Environment Protection Authority v Cargill Australia Limited

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

50121 of 2003 Environment Protection Authority v Cargill Australia Limited

JUDGMENT 1 Her Honour: The Defendant in this matter is charged with an offence against s 129(1) of the Protection of the Environment Operations Act 1997 ("the PEO Act"). The Summons alleges that the Defendant caused the emission of an offensive odour, between 13 and 14 January 2003, from occupied premises at which a scheduled activity, being a livestock slaughtering rendering plant, was carried on under authority of a licence. 2 The Defendant has pleaded guilty to the offence and, accordingly, all the requisite legal elements in relation to the offence are taken to have been proved. I note that the maximum penalty applicable in this case is $250,000. The parties helpfully supplied to the Court a Summary of Agreed Facts and I note that the particular circumstances in relation to the offence are set out at par 11 - 17 as follows:

11. On 13 and 14 January 2003 odour created in the rendering process escaped from the premises. The odour was detected at several locations outside the premises by EPA officers while conducting an odour survey.

12. On 13 January 2003 EPA officers detected odour from the rendering process at eight locations in the vicinity of the premises. The distance between these locations and the premises ranged from approximately 500 metres to 2.5 kilometres. On a scale of 1 to 6 (the most intense odour being 6), the intensity of the odour ranged from 2 to 4. In relation to each of the locations at which odour was detected, there was a light wind coming from the direction of the premises. 13. On 14 January 2003 odour from the rendering process was detected by EPA officers at five locations in the vicinity of the premises. The distance between these locations and the premises ranged from approximately 300 metres to 2 kilometres. On the same scale of 1 to 6, the intensity of the odour ranged from 3 to 5-6. In relation to each of these locations there was a light wind coming from the direction of the premises when the odour was detected.

14. The odour from the rendering process on 14 January 2003 was also the subject of a complaint by a local resident.

15. The primary cause of the emission of odour from the rendering process outside the premises on 13 and 14 January 2003 was that fugitive rendering odours were not captured and treated by the existing pollution control equipment in the rendering plant (comprising a thermal oxidiser odour treatment unit). The rendering plant was old and had not been designed to capture all the odours created in the rendering process. Various items of pieces of machinery and equipment used within the plant give rise to odours. These include what is called the cookers, the presses, the blood collection system, the meal system and other equipment. 16. The thermal oxidiser unit collected odours from the main cooker and the press system but it did not collect all odours from additional point sources within the rendering plant.

17. These fugitive emissions were released to atmosphere through various openings in the rendering building.

3 It is alleged by the Prosecutor, and confirmed by the Summary of Agreed Facts, that the odour emitted interfered unreasonably with the comfort or repose of a person outside the premises. 4 The Summary of Agreed Facts notes that there was one complaint received from a resident near the premises on 14 January 2003 and that the offence was otherwise determined by measurements taken by the Prosecutor's officers, at varying distances outside the site, on 13 and 14 January 2003. These measurements were detailed in exhibit B and are set out in par 12 - 14 of the Summary of Agreed Facts as extracted above. 5 Paragraph 15 of the Summary of Agreed Facts states that the offensive odour was primarily caused by the age and design of the plant, which resulted in fugitive rendering odours not being captured and treated by the existing pollution control equipment, being a thermal oxidiser odour treatment unit. A secondary cause was various other pieces of plant, including the cookers, presses, blood collection system, mill system and other equipment, which also emitted fugitive odours on 13 and 14 January 2003. 6 Since the date of the offence the Defendant has carried out a number of works aimed at improving the odour control abilities of the premises. These works were part of a larger upgrade of the entire plant which had been planned for some years and was awaiting the grant of development consent at the time of the offence. Development consent was in fact issued by the relevant minister in February 2003, shortly after the events giving rise to this offence. The Summary of Agreed Facts notes at par 18 that, as a result of the offence, some of the upgrades relating to odour control were implemented earlier than was originally proposed. The Summary of Agreed Facts states at par 20 - 24 that the upgrades implemented by the Defendant included the installation of a new bio-filtration system works to ensure the sealing of the building in which the rendering plant is located so that all odours are contained within the plant, and other works to reduce odour emissions from the plant as a whole. The Summary of Agreed Facts states that the cost of these works was substantial, amounting to some $1,229,082. Section 241 of the PEO Act 7 I am required by s 241 of the PEO Act to take into account a number of factors to the extent that they are relevant. Section 241(a) - the extent of the harm caused or likely to be caused to the environment by the commission of the offence 8 The Prosecutor in this case is relying on the definition given to "offensive odour" and "harm" under the PEO Act to establish environmental harm. The PEO Act relevantly defines "offensive odour" to mean an odour: (a) that, by reason of its strength, nature, duration, character or quality, or the time at which it is emitted, or any other circumstances: … (ii) interferes unreasonably with (or is likely to interfere unreasonably with) the comfort or repose of a person who is outside the premises from which it is emitted, or "Harm" is defined to include: … any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution. 9 The Prosecutor submitted, and it is clear that this submission in correct, that there was actual environmental harm in the sense that there was alteration to air quality, so that definitions of harm in the PEO Act are met. Further, there is evidence that the odour was likely to interfere unreasonably with the comfort or repose of a person. However I accept the Defendant's argument that the environmental harm caused was small and that there was no lasting environmental harm caused by this offence. Section 241(b) - the practical measures that may be taken to prevent, control, abate or mitigate that harm 10 The Prosecutor relied on the evidence contained in affidavits adduced by the Defendant, in particular, an affidavit of Mr Terence Shultz, a chemical engineer specialising in odour control, and an affidavit of Mr Anthony Mitchell, a chemist and environmental scientist, to show that there were practical measures which could have been taken to avoid the odour emission, the subject of the offence. 11 The Defendant agreed with the Prosecutor that there were practical measures which could have been taken and further submitted that these measures were well recognised by the Defendant. The Defendant argued it had already taken preliminary measures, commencing in 2001, in relation to the preparation of an odour assessment report, leading up to the lodgement of a development application, accompanied by an environmental impact statement, for the expansion and upgrade of the plant with the State Government in July 2002. The approval for the expansion and upgrade of the abattoir was granted in early February 2003, some eight to nine months after the initial development application was lodged and shortly after this offence occurred. The measures designed to contain odour impacts, as approved by the development consent, have been implemented in accordance with the consent. The Defendant could not act to undertake these measures until such time as it obtained development consent. 12 I find that there clearly were practical measures which the Defendant could have taken to prevent or mitigate the harm. However, it is clear from the Defendant's evidence that the need to upgrade and improve the Defendant's operations was recognised by the Defendant and that the Defendant was actively taking the necessary steps to enable that to occur. As the upgrade has now been implemented, I am satisfied that the evidence shows that the likelihood of re-occurrence is minimal. Section 241(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 13 The Prosecutor argued that the offence was clearly foreseeable. There was a history of complaints regarding odour being emitted from the premises into the surrounding area. It is clear from the Defendant's consultants' own reports, as referred to in the Defendant's affidavits, that there was a recognised need to upgrade the facility to achieve better odour control, amongst other objectives. The Defendant agreed that the offence was foreseeable but stressed once again that at the time of the offence it was taking active steps to ensure there was no further emission of offensive odours and it was a matter of awaiting the requisite development consent to enable it to carry out the necessary work. I accept and adopt the Defendant's submissions that the offence was foreseeable and that steps were in fact being taken to overcome the difficulties at the premises. Section 241(d) - the extent to which the person who committed the offence had control over the causes that gave rise to the offence 14 The Defendant accepts that it had control over the causes of the offence and stresses once again that it was endeavouring to carry out the necessary upgrade of work. 15 Section 241(e) is not relevant in this matter. Aggravating Factors 16 Section 21A(2) of the Crimes (Sentencing Procedure) Act 1999 specifies certain aggravating matters, additional to any other matters, which it is necessary to take into account on sentencing. Other than s 21A(2)(d) which relates to the prior convictions there were no particular additional factors relied on under s 21A by the Prosecutor. The Defendant has one prior conviction. 17 In light of both the objective and individual circumstances which led to the commission of the offence, I consider that there is a relatively low level of culpability on the Defendant's part in the circumstances. Proportionality 18 I am also required to ensure that the sentence imposed is proportional to the gravity of the crime. It is very common for this Court to be referred to, as I have been on this occasion, Camilleri Stockfeeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 where it was said the Court is to have regard to the maximum penalty applicable as this is an expression of the seriousness which Parliament attributes to the offence. The Prosecutor did refer the Court to three other cases involving emissions of offensive odour: Environment Protection Authority v Nationwide Oil Pty Limited [2002] NSWLEC 201, Environment Protection Authority v Burrangong Meat Processors [2003] NWSLEC 102 and Environment Protection Authority v Illawarra Coke Company Pty Limited (2002) 118 LGERA 451. I will briefly set out in this judgment a summary of each of those cases. 19 Environment Protection Authority v Nationwide Oil was a case which involved the escape of light oil gas from a waste oil facility, resulting in the emission of an offensive odour. In this case the odour emitted had strong effects, including vomiting and headaches, which were experienced by several members of the public. The Court determined that the penalty should be a base fine of $60,000. This was discounted in light of various mitigating factors. 20 In the matter of Environment Protection Authority v Burrangong Meat Processors, which is a decision of mine, the defendant was charged with three offences of emitting offensive odour, in that case from effluent treatment ponds. In that case the level of odour emitted caused discomfort to a number of members of the public but there was no evidence that medical treatment was required in relation to that discomfort. I found that the base penalty should be $50,000 for each offence but that this should be reduced in light of mitigating circumstances and that the totality principle should be applied to reduce the penalty in that matter. 21 In Environment Protection Authority v Illawarra Coke Company the defendant was charged with three offences of emitting offensive odour as a result of operations at a coke plant. In that case there were quite severe impacts on members of the public including headaches and sore throats. In that case the base penalty was held to be $55,000 for each offence, reduced once again due to mitigating factors and the application of the totality principle. 22 While it is of course important that each case be considered on its own facts, it does appear that the circumstances of this case are less serious than those in the three cases referred to earlier in this judgment. Deterrence 23 It was also submitted that I must consider general deterrence in relation to penalty. In this regard, the Prosecutor particularly referred me to the decision of Talbot J in Environment Protection Authority v Nationwide Oil at par 25 where his Honour emphasised the serious nature of emissions of offensive odour. The Defendant noted that it was important that the penalty should not be disproportionately increased on the basis of general deterrence alone. In relation to specific deterrence I note that the Prosecutor did not make particular submissions on the need for this penalty to reflect specific deterrence and I do not consider that the circumstances justify it, in any event. Prior Conviction 24 I note this Defendant has one prior conviction, in relation to an environmental offence of water pollution committed on the same premises. The Prosecutor did not put forward any particular submission to the effect that the Defendant showed an attitude of disobedience to the law and I do not so find. Accordingly I do not particularly take into account that prior conviction in the penalty that I am about to impose. Penalty and Mitigation 25 In my opinion the circumstances of this offence warrant that a penalty of $40,000 should be imposed. However I need to now go to a number of mitigating factors which will cause a reduction in that penalty. Section 21A(3) of the Crimes (Sentencing Procedure) Act 1999 sets out matters which should be considered in mitigation in sentencing. In this case, the following of these are relevant: (a) s 21A(3)(g) and (h) which relate to the lack of likelihood of re-conviction; (b) s 21A(3)(i) an expression of remorse; (c) s 21A(3)(k) the effect of a plea of guilty; and (d) s 21A(3)(m) being the assistance by the offender to law enforcement authorities, which was also linked in the Defendant's case to s 23 of the same Act which provides for a reduction of penalty in circumstances where a defendant has assisted law enforcement agencies. The Guilty Plea 26 In relation to the guilty plea, I note that the Defendant in this case has pleaded guilty at an early opportunity. It is well recognised in this Court, after guideline judgments such as R v Thompson; R v Houlton (2000) 49 NSWLR 383 as affirmed in R v Sharma (2002) 54 NSWLR 301, that it is appropriate to consider a discount in penalty under s 22 of the Crimes (Sentencing Procedure) Act 1999 as a result of an early plea of guilty. I should note that the discount referred to in R v Thompson is in the range of 10 - 25 per cent. 27 In considering this case I note that on the evidence there was a high likelihood of conviction so that the utilitarian value of the plea is reduced in those circumstances. Accordingly, I will allow a reduction based on the early plea of guilty but not to the extent of 25 per cent as the Defendant urged on me. Contrition and Remorse 28 It is clear that the Defendant has expressed contrition and remorse through the affidavit of its general manager, Mr Kelly, and I take that into account. Cooperation 29 I note, and it is agreed by both the Prosecutor and Defendant, that there was cooperation by the Defendant with the investigation of this matter. 30 I earlier indicated that the Defendant sought to rely on s 23 of the Crimes (Sentencing Procedure) Act 1999, being a section specifically providing for a reduction of penalty where there is assistance to law enforcement agencies. The Prosecutor argued it was not a section which was particularly directed to cases of this nature. On its face it appears that I could apply s 23 to cases of this nature but I do not think I am in a position to form a definitive view on this issue in this case. In any event, such cooperation is a matter which the Court would normally take into account in considering mitigation and I do so here, without the need to specifically apply s 23. 31 It has been agreed that the Prosecutor's costs are to be paid and I note that the amount of those costs is estimated to be $40,000. Character of the Defendant 32 In relation to the matter of character evidence it is clear from Mr Kelly's affidavit that the Defendant is of good corporate character. I note in Mr Kelly's affidavit that he gives evidence as to the Defendant's implementation of a number of programs and plans aimed at ensuring environmental compliance within its operations and also as to the important role it plays in the local community in which it is located. 33 In all the circumstances I think that the Defendant's penalty should be discounted by a total of 20 per cent and consider that a fine of $32,000 is appropriate. Orders 34 There are some other matters that I need to address given the submissions put to me in relation to the making of orders under s 250(1) of the PEO Act. Publication Order 35 The first matter relates to an application made by the Prosecutor for the making of a publication order under s 250(1)(a) of the PEO Act. I have labelled as exhibit C the draft wording for the publication order and the accompanying page setting out possible agreement between the parties. The Prosecutor argued that it was appropriate that such a publication order should be made on the basis that it was necessary to achieve general deterrence in the community. 36 I note that I have a wide discretion under the PEO Act in determining whether such an order ought to be made. Indeed, there is nothing specifically in the Act which indicates to the Court the matters it should take into account in exercising its discretion. The Prosecutor relied upon three extempore judgments to support its submission that a publication order was appropriate and these were the cases of Environment Protection Authority v Biosolids Management Pty Limited [2004] NSWLEC 90, Environment Protection Authority v Incitec Limited [2003] NSWLEC 381 and Environment Protection Authority v Metalcorp Recyclers Pty Limited [2004] NSWLEC 14. 37 I note that these cases all concern Defendants who were charged with breaching the conditions of their licence under s 64(1) of the PEO Act. In EPA v Biosolids Management Pty Limited, Lloyd J imposed a fine of $10,000 and also stated that a publication order was appropriate because, in his words: A message should go to the community that holders of pollution control licences are under a heightened responsibility to ensure that their operations are conducted in accordance with the conditions of such licence. 38 The Defendant argued that such a publication order should not be lightly made if its deterrence value is to be maintained. The Prosecutor has not argued for the need for specific deterrence in this case and the making of an order cannot be supported on this basis and, as already stated, the Prosecutor does not press it on that basis. 39 It was also said by the Defendant there was no general deterrence value in the circumstances of this particular case, given that the Defendant had recognised the problem and has now corrected it. Further the Defendant noted that there will be publication of the offence in any event, given that the Prosecutor publishes on its website information about prosecutions and issues press releases which advise of convictions. 40 I have reviewed the cases which have been put forward by the Prosecutor and I note that Incitec and Metalcorp Recyclers, which were relied on by the Prosecutor, concerned Defendants who already had earlier convictions for breach of licence condtions under the same provisions. So arguably it could be said that Incitec and Metalcorp Recyclers were matters where there was a more serious need to impose an additional level of deterrence in the penalty imposed on the Defendants than there is in this case. 41 Whilst the Defendant here is also the holder of a pollution control licence, as is implicit in any charge under s 129 of the PEO Act, it has not been charged previously with breaching any of the conditions of its licence. I also note that no publication order was sought by the Prosecutor in the matter of Burrangong Meat Processing Plant which was also before me and which was arguably a more serious charge in relation to the emission of offensive odours by a corporate Defendant on several occasions. 42 The Prosecutor's policy relating to the circumstances in which it seeks publication orders for environmental offences is, based on the cases before me, frankly not entirely clear to the Court. Such an order does not appear justified on this occasion for the reasons given by the Defendant's counsel and I decline to make it on this occasion. Environmental Restoration and Enhancement Project Order 43 The next matter I must deal with is whether I should make an order under s 250(1)(c) of the POEO Act. Section 250(1)(c) of the POEO Act states that: The Court may make an order that the offender carry out a specified project for the restoration or enhancement of the environment in a public place or for the public benefit. 44 In that regard the Defendant handed up to me two alternative forms of draft environmental enhancement orders. I have labelled the longer draft environmental enhancement order, that is the one with the map of the park attached to it, exhibit D, and the shorter order which consists only of two paragraphs I have marked as exhibit E. 45 Both the proposals put forward by the Defendant in these exhibits are opposed by the Prosecutor. The Prosecutor's submissions relate to the lack of specificity of the proposals made, which the Prosecutor argues do not satisfy the requirements of the section, and also as to whether or not the requirement of the section, that the project be for the public benefit, is met. These submissions apply to both to exhibits D and E. I consider that the Prosecutor's objections are well-founded in relation to par 1(b) and 1(c) of exhibit D as presently drafted and also to exhibit E, which is in general terms, but not necessarily in relation to par 1(a) of exhibit D. Subject to my comments below, I consider that par 1(a) of Exhibit D provides a specific proposal for a park to be established on the Defendant's land, with spending by the Defendant on playground equipment, landscaping and fencing. 46 I do not understand why the Prosecutor considers that the letters from the general manager of Wagga Wagga Shire Council to this Court supporting such a proposal, as tendered by the Defendant, are not a sufficient demonstration of the public benefit of the park proposal. Further, I do not consider that the Prosecutor's submission that the proposal is so uncertain that it cannot be enforced is valid. I understand from Mr Preston, the Defendant's barrister, that the Defendant is prepared to donate the land to the Council regardless of the size of the penalty imposed and to put the penalty sum towards the provision of landscaping and amenities within the park. Now that the level of penalty is known my sole concern is whether that is sufficient for a reasonable park environment to be created. I will in a moment raise with the parties whether or not further inquiries ought to be made about this matter. 47 Another issue that needs to be considered, if I am to make such an order, is that the order need to be structured so that a reasonable timeframe is allowed for the project to be completed or, if not completed in this timeframe, provision must be made for the penalty to be paid to consolidated revenue. This is because, as was pointed out to me by the Prosecutor, s 251 of the PEO Act could have the result that, if the project fails, the Defendant may be guilty of a possible further offence under the Act. The parties ought to consider this further and I will come back to this at the end of the judgment. 48 There is just one other matter that I need to consider. Further orders were sought by the Prosecutor in par 5 and 6 of exhibit C in the event that I did make an order under s 250(1)(c) in relation to the conduct of an environmental project. The orders sought are that whenever the Defendant refers to the works the subject of an environmental project order, it must state that the works were carried out by order of the Land and Environment Court following a prosecution taken by the Prosecutor. Paragraph 6 states that if an environmental project order is made in relation to the provision of a park then, before the park is opened to the public, the Defendant must construct a memorial and plaque at the entrance to the park with the plaque stating that:

Cargill Australia Limited was ordered by the Land and Environment Court to provide this park for the benefit of the people of Wagga Wagga following a prosecution taken against the company by the New South Wales Environment Protection Authority. The memorial and plaque must be maintained in a good state of repair. 49 The application to the Court for these orders is apparently novel. As I understand it from the Prosecutor's counsel the Prosecutor has not previously sought such orders in any matter before this Court and certainly no judgment of this Court imposing such orders has been provided to me. It seems to me that there is a real question as to whether such orders are encompassed, as the Prosecutor argued, by s 250(1)(a) which gives the Court the discretion to order publication. The Defendant argued that such an order would be contrary to the sentencing principle of finality as it would require the Defendant to forever state that it has been found guilty of an offence by this Court. I do not consider that I have heard adequate legal argument, particularly from the Prosecutor, to finally determine the question in this case as to whether s 250(1)(a) does in fact cover orders of this nature. In any event, I am not convinced that, even if I had the powers to do so under s 250(1)(a), this case warrants such orders. Accordingly, I decline to make such orders in any event. 50 Returning to the concerns I expressed earlier in relation to the park proposal, I ask the Defendant to make further enquiries with the Council as to what the Council's preferences in relation to the provision of a park are and as to whether the sum of $32,000 will be sufficient to adequately landscape and equip a park. Further I ask the parties to re-draft the terms of the order so as to make provision should a park proposal not be implemented in a reasonable timeframe.

1. The Defendant is convicted of the offence with which it is charged. 2. The Defendant must pay the Prosecutor's costs in the sum of $40,000 within 28 days of the date of this order. 3. The exhibits may be returned. 4. The proceedings are listed for final determination before Justice Pain at 9:30am on 20 July 2004.

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