Environment Protection Authority v Wambo Coal Pty Ltd

[2017] NSWLEC 152

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Environment Protection Authority v Wambo Coal Pty Ltd [2017] NSWLEC 152
Hearing dates:	1 November 2017
Date of orders:	20 November 2017
Decision date:	20 November 2017
Jurisdiction:	Class 5
Before:	Pain J
Decision:	See par 75
Catchwords:	SENTENCE – environmental offence – plea of guilty to charge of water pollution from coal mine – low objective seriousness – mitigating factors considered – totality principle applied   SENTENCE – environmental offence – plea of guilty to charge of failure to comply with licence condition – low objective seriousness – mitigating factors considered – publication order made
Legislation Cited:	Crimes (Sentencing Procedure) Act 1999 ss 3A, 21A, 22, 23 Criminal Procedure Act 1986 s 257B Protection of the Environment Operations Act 1997 ss 3, 64, 120, 129, 241, 248, 250, Dictionary
Cases Cited:	Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234; [2006] NSWLEC 34 Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 Director-General of the Department of Environment & Climate Change v Rae (2009) 168 LGERA 121; [2009] NSWLEC 137 Environment Protection Authority v George Weston Foods Ltd [2013] NSWLEC 16 Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103 Environment Protection Authority v Port Kembla Copper Pty Ltd (2001) 115 LGERA 391; [2001] NSWLEC 174 Environment Protection Authority v Port Kembla Copper Pty Ltd [2003] NSWLEC 256 Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80 Environment Protection Authority v Warkworth Mining Ltd [2017] NSWLEC 107 Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299; [2006] NSWLEC 419 Environment Protection Authority v Wattke; Environment Protection Authority v Geerdink [2010] NSWLEC 24 Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 Hoare v R (1989) 167 CLR 348; [1989] HCA 33 R v Araya (2005) 155 A Crim R 555; [2005] NSWCCA 283 R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 R v Visconti [1982] 2 NSWLR 104
Category:	Principal judgment
Parties:	Environment Protection Authority (Prosecutor) Wambo Coal Pty Ltd (Defendant)
Representation:	COUNSEL: M Bragg, solicitor (Prosecutor) J Johnson (Defendant)   SOLICITORS: Department of Environment Climate Change & Water (Prosecutor) Allens (Defendant)
File Number(s):	16/376075; 16/376087

Judgment

1. The Defendant Wambo Coal Pty Ltd (Wambo) has pleaded guilty to two charges brought by the Prosecutor the Environment Protection Authority (EPA) under the Protection of the Environment Operations Act1997 (POEO Act). The offences relate to the partial failure of a dam (the Dam) on Wambo’s premises at the Wambo Mine, Jerry Plains Road Warkworth (the Premises). The collapse of a segment of a wall of the Dam resulted in the discharge of material from the wall and sediment-laden waters into an unnamed ephemeral drainage line (the tributary) which led to Waterfall Creek (the creek).

2. The first charge is that Wambo polluted waters contrary to s 120(1) of the POEO Act which occurred at or near the Premises between about 5 and 11 January 2016.

3. The second charge is that Wambo contravened an environment protection licence (EPL) condition contrary to s 64(1) of the POEO Act between about 28 November 2015 and 11 January 2016.

4. The offences are strict liability so that no element of the offences has a mental component. The pleas of guilty mean that the essential elements of the offences are admitted by Wambo, R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at 275.

Summons – matter no 16/376075 pollute waters

The Prosecutor claims:

1 An order that the Defendant, Wambo Coal Pty Limited ACN 000 668 057, having its registered office at 100 Melbourne Street, South Brisbane, Queensland 4101, appear before a Judge of the Court to answer the charge that, between about 5 January 2016 and about 11 January 2016 inclusive, at or near the Wambo Mine, Jerry's Plains Road, Warkworth in the State of New South Wales (the Licensed Premises), it committed an offence against section 120(1) of the Protection of the Environment Operations Act 1997 in that it polluted waters.

Particulars

(a) Waters:

The ephemeral drainage line leading to Waterfall Creek.

(b) Pollutant:

Sediment from a wall of the Montrose sediment dam (the Dam) and sediment laden water which was being stored in the Dam before the breach of the Dam wall, being soil, earth, mud, stones, sand, clay or similar inorganic matter.

(c)   Manner of breach:

The Defendant was the occupier of the Licensed Premises, at which the Pollutant was introduced into the Waters from the Dam when the Dam wall failed. The Defendant had failed to ensure the Dam was adequately constructed for its purpose, leading to the collapse of the Dam wall, and:

(i)   the introduction into Waters of the Pollutant; and/or

(ii)   placing the Pollutant in a position where it is likely to fall, descend or be washed into the Waters or the dry bed of the Waters.

2   That the Defendant be dealt with according to law for the commission of the above offence.

3   An order that the defendant pay the prosecutor's costs.

4 Such orders pursuant to Part 8.3 of the Protection of the Environment Operations Act 1997 as the Court in its discretion sees fit to make.

Amended summons – matter no 16/376087 breach of licence condition

The Prosecutor claims:

1.   An order that the Defendant, Wambo Coal Pty Limited ACN 000 668 057, having its registered office at 100 Melbourne Street, South Brisbane, Queensland 4101, appear before a Judge of the Court to answer the charge that between about 28 November 2015 and 11 January 2016, at or near the Wambo Mine, Jerry's Plains Road, at Warkworth in the State of New South Wales (the Licensed Premises), it committed an offence against section 64(1) of the Protection of the Environment Operations Act 1997 in that it was the holder of [a – sic] licence, a condition of which was contravened by a person.

Particulars

a.   Licence

Environment Protection Licence Number 529.

b.   Licence condition contravened

Condition 01.1, which states: “Licensed activities must be carried out in a competent manner. This includes:

(a)   The processing, handling, movement and storage of materials and substances used to carry out the activity, and

(b)   The treatment, storage, processing, reprocessing, transport and disposal of waste generated by the activity.”

c.   Manner of breach

The Defendant failed to carry out its licensed activities at the Licensed Premises in a competent manner, in that it:

i.   caused the spillway on the Montrose sediment dam (the Dam) to be constructed and/or modified in a manner such that it had insufficient capacity;

ii.   failed to ensure the Dam was constructed in a manner which was suitable and/or adequate for the soil type used; and/or

iii.   otherwise failed to ensure the Dam was fit for purpose.

As a consequence, the dam wall collapsed, leading to sediment from the dam wall and the waters in the dam being deposited in the ephemeral drainage line leading to Waterfall Creek.

2.   An order that the Defendant be dealt with according to law for the commission of the above offence.

3. Such orders pursuant to section 8.3 of the Protection of the Environment Operations Act 1997 as the Court in its discretion see fit to make.

4.   An order that the Defendant pay the Prosecutor's costs.

Protection of the Environment Operations Act 1997

5. Relevant definitions in the POEO Act include:

Dictionary

environment means components of the earth, including:

(a)   land, air and water, and

(b)   any layer of the atmosphere, and

(c)   any organic or inorganic matter and any living organism, and

(d)   human-made or modified structures and areas,

and includes interacting natural ecosystems that include components referred to in paragraphs (a)–(c).

…

harm to the environment includes 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.

6. Sections 64 and 120 of the POEO Act relevantly provide:

Part 3.4 Licence conditions

…

64 Failure to comply with condition

(1)   Offence

If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence.

...

Part 5.3 Water pollution

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.

Evidence

7. The parties usefully agreed a statement of agreed facts (SOAF) which was tendered at the sentencing hearing. The SOAF refers to annexures which are not included this judgment but are summarised at par 9 below. The SOAF and its annexures became Exhibit A in these proceedings.

Statement of agreed facts

The Defendant

1)   Wambo Coal Pty Limited (ACN 000 668 057) (Wambo) operates an open cut and underground coal mine located at Wambo Mine, Jerry's Plains Road, Warkworth, New South Wales (the Premises).

2)   Wambo has operated a combined surface and underground mine in the upper Hunter Valley since 1969.

3)   Wambo is an indirect subsidiary of Peabody Energy Australia Pty Ltd (Peabody). Peabody is the sole shareholder of Peabody Australia Mining Pty Ltd (ACN 002 818 699) (Peabody Mining), which in turn owns all of the ordinary shares in Wambo.

The Licensed Activities

4)   Wambo is the holder of Environment Protection Licence Number 529 in relation to the Premises (the Licence). A copy of the Licence is at Annexure A.

5)   Wambo is the occupier of the Premises, the operator of the mine and carries out activities relating to the mining, processing and handling of coal at the Premises. At all relevant times, Wambo was carrying out activities at the Premises under the Licence.

6)   At all relevant times, Wambo was authorised to undertake mining activities in accordance with the Development Consent dated 4 February 2004 (DA305-7-2003) (as modified) and the Development Consent dated 16 December 2004 (DA177-8-2004) (the Development Consents), the Licence and the mining tenements.

7)   In accordance with the Development Consents, Wambo was required to prepare a site water management plan for the operation of mining activities at the Premises. A component of this site water management plan was an Erosion and Sediment Control Plan (the Premises ESCP) for the Premises.

8)   The Premises ESCP was prepared by Wambo and approved by the Department of Planning and Environment on 27 November 2015.

9)   The Premises ESCP was in place at all relevant times, and forms part of Wambo's environmental management system.

10)   In order to allow the preparation of the ground surface (mulching vegetation and minor earthworks) prior to commencing open cut mining for the Montrose Pit, SLR Consulting Australia Pty Ltd (SLR) was engaged by Wambo to prepare an erosion and sediment control plan for the Montrose Pit to manage sediment laden runoff from the proposed stripping area, and to include a conceptual design of sediment control structures (the Montrose Pit ESCP).

11)   On 19 August 2015, SLR provided the Montrose Pit ESCP to Wambo. The Montrose Pit ESCP noted that the pre-strip disturbance area is located on a generally steep slope, with a significant catchment area upslope and to the west of the proposed pre-strip disturbance area.

12)   The Montrose Pit ESCP included a conceptual design for a sediment dam, the Montrose Sediment Dam (the Dam) (the Concept Design). The Concept Design included sizing of the Dam and spillway. A copy of the Montrose Pit ESCP, including the Concept Design is at Annexure B.

13)   The Montrose Pit ESCP also noted that, as the pre-strip disturbance area would be mined in the near future and the proposed sediment dam capacity calculations incorporate high erosion potential, no temporary erosion controls were recommended on the pre-strip disturbance area. However, the Montrose Pit ESCP did recommend that stripping of the pre-site disturbance area be staged and be undertaken as close to the commencement of mining as possible.

14)   In accordance with the Licence and the Development Consents, Wambo had approval to progress mining through the disturbance area surrounding the Dam in 2016, including the approximately 1.3km length of Waterfall Creek and its tributary downstream of the Dam. The extent of approved mining operations in 2016 is at Annexure C.

The design of the Dam and spillway

15)   The sizing of the Dam in the Concept Design was determined in accordance with the requirements of the Managing Urban Stormwater: Soils and Construction Vol. 1, 4th edition and Vol. 2E Mines and Quarries (Landcom, 2004 and DECC, 2008) (the Blue Book Guidelines). The sizing of the spillway was in accordance with the Best Practice Erosion & Sediment Control, Book 2 (IECA, 2008).

16)   The Concept Design provided for a sediment dam sized for a 5 day, 80th percentile rainfall depth of 24.4 mm, with an average spill frequency of 6 times per year. The total minimum volume required for the sediment dam under the concept plan was 2.83 ML.

17)   The Concept Design also provided for a spillway sized for a 100 year Average Recurrence Interval rainfall event, with a minimum base width of 4 m, water depth of 0.7 m and depth including the freeboard of 1 m.

18)   SLR noted, in the Montrose Pit ESCP, that its scope of work involved the conceptual design of sediment control structures as required for the disturbance layout. SLR recommended that all new sediment dams should be the subject of further detailed investigation including geotechnical assessment and detailed design prior to construction.

19)   The Concept Design included a conceptual pump line location and SLR noted that pump and pipeline systems would need to be determined, to enable the dams to be regularly drawn down following rainfall (within 5 days), in accordance with the Blue Book Guidelines, to minimise the chances of an uncontrolled discharge.

20)   Between about 19 August 2015 and 28 November 2015, further detailed investigation and design was undertaken by Wambo's technical services team. Wambo engineering and survey personnel undertook the following further detailed investigation and design:

a.   An aerial survey of the catchment area;

b.   Development of a Location Plan and General Arrangement for the Dam and contour drains;

c.   Development of a Set Out Plan;

d.   Development of a Cross Section;

e.   Development of Construction Notes for the Dam and contour drains, including:

i. Gradients;

ii. Batter angles;

iii. Cut and fill balance; and

f.   In-field Survey Set Out.

A copy of the Set Out Plan and Cross Section are at Annexure D.

The construction of the Dam

21)   The Dam was constructed within an area of predominantly undisturbed grazing land in preparation for future open cut mining disturbance. At the time of the incident, approximately 25% of the Dam catchment was disturbed, limited primarily to mulching of existing vegetation, with mulch being retained in these areas to provide additional protection against runoff and rainfall impact.

22)   Wambo contracted Shearer Contracting Pty Limited (the Contractor) to provide a bulldozer and operator to construct the Dam, on instruction from employees acting for Wambo.

23)   The design and operation of the Dam was undertaken by a number of Wambo's employees, and contractors, including Mark Mills (Open Cut Technical Services Superintendent), Matthew Remington (surveyor), Peter Kane (Production Superintendent), Harry Egan (Environmental Adviser), Peter Jaeger (Senior Environmental Adviser), and Steven Peart (Environment and Community Manager). At all relevant times, these personnel were acting on behalf of Wambo with respect.to the design and operation of the Dam.

24)   The Contractor carried out all construction works and Wambo's employees carried out surveying activities throughout the construction process. At all relevant times, the Contractor was acting on instruction of Wambo's employees during the construction of the Dam.

25)   There was no formal commissioning or approval process prior to the construction of the Dam. The Darm was a temporary structure and the disturbance area was to be mined through during 2016 (i.e. within 1 year). Once mining commenced, all runoff from the Dam's catchment would be directed to the mine pit.

26)   Between approximately 18 and 28 November 2015, the Dam was constructed using local soils compacted by a D6 bulldozer, as follows:

a.   The outline of the Dam, and the cut-and-fill areas, were pegged out by surveying using GPS from the 3D image produced by the Technical Services Team.

b.   The in-field survey set out of the Dam was completed on 18 November 2015.

29)   As a result, the Dam as constructed departed from both the Concept Design and the detailed design prepared by Wambo.

30)   Following the completion of construction of the Dam, Wambo did not undertake any verification that the Dam had been constructed in accordance with the design. Wambo did not undertake formal commissioning or approval for a structure such as the Dam and as such no engineering assessment of the Dam was carried out post-construction.

Operation of the Dam

31)   At the time of the incident, the total catchment area for the Dam was approximately 27.8 ha, comprising:

a.   Approximately 6.8 ha disturbed area (having topsoil and vegetative mulch either removed or exhibiting a high level of disturbance), primarily from mulching of existing vegetation, contributing to sediment-laden runoff; and

b.   Approximately 21 ha undisturbed area (including areas of existing vegetation and areas where a significant cover of vegetative mulch remained), contributing to clean-water runoff.

32)   The Blue Book Guidelines provide that a sediment control structure such as the Dam should be drawn down, or dewatered, using a pump and pipeline system, generally within 5 days of completion of a rainfall event if the nominated water quality targets can be met. However, the number of days that the dewatering should be conducted within, following the completion of a rainfall event, is dependent upon site conditions.

33)   Prior to the incident, Wambo did not install a permanent pump and pipeline system for the purposes of dewatering the Dam. However, Wambo maintains a trailer mounted, mobile Sykes High Head 100 pump capable of pumping water for dewatering purposes following a rainfall event (the Pump System).

34)   A significant rainfall event occurred at the Premises between 3 January 2016 and 6 January 2016. Wambo did not mobilise the Pump System, or, any other pump and pipeline system, to dewater the Dam during or following the rainfall event.

Pre-lncident Inspections and monitoring of the Dam

35)   The Premises ESCP that applied at the time of the incident provided, in relation to inspections, monitoring and maintenance:

“Sediment control structures will be inspected on a monthly basis, or following rainfall events ≥ 20 mm/day* (midnight to midnight), as recorded by the Wambo Meteorological Station. If no rain is received for at least a 24 hour period, any subsequent rain event ≥ 20 mm/day will trigger a new inspection. The sediment control structures will be inspected for capacity, structural integrity and effectiveness by Wambo's Environmental Personnel.”

36)   Following the completion of the construction of the Dam on 28 November 2015, further inspections of the Dam were carried out by Mr Jaeger in mid-December, and by Mr Remington on 22 December 2015 (following a rainfall event). Mr Remington considered that on 22 December 2015 the Dam appeared to be working.

The Incident

37)   Between 3 and 6 January 2016, there was significant rainfall at the Premises, leading to significant regional flash and riverine flooding (the Storm Event). The rainfall recorded for the 71 hours from 3 January to 6 January 2016 was 118.6 mm. According to Bureau of Meteorology records for the Cessnock weather station, located approximately 39km from the Premises, 6 January 2016 recorded the highest amount of rain in a single day in January, since records began.

38)   The following rainfall data was recorded at the Premises by the Wambo Meteorological Station between 3 and 6 January 2016 (midnight to midnight):

Date	Rainfall (mm)
3 January	3.6
4 January	13.8
5 January	76.8
6 January	24.4
Total	118.6

39)   On Tuesday 5 January 2016 at approximately 10:30 am, Mr Remington inspected the Dam. The Dam wall was observed to be intact. Mr Remington observed that it was "raining quite heavily" and that the Dam looked to be “pretty much full”. At that time, Mr Remington, considered that the Dam “looked to be working pretty well”.

40)   Photographs taken of the Dam and spillway by Mr Remington on 5 January 2016 are at Annexure E. The photographs show that the Dam was operating at or above the base of the spillway, suggesting that peak inflows into the Dam were in excess of the corresponding spillway discharge.

41)   Mr Remington emailed the photographs to Mr Jaeger, Mr Peart, Mr Mills and Geoff Stanton (Senior Surveyor) on 5 January 2016.

42)   Storm runoff analysis carried out after the incident determined that the peak rainfall intensity over the 71 hour Storm Event occurred between 11:30 am and 12:00 pm on 5 January 2016.

43)   Further inspections of the Dam were attempted on 6 and 7 January 2016. At the time of the proposed inspections, access and egress to the Dam was deemed unsafe by operational personnel due to unsuitable track conditions and unstable surfaces. Mining operations were suspended on 6 and 7 January 2016.

44)   Between 8 to 10 January 2016, no inspection of the Dam by Wambo personnel was undertaken.

45)   On Monday 11 January 2016, at approximately 10:30 am, Mr Peart and Mr Egan inspected the Dam and the downstream ephemeral drainage line. They observed that a section of the Dam wall had collapsed. Photographs taken of the collapsed Dam wall at the time are at Annexure F.

46)   On 11 January 2016, Mr Peart notified, on behalf of Wambo, the following authorities of the incident:

a.   Environment Protection Authority (EPA);

b.   NSW Minister for Health;

c.   NSW Fire and Rescue;

d.   NSW Workcover;

e.   Singleton Shire Council; and

f.   Department of Planning and Environment.

47)   On 14 January 2016, Mr Jaeger notified the landholder downstream of the Dam of the incident.

48)   It is unknown at what time between 5 and 11 January 2016 part of the Dam wall collapsed. Based on analysis of storm water runoff, the results of water sampling carried out at the Premises, and the timing of inspections of the Dam, it is estimated that the Dam wall failed on or about 5 January 2016.

49)   As a result of the failure of part of the Dam wall, sediment-laden runoff escaped through the collapsed section of the Dam wall.

50)   Storm runoff analysis carried out after the Incident by SLR estimated that approximately 18.33 mega litres (ML) of runoff discharged from the Dam and spillway from the Storm Event. This is estimated to have comprised approximately 2.5 ML of water that was stored in the Dam at the time it failed and which was discharged through the failed section of the Dam wall. An additional 15.5 ML of catchment runoff would have discharged through the Dam spillway.

51)   SLR concluded that the total runoff volume estimated from its model was significantly larger than what the Dam was designed to contain in accordance with the Blue Book Guidelines. As such, had the dam embankment not failed then a significant amount of runoff would still have flowed downstream via the dam spillway.

52)   In addition, SLR also concluded that the majority of the 27.8ha Dam catchment area would contribute clean water runoff to the overall runoff yield with only a small amount (conservatively estimated at approximately 6.9ha) of catchment area contributing to sediment laden runoff. SLR also noted that the strategic placement of the Dam (over 300m upslope of the approved boundary for Wambo Coal Mine) would also have reduced the overall sediment yield reporting offsite as the sediment laden runoff would have been treated to some degree by this downslope vegetative buffer area.

53)   It is unknown what proportion of the water released from the Dam was discharged from the Premises. It is unknown whether any sediment released from the Dam as a result of the incident was discharged beyond the boundary of the Premises.

54)   However, an environmental assessment undertaken by Aquatic Ecologists (Niche Environment and Heritage) following the incident concluded that no visible sediment deposition was observed outside of the boundary of the Premises.

55)   The source of the material released from the Dam as a result of the incident came either directly from the failed section of the wall (estimated to comprise approximately 109.7m³ of material) or was suspended sediment in the 2.5 ML of water released from the Dam.

56)   No complaints or other contact initiated by community members or landholders were received by Wambo in relation to the incident.

Environmental harm

57)   The sediment-laden water discharged from the failed section of the Dam wall and flowed along the ephemeral drainage line and into Waterfall Creek (the Creek).

58)   The ephemeral drainage line is a tributary of the Creek (the Tributary). An aerial image showing the location of the Dam, the Tributary, the Creek and the boundary of the Premises is at Annexure G. An aerial image showing the flow path of the discharge is at Annexure H.

59)   The Creek is an ephemeral watercourse which eventually leads to the Hunter River. The Creek and its tributaries have been historically disturbed from agricultural practices (grazing), resulting in weeds, limited riparian vegetation and gully/bank erosion in most parts of the catchment.

60)   The Creek is usually either dry or aeries of small pools. The ephemeral pools are not connected by flow except during heavy rainfall. Even in the deepest pool in the Creek, where there is a monitoring point, the site is often dry and is usually quite turbid when it has water. When inspected by the EPA's expert on 18 April 2016 only four small pools were visible despite 33.4mm of rain being measured at the mine the day before.

61)   The soils of the Creek contain dispersible clays which result in the small pools having very high turbidity and low dissolved oxygen levels. Cattle access to the Creek exacerbates the very high turbidity.

62)   The habitat of the Creek is likely to support aquatic macroinvertebrates that are adapted to ephemeral and turbid pools, such as some water bugs (Hemiptera), beetles (Coleopatera), worms, mosquitoes and midges (Chironomids). Freshwater crayfish are also likely to inhabit the Creek.

63)   The high turbidity and low dissolved oxygen of the pools means that aquatic taxa that live predominantly on the water surface (Hemipterans and some Coleopterans), or which are adapted to such conditions (some Dipterans), would survive in the pools.

64)   Aquatic monitoring carried out by Niche Environment and Heritage in 2013 identified that the pool fauna were dominated by pollution tolerant families of beetles (Coleoptera), water bugs (Hemiptera), and true flies (Diptera). Freshwater crayfish were also found to inhabit the waterway. Niche Environment and Heritage concluded that Waterfall Creek is limited in being able to support complex macroinvertebrate communities and long term improvement/change in aquatic health is unlikely.

65)   The Creek and its Tributary extends approximately 1.3km from the base of the Dam to the boundary of the Premises. Following the incident, visible sediment from the Dam was observed up to 389 m downstream of the failed Dam wall. No visible sediment deposition was observed in the remaining 972m of the drainage line downstream to the boundary of the Premises.

66)   Larger sized substrate boulders (larger than 256mm) were deposited up to 116m downstream, cobbles (64 - 256mm) were deposited 174m downstream, pebbles and gravels (2 - 64mm) were deposited 283m downstream, and beyond that, fine sands and silts were deposited. An aerial image showing the extent of deposition is at Annexure I.

67)   It is unknown whether any sediment was carried by flow beyond the boundary of the Premises. However, no visible sediment deposition was observed outside of the Premises.

68)   Photographs of sediment deposit observed in the Tributary and the Creek, taken by Mr Harry Egan on or about 11 January 2016, are at Annexure J.

69)   During the Storm Event, very high turbidity was recorded at a sampling point in the Creek, downstream of the Dam. The release of sediment-laden water from the Dam may have contributed to the elevated turbidity reading.

70)   The sudden increase in turbidity may have affected any macroinvertebrates living in the pools at the time.

71)   The localised flooding on 5 January 2016, in combination with the failure of part of the Dam wall and discharge of the sediment-laden waters contained in it, is likely to have either killed or swept downstream any aquatic fauna in the streams at the time.

72)   However, as the habitat is ephemeral, the aquatic biota that would have been in the Creek at the time of the incident would be adapted to ephemeral conditions and able to quickly re-colonise pools. As such, any impact from the incident would have been temporary and recolonisation could be expected within days if not hours.

73)   It is possible that small pools within the approximately 400 m length of the ephemeral drainage line and the Creek might have been filled by sediment, thus reducing potential habitat. However, the creek lines and surrounding areas are destined to become an open cut mine, and all habitat will be lost when the mine proceeds.

Cause of the incident

70a)   Investigations have not been able to determine conclusively the cause of the failure of the Dam wall.

71a)   Wambo and Peabody employees carried out a reverse engineering assessment of the Dam post-failure. Surveys and diagrams of the Dam as constructed and of the failed section of the Dam wall were prepared (Annexure K).

72a)   The analysis determined that the capacity of the spillway had been reduced (possibly by up to 50%), due to rock armouring which had been placed in the spillway, with the intent of reducing erosive scouring. The capacity of the spillway was therefore less than the design capacity.

73a)   As a result, the capacity of the spillway was inadequate for the inflow of water that occurred during the significant rainfall event, as the rate of water out-flow through the spillway was reduced by the rock armouring. The peak inflow rate was unable to be discharged through the spillway.

74)   Additionally, there was variable settlement of the Dam wall. A survey of the height of the Dam wall following the incident indicated that a section of the wall in or about the location of the failure appears to have settled to a greater extent than the remainder of the wall. This appears to have contributed to the reduction of the integrity of the Dam wall at the failure point.

75)   Additionally, inadequate or unsuitable construction methods were adopted for the type of soil used to construct the Dam.

76)   The Dam was constructed using in-situ virgin excavated natural material, through an iterative cut-and-fill process.

77)   Stephen Young, Senior Operations Manager, Soil Conservation Service (SCS), inspected the Dam on 14 January 2016 and took four samples of the soil from locations across the Dam. Two of these samples were analysed by Mr Young and officers of the SCS, as follows:

a.   Based on a visual observation of the samples, the soil was a reddish/yellowish brown mottled clay.

b.   The soils were inorganic clays of low to moderate plasticity, in accordance with the Unified Soil Classification System, very highly dispersive, with a very high risk of tunnel failure.

c.   The soils were Type D soils, which are highly dispersive and highly susceptible to tunnelling or piping failure.

78)   For the intended purpose of the Dam, and considering the type of soil used, the construction methods used for the construction of the Dam were not adequate or appropriate in the following respects:

a.   The preparation of the site for the construction of the Dam wall was inadequate in that: the Dam was not keyed in; there was inadequate stripping of the topsoil from the excavation area or from the area beneath the Dam wall; and, there was inadequate shaping of the gully prior to construction of the Dam wall.

b.   There was inadequate or no treatment of the highly dispersive soil, such as amelioration with gypsum or hydrated lime, during construction of the Dam.

c.   The embankment freeboard was inadequate, in that it provided for a depth of water above the spillway of less than the recommended 1 metre (as constructed the height of the embankment above the spillway inlet was between approximately 0.69 and 0.41 meters).

d.   The spillway capacity was inadequate, in that it was constructed with a base width of approximately 2.929 metres, which was less than the recommended width of 4 metres. The spillway capacity was reduced (possibly by up to 50%), due to the placement of rock armouring within the spillway.

e.   The spillway outlet was not located on a well-grassed area with a broad gentle slope, rather it allowed water to run along the back batter of the embankment.

f.   The compaction of the embankment was inadequate.

79)   The combination of the following factors led to the incident occurring:

a.   The inadequate or unsuitable construction methods adopted for the type of soil used to construct the Dam;

b.   The construction and/or modification of the spillway, including by placing rock armouring in it such that it had insufficient capacity;

c.   Given the nature of the Dam, there was no verification, following the completion of construction of the Dam, that the Dam had been constructed in accordance with the design, including consideration of the adequacy of the capacity of the spillway;

d.   Between 3 and 6 January 2016, there was significant rainfall, totalling approximately 118.6mm, at the Premises; and

e.   At some stage between 5 and 11 January 2016, a section of the Dam wall collapsed, releasing the sediment-laden runoff contained in the Dam.

Remediation actions

80)   On 12 January 2016, Wambo facilitated inspection of the Dam, the Tributary and the Creek by the EPA.

81)   On 13 and 14 January 2016, earthmoving equipment commenced rectification and remediation works. The Dam wall was reconstructed using different materials and construction techniques. A new spillway was built in a different location. Remediation hay bales and coir logs were placed on the downstream side of the Dam and along the toe of the Dam wall to limit sediment runoff into the Creek.

82)   Repair and remediation works were completed on 14 January 2016 and subsequently inspected by both the Department of Planning and the EPA on 14 January 2016.

83)   SLR was engaged voluntarily on 15 January 2016 by Wambo to provide expert technical advice regarding hydraulic modelling of the significant rainfall event to clarify the cause of the incident.

84)   Niche Environment and Heritage was commissioned voluntarily by Wambo on or about 15 January 2016 to provide expert technical advice regarding an environmental assessment of the extent of sedimentation of the Tributary and the Creek, and any impacts from the incident upon aquatic ecology, and provide recommendations for clean-up or remedial actions.

85)   Lindsay Dynan Consulting Engineers was engaged voluntarily by Wambo on or about 15 January 2016 to investigate and report on the structural integrity of the Dam as modified and reconstructed after the incident. The expert engineers concluded that the reinstated Dam was at a considerably lower risk of failure than prior to the incident.

86)   On 21 January 2016, a pump was installed at the Dam for the purposes of dewatering.

87) On 25 January 2016, the EPA issued Notice 1537356 to Wambo under s 91 of the POEO Act, requiring it to investigate remediation options in relation to the incident. In particular, the EPA directed Wambo to ascertain the extent of the area affected by the incident, to implement erosion and sediment controls to prevent further downstream impacts and to engage a civil engineer to investigate the structural integrity of the reconstructed Dam.

88)   Following the incident, Wambo Coal has implemented the following measures with the objective of ensuring that an incident of this nature will not occur in the future at the Premises:

a.   significant review and amendment of Wambo's Premises ESCP in April 2016, which was submitted by Wambo to the Department of Planning and Environment on 24 May 2016 (a copy of the revised Premises ESCP is at Annexure L), including:

i.   the introduction of a structured risk-based assessment process for the analysis of surface disturbance activities within surface and diverted water catchments on Site, in order to identify “significant risk dams”;

ii.   incorporation of additional planning, risk analysis, design and surveillance monitoring of sediment control structures;

iii.   requirement for all employees and contractors working on-site to undertake and complete a general site induction which includes details on erosion and sediment control and environmental management;

iv.   revised requirement, for all employees and contractors seeking to undertake ground disturbance activities, to complete (1) a surface disturbance permit and (2) an erosion and sediment control implementation plan, identifying potential erosion and sediment issues and controls, in consultation with Wambo Coal's Environment and Community Management personnel; and

v.   further actions and controls applied to the certification and commissioning of sediment dams on Site; and

b. review and amendment of Wambo's Pollution Incident Response Management Plan in place under Part 5.7A of the POEO Act, to update the reporting and notification procedures and protocols for the Premises to provide for the notification and consultation with additional stakeholders in relation to relevant environmental incidents. This management plan was submitted to the Department of Planning, Department of Resources and Energy and the EPA on 17 February 2016.

Prior history

89)   Wambo has two prior convictions for environmental offences:

a. On 1 August 2014, Wambo was convicted in Singleton Local Court of causing or permitting an offensive odour (being an offence under s 129 of the Protection of the Environment Operations Act 1997 (the POEO Act), following a blasting incident at its open cut pit on 24 July 2012 which produced a fume with a pungent and irritating odour. It was fined $13,000 and ordered to pay costs of $24,000.

b.   On 28 September 2016, Wambo was convicted in the Land and Environment Court of an offence of causing or permitting an offensive odour following a further mine blast which produced a fume with a pungent and irritating odour. It was fined $60,000 and agreed to pay costs of $35,000.

90) In 2014, the EPA accepted an enforceable undertaking from Wambo under s 253A of the POEO Act in relation to a water pollution incident which occurred following rainfall events in late January to early February 2013, after sediment from the newly constructed North Wambo Creek Diversion discharged downstream into the natural basin of North Wambo Creek. Wambo had engaged external consultants to design and construct the works. The incident was contributed to by a lack of erosion controls along the banks of the diverted section of creek, combined with heavy rain. When contractors began construction in 2012, the North Wambo Creek had been dry since 2009. The hot, dry conditions at the time meant there was a slower than normal growth of vegetation along the creek banks, with many of the seedlings the mine's contractors planted failing to grow. The environmental harm from the sediment discharge was low. According to expert technical advice, there was little if any impairment to aquatic ecology as a result of the incident. Wambo undertook substantial remediation efforts, at a cost of over $400,000. Under the EU, Wambo agreed to pay $30,000 to the Singleton Shire Council for the Council to undertake an agreed river rehabilitation program and $7,000 in legal costs to the EPA.

Cooperation

91)   Wambo has fully cooperated with the Prosecutor in its investigation of the incident, including:

a.   On 11 January 2016, Wambo reported the incident to the EPA's Environment Line on the day on which it became aware of the incident;

b.   On 12 January 2016, Wambo facilitated the inspection of the Dam, the Tributary and the Creek by the EPA;

c.   On 18 January 2016, Wambo provided to the EPA an incident report, as required under condition R2.2 of the Licence;

d.   Providing requested responses to all statutory notices for information and records, including:

i. Clean-Up Notices issued to Wambo Coal under section 91 of the POEO Act; and

ii. Notices under s191 of the POEO Act.

e.   Wambo and Peabody made all requested agents, officers and employees and representatives of entities associated with Wambo available for directed interviews by officers of the EPA;

f.   Wambo entered an early plea of guilty, in respect of both charges, once the prosecutor had amended its summons and filed its evidence, so avoiding the expense of a trial for both the Prosecutor and the Court; and

g.   Through its solicitors, agreeing to a statement of agreed facts.

8. I note that the numbering of pars 70 to 73 have been duplicated in the SOAF. I have labelled the second set of numerals [70a], [71a], [72a] and [73a] so as to differentiate it from the first set.

9. Annexed to the SOAF was a copy of Wambo’s EPL for the Premises, an erosion and sediment control plan relating to an area of the Premises called the Montrose Pit dated 19 August 2015 (Montrose ESCP) and an updated erosion and sediment control plan relating to the entire Premises dated April 2016 (Premises ESCP). The SOAF also contained aerial images of the Premises showing the extent of approved mining operations, the surrounding waterways including the creek, the flow path of the discharge and the extent of deposition. Photographs of the Dam taken before the incident on 5 January 2016 and after on 11 January 2016 clearly showed the collapsed Dam wall. Photographs of sediment deposit observed in the tributary on 16 January 2016 were also annexed to the SOAF.

10. Wambo read two affidavits.

Affidavit of Mr Baker

11. Mr Baker Senior Vice President of underground operations at Peabody Energy Australia Pty Ltd (Peabody) affirmed an affidavit dated 12 July 2017. Wambo is an indirect subsidiary of Peabody. At the time of the incident Mr Baker was responsible for underground and open-cut operations at the Premises.

12. Mr Baker acknowledged that Wambo failed to carry out the construction of the Dam in a competent manner. Insufficient training and direction was provided to the contractor who built the Dam and the concept design for the Dam was not sufficiently comprehensive. Mr Baker expressed sincere regret and remorse for the incident. Since the incident Wambo has re-examined its operations and has taken steps to avoid a recurrence as outlined in the affidavit of Mr Peart (summarised at pars 21-22 below).

13. Mr Baker attested to Wambo’s good corporate character including involvement in the local community. Wambo has donated over $200,000 in the past seven years to local charities, sporting and community groups. It also participates in local education and training schemes and maintains a team which provides local emergency response capabilities for other coal mines in the Hunter region.

14. Mr Baker outlined Wambo’s cooperation with the EPA following the incident as described in the SOAF at [91].

Affidavit of Mr Peart

15. Mr Peart Manager, Environment and Community at Wambo, affirmed an affidavit dated 12 July 2017. Mr Peart is responsible for the environmental performance of mining operations at the Premises including development and implementation of environmental systems to ensure Wambo’s operations comply with legislative, policy and regulatory requirements.

16. Mr Peart stated that following construction of the Dam Wambo did not verify that it had been constructed in accordance with the design plans, although it was inspected by employees on at least two occasions in December 2015. At the time of construction it was usual for no formal commissioning or approval process to be carried out given the temporary nature of the Dam and its small catchment area.

17. Mr Peart attested to inspecting the Premises on 11 January 2016 and noticed the collapsed Dam wall (SOAF at [45]). The same day Mr Peart alerted the EPA, NSW Minister for Health, NSW Fire and Rescue, NSW Workcover and Singleton Shire Council to the incident. Remediation works were undertaken on the Dam on 13 and 14 January 2016.

18. Wambo commissioned expert advice and investigations following the incident. Hydraulic modelling of the storm event was conducted by SLR Consulting Australia Pty Ltd who prepared a report dated 15 January 2016 which was attached to Mr Peart’s affidavit. The report stated inter alia that the highest level of rainfall during the storm event resulted in a peak flow rate of runoff into the Dam of 906 L/s. Modelling estimated that the total runoff volume which flowed into the Dam during the storm event was 18.33 ML, significantly greater than what the Dam was designed to contain (approximately 2.83 ML, SOAF at [16]). Consequently, even if the Dam wall had not failed its capacity to store water would have been greatly exceeded.

19. A report on the structural integrity of the reconstructed Dam was prepared by Lindsay Dynan Consulting Engineers dated 19 February 2016 and was attached to Mr Peart’s affidavit. The report concluded that the reconstructed Dam was at a considerably lower risk of failure than prior to the incident. It also recommended that some additional geotechnical investigations be carried out.

20. An environmental assessment downstream of the Dam was undertaken by Niche Environment and Heritage who prepared a report dated 4 February 2016 which was attached to Mr Peart’s affidavit. The report advised of any impacts on aquatic ecology and provided recommendations for clean-up or remedial actions. Wambo installed sediment retention measures in the tributary and undertook further monitoring of the aquatic environment in the creek in September 2016 as recommended by Niche Environment and Heritage. Overlay maps depicting the extent of sediment deposition and the area of approved mining operations were also attached to Mr Peart’s affidavit.

21. Mr Peart attested to the measures taken by Wambo to avoid a recurrence of the incident. A significant review and amendment of the Premises ESCP was conducted and submitted to the Department of Planning and Environment on 24 May 2016. A copy of the Plan highlighting extensive changes was attached to Mr Peart’s affidavit. These included: the introduction of a structured risk-based assessment process to identify dams at “significant risk”; the incorporation of additional planning, risk analysis, design and surveillance monitoring of sediment control structures; a new requirement for all employees and contractors to undertake a general site induction including details on erosion and sediment control; a revised requirement for all employees and contractors seeking to undertake ground disturbance activities to complete a surface disturbance permit and erosion and sediment control and implementation plan; and further actions and controls applied to the certification and commissioning of sediment dams on the Premises.

22. In further response to the incident Wambo reviewed and amended its Pollution and Incident Response Management Plan in February 2016, a copy of which was attached to Mr Peart’s affidavit. Wambo also engaged independent consultants to provide advice on other sediment control measures in place at the Premises, spent approximately $10,000 installing clean water conveyance works surrounding the Dam to ensure it became isolated from the creek and constructed two additional sediment dams at the Premises which have permanent pump installations.

23. In addition to the actions already taken, Mr Peart attested to a number of further preventative measures that Wambo intends to undertake. It will: continue to implement revised procedures for notification by contractors of environmental incidents on the Premises; conduct water monitoring of all future discharge and overflow events; report on routine inspections of sediment control measures at an increased frequency and with greater formality; ensure that pumping capacity is provided for in any new sediment dams; ensure that the risk-based assessment of all surface disturbance activities are undertaken in accordance with the Premises ESCP; review regularly the Premises ESCP; and ensure that all relevant employees and contractors are made aware of all revised policies, procedures and management plans related to environmental compliance prior to undertaking ground disturbance activities.

Purposes of sentencing

24. Section 3A of the Crimes (Sentencing Procedure) Act 1999 (CSP Act) identifies the purposes of sentencing. It states:

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.

25. The EPA submitted that factors (a), (b), (e), (f) and (g) are most relevant to these proceedings.

26. Section 21A of the CSP Act identifies numerous matters which a court must take into account when sentencing including in relation to aggravating (s 21A(2)) and mitigating (s 21A(3)) factors.

27. The objective and subjective circumstances of the offence must be weighed up in the context of the legislative framework under the POEO Act.

Objective seriousness of offences

28. A fundamental consideration of relevance to environmental offences is the degree to which a defendant's conduct would offend against the legislative objectives expressed in the offence. The objects of the POEO Act include:

3 Objects of Act

(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,

(ii)   the reduction to harmless levels of the discharge of substances likely to cause harm to the environment,

…

29. The pollution of waters offence proscribed in s 120 has an important role in achieving the objectives of the POEO Act. The contravention of an EPL in relation to offences under s 64 is serious because it involves a breach of public trust, Environment Protection Authority v Port Kembla Copper Pty Ltd (2001) 115 LGERA 391; [2001] NSWLEC 174 at [23]-[27] and Environment Protection Authority v Port Kembla Copper Pty Ltd [2003] NSWLEC 256 at [57]. Offences that undermine the integrity of the regulatory system are objectively serious, Director-General of the Department of Environment & Climate Change v Rae (2009) 168 LGERA 121; [2009] NSWLEC 137 at [19].

30. Section 241(1) of the POEO Act sets out the following factors that the Court is required to take into account when imposing a penalty for offences under the Act:

(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.

31. As both offences arise from the same circumstances and are closely related it is appropriate to consider the relevant s 241(1) factors at the same time.

Extent of harm caused or likely to be caused to the environment by the commission of the offence (s 241(1)(a))

32. “Harm to the environment” is widely defined in the Dictionary of the POEO Act as set out above. “Pollution” as defined in the Dictionary includes water pollution.

33. As was held by Preston CJ in Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299; [2006] NSWLEC 419 at [145], “Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account”.

34. The harm caused by the offences is set out in the SOAF at [57]-[73]. A section of the Dam wall collapsed during a period of extremely heavy, sustained rainfall, on a date identified as the heaviest rain recorded in a single day in January since records commenced (SOAF at [37]). Consequently, sediment and sediment-laden water was discharged into the tributary (SOAF at [57]). Very high turbidity levels were recorded at a sampling point in the creek during the storm event (SOAF at [69]). The SOAF at [60]-[61] suggests that the creek is “usually quite turbid” after periods of rain. The Dam failure may have contributed to the elevated turbidity reading.

35. The sediment discharged into the tributary as a result of the offences comprised an estimated 109.7 m³ of earthen material from the collapsed section of the Dam wall and approximately 2.5 ML of sediment-laden waters stored in the Dam at the time of the failure (SOAF at [55]). Sediment was observed up to 389 m downstream of the failed Dam wall (SOAF at [65]-[66]). I note that although the SOAF at [68] and [73] refers to deposition of sediment in the creek, aerial maps attached to the SOAF depicting the discharge flow path and extent of deposition of sediment confirm that no sediment was observed in the creek. Visual inspections after the incident also did not discover any sediment deposition beyond the boundary of the Premises (SOAF at [54], [67]).

36. The discharge of sediment-laden water is likely to have killed or swept downstream any aquatic fauna living in the tributary or the creek at the time (SOAF at [71]). The deposition of sediment in the tributary may have reduced potential habitat for aquatic biota (SOAF at [73]). Any biota that would have been in the tributary at the time would be adapted to ephemeral conditions and be able to recolonise within days if not hours (SOAF at [72]).

37. Notwithstanding the harm set out above, some additional comments about the context in which the incident occurred are warranted in light of the evidence. The Dam was sized and designed in accordance with the requirements of the “Blue Book Guidelines” referred to in the SOAF at [15]. The Dam was designed to accommodate a five day, 80th percentile rainfall event (24.4 mm) (SOAF at [16]). During the storm event a very substantial 118.6 mm of rain fell at the Premises between 3 and 6 January 2017 (SOAF at [37]-[38]). An estimated 18.33 ML of runoff was discharged from the Dam spillway during and after the storm event (SOAF at [50]). The failure of the Dam wall contributed at most an additional 2.5 ML of discharge, being the volume of water stored in the Dam at the time it failed (SOAF at [50]). Had the Dam not failed a significant amount of runoff would have discharged through the spillway (SOAF at [51]) in any event. Most of the discharge is likely to have been clean water as the majority of the 27.8 ha Dam catchment area consisted of undisturbed vegetation (SOAF at [31] and [52]). Those areas which were disturbed, approximately 25% of the catchment area, consisted primarily of mulched existing vegetation with mulch being retained in these areas to provide additional protection against runoff (SOAF at [21]).

38. Although not material to my finding on harm I also note that the area where sediment was deposited in the tributary, an ephemeral waterway, was approved for open-cut mining at the date of the incident and has since been excavated.

39. The SOAF at [72] suggests the likely and potential harm lasted for a few hours at most. In the circumstances of the unusually heavy storm event contributing to substantial surface runoff into the tributary and creek regardless of any failure of the Dam wall, and that sediment was deposited in the tributary alone, the harm both likely and potential caused by the offences was minor.

Practical measures that may have been taken to prevent, control, abate or mitigate that harm (s 241(1)(b))

40. Investigations have not been able to conclusively determine the cause of the failure of the Dam wall (SOAF at [70a]). It is agreed that a combination of at least the following factors contributed to the cause of the incident: inadequate or unsuitable construction methods adopted for the type of soil used to construct the Dam; the construction and/or modification of the spillway by the placement of rocks as armoury (see SOAF at [28] and [72a]); the absence of any verification process to ensure that the Dam had been constructed according to design plans; and the heavy precipitation which fell on the Premises during the storm event (SOAF at [79]).

41. The parties have agreed that adopting the measures set out in the SOAF at [78] could have prevented, controlled, abated or mitigated the potential harm arising from the offences. These included adequate preparation of the Dam site prior to construction, treatment of the highly dispersive soil used during construction, adequate embankment freeboard, adequate spillway capacity, suitable location of the spillway outlet and adequate compaction of the embankment.

42. Mr Baker acknowledged that insufficient training and direction was provided to the contractor who built the Dam and that the concept design for the Dam was not sufficiently comprehensive, see par 12 above. Wambo also failed to verify that the Dam had been constructed to design and did not have a formal commissioning or approval process in place, see Mr Peart’s affidavit at par 16 above.

43. Following the incident Wambo instituted a range of measures directed at preventing a recurrence of the incident. The Dam wall was reconstructed using different construction materials and a new spillway was built in a different location (SOAF at [81]). The reinstated Dam was inspected by independent engineers who concluded that it was at a considerably lower risk of failure compared to prior to the incident (SOAF at [85]). Hay bales and coir logs have been placed downstream of the Dam to limit sediment runoff (SOAF at [81]). Wambo also reviewed and amended its Premises ESCP and Pollution Incident Response Management Plan after the incident as set out in the summary of Mr Peart’s affidavit at pars 21-22 above (see also SOAF at [88]).

44. The EPA submitted that a permanent pump and pipeline system could have allowed dewatering of the Dam during the storm event and potentially mitigated the harm caused. A permanent pump was installed after the incident (SOAF at [86]), however, as Wambo pointed out during the sentencing hearing, this would not have mitigated the potential for harm even if it was in place at the time of the storm event. A pump removes clean water from a sediment dam once the sediment has settled. It is the function of a spillway to permit water which cannot be contained within the dam capacity to overflow in extreme rainfall events. Using a pump to “dewater” the Dam in the present circumstances would have been futile as the peak flow of water into the Dam (906 L/s) far exceeded the capacity of the portable pump available to Wambo staff at the time of the incident (140 L/s).

45. While clearly Wambo could not control the unusually heavy rain event, it accepted that it had control over the identified inadequacies of construction and lack of verification of design before and after construction.

Extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused by the offence (s 241(1)(c))

46. Wambo accepted that the harm caused or likely to be caused to the environment by the commission of the offences was reasonably foreseeable.

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

47. Wambo accepted that it had control over the causes of the commission of the offences (apart from the storm event).

Whether, in committing the offence, the person was complying with orders from an employer or supervising employee (s 241(1)(e))

48. This factor is not relevant to these offences.

Maximum penalties

49. The maximum penalty for each offence is $1,000,000 for a corporation, ss 64(1)(a) and 123(a) of the POEO Act. A maximum penalty is a public expression by Parliament (and, by extension, the general community) of the seriousness of the offence. The gravity of any particular offence should be measured by reference to the range of penalty available. In Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 Kirby P held at 698:

... While it is the function of the Court itself to assess the seriousness of the offence in question, the maximum penalty available for an offence reflects the “public expression” by parliament of the seriousness of the offence: R v H (1980) 3 A Crim R 53 at 65. Here, the maximum penalty is $125,000. Such a large penalty indicates the gravity of the offence as perceived by the community: see also the comments of the Hon TJ Moore in New South Wales Parliamentary Debates (Legislative Assembly), 20 November 1990, 10037 at 10038. The task of a court is to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the scale of penalty set by the legislature from zero to the maximum.

Reasons for committing the offences

50. The offences were not committed for any reason that would increase their objective seriousness.

Conclusion on objective seriousness

51. The objective seriousness of the water pollution offence is at the low end of the low range of objective seriousness and is consequential on the s 64 offence of breach of licence condition. The objective seriousness of the breach of licence offence is in the high end of the low range of objective seriousness given there were causes of the offence over which Wambo had control and the environmental harm to the extent this occurred was foreseeable.

Subjective factors

Prior record and good character of defendant (ss 21A(3)(e)-(f))

52. Wambo has two prior convictions for environmental offences (see SOAF at [89]). On 1 August 2014 Wambo was convicted in Singleton Local Court of causing or permitting the emission of an offensive odour against s 129 of the POEO Act following a blasting incident. It was fined $13,000 and ordered to pay costs of $24,000. On 28 September 2016 Wambo was convicted in this Court of the same odour offence in relation to a separate mine blast incident. It was fined $60,000 and ordered to pay costs of $35,000. The EPA relied on Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103 at [177] where Pepper J held that “an exact conformity between the nature of the prior conviction and the current offence is not required”.

53. Wambo submitted that its prior record should not be considered as an aggravating factor in sentencing for these two offences. The circumstances giving rise to these offences are very different to those which led to the offences in the present case, as in Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299; [2006] NSWLEC 419 at [193]. Wambo also submitted that its prior record must be considered in the context of the nature of its business which involves large operations that necessarily interact with the environment where accidents can occur, see Environment Protection Authority v George Weston Foods Ltd [2013] NSWLEC 16 at [90].

54. I accept Wambo’s submissions in the circumstances of these two offences. I consider that Wambo has not exhibited a continuing attitude of disobedience of the law or demonstrated that it has not been deterred from reoffending by sentences imposed for its prior offences, Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80 at [83]. I also accept that Wambo is of good corporate character. This is plain from the affidavit of Mr Baker summarised at par 13 above.

Discount for early guilty pleas (ss 21A(3)(k), 22)

55. An early plea of guilty may entitle a defendant to a discount in penalty in the range of 10-25%, R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 at 419. This range is intended to be a guide only, it does not create a presumption or entitlement to a particular discount in a given situation, R v Araya (2005) 155 A Crim R 555; [2005] NSWCCA 283 at [44].

56. Wambo pleaded guilty to both charges at the earliest practicable opportunity. Accordingly it is entitled to a discount of 25% for the full utilitarian value of its pleas.

Remorse and contrition (s 21A(3)(i))

57. “Contrition and remorse will be more readily shown by the offender taking actions, rather than offering smooth apologies through their legal representatives”, Environment Protection Authority v Waste Recycling and Processing Corporation at [203]. Wambo has undertaken numerous actions to prevent a recurrence of the incident and acknowledged responsibility for the incident as expressed in the affidavit of Mr Baker, see par 12 above.

Assistance to authorities (ss 21A(3)(m), 23)

58. Wambo fully cooperated with the EPA during the investigation of the incident giving rise to the offences (SOAF at [91]) and in the preparation of the SOAF.

Further sentencing considerations

General deterrence

59. Deterrence is an important factor in sentencing for environmental offences. As held by Preston CJ in Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234; [2006] NSWLEC 34 at [139]-[140]:

The sentence must serve the purpose of general or public deterrence. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only light punishment will be imposed: R v Rushby [1977] 1 NSWLR 594 at 597 to 598.

This factor is particularly relevant to environmental offences. Persons will not be deterred from committing environmental offences by nominal fines: Environment Protection Authority v Capdate Pty Limited (1993) 78 LGERA 349 at 354 and Director-General, National Parks and Wildlife v Wilkinson [2002] NSWLEC 171 (27 September 2002) at paras 85 and 93 per Lloyd J.

60. General deterrence is an important consideration in this case. The community must be assured that Wambo is adequately punished for the offences.

Specific deterrence

61. Wambo continues as the operator of a large mining venture and must maintain a high level of vigilance to ensure protection of the environment in that context. While it has two prior convictions for odour offences no attitude of continuing disobedience to the law is demonstrated by this history Environment Protection Authority v Sydney Water Corporation at [83] in light of the complexity of the mining company’s operations. I have found the objective seriousness of both offences is low albeit at different points in the low range. Some allowance for specific deterrence to encourage that necessary vigilance is warranted to a small degree.

Retribution and denunciation under the CSP Act

62. Subsections 3A(a) and (e) of the CSP Act set out retribution and denunciation as part of the purposes of sentencing and as such the Court needs to take them into account. This consideration applies equally to strict liability offences.

Totality principle

63. The sentencing principle of totality is relevant where more than one similar offence is committed to ensure that the sum of any fines imposed is not disproportionate to the total criminality of a defendant. In Environment Protection Authority v Wattke; Environment Protection Authority v Geerdink [2010] NSWLEC 24 at [98] I said:

… That principle requires a judge to determine the appropriate sentence for each offence and when reviewing the aggregate sentence, consider whether it is just and appropriate. In this way the overall criminality of all the offences is reflected proportionately in the sentences imposed, Mill v R [1988] HCA 70; (1988) 166 CLR 59 at 62, Postiglione v R [1997] HCA 26; (1997) 189 CLR 295, and Pearce v R [1988] HCA 57; (1988) 194 CLR 610.

64. The totality principle should be applied to the water pollution offence. Both offences arose as a consequence of the same incident and the same conduct on the part of Wambo. The breach of a licence condition offence resulted in the water pollution offence.

Even-handedness

65. The principle of even-handedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty, R v Visconti [1982] 2 NSWLR 104. This principle must always be applied subject to the particular circumstances of the case before the Court, Hoare v R (1989) 167 CLR 348; [1989] HCA 33. The principle of even-handedness in sentencing so that like offences receive like sentences is recognised, but each case must be determined on its own facts, Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45. A history of sentencing in other cases does not limit my sentencing discretion.

66. The EPA referred to a number of cases where a company defendant was sentenced for offences of water pollution (s 120), failure to comply with a licence condition (s 64) and both offences (ss 64, 120). As most of the cases addressed circumstances of greater objective seriousness than I have found in the present case they are of limited assistance in setting penalties in relation to these offences.

67. Environment Protection Authority v Warkworth Mining Ltd [2017] NSWLEC 107 has many similarities with the present circumstances. That case related to the failure of a sediment dam on a property at which open-cut coal mining took place. The property was in the vicinity of Wambo’s Premises and the failure occurred during the same period of sustained rainfall in the upper Hunter Valley in January 2016 as that which caused Wambo’s Dam to fail. Warkworth Mining Ltd pleaded guilty to an offence under s 64 of the POEO Act. The dam failure caused the discharge of between 0.2 and 4.4 ML of sediment-laden water which flowed across a public road reserve and into another dam owned by the same company. The second dam was also overflowing due to the storm event. The harm caused was insubstantial and transient. The dam had been modified prior to the incident to increase its capacity, however this construction was not overseen or verified by an engineer. The objective seriousness was held to be at the top end of the low range. The defendant was fined $50,000, which reflected a discount of 33% for mitigating factors, and ordered to pay the EPA’s legal costs as agreed or assessed.

68. The present case is possibly less serious than EPA v Warkworth Mining Ltd in relation to my finding that harm was minor. The capacity of Wambo’s Dam was greatly exceeded during the storm event and significant discharge of sediment-laden waters occurred irrespective of the collapsed wall. Whether the capacity of the failed dam in EPA v Warkworth Mining Ltd was exceeded was not discussed, suggesting this was not a factor which mitigated the sentence imposed. There is an apparent evidentiary inconsistency in terms of precipitation between that case and this case.

Penalty in matter no 16/376087

69. As the s 64 offence led to the water pollution offence I will sentence for that first. The appropriate penalty in matter no 16/376087 is $60,000. This should be reduced by 30% taking into account mitigating factors such as the early plea of guilty and the substantial efforts made since the incident to reduce the likelihood of a recurrence resulting in a penalty of $42,000.

Penalty in matter no 16/376075

70. The appropriate penalty in matter no 16/376075 should take into account the totality principle. A penalty of $20,000 is warranted.

Additional orders

71. Section 250 of the POEO Act provides the Court with power to make additional orders. A publication order is sought under s 250(1)(a) and agreed by Wambo in the terms set out in Annexure A to this judgment. I consider this should be imposed in addition to a penalty.

Costs

72. Wambo has agreed to pay the EPA’s investigation costs pursuant to s 248(1) of the POEO Act. These have been agreed at $2,590.

73. Wambo has agreed to pay the EPA’s professional costs pursuant to s 257B of the Criminal Procedure Act 1986. These have been agreed at $67,130.07.

74. As an administrative matter, all costs should be paid to the Registrar of the Land and Environment Court.

Orders

75. The Court makes the following orders:

1. In matter no 16/376087, the Defendant is convicted of the offence against s 64(1) of the Protection of the Environment Operations Act1997 in that it was the holder of a licence a condition of which was breached by a person between about 28 November 2016 and 11 January 2016.

2. In matter no 16/376087 the Defendant is fined $42,000.

3. In matter no 16/376075, the Defendant is convicted of the offence against s 120(1) of the Protection of the Environment Operations Act1997 in that it polluted waters between about 5 and 11 January 2016.

4. In matter no 16/376075 the Defendant is fined $20,000.

5. The Defendant is to pay the Prosecutor's legal costs in the amount of $67,130.07.

6. The Defendant is to pay the Prosecutor’s investigation costs in the amount of $2,590.

7. Pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 the Defendant is, at its expense and within 28 days of the date of this order, to cause a notice in the form of Annexure “A” to be placed within the first 12 pages of the Singleton Argus and Newcastle Herald at a minimum size of 9 cm x 12 cm.

8. Within 42 days of the date of this order, the Defendant is to provide to the Prosecutor a complete copy of the pages of the Singleton Argus and the Newcastle Herald on which the notice published pursuant to order (7), above, appears.

9. The exhibit is to be returned.

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ANNEXURE A

WAMBO COAL PTY LIMITED CONVICTED AND FINED $62,000 FOR DAM FAILURE AT WARKWORTH

Wambo Coal Pty Limited (“Wambo Coal”) has been convicted and fined $62,000 by the Land and Environment Court of New South Wales for two offences under the Protection of the Environment Operations Act 1997. Wambo Coal was prosecuted by the Environment Protection Authority (EPA) and pleaded guilty to one offence of water pollution and one offence of contravening its Environment Protection Licence by failing to carry out its licensed activities in a competent manner.

The conviction related to an incident occurring at the Wambo Mine premises in Warkworth in January 2016 when a sediment dam built to retain rainfall and runoff from disturbed soil failed following heavy rainfall. Between about 5 and 11 January 2016, a section of the dam wall collapsed, resulting in material from the failed section of the dam wall and approximately 2.5 ML of sediment-laden waters being released. The sediment-laden waters flowed along an ephemeral drainage line to Waterfall Creek. No visible sediment deposition was observed outside of the boundary of the mine site. Any impact from the incident would have been temporary.

Following completion of construction of the dam in late November 2015, Wambo Coal did not carry out an engineering assessment to verify that the dam had been constructed to design. Whilst the precise cause of the failure of the dam was unable to be determined conclusively, contributing factors include that the spillway capacity was insufficient due to a decision to place rock armouring in the spillway. Additionally, the construction methods used were deficient in several respects for the type of soil used and for the intended purpose of the dam.

On 20 November 2017, Wambo Coal was convicted and ordered by the Land and Environment Court to:

1.   Pay a fine of $62,000;

4.   pay the EPA's legal costs of $67,130.07;

5.   pay the EPA's investigation costs of $2,590; and

6.   place and pay for this publication notice in the Singleton Argus and the Newcastle Herald.

Amendments

29 November 2017 - Annexure A - typographical errors in the heading and second paragraph of the annexure.

Decision last updated: 29 November 2017