Environment Protection Authority v Virotec International Ltd

[2001] NSWLEC 290

Reported Decision: 122 LGERA 118

Land and Environment Court

of New South Wales

CITATION:	Environment Protection Authority v Virotec International Ltd [2001] NSWLEC 290
PARTIES:	PROSECUTOR: Environment Protection Authority DEFENDANT: Virotec International Ltd
FILE NUMBER(S):	50074 of 2000
CORAM:	Talbot J
KEY ISSUES:	Prosecution :- effect of complying with provisions of the Mining Act 1992 on pollution of waters.
LEGISLATION CITED:	Clean Waters Act 1970 s 16, s 16(1) Environmental Planning and Assessment Act 1979 Interpretation Act 1987 s 35(1)(a), s 34(4)(a) Marine Pollution Act 1987 Mining Act 1992 s 64, s 73(1A), s 74, s 380, s 381 Mining Act 1973 Pollution Control Act 1970 Protection of the Environment Operations Act 1997 s 3(a), s 6, s 7, s 7(1), s 7(2), s 7(3), s 48, s 120, s 120(1), s 122, s 257 Protection of the Environment Operations (General) Regulation 1998 cl 52 Mining Rehabilitation and Environmental Management Plan 1989
CASES CITED:	Bromley and Others v Forestry Commission of New South Wales (2001) 51 NSWLR 378; Electricity Commission of New South Wales v Environment Protection Authority (1992) 28 NSWLR 494
DATES OF HEARING:	12/11/2001, 14/11/2001, 15/11/2001, 16/11/2001, 19/11/2001, 20/11/2001, 21/11/2001, 22/11/2001, 23/11/2001
DATE OF JUDGMENT:	12/14/2001
LEGAL REPRESENTATIVES:	PROSECUTOR: Mr SJ Rushton SC with Mr J Smith (Barrister) SOLICITORS: Environment Protection Authority DEFENDANT: Mr AL Hill with Mr DA Caspersonn (Barrister) SOLICITORS: Greg Judd & Associates

JUDGMENT:

IN THE LAND AND Matter No. 50074 of 2000
ENVIRONMENT COURT Coram: Talbot J
OF NEW SOUTH WALES Decision Date: 14 December 2001

Environment Protection Authority
Prosecutor

v
Virotec International Ltd

Defendant

REASONS FOR JUDGMENT


1. The defendant is charged that on or about 3 November 1999 at or near Drake it committed an offence against s 120(1) of the Protection of the Environment Operations Act 1997 (“the PEO Act”) in that it polluted waters.

2. The pollutant is particularised as liquid from “waste rock dam 4” (“WRD 4”) containing matter from the waste rock dump, situated at or near the Drake Silver/Gold Mine, Drake. The offending matter is identified as cadmium, copper, iron, lead, manganese, sulfur (sulphur) and/or zinc.

3. The summons identifies the relevant waters as an open drain/watercourse which flows to Humphries Creek and/or Humphries Creek Dam, and/or Humphries Creek Dam and/or Humphries Creek itself.

4. “ Water pollution” or “pollution of waters ” is defined by alternative (c) in the dictionary to the PEO Act as placing in or on, or otherwise introducing into or onto, waters any matter that is of a prescribed nature, description or class. Each of the substances, cadmium, copper, iron, lead, manganese and zinc are matter described in Sch 3 to the Protection of the Environment Operations (General) Regulation 1998 pursuant to cl 52. Any matter that contains any sulphur is similarly described in the schedule. Schedule 3 does not specify any standard or quantity in respect of the identified matter.

5. The expressions “ Water pollution ” or “ pollution of waters ” do not appear to be used in the body of the PEO Act, except as the heading to Pt 5.3 in the case of “ Water pollution ” and the introduction to s 120 in the case of “ pollution of waters ”.

6. Section 120(1) of the PEO Act appears in the following context:-


Part 5.3 Water pollution

120 Prohibition of pollution of waters

(1) Prohibition on polluting


A person must not pollute any waters.

7. By dint of s 35(1)(a) and s 35(4)(a) of the Interpretation Act 1987 headings are to be taken to be part of the PEO Act. Accordingly, the definitions in the dictionary apply to them. No submission has been made that the definitions referred to are not relevant to the consideration of the Court in respect of a charge brought pursuant to s 120(1) of the PEO Act.

8. The prosecutor relies on the definition of “waters” found in the dictionary to the PEO Act as follows:-


(a) any river, stream, lake, lagoon, swamp, wetlands, unconfined surface water, natural or artificial watercourse, dam or tidal waters (including the sea), or

(b) any water stored in artificial works, any water in water mains, water pipes or water channels, or any underground or artesian water.


9. The defendant has entered a plea of not guilty.

10. Although the defendant has raised as a defence that the evidence of sampling of water taken on behalf of the prosecutor is flawed and unreliable and should not be accepted, the principal defence is that the channel, gully or creek immediately below WRD 4 and beyond, including Humphries Creek and Humphries Creek Dam, are not “waters” within the meaning of the PEO Act.

11. In summary, it is claimed that all relevant waters above and within Humphries Creek Dam are part of a system introduced and maintained pursuant to a 1989 Mining Rehabilitation and Environmental Management Plan (“MREMP”) required as a condition of Mining Purposes Lease No. 259 (“MPL 259”) that applies to the relevant part of the Drake site. According to Mr Hill, who appears for the defendant, in order for there to be a relevant discharge, for the purposes of s 120 of the PEO Act, it would have to be a discharge from Humphries Creek Dam at the dam wall.

The history of mining at the site

12. In order to understand the primary defence upon which the defendant relies it is important to appreciate the mining titles that apply to the site and the manner in which the site has operated since the late 1980’s.

13. Gold and silver mining commenced on the Drake mineral field in 1886. In the meantime it has been sporadically worked. Eleven mining leases currently apply to the site and were granted between 1946 and 1988.

14. Stockpiles of waste rock have been generated by the mining activities. Water drainage from these stockpiles is collected by a system of small dams that have been constructed down slope from the stockpiles. WRD 4 is downstream from three other dams constructed in the gully below the waste rock dump. The gully or creek in which the dams have been constructed lead to Humphries Creek, which flows into Humphries Creek Dam.

15. MPL 259 encompasses the area of the waste rock dump and Humphries Creek Dam. It was issued on 23 March 1988 to Mount Carrington Mines Limited. Mining production commenced in 1988 and ceased in March 1990.

16. The defendant, Virotec International Ltd, changed its name from Tin Australia NL on 11 February 2000. Mount Carrington Mines Limited previously changed its name to Norminco Limited. On 5 February 1998 Norminco Limited became Norminco NL and on 12 May 1998 Norminco NL changed its name to Tin Australia NL.

The applicable mining conditions

17. In common with other leases relating to the Drake mine, MPL 259 contained the following condition:-

141. (a) The registered holder shall within 24 months of the date of the grant of this authority furnish to the Minister a rehabilitation and environmental management plan (hereinafter referred to as “the plan”) which shall describe the methods to be adopted by the registered holder to protect the environment of the subject area including:


(i) A description of the method of controlling the disposal of mine waste;

(ii) A description of the method for minimising air noise and water pollution and erosion arising from the subject area;
(iii) A description of the method of rehabilitating the subject area.
(b) (i) On submission of the plan the Minister may approve the plan or return it for amendment and resubmission by the registered holder.

(ii) Where the Minister returns the plan under (b) (i) above he shall by notice in writing inform the registered holder of the amendment required and the time within which the plan is to be resubmitted and the registered holder shall comply with that notice.

(c) The registered holder shall at the end of each succeeding period of 12 months from the date of the Minister’s approval of the plan, submit a written report to the Minister indicating how the plan has been implemented on the subject area in the preceding 12 months. The registered holder shall also indicate in the report whether the plan should be amended in order to better protect the environment of the subject area.

(d) (i) Upon receiving a recommendation for amendment of the plan under clause (c) or whenever it appears to the Minister that the plan should be amended in any particular, he shall cause to be served on the registered holder a notice specifying the proposed amendment and stating that representation with respect to the proposed amendment may be made to the Minister within the period specified in the notice.


(ii) The registered holder when served with a notice under (d) (i) above may within the period specified in the notice, by instrument in writing lodged with the Secretary make such representations with respect to the proposed amendment referred to in the notice as the registered holder thinks fit.

(iii) The Minister shall take or cause to be taken such steps including the amendment of the plan as the Minister deems appropriate in connection with any representations made under (d) (ii) above.
(e) The registered holder shall conduct all operations under this authority in accordance with the provisions of the plan as approved by the Minister.



18. A draft of the first Drake MREMP, prepared pursuant to the provisions of mining leases, was submitted to the Department of Mineral Resources (“the DRM”) in June 1989. The final amended version was submitted in November 1989 and approved under delegation on 29 December 1989.

19. The Court has heard evidence from the Assistant Director, Environment of the DMR, Kenneth Michael Hollands. In December 1989 Mr Hollands was notified by mine management that the mine was unlikely to continue operations beyond March 1990. He further states that the mining contract was terminated on 31 January 1990 and there has been no extraction of ore since that date. According to Mr Hollands, the mine has since remained in care and maintenance.

20. A draft care and maintenance plan was provided to the DMR in February 1990. Mr Hollands has not been able to find any record that this document was formally approved by the DMR.

Water management systems on the site

21. In cross-examination Mr Hollands agreed that in 1990 there were two water management systems on site. There was a tailings storage system on one side of the hill running through the site. On the other side of the hill there was the waste rock dump which drained down through WRD 1, WRD 2, and WRD 3 and then onto Humphries Creek Dam. WRD 4 was added later. The topography of the land created two distinct water catchment areas. This evidence is not in dispute and is generally accepted by all witnesses.

22. The water management system involving the waste rock dump had a number of features upon which the defendant relies to support a submission that the system was developed in cooperation with government authorities pursuant to the mandatory terms of the MREMP and in accordance with the provisions of the mining lease. The elements of the system described in the MREMP, upon which the defendant relies in this respect, are as follows:-

(a) Humphries Creek Dam was a purpose-built dam built between November 1987 and January 1988.

(b) Runoff and leachate from the waste rock dump are routed through a three-stage system of collection dams with overflow facility to the Humphries Creek dam.

(c) Water from WRD 3 flows into a tributary of Humphries Creek and on to the Humphries Creek water supply dam.


(d) Water management was a fundamental aspect of the MREMP. The MREMP contemplates regular and continuing monitoring of both systems

(e) Continued monitoring was proposed at WRD 3, downstream of Humphries Creek Dam site and upstream in Humphries Creek.
(f) A schematic water management system shows the flow from the main waste rock dump through the collector dams and then to Humphries Creek Dam.

23. The primary defence is that the defendant is not polluting water until such time as there is a polluting discharge out of Humphries Creek Dam and off the Drake mine site. None of the samples prove this occurred. To the contrary, according to the defendant, the samples of the discharge out of Humphries Creek Dam show the system to be working properly as they display no pollution.

24. The offence alleged in the summons occurred within the system in the gully above Humphries Creek and in the dam itself.

25. In support of its case, the defendant has strived to satisfy the Court that the MREMP and the subsequent operation of the site was endorsed by and had the approval of the Minister for Minerals and Energy, the DMR and the State Pollution Control Commission (“SPCC”) (as the predecessor to the prosecutor).

26. Furthermore, Mr Hill does not accept that the MREMP was confined in its application to an operating mine. He seeks to show that the terms of the MREMP clearly contemplate that operations could cease and that the mine would go into a care and maintenance phase.

The case for the prosecution

27. Despite the large volume of paper generated by the hearing, Mr Rushton SC says, on behalf of the prosecutor, that there really are but two issues.

28. Firstly, whether the channel or creek immediately below and beyond WRD 4, including Humphries Creek Dam, is “waters” within the meaning of the PEO Act.

29. Secondly, whether the prosecutor has proved beyond reasonable doubt that one or more of the elements, specified as matter in the summons, was in the samples taken by an officer of the prosecutor at two points below WRD 4.

30. Section 257 of the PEO Act provides that the occupier of premises at or from which any pollution occurs is taken to have caused the pollution unless it is established the pollution was caused by another person under the circumstances described in the section. I do not believe that the defendant is contending that it is not liable as the occupier if the offence is otherwise proved.

31. The prosector emphasises the use of the phrase “premises at…which any pollution occurs” as it is used in s 257 to show that even if Humphries Creek Dam is a private place the words of the section indicate that pollution can occur at a site which is privately occupied or owned.

32. In Electricity Commission of New South Wales v Environment Protection Authority (1992) 28 NSWLR 494, the Court of Criminal Appeal dealt with pollution of a purpose built cooling pond for the Liddell Power Station. In the Elcom case, Gleeson CJ described the factual situation at p 496 as follows:-


The Liddell Power Station is located on the shores of a large artificially constructed lake, Lake Liddell. The land upon which the complex is located is owned by Elcom, but part of Lake Liddell is leased for use by members of the public for recreational purposes.

33. Gleeson CJ then went on to describe how Lake Liddell was used as a purpose built cooling pond for the power stations and receptacle for various pollutants from the industrial processes associated therewith. He described the Electricity Commission of New South Wales’ (“Elcom”) argument at p 497 as follows:-

…in the ordinary course of its activities, it routinely pollutes Lake Liddell, and says not only that is it licensed to do so, but also that Lake Liddell is an artificially constructed body of water that came into existence for the very purpose of processes which necessarily involve pollution within the meaning of the Clean Waters Act. Accordingly, so the argument runs, Lake Liddell should not be regarded as “waters” for the meaning of the Act, or, alternatively, pollution of Lake Liddell should be regarded as something that Elcom is licensed to do.


34. Elcom submitted that there is a distinction to be drawn between waters in or upon privately owned or occupied premises and other waters. The Chief Justice responded to that submission at p 497 as follows:-

Although this distinction is not made in the definition of “waters”, and is not specifically referred to in the operative provisions of the Act, it is said to derive from two sources. First, some of the provisions of the Act look at activities from the point of view of the discharge of pollutants from “premises” into waters and this, it is said, suggests that the focal point of the legislature’s attention was waters external to premises on which a particular activity is being undertaken. Secondly, it is argued that commonsense requires the recognition of some such distinction. Having regard to the extremely wide definition of “pollute”, can it have been intended that owners or occupiers of property would be liable to prosecution for engaging in activities whose effects were confined to bodies of water entirely contained within their own premises? Two examples referred to in argument were private swimming pools, and rural dams. If the width of the statutory provisions were not confined, it was said, the owner of a domestic swimming pool might contravene s 16 by putting chlorine into the pool water; or a farmer might break the law by spraying land with pesticide that runs into a dam.



35. At p 498 the Chief Justice made it clear that he entertained no doubt that the term “waters” should include waters on privately-owned or occupied land.

36. Finally, in rejecting the appellant’s case, Gleeson CJ found at p 498 as follows:-

There is no warrant for limiting the width of the definition of “waters” in the somewhat awkward manner proposed by the appellant. Furthermore, I am far from persuaded that the Act, in its operation without such limitation, would have far-reaching and even absurd consequences for which the appellant contends. The definition of “pollute” is to be applied in a commonsense fashion. To take one of the examples referred to in argument, if the normal maintenance of a domestic swimming pool involves treating the water from time to time with certain levels of chlorine, then that would not seem to me to produce the consequence that, every time the pool is so treated, the condition of the waters is relevantly “changed”: cf Palos Verdes Estates Pty Ltd v Carbon (1991) 72 LGRA 414. Furthermore, the maxim de minimis non curat lex would have a role to play.



37. For present purposes, at least, the definition of “waters” contained in the Clean Waters Act 1970 (“the Clean Waters Act”) at the time the judgment in Elcom was delivered is to the same effect as the definition of “waters” now contained in the PEO Act.

38. It is Mr Rushton’s submission that the waters in and above Humphries Creek Dam are not materially different to Lake Liddell in the context of the statutory definition. In order to protect itself from the consequences of such a broad definition, the company should have taken the step of obtaining a licence to discharge leachate generated from its source at the waste rock dump.

39. In answer to the defendant’s claim that Humphries Creek Dam was used as a polishing pond for the mineral residues discharged from the mine site the prosecutor argues in the alternative, that as a matter of fact on 3 November 1999 when the offence is alleged to have occurred, the area below WRD 4 was not part of the system and that Humphries Creek Dam had not been used as a polishing pond since at least 1994.

40. The prosecutor relies on a number of matters to demonstrate that the MREMP is completely irrelevant to a consideration as to whether an offence against s 120 of the PEO Act has occurred.

41. Firstly, the MREMP is a document that is produced as a consequence of a contractual obligation between the DMR and the defendant. Furthermore, as a matter of construction, the Mining Act 1992 (“the Mining Act”) does not afford any protection for breaches of the environmental legislation.

42. Secondly, it is said to be clear from the face of the MREMP document itself that it was prepared by the defendant in respect of an operating mine before any decision was made to close it.

43. Another reason the MREMP has no relevance to the problem at hand is that, according to the prosecutor, the Environment Protection Authority (“the EPA”) had nothing whatsoever to do with its formulation or indeed its approval by the Minister. Moreover, from the very beginning, after the MREMP was issued, the EPA continually expressed its concern in relation to spills from WRD 4. Reliance is placed upon steps taken by the defendant, following the expression of concern by the EPA, to pump liquid out of WRD 4 into the tailings dam constructed within the other catchment area.

44. In order to emphasise the point that it was never intended for the so called system, relied upon by the defendant to relieve it from the effect of the pollution control legislation, Mr Rushton refers to the evidence of the defendant’s Environmental Officer, Howard Philip Le Couteur, that the first dam below the waste rock dump was designed only to take silt in circumstances where it was originally intended the waste rock would be buried deep in the earth and would not give rise to a leachate problem.

45. Mr Le Conteur described the position as follows:-


Q. Wasn’t it the case that the waste rock dams that were, or the first dam which was initially constructed next to the waste rock dump, was a dam which was designed tot [sic] take silt?
A. That’s correct yes.

Q Because what was intended was that the acid waste rock would be buried deep, it would have neutral ore on top of it and on top of that would be top soil, isn’t that right?
A. That’s correct.

Q. And there was the potential for top soil to rundown into Humphries Creek catchment?
A. That’s correct yes.

Q. And the first waste rock dam number 1 was built as a silt dam to contain sediment?
A. That’s right yes.

Q. It wasn’t intended at the time of construction that it would be a dam which would in some way treat acid drainage?
A. No it wasn’t.

46. Accordingly, in the same way that Lake Liddell was a purpose-built cooling pond for the power station and at the same time a receptacle for various pollutants the waste rock dams are also “waters” within the meaning of the definition found in the PEO Act. Mr Le Conteur explained that the system was designed so that water would be trapped in the waste rock dams, but when WRD 4 exceeded its capacity and water overflowed down the spillway “the water would enter the Humphries Creek Dam where there was a far greater capacity of retention and where it would be diluted and polished by the organic matter in the dam itself” . It is submitted on behalf of the prosecutor that the subjective intention of the operator of a site cannot change the status of any water for the purposes of the legislation. Consequently, the function of the business and the way it treats its system does not affect the way the statute is to be construed. In any event, as I have already mentioned, the prosecutor relies on the fact that on 3 November 1999 the area below WRD 4 could not have been regarded as part of the system because the Humphries Creek Dam was no longer functioning as a polishing pond. It ceased to be part of the waste water management system when the mine was placed in a care and maintenance phase.

47. Dealing now with the detail of the matters which the prosecutor claims demonstrates that the MREMP is completely irrelevant:-

(1) The Provisions of the Mining Act 1992 and the Protection of the Environment Act 1997


48. The savings, transitional and other provisions in Pt 2 of Sch 6 to the Mining Act 1992 provide that a mining purposes lease granted under the Mining Act 1973, and in force, is taken to be a mining lease granted under the Mining Act 1992. This provision applies to MPL 259.

49. Section 380 of the Mining Act provides:-

Saving of other Acts etc

Except as expressly provided by this Act, this Act does not affect any other Act or law that prohibits, regulates or restricts, or that has the effect of prohibiting, regulating or restricting:
(a) the grant, renewal or transfer of an authority, a mineral claim or an opal prospecting licence, or
(b) the exercise of any right conferred by or under this Act in respect of an authority, a mineral claim or an opal prospecting licence.

50. The definition of an “authority” in the dictionary to the Mining Act includes a mining lease.

51. The prosecutor’s argument is that there is nothing in the mining legislation which in any way restricts the operation of the PEO Act. Furthermore, there is no relevant inconsistency between the Mining Act and the PEO Act that has the potential to raise questions of implied revocation. However, if there are such inconsistencies the PEO Act, as the later Act, would prevail. Moreover, s 7 of the PEO Act provides as follows:-

7. General relationship with other Acts

(1) Other Acts not affected

Nothing in this Act affects any of the provisions of any other Act or any statutory rules, or takes away any powers vested in any person or body by any other Act or statutory rules.

(2) This Act generally prevails

However (subject to subsection (3)):


(a) this Act prevails over any other Act or statutory rule to the extent of any inconsistency, and

(b) a regulation made under this Act prevails over any other statutory rule to the extent of any inconsistency.

(3) Marine Pollution Act 1987 prevails

The provisions of or made under the Marine Pollution Act 1987 (except Part 4), in their application to State waters within the meaning of that Act, prevail over this Act, to the extent of any inconsistency.

52. If it was intended for the Mining Act provisions to prevail over the PEO Act, and in particular s 120(1) of the PEO Act, then the legislation would be expected to state this intention in a manner similar to the way in which the Marine Pollution Act 1987 is treated in s 7(3), as set out above.

(1) The terms of the MREMP itself


53. As foreshadowed earlier, the prosecutor contends that on its face the MREMP is a document that was prepared by the defendant in respect of an operating mine before any decision was made to close the operation.

54. Mr Rushton describes it as “a wish list of what things might be in the future if certain policies and procedures are developed” .

55. The prosecutor also describes the MREMP as a superficial endeavour to remedy a breach of certain conditions of some of the mining leases. In this respect, it is relevant to note that there is no reference to MPL 259 either in the contemporary correspondence at or about the time the MREMP was being drafted or in the body of the MREMP itself.

56. The MREMP document is referred to by Mr Hollands in a minute paper dated 28 December 1989 in the following way:-


Mount Carrington Mines Ltd have submitted their Rehabilitation and Environmental Management Plan for the Minister’s approval, as required by the conditions of the company’s mining leases.

57. In correspondence from the company, addressed to Mr Hollands in February 1990, the subject of the management of the mine under a care and maintenance schedule was raised in order to solve problems during the care and maintenance period or leading into decommissioning. A draft care and maintenance plan was submitted to Mr Hollands by the company on 9 February 1990 following discussion on the site on 31 January 1990.

58. Each of the defendant’s witnesses had difficulty in identifying any part of the MREMP which stipulated environmental and rehabilitation strategies for any period during which the mine was held in care and maintenance. The evidence of Mr Le Couteur and Trevor Peter Scutts, the defendant’s Environmental Officer and Caretaker from 1994 to about 2000, is critical in this respect. Both of these witnesses have been directly involved in the physical day to day activities over the years since the MREMP was prepared. Moreover, as already indicated, Mr Le Coutuer agreed that when WRD 1 was constructed it was never intended that it would take acid run-off. It was purpose-built as a silt dam to catch the sediment run-off from the site of the waste rock dump.

(1) Lack of involvement by the EPA


59. Another key reason the prosecutor claims the MREMP has no relevance to the effect of the PEO Act is that the EPA (the SPCC) had nothing to do with its formulation by the Minister.

60. Even if it is accepted, which the prosecutor does not, that the MREMP permitted a discharge of acid leachate run-off into the waste rock dam or at any point below the dam once the mine was in care and maintenance, the EPA consistently disapproved of this occurring.

61. Mr Le Conteur retracted his otherwise bold assertion that the EPA was involved, during the following passages of cross-examination:-


Q. And you said in paragraph 23 of your affidavit, and you can go to it if you like, that the MREMP was a document that ultimately represented all of the environmental and rehabilitation strategies and views for the Drake mine site as well as the requirements of the Department of Mineral Resources, The Soil Conservation Authority, National Parks and Wildlife Service, the Tenterfield Local Shire Council, and the Environment Protection Authority, that’s what you say?
A. Yes.

Q. The EPA had no involvement in the formulation of the document, did it?
A. At the time the document was formulated in 1988 the State Pollution Control – I think it was called the State Pollution Control Commission—

Q. Yes?
A. --through its agents were involved in that process, as far as I know.

Q. Just stopping you there, I’m just asking you whether they had any involvement in the formulation of the document itself?
A. I can’t say yes to that, no.

Q. The fact is you don’t know, do you?
A. I don’t.

Q. And therefore when we see in paragraph 24 of your affidavit that each one of these bodies had representatives who were to a greater or lesser degree actively involved in considering all aspects of the MREMP we take that to be a reference to all aspects of the MREMP after it had been published, is that right?
A. Yes.

62. Later on in cross-examination the following exchange took place:-


Q. No, indeed you can accept from me that the licence doesn’t contain any condition at all which would permit the mine to discharge any substance which might pollute waters, is that consistent with you understanding at the time?
A. My understanding at the time was that the mine could not discharge polluted waters off the mining leases or off the company’s leases.

Q. Was that based on legal advice do you know?
A. Look I really honestly couldn’t tell you but that was the culture of the company when I was working there was that we could not discharge polluted waters off the company’s leases.

Q. And that was, as you say, the company’s culture?
A. Yes.

Q. You neither saw or heard anything to suggest that that was a culture which the EPA or the SPCC supported though did you?
A. I think it is.

Q. Well you’ve got the MREMP which says insofar as it covers environmental standards, that there can be no discharge of polluted waters?
A. But it doesn’t define – discharge from where to where.

Q. Well where in the MREMP do we find any suggestion that the company’s culture of not discharging waters off the mining lease was a culture of which the EPA approved?
A. There’s nothing there.



63. Mr Le Coutuer expressly agrees that the EPA never accepted that the then current water management plan be retained without modification as he had proposed in a discussion paper on the outcomes of a meeting held on site on 26 March 1992, at which a representative of the EPA was present.

64. Furthermore, in a letter following the meeting that occurred on the site on 26 March 1992 the EPA made it quite clear that it was not satisfied with the capacity of the waste rock dams. In reply, the company expressly acknowledged the possible need to increase the size of dams below the waste rock dump but stated that no action would be “planned” during that phase of work.

65. The minutes of a meeting between representatives of the EPA, the defendant and the DMR on 5 December 1994 record the following:-

David Dutaillis would like Mt Carrington to do a water balance on the area of the waste rock dump dams. Water balance would show rainfall/runoff/storage. This would indicate whether the fresh water diversions are working and whether the storages are large enough. David does not want water from the dams going into Humphries Creek. [T] his is a breach of the Clean Waters Act and Mt Carrington will be liable. Jim is considering pumping water from the waste rock dams into the tailings dam.

66. David Dutallis represented the EPA at the meeting.

67. It is the prosecutor’s contention that it is clear by 1994 that all interested parties were involved in a process whereby the water management system contemplated by the MREMP would be changed to meet concerns regarding the contamination of Humphries Creek and Humphries Creek Dam. Following the December 1994 meeting a manual fire pump was installed on WRD 4 for the purpose of diverting the contents of that dam to the leachate dam constructed on the site in the other catchment. While a water balance study was being completed, and after the installation of the manual fire pump, a discharge took place at WRD 4.

68. As a consequence of that discharge the company was prosecuted.

69. In proceedings No 50009 of 1996 the defendant, Norminco Limited, pleaded guilty to the charge and made formal admissions that on or about 16 and 17 February 1995 it committed the offence of polluting waters contrary to s 16(1) of the Clean Waters Act by introducing prescribed matter into Humphries Creek Dam below the four waste rock dams. An Agreed Statement of Facts in those proceedings contains the following:-


(f) The Officers then went to an area where there were four waste rock dump dams. These four dams were constructed below the main waste rock dump. They were constructed to contain leachate from the waste rock dump, preventing the leachate from flowing directly into Humphries Creek.

(g) It was still raining at the time they inspected this area. They observed water overflowing from the dams into Humphrties (sic) Creek. The Scientific Officer from the Department of Mineral Resources took a number of samples where the water was overflowing together with photographs of the overflow.
70. An Uncontested Statement of Mitigation in the proceedings contains the following statement:-


2) Remedial action taken by Norminco Limited to obviate a recurrence:

2a) Since the dam overflowed in February 1995, the company commissioned a consultant to provide a water balance for the waste rock area – completed in June 1995.

2b) A new pump, engine, automatic controls, and pipeline have been installed to the waste rock dam sized for Q20 and Q50 rainfall which pumps to the tailings dam and protects Humphries Creek.


71. Despite protestations by Mr Scutts that the water balance study was directed only to the size of the pump to be installed on WRD 4, Mr Rushton claims it is clear that consultants were carrying out a proper study for the purpose of determining the best solution to the problem of the potential discharge of leachate generated from the waste rock dump.

72. According to the prosecutor, the plea of guilty to the charge against the company in 1996 and the accompanying Agreed Statement of Facts and Uncontested Statement of Mitigation support the proposition that if there was in fact a system then the system stopped at WRD 4. This was as the EPA saw it at the time of the first prosecution and the defendant acquiesced in that belief. In the course of dealing with representations made by the defendant the EPA wrote to the company on 15 April 1996 and said as follows:-

The Humphries Creek Dam and the waters on your Company’s site are still ‘waters’ under the Clean Waters Act. It is the opinion of the EPA that more could have been done to improve pollution from the waste rock dump.

73. The prosecutor relies on the failure of the defendant to take a number of practical measures available to it between 1994 and 1999 in order to prevent the occurrence which underlies the present charge. The evidence of Mr Le Coutuer and Alan Timothy Prowse, a Mining Engineer called to give evidence for the defendant, shows that, far from there being any real basis for suggesting that what occurred on 3 November 1999 was as a consequence of action taken by the EPA to have a pump installed, what happened on that day occurred “partly and obviously as a result of the company doing nothing for many, many years” .

The sampling evidence

74. Despite some evidence that bottles of samples were relabelled in a motel room on the evening of 3 November 1999, the prosecutor claims that there can be no doubt that the labelling process was consistent so that a direct connection was maintained between the samples taken and the analysis subsequently undertaken in the laboratory. Each bottle was marked with a black pen on the bottom of the bottle at the point of sampling. The process of affixing paper labels with appropriate details was undertaken in the motel room after dinner. The bottles have been tendered in evidence and each one still bears the original black mark and the paper label. There is no evidence, other than cross-examination, to challenge the system used by the EPA officer. He was not directly challenged about the authenticity of the samples.

75. The only real issue in relation to the conclusiveness of the samples taken relates to whether the addition of sodium hydroxide tablets, on the night of 3 November 1999, affected the analysis results.

76. Unfortunately the evidence of the Chemical Technologist, Razi Uddin, is not clear. His diction and expression in the witness box was difficult to comprehend to the extent, at times, his explanation in answer to questions was unintelligible. His affidavit evidence is that the sodium hydroxide tablets would not have affected the analysis results in any measurable way. Ultimately his opinion in that respect was not shaken. Nor is there evidence to the contrary. The confusion which arose in cross-examination is caused by Mr Uddin’s reference to a calculation to determine whether the quantity of the elements, otherwise in the sample, had been increased by the introduction of the sodium hydroxide tablets.

77. The assay of the sodium hydroxide tablets is in evidence. Despite some doubt that the assay taken from the label produced in evidence properly represents an assay of the specific sodium hydroxide tablets added to the samples on 3 November 1999 the Court is satisfied that the analytical results presented by Mr Uddin can be relied upon to the extent that they show, beyond reasonable doubt, that the elements referred to earlier in these reasons were present in the samples taken at the site.

The defendant’s position

78. At the outset and in answer to the prosecutor’s submission that it is only when these proceedings were commenced the company claimed the Humphries Creek Dam is part of its water system, Mr Hill refers to correspondence between the company and the EPA in March 1996 wherein the company asserts “The Humphries Creek dam was built by the company exclusively for the company and is therefore part of the companies [sic] on-site water facilities”. The contrary view held by the EPA as expressed in its letter dated 15 April 1996 does not, according to Mr Hill, detract from the defendant’s response.

79. The plea of guilty in the prosecution proceedings in 1996 is explained by the parlous state of the company’s financial affairs at that time. Accordingly, the defendant says that any admissions made for the purpose of that litigation must have regard to that circumstance.

80. In an effort to distinguish the decision of the Court of Appeal in Elcom, Mr Hill makes the following observations:-

(1) No part of Humphries Creek was leased to the public. Although there is evidence it was used at some time by members of the public for recreational purposes the use was unauthorised and was discontinued after Mr Scutts intervened.

(2) Lake Liddell was not designed to accept oil discharged from the gas turbine power station in contrast to the design purpose of Humphries Creek Dam as a polishing pond. The process dilutes the leachate run-off from the waste rock dump. It is then polished by interaction with reeds growing in the water and with other organic material that finds it way to the dam.
(3) The commonsense approach referred to by the Chief Justice in Elcom dictates an acknowledgment that it is ridiculous to suggest operating a mine site without a water management system to deal with pollutants. If the prosecutor is right then even the discharge from one waste rock dam to another would be an offence.
(4) The polluting event at Liddell was outside the terms of Elcom’s licence whereas no relevant licence applies to Humphries Creek Dam.

81. The defendant’s submission in relation to the MREMP are summarised as follows:-


(1) The MREMP governs the whole of the mine site and for there to be a relevant discharge for the purposes of Section 120 of the POE Act it would have to be a discharge from Humphries Creek Dam at the dam wall.

(2) The MREMP was designed as a permanent system that would operate during the life of the mining leases and would apply to the whole of the mine site during mining operation in the wider sense of those words through to completion of rehabilitation of the site.
(3) The MREMP was formally approved by the Minister for Mines in December 1989 and until amended or replaced it governs the whole of the site and the project conducted on it.
(4) Mining operations in its wider sense must include periods of care and maintenance and the period of rehabilitation of the site.
(5) The MREMP is a fluid document which contemplated meetings and reports on activities and recommendations throughout the life of the leases so as to bring about the objectives of the MREMP that included rehabilitation of the Site that could only be completed after cessation of mining.
(6) For the MREMP to be changed or replaced there must be a formal procedure of amendment or revocation with the replacement by a new MREMP and approved by the Minister in accordance with the lease terms.
(7) Given that the MREMP was a designed system that involved permanent aspects of the site, permanent right through to completion of rehabilitation, that is:-

_ the waste rock dump;

_ the tailings dam;
_ the waste rock leachate dams 1 to 4;
_ the Humphries Creek Dam
it is impractical to limit the scope of the MREMP as suggested by the EPA.

82. The defendant’s claim is that whilever it complies with the terms of an MREMP, prepared in accordance with a mining lease, it has a complete defence to any prosecution under the pollution control legislation. In support of this argument Mr Hill refers to s 73(1A) of the Mining Act which states as follows:-

73(1A) The holder of a mining lease granted in respect of a mining purpose or mining purposes only may, in accordance with the conditions of the lease, carry out the mining purpose or mining purposes specified in the lease.
83. According to the defendant there is no inconsistency (as contemplated by s 7(2) of the PEO Act) in the Crown granting a right to mine or to carry on mining purposes pursuant to the Mining Act. Mr Hill has emphasised that the Minister has never elected to cancel the lease. Nor did he exercise the power under condition 141(d)(i) of MPL 259 to require the MREMP to be amended. In this respect, regard should be given to the authorised purposes under MPL 259, namely, inter alia,:-


Constructing, laying, maintaining or using in connection with mining or mining purposes a building, cable, dam, electricity transmission line, pipeline, reservoir, road, telephone line or any machinery.

…

The dumping or depositing of any overburden, ore, mineral, mine residues or tailings.


84. In other words, the rights granted pursuant to MPL 259 can only be taken away by a formal process. That was never done.

85. Mr Hill says that it is unrealistic to claim, as the prosecutor does, that the MREMP does not apply to the area covered by MPL 259. It was prepared pursuant to condition 141 of MPL 259 within the period of 24 months specified by condition 141(a).

86. A minute paper dated 28 December 1989 and signed by Mr Hollands recommended approval of the MREMP. The MREMP was approved by the Director of the Minerals Division on the following day.

87. The approval by the Director is endorsed on the minute paper. The following statement appears in the minute paper:-

I have been advised by the company that it is probable that the Drake mine will close at the end of March 1990. Following receipt of this information, I deferred a site meeting previously convened to discuss the REMP until I have met with the mine management to discuss the decommissioning of the Drake mine. I intend to meet on site with Mt Carrington Mines’ management at the end of January 1990, and the meeting to discuss the REMP will probably now be held during March 1990.


88. Furthermore, it was approved the day after Mr Hollands wrote to the Mineral Resources Development Laboratory stating that he had been “informed by the mine management that the mine is unlikely to continue its operations beyond March 1990” .

89. As there was no amendment to the MREMP the defendant considers it “was strictly bound” to conduct its operations in accordance with the approved plan. That plan included Humphries Creek Dam in the water management system. Mr Hollands confirmed that, in his opinion, compliance with the provisions of the MREMP is mandatory.

90. In the section dealing with environmental monitoring and management the MREMP lists decommissioning options in the body of the document. Figure 11 shows Waste Dumps – Proposed Rehabilitation Schedule in schematic form.

91. When the MREMP was first produced in May 1989 it was reviewed by three DMR officers, including Mr Hollands, who concluded collectively as follows:-

Overall the management plan is an excellent document providing a sound basis for waste control and environmental management.


92. Mr Hollands confirms that, according to his recollection, the MREMP was circulated to other statutory authorities including the SPCC. So far as he can remember there was no response from the latter. There is no other evidence identifying a response before the MREMP was approved by the delegate of the Minister.

93. The defendant notes that the management system in respect of the waste rock dams was devised to deal with the wrong placement of waste rock in the waste rock dump. Thereafter the company was bound to comply with its requirements and maintain the system. Mr Hill asserts it is obvious the system worked as the sampling undertaken shows the reading of the various metals to be dropping at several points below the waste rock dump.

94. On the same day as the alleged offence took place there was a discharge from the tailings dam located in the second water catchment area. The defendant places some importance on the failure of the EPA to prosecute the defendant discharge from in respect of the tailings dam. This, says Mr Hill, is because the EPA accepts that for there to be a polluting discharge from that system it must be a discharge from the defendant’s premises. The evidence is that pumping of effluent from WRD 4 to the tailings dam had caused the latter to overfill. Mr Scutts was so concerned that he had switched off the pump. Some of the water from WRD 4 would have spilled out of the tailings dam yet the EPA has only prosecuted the defendant for the alleged offence in respect of WRD 4.

95. The defendant does not accept the sampling proves any metals reached Humphries Creek Dam. The only hard evidence of the presence of the matter particularised in the summons is in the drain or gully above Humphries Creek and below WRD 4. Thus if, notwithstanding the overall defence in respect of the operation of the water management system, there is a finding of guilt then it will be found to be pollution in the drain or gully.

96. One further problem identified in relation to the samples taken is the evidence of various other derelict mines in the area which are known sources of pollution.

97. Reference to licences issued under the Pollution Control Act 1970, although cancelled or expired at the date of the offence, contain the following condition:-

No alteration or modification to the place or method of disposal of wastes or pollutants, or to the method of operation of plant, works, fuel burning equipment or pollution control equipment, which is likely to cause or increase air or water pollution or noise being emitted from the premises shall be made without approval in writing from the EPA.


98. The defendant claims that condition lends support for its contention that the Humphries Creek Dam was part of the system and recognised as such.

99. The defendant places strong reliance upon the ongoing and continuous involvement of the EPA in monitoring, amendment and management of the water system during the whole period following the approval of the MREMP right up to the date of the alleged offence. Importantly the process involved the pumping of leachate from WRD 4 to the tailings dam. The pumping started in 1994. Mr Hill seeks to make the point that pumping the leachate from WRD 4 to the tailings dam “did nothing but mess up the system” .

100. In June 1994 the company issued a report entitled “Review of Drake Rehabilitation and Work Proposals for 1994/1995” . The document contains the following statements:-


(a) “As there is not enough capacity in the dams [Waste Rock Dams] to contain all the leachate that could be produced in wet season, some water will overflow into Humphries Creek during rainfall periods”.

(b) “There is no doubt the extensive reed bed around the dam [Humphries Creek Dam] especially in its upper reaches are very effective in reducing the heavy metal levels in the water. Water quality monitoring in this catchment will need to be long-term as long as leachate is being produced”.

(c) “Increasing dam capacity only makes sense if the water can be evaporated and that doesn’t seem to be the case. Effectively, Humphries Creek Dam provides a polishing function for water coming from the Main Waste Rock Dump area reducing contaminants to lower levels.”

(d) “No further work is proposed at this stage to deal with leachate produced from the main waste rock dump apart from regular water quality monitoring”.



101. According to Mr Hill, the documents show the continuance of the mandatory requirements for the waste water management system established by the MREMP. The system was that water from the waste rock dump flowed into WRD 1 and thereafter down through the other dams and eventually, during rain events, into Humphries Creek Dam.

102. Even the proposal to pump into the tailings dam was an attempt to “minimise” the overflow to Humphries Creek Dam. It was not an attempt to eliminate it.

103. Although the EPA could not itself amend the MREMP, nevertheless as a result of its intervention the system was changed. Mr Hill reminds the Court that the company did not ever lose its right to operate the system in accordance with the MREMP. The “ad hoc tinkering with the water management system” , as Mr Hill describes it, ultimately led to the turning off of the pump at WRD 4.

104. Mr Hill says it is a telling fact that the authorities concede the tailings dam and spillway were opened as a consequence of the directions given by the EPA thereby causing the tailings dam to overfill. If the requirements of the MREMP had been maintained this would not have happened.

105. The defendant’s position is that it is not correct to say that the MREMP ceased to apply as soon as mining finished for the following reasons:-


(1) The name of the MREMP contemplates rehabilitation;

(2) The need for management of water on the site does not cease when mining stops;
(3) Placing a mine in care and maintenance means the mine can subsequently become operational when economic conditions change;
(4) Care and maintenance involves caring for the system and maintaining the approved system; and
(5) The DMR never saw fit to amend the MREMP.


106. Any effort by the company to limit the amount of leachate reaching Humphries Creek Dam is said to be motivated by the need to prevent any escape beyond the dam and off the premises.

107. It is the defendant’s submission that this case falls within the exception identified by the Court of Criminal Appeal in the Elcom case, namely that one uses commonsense to determine whether a pollution event has occurred.

108. Finally, Mr Hill refers to the effect of the interaction between the Mining Act and the PEO Act. He seeks to distinguish between rights created pursuant to the Mining Act and the burden imposed on the miner under the mining legislation through the lease conditions and the MREMP. Section 380 of the Mining Act refers only to the exercise of any right conferred by the Act. It says nothing of the burden imposed under the Mining Act through the conditions of the MREMP. The submission depends on accepting the argument that the MREMP imposes a burden, or burdens, on the holder of the authority rather than it being part of the conditional exercise of the right to mine. Mr Hill claims that the company is in a “no win” situation. The mining authority on the one hand requires compliance with the MREMP whereas, on the other hand, the EPA says that if the company does comply with the terms of the MREMP it will be prosecuted.

The legislation

109. Section 380 of the Mining Act had effect in respect of the Clean Waters Act when the Mining Act was enacted in 1992.

110. Section 16 of the Clean Waters Act contained a prohibition on polluting waters. Read together with s 380 of the Mining Act, s 16 clearly provided that the exercise of the rights conferred by the mining purposes lease were restricted. The prohibition against pollution was not affected. That argument is even stronger if the rights under the mining title are regarded as contractual (see discussion in Bromley and Others v Forestry Commission of New South Wales (2001) 51 NSWLR 378 at 393). The intention to leave intact the provisions of the Clean Waters Act, and related legislation, including the regulating provisions in respect of licences, is made even clearer by the express reference to the Environmental Planning and Assessment Act 1979 (“the EP&A Act”) in ss 65, 74 and 381 of the Mining Act. The operation of the EP&A Act is significantly modified in respect of the granting of development consent for mining. No attempt is made to change the effect of any pollution control legislation.

111. The argument is ultimately resolved in favour of the prosecutor by the provisions of s 7(2) of the PEO Act. By dint of that section the PEO Act expressly prevails over any other Act to the extent of any inconsistency. If there is no inconsistency then obviously the application of the definitions of “water pollution” and “waters” to s 120(1) prevail.

112. The provisions of the MREMP are more properly to be regarded as a reflection of conditions attached to the exercise of the right to mine rather than a burden. Even so, the argument developed by Mr Hill in respect of the distinction between a right and a burden is not relevant to the effect of s 7(2). It is directed only to the application of s 380 of the Mining Act. Ultimately, s 380 has no relevance in the present case.

113. If there is an inconsistency between the two statutory regimes then s 7(2) of the PEO Act requires that Act to prevail.

114. It must follow therefore that the requirement for compliance with the provisions of the MREMP does not, and indeed cannot, constrain the literal application of s 120(1) of the PEO Act.

115. The commonsense approach referred to by Gleeson CJ in Elcom is not, in my view, readily extended to cover the circumstances of a major development such as a mine. The extent of the power station development was clearly a factor that distinguished it from the instances of a domestic swimming pool or a farm dam put to the court during argument.

116. In Elcom the court appeared to place significant weight on the public use of Lake Liddell. Setting aside the sporadic and presumably unauthorised use of Humphries Creek Dam by members of the public it is relevant that mining and mining purposes are authorised only during the term of a lease At the end of the terms of the lease the land is returned to the owner or the Crown as the case may be.

117. As in Elcom, having regard to the nature of the mine development, there is no warrant for limiting the width of the definition of “waters” . Similarly, the Court is not persuaded that the defendant should be at liberty to pollute any water within or external to the site in an uncontrolled fashion. The mining activities should not be treated as being beyond the purview of the PEO Act. The Minister has a responsibility to ensure that, as far as practicable, mining is carried out in a manner which does least harm to the environment and to that end applies controls on water management. Nevertheless the PEO Act was enacted specifically to protect, restore and enhance the quality of the environment (s 3(a) of the PEO Act).

118. Furthermore, the PEO Act contains special provisions in respect of mines. Mines are one of the activities listed in Sch 1 Schedule of EPA–licensed activities. A licence is required under s 48 of the PEO Act for the premises at which the activity of a mine is carried out. Pursuant to s 6 the EPA is the appropriate regulatory authority for the purposes of the PEO Act.

119. The definition of “mines” in Sch 1 incorporates the activities authorised by MPL 259 as follows:-


Mines that mine, process or handle minerals (being minerals within the meaning of the Mining Act 1992 other than coal) and that disturb or will disturb a total surface area of more than 4 hectares of land associated with a mining lease or mineral claim or subject to a section 8 notice under the Mining Act 1992 by:

(1) clearing or excavating, or

(2) constructing dams, ponds, drains, roads, railways or conveyors, or
(3) storing or depositing overburden, ore or its product or tailings.

120. The defendant’s submissions suggest the EPA has no control over premises once a mining lease is granted. The PEO Act expressly provides the opposite.

121. Section 122 of the PEO Act provides a defence to proceedings for an offence under Pt 5.3 if it is established that pollution was regulated by an environment protection licence. An environment protection licence includes a licence authorising “scheduled activities” . No such licence has been produced and the defendant does not raise the defence.

Conclusion

122. Having regard to all of the circumstances and the whole of the evidence, much of which has not been specifically referred to but nevertheless has been taken into account, the Court is not satisfied that the MREMP is a relevant consideration as a defence to a charge under s 120(1) of the PEO Act. It is not necessary to determine whether the MREMP applied after the mine was placed in care and maintenance. However, the failure of the Minister to require an amendment or the lodgement of a further plan suggests that the DMR was satisfied in this respect. There is significant weight in the argument that the prevailing circumstances and water management regime in respect of the Humphries Creek Dam catchment were arguably unchanged particularly in respect of the control and treatment of leachate run off from the waste rock dump.

123. Even if the EPA was complicit in what occurred on 3 November 1999 its involvement did not lead to the discharge from WRD 4 and could not, in any case, constitute a defence.

124. The Court finds that compliance with the obligation imposed by the MREMP did not have the effect of avoiding the requirement for a licence to pollute any waters within the mine site. Compliance with the terms of the MREMP is not a defence to the charge under s 120(1) of the PEO Act.

125. Moreover, the defendant has not persuaded the Court that the evidence of the sampling procedures and the subsequent analysis of the samples taken is unreliable. The Court is satisfied that the pollution did occur at the sampling point in the drain or gully above Humphries Creek Dam and in Humphries Creek itself at the head of the dam as alleged and particularised in the summons.

126. The Court finds the offence proved.