Environment Protection Authority v Fulton Hogan Pty Ltd - [2008] NSWLEC 268 - NSWLEC 2008 case summary — Zoe

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Environment Protection Authority v Fulton Hogan Pty Ltd

[2008] NSWLEC 268

Land and Environment Court (NSW)|2008-07-01|Before: Biscoe J

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Source facts

Court

Land and Environment Court (NSW)

Decision date

2008-07-01

Before

Biscoe J

Source

Original judgment source is linked above.

Judgment (56 paragraphs)

[1]

BACKGROUND FRH 5 FRH is a major civil contracting company which operates in the road construction, quarrying, civil construction, infrastructure and land development sectors. The spillway upgrade and outlet works 6 The passage of the Snowy Hydro Corporatisation Act 1997 (NSW), the Snowy Hydro Corporatisation Act 1997 (Vic) and Snowy Hydro Corporatisation Act 1997 (Cth) was followed by the Snowy Water Inquiry, which considered the environmental effects of the Snowy Mountains Hydro-electric Scheme, including river flows, catchment management and Snowy River rehabilitation. The Snowy Water Inquiry resulted in the formulation of heads of agreement between the New South Wales, Victorian and Federal governments, which had among its environmental objectives the improvement of the environment of the Snowy River. The heads of agreement detailed the need for environmental releases of water (environmental flows) from Lake Jindabyne to the Snowy River downstream of Jindabyne Dam. 7 The dual purposes of the spillway upgrade and outlet works were, first, to enable environmental flows to be delivered to the Snowy River (through the outlet works) and, secondly, to provide increased spillway capacity in the event of extreme floods (through the construction of an auxiliary spillway). The construction of the spillway upgrade and outlet works was an obligation imposed upon Snowy Hydro under its Snowy Water Licence which was issued on corporatisation pursuant to the Snowy Hydro Corporatisation Act 1997 (NSW). 8 The outlet works carried out as part of the spillway upgrade and outlet works included:

[2]

[9]

(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:

[11]

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

[41]

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:…

[48]

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".

Parties

Applicant/Plaintiff:

Environment Protection Authority

Respondent/Defendant:

Fulton Hogan Pty Ltd

Legislation Cited (7)

Environment Operations Act 1997(NSW)

(NSW), the Snowy Hydro Corporatisation Act 1997(Vic)

Crimes (Sentencing Procedure) Act 1999(NSW)

Environmental Planning and Assessment Act 1979(NSW)

Snowy Hydro Corporatisation Act 1997(Cth)

Snowy Hydro Corporatisation Act 1997(NSW)

Snowy Hydro Corporatisation Act 1997(Vic)

Cases Cited (36)

CITATION : Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268

Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Director of Public Prosecutions (Cth) v Said Khodor El Karhani (1990) 21 NSWLR 270 Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278 Environment Protection Authority v Barclay Mowlem Construction Ltd [1998] NSWLEC 304 Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732 Environment Protection Authority v Cleary Bros (Bombo) Pty Ltd [2007] NSWLEC 466 Environment Protection Authority v Coe Drilling Australia Pty Limited [2005] NSWLEC 719 Environment Protection Authority v CSR Building Products Limited [2008] NSWLEC 224 Environment Protection Authority v Daryl McCarthy Constructions Pty Ltd [2000] NSWLEC 223 Environment Protection Authority v Duke Eastern Gas Pipeline Pty Limited [2002] NSWLEC 84 Environment Protection Authority v G. Pezzimenti & Sons Pty Ltd [1994] NSWLEC 6 Environment Protection Authority v Gosford City Council (1997) 95 LGERA 338 Environment Protection Authority v Hochtief AG and Thiess Pty Limited [2007] NSWLEC 177 Environment Protection Authority v Integral Energy Australia Pty Ltd [2006] NSWLEC 141 Environment Protection Authority v Lithgow City Council [2007] NSWLEC 695 CASES CITED: Environment Protection Authority v Nalco Australia Pty Ltd [2007] NSWLEC 831 Environment Protection Authority v Nowra Chemical Manufacturers Pty Ltd [2008] NSWLEC 187 Environment Protection Authority v Sell & Parker (2006) 149 LGERA 209 Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264 Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368 Environment Protection Authority v Timber Industries Ltd [2001] NSWLEC 25 Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 Hardt v Environment Protection Authority (2007) 156 LGERA 337 Hoare v The Queen (1989) 167 CLR 348 Markarian v The Queen (2005) 228 CLR 357 R v Carroll [2008] NSWCCA 218 R v Dodd (1991) 57 A Crim R 349 R v Henry (1999) 46 NSWLR 346 R v Hoerler (2004) 147 A Crim R 520 R v McNaughton (2006) 66 NSWLR 566 R v Slattery (1996) 90 A Crim R 519 R v Thompson; R v Houlton (2000) 49 NSWLR 383 R v Whyte (2002) 55 NSWLR 252 The Queen v De Simoni (1981) 147 CLR 383 Veen v The Queen (1979) 143 CLR 458

JUDGMENT INTRODUCTION 1 HIS HONOUR: The defendant, Fulton Hogan Pty Ltd, which at the relevant time was called FRH Group Pty Ltd (FRH), pleads guilty to the charge that, from about 30 July 2006 and continuing until about 2 August 2006, it polluted waters at Jindabyne contrary to s 120(1) of the Protection of the Environment Operations Act 1997 (POEO Act). Section 120 provides: (1) A person who pollutes any waters is guilty of an offence. (2) In this section: pollute waters includes cause or permit any waters to be polluted. 2 The offence relates to series of related incidents which occurred over the charge period during the final stages of a major construction project being carried out in, and immediately downstream of, the Jindabyne Dam, known as the spillway upgrade and outlet works. A component of the Snowy Mountains Hydro-electric Scheme, the Jindabyne Dam at Lake Jindabyne holds back waters of the Snowy River. The pollutant was sediment laden waters containing soil, earth, clay or similar inorganic matter. The polluted waters (the subject of the charge) were a stretch of the Snowy River approximately 15 kilometres downstream of a permeable silt curtain, which was the sole sediment control. FRH carried out the works which introduced the pollutants into the waters. 3 FRH's principal Snowy Hydro Limited (Snowy Hydro) has pleaded guilty to an identical charge arising out of the same incident. The two proceedings were heard concurrently and I sentence Snowy Hydro in a separate judgment: Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264. There is a large common body of agreed facts in both cases. However, the evidence in each case was not identical and this has led to some findings in one case which are absent or inconsistent with findings in the other case. That is the inevitable consequence of having to decide each case only on the evidence in that case without regard to the evidence in the other.

[1994] NSWLEC 6

[2008] NSWCCA 218

(1993) 113 LGERA 357

(2006) 145 LGERA 234

(2001) 115 LGERA 304

(1993) 32 NSWLR 683

(1990) 21 NSWLR 270

(2006) 148 LGERA 278

(1997) 95 LGERA 338

(2006) 149 LGERA 209

(1997) 97 LGERA 368

(2006) 148 LGERA 299