Environment Protection Authority v John Michelin & Son Pty Ltd

ng Limited [2017] NSWLEC 107 Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 Environment Protection Authority v Whitehaven Coal Mining Limited [2019] NSWLEC 27 Harris v Harrison [2014] NSWCCA 84; 86 NSWLR 422 Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348 Khamis v The Queen [2010] NSWCCA 179; (2010) 203 A Crim R 121 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 MJW v The Queen [2005] HCA 74; (2005) 222 ALR 436 Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66 Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 R v Birks (1990) 19 NSWLR 677 R v De Simoni [1981] HCA 31; (1981) 147 CLR 383 R v Dodd (1991) 57 A Crim R 349 R v Nichols (1991) 57 A Crim R 391 R v Oliver (1980) 7 A Crim R 174 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 R v Visconti [1982] 2 NSWLR 104 RWB v The Queen [2010] NSWCCA 147; (2010) 202 A Crim R 209 Ryan v The Queen [2001] HCA 21; (2001) 206 CLR 267 State Pollution Control Commission v The Electricity Commission of New South Wales [1991] NSWLEC 106 Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 Veen v The Queen (No 2) [1988] HCA 1; (1988) 164 CLR 465 Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561 Texts Cited: Australia and New Zealand Guidelines for Fresh and Marine Water Quality (2000) Category: Sentence Parties: Environment Protection Authority (Prosecutor) John Michelin & Son Pty Ltd (Defendant) Representation: Counsel: Ms S Ella (Solicitor) (Prosecutor) Mr J Johnson (Defendant)

Solicitors: Environment Protection Authority (Prosecutor) Beatty Legal (Defendant) File Number(s): 2018/379997

John Michelin & Son Pleaded Guilty to Polluting Waters

1. The defendant, John Michelin & Son Pty Ltd ("Michelin"), has pleaded guilty to an offence against s 120(1) of the Protection of the Environment Operations Act 1997 ("POEOA"). Michelin is charged with polluting waters between 12 and 14 December 2017 inclusive, at or near Lot 101 DP 1095252, William Allen Drive, Eden in New South Wales ("Premises").
2. The summons relevantly charged Michelin with the following: An order that the defendant, John Michelin & Son Pty Ltd (CAN 002 898 660), having its registered office at 13 Ben Boyd Drive, Eden in the State of New South Wales, appear before a Judge of the Court to answer the charge that, between about 12 December 2017 and about 14 December 2017 inclusive, at or near Lot 101 DP 1095252, William Allen Drive, Eden in the said State (Premises), it committed an offence against section 120(1) of the Protection of the Environment Operations Act 1997 (POEO Act) in that it polluted waters. Particulars Waters A table drain that runs between the northern boundary of the Premises and William Allen Drive and downstream thereof. Pollutant Sediment laden water, containing: Plant matter; and/or Matter that causes biochemical oxygen demand; and/or Suspended solids; and/or Dissolved solids; and/or Matter that has a pH value of less than 6.5. Manner of Breach The Defendant, pumped the Pollutant from a dam on the Premises known as Sediment Basin 1, which resulted in the Pollutant entering, or being likely to enter, the Waters.
3. Section 120(1) of the POEOA creates the offence of polluting waters: 120 Prohibition of pollution of waters (1) A person who pollutes any waters is guilty of an offence.

Michelin Owns and Operates an Excavation and Earthmoving Company in Eden

1. Most of the facts giving rise to the commission of the offence were not in dispute and were contained in a comprehensive Statement of Agreed Facts provided by the parties.
2. Michelin is a family owned and operated excavation and earthmoving company based in Eden. Michelin has been operating for over 65 years. Mr Brent (Billy) Michelin ("Mr Michelin") is the general manager of Michelin. He is the son of Mr Robert Michelin, the sole director and secretary of Michelin.

The Premises

1. The Premises is owned by the Newcastle Port Corporation, known as "the Port Authority of New South Wales" ("Port Authority"), which was at all relevant times a corporation constituted under the Ports and Maritime Administration Act 1995. The prosecutor, the Environment Protection Authority ("EPA"), is also prosecuting the Port Authority in separate proceedings in relation to the same water pollution incident.
2. The Port Authority has granted a licence of partial occupation ("Licence") to the Forestry Corporation of NSW ("Forestry NSW") for an area of the Premises identified as the "Licensed Land" in annexure A to the Licence.
3. The Licensed Land is identified as "Area 1" in an Operation Environmental Management Plan dated April 2010 ("OEMP"), prepared on behalf of the Port Authority's predecessor, NSW Maritime, in accordance with its development consent for use of the Premises. The Licensed Land is referred to as "Area 1" herein.
4. The Licence allows Forestry NSW to grant a sub-licence to a third party for the purpose of a "long term wood supply agreement" ("Timber Supply Agreement").
5. On 17 November 2017, Forestry NSW and Pentarch Forest Products Pty Limited ("Pentarch") executed the Timber Supply Agreement. Australian Marshalling Services ("AMS") occupies Area 1 pursuant to the Timber Supply Agreement as a related entity of Pentarch.
6. The Premises is located approximately 30 km south of the Eden township and 375 m inland from Fisheries Beach, south-east of Munganno Point in Twofold Bay.
7. The Premises is around eight ha in size and is divided into two areas of approximately four ha each, Area 1 and "Area 2" (these areas are also referred to in some plans and diagrams as "Commercial Area 1" and "Commercial Area 2", respectively).
8. Area 1 includes a weighbridge, amenities building, site office, diesel tank and a gravel base with a sub-surface drainage structure feeding into Sediment Basin 1 below the site office (discussed in more detail below). Sediment Basin 1 is located within the Premises but outside of Area 1.
9. AMS stores logs on Area 1 prior to export at the Twofold Bay Multipurpose Wharf. As a result of the handling and storage in Area 1, bark from the logs is deposited on the ground. AMS leases Area 2 from the Port Authority on a casual basis when it requires additional storage.

Surrounding Land Uses

1. Forestry NSW administers Lot 25 DP 1210880, namely, East Boyd State Forest no 127, which is owned by the State ("Forestry NSW Land"). The Forestry NSW Land adjoins the western boundary of the Premises. A creek ("the Creek") flows through the boundary of the Premises, into and through the Forestry NSW Land, and exits at the beach of East Boyd Bay where an intermittent coastal lake and lagoon ("ICOLL") is located.
2. Immediately to the north of the Premises, on the opposite side of William Allen Drive, are Lots 16 and 17 DP 1066187 ("Chip Mill Site"), which is owned by South East Fibre Exports Pty Limited ("SEFE"). AMS operates a chip mill and export facility on the Chip Mill Site for Allied Natural Wood Exports Pty Limited, a related party of SEFE.
3. AMS holds environment protection licence 1482, which authorises the scheduled activities of "shipping in bulk" and "wood or timber milling or processing" on the Chip Mill Site. The Chip Mill Site is a highly modified industrial site and contains a leachate dam to which all stormwater on the site drains.
4. In order to demonstrate that the Chip Mill Site forms part of the same catchment as the Premises, Michelin took the Court to a number of aerial photographs and diagrams of the Premises and the surrounding land, but did not provide any expert evidence to support its assertion. I find that the evidence relating to whether the Chip Mill Site forms part of the same catchment as the Premises is inconclusive and, accordingly, not having proved this assertion on the balance of probabilities I reject Michelin's submission in this regard.
5. In July 2018, the EPA issued an official caution to AMS in relation to its environment protection license no 1482 for an incident which occurred on 21 December 2017 during which 15 kl of effluent from the leachate dam overflowed into the environment via an overflow pipe into a table drain.
6. Below is a map of the Premises and the surrounding area:

Development Consents Held in Relation to the Premises

1. The Port Authority holds the following development consents for the Premises: 1. Integrated State Significant Development DA 254-11-99 granted by the Minister for Planning ("Minister") on 17 December 2000, being a two-staged development consent for the development of a Multi-purpose Wharf and Naval ammunitioning facility ("Navy Wharf") and use of land for a commercial facility (Stage 1), and the detailed design and operation of the commercial facility (Stage 2) ("Head Consent"); 2. Integrated State Significant Development DA 254-11-99 (Stage 2) granted by the Minister on 24 September 2004 ("Stage 2 Consent"); and 3. a modification to the Stage 2 Consent granted on 23 March 2009 ("Modified Stage 2 Consent").
2. The Head Consent applies to the Navy Wharf and the Premises. The Stage 2 Consent and the Modified Stage 2 Consent apply to the Premises only.
3. Condition 2 of the Stage 2 Consent requires that the Port Authority ensures that "employees, contractors and sub-contractors are aware of, and comply with, the conditions of this consent relevant to their respective activities."
4. Condition 7.5 of the Stage 2 Consent requires the Port Authority to implement and comply with the OEMP. Among other things, the OEMP provides that: 1. "the ultimate responsibility for maintaining and implementing this OEMP lies with [the Port Authority]…The Harbour Master, based in Eden, provides the main point of contact and frequent supervision of the site"; 2. the responsibilities of the Harbour Master include: 1. undertaking fortnightly, quarterly and annual site inspections and completing checklists which "summarise the requirements of the OEMP"; 2. monitoring compliance with the OEMP and annual site inspections; 3. undertaking audits/reviews of the OEMP at appropriate stages; 4. reporting to Manager, Shipping Safety and Port Coordination and Environmental Representative on OEMP implementation and compliance; 5. being familiar with OEMP requirements; 6. arranging training/induction of relevant personnel; 7. facilitating implementation of the OEMP; 8. ensuring that site personnel are made aware of the management measures that are to be implemented; and 9. ensuring that all site personnel, including sub-contractors, comply with OEMP requirements relevant to their scope of work and as included in contract documents; and 1. certain "management actions" are delegated to the site operators through licence conditions, including being familiar with and facilitating the OEMP.

Environment Protection License Held in Relation to the Premises

1. The EPA issued environment protection licence 20053 ("EPL") to AMS for the scheduled activity of "shipping in bulk". The EPL applies to the Navy Wharf, the Premises, and a portion of William Allen Drive between the two facilities ("EPL Premises").
2. In December 2013, the EPA issued AMS a Notice of Variation of the EPL. The variation was issued because during an inspection of the EPL Premises in March 2013, the EPA observed that "during loading operations [at the wharf] bark entered the waters of Twofold Bay." The EPA subsequently included a pollution reduction program that addressed bark management during vessel loading operations.
3. In June 2016, the EPA issued a new version of the license which required, pursuant to Condition 8, that AMS submit to the EPA by 31 December 2016, a report prepared by a suitably qualified person in relation to the suitability of a "first flush capture" water management system for the EPL Premises.
4. In February 2019, the EPA again issued AMS with a Notice of Variation of the EPL. The variation was imposed by the EPA in response to what it considered to be a failure to implement effective operational procedures and practices at the EPL Premises. The variation required AMS to undertake works to achieve the capture of a 1 in 10 year 96 hour ARI rainfall event and to "review its stormwater management practices and procedures and to provide recommendations to demonstrate how the stormwater management system will be operated to protect the NSW Water Quality Objectives for the receiving environment".
5. Clause 2 of the EPL does not permit any water to be discharged from the EPL Premises.

The Stormwater Management System at the Premises

1. The Premises has a stormwater management system, however, there was some disagreement between the parties as to its precise nature. Specifically, the parties disagreed as to whether a table drain that runs parallel to William Allen Drive into which Michelin discharged the Pollutant particularised in the summons ("Table Drain") and a sediment pond downstream ("Sediment Pond A") were a part of the stormwater management system designed to receive sediment laden water such as the Pollutant.
2. It was common ground that the stormwater management system as designed for Area 1 included the infrastructure described below: 1. a plastic lined detention basin known as "Sediment Basin 1", which has a capacity of 1,071 m3. Sediment Basin 1 has a spillway that discharges into the Table Drain if Sediment Basin 1 reaches capacity during flood events; 2. a sprinkler system connecting Sediment Basin 1 and the perimeter of Area 1; 3. a sub-surface drainage system consisting of pipelines, a series of 10 grated drainage pits, a junction pit and a stormwater outlet ("Stormwater Outlet") located in the Table Drain slightly upstream of the box culvert shown on the Drainage Plan ("Box Culvert"); 4. Sediment Pond A is a smaller sediment dam that is designed to capture further sediment. There is no infrastructure in place for irrigation of water from Sediment Pond A; and 5. overflow from Sediment Pond A discharges out of the Premises into the Creek.
3. The parties also agreed that Area 2 contains a similar subterranean drainage system to Area 1, with ten grated pits diverting stormwater to a dam known as "Sediment Basin 2". Sediment Basin 2 has a similar capacity to Sediment Basin 1.
4. A pump is installed at Sediment Basins 1 and 2 that is connected to a sprinkler system. As the sediment basins fill with water, the water from Sediment Basin 1 can be irrigated by a sprinkler system around the perimeter of Area 1 and the water from Sediment Basin 2 can be irrigated by a sprinkler system around the perimeter of Area 2.
5. The following is a diagram of the stormwater management system at the Premises:

Were the Table Drain and Sediment Pond A Intended to Receive the Pollutant?

1. The parties disagreed about the characterisation of "waters" in the particulars of the offence outlined in the summons. Specifically, it was a point of contention as to whether the Table Drain and Sediment Pond A formed a part of the stormwater system approved for the EPL Premises in the EPL, and ought to be excluded from the offence.
2. The EPA relied on the definition of "waters" in the POEOA which is sufficiently broad to include the waters in the Table Drain and Sediment Pond A. "Waters" is defined in the POEOA as follows: waters means the whole or any part of: any river, stream, lake, lagoon, swamp, wetlands, unconfined surface water, natural or artificial watercourse, dam or tidal waters (including the sea), or any water stored in artificial works, any water in water mains, water pipes or water channels, or any underground or artesian water.
3. The EPA submitted that the Table Drain was never intended to receive contaminated waters such as the Pollutant pumped from the bottom of Sediment Basin 1, because Sediment Basin 1 was designed to be a stormwater detention pond and the system downstream of it was designed only to manage stormwater runoff.
4. In reply, Michelin submitted that the discharge of Pollutant into the Table Drain and Sediment Pond A was not a breach of s 120 of the POEOA because placing water in the Table Drain and Sediment Pond A was permitted under the EPL. These components were "part of the stormwater infrastructure within the licensed premises and designed to convey and retain water containing the precise pollutants which were discharged."
5. In State Pollution Control Commission v The Electricity Commission of New South Wales [1991] NSWLEC 106, Bannon J dealt with a pollution of waters offence under the now repealed Clean Waters Act 1970. His Honour found that an artificial lake contained wholly within the defendant's premises (at which it operated two coal fire power stations), which formed part of the operation of the power stations (water was pumped from the lake to cool the boilers which then returned as heated water), and to which sewage effluent from the defendant's sewage treatment plant was pumped, constituted "waters" which could be polluted under the Act (at 7): Whatever its difficulties, the definition of "waters" in the Act, in my opinion, plainly covers waters in an artificial lake such as Lake Liddell, even if they are on private "premises" within the meaning of the Act. The beds of rivers and artificial watercourses are frequently vested in private ownership. Artificial waterways and their use are well known to the law Bailey & Co. v Clark Son & Morland (1902) 1 Ch.649. I have reached the conclusion that s.16 of the Act applies to the waters of Lake Liddell. If Elcom enjoys rights to "pollute" Lake Liddell, whether by the introduction of hot water, ash or acid, those rights have to be found in a relevant licence. Perhaps there is room to alter the law with respect to an artificial lake created for industrial purposes, but that is a matter for the legislature.

The Sediment Basins Required Cleaning

1. From at least 31 March 2017 onwards, the Port Authority was aware that there was a "high level of sediment" in the sediment basins at the Premises.
2. On 22 September 2017, Michelin provided a quote to the Port Authority for "work at [the Premises]…to clean and remove sediment from 3 onsite dams as per instructions."
3. As noted above, the OEMP required the Port Authority to complete fortnightly and quarterly inspections of the Premises. Upon the completion of each inspection, the relevant Port Authority service officer was required to complete an inspection report including a checklist with comments.
4. According to the instructions on the inspection reports, the purpose of the fortnightly and quarterly inspection checklist was to "check compliance with the requirements of the OEMP and overall environmental performance at the facility".
5. The quarterly inspection report required Port Authority employees to "inspect downstream watercourses for evidence of spills and sediment from the facility being discharged off-site" and to "sample as directed by EPA."
6. Between 17 November 2017 and 19 November 2017, approximately 59.5 mm of rain fell in the Eden area.
7. On 20 November 2017, Captain Webster confirmed that Michelin's quote to clean Sediment Basins 1 and 2 had been approved. The Port Authority had engaged Michelin to clean the sediment basins and to carry out other maintenance works on previous occasions. There was no written contract or any other written document between the Port Authority and Michelin regarding the nature of the "instructions" referred to in the quote, or the manner in which the sediment basins were to be cleaned.
8. On 22 November 2017, the Port Authority completed fortnightly and quarterly inspections of the Premises.
9. The fortnightly inspection report was completed by a Port Authority Service Officer, Mr David Malone, on 22 November 2017. This report noted that a rain event on 17 November 2017 had caused: …a large amount of yard surface [to be] diminished in yard 1 and this has changed the engineered design of [the] yard causing grated pits to be ineffective and causing excess water to flood further down the system. … Dam1 and 2 chocked [sic] with pine bark and cleaning has been arranged [referring to the cleaning by Michelin approved on 20 November 2017].

The Sediment Basin Clean Up Works

1. Michelin proposed to use a customised excavator to remove the bark and sediment from the sediment basins. The excavator had been customised by enclosing rubber runners around the wheels to prevent it from damaging the plastic lining of the basins.
2. Moreover, prior to operating the excavator, the remaining water in Sediment Basin 1 needed to be extracted. Michelin was aware of this and had hired a pump from an equipment hire company to carry out this task.
3. At 9.52 am on 12 December 2017, Mr Malone and Mr Michelin signed into the AMS site register. Mr Malone and Mr Michelin had a discussion about how the sediment basins should be cleaned. One issue arising during the conversation was where the water from Sediment Basin 1 would be pumped to. The Port Authority intended that Michelin would pump the water from Sediment Basin 1 into a grate that led to the subterranean drainage system that would flow into Sediment Basin 2. Mr Michelin disagreed with this methodology because the intended receiving drain was blocked with bark and other matter.
4. Mr Michelin suggested that the water from Sediment Basin 1 be pumped over the spillway and into the Table Drain. Mr Malone confirmed that the water could be pumped into the Table Drain. Mr Michelin recorded those instructions on a document entitled "Worksite daily record" as "pump water to outside of fence as instructed by Port Authority" in respect of the works carried out. Mr Michelin then briefed the other Michelin employees on the task and discussed the safety aspects of the work.
5. Michelin, with the assistance of Mr Malone, proceeded to set up the pumping equipment. The equipment set up involved the following steps: 1. the pump was moved into place; 2. the entrance of the hose through which the water from Sediment Basin 1 travelled from the basin to the pump was covered with a gauze material which was "like a shade cloth folded over 3 or 4 times" to prevent sediment fines getting through and to protect the pump. This end of the hose was placed in Sediment Basin 1; and 3. the other end of the hose, which would discharge water from the pump, was pushed under the chain wire fence between Sediment Basin 1 and the Table Drain and placed in the Table Drain approximately halfway between the Stormwater Outlet and the upstream end of the Box Culvert. Mr Malone assisted with feeding the hose under the chain wire fence.

Mr Glen Rixon Witnessed the Water Pollution Incident

1. Mr Glen Rixon is the caretaker of Edrom Lodge, which is located near the water's edge of East Boyd Bay. The following evidence was contained in his affidavit affirmed 8 February 2019. Mr Rixon was not cross examined in Court.
2. At 10.30 am on 12 December 2017, Mr Rixon walked to the cliff near Edrom Lodge and saw a large patch of black water in East Boyd Bay. This was different from the Bay's usual appearance, which was typically very clear. The black patch of water was several hundred metres in size and black matter was washing up on the beach.
3. At 11.00 am, Mr Rixon went down to the beach and saw that "black water was coming down along the creek in the gully that leads to the beach".
4. A short time later, Mr Rixon drove to William Allen Drive and saw that Sediment Pond A was overflowing into the Creek and flowing in the direction of a culvert that flows beneath a fire trail on the Forestry NSW Land.
5. Mr Rixon drove to the culvert on the fire trail on the Forestry NSW Land. He saw black water with whitish brown froth and pine bark flowing under the culvert and into the Creek. There was a build-up of the whitish brown froth upstream of the culvert and the black water was almost spilling onto the fire trail. Mr Rixon said the water "appeared to have a consistency a bit thicker than water usually would" and "a strong offensive chemical odour, unlike one I had smelled before, and the smell gave me a headache".
6. Later that day, from 3.30pm, Mr Rixon used his iPad to take photographs at Sediment Pond A, the culvert under the fire trail, East Boyd Bay, and the ICOLL on the beach of East Boyd Bay.
7. On 13 December 2017, Mr Rixon observed that the water was still running and contacted the EPA.

The Events of 13 December 2017

1. A major point of disagreement between the Parties was what, if anything, took place on 13 December 2017 when two Michelin employees attended the Premises. Michelin denies that any pumping took place on 13 December 2017, whereas the EPA submitted that Michelin employees did pump that day.
2. The evidence included the following facts: 1. the AMS visitor register for the Premises shows Mr Brad Johnson, a Michelin employee, signed into the Premises at 7.03 am on 13 December 2017, recording the reason for the visit as "pumping out dam". Mr Johnson signed out at 9.15 am, and then signed back in at 10.15 am for the same reason, namely, "pumping out dam"; 2. the AMS visitor register also shows that Mr Michelin signed into the Premises at 7.35 am on 13 December 2017 and left at 8.30 am that day, and that Mr Malone signed into the Premises at 9.00 am; 3. Michelin's "worksite daily record" completed by Mr Johnson on 13 December 2017 identifies the work undertaken that day as "pump water to outside of fence as instructed by Port Authority", however, Michelin submits that these are pre-start forms and therefore do not necessarily reflect the work which actually took place; 4. in a record of interview between Mr Malone and the EPA dated 30 August 2018, Mr Malone stated that he saw one Michelin employee on the Premises on 13 December attempting to carry out pumping works, however, this employee was having difficulties operating the pump because the shade cloth became obstructed; 5. Mr Malone stated that he heard the pump operating, however he did not see black water entering the Table Drain; 6. Mr Rixon contacted the EPA's environment line and reported the incident at 11.13 am on 13 December 2017 because he could still see black water running; 7. in a ROI between Mr Johnson and the EPA dated 18 August 2018, Mr Johnson stated that no pumping took place on 12 or 13 December 2017, and that pumping only took place on 14 December 2017; and 8. a letter from Michelin to the EPA dated 23 April 2018 in response to a request for information during the investigation of the offence stated that pumping took place "from 12 noon on Tuesday 12 December 2017 and… ceased at 8:30am on Thursday 14 December 2017."
3. Both the ROI dated 18 August 2018 and the letter dated 23 April 2018 contradict other evidence before the Court and the facts as agreed, and therefore, I find them to be unreliable accounts of the events on 13 December.

The EPA's Investigation

1. The EPA's investigation of the offence was detailed in the affidavits of Mr Tristan Johnston, affirmed 5 December 2018 ("Johnston Affidavit") and Ms Amanda Fletcher, affirmed 16 November 2018 ("Fletcher affidavit").
2. On 14 December 2017, two Michelin employees arrived at the Premises at approximately 7.10 am. Equipment was set up and the employees were ready to commence pumping, however, it was agreed between the parties that in fact no pumping took place on that day.
3. At 8.05 am on 14 December 2017, two EPA authorised officers, Mr Johnston and Ms Fletcher ("EPA Officers"), attended the Premises in response to the incident report received on 13 December 2017. Mr David Rodgers from Bega Valley Shire Council ("the Council") arrived at 8.00 am.
4. The EPA Officers and Mr Rodgers were accompanied by an AMS staff member through the Premises to Area 2. Mr Rodgers operated a drone to take aerial photographs of the Premises and the surrounding area.
5. Mr Michelin arrived at the Premises at 8.30 am. Mr Malone and Captain Webster arrived at 10.00 am.
6. At 8.40 am Mr Michelin informed the EPA Officers that Michelin's employees had pumped water out of Sediment Basin 1 into the Table Drain. Mr Johnston directed that no further pumping be carried out.
7. At 9.35 am Mr Johnston collected five water samples from Sediment Basin 1. At the time of sampling, the water in Sediment Basin 1 had a dissolved oxygen level of 6.67 mg/L and the pH was 5. Sediment Basin 1 contained dark water that was black in colour.
8. At 10.45 am Mr Johnston collected five water samples from East Boyd Bay.
9. At 12.00 pm the EPA Officers met with Mr Rixon at Edrom Lodge. Mr Rixon accompanied the EPA Officers to the beach, ICOLL, and estuarine area where the Creek meets the ICOLL. At 12.30 pm Mr Johnston collected five water samples from the ICOLL.
10. At 1.00 pm Mr Rixon accompanied the EPA officers to the fire trail on the Forestry NSW Land.
11. The EPA Officers departed the area to buy ice to preserve the water samples and returned at 3.20 pm.
12. At 3.25 pm Mr Johnston collected two further water samples from Sediment Basin 1.
13. At 4.09 pm Mr Johnston collected five water samples from a small pool of water at the Stormwater Outlet. This sampling location was approximately 10 m upstream of where the hose discharged into the Table Drain. At the time of sampling, the water in the Stormwater Outlet pool had a dissolved oxygen level of 2.03 mg/L and a pH of 5.

The Causes of the Offence

1. The parties agree that offence was primarily caused by Michelin pumping the sediment laden water from Sediment Basin 1 into the Table Drain under the Port Authority's instruction.
2. The parties also agree that there were five further contributing causes, namely that: 1. first, the stormwater system was not operating as intended, that is: 1. the drainage system was not operating in accordance with its intended design; 2. the capacity of Sediment Basins 1, 2 and 3 was significantly reduced at the time of the commission of the offence due to the amount of bark and sediment that they contained; and 3. the subsurface drainage structure in Area 1 was not functioning properly at the time. It had become clogged with bark and sediment; 1. second, the Port Authority had failed to clean Sediment Basin 1 as required. As noted above, the Port Authority was aware that the sediment basins were full of sediment from 21 March 2017, but did not approve the necessary works to clean them until 20 November 2017; 2. third, the Port Authority employees's lack of training in relation to the OEMP and water pollution generally: 1. none of the Port Authority employees at Eden had any formal training or qualifications in relation to environmental management, with the exception of an oil spill water pollution course prior to the offence occurring; 2. the Port Authority employees did not consider the incident to be water pollution and were not concerned about any environmental impacts arising from the incident. For example, when questioned about the incident Mr Malone stated that he "didn't have a problem with [the water being pumped into the drain]…as far as I was concerned, there was a little bit of water they were going to pump out. It was only water"; 3. Captain Webster, although not present at the time of the commission of the offence, said that it was "no different to pumping it to one of the other dams" and in his opinion there were no pollutants in the water that was discharged from Sediment Basin 1; 4. Mr Liddell, who worked for the Port Authority for 10 years and was responsible for training Mr Malone, did not consider that the sediment laden water in the sediments basins was a pollutant "because it was natural to the tree"; 5. with regard to whether any checks were carried out to determine whether Sediment Pond A had capacity to receive the water from Sediment Basin 1, Mr Malone said that he "didn't really take any notice of it"; 6. Mr Malone did not inspect Sediment Pond A at any time after pumping had commenced to check the capacity of Sediment Pond A or to check whether there was any overflow from Sediment Pond A into the Creek. Mr Malone understood that Sediment Pond A would receive any water pumped into the Table Drain from Sediment Basin 1 and that any overflow from Sediment Pond A would flow into the Creek; and 7. the Port Authority employees were not familiar with the numerous requirements set out in the OEMP designed to prevent water pollution from the Premises. For example, the quarterly inspection report required the Port Authority employees to "inspect downstream watercourses for evidence of spills and sediment from the facility being discharged off-site. Sample as directed by EPA". Mr Malone, who completed the checklists in November 2017 in the lead up to the incident, gave evidence that he had never inspected downstream watercourses and that he did not have training or equipment to carry out water testing; 1. fourth, Michelin was not provided with a copy of the OEMP: 1. the Port Authority never provided Michelin employees with a copy of the OEMP. Michelin employees were not aware of the OEMP and did not have any understanding at the relevant time of the obligations contained in it; and 2. Michelin employees did not receive an induction from the Port Authority or AMS on the stormwater management system for the Premises; and 1. fifth, Michelin employees lacked relevant training. That is, Michelin employees did not sufficiently understand the offence of water pollution and had not received any training in relation to the offence. None of Michelin's employees had any formal qualifications or training in environmental management.

The Purposes of Sentencing

1. The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 ("CSPA"): 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community.

Statutory Matters Required to be Taken into Account in Sentencing

1. In addition to the matters set out in Div 1 of the CSPA, the POEOA sets out the factors which are required to be taken into account when sentencing offences committed under that Act. Section 241 of the POEOA relevantly provides that: 241 Matters to be considered in imposing penalty … (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. ... (2) The court may take into consideration other matters that it considers relevant.
2. Subsections 21A(2) and (3) of the CSPA also set out aggravating and mitigating factors that the Court must consider. Relevant to the facts of this case, they are: 21A Aggravating, mitigating and other factors in sentencing (2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows: … (d) the offender has a record of previous convictions (particularly if the offender is being sentenced for a serious personal violence offence and has a record of previous convictions for serious personal violence offences), … (o) the offence was committed for financial gain… The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence. (3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows: (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, (b) the offence was not part of a planned or organised criminal activity, … (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, (h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise, (i) the remorse shown by the offender for the offence, but only if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), … (k) a plea of guilty by the offender (as provided by section 22 or Division 1A), … (m) assistance by the offender to law enforcement authorities (as provided by section 23)…

Objective Circumstances of the Offence

1. The objective gravity of the offence fixes both the upper and lower limits of proportionate punishment. It fixes the upper limit insofar as the sentence must not exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances (Veen v The Queen (No 2) and Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348 at 354). It fixes the lower limit because allowance for the subjective factors of the case ought not produce a sentence which fails to reflect the objective gravity or seriousness of the offence (R v Dodd (1991) 57 A Crim R 349 at 354 and R v Nichols (1991) 57 A Crim R 391 at 395).
2. The objective seriousness is to be determined by reference to the nature of the offence and not by reference to matters that are personal to a particular offender (Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [27]).
3. In determining the objective seriousness or gravity of the offence the relevant objective circumstances include: the nature of the offence; the maximum penalty under the Act establishing the offence; the reasons for committing the offence; the environmental harm caused by the commission of the offence; the foreseeability of the risk of environmental harm caused by the commission of the offence; the practical measures to prevent environmental harm; Michelin's control over the causes giving rise to the offence; and Michelin's state of mind in committing the offence.

Nature of the Offence

1. The nature and purpose of the statutory provision that has been contravened, and its place in the statutory scheme are illustrative of the objective seriousness of an environmental offence (Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234 at [168]-[172]; Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 at [49] and Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 at [59]).
2. The relevant objects of the POEOA identify the purpose of creating the offence: 3 Objects of Act The objects of this Act are as follows: (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, … (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, (iia) the elimination of harmful wastes, (iii) the reduction in the use of materials and the re-use, recovery or recycling of materials, (iv) the making of progressive environmental improvements, including the reduction of pollution at source, (v) the monitoring and reporting of environmental quality on a regular basis, (e) to rationalise, simplify and strengthen the regulatory framework for environment protection…
3. The EPA submitted that Michelin's offence was in direct contravention of the objects of the POEOA, as well as other provisions in that Act aimed at protecting against pollution. The commission of the offence therefore "undermined the statutory scheme" set out in the POEOA and, as a result, is objectively serious (Environment Protection Authority v Ardent Leisure Ltd [2018] NSWLEC 36 at [55]). I accept the EPA's submissions in this regard.

Maximum Penalty

1. The maximum penalty provided for an offence indicates the seriousness with which Parliament views the commission of the offence (Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 and Rawson at [57]). It also provides a sentencing yardstick for the case before the Court (Markarian at [31] and Elias v The Queen [2013] HCA 31; (2013) 248 CLR 483 at [27]).
2. The maximum penalty for an offence against s 120(1) of the POEOA by a corporation is $1,000,000.

Michelin's State of Mind in the Commission of the Offence

1. The offence under s 120(1) of the POEOA is one of strict liability. The principle in R v De Simoni [1981] HCA 31; (1981) 147 CLR 383 (at 389) applies to offences committed under s 120(1) of the POEOA, and therefore, the Court is precluded from considering Michelin's state of mind by reason of the existence of a more serious water pollution offence under s 116 of the POEOA (see, for example, Environment Protection Authority v Tea Garden Farms Pty Ltd [2012] NSWLEC 89 at [101]-[102]; Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273 and Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220; (2012) 192 LGERA 415 at [178]). Accordingly, the Court cannot consider whether the offence was committed intentionally, recklessly, or negligently by Michelin.

The Environmental Harm Occasioned or Likely to be Occasioned by the Commission of the Offence

1. Section 241(1)(a) of the POEOA requires the Court to take into account the extent of the harm caused, or likely to be caused, to the environment by the commission of the offence. "Harm" is defined in the dictionary to the POEOA as: harm to the environment includes any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution.
2. In Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 Preston J stated that harm includes both actual harm and potential harm (at [145]-[148]): 145. Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366 and Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 (6 February 2006) at [175]. Harm should not be limited to measurable harm such as actual harm to human health. It can also include a broader notion of the quality of life. 146. Harm can include harm to the environment and its ecology. Harm to an animal or plant not only adversely affects that animal or plant, it also affects other biota that have ecological relationships to that animal or plant: Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 (6 February 2006) at [174]. 147. Harm can be direct or indirect, individual or cumulative. Activities that contribute incrementally to the gradual deterioration of the environment, even when they cause no discernible direct harm to human interest, should also be treated seriously. 148. The culpability of the defendant depends in part on the seriousness of the environmental harm. Sentencing courts have exercised their discretion in relation to penalty on the principle that the more serious the lasting environmental harm involved, the more serious the offence and, ordinarily, the higher the penalty: Camilleris Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 701. If the harm is substantial, this objective circumstance is an aggravating factor: s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999.
3. The meaning of the words "likely to be caused to the environment" was considered by Lloyd J in Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66, where his Honour stated (at [44]): 44. In considering the harm likely to be caused to the environment, it is to be noted that the word "likely" in this context has been held to mean "a real or not remote chance or possibility regardless of whether it is less or more than a fifty per cent chance" (Mathews v Goulburn Wool Processors, NSWSC, Smart J, 6 November 1986, unreported); "only a real chance or possibility, and not more probably than not" (State Pollution Control Commission v Blayney Abattoirs Pty Ltd (1991) 72 LGERA 221 at 224); and "does not mean probable. It means a real possibility" (New South Wales Sugar Milling Co-operative Ltd v State Pollution Control Commission (1991) 73 LGRA 86 at 100, affirmed by the Court of Criminal Appeal on other grounds, (1992) 75 LGRA 320).

Agreed Facts on the Extent of Environmental Harm

1. The following facts with respect to the environmental harm caused by the commission of the offence were agreed to by the parties.
2. The Creek is an ephemeral or intermittent stream. Generally, biota abundance and taxa richness are lower in intermittent streams compared to permanent waters due to variable habitats. Some flora and fauna possess physiological and/or behavioural traits that allow them to persist when there is no surface water.
3. Approximately 66.7 mm of rain fell in the relevant area between 2 and 7 December 2017. It was mostly dry for the remainder of December 2017, except for 7.4 mm of rain that fell on 21 December 2017 and 7.6 mm on 30 December 2017.
4. The total estimated volume of water that was discharged into the Table Drain during the offence was not known.
5. The sediment laden water in Sediment Basin 1 that is, the Pollutant which was pumped into the Table Drain and descended into Sediment Pond A, had the following characteristics: 1. an acidic pH of 5.6; 2. high biological oxygen demand level (this measures demand of oxygen for biological and chemical decomposition causing depletion of oxygen levels) of 244 mg/L; 3. high total suspended solids of 2,310 mg/L and turbidity of 2,330 nephelometric turbidity units ("NTU"); 4. elevated total nitrogen of 13.5 mg/L and total phosphorus of 3.14 mg/L; 5. highly coloured with a true colour of 1,770 platinum cobalt units ("PCU"), which potentially affected visual clarity; and 6. high tannin levels of 420 mg/L.
6. Toxicity analysis of the Pollutant showed that it was toxic to three standard test species.
7. The water in Sediment Pond A which descended into the Creek had the following characteristics: 1. an acidic pH of 5 measured in the field (or 5.5 when measured in the laboratory); 2. low dissolved oxygen of around 10% saturation measured in the field; 3. high biochemical oxygen demand of 228 mg/L; 4. high total suspended solids of 472 mg/L and high turbidity of 518 NTU; 5. high total phosphorous; and 6. highly coloured water with a true colour of 1,550 PCU.
8. Toxicity analysis of the water in Sediment Pond A was toxic to three standard test species.
9. The waters sampled in the ICOLL and East Boyd Bay were not ecotoxic, but were coloured by the commission of the offence.

The EPA Tendered Expert Evidence Relating to Environmental Harm

1. The EPA engaged Dr Fleur Pablo, an eco-toxicology expert, to provide an expert opinion on environmental harm caused by the offence. In a report entitled Report assessing the extent and potential for harm to the environment of the alleged water pollution incident at Eden NSW between about 12-14 December 2017 ("the Expert Report"), she concluded that (emphasis added): 14. The black coloured liquid discharged between about 12-14 December 2017 from Sediment Basin 1 within the Premises, into the waterway outside the Premises fence, had the following physico-chemical characteristics: a) acidic; b) highly depleted in oxygen levels (ie measured high Biodiversity Oxygen Demand (BOD) and low Dissolved Oxygen (DO)); c) highly turbid and high in suspended solids; d) elevated levels of total phosphorus; e) highly coloured; and f) high tannin content. 15. The discharge of black coloured liquid from the Premises resulted in significant actual harm to the aquatic environment of the receiving waterway: from the table drain (adjacent to William Allen Drive Drive [sic]), over a retention pond (Sediment Pond A), into an unnamed creek (Creek), then an intermittent coastal lake and lagoon (ICOLL), and finally into East Boyd Bay. Actual harm took the form of severely degrading the water quality and visual clarity of waters. Black coloured liquid was observed from the table drain into the ICOLL. 16. Toxicity analysis of the water samples collected by the EPA officers on 14 December 2017 demonstrated that the discharged liquid was toxic to three standard test species: cladoceran Ceriodaphnia dubia, larval rainbowfish Melanotaenia duboulayi and bacterium Vibrio fischeri. Based on results of toxicity and chemical analyses, the degradation of waters in the table drain and the Creek was of sufficient intensity that would have posed risks to organisms normally expected to exist at these sites. 17. The duration of the environmental harm lasted at least 10 days, but was more likely longer, when significant rainfall occurred to assist in the dilution and flushing of degraded waters from the waterway.
2. At paragraph 31 of the Expert Report, Dr Pablo assessed the receiving waterway against the Australia and New Zealand Guidelines for Fresh and Marine Water Quality (2000) ("ANZECC Guidelines"): 31. I consider the receiving waterway (as described above to include the table drain, Sediment Pond A, Creek, ICOLL and East Boyd Bay near the beach downgradient from ICOLL) to be classified as a slightly to moderately disturbed system according to the Australia and New Zealand Guidelines for Fresh and Marine Water Quality (2000) by Australia and New Zealand Environment and Conservation Council (ANZECC WQG). It is an ecosystem in which aquatic biological diversity may have been adversely affected to a relatively small but measurable degree by human activity. As such, I assume that the waterway would have an aquatic biota assemblage that is most likely made up of more pollutant-resistant and drought-resistant organisms compared to pollution-sensitive organisms.

The Rule in Browne v Dunn Applies to Dr Pablo

1. Michelin elected not to cross-examine Dr Pablo on any of the matters it complained of, or indeed on anything. That is, Michelin did not put to Dr Pablo that her assumptions, and hence her conclusions, were wrong. In my view, it ought to have done so.
2. Contrary to the initial submission by Michelin, the rule in Browne v Dunn (1893) 6 R 67 applies in criminal proceedings, albeit heavily qualified. In Khamis v The Queen [2010] NSWCCA 179; (2010) 203 A Crim R 121 Whealy J described the rule as follows (at [30]): 30 The rule in Browne v Dunn was formulated as long ago as 1893. It has been the subject of judicial analysis on many occasions, and indeed, the subject of considerable academic discussion, since the rule was first enunciated. It is, plainly enough, an important rule of practice. In Allied Pastoral Holdings Pty Limited v FCT (1983) 1 NSWLR 1 at 16 it was formulated as follows by Hunt J: "It has in my experience always been a rule of professional practice that unless notice has already clearly been given of the cross-examiner's intention to rely upon such matters, it is necessary to put to an opponent's witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings. Such a rule of practice is necessary both to give the witness the opportunity to deal with that other evidence, or the inferences to be drawn from it, and to allow the other party the opportunity to call evidence either to corroborate that explanation or to contradict the inference sought to be drawn".
3. His Honour held that the rule applied in that criminal trial (at [35]).
4. The issue of the proper approach to the rule in Browne v Dunn in criminal proceedings was examined by the High Court in MJW v The Queen [2005] HCA 74; (2005) 222 ALR 436. In that case, the appellant sought to rely on inconsistencies in evidence given by the complainant and the complainant's mother, notwithstanding that the appellant did not put the inconsistencies to the complainant in cross examination, Gleeson CJ and Heydon J stated that (at [18] and [19]): 18. The principle of fair conduct on the part of an advocate, stated in Browne v Dunn, is an important aspect of the adversarial system of justice. It has been held in England, New South Wales, South Australia, Queensland, and New Zealand, to apply in the administration of criminal justice, which, as well as being accusatorial, is adversarial. Murphy J, in this Court, even applied it to the conduct of an unrepresented accused. However, for reasons explained, for example, in R v Birks, and R v Manunta, it is a principle that may need to be applied with some care when considering the conduct of the defence at criminal trial. Fairness ordinarily requires that if a challenge is to be made to the evidence of a witness, the ground of the challenge be put to the witness in cross-examination. This requirement is accepted, and applied day by day, in criminal trials. However, the consequences of a failure to cross-examine on a certain issue may need to be considered in the light of the nature and course of the proceedings. 19. In the present case, there was no obligation on trial counsel for the appellant to question the complainant about whether there had been more than one incident of sexual abuse at Sutcliffe Street, and there was no obligation to seek to have the complainant recalled for that purpose. Why would counsel for the appellant want to run the risk of eliciting further evidence of uncharged criminal acts by her client? That, no doubt, left the trial judge in a difficult position when he came to evaluate a criticism (in final address) of the complainant's credibility based on the supposed (although, in truth, non-existent) inconsistencies. It did not mean that counsel could not put her argument to the judge. As Doyle CJ said, it was a matter to be taken into account in assessing the weight to be given to the supposed inconsistencies. In the event, it was the fact that counsel chose (with reason) to leave the evidence in a state of uncertainty that undermined her submission about inconsistency. That was a forensic choice for counsel to make.

Harm to the Table Drain and Sediment Pond A

1. Due to my earlier finding that the EPA has failed to prove beyond reasonable doubt that discharging the pollutant into the Table Drain and subsequently Sediment Pond A, formed part of the commission of the offence, it is unnecessary to assess the actual or likely harm to the environment caused by the Pollutant entering those waters.

Harm to the Creek

1. It is not known whether the Creek was flowing prior to the offence. Consequently, the dilution factor for the Pollutant upon entering the Creek, if any, could not be determined. However, in light of the heavy rainfall which occurred in the weeks prior to the offence, the EPA submitted that the Creek was "likely to contain some pools and would have supported some aquatic life directly before the incident."
2. The EPA conceded, however, that no water testing was carried out in the Creek. But, it argued that harm to the Creek could nevertheless be inferred because Sediment Pond A overtopped and Pollutant travelled the entire length of the Creek from the point where Sediment Pond A overflowed to the ICOLL. The Pollutant entering the creek therefore severely degraded the water quality and visual clarity of the Creek and was likely to have had lethal and chronic effects on aquatic life normally expected to exist in the Creek.
3. In reply, Michelin submitted that because it was necessary to prove beyond reasonable doubt the nature of the receiving environment before a finding of potential or likely harm can be made, and because the EPA had failed to demonstrate this, the submission ought to be rejected (relying on Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at [366]).
4. Michelin further submitted that the Creek was already degraded due to the highly modified industrial landscape surrounding it and the "long history of inadequate pollution control" resulting in poor quality run-off from the Premises occurring regular intervals.
5. Michelin took the court to extensive evidence of the prior pollution of the Creek. While some of the evidence relating to the inadequacy of the stormwater management system at the Premises has already been discussed above, other evidence included: 1. the affidavit of Mr Rixon, in which he deposed that "for the last five years or so I have noticed black water discharging from the site on a number of occasions. I have observed water flowing into East Boyd Bay"; 2. the Expert Report, where Dr Pablo identified that the Creek was likely to have been subjected to many incidents or several years of discharging (at paragraph 23, extracted above); and 3. another pollution incident reported by Mr Rixon to the EPA on 21 December 2017, where approximately 15,000 l of water flowed from a leachate dam on the neighbouring property (also operated by AMS).

Harm to the ICOLL and East Boyd Bay

1. The EPA submitted that the waters sampled in the ICOLL were not ecotoxic but the turbidity and colour of the water was evidence of actual environmental harm.
2. In response, Michelin submitted that the impacts of the offence, combined with the earlier discharge on the same day, on the ICOLL were "acceptable" consistent with the Expert Report, and moreover, had dissipated by 14 December 2017.
3. In relation to the ICOLL and East Boyd Bay, having regard to Dr Pablo's evidence, I find that the offence caused limited short term actual harm to the water quality in these waters. The offence did not, however, cause harm to any aquatic biota in the ICOLL or East Boyd Bay.

Conclusion on Environmental Harm

1. Overall, the offence caused limited and short term actual environmental harm to the water quality in the Creek, ICOLL, and East Boyd Bay. It also was likely to have caused limited harm to aquatic biota in the Creek because the sampling results from Sediment Pond A indicated that the water was toxic to three standard species. The actual harm caused to the Creek, ICOLL, and East Boyd Bay was, however, short term due to a rainfall event on 20 December, which the parties agreed would have flushed the pollutant from the receiving waters.
2. No harm was caused to the waters in the Table Drain or Sediment Pond A.

Michelin's Reasons for Committing the Offence

1. The criminality involved in the commission of the offence by a defendant is measured not only by the seriousness of what actually occurred but also by reference to the reasons for its occurrence (Axer at [366] and Bentley at [237]).
2. There is no evidence that the offence was committed for financial gain. As Michelin correctly observed, it is not the case that every act committed during the course of operating a business is committed for financial gain (Environment Protection Authority v P&M Quality Smallgoods Pty Ltd; Environment Protection Authority v JBS Australia Pty Ltd [2017] NSWLEC 89 at [74]).

Reasonable Foreseeability of the Harm Caused or Likely to be Caused to the Environment by the Commission of the Offence

1. Section 241(c) of the POEOA obliges the Court to have regard to the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment.
2. Both parties agreed that it was reasonably foreseeable that harm would arise as result of the commission of the offence. I accept that this is the case.

Control Over the Causes of the Commission of the Offence

1. Section 241(1)(d) of the POEOA requires the Court to take into account the extent to which the person who committed the offence had control over the causes that gave rise to it.
2. It was common ground that Michelin had complete control over the immediate cause giving rise to the offence, being the pumping of the water into the Table Drain. However, Michelin did not have control over four of the underlying or contributing causes, namely, the inadequacy of the stormwater system, the Port Authority's failure to clean Sediment Basin 1, the Port Authority's failure to provide Michelin with a copy of the OEMP, and the Port Authority staff's lack of training in relation to the OEMP and water pollution generally.

Practical Measures Which Could Have Been Taken to Prevent or Mitigate the Environmental Harm

1. The Court must take into account the practical measures available to the defendant to control, abate or mitigate the environmental harm (s 247(1)(b) of the POEOA).
2. The EPA listed five "simple measures" which Michelin could have taken to prevent or mitigate the environmental harm cause by the offence: 1. first, Michelin could have pumped the Pollutant from Sediment Basin 1 to the grated pit, as suggested by a Port Authority employee; 2. second, Michelin could have declined to pump the Pollutant into the drain and instead pumped the Pollutant into a receptacle for subsequent disposal, dilution, or other treatment; 3. third, Michelin could have educated its staff on the offence of pollution of waters; 4. fourth, Michelin could have walked the Table Drain and inspected the capacity of Sediment Pond A; and 5. fifth, Michelin could have attempted to clean up the Pollutant after it was informed by the EPA officers that it had caused water pollution.
3. Michelin conceded that it should have inspected Sediment Pond A prior to commencing pumping. However, Michelin submitted that there was no need for any clean-up of the Creek because there was no residual Pollutant left in it (although Michelin did not support this claim with any expert evidence) and, according to the Expert Report, the ICOLL and East Boyd Bay recovered within two days of the offence.
4. In addition, Michelin argued that it was not a suitably qualified environmental remediation specialist and risked occasioning more harm to the environment if it attempted to clean up the pollution (see, for example, Environment Protection Authority v Hunter Water Corp [2016] NSWLEC 76, where Hunter Water discharged fluoride into a waterway and subsequently caused more harm when it attempted to dilute the fluoride by flushing the waterway with clear water which had been treated with chlorine).
5. Michelin also noted that pumping the water to the grated pit was not possible because it was an agreed fact that this drain was blocked with bark and other matter.
6. While Michelin's submissions were persuasive, nevertheless I am satisfied that there were some practical measures available to Michelin which would have prevented the harm occurring (namely, that Michelin could have walked the length of the Table Drain and inspected the capacity of Sediment Pond A, that Michelin could have refused to pump Pollutant into the Table Drain, and that Michelin could have trained its staff in environmental management), which it did not take.

Whether Michelin Was Complying With Orders From an Employer or Contractor

1. It was common ground that Michelin was acting in accordance with instructions from the Port Authority when it pumped the Pollutant into the Table Drain. Accordingly, I have taken this matter into consideration under s 241(2)(e) of the POEOA.

Conclusion on Objective Seriousness

1. Having regard to the factors discussed above, I would characterise the objective seriousness of the offence as being in the low range.

Subjective Circumstances of Michelin

1. A proportionate sentence requires the Court to take into account any mitigating factors that are personal to Michelin (s 21A(3) of the CSPA). Relevant subjective circumstances include: 1. whether Michelin has demonstrated remorse for the commission of the offences (s 21A(3)(i) of the CSPA); 2. whether, and when, Michelin entered a guilty plea (ss 21A(3)(k) and 22 of the CSPA and R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152]-[155]); 3. whether Michelin provided assistance to the regulatory authorities in the investigation and prosecution of the offence (ss 21A(3)(m) and 23 of the CSPA); 4. whether Michelin is of good character (s 21A(3)(f) of the CSPA); and 5. whether Michelin has a prior criminal record (s 21A(3)(e) of the CSPA).

Contrition and Remorse

1. Michelin has demonstrated contrition and remorse (Waste Recycling at [203]-[215]) by the fact that it: 1. made frank admissions during the EPA site investigation on 14 December 2017; 2. has implemented "significant and systemic" steps across the whole of its organisation at considerable expense (Mr Michelin deposed that his company has spent approximately $185,000 the legal proceedings and the implementation of training and management systems) in an effort to ensure that this incident will not be repeated. These steps are set out at paragraphs 26 to 37 of Mr Michelin's affidavit affirmed 1 June 2019, and include: 1. engaging a consultant, Mr Brett Whalan, on a full time basis to assist Michelin in improving its management systems, including the preparation of project specific environmental plans; 2. engaging the services of Beatty Legal Pty Ltd ("Beatty Legal"), a Sydney based law firm specialising in environmental law to provide training to its staff, including a workshop on environmental law with senior and key members of Michelin and Mr Whalan; 3. working with Beatty Legal to create an environmental management system and environmental policy for Michelin; 4. providing in-house training to its staff based on the workshop with Beatty Legal. During this training, Michelin staff analysed previous projects completed by the company and reviewed the project specific environmental management plans created for current projects to ensure each employee understood the plans and how they are to be implemented; and 5. updating its operating procedures so that prior to the commencement of a new project, the supervisor or project manager must assess and complete a register of environmental aspects and impacts for that project. The register is reviewed by senior management who in turn identify and assign responsibility for implementing the required controls and measures; and 1. expressed, through Mr Michelin, "sincere deep regret and remorse" on behalf of the company and "apologised unreservedly for the incident". Mr Michelin also acknowledged his personal responsibility for the actions of the company and his regret that the offence has jeopardised his family's and employees' financial welfare.

Assistance to the EPA

1. Michelin cooperated with the EPA in its investigation of the offence by: 1. providing timely responses to statutory notices for information and records; 2. making staff available for interviews and giving full and frank evidence; and 3. participating in the preparation of a Statement of Agreed Facts for hearing.
2. The EPA submits, however, that the extent of mitigation that should be afforded to Michelin ought to be reduced because Michelin was "obliged to take many of the [above] actions" under the POEOA (Dyno Nobel Asia Pacific Pty Ltd v Environment Protection Authority [2017] NSWCCA 302; (2017) 228 LGERA 55 at [44]).
3. I do not accept this submission. While some of these steps were required to be taken by Michelin under the POEOA, Michelin has nevertheless cooperated with the EPA above and beyond its statutory obligation to do so.

Early Plea of Guilty

1. Michelin entered a plea of guilty at the earliest available opportunity. It is therefore entitled to the full 25% discount for the utilitarian value of its plea (ss 21A(3)(k) and 22 of the CSPA; R v Thomson; R v Houlton at [152]).

Prior Convictions of Michelin

1. Michelin has been in business in the Eden area for 65 years and has no prior convictions (s 21A(3)(e)).

The Likelihood of Michelin Reoffending

1. Due to Michelin's 65 year unblemished record, demonstrated contrition and remorse, good character (see below), and the measures that it has put in place to prevent similar future offending, I find the likelihood that it will reoffend to be negligible.

The Good Character of Michelin

1. There is no doubt that Michelin is of good character. Michelin has participated in, and supported, a number of community activities such as (Plath at [143] and Ryan v The Queen [2001] HCA 21; (2001) 206 CLR 267 at [27]): 1. providing casual work outside school hours washing trucks and machinery to up to 10 local young kids; 2. supporting local fundraising events; 3. providing free or discounted earthworks services and/or financial donations to community organisations such as sporting clubs, churches and local festivals; and 4. maintaining strong ties with the local Indigenous community and employing two Indigenous persons.
2. Michelin also relied upon two character references attesting to its good character. The first was from Mr Liddell, the former Port Services Officer at the Port Authority, who has now retired. Mr Liddell had previously engaged the services of Michelin in his capacity as Port Services Officer. In his reference, Mr Liddell stated that this partnership between Michelin and the Port Authority had been ongoing for 20 years and that during this time Michelin had displayed professionalism in its work. The second was from Mr Michael Sheppard. Mr Sheppard, now retired, has held a number of prominent roles and positions in the local community of Eden. Mr Sheppard has known the Michelin family since 1976 and spoke highly of the Michelins' "hard work," "business acumen" and "work ethic." Mr Sheppard also commended Michelin for the numerous contributions that it has made to the local community, as well as its efforts to improve its environmental management systems since the commission of the offence. Both referees spoke of the severe impact a large financial penalty would have on Michelin and indirectly on the local community.

The Offence Could Have Been Prosecuted in the Local Court

1. In Harris v Harrison [2014] NSWCCA 84; (2014) 86 NSWLR 422 at [92] the Court of Criminal Appeal held that this Court must take into account whether the offence could have been prosecuted in the Local Court.
2. While I have, as I must, taken this factor into account, given the factual complexity of the matter and given that the parties were seeking orders which could not be granted in the Local Court, I place limited weight on it.

Deterrence, Retribution and Denunciation

1. The Court is required to take into account both specific and general deterrence. As the High Court stated in Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561, "the chief purpose of the criminal law is to deter those who are tempted to breach its provisions" (at 569 per Brennan J).
2. The penalty imposed by the Court must serve as a general deterrent (Environment Protection Authority v Crown in the Right of New South Wales (Office of Environment and Heritage) [2019] NSWLEC 66 at [175]-[177]). Section 3A(b) of the CSPA provides that one of the purposes for which a Court may impose a sentence is to prevent crime by deterring the offender and other persons from committing similar offence.
3. The Court accepts that embedded with the determination of the appropriate sentence to be imposed on Michelin must be an element of general deterrence to ensure that those who undertake activities such as clean-up works on potentially contaminated industrial sites do so in a competent manner that does not harm the environment.
4. In relation to specific deterrence (s 3A(b) of the CSPA), the EPA submitted that, as Michelin continues to operate an excavation and earth-moving business in the Eden area, specific deterrence was a relevant matter to consider (Environment Protection Authority v Ravensworth Operations Pty Limited [2012] NSWLEC 222 at [48]; Environment Protection Authority v Whitehaven Coal Mining Limited [2019] NSWLEC 27 at [251]).
5. I do not agree having regard to the present circumstances, which include the fact that Michelin has operated in the industry for 65 years without breach of any relevant regulatory scheme. This offence is an uncharacteristic event. Further, I am satisfied that Michelin has implemented extensive measures since the commission of the offence to ensure that future offending does not occur.
6. Consequently, I accept Michelin's submission that there is no need for specific deterrence in the determination of an appropriate sentence in this matter.
7. Finally, the Court must impose a sentence that achieves the purposes of denouncing the conduct the subject of the offence and making Michelin accountable for its actions.

Consistency in Sentencing

1. The task of the sentencing court is to seek even-handedness in the imposition of a sentence (R v Oliver (1980) 7 A Crim R 174 at 177 and R v Visconti [1982] 2 NSWLR 104 at 107). However, care must be taken in achieving consistency. There is always difficulty comparing the penalty in one case with that in another because of the wide divergence of facts and circumstances in each case (Axer at [365]). The sentence imposed in a single case does not demonstrate the limits of a sentencing court's discretion (Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 at [35] and Environment Protection Authority v Barnes [2006] NSWCCA 246 at [79]).
2. The EPA relied upon three comparable cases all relating to breaches of s 120(1) of the POEOA. The first was Environment Protection Authority v Chillana Pty Ltd [2010] NSWLEC 255, a case concerning the pollution of waters with untreated abattoir effluent from a cracked pipe. The receiving environment in this case was already degraded prior to the offence, however, the Court nevertheless found that the offence caused significant actual environmental harm. The Court also found that the defendant had failed to take practical measures to prevent or mitigate the harm. Similar to the present case, the defendant in Chillana was found to be of good character, remorseful, and unlikely to reoffend. The Court imposed a fine of $60,000 after discounting the original sum of $90,000 by 33% for the defendant's early guilty plea and other mitigating factors.
3. The second was Environment Protection Authority v Borg Panels Pty Ltd [2016] NSWLEC 71. In that case, the defendant caused effluent to be discharged into a constructed stormwater drainage channel that flowed into a waterway. The Court found that the offence caused severe actual and likely environmental harm and that the defendant did not take reasonable measures to prevent it. This resulted in a finding of "low to moderate objective seriousness" (at [39]). The defendant did not have any prior convictions, demonstrated contrition and remorse, and took measures to prevent future harm occurring after the incident. The appropriate sentence was determined to be a fine of $58,500 after discounting by 35% in light of the subjective circumstances of the defendant.
4. The third case was that of Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268; (2008) 163 LGERA 354. There, a river was polluted with sediment laden water during dam upgrade works. The defendant, Fulton Hogan Pty Ltd ("Fulton"), was a contractor to Snowy Hydro Ltd ("Snowy"), which was considered equally culpable and prosecuted in separate proceedings. Fulton was found to be complying with orders from Snowy when it committed the offence, however, the Court considered that Fulton ought to have been aware of its statutory obligations, particularly given it was a term of the contract between Fulton and Snowy that Fulton was obliged to satisfy all legislative requirements, including the POEOA. In addition, the offence caused actual environmental harm, albeit minor and short term, and in already degraded waters. The defendant took a range of measures to prevent the harm, however, they fell short of all of the measures available to it. The Court fined Fulton $100,000 after discounting for all mitigating factors, including a 25% discount for the early guilty plea.

Costs

1. Because there was no agreement between the parties as to costs, any costs awarded to the EPA in this matter pursuant to s 257B of the Criminal Procedure Act 1986, will need to assessed under s 257G(b) of that Act. The EPA also sought its investigation costs fixed in the sum on $4,952.25 under s 248 of the POEOA. This was not opposed by Michelin and it is appropriate to make such an order.
2. Moreover, I note that according to Mr Michelin, Michelin has spent approximately $180,000 in legal and other fees to date.

Appropriate Sentence

1. Having regard to the objective seriousness of the offence and the mitigating subjective factors of Michelin, together with the penalties imposed in the relevant comparable cases, I consider that the appropriate penalty to be imposed for Michelin's contravention of s 120(1) of the POEOA is a penalty of $65,000. This figure must be discounted by 33% for the utilitarian value of Michelin's plea of guilty and other factors in mitigation including its good character, lack of prior offences, and the fact that Michelin did not have control over a number of the underlying causes of the offence. This results in a monetary penalty of $43,550.

Any Monetary Penalty to be Paid to the Pambula Wetlands and Heritage Project Inc and the Environmental Trust

1. The parties have requested that in lieu of a fine any monetary penalty up to $25,000 be paid to the Pambula Wetlands and Heritage Project Inc ("Pambula") for use on its Protecting and Enhancing Panboola's Floodplain Ecosystems Project (s 250(1)(e) of the POEOA).
2. The area of Panboola, located on the Pambula River floodplain, is being rehabilitated as a wetland for the purpose of nature conservation, protection and restoration of habitat for birds and other indigenous flora and fauna and for community education and passive enjoyment. The $25,000 payment will be used by Pambula to implement a revegetation program and weed management plan. Further details of the project are provided in annexure "A" to this judgment.
3. I consider this to be an appropriate local environmental project under s 250(1)(e) of the POEOA.
4. The parties have further requested that any amount exceeding $25,000 be paid to the Environmental Trust (s 250(1)(e) of the POEOA).
5. I consider it appropriate that the amount of $18,550 be paid to the Environmental Trust.

Publication Order

1. The EPA requested, and Michelin has purported to consent to (but see the evidence of Mr Michelin below), the making of a publication order. The parties gave the Court suggested wording for the publication, which was to be published in three local publications.
2. The Court retains a discretion as to whether or not a publication order ought to be made. In the present case, I have declined to make such an order.
3. Mr Michelin deposed in his affidavit that a publication order would cause "significant further embarrassment to me and my family", in addition to that which they have already experienced during the course of the EPA's investigation and the legal proceedings. Mr Michelin further stated that he had grave concerns that Michelin would lose future local government and council projects, which currently make up over 75% of its revenue, and that the combination of the likely monetary penalty, legal costs and potential loss of future work could result in the company selling its machinery or ceasing to operate.
4. Although a publication order also serves a "significant educative and deterrent function" (Harris at [128]), it is an aspect of individual punishment insofar as it operates to "name and shame" the defendant (Environment Protection Authority v Warkworth Mining Limited [2017] NSWLEC 107 at [82]).
5. Given that Michelin has operated in the Eden area for 65 years without committing an offence; has contributed to, and supported, its local community; has proven to be, apart from the commission of this offence, an exemplary corporate citizen; its objective culpability for the commission of the offence is low; was complying with instructions from the Port Authority; did not have control over a number of the contributing causes of the offence; and has already taken extensive steps to train its staff and prevent future offences occurring, I find that a publication order is not warranted.

Orders

1. In conformity with the reasons given above, the Court makes the following orders: 1. John Michelin & Son Pty Ltd is convicted of the offence against s 120(1) of the Protection of the Environment Operations Act 1997 as charged; 2. pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, John Michelin & Son Pty Ltd is ordered to pay, within 28 days of this order, the amount of $25,000 to Pambula Wetlands and Heritage Project Inc for the purposes of a project to protect and enhance the Panboola floodplain ecosystem, as set out in annexure 'A' to this judgment; 3. pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, John Michelin & Son Pty Ltd is ordered to pay, within 28 days of this order, the amount of $18,550 to the Environmental Trust established under the Environmental Trust Act 1998 for environmental purposes; 4. pursuant to s 248 of the Protection of the Environment Operations Act 1997, John Michelin & Son Pty Ltd is to pay the prosecutor's investigation costs in the sum of $4,952.25; 5. pursuant to s 257B of the Criminal Procedure Act 1986, John Michelin & Son Pty Ltd is to pay the prosecutor's costs of the proceedings as may be determined under s 257G(b) of the Criminal Procedure Act 1986; and 6. the exhibits are to be returned.

Amendments 02 March 2022 - Formatting changes to legislation. 31 March 2022 - Formatting changes to legislation and duplicate cases listed in the coversheet. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 March 2022