Environment Protection Authority v Hy-Tec Industries Pty Limited

IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

Matter No . 50070 of 2002 Coram : Bignold J. 25 October 2002 ENVIRONMENT PROTECTION AUTHORITY

The Defendant has pleaded guilty to a charge of an offence against s 120(1) of the Protection of the Environment Operations Act 1997 (PEO Act) in that on 31 July 2001 at Botany, it polluted waters.

The particulars of the offence endorsed upon the Summons are as follows: a) Pollution/Pollutant:

• Liquid with a pH exceeding 8.5 and/or
• Wastewater from the Premises. b) Waters
• A stormwater pipe leading from a side entry drain on a private road near Stephen Road, Botany to a stormwater pit on Mobil's premises on or near Stephen Road Botany to Floodvale Drain and downstream thereof and/or
• Floodvale Drain leading to Botany Bay and/or downstream thereof. c) Pollution of Waters:
• the Pollutants were placed in a position where they were likely to fall, descend or wash into the Waters and/or
• the Pollutants were placed in a drain, channel or gutter used or designed to receive or pass rainwater, floodwater or any water that is not polluted and/or
• the Pollutants were placed in a position where they fell, descended or were washed into a drain, channel or gutter used or designed to receive or pass rainwater, floodwater or any water that is not polluted. d) Nature of contravention:
• pumping the Pollutants from the stormwater pit on the Premises into the gutter on a private road near Stephen Road which flowed to a stormwater pipe leading to the Waters. e) Premises 71 Stephen Road Botany NSW 2019

The PEO Act, s 120(1) provides as follows: A person must not pollute any waters.

The Dictionary to the PEO Act contains relevant definitions (see s 4) including definitions of the terms "pollution", "water pollution" and "waters". Each of these terms is broadly defined.

Relevantly for present purposes "water pollution" includes "placing in or on, or otherwise introducing into or onto, the waters (whether through act or omission) any matter, whether solid, liquid or gaseous that is of a prescribed nature….".

The Protection of the Environment Operations (General) Regulation 1998 cl 52 provides that "matter described in Schedule 3 is prescribed as matter for the purposes of paragraph (c) of the definition of water pollution in the Dictionary at the end of the Act". Schedule 3 includes the following matter: Any matter that has a pH value of less than 6.5 or more than 8.5.

Relevantly, the Dictionary to the PEO Act defines "waters" to include "(a) artificial watercourse or (b) water in ….water channels".

The PEO Act s 123 prescribes a maximum penalty of $250,000 where the defendant is a corporation on conviction of an offence under Pt 5.3 which includes the offence charged against the Defendant in the present case.

The parties have considerably assisted the Court in its understanding of relevant facts by tendering an Agreed Statement of Facts (Exhibit 1) which contains facts relevant to the commission of the offence and facts relevant to sentence.

Facts relevant to the commission of the admitted offence (which derives chiefly from Exhibit 1) can be summarised as follows:

1. The Defendant, which came into existence in 1997, conducts eight concrete batching plants in Metropolitan Sydney, including the plant located at Stephen Street, Botany (the Botany premises).
2. It commenced its operation at the Botany premises in July 1999 when it acquired a lease of the premises which contained a purpose built concrete plant built in 1985. At the time of acquiring the lease of the Botany premises, the plant was in very poor condition by virtue of a build-up of waste materials in pits etc.
3. The Botany premises are the subject of an environmental protection licence issued pursuant to the PEO Act. That Licence authorises the carrying on at the Botany premises of a scheduled activity, namely "Concrete works": see s 48 of the PEO Act. The conditions of that Licence include the following Condition L1 Pollution of waters L1.1 Excerpt as may be expressly provided in any other condition of this licence, the licence must comply with section 120 of the Protection of the Environment Operations Act 1997 ".

There is no condition contained in the licence applying any exception to Condition L1.1. 4. On 26 July 2001 officers of the Environment Protection Authority (EPA) attended the Botany premises in response to a telephone call received on the EPA's "Pollution Line". The officers observed that a collapsible hose had been inserted into a join in an above ground pvc pipe located on the premises and apparently leading to the stormwater drain located in Stephen Road. The officers did not observe any discharge from the Botany premises but after testing stored waste waters for ph levels and noting that the ph was 12.2, the officers informed two employees of the Defendant Mr Hopper and Mr Stewart, that the stored liquid must not be discharged from the Botany premises. 5. Five days later, upon returning to the Botany premises, on 31 July 2001 the EPA Officers observed that wastewater was being discharged from the Botany premises into the gutter in Stephen Road and that when tested the ph levels of the discharged waste water was 12.1. The waste water being discharged was contained in a wastewater pit with a capacity of 6,600 litres (which appeared to be full) and was being pumped from the pit via a collapsible hose connected to the pump and connecting to the pvc pipe. Tests of the ph levels of the waste water in the pit revealed levels of 12. 6. Mr Stewart, an employee of the Defendant, had in accordance with instructions from his supervising officer, Mr Hopper, another employee of the Defendant, switched on the pump at approximately 6.45 am. It had a capacity of pumping 325 litres per minute. The EPA officers arrived at the premises approximately 5 minutes later that morning. They requested Mr Stewart to switch off the pump. He immediately did so. In the result on the basis that the pump had been operating for a period of 5 to 10 minutes, some 1,625 to 3,250 litres of waste waters with a high ph level of 12 had been discharged from the Botany premises into the local stormwater system. That discharged wastewater, having been pumped to the gutter in Stephen Road, thereafter flowed via an underground stormwater pipeline to Floodwater Drain which thence flows south for approximately 800 metres before it discharges into Penrhyn Estuary in Botany Bay. 7. Mr Stewart, when questioned by the EPA Officers on the day that the offence was committed said that he had checked the ph level in the wastewater which he had commenced to pump from the pit using "the old kit" (this was a swimming pool testing kit which only measured to a maximum ph level of 8.4) which he said was 9. Mr Stewart had only been employed by the Defendant for some six months and it was his job to maintain the yard area and to ensure that water did not pond in the yard area where the concrete was batched and loaded onto concrete trucks. He had to ensure for work safety reasons that excess water was collected before concrete trucks traversing the yard area turned it into slurry.

On the day that the offence was committed, the EPA officers observed that a large area of the concrete yard area was covered with waste water up to 12.5 cm deep. The estimated volume of the ponded waste water was between 7,400 and 11,400 litres. 8. The ambient ph level of the waters in Floodvale Drain is approximately 7. The effect of the introduction into those waters of the estimated volume of discharged waste waters from the Botany premises representing, upon its introduction to the Drain, some 44 per cent of the total volume of water in the drain would have been the creation of an "alkaline slug" moving downstream the drain over a period of some 20 minutes (before it discharged into the more expansive waters of Penrhyn Estuary) and raising the ph ambient level in the Drain from 7 to between 9 and 11. The Drain which services a large industrial area is a degraded environment which is affected by hydrocarbon contamination unrelated to the Defendant's activity. It appears that it does not accommodate living aquatic organisms. 9. Penrhyn Estuary, because it comprises a much larger water body, contains mangroves and shellfish, would have diluted the pollution caused by the commission of the offence and any harmful effects on the Estuary would have been confined to the area immediately where the Drain discharges into the Estuary. 10. At the time of the commission of the offence, the Defendant had in place a Procedures Manual which included a section under the heading "Plant Cleaning Procedure - Botany". The Manual divided the Plant into two distinct areas - the "Clean Area" and the "Dirty Area", the latter being the rear section of the premises containing the concrete batching plant and yard area. The Manual noted that in this area "alkaline waters are found originating from batch, slump, material seepage, and wash out waters. In addition, all raw materials are stored in static ground bins with wash out pits and water storage facilities". The Manual states that the "Duty Area" is to be "kept clean within reason". Although the Manual contains stipulations for daily cleaning of this area and its installations (eg drains, pits, storage facilities etc) the Manual is entirely silent on the questions of discharge of wastewaters to the environment and of the testing of waste waters for ph levels before discharge.

In my judgment, having regard to the objective gravity of the offence and the subjective culpability of the Defendant in its commission (the Defendant, being vicariously liable for the acts of its employees) the present case justifies the recording of a conviction for the admitted offence and the imposition of a commensurate penalty.

No submission was advanced by the Defendant for the discharge of the change or the conditional discharge of the Defendant pursuant to the discretion conferred upon the Court by the Crimes (Sentencing Procedure) Act 1999, s 10.

In my judgment, the admitted offence is not of a trivial nature and there are no extenuating circumstances in which the offence was committed. Accordingly, no case has been made out for an order being made pursuant to the Crimes (Sentencing Procedure) Act 1999, s 10(1).

In determining the appropriate penalty to be imposed in the present use, s 241(1) of the PEO Act requires the Court in imposing a penalty to consider a number of specified matters, in addition to such "other matters it considers relevant" (subsection (2)).

Such "other" matters obviously include the following mitigating factors that are relied upon by the Defendant: (i) This is the first environmental offence with which the Defendant has been charged; (ii) The Defendant is a large scale, though comparatively recent operator in Metropolitan Sydney in the concrete manufacturing and supply industry with a hitherto unblemished environmental record in the industry; (iii) The Defendant entered a plea of guilty at the first return date in these proceedings and has fully co-operated with the Prosecutor in the efficient presentation of the case by tendering the Statement of Agreed Facts; (iv) The Defendant has fully co-operated with the EPA in its investigation of the offence and in its statutory demands for the supply of information relevant to the offence (There was an initial uncooperativeness by the Defendant acting upon "in house" legal advice with the interviewing process sought to be undertaken by the EPA officers, but subsequently, there was full co-operation in the interviewing process). (v) The Defendant has taken immediate remedial action following the commission of the offence to ensure that there is no recurrence. In this respect, it has expended some $80,000 on environmental assessments and infrastructural changes. These changes have resulted in the disconnection of the pump in the pit and the closure of the pipeline discharging to the street gutter, the installation of new wash out wastewater pit doors and the installation of a waste storage tank with a capacity of 80,000 litres to store excess water from the wastewater pit and the improved on-site education of its employees at the Botany premises in proper environmental management of the plant. (vi) The Defendant has attained full quality assurance certification in respect of all eight concrete plants it currently operates including the Botany premises; (vii) The Defendant's contrition for the commission of the offence and its candid admission that the pollution incident was caused by inadequate testing equipment (to test the ph levels in waste waters) and inadequate staff training.

In my judgment, these mitigating factors, taken globally and in combination, justify a significant sentence discount. In the present case, I think the discount should be in the order of 50 per cent of the amount of penalty that would otherwise be justified by reference to the matters enumerated in s 241(1), together with the relevance of prevailing sentences for the same or similar environmental offence with which the Defendant is charged pursuant to the sentencing principle of "even handedness": Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 701/702.

In relation to the sentencing principle of "even handedness", it is to be noted that the PEO Act, s 120(1) (which came into force on 1 July 1999) repealed the Clean Waters Act 1970 and the Environmental Offences and Penalties Act 1989 and re-enacted a number of offences relating to water pollution. However, the maximum penalty for such offences was doubled. Accordingly, in applying the principle of "even handedness" in sentencing the penalties imposed in respect of convictions of water pollution offences under the previous legislation will not be directly relevant (because the maximum prescribed penalty in such cases was only 50 per cent the currently prescribed maximum penalty). Reference to the penalties imposed for convictions of water pollution offences under the PEO Act reveal penalties ranging from $15,000 to $60,000 and there are now sufficient cases under the PEO Act to no longer have recourse to the earlier cases.

Many of the penalties imposed in these current law cases reflected considerable sentence discounting (up to 50 per cent) on account of mitigating factors.

My consideration of the agreed facts in the present case in relation to the factors specified in s 241 leads me to the following conclusions -

(a) " harm " as broadly defined in the PEO Act Dictionary was caused to the immediate receiving waters in Floodwater Drain, although there is no evidence of harm being caused to aquatic life either in the drain or in the waters of Penrhyn Estuary into which the Drain ultimately discharged;

(b) practical measures could have been taken to "prevent, control, abate or mitigate" that harm - namely proper training and equipment to ensure that any waste waters discharged were within the permissible ph levels range or better still the adoption of the position that presently obtains, of not allowing any discharge of waste waters from the Botany premises;

(c) the harm caused by the offence was clearly foreseeable inasmuch as even with inadequate testing equipment it was obvious that the ph level was too high for discharge to aquatic environment;

(d) the Defendant was responsible for the acts of its employees who were inadequately equipped and trained.

In all of the circumstances, I consider that but for the influence of the mitigating factors (which I have valued globally as justifying a 50 per cent sentence discount), the offence in the present case warranted the imposition of a penalty of $50,000, reflecting 20 per cent of the maximum penalty. This assessment includes the aggravated circumstances that the offence was deliberately committed just five days after EPA officers had warned the Defendant's employees not to discharge the waste waters to the aquatic environment. However, by factoring in the 50 per cent sentence discount, the resultant penalty is $25,000 representing 10 percent of the maximum penalty. Such a result, in my judgment, is a just and appropriate penalty in the present case.

Accordingly, I propose to convict the Defendant and to impose a penalty of $25,000.

For all the foregoing reasons, I make the following orders -

1. The Defendant is convicted of the offence charged.

2. A penalty of $25,000 is imposed in respect of that conviction.

3. The Defendant shall pay the Prosecutor's reasonable legal costs in the sum determined in accordance with the Land and Environemnt Court Act 1979, s 52(2).

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