Environment Protection Authority v Koppers Carbon Materials & Chemicals Pty Ltd

Background

1. The background facts are relatively uncontentious and are set out in a detailed statement of agreed facts filed 11 September 2020 and an affidavit of Richard Lyons, Koppers Vice President of Australian Operations, affirmed 25 September 2020. A summary of the salient facts follows.
2. Koppers is a chemical manufacturing company involved in the distillation of coal tar (a by-product from Australian steelworks) and soft pitch (a partial distillation of coal tar with lighter fractions removed) into chemical products, including "coal tar pitch". Coal tar pitch is an essential raw material used in aluminium smelters, and Koppers is the only Australian producer of coal tar pitch for the aluminium industry in Australia.
3. Koppers operates its Plant continuously (i.e. on a non-stop basis). The Plant has operated for approximately 50 years.
4. Koppers holds Environment Protection Licence number 2156 issued under the POEO Act ('Licence'), pursuant to which it undertakes chemical production, chemical storage and "shipping in bulk" at the Plant.

The system for storing soft pitch

1. Koppers processes soft pitch at the Plant using a "tar distillation unit". Prior to processing, the raw materials, including soft pitch used by Koppers, is stored in tanks at the Plant. Soft pitch is kept heated while it is stored, and generates fumes containing polycyclic aromatic hydrocarbons ('PAHs').
2. Tank 191 is a tank used to store soft pitch at the Plant. Fumes produced from the soft pitch stored in Tank 191 are processed using what is referred to as the "711 Fume System". The 711 Fume System initially included: 1. A "scrubber", which partially removes pollutants from the fumes through the "wet scrubbing" process; 2. A "stack" which disperses vapours at height to the atmosphere (the 'scrubber stack'); and 3. Various pumps, pipes and valves.
3. Tank 191 is not the only tank that utilises the 711 Fume System. The parties agreed during the sentence hearing that other tanks, including tanks that contained naphthalene, utilised the 711 Fume System.
4. Between May 2018 and June 2019, Koppers upgraded the 711 Fume System to connect the 711 Fume System to a "furnace" for the "thermal oxidation of fumes". Thermal oxidation in the furnace eliminates over 99.5% of the pollutants contained within the fumes.
5. Prior to 12 April 2019, the 711 Fume System wet scrubbed the fumes in the scrubber and then sent them to the scrubber stack for dispersion into the atmosphere.
6. The furnace was connected to the 711 Fume System on 12 April 2019. Following the connection to the furnace, after the fumes were wet scrubbed (to partially remove the pollutants) in the scrubber, fumes processed in the 711 Fume System could either be: 1. Directed to the furnace and then discharged into the atmosphere; or 2. Discharged through the scrubber stack to the atmosphere.
7. The passage of fumes between Tank 191 and the 711 Fume System, including the scrubber, the scrubber stack and the furnace, is regulated by a number of valves. Relevantly, there is: 1. A valve into the furnace that can prevent fumes from entering the furnace (the 'safety shut off valve'); 2. A valve located between the scrubber and the scrubber stack (the 'scrubber stack valve'); and 3. A valve located between the scrubber stack valve and the safety shut off valve (the 'intermediate valve').
8. By 21 May 2019, the upgrade of the 711 Fume System was operational (that is, in use by Koppers) and the upgrade process was nearing completion. However, not all elements of the upgrade had been undertaken. The upgrade was completed on 4 June 2019.
9. Under Koppers' Licence in force on 21 and 22 May 2019, the fumes were to be wet scrubbed by the scrubber and could then either be discharged via the scrubber stack, or directed to the furnace for thermal oxidation and then discharged into the atmosphere.
10. On 15 May 2020, Koppers' Licence was amended so that it required all "process vapours" to be treated by a "fume scrubber" and be "thermally oxidised", unless it was an emergency or essential maintenance was being undertaken.

The first emission incident

1. At approximately 5.24pm on 21 May 2019, the flame in the furnace went out and caused the safety shut off valve regulating the passage of fumes into the furnace to automatically close.
2. The closure of the safety shut off valve prevented fumes from entering the furnace, requiring fumes to be redirected through the scrubber stack. However, the scrubber stack valve was not open and had not yet been automated to open when the safety shut off valve closed (as the upgrade to the 711 Fume System had not yet been completed).
3. As such, a build-up of pressure caused fumes to be released into the atmosphere through a release point on the roof of Tank 191, where the soft pitch was being stored. This meant the fumes released to the atmosphere had not been treated by either the furnace or the scrubber.
4. At 5.30pm an odour was detected by Koppers operators and the flame in the furnace was manually relit approximately 10 minutes later. Although the safety shut off valve had been automated to reopen, it did not do so. As a result, fumes continued to escape through the roof of Tank 191.
5. By 5.50pm, an odour of pitch and a plume of fumes that was "about 2 metres high and was flowing down from the roof of the tank" were observed by a Koppers shift supervisor. Once the safety shut off valve was identified to have remained closed, another shift supervisor then directed a Koppers operator to open the scrubber stack valve to redirect the fumes through the scrubber stack.
6. Following the opening of the scrubber stack valve, fumes stopped escaping from Tank 191 and were instead directed into the scrubber stack.
7. A number of actions were then taken by Koppers' employees to reopen the safety shut off valve, with the result that fumes were again being directed into the furnace by approximately 6.27pm.
8. However, the flame in the furnace went out again at 7.44pm, causing the safety shut off valve to once again automatically close. The scrubber stack valve was manually reopened within minutes and the flame in the furnace was relit at 7.51pm.
9. Koppers took further actions to ensure that fumes would be directed to the scrubber stack, to manage the risk of the furnace flame going out again overnight. Relevant to the second emission incident discussed below, the actions taken included manually closing the intermediate valve located between the scrubber stack valve and the safety shut off valve, to ensure the continued efficient draw of fumes from other fume scrubbers connected to the furnace at the time.

The second emission incident

1. Between 7am and 8am on 22 May 2019, Koppers' employees concluded that the flame in the furnace was unlikely to extinguish again and decided to redirect the fumes from the scrubber to the furnace to allow fumes from that part of the system to be oxidised.
2. The Koppers shift operator who redirected the fumes from the scrubber to the furnace was not familiar with the operation of the upgraded 711 Fume System. The shift supervisor (who had delegated the task to that shift operator) did not know that the operator was unfamiliar with the upgraded system.
3. As a result, while attempting to redirect the fumes, the shift operator closed the scrubber stack valve but failed to reopen the intermediate valve (which had been closed the night before). The closure of both the scrubber stack value and intermediate valve caused a build-up of pressure within Tank 191 which caused fumes to escape through the roof of the tank.
4. At around 10.30am an employee working at an adjoining industrial premises ('Modulate premises') contacted Koppers and complained of an odour. Subsequent to this call, two Koppers' employees attended the Modulate premises with gas monitors to investigate, and three Koppers' employees surveyed the Plant, to check for odours.
5. A Koppers' employee observed fumes coming out of the top of Tank 191. At approximately 10.45am, the shift supervisor inspected the 711 Fume System and, upon realising that both the scrubber stack valve and the intermediate valve were closed, opened the intermediate valve. Following the opening of the intermediate valve, fumes subsequently stopped escaping from Tank 191.
6. Following the second emission incident, Koppers decided that the scrubber stack valve ought to remain open to allow fumes that had been wet scrubbed to be released through the scrubber stack (a licenced emission point at that time) until the automation of the scrubber stack valve had been completed as part of the upgrade to the 711 Fume System to connect it to the furnace.

Aftermath of the emission incidents

1. On 21 and 22 May 2019, the EPA received at least six telephone complaints in relation to an odour in Mayfield.
2. Between approximately 6.49pm and 8.35pm on 21 May 2019, an EPA authorised officer communicated with Koppers' employees and attended the Plant to carry out an inspection.
3. At approximately 10.58am on 22 May 2019, two EPA authorised officers attended the Modulate premises in response to a call received by the EPA complaining of odour. One EPA officer observed a "mothball" odour and the other described the odours as being consistent with tar and naphthalene.
4. The two EPA officers then met with employees of Koppers to discuss the second emission incident, and later inspected the Plant on 24 May 2019.
5. At the time of the emission incidents, on 21 and 22 May 2019, Koppers did not have a formal written standard operating procedure on the operation of the 711 Fume System. However, written instructions had been provided to Koppers shift supervisors. There was also signage located on the scrubber stack valve indicating that it needed to be manually opened and closed and providing instructions on how to do this.
6. At 12.45pm on 22 May 2019, members of Koppers Plant management and operations team undertook an incident investigation. The safety shut off valve to the furnace was replaced and, on 4 June 2019, the scrubber stack valve was automated so that it opens if the safety shut off valve to the furnace closes.
7. Following the emission incidents, Koppers has undertaken the following actions and implemented the following procedures to prevent recurrence of similar emission incidents: 1. Prepared updated instructions and conducted training for shift supervisors and operators in relation to the upgraded thermal oxidation system (including the 711 Fume System); 2. Conducted interim training for shift supervisors and operators on the use of the 711 Fume System (prior to the automation of the scrubber stack valve); 3. Introduced a new role of "Process Safety and Environmental Management Engineer" at the Plant; 4. Established a "Community Reference Group" to consult with community members in relation to Koppers' operations; and 5. Cooperated with an external consultant conducting an audit of the Plant on 12 and 13 June 2019 (as organised by the EPA) in order to prepare a remedial plan of action and audit report. The recommendations contained within the audit report were then required to be implemented as a result of a prevention notice (Prevention Notice 1582441) issued by the EPA to Koppers pursuant to s 96 of the POEO Act. A further plan for those actions that were not specifically required by the prevention notice was incorporated into a "Pollution Reduction Program 27 (PRP 27)", which is now a condition of Koppers' Licence. Koppers has completed the majority of directions required by the prevention notice and pollution reduction program, including: 1. Installation of various detection devices to prevent future incidents; 2. Updating its "Emergency Response Plan" and its training database; and 3. Formalisation of shift handover requirements.

Impact of the emission incidents on the environment and the community

1. The soft pitch fumes released into the atmosphere in the emission incidents contained a number of PAHs of unknown compound and concentration. Exposure to fumes containing PAHs over a short period of time may cause headaches, nausea, irritation of the throat and eyes, coughing and, where there are higher concentrations of PAHs, fatigue, malaise, confusion, and coma.
2. It is likely that most of the symptoms caused by short term exposure to such fumes, with a low concentration of PAHs, will resolve completely. An expert toxicologist engaged by the EPA considered that the exposure from the emission incidents was likely acute and not chronic.
3. In relation to the first emission incident, three local residents contacted the EPA's Environment Line on 21 May 2019, and each described experiencing a "strong" or "overpowering and intense" naphthalene or "chemical like" odour. Each resident was forced to close up their house as a result of the odour.
4. In relation to the second emission incident, four people who were employees working at the adjoining Modulate premises on the morning of 22 May 2019 described their experiences as follows: 1. One employee described smelling a "foul" odour at approximately 6.45am which caused him to feel queasy and experience a dry mouth. Following instruction from his site supervisor at approximately 10am, he "sat in the back corner of the yard at the Modulate premises and rinsed his mouth out with water." He returned to work between 11am and 11.30am until approximately 2.30pm, and later that evening experienced a "very bad headache"; 2. One employee detected a strong "mothball-like" odour between approximately 7am and 8am. He began to feel "nauseated" and experienced a "headache" at approximately 10am, at which time he took a break from work for approximately 45 minutes to "get some fresh air". He returned to work at around 10.45am and worked until 2.30pm before returning home, at which time his headache began to improve; 3. One employee smelled a "mothball-like" odour between approximately 10am and 10.30am and went outside at the instruction of his site supervisor. He returned to work 10 or 20 minutes later when he considered that the odour had gone; 4. One employee, between 10am and 10.30am, smelled a "mothball type" odour and began to feel "nauseous and breathless". He experienced a "sore throat" and put on a respirator. He felt very tired upon returning home later that day and continued to feel tired the next day.
5. It was agreed that the experience of the four employees working at the adjoining Modulate premises described above was consistent with exposure to soft pitch fumes and that it was not likely that their short-term exposure would lead to future adverse medical effects. Further, it was agreed that it was possible that other individuals living or working near the Plant may have experienced similar adverse effects to those described.

Principles of sentencing

1. In imposing a proportionate and appropriate sentence for each of the offences, the instinctive synthesis process of sentencing necessitates consideration of the objective circumstances of the offences and the subjective circumstances of the offender. This process requires the Court to identify and weigh the significance of the factors relevant to sentence.
2. The Court must have regard to the legislative framework, which includes the purposes of sentencing as contained within s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('Sentencing Act'); any aggravating, mitigating and other factors of relevance as set out in ss 21A and 22 of the Sentencing Act; the objects of the POEO Act; and relevant matters to be taken into account as required by s 241 of the POEO Act.
3. In relation to s 21A of the Sentencing Act, the prosecutor carries the onus of proving any aggravating factors beyond reasonable doubt for the purposes of sentencing, while the offender carries the onus of proving any mitigating factors on the balance of probabilities: R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at [27].
4. Section 124(b) of the POEO Act states: 124 Operation of plant (other than domestic plant) The occupier of any premises who operates any plant in or on those premises in such a manner as to cause air pollution from those premises is guilty of an offence if the air pollution so caused, or any part of the air pollution so caused, is caused by the occupier's failure - … (b) to operate the plant in a proper and efficient manner.
5. Section 3A of the Sentencing Act identifies the purposes of sentencing as follows: 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.
6. Section 21A of the Sentencing Act sets out a number of aggravating and mitigating factors which the Court is to take into account. The prosecutor does not rely on any aggravating factors under s 21A(2). The mitigating factors under s 21A(3) which are relevant to the emission incidents are: … (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, … (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, … (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), …
7. Further, s 241 of the POEO Act provides the following matters that a court is required to take into account when imposing a penalty for offences under the POEO Act: … (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, … …

Objective seriousness of the offences

1. The objective gravity or seriousness of the offences committed by Koppers is the principal factor to be considered in determining the appropriate sentence. This requires the Court to take into account the nature of the offences, including the maximum penalty; the extent of harm caused to the environment by the commission of the offences and the extent to which this harm was reasonably foreseeable by Koppers; the state of mind of Koppers including its reasons for committing the offences; Koppers' control over the causes that gave rise to the offences; and whether practical measures were available to prevent the harm caused to the environment by the commission of the offences.

Nature of the offences

1. The nature and purpose of s 124(b) of the POEO Act and its place in the statutory regime are indicative of the objective seriousness of the offences.
2. The objects of the POEO Act include: 3 Objects of Act … (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, … …
3. The prosecutor submitted, and I accept, that the five non-domestic "air pollution" offences contained within Pt 5.4 Air pollution, Div 1 of the POEO Act (including s 124(b)) operate alongside the licencing regime within the POEO Act and relate to the general objective of pollution reduction.
4. The generation of air pollution is an offence against s 124(b) of the POEO Act where the pollution is caused by a failure of the occupier of a premises with plant "to operate the plant in a proper and efficient manner", irrespective of the quality or quantity of the pollutant that has been released. A breach of s 124(b) tends to undermine the objects of the POEO Act.

Maximum penalty

1. The maximum penalty for an offence committed by a corporation against s 124(b) of the POEO Act is $1,000,000. This is indicative of the seriousness of the offence as expressed by the legislature. In sentencing Koppers for the offences it has committed, the Court is required to assess the relative seriousness of Koppers' offences against the worst case for which the maximum penalty is provided: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698.

Extent of harm

1. The extent of harm caused, or likely to be caused, to the environment by the commission of the offences is a matter which the Court is required to take into account pursuant to s 241(1)(a) of the POEO Act, and is relevant to the objective seriousness of the offences.
2. Harm to the environment is defined by the Dictionary to the POEO Act to include: "…any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution."
3. Relevantly, "pollution" is defined to include "air pollution", meaning the "emission into the air of any air impurity". The definition of "air impurity" in the Dictionary of the POEO Act relevantly includes gases, fumes and odours.
4. It is not necessary for actual harm to be caused; a potential or risk of harm will be sufficient: Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 ('Waste Recycling') at [145].
5. The prosecutor submits that, by definition, the emission incidents caused harm to the environment by virtue of the fact that air pollution was caused. The prosecutor also submits that there was harm caused to individuals and there was potential for others living or working in the nearby area to experience adverse effects.
6. Although the precise composition of the fumes emitted to the atmosphere as a result of the emission incidents cannot be determined on the available evidence, Koppers accepts that the symptoms experienced by the individuals described above at [44]-[45] are consistent with exposure to soft pitch fumes.
7. The parties agree that short-term exposure to soft pitch fumes is unlikely to lead to future adverse medical effects and, as such, there is no likely future harm. Koppers submits that the potential for the emission incidents to cause harm was insignificant given the nature and duration of the emissions, and that the circumstances are less severe than those considered by Pepper J in Environment Protection Authority v Orica Australia Pty Ltd (the Evaporator Incident) [2014] NSWLEC 104 (in which her Honour found that the offence caused moderate environmental harm).
8. Koppers further submits that, by application of the well-known principle espoused in The Queen v De Simoni (1981) 147 CLR 383; [1981] HCA 31 ('De Simoni'), in considering the extent of harm, the Court cannot take into account the "offensiveness" of the odour generated by the incidents, as causing an offensive odour is a discrete offence under s 129 of the POEO Act. Koppers notes that the maximum penalty for an offence under s 129 is also $1,000,000 for a corporation. As such, while Koppers accepts that the effects of the odour and fumes are relevant to environmental harm, it submits that the offensiveness of the odour cannot be taken into account as a circumstance of aggravation or in a manner which would otherwise have an upward influence on sentence.
9. I find that, in relation to each emission incident, harm has been caused to the environment. I accept the prosecutor's submission that the fumes containing PAHs constituted air pollution and therefore resulted in harm as defined by the POEO Act. The first emission incident lead to the intermittent emission of fumes over a period of approximately two hours and 30 minutes, and the second emission incident involved the emission of fumes for around two hours and 45 minutes.
10. To the extent that this harm incorporates consideration of the offensiveness of the odour produced, I accept Koppers' submission that as a potentially aggravating circumstance this cannot be taken into account by virtue of the De Simoni principle. In this respect, I note that while the separate offence under s 129(3) of the POEO Act of causing or permitting the emission of an offensive odour is of the same seriousness as s 124(b) of the POEO Act (on the basis of the objective yardstick of maximum penalty: Environment Protection Authority v Wollondilly Abattoirs Pty Limited & Davis [2019] NSWCCA 312 at [66]), the offensiveness of the emissions is an element of the separate offence under s 129(3) and extraneous to the emission incident offences.

State of mind and reasons for committing the offences

1. Although the state of mind of the offender at the time of an offence may make a strict liability offence such as s 124(b) of the POEO Act objectively more serious if committed intentionally, recklessly or negligently, Koppers is not alleged to have conducted itself in such a manner. Similarly, while an offence that is carried out for financial gain may be of increased seriousness, the prosecutor does not allege that Koppers had a "reason" for committing the offences.

Foreseeability of risk of harm

1. The objective seriousness of an offence may increase if the environmental harm caused by the commission of the offence was reasonably foreseeable.
2. In relation to the first emission incident, in circumstances where the flame in the furnace is extinguished, Koppers accepts that it may be inferred that the safety shut off valve would close, and the fumes would be redirected. However, Koppers submits that there was no reason to infer that the flame in the furnace would go out at that time, or that it was reasonably foreseeable to Koppers that the safety shut off valve would not automatically reopen as it was designed to do.
3. In relation to the second emission incident, Koppers accepts that it was reasonably foreseeable that as a result of incomplete training, the operator would erroneously fail to open the intermediate valve. Koppers notes that although training had been provided, the operator on shift on 22 May 2019 was not usually part of the team and his shift supervisor had not realised that the operator did not have specific training in relation to the 711 Fume System.
4. The prosecutor submits that Koppers was aware that, or was on notice that, its manufacturing activities had the potential to cause harm. The prosecutor notes that the automation of the safety shut off valve into the furnace meant that the potential for the flame in the furnace to extinguish must have been foreseeable, but that Koppers had not fully addressed the risk posed prior to the emission incidents as the scrubber stack valve had not yet been automated.
5. The prosecutor submits that it is not necessary for the precise cause of the emission incidents to be foreseeable. The prosecutor submits, in relation to both the first and second emission incidents, that it is sufficient for the Court to find that it was foreseeable that a failure to open the correct valves in the upgraded 711 Fume System could cause fumes to be trapped in Tank 191 and for those fumes to be released into the atmosphere, causing air pollution and harm to individuals. In oral submissions, the prosecutor noted that reasonable foreseeability could be characterised the same way in relation to each of the emission incidents but may arise as a result of different reasons or conduct.
6. I find that it is not necessary to be able to foresee the precise cause of either of the incidents: Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280; (2008) 163 LGERA 71 at [32]. I accept the prosecutor's submission that it was reasonably foreseeable to Koppers that the flame in the furnace could go out, and that a failure to open the correct valve in the upgraded 711 Fume System would cause the build-up of fumes in Tank 191 and the subsequent release of fumes into the atmosphere, causing air pollution and harm to individuals in relation to the emission incidents.
7. In relation to the first emission incident, I note that for part of the incident the safety shut off valve in the upgraded 711 Fume System (which should have allowed the fumes into the furnace) was not working correctly. The scrubber stack valve that allowed fumes to be directed to the scrubber stack was closed and had not yet been automatically programmed to open when the safety shut off valve was closed. I accept that, in circumstances where the scrubber stack valve was later automated to open when the safety shut off valve was closed, it was reasonably foreseeable to Koppers, that failure to ensure the scrubber stack valve opened when the safety shut off valve closed would cause the build-up of fumes and subsequent release of fumes into the atmosphere.
8. In relation to the second emission incident, I accept the prosecutor's submission and find that it was reasonably foreseeable to Koppers that incomplete training could result in operator error regarding the need to open valves in the 711 Fume System, causing the build-up of fumes and subsequent release into the atmosphere.

Practical measures available to prevent, mitigate, abate or control the harm caused

1. Koppers submits that the prosecutor has not established that practical measures could have entirely prevented the first emission incident as there is no evidence indicating why the safety shut off valve did not reopen. Koppers notes that the safety shut off valve's failure was discovered within 10 minutes and action was thereafter taken to redirect fumes through the scrubber stack.
2. The prosecutor submits that the first emission incident could have been prevented if the scrubber stack valve had been automated, or if a formal standard operating procedure had been adopted to ensure the scrubber stack valve was manually opened whenever the safety shut off valve was closed, and Koppers operators had been trained to follow this procedure. The prosecutor also submits that an immediate reopening of the scrubber stack valve would have been the quickest solution to stop the emission of fumes, however the decision of Koppers' employees instead to manually relight the furnace led to an additional 20 minutes of emissions. Koppers could have had strict protocols so operators were aware that as soon as the flame in the furnace went out, the scrubber stack valve was to be opened (prior to attending to the furnace).
3. In response, Koppers submits that the furnace was also processing fumes from other scrubbers, influencing the focus of Koppers' employees on relighting the flame in the furnace.
4. Koppers accepts that additional training could have been undertaken, and with this additional training, an operator should have realised that the intermediate valve needed to be reopened to prevent the second emission incident from occurring. However, Koppers noted the context of the "major upgrade" to the 711 Fume System.
5. In relation to the second emission incident, the prosecutor submits that: the shift supervisor could have been made aware that the plant operator who caused the operator error was not fully trained; Koppers could have ensured all operators were fully trained prior to their first shift following the connection of the 711 Fume System to the furnace; and Koppers could have continued using the scrubber stack (instead of the furnace) to emit fumes until the safe operation of the 711 Fume System could be ensured and all necessary procedures followed. The prosecutor also submits that detectors could have been installed in order to identify any increases in pressure within the relevant tanks.
6. It is clear, and I find, that there were practical measures that would have prevented the risk of harm as submitted by the prosecutor in relation to the first emission incident, particularly the automation of the scrubber stack valve and the adoption of better operating procedures.
7. In relation to the second emission incident, I find, as accepted by Koppers, that there were practical measures to prevent harm including the implementation of measures similar to those adopted after the emission incidents noted at [41] above.

Control over causes of the offences

1. The prosecutor submits that Koppers had complete control over the automation of the valves, its operating procedures and training of operators, which "contributed significantly" to the emission incidents.
2. Although Koppers accepts that it had primary control over the causes that gave rise to the offences, it submits that the causes for the safety shut off valve failure are unknown and thus outside of Koppers' control.
3. I consider that it is clear that, at all relevant times, although the immediate cause of the emission incidents was operator error, Koppers had control over the plant and the equipment which caused each of the offences.

Conclusion on objective seriousness

1. Conscious that the task in which the Court is engaged is one of instinctive synthesis and not what may otherwise be described as two-staged sentencing, and that an assessment of objective seriousness referable to a notional point on a spectrum of culpability, despite being a convenient shorthand descriptor, is not a necessary component of the sentencing task, I consider that, on account of the objective factors noted above, each emission offence is of low objective seriousness for offences of this kind.

Subjective circumstances of the offender

1. Within the bounds set by the objective seriousness of the offences noted above, the Court is required to consider the subjective circumstances of Koppers. As the subjective factors are the same in relation to each emission incident and offence, I deal with these matters together.

Early guilty pleas

1. Koppers entered an early guilty plea in relation to each of the offences and is thus entitled to the full 25% discount for the utilitarian value of its pleas.

Remorse

1. An expression of remorse may be a mitigating factor pursuant to s 21A(3)(i) of the Sentencing Act, 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),
2. Although the prosecutor accepts that Koppers has expressed "regret" for the offences, it submits that Koppers has not complied with the requirements of s 21A(3)(i) of the Sentencing Act as it has not provided evidence that it has accepted responsibility for the emission incidents and recognised the harm caused by its actions.
3. Koppers submits that it has demonstrated genuine remorse and has done so through the actions it has taken rather than through "smooth apologies" which the Court has sought to avoid: Waste Recycling at [203].
4. Koppers makes four submissions in this regard, being: 1. First, the speed and efficiency of actions taken by Koppers to rectify the harm caused by the commission of each of the emission incidents, including the prompt response of employees at the Plant on both 21 and 22 May 2019 (which included two Koppers' employees attending the Modulate premises with gas monitors), the attempts to identify the odour sources, and the investigations undertaken on 22 May 2019, is indicative of remorse; 2. Secondly, Koppers acted with diligence and commitment in communicating with the EPA in relation to each emission incident and positively engaged with the prosecutor in relation to the investigation and subsequent prosecutions; 3. Thirdly, Koppers has implemented a number of corrective actions to prevent recurrence of similar incidents including: the replacement of the safety shut off valve; the acceleration of the automation of the scrubber stack valve; the preparation of further instructions on the upgraded thermal oxidation system; and the provision of further training. 4. Finally, the actions and statements of Koppers' executives indicate that Koppers is genuinely remorseful. This includes statements by Mr Lyons in his affidavit; attendance by Mr Lyons and two senior executives at the sentence hearing; attendance of Koppers Global Chief Executive Officer and other Koppers' executives at a meeting with the EPA; and Koppers Global Chief Executive Officer's subsequent emphasis on the importance of environmental compliance when engaging with Koppers' personnel at the Plant.
5. Koppers submits that each of the above actions demonstrates that it accepts responsibility for the emission incidents, acknowledges the impacts to the community, and is committed to preventing further incidents.
6. I find that Koppers' conduct, as demonstrated by the matters noted above, is indicative of "taking actions" in the sense considered in Waste Recycling. As such, I accept the evidence of Mr Lyons, the most senior executive of Koppers, in relation to his personal acknowledgment of Koppers' responsibility for each emission incident and concerns regarding its past environmental performance and commitment to furthering environmental objectives. I note that Mr Lyons and two other senior executives of Koppers were present (virtually, in accordance with the Court's COVID-19 Pandemic Arrangements Policy) at the sentence hearing and I find that Koppers has demonstrated contrition and remorse and has taken responsibility for its actions, including a public apology, and, has acknowledged that harm was caused.

Lack of prior criminality and likelihood of reoffending

1. Koppers does not have any prior convictions for environmental offences which is a mitigating factor pursuant to s 21A(3)(e) of the Sentencing Act. I also accept that Koppers is unlikely to reoffend (a mitigating factor pursuant to s 21A(3)(g) of the Sentencing Act), particularly in light of my findings above that Koppers has demonstrated remorse through taking actions in a genuine attempt to prevent further incidents from occurring.

Good character

1. Similarly to its submissions in EPA v Koppers (the Spill Incident), in considering whether Koppers is of good character (being a mitigating factor pursuant to s 21A(3)(f) of the Sentencing Act), the prosecutor submits that the Court should have regard to the fact that Koppers has received four penalty infringement notices - two of which relate to events that occurred following the commission of the offences the subject of these proceedings.
2. The prosecutor also submits that, as observed by Preston CJ of LEC in Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 ('Plath v Rawson'), given the importance of general deterrence, good character should be given less weight by the Court when sentencing for an environmental offence as such offences are typically committed by persons without prior convictions.
3. Reflecting its submissions in EPA v Koppers (the Spill Incident), Koppers notes that it does not have any prior convictions for environmental offences. Koppers submits that the receipt of penalty infringement notices is not a relevant factor for the purposes of sentencing, as penalty infringement notices are a statutory, administrative mechanism that are neither curial nor do they result in a conviction.
4. Koppers outlined a number of considerations said to support a finding of good character. Koppers submits that it was regularly in contact with the EPA prior to the emission incidents to manage and enhance environmental compliance at the Plant including undertaking relevant studies and programs and upgrading equipment.
5. Koppers submits that it has undertaken significant upgrades and programs since 2009 to achieve additional environmental controls. Koppers points to the evidence of Mr Lyons who details a number of specific measures which have been implemented by Koppers, including: engagement in a number of programs and studies primarily related to the management of emissions; the replacement, upgrading and installation of various pieces of equipment (such as back-up generators, pumps, water cooling towers etc) at an estimated cost of $16 million; and the fact that Koppers has undertaken a number of thermal oxidation improvements to reduce pollutants and risks. Koppers also notes that it has engaged third parties for the purposes of gaining certification under ISO 14001 Environmental Management System for approximately 15 years.
6. Koppers finally submits that the circumstances before the Court are different to those considered by Preston J in Plath v Rawson and that Koppers' situation is more akin to that considered by Pepper J in Environment Protection Authority v Whitehaven Coal Mining Limited [2019] NSWLEC 27 ('Whitehaven'), with the consequence being that the Court would not give less weight to Koppers' good character and lack of prior convictions by reason of the nature of the offences which have been committed.
7. In relation to the parties' submissions regarding the penalty infringement notices, as I considered and found in relation to the spill offence in EPA v Koppers (the Spill Incident): 1. It is clear that the receipt of a penalty infringement notice cannot be a conviction to be taken into account pursuant to s 21A(3)(e) of the Sentencing Act; and 2. It is a matter of some nicety whether the receipt of a penalty infringement notice can be taken into account in relation to a party's good character. The Court has previously considered whether particular penalty infringement notices concern matters which are related to the offence then before the Court and, if the circumstances leading to the notices are unrelated, found they should be given minimal, if any, weight.
8. The Court did not receive evidence of the circumstances surrounding the penalty infringement notices received by Koppers, however it was agreed that two of the notices (one relating to a breach of s 64(1) of the POEO Act and one notice relating to a breach of s 129(3) of the POEO Act) were issued prior to the subject charges and two notices (each relating to a breach of s 64(1)) were issued thereafter. While the receipt and payment of the notices were admitted by Koppers, it was submitted that the conduct which lead to the issue of the notices is not before the Court. I accept this submission. As such, and apart from noting the fact that three of the notices related to the breach of a condition of an environment protection licence and one notice related to emission of offensive odours, given the present state of the evidence regarding good character, I attribute minimal weight to the penalty infringement notices.
9. While I accept the comments of Preston J in Plath v Rawson in relation to the weight to be given to good character in environmental offences generally, I note that his Honour also emphasised at [146] that consideration of the weight to be given to good character requires examination of the character of the offence that has been committed. I consider that the approach taken by Pepper J in Whitehaven was more nuanced in that her Honour was concerned with the specific character of s 64 of the POEO Act, being strict liability offences committed by environment protection licence holders.
10. Given the evidence now before the Court, I consider that Koppers is a corporation of good character such that this is a mitigating factor which I take into account in determining the appropriate sentences.

Assistance to authorities

1. Koppers cooperated fully with the EPA's investigation which is a mitigating factor in accordance with s 21A(3)(m) of the Sentencing Act. This cooperation included: participation in the external audit of the Plant; and implementing the findings of the audit.

General and specific deterrence

1. The Court is required to take into account both specific and general deterrence. While I do not consider specific deterrence to be of particular relevance given my earlier finding concerning Koppers' likelihood of reoffending, I nonetheless consider general deterrence to be a more relevant matter in the imposition of a sentence.
2. General deterrence plays a role in preventing conduct of this nature, as the appropriate sentence must deter corporations and individuals from accepting a risk of, or acting indifferently toward, causing environmental harm in exchange for a nominal or justifiable fine. I consider that in the determination of the appropriate sentence to be imposed for each emission incident, an element of general deterrence must be included to ensure that occupiers of premises operate plant in a manner that that does not cause air pollution.

Even-handedness

1. Although each judicial decision will turn upon the facts unique to that case and will necessarily be subject to a variety of objective and subjective factors (Environment Protection Authority v Borg Panels Pty Ltd [2016] NSWLEC 71 at [45]), the Court should nonetheless seek to impose a sentence which is consistent with any patterns of sentencing for like offences.
2. The Court was informed by the prosecutor that these proceedings constitute only the second occasion on which this Court has considered s 124(b) of the POEO Act, the first being the 2006 decision of Pain J in Environment Protection Authority v Caltex Refineries (NSW) Pty Limited [2006] NSWLEC 335 ('Caltex Refineries'). The prosecutor noted that as the maximum penalty for the offence was $250,000 at the time of her Honour's decision, the Court ought to apply the principle of even-handedness by reference to cases concerning s 64 of the POEO Act which concern breaches of licence conditions. The prosecutor provided the Court with a table of cases in this regard (with discrete references to objective seriousness, prior convictions, aggravating and mitigating factors, fines imposed and whether costs and/or publication orders were made) including: Environment Protection Authority v Viva Energy Pty Ltd [2019] NSWLEC 13; Environment Protection Authority v Steggles Foods Mt Kuring-gai Pty Ltd [2017] NSWLEC 178; (2017) 230 LGERA 24; Environment Protection Authority v Morgan Cement International Pty Ltd [2016] NSWLEC 140; Environment Protection Authority v Hunter Water Corporation [2016] NSWLEC 76; Environment Protection Authority v Nulon Products Australia Pty Ltd [2015] NSWLEC 153; Environment Protection Authority v Orica Australia Pty Ltd (the Evaporator Incident) [2014] NSWLEC 104; Environment Protection Authority v Caltex Refineries NSW Pty Ltd [2008] NSWLEC 194; Caltex Refineries.
3. Koppers submits that the Court should have regard to Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131 and Environment Protection Authority v Huntsman Corporation Australia Pty Ltd [2011] NSWLEC 39 as comparable cases.
4. In sentencing Koppers for each of the emission offences it has committed, I have given close consideration to the above cases and their objective and subjective circumstances which led the sentencing judge in each matter to impose the various sentences. I have also considered the summaries of other cases undertaken in a number of the cases. The sentences that I consider appropriate to be imposed for each of the emission offences is not inconsistent with the sentences imposed in the matters to which I have been referred.

Totality

1. The totality principle requires the Court to consider whether, having regard to the totality of the criminal behaviour, the aggregate sentence imposed across the series of sentences is just and appropriate: Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 at 63; Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [196]; Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57 at [40].
2. The parties agree, and I find, that the totality principle applies with respect to the two emission incidents as they concern the same, or very similar, course of conduct. I therefore take this into account in determining the appropriate aggregate sentence for the offences.

Costs of proceedings

1. Koppers has agreed to pay the prosecutor's costs and I take this into account in determining the appropriate sentence: Harris v Harrison (2014) 86 NSWLR 422; [2014] NSWCCA 84 at [100]. Nonetheless, an order for costs does not justify reducing a penalty to an amount lower than suggested by the general pattern of sentencing for like offences.

Publication and apology

1. The publication of information relating to environmental offences and their repercussions is relevant to sentence as it enhances public perception and the deterrent effect of the sentence imposed: Waste Recycling at [242]; Environment Protection Authority v Dyno Nobel Asia Pacific Pty Ltd [2017] NSWLEC 64 at [163]; Environment Protection Authority v Crown in the Right of New South Wales [2019] NSWLEC 178 at [86].
2. The prosecutor seeks an order pursuant to s 250(1)(a) of the POEO Act requiring Koppers to publicise these offences (and that such order include details arising in relation to the spill offence (EPA v Koppers (the Spill Incident)) in a number of newspapers and has provided a draft publication notice. Koppers does not oppose the publication order sought by the prosecutor.
3. I consider it appropriate that a publication order be made and that the publication be in the form of Annexure "A" to this judgment which reflects the findings and sentences imposed in both this judgment and EPA v Koppers (the Spill Incident).
4. The prosecutor has proposed that the monetary penalty imposed on Koppers be paid to Port Stephens Koala & Wildlife Preservation Society Ltd for the purposes of volunteer personnel training and associated veterinary costs at the Port Stephens Koala Hospital, pursuant to s 250(1)(e) of the POEO Act. Koppers does not oppose this order.
5. Having considered the evidence in relation to such an order, including a proposal signed by the Chief Executive Officer and Secretary of Port Stephens Koala & Wildlife Preservation Society Ltd, I consider it appropriate that such an order be made.

Appropriate sentence

1. Synthesising the above matters, I find that the appropriate penalty for the offence in relation to the first emission incident is $40,000 and the appropriate penalty for the offence in relation to the second emission incident is $40,000. These amounts should each be reduced by 25% for the utilitarian value of the guilty pleas entered by Koppers. I find that the application of the totality principle makes it appropriate to reduce the aggregate amount of the monetary penalty of $60,000 for the emission incidents by $7,500 (effectively applied as a 25% reduction of the monetary penalty for the offence in relation to the second emission incident).
2. This results in a monetary penalty of $30,000 for the offence in relation to the first emission incident and $22,500 for the offence in relation to the second emission incident.

In proceedings 2020/00135094: 1. Koppers Carbon Materials & Chemicals Pty Ltd ('Koppers') is convicted of the offence against s 124(b) of the Protection of the Environment Operations Act 1997 (NSW) ('POEO Act') as charged. 2. Koppers is to pay the Environment Protection Authority's legal costs as agreed or assessed, pursuant to s 257B of the Criminal Procedure Act 1986 (NSW). 3. Pursuant to s 250(1)(e) of the POEO Act, Koppers is to pay, within 28 days, the amount of $30,000 to the Port Stephens Koala & Wildlife Preservation Society Ltd (ACN 614 265 833) for the purpose of training volunteers to assist veterinary staff at the Port Stephens Koala Hospital and associated facilities. 4. Pursuant to s 250(1)(a) of the POEO Act, Koppers is, at its own expense and within 28 days of the date of this order, to cause a notice in the form of Annexure "A" to this judgment to be placed within the first 11 pages of the following publications, at a minimum size of 14cm x 13cm: 1. Australian Financial Review; 2. Sydney Morning Herald; and 3. Newcastle Herald. 1. Within 35 days of the date of this order, Koppers must provide to the Environment Protection Society a complete copy of the pages of the publications in which the notices have appeared pursuant to Order (4).

In proceedings 2020/00135095: 1. Koppers Carbon Materials & Chemicals Pty Ltd ('Koppers') is convicted of the offence against s 124(b) of the Protection of the Environment Operations Act 1997 (NSW) ('POEO Act') as charged. 2. Koppers is to pay the Environment Protection Authority's legal costs as agreed or assessed, pursuant to s 257B of the Criminal Procedure Act 1986 (NSW). 3. Pursuant to s 250(1)(e) of the POEO Act, Koppers is to pay, within 28 days, the amount of $22,500 to the Port Stephens Koala & Wildlife Preservation Society Ltd (ACN 614 265 833) for the purpose of training volunteers to assist veterinary staff at the Port Stephens Koala Hospital and associated facilities. 4. Pursuant to s 250(1)(a) of the POEO Act, Koppers is, at its own expense and within 28 days of the date of this order, to cause a notice in the form of Annexure "A" to this judgment to be placed within the first 11 pages of the following publications, at a minimum size of 14cm x 13cm: 1. Australian Financial Review; 2. Sydney Morning Herald; and 3. Newcastle Herald. 1. Within 35 days of the date of this order, Koppers must provide to the Environment Protection Authority a complete copy of the pages of the publications in which the notices have appeared pursuant to Order (4).

Annexure A (102078, pdf) 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: 17 February 2021