Environment Protection Authority v Fulton Hogan Pty Ltd

10 While the spillway upgrade and outlet works were being undertaken, Snowy Hydro maintained, as an environmental control, an environmental release flow of approximately 96 megalitres per day via a siphon outlet which discharged water from Lake Jindabyne to a point on the Snowy River located downstream of the outlet works. This flow was often called "the riparian flow".

11 The final stages of the works included commissioning of the plunge pool by physically connecting it to the downstream waters of the Snowy River. To achieve the connection, the plunge pool was filled, two temporary coffer dams were removed, and the earthen material next to the plunge pool was excavated to form an outlet channel to connect the plunge pool to the downstream waters. The shape and dimensions of the outlet channel were important because they had to match the shape and dimensions of the Snowy River watercourse. It was during the process of physical connection of the plunge pool to the Snowy River that the pollution occurred.

12 Until the plunge pool commissioning works were completed, the commissioning works on the mini hydro and the outlet valves could not take place, and the riparian flow could not be re-directed through the plunge pool. 13 One of the two temporary coffer dams required to be removed was a rock coffer dam. Its purpose was to prevent the waters of the Snowy River flowing back into the plunge pool construction site. Behind the rock coffer dam was a depression which functioned as a sediment basin (Sediment Basin 4). Behind that, next to the plunge pool construction site, was a clay coffer dam. Over the top of the clay coffer dam was a haul road so that construction traffic could cross the Snowy River. 14 Because the coffer dams were temporary works, Snowy Hydro did not pay as much attention to them as it did to permanent works. 15 The pollutant which entered the waters of the Snowy River downstream of the construction site comprised soil, earth, clay or similar inorganic matter: (a) which was introduced into waters during the process of excavation carried out by FRH to remove the temporary coffer dams and create the channel to join the plunge pool to the downstream waters; and (b) which, from about midday on 1 August 2006 (when the plunge pool was connected to the downstream waters) was already suspended in the waters of the plunge pool, and entered the downstream waters after the two water bodies were connected. Contract between Snowy Hydro and FRH 16 On 7 April 2004 Snowy Hydro, as principal, entered into a construction contract for the spillway upgrade and outlet works with Belmadar Constructions Pty Ltd. Later, Belmadar constructed the two coffer dams and the haul road. With effect from 1 December 2005, the contract was novated so that FRH took the place of Belmadar as contractor.

17 In the contract, Snowy Hydro emphasised that pollution in the Snowy River was a major concern to it. Under the contract, Snowy Hydro, through its Superintendent, had power to demand from FRH a method statement and a risk management assessment for the works relating to removal of the coffer dams. It also had the power to give directions to FRH in relation to those works including in relation to the prevention and control of pollution. No such method statement or risk assessment was demanded or provided. Snowy Hydro gave some directions in relation to the works, but gave none in relation to the prevention or control of pollution until Wednesday 1 August.

18 The terms of the contract included the following: (a) Section E Specification cl 2.17.1 stated: The Contractor shall note that pollution in the Snowy River and Lake Jindabyne is a major concern to the Principal and the Superintendent will enforce the requirements for Soil Conservation and Erosion Controls rigidly; (b) FRH was required to submit to the Superintendent method statements detailing the proposed methodology for the works, including details of all temporary works and the contractor's proposed methods for preventing pollution of waterways from excavation and materials management (Section E Specification cl 1.13; Section C General Conditions cl 8.3); (c) all works would be carried out in accordance with the development approval and an environmental management plan prepared by the contractor, which was to be submitted to the Superintendent for approval. That was to be a plan which described the measures which would be taken by the contractor to avoid adverse environmental impacts, in each specific location of works under the contract (Section E Specification cl 1.13, Section D Conditions cll 9.31 and 14.3). Among the matters to be included in the environmental management plan were details of the site specific controls to be adopted to ensure environmental requirements were met; details of the resources proposed to be used to manage environmental issues; details of water quality discharge requirements; details of each environmental issue and impacts; and risk assessment of each potential impact using the appropriate Australian Standard (Section E Specification cl 2.15);

(d) FRH was obliged to immediately report to the Superintendent all safety and environmental incidents, accidents and potential hazards. If such an incident occurred, the Superintendent could direct all works on site to be suspended (Section D Special Conditions cl 9.5); (e) FRH was obliged to satisfy all legislative requirements including the requirements of the POEO Act: (Section C General Conditions cl 11.1, Section D Special Conditions cl 9.3.3); (f) the "Superintendent" under the contract was a Snowy Hydro executive, Mr Brett Jones (Section C General Conditions cl 1); (g) FRH was required to carry out and complete the works under the contract "in accordance with the Contract and directions authorised by the Contract" (Section C General Conditions cl 2.1). Directions could be given by the Superintendent or by the Superintendent's representative (Section C General Conditions cll 20 and 21). The Superintendent's powers of direction included a power to direct FRH to suspend the carrying out of any works if the Superintendent was of the opinion that it was necessary because of an act, default or omission of FRH (Section C General Conditions cl 33); (h) formal progress meetings between Snowy Hydro and FRH were to (and did) take place on a weekly basis (Section D Special Conditions cl D.7);

(i) the contract contains a number of clauses whereby FRH agrees to indemnify Snowy Hydro. Snowy Hydro's active role 19 Snowy Hydro had an active role in the construction project. It dealt with regulators and members of the public. It had its own site office on the construction site. It normally had personnel present every working day except Sundays. There was constant communication and collaboration between Snowy Hydro and the contractor in relation to the construction program, including weekly progress meetings and day to day discussions. There were discussions between Snowy Hydro and its contractor in respect of the particular works which caused the pollution. Snowy Hydro directed the contractor in respect of the carrying out of those works. The plunge pool outlet channel, which was the pollution conduit, was excavated by the contractor to the specifications of Snowy Hydro. The specifications were not pre-determined by contract drawings but were dictated on site by Brian Mayhew (Snowy Hydro's Structures and Dam Safety Manager and Construction Manager for this project) whilst the works were being carried out. Mr Mayhew reported to Brett Jones, Snowy Hydro's Superintendent. 20 Snowy Hydro utilised the services of two or three full time site inspectors. The site inspectors spent most of their time on the site monitoring and inspecting the works carried out by the contractor in order to examine compliance with the contract and the environmental management plan. 21 One of the site inspectors was Ian McCann, who gave evidence for the prosecution. Mr McCann was aware that the excavation of the coffer dams and haul road was to commence on 28 July 2006. His role in respect of that excavation was to ensure that the width and depth of the channel joining the plunge pool and the Snowy River was achieved. Mr McCann was not aware of any written plans or specifications for that task. It was his understanding that the works were to be completed to the satisfaction of himself and Mr Mayhew, to whom Mr McCann reported on a daily basis both verbally and in reports. It was Mr Mayhew who would give him direction in the works that he was to carry out. In addition to the site inspectors, other Snowy Hydro site employees regularly inspected works being carried out by FRH. Development application, assessment and approval 22 In 2003, Snowy Hydro submitted a development application to Snowy River Shire Council to carry out the spillway upgrade and outlet works. The development application was supported by two Statements of Environmental Effects (SEE). The SEE noted that the Snowy River Inquiry had identified the section of the Snowy River downstream from the Jindabyne Dam to the junction with the Delegate River as highly degraded (p 118). The SEE noted that potential adverse impacts would generally be restricted to the construction phase and included potential erosion and sedimentation during and immediately following activities that disturbed the land surface or were carried out within water bodies. The SEE stated that "These potential impacts are of particular importance" (p 119). 23 The development application proposed that a water quality guideline of less than or equal to 150 NTU be adopted for water discharged into the Snowy River. A water quality guideline of less than or equal to 50 NTU was proposed for 150 metres upstream of the construction activities on the surface of Lake Jindabyne. 24 Turbidity expressed as NTUs (nephelometric turbidity units) is a measurement derived from the degree to which light is able to penetrate the water column. It is relevant to note that the measurement of total suspended solids (TSS) is an alternative to the measurement of turbidity for the purpose of determining the degree or concentration of solids suspended in a water column. The concentration of TSS is expressed in milligrams per litre (mg/L) and is a measurement of the weight of solids in milligrams per litre of water. 25 In accordance with the scheme for integrated development under the Environmental Planning and Assessment Act 1979 (EPA Act), various approval bodies were forwarded copies of the development application and invited to provide general terms of approval to the council. One of the approval bodies was the Environment Protection Authority (EPA). 26 Over the next few months there were communications between Snowy Hydro and the EPA concerning water quality guidelines. As FRH was not privy to them, I do not propose to set most of them out. 27 By letter to Snowy Hydro dated 3 December 2003, the EPA issued its general terms of approval. They were provided by the EPA in contemplation of like conditions being inserted in the environment protection licence by way of licence variation. In respect of discharges to downstream waters, conditions 2.1.2 and 3.2 of the general terms of approval specified discharge limit points to the Snowy River immediately downstream of each "pollution control structure that discharges" from the Jindabyne Dam and spillway premises, to which a discharge concentration limit of 30mg/L of TSS applied. That was a more stringent water quality criterion than Snowy Hydro's previously proposed 150 NTU (see [23] above). I do not consider that the silt curtain (located downstream of the plunge pool and coffer dams) could be described as a "pollution control structure that discharges" from the premises. 28 The EPA issued its final (amended) general terms of approval on 16 February 2004. They were relevantly in the same terms as the general terms of approval referred to above, although the discharge limit was stated to be 30mg/L of TSS "plus ambient background". 29 On 17 February 2004, the council issued its development consent to Snowy Hydro for the spillway upgrade and outlet works. The EPA's general terms of approval were incorporated in the consent. Environment protection licence 30 In 2004, Snowy Hydro's existing environment protection licence was amended so that it extended to, and imposed controls over, the carrying out of the spillway upgrade and outlet works. The definition of "premises" in the amended environment protection licence included the construction site downstream of the Jindabyne Dam wall where the plunge pool and the temporary coffer dams were to be constructed. The environment protection licence required the licensee to comply with s 120 of the POEO Act, except as may be expressly provided in any other condition of the licence. 31 The environment protection licence did not permit polluted waters to be discharged from the plunge pool outlet works into the Snowy River. The only point at which the licence permitted pollutants to be discharged to the Snowy River from the construction site was at Point 17, which was the final point for the treatment of stormwater retained on the site. Point 17 was located at the end of an erosion gully, flowing into the Snowy River from Sediment Basin No 3, a little downstream from the silt curtain. At Point 17 the licence permitted a 30 mg/L ambient percentile concentration of TSS. Environmental management plan 32 As with condition 6.6 of the EPA's general terms of approval, the amended environment protection licence had a condition (E4) requiring Snowy Hydro to prepare a construction management plan for the Jindabyne Dam spillway premises, which had to be provided to and approved by an EPA Regional Manager prior to the commencement of construction. The construction management plan was required to include:

(a) a clear statement of the environmental construction objectives, and responsibilities for ensuring compliance; (b) detail of measures to mitigate construction impacts to meet the objectives; (c) a procedure for monitoring environmental construction impact levels on premises; (d) a procedure for improving performance and taking corrective action where monitoring indicates excessive noise or other pollution levels; (e) a Sediment and Erosion Control Plan; and (f) a Water Quality Control plan. 33 In June 2005, the environment protection licence was varied to remove condition E4, as the construction management plan had been submitted and approved by the EPA on 15 July 2004, as described below. 34 In May 2004 Snowy Hydro sent to the EPA a letter which enclosed what it described as an "Environmental (Construction) Management Plan as required under Consent Condition 6.6 of the EPA's General Terms of Approval for the above project (and draft amendment to the Environment Protection Licence..)". 35 That plan was in fact entitled "Environment Management Plan". It had been prepared by Belmadar, as required under its contract with Snowy Hydro. When the plan was being developed, Snowy Hydro was regularly consulted and given the opportunity to comment on its contents.

36 The environmental management plan included a "Water Control Plan". The environmental management plan indicated that the contractor's construction activities had "the potential to impact on water quality both directly and indirectly", and that the plan's objectives were to both "limit erosion and sedimentation" and "limit impacts on nearby receiving waters". A safety measure which the environmental management plan required to be in place for the entirety of the project was as follows: A silt curtain will be positioned within Jindabyne Lake during the construction activities adjacent to water. The silt curtain will be erected to prevent sediment runoff into the Lake… The design implemented for the project is based upon industry standard which has been found effective in similar applications. Results of monitoring will determine if more controls are required. 37 There was no pollution incident in Jindabyne Dam involving sediment. As part of "General Mitigation Measures", the Water Control Plan also provided for "Silt curtaining [of] all the areas with a potential for receiving runoff" and "Constant risk assessment and taking pre-empting actions to contain and address the risk of affecting the Water quality". In relation to the rock coffer dam, the Water Control Plan provided that the following practices were to be put in place: Silt curtain, within the reservoir around the perimeter of cofferdam will be provided. … Regular inspections of all erosion and sedimentation controls during the construction period will be undertaken to ensure their continued effectiveness. 38 The environmental management plan, at section 4.3.1 included a table under the heading "Water Quality Management Plan, Key Performance Indicators" which comprised information under three columns: "Parameter", "Threshold" and "Measurement Location". The table included an entry identifying turbidity as the parameter, identifying 12,000 MLd-1). Flood flows are much higher than the flushing flow of 300-1,200 MLd-1 over 8 days . Biological/ecological questions

(1) Were there any invertebrate data that indicated a change in community composition as a result of the sediment spill?

Against a background of an already degraded river it is difficult to determine a clear effect in the biota that could be attributed to the sediment spill in the pre-existing data and those collected after the spill.

Without prior degradation the methods employed would have been likely to have detected a short-term effect on stream invertebrates, especially close to the dam wall.

There was some change in the invertebrate community after the flushing flow that may be attributed to the flow but could also have been affected by normal seasonal changes.

(2) Was there any evidence for increases in invertebrate drift as a consequence of the sediment spill? No evidence because no data were collected during the spill.

(3) Was there any indication of sediment accumulation in riffle areas of the Snowy River? None observable that could be contributed to the sediment spill.

(4) Did the sediment spill have a major or minor effect on the invertebrate community? As noted in 1. above, at most minor and short term.

(5) What is the known effect of sediment addition on stream invertebrates from the literature? There is a lot of evidence in the scientific literature that sediment has marked detrimental effects on aquatic fauna, especially in cases of chronic sediment addition. However, several studies (including Australian studies) have shown short-term responses, both degradation and recovery.

(6) What is known about the condition of the invertebrate community condition in the Snowy River downstream of Jindabyne Dam before the sediment spill? The fauna immediately downstream of the Dam (several kilometres) has been shown to be degraded because of the dam, reduced flows and land use. Degradation continues further downstream also because of land use and lack of fencing of a degraded riparian zone. 150 The overall conclusion reached by the experts was: Given the pre-existing degraded state of the river, the investigations could not clearly detect environmental harm resulting from the sediment spill on aquatic invertebrate communities. Any effects are likely to have been minor and short term (<4 months) and short distance (upstream of Dalgety). There are indications that the flushing flow mobilized some sediment that had deposited from the spill and improved invertebrate communities. 151 Thus, the commission of the offence caused actual environmental harm. It is likely that between 4 and 11 tonnes of sediment was discharged into the Snowy River as a direct consequence of the commission of the offence, and a further 7 tonnes as a consequence of the release of the flushing flow as a measure to address the impact occasioned by the commission of the offence. The discharge of the sediment caused discernible pollution of approximately 15 kilometres of the Snowy River. The nature of the harm was degradation of the water quality and diminution in the aesthetic quality of the Snowy River.

152 By virtue of the offence having directly caused actual environmental harm, the offence is aggravated: Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278 at 294. 153 On the other hand, the environmental harm was minor, short term and over a relatively short distance on an already degraded section of the Snowy River. Although the degraded state of receiving waters is not a mitigating factor, it is relevant to the assessment of the harm or likely harm caused by the commission of the offence: Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 at [149]; Environment Protection Authority v Hochtief AG and Thiess Pty Limited [2007] NSWLEC 177 at [19]. The prosecutor points out that the SEE which accompanied the development application noted that the platypus was recorded in 2003 in the pool and reed bed immediately downstream, suggesting that that environment had some quality of sensitivity. However, no platypus was recorded in the then current survey for the SEE. Nor was any mention made of the platypus in the experts' joint report, where one would expect to find a reference if it was a significant consideration as at the date of the incident. I am therefore disinclined to attach much weight to the platypus consideration. Also, it appears from information in a letter dated 18 September 2003 from Snowy Hydro to the council that the level of pollution was comparable with pollution caused by a serious storm event.

154 Although there was potential for greater environmental harm and notwithstanding that the pollution continued over some days, overall I consider that the environmental harm was in the relatively low range. Practical measures 155 A factor which bears on the objective gravity of an offence is the practical measures that may be taken to prevent, control, abate or mitigate the harm to the environment: s 241(1)(b) POEO Act.

156 Christopher Alsop gave expert evidence for the prosecution, which I accept. Mr Alsop produced photographs showing the effectiveness of multiple silt curtains to control the escape of sediment and turbidity into a waterway on other projects. Mr Alsop considered that for a project of this nature there should have been a risk assessment which included a management plan and establishment of controls. Simple controls which he says would probably have reduced the turbidity generated to a non-visible level - but which were absent in the present case - include an impermeable skirt to prevent particles passing through the silt curtain; aggregate filled tubes sewn to the vertical ends of the silt curtain contoured to the banks on each end to seal against leakage around the ends; and removal or limitation of the influence of agitation sources (from the riparian flow).

157 Mr Miller, FRH's chief executive officer, gave evidence that, having considered the incident, FRH intends to adopt the following practice on any future occasions when FRH conducts wet works and a silt curtain is to be used:

(a) ensure the skirt of any silt curtain is held where possible to its full depth in the water (with the assistance of ballasting) and includes an impermeable skirt as an extra protection measure to prevent particles passing through the curtain skirt; (b) ensure that any silt curtain is either moored to an anchor point with sufficient holding power to hold the silt curtain in position and/or that the ends of any silt curtain are sealed to the contour of the shore line; (c) where provision is made on a particular silt curtain for a chain pocket and a pull through on each section, that the draw chord pulls the chain through each pocket; and (d) remove or limit the influence of any agitation sources. 158 I do not think that this proposed practice goes far enough in that it makes no provision for more than one silt curtain.

159 The prosecutor submits that there were simple practical measures which FRH could and should have taken, the most obvious of which was to cease excavation works and defer connection of the plunge pool to the Snowy River until such time as steps had been taken to: (a) significantly reduce the level of turbidity in the plunge pool; (b) ensure that controls were in place downstream which would prevent pollution of the downstream waters of Snowy River. The silt curtain was manifestly ineffective and this should have been obvious to FRH prior to commission of the offence. It was amateurish: a silt curtain tied by ropes to bushes and not extending across the full width of the river. This is apparent from the photos taken of it on 1 August 2006. A more professional system should have been installed involving more than one silt curtain - the sort of system observable both in the examples and photographs provided by Mr Alsop and in the photographs of the system later put in place downstream of the plunge pool; and (c) submit a written risk assessment and method statement to Snowy Hydro before carrying out the works. The risk assessment should have extended to an assessment of the risk associated with filling of the plunge pool with waters discharged from the intake tower. Mr Macklin's oral evidence demonstrated that FRH did not appreciate that sediment had become entrained in the intake tower during the commissioning of that plant when the temporary coffer dam in the lake was removed. 160 FRH submits that:

(a) the works were the subject of careful planning and were discussed with Snowy Hydro. In the absence of a risk assessment, method statement and detailed discussions of the risk and methodology between FRH and Snowy Hydro prior to the incident, I do not accept that this critical stage of the works was the subject of sufficient care and planning; (b) the possibility of environmental pollution was always a concern to FRH and was planned for. I accept that is so although I have commented on the inadequacy of the planning; (c) FRH considered that its construction method and the silt curtain would prevent any environmental spill. A silt curtain had been used successfully on previous occasions to prevent sediment spill in the lake. In my view, this overlooks that the riparian flow (causing agitation of waters), the turbid waters in the plunge pool and the movement of waters due to equalisation were factors which were not present in relation to the silt curtain installed in the lake; (d) whether it has been proved to the requisite standard that the silt curtain was at one time not installed correctly is perhaps arguable and there is no evidence that a written risk assessment would have made any difference. In my view, it has been proved to the requisite standard that the silt curtain was not installed correctly. The evidence includes photographs taken on 1 August and the fact that FRH had to adjust the silt curtain more than once during the incident. It is a reasonable inference, I think, that a written risk assessment would have made a difference including by focusing the parties' attention on sediment control options, particularly multiple silt curtains; (e) FRH took immediate action once discolouration was noticed. I accept that is so although there was significant delay before a second silt curtain was even considered, let alone installed.

161 I accept the prosecutor's submissions. Even if there is doubt whether the silt curtain extended the width of the river, it is clear that it was not properly secured to the banks. Only one silt curtain was in place until 2 August when a second curtain was installed which, with the readjustment of the first curtain, was effective to contain the sediment. The effectiveness of a system involving more than one silt curtain is clear from the photographic evidence.

Foreseeability of risk of harm 162 A factor bearing on the objective gravity of the offence is the extent to which the offender could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence: s 241(1)(c) POEO Act.

163 In my view, FRH could and should reasonably have foreseen that the removal of the coffer dams could result in the release of sediment into the Snowy River below the silt curtain, thus causing harm to the environment. The absent prior risk assessment should have identified the risk, which eventuated. By 29 July 2006, it was obvious that the plunge pool was turbid and virtually full. By that date it was foreseeable, and there was a high risk, that the connection of the plunge pool to the downstream Snowy River would have the consequence that turbid water in the plunge pool would migrate downstream. It was also apparent prior to the connection of the plunge pool to the Snowy River that the silt curtain was not working in such a way as to prevent the downstream migration of suspended sediment. Control over the causes 164 A factor bearing on the objective gravity of the offence is the extent to which the offender had control over the causes that gave rise to the offence: s 241(1)(d) POEO Act.

165 FRH concedes that to the extent that it was the contractor, and performed the plunge pool commissioning works, it had control over most of the works. However, it submits, Snowy Hydro inspected and had power to give directions in relation to the works, gave no directions to FRH to do anything differently, gave specific directions to dig a deeper channel and to keep digging after discolouration was first noticed. FRH submits that from the time discolouration was first noticed, Snowy Hydro was "calling the shots". Additionally, if the riparian flow was a contributing factor, that was beyond FRH's control. 166 In my opinion, FRH had equal control with Snowy Hydro over the causes that gave rise to the offence. FRH was responsible for the implementation of effective controls to prevent pollution. It carried out the works. It had an obligation not to pollute waters and had the right to refuse to carry out works which would cause pollution. Complying with orders 167 FRH was not complying with orders of an employer or supervising employee. Thus, s 241(1)(e) of the POEO Act does not apply in its terms. However, FRH points to the uncontradicted evidence in this case of Mr Macklin, which I am prepared to accept, that on Sunday 30 July 2006 FRH was directed by the Snowy Hydro Superintendent, Brett Jones, to "keep digging" after Mr Jones had seen that the works were causing pollution.

168 The prosecutor submits that this does not diminish FRH's culpability: Environment Protection Authority v Coe Drilling Australia Pty Limited [2005] NSWLEC 719 at [139] - [142] where Preston CJ held: 139 …All persons under a contract, whether a principal or a contractor, are obliged to obey the law, including in this context, the statutory obligation under the POEO Act not to pollute waters. The fact that one party to a contract refuses to take action to avoid breaching the law, here to avoid pollution of waters, does not exculpate or relieve another party from its obligations to comply with the law.

140 Here both parties were on notice that there was a highly foreseeable risk that pollution of waters would occur if the contract was performed in the manner originally proposed. Practical alternatives were available to avoid that risk. Both parties were obliged to comply with the law including the statutory obligation under the POEO Act not to pollute waters.

141 In the circumstances, this required both parties either to agree to one of the alternatives suggested by the defendant or otherwise not to perform the contract as originally specified. A failure by the principal, MCW, to pursue one of the suggested alternatives of action could in no way relieve the defendant as the contractor from its obligation to comply with the law, including the statutory obligation not to pollute waters under the POEO Act. If the principal would not agree to pursue one of the suggested alternative means of installing the pipe, the contractor was obliged not to perform the contract as originally specified. There was no legal conundrum.

142 To find the defendant's conduct in the circumstances of this case an extenuating circumstance would be to undermine the regulatory scheme established under the POEO Act. The system of pollution control would become ineffective. The dicta of Mahoney J in Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359, quoted in part above, emphasises this point. 169 FRH concedes that both parties were obliged to obey the law but submits that there is a distinction in that FRH did not think it was disobeying the law or was about to breach it. I do not accept the submission. FRH's obligation to obey the law included the statutory obligation not to pollute waters, of which it should have been aware. It was also a term of FRH's contract that it was obliged to satisfy all legislative requirements, including the POEO Act. The risk of pollution of the river by reason of continuation of the works was apparent at the time Mr Jones gave his direction. Reasons for commission of offence 170 The objective seriousness of an offence may also be measured by reference to the reasons for its occurrence: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366 per Badgery-Parker J. There were no deliberate, commercial reasons for the commission of this offence. Conclusion 171 Overall, I conclude that FRH's offence is of moderate objective seriousness.

SUBJECTIVE FACTORS State of mind of offender 172 A relevant subjective factor in a strict liability offence such as this is the state of mind of the offender: Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [201] - [208]; Hardt v Environment Protection Authority (2007) 156 LGERA 337 at [53]. FRH did not intend to pollute the Snowy River. Ironically, it was engaged in the tasks of rejuvenating the degraded Snowy River, in respect of which it was otherwise successful. It thought that there were adequate environmental controls in place and the polluting event took it by surprise. Awareness of its contractual obligations 173 FRH must be taken to have been aware of its contractual obligations, which are analysed at [18] above. They included an obligation to satisfy the requirements of the POEO Act. Awareness of obligations under the POEO Act and environment protection licence 174 FRH must be taken to have been aware that it was an offence to pollute waters unless authorised to do so pursuant to an environment protection licence. Mr Macklin in oral evidence effectively conceded this.

175 Mr Macklin's evidence was that he believed that FRH was entitled to discharge turbid water into the river provided it was inside the turbidity limit of 150 NTU. He said this belief was based on his understanding of the information in section 4.3.1 of the environment protection licence. In my opinion, the terms of the licence environment protection licence are sufficiently clear, and FRH should have known, that no discharge of pollutants into the Snowy River was permitted (save for discharge of treated water from Point 17, being a point located downstream of the construction site at the end of an erosion gully flowing into the Snowy River from Sediment Basin No 3). In the circumstances, I do not consider that a mistake such as this by a major civil contracting company such as FRH is excusable. It is not a mitigating factor.

Awareness of potential impacts identified in the SEE 176 FRH must be taken to have been aware of the assessment of potential impacts set out in the SEE accompanying the development application. It was supplied to the contractor by Snowy Hydro. The SEE: (a) noted that the Snowy River Inquiry had identified the relevant section of the Snowy River downstream from the Jindabyne Dam as highly degraded (p 118); (b) identified that potential adverse impacts included potential erosion and sedimentation during and immediately following activities that disturb the land surface or are carried out within water bodies, and that such impacts are of particular importance as the works would be undertaken adjacent to and within Lake Jindabyne and the Snowy River (p 119); and (c) asserted that potential impacts would be minimised by the contractor's preparation of, and adherence to, an environmental management plan and the implementation of water quality controls in a sediment and erosion control plan; and (d) proposed specific mitigation measures to minimise potential impacts of the proposed development on the platypus " to control soil loss at the construction site and minimise any associated increases in water turbidity downstream - blanketing sediments can be particularly harmful to aquatic invertebrates (an important food source for the platypus) ". Awareness of requirements for plunge pool connection 177 FRH was aware that the connection of the plunge pool to the Snowy River would necessitate the removal of the coffer dams and earthen material. It was aware that this was a critical time in respect of potential pollution for the Snowy River because the connection would create a conduit between the construction site and downstream waters after a long period of physical separation.

Awareness of turbidity of plunge pool waters 178 In July 2006, FRH personnel were present during the commissioning of the submerged discharge valve and witnessed the release of a large volume of highly turbid water into the plunge pool. It changed the colour of the plunge pool from a light green colour to a muddy brown colour. In the period between 21 July and 29 July 2006, FRH was aware that the suspended particles in the plunge pool were not settling out of the water column to any significant degree. FRH thus knew that this large body of turbid water would presently be connected with the downstream river. Awareness of sediment control - a silt curtain 179 For a considerable period prior to connection of the plunge pool waters and the downstream river, FRH was aware that the only sediment control in place was one silt curtain. It was also aware that it had not submitted a method statement or risk assessment in relation to the works. 180 Mr Macklin gave evidence that he had confidence in the effectiveness of the single silt curtain to control migration of sediment from the construction site. In the absence of a submission to the Superintendent and consideration of a risk assessment, I do not think that his confidence was well founded. It also appears to be inconsistent with FRH's installation for a time in 2004 of an additional silt curtain in this location. An email of 15 September 2004 from Mr Endersby of Snowy Hydro to Mr Macklin indicates that FRH was aware that there had been problems with respect to water quality downstream of the rock coffer dam in September 2004 and had at that time agreed with Snowy Hydro to install an additional silt curtain. A photograph taken in August 2004 in that location appears to show only one silt curtain in that location. A photograph taken on 22 September 2004 appears to show two silt curtains in that location.

181 Mr Macklin's perception that a similar type of silt curtain had earlier been effective in preventing sediment migration in Lake Jindabyne was a fragile basis for his belief that the subject silt curtain would be effective to prevent migration down the river. He agreed that the two situations were fundamentally different because of the riparian flow and consequent turbulence. There were also other differences. Any such confidence should not have survived the events of 30 July and the subsequent days when it became apparent that the silt curtain was not working effectively. Awareness of pollution: 29 July - 2 August 182 On Sunday 30 July, FRH knew there were elevated levels of turbidity downstream of the silt curtain. Nevertheless, Mr Macklin instructed Mr Suthern to keep digging. On Monday 31 July, when FRH carried out further excavation works, FRH was aware that discolouration downstream continued to increase as the day progressed - later in the day becoming quite turbid.

183 On Tuesday 1 August, prior to connection of plunge pool to river, FRH was aware from early morning that there was slight discolouration in the water of the Snowy River downstream of the silt curtain. It was aware that a complaint had been made by a downstream property owner and it had cause to believe that this was a consequence of the works because it had seen turbid waters migrating downstream since 30 July. Nevertheless it continued the connection works. After the plunge pool was connected to the Snowy River at about midday on 1 August, and the water levels of the Snowy River and plunge pool had equalised, FRH was aware that the downstream waters of the Snowy River became progressively more polluted, but continued with the works. On Wednesday 2 August, FRH was aware that there had been serious pollution of the river. But works continued until they were directed to stop by Mr Mayhew at approximately 10am. Prior good character 184 FRH's lack of prior convictions and good character are mitigating factors: Crimes (Sentencing Procedure) Act 1999, s 21A(3)(e) and (f); Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at 271 [251]. FRH is a good corporate citizen. It has engaged in various environmental initiatives including environmental training and auditing, working with the community to minimise effects of its activities, and implementing sustainable development. Plea of guilty 185 FRH's guilty plea is a mitigating factor: Crimes (Sentencing Procedure) Act 1999, s 21A(3)(k). It was entered at the earliest possible moment. It is common ground that this should be reflected by discounting the penalty it would otherwise incur by the full amount of 25 percent allowed for early pleas: R v Thompson; R v Houlton (2000) 49 NSWLR 383. Remorse 186 Remorse is a mitigating factor to be taken into account in accordance with s 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999, which provides: (3) The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows:…

(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),…

187 FRH has expressed remorse which demonstrates that it has genuine insight into how it came to offend, has provided evidence that it has accepted responsibility for its actions, and has acknowledged the damage caused. Its chief executive officer has said that FRH regards this incident as a serious blot on its otherwise untarnished reputation and is determined that it will not be involved in a breach of the environmental laws again. Its remorse in these circumstances is a mitigating factor: Crimes (Sentencing Procedure) Act 1999, s 21A(3)(i). Its expressions of remorse have weight given that they were expressed by the chief executive officer and that four senior executives of FRH were present during the sentencing hearing: Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 at 338 [214]. The early guilty plea is also a demonstration of remorse. FRH has also demonstrated remorse by its conduct in response to the incident to which I refer to below in the context of individual deterrence.

Cooperation with authorities 188 FRH has cooperated to a high degree with the investigation of the offence and its own prosecution. This should be reflected in a significant discount on penalty: Crimes (Sentencing Procedure) Act 1999, s 23(1). GENERAL DETERRENCE 189 The purposes for which a court may impose a sentence includes deterring others from committing similar offences: s 3A(b) Crimes (Sentencing Procedure) Act 1999. In Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [139] - [140] Preston CJ said (citations omitted): The sentence must serve the purpose of general or public deterrence. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only light punishment will be imposed.

This factor is particularly relevant to environmental offences. Persons will not be deterred from committing environmental offences by nominal fines. 190 A fine needs to be large enough to make it worthwhile that the cost of precautions be taken, to outweigh any gains and so as not to appear as a mere licence fee for illegal activity: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359-360; Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 at 341 [229]; Environment Protection Authority v Sell & Parker (2006) 149 LGERA 209 at 215 [26].

191 FRH submits that general deterrence is of less weight than usual with environmental offences having regard to the fact that the incident involved not dangerous or harmful material per se, but natural sediment; and that it has not been established that any, or any significant environmental harm occurred. 192 In my opinion there is still a need for a firm general deterrent. The penalty should act as a general deterrent for others who engage in earthen and construction activities with potential water pollution consequences, even if their activities are of a different nature and scale.

INDIVIDUAL DETERRENCE 193 The purposes for which a court may impose a sentence includes deterring the defendant from committing similar offences: s 3A(b) Crimes (Sentencing Procedure) Act 1999. Although FRH has not provided the Superintendent with an incident report in accordance with its contractual obligations, its conduct, particularly after the incident, satisfies me that individual deterrence is not a particularly weighty consideration. It has made efforts to analyse what went wrong and to ensure that nothing like this happens again. It has demonstrated insight into its offending. I have referred at [157] above to the future practice that FRH, having considered the incident, intends to adopt in relation to silt curtains. FRH also intends to ensure that all works with which it is involved receive more comprehensive environmental consideration than has occurred in the past. This will be achieved by continuing to improve the results of auditing of its environmental management systems and by increasing the education given to all its staff on recognising potential risks to the environment and delivering the requisite knowledge to ensure such risks are minimised. 194 Since the incident FRH has adopted a range of pro-active risk management strategies to assist in decreasing the likelihood of it being responsible for another environmental incident. DAILY PENALTY 195 As noted at [145] above, the prosecutor does not press for and I do not propose to impose a daily penalty. The penalty should, however, take into account that the offending occurred on all four days during which the incident occurred.

COSTS 196 FRH submits that it should not receive a large (or any) financial penalty in addition to the costs and potential costs it has already suffered. In the circumstances of this case, I do not think that its costs of the proceedings are a significant consideration. By "potential costs" FRH means that Snowy Hydro has claimed on FRH for a large amount of money arising from the incident under contractual indemnity provisions. Assuming that such a contractual liability is a relevant circumstance - as to which it is unnecessary to express an opinion - I do not propose to take it into consideration in the present case because FRH has not conceded, and it has not been established, that it is under any such liability: cf Environment Protection Authority v Cleary Bros (Bombo) Pty Ltd [2007] NSWLEC 466 at [165] (Lloyd J). EVEN-HANDEDNESS AND PARITY 197 Consistency in sentencing is an important objective in a rational and fair system of criminal justice: R v Henry (1999) 46 NSWLR 346 at [12] per Spigelman CJ. In Markarian v The Queen (2005) 228 CLR 357 at 371 the High Court held that: "[T]here is no single correct sentence. And judges at first instance are to be allowed as much flexibility in sentencing as is consonant with consistency of approach and as accords with the statutory regime that applies" (footnotes omitted). Regard should be had to comparable cases to see if they disclose a general pattern of sentencing: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 (CCA) at 701-702. However, it is sometimes difficult with environmental crimes to obtain guidance from decisions where sentences have been imposed for the same type of offence. This is because of the wide range of factual circumstances comprising environmental offences and the need to tailor sentences to the individual circumstances of the case. In that context, in Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 at 312 [35] the Court of Criminal Appeal held that: "Even discriminating reference [to other cases] is likely to be of no utility because the facts in cases such as the present will almost always be peculiar to the individual case".

198 An additional complicating factor when comparing other decisions in the case of environmental crime is the frequency with which the maximum sentences have increased. In R v Hoerler (2004) 147 A Crim R 520 at 529 [35] Spigelman CJ said: Prior cases and Judicial Commission statistics do not often determine a range appropriate for a particular offence. They reflect what was regarded as appropriate in the wide variety of circumstances of those particular prior cases. Whether or not a sentencing pattern can be said to have emerged requires consideration of the whole body of sentences. It is unlikely that any such pattern can be said to have been established unless there have been a significant number of cases covering a wide variety of objective circumstances. Unless that is so, the cases would not encompass the relevant range of objective criminality.

199 Sentencing statistics for criminal matters dealt with by the Land and Environment Court are now available in graphical form on the Judicial Information Research System (JIRS). I have been referred to JIRS statistics. For offences against s 120(1) of the POEO Act in 35 cases between 2002 and 2008, 80 percent of the fines were in the range of $10,000 to $60,000, with the mid-point about $30,000. JIRS statistics for 17 cases in that period where the levels of environmental harm were found to be low show that 80 percent of the fines were in the range of $20,000 to $60,000. However, in both sets of statistics most of the fines were imposed before the maximum penalty was increased fourfold on 1 May 2006.

200 The JIRS database was interrogated as to cases with the following characteristics: co-operation, contrition, prior good character, costs awarded, early guilty plea, low objective seriousness, foreseeable harm to the environment, practical measures, control over causes, negligence and low environmental harm. The result yielded only one case, which was Environment Protection Authority v Nalco Australia Pty Ltd [2007] NSWLEC 831, in which a s 250(1)(e) order of $50,000 was imposed. That case was discussed at [147] above, as were Environment Protection Authority v Nowra Chemical Manufacturers Pty Ltd [2008] NSWLEC 187 (s 250(1)(e) order of $100,000) and Environment Protection Authority v CSR Building Products Limited [2008] NSWLEC 224 (fine of $280,000). All were cases of tier 2 offences where the sentences were imposed after the maximum penalties were increased in 2006. The circumstances of these cases were so different that they provide little assistance in the present case.

201 I also referred to a number of other cases of pollution of waters caused by introduction of soil or sediment from construction activities decided between 1994 and 2006: Environment Protection Authority v G. Pezzimenti & Sons Pty Ltd [1994] NSWLEC 6 (Pearlman J); Environment Protection Authority v Gosford City Council (1997) 95 LGERA 338 (Pearlman J); Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368 (Lloyd J); Environment Protection Authority v Barclay Mowlem Construction Ltd [1998] NSWLEC 304 (Talbot J); Environment Protection Authority v Daryl McCarthy Constructions Pty Ltd [2000] NSWLEC 223 (Bignold J); Environment Protection Authority v Duke Eastern Gas Pipeline Pty Limited [2002] NSWLEC 84 (Cowdroy J); Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732 (Preston CJ). In about half, the penalty imposed was 10 percent or more of the maximum penalty. These cases have been of limited assistance given the different and unusual circumstances of the present case and the need to tailor sentences to individual circumstances.

202 I have had regard to the sentence which I am concurrently imposing on Snowy Hydro in my separate judgment. After allowing for differing circumstances and the differences in the evidence, I have concluded that the same sentence should be imposed on both Snowy Hydro and FRH.

CONCLUSION 203 In my opinion, in all the circumstances, and after discounting for all mitigating factors including a 25 percent discount for the early plea, the appropriate sentence is a fine of $100,000. FRH has agreed to pay the prosecutor's costs of the proceedings in the agreed sum of $84,289.00 and investigation costs under s 248 of the POEA Act in the agreed sum of $1,897.50. 204 The orders of the Court are as follows:

1. The defendant is convicted of the offence as charged. 2. The defendant is fined the sum of $100,000. 3. The defendant is to pay the prosecutor's costs of the proceedings agreed in the sum of $84,289.00. 4. The defendant is to pay the prosecutor's investigation costs under s 248 of the Protection of the Environment Operations Act 1997 agreed in the sum of $1,897.50. 5. The exhibits may be returned.

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