Environment Protection Authority v Boral Resources

PARTIES : DEFENDANT: Boral Resources (QLD) Pty Limited ACN 009 671 809 FILE NUMBER(S) : 50018 of 2000 CORAM: Lloyd J KEY ISSUES: Environmental Offences :- deemed pollution - penalty Clean Waters Act 1970 s 16(1) LEGISLATION CITED: Crimes (Sentencing Procedures) Act 1999 s 22 Environmental Offences and Penalties Act 1989 s 9 Protection of the Environment Operations Act 1997 s 241 Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683; Environment Protection Authority v Action Sands Pty Limited [1999] NSWLEC 298; CASES CITED: Environment Protection Authority v BHP Steel (JLA) Pty Limited [1999] NSWLEC 150; Environment Protection Authority v George Weston Foods Limited, Lloyd J, NSWLEC, 9 April 1998, unreported; Environment Protection Authority v New Generation Beverages Pty Limited [2000] NSWLEC 230; R v Thomson (2000) 49 NSWLR 383 DATES OF HEARING: 31/10/00 and 01/11/00 DATE OF JUDGMENT: 03/28/2001

Environment Protection Authority Prosecutor v Boral Resources (QLD) Pty Limited ACN 009 671 809 Defendant REASONS FOR JUDGMENT Introduction

The defendant, Boral Resources (QLD) Pty Limited ("Boral"), has pleaded guilty to an offence against the Environmental Offences and Penalties Act 1989 in that it polluted waters with liquid wastes with a pH of 10.8, contrary to section 16(1) of the Clean Waters Act 1970. This matter came before the Court on the question of an appropriate penalty pursuant to the Environmental Offences and Penalties Act. The subsequent repeal of that Act does not affect an offence committed against the Act whilst it was in force: section 30(1), Interpretation Act 1987. Summary of Facts
Boral operated a concrete batching plant ("the plant") on the Pacific Highway at Tweed Heads South. At the time of the offence, this plant was licensed under the Pollution Control Act 1970. On the morning of Monday, 24 May 1999, an officer of the Environment Protection Authority ("the EPA"), Mr Steve Small, was driving past the plant when he observed a discharge of liquid to the road gutter immediately outside the plant. He stopped and took photographs and samples. He then entered the plant premises and spoke with Mr Stefanovich, an employee of Boral who was in charge of the plant on 24 May 1999.
Mr Small and Mr Stefanovich conducted an inspection of the plant together and Mr Small then placed a dye in the wastewater close to the water exit point in the north-eastern wall of the plant, where the water entered a grate-covered drain. Mr Small and Mr Stefanovich then observed wastewater containing the dye was discharging into the road gutter which in turn runs into an open drain. That drain runs for approximately 400 m into a tidal inlet that leads to Shallow Bay and the Tweed River. The first 100 m of the gutter and drain is unobstructed; thereafter the drain is covered with undergrowth. There is no evidence of the occurrence of any actual environmental harm to the waters of either Shallow Bay or the Tweed River.
The last batch of concrete that had been made at the plant prior to the incident was made on Saturday 22 May 1999. Daily rainfall data for a Bureau of Meteorology site located at the Tweed Heads Golf Course, approximately 2 kilometres from the plant, shows that 17.4 mm of rain fell to 9 am on Saturday 22 May 1999, no rain fell to 9 am on Sunday 23 May 1999, and 14.0 mm of rain fell to 9 am on Monday 24 May 1999. Statutory Considerations
Section 16(1) of the Clean Waters Act 1970 states: A person shall not pollute any waters.
Section 17 of the Clean Waters Act provides for licences to be issued to regulate the discharge of pollutants. Although the offence was committed under the now repealed Environmental Offences and Penalties Act, by virtue of Schedule 5 of the Protection of the Environment Operations Act, and clause 7(1) of the Protection of the Environment Operations (Savings and Transitional) Regulation 1998, the considerations which are to be borne in mind imposing a penalty are those which appear under section 241 of the Protection of the Environment Operations Act (see Environment Protection Authority v Norco Co-Operative Limited [2000] NSWLEC 35). These are as follows: (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the extent of the harm caused or likely to be cause to the environment by the commission of the offence; (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm; (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence; (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence; and (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. (2) The court may take into consideration other matters it considers relevant The Submissions of the Prosecutor
Mr C McElwain, appearing for the EPA, submitted that maximum penalty of $125,000 for such an offence is, in itself, an indication of the gravity of an offence which breaches s 16 of the Clean Waters Act. He relies upon the judgment of Kirby P in Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683, at 698: While it is the function of the Court itself to assess the seriousness of the offence in question, the maximum penalty available for an offence reflects the "public expression" by parliament about the seriousness of the offence: R v H (1980) 3 A Crim R 53 at 65. Here, the maximum penalty is $125,000. Such a large penalty indicates the gravity of the offence as perceived by the community: see also the comments of the Hon T J Moore in New South Wales Parliamentary Debates (Legislative Assembly), 20 November 1990, 10037 at 10038.
Mr McElwain submitted that the penalty should be made heavier by the admission of the defendant that it had the financial capacity to fund the installation of a second flush pit and a water-holding tank at the plant, but, given the marginal profitability of the business operating from the its premises at the time, the additional funding could not be provided. He argues that such commercial "prioritising" is unacceptable, and accordingly the fine should be enough to make worthwhile the costs of preventative measures.
Mr McElwain referred to the history of the concrete batching plant's environmental performance. The EPA warned Boral by letter of 6 September 1994, about the discharge of pollutants from the plant. On 18 November 1997, Boral had been issued with an on-the-spot fine for the pollution of waters with wastewaters with a pH of 10 in circumstances similar to those of this offence.
The licensed nature of the operations was emphasised by Mr McElwain. He referred to the element of "public trust" that accompanies a pollution control licence. Mr McElwain referred to a letter that Boral had written to the EPA outlining proposed measures to control run-off, including a second flush pit and water holding tank, and he submitted that Boral's decision not to install such equipment was based purely on commercial considerations. The existence of such equipment, had it been in place, would have prevented the commission of this offence.
Mr McElwain pointed to the actions of Boral's employees on the date of the offence. He noted that the discharge was clearly visible from outside the plant and the pool of wastewater on the premises was clearly visible to any person arriving at the premises. The fact that the employees only took action to prevent or mitigate the discharge after the EPA officer had drawn it to their attention indicates that measures taken were inadequate. Boral's action, through its employees, showed scant regard for the importance of preventing and minimising pollution.
Mr McElwain drew the Court's attention to the fact that there was a guilty plea by Boral but there has been no other expression of contrition. He compared this attitude with the fact that there was a previous fine and this offence was very much foreseeable.
Mr McElwain submitted that the offence was clearly foreseeable and the control of the defendant was complete. He noted that a plea of guilty was entered at an early stage, at the third call-over, although not the earliest possible time, which would have been the first call-over. The defendant also agreed to a statement of facts. Mr McElwain submitted that an appropriate penalty would be a monetary fine, greater than a nominal amount. The Submissions of the Defendant
Mr A L Hill, appearing for Boral, submitted that the potential measures that could have been implemented and, according to the EPA would have prevented the offence, would not have been sufficient to hold rainfall within the site on 29 out of the 70 days of recorded rainfall which was in evidence. Mr Hill submitted that a second flush pit and holding tank would have been ineffective in the longer term. He argued that the problem needed to be dealt with at its source because creating a flush pit and holding tank of greater volume is no real solution in such a high rainfall area.
Mr Hill argued that the EPA's own literature indicates that a first flush pit would be sufficient to prevent such an incident, and hence it is in a kind of "contributory" position because it had not sufficiently warned the defendant that a second flush pit would be required.
Mr Hill placed emphasis on the subsequent closure of the plant. He submitted that such a drastic action by Boral is ample evidence of contrition, showing the ultimate intent to prevent further offences. Mr Hill's submission is that the closing of the plant has been a penalty in itself, with ongoing disadvantages to Boral. He sought to distinguish the facts of this case as unique in comparison with other cases on the basis that this offence has led to a shutdown of the premises, unlike the other cases. For this reason, Mr Hill argued that the penalty should be a nominal amount. Conclusions
I return to the relevant consideration in imposing a penalty (noted in paragraph 6 above). (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence. There is no evidence of actual harm to the environment. If water with an elevated pH had reached either Shallow Bay or the Tweed River, there was potential for environmental harm, although the large volume of water there would have quickly resulted in the dilution of the pH level. (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm; and (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused, or likely to be caused to the environment by the commission of the offence. There is no doubt on the evidence that practical measures could have been taken in this case. The possibility of the escape of surface water from the plant with an elevated pH level was foreseen. The defendant chose to meet the danger by installing a mechanical exhaust system to exhaust cement dust at the plant itself, thereby reducing the dispersion of cement dust on the ground and hence into the storm water system. This is what Mr Hill described as dealing with the problem at its source. This could not, of course, remove cement and cement dust from tracks. Although there was a wash-down area for trucks, the presence of wastewater and the possibility of its discharge in the event of rain was recognised and was preventable. (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence. The defendant owned and operated the plant and had complete control over the factors which caused the offence. (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. This consideration is not relevant.
The Court is required to take into consideration that the defendant has pleaded guilty (section 22, Crimes (Sentencing Procedures) Act 1999). In accordance with the principles explained in R v Thompson (2000) 49 NSWLR 383, I take this fact into account and I accept it as evidence of the defendant's contrition. The plea was not entered, however, at the earliest opportunity, being entered on the third occasion that the matter was before the Court. I do not regard utilitarian value of the plea as being high: the polluted water was seen flowing from the premises into the gutter and then into the drain. I am nevertheless prepared to discount by about 20 % the penalty that would otherwise be imposed having regard to both the plea of guilty and the somewhat slight utilitarian value of the plea.
In fixing the penalty I do not attach much weight to the fact of the subsequent closure of the plant. The evidence suggests that the plant was of marginal profitability in any event and this was one of the principal reasons for the decision to close it down. I bear in mind that a penalty must also act as a general deterrent. I also bear in mind the principle of even-handedness. It seems to me that in a case such as this, where no environmental harm is demonstrated, a penalty of $6,500 discounted by about 20 % for the reasons that I have indicated to a round figure of $5,000 is appropriate. This penalty is consistent with other cases of a similar nature where there was little or no environmental harm (Environment Protection Authority v George Weston Foods Limited, Lloyd J, NSWLEC, 9 April 1998, unreported; Environment Protection Authority v BHP Steel (JLA) Pty Limited [1999] NSWLEC 150; Environment Protection Authority v Action Sands Pty Limited [1999] NSWLEC 298; and Environment Protection Authority v New Generation Beverages Pty Limited [2000] NSWLEC 230). Orders:
I make the following orders: (1) I find the defendant guilty of the offence as charged. (2) The defendant must pay a penalty of $5,000 for the offence. (3) The defendant must pay the prosecutor's costs in accordance with section 52(2) of the Land and Environment Court Act 1979. (4) The exhibits may be returned.

At a glance

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Judgment (6 paragraphs)

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Cases Cited (6)