EPA v Ramsey Food Processing Pty Ltd (No.2)
[2010] NSWLEC 175
•17 September 2010
Land and Environment Court
of New South Wales
CITATION: EPA v Ramsey Food Processing Pty Ltd (No.2) [2010] NSWLEC 175
This decision has been amended. Please see the end of the judgment for a list of the amendments.PARTIES: PROSECUTOR
Environment Protection Authority
DEFENDANT
Ramsey Food Processing Pty LtdFILE NUMBER(S): 50069 of 2009 CORAM: Sheahan J KEY ISSUES: ENVIRONMENTAL OFFENCES :- No appearance by Defendant - ex parte hearing - sentencing principles - had pleaded not guilty but put on no evidence - actual environmental harm, but minor - prompt mitigation - poor record - possible impecuniosity - audit ordered in lieu of imposing fine - publication order - costs - investigation expenses LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999
Protection of the Environment Operations Act 1997CASES CITED: EPA v George Weston Foods Ltd [2010] NSWLEC 120
EPA v Pal [2009] NSWLEC 35
EPA v Ramsey Food Processing Pty Ltd [2003] NSWLEC 82, 125 LGERA 369
EPA v Ramsey Food Processing Pty Ltd [2010] NSWLEC 23
EPA v Ramsey Food Processing Pty Ltd [2010] NSWLEC 150
DATES OF HEARING: 17 September 2010 EX TEMPORE JUDGMENT DATE: 17 September 2010 LEGAL REPRESENTATIVES: PROSECUTOR
Mr D Jordan, Barrister
SOLICITORS
Department of Environment, Climate Change and WaterDEFENDANT
No appearance
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALESSheahan J
17 September 2010
EXTEMPORE JUDGMENT50069 of 2009 Environment Protection Authority v Ramsey Food Processing Pty Ltd (No.2)
Introduction
1 His Honour: The defendant company is to be sentenced today, following its conviction on 10 August 2010 for a “pollution of waters” offence under s 120(1) of the Protection of the Environment Operations Act 1997 (‘POEO Act’), committed on 3-4 December 2008.
2 It is also on notice (see Exhibits P11, P13, P14, P15, P17, and P18) that the court may well make other orders against it today under s 250(1) of that Act in respect of environmental auditing, and publication of the conviction and any sentence. The prosecutor no longer seeks a further order requiring the defendant to fund an environmental or other community project.
3 The company entered a plea of Not Guilty to the charge on 11 June 2010, but has failed to appear or be represented when the substantive trial was listed on 9-10 August 2010, when the matter was mentioned on 10 September 2010, and again today.
4 The defendant company has filed no evidence at all in these proceedings, and has not responded to the prosecutor’s invitation to engage with it in ensuring that the premises are audited.
5 On 6 August 2010, the eve of the liability hearing, the defendant wrote to the court in the following terms:
“ Your Honour
Ramsey Food Processing Pty Ltd is in a pecunious (sic) financial position and unable to afford the services of legal practitioners. An application was made to the Department of Environment Climate Change and Water to transfer the licence and dispute giving all particulars to the Department, they failed to advise their position within the period referred to in the Act.
An appeal has been lodged with the Land and Environment Court (being matter number 10/10466) and a timetable set for this matter and it is my respectful submissions the Department do not appear before you on a bonafide basis. The Department has failed to fully inform the Court of its motives.
It is my respectful submission that his matter should be adjourned until after the hearing of the appeal”.If financial circumstances were different the Company would be represented.
6 In par [8] of my earlier judgment I indicated my reasons for refusing that requested adjournment.
7 This morning the court received the following further letter from the defendant company, tendered by the prosecutor today (as Exhibit P12), marked “for urgent attention of sentencing judge”, and accompanied by a note acknowledging that the company would be sentenced today:
“Your Honour
The Director of the Defendant wrote to this Honourable Court on the 6 th of August 2010 advising of the pecunious (sic) financial position the Defendant Company was in at the time.The financial position of the Defendant Company has not changed.
The solicitor for the Environment Protection Authority wrote to the Defendant Company advising of the Orders sought in this matter, specifically Order 4 - the advertisement Order.
The cost to advertise in the Sydney Morning Herald with the wording and dimensions sought by the Prosecutor is extreme. The cost to advertise the Defendant’s previous conviction was $6,715.37. Please see attached Tax Statement paid for the said advertisement.
Yours faithfully,Whilst the Defendant Company understands the public interest in this matter, the Defendant Company respectfully requests that the Advertisement be published in accordance with Order 4(b) sought by the Prosecutor, that is in the local newspaper where the Abattoir carries on its livestock slaughtering and rendering activities. The Defendant Company respectfully requests that Order 4(a) not be ordered against the Company.
RAMSEY FOOD PROCESSING PTY LTD”.
8 Those two letters are all the material placed before the court by the defendant in respect of the present charge, yet the defendant has chosen to take an active part in, and maintain its legal representation in, two class 1 matters currently before the court concerning the subject premises. Those matters are to be the subject of a s 34 conference on 6 October 2010.
9 On 9-10 August 2010, I found the offence proved – see my judgment [2010] NSWLEC 150. I will not repeat in full here the contents of that judgment, but will quote some paragraphs of it and draw attention to others. After delivery of that judgment on 10 August, I entered the conviction, and ordered the defendant company to pay the prosecutor’s costs to that date (not yet quantified), and its investigation expenses ($1,715.01). I also made a series of orders requiring a mandatory environmental audit of the subject site.
10 Being satisfied that the defendant is well aware that this sentencing hearing would proceed today, leave was granted to the prosecutor to proceed on an ex parte basis.
The Pollution Event
11 What flowed into Musk Valley Creek from the defendant’s abattoir premises near South Grafton in the incident which occurred on 3-4 December 2008 was a mixture of the proscribed substance, “animal tallow” (see [31]), and waste water.
12 The affected creek system could certainly not be regarded as in pristine condition prior to this pollution event (see [25] and [26]), and a length of approximately 100m of it was moderately affected by the spill, which settled on the creek surface as a scrum ([34]).
Environmental Harm
13 The prosecutor’s evidence on “environmental harm” flowing from the incident was summarised in the following paragraphs of my earlier judgment, viz:
“38. The prosecutor’s expert, Moreno Julli, opines that the presence of tallow in or on waters can be detrimental to the health of those waters. In sufficient quantities and warm temperatures, tallow can form a smothering or fouling layer on the water surface, and impede the transfer of gases such as oxygen, leading to a reduction in the amount of dissolved oxygen ordinarily carried in the waterway.
39. Mr Julli opines that the entry of the polluting mixture into Musk Valley Creek changed the chemical, biological and physical condition of the water and resulted in actual environmental harm . It covered the surface of sections of the creek in an oily layer, which contributed to the deoxygenation of the waters to the point that the water became both “black” and anaerobic in places. That condition was still visible and detectable during testing on 8 December, according to Ensbey. On that date, other sites in the creek near the point of entry, had low to very low levels of dissolved oxygen (‘DO’). That absence of DO on 8 December 2010 was caused by the spill on 3-4 December 2008.
41. There was a significant rain event on the night of 8-9 December (see charts in Exhibit P8), which probably resulted in a flushing of the creek and a dilution of its waters. This is likely to have assisted in the re-oxygenation of the waters of the creek where the black water had occurred.” (emphasis added).40. Mr Julli opines that the actual harm to the creek was minor and restricted to a relatively small section , probably less than 100m. Less mobile organisms were likely to have been killed by those conditions, but no fish alive or dead were observed in or near the black water. They may ordinarily not be present in the creek, or may have moved, or been removed by scavengers, prior to human observation. If the creek had been flowing at the time of the spill, the impact would have been more extensive downstream. Julli opines (Exhibit P5, pars 24-25) that, due to the low flow in the creek at the time, and the quick booming and skimming operations of the defendant’s agents , the length of presence and downstream migration of the tallow was minimised. There was limited potential for the spill as it occurred and as a result of remediation efforts to cause long-term impact to the creek.
Prior Prosecutions
14 Cowdroy J sentenced the defendant company in April 2003 – [2003] NSWLEC 82, 125 LGERA 369 – for a s 120 offence committed in 2001. His Honour observed that the defendant company had failed to improve its environmental management procedures appropriately following an incident in April 2000. In addition to imposing a substantial financial penalty ($33,750 plus costs), His Honour made an order requiring the defendant to submit to the EPA a specification for the operation of its waste disposal system “in view of the two failures which have occurred at the abattoir”.
15 Biscoe J dealt with the defendant company in a judgment earlier this year ([2010] NSWLEC 23 – ‘Ramsey 2010’) over a further s 120 pollution incident in the creek and a tributary in October 2007. There was evidence of a potential threat to human health, but the major offence was a failure to notify, as the actual pollution event was accepted to have resulted from an intruder tampering with equipment. Apart from Cowdroy J’s 2003 case, Biscoe J referred (in [146]) to a January 2006 pollution incident. His Honour imposed on the defendant company fines totalling $130,000 ($80,000 for the “notify” offence, $40,000 for pollution of the creek, and $10,000 for pollution of the tributary), prosecutor’s legal costs of $200,000, and investigation costs of $13,477.
16 It is clear, therefore, that the defendant company, with recorded incidents and/or court appearances in 2000, 2001, 2003, 2006, 2007, 2008, 2009 and 2010, has a poor record in environmental matters. The court’s earlier decisions and the evidence in the present matter indicate a reactive and incident-driven approach to environmental management of this abattoir.
Applying Sentencing Principles to the evidence
17 The principles to be applied in fixing an appropriate penalty for this offence are well established, and are consistently applied in this court for environmental offences. The sentence must fit both the offence and the offender, by reflecting the objective circumstances of the offence, and the personal or subjective circumstances of the defendant.
18 Section 241 of the POEO Act lists factors for the court to consider. Also, in the Crimes (Sentencing Procedure) Act 1999, s 3A sets out the purposes of sentencing, and ss 21A ff list aggravating and mitigating features to be taken into account. There is some overlap among these provisions.
19 All judges of this court have summarised the relevant principles in various cases in which they have applied them. I adopt and apply my own summary of them in EPA v Pal [2009] NSWLEC 35 at [73]ff, and Biscoe J’s summary of them in Ramsey 2010 at [148]-[160].
20 Objective seriousness of the offence is a key consideration, and so is the offender’s record of previous offences. Assistance to law enforcement authorities, and expressions of remorse are to the credit of an offender. In this case the objective seriousness of the offence is at the lower end of the scale for an offence where a $1M fine is the maximum penalty, but the defendant’s record is poor. In this case its co-operation with the authorities was clearly better than previously, and there is some expression of remorse (see par 61 of Greenbank affidavit).
21 As I noted in my previous judgment (at [53]), this offence resulted from a range of failures on the part of the defendant company in the conduct of its abattoir business, principally a failure to anticipate that old infrastructure, such as redundant pipe systems and old, cracked pavements, could constitute a serious risk of precisely the incident which occurred in this instance. Similar events had occurred in the past ([49]). While it is clear that many improvements had been effected during the Ramsey company’s conduct of the abattoir, (1) the premises are neither supervised nor secured overnight, despite the intrusion in October 2007, (2) the water drainage arrangements were clearly inadequate, (3) no precautions were taken to ensure that leaf litter etc did not foul or block the drainage system, and (4) regular cleaning of the premises is inadequate. There is evidence also of (5) inadequate training in environmental management matters (see generally pars [42]-[52]).
22 However, when the tallow spill occurred, the abattoir personnel reacted promptly and effectively, and worked assiduously to clean up the pollution, mitigate the environmental harm, and organise the urgent repair, and securing, of the drainage system by an experienced plumber, so as to preclude a repeat occurrence ([33], [36], [40], [42] and [45]).
23 In line with Craig J’s recent decision in EPA v George Weston Foods Ltd [2010] NSWLEC 120 – (a) where more tallow was involved, (b) more harm was evident, (c) the defendant reacted promptly, and (d) the causes reflected misadventure rather than deliberate, reckless, or negligent behaviour in respect of facility maintenance etc, but (e) the defendant had a much better record – I would be disposed to impose a fine in this matter in the vicinity of $100,000, to which no discount should be applied.
Fine or other impost?
24 Today the prosecutor submits that the court should address the underlying environmental problems with this company’s operations by ordering it to carry out, at its own expense, an environmental audit, which would focus on water pollution risks and issues (a narrower focus than suggested by earlier draft orders, etc referred to the defendant), rather than by imposing a fine.
25 Because the defendant has refused to engage with the prosecutor on this possibility, the prosecutor has made inquiries of reputable environmental audit professionals, and has assessed their responses in a thorough and efficient way.
26 The affidavits of departmental officers Anthony Alexander Hill (7 and 10 September) and Scott Christopher Ensbey (3 September) and Exhibit P16 identify six potential auditors, of whom five eminent organisations submitted proposals. The prosecutor’s submissions, coupled with that evidence, satisfy the court that the auditor best qualified to do this particular audit is Molino Stewart Pty Ltd of Parramatta, whose detailed proposal appears at fols 14-65 of Exhibit P16. Theirs is an impressive proposal which finds favour with the court. The quoted lump-sum cost of $84,450.30, inclusive of GST, would appear appropriate when assessed against the scope of works proposed, and I am satisfied that this court has the necessary power under s 250(1)(d) of the POEO Act to order the defendant to engage this auditor for that price, in lieu of paying a fine.
27 In addition, the defendant will be responsible to pay the prosecutor’s costs of the whole proceedings, estimated to have increased by about $20,000 since the first costs order was made on 10 August 2010, and its investigation expenses, as earlier ordered, and to place and pay for the advertisement proposed by the prosecutor, in both the Sydney Morning Herald and the Grafton Daily Examiner, pursuant to s 250(1)(a). In this latter respect I reject the company’s submission (in the last par of its letter at Exhibit P12) that only the regional newspaper should be involved.
28 The defendant company has made no submissions at all regarding the audit, and cannot avoid its being ordered simply by ignoring the proposal and the provisions of the Act, and failing to attend the hearing. Co-operation in this desirable public objective would have been evidence of genuine contrition on its part, and the court believes that the audit will prove advantageous to the defendant over time.
29 The company has chosen, despite order 5 made on 10 August 2010 – and not for the first time (Biscoe J in Ramsey 2010 at [186]-[189]) – not to support its claims of impecuniosity by evidence (see EPA v Pal at [114]-[122], so the court has nothing to address in this regard.
30 The amount of legal costs, investigation expenses and the costs of the advertising in this case are not excessive in the circumstances, and the audit cost is lower than the fine I consider would be appropriate.
Orders
31 I will publish these reasons, but the consolidated orders of the court today will be:
1. The court confirms its order ‘A’ of 10 August, that the defendant is convicted of the offence charged in the summons dated 12 November 2009.
2. Pursuant to s. 250(1)(d) of the Protection of the Environment Operations Act 1997, and subject to Order 3 of these orders, the offender is ordered to carry out the environmental audit specified in Annexure A to these orders (‘the mandatory audit’).
3. Pursuant to s. 250(1)(d) and s. 250(2) of the Protection of the Environment Operations Act 1997:4. Pursuant to s. 250(1)(a) of the Protection of the Environment Operations Act 1997, the offender is ordered to take the following action to publicise the offence:
a. Molino Stewart Pty Ltd ACN 067774332 is appointed to carry out the mandatory audit;
b. within 14 calendar days of the date of these orders, the offender shall, at its own cost, do all things reasonably necessary to cause the auditor to perform the mandatory audit; and
c. within 60 calendar days of the appointment date, the offender is to file and serve a copy of the mandatory audit on the Prosecutor.
5. Within seven calendar days of the due date for compliance with Orders 3b, 4a and 4b, the defendant is ordered to provide evidence to the prosecutor that there has been compliance with each of those orders.
a. Within 14 calendar days of the date of these orders, publish the contents of the notice annexed to these orders and marked ‘Annexure B’, in the first 12 pages of the early general news section of the Sydney Morning Herald at a minimum height of 10cm by width of 20cm, from and including the heading below the words ‘Annexure B’, such heading to be in bold print; and
b. Within 14 calendar days of the date of these orders, publish the contents of Annexure B in the first 12 pages of the Grafton Daily Examiner at a minimum size of one quarter of a page, from and including the heading below the words ‘Annexure B’, such heading to be in bold print.
6. The Prosecutor is ordered to notify the offender of these orders in writing.
7. The court notes that, upon the offender carrying out the mandatory audit the subject of Order 3 of these orders, and having regard to the recommendations of the audit report arising from the mandatory audit, the Court may contemplate ordering, as part of sentencing and pursuant to section 245(c) of the POEO Act, that the offender take such steps as may be specified in any such report to prevent the continuance or recurrence of the offence. The matter is adjourned to 9.30am on Friday 26 November 2010 for the purpose of the Court making any further orders based upon the recommendations set out in the mandatory audit.
8. Liberty is granted to the parties to apply generally on two calendar days notice.
9. The defendant company is ordered to pay the prosecutor’s costs of these proceedings up to and including today, including the costs ordered to be paid pursuant to order C:9 made on 10 August 2010, as agreed or assessed.
10. Order C:8 made 10 August 2010 in respect of investigation costs and expenses ($1,715.01) is confirmed.
11. Exhibits P10, P11, P13-P18 are now returned.
ANNEXURE A
1. In this Annexure A:
2. For the purpose of ensuring that the offender, during the course of carrying out activities at the Armidale Road site, does not pollute the environment (as defined in the POEO Act), the offender must engage a suitably qualified expert or experts to carry out an environmental audit of the Armidale Road site ( the mandatory audit ) that shall:
a. Armidale Road site means the premises comprised of cattle holding pens, a cattle rendering and processing plant ( the Plant ), and a system for treating and irrigating abattoir waste product to paddocks ( the Irrigation Paddocks ) surrounding the Plant located on Armidale Road South Grafton NSW and known generally as South Grafton Abattoir .
b. Irrigation Management Plan means the “irrigation management plan” specified in the table accompanying Condition P1.3 of the Licence.
c. Licence means Environment Protection Licence 1598 issued by the Environment Protection Authority under the Protection of the Environment Operations Act 1997 (NSW) ( the POEO Act ).
d. Pollution, water pollution and pollution of waters have the same meaning as given to those terms in the Dictionary to the POEO Act.
a. Identify, map and describe every pipe, structure and feature (whether man-made or otherwise) situated on the Armidale Road site, whether currently operational or otherwise, which is or at any time is or has been used at any time to disperse and/or treat liquid discharges and/or other by-products in relation to the activities conducted on at the Armidale Road site.
b. Identify and list every process, activity, substance waste and by-product stored, used or generated at the Armidale Road site that pollutes or has the potential to pollute waters.
c. Benchmark each process and activity identified in the sub-paragraph above, and the existing technology, infrastructure and management practices at the Armidale Road site, against comparable international best available technology and industry best management practice relating to the control of pollution from that process, activity and substance.
d. Identify and list all actual and potential sources of water pollution from the Armidale Road site, including all point, diffuse and fugitive sources.
e. Identify for each pollution source in sub-paragraph 2(d) above the cause(s) of pollution.
f. Risk rank each pollution source identified in sub-paragraph 2(d) above by quantifying the level of potential environmental impact and the likelihood of environmental harm occurring for each pollution source, taking into account current environmental controls and using the risk ranking procedure given in the Australian Standard AS/NZS ISO 31000:2009 Risk Management – Principles and Guidelines.
g. Identify, explain and cost any and all options to prevent pollution for each pollution source identified in sub-paragraph 2(d) above.
h. Where at sub-paragraph 2(g) above prevention is not possible, identify, explain and cost any and all options to minimise the generation of pollution for each pollution source identified in sub-paragraph 2(d) above.
i. Describe, quantify and model the likely environmental improvements delivered by implementing each option identified in sub-paragraphs 2(g) and 2(h) above.
j. State for each pollution source identified in sub-paragraph 2(d) above the preferred option for the prevention or minimisation of pollution from that source and develop an implementation strategy for each option.
k. Review the offender’s environmental performance with Licence conditions, including pollution management and performance of the requirements of the Irrigation Management Plan.
l. Review the adequacy of any of the offender’s policies, procedures, standards, practices and training at the Armidale Road site in relation to environmental performance and, in particular, pollution management, against international best practice. Where any inadequacy is found to exist recommend, explain and cost options to address each inadequacy.
m. Produce and certify (by satisfying the requirements specified in sections 176(a) and (b) of the POEO Act) an environmental audit report that details all of the above.
ANNEXURE B
Abattoir at South Grafton convicted of water pollution offence
On 10 August 2010 the Land and Environment Court found Ramsey Food Processing Pty Ltd, which carries on livestock slaughtering and rendering activities at the abattoir located on Armidale Road, South Grafton and known as South Grafton Abattoir, guilty of one charge of water pollution.
The Environment Protection Authority prosecuted the company for polluting about 100 metres of Musk Valley Creek with a large quantity of tallow in December 2008.
Tallow is a fatty material rendered from the carcasses of cattle. The discharge of tallow was mixed with boiler engine water. The mixture escaped from a bund at the plant, through a cracked, underground pipe and into Musk Valley Creek between 3 December 2008 and 4 December 2008.
The company pleaded not guilty to the offence. The company did not appear at the hearing of the charge. On 10 August 2010 the Court found the defendant guilty and convicted the defendant in its absence. The company was sentenced on 17 September 2010.
The polluting mixture caused actual environmental harm to the waters of Musk Valley Creek. The mixture covered the surface of sections of the water body in an oily layer which contributed to the de-oxygenation of the waters of the Creek such that it became, at points, black and anaerobic.
This is the third occasion that the company has been brought before the Court and convicted of this type of offence. The previous convictions were recorded in 2003 and 2010, relating to pollution events caused by the company in 2001 and 2007 respectively.
The court ordered the company to undertake and submit to the court a mandatory audit of its activities. The company was also ordered by the Land and Environment Court to place this notice and to pay the EPA’s legal costs and investigation expenses.
21/09/2010 - Year matter on coversheet incorrect should be 50069 of 2009 not 50069 of 2010 - Paragraph(s) coversheet
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