Environment Protection Authority v Coal and Allied Operations Pty Ltd

BACKGROUND 7The Defendant is a publicly listed company 80 per cent owned by Rio Tinto Limited. The Defendant operates two adjacent open cut coal mines located approximately 15 kilometres south west of Singleton in the Hunter Valley of New South Wales known as "Mt Thorley-Warkworth". 8While the Mt Thorley and Warkworth mines are run as an integrated mining operation they are the subject of individual Environment Protection Licences. 9The incident the subject of the offence occurred at the Mt Thorley site. 10The Defendant holds Environment Protection Licence number 1976 (EPL) under the Act, which regulates the scheduled activity of mining for coal and coal works at the Premises for the purposes of the Act. Mining at the Premises is authorised by various planning approvals granted by the Minister for Planning pursuant to the Environmental Planning and Assessment Act 1979. 11The Premises boundary at the relevant location is bordered by Putty Road in the north-west and Charlton Road immediately to the west. 12Immediately to the west of Charlton Road is a property which is owned by the Defendant which does not form part of the EPL. 13In early 2011 the Defendant commenced development works adjacent to the western boundary of the Premises, primarily for the purpose of constructing a visual bund running parallel to Charlton Road to mitigate the visual impact of the mining operations. There were associated erosion and sediment control works. Open cut coal mining operations were progressing to the east of the visual bund and were migrating in a westward direction towards the visual bund and erosion and sediment control works. The visual protection bund is a structure required by conditions of the Defendant's development consent for the Mt Thorley Mine. An area of approximately 12.41 hectares was disturbed as a result of carrying out these development works and treated with erosion and sediment control measures. 14The toe of the visual protection bund varies in location from approximately 20 metres to 50 metres from Charlton Road which runs parallel to the Premises' western boundary. The closest the open cut pit comes to Charlton Road at relevant locations is over 200 metres. Charlton Road is down gradient from the area disturbed during the development works. 15The development consent and the defendant's internal procedures required erosion and sediment controls aimed at retaining runoff from disturbed areas of the site, or allowing sediment to settle before it moved offsite. The internal procedures were a ground surface permit (GDP), an erosion and sediment control plan (ESCP) and a water management plan (WMP). Pursuant thereto, by the time of the incident the Defendant had installed sediment erosion and control measures including sediment basins, straw bales and sediment fences east of the public road to manage runoff from the visual protection bund. 16The GDP is an internal due diligence assessment and approval of works by which the Defendant ensures that the works are carried out in accordance with both internal policies and procedures in addition to the requirements of the EPL and relevant development approvals. The GDP may impose certain conditions or restrictions on the manner in which the works are carried out. In relation to visual bunds, the GDP says that: "External bund walls to be finished with topsoil and promptly seeded". Photographs after the incident indicate that parts of the bund were covered in grass but that newer parts were not, suggesting that the seeding had not yet become grass on those parts as at the time of the incident. 17The ESCP states at Section 4.3: "Where practicable, [r]unoff from disturbed areas will be retained on site in sediment dams and allowed to settle prior to discharge into the natural system ...[d]etailed construction and control measures are presented in Appendix B". Section 3.0 states that "[a]ll erosion and sediment control devices including dams and sediment fences and banks and channels will be consistent with the DLWC Guidelines for establishing Stable Drainage Lines on Rehabilitated Minesites and with the NSW Department of Housing Managing Urban Storm Water: Soils and Construction Manual (NSW Department of Housing, 1998) [the Blue Book]". Volume 2E of the Blue Book paras 3.1 and 3.2 states: The goal for erosion and sediment control from a mine or quarry is to ensure no pollution of surface water or groundwater. Current best-practice erosion and sediment control techniques are, however, unlikely to achieve this goal, due to the limited effectiveness of most of the techniques. An appropriate management objective is therefore to minimise the water-quality impacts form erosion and sedimentation through implementing best-practice management techniques. Given this limited effectiveness of techniques for retaining eroded sediment, a strong emphasis should be placed on pollution prevention through erosion control, rather than relying on treatment techniques to capture these sediments. The primary principles for erosion and sediment control are firstly to minimise erosion and then to capture sediment form disturbed areas. This approach emphasises pollution prevention rather than pollution control. 18The ESCP at Section 4.3 also states that "[p]rior to the disturbance of land appropriate erosion and sediment controls will be established and approved by [Coal and Allied] Environmental Services". 19The WMP was prepared to comply with the development consent conditions, the Rio Tinto Environment Standard on Water Use and Quality Control, the EIS and other commitments to the community. The WMP is dated July 2008. The purpose of the WMP is stated as being to guide water management compliance with the business and operational needs and the regulatory and other commitments for the site. The WMP states at Section 5.3.2 that: "[c]lean catchment which has been disturbed by mining or ancillary operations will produce sediment laden runoff water. Prior to release from site this water will need to be treated to minimise sediment load. MTW has committed in various regulatory documents to maintain sediment control structures to manage this quality of runoff". One of the targets specified in the WMP is zero unplanned releases of polluted water from the site when rainfall events are less than a 1:100 ARI (Average Recurrence Interval). The WMP specifies that sediment control dams are designed to cater for single rainfall events with an average recurrence interval equivalent to 1:10 ARI (24 hour duration) or 1:20 ARI (4 hour duration). Section 7.1.2 of the WMP states: Runoff from spoil emplacements and other disturbed, reshaped and rehabilitated areas is collected and passed through sediment control dams that reduce sediment loads to levels acceptable for release to natural watercourses.

SEDIMENT AND EROSION CONTROLS 20The sediment and erosion control measures located on the Premises, in particular, in the disturbed and partially cleared catchment area in between the visual bund to the east and the Premises boundary in the west, and from the Putty Road in the north and the entrance to Salt Pan Creek in the south (the Charlton Road catchment area), did not prevent the discharge of sediment laden water across the Premises boundary during the incident the subject of these proceedings. 21As stated earlier, the Defendant had installed a series of sediment and erosion control measures, including basins, straw bales and sediment fences in accordance with the Blue Book Guidelines in the area east of Charlton Road referred to above. While the Blue Book recommended the design of the sediment basins for an 85th percentile, five day duration event, this particular design requirement was not achieved at the dates of the incident (1-5 February 2012) due to the physical constraints of this strip of land which included the presence of the visual bund, the power line along Charlton Road, an access track and mine site safety controls for sediment basins of greater than 1m in depth. 22At the time of the incident, and from November 2011, the erosion and sediment control measures were undergoing improvements which included increasing the number of sediment basins in this strip of land from 8 to 11 multi-celled basins and the installation of additional controls including catchment reduction/revegetation and drainage stabilisation, which mitigated the need to enlarge the basins to achieve the original recommended design capacity. 23The Defendant had been conducting works to upgrade and improve the erosion and sediment control measures on the Premises' western boundary between the corner of Charlton and Putty Roads and the Charlton Road Bridge since August 2011. 24The sediment basins that formed part of the erosion and sediment control measures adjacent to the western Premises boundary in the Charlton Road catchment area at the time of the incident did not meet the recommended size or design capacity requirements of the Blue Book (a document referenced by the ESCP). This was generally for the reasons identified in [21] above. 25The Defendant was required to construct the visual bund in compliance with the requirements of the development consent. The location of the visual bund was required to be outside the limit of extraction as determined by the Mt Thorley Mine Operations Plan. The visual bund is designed to minimise the visual impact of the mine on the surrounding landscape and the design and location takes into account multiple factors including ensuring that the location of the visual bund does not unnecessarily sterilise areas suitable for coal extraction, which was an important consideration for the mine. The mine plan left a distance of around 20 to 50 metres between the toe of the bund and the boundary fence along Charlton Road, which constrained the area of sediment basins or sumps in that strip of land. Once the visual bund was located in its present position, safety concerns with allowing sediment ponds deeper than 1m in depth immediately adjacent to a public road also affected the size of sediment basins in that location. These matters are discussed in the record of interview between Officer George and the Defendant's company representative and Manager Environmental Services, Andrew Speechly, on 30 October 2012 at questions and answers 80 to 83, as follows: Q 80 What's the purpose of the mine plan? A It's to ensure that there's available space to mine the improved resource in that area. Q 81 Does the mine plan take into consideration the potential impact that that (sic) may have on restricting available space to put in erosion and sediment controls? A That consideration wasn't made at the time. Q 82 In hindsight do you think that should have been made? AI believe it's a number of options that can be assessed in hindsight as to how to control erosion and sediment control in that area. Q 83 So you're sort of saying with the mine plan that it's the targeting of the resource rather than the environmental issues that have priority? A Oh no not saying that, I was just saying it wasn't considered that the placement of that bund would impact on the erosion and sediment control and construction in accordance with the blue book criteria.'

AUGUST 2011 26On 10 August 2011 the environmental consultant engaged by Coal and Allied in relation to the erosion and sedimentation controls in the catchment area, TOEPFERS Rehabilitation, Environmental & Ecological Services Pty (TREES) made a recommendation as to sediment basin capacity.

NOVEMBER 2011 27On 23 November 2011 Environment Protection Officer Steve Clair (Officer Clair) was conducting routine inspections of Hunter Valley mine sites. 28When he arrived at Charlton Road which borders the western boundary of the Premises, Officer Clair observed sediment laden water discharging across the Premises boundary. 29Sediment laden water was discharging through sediment and erosion control measures such as hay bales and siltation fences prior to discharging across the Premises boundary. 30Officers George and Clair observed the sediment laden water discharging from the Premises and entering a drainage channel running parallel to the Premises boundary and Charlton Road, and into culverts which run underneath Charlton Road. The sediment laden water entering the culvert which runs underneath the Charlton Road bridge was, on 1 and 2 February 2012, running into Salt Pan Creek. 31Officer Clair contacted the Defendant's Environmental Services Coordinator for the Premises, Mr Robert Carter, who was on Premises at the time of the incident. Mr Carter came to meet Officer Clair in the vicinity of Charlton and Putty roads as requested. 32On 7 December 2011 the Environment Protection Authority received an incident report pursuant to condition R3 of the EPL in relation to the discharge of sediment laden water from the western boundary of the Premises in November 2011 (November Incident Report). The November Incident Report refers sketchily to an earlier incident in October 2011. 33There had been rainfall of 105mm over 5 days at the time of the November 2011 incident.

1 FEBRUARY 2012 34Between 1:00am on 1 February 2012 and midnight on 2 February 2012, 70.2mm of rainfall was recorded at the Premises. 35Between 1:00am on Friday 1 February 2012 and midnight on 4 February 2012 approximately 78.6mm of rainfall was recorded on the Premises 36The rainfall that occurred at the Premises between 1:00am on 1 February 2012 and 4 February 2012 was rated as a 1 in 1 year Average Recurrence Rainfall (ARI) event with an average exceedance probability of greater than 63 per cent. 37On 1 February 2012 Officer Clair was undertaking routine inspections of licensed premises in the Hunter Valley of NSW. 38When he arrived at Charlton Road, which runs parallel to the western boundary of the Premises, Officer Clair saw sediment laden water discharging from the Premises and entering a drainage channel that runs south in between Charlton Road and the Premises boundary. Officer Clair took a number of photos of the sediment laden water discharging across the Premises boundary and entering the drainage channel. 39At about 13:30 Officer Clair travelled south along Charlton Road to a position where the drainage channel enters a road culvert that passes underneath a small bridge on Charlton Road and enters a body of water known as Salt Pan Creek. The water entering this culvert from the drainage channel and then entering Salt Pan Creek appeared turbid and consistent in colour with the sediment laden water discharging across the Premises boundary and entering the drainage channel up gradient of this position. 40Officer Clair then travelled back north along Charlton Road. He observed that sediment laden water travelling south in the drainage channel was entering road culverts that run underneath Charlton Road and discharge onto a property on the western side of Charlton Road. Officer Clair took a number of photos of the sediment laden water discharging across the premises boundary, entering the drainage culverts on the eastern side of Charlton Road and discharging onto a property on the western side of Charlton Road through culverts. 41Officer Clair then contacted the Defendant's coordinator of environmental services, Mr Robert Carter and requested that he provide access to the Premises for the purpose of investigating the incident. 42The water in the drainage channel near the corner of Charlton and Putty Roads, up the gradient from where Officer Clair first observed the sediment laden water discharging across the Premises boundary and entering the drainage channel, was clear and free of sediment. 43At approximately 15:20, EPA Officer Bill George arrived to assist Officer Clair in the investigation of the incident. 44Shortly afterwards Mr Carter arrived to meet Officers Clair and George for the purpose of providing access to the Premises. Mr Carter introduced another person by the name of Mr New. 45Officers Clair and George then entered the Premises with Mr Carter and Mr New via a locked entry gate at the corner of Charlton and Putty Roads and proceeded to inspect the erosion and sediment control measures in the area of the Premises adjacent to the Western boundary running parallel to Charlton Road. 46The erosion and sediment control measures in this area of the Premises consisted of a series of sediment basins, siltation fences and hay bales situated in between the unsealed access road running parallel to a visual bund, and the premises boundary running adjacent to Charlton Road. 47The sediment basins were full and discharging sediment laden water toward the Premises boundary adjacent to Charlton Road. 48Sediment laden water was also discharging through the hay bales and siltation fences across the western boundary of the Premises and entering the drainage channel adjacent to Charlton Road. During this inspection of the Premises Officer George took a number of photos of the erosion and sediment control measures and sediment laden water discharging across the western boundary of the Premises toward the drainage channel on the eastern side of Charlton Road. 49Officers Clair and George then travelled south along the unsealed access road running parallel to the visual bund. Officer George observed that a section of the bund had very little vegetation cover and contained an erosion scar which was discharging sediment laden water. Officer George took two photos of this section of the visual bund including the erosion scar. 50Officers Clair and George then travelled further south along the unsealed access road running parallel to the visual bund and the Premises boundary to a position on the Premises adjacent to the culvert which passes under the bridge on Charlton Road and enters Salt Pan Creek. At this location Officer George observed sediment laden water flowing South in the drainage channel adjacent to the Premises' boundary on the eastern side of Charlton Road and entering the drainage culvert which leads into Salt Pan Creek and then Newport Farm Lagoon. Officer George took two photos at this location. 51Officer Clair in the presence of Officer George then proceeded to caution Mr Carter before proceeding to ask him a series of questions in relation to the incident. 52Officers Clair and George then left the Premises and parted company with Mr Carter and Mr New before continuing their investigation off the Premises along Charlton Road. 53Approximately 3.5 megalitres of sediment laden water discharged across the western boundary of the Premises on 1 February 2012 54Officers Clair and George then returned to the Newcastle EPA office where they completed chain of custody and sample submission forms in relation to the water samples taken in relation to the investigation. 55During the investigation of the incident on 1 February 2012 Officer Clair, with the assistance of Officer George, took approximately 21 water samples at various locations on the Premises and in the drainage channel and culverts along Charlton Road. A map indicating the approximate locations of those samples is referred to in the affidavit of Officer Clair. 56A copy of the Office of Environment and Heritage Scientific Laboratory analysis report of the water samples taken by Officers Clair and George on 1 February 2012 is in evidence.

2 FEBRUARY 2012 57At approximately 11:30am on 2 February 2012 Officers Clair and George returned to the western boundary of the Premises in the vicinity of Charlton Road and Putty Road. 58Sediment laden water was discharging through erosion and sediment control structures on the Premises. 59The sediment laden water discharged across the Premises boundary into a drainage channel on the eastern side of Charlton Road which flows in a southerly direction parallel to the Premises boundary. 60The sediment laden water flowed down gradient along the drainage channel into culverts that passed underneath Charlton Road and discharged onto a property on the western side of Charlton Road and into Salt Pan Creek. 61At approximately 12:40pm Mr Carter and the Defendant's officer Mr Gerard Gleeson, Environmental Officer Systems and Compliance, arrived to meet officers Clair and George in order to provide access to the Property on the western side of Charlton Road, which is owned by the Defendant, so that that they could continue their investigation of the incident. 62After entering the property on the western side of Charlton Road Officer Clair, with the assistance of Officer George, proceeded to take approximately nine water samples at various locations in the body of water known as Newport Farm Lagoon and Salt Pan Creek. A map indicating the approximate locations of where these samples were taken is in evidence. 63A copy of the Office of Environment and Heritage Scientific Laboratory analysis report of the water samples taken by Officers Clair and George on 2 February 2012 referred to above is in evidence. 64While undertaking the inspection and sampling on the Property on the western side Charlton Road Officer's George and Clair took a number of photos of the water in Salt Pan Creek and Newport Farm Lagoon which are in evidence. 65Officers Clair and George then left the property on the western side of Charlton Road via the locked entry gate through which they had entered and parted company with Mr Carter and Mr Gleeson. 66At approximately 15:35 Officer's Clair and George then completed their inspection along the drainage Channel on the Eastern side of Charlton Road running adjacent to the western boundary of the premises. Officer Clair took a number of photos of the drainage channel at various locations along Charlton Road in between the corner of Putty Road and the bridge that runs over the culvert leading into Salt Pan Creek. Copies of a these photos are in evidence. 67Officers Clair and George then returned to the Newcastle office of the EPA and completed chain of custody forms and sample submission forms in relation to the samples taken in Newport Farm lagoon and Salt pan Creek on 2 February 2012. 68Approximately 3.3 megalitres of sediment laden water discharged across the western boundary of the Premises adjacent to Charlton Road on 2 February 2012. 69Sediment laden water discharged from the premises for a period of approximately five days between about 1 February 2012 and about 5 February 2012.

FEBRUARY 2012 70On 10 February 2012 the EPA received an incident report from the Defendant pursuant to condition R3.1 of the EPL in relation to the incident the subject of these proceedings (the February Incident Report). 71In the February Incident Report the Defendant listed a number of actions they had undertaken since the incident the subject of these proceedings. These actions included but were not limited to: (a)the inspection and reinforcement of existing sediment controls; (b)sediment sumps along Charlton Road were linked and a high volume pump was installed to pump waters into the active mine pit (closed catchment); (c)earthen bunds around sediment sumps were removed to prevent sediment mobilisation from the area; (d)construction of rock armoured roadside drain, installation of drainage culverts and downstream outlet dissipation structures (rock armouring) in the upper catchment located north of the Charlton Road access gateway; (e)hand over-seeding of roadside and near boundary areas was undertaken to augment existing ground cover; (f)a temporary drain was installed from the Charlton Dam Wall access track area draining eastwards into the active mining pit area; and (g)enlargement of existing sediment basins in association with the upper catchment and drainage culvert works noted above. The Incident report noted that the final trim and survey to confirm Blue Book sizing were pending. 72In the February Incident Report, the Defendant also outlined elements of an Action Plan designed to address the erosion and sediment control measures into the future. This Action Plan included the following measures: (a)Construction of temporary drain and pumping sump in mid-catchment area between gate and Charlton Dam. Pumped waters to report to mine catchment. (Due for completion 24 February 2012). (b)Construction of rock armoured roadside drain and culverts in mid catchment section between gate and Charlton Dam. (Due for completion 16 March 2012). (c)Enlargement of sediment basins in mid catchment section between the Charlton Road gate and Charlton Dam in accordance with the sediment and erosion control plan. (Due for completion 23 March 2012). (d)Gravel sheet access road (following completion of drains) in upper and mid catchment areas. (Due for completion 19 April 2012). (e)Lift form and gravel the access road on Charlton Dam and construct sediment controls to manage waters from the area. (Due for completion 18 May 2012). (f)Additional seeding of the rehabilitation bund and roadside verges. (Due for completion 8 June 2012).

STATUS OF SEDIMENT AND EROSION CONTROL MEASURES 73On 16 August 2012 the erosion and sediment control measures in the Charlton Road catchment area were inspected and declared to be nearly completed as per the Blue Book by John Right of TREES. 74The following ongoing erosion and sediment control measures which are consistent with the requirements of the Blue Book have now been completed: (a)Enlargement and improvement of existing sediment basins whilst considering the physical constraints of the strip of land adjacent to Charlton Road. (b)Maintenance and replacement of sediment control devices such as hay bales and sediment filter fences. (c)Construction of diversionary structures to ensure that a significant component of the receiving catchment is diverted away to the east into the mine. (d)Stabilising the disturbed catchment via soil amelioration, seeding and mulching. (e)Rock armouring of roadside drainage areas and culvert installation. (f)Re-profiling and resurfacing of the internal access roads. (g)Reducing the size of the catchment by the construction of runoff diversions. (h)Revegetation of catchment and stabilisation of drainage paths using rock armouring. 75Some $517,000 has been expended by the Defendant on the above sediment control works since November 2011. 76The Defendant has at an early stage acknowledged that these corrective actions in relation to the sediment and erosion control measures in the Charlton Road Catchment area could have been taken earlier. In respect of these corrective actions Mr Andrew Speechly in his record of interview states the following: Q 113 The EPA sort of noted in the company's response to the Section 191 Notice, it was dated on 29 August 2012, that there was numerous sort of internal correspondence within that document about the deficiencies of the erosion and sediment controls adjacent to Charlton Road prior to the discharge in February 2012, does the Company believe that corrective actions should have been undertaken earlier to prevent that discharge of sediment laden water entering the Salt Pan Creek catchment? A I believe that actions could have been taken earlier to reduce the risk of that occurring. I don't believe, as I've stated, that I can factually say that it would have stopped or mitigated any water going off site. 77The Defendant has also acknowledged that the amount of turbid water that discharged from the site during the incident could have been reduced if the disturbed catchment size had been reduced and or construction in the area had been staged with a view to providing less open ground.

MR MASTER'S EVIDENCE 78The Defendant's erosion and sediment control expert, Mr Rodney Masters, whose evidence I accept, made a report in which he says that even if the sediment basin capacities had complied with the recommended Blue Book design guideline, they would still have overflowed because the rainfall depth during the February 2012 event was approximately 2.5 times higher than the design event for sediment basin capacity assumed by the Blue Book. His report includes the following summary: The February 2012 discharge incident from the Charlton Road visual bund area occurred during a very high rainfall event (being 2.5 times greater than the rainfall events on which the sediment basins in the Blue Book are designed for). It was apparent to me from an analysis I undertook of the water quality monitoring data contained in the affidavit of Joanne Elizabeth Ling affirmed 14 February 2013 that the majority of sediment in the water that left the Premises was contained in the swamp (Newport Farm Lagoon) that is located on Coal & Allied land. During December 2011, Coal & Allied commenced the sediment basis' improvement programme which include increasing the number of sediment basins from 8 to 11 multi-celled basins. After the February incident, high volume pumping of water from the linked sediment basins and the use of vacuum trucks to transfer water into the active mine area (a self-contained catchment) was undertaken. During my inspection on 26 March 2013 I observed the physical constraints associated with the Charlton Road visual bund work area such as the powerline corridor, the access track and the visual bund. These infrastructure items are very restrictive in terms being able to significantly expand the capacity of the sediment basins. The inability to increase the capacity of the sediment basin system to Blue Book recommended designs was mitigated via the installation of a range of other Blue Book principles such as catchment reduction / revegetation and drainage stabilisation. In my opinion, apart from maintenance of all existing erosion and sediment control measures eg desilting of basins, straw bale / sediment filter fence repairs, the only necessary future safeguard for prevention of a non-compliant release of sediment laden water is to ensure that the existing portable pumping system remains in place until the catchment area reporting to the sediment basins has been deemed fully or successfully rehabilitated. 79He concludes his report as follows: I do note that while some water did leave this swamp and entered the Wollombi Brook, the water sampling undertaken shows that there is no material difference between water quality upstream and downstream of this point of discharge for the period that water was entering the Brook. In my opinion, most sediment would have had the opportunity to settle into the lagoon and Saltpan Creek before entering Wollombi Brook. This opinion is based on my experience in past observation of the sediment filtering capability of these types of lagoons. Sediment-laden runoff entering the culverts under Charlton Road would have been dispersed by vegetation, particularly by existing pasture between Charlton Road and Wollombi Brook. Sediment-laden runoff discharging into Salt Pan Creek would have been diverted into Newport Farm Lagoon, which is an excellent sediment filtering structure. Based on my expertise drawn from my experience, in my opinion any overflow discharge from the Lagoon would have been far less turbid than inflow to the Lagoon for this reason. 80He also notes: The majority of costs associated with the erosion and sediment control works installed since the November 2011 and the February 2012 discharge incidents appear as invoices or financial records in the Appendices of the coal & Allied Regulator Response Form, dated 29 August 2012. Some $517,000 has been expended by Coal & Allied to fund the abovementioned works.

ENVIRONMENTAL INITIATIVES 81The Defendant's related company involved in the management of the mines is certified to an international specification for an environmental management system and its environmental initiatives include environmental training, environmental auditing, and working closely with communities to minimise the effect of its activities and to meet environmental expectations. It has been the recipient of environmental awards. Since the subject incident, it has recognised that it needs to be more proactive in adopting risk management strategies which will assist in decreasing the likelihood of it being responsible for another environmental incident. A number of measures and procedures have been, and are in the process of, being implemented, including techniques to achieve stabilisation and reduce erosion upon the bund when traditional stabilisation methods of topsoiling and seeding proved ineffective during the incident. It has developed a system of reporting its sustainable development performance and approach in line with the Global Reporting Initiative.

SENTENCING CONSIDERATIONS 82The sentence should reflect both the objective seriousness of the offence and the subjective circumstances of the Defendant. It is necessary to consider the objects of the POEO Act in s 3, the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (CSP Act), the matters required to be taken into account under s 241 of the POEO Act, and the mitigating and aggravating factors required to be taken into account under s 21A of the CSP Act. 83The objects of the POEO Act set out in s 3 include the following: 3 Objects of Act The objects of this Act are as follows: (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, ... (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, (iia) the elimination of harmful wastes, (iii) the reduction in the use of materials and the re-use, recovery or recycling of materials, (iv) the making of progressive environmental improvements, including the reduction of pollution at source, (v) the monitoring and reporting of environmental quality on a regular basis, 84Section 3A of the CSP Act sets out the purposes of sentencing: 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. 85Factors (a), (b), (e) and (f) are relevant in the present case. 86Section 241 of the POEO Act sets out matters required to be taken into account: (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. 87Section 21A of the CSP Act sets out mitigating and aggravating factors required to be taken into account in determining the appropriate sentence, including the following: ... (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, ... (i) the remorse shown by the offender for the offence, but only if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), ... (k) a plea of guilty by the offender (as provided by section 22), (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23). ... 88The POEO Act also aims to ensure that the environment is protected having regard to the principles of ecologically sustainable development. Those principles are set out in s 6(2) of the POEO Act and include: (a)The principle of integration, which states that economic and environmental considerations should be integrated in decision-making processes. (b)The precautionary principle, which states that decisions should incorporate a careful evaluation of any serious environmental harm that may occur to the environment. (c)The principle of inter-generational equity, which states that the health of the environment should be maintained for future generations. 89Thus, the principles of ecologically sustainable development create what has been described in environmental prosecutions as: (a)The necessity to assess the environmental impacts and risks associated with proposed activities and for prior environmental impact assessment: Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34, (2006) 145 LGERA 234 at [67] - [68]. (b)The obligation on members of the present generation (including the courts) to play a part in ensuring that rivers, creeks, and watercourses are preserved from pollution: Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114, (2010 174 LGERA 314 at [60]. 90The Prosecutor submits that the offence committed by the Defendant undermines the objects and aims of the POEO Act and therefore should be viewed as objectively more serious.

Actual or likely harm 91One of the matters to be taken into consideration under s 241(1)(a) of the POEO Act is "the extent of the harm caused or likely to be caused to the environment by the commission of the offence". 92"Harm" is defined in the Dictionary to the POEO Act as follows: harm to the environment includes 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. 93"Pollution" is defined to include water pollution. 94"Likely" means a real chance: Environment Protection Authority v Sibelco Australia Ltd [2011] NSWLEC 160 at [57]. 95Actual or likely (ie potential) harm both have to be taken into consideration. In Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34, (2006) 145 LGERA 234 and [175] Preston CJ of LEC said: Harmfulness needs to be considered not only in terms of actual harm but also harm that is likely to occur in the future as a result of the commission of the offence. The seriousness lies not only in the actual death or damage to the plants of the threatened species and their habitats at the time of commission of the offence but also in the potential for harm which the acts constituting the picking of the plants might entail: see Axer Pty Ltd v Environment Protection Authority at 366. 96In Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419, (2006) 148 LGERA 299 at [145] - [148] Preston CJ of LEC said (omitting citations): 145. Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account. Harm should not be limited to measurable harm such as actual harm to human health. It can also include a broader notion of the quality of life. 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. 147. Harm can be direct or indirect, individual or cumulative. Activities that contribute incrementally to the gradual deterioration of the environment, even when they cause no discernable direct harm to human interest, should also be treated seriously. 148. The culpability of the defendant depends in part on the seriousness of the environmental harm. Sentencing courts have exercised 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. If the harm is substantial, this objective circumstance is an aggravating factor. 97Section 241(1)(a) requires an assessment, as at the time of the sentencing hearing, as to whether actual harm has been caused in the past by the commission of the offence and, secondly, whether harm is likely to be caused in the future by the commission of the offence. The second is potential harm. There was debate before me as to whether s 241(1)(a) is also concerned with transient short-term potential harm following the pollution incident - as in the present case - which is no longer a potentiality as at the time of the sentencing hearing. However, the issue is sterile because it is obviously relevant and, if it is not within s 241(1)(a), it should be considered under s 241(2) which provides that: "The court may take into consideration other matters that it considers relevant". 98Approximately 3.5 megalitres of sediment laden water discharged from the Premises on 1 February 2012. Approximately 3.3 megalitres of sediment laden water discharged from the Premises on 2 February 2012. Sediment laden water continued to discharge for three more days. Samples thereafter found highly elevated levels of TS and TSS. 99In their first joint report, the parties' ecological experts, Dr David Robertson and Dr Joanne Ling agreed as follows: 7. It is our joint opinion that the release of sediment-laden water had some potential for short-term disturbance to aquatic flor and fauna at the time of the incident. However, there is no evidence to support the fact that actual harm was caused to the environment, and aquatic flor and fauna in particular, at the time of the incident. 8. It is our joint opinion that there has been no significant lasting impact on aquatic flora and fauna as a result of the incident. The results of the surveys conducted by Cumberland Ecology in April 2013 indicate that the aquatic flor and fauna are in good condition and have recovered from any environmental harm, that may have occurred at the time of the incident. 9. It is our joint opinion that if regular discharges had occurred into the areas known as Saltpan Creek and Newport Farm lagoon, they would have had the potential to cause environmental harm. However, the discharge of sediment-laden water that is the subject of this Appeal appears to be an isolated event and it is our opinion that the harm likely to be caused to the environment by the incident is negligible. 100In their second joint report written during the sentencing hearing, they explained that by potential for short term "disturbance" at the time of the incident in paragraph 7 of their first report, they meant potential for short-term change in optical properties of water, smothering of some organisms and changes in nutrient levels. Such "disturbance" seems to me to include environmental harm. Dr Ling also explained in the second report that "short-term" means 2-3 weeks. 101In their second report, they addressed the question whether, given that there had been an earlier water pollution incident in November 2012, they still agree that the "likely" harm referred to in paragraph 9 of their first report is negligible. Dr Robertson's view was unchanged. Dr Ling thought that detrimental changes were likely, including increased fine sediments and that over time and with repeated events could reduce the species richness in the wetland. I find Dr Robertson's reasoning convincing that the previous century of livestock grazing, weed invasion, erosion, deposition of sediments etc, had so changed the environment as to leave only quite hardy species which would be unlikely to be harmed by the incident. 102Dr Robertson cautiously suggested that the flooding "may" have benefited the wetland, but conceded that the earlier 2011 incident added additional uncertainty to this hypothesis. Dr Ling disagreed. I think, as Dr ling suggested, that there has been insufficient research to support such a proposition. I consider that it is too conjectural to make a finding that the incident benefited the wetland. 103I conclude that no actual or potential environmental harm was caused by the offence other than short-term potential harm for two or three weeks following the incident. As regards cumulative or incremental harm, I conclude that regular or repeated incidents such as this have the potential to cause environmental harm; however it is unlikely that such an incident will recur given the defendant's strong commitment to preventative measures since the incident. Overall, the environmental harm should be assessed as low.

Practical measures 104Practical measures could have been taken to prevent the incident occurring by ensuring that the capacity of the sediment management system was greater; in particular, most of the measures the Defendant has implemented since the incident referred to at [74] above, at a cost of over $500,000. It is a mitigating factor that at the time of the incident the Defendant was acting to improve the sediment controls and had started this process before an earlier rainfall incident involving the movement of sediment offsite in November 2011.

Foreseeability of harm or likely harm 105In my view, the defendant could have reasonably have foreseen the potential for at least short-term environmental harm.

Extent to which Defendant had control over the causes that gave rise to the offence 106The defendant had control over the causes that gave rise to the offence in the operator of the mine, it had control over the sediment and management and control works.

State of mind 107The offence was unintentional. No question of negligence arises.

Conclusion as to objective seriousness 108The maximum penalty for the offence is $1 million. This is the public expression by Parliament of the seriousness of the offence. However, there is a broad spectrum of conduct that can give rise to an offence. In my opinion, the offence is at the upper end of the spectrum of low objective seriousness.

Subjective circumstances 109The following subjective circumstances are mitigating factors.

Record of Prior Convictions 110The Defendant has no prior convictions for an environmental offence.

Early plea of guilty 111The Defendant pleaded guilty at the earliest opportunity. This should be reflected by discounting the penalty it otherwise would incur by 25 per cent.

Good character 112The Defendant has a good corporate character. The Defendant is 80 per cent owned by Rio Tinto. The Defendant is a good corporate citizen with good record of corporate responsibility and a long history of providing assistance to communities. It adopts a sustainable approach and has been concerned to cooperate with the Prosecutor.

Remorse 113The Defendant is remorseful and has expressed regret for the incident. The Defendant has demonstrated remorse by actions in the following ways: (a)a proactive approach to responding to the incident; (b)identification and implementation of measures to improve sediment control and management in this location; (c)expressing acceptance of responsibility for the incident and expressing regret for the occurrence of the flow of turbid water into the Charlton Road drainage ditch and under the road into Salt Pan Creek and the Newport Lagoon; (d)its expression of determination not to breach the relevant environmental law again; (e)its plea of guilty at the earliest opportunity; (f)its agreement to pay the Prosecutor's costs; (g)a number of its senior officers attended the sentencing hearing.

Cooperation with Prosecutor 114The Defendant has cooperated with the Prosecutor and its investigators through the management of the incident, the investigation of the offence and its own prosecution. Its high level of cooperation is demonstrated by: (a)Dispatching an officer to liaise with and allow access to the Prosecutor as soon as requested by the Prosecutor; (b)providing a written incident report to the Prosecutor on 10 February 2012; (c)providing records and information as and when required by the Prosecutor; (d)arranging for interviews of numerous staff; (e)willingly cooperating with the Prosecutor to provide a statement of agreed facts.

DETERRENCE 115There is a need for general deterrence to ensure that mining companies and others engaged in industries near waters do not pollute them. I do not think that there is a need for specific deterrence given the defendant's remorse and the diligent efforts it has made since the incident to implement measures to prevent a recurrence.

COSTS 116The Defendant has agreed to pay the Prosecutor's costs of $51,000, which should be taken into account on penalty.

COMPARABLE CASES 117Regard should be had to comparable cases to see if they disclose a trend in sentencing or other guidance. However, it is often difficult to obtain much guidance from other cases in the case of environmental offences because of the wide range of factual circumstances and the need to tailor the sentence to the individual circumstances of the case. 118As in the present case, the following five cases involves pollution of waters by mining companies because of escape of sediment laden waters from mining sites. 119In Environment Protection Authority v Centennial Newstan Pty Ltd [2010] NSWLEC 211 the defendant was ordered to pay a penalty of $105,000, prosecutor's costs of $28,500 and investigation costs of $10,000. It had a prior conviction for an environmental offence at the same site, which was of medium objective seriousness. There was an early plea of guilty. Between 1.4 to 1.8 megalitres of water containing between 6 and 14.6 tonnes of sediment polluted a creek, creating a plume of dirty water for a distance between 800 and 900 metres downstream. It discharged from a pipeline constructed in 1976 from which there had been no prior discharge. It was held that the offence was one of moderate objective seriousness. 120In Environment Protection Authority v Ravensworth Operations Pty Ltd [2012] NSWLEC 222 the mining company was fined $50,000 and paid professional costs of $26,500. Approximately 1.64 megalitres of sediment laden water polluted a creek. Despite plans for adequate controls, a contractor did not implement them. The circumstances were accidental. The level of culpability was low. There was no likely harm. The environmental harm was low. Objective seriousness of the offence was at the lower end of the low to moderate range. The defendant pleaded guilty at the earliest opportunity. 121In Environment Protection Authority v Sibelco Australia Ltd [2011] NSWLEC 160 the mining company was penalised $78,000 and paid professional costs of $25,270. Approximately 2.8 - 5 megalitres of sediment laden water escaped from a dam into a brook via the wall of the dam which failed. Culpability was low to moderate. There was short-term moderate harm and no likely harm or cumulative harm. Environmental harm was in the low to moderate range. The objective seriousness of the offence was low to moderate. The defendant pleaded guilty at the earliest opportunity. 122In Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65 the mining company was fined $105,000 and ordered to pay prosecutor's costs of $53,000 and investigation costs of over $8,000. Sediment laden water, the total quantity of which was unknown (but not less than 16,200 litres) polluted a creek. The majority of sediment and erosion control measures and structures identified in an erosion and sediment control plan had not been put in place. The offence caused the visible pollution of a creek and a stretch of the Goulburn River for a distance of something less than 16 kilometres. There were elevated levels of nutrients. The rainfall was unexceptional. There were four discharges giving rise to the potential for serious environmental harm. Specific deterrence was warranted. The offence was assessed as medium objective seriousness. The defendant pleaded guilty early. 123In Environment Protection Authority v Moolarben Coal Operations Pty Ltd (No 2) [2012] NSWLEC 80 the mining company was fined $112,000 and paid the prosecutor's costs of $61,000. 18.7 megalitres of sediment-laden water discharged into a creek and thence into the Goulburn River. Visual pollution occurred as far as 72 kilometres downstream and the water of the river was heavily affected by sediment. There was potential harm to the environment, assessed as low to moderate. The cause was due to the defendant's conduct and inadequate capacity of a pump it installed. The offence was held to be of medium objective seriousness. There was a prior conviction for the same offence six months earlier (see above). There was an early plea of guilty. There was a need for specific deterrence. 124The circumstances of the present case are substantially less serious than the mine cases referred to above, with the exception of Ravensworth. 125The Defendant referred me to a large number of other water pollution cases. The following may be mentioned. 126More serious than the present case is Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264, (2008) 162 LGERA 273. A fine of $100,000 was imposed and the defendant was ordered to pay prosecutor's costs and investigation costs totalling about $86,000. Between 4 and 11 tonnes of sediment were discharged into the Snowy River from a dam site over four days and stretched 15 kilometres downstream. The environmental harm was minor and short-term. The offence was of moderate objective seriousness. The causes of the incident were serious failures to take a range of measures. There was an early plea of guilty. 127Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220, (2012) 192 LGERA 415, a sentencing decision in relation to a s 120 offence, usefully sets out the key facts and results of many recent sentencing decisions in relation to this section. Each sentencing decision is heavily dependent on its facts, but some recent decisions (referred to in the Queanbeyan decision from [261]) provide comparisons, although most are higher on the scale of objective seriousness than the present. 128Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77, involved an accidental spill of approximately 20-50 litres of toxic phenolic resin products used by the defendant. The resin entered the stormwater system and flowed downstream into a creek. The defendant disputed the volume held to have escaped. There was short term environmental harm but no long term harm. There was an early guilty plea. The defendant had no prior convictions and the offence was of "a low degree of objective seriousness"; at [89]. A fine of $25,000 was imposed. 129In Environment Protection Authority v Pipeline Drillers Group Pty Ltd [2012] NSWLEC 18, after a number of earlier incidents of similar character, some benign bentonite slurry was discharged into a wetland, causing actual environmental harm over 120 hectares. A total fine of $30,000 was imposed for both offences. 130In Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114, (2010) 174 LGERA 314 a fine of $50,000 was imposed in relation to the release of some 1,000 to 3,000 tonnes of toxic slimes which spread 300 metres along a road, 200 metres over a grassed area and along a dry creek bed. No environmental harm (apart from the presence of the toxic slimes) was caused, and potential harm to the receiving waters was low (if it had reached the waters). A fine of $50,000 was imposed.

PENALTY 131In my view, a fine of $45,000 is appropriate after synthesising all the relevant factors and deducting 25 per cent for the utilitarian value of the early plea of guilty.

Publication order 132There will be a publication order under s 250(1)(a) of the POEO Act in the form of Annexure A hereto, which the parties have agreed.

ORDERS 133The orders of the Court are as follows: (1)The Defendant is convicted of the offence against s 120 of the Protection of the Environment Operations Act 1997 as charged. (2)The Defendant is fined the sum of $45,000. (3)Pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997, the Defendant, within 21 days of this order, is to place a notice in the first five pages of the following publications: (a)Singleton Argus newspaper; (b)Newcastle Herald newspaper; and (c)Australian Mining monthly magazine, at a quarter of a page in size in the form of Annexure A. (4)Within 35 days of the date of these orders, the Defendant is to provide to the Prosecutor with a complete copy of the page of the publications in which the notice appears. (5)The Defendant is to pay the Prosecutor's costs of the proceedings in the agreed amount of $51,000. (6)The exhibits may be returned. ANNEXURE A 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: 19 August 2013