Defendant's evidence
13 An affidavit of Aditya Jhunjhunwala sworn 11 September 2009 was read for the Defendant. Mr Jhunjhunwala has been the managing director of the Defendant since 1 July 2009. He states that his father, Surendra Jhunjhunwala, is the chairman of the Defendant and served as the managing director prior to Mr Jhunjhunwala. The Defendant is a wholly-owned subsidiary of Orind Australia Pty Ltd. Mr Jhunjhunwala's family are the sole shareholders of Orind Australia. He states that the Defendant obtains raw magnesium carbonate which it processes into magnesium oxide. It obtains the raw material from the Young Mining Company Pty Ltd which, like the Defendant, is a wholly owned subsidiary of Orind Australia. Twelve people are employed by Young Mining and 21 are employed by the Defendant, together forming the largest single employer in the Young Shire Council area. Mr Jhunjhunwala states that the Defendant has operated the plant since at least 1958. It was purchased by Orind in 1997 as was Young Mining. Both companies were not performing well financially and Orind purchased the companies seeking to revive them. Over $2 million has been invested in new equipment. The owners have foregone salaries and commissions and not taken any dividends in order to keep the Defendant operating. Mr Jhunjhunwala and members of his family have provided interest-free loans to both companies in the sum of $125,000. Mr Jhunjhunwala left a job in California in May 2008 after he was informed by his father that gas supplies to the plant had been cut due to default in payment. He sought to assist his father, who was under severe stress, in matters related to the company. Mr Jhunjhunwala states that he has attempted to obtain a bank loan of $2.5 million in order to refurbish the plant and equipment of the Defendant and Young Mining. If obtained, he intends to spend a considerable amount of money on new equipment for dust extraction and control.
14 Mr Jhunjhunwala states that the Defendant employs a resident director responsible for day-to-day management of all operations at the Defendant's plant including supervision of the kilns and the two bag houses used to control the emission of dust. At the time of the offence Mr TBK Rao was the resident director. After Mr Rao's departure from the company and from Australia, Mr Isidore Thumma has been in that position since 12 November 2008. Mr Jhunjhunwala expresses contrition and remorse on behalf of the Defendant in relation to the offence. He recognises the Defendant's duty to comply with its licence and ensure equipment associated with the control of air emissions is operated properly and efficiently, particularly because of the close proximity of the plant to residents. He states that the Defendant admits full responsibility for the breach of its licence.
15 Mr Jhunjhunwala attests that the Defendant is prepared to accept a publication order made by the Court pursuant to s 250(1)(a) of the POEO Act. Since the offence, Mr Jhunjhunwala states that the Defendant has prepared and will implement a "Bag House Maintenance Protocol" to ensure filter bags are functioning properly. This protocol has been prepared with regard to the recommendations of the Prosecutor's expert Mr Court. The protocol prepared by the Defendant was annexed to Mr Jhunjhunwala's affidavit.
16 In oral evidence, Mr Jhunjhunwala stated that an amendment of one of the provisions in the protocol relating to replacement of filters was made on 14 September 2009, several days after the preparation of his affidavit. The amended protocol was tendered by the Defendant (exhibit 1).
17 Mr Jhunjhunwala stated that he was confident that employees would comply with the protocol which included giving power to production workers to shut down the plant if required without having to first speak with a supervisor. He interviewed a number of the Defendant's personnel and considered all the affidavits already prepared in these proceedings before attesting to the new protocol in his affidavit. Since the offence was committed, Mr Jhunjhunwala also stated that he had spoken to the workers and their union about the prosecution and the need to comply with the licence conditions. He has made the protocol available and stated that new employees are informed of their responsibilities in relation to complying with the licence.
18 Mr Jhunjhunwala also gave oral evidence about the structure of the Defendant company and its holding company Orind Australia. His uncle's holding company which is incorporated in Hong Kong purchased the Defendant in 1997. His uncle was chairman and managing director of the Defendant but employed someone else to manage the day to day affairs of the business. In 2004 there was a division of assets between family members. Management of the Defendant was transferred from Mr Jhunjhunwala's uncle to his father. A full legal transfer was completed in 2004. Mr Jhunjhunwala states that he is committed to improving the profitability of the plant which is required if it is to continue operating. He expects this may take between 5 and 10 years. Alternatively a private investor willing to take over the operations may be found. Mr Jhunjhunwala stated that the financial losses that have accrued have been independent of the prosecution. A fine of more than $100,000 would cause Mr Jhunjhunwala to liquidate the company.
19 Yogendra Nagar swore an affidavit dated 9 September 2009 which was read for the Defendant. Mr Nagar has been the deputy general manager of operations at the Defendant's plant since 25 February 2008. This position includes supervision of the Defendant's two kilns. Mr Nagar states that on 23 April 2008 at approximately 9.00am he observed dust being released intermittently into the air for approximately three to five seconds followed by a period of about ten minutes where there were no emissions. This pattern repeated observations made on 21 April 2008 and 22 April 2008 (see SOAF par 76-77). On 23 April 2008 at 4.30pm operation of one of the kilns was discontinued so that the filter bags in the Luhr bag house could be changed. Operation was resumed on 27 April 2008. Mr Nagar annexed to his affidavit records of dust recovered from the plant's bag houses. In January 2008 a total amount of 119 metric tonnes was recovered (21.88 kg/hr), in February 120 metric tonnes was recovered (266.075 kg/hr), in March 2008 142 metric tonnes was recovered (305 kg/hr) and in April 2008 121 metric tonnes was recovered (223.66 kg/hr). Mr Nagar states that the Defendant maintains records concerning the inventory of finished magnesium oxide which it has at the end of each month as well as orders for the product that are received. At 31 March 2008 the Defendant had an inventory of 1203 metric tonnes of finished magnesium oxide at its plant. During the whole of April the Defendant received orders for 690 metric tonnes of product. Mr Nagar attests that it was not necessary for the Defendant to operate its kilns during the period 31 March 2008 to 23 April 2008 in order to fulfil purchase orders that it had received prior and that there was sufficient finished magnesium oxide to fill all the orders. The manufacturer of the fabric filter bags used in the Luhr bag house states in a document provided to the Defendant and annexed to Mr Nagar's affidavit that the typical bag life may be anywhere from three months to five years depending on bag house and system design and the nature of the dust being handled.
20 Mr Nagar was cross-examined by the Prosecutor on the issue of whether there were commercial considerations in continuing to operate both kilns up until 23 April 2008. He was new in his job having commenced in late February 2008. He was then learning about the plant's production processes and saw his role as ensuring that his daily production targets were met. He was involved in ensuring the kilns were running at capacity. The Defendant was required to produce enough material to meet customer orders which was based on information provided by marketing personnel. During April the kiln was running with a constant output. During March Mr Nagar stated that he became aware through discussions with the marketing manager and the director that there was excess stock in the hoppers. No discussion was had about stopping the production line. Mr Nagar wanted to keep running the plant in order to achieve his production targets and learn more about the process of production as he was new in his job. Extra stock would be sold to future customers. Referring to his statement in the record of interview with Mr Press that there was a tight manufacturing schedule, Mr Nagar stated that this was in the context of Mr Nagar wanting to learn about production and meet personal production targets.
21 An affidavit of Bipin Pandey sworn 11 September 2009 was read for the Defendant. Mr Pandey has been the finance and administration manager of the Defendant since 3 January 2009. The Defendant pays more than 90 per cent of Young Mining's expenses. The Defendant produces magnesium oxide which is used principally in the animal health industry as an animal feed supplement. The product is also sold for use in a variety of industrial applications. The two companies together employ 33 people and pay around $1.85 million in wages and superannuation each year. They also rely on the services of a number of local businesses. Mr Pandey states that the Defendant has encountered difficult market conditions since 2002 caused in part by drought. In 2003, 2005 and 2008 the Defendant recorded net losses, some of which were substantial. In 2004, 2006 and 2007 and during the first half of 2009 moderate profits were recorded. Mr Pandey states that the Defendant and Young Mining have together recorded net losses in 2003, 2005, 2006, 2007, 2008 and during the first half of 2009. Mr Pandey attests to the Defendant having significant debts including a tax liability of more than $1 million. Young Mining is also in debt. Due to defaults in the payment of gas and electricity invoices, gas and electricity supplies to the Defendant were disconnected from mid May 2008 to early July 2008. Mr Pandey states that the Defendant has been forced to take loans from staff members on several occasions and some staff have accepted delayed payment of their salaries. Mr Pandey attests that the Defendant does not have capacity to pay a substantial fine. A substantial fine could force the Defendant to cease trading.
22 Prem Kumar swore an affidavit on 14 September 2009 which was read for the Defendant. Mr Kumar was maintenance supervisor of the Defendant from May 2005 until September 2008. He states that in late March 2008 he observed dust being emitted from the stack serving the rotary kiln at the Defendant's plant. The emissions he saw were intermittent and he describes them as very mild. On 30 March 2008 Mr Kumar directed that 22 of the filter bags in the Luhr bag house at the plant be replaced. He did not recall observing any holes in these new filter bags. After the bags were replaced he continued to observe intermittent emissions of dust in early April 2008. He describes these emissions as mild and occurring only during a purging cycle. He did not observe any heavy emissions of dust. The emissions occurred for a period of a few seconds every few minutes and were minor puffs of dust. Mr Kumar attests to sending an email to Mr Rao, resident director of the Defendant's plant at the time, on 7 April 2008 when Mr Rao was on leave (returning 10 April 2008) (SOAF par 67).
Purposes of sentencing
23 Section 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) sets out the purposes of sentencing as follows:
3A Purposes of sentencing
The purposes for which a court may impose a sentence on an offender are as follows:
(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.
24 The Prosecutor submitted that paragraphs (a), (b), (e), (f) and (g) were relevant.