Environment Protection Authority v Australian Waste Recyclers 1 Pty Ltd [2005] NSWLEC 739 | Case summary

JUDGMENT Offence charged 1 Cowdroy J: The defendant ("AWR") pleads guilty to a charge that it committed an offence by contravening s 64(1) of the Protection of the Environment Operations Act 1997 ("the POEO Act"). 2 The charge as particularised alleges that, from 13 June 2002 and continuing until 7 February 2003, AWR breached condition L5.1 of its environment protection licence in that, without being expressly permitted by its licence, it caused hazardous waste generated at the former BHP Steelworks site at Newcastle ("the waste" or "coal tar waste") to be received at its St Marys premises for storage and/or treatment and/or processing and/or re-processing and/or disposal. The company structure of AWR 3 AWR was incorporated on 19 January 1999 in the corporate name of National Waste Services Pty Limited. On 4 September 2001, its name was changed to Australian Waste Recyclers 1 Pty Limited. The directors of AWR at the time the offence was committed were Barry Purdy (until 8 November 2002) and Shane Brownless (throughout the charge period). Shane Brownless was also the company secretary throughout the charge period. 4 The registered proprietor of the land at St Marys upon which AWR conducts its operations is Robar Holdings (Aust) Pty Limited ("Robar"). At the time of the offences the directors of Robar were Barry Purdy and Robert White. The shareholders in Robar were Bushland River Cruises Sydney Pty Limited and Be My Guest Pty Limited. 5 AWR had four shareholders during the period of the charges, namely Be My Guest Pty Limited, Bushland River Cruises Sydney Pty Limited and Barry and Carol Purdy (who jointly owned shares). AWR's Environment Protection Licence 6 At all relevant times AWR has been carrying on the business of receiving, treating, processing and reprocessing of various types of wastes at its premises at 38 Links Rd, St Marys in New South Wales ("the St Marys premises"). In carrying out this business, AWR has been undertaking scheduled activities within the meaning of that term in the POEO Act such as to require licensing under the POEO Act. 7 Immediately prior to the offence, the business at the St Marys premises was conducted and licensed in the name of Australian Solvent Recyclers Pty Ltd ("ASR"). At almost exactly the same time as or shortly before the offence commenced, AWR took over conduct of the St Marys premises. ASR had the same shareholders as AWR, although the shareholdings were in different proportions. 8 AWR has at all relevant times held an environment protection licence No 5661 issued under the POEO Act ("the licence") with respect to the scheduled activities it carries out in the course of its business at the St Marys premises. 9 During the charge period, condition L5 of the AWR Licence provided: L5.1 The licensee must not cause, permit or allow any waste generated outside the premises to be received at the premises for storage, treatment, processing, reprocessing or disposal or any waste generated at the premises to be disposed of at the premises, except as expressly permitted by the licence. L5.2 This condition only applies to the storage, treatment, processing, reprocessing or disposal of waste at the premises if those activities require an environment protection licence. L5.3 Except as provided by any other condition of this licence, only the hazardous and/or industrial and/or Group A and/or Group B waste listed below may be treated and/or processed and/or reprocessed at the premises: waste solvents, solvent based paints, water based solvents, water based paints, oily waters, and contaminated soils capable of being remediated. 10 AWR also holds a Environment Protection Licence No 6730 which permits it to transport hazardous, industrial, group A, group B or group C waste (both liquid and non-liquid). The waste 11 The waste was approximately 6,449 tonnes of coal tar waste which had been generated by BHP Limited ("BHP") at the BHP Steelworks Site at Mayfield, Newcastle. 12 According to records, AWR received a total of about 6,449 tonnes of the coal tar waste between 13 June 2002 and 7 February 2003 in more than 200 separate loads. Some days they received a single load of waste and other days up to 3 loads of waste. AWR received waste from the BHP site on 128 days. 13 Coal tar waste was not one of the specific classes of waste listed in condition L5.3 of the AWR Licence. There was no other condition of the AWR Licence which expressly (or impliedly) permitted coal tar waste to be received at the AWR premises for storage, treatment, processing, reprocessing or disposal. 14 The vast bulk of the coal tar waste received by AWR was in non-liquid form and thus, for the purposes of classification under the POEO Act and the Waste Guidelines (see below at [23]) was a non-liquid waste. 15 On 28 November 2002, Catherine Trindall, an Environment Protection Authority ("EPA") officer, took six samples of coal tar waste from the St Marys premises. The samples were delivered that day to the EPA laboratory, where they were subject of chemical analysis. Three of the six samples were analysed for polycyclic aromatic hydrocarbons (PAHs): see below at [20]. Each of those three samples was found to contain very high levels of PAHs (between 56,730 mg/kg and 101,200 mg/kg of PAHs). The samples also contained between 620 mg/kg and 1,400 mg/kg of benzo(a)pyrene, which is a type of PAH. Such levels are typical of coal tar waste. 16 The samples taken on 28 November 2002 were also found to have high levels of total petroleum hydrocarbons, being between 5% and 12%. 17 On 22 January 2003, Ms Trindall attended the BHP site and took further samples of the waste. Ten samples were analysed for PAHs and each was found to contain very high levels of PAHs, most being in the range of 100,000 to 200,000 mg/kg. 18 The high levels of PAHs in samples taken on 28 November 2002 and 22 January 2003 were confirmed by testing by Leeder Consulting. 19 On the basis of the above data, the EPA classified the material as hazardous waste in accordance with the procedures set out in the Waste Guidelines. The classification of coal tar waste as hazardous waste was made on the basis both of the total concentration of the PAHs present in coal tar waste and also of the concentration of benzo(a)pyrene present in the waste. The nature of coal tar waste 20 Coal tar and coal tar waste contain a broad range of complex polycyclic aromatic hydrocarbons (PAHs). The presence of PAHs is a recognised feature of coal tar materials, such that their presence can be described as the "signature" of coal tar. That is, the presence of PAHs in high concentrations is unique to coal tar materials, coal tar wastes and coal tar contaminated waste. There are many types of coal tars and coal tar pitches, depending on the temperature and process conditions to which the coal was subjected. However, all coal tar substances contain very high concentrations of PAHs, typically at 10% to 20% by weight (ie 100,000-200,000 mg/kg). 21 When present in the high concentrations typical of coal tar and coal tar waste, PAHs are known to be carcinogenic. The most carcinogenic PAH is benzo(a)pyrene. The coal tar waste is high in benzo(a)pyrene. 22 Both heavier fraction petroleum hydrocarbons (C10-C36) and lighter fraction petroleum hydrocarbons (C6-C9) are also present in coal tar. The combined total of C6-C9 and C10-C36 petroleum hydrocarbons is referred to as the "total petroleum hydrocarbons" (TPH). The TPH level of coal tar waste is high. Petroleum hydrocarbons are known carcinogens. Classification of waste in New South Wales 23 In New South Wales, wastes are classified pursuant to the provisions of the POEO Act, regulations made under that Act, and the document published by the EPA entitled Environmental Guidelines: Assessment Classification and Management of Liquid and Non-Liquid Wastes issued by the EPA and in force as at and from 1 July 1999 (the "Waste Guidelines"). 24 Pursuant to the provisions of the POEO Act, the Regulations and the Waste Guidelines, all non-liquid waste is classified as one of the following: (a) inert waste; (b) solid waste; (c) industrial waste; or (d) hazardous waste. 25 The classification categories above are listed in order from the least harmful to the environment, being inert waste, to the most harmful, being hazardous waste: see para 3.4.1 Waste Guidelines (pp 22-23) and subparas (a) & (g) of para 3.4.3 (p 24); see also Table 6 (p 25). Non-liquid waste is classified as one of the 4 categories either: (a) by reason of being of a type specified as inert, solid, industrial or hazardous in Pts 1 to 4 of the Appendix to Sch 1 to the POEO Act or, if not so specified, (b) by reason of being assessed and classified as one of the 4 types in accordance with the procedures set out in the Waste Guidelines. (See the definitions contained in Div 2 of Pt 3 of Sch 1 to the POEO Act). 26 Under AWR's environment protection licence and under the Waste Guidelines, the primary obligation to classify waste rested upon the generator/consignor of the waste: licence cl O6.2(b); Waste Guidelines paras 2.2.1 (p 10), 3.4.1 (p 22), pp 31, 51. However, AWR had an obligation to take all reasonable care to verify the accuracy of the consignor's classification and, if it found the classification to be wrong, to notify the EPA: see licence cll O6.2(b), O6.19; see also O6.15. 27 Hazardous waste must be treated to remove its hazardous contaminants, have its hazardous contaminants immobilised according to an EPA "Immobilisation" Approval under the Protection of the Environment Operations (Waste) Regulation 1996, or be stored in a way that does not cause harm to the environment. Classification of waste in relation to concentration of PAHs 28 Coal tar is not specified in any of the Pts 1 to 4 of the Appendix to Sch 1 to the POEO Act. Accordingly, coal tar waste is to be classified in accordance with the procedures set out in the Waste Guidelines. 29 PAHs are one of the classes of contaminants which determine the classification of waste under the Waste Guidelines, as indicated on Table A4 of the Waste Guidelines: see at p 67. For the purpose of classification of waste under the Waste Guidelines, PAHs are assessed as the total concentration of the 16 US EPA Priority Pollutant PAHs: see at p 68. 30 The Waste Guidelines set out maximum levels of various chemicals and elements for each level of non-liquid waste. For many of these chemicals and elements, a maximum leachable concentration, as well as a maximum total concentration, is prescribed. The leachable concentration is the concentration of a chemical contained in leachate. Leachate is defined as "liquid released by, or water that has percolated through, waste, and that contains dissolved and/or suspended liquids and/or solids and/or gases". The total concentration is the concentration of a chemical contained in the waste itself. 31 For PAHs and TPHs, no maximum leachable concentration is provided. A note to the table states clearly that PAHs are assessed using total concentration values, and that no leachable concentration analysis is required. Accordingly leachate tests for PAH and TPH are not pertinent to the classification of waste containing these chemicals. 32 Under the Waste Guidelines, where the total concentration of PAHs present in waste is 200 mg/kg or less, waste may be classified as either "inert waste" or "solid waste". Where the total concentration of PAHs present in particular waste exceeds 200 mg/kg, but does not exceed 800 mg/kg, the waste must be classified as "industrial waste". Where the total concentration of PAHs present in particular waste exceeds 800 mg/kg, the waste must be classified as "hazardous waste". 33 Where the level of benzo(a)pyrene present in waste is no more than 1 mg/kg, the waste may be classified as "inert". Where there are a maximum of 10 mg/kg of benzo(a)pyrene, the waste must be classified as "solid waste". Where the level of benzo(a)pyrene is between 10 and 23 mg/kg it must be classified as "industrial". If the level of benzo(a)pyrene is higher than 23 mg/kg, the waste must be classified as "hazardous". 34 Petroleum hydrocarbons are another class of contaminant which must be considered when classifying waste. The concentration of C10-C36 petroleum hydrocarbons above which waste must be classified as hazardous is 40,000 mg/kg. 35 Under the Waste Guidelines, waste may be classified without chemical analysis if it is classified on the basis of the generator's knowledge of the processes that led to the production of the waste and of the maximum possible levels of contaminants in the waste, and the generator is certain that the waste can be classified without testing: see Pt 2 of Technical Appendix 1 to the Waste Guidelines (p 49). 36 Once classified in accordance with the Waste Guidelines, waste cannot be reclassified into a lower category unless it has been treated to reduce or remove its hazardous characteristics: para (b) in para 3.4.3 Waste Guidelines (p 24). The generation of the coal tar waste 37 The coal tar waste had been generated by BHP in the process of burning coal at its steelworks site. BHP made steel at its Mayfield, Newcastle premises for a period of many years until it ceased operations in around September 1999. 38 BHP's steel making operation included the coking of coal to make coke to fire blast furnaces. The coking process produced a number of by-products including coal tar. The by-products were stored in the area of the site known as the "coke ovens, by products and gas holder area". Classification of the coal tar waste by BHP 39 BHP was the generator and consignor of the coal tar waste in this case. BHP classified the coal tar waste as hazardous. It did so on the basis of its knowledge of the processes that led to its production and of the fact that the level of contaminants, particularly PAHs, in coal tar waste is higher by orders of magnitude than the threshold in the Waste Guidelines for classification as hazardous waste (see p 67). 40 BHP had 13 material safety data sheets (MSDSs) in respect of 13 substances/residues generated in the coking process Two of the MSDSs were for coal tar and for tar decanter sludge (a form of coal tar that has been partially refined). Both MSDSs classified those materials as hazardous for occupational health and safety purposes. 41 After closing its Newcastle steelworks operation, BHP carried out post-closure works including the demolition of the vessels/tanks in the "coke ovens, by products and gas holder area" and the disposal of coal tar waste stored in them. 42 As part of the process of closing down its Newcastle Steelworks and on the advice of its consultant Robert Carr and Associates, BHP classified coal tar waste as hazardous waste in accordance wit the procedures set out in the Waste Guidelines. 43 In advising BHP that coal tar waste should be classified as hazardous waste under the Waste Guidelines, Robert Carr and Associates did not analyse samples of coal tar waste. Mr Geoff Mason, a senior environmental engineer employed by Robert Carr and Associates, deposed that he knew because of the nature and source of the waste that it would contain levels of PAHs which would require it to be classified as hazardous. Agreements for the removal and disposal of the waste The BHP/Brambles Contract 44 In April 2001 Brambles Australia Limited ("Brambles") entered into a contract dated 6 March 2003 with BHP to demolish and remove the coke ovens power plant boilers and associated plant and equipment ("the BHP/Brambles contract"). 45 The BHP/Brambles contract required Brambles to remove and dispose of all "hazardous substances" located in the coke ovens, by products and gas holder area of the site. It specified the hazardous substances most likely to be present in this area and referred to the MSDSs. For example, in respect of the "Tar storage plant" the contract stated: Residual Hazardous substances - Coal Tar Sludge, Naphthalene. 46 BHP's classification of the waste as hazardous is apparent from its material safety data sheets and from BHP/Brambles contract. Such contract repeatedly refers to the fact that hazardous substances were most likely to be present in each of the Asset Areas detailed in the Specification for each Area (see specification BHPMS004). 47 The BHP/Brambles contract further specified that Brambles was to supply documentation to BHP to prove that all hazardous substances had been disposed of in accordance with EPA and council requirements. Brambles acknowledged that those requirements included: That the waste is correctly assessed and classified according to the Protection of the Environment Operations Act 1997 and the EPA's guidelines. 48 The contract price under the BHP/Brambles contract was $11,297,696.75 of which $9,804,220 was identified as being for the removal of hazardous materials, which comprised the coal tar waste. 49 Brambles were supplied by BHP with 13 MSDSs in respect of the substances they would be likely to encounter which required disposal under the contract. The MSDSs included the sheets for tar decanter sludge and coal tar, both of which sheets stated the substances were classified as hazardous according to Worksafe Australia criteria. The Brambles/Enviro Seen Contract 50 On 22 June 2002 Brambles and a newly-formed company, Enviro Seen Pty Ltd ("Enviro Seen") entered into a contract for disposal of the waste ("the Brambles/Enviro Seen Contract"). Mr Smith, director of Enviro Seen, deposes that in late 2001 he became aware of the BHP/Brambles contract and a group of his colleagues formed Enviro Seen to tender for the disposal of the waste. He proposed that it be taken to AWR's premises at St Marys where it would be treated and/or recycled then disposed of to landfill. Mr Smith is a Chartered Professional Engineer with approximately 28 years' experience in water and waste treatment. 51 Under the Brambles/Enviro Seen Contract, Enviro Seen was required to remove and dispose of the coal tar waste as part of its obligation to remove and dispose of "residue" comprising all the material found at the site covered by the BHP contract being: (a) tar or bituminous waste products; (b) oils (such as benzolysed oil); (c) benzene, toluene, ethylbenzene and xylene (BTEX); (d) heavy metal; (e) any other products similar to or associated with those referred to in paragraphs (a), (b), (c) or (d). 52 Under the Brambles/Enviro Seen Contract, Enviro Seen were to be paid $620 per tonne for the removal and disposal of the first 5,200 tonnes of the waste and thereafter $602.50 per tonne (plus GST). Each Tuesday Enviro Seen was to provide Brambles with an invoice, waste consignment form (or waste data form) and destruction certificates for the loads of waste removed and disposed of. 53 Enviro Seen was required to remove, treat and dispose of the waste at a rate of not less than 1000 tonnes every 4 weeks. Enviro Seen were also required to provide Brambles with evidence that Enviro Seen or its nominee held, inter alia, a current, "licence for the storage of hazardous waste" and "EPA hazardous work treatment depot licence (in respect of Residue being disposed of under this agreement)". "Residue" was defined as meaning the materials listed at [51] above. The contract stated the waste remained the property of BHP until destroyed. Pursuant to the contract, Enviro Seen was required to comply with all relevant statutes. It was expressly contemplated that Enviro Seen could assign its obligations or sub-contract to ASR and/or AWR. 54 "Destruction" is defined in the Agreement as follows: Destruction means disposed of and/or recycled in accordance with NSW EPA Guidelines and Destroy has a corresponding meaning. 55 Mr Smith was aware from discussions with Brambles that the waste was classified as hazardous. He was aware that the waste was very high in TPHs and PAHs, which were particularly difficult to dispose of safely and lawfully because they were carcinogens. Enviro Seen/AWR agreement 56 In about early 2002, when ASR was running the St Marys premises, Mr Smith of Enviro Seen approached ASR/AWR with a view to ASR/AWR accepting the BHP waste and treating it at the St Marys premises before disposing of it to landfill. Mr Smith became aware that Mr Brownless, or possibly Barry Purdy, was already aware of the job and had visited the Newcastle site. 57 Shortly thereafter, AWR entered into an agreement with Enviro Seen pursuant to which AWR would receive the waste at its St Marys premises, treat it and dispose of it in return for being paid a fee for waste received. 58 At a later point in time, Mr Smith had further discussions with Mr Brownless and with Dale Cable, an employee of AWR. He says: My discussions were about Australian Solvent Recyclers' EPA licence, how they could treat the material to the point where it could be disposed of to landfill and their capacity to handle the required amount of materials in terms of holding capacity, capacity in their autoclaves and capacity of other equipment … I approached Dale because I knew he had a thorough understanding of the autoclaves and the system at Australian Solvent Recyclers for treating and disposing of hazardous waste. Dale assured me that autoclaves were the best way to go. 59 AWR proposed to treat the waste on site and then dispose of it to landfill. This process was demonstrated by AWR in April 2002 to representatives of Brambles, Robert Carr & Associates and Enviro Seen. 60 No formal written contract between Enviro Seen and AWR existed before AWR started accepting the coal tar waste. In response to statutory notices issued by the EPA requiring production of contractual documents, Enviro Seen supplied two unsigned deeds of non-circumvention and a deed of agreement between AWR/ASR and Enviro Seen. The only signed document is 3 pages of handwritten notes headed "meeting", dated 7 August 2002 and signed by Shane Brownless of AWR/ASR and David Katz, one of the directors of Enviro Seen. This agreement deals solely with payment. Mr Smith says that Enviro Seen offered AWR a written contract (probably called a "deed of agreement") but Mr Brownless refused to sign it. 61 The Enviro Seen/AWR contract refers to the removal of "Residue offered to Enviro Seen from Newcastle site". The contract also refers to "completing the residue removal transport and Destruction process". Removal of waste from Newcastle 62 Mark Lee, project supervisor, was employed by BHP at its Mayfield site. He was present whilst Mr Smith and others, including Mr Cable, attended the site for the purpose of collecting samples. He understood the samples were tested by an independent laboratory but he was not aware of the results. Mr Lee deposed that Mr Smith had told him that he was classifiying the waste, and that he had classified it as hazardous. 63 Mr Lee also deposed: As part of my dealings with AWR I had dealt with Bob White, Shane Brownless, John Morris and Dale Cable. These men visited the BHP site. During my conversations with these men, I believe that they understood the type of the waste being removed from the site and that it was hazardous. 64 The coal tar waste was dispatched from the Newcastle Steelworks to the St Marys premises by Mr Lee on behalf of BHP. His letter of authorisation by BHP dated 29 January 2002 states that he is authorised to sign: Waste Disposal documentation covering the disposal of the Hazardous Materials listed below. 65 The materials covered by the authorisation were described as: residues remaining from the operations of the Coke Ovens and Coke Ovens By Product Plant including residues from previous operations and purchased proprietary items such as chemicals paint solvents and cleaning agents etc. 66 Each load of coal tar waste dispatched from the BHP site and received at the AWR premises was accompanied by a waste data form. The waste data forms were required under its licence (cll O6.12 & O6.16) and were required for transport under the Waste Guidelines (para 4.2 (p 29)). The forms were generated in the first instance by AWR. The top part of each waste consignment form was signed by Mr Lee. The middle part of the form was completed by the driver of the transport vehicle. Once the waset was received at the St Marys premises, the bottom part of each form was completed and signed by a representative of AWR. As part of the waste tracking process required by BHP and Brambles, each completed form was then faxed to BHP by AWR. 67 The coal tar waste was transported from the BHP site to the AWR premises by truck. A relatively small amount of the waste was in liquid form and was transported in a tanker owned by AWR. The vast bulk of the waste was in non-liquid form and was transported in tipper trucks. There were 248 bulk coal tar waste loads. AWR arranged and paid for all transport, which was mostly provided by contractors. 68 All the vehicles and their drivers were licensed for the carriage of dangerous goods and hazardous waste, as required by BHP, Brambles and Enviro Seen. 69 The waste was held at the AWR premises during the charge period until processed and/or disposed of. It was a requirement of Brambles, passed on by Enviro Seen to AWR, that the coal tar waste not be stockpiled at the St Marys premises. Enviro Seen checked the St Marys premises each week to ensure AWR complied with this requirement. Classification of the waste by AWR at the time of its receipt 70 AWR signed waste data forms which described the coal tar waste as hazardous and generated documents entitled "destruction certificates" with respect to the waste. The destruction certificates indicated the volume of waste in each load received by AWR, how it was treated and where it was sent. 71 From 1 July 2002 the destruction certificates were changed to show the classification of the waste by AWR as it was received at the AWR premises and as it left the AWR premises. All of the destruction certificates from 1 July 2002 indicate that the waste received at the AWR premises was classified by AWR as hazardous waste upon receipt and, after its treatment, as inert. 72 Mr Brownless knew that the waste it received at St Marys was high in PAHs. AWR obtained laboratory test results which showed that samples of the waste as received were very high in PAHs and TPHs. Nonetheless, Mr Brownless told the EPA he was of the view that some of the waste could have been disposed of without needing any treatment. He claimed that as far as AWR was concerned, the only reason that the waste was classified as hazardous was as a precaution, and that "hazardous" was the classification that Brambles wanted for the waste leaving the Newcastle site and that was why it was so classified in the waste data forms. 73 AWR claimed that the waste could be described as bitumen or asphalt. A category of waste specified in the Appendix (as to Types of Waste) to Sch 1 to the POEO Act as being "inert waste" was: Asphalt waste (eg resulting from road construction and waterproofing works) 74 At no stage did AWR notify the EPA that it thought the coal tar waste it received from the BHP site was not properly classified as hazardous waste. 75 In his interview with the EPA of 1 October 2003, Mr Brownless said that he left the aspects of compliance with the MSDSs with Mr Cable because "he had all the technical expertise and the people he associated with, and he got his advice from as well, and that, you know. And Steve Smith is an environmental consultant as well. That's what he does. I mean, it's a - they represented to me that it was totally within our licence, totally lawful and totally feasible". 76 Mr Brownless had studied for (but not completed) a mechanical engineering degree at the University of Queensland and had been a director of AWR for some years. In his interview with the EPA, Mr Brownless said that he was approached by Mr Smith to remove coal tar waste from the Newcastle site, and was encouraged by Mr Smith to enter into the contract. 77 Mr Smith's evidence is not entirely in accordance with Mr Brownless. He deposes: … in discussions I had with Dale Cable and Shane Brownless, including about their waste facility licence, we came up with two classifications for the waste. The first was that, as received at St Marys, it had the potential to be inert waste under the EPA's classifications on the basis that it amounted to asphalt. I remember that we looked at a chemical engineer's handbook for the description of wastes and that we looked at dictionary definitions of asphalt. I was of the opinion, based on the EPA's Waste Guidelines, that as long as it did not have free liquid in it the coal tar waste was inert. However, I told Shane Brownless that we did not accept that the coal tar waste could go to the tip that way. We would contract with Australian Solvent Recyclers/Australian Waste Recyclers for them to take the waste to their depot at St Marys to treat it so that it was turned into a form that could be received by a landfill, either as inert or as solid waste. Enviro Seen, through me, directed Australian Waste Recyclers not to take the coal tar waste direct to landfill because BHP regarded it as hazardous waste and insisted on it being transported as hazardous waste. All parties - Brambles, Enviro Seen and Australian Waste Recyclers - were being paid to treat the waste, to render it harmless and acceptable to go to landfill as either solid or inert waste. Accordingly, the second classification, after treatment, was also as inert waste. This classification was based upon an assessment of the product of treatment of the waste after it had been, possibly chemically treated but definitely autoclaved. We decided that, by autoclaving it, we would have, if you like, an each way bet - the waste would be treated and autoclaved. After chemical treatment, autoclaving would separate the volatile component (for recycling) and remove the PAHs, TPHs and any benzene, toluene, ethylbenzene and xylene (BTEX). After autoclaving, the liquid would be drained off to a bio-pile on the St Marys site and the remainder would fall within the EPA's Waste Guidelines for solid or inert waste. In that way, if we were wrong about the waste being semantically inert at Newcastle because it amounted to asphalt then, after treatment, chemically it would still fall within the EPA's guidelines of material acceptable for disposal to landfill. 78 Mr Smith provided environmental consulting services to ASR in the period 2001 to early 2002. However in August 2002 after the Enviro Seen/AWR contract had been in progress for a month and a half, he was concerned about his relationship with AWR and recommended that AWR obtain an alternative consultant. 79 AWR then obtained an opinion from a Dr Simon Leake of Sydney Environmental and Soil Laboratory Pty Ltd (dated 28 August 2002) that the coal waste as received at the St Marys Facility was properly classified under the Waste Guidelines as "inert". Mr Brownless said that, in addition to Mr Smith, Dr Leake was one of his sources for concluding that the tar could be categorised as "Fuel for furnaces, raw material for the manufacture of benzene, toluene and other solvents, road making and waterproofing" and would therefore be inert. Proper classification of the waste 80 Patrick Chi Chung Choi, an employee of the Department of Environment and Conservation and chemical engineer, deposed that a substance may be chemically identified using an internationally-accepted reference system known as a Chemical Abstract Service ("CAS") Registry Number, which avoids the ambiguity of chemical nomenclature. A CAS number is a unique identifier designated to only one substance, and CAS numbers exist for more than 22 million organic and inorganic substances. Coal tar waste has a different CAS number from bitumen or bitumen associated products. The Waste Guidelines themselves refer to CAS numbers. 81 Bitumen is obtained by processing the residue from the refining of particular naturally occurring crude oils. Unlike coal tar, bitumen contains very low concentrations of PAHs. When mixed with aggregate bitumen can be used as asphalt. Asphalt is derived from petroleum, not from coal. The bituminous binder in asphalt does not include coal tar. 82 Mr Choi deposed that there are publications readily available to industry and the community which describe the nature and properties of asphalt, as well as the difference between bitumen and coal tar. Those publications are available for purchase, and can be obtained through a website. He concluded: It is not reasonable to regard coal tar waste as asphalt waste. · It is incorrect to regard coal tar waste as a petroleum product. · When working in NSW, it is not acceptable to determine coal tar waste as asphalt waste based on terminology used in North America. · It is not an acceptable practice to determine what is an asphalt waste without making reference to the relevant publications by AS and AAPA and/or without consulting relevant regulatory authorities. · It is not an acceptable practice in the asphalt trade to treat/blend coal tar waste using saw dust with a view to converting it to an asphalt material without checking the acceptable asphalt material specifications contained in AS and AAPA publications. Treatment and disposal of the waste by AWR 83 Mr Smith deposed that in early 2002, Mr Cable and Mr Brownless told him that they had developed a technique for the treatment of the waste, which involved treating the waste with lime, iron oxide and acrylic polymer and then heating it in an autoclave. An autoclave is a heating device utilising a vacuum. The free liquids were to be drained to a biopile (namely a pile of organic material which is subjected to an ongoing composting process to break down the material). In April or May 2002, Mr Lee, Mr Mason and Mr Smith visited the AWR premises. They inspected the premises and were shown the treatment which AWR was proposing for the waste. They were told that once it had been treated and tested for acceptable leachate levels, the waste would be reclassified as inert and could go to landfill. 84 AWR submitted samples of the waste (apparently treated) for leachate testing by GM Laboratories, which showed the concentration of PAH and TPH. There is no evidence of any test for the total concentration of PAH and TPH as required under the Waste Guidelines. 85 Both Mr Smith and Mr Lee deposed that following this visit AWR provided them with copies of leachate test results. It is not clear whether the test results provided were those which are in evidence in these proceedings, but it appears likely. Mr Lee asked Mr Mason to check the results and Mr Mason informed him that the results were within the guidelines of material classified as "inert waste". 86 It is clear that some of the coal tar waste received by AWR was autoclaved. However, in the record of interview, Mr Brownless acknowledged that the destruction certificates were not accurate. The majority of the waste was not autoclaved but was simply unloaded, drained of any free liquids, mixed with sawdust, loaded onto another truck and taken to landfill. The free liquids were placed upon the biopile. 87 Mr Smith wrote to landfills on behalf of AWR to negotiate the ultimate disposal of the waste by AWR, describing the waste as "inert". On the basis of the treatment that the waste was to undergo before disposal, Mr Smith said it was possible for him to approach landfills describing the waste as "inert". Effectiveness of treatment 88 Mr Choi visited the premises of AWR on 3 September 2003. He noted that the waste contained very high levels of PAHs and that the total concentrations of TPHs were also extraordinarily high. He undertook calculations of the operating temperature of the autoclave and of the temperature required to impact upon the coal tar waste. He then concluded: Based on the maximum operating temperature of the autoclave at the AWR premises and the pressure at which it operates as described to me by Mr Brownless none of the PAHs listed in the table at Annexure B to this affidavit would have been separated from the coal tar waste, with the possible exception of naphthalene. This is consistent with the fact that Mr Brownless told me that only a little distillate was collected when the coal tar waste was autoclaved. Accordingly even after autoclaving at the AWR premises the coal tar waste would remain toxic and hazardous to human health and/or the environment. Further even after autoclaving the coal tar waste would be classified as hazardous waste in accordance with the Waste Guidelines because of the very high concentrations of PAHs remaining in the waste. 89 Mr Choi stated that the addition of sawdust to the tarry waste would not change the PAH levels of the waste. The addition of sawdust simply made loads easier to transport. Likely environmental harm 90 Coal tar and coal tar derived products are toxic and hazardous substances. The International Agency on Research for Cancer, being a subsidiary of the World Health Organisation, has determined that coal tar and coal tar derived products are human carcinogens. 91 When present in the sort of high concentrations which are typically present in coal tar and coal tar waste, PAHs are known to be carcinogenic. Benzo(a)pyrene is a particularly carcinogenic PAH and is known to be present in coal tar waste. This PAH was reported to be present in high concentrations in each of the samples taken by Ms Trindall at the AWR and BHP sites which were analysed for organic compounds. 92 Coal tar wastes are widely known in the environmental and waste industries to contain high levels of PAHs and petroleum hydrocarbons. The levels of PAHs and petroleum hydrocarbons present in coal tar waste will always result in these materials being classified as hazardous waste. 93 Moreno Julli, an environment protection officer who has expert qualifications in applied science, considered the effect of pollutants on the aquatic and terrestrial environment. He testified that many of the PAHs found in coal tar waste samples were "highly persistent". He deposed: Under 'ideal' conditions, being limited exposure to light and oxygen, such as would occur in many landfills, these PAHs can be expected to persist for many decades. 94 Mr Julli concluded that the landfilling of large aggregations, which occurred with the subject coal tar waste at the Mulgoa Landfill, in the absence of oxygen and suitable microbial populations "will likely lead to extended half-light periods of PAHs measured in years and possibly decades. I would expect in this case that the PAHs in the coal tar waste at the Mulgoa Landfill may persist for decades." 95 Mr Julli stated that there was no evidence of actual water pollution in this case, and that PAHs had not been detected in leachate from the Mulgoa Landfill as at May 2005. However he said it was possible that in the future leachate from the Mulgoa Landfill containing PAHs will contaminate ground and/or surface waters. He states: If PAH contamination from the coal tar waste that has been placed in the landfill did migrate to a watercourse, acute toxic effects on aquatic life in the watercourse would occur if water column concentrations reached 0.2 to 10 mg/L. Deleterious sublethal responses would possibly occur at concentrations around 0.005 to 0.1 mg/L. By comparison 0.005 mg/L is the approximate equivalent of adding two teaspoons (9g) of liquid to 2 million litres of liquid (being about the size of an Olympic swimming pool). Noting the low trigger values for PAHs in the ANZECC/ARMCANZ guidelines contamination of aquatic environments can occur with the migration of relatively small amounts of PAHs. 96 Mr Julian Thompson deposed that the disposal of the coal tar waste to the landfill at Mulgoa has created an increased risk to the environment. The Mulgoa landfill was not designed to hold the type of chemicals contained in the waste. As a consequence there will need to be continuing monitoring of leachate and groundwater by the EPA. Should BTEX and/or PAHs be detected, the EPA will require significant investigation by the landfill operator and a programme of rectification works will be required. Financial gain of AWR 97 Julian Thompson provided details of the cost of transportation of hazardous waste materials. Mr Thompson undertook calculations of the total amount of coal tar waste which he estimates to be 6,449 tonnes and the payment received by AWR for the receipt, treatment and disposal of such waste under the agreement with Enviro Seen. Such amount was $345 per tonne (plus GST). The costs of disposal were only $55 per tonne. In his calculation, AWR would have received $2,450,620 for such service. 98 Mr Thompson then estimated the costs involved in transport and disposal of the waste, based upon records provided by AWR and the transport contractors, which he deducted from the above figure. He did not deduct any costs for treatment on the basis that most of the waste was the subject of "only cursory treatment at the AWR premises". On this basis, he estimated AWR's profits under the contract to be $1.85 million. 99 Mr Wager, the General Manager of AWR, reported that the net profit from the Enviro Seen/AWR contract was $124,905.27. He itemised numerous costs for transportation, disposal, labour, testing and chemicals. No invoices were provided by Mr Wager to verify the costs incurred. Prosecutor's submissions 100 The prosecutor submits that AWR's conduct was deliberate, dishonest, undertaken for commercial gain and it resulted in actual environmental harm. It is submitted that the offence was a continuing offence and that the potential for further environmental harm is serious. The prosecutor submits that these matters place the actions of the respondent in the most serious category, requiring not only a penalty for general deterrence, but also a daily penalty for each day that the offence was continued. 101 The maximum penalty for the offence, when committed by a corporation is $250,000 with an additional maximum daily penalty of $120,000 for each day that the offence continues. 102 The prosecutor submits that AWR was at all material times aware that the waste was coal tar waste and that its behaviour was dishonest. The prosecutor refers to the antecedents of AWR and relies upon a decision of Her Honour Judge Staunton in the Industrial Relations Commission delivered on 3 June 2005: see Australian Waste Recyclers 1 Pty Ltd v Enviro Seen Pty Ltd [2005] NSWIR Com 190 at [27] to [32]. The prosecutor says this decision disclosed the close association between Robar Holdings Pty Limited as trustee for the Robar unit trust and AWR. The prosecutor urges the Court to find that AWR company is essentially controlled by Mr Robert James White. 103 Mr White was convicted in 1996 of an offence of Dispose of Waste in a Manner Likely to Harm the Environment (see Environment Protection Authority v White (1996) 92 LGERA 264). The prosecutor submits that is a relevant and serious Tier 1 environmental offence, involving the deliberate disposal of hundreds of 200 L drums of contaminated waste on a property owned by Alltypes Liquid Haulage Pty Ltd, of which Mr White was a major shareholder and director. 104 The prosecutor submits that Mr White's previous conviction is relevant given his involvement with AWR. The prosecutor submits that there is no guarantee that the shareholders and/or directors of AWR will not re-offend, and says that there has been a history of company restructuring designed to evade responsibility for environmental crimes. 105 The prosecutor says that the Court would give little weight to the evidence of AWR's general manager, Mr Wager. At the date of trial, Mr Wager had been engaged for only three months and was unaware of the AWR's ownership or financial position. The prosecutor relies upon the lack of knowledge of Mr Wager to make any acknowledgement of regret or contrition on the part of AWR and no evidence was adduced from either Mr Morris, AWR's company sole director nor from Mr White nor from Mr Pears, an accountant and the owner of the shares held for Mr White in AWR. 106 The prosecutor submits that AWR has gained substantial revenue from the unlawful activities the subject of the charge. 107 The prosecutor submits that the offence is in the worst type of category because AWR has engaged in an abuse of the privilege which it held by virtue of being the holder of a licence issued under the POEO Act. The prosecutor relies upon the principles referred to in Environment Protection Authority v Port Kembla Copper Pty Ltd (2001) 115 LGERA 391 per Pearlman CJ at 398-9; Environment Protection Authority v Incitec Limited (2003) 131 LGERA 176 at 184; Environment Protection Authority v BHP Steel (AIS) Pty Ltd (2004) 132 LGERA 213 at 221-2; Environment Protection Authority v Capral Aluminium Ltd (unreported, Land and Environment Court, Cowdroy J, 18 December 1998); see also Environment Protection Authority v Lithgow Coal Company Pty Limited [2003] NSWLEC 430 at [15]; Environment Protection Authority v Metalcorp Recyclers Pty Limited [2001] NSWLEC 253 at [13]. 108 The prosecutor submits that the waste was dangerous since it contained very high levels of PAHs, which are a known carcinogen. It also contained very high levels of Benzo(a)pyrene, the most dangerous of all PAHs. Further, the amount of waste received in breach of the licence was significant, being approximately 6,449 tonnes. Excluding the quantity transported using a tanker, the quantity of waste is approximately 6,170 tonnes. 109 The prosecutor relies upon the fact that the offence was deliberate and committed over a long period of time and that the dishonesty was involved as to the proper classification of the waste. The prosecutor submits that AWR was being paid to accept both the cost and the risk which accompanied the fact that the waste was coal tar waste which was classified as hazardous. It deliberately elected to treat it as inert waste. 110 The prosecutor also submits that the misrepresentations in the destruction certificates involved a further example of the dishonesty engaged in by AWR. 111 The prosecutor submits that AWR has attempted to shift the blame for its approach to the treatment of the waste to Mr Stephen Smith, and to a lesser extent to Dr Simon Leake. The prosecutor submits that AWR well knew of the true classification of the waste. The suggestion that the classification of "hazardous" allocated to the waste by AWR for transportation purposes only as "precautionary" should be rejected. Both BHP and Brambles insisted that the waste was given the appropriate classification of "hazardous". 112 The prosecutor relies upon the fact that AWR was paid $345 per tonne plus GST for the disposal of the waste, but paid only $55 per tonne to the landfill at Mulgoa operated by Penrith Waste. The prosecutor submits that AWR well knew of the nature of the waste and of its illegal conduct. The prosecutor refers to the harm caused in consequence of the wrongful classification and of the future potential for exposure to humans. The prosecutor submits that there has been clear disregard for public safety and that AWR had control of the operations. 113 As to the plea of guilty, the prosecutor submits that the discount for an early plea of guilty, envisaged by s 22 of the Crimes (Sentencing Procedure) Act 1999 is based upon the utilitarian value of the plea. The plea of guilty charge was not made at the first available opportunity but the prosecutor submits that a discount of 11% of any fine would be appropriate. 114 The prosecutor submits that loads were received by AWR on 127 days between 13 June 2001 and 7 February 2003. Some of the loads were said to be "oily waters". The prosecutor submits that such waste was coal tar waste and was equally hazardous. However the prosecutor says that there were only three days on which waste was only transported by tanker. Accordingly if the Court is not satisfied beyond a reasonable doubt that the waste transported by tanker was in breach of the licence, the total number of days on which the offence continued after the first day is 124. The prosecutor seeks the imposition of a daily penalty pursuant to s 64(1) of the POEO Act. 115 The prosecutor submits that the activity was properly described as a course of conduct: see Walsh v Tattersall (1996) 188 CLR 77 per Gaudron and Gummow JJ at 91, Kirby J at 107; CSR Ltd v Environment Protection Authority (2000) 110 LGERA 334 at [49], [52]; Environment Protection Authority v HTT Huntley Heritage Pty Ltd (2003) 125 LGERA 332. The prosecutor submits that AWR should be fined for each day in which it continued to breach the condition L5 of its licence by receiving hazardous waste. 116 The prosecutor submits that the totality principle does not result in the conclusion that AWR is entitled to a reduction of the total amount of the fine. The ultimate question is whether the total sentence is "just and appropriate": Mill v The Queen (1988) 166 CLR 59 at 62; Pearce v The Queen (1998) 194 CLR 610 at 624; Johnson v R (2004) 205 ALR 346 at 354-6 [18]-[26]; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 703-4. 117 The prosecutor has also made submissions concerning the costs of investigation and the publication order. Defendant's submissions 118 AWR submits that the Court would need to find that AWR's breach of its licence condition was deliberate and continuing before it could impose a fine in the upper range of prescribed penalty. AWR submits that the Court could make no such finding. 119 AWR submits that in agreeing to take receipt of coal tar waste, AWR accepted the "semantic classification" of the waste as "asphalt" believing that it could then lawfully receive the waste as "inert" under the POEO Act and also under the Waste Guidelines. In accepting such classification, AWR did not act in deliberate and contumacious disregard of the law but rather, worked in conjunction with Stephen Smith. 120 AWR submits that Brambles and Enviro Seen assumed the risk of disposing of the waste for a significant fee. Enviro Seen used the semantic classification of the waste as "inert" to pass on this risk to AWR. 121 AWR submits that its conduct should properly be assessed at the lower end of the spectrum of criminality and says the prosecutor must prove aggravating circumstances beyond reasonable doubt. AWR relies upon the decision of the High Court of Australia in The Queen v Olbrich (1999) 199 CLR 270 at 281. 122 With respect to the extent of harm caused or likely to be caused to the environment by the commission of the offence, AWR submits that the Court should not take into account the harm or potential harm caused by AWR's actual disposal of the waste to landfill. It submits that such is not an element in the offence charged and consistent with the principle in The Queen v De Simoni (1981) 147 CLR 383 the Court is prohibited from taking into account circumstances of aggravation which could have formed part of a more serious offence which was not charged by the prosecuting authorities. Accordingly AWR submits that any evidence which suggests is directed to environmental harm in connection with the storage, treatment or reprocessing of the waste, or the disposal by AWR of the waste the landfill should not be taken into consideration when fixing the appropriate penalty for AWR's receipt of the waste in breach of its licence because it is the receipt only that is charged as conduct and is the gravamen of the offence: see Incitec per Sheahan J at [43]-[44]; Environment Protection Authority v TransGrid [2003] NSWLEC 18 per Lloyd J at [124]-[128]. 123 AWR submits that the Court would not be satisfied that there was any actual or likely harm to the environment by AWR receiving the waste. It says that the prosecutor's evidence on this issue does not rise above speculation or conjecture: see Environment Protection Authority v Collex Pty Ltd [2002] NSWLEC 196 at [55]. AWR says that no chemical leachates have been detected in any of the three landfill facilities to which AWR ultimately disposed of the waste. It was an agreed fact between the parties that the waste taken to Mulgoa was deposited into cells of recent construction with a lining of a higher quality than previously. 124 AWR refers to s 241(1)(b) of the POEO Act and submits that the fact that AWR had the waste chemically analysed at intervals after its receipt demonstrates its commitment to risk management and prevention of harm to the environment. 125 As regards the provision of s 241(1)(c) of the POEO Act, AWR says that the evidence establishes that only one MSDS was ever in AWR's possession being for tar decanter sludge which records the waste as "Classified as hazardous according to criteria of WorkSafe Australia". It does not state that the material is hazardous under the Waste Guidelines. Further, AWR says that the Court will have regard to the deed entitled "Deed of Non-Circumvention" which prohibited AWR from speaking directly to BHP or Brambles and becoming acquainted with the terms upon which the parties had contracted. 126 AWR also submits that it was dependant upon the classification of the waste as asphalt and therefore inert, by Mr Smith and thereafter by Dr Leake. Dr Leake's opinion was sought in August 2002 shortly after receipt of the waste at St Marys. AWR refers to the letter from Mr Smith to Penrith Waste Services on 11 July 2002 in which he described the waste as "asphalt waste" and as "inert waste" under the POEO Act, Sch 1 Pt 2. The letter concluded that the PAH and TPH levels were those found in asphalt. Mr Smith did not provide any information to suggest that the waste was coal tar waste. 127 AWR submits that Mr Brownless did not have the capacity to properly categorise the waste, given his experience and qualifications. AWR submits that the Court would find that Mr Smith was acting as a consultant to AWR. It was Mr Smith who designed the waste data forms and who possessed the relevant expertise to form a view as to the capacity of the autoclaving process to treat the waste effectively. 128 AWR says that in relying on the advice of Mr Smith and Dr Leake, AWR believed that it was permitted to receive the waste. It did not act in contumacious disregard of the law. By its plea of guilty AWR accepts that it did fail to take reasonable steps to ensure that the waste was such that it could receive it for disposal. However, AWR submits that there is no evidence that such failure was deliberate in the sense that it knew that it was unlicensed to receive the waste. The prosecution could only succeed in obtaining a substantial penalty if the Court is satisfied that AWR's breach of its licence condition was deliberate and continuing. 129 AWR submits that because of its belief that the waste was inert, it was never its intention to autoclave all of the waste. Asphalt or bitumen waste could have been lawfully disposed of to landfill without being autoclaved. If waste received by AWR contained a water or oil component of some kind, such waste might be the subject of an autoclave treatment in order to eliminate organic contaminant solvents and volatile compounds. Accordingly only the liquid portion was autoclaved. 130 AWR submits there is evidence that both Brambles and BHP also relied upon a semantic classification of the waste. The waste data forms signed by Mr Lee show loads described as "Bitumen/Asphalt Residues". AWR also relies upon the fact that Enviro Seen did not hold a current licence to receive or store hazardous waste. 131 AWR submits that the prosecutor was dilatory. AWR says that the prosecutor was aware of the hazardous nature of the waste being removed from June 2002 but took no steps to stop the receipt by AWR in breach of its licence until 7 February 2003. 132 AWR submits that it co-operated with the prosecutor's investigations and pursuant to s 23 of the Crimes (Sentencing Procedure) Act 1999 it is entitled to consideration. 133 As regard to penalty, AWR submits the Court would apply the principle of totality as considered by Street CJ in R v Holder; R v Johnston [1983] 3 NSWLR 245 at 260. AWR also relies upon the fact that it has had no prior convictions. Findings 134 The plea of guilty carries with it an acknowledgment of the essential ingredients of the offence: see R v O'Neill [1979] 2 NSWLR 582. As a consequence of such plea, AWR acknowledges that, from 13 June 2002, and continuing until 7 February 2003, it breached condition L5.1 of its licence by receiving hazardous waste which it was not authorised to receive under its licence. 135 The Court is satisfied that all of the waste removed from the BHP site constituted hazardous waste, being coal tar waste, which was not permitted by AWR's licence. Accordingly the Court finds AWR breached its licence on 128 days during the charge period (the initial breach plus 127 subsequent days). 136 The evidence establishes that BHP had classified the waste as hazardous waste, and the directors of AWR were aware of such classification through personal communications from Brambles' representative Mr Lee, as well as through its acceptance of the waste consignment forms, which were signed by Mr Brownless. Such forms clearly recorded that the waste was hazardous. 137 The waste which AWR was authorised to receive under its licence is "waste solvents, solvent based paints, water based solvents, water based paints, oily waters, and contaminated soils capable of being remediated". The Court does not accept that Mr Brownless or AWR could have been in any doubt that the waste did not fall into any of these categories. The licence permitted AWR to treat specific liquids as well as contaminated soils. The coal tar waste was clearly not one of those liquids or contaminated soil. As a director of the company, Mr Brownless must have known of AWR's obligations under the licence. The failure of Mr Brownless to comply with the requirement of the licence is indicative of either dishonest conduct, recklessness or gross negligence. 138 AWR submitted that it relied upon the classification of the waste as "asphalt" by Mr Smith. However Mr Smith stated that although he considered that the waste was probably asphalt, he specifically told Mr Cable of AWR that to be certain, the waste should be treated before being sent to landfill. This evidence is in accordance with other facts before the Court. Three witnesses deposed that AWR claimed to have developed a treatment regime for the waste, which was demonstrated to Enviro Seen, Brambles and BHP. Many of the destruction certificates represented that there had been treatment by autoclaving or bioremediation when the record of interview with Mr Brownless establishes that that was not the case. This was contrary to the proposals for the treatment of the waste which had been demonstrated by AWR to representatives of Enviro Seen, Brambles and BHP in early 2002. The Court considers that the destruction certificates were completed to mislead other parties as to the treatment which was actually occurring. On this basis, the Court is satisfied that AWR had not been told by Mr Smith that the waste could be classified as inert waste. 139 AWR also submitted that it also relied upon the classification provided by Dr Leake. The Court accepts that Dr Leake provided advice which was completely incorrect. However, it is not clear to the Court that Dr Leake had been informed of the true nature of the waste. The Court notes that in his letter of 28 August 2002, he refers to the "classification of partially solidified bituminous asphalt material" and "asphalt derived from crude petroleum". The waste is not derived from petroleum but from coal and is not bituminous. The Court has not been provided with evidence of the information given to Dr Leake on which his opinion was based. 140 Furthermore, Dr Leake's advice conflicted with AWR's knowledge that BHP had classified the waste as hazardous, and with its proposals for treatment explained to BHP, Brambles and Enviro Seen. In these circumstances the Court does not consider that the advice provides any basis for mitigation of the penalty. 141 In addition, the rate of payment for the disposal of the waste was well in excess of the standard industry rates for the disposal of inert waste. AWR must have been suspicious that waste which was classified as "hazardous" on entry could have been removed to landfill without having been treated at all. If AWR were unaware that hazardous waste was in fact being transported to landfill, the highly irregular circumstances would have put it on notice that unlawful activities were being conducted. Mr Brownless gave no evidence to explain why such substantial rates were being paid by Enviro Seen for the disposal of inert waste. 142 Since Mr Brownless was clearly aware that BHP had classified the waste as hazardous, it was incumbent on him to ensure that it was dealt with as hazardous waste. A heavy responsibility is placed upon a company who is entitled to deal with dangerous substances. The Waste Guidelines place the primary obligation for classifying waste upon the generator, in this case BHP. Knowing that BHP had classified it in such a manner, it was not open for AWR to decide that the classification was erroneous or merely precautionary. If there were any doubt as to the classification, AWR should have contacted the EPA, as required by its licence in circumstances where waste was wrongly classified. Further, it should have made contact with the generator to confirm the classification. It was grossly reckless to unilaterally reclassify waste from the "hazardous" to the "inert" category, without at the very least requesting advice from the EPA. 143 It has been submitted that AWR was bound not to communicate with Brambles or BHP by a deed of non-circumvention which it had signed with Enviro Seen, and therefore could not communicate with BHP with respect to the classification of the waste. However, the document relied upon has not been signed and remains only a draft. Furthermore on its terms it would not have prevented AWR from seeking information from, as opposed to providing information to, Brambles or BHP. 144 Further, even a cursory examination at the Waste Guidelines indicates that the chemical testing undertaken by AWR of the treated waste was not the appropriate testing for waste of this kind. The testing undertaken by AWR was leachate testing when the Waste Guidelines indicate that the basis for classification in respect of PAHs and TPHs is total concentration, not leachable concentration. The Court does not accept that AWR was unaware that it was utilising the wrong test. It specifically sent the leachate test results to Enviro Seen. The Court considers that this was calculated to mislead Enviro Seen, and subsequently the other contracting parties, into thinking that the waste was being treated appropriately by AWR. 145 At the very least, AWR's method of treating the waste showed complete incompetence, lack of expertise and lack of awareness of the appropriate guidelines. Given that AWR knew that the waste was hazardous, it was completely reckless to have accepted it without having the capacity to ensure it was disposed of safely. One purpose of EPA licensing is to ensure that licence-holders have the appropriate expertise and resources to process waste of the type which they are licensed to receive. AWR did not have the requisite expertise or facilities to receive and treat coal tar waste. 146 The Court notes that the leachate test results for the treated waste were provided to both Robert Carr and Associates and Enviro Seen. Despite the qualifications of both companies, it appears that neither checked, or noticed, that the testing undertaken by AWR was not valid under the Waste Guidelines because leachate testing is not pertinent to measuring PAHs and TPHs. The Court considers this was a significant oversight on their part. Had they checked the test results diligently, the offence may have been detected earlier. However, this does not detract from AWR's culpability. Financial gain 147 The company balance sheets for the financial years 2003, 2004 and 2005, together with profit and loss statements were produced to the Court. The Court has no confidence that such records accurately represent the true expenses of AWR in fulfilling the contract. For example, the estimated costs of labour for fulfilling the contract exceed the total wages for all projects of the company recorded in its profit and loss statement for the 2003 financial year. 148 The Court accepts that AWR may have incurred some costs which were not taken into account in the figure of $1.85 million which was estimated by Mr Thompson. However the Court is satisfied that AWR must have received a net profit in excess of $1 million arising from the contract. 149 The Court is satisfied that AWR made a substantial profit from the contract with Enviro Seen. The profit resulted from the deliberate conduct of AWR in failing to treat the waste or dispose of it lawfully. Environmental harm 150 AWR has submitted that the environmental harm from disposal of the waste should not be taken into account in the assessment of penalty, on the basis that it could have formed part of a more serious offence which was not charged. 151 In The Queen v De Simoni, Gibbs CJ referred to the principle that an offender should not be punished for an offence for which he has not been convicted: see also Olbrich. 152 In view of these authorities, the Court cannot consider the environmental harm which resulted from the disposal of the waste at landfill. The harm to the environment was not caused by the commission of the offence, but by acts subsequent to the offence. Such acts could clearly have formed part of a charge of wilfully or negligently disposing of waste in a manner likely to harm the environment under s 115 of the POEO Act, but AWR has not been charged with such an offence. 153 Although the prosecutor submits that AWR could not have committed the offence without disposing of the waste and that therefore the Court can consider the harm caused by such disposal, it does not follow that the harm is an ingredient of the charge. It is possible that AWR, even having received the waste unlawfully, could have disposed of it lawfully. 154 The Court accepts that it must consider s 241(1)(a) of the POEO Act in sentencing AWR. However, the Court considers it may only take into account those elements of actual or likely environmental harm which were a direct result of the ingredients of the offence, not those which resulted from other unlawful acts, namely unlawful disposal, which occurred subsequent to the offence but which were not the subject of the charge. 155 However, the Court considers that the receipt of the waste by AWR was likely to cause harm to the environment. The waste received by AWR was hazardous, containing high quantities of known human carcinogens. It represented a serious threat to human health if it were disposed of inappropriately. The EPA's licensing regime exists to ensure that those who receive hazardous wastes are equipped to deal with them safely. AWR clearly did not have the expertise or the facilities to deal with hazardous waste of this type and was accordingly not licensed to receive such waste. By accepting dangerous waste of this nature, AWR recklessly created a risk to the environment and human health, because it was not equipped to treat the waste appropriately. It also prevented appropriate oversight by the EPA, because it was operating in a sphere outside of its licence conditions. In this way, the offence was likely to cause serious environmental harm. 156 By s 21A(2)(i) of the Crimes (Sentencing Procedure) Act 1999 the Court is entitled to consider whether the offence was committed without regard for public safety. The Court considers that the offence was committed with total disregard for public safety. 157 Under s 241(1)(b) of the POEO Act, the Court is considered the practical measures that may have been taken to prevent, control, abate or mitigate the harm likely to be caused by the offence. In the circumstances, the Court is satisfied that AWR took no measures to ensure the waste would be dealt with safely and in fact treated it as inert waste despite knowing that it was hazardous. 158 As to the extent to which AWR could reasonably have foreseen the harm caused, as referred to in s 241(1)(c) of the POEO Act, the Court is satisfied that the harm likely to result from AWR's conduct was obvious. It knew the waste was hazardous and it was clearly beyond its licence conditions. 159 AWR had complete control over the commission of the offence (see s 241(1)(d) of the POEO Act), having contracted to accept the waste. Furthermore, the offence was committed deliberately. 160 The Court considers that the breach of licence condition was deliberate, and showed a total disregard for the community and the environmental regulation provided by statute. In these circumstances the Court considers that there is a need for the penalty to reflect an element of specific deterrence. Conduct of the EPA 161 AWR submitted that the EPA, having been aware of the hazardous nature of the waste being removed from the BHP site since June 2002, was dilatory in not issuing a clean up notice until February 2003. AWR submits this prolonged the period of the breach. 162 However, such conduct by the EPA does not provide any basis for mitigation of penalty: see Environment Protection Authority v Allied Industrial Services Pty Ltd [2005] NSWLEC 501 at [30]. AWR had exclusive control over its activities and the responsibility to comply with the requirements of its licence rested solely with it and not with the EPA. Plea of Guilty 163 Section 22 of the Crimes (Sentencing Procedure) Act 1999 entitles the Court to provide a discount for an early plea of guilty. The rationale for such consideration is the utilitarian value of avoiding unnecessary expenditure and costing the courts and the community time and money: see R v Thomson; R v Houlton (2000) 49 NSWLR 383. AWR's plea of guilty was indicated to the prosecutor one and a half days before the hearing was fixed to commence. AWR is entitled to some recognition for the saved hearing time, but because of the lateness of the plea the discount to be applied is reduced: see s 22 of the Crimes (Sentencing Procedure) Act 1999; Filipowski v Frey [2005] NSWLEC 661 at [72] to [84]; Siganto v The Queen (1998) 194 CLR 656 (at 663-4 [22]-[23]). The prosecutor submitted that an 11% reduction was appropriate since the plea of guilty occurred before the first day of trial. However, the Court considers that the additional one and a half days prior to trial is insignificant. The Court will allow a 10% reduction in view of the late plea of guilty. Contrition 164 Evidence of remorse or contrition may give rise to a mitigation of punishment: see Cameron v The Queen (2002) 209 CLR 339 at 360 per Kirby J. In the present case there is no basis for such mitigation. The only evidence of contrition provided by any AWR representative was that of its general manager, Mr Wager, who was appointed a mere three months before the hearing, more than two years after the offence commenced. He had little knowledge of AWR's affairs and the Court is not satisfied that he was in a position to express genuine contrition on behalf of AWR. Other than the employment of Mr Wager, there was no evidence that AWR had taken any steps to prevent a similar breach in the future. Prior conviction 165 The prosecutor requested the Court to take into account the prior conviction of Mr White, whom it says is the controlling mind behind AWR. The Court does not consider there is sufficient evidence to establish that AWR is controlled by Mr White. His prior conviction for an environmental offence is of no relevance to the penalty in these proceedings. Accordingly, the Court accepts that AWR has no prior convictions. Cooperation with the authorities 166 AWR has submitted that its cooperation with the EPA warrants a reduction in penalty. The prosecutor refutes such submission, claiming that there is no evidence that the defendant cooperated with the EPA beyond cooperating with statutory notices as it was required to do. The Court considers that AWR has not established that it provided any assistance beyond compliance with the statutory requirements. This is insufficient to warrant a discount in penalty. Penalty 167 The Court considers that the evidence establishes overwhelmingly that AWR has engaged in a course of dishonest conduct in breach of the law. The conduct was deliberate, calculated and undertaken for financial gain with complete disregard for public safety or the environment. The breach involved AWR knowingly receiving waste which was highly dangerous to human health, despite the fact that it had not been licensed to do so. It was a serious breach of its licence which created a risk of serious environmental harm. The penalty must involve an element for both general and specific deterrence: see s 3A(b) of the Crimes (Sentencing Procedure) Act 1999; see also Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 per Mahoney JA at 359. 168 The maximum penalty described by the POEO Act for the offence is $250,000. Given all the circumstances of this offence, the Court considers a penalty of $150,000 is warranted. 169 In addition, the Court considers a daily penalty should be imposed to reflect the continuing and flagrant breach of the POEO Act by AWR. The maximum penalty is $120,000 per day. For the duration of the offence, namely 127 days, the Court considers that a daily penalty of $1,000 should be imposed, resulting in a total of $127,000. The Court notes that if the maximum daily penalty for this offence were imposed, the total sum would be $15,240,000. 170 These two amounts would give a total of $277,000. To this figure, the Court applies the totality principle in accordance with the authorities: see Camilleri's Stock Feeds at 703-4 and Mill at 62; Pearce at 624. The Court therefore reduces the penalty to $250,000, to reflect the total criminality involved. 171 The Court also reduces the penalty by 10% to reflect the plea of guilty. Accordingly, the total penalty to be imposed is $225,000. Prosecutor's Investigation Costs 172 The prosecutor applies for an order under s 248(1) of the POEO Act that AWR pay the costs and expenses of the investigations amounting to of $20,284.54. Publication Order 173 Pursuant to s 250(1) of the POEO Act, the Prosecutor seeks an order that AWR caused to be published in a general circulation newspaper and in the waste industry journal a notice of a fact of its prosecution and conviction, a summary of the Court's findings and the penalty imposed. In the interests of general deterrence the Court considers that such a notice is appropriate. Costs 174 The prosecutor seeks an order that its costs be paid. The Court will make such order. Orders 175 Accordingly the Court makes the following orders:

The defendant is convicted of the offence as charged.
The defendant is fined the sum of $225,000.
The defendant pay the costs of the prosecutor.
The defendant pay the prosecutor's costs of investigation in the amount of $20,284.54 pursuant to s 248 of the Protection of the Environment Operations Act 1997.
Within 21 days of the date of this judgment the defendant is to publish, at its own cost, in the Sydney Morning Herald and in a waste industry journal, a notice containing the fact of its prosecution, its conviction and summary of the Court findings and the penalty imposed in the form of annexure "A". Such notice is to be 15 cm high by 3 columns wide.
The exhibits be returned.

Environment Protection Authority v Australian Waste Recyclers 1 Pty Ltd

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