waters to be polluted.”

4 Between 1,000 and 3,000 tonnes of toxic slimes material spilled from the defendant’s gold and antimony mining plant, escaped over a section of an earthen bund that had been lowered to facilitate a contractor’s access to power lines, and travelled a distance of over 300 metres along a road, a grassed area and (for 200 metres or more) along the dry bed of an unnamed creek.

5 The bed of the unnamed creek was dry, as it is most of the time, but when it flows it flows significantly. The dry creek bed constituted “waters” for the purpose of the POEO Act because it was a “watercourse” which falls within the extended definition of “waters”. The placing of any matter where it falls or descends onto the “dry bed of any waters” falls within the statutory definition of “water pollution” or “pollution of waters”: see the Dictionary to the POEO Act.

6 The facts are agreed and the main issues concern the objective seriousness of the offence in terms of the defendant’s conduct and the potential for environmental harm. The defendant’s conduct following discovery of the escape of the pollutant has been good.

Background

7 The defendant undertakes gold and antimony mining activities at the Hillgrove Mine, Brackin Street, Hillgrove (Premises).

8 The defendant is a wholly owned subsidiary of Straits Resources Limited which purchased the Hillgrove Mine in March 2004. The Hillgrove Mine and processing plant are situated about 30 kilometres east of Armidale. The Premises are on one side of a gorge.

9 The Premises are in an area where mining has occurred for over 130 years and where there are still unused old workings which pre-date the defendant’s purchase of the Hillgrove Mine.

10 The defendant holds Environment Protection Licence (EPL) 921 issued under the POEO Act. EPL 921 is a premises based EPL which regulates activities at the Premises. EPL 921 was in force at the time of the incident.

11 EPL 921 authorises the pollution of waters from 12 discharge points at the Premises subject to conditions. Discharge points 1 to 11 are from adits which were created as part of the historical mining of the Premises before the defendant purchased the Hillgrove Mine in 2004. Discharge point 23 is from the spillway of the no. 3 emergency storage of the Recycled Water Storage System. EPL 921 does not otherwise authorise the pollution of waters.

12 At the time of the incident, gold and antimony mining, including the processing of ore, was being undertaken at the Premises.

13 On 18 August 2009, processing of ore at the Premises ceased and the Hillgrove Mine was placed on care and maintenance.

The Premises

14 At the time of the incident, the processing plant at the Premises had been going through a commissioning program since May 2008. The processing plant was still in its commissioning stage when the incident occurred.

15 The extraction process involves ore being delivered to the processing plant from a run-of-mine stockpile and then crushed. The crushed ore goes onto a conveyor belt where it is fed into a rotating semi-autogenous mill (SAG mill) via a feed chute. In the feed chute it is mixed with water, returned liquid from the cyclone underflow, and periodically steel balls as grinding media. The mill breaks and grinds the ore, with the purpose of liberating the valuable minerals “locked” in the ore, and therefore making them amenable to concentration via flotation downstream. The discharge end of the mill has grates in it that allow a certain sized material through. This in turn passes onto a trommel screen that rotates with the mill. The trommel screen separates any oversized material that has passed through the grates from the mill discharged slurry which falls to a hopper below. The oversized material that is screened out by the trommel is known as scats, and contains some rock and steel balls. The material in the hopper pumps to a cyclone pack which splits the finer material into the flotation feed and the coarser underflow returning to the mill for further grinding.

16 The mill produces particles across a size distribution. If excessive particles are produced at a size close to the trommel screen aperture the screen may become partially blocked (the operators call this becoming “pegged”). This has the effect of reducing the trommel screen's open area, which is the area available for the ground slurry to fall into the hopper below. This can result in some of the slurry (also known as “slimes”) being discharged with the scats into the scats bunker on the ground. The slimes are ground ore feed, ore which contains high levels of antimony and arsenic together with elevated levels of heavy metals. The periodic discharge of slimes with the scats from the trommel is not uncommon across the industry's milling operations, with operations taking action as it occurs by adjusting process parameters or equipment. Operations also ensure that appropriate capture and return systems, such as bunds and sumps are in place for this eventuality.

17 The defendant had been commissioning the processing plant in order to achieve design performance. This commissioning process included redesigning the trommel screen configurations. At the time of the incident the trommel screen was pegging more regularly than normal. It was accepted by the defendant’s staff that the trommel screen selection at the time of the offence required higher than normal operator monitoring and its design could be improved. It was necessary to de-peg the trommel regularly, about every two weeks. This was not a scheduled maintenance task but rather one that was undertaken when there was a shutdown for some other reason or there was an excessive flow of slimes.

18 An earthen bund surrounds the operationaI part of the Premises. Its purpose was to divert unwanted runoff either from spillage or rainwater into a contained zone for controlled drainage. It varied in height but was approximately 60 to 75 centimetres high and was made of a fine consolidated material. The defendant’s staff were aware of the importance of the bund for environmental protection. A section of the bund near the trommel mill had recently been lowered by about 40 to 50 centimetres by the defendant’s electrical contractor to facilitate access to power lines down slope of the processing area of the Premises.

The day of the incident

19 Staff on duty on 23 April 2009, the day of the incident, included:

Justin Johns – processing manager
Jim Davis - processing superintendent
Rob Thomas - processing shift supervisor
Sandy Williams - leach operator
Cameron Ley - mill operator

20 The day shift came to the Premises to start work at 6 am. There was a handover meeting between Rob Thomas and his counter part on the night shift, Peter Cruikshank. Mr Cruickshank said that the trommel was pegging up again despite the fact that it had been de-pegged the previous day. This was prior to the 6 am shift start.

21 The area around the trommel was already wet. It had been raining but there was more liquid there than just from the rain. A number of the defendant’s staff noticed this including Mr Williams, Mr Jim Davis, Mr Thomas and Mr Ley.

22 At about 7 am there was a routine meeting of a number of staff including Justin Johns and Jim Davis. The spillage from the trommel was discussed and according to Mr Johns, Mr Davis was tasked with dealing with this by altering some of the processing “parameters”.

23 The processing plant continued to operate until some time between 10.15 and 11 am. During this time the slimes discharged onto the ground in the bunded area. It was observed at times to be “like a garden hose” that was turned on fully. The level of slimes on the ground built up until it was about ankIe deep and eventually it overtopped that part of the bund which had been lowered.

24 During a routine inspection at around 10 am, Mr Johns saw that a section of the bund had been lowered and that the slimes material was leaving the bunded area of the Premises. He followed the path of the slimes down slope and saw that it had progressed to such a point that it was going down into the gorge.

25 It was at this point that Mr Johns called an immediate halt to processing at the mill, and the mill stopped at this time.

26 The section of the bund that had been removed was reinstated by employees of the defendant to prevent any further slimes leaving the bunded area and further temporary bunds put in place down slope to prevent the discharge going any further than it already had done.

27 The defendant’s Environment Coordinator, Daniel Calderwood, was offsite in Mudgee on 23 April 2009. Mr Calderwood was contacted by the Processing Engineer, Ashley Howland on 23 April 2009, and advised of the incident and returned to the Premises the next day.

28 When Mr Calderwood returned to the Premises on 24 April 2009 and inspected the scene of the incident, he reported the incident to the Department of Environment, Climate Change and Water (DECCW) Environment Line.

The spill

29 The path of the slimes material was tracked by the defendant’s staff and then, on Monday 27 April 2009, by DECCW officers, Angus Adair and Mike Lewis together with the defendant’s Mr Calderwood.

30 An aerial photo of the Premises was taken on 29 April 2009. The path of the slimes material and the sample sites have been superimposed onto the photos.

31 The slimes material overtopped the section of the bund that had been removed and first ran onto a temporary ramp and then on to an access road. The path of the slimes was apparent on 27 April 2009 by light grey residue approximately 2.5 metres wide.

32 It then continued down the road along a gutter before apparently pooling in the road before further running downhill across a grassed area and into a dish drain which was acting as a clean water diversion drain. The flow continued along this grass clean water diversion drain and into a surface drain running through the rock. The path of the slimes continued to be apparent from the grey residue.

33 It flowed along the depression in the rock before running over a 1.8 metre drop to a rock ledge where it had pooled again before running further down the unnamed creek through rocks. These rocks had grey residue on them.

34 The DECCW officers followed the unnamed creek as far as they could but eventually it became too steep as it descended rapidly towards Bakers Creek at the bottom of the gorge.

35 There was visible grey residue up to 300 metres from the bund surrounding the operation part of the Premises.

36 The DECCW officers then went to a point at Bakers Creek where it was estimated that the unnamed creek entered Bakers Creek. There was no visual evidence of the slimes at this point.

37 The defendant estimates that between 1,000 and 3,000 litres of slimes escaped the bunded area.

Environmental harm

38 Mr Adair instructed Mr Calderwood not to begin clean-up operations until the Premises were inspected by DECCW's ecotoxicologist.

39 On 29 April 2009 and before any clean up had commenced, Ms Fleurdelis Pablo, an ecotoxicologist employed by DECCW, inspected the Premises and the slimes' flow path with Mr Adair. She took a further four slimes samples and six liquid samples.

40 The slimes samples were all analysed as having high levels of antimony, arsenic and lead with lower levels of manganese, zinc, chromium, titanium, nickel, vanadium, cobalt and selenium. The analysis of DECCW samples was broadly consistent with analysis undertaken by the defendant other than for lead. The DECCW analysis was higher for this parameter.

41 There is no visual or analytical evidence in the samples taken in Bakers Creek that the slimes had reached Bakers Creek.

42 There was evidence of elevated background levels of antimony and arsenic in Bakers Creek upstream of the confluence of the unnamed creek and Bakers Creek. Ms Pablo opines that some aquatic organisms have adapted to deal with these conditions. The path to the gorge, the dry creek bed, Bakers Creek and the surrounding local region have a history of over 130 years of mining activities. The historical activities, undertaken before the defendant purchased the Hillgrove Mine, include:

(a) the presence of tailings storage in the gully above the dry creek bed;
(b) the presence of processing and cyanidation facilities in the gully above the old creek bed;
(c) mine buildings at the top of the gorge where the current plant, track and drain are;
(d) an ore/concentrate haulage tramway, from Bakers Creek to the processing plant area upstream of the unnamed creek; and
(e) extensive mining and processing activities in the creek bed of Bakers Creek both up and downstream of the confluence of the unnamed creek and Bakers Creek including the discharge of tailings into the creek.

43 Ms Pablo's opinion is as follows:

“ Summary and Conclusion

The spill of approximately 3000 litres ‘slimes’ material from the premises of Straits (Hillgrove) Gold Pty Ltd mine at Hillgrove on 23 April 2009 produced a general trail of the slimes from the processing plant area to the edge of the gorge. The spill was traced in patches in some areas, also heading in multiple paths in other areas, and was traced within the top of an unnamed creek that leads to Bakers Creek. The area was a closed woodland having a variety of gums. The unnamed creek is located on the edge of the gorge and because of its topography, it is dry most of the time (such as at the time of investigation by DECCW on 27 and 30 April 2009) but when it flows it flows significantly. Bakers Creek is at the base of the gorge, and its water is slow-flowing and contains a number of organisms such as caddis flies, water pennies and water boatmen. While there was evidence of the slimes having flowed over to the side of the gorge, there was no evidence of its having reached Bakers Creek. The slimes material from various sampling sites of the contaminated area were analysed by EFAS to contain high levels of antimony Sb (22000-23000 mg/kg), arsenic As (2100 mg/kg), lead Pb (4700-5100 mg/kg). Other metals were also present at relatively lower levels: manganese Mn, zinc Zn, chromium Cr, titanium Ti, nickel Ni, vanadium V, cobalt Co and selenium Se. There was no evidence of the vegetation in the area having been affected by the spilt slimes. Water samples collected from Bakers Creek on 27 and 30 April 2009 were not toxic to three laboratory test species cladoceran C. dubia , bacteria V . fischeri and rainbowfish M. duboulayi . This is despite the presence of ~0.5 Sb and 0.05 mg/L As in the waters. The toxicity results are consistent with the lack of evidence of slimes entering the Creek. Toxicity testing of the slimes samples mixed in water, to the three laboratory test organisms, showed acute toxicity in the order:

C. dubia > V. fischeri > rainbowfish M. duboulayi .


These tests model the possible scenario in the field wherein a storm event would cause disturbance of the slimes material on the ground, resuspend the slimes into the water, wash the slimes down to Bakers Creek while causing mobilisation of some metal ions into the water column.

There was no environmental harm in the sense of evidence of dead creatures observed in the area from the processing plant to the edge of the gorge as well as in Bakers Creek during the investigations on 27 and 30 April 2009. Most of the spilt slimes material would have been recovered during the clean up of the site on and/or after 30 April 2009. However, there would be some quantity of the slimes in the drainage line that would not be recovered due to difficult access. There was a potential for environmental harm at Bakers Creek. If there had been a rain event which was sufficiently large to cause the unnamed creek to flow, the 'unrecovered slimes' material may well have been flushed into Bakers Creek. Species such as caddis fly and water pennies which were in the waters of Bakers Creek at the time of investigation on 30 April 2009, as well as other sensitive to moderately sensitive organisms which were not identified but were present, would likely be among the organisms that would have been affected. Tolerant species such as water boatmen would be less likely affected. In the absence of information on estimated volume of 'unrecovered slimes' and degree of dilution of the slimes at Bakers Creek with the addition of stormwater runoff, the extent of potential environmental harm cannot be estimated.”
Post incident conduct

44 The defendant cleaned up the slimes. The defendant was permitted by Mr Adair on 29 April 2009 to clean up the bunded area and, following the inspection by Ms Pablo on 30 April 2010, the remainder of the affected area. The defendant undertook the clean up of the bunded area and the remaining of the affected area in accordance with the DECCW recommendations. The clean up included:

(a) use of an excavator to clean up material accessible by machine; and
(b) personnel with buckets and hand towels to clean up the remainder of the accessible material.

45 The defendant has fully cooperated with DECCW's investigation in every respect including:

(a) filing an incident report with DECCW on 15 May 2009;
(b) facilitating inspection of the Premises as and when required by DECCW;
(c) providing information and records as and when required by DECCW;
(d) nominating a corporate representative under s 203 of the POEO Act as and when required by DECCW; and
(e) arranging for interviews of managers and staff as and when requested by DECCW.

46 The defendant has implemented the following internal changes since the incident:

(a) as part of the commissioning process, the defendant reconfigured the trommel screen in late May 2009 and installed a 10 mm woven mesh screen which has the effect of increasing the open area and therefore minimising the flooding and the likelihood of the incident occurring again;
(b) the defendant discussed the incident with all employees at a site briefing in late May 2009. This included re-enforcing environmental accountability and authority to stop equipment when required if the employee believes there is a risk of environmental harm.
(c) the defendant have upgraded their site induction program to ensure all personnel working on site understand the requirement not to impact on any environmental protection measures.

47 The defendant pleaded guilty at the first possible opportunity at the mention on 7 May 2010.

48 The defendant has no prior convictions.

49 The defendant formally expresses regret for the occurrence of the incident and apologises for the discharge occurring.

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

“ 3A Purposes of sentencing

The purposes for which a court may impose a sentence on an offender are as follows:
(a) to ensure that the offender is adequately punished for the offence,
(b) to prevent crime by deterring the offender and other persons from committing similar offences,
(c) to protect the community from the offender,
(d) to promote the rehabilitation of the offender,
(e) to make the offender accountable for his or her actions,
(f) to denounce the conduct of the offender,
(g) to recognise the harm done to the victim of the crime and the community.”

51 Purposes (a), (b), (e), (f), and (g) are the most relevant in this case.

52 In determining the appropriate sentence the Court must consider the aggravating, mitigating and other matters specified in s 21A of the CSP Act. Relevant mitigating matters in s 21(A) are as follows:

“(3) Mitigating factors
The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows:
(a) the injury, emotional harm, loss or damage caused by the offence was not substantial,
…
(e) the offender does not have any record (or any significant record) of previous convictions,
(f) the offender was a person of good character,
(g) the offender is unlikely to re-offend,
(h) the offender has good prospects of rehabilitation, whether by reason of the offender’s age or otherwise,
(i) the remorse shown by the offender for the offence, but only if:
(i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and
(ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both),
…
(k) a plea of guilty by the offender (as provided by section 22),
…
(m) assistance by the offender to law enforcement authorities (as provided by section 23).

53 Sections 22 and 23 of the CSP Act provide:

“ 22 Guilty plea to be taken into account

(1) In passing sentence for an offence on an offender who has pleaded guilty to the offence, a court must take into account:
(a) the fact that the offender has pleaded guilty, and
(b) when the offender pleaded guilty or indicated an intention to plead guilty,
and may accordingly impose a lesser penalty than it would otherwise have imposed.

(2) When passing sentence on such an offender, a court that does not impose a lesser penalty under this section must indicate to the offender, and make a record of, its reasons for not doing so.
…

23 Power to reduce penalties for assistance provided to law enforcement authorities

(1) A court may impose a lesser penalty than it would otherwise impose on an offender, having regard to the degree to which the offender has assisted, or undertaken to assist, law enforcement authorities in the prevention, detection or investigation of, or in proceedings relating to, the offence concerned or any other offence.
(2) In deciding whether to impose a lesser penalty for an offence and the nature and extent of the penalty it imposes, the court must consider the following matters:
(a) the effect of the offence on the victim or victims of the offence and the family or families of the victim or victims,
(b) the significance and usefulness of the offender’s assistance to the authority or authorities concerned, taking into consideration any evaluation by the authority or authorities of the assistance rendered or undertaken to be rendered,
(c) the truthfulness, completeness and reliability of any information or evidence provided by the offender,
(d) the nature and extent of the offender’s assistance or promised assistance,
(e) the timeliness of the assistance or undertaking to assist,
(f) any benefits that the offender has gained or may gain by reason of the assistance or undertaking to assist,
(g) whether the offender will suffer harsher custodial conditions as a consequence of the assistance or undertaking to assist,
(h) any injury suffered by the offender or the offender’s family, or any danger or risk of injury to the offender or the offender’s family, resulting from the assistance or undertaking to assist,
(i) whether the assistance or promised assistance concerns the offence for which the offender is being sentenced or an unrelated offence,
(j) the likelihood that the offender will commit further offences after release.
(3) A lesser penalty that is imposed under this section in relation to an offence must not be unreasonably disproportionate to the nature and circumstances of the offence.”

54 The aggravating factors listed in s 21A are mostly irrelevant in pollution cases but the few that may be relevant include that the offender has a record of previous convictions, the loss or damage caused by the offence was substantial, the offence was committed without regard to public safety, and the offence involved a series of criminal acts.

55 In determining the appropriate sentence in pollution matters the Court must also consider the factors of relevance in s 241(1) of the POEO Act,which provides:

241 Matters to be considered in imposing penalty

(1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant):
(a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence,
(b) the practical measures that may be taken to prevent, control, abate or mitigate that harm,
(c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence,
(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence,
(e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee.”

56 The Court may take into account the objects of the legislation that has been breached. The objects of the POEO Act include:

“(a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development,
…
(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,…”

57 The principles of ecologically sustainable development include inter-generational equity – namely that the present generation should ensure that the health, diversity and productivity of the environment are maintained or enhanced for the benefit of future generations: s 6(2) of the Protection of the Environment Administration Act 1991.

58 The maximum penalty for an offence against s 120(1), in the case of a corporation, is $1 million and $120,000 for each day that the offence continues: s 23(a) POEO Act.

59 Authorities in this Court reviewing sentencing principles and the appellate decisions include Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34, 145 LGERA 235; Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419, 148 LGERA 299; Environment Protection Authority v Snowy Hydro Pty Ltd [2008] NSWLEC 264, 162 LGERA 273; Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137, 168 LGERA 121; Environment Protection Authority v Ghossayn [2009] NSWLEC 181; Environment Protection Authority v Transpacific Industries Pty Ltd [2010] NSWLEC 85; and Environment Protection Authority v Hanna [2010] NSWLEC 98.

60 The following sentencing principles in pollution cases emerge from the legislation and the authorities including the recent decision of the English Court of Appeal in R v Thames Water Utilities Ltd [2010] EWCA Crim 202, 3 All E.R. 47 at 55-57:

(a) the environment is a precious heritage and it is incumbent on the present generation (including the courts) to play a part in preserving it for the future. This is clear from the object of the POEO Act to protect the environment having regard to the need to maintain ecologically sustainable development, whose principles include the principle of inter-generational equity. Rivers, creeks and watercourses are an important part of the environment, and it is necessary to preserve them from pollution.
(b) Section 120(1) of the POEO Act creates an offence of strict liability because the legislature regards the escape of pollutants into waters to be so undesirable as to merit criminal punishment irrespective of the defendant’s state of mind.
(c) the legislature considers that water pollution offences are so serious that the maximum penalty, in the case of a corporation, is $1 million and $120,000 for each day that the offence continues.
(d) The sentence must fit the offence as well as the offender. That is, it must reflect the objective circumstances of the offence and the personal or subjective circumstances of the offender: Veen v The Queen (1979) 143 CLR 458 at 490.
(e) The objective gravity of the offence establishes the upper and the lower limits of the appropriate penalty irrespective of the mitigating features: Environment Protection Authority v Waste Recycling and Reprocessing Corporation [2006] NSWLEC 419,148 LGERA 299 at [140].
(f) the size of the penalty depends on the facts of each case. Decisions of this court will continue to emerge over time and will provide focal points to assist consistency in sentencing.
(g) punishment, deterrence (thereby protecting the environment and the public in future) and denunciation are among the important purposes of sentencing in pollution cases.
(h) the purpose of deterrence in this context includes: (i) making clear that the overall penalty for a breach of the law is always likely to be more than any expense that should have been incurred in avoiding the breach in the first place; (ii) the need for the overall penalty to bring the necessary message home to the particular offender in order to deter future breaches by the offender or by other potential offenders; (iii) the need for equal deterrence of all potential offenders, whether wealthy or of limited means.
(h) the financial means of an offender to pay a fine may be taken into account under s 6 of the Fines Act 1996. That factor may trump consistency in sentencing and consistency of proportionality between the fine and the gravity of the offence.
(i) the following factors relating to the actual or potential extent of the damage caused may aggravate the seriousness of the offence: (i) the pollutant was noxious, widespread or pervasive or liable to spread widely or have long-lasting effects; (ii) human health, animal health or flora were adversely affected; (iii) an extensive clean up operation, site reparation or animal rehabilitation operation was required; (iv) other lawful activities were prevented or significant interfered with.
(j) more general aggravating factors include: (i) the culpability of the defendant; (ii) deliberate offending in order to maximise profit; (iii) the skimping of proper precautions to make or save money, or to gain a competitive advantage; (iv) repetition; (v) failure to heed advice or warning from regulatory authorities, employees or others; (vi) a poor response after the event; (vii) previous convictions.
(k) mitigating factors include: (i) the loss or damage caused by the offence was not substantial; (ii) absence of prior convictions; (iii) good character; (iv) the offender is unlikely to re-offend; (v) the offender has good prospects of rehabilitation; (vi) the remorse shown by the offender (in accordance with the legislative prescription); (vii) the offender has accepted responsibility for their actions; (viii) the offender has acknowledged any injury, loss of damage caused and made reparation; (ix) a plea of guilty at an early opportunity; (x) a good response after the event, including prompt reporting of the offence, assistance to law enforcement authorities and the taking of prompt and effective measures to rectify any failures.

61 The maximum penalty for an offence reflects Parliament’s expression of the seriousness of the offence. At the time of commission of the offence, the maximum penalty was $1 million for a corporation: s 123(a) POEO Act. The significant increases in the maximum penalty in the last decade from $125,000 in 1999 emphasise the seriousness with which Parliament regards environmental offences.

Harm caused or likely to be caused to the environment by commission of the offence: s 241(1)(a) POEO Act

62 “Harm to the environment” is defined in the POEO Act Dictionary to include “any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution”. The meaning of the word “likely” in s 241(1)(a) is “a real or not remote chance or possibility regardless if whether it is less or more than a fifty per cent chance”: Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66 at [44].

63 Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account: Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419, 148 LGERA 299 at [145].

64 As between 1,000 and 3,000 litres of toxic slime travelled along the unnamed creek bed, the environment was degraded. That was the extent of the actual environmental harm apart from temporary discolouration of the creek bed and several rocks at the perimeter of the gorge. There was no actual environmental harm in the form of dead of injured fauna or flora. The defendant cleared up the slime in accordance with the directions of the Environment Protection Authority. The slime did not reach the waters in Baker’s Creek. Overall, the actual harm to the environment was small.

65 In my opinion, Ms Pablo’s evidence is sufficient to establish potential harm to Bakers Creek had the residues of the pollutant in the unnamed creek been mobilised by rain. Contrary to the defendant’s submission, the fact that the potential receiving environment of Bakers Creek is impacted by historical mining activities and contains background levels of antimony and arsenic is not a mitigating factor. Pollution can and often does occur incrementally and each pollution incident degrades the environment further. I do not accept the defendant’s submission that Ms Pablo’s opinion was merely speculative. However, I accept that there is no evidence of the amount of residual material. It would appear to be minor, and it would be significantly diluted by a large rainfall event. I conclude that the potential harm to the receiving waters of Baker’s Creek was very low.

Practical measures which may have been taken to prevent, control, abate or mitigate the harm: s 241(1)(b) POEO Act

66 In my opinion, the pollution incident could and should have been avoided by practical measures if the defendant had taken reasonable care. By the time the escape of the slime was discovered and immediate remedial steps taken, 1,000 to 3,000 litres had escaped through the part of the bund which the defendant knew had been lowered greatly from about 60 centimetres to 10 to 25 centimetres.

67 The defendant knew that the bund was there to protect the environment, that it had been greatly reduced in height for pragmatic reasons to allow a contractor access to another part of the land. Hours prior to the discovery of the escape of the slime over the lowered bund, the defendant knew that there was a problem with slime escaping from the trommel. During those hours the defendant knew that the slime was flowing like a garden hose and was ankle deep on the ground adjacent to the bund. It is very difficult to see why the defendant took no steps during that time to raise the lowered part of the bund to contain the slime and to stop processing until the danger was overcome.

68 For these reasons, in my opinion, the defendant was careless in allowing the slime to escape.

69 However, the defendant’s conduct after discovery of the escape was good. Processing was immediately stopped. The lowered section of the bund was reinstated and temporary earthen bunds were put in place down the slope to prevent the discharge travelling further. The defendant’s environmental coordinator (who was away at a conference on the day of the pollution incident) was contacted and advised of the incident and upon his return to the premises and inspection he reported the incident to the regulations authority.

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) POEO Act

70 The defendant accepts that it was reasonably foreseeable that if the trommel became blocked, slime discharge would enter the bunded area and that the slime could overtop the bunded area if the bund was lowered. In my opinion, the defendant could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence.

The extent to which the person who committed the offence had control over the causes which gave rise to the offence: s 241(1)(d) POEO Act

71 As the operator and licensee of the premises, as well as the employer of all the people involved, the defendant had complete control over the operation and the causes which gave rise to the offence.

Other relevant factors: s 241(2) POEO Act

72 Regard should be had to the fact that the defendant holds an environment protection licence because it placed a high responsibility on the licensee and increased its awareness of the possibility of harm. A condition of that licence imposed an express obligation on the defendant to comply with s 120 of the POEO Act (except as may be expressly provided in any other condition).

Conclusion as to objective circumstances

73 In my opinion, taking all things into consideration, including on the one hand the carelessness of the defendant and on the other hand the low actual and potential harm to the environment, the offence should be considered to be of low to medium objective gravity.

General deterrence

74 This is a case where the defendant could and should have done more to avoid committing the offence. There is a need for general deterrence.

Specific deterrence

75 I do not think that specific deterrence is a weighty factor. The conduct of the defendant since the discovery of the escape on the morning of the pollution incident has been good. It has expressed remorse and has taken measures to prevent a recurrence. The prosecutor complimented the defendant on its cooperative conduct in these proceedings.

Retribution and denunciation

76 Retribution and denunciation are among the purposes of sentencing. I take them into account.

SUBJECTIVE FACTORS

77 The commission of the offence was unintended and was not deliberate.

78 The defendant has no prior convictions for an environmental offence.

79 The defendant’s guilty plea is a mitigating factor. The plea of guilty was entered at the earliest opportunity. This should be reflected by discounting the penalty that the defendant would otherwise incur by the full amount of 25 per cent allowed for early pleas: R v Thomson [2000] NSWCCA 309, 49 NSWLR 383.

80 The defendant has cooperated to a high degree with the prosecutor throughout the conduct of the matter, including with the investigation of the matter on site and through the provision of interviews, documents and information. Through its solicitor the defendant has cooperated with the prosecutor culminating in the filing of the statement of agreed facts.

81 The defendant is of good character. The defendant is a good corporate citizen and has been directly involved in civic improvements and other initiatives in the local community. These include holding regular meetings with the Hillgrove community and active involvement with local schools and the University of New England including tree planting throughout Hillgrove and site visits with particular reference to environmental systems in place. The defendant takes its environmental responsibilities seriously and operates under a formal environmental policy which commits it to continuing improvement in environmental management and performance. The defendant is also actively involved in the rehabilitation of the region in light of its extensive mining history.

82 The defendant by its conduct has shown remorse for the offence by accepting responsibility for its actions and by acknowledging the damage caused.

83 I conclude that the subjective circumstances of the defendant substantially mitigate the sentence which should be imposed.

COSTS

84 The defendant has agreed to pay the prosecutor’s costs in the agreed amount of $24,000 comprising $11,000 legal costs and $13,000 investigation costs under s 248 of the POEO Act.

EVEN-HANDEDNESS

85 There is always a difficulty in comparing the penalty in one case with the penalty in another because of the wide divergence of facts and circumstances. Nevertheless, regard may be had to the following water pollution cases under s 120(1) of the POEO Act decided since the maximum penalty, in the case of a corporation, was increased to $1 million.

86 Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280, 163 LGERA 71 involved the accidental escape of 1,000,000 litres of effluent. The effluent escaped from a defective weld in an underground pipeline that conveyed effluent from the defendant’s poultry plant to the sewer line of Tamworth Regional Council. Approximately 1.1km of a watercourse was exposed to the effluent. The actual environmental harm was very small given that there was no aquatic life in the watercourse. There was no likely harm to the environment. The defendant had four prior convictions (the most recent of which was eight years prior). Preston CJ ordered the defendant to pay $120,000 to the Tamworth Regional Council to fund the North Bolton's Creek Extension of the Grassy Box Woodland Conservation Project. He also made a publication order under s 250(1) of the POEO Act that a notice be placed in the Sydney Morning Herald, the Northern Daily Leader and the Financial Review and ordered the defendant to pay the prosecutor’s legal costs in the amount of $30,000 and investigation costs in the amount of $4,872.

87 Environment Protection Authority v Boral Australian Gypsum Limited [2009] NSWLEC 26 involved pollution of water in a drain which flows to the Parramatta River with 6,000 litres of a liquid chemical known as Gardisperse. The spill of liquid occurred when it was transferred from a large storage tank to a small batching tank and an electronic sensor failed. The environmental harm involved likely short term harm to plankton, and the harm caused was reasonably serious although of short rather than long term duration. The defendant had no prior convictions and the “seriousness of the offence [was] in the low to medium range” and there was a “low level of culpability on behalf of the defendant”: at [38]-[39]. Pain J imposed a fine of $58,500 (including a “large” discount for an early guilty plea) and ordered the defendant to pay the prosecutor’s legal costs in the amount of $20,000 and investigation costs in the amount of $3,000.

88 In Environment Protection Authority v Ross [2009] NSWLEC 36, 165 LGERA 42 the defendant sprayed liquid insecticide containing Bifenthrin near Dungay Creek and Tributary. The pesticide was blown and/or washed into the waters. High levels of Bifenthrin were sampled in the creek bed. Serious environmental harm was caused. Hundreds of crayfish and some insects were killed as a result. The defendant had no prior convictions and there was a “low level of culpability on the part of the defendant, albeit the environmental harm caused was reasonably serious”: at [62]. Pain J imposed a fine of $18,000 (including a “large discount” for an early guilty plea) and ordered the defendant to pay the prosecutor’s legal costs in the amount of $23,000 and investigative costs in the amount of $12,000.

89 Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77 involved an accidental spill of approximately 20-50 litres of phenolic resin products used by the defendant. The resin entered the stormwater system and flowed downstream into Piles Creek. The defendant disputed the volume held to have escaped. There was short term environmental harm but no long term harm. The defendant had no prior convictions and the offence was of “a low degree of objective seriousness”: at [89]. I imposed a fine of $25,000 (after a 22 per cent discount for a guilty plea) and ordered the defendant to pay the prosecutor’s legal costs as agreed or assessed and investigation costs in the amount of $5,844.35

90 In Environment Protection Authority v Albury City Council [2009] NSWLEC 169 a pump failure caused between 84,000 and 127,000 litres of sewage effluent to overflow from a manhole. It discharged via a gutter into a stormwater drain which ultimately flowed into the Murray River. No actual environmental harm occurred, however there was potential environmental harm given the volume of sewage discharged and the presence of material levels of contaminants. The defendant had no prior convictions and the “objective gravity of the offence [was] relatively low”: at [53]. Pepper J imposed a fine of $45,500 (including a 35 per cent discount for a guilty plea and other mitigating factors) and ordered the defendant to pay the prosecutor’s legal costs in the amount of $15,500 and investigation costs in the amount of $2,544.

91 In Environment Protection Authorityv Ramsey Food Processing Pty Ltd [2010] NSWLEC 23 a substantial volume of untreated abattoir effluent escaped the defendant’s abattoir through a fractured unused pipeline and an open valve. Significantly, I held that the valve was opened by a third party intruder. That was an unusual and weighty consideration which lowered the objective seriousness of the offence and resulted in a substantially lower fine than otherwise would have been imposed. In that respect the case is distinguishable from the present case and all the other cases under analysis. The effluent washed into the Musk Valley Creek and its tributary. There was actual and immediate environmental harm but no long term environmental harm. There was low potential harm to human health. The defendant had one prior conviction. The “objective seriousness of the pollution offences [was] low to medium”: at [176]. I imposed a fine of $40,000 in respect of polluting the creek and $10,000 in respect of polluting the tributary. I imposed a fine of $80,000 in respect of failing to report the pollution incident to the authorities. I also made a publication order under s 250(1) of the POEO Act and ordered the defendant to pay the prosecutor’s legal costs in the order of $200,000 and investigation expenses in the amount of $13,477.82.

92 In Environment Protection Authority v State of New South Wales [2010] NSWLEC 67 the defendant was convicted of an offence under s 64(1) of the POEO Act for breaching a condition of an environment protection licence, namely failing to operate equipment in a proper and efficient manner. The failure resulted in the discharge of partially treated effluent into Perisher Creek. There was no evidence of actual environmental harm and the likelihood of environmental harm was low. The defendant had one prior conviction. Pain J ordered the defendant to pay the Southern Rivers Catchment Management Authority the amount of $80,000 for the purpose of riparian rehabilitation and exotic tree removal and ordered the defendant to pay the prosecutor’s costs of $65,000.

93 In Environment Protection Authority v Wattke, Environment Protection Authority v Geerdink [2010] NSWLEC 24 the offence arose on a property that was used for dumping waste. An area of 700m by 10m was excavated along a creek. This destroyed the banks of the creek and resulted in disturbance of rocks, riffles and vegetation along the cleared area. The presence of liquid waste, sludge and grease trap waste was detected in the creek. The environmental harm was substantial but localised. Neither defendant had any prior convictions. The level of seriousness of the offence was found to be “in the low to medium range”: at [114]. Taking into account the totality principal Pain J imposed a fine on both defendants of $10,000 and ordered them to pay the prosecutor’s legal costs as agreed or assessed and the prosecutor’s investigative costs in the amount of $15,000.

PENALTY

94 Having regard to all relevant factors, in my opinion the appropriate fine is $75,000 which should be discounted by one third for all mitigating factors to arrive at a fine of $50,000.

95 The orders of the Court are as follows:

1. The defendant is found guilty of the offence as charged.
2. The defendant is fined the sum of $50,000.
3. The defendant is to pay the prosecutor’s legal costs in the sum of $11,000 and investigation costs in the sum of $13,000.
4. The exhibits may be returned.

13/07/2010	-	Incorrect citation - Paragraph(s) 60
19/08/2010	-	typographical error - Paragraph(s) 69