Environment Protection Authority v Boral Resources

Land and Environment Court (NSW)|2002-12-11|Before: Pearlman J

Introduction 1 The defendant, Boral Resources (NSW) Pty Ltd, has pleaded guilty to a charge that, on or about 24 May 2001, it committed an offence against s 120(2) of the Protection of the Environment Operations Act 1997 ("the POEO Act"). 2 The plea of guilty carries with it an admission of the essential elements of the offence (R v O'Neill (1979) 2 NSWLR 582) and hence the Court is concerned only with the imposition of a penalty. 3 I have noted that the summons, as filed by the prosecutor, states the charge as being an offence against s 120(2) of the POEO Act. That is not a correct description of the offence. Rather, it is properly described as an offence against s 120(1) which stipulates that a person who pollutes any waters is guilty of an offence. Section 120(2) provides that "pollute waters" includes cause or permit any waters to be polluted. The defendant's plea of guilty has been accepted by the Court, and no point about the description of the offence was taken on behalf of the defendant. Had an application been made for leave to amend the summons to show the correct description, it would undoubtedly have been granted in the circumstances. Accordingly, I proceed on the basis that the offence with which the defendant is charged and for which a plea of guilty has been entered is that described in s 120(1). 4 The parties have assisted the Court by preparing an agreed statement of facts from which most of the factual findings in this judgment have been derived, but the parties were not agreed on all of the material facts, and hence affidavits were read and some of the deponents were cross-examined.

The incident 7 On 24 May 2001, in response to a telephone complaint, Mr S M Durrington, an officer of the prosecutor, went to the vicinity of the site and approached the Alexandra Canal upstream of the site. He observed a clear liquid discharging from the stormwater outlet through a horizontal culvert above the level of the Alexandra Canal. The liquid was flowing down a concrete retaining wall and entering the Alexandra Canal. He then went to the site, and observed water flowing into the stormwater pit. 8 It is not in dispute that the water discharging into the Alexandra Canal was wastewater discharging from the washout pits on the site, nor was it in dispute as to how that had occurred. At the time the wastewater was discharging, there was a deposit of concrete material at the eastern edge of the dish drain at the point at which wastewater from the washout pits would normally turn and flow via the channel into the stirrer pits. This deposit of material prevented the wastewater from flowing east towards the channel and thence to the stirrer pits. Instead it diverted the wastewater and forced it to flow in the opposite direction, that is, from east to west. However, at the western edge of the dish drain there was another deposit of concrete material. This had the effect of redirecting the wastewater over the ramp and back again in a west to east direction, but this time, not in the dish drain, but over the site and towards the stormwater pit.

Poor housekeeping or industrial sabotage? 9 An issue in this case is how the concrete material deposited at the eastern end of the dish drain came to be there. It is an issue because it was that deposit that caused the diversion of the normal flow of wastewater. There was, as I have said, another deposit of concrete material at the western end of the dish drain, but it was not the direct cause of the diversion. The prosecutor alleges that the concrete material at the eastern end was the direct result of 'poor housekeeping' by the defendant, which was manifested by an accumulation of concrete in the dish drain. The defendant, on the other hand, alleges that the concrete was placed there as a direct result of industrial sabotage. 10 The evidence called in aid by the prosecutor to establish 'poor housekeeping' was as follows: i. Video footage taken by Mr Durrington on his visit to the site on 24 May 2001 and on the next day, 25 May 2001, said by the prosecutor to disclose a build up of concrete material surrounding the washout pits - in the dish drain, and in and between the washout pits. But the video is unclear - that part of it filmed on 24 May 2001 was taken in the early evening, and it is difficult to discern any clear indication of the state of the site. ii. Mr Durrington's oral evidence, where he said that "… there was a build up of sediment or concrete waste in a number of areas throughout the plant which I found unusual". Later in his evidence, Mr Durrington explained his reference to "unusual" - he said that, in the course of his duties, he had visited other concrete batching plants and was familiar with the state in which washout pits and their surrounding area needed to be kept. He also said that, on 25 May 2001, he had observed a clean-up operation taking place but it is not clear from Mr Durrington's evidence whether this was a normal operation or instead was designed to clean up an "unusual" build up of concrete waste. iii. It was an agreed fact that maintenance personnel in the employ of the defendant had left the site at about 3 pm on 24 May 2001, yet the plant was in operation for 24 hours. iv. Mr I Kolic, an employee of the defendant whose general duties included maintenance of the washout pits on a daily basis, was interviewed for the purpose of the prosecution, and the record of interview was tendered in evidence. In that interview, Mr Kolic said that he had observed "a couple of times" wastewater discharging into the stormwater pit as a result of the drain being blocked by concrete. However, Mr Kolic's responses to other questions during the interview are inconsistent with this statement, and generally his responses are not reliable. 11 Ms Mahony, appearing for the prosecutor, submitted that all this evidence amounted to proof of 'poor housekeeping' on the part of the defendant. However, the evidence is scant. The video was unclear, and neither Mr Durrington's observations, nor the clean up operation, nor the absence of maintenance personnel, nor Mr Kolic's evidence, provide a basis from which to draw a clear inference that the material deposited in the eastern end of the dish drain was a consequence of 'poor housekeeping'. Facts that are adverse to the interests of the defendant may not be taken into account unless they are established beyond reasonable doubt (R v Olbrich (1999) 199 CLR 270 at 281). I cannot be satisfied beyond reasonable doubt that the concrete material deposited at the eastern end of the dish drain came to be there as a result of the 'poor housekeeping' of the defendant. 12 As I have said, the defendant claims industrial sabotage. The standard of proof required to establish this claim is different. If the Court is to take into account facts in favour of the defendant, then it is enough if those facts are proved on the balance of probabilities (R v Olbrich at 281). The defendant points to the following matters: i. Mr Farah's evidence was that, over approximately ten days preceding 24 May 2001, there had been "discontent" among the truck drivers relating to a claim for recompense from the defendant for items stolen and damage caused to trucks, and relating to a claim of insufficient provision by the defendant of catalytic converters for fitting to the trucks so that they could be allocated work on the M5 East project. On 17 May 2001, there had been a strike of truck drivers at the site. On 23 May 2001, the solicitors for the defendant wrote to each truck driver claiming that the strike was a breach of the respective cartage contracts and threatening actions for damages. In Mr Farah's estimation, that letter would have been received by each truck driver at the site about 23 or 24 May 2001; ii. It was an agreed fact that a truck driver (whose name was not revealed and who was not called) had made a telephone complaint to the prosecutor on 7 May 2001 in relation to discharge from the site, and that the same truck driver had made the telephone complaint on 24 May 2001 which led to the present proceedings; iii. The contact with the prosecutor on those two occasions had been made without any prior report by the truck driver to the management of the defendant as was required by formal operating procedures in place; iv. Expert evidence was given by Mr G A McLellan, an environmental consultant, who, subsequent to the incident, endeavoured to replicate on site the conditions in which the incident had occurred. His conclusion was that the concrete material could have been placed in the eastern end of the dish drain only by one or other of two abnormal actions, namely, the placing of the truck off centre so that the concrete waste was deposited in the dish drain, or the addition of an extension to the chute of the barrel of a truck to a position over the dish drain enabling the concrete waste to be so deposited. 13 I am satisfied on the balance of probabilities that the concrete material deposited in the eastern end of the dish drain was a direct result of that deliberate act. However, I do not think that this finding has any direct relevance to the culpability of the defendant. Whilst the deliberate act was the cause of the diversion of the wastewater, the defendant's culpability lies in its management of the site. The fact is that there were no maintenance personnel on the site and available to check the operations on the site. The site was unattended by such personnel after 3 pm, yet the operations on the site continued for the whole of the night. There was no person available to observe the diversion of the wastewater and to take appropriate action to prevent its discharge into the stormwater pit.

Statutory considerations 14 Section 241 of the POEO Act prescribes matters which, so far as they are of relevance, must be considered in imposing a penalty for the offence. I deal with each in turn. 15 (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence The prosecutor submitted that there are two ways in which harm was caused to the environment or was likely to be caused by the commission of the offence. The first is the impact of the pH value of the wastewater that was discharged, and the second is the impact from concrete sediments that were likely to be contained in that wastewater. 16 Dealing first with the pH value, samples of the discharge were taken. The pH of the water discharging from the stormwater outlet into the Alexandra Canal was 12.3. The water in the channel leading to the stormwater pit also had a pH of 12.3, and the water channel adjacent to the washout pits had a pH of 12.1. A sample of the water in the Alexandra Canal in the vicinity of the stormwater outlet showed a pH of 8.5. 17 The term "water pollution" is defined in the Dictionary to the POEO Act to include, in par (c), placing in waters any matter that is of a prescribed nature, description or class. Clause 52 of the Protection of the Environment Operations (General) Regulation 1998 provides that the matter described in sch 3 is prescribed for the purposes of par (c). Item 17 on the list of matters described in sch 3 is "[a]ny matter that has a pH value of less than 6.5 or more than 8.5". 18 It is agreed that approximately 600 litres of water discharged into the Alexandra Canal between 4 pm and 6:30 pm on the day of the incident. The prosecutor submitted that, as it is agreed that the discharge continued until 8:30 pm, it is likely that the total discharge from the site was closer to 1000 litres. 19 Evidence as to the harm or likely harm caused by the discharge was given by Mr M J Root, an environmental scientist employed by the prosecutor. His opinion was that the pH of the wastewater discharged into the Alexandra Canal was high, and had the potential to adversely affect the aquatic communities in it. However, it was unlikely that there was actual harm from the pH levels because, as demonstrated by the pH value of 8.5 in waters near the stormwater outlet, the tidal water in the Alexandra Canal was likely to have been sufficient to dilute and mitigate the effect of the high pH wastewater. 20 As to the impact from concrete sediments likely to be contained in the wastewater discharge, it is an agreed fact that, on the day after the incident, a plume of sediment estimated at around 10 metres long and extending around 5 metres across the Alexandra Canal was visible from its shore. 21 On 7 June 2001, nine core samples of the sediment on the floor of the Alexandra Canal were taken from locations adjacent to the stormwater outlet and upstream and downstream of the site. All were analysed and reported on by Dr J A Cattle, a soil chemist employed by the prosecutor. All samples contained elements which are major constituents of cement. However, Dr Cattle concluded that only one of the samples (taken from a location adjacent to the stormwater outlet) had similar characteristics to the sample of solid material from the discharge point into the Alexandra Canal, and she said that this suggested a common origin. Three other samples which she analysed had similar characteristics, but to a lesser degree. The remainder did not have similar characteristics. 22 The other piece of relevant evidence was a report prepared for the defendant by Johnstone Environmental Technology Pty Ltd. The opinion expressed in that report was that a white deposit of material on the floor of the Alexandra Canal was likely to be cement, but it had built up over a period of time and was not the product of one event, but rather of long term accretion. 23 Given that a plume of sediment had been observed on the day following the incident, and having regard to the evidence I have outlined, I find that sediments likely to contain cement material were contained in the wastewater that discharged from the site. 24 Mr Root's opinion was that, during the period that the sediment plume was present in the water in the Alexandra Canal, the sediment contained in the wastewater discharge was likely to have smothered any small sessile or sedentary macroinvertebrates that were living in the area directly affected by the plume, and there was a possibility that it rendered that area unsuitable for re-colonisation by aquatic species until it was dissipated by the tides, currents or other actions. However, there is some doubt that any aquatic species existed in the Alexandra Canal at the time of the discharge. Mr Root thought there were, although characterised by low diversity and being hardy, pollution tolerant or transient species. On the other hand, Mr W S Rooney, whose area of expertise is aquatic ecology and water quality, was of the opinion that little if any benthic macroinvertebrate life was present in the sediments in the Alexandra Canal, and virtually nothing would live in the sediment deposits adjacent to the stormwater outlet. He thought that, if there were any fish present at the time of the incident, they could have avoided the plume, and, furthermore, the chemical reaction of the slurry with seawater would render it benign almost immediately. 25 From all this evidence, I find that no actual harm to the environment was caused by the commission of the offence, and that, although there was a likelihood of harm, it was, in all the circumstances of the incident and its impact, of a minor degree. 26 (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm As set out in par 13, I have found, on the balance of probabilities, that the deposit of concrete material in the eastern end of the dish drain was a deliberate act and not a consequence of 'poor housekeeping'. Nevertheless, it is significant that the discharge commenced at a time after 3pm when the defendant's maintenance personnel had left the site. Mr Farah stated, in the incident report prepared by him on 22 June 2001, that he believed the yardman to have "… left the wash out pit system in such a state that it would have adequately coped with the activities of the night shift". Despite the comfort the defendant derived from this belief, the fact is that there was no employee available to monitor the operations on the site to ensure there was no risk of harm to the environment. The practical measure which the defendant could have taken was to ensure that such an employee was on site and available during the 24 hour operation of the plant to monitor and supervise the operation of the plant. Such monitoring and supervision would have been likely to have prevented the discharge of the wastewater. Whilst there is no evidence to establish that such a procedure could have prevented the deposit of concrete in the eastern end of the dish drain, I am prepared to accept that a yardman or supervisor could have acted to control the damming of the wastewater in the dish drain and to avoid or mitigate its discharge into the stormwater pit. 27 (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 The prosecutor relied upon three matters to establish that the defendant could reasonably have foreseen the harm caused or likely to be caused to the environment by the discharge of wastewater with a high pH level and containing concrete sediment. They were as follows: i. The potential for harm was identified by the defendant in several of its "plant daily reports". For example, in the report for 5 March 2001, the defendant stated that "[d]esign of washout pit. Amount of slurry build up may lead to a environmental problem" and in the report of 6 March 2001, it stated "[p]it design. Washout pits leading to overflow stormwater"; ii. Tendered in evidence was a copy of a document created by the defendant in January or February 2001 entitled "Summary of Environmental Issues for Metro Sydney up to 2005". Under the heading "water", and in respect of the site (as distinct from other properties of the defendant referred to in the document) it stated: Issue - *Severe ponding near storm water outlet. High risk of discharge to Alexandria Canal. (R) Solution - *Rectify levels and modify recycle water system Est. Costs - *$50K - budgeted 01/02 The legend to the document stated: "Red - High risk requiring immediate attention". I infer that (R) refers to "Red". iii. As I have already mentioned in par 10(iv), Mr Kolic had observed wastewater flowing into the stormwater pit "a couple of times". 28 I am prepared to accept the matters set out in par 27(i) and (ii) as establishing that the defendant had foreseen that water was likely to discharge to the Alexandra Canal, and that it would have an environment consequence. 29 (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence Despite my finding that the concrete material in the eastern end of the dish drain was placed there by deliberate act, I find that the defendant had full control of how the plant was operated and managed on the site. It was within its control to monitor and supervise the operation of the washout pits, and it did not do so at the relevant time.

Prior offences 30 I take into account that the defendant has been convicted of previous environmental offences. They are: i. 13 December 1978 - breach of s 16 of the Clean Waters Act 1970. Fined $750; ii. 2 May 1986 - breach of the Clean Air Act 1961. Fined $750; iii. 18 May 1990 - breach of s 16(1) of the Clean Waters Act. Fined $20,000. (State Pollution Control Commission v Boral Resources (NSW) Pty Ltd Stein J, NSWLEC, 18 May 1990, unreported); iv. 23 May 1991 - breach of s 16(1) of the Clean Waters Act and s 17D(a) of the State Pollution Control Commission Act 1970. Fined total of $30,000 for both offences. (State Pollution Control Commission v Boral Resources (NSW) Pty Ltd (No 2) Hemmings J, NSWLEC, 23 May 1991, unreported). 31 I accept that none of these offences took place on the site in question in these proceedings, but I note from the judgments delivered in the matters numbered (iii) and (iv) above that the offences there recorded were committed by the defendant in one of its other concrete batching plants. However, having regard to this history, I take into account that the offence with which the defendant has now been charged cannot be regarded as an uncharacteristic aberration (Veen v The Queen (No 2) (1988) 164 CLR 465 at 477).

Matters in mitigation 32 There are two matters which I take into account in mitigation of the penalty to be imposed. The first is the modifications to the wastewater recycling system made by the defendant since the incident. In his affidavit, Mr L de Carvalho, who is the operations manager for the defendant, provided detail as to those modifications, which he said, in giving oral evidence, have cost the defendant about $300,000. They have been carried out in various parts of the site, not all of them in the area where the wastewater discharged on 24 May 2001, although I note that adjacent to that area a new 65000 litre first flush pit has been installed and the stormwater pit has been relocated. I accept Mr de Carvalho's evidence that all the modifications have been designed to ensure that wastewater is properly recycled, to permit easier and more frequent cleaning, and generally to remove any risk of wastewater entering the stormwater drains even in circumstances of blockage by concrete waste. 33 The second matter is the defendant's plea of guilty, which was entered on the first return date, the earliest possible time for that to have been done. Taking this into account in accordance with s 22 of the Crimes (Sentencing Procedure) Act 1999 and R v Thomson (2000) 49 NSWLR 383, I hold that the defendant is entitled to a discount in penalty of 25%.

Penalty 34 The maximum penalty for the offence is $250,000. Having regard to the circumstances in which the offence occurred and the matters taken into account pursuant to s 241 of the POEO Act, I consider that the offence warrants a penalty of $30,000 or 12 % of the maximum. I am prepared, however, to discount that penalty to $20,000 by reason of the matters in mitigation which I have set out.

Orders 35 I make the following orders: i. The defendant is convicted of the offence with which it is charged. ii. The defendant is fined the sum of $20,000 to be paid to the Registrar of the Court within one month of the date of this judgment. iii. The defendant must pay the costs of the prosecutor, as determined in accordance with the Land and Environment Court Act 1979. iv. The exhibits may be returned.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Environment Protection Authority v Boral Resources (NSW) Pty Ltd [2002] NSWLEC 232 PROSECUTOR Environment Protection Authority PARTIES : DEFENDANT Boral Resources (NSW) Pty Ltd FILE NUMBER(S) : 50048 of 2002 CORAM: Pearlman J KEY ISSUES: Environmental Offences :- pollution of waters - concrete batching plant - plea of guilty - penalty - dispute as to cause of offence - poor housekeeping or industrial sabotage Crimes (Sentencing Procedure) Act 1999 s 22 LEGISLATION CITED: Protection of the Environment Operations Act 1997 s 120, s 241 Protection of the Environment Operations (General) Regulation 1998 cl 52 R v O'Neill (1979) 2 NSWLR 582; CASES CITED: R v Olbrich (1999) 199 CLR 270; R v Thomson (2000) 49 NSWLR 383; Veen v The Queen (No 2) (1988) 164 CLR 465 DATES OF HEARING: 28/10/2002; 31/10/2002 DATE OF JUDGMENT: 12/11/2002

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