Environment Protection Authority v Environmental Treatment Solutions Pty Ltd

CCA 114; (2013) 298 ALR 532 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 R v Morgan (1993) 70 A Crim R 368 R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 R v Wickham [2004] NSWCCA 193 Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 Category: Sentence Parties: Environment Protection Authority (Prosecutor) Environment Treatment Solutions Pty Ltd (Defendant) Representation: Counsel:

Mr D Zanello (Prosecutor) Mr R Ranken (Defendant)

NSW Office of Environment and Heritage (Prosecutor) Wotton + Kearney (Defendant) File Number(s): 15/50143

ETS Accidentally but in Breach of its Licence Releases Hydrogen Sulphide into the Atmosphere Harming Several Employees

1. The defendant, Environmental Treatment Solutions Pty Ltd ("ETS"), pleads guilty to a single offence of contravening s 64(1) of the Protection of the Environment Operations Act 1997 ("POEOA") as the holder of environment protection licence 13230 ("the licence") originally granted by the Environment Protection Authority ("the EPA") on 15 December 2009.
2. Section 64(1) provides as follows: 64 Failure to comply with condition (1) Offence If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence. Maximum penalty: (a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, …
3. The licence authorises ETS to conduct the activities of waste storage and non-thermal waste processing to be carried out at the Blayney Premises, subject to conditions, including condition O1.1.
4. The offence is set out in the amended summons filed 24 July 2015, and is particularised as follows: Licence Environment Protection Licence 13230 Condition contravened Condition O1.1 which states: "Licensed activities must be carried out in a competent manner. This includes: the processing, handling, movement and storage of materials and substances used to carry out the activity; and the treatment, storage, processing, reprocessing, transport and disposal of waste generated by the activity." Place where contravention occurred At or near the Defendant's Blayney Premises, located at 79 Marshalls Lane Blayney NSW 2799 [sic] Manner of contravention The Defendant failed to carry out the licensed activity of "waste processing (non-thermal treatment)", specifically, the neutralisation of acidic and caustic materials in a concrete fixation bay (Licensed Activity), in a competent manner in that the Defendant: placed sodium hydrosulphide in the fixation bay at a time when the material in the fixation bay was acidic, and/or should have known that sodium hydrosulphide should not be mixed with acidic substances, and/or failed to conduct adequate trials to determine whether or not the sodium hydrosulphide could be safely used in the Licensed Activity, and/or failed to comply with the requirements of its Standard Operating Procedure and or Safe Work Method Statements: and/or did not provide adequate instructions to its employees Sam Crisp and Luke Davis as to the materials to be used in the Licensed Activity, and/or did not adequately supervise staff carrying out the Licensed Activity. Person Contravening The Defendant, by its employees.

ETS's Waste Storage and Processing Business

1. The facts forming the basis of this judgment were not in dispute and were contained in an agreed statement of facts and accompanying tender bundle.
2. ETS also relied upon an affidavit of Mr Jock Germany affirmed 18 September 2015. Mr Germany is a chemist and a director of ETS. The affidavit was not objected to and Mr Germany was not required for cross-examination. His evidence, where relevant, is referred to in the body of these reasons.
3. ETS operates a waste storage and processing business that stores, consolidates and processes a variety of liquid and solid wastes from commercial and industrial sources across New South Wales and interstate. At the time of the incident, ETS conducted its business at both the Blayney Premises and a waste storage facility at Ingleburn, in the Sydney metropolitan area.
4. At the time of the offence, ETS regularly received, stored and processed hazardous waste as defined in Pt 3 of Sch 1 of the POEOA, including various classes of dangerous goods as classified by the Australian Code for Transport of Dangerous Goods by Road and Rail and the Dangerous Goods (Road and Rail Transport) Act 2008. A list of the types of waste permitted by the licence to be stored and/or processed at the Blayney Premises was set out at condition L.2 of the licence.

The Incident

1. Between 9:00am and 11:30am on 27 February 2014, ETS employees Mr Sam Crisp and Mr Luke Davis were carrying out a licensed activity, namely, the non-thermal waste treatment process known as acid-alkali neutralization ("the licensed activity").
2. Acid-alkali neutralization involves mixing acidic wastes with alkaline wastes in order to produce a substance with a neutral pH level, which can then be disposed of in a less restrictive and less costly manner.
3. The licensed activity is regularly undertaken at the Blayney Premises in a 16,000 litre capacity, open-air, concrete fixation bay ("the fixation bay").
4. As at the date of the incident, ETS had in place the following written procedures relevant to the licensed activity: 1. Blayney Neutralisation Procedure, dated 8 January 2014; 2. Safe Work Method Statement ("SWMS") for Neutralisation of Corrosive Substances, dated 21 January 2014; 3. Blayney Sampling Waste and Pre-Treatment Trials Procedure, dated 8 January 2014; and 4. SWMS for Sampling Waste and Pre-Treatment Trials, dated 18 November 2013.
5. Those policies and procedures required the ETS's employees to: 1. ensure that they had fully read and understood the relevant SWMS for the neutralization of corrosive substances, which identified the risk of contamination to the environment and provided for advice to be sought from the site chemist if in doubt; 2. ensure that they had fully read and understood the relevant material safety data sheets ("MSDS") for substances to be used in procedures; and 3. arrange for a document bucket test to be performed if unsure of how a substance may react. ETS's workers were required to perform such trials in accordance with the SWMS for Neutralisation of Corrosive Substances, the Blayney Sampling Waste and Pre-Treatment Trials Procedure and the SWMS for Sampling Waste and Pre-Trials.
6. The relevant SWMS identified incompatible wastes and inhalation as risks and required the workers to complete any trials in the designated trial area with the site chemist present. In addition, workers performing such trials were required to read through the relevant MSDS and pre-trial chemical analysis and ensure all trials were documented.
7. Significantly, each of ETS's employees, relevantly including, Mr Crisp, Ms Freya Leach and Ms Nicole Meek had been inducted onto, read, and acknowledged that they understood each of the above procedures and each SWMS. Mr Davis had been inducted onto, read, and acknowledged that he understood the each of the above procedures and the SWMS for Neutralisation of Corrosive Substances, except for the SWMS for Sampling Waste and Pre-Treatment Trials.

Sentencing Principles

1. A basic principle of sentencing law is that the sentence imposed for an offence must reflect, and be proportionate to, the objective circumstances of the offence and the personal or subjective circumstances of the offender (Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 at 490 and Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472).
2. The instinctive synthesis method is the correct method of sentencing. The Court identifies all the factors relevant to the sentence and weighs their significance to arrive at an appropriate sentence (Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 at [26] and [29] and Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [35]-[39], [50]-[84] and [136]-[139]).
3. Although ETS's plea of guilty to the charge entails acceptance of the proof beyond reasonable doubt of the elements of the offence, the Court must not take facts into account in a manner that is adverse to ETS unless those facts have been established beyond reasonable doubt by the EPA (Gore v The Queen; Hunter v The Queen [2010] NSWCCA 330 at [27] and [105] and R v Wickham [2004] NSWCCA 193 at [27]). But if there are circumstances that the Court proposes to take into account in favour of ETS, it is enough that these circumstances are proved on the balance of probabilities (R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at [27]).
4. Section 3A of the Crimes (Sentencing Procedure) Act 1999 ("the CSPA") sets out the purposes of sentencing an offender. Relevant purposes in these proceedings are those contained in ss 3A(a), (b), (c), (e), (f) and (g).
5. In addition, s 21A of the CSPA identifies the matters that the Court must take into account when determining the appropriate sentence, including factors in aggravation under s 21A(2) and factors in mitigation under s 21A(3).
6. The matters referred to in ss 3A and 21A of the CSPA are in addition to any other matters that are required or permitted to be taken into account by the Court under any Act or rule of law, such as s 241(1) of the POEOA.
7. Section 241(1) of the POEOA provides: 241 Matters to be considered in imposing penalty (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee.

Objective Circumstances of the Offence

1. The primary factor the Court must consider in determining an appropriate sentence is the objective gravity or seriousness of the offence. In determining the objective seriousness of the offence, the circumstances to which the Court may have regard include (Bentley at [163]; Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [110] and Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 at [48]): 1. the nature of the offence; 2. the maximum penalty for the offence; 3. the harm caused to the environment by the commission of the offence; 4. ETS's state of mind in committing the offence; 5. ETS's reasons for committing the offence; 6. the foreseeability of the risk of harm to the environment by the commission of the offence; 7. the practical measures available to ETS to avoid harm to the environment; and 8. ETS's control over the causes of harm to the environment.

Nature of the Offence

1. A fundamental consideration of relevance to environmental offences is the degree to which the offender's conduct would offend against the legislative objectives expressed in the statutory offence (Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [15] and Plath at [49]). A proper understanding of the purpose of creating an offence is usually assisted by a consideration of the objects of the statute (Connell v Santos New South Wales Pty Limited [2014] NSWLEC 1; (2014) 199 LGERA 84 at [59]). Therefore, regard ought to be had to the objects set out in s 3 of the POEOA.
2. The objects of the POEOA set out in s 3 relevantly include: (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, … (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, (e) to rationalise, simplify and strengthen the regulatory framework for environment protection,
3. The objects of the POEOA disclose that the central mischief to which the Act is directed is to avoid, or at least mitigate, pollution in order to prevent harm to human safety and the natural environment for both present and future generations (Environment Protection Authority v Unomedical Pty Limited (No 3) [2010] NSWLEC 198 at [188]).
4. The legislative scheme requires that "proper, and strict, precautions be taken by those whose activities may cause proscribed pollution". The adoption of that legislative scheme reflects on the part of the community "a stern policy against pollution" (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359 and Moolarben at [43]).
5. As was stated in Environment Protection Authority v Orica Australia Pty Ltd (Nitric Acid Air Lift Incident) [2014] NSWLEC 103; (2014) 206 LGERA 239 at [104]), it is difficult to envisage industrial production that would not, having regard to the broad definitions ascribed to the various forms of pollution regulated by the POEOA, give rise to conduct that would otherwise, but for a proscribed licensing regime under that Act, be unlawful. Compliance with licence conditions is the price that entities must pay for permission to engage in potentially polluting manufacturing processes. The conditions imposed in any licence are aimed at maximising beneficial environmental outcomes and minimising environmental harm. They represent a balancing exercise between fostering economic growth and development, on the one hand, and protecting and preserving the environment now and for the future, on the other. Strict compliance with the conditions of any environmental protection licence is therefore necessary to ensure that this balance is achieved and that the objectives of the POEOA are met.

Maximum Penalty

1. The maximum penalty for an offence reflects the seriousness with which Parliament views the offence (Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 and Plath at [67]). There is a spectrum of offending behaviour covered by a given offence and imposition of the maximum penalty is necessarily reserved for the worst case for which the penalty is prescribed (Markarian at [31]).
2. The maximum penalty for the commission of the offence pursuant to s 64(1) of the POEOA by a corporation is $1 million.

Environmental Harm Caused by the Commission of the Offence

1. The environmental harm caused by the commission of an offence is a central consideration in determining the objective gravity of the offence. The concept of harm in the context of environmental offences is broad (Waste Recycling and Processing Corp at [145]-[147]).
2. Harm includes the potential or risk of harm, not merely actual harm (Waste Recycling and Processing Corp at [145]; Axer at 366 and Bentley at [175]). Harm can be direct, indirect or cumulative (Waste Recycling and Processing Corp at [147]).
3. Furthermore, s 241(1)(a) of the POEOA makes it clear that in sentencing the Court is to consider the "extent of the harm caused or likely to be caused to the environment by the commission of the offence". The POEOA defines "harm to the environment" broadly 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.
4. In the present case, actual, albeit transient, harm resulted from the commission of the offence.
5. Seven ETS employees, located at various parts of the Blayney Premises at the time, were adversely affected by the hydrogen sulphide gas released in the following manner: Employee Name Position Physical Impact of Hydrogen Sulphide Inhalation Mr Ryan Whitaker General Labourer, ETS Blayney Premises Loss of consciousness resulting in loss of memory, disorientation, dizziness and headache. Ms Nicole Meet Site and Compliance Manager, ETS Blayney Premises Headache, dizziness and chest tightness. Ms Freya Leach Onsite Chemist / Operations Manager, ETS Blayney Premises Loss of consciousness resulting in loss of memory, disorientation, dizziness, headache, nausea. Mr Sam Crisp Leading Hand, ETS Blayney Premises Loss of consciousness resulting in loss of memory, disorientation, dizziness and headache. Mr Luke Davis Labourer, ETS Blayney Premises Dizziness, nausea and chest tightening. Mr Rizqa Frieslaar Administration Manager, ETS Ingleburn Facility Headache. Mr Zedd Lawton Site Manager, ETS Ingleburn Facility Headache, dizziness and chest tightening.

1. Upon becoming aware of the incident, ETS employees that were less severely impacted by the hydrogen sulphide gas assisted those members who had temporarily lost consciousness. They also caused the Blayney Premises to be evacuated. ETS staff also immediately notified adjacent businesses of the incident and called emergency services and the EPA to report the incident.
2. The Police, Ambulance Service and the Hazardous Materials Unit of Fire and Rescue NSW ("HAZMAT") attended the Blayney Premises in response to the incident. Police established a 500m evacuation and exclusion zone around the Blayney Premises.
3. HAZMAT staff took a sample of the liquid waste material in the fixation bay, which indicated an acidic pH level of 0.2. HAZMAT staff then stabilised the material in the fixation bay and carried out air monitoring. The Blayney Premises were declared safe and control was handed back to ETS at approximately 4:30 pm that same day.
4. After being treated at the scene by paramedics, the seven ETS employees affected by the hydrogen sulphide gas were taken to hospital for monitoring and observation. All but one of those employees were released from hospital approximately six hours after admissions without any signs of ongoing adverse health impacts as a result of the incident. The remaining affected employee was kept in hospital for a longer period due to the existence of an unrelated and previously unknown medical condition that was fortunately identified during the period of observation.
5. In addition, an independent contractor working at the premises at the time of the incident and a police officer who attended the scene in response to the incident, were also taken to hospital for observation.
6. The EPA submitted that the harm caused by the incident was substantial and serious, despite its temporary nature. As Preston J held in Waste Recycling and Processing Corp (at [157J]): 157 I find the environmental harm to be substantial, and an aggravating circumstance of the crime, for the following reasons:… (j) The fact that the adverse effects on the environment are limited in duration (at least 5 weeks) or in space (800 m length of the creek) does not mean that the harm is not substantial: see Environmental Protection Authority v Warringah Golf Club Limited (No 2) [2003] NSWLEC 222; (2003) 129 LGERA 211 at 215 [10].
7. I agree, despite a submission to the contrary by ETS premised on the limited duration and temporary nature of the harmful effects of the release of the hydrogen sulphide gas. The actual consequences were, on any view, severe, and could have potentially been much worse had it not been for the fact that the release did not occur in a confined space but in open air. Hydrogen sulphide gas is a rapidly acting and highly toxic gas which is potentially lethal to humans in high concentrations. True it is that the actual concentration of the hydrogen sulphide gas released is not known, but the potential for far more serious harm, given the toxicity of the gas, remained.

ETS's State of Mind

1. A breach of s 64 of the POEOA is an offence of strict liability, which means that mens rea is not an element of it. However, the state of mind of ETS at the time of committing the offence is a relevant consideration when imposing a sentence. This is because a strict liability offence that is committed intentionally, negligently or recklessly, will be objectively more serious than one committed accidentally (Rae at [42]-[43] and Gittany at [123]).
2. In the present case there is no question of ETS having intentionally or recklessly committed the offence with which it has been charged. Equally, on the facts outlined above, although it was ETS's negligence that caused the gas to be released, its actions did not attain the level of seriousness required to be characterised as conduct that is criminally negligent.
3. As was stated in Gordon Plath of the Department of Environment and Climate Change v Fish; Orogen Pty Ltd [2010] NSWLEC 144; (2010) 179 LGERA 386, albeit in relation to an offence against s 118D of the National Parks and Wildlife Act 1974, "in the criminal context, negligence means more than a breach of a duty of care". To amount to criminal negligence (at [81]): ... the degree of carelessness must be such as to show such a disregard for the objects of the statute as to amount to a crime against the state (R v Bateman [1925] All ER Rep 45; (1925) 19 Cr App R 8; see also Andrews v DPP [1937] AC 576 per Lord Atkin at 583; applied in Cittadini v The Queen [2009] NSWCCA 302 at [38]-[40]). For there to be negligence, there must have been an indifference to an obvious risk (R v Taktak (1988) 14 NSWLR 226 at 247, applied in Cittadini).
4. Rather, as the evidence presented disclosed, the commission of the offense was purely accidental. A matter agreed upon by the parties.

Reasons for Offending

1. A factor by which the objective seriousness of the offence may be augmented is the reason for its commission (Axer at 366, Bentley at [237] and Rae at [47]). If the offence is found to be committed for financial gain this will increase its objective seriousness (Bentley at [246]-[247] and s 21A(2)(o) of the CSPA).
2. Here the offence was not committed for any such reason that would have the effect of increasing the objective seriousness of the crime.

Foreseeability of the Risk of Harm

1. The extent to which ETS could have reasonably foreseen the harm caused by the commission of the offence is a relevant objective circumstance in determining an appropriate sentence (s 241(1)(c) of the POEOA; Camilleri's at 700, Plath at [48] and [135] and Kyluk v Chief Executive, Office of Environment and Heritage [2013] NSWCCA 114; (2013) 298 ALR 532 at [131]).
2. The harm caused by ETS's failure to carry out the licensed activity in a competent manner giving rise to the offence was clearly foreseeable for the following reasons: 1. each of the waste types used in the licenced activity were dangerous goods which in and of themselves, without mixing or processing, posed a risk of harm to the environment, particularly human health; 2. ETS's written policies and procedures identify the risks of "unknown reactions and toxic/corrosive fumes as a possible safety or environmental hazard"; 3. the MSDS for sodium hydrosulphide flakes and the warning labels on the bags of sodium hydrosulphide flakes used in the licenced activity warned that sodium hydrosulphide produces hydrogen sulphide gas when mixed with acids; and 4. ETS had been advised by the findings of a mandatory environmental audit, carried out pursuant to Pt 6.2 of Ch 6 of the POEOA, that its processes and procedures concerning the neutralisation of acidic and caustic waste required improvement.
3. ETS therefore accepted that the harm caused was foreseeable. This is evident from the fact that the ETS had a number of policies and procedures concerning the carrying out the licensed activity which, if properly followed at the time, would have prevented the harm from arising.

Control Over the Causes of the Harm

1. At all times ETS had complete control over the causes of the harm (s 241(1)(c) of the POEOA). The control extended to the following causal factors giving rise to the commission of the offence: 1. ensuring that incompatible dangerous goods were not mixed during the carrying out of the licenced activity; 2. appropriately and accurately instructing its employees charged with carrying out the licensed activity as to the specific types of dangerous goods that could be safely used in the licenced activity; 3. adequately supervising the employees charged with carrying out the licenced activity; 4. implementing practical measures and procedures (such as job running sheets or checklists and the direct involvement or oversight of the site chemist with all aspects of dangerous goods storage and processing) to ensure that the licenced activity was carried out in a competent manner; and 5. ensuring that the requirements of its policies and procedures were complied with.
2. In other words, the harm was caused by a combination of broader systemic and procedural failures by ETS, through its employees, resulting in specific failures by several individuals in carrying out their duties in relation to the licensed activity.

Practical Measures Available to ETS to Avoid or Mitigate Harm

1. Section 241(1)(b) of the POEOA mandates that the Court consider the "practical measures that may be taken to prevent, control, abate or mitigate" the harm identified in s 241(1)(a). In Axer, Mahoney JA commented as follows (at 359): The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that… proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that… care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur.
2. It was not in dispute that there were a number of practical measures available to ETS to prevent the resultant environmental harm arising from the commission of the offence and to ensure that the licensed activity was carried out in a competent manner, namely, by: 1. providing written (as opposed to merely verbal) instructions concerning the materials to be used in the licensed activity; and 2. ensuring that the site chemist, Ms Leach, undertook further supervision of the workers when they carried out the licensed activity.

Response to the Incident

1. ETS's response to the incident was immediate and appropriate. As Mr Germany stated: On the day of the Incident, I was working at the Ingleburn premises. I received a call from Nicole Meek, in which I was told of the Incident. I immediately drove to the Blayney Premises, which is roughly three hours away by car. I arrived at the Blayney Premises at around 4pm by which time all ETS employees had been evacuated and taken to hospital for monitoring observation. Officers from the EPA and the emergency services were at the Blayney Premises when I arrived, although they left shortly afterwards. Later that evening, when all but one ETS employee had been released from hospital (that person remaining in hospital due to an unrelated medical condition), I took the ETS employees to dinner to discuss the Incident and to make sure everyone was okay. The day after the Incident, I conducted a debrief session with ETS' employees at the Blayney Premises to discuss the Incident in further detail and to address any concerns. An officer from WorkCover NSW attended the Blayney Premises either the day of or the day after the Incident. Nicole Meek relayed to me the conversation she had had with the officer as follows: Me: "What did the WorkCover NSW officer say to you?" Nicole: "He said that he did not propose to take any further action against ETS". ETS has not had any further contact with WorkCover NSW in relation to the Incident. In the days following the Incident, ETS then took the steps detailed in the PIRMP [Pollution Incident Response Management Plan]. This included visiting the neighbouring properties (including the local primary school which was a few hundred metres away) to discuss the Incident and to see whether there had been any adverse impact caused by the Incident. Additionally, ETS advertised an upcoming meeting in the Blayney Courier to discuss the Incident. The meeting took place approximately 2 weeks after the Incident. The meeting was attended by approximately 20 people. At this meeting, ETS sought to address any concerns the community had with respect to the Incident.

Conclusion on Objective Gravity

1. In my opinion, the offence should be classified towards the mid-range of seriousness having regard to the fact that: 1. the environmental harm was substantial; 2. by its very nature, namely, chemical processing, carries inherent environmental risks; 3. the offence was caused by inadvertence only; 4. ETS has demonstrated its commitment to environmental protection by investing in practical measures to improve environmental performance at the Blayney Premises; 5. the offence did not result from any decision to put the environment at risk in order to save money; and 6. ETS responded promptly and appropriately to the incident to minimise environmental impacts.

Subjective Considerations

1. As stated above, within the limits set by the objective seriousness of the offence, the Court must take into account subjective factors both favourable and unfavourable to ETS contained in s 21A of the CSPA. A proportionate sentence requires the Court to take into account any mitigating factors that are personal to ETS (Rae at [55]; Gittany at [144] and s 21A(3) of the CSPA). Relevant subjective circumstances include: 1. whether ETS has a prior criminal record (s 21A(3)(e) of the CSPA); 2. whether ETS is of good character (s 21A(3)(f) of the CSPA); 3. whether ETS is unlikely to re-offend (s 21A(3)(g) of the CSPA); 4. whether ETS has demonstrated remorse for the commission of the offence (s 21A(3)(i) of the CSPA); 5. whether, and when, ETS entered a guilty plea (ss 21A(3)(k) and 22 of the CSPA and R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [151]-[155]); 6. whether ETS provided assistance to the regulatory authorities in the investigation and prosecution of the offence (ss 21A(3)(m) and 23 of the CSPA); and 7. whether ETS is likely to pay the prosecutor's legal and investigation costs of the proceedings.

Prior Convictions

1. ETS does not have any prior convictions for environmental offences.

Good Character

1. The evidence of Mr Germany demonstrates that ETS is a good corporate citizen and, more specifically, that its recent investments in environmental improvements and its support for various community programs, show that it is of good corporate character. For example, ETS sponsors local events including the annual trotting race in Blayney and accepts waste from local residents at no charge. It also has hired several unskilled workers from the local Blayney community and paid for their relevant training.

Likelihood of Re-offending

1. According to Mr Germany, ETS has undertaken a number of actions to minimise the chance of similar incidents occurring in the future. These include actions taken both immediately following the incident and in the intervening period prior to sentencing.
2. Immediately following the incident, ETS undertook the following measures in order to avoid the recurrence of a similar incident and to ensure that licensed activities involving hazardous waste are carried out in a competent manner: 1. full implementation of the pallet numbering system, which is designed to ensure the traceability of waste from receipt to disposal and that had not been fully implemented at the time of the incident; 2. full implementation of the colour coding system, which is designed to ensure that all wastes stored, created or consolidated at ETS sites are identified and segregated according to this system to prevent incompatible material being stored "together or unidentified waste undergoing incorrect treatment or disposal"; 3. the creation and use of daily operational check sheets; and 4. the involvement of the site chemist in all dangerous goods processes such as chemical trials, sorting and segregating waste, ensuring correct labelling, including colour coding, pallet numbering and storage.
3. ETS also issued a number of warnings to the following staff members involved in the incident. In particular, to Mr Germany, Ms Meek, Ms Leach, Mr Crisp and Mr David.
4. ETS voluntarily proposed to the EPA that the licence be amended to remove dangerous goods (including acids and alkalis) from the list of the types of waste permitted by the licence to be processed at the Blayney Premises. The EPA agreed to that proposal and amended the licence accordingly.
5. ETS has not processed any dangerous goods (including acids and/or alkalis) at the Blayney Premises since the incident. However, it would like to resume such processing in the future.
6. I therefore find that the likelihood of ETS re-offending is so low as to be negligible, a matter which should be taken into account as a factor in mitigation (s 21A(3)(g) of the CSPA).

Contrition and Remorse

1. The contrition or remorse of an offender must be taken into account as a mitigating factor in determining the appropriate sentence for an offence (s 21A(3)(i) of the CSPA).
2. ETS has accepted its responsibility for the offence at all levels of the company. This is demonstrated by the fact that it issued warnings to particular staff members, including its director, Mr Germany.
3. In addition to the plea of guilty, ETS, through Mr Germany, has expressed its genuine remorse and contrition for the incident and the distress created for its employees and inconvenience to the wider Blayney community.
4. ETS has further demonstrated that contrition and remorse in its actions immediately following the incident, as outlined above.

Early Guilty Plea

1. ETS pleaded guilty at the first available opportunity. Accordingly, its plea should attract a maximum discount of 25% (ss 21A(3)(k) and 22 of the CSPA and Thomson at [160]).

Assistance to Authorities

1. ETS cooperated fully with the EPA both during the incident investigation and during the preparation of the proceedings for hearing. This culminated in the agreed statement of facts. This assistance must be taken into account as a mitigating factor in ETS's favour (ss 21A(3)(m) and 23 of the CSPA).

Agreement to Pay the EPA's Costs

1. The Court is empowered to order an offender to pay the prosecutor's legal costs of the proceedings pursuant to ss 257B and 257G of the Criminal Procedure Act 1986.
2. The payment of a prosecutor's costs is an aspect of punishment and should be considered in the determination of the appropriate penalty as a factor that acts to reduce the penalty (Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78] and [88]; Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220 at [248] and Rae at [68]), and therefore, should be factored into the determination of the appropriate penalty.
3. ETS has agreed to pay the EPA's reasonable legal costs as agreed or assessed. Although not quantified, it may reasonably be inferred that these costs will be reasonably substantial.

Conclusion on Subjective Considerations

1. The subjective circumstances of ETS operate to mitigate to a considerable degree the penalty that would otherwise be imposed by the Court and I consider a total discount of 33% appropriate.

The Appropriate Sentence to be Imposed on ETS

1. The imposition of a sentence serves a number of purposes. As identified above, the relevant purposes listed in s 3A of the CSPA also inform the determination of an appropriate sentence. These include punishment (s 3A(a)); both general and specific deterrence (s 3A(b)); community protection (s 3A(c)); making ETS accountable for its actions (s 3A(e)); denunciation (s 3A(f)); and recognition of the harm done (s 3A(g)).

Deterrence, Retribution and Denunciation

1. The sentence must be sufficient to specifically deter ETS from repeating the conduct that resulted in the commission of the offence in the future in the hope that only nominal penalties will be applied.
2. There is also a need for the sentence to serve as a general deterrent to prevent others committing similar offences against the POEOA (Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273 at [206]-[207] and Axer at 367). The penalty imposed should be sufficient to cause others to take the positive precautions necessary to avoid offending rather than simply treating the risk of a fine as a cost of doing business.
3. Given the measures undertaken by ETS since the commission of the offence to ensure that licensed activities are carried out in a competent manner in the future, and the genuine contrition and remorse demonstrated by the company for the harm caused, specific deterrence has a limited role to play in the determination of an appropriate sentence to be imposed on ETS. However, there is nevertheless some scope for this element to operate given that ETS has expressed a desire to recommence the processing of dangerous chemical at the Blayney Premises in the future.
4. There is also, in my view, a need for the sentence to have embedded in it an element of general deterrence to promote the objects of the POEOA and to ensure that other holders of environmental protection licences comply with the conditions attached to their respective licences.
5. There is, moreover, a strong desire to ensure that those involved in the production of potentially harmful and polluting chemicals do not engage in behaviour that has the capacity to harm the environment and to human safety.
6. The imposition of an appropriate sentence also serves the purpose of ensuring that retribution and denunciation are properly addressed. The sentence of this Court is a public denunciation of the conduct of ETS and ensures that it is held accountable for its actions and is adequately punished (Rae at [8]-[9], and ss 3A(a) and (e) of the CSPA). Accordingly, I also take these elements of sentencing into account.

Consistency in Sentencing

1. A relevant consideration in sentencing is the ascertainment of the existence of a general pattern of sentencing by the Court for offences such as the offence in question (Gittany at [179]-[182] and Rae at [69]). The proper approach is for the Court to examine at whether the sentence is within the range appropriate to the gravity of the particular offence and to the subjective circumstances of the particular offender, and not whether it is more severe or more lenient than some other sentence that merely forms part of that range (Gittany at [182] quoting R v Morgan (1993) 70 A Crim R 368 at 371).
2. Of course care must be taken because each case is different and a sentence in one case does not demonstrate the limits of a sentencing judge's discretion, given the wide divergence of facts and circumstances leading to the imposition of specific penalties (Axer at 365; Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 at 312 and Hili v The Queen; Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520 at [54]).
3. The pattern of sentencing against which the present case falls to be determined is established through an examination of the relevant sentencing cases dealing with breach of licence offences under s 64(1) of the POEOA (or analogous offences) which have resulted in the release of gas or other emissions into the atmosphere.
4. Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131 concerned an offence of contravening s 128(2) of the POEOA, which required an occupier of licensed premises to carry on any activity, or operate any plant, in or on the premises so as to minimise air pollution where no emissions standard or rate was prescribed for the relevant air impurity. The maximum penalty was $1 million. The Court concluded that the offence was of low objective gravity and the harm was not substantial. The subjective factors, including the defendant's lack of prior convictions, good character, assistance to authorities, and unlikelihood of re-offending, all operated to mitigate the ultimate penalty. However, Unomedical had not pleaded guilty nor expressed remorse. A discount of only 15% was applied to the penalty. The Court imposed a fine of $90,000, made a publication order and ordered costs payable in the amount of $140,000 (at [97]-[112] and [157]-[158] of Unomedical).

Conclusions on the Appropriate Penalty for the Incident

1. Synthesising the objective circumstances of the offence as mitigated by the subjective circumstances of ETS, and having regard to the existing patterns of sentencing, I consider that the appropriate penalty for the commission of the offence is a monetary penalty.
2. The appropriate penalty for the breach of the licence condition, contrary to s 64(1) of the POEOA, is $100,000, discounted by 33%, to $67,000.

Orders

1. For the reasons provided above, the Court orders that: the defendant is convicted as charged; the defendant is fined the sum of $67,000; pursuant to ss 275B and 275G of the Criminal Procedure Act 1986 the defendant is ordered to pay the prosecutor's costs as agreed or assessed; and the exhibits are to be returned.

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