Environment Protection Authority v Ulan Coal Mines Ltd

[2002] NSWLEC 199

Land and Environment Court

of New South Wales

CITATION:	Environment Protection Authority v Ulan Coal Mines Ltd [2002] NSWLEC 199
PARTIES:	PROSECUTOR: Environment Protection Authority DEFENDANT: Ulan Coal Mines Ltd ACN 000 189 248
FILE NUMBER(S):	50139 of 2001
CORAM:	Lloyd J
KEY ISSUES:	Environmental Offences :- water pollution - plea of guilty - mitigation -penalty
LEGISLATION CITED:	Protection of the Environment Operations Act 1997 s 120 and s 241 Crimes (Sentencing Procedure) Act 1999 s 22
CASES CITED:
DATES OF HEARING:	03/09/2002
EX TEMPORE JUDGMENT DATE :	09/03/2002
LEGAL REPRESENTATIVES:	PROSECUTOR: Mr D Samuels (solicitor) SOLICITORS; Stephen Garrett Environment Protection Authority DEFENDANT: Mr S B Austin QC and Miss J Jagot (barrister) SOLICITORS: Mallesons Stephen Jaques

JUDGMENT:

- 8 -

IN THE LAND AND

ENVIRONMENT COURT

OF NEW SOUTH WALES

50139 of 2001

Lloyd J

3 September 2002

Environment Protection Authority

Prosecutor
v

Ulan Coal Mines Ltd

ACN 000 189 248

Defendant

EXTEMPORE JUDGMENT

1 HIS HONOUR: The defendant has pleaded guilty to an offence against s 120(1) of the Protection of the Environment Operations Act 1997 (“the PEO Act”), that between 1 January 2001 and 2 February 2001 at Ulan, it did pollute waters, namely an unnamed tributary leading to Spring Gully Creek. Section 120(1) of the PEO Act provides: “a person who pollutes any water is guilty of an offence”. The maximum penalty for the offence is, in the case of a corporation $250,000 and in the case of an individual offender $120,000.

2 The relevant facts have been reduced to an agreed statement of facts. There is no dispute, both as to the reason for the occurrence of pollution and the harm that resulted from it.

3 The defendant, Ulan Coal Mines Ltd, operates a coal mine at Ulan which covers an area of some 17,157 hectares. The mining operation undertaken by the defendant includes open cut mining, underground mining (including long-wall mining) and other ancillary activities. In 2001 the defendant produced 6.7 million tonnes of coal which yielded some 5.9 million tonnes of saleable coal. The total revenue from the mining operation in 2001 was $276 million and the mine currently employs 329 people.

4 The underground component of the mining operation uses retreating long-wall extraction technology. In order to maintain the safety of the mine and to ensure it is not flooded, any ground water that flows into the workings is pumped out. Large pumps known as Pleuger pumps are placed in the low points of the workings. These lift the ground water to the surface where an interconnecting pipeline directs the water over a distance of approximately six kilometres to a sedimentation pond near the open cut component of the mine. The waste water is monitored and treated there before being discharged into Rowans Dam.

5 The pipeline in the present case included a length of galvanised steel pipe of some 950 metres in length, 273 millimetres in diameter and which was laid along the ground surface. The pipeline in this area was not buried due to the rugged terrain and because the area had been identified as an ecologically sensitive area with Aboriginal significance. The galvanised steel pipe was used in lieu of polythene pipe to minimise environmental disturbance and risks, including fire damage. Before laying the pipeline a risk assessment report was commissioned by the defendant and had been produced as an annexure to the agreed statement of facts.

6 The primary safeguard to deal with pipeline failure recorded in the risk assessment report, in addition to a galvanised steel pipe, was an automated monitoring system to detect interruptions in flow through the pipeline using a series of flow meters. This flow gauge system was designed to detect discrepancies in flow by monitoring the flows from each pump and of the total flow. Any significant variation would trigger an alarm in the central control room which is monitored continually. The possibility of trees falling on the pipeline and breaking the pipeline was also identified in the risk assessment report.

7 The risk assessment was categorised as C in a scale of A to E; that is, there was a possibility of an occurrence of incident at some time. In addition to the flow gauge system, regular inspections of sections of the pipelines and of each pumping station took place. The exposed galvanised steel pipeline was not readily accessible by that method and no physical examination of that area of the pipeline took place.

8 On 1 February 2001 Mr M J S Denny, an ecological consultant, was in an area known as Spring Gully Creek for the purpose of carrying out fauna survey on behalf of the defendant as part of its annual environmental monitoring requirements. Mr Denny saw the creek flowing had a black opaque water and that the banks of the creek were coated with what appeared to be coal dust. Mr Denny immediately phoned Mr P G Gibb, environmental manager of the defendant, and left a message that there was a lot of water flowing down the creek which appeared to be contaminated with coal dust.

9 After retrieving Mr Denny’s message on the same day, 1 February 2001, Mr Gibb informed Mr M A Andrew Winchester, group engineer for the defendant. Mr Gibb and Mr Winchester then proceeded to walk across the creek and to follow the course the mine’s dewatering pipeline. They discovered that a tree had fallen across a section of the pipe, there was black water on the ground which was flowing down in the direction of the creek approximately 300 metres away. Mr Gibbs and Mr Winchester checked the area of the pipe where the tree had fallen and noticed that the pipe was leaking, although no hole in the pipe could be observed. There was water lying under that section of the pipe and flowing from underneath it. There was black sediment also lying on the ground in the same area. Both Mr Winchester and Mr Gibb then walked along an unnamed watercourse, following this watercourse until it intercepted Spring Gully Creek. They observed that the layer of black silt had accumulated in varying width and thickness, generally according to the contours of the ground. Mr Winchester arranged for the pumping to stop and Mr Gibb arranged with a contractor for urgent repairs to the pipeline and the placement of a silt fencing. Mr Gibb returned to the site with the contractors on that same afternoon of 1 February 2001 and fitted a new replacement section of pipe and installed silt fencing to act as silt traps. Once the new pipe and silt fencing was in place the pumping recommenced.

10 On the following morning, 2 February 2001, an inspection of the spillage area showed that whilst the overland flow from the pipe had ceased, the area downstream was still saturated, although sediment fences were preventing further migration of fines into the watercourse. On the same day Mr Gibb contacted officers of the prosecutor at its Bathurst office. Also on the same day it was noticed that water flow down the creek had almost ceased. The bottom of the creek was covered with a black material which appeared to be coal dust.

11 Over the ensuing few days it was observed that the situation in Spring Gully Creek improved and that a number of tadpoles appeared in the creek to be in good health and active.

12 An officer of the prosecutor, Mr P W English, in company with Mr Gibbs, Mr Winchester, Mr S Brooks from the Department of Mineral Resources and Mr T Voller from the Department of Land and Water Conservation inspected the site on 6 February 2001. Mr English saw black coal fines in Spring Gully Creek which had affected an area of the gully above the creek and the creek itself. The coal fines continued to be seen for about 500 metres down the creek. It was agreed between the prosecutor and the defendant that clean-up at the site of the pipeline break would be difficult due to the sensitive nature of the area and clean-up using heavy machinery was impractical. It was agreed that the coal fines would be removed manually in order to minimise disturbance.

13 The clean-up operation was undertaken by L&L Contractors, a company engaged by the defendant. An estimated 20 tonnes of deposited coal fines were removed over a period of two to three weeks. Clean-up commenced on or about 7 February 2001. The coal fines were manually removed and placed into bags. Mr L J Joseph Morrison from L&L Contractors estimated that in Spring Gully Creek the coal fines would have run for approximately 800 millimetres to a kilometre or better and as the fines went down Spring Gully Creek they thinned out.

14 In terms of the environmental harm caused by the discharge of mine’s water, it is agreed that coal fines are not directly toxic to aquatic life. Sites along the creek which were heavily contaminated with coal fines were are likely to experience indirect effects due to a change in the nature of sediment material in the body of the water. The introduction of a large amount of coal fine material into the creek system would change the structure of the sediment. Many micro-invertebrates have specific requirements regarding the sediment’s substrate on which they live and obtain food. The particular size of coal fines is much finer and totally different from the coarse sandy sediment observed in the creek’s bed. The discharge caused a significant physical and visual change to Spring Gully Creek for a distance greater than 400 metres, but less than one and a half kilometres.

15 The actions of the defendant in removing almost all of the coal fines from the creek’s bed would assist in the ultimate recovery of the creek from the polluting event. It is agreed that the environmental harm to the creek system was of a non-permanent nature and the upstream populations would be expected to recolonise sections of the creek once the natural stream flows occurred. It is said that there was impact on vegetation in the upper gully area but which is also accepted to be short term. Waterlogging caused the death of some mature trees and destabilised others. Some shrub and ground cover vegetation were killed where they were rooted within or covered by the polluting material. Such impact on vegetation, however, is short term and the regeneration of the ground cover vegetation is occurring and the photographs that are in evidence illustrate that.

16 There is no direct impact on fauna, although the impact was upon its habitat and it is restricted to small vertebrates and invertebrates. No threatened fauna is expected to have been or is expected to be affected by the spill. Re-colonisation of the area by small vertebrates and invertebrates is expected to occur as conditions improve.

17 Since the incident the defendant has changed its inspection procedures so that the total length of the pipeline, which is a distance of approximately six kilometres, is inspected by contractors who physically walk the pipeline on a monthly basis. There have been no other incidents reported since the adoption of this policy.

18 Prior to this incident the defendant had no knowledge of the leak in the pipeline. The installation of a galvanised steel pipe rather than less expensive plastic was intended to provide greater protection and the back up flow gauge system was intended to detect material flow discrepancies. In the present case the alarm did not trigger, most likely as a consequence of the leak being slow.

19 It is accepted that the defendant acted promptly and effectively to contain the harm to the environment. It cooperated with the prosecutor to investigate the offence. The defendant promptly carried out the clean-up with the concurrence and to the satisfaction of the prosecutor. The clean-up operation was effective and the previously affected areas are revegetating. The defendant expended $7,500 in the clean-up costs. The revised inspection procedures will result in the early detection of any recurrence of any similar leak. I accept the fact that the defendant pleaded guilty to the charge at the first opportunity.

20 The defendant has expressed its contrition and remorse in the form of a letter from its managing director in which he expresses his sincere regret that the leak occurred. The letter goes on to say that the defendant takes its environmental responsibilities very seriously. The defendant has revised its inspection procedures as a result of this incident. The defendant has no prior convictions in relation to environmental matters other than four infringement notices, the details of which are not before the Court.

21 In considering the question of penalty the Court is required to consider a number of matters. Firstly, s 241 of the Protection of the Environment Operations Act 1997 sets out a number of matters to be considered in imposing penalty for an offence against the Act.

22 The first of the matters to be considered is the extent of harm caused or likely to be caused to the environment by the commission of the offence. In the present case it is accepted that the harm was short term and not continuing. I accept the fact that coal is a naturally occurring substance and coal fines are not directly toxic to aquatic life. It is the introduction of coal fines into the waters that changes the physical condition of the habitat of the species that live in those waters. As I have noted above, the prompt clean-up and the steps taken by the defendant to reduce further harm have resulted in minimal impact. The real impact was visible and again that has been remedied by the prompt clean-up undertaken by the defendant. I am satisfied that the short term impacts on the gully area and the creek are just that, namely short term. It is apparent that any harm will be at the lower end of the scale.

23 The next matter to be considered is the practical measures that may be taken to prevent, control, abate or mitigate that harm. In the present case before laying the pipeline the defendant obtained a risk assessment report. The recommendations contained in that report were implemented. The alarm system that was in place was one which could not detect a slow rupture in the pipeline which led to a slow leak and did not trigger the alarm. Nevertheless the risk assessment report recognises the possibility of a tree falling on the pipeline, and it is a risk which, in my opinion, should have been at least guarded against by some form of regular inspection of the pipeline as now occurs. This comment is also relevant to the third matter to be taken into consideration, namely the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused. It is an event that was expressly foreseen in the risk assessment report but was not guarded against.

24 Next matter to be taken into consideration is the extent to which the person who committed the offence had control over the causes that give rise to the offence. It is accepted that in this case the defendant had complete control over the whole of the activities that were occurring on the land.

25 It is also necessary to consider the fact that there was an early entry of the plea of guilty in this case, a matter which the Court must consider pursuant to s 22 of the Crimes (Sentencing Procedure) Act 1999, coupled with the express statement of sincere regret from the defendant’s managing director. I have also referred to the prompt and effective action taken to clean up and minimise the harm caused to the environment. It is also relevant that the Court consider the cooperation by the defendant with the prosecutor in notifying the prosecutor of the incident, in making full and frank admissions, and in cooperating and agreeing to the prosecutor’s suggestions as to the clean-up.

26 It is also relevant in the present case that the legislative provision breached by the defendant is a strict liability offence. There is no need for the prosecutor to prove some positive act on the part of the defendant leading to the offence. The legislation provides that a person must not pollute any waters. All possible steps and precautions must be taken to prevent the pollution of waters.

27 I also take into account the fact that the defendant has incurred the costs of the clean-up and has agreed to pay the prosecutor’s costs in the sum of $7,500. In all the circumstances I agree that the penalty to be imposed must be at the lower end of the scale; that is to say, within the range of $20,000 to $25,000 which I discount by approximately 30 per cent to take into account the matters to which I referred, that is a penalty of $15,000.

28 The formal orders of the Court therefore are:

1. The defendant is convicted of the offence as charged.
2. The defendant must pay a penalty in the sum of $15,000.
3. The defendant must pay the prosecutor’s costs in the sum of $7,500.

I hereby certify that the preceding 28 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd.

Associate