Gosford City Council v Australian Panel Products Pty Ltd
[2009] NSWLEC 77
•22 May 2009
Land and Environment Court
of New South Wales
CITATION: Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77 PARTIES: PROSECUTOR:
DEFENDANT:
Gosford City Council
Australian Panel Products Pty LtdFILE NUMBER(S): 50083 of 2008 CORAM: Biscoe J KEY ISSUES: ENVIRONMENTAL OFFENCES :- water pollution - sentencing - resin escapes from industrial premises into a creek - appropriate penalty LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A
Protection of the Environment Operations Act 1997, ss 120, 193, 203, 241, 248CASES CITED: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357
Environment Protection Authority v Boral Australian Gypsum Ltd [2009] NSWLEC 26
Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268, (2008) 163 LGERA 345
Environment Protection Authority v Hanson Precast Pty Ltd [2008] NSWLEC 285
Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264, (2008) 162 LGERA 273
Markarian v The Queen [2005] HCA 25, (2005) 228 CLR 357
R v Borkowski [2009] NSWCCA 102
R v Thomson; R v Houlton [2000] NSWCCA 309, (2000) 49 NSWLR 383
Sullivan v R; Skillin v R [2008] NSWCCA 296
Veen v The Queen (1978-1979) 143 CLR 458
Wollongong City Council v Belmorgan Property Development Pty Ltd [2008] NSWLEC 291DATES OF HEARING: 18 - 19 May 2009
DATE OF JUDGMENT:
22 May 2009LEGAL REPRESENTATIVES: PROSECUTOR:
Mr M Baird
SOLICITORS
P J Donnellan & Co
DEFENDANT:
Mr T Hale SC
SOLICITORS
McDonald Johnson Lawyers
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES
BISCOE J
22 May 2009
50083 of 2008
JUDGMENTGOSFORD CITY COUNCIL v AUSTRALIAN PANEL PRODUCTS PTY LTD
1 HIS HONOUR: This is a sentencing matter. The defendant, Australian Panel Products Pty Ltd (APP) has pleaded guilty to a charge that on or about 20 November 2007 to 21 November 2007 at its premises at 1088 Pacific Highway, Somersby, it committed an offence against s 120(1) of the Protection of the Environment Operations Act 1997 (POEO Act) in that it polluted waters in Piles Creek, Somersby.
AGREED FACTS
2 On the first return date of the summons the prosecutor's evidence was not complete. The Court directed the prosecutor to serve the evidence upon which it intended to rely by the second return date, which it did.
3 The defendant entered a plea of guilty on the second return date of the summons.
4 The maximum penalty for an offence under s 120 of the POEO Act is $1,000,000 in the case of a corporation.
5 The incident giving rise to the allegation occurred between 20 and 21 November 2007 (the incident).
Background
6 The defendant, Australian Panel Products Pty Ltd ACN 124715402 (APP) is fully owned by Borg Group Holdings Pty Limited (Borg Group).
7 APP conducts its business from the premises known as Lot 1 in DP 1047592, also known as 1088 Pacific Highway, Somersby in the State of New South Wales (the Premises).
8 The activities carried on at the Premises are not scheduled under the POEO Act. APP does not hold an Environment Protection Licence in respect of any scheduled activities or regulating the pollution of waters.
9 In general terms, at the Premises, APP manufactures a range of Phenolic resin products which are used to build table and bench tops, partitioning, ramp surfaces, flooring and laminate products. The manufacturing process, which occurs at the Premises, basically involves taking a resin, bonding it with paper and drying it at high temperature.
10 The resin is a viscous liquid that is about the same consistency as honey. The resin is delivered to the APP factory by way of tanker approximately once per week. It is pumped from the tanker into two large storage tanks on the Premises located in the concrete driveway adjacent to the factory. It is subsequently piped into a blending tank inside the factory through overhead pipes. Certain components such as waxes and dyes are added to the resin in the blending tank, and the mixture is agitated to produce a final product that can be blended with paper.
11 There is a transducer in the blending tank that monitors the pressure in the tank in order to provide full accurate measurement of the amount of resin that is inside. The transducer is important to the manufacturing process because it is designed to allow a precise determination to be made as to the amount of additives required proportionate to the amount of resin in the blending tank.
12 There is fixed bunding around the blending tank on the factory floor to prevent any resin from escaping an area proximate to the blending tank.
Events of 20 November 2007
13 On 20 November 2007 there was a malfunction with the transducer in the blending tank. It was therefore not clear what amount of additives were needed to be added to the tank because the amount of resin could not be accurately measured.
14 An employee of APP, Mr Brett Harrison, attempted to ascertain the amount of resin being pumped into the blending tank by manually filling a 1000 litre Intermediate Bulk Container (the IBC). It was then proposed to weigh the IBC to determine the amount of resin.
15 The IBC was located outside the bunded area on the concrete driveway. The employee ran a hose from the tank in the bunded area and into the IBC.
16 While the IBC was in the process of being filled, which would take some time because of the viscous nature of the resin; the employee was called away to help fix a paper break that had interrupted the manufacturing process inside the factory.
17 The employee did not stop the process of filling the IBC when he was called away.
18 At approximately 2 pm, when the employee came back outside to the IBC, he noticed that the IBC had overflowed and that some resin had entered into the stormwater drain on the site. He called some other employees of APP and together they closed the safety valve in the stormwater drain and obtained a spill kit in order to clean up the resin.
19 Closing the safety valve of the stormwater drain halted the discharge of the resin into the stormwater drain. Had this been closed prior to the decanting operation then it is likely that no resin would have entered the stormwater drainage system.
20 The stormwater pit leads to an underground storrnwater drain for a short distance and then into an open stormwater drain that starts on the north-western corner of Pile Road and the Old Pacific Highway. This drain runs parallel to the Old Pacific Highway before entering Piles Creek, that flows into, and through, the Brisbane Waters National Park approximately one kilometre downstream.
21 The clean-up process involved the use of a mop and bucket, together with a solvent used to dilute the resin by three employees of APP. These were Brett Harrison, Damon Richards and Joe Geha. Mr Geha is a contractor to APP.
22 According to the spill reports prepared by these employees after the incident, approximately 50 litres was spilled onto the driveway and approximately five litres entered the stormwater drain. However, according to the report provided by Mr Bendevski on 22 November 2007 approximately 20-50 litres entered the stormwater drain.
23 The stormwater pit was washed out and pumped clean by the employees. The employees thought that the whole of the resin had been cleaned up.
24 There was no investigation made outside the Premises where the stormwater drain discharged into the watercourse known as Piles Creek.
25 Mr Victor Bendevski, the General Manager of APP, was on leave on Tuesday 20 November. He returned to work on Wednesday 21 November 2007.
26 No report was made to Mr Bendevski when he returned to work. He was unaware of the spill until he met with the council officers on the 21 November 2007.
27 The stormwater valve remained closed until the night shift operator came on site.
Events of 21 November 2007
28 At approximately 8 am on Wednesday 21 November 2007, Mr Michael Ebert, Environment Officer for Gosford City Council, was advised by Mr Shannon McKiernan, Acting Manager of Education and Compliances with the council, of a potential pollution incident.
29 The incident had been reported to the council and Mr McKiernan, who contacted NSW Fire Brigade and Department of Environment and Climate Change (DECC), at about 7.50 am on Wednesday morning, by workers who had arrived at a site on the Old Pacific Highway where it intersected Piles Creek. Workers had arrived at the site to discover that a section of Piles Creek had turned a pink colour overnight.
30 Mr Ebert first attended the council chambers and checked the register to see which premises at Somersby were licensed by DECC.
31 At approximately 9.10 am Mr Ebert and Mr McKiernan arrived at the reported site at the Old Pacific Highway on the eastern side of Piles Creek.
32 At that location Mr Ebert and Mr McKiernan were shown the confluence of the open stormwater drain and Piles Creek. Water within the open stormwater drain was a cloudy pink colour and they thought that it had a very distinct odour. Mr Ebert noted that the waters of Piles Creek upstream of the confluence was relatively clear in colour and free from turbidity. Mr Ebert took a number of photographs during this inspection and throughout his further inspection.
33 The council officers followed the open stormwater drain until it went under the Pile Road.
34 They then entered Lot 130 DP 1016291 to determine if there had been any spill from these premises. Having inspected the stormwater drains within these premises the officers could find no evidence of any stormwater pollution.
35 Mr Ebert and Mr McKiernan left this site at 10.40 am and attended the premises at Lot 1 DP 1047592, the premises of APP.
36 On entering the Premises Mr Ebert could smell the same odour that he had smelt earlier at Piles Creek.
37 Mr Ebert and McKiernan requested to see the manager and were met by Mr Victor Bendevski who introduced himself as the general manager of APP. Mr Bendevski offered to escort the officers around the site.
38 The group walked through the office area into the workshop. Halfway down the driveway near the bulk storage area, Mr Ebert and Mr McKiernan observed an IBC with reddish brown staining located next to the two bulk storage tanks located within a bunded area.
39 Mr Ebert and Mr McKiernan noticed the dark reddish residue had stained the surface of the concrete area between the IBC and the gutter. The residue had accumulated in the gutter and stained the interior of the adjacent down-slope stormwater pit.
40 Mr Ebert inspected the stormwater pit and observed that it contained a quantity of liquid that was of a milky pink colour. He also observed that the storm water isolation valve within the pit was open.
41 Mr Bendevski then went back into the workshop to have a discussion with his staff, and Mr Ebert said to Mr McKiernan words to the effect: "We shouldn't say anything further until we have issued him the warning."
42 Mr Bendevski then returned, and was issued with a caution by Mr McKiernan. Mr Bendevski said, "My staff have just told me there was a small overflow of material which happened during the decanting into the IBC. The stormwater valve was closed and the pit cleaned. This happened yesterday afternoon. I was not at work yesterday and was not told that the spill had occurred until now. This is the first I knew of it."
43 Mr Ebert and Mr McKiernan left the site and returned about 1.30 pm. Mr Hamish Rutherford, an environment protection officer with DECC and Ms Victoria Bennett a graduate trainee with DECC were also at the Premises.
44 By the afternoon of 21 November 2007 it had been determined that a spill of a product called "Borden Cascophen MSL-6112" (otherwise known as "Phenol Formaldehyde Resin Solution") had entered the stormwater system and downstream into Piles Creek.
45 During the afternoon Mr Rutherford, in the company of Mr Ebert and Ms Bennett, undertook sampling of the water and took photographs at various locations.
46 Samples were taken at the following locations:
a. Piles Creek, downstream of its confluence with the open stormwater drain;
b. Piles Creek at its confluence with the open stormwater drain;
c. Piles Creek, upstream of its confluence with the open stormwater drain;
d. from within the open stormwater drain;
Events of 22 November 2007e. of the Phenol Formaldehyde Resin Solution from the bulk storage at the Premises.
47 Mr Rutherford transported the samples that he collected on 21 November 2007 to DECC's laboratory at Lidcombe on 22 November 2007 for analysis.
48 On the afternoon of 22 November 2007, Mr Rutherford, returned to the site and took further photographs of Piles Creek. There had been overnight rain in the area.
49 Mr Rutherford walked the length of the open stormwater drain and noted that whilst the water appeared considerably clearer than the previous day there remained a slight pink discolouration. He also observed a pink to maroon staining and thick residue along the bed of the drain. He observed that there remained a slight pink coloured stain on a number of the rocks within the bed of Piles Creek from its confluence with the open stormwater drain and approximately 200 m downstream.
Subsequent investigations
50 A few days after the incident, Mr Bendevski provided the prosecutor with a diary note about the incident dated 22 November 2007. This note estimated that approximately 20 - 50 litres entered the stormwater drain from the pit.
51 On 12 December 2007 a formal request under s 203 of the POEO Act was sent to APP requesting an interview with an officer of APP.
52 On 15 January 2008 an interview was conducted with Mr Borg, the director of AAP, Mr Bendevski and Ms Samantha Farrar, the occupational health and safety manager of APP.
53 On 3 October 2008, APP was served with a notice under s 193 of the POEO Act requiring the production of information and records. APP provided some of the requested information and records by way of letter dated 10 October 2008 and provided further information on 3 November 2008.
54 On 17 November and 18 November 2008 a number of tests were carried out to confirm that the stormwater drain extending from the Premises discharges into the open stormwater drain and thence into Piles Creek.
Environmental Harm
55 The contaminant that entered the waters of the stormwater system and subsequently Piles Creek was Phenol Formaldehyde resin.
56 This product is used in laminated products as a binding or protective agent used in building materials, furniture, kitchen bench tops, skateboard jumps and other common products.
57 Based on an assessment of habitat requirements and recorded threatened species locations conducted by Michael Sheather-Reid for the prosecutor, no threatened flora or fauna species were likely to have been impacted by the pollution incident.
58 The pH impact would have been limited to within 200 m downstream of the stormwater drain and Piles Creek.
59 The rainfall data indicated that the contaminant would have been diluted rapidly within one month after the pollution occurred following heavy rainfall in December 2007.
60 An inspection on 16 January 2009 revealed that the Creek had recovered from any short-term impacts.
THE DEFENDANT
61 The defendant company, which is a member of the Borg Group, acquired the business in June 2007. Since 1997 the defendant’s general manager, Mr Victor Bendevski, had been employed by the company from which the business was acquired.
MR BENDEVSKI
62 Mr Bendevski, after being alerted to the pollution incident by the council investigating officers on 21 November 2007, spoke to employees and made his own enquiries in order to determine exactly what happened on 20 November 2007. I accept the following evidence in his unchallenged affidavit:
“34. I have determined that the incident took place as a consequence of a malfunction with the transducer in the blending tank. Because of the malfunction, and it became unclear what amount of additives needed to be added to the tank because the amount of resin could not be accurately measured.
35. As a result, instead of seeking assistance to rectify the problem with the transducer, one of the employees of APP took it upon himself to try and ascertain the amount of the resin being pumped into the blending tank by manually filling a 1000 litre bulk container and then weighing it.
…
37. It is very rare for resin to be decanted manually from the storage tanks, and since 1997 I would say it probably only takes place once or twice per year as a result of circumstances whereby a specific order from a client has required certain additives to be added to small quantities of resin to produce a specific product.
38. In fact, between the time APP took over the business in June 2007 and the time of the incident which is the subject of these proceedings in November 2007, no resin had been decanted manually from the storage tanks outside the factory on the premises.
39. To my knowledge, an employee has never taken upon him or herself to manually fill a container with resin outside of the factory unless there was a need to fill a specific order.
40. In addition, APP would never suggest that such an attempt be made in circumstances where the appropriate course of action would be to advise me of the problem and make arrangements for the problem with the transducer to be rectified.
41. That is particularly because there is a bypass system that allows resin to be pumped into a smaller tank as an alternative to it being pumped into the blending tank. What this means is that the decanting can be performed manually inside the factory and that there is no reason whatsoever for anyone to manually decant resin outside the factory.
42. There is now a procedure in place where any manual decanting, which is very rare to begin with, is done inside the factory using a pipe line.
43. While the bulk container was in the process of being filled, which would take some time because of the viscous nature of the resin, the employee involved was called away to help fix a paper break that had interrupted the manufacturing process inside the factory.
44. When he came back outside to the bulk container, he noticed that the bulk container had overflowed and that a small amount of the resin had entered into the stormwater drain on the site.
45. He immediately closed the safety valve in the stormwater drain, and obtained a spill kit in order to clean up the resin.
46. The effect of closing the stormwater valve drain was to make it impossible for any substance to leave the premises through the drain and, if the stormwater drain had been closed on 20 November 2007, no resin could have escaped from the premises.
…
48. The clean up process involved the use of a mop and bucket, together with an environmentally friendly solvent used to dilute the resin by three employees. The stormwater pit was also washed out and pumped clean.
49. The relevant employees thought that the whole of the resin had been cleaned up, and that no part of the liquid had escaped from the Premises. It was for that reason that the incident was not reported to me when I returned to work on 21 November 2007, or to anyone else.
52. Based on my experience working at APP, I believe that it is highly unlikely that an incident such as that that took place would ever occur again the future.50. The stormwater valve remained closed until the night shift operator, who was more experienced in opening the valve (which required a small pin to be inserted in a particular position), and contemporaneous incident reports were completed.
…
…
59. Additionally, a development application has also been lodged with Gosford Council which, if approved, will result in the enclosure of the stormwater pit, and the consolidation of the APP factory with the factory which is currently next door and which is operated by Borg Group.
- …
61. If the same problem occurred with the transducer at the factory today, the employees of APP have been made aware that production should stop until the problem can be resolved.”
63 Mr Bendevski described a greater focus on environmental training within the defendant company since the incident took place. In particular:
(a) new written and verbal protocols have been put into place;
(b) the pipes leading from the storage tanks outside the factory have been shortened so that they do not overhang the enclosed area in which the tanks are located;
(c) an additional “bypass” line has been installed;
(d) the site has been cleaned up generally and made free of rubbish or unused items;
(e) the employees have undertaken spills training, and have been specifically instructed not to manually decant resin outside the factory;
(f) the procedures for the delivery of the resin by tankers have been improved so that, for example, employees are now required to put temporary “sausage bunding” into place around the tanker during the period of time it takes for resin to be pumped into the storage tanks;
(h) improved safety signage has also been installed around the premises.(g) the concrete area in which the resin is pumped form tankers into the storage tanks was grinded so that it could, in turn, be painted with a sealant in order to ensure that it cannot be absorbed into the concrete in the unlikely event of a future spill; and
SENTENCING CONSIDERATIONS
64 Sentencing principles were reviewed in my judgments in Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264, (2008) 162 LGERA 273 and Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268, (2008) 163 LGERA 345.
65 A stern policy against pollution lies behind the legislation. In Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359 Mahoney JA held:
“The community has adopted a stern policy against pollution. The legislative scheme requires that proper, and strict, precautions be taken by those whose activities may cause proscribed pollution. The quantum of the fines which may be imposed evidences this: for the present offence, a maximum fine of $125,000 [now $1 million] was available. The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur...
…
The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that in many cases care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur.
I do not mean by this that the legislature saw the legislation as providing, by payment of a fine, a licence to pollute. In the end, the object of the legislation is to prevent pollution and to do this, inter alia, by the deterrent effect of a substantial fine and by, in consequence, persuading the industries concerned to adopt preventive measures.”Precautions may be costly. The cost of precautions to avoid pollution will no doubt become accepted, in due course, as an ordinary cost of operating in an industry where, absent precautions, pollution may occur ... The fine should be such as will make it worthwhile that the cost of precautions be undertaken. As the learned judge indicated, in the present case, in order to prevent pollution of the river, it was necessary, inter alia, that the company delay spraying until the conditions were appropriate for it. No doubt that delay cost money. Ordinarily, the fine to be imposed should be such as to make it worthwhile that costs of this kind be incurred.
66 The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) as follows:
“ 3A Purposes of sentencing
The purposes for which a court may impose a sentence on an offender are as follows:
(a) to ensure that the offender is adequately punished for the offence,
(b) to prevent crime by deterring the offender and other persons from committing similar offences,
(c) to protect the community from the offender,
(d) to promote the rehabilitation of the offender,
(e) to make the offender accountable for his or her actions,
(g) to recognise the harm done to the victim of the crime and the community.”(f) to denounce the conduct of the offender,
67 Section 21A(1) provides:
“(1) General
In determining the appropriate sentence for an offence, the court is to take into account the following matters:
(a) the aggravating factors referred to in subsection (2) that are relevant and known to the court,
(b) the mitigating factors referred to in subsection (3) that are relevant and known to the court,
The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law.”(c) any other objective or subjective factor that affects the relative seriousness of the offence.
68 Section 21A(2) and (3) list aggravating and mitigating factors which the Court is required to take into account. The aggravating factors are inapplicable in the present case and are mostly inapplicable to environmental offences (apart from whether the offender has a record of previous convictions or if the offence was committed for financial gain). A number of the mitigating factors are applicable in the present case.
69 Section 241 of the POEO Act requires the Court to consider five objective gravity matters (so far as they are relevant), as follows:
(1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant):
“241 Matters to be considered in imposing penalty
(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,
(e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee.(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence,
(2) The court may take into consideration other matters that it considers relevant.”
70 The sentence must reflect both the objective circumstances and the subjective circumstances of the offence: Veen v The Queen (1978-1979) 143 CLR 458 at 490. The penalty should be determined by an instinctive synthesis of all the relevant objective and subjective circumstances: Markarian v The Queen [2005] HCA 25, (2005) 228 CLR 357 at [37], [39], [66] and [73].
MAXIMUM PENALTY
71 The maximum penalty is the expression by parliament of the seriousness of the offence. The maximum penalty for this offence is $1 million for a corporation.
ENVIRONMENTAL HARM
72 In relation to the impact of the spill, Mr Rutherford noted that the pink colour extended 200 metres along the open stormwater drain to Piles Creek and a further 150 metres to 200 metres along Piles Creek.
73 It is an agreed fact that, based on Mr Bendevski’s inquiries approximately 20 to 50 litres escaped from the pit into the stormwater drain: see [50] above. The defendant in submissions sought to cast doubt on this by reference to Mr Bendevski's diary note dated 22 November 2007 about the incident which he provided to the prosecutor (see [50] above), in which he wrote:
"They said they had a small Overflow of material (2-2:30pm 20/11/07) while decanting into the IBC, they isolated the stormwater valve cleaned up the product as best they could and pumped all the residue from the stormwater pit. In total approximately 70L was pumped from the pit. It is not common for APP to decant resin from bulk storage into IBC containers. After much discussion we cannot accurately say but we estimate that approximately 20-50L made into stormwater [sic] from the pit."
74 The defendant submits that (a) this was not intended to mean that 20 to 50 litres escaped from the site and that this is clear from an interview that Mr Bendevski gave on 15 January 2008 and (b) if 70 litres was removed from the drain although only 20 to 50 litres went into it, the difference is what was in the drain at the time of the incident. I do not accept the submission. The agreed statement of facts is clear that Mr Bendevski’s conclusion, on the basis of his inquiries, was that 20 to 50 litres escaped from the pit into the stormwater drain. There was then nothing to prevent it from escaping into the creek.
75 Insofar as any incident report written by an employee involved in the incident may have suggested that a smaller amount entered the pit, I regard it as unreliable and inconsistent with the agreed facts.
76 The defendant, in its post-incident training, has trained employees in the interpretation of the material safety data sheet (MSDS). The MSDS identifies that the subject resin is an industrial overlay resin that has a high degree of toxicity and a moderate degree of flammability, is listed as a hazardous substance and dangerous goods, and is listed as S6 in the Poison Schedule. Under "Risks", there is a reference to toxic by inhalation, in contact with skin and if swallowed, causes burns and there are dangers of very serious irreversible effects through inhalation, in contact with skin and if swallowed. There is a reference in the MSDS for the need for personal protective equipment including a breathing apparatus and protective gloves in the event of an accident or spill. There is also reference to emergency procedures.
77 The defendant takes the contents of the MSDS seriously. This is evidenced by the fact that after the incident, Ms Farrar, Borg’s occupational health and safety manager who manages occupational health and safety issues and workplace issues for the defendant, held a training session titled “Chemical Safety and How to Interpret an MSDS [Material Safety Datasheet]”. This session involved watching a DVD entitled “Control of Hazardous Substances”, the interpretation of an MSDS for the subject resin and an overview on the use of personal protective equipment at the site. The MSDS for the subject resin is in evidence. Since the incident Ms Farrar has also developed and implemented training courses on environmental compliance, spill training and operating procedures.
78 The evidence of Dr Andradi, a chemist and engineer employed by the defendant, was that resin is viscose and ultimately becomes solid and breaks down naturally without any adverse consequences to the environment apart from a change in the appearance of the colour of the water, and without the need for any clean-up measures to be taken.
79 I accept the following response to Dr Andradi’s evidence by Mr Sheather-Reid, an ecologist:
“Point 18 contains a statement by Dr Andradi that phenol formaldehyde resins will breakdown in nature without any adverse consequences to the environment apart from a change in appearance of the colour of the water and without the need of any clean up measures. I comment that whilst phenol formaldehyde resins are likely to breakdown within streams the impacts are not limited to a change in the colour of the water. As evidenced by Mr Rutherford’s affidavit, an increase in turbidity and an alkaline reaction were also observed. Dr Andradi’s affidavit does not address the biological impacts of these two aspects of the contaminant on the natural environment, through a decrease in light penetration and the direct impact of an alkaline substance being released into a water profile.”
80 Mr Sheather-Reid concluded, and I accept, that the incident was likely to cause short-term environmental harm but there was no long-term impact. He said:
"The contamination incident is likely to cause short term harm on the environment due to the presence of a highly alkaline contaminant and a pink substance that may have caused a temporary lack of light penetration through the water profile. The nature and extent of that harm is uncertain, but there is no evidence of any long term or irreversible harm caused by the evidence based on a visual inspection of the affected tributary some 12 months after the incident. Given the rapid response of the Hazmat team and the high rainfall records immediately after the incident, Travers Environmental considers that the harm caused would have been limited to the immediate affected tributary and for approximately 1-2 months from the date of pollution incident. With the exception of common native flora and fauna plant, an animal species, there is unlikely to have been any significant impact on threatened floral or fauna or endangered ecological communities.”
81 Dr Andradi’s evidence did not address the impacts of alkaline pH. The evidence establishes that the resin changes the pH value of acid or alkaline solutions, which can be deleterious to some species. A pH value shows the intensity of acid or alkaline solutions. pH level is measured on a scale from 1 (acid) to 14 (alkaline) and 7 is neutral. On 21 November 2007, Mr Rutherford, an officer of DECC, tested pH levels by testing the pH of the water at the outlet of the underground drain (pH 9) and comparing it to the pH levels five metres upstream from the confluence (pH 6.5), at the confluence of the open stormwater drain in Piles Creek (pH 7) and five metres downstream of the confluence (pH 7). This suggests that the physical effect of the pollution incident was to raise the slightly acidic normal pH level of this creek, to alkaline at the outlet, to neutral at the confluence and five metres downstream. The ecologist, Mr Sheather-Reid, noted amphibian species are particularly susceptible to pH change and other aquatic organisms such fish and invertebrates are also susceptible to rapid changes in pH. He concluded that none of the known threatened species of flora or fauna species in that area are likely to have been impacted by the contamination incident.
82 In my opinion, the evidence establishes that the incident caused short-term, minor harm to the environment.
PRACTICAL MEASURES TO PREVENT HARM
83 The defendant submits that as management did not expect the employee to take the steps that he did, it is difficult to see what practical measures it could have taken to prevent the employee acting in this way.
84 In my opinion, the defendant could have taken practical measures to prevent harm by instructing employees to supervise decanting operations; close the stormwater valve and place booms around the stormwater drain if manually decanting outside the factory, or to only manually decant resin inside the factory (an instruction which the defendant has given employees since the incident); to investigate whether any spilt resin has reached the public stormwater system; and report any spills promptly to management with a view to them informing authorities as appropriate. The failure of employees to take such steps led to the escape of material into the external stormwater drain and the creek and there was no notification to management or an appropriate authority, leading to substantial delay in its detection. It was only the fact that workers happened to be working at the creek the next day that the matter was reported on that day.
FORESEEABILITY OF HARM
85 The defendant submits that management could not reasonably have foreseen that the employee would have undertaken the acts he did. I agree with the submission as far as it goes. However, the defendant foresaw the obvious possibility of the escape of spillages in this area by the installation of a safety valve to contain spillages in the stormwater pit. Through Mr Bendevski, the defendant knew that manual decanting operations occurred for other reasons in this area, albeit rarely. In my view, the defendant could reasonably have foreseen the harm caused or likely to be caused to the environment by the escape of resin during any decanting operation in the area if it did not take the practical steps to which I have referred.
CONTROL OVER THE CAUSES
86 The defendant submits that, in the sense referred to above, it did not have control over the causes that gave rise to the offence, because the employee’s action was unnecessary, unexpected and not in accordance with any direction. That comment on the employee’s action may be accepted. However, the defendant, by its employee, had control over the causes that gave rise to the offence. The employee could have ceased the flow of resin when he left to attend to the paper break or could have shut the stormwater valve to close the stormwater pit. Further, the defendant had control over the causes by putting in place the practical measures to which I have referred.
COMPLYING WITH ORDERS
87 There is no suggestion that the employee responsible for the offence was complying with orders from the defendant or a supervising employee.
REASONS FOR COMMITTING THE OFFENCE
88 There was no commercial reason for the commission of the offence.
CONCLUSION AS TO OBJECTIVE SERIOUSNESS
89 In my opinion, the offence is of a low degree of objective seriousness.
STATE OF MIND OF DEFENDANT
90 The defendant did not intend to cause environmental harm.
91 The defendant points out that it only acquired the business in June 2007. I do not think that is a significant consideration. Its general manager had been employed by the vendor company since 1997. The defendant also points out, and I accept, that the incident occurred at a time when a review was being undertaken in relation to occupational health and safety and environmental matters; and that since the incident there has been environmental and safety training of employees, including in relation to chemical safety, how to interpret the material safety datasheet for the subject resin, and use of formal protective equipment.
PRIOR GOOD CHARACTER
92 There is no evidence that the defendant has any prior convictions and it appears to be of good character. The evidence of training to which I have referred and the defendant’s cooperation with the prosecutor (see [103] below) support the conclusion that it is of good character.
PLEA OF GUILTY
93 A plea of guilty is a mitigating factor.
94 A question arises as to the extent of the utilitarian value of the plea because it was not entered on the return date of the summons, 19 December 2008, but on the next occasion the matter was before the Court, 13 February 2009. The matter was stood over on the earlier date to enable the prosecutor to file further evidence.
95 The utilitarian value of a plea of guilty should generally be assessed in the range of 10 to 25 percent discount on sentence. The utility of the plea and therefore the appropriate level of discount is generally affected by the timing of the plea and the complexity of the issues. These principles were laid down by the Court of Appeal in R v Thomson; R v Houlton [2000] NSWCCA 309, (2000) 49 NSWLR 383. Spigelman CJ held at [154] and [160]:
“[154] There are however two circumstances which will generally affect the appropriate level of discount in a particular case:
(i) The time at which a plea is entered. A plea entered at committal has a more significant utilitarian benefit than a plea entered at first listing, which in turn has the greater benefit than a plea entered at the beginning of trial.
[160] The utilitarian value of a plea to the criminal justice system should generally be assessed in the range of 10-25 per cent discount on sentence. The primary consideration determining where in the range a particular case should fall, is the timing of the plea. What is to be regarded as an early plea will vary according to the circumstances of the case and is a matter for determination by the sentencing judge.”(ii) The complexity of the issues about which evidence will have to be gathered and adduced affects the value of the plea. The greater the difficulty of assembling the relevant evidence and the greater the length and complexity of the trial, the greater the utilitarian value of a plea.
96 The timing of a plea of guilty was closely considered in Sullivan v R; Skillin v R [2008] NSWCCA 296 at [16] – [17], Howie J (McClellan CJ at CL and Grove JJ agreeing) said:
At the hearing of the application, counsel for the applicant submitted that the Judge should have taken into account that whole history of the matter including the various charges that the Crown laid at different times during the period of the prosecution that did not find their way on to the final indictment. In my opinion none of this history changes the situation that the applicant knew what offences he had committed and what he was prepared to acknowledge whether the Crown had chosen to charge him with those offences or not. It is not unusual for persons to acknowledge to the authorities guilt of offences uncharged against them in an effort to clear the record and, as a result, be rewarded with what is known as an Ellis discount. A discount of 15 per cent was more than appropriate to meet the situation in this case.”
“…Clearly the applicant could have indicated a willingness to plead guilty to some charges early in the proceedings. He did not have to wait until the Crown was in a position to go to trial in order to enter into negotiations. If he chooses to wait to see what the Crown is going to do at trial then clearly the utilitarian value of the pleas is less. He knew what offences he had committed even if the Crown was not in a position to prosecute him for those matters. If the accused waits as a matter of tactics before entering negotiations with the Crown then so be it, but he does not obtain the advantage of the full utilitarian value of an early plea.
97 In R v Borkowski [2009] NSWCCA 102 at [29] Howie J (McClellan CJ and Simpson J agreeing) said that there were discrepancies in the application of the discount for the utilitarian value of a guilty plea and that there was no place for variations between courts or judges in determining its value, depending on trial management procedures. His Honour set out the following principles of general application, at [32]:
“1. The discount for the utilitarian value of the pleas will be determined largely by the timing of the plea so that the earlier the plea the greater discount: Thomson at [154]; Forbes [2005] NSWCCA 377 at [116].
2. Some allowance may be made in determining the discount where the trial would be particularly complicated or lengthy: Thomson at [154].
3. The utilitarian discount does not reflect any other consideration arising from the plea, such as saving witnesses from giving evidence but this is relevant to remorse: Thomson at [119] to [123]; nor is it affected by post-offending conduct: Perry [2006] NSWCCA 351.
4. The utilitarian discount does not take into account the strength of the prosecution case: Sutton [2004] NSWCCA 225.
5. There is to be no component in the discount for remorse nor is there to be a separate quantified discount for remorse: MAK and MSK [2006] NSWCCA 381; Kite [2009] NSWCCA 12 or for the `Ellis discount’; Lewins [2007] NSWCCA 189; S [2008] NSWCCA 186.
6. Where there are multiple offences and pleas at different times, the utilitarian value of the plea should be separately considered for each offence: SY [2003] NSWCCA 291
7. There may be offences that are so serious that no discount should be given: Thomson at [158]; Kalache [2000] NSWCCA 2; where the protection of the public requires a longer sentence: El-Andouri [2004] NSWCCA 178.
8. Generally the reason for the delay in the plea is irrelevant because, if it is not forthcoming, the utilitarian value is reduced: Stambolis [2006] NSWCCA 56; Giac [2008] NSWCCA 280.
9. The utilitarian value of a delayed plea is less and consequently the discount is reduced even where there has been a plea bargain: Dib [2003] NSWCCA 117; Ahmad [2006] NSWCCA 177; or where the offender is waiting to see what charges are ultimately brought by the Crown: Sullivan and Skillin [2009] NSWCCA 296; or the offender has delayed the plea to obtain some forensic advantage: Stambolis [2006] NSWCCA 56; Saad [2007] NSWCCA 98, such as having matters put on a Form 1: Chiekh and Hoete [2004] NSWCCA 448.
10. An offer of a plea that is rejected by the Crown but is consistent with a jury verdict after trial can result in a discount even though there is no utilitarian value: Oinonen [1999] NSWCCA 310; Johnson [2003] NSWCCA 129
12. The amount of the discount does not depend upon the administrative arrangements or any practice in a particular court or by a particular judge for the management of trials or otherwise.”11. The discount can result in a different type of sentence but the resulting sentence should not again be reduced by reason of the discount: Lo [2003] NSWCCA 313.
98 In light of principles 8 and 9 in Borkowski and the strong statements in Sullivan quoted above, the question arises whether the utilitarian value of the plea of guilty may be less if it is not entered on the return date of the summons. In the present case it was not entered on that date but on the second occasion that the matter was before the Court. I invited debate on the point by reference to the authorities to which I have referred.
99 The parties both submitted that the earliest reasonable opportunity for a defendant to plead guilty was when the prosecutor indicated that it had served all its evidence, which, as in the present case, may be later than the return date of the summons. The defendant suggested that three considerations supported that conclusion. First, this Court has a summary criminal jurisdiction whereas the authorities to which I have referred were concerned with indictable offences where there are committal proceedings. In the latter case the prosecutor provides the defendant with a brief of evidence before the committal proceedings. The defendant suggested that this is equivalent to a prosecutor in this Court serving the defendant with all the affidavits on which it intends to rely. Secondly, many offences tried in this Court are strict liability “result” offences. For example, strict liability pollution offences depend on proof of pollution and while the defendant knows whether an incident occurred on the defendant’s premises, the defendant does not necessarily know whether it has resulted in pollution off the premises until it has seen the prosecution evidence. Thirdly, it is the usual practice of this Court in sentencing matters to order the defendant to pay the prosecutor’s costs. Therefore there is usually a costs consequence for the defendant if it does not plead at the earliest opportunity.
100 I have not had the benefit of adversarial argument on this issue and, it is unnecessary to express a conclusion because I accept the submission of both parties that, in the particular circumstances of this case, there was no loss of utility in the plea of guilty being entered on the second rather than the first occasion that the matter was before the Court. This is because, the one affidavit which the prosecutor filed and served between the first and second occasions that the matter was before the Court related to environmental harm and it would have been filed and served even if the defendant’s plea had been entered on the earlier occasion. Therefore there was no greater utility in the defendant pleading guilty on first occasion that the matter was before the Court.
101 It was held in R v Thomson; R v Houlton that it is the timing of the plea that is the primary consideration affecting the utility of a plea of guilty and therefore the extent of the discount on sentence. However, the other consideration identified in that case cannot be ignored even if it is a secondary consideration viz the complexity of the issues about which evidence will have to be gathered and adduced and the length and complexity of the trial. In the spectrum of criminal matters that come before the courts, the issues in this case are not particularly complex and a defended trial would not be particularly long or complex. Having regard to this consideration, I propose to discount the sentence for the utilitarian value of the plea not by the maximum of 25 percent but by 22 percent.
REMORSE
102 Remorse is a mitigating factor. Remorse is evidenced by the defendant’s public and timely cooperation with the prosecutor. It is also suggested by the presence of the defendant’s general manager during the sentencing hearing. However, as the prosecutor points out, the defendant’s evidence contains no specific statement of remorse. I therefore do not think that the factor of remorse is entitled to the same weight as it would be if it had been expressed: Environmental Protection Authority v Fulton Hogan at [187].
COOPERATION WITH AUTHORITIES
103 The defendant has fully cooperated with the prosecutor in relation to the offence and the preparation of the hearing. The only qualification is that the incident was not reported by the defendant’s employees with the consequence that its management appear to have been unaware of the incident until a council investigating officer attended on the following day.
GENERAL DETERRENCE
104 I think that there is some need for a general deterrence for others who engage in operations involving decanting of substances with potential for water pollution consequences.
INDIVIDUAL DETERRENCE
105 I am satisfied that there is no need for a sentence to deter the defendant from re-offending. There is no suggestion that the defendant is likely to re-offend. The defendant has taken steps to prevent such an incident occurring again.
EVEN-HANDEDNESS
106 This matter involved 20 to 50 litres of resin escaping into a creek with no evidence of long-term harm. The prosecutor submits that it is at the low end of the spectrum of seriousness. The defendant submits that the fine should be nominal or close to nominal.
107 In Environment Protection Authority v Boral Australian Gypsum Ltd [2009] NSWLEC 26 6,400 litres of a chemical known as Gardisperse overflowed and it was assumed most had entered the Parramatta River. The substance had low to moderate acute toxicity to aquatic organisms and there was potential for harm. A fine of $58,500 was imposed. In Environment Protection Authority v Hanson Precast Pty Ltd [2008] NSWLEC 285, a leak in a heating pipe caused 200 to 300 litres of oil to escape into a watercourse. There was short-term actual environmental harm and potential harm. A fine of $50,000 was imposed. A fine of $40,000 was imposed in Wollongong City Council v Belmorgan Property Development Pty Ltd [2008] NSWLEC 291 where oil escaped from underground storage tanks into wetlands causing fairly serious but short-term environmental harm. In all these cases there were substantial mitigating circumstances.
108 In my opinion, this case is at the lower end of the spectrum of seriousness and is less serious than any of the cases to which I have referred. I propose to impose a fine of $25,000 after taking into account all mitigating circumstances, including a 22 percent discount for the utilitarian value of the early plea of guilty.
COSTS
109 The prosecutor seeks an order for costs. The defendant acknowledges that it will be obliged to pay the prosecutor’s costs. I propose to make the costs order sought by the prosecutor. In addition, by consent, I will make an order that the defendant pay the prosecutor’s investigation costs under s 248 of the POEO Act in the amount of $5,844.35.
ORDERS
110 The orders of the Court are as follows:
1. The defendant is convicted of the offence as charged.
2. The defendant is fined the sum of $25,000.
3. The defendant is to pay the prosecutor’s costs of the proceedings as agreed or assessed.
5. The exhibits may be returned.4. The defendant is to pay the prosecutor’s investigation costs under s 248 of the Protection of the Environment Operations Act 1997 in the sum of $5,844.35.
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