Environment Protection Authority v BlueScope Steel

Judgment (4 paragraphs)

[1]

Background information in respect of the Steelworks operation 51 The Steelworks is a fully integrated iron and steel making plant, which in the 2002/2003 financial year produced more than five million tonnes of steel. At September 2003 BlueScope directly employed 3,722 people and provided work for approximately 2,100 contractors at the Steelworks and is one of the largest employers in the Illawarra region. 52 Electricity is one of the main energy sources used at the Steelworks. The Steelworks consumes more electric power than the rest of the Illawarra, with power requirements similar to those of a city of approximate population of 300,000. The high voltage system is monitored twenty-four hours a day, seven days a week and involves 37 full-time employees. Annual expenditure on operations, repairs and maintenance of High Voltage equipment is approximately $6 million. 53 The High Voltage Technicians are employees of BlueScope, being a separate group dedicated to the maintenance of high voltage equipment. The High Voltage Technicians are trained and accredited in high voltage safe work practices by accredited training bodies, such as Integral and Optec. The High Voltage Technicians are also trained and accredited in BlueScope's procedures titled "Isolation for Personal Protection", "Job Safety Management" and the "High Voltage Safety Rules". In addition, BlueScope's High Voltage Technicians work with the manufacturer's engineers when installing new high voltage equipment not previously installed at the Steelworks. 54 The Power Control Officers ("PCOs") are a separate group of qualified electrical engineers who monitor and control the operation of and access to the high voltage transmission and distribution network. PCOs are also trained and accredited. The PCOs manage the access to high voltage equipment for inspections, maintenance and repairs of equipment. 55 Integral Energy audits BlueScope's High Voltage system in areas such as maintenance, operations and equipment. Integral Energy's last audit dated 25 September 2003 concluded that BlueScope had suitable systems and processes in place to manage the maintenance of their high voltage equipment.

56 It must be acknowledged that BlueScope carries on a highly developed industrial process that involves a high level of potential to cause significant environmental harm if it is not operated in a proper and efficient manner. 57 There is no suggestion that the defendant does not take its responsibilities to the environment seriously. The incident which led to the present charge did not involve wanton or reckless behaviour. 58 Mr Jordan made a submission on behalf of the EPA, as prosecutor, that as the holder of a licence under the PEO Act, the defendant has a duty in the nature of a public trust not to cause pollution, otherwise than to the extent authorised by the licence. I have previously expressed reservations about attempting to equate the duty of a licence holder to an obligation arising out of a public trust. I accept that the operator of an industrial undertaking in the nature of that conducted by the defendant has a high responsibility to protect the environment from harm as a consequence of its operations. The legislation recognises the level of this duty by providing that a breach of the Act attracts strict liability. Condition O2.1 of the licence sets an absolute standard that places a strict obligation on the licence holder. The conditions of the licence reflect the nature and extent of the duty imposed upon the licence holder. I would prefer to find the strict obligations of the defendant within the terms of the licence, rather than seeking to extract some abstract principle out of an implied public trust. 59 The Court is satisfied in this instance that CB 6-99 was not maintained in a proper and efficient condition contrary to condition O2.1(a) of the licence. Furthermore, by failing to keep six of the 32 batteries installed in the UPS for Nos. 4, 5 and 6 Coke Ovens Batteries in an efficient condition, the defendant was in breach of condition O2.1(a). It is significant, however, that when the arc flashover occurred and the power supply went down, employees promptly engaged procedures that limited the extent of adverse impact upon the environment. Nevertheless, it must be recognised that there was a large volume of unburnt raw coke ovens gas discharged and that the discharge caused a visual impact and had the potential to cause mild irritation and potentially lethal consequences. It is fortunate that adverse health affects would be unlikely to result as a consequence of the specific incident. Contrition and remorse 60 The Court accepts the evidence that the defendant company takes its obligations to the community and the environment seriously. Significant resources have been committed to measures designed to prevent a re-occurrence. I am satisfied that the defendant strives to meet its environmental responsibilities. Its health, safety, environmental and community policy aspires to achieve zero harm to people and it is committed to the efficient use of resources, reducing and preventing pollution and product stewardship. 61 In a letter to the Court the company's Vice President - Technology and Environment, states that the company is embarrassed by the fact that it is again before the Court and acknowledges that this position is not acceptable. Crimes (Sentencing Procedure) Act 1999 s 21A 62 Although the defendant has a record of previous convictions, this record needs to be understood and appreciated in the context of the operations and the nature of them, as already discussed. The loss or damage caused by the offence was not substantial and the defendant, which generally should be regarded as a person of good character, has shown remorse for the offence. A plea of guilty has been entered and that plea was made at a time which entitles the defendant to a substantial discount on penalty. Account is to be taken of the assistance by the company to the EPA, as already explained. Sentence 63 I take into account all of the above-mentioned facts and circumstances which demonstrate the seriousness of the offence on the one hand and those which mitigate or exculpate the defendant on the other. I find that the offence is not in the most serious category, nor is it trivial or inconsequential. Although the offence was unintended, it was not unforseen and the defendant cannot be discharged from responsibility for any of the blame. 64 The concepts of specific deterrence and general deterrence are taken into account in order to remind the defendant of its obligations and to demonstrate to others that environmental offences are matters that will be taken seriously by the Court. 65 Taken overall and nevertheless recognising the potential consequences, the extent of the actual emissions can, in the context, be regarded as being for a short duration and fortunately there was no actual harm other than visual impacts. 66 The ability of the defendant to take practical measures to avoid or mitigate the consequences must be approached on the basis that the defendant operates a highly technical, complicated and vast industrial undertaking that depends on the proper and efficient functioning of many facets of the plant used in the process of steel making. The incident occurred notwithstanding internal vigilance on the part of the company and its employees and external auditing and monitoring by Integral Energy and even the EPA. The latter recognises that BlueScope understands and accepts its responsibilities to the environment. This is further demonstrated by the level of co-operation afforded to the EPA by the defendant in respect of the investigation and the implementation of remedial measures. 67 I am not prepared to accept the ultimate submission made by Ms Jagot, on behalf of the defendant, that the objective features of the offence place it towards the lower end of the scale of seriousness. Although the subjective features of the defendant's conduct weigh heavily in its favour, nevertheless, the offence itself is serious and the incident was not trivial or insignificant. I regard it as a major incident. However, the procedures in place and the diligence of the company's employee's once the incident occurred prevented the offence from becoming more serious. 68 I find that the defendant breached condition O2.1(a) of its licence and thereby caused a discharge to atmosphere and water. The consequences did not involve any direct environmental harm except by way of a visual impact. 69 After taking into account the seriousness of the offence, the nature of the incident, the consequences, mitigating factors, the early plea of guilty, the remorse of the defendant and the overall circumstances under which the steel making plant operates, together with the record of prior convictions, I have determined that an appropriate penalty is $70,000. Orders 70 The Court makes the following formal orders:-

(6) The steps open to be taken to prevent the occurrence were available as demonstrated by the measures taken since the date of the incident. 30 Specifically, in relation to the matters the Court is required to address, pursuant to s 241 of the PEO Act, Mr Jordan submits as follows:- Section 241(1)(a) 31 Although the extent of harm was limited to a visual impact and adverse health affects were highly unlikely in the circumstances, nevertheless, the environment was degraded. Section 241(1)(b) 32 The measures taken since the incident show that there were practical measures available to the defendant to prevent, control, abate or mitigate the harm that occurred. The existence of UPS 2 in the process of being utilised to allow additional maintenance activities on the UPS involved in the incident is demonstrative of a practical measure that should have been initiated earlier. Section 241(1)(c) 33 The development of UPS 2 clearly shows that the defendant had recognised the need to alter the design to allow additional maintenance activities and, accordingly, it had already foreseen the prospect of failure. Section 241(1)(d) 34 There can be no issue that the defendant had complete control over the causes that gave rise to the offence, particularly having regard to the matters referred to in respect of s 241(1)(b) and s 241(1)(c). Section 241(2) 35 It is not necessary to establish environmental harm to substantiate a charge pursuant to s 64(1) of the PEO Act that any condition of a licence has been contravened. The holder of a licence has a heightened responsibility to carry on its operations within the parameters set by the licence (Environment Protection Authority v ADI Ltd [1999] NSWLEC 14, unreported). There is a significant public interest in prevention of harm to the environment. This interest, of course, is to be balanced, as the licensing system does, against the necessity for business to be carried on in a manageable way. The defendant, BlueScope, carries on an important industry employing a significant number of people and makes a major contribution to the economic welfare of the country. As I said earlier, I am not prepared to employ the phrase "breach of trust" to identify the nature of the defendant's responsibilities. Nevertheless, a contravention of a condition of a licence must be regarded as a serious matter. The defendant's submissions 36 The defendant asks the Court to take the following matters into account in considering the appropriate sentence:- (1) The immediate and largely effective steps taken to mitigate the environmental harm by igniting the manual system and notification to the prosecutor;

At a glance

Court

Decision date

Before

Source

Judgment (4 paragraphs)

Parties

Cases Cited (2)

Cited By (8)