Environment Protection Authority v BHP Steel [2003] NSWLEC 46 | Case summary

HIS HONOUR: 1 The defendant, BHP Steel (AIS) Pty Limited, has pleaded guilty to an offence against s 64(1) of the Protection of the Environment Operations Act 1997, in that it was the holder of an environmental protection licence, a condition of which was contravened by a person. Section 64(1) of the Act provides for a maximum penalty in the case of a corporation of $250,000 and, in the case of an individual, $120,000. 2 The relevant facts may be briefly described. 3 The offence occurred on or about 10 December 2001 at which time the defendant held an environmental protection licence issued by the prosecutor, the Environment Protection Authority, under s 55 of the Protection of the Environment Operations Act in respect of coal works at two sites, including the Elouera Colliery, Wongawilli, within the State of New South Wales. The defendant operated an underground coal mine at the Elouera Colliery at the time of the offence. Coal is mined then stored in bins or stockpiles in a defined coal stockpile area before it is transported from the site by rail. In the stockpile area at the site is a rill tower coal stockpile and adjacent to that are secondary coal stockpiles which are formed by moving coal from the rill tower stockpile by a front-end loader and trucks to the secondary stockpiles. A noise attenuation wall runs parallel to the coal stockpile area between that area and residential premises at Wongawilli village. There is and was at the relevant time, a computerised automatic dust suppression system to control dust in the coal stockpile area. The spray system has thirteen sprays located around the perimeter of the stockpile area. Under usual operating conditions, the spray system operates according to an algorithm that uses data from a weather station on site to determine when the sprays should be activated. The sprays can also be activated by a manual phone dial-in system. At the time of the offence, South Coast Equipment Pty Limited ("South Coast Equipment") had a contract with the defendant in relation to the day to day operation of the coal stockpile. Auspower EDM Pty Limited ("Auspower") had a contract with the defendant for the maintenance of the computerised element of the dust suppression system. There is also a water cart that can be used to supplement the computerised dust suppression system. 4 Condition 03.3 of the relevant licence relates to dust control and it states: "The water spray system in the stockpile area must be operated to maintain an effective dampening of the stockpile surface to prevent the emission of wind blown [sic] dust". 5 At about 7.30am on Monday 10 December 2001, Mr Frank Thompson, an employee of South Coast Equipment, who is a supervisor at the site, noticed the computerised dust suppression sprays were not working and rang the phone dial-in system to initiate the sprays. This failed to activate the sprays. He then rang both the defendant and Auspower to report the problem. The water cart was also then put into use to wet down the coal stockpiles at the site. Throughout the day, the coal stockpiles at the site were continually worked by trucks and a front end loader. Mr Thompson's daily report for the day indicates that the dust suppression sprays did not work at all that day. The use of the water cart, it seems, was not particularly effective due to strong winds and hot weather. 6 At about 1.00 pm on 10 December 2001, Mr Kevin Cass, a local resident at Wongawilli, walked to the site. From about 100 metres from the north-western end of the noise attenuation wall at the site, Mr Cass saw heavy coal dust emissions rising above the noise attenuation wall. Mr Cass then proceeded to the north-western end of the noise attenuation wall where he saw the rill tower stockpile and the secondary stockpile and saw coal dust blowing from them. The stockpiles were being worked by articulated dump trucks and a front-end loader. 7 At approximately 4.25 pm that afternoon, Mr Cass returned to the coal stockpile with officers of the prosecutor, Dr Bruce Blunden and Mr Nicholas Kuster. Dr Blunden states that the weather at the time was hot and sunny, the wind strong and gusting up to fifteen metres per second. The rill tower and secondary coal stockpiles appeared to be dry and all three gentlemen saw dust blowing off the rill tower stockpile in a generally north-easterly direction. Dr Blunden saw dust being blown from the main secondary stockpile. He states that he saw dust emitted from the coal stockpiles blown into the air to an elevation of about twenty to thirty metres above the surface of the stockpile working area. 8 I turn now to the cause of the failure of the computerised dust suppression sprays. As part of a planned maintenance shutdown at approximately 9.00 am on Friday 7 December 2001, Auspower isolated the dust suppression sprays to rectify low pressure in the suction line to those sprays. The low pressure was caused by air in the system. The repair work involved draining the dust suppression spray system. Once the work was completed, a jacking pump was used to refill the spray system with water from a nearby dam. At approximately 2.00 pm on 7 December 2001, Auspower transferred the alarms associated with the automatic dust suppression system to a new security monitoring provider. The system was put back into service at approximately 5.30 pm that day with the pressure in the system still low. 9 On Tuesday 11 December 2001, that is the day following the offence, Auspower found the suction line priming pressure of the dust suppression system low. Further investigation revealed a valve in the system was blocked by vegetation that had passed from the dam into the jacking pump suction line. The vegetation was cleared and the system put back into service. On 12 December, Auspower returned to the site and found that the water pressure in the dust suppression spray system was still low. Investigation revealed the same valve was blocked with vegetation that passed into the system from the dam. The vegetation was again removed and the water pressure was restored in the system. 10 On 12 December 2001, the new security monitoring provider, Chubb, instructed Auspower how to re-boot the computerised dust suppression system to re-activate the remote dial-in function for the computerised dust suppression sprays. The defendant installed a strainer on the jacking pump, and alarms for low suction pressure. The defendant reviewed its procedures and considered steps such as advanced early warning systems. The defendant voluntarily agreed to develop a surface dust action plan to improve the effectiveness of dust suppression strategies at the Elouera stockpiles. The requirement to develop and implement the surface dust action plan was attached to the defendant's licence on 28 May 2002. 11 The defendant has fully cooperated with the prosecutor. As noted at 7.30 am on Monday 10 December 2001, Mr F Thompson, an employee of the defendant's agent, South Coast Equipment, telephoned the defendant and advised that the dust suppression spray was not working. On 11 January 2002, the defendant provided an incident report as requested by the prosecutor. 12 On 13 February 2002, the prosecutor served a notice under s 193 of the Protection of the Environment Operations Act for information and records in respect of the incident. On 28 February 2002, the defendant supplied that information. 13 The defendant has had a number of convictions for environmental offences in the past. Of particular relevance is a conviction on 19 April 2000 when it pleaded guilty to breach of a licence condition, namely, an offence similar to the present one relating to dust at the Elouera Colliery. On that occasion the defendant was fined $14,000. I note, however, that when that fine was imposed, the maximum penalty was $125,000. 14 In considering the question of penalty, the Court is required to take into consideration the matters set out in s 241 of the Protection of the Environment Operations Act. In considering these matters, it has been conceded by the prosecutor that there was neither actual environmental harm nor the likelihood of environmental harm. What occurred was a dust nuisance. True it is that the dust nuisance was one which affected nearby residents including, in particular, the residence of Mr Cass. However, there was, it seems, no harm or potential harm to health. Section 241(1)(a) requires the Court to consider the extent of the harm caused and having regard to the extent of the harm, this offence must be regarded as being at the lower end of the scale. 15 Section 241(1)(b) requires the Court to consider the practical measures that may be taken to prevent, control, abate or mitigate the harm. The fact that there were practical measures that could be taken is apparent from the measures that have since been taken, namely the installation of a strainer on the suction pipe from the dam which supplies water to the sprays and the installation of an automatic alarm. 16 Section 241(1)(c) requires the Court to consider the extent to which the person who committed the offence could reasonably have foreseen the harm. In the present case, as previously noted, there was no harm other than the fact that there was a dust nuisance. It seems to me that the fact that vegetation could be sucked into the pump suction line from the dam was foreseeable and was preventable by the installation of a strainer. 17 Section 241(1)(d) requires the Court to consider the extent to which the person who committed the offence had control over the causes that gave rise to the offence. In the present case the defendant had complete control over the causes that gave rise to the events and this was recognised by it when the prosecution for the previous offence was before the Court. I should say that it appears that following the previous offence, which occurred on 13 October 1998, the defendant installed what were thought to be failsafe measures. In the event the failsafe measures were not failsafe, due to the absence of a strainer on the pump suction line from the dam. I note that s 241(1)(e) is not relevant. 18 Section 22 of the Crimes (Sentencing Procedure) Act 1999 requires the Court to take into account the fact that an early plea of guilty was entered. In the present case the defendant entered a plea of guilty at an early opportunity. As explained in R v Thompson (2000) 49 NSWLR 383 at 419, the primary consideration in determining the discount on penalty for a plea of guilty is the timing of the plea. I am thus prepared to allow a full discount of 25 per cent on the penalty that would otherwise apply on that account. 19 It is submitted on behalf of the defendant that in view of the measures it has now taken, it is unlikely that there will be a recurrence of this kind of offence in the future; that what had occurred was a mechanical failure; and that the Court can therefore take that into account, which I do. It is also pointed out on behalf of the defendant, that the defendant has wide and extensive industrial interests. It employs a very large workforce and is responsible for a large number of industrial undertakings including colliery holdings. I am asked to take into account the nature and size of the operations of the defendant; and to recognise the fact that although this company has been convicted on a number of previous occasions for various offences and on one occasion for an infringement of this particular section, nevertheless in view of its wide and extensive operations, its record must be seen as being one which is a responsible one. In my opinion, having regard, in particular, to the previous breach of licence condition as recently as 1998, the penalty called for is in the vicinity of $40,000 which I discount by 25 per cent to $30,000. 20 Accordingly, the orders of the Court are as follows: 1. The defendant is convicted of the offence as charged. 2. The defendant must pay a penalty of $30,000. 3. The defendant must pay the prosecutor's costs in accordance with section 52(2) of the Land and Environment Court Act. 4. The exhibits may be returned. **********

Environment Protection Authority v BHP Steel

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