Environment Protection Authority v Bourke Shire Council

Local Court of NSW|2012-06-01

Judgment 1Bourke Shire Council (Council) has pleaded guilty to an offence of transporting waste to a facility that could not be used for that purpose in breach of s 143(1)(a) of the Protection of the Environment Operations Act 1997 (POEO Act). 2The maximum penalty for the offence by a Corporation is $1,000,000: s 143(1) POEO Act. 3Under s 215(2) POEO Act the maximum penalty that may be imposed in the Local Court is $110,000. That amount was an increase from $22,000 and came into effect on 6 February 2012. These proceedings were commenced in the Local Court on 28 November 2011. The Environment Protection Authority (EPA) submits that although there were no transitional or savings provisions in respect of the increase in jurisdiction, the appropriate jurisdictional maximum penalty should be $22,000. I propose to proceed on that basis. 4An agreed statement of facts was tendered to the Court together with written submissions, two affidavits from the General Manager of Bourke Shire Council and numerous authorities.

Summary of agreed facts 5Council owns and operates a landfill known as the Bourke Shire Waste Depot. EPA is the appropriate regulatory authority for the Depot under the POEO Act. The Council does not hold an environment protection licence in relation to the Depot. The Depot is operated under an exception from the need to hold a licence (under cl 39(2)(f) of Schedule 1 of the POEO Act) where it: (vi) receive(s) from off site less than 5,000 tonnes per year of general solid waste (putrescible), general solid waste (non-putrescible), clinical and related waste, asbestos waste, grease trap or waste tyres (or any combination of them), but only if the waste has been generated outside the regulated area. 6This exemption does not permit hazardous waste to be applied to the land at the Depot. A licence is required for that purpose. 7The Council also operates a water treatment plant in Bourke. Council used the chemical sodium fluoride to fluoridate the water. Sodium fluoride is a whitish crystalline solid that is classified as a Class 6 dangerous good under the Australian Code for the Transport of Dangerous Goods by Road and Rail. It is therefore "hazardous waste" under the POEO Act by virtue of that classification. 8At 1 May 2007 Council had between 440kg and 600kg of sodium fluoride stored at the Water Treatment Plant in bags on a pallet in a shipping container. A further 500kg to 1000kg of sodium fluoride was stored at the plant in four plastic HAZMAT drums. The sodium fluoride had been acquired in 2002 for use in a fluoridation plant constructed in 1999 but never commissioned. Council wished to dispose of the sodium fluoride rather than use it in a new plant, which was to be commissioned in the near future. It obtained a quotation from Chemsal (hazardous waste disposal specialists) for $7,485.50 to remove and dispose of the stored sodium fluoride. Chemsal was expected to collect the waste on or about 25 June 2007. It was never collected. 9In September 2010 Council was preparing to commission a new fluoridation system and to have fresh stock of sodium fluoride delivered to the plant. It still needed to dispose of the old stock. By this time the outer woven bags of the sodium fluoride stored on the pallets was deteriorating, although the inner plastic wrap remained intact. Council's Manager Environmental Services, Mr Bernie Wilder, had done some research and determined that the sodium fluoride could be disposed of at the Depot. In part he relied upon Council's copy of the material safety data sheet for sodium fluoride. Although this document correctly identified sodium fluoride as a Class 6 dangerous good, Mr Wilder failed to appreciate that such a classification made sodium fluoride hazardous waste. He passed on his determination to Mr Willoughby (Environmental Services and Development Officer) who in turn told Mr Brown (Manager of Waste and Wastewater) of Mr Wilder's decision. Mr Brown instructed his team leader Mr Stephens to take the sodium fluoride to the Depot for disposal. 10On 11 October 2010, Mr Willoughby telephoned the EPA and left a voicemail message for a Mr Tanswell to confirm that Council could dispose of sodium fluoride at the Depot. He advised Mr Brown he had not heard back from the EPA. A risk assessment sheet of one page was prepared but did not consider any environmental risks associated with this disposal. 11On 12 October 2010, Mr Brown instructed Mr Stephens and a Mr Hopley to wrap the bags of sodium fluoride "like asbestos" because it was a high risk substance, transport it to the Depot and place it at the bottom of the landfill. The sodium fluoride was then wrapped, taken to the Depot and placed at the bottom of an area known as "Cell 2" about 117 meters from the depot boundary. It was then covered with waste to a depth of four metres and finally covered sometime later with a layer of material containing clay, sand and gravel. The top layer was intended to prevent entry of water into the waste and to direct any flow of water away to the drains. 12On 20 October 2010, Council's OH&S Officer Mr Ryan became aware that the sodium fluoride was missing from the plant. He reported this fact to his superiors. The General Manager, Mr Wise, was advised that the sodium fluoride had been disposed of at the Depot. Mr Wise was at a meeting in Cobar at the time and upon his return to Bourke the next day, he convened a meeting with Mr Brown, Mr Ryan and the Manager of Corporate Services, Ms Brown. They discussed the disposal and the hazardous nature of sodium fluoride but not whether the Depot was legally able to receive such a substance or the effect of the actual classification of sodium fluoride. Mr Wise regarded the matter as closed. 13Mr Ryan however clearly had some concerns. On 28 October 2010 he filed an OH&S incident report recommending that the sodium fluoride be removed from the Depot and be properly disposed of by a licensed contractor. He also sought a full investigation into the disposal by 15 December 2010. If his recommendations were not followed he advised that he would report the matter to the EPA and WorkCover. 14The General Manager agreed to reconsider the disposal. He asked Mr Wilder to review the disposal and report back to him by 15 December 2010. 15On 1 November 2010 Mr Tanswell called Mr Willoughby back in relation to his earlier call. Mr Tanswell was not told the waste had already been placed at the Depot. Mr Tanswell advised Mr Willoughby that Council would need to assess disposal in accordance with the Department of Environment, Climate Change and Water (DECCW) "Waste Classification Guidelines". Mr Willoughby was told these guidelines were available on the DECCW website. This information was passed onto Mr Wilder. 16On 8 December 2010 Mr Wilder reported back to Mr Wise that he had "thoroughly investigated the matter from the Environmental Services section perspective and legislation under which we operate". Mr Wilder recommended that Mr Ryan be advised as follows: (1)"The matter has been extensively researched by Management and the disposal to landfill represents current industry best practice and meets environmental protection requirements. (2)There is no reasonable justification for retrieval of the waste from its current location because it is unlikely that the material will be disturbed or subjected to action by strong acids in its present location....". 17On 13 December 2010 Mr Wise sent a memo to Mr Ryan. Included in the memo were these words "I have requested a detailed investigation and written report of best practice strategies for disposal of fluoride, and this has reassured me that the fluoride was appropriately disposed of, and any suggestion of removing the fluoride would be counter-productive". There followed some observations by Mr Wise about Mr Ryan's attitude to himself and Mr Ryan's threats to go to a higher authority. On 16 December 2010 the EPA received a confidential telephone call alleging that Council had illegally disposed of sodium fluoride at the Waste Depot in Bourke. Senior Management at the Council made no report to the EPA. 18EPA then investigated the complaint. Initially not all documents requested by EPA were provided by the Council apparently because they misunderstood what was required to be produced. However after 16 February 2011 there was co-operation and compliance by the Council with the EPA investigation. 19On 8 June 2011 EPA issued the Council with a Clean-up Action under s 91 POEO Act. Council complied with all the requirements of the notice at Council's cost. The sodium fluoride was removed intact and transferred to an appropriate disposal site at Blayney. Soil sampling and testing confirmed that there was no contamination of the soil at the Bourke Waste Depot. EPA issued a notice of satisfaction to the Council on 1 September 2011. 20On 15 September 2011 Mr Wilder resigned as an employee from Council. Mr Brown also resigned on 17 February 2012.

Environmental Harm 21As part of the statement of facts a number of photographs were tendered together with an agreed statement of potential harm. It was conceded that there was in fact no actual environmental harm caused by Council's actions. A summary of the harm alleged follows. 22Sodium fluoride is an inorganic compound. Fluoride is naturally present in water and soils. It is found in higher concentrations in seawater (up to 1.5mg/L) than in freshwater (0.01 to 0.3mg/L) and accordingly sodium fluoride is added to drinking water in some parts of Australia to reach a safe level of approximately 1mg/L. At that level it poses negligible risk to organisms in the environment. Concentrations above 1.5mg/L could increase risk due to the toxicity of fluoride ion. 23Landfills containing mixed waste substances such as Cell 2 at Bourke are dynamic. Waste shifts over time as it breaks down. The plastic wrapping around the sodium fluoride may have been pierced by a sharp object or may have eventually degraded, allowing the sodium fluoride to escape. There was insufficient evidence to guarantee that the waste cover placed over the buried sodium fluoride would permanently exclude water from the cell. As sodium fluoride is highly soluble in water, any penetration of water could have led to the sodium fluoride solubilising. 24If the sodium fluoride had solubilised in percolating water, this could have been taken into leachate. If the leachate accumulated at the bottom of the cell it may have been pumped into an evaporation pond. The amount of leachate generated by a landfill depends upon factors such as rainfall, the contents of the waste and the ability of water to enter the cell. As Bourke has a semi arid climate, Cell 2 generates less leachate than landfills say on the coast might be expected to generate. If leachate had been pumped to an evaporation pond then it may have been consumed by birds or animals and would be hazardous and perhaps fatal to those animals. There was however no evidence of leachate from this disposal. 25Although the offence did not result in environmental harm, it had the potential to cause environmental harm. Had the offence gone undetected then it is likely over time that actual harm may have resulted from the disposal.

Costs incurred by Council 26Council has paid the following costs associated with the offence: (1)$444.00 to EPA for Cleanup Notice (2)$5,995.00 to ERM for a risk assessment report (3)$24,944.70 to Cleanaway Environmental Services for the lawful disposal of the waste (a cost the EPA says Council would have incurred anyway to properly dispose of the waste). (4)$14,000.00 to EPA for legal costs. 27Council co-operated with the EPA during its investigation. Council has no prior convictions. 28It is a matter to be taken into account in respect of penalty that the defendant Council has paid agreed costs.

Purpose of Sentencing and Matters Relevant to an Environmental Offence 29Section 3A of the Crimes (Sentencing Procedure) Act 1999 states the purpose for which a Court may impose a sentence on an offender: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community. 30Where the Defendant is a Council, "there is no principle that a penalty should be increased by reason that the defendant is a public authority rather than a private person" nor should a Council "receive a more lenient penalty merely because of its status as a public body": Preston J in EPA v Ballina Shire Council [2006] 148 NSWLEC 289 at [85]-[86]. 31In determining the appropriate penalty for a pollution offence, two things are to be borne in mind; the seriousness with which the community regarded the pollution and the purpose to be achieved by the imposition of a fine. Those who handle dangerous chemicals must be regarded as being under a heavy obligation to the rest of the community to do so with the utmost care: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357. 32In environmental matters, courts should exercise their discretion in relation to penalty on the principle that the more serious the lasting environmental harm involved, the more serious the offence and ordinarily, the higher the penalty: Camilleri's Stock Feed Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683. 33"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 of the seriousness of the offence": R v H (1980) 3 A Crim R 53 at 65. 34The sentence must serve the purpose of general deterrence and this is particularly important in relation to environmental offences: Bentley v BGP Properties (2006) 145 LGERA 234. 35The POEO Act sets out the matters to be taken into account by the Court in sentencing for an offence under the Act: 241 Matters to be considered in imposing penalty (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 caused 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, (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 that it considers relevant.

Nature and seriousness of the Offence 36In EPA v Geoff Robinson Pty Ltd [2011] NSWLEC 14 the Court said that the objective seriousness of the offence is "the primary factor the Court must consider when determining sentence". In Bentley v BGP Properties Pty Ltd the Court noted that regard must be had to the defendant's state of mind in committing the offence and the defendant's reasons for the commission of the offence in determining the objective seriousness of the offence. 37Craig J in Environment Protection Authority v Hanna [2010] NSWLEC 98 stated at [38]: The objective seriousness of the offence is illuminated by the nature of the statutory scheme. Relevant to the offences charged, the legislature has prescribed a highly regulated scheme for the disposal of waste. This is undoubtedly due to the harm to the environment, including risk to human health, which is, or may potentially be caused by the improper disposal of waste. By reference to the definitions of both 'pollution' and 'harm' found in the POEO Act, disposal of waste other than at a licensed facility is taken, for the purposes of the POEO Act, to have caused environmental harm. 38Preston CJ in EPA v Waste Recycling and Processing Corp [2006] NSWLEC 419 said at [146]: Harm can include harm to the environment and its ecology. Harm to an animal or plant not only adversely affects that animal or plant, it also affects other biota that have ecological relationships to that animal or plant; Bentley v BGP Properties Pty Ltd at 174. 39Council submits that the objective seriousness of the offence is low. Mr Wilder was negligent in his assessment of the requirements that Bourke Shire Council was required to meet and as a result other Council officers including the General Manager subsequently fell into error. Accordingly as this was a case of error as to the appropriate way to dispose of the waste, it is submitted that there was not the wilfulness or deception that is found in many of the other prosecutions for breaches of s 143 POEO Act. In this case it would not have been difficult to determine that sodium fluoride was a toxic substance that required special methods of disposal. As submitted by Ms Cory for the EPA, a simple Google search would have clarified the status of sodium fluoride. This was a fact that was easily discoverable and Council could have taken simple steps to properly dispose of the waste. Council's own website confirmed that its Depot was NOT accepting hazardous waste. 40That it falls at the lower end of the scale of seriousness is confirmed by the proceedings being commenced in this Court. The EPA can deal with matters in three ways. They can issue a Penalty Infringement Notice (in this case $5,000), commence a prosecution in the Local Court (maximum penalty now $110,000 but as at November 2011 $22,000) or proceed in the Land and Environment Court where the maximum penalty is $1,000,000. In addition the likelihood of serious harm was reduced by both the manner of the disposal and the fact that Bourke is a semi arid area with relatively low annual rainfall. 41I am therefore satisfied that this is not a serious breach, however it is difficult to see how it could fall much below the Court's jurisdictional threshold on penalty as at November 2011 of 2.2% of the worst case. $22,000 is the jurisdictional limit and not the maximum penalty for the purpose of determining an appropriate penalty: R v Doan [2000] NSWCCA 317.

Application of s 10 Crimes Sentencing Procedure Act 42In considering the application of s 10 a Court can consider the following: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the Court thinks proper to consider. 43The offence does not have to be trivial. In R v Paris [2001] NSWCCA 83 at [42], Simpson J held: It is not necessary to the application of s10 that the offence be characterised as trivial; the four factors mentioned in subs 3 are, in my view, intended to be disjunctive and nonexhaustive. 44Council submits that the proceedings should be dismissed without conviction. Mr Down for the Council points to the good character of the Council, its co-operation with the EPA, its early plea of guilty, contrition and remorse and changes implemented to ensure that such an offence would not be committed in the future. Council has no prior convictions. There was no environmental harm and Council acted in good faith although mistaken as to the proper method of disposal. 45The EPA submit that dismissal under s 10 is not appropriate because this is more than a technical breach, was foreseeable and could have been avoided. In Hunter Water Board v State Rail Authority of NSW (No 2) (1992) 75 LGRA 22 Stein J said at 33 that the Court "has not infrequently stated that it will be a rare case when a dismissal under s556A is seen as appropriate to an environmental offence". Section 556A was the section in the Crimes Act 1900 superseded by s 10. In that case although there was in fact little harm, the potential for harm was serious. The Defendant was fined $15,000 and ordered to pay costs. 46In Thorneloe v Filipowski [2001] NSWCCA 213 Spigelman CJ said at [151]: The discretion conferred by s10 is wide-ranging. There is no warrant for treating the scope and range of matters which it is 'proper' for a sentencing judge to take into account in a narrow way. Nevertheless, it is a discretion which must be exercised judicially. Also at [171] his Honour made this observation: Even in the case of an offence of strict liability, no public purpose is served by recording a conviction or imposing a penalty in circumstances where the relevant accused could not, as a matter of practical reality, have done anything to ensure that the offence or, in the case of a result offence, the adverse consequences of the conduct, did not occur. At [178] his Honour made this comment: It is, in my opinion, relevant to the exercise of the discretion under s10 of the Sentencing Act, in the context of a strict liability offence, to consider what the applicant for the benefit of s10 could have done to avert the event that has occurred. Spigelman CJ then determined that the Master of the vessel in that case had done all that was reasonably practical to avoid what amounted to a small discharge of oil into the water. As he had an unblemished record, the pollution was small and short of virtual perfection it was difficult to identify any other steps the Master could have taken to avoid the discharge, it was appropriate to apply s 10. Hulme J and Howie J concurred with the Chief Justice and Mr Thorneloe was not convicted. 47This is not a case where s 10 should be applied. Although there was no harm, there was potential for harm. The steps required to avoid the illegal disposal were modest and reasonable. Although I accept that specific deterrence is not needed to ensure future compliance by the Defendant Council, general deterrence is an important factor in exercising my judicial discretion in this case against a dismissal. It is important that all defendants including Local Government and Statutory Authorities understand that the Courts will enforce compliance with the requirements to safely dispose of hazardous waste. 48There is a clear distinction between the reasons given by the Court of Criminal Appeal in Thorneloe v Filipowski for the application of s10 and the facts of this case. The actions of the Council employees at Bourke were careless. Mr Ryan's concerns were ignored. There was initial reluctance to either "confess" to the EPA that the sodium fluoride had already been disposed of illegally or to fully comply with the initial EPA request for information.

Factors to consider on penalty 49Deterrence: In EPA v Barnes [2006] NSWCCA 246 Kirby J said at [31]-[32]: Deterrence, especially in the context of environmental offence, is a matter of some importance. In Axer Pty Limited v EPA Mahoney JA said this: (at 359) "the quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded, but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur." In Camilleri's Stock Feeds Pty Limited v EPA Kirby P (Campbell and James JJ agreeing) made the following comment in the context of the objects of pollution control legislation: (at 701) "The objects of the Act and its provisions would require a substantial sentence to punish the appellant, to deter others and to encourage full compliance with the Act by the appellant and others." 50Preston J in Bentley v BGP Properties Pty Limited at [139] said this: The sentence must serve the purpose of general or public deterrence. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only light punishment will be imposed... Further at [140]: This factor is particularly relevant to environmental offences. Persons will not be deterred from committing environmental offences by nominal fines. 51Plea of Guilty: s 22 Crimes (Sentencing Procedure) Act requires a Court to take into account a guilty plea. The Court must take into account both the fact of the plea and the time when it was made: R v Sharma [2002] NSWCCA 142. In R v Thomson; R v Houlton (2000) 49 NSWLR 383, the Court of Criminal Appeal indicated that the utilitarian value of the plea "should generally be assessed in the range of ten to twenty five percent discount on sentence" for the utilitarian component of avoiding the necessity for a trial. His Honour RA Hulme J at the Annual Magistrates Conference in 2011 suggested that in the Local Court the discount to be allowed should be less than 25% as the value of a trial in that jurisdiction is substantially less than a trial in a superior Court involving a jury. It has been my experience that in general, discounts of up to 25% have regularly been applied in the Local Court. In the absence of some judicial direction by a superior Court it is my view that the 25% discount remains available in the Local Court. 52Bourke Shire Council indicated a plea of guilty at the first available opportunity. They have co-operated to the extent that a joint statement of agreed facts was prepared and tendered to the Court. Written submissions on sentence were prepared by both parties to minimise Court time. The saving to the Court and the parties by this co-operative approach must in my view attract the full benefit of making such a plea. I intend to allow a discount of 25% for the utilitarian value of this plea. 53Extra curial punishment: Extra curial punishment refers to any serious loss or detriment an offender has suffered or will suffer as a result of committing an offence, quite apart from any punishment imposed by a sentencing judge: R v Einfeld [2009] NSWSC 119 at [154]. What weight is to be given to any extra curial punishment is a factor for the Court to consider on the particular facts and circumstances of the matter before it: Director of Public Prosecutions v D'Arcy [2009] NSWLC 1 at [26]. 54The Council submits that the loss of two senior staff as a result of this matter amounts to extra curial punishment. Although such a submission may seem strange in the metropolitan area it has some weight when one considers the circumstances of this Council. Bourke is a small town located approximately 800 kilometres north west of Sydney. It is located in a semi arid area where there is little rainfall and the summers are extremely hot. There is limited public transport. Bourke has no regular air service, has no train service and is only serviced by a State Rail bus service three days a week. There are no theatres or cinemas, limited sporting facilities, shops are closed at 5pm and shuttered for the night. Crimes including break and enter of premises, damage to property and car stealing are common. There is no dentist and not even a fulltime hairdresser. Attracting suitably qualified staff to a remote town like Bourke must present significant problems. Magistrates and Judges attend on a fly in/ fly out arrangement, as do many medical services. The loss of Mr Wilder and Mr Brown will have an impact on the defendant not only as to their experience but also in the likely cost of attracting experienced replacements. I take the loss to the defendant of Mr Wilder and Mr Brown as employees into account as a factor in justifying some reduction in the penalty otherwise applicable.

Penalty 55The maximum penalty for this offence is $1,000,000.00. In determining penalty I have taken into account the following factors: (i) s 3A Crimes (Sentencing Procedure) Act as to the purposes of sentencing; (ii) s 241 POEO Act as to there being no actual harm but the potential for harm, the practical measures that could have avoided the offence, the foreseeability of harm and the extent to which the Defendant had control over the causes giving rise to the breach; (iii) General and specific deterrence; (iv) Mitigating factors including the early plea of guilty and assistance to the EPA, costs of the cleanup and these proceedings, that the Council has no prior offences and Council is unlikely to re-offend, measures taken to avoid environmental harm when the substance was placed at the waste site, the low risk of actual harm and extra curial punishment. 56No submissions were made on the ability of the defendant Council to pay a fine. 57Taking into account all of the factors referred to above, the written and oral submissions of the parties and the objective seriousness of the breach, I impose a fine of $10,000, which is 1% of the maximum penalty. The fine reflects that the breach was of a very low level of seriousness but the quantum of the penalty serves to indicate that any illegal disposal of hazardous waste will have consequences that are more than a slap on the wrist.

Order 58Bourke Shire Council is convicted and fined $10,000. I allow 28 days to pay the fine. R Clisdell LCM 1 June 2012

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. Decision last updated: 13 June 2012

(1993) 113 LGERA 357

(2006) 145 LGERA 234

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