Environment Protection Authority v Lithgow City Council

18 August 2003 ENVIRONMENT PROTECTION AUTHORITY Prosecutor v LITHGOW CITY COUNCIL Defendant Judgment

1. The Defendant is charged that it committed an offence against s 64(1) of the Protection of the Environment Operations Act 1997 ("the PEO Act") in that it was the holder of an Environment Protection Licence which it contravened through the actions of one of its employees. The Environment Protection Licence ("the Licence") is held by the Defendant in relation to the Lithgow Sewerage Treatment Plant ("the Lithgow STP") which is located in Geordie Street, Lithgow. The condition which the Defendant is charged with breaching is condition R5.1 of the Licence. Condition R5.1 of the Licence states that: Should the algal identification prove the presence of a toxic species of blue green algae and the cell count concentration is greater than 15,000 cells per millilitre, a toxicity analysis must be completed. A regional officer of the Authority must be immediately notified by phone and confirmed by fax or mail.

2. The particulars of the offence charged are that the Defendant failed to perform a toxicity analysis on or about 11 March 2002 and failed to notify the Prosecutor in accordance with condition R5.1 despite there being identification of algal discharge from the sewage treatment plant with a cell count concentration of blue green algae greater than 15,000 cells per millilitre. The maximum penalty applicable to this offence is $250,000. The Defendant has pleaded guilty to this offence.

3. The parties provided to the Court a Statement of Agreed Facts which contains considerable material concerning the location of the sewage treatment plant and related waterways into which it flows. Relevantly, the Statement of Agreed Facts states at paragraphs 3 - 6: The treatment process at the Lithgow STP involves passing wastewater through a series of three large tertiary ponds. The ponds are used to settle fine solids and to provide disinfection and denitrification of the wastewater (i.e. to kill bacteria and remove nitrates and organic matter). The effluent from the STP is ultimately released from the third tertiary pond into Farmer's Creek through a concrete flume.

The tertiary treatment ponds at the Lithgow STP are located approximately 750 metres from the main buildings at the plant and can be accessed either by vehicle or on foot by means of a dirt road. The ponds can also be seen from a sealed road that runs up a hill that overlooks the STP. This road leads to a waste disposal facility that Lithgow Council owns and operates.

Farmer's Creek flows through an urban area immediately below the Lithgow STP. A short distance further downstream, the land adjacent to the Creek is rural. Cattle are kept on some of the lands that border the section of the Creek that extends from 2 to 6 kilometres downstream of the discharge point of the Lithgow STP, both through agistment and by direct ownership of the landowners. Because the Creek is not fenced in this area, stock have access to the Creek and can drink from it. On at least one property, Farmer's Creek provides the sole source of drinking water for cattle during drought conditions.

Farmer's Creek flows into Lake Lyall about 7 kilometres downstream from the Lithgow STP. Lake Lyall is an artificial lake that was constructed in the late 1980s to store water of the Mount Piper Power Station. The public uses the lake for recreational purposes including boating and water skiing.

4. The Licence issued to Lithgow Council includes condition M7.1 which requires the Council to monitor the discharge from the Lithgow STP for the presence of algae. The condition requires the Defendant to conduct monthly analyses to determine the types of algae which are contained in the discharge and to determine the number of cells present for each species of algae that is detected. The result of the algal cell count test is reported to the Environment Protection Authority ("the EPA") as number of algae cells per millilitre. The Defendant has been doing the monthly testing analysis for the algal identification and cell count through its laboratory, Australian Water Technologies ("AWT"), since condition M7.1 came into effect under the PEO Act licence issued to the Defendant at that time on 3 April 2000. Circumstances of the Offence 5. The relevant circumstances leading up to the date of the offence are as follows. In mid January an inspection of the Lithgow STP occurred. At the time of the inspection an officer of the EPA observed that there was a vivid green coloured discharge flowing from the Lithgow STP into Farmer's Creek. The Prosecutor took laboratory samples of the discharge on that day. Analysis of the samples established that the discharge from the Lithgow STP into Farmer's Creek contained a very high concentration of algae. Representatives of the Defendant collected samples from the discharge from the Lithgow STP on 29 January 2002. The Defendant's laboratory, AWT, carried out algal identification and cell count tests on the samples obtained by the Defendant. AWT's results also showed a high concentration of algal cells per millilitre in the discharge from the STP.

6. During a telephone conversation which occurred on 6 February 2002 between an officer of the Prosecutor and an employee of the Defendant, it became clear that the responsible employee of the Defendant was not aware of condition R5.1 of the Licence concerning toxicity testing. An officer of the Defendant arranged for a further sampling to be carried out and subsequently requested AWT to perform algal counts on 6 February 2002. These were then analysed and established that the discharge contained approximately 53,282 cells per millilitre of blue green algae, known as microcytes. These results were provided to the Defendant by AWT and the Defendant forwarded these results to the Prosecutor on 8 February 2002.

7. On 22 February 2002, an employee of the Prosecutor had another telephone conversation with the responsible employee of the Defendant, during which the employee of the Prosecutor explained to the employee of the Defendant what was involved in testing algal discharge for toxicity. The further samples collected by the Defendant from the discharge from Lithgow STP on 26 February 2002 were sent to AWT, the laboratory which performed an algal identification and cell count analysis on this sample on 11 March 2002. Again, a high level of microcytes was found in that sample being some 113,226 cells per millilitre. No request was made to the laboratory, AWT, to conduct toxicity testing on samples of discharge from Lithgow STP containing more than 15,000 cells per millilitre of blue green algae until after 11 March 2002, in approximately mid March 2002. Consequently, the date of the offence has been named in the charge as being on or about 11 March 2002. The Statement of Agreed Facts also deals with the notification measures undertaken by the Defendant in the event of algal discharge from Lithgow STP in par 47 - 48 as follows: Since 1994, the Council has, through its Health Department, had Environmental Officers undertake regular monitoring and sampling of Farmer's Creek at the Cooerwul Bridge (which is approximately 800 metres downstream of the discharge point from the Lithgow STP) and at various locations at Lake Lyall with a view to detecting any outbreaks of blue-green algae and ensuring that the public are notified of same. Such monitoring and sampling occurs on a monthly basis whilst the results indicate the presence of levels of potentially toxic species of blue-green algae of less than 2,000 cells per millilitre, and are increased to weekly monitoring and sampling when the results indicate greater than 15,000 cells per millilitre (in accordance with the Regional Algal Co-ordinating Committee Algal Contingency Plan dated May 2003).

When these tests indicate excessive blue-green algal numbers (i.e. 15,000 cells per millilitre or more) Council notifies residents along Farmer's Creek by way of mail box drop of same. Furthermore, Council has permanently in place warning signs at Lake Lyall and along Farmer's Creek to advise persons of the presence of blue-green algae. The display panel on each sign is opened when appropriate so as to display a warning of the presence of blue-green algae. Alerts are also published by the Regional Algal Co-ordinating Committee in the local newspaper and on the local radio stations.

The presence of blue-green algae in Farmer's Creek was detected through the monitoring program carried out by the Council's Health Department at the Cooerwul Bridge on 22 January 2002. On 14 February 2002, the Council undertook the measures outlined above in Paragraph 47 to notify the public. The notice that was issued on 14 February 2002 stated that algal contamination was present in the section of Farmer's Creek extending from the discharge point of the Lithgow STP to 200 metres downstream of the discharge point. The public alert remained in place as at 26 February 2002 (when again, the presence of blue-green algae in Farmer's Creek was detected by Council's monitoring of same). The alert remained current until 18 July 2002.

8. The important point to note is that there was an alert issued by the Defendant to the public for the period from 14 February 2002 until 18 July 2002 warning of the presence of blue green algae in Farmer's Creek and advising that people and animals should avoid contact with the water. I also note that the Defendant has implemented procedures, in cooperation with its laboratory AWT, to prevent a recurrence of the licence breach with which it is charged. Further, the Defendant implemented a bacterial dosing programme after this licence breach was drawn to its attention but before it was notified of the Prosecutor's intention of bringing this prosecution. That bacterial dosing programme involves the injection of bacteria into the final effluent ponds which form part of the treatment works at Lithgow STP, with the aim of reducing the amount of algae present in the ponds. Over the last twelve month period, the Defendant has spent some $45,256 on this bacterial dosing programme. It is intended by the Defendant to continue this bacterial dosing treatment until the plant augmentation of Lithgow STP is completed and in operation. Environmental Harm 9. The Prosecutor's submissions relied on the evidence of Dr Lee Bowling, an expert in blue green algae science employed by the Department of Infrastructure, Planning and Natural Resources, whose evidence formed part of the Statement of Agreed Facts. Dr Bowling deposed to the harm resulting from blue green algae, particularly microcytes, a toxic form of blue green algae which was found to be present in the discharge. He gave evidence that the sewage treatment ponds in sewage treatment plants contain high concentrations of nutrients in which microcytes feed. He stated that microcytic blooms could change over time, so they may initially be non toxic and later become toxic and vice versa. Dr Bowling estimates that approximately sixty percent of microcytic blooms are toxic. He stated that ingesting microcytes may have a lethal effect on domestic stock, and may also cause gastroenteritis and diarrhoea in people. Dr Bowling's evidence was uncontested by the Defendant.

10. The Defendant made submissions to the effect that there is no evidence of actual environmental harm resulting from this particular breach. The Defendant further submitted that it is accepted that blue green algae will be discharged in any event until such time as the Lithgow STP has been upgraded. The Prosecutor did not disagree with this submission. The Defendant adduced evidence that the ability of the Lithgow STP to process the current sewage discharge which flows through it is insufficient to meet the current standards set by the EPA in relation to effluent quality for Farmer's Creek. The Defendant is currently required by the EPA to meet a sensitive water standard which is the highest standard achievable. The sewage treatment plant requires further augmentation works in order to meet that standard. The Defendant has been working with numerous other government agencies since 1996 to ensure that the necessary augmentation is achieved. The effect of the Local Government Act 1993 is that a Council cannot act unilaterally in improving sewage treatment works, but rather must do so through the Minister of Land and Water Conservation. Funds are required from the State government in order to enable the capital works to be conducted. Councils are also responsible for half of the costs of the capital works carried out in relation to sewage treatment facilities. The Defendant has ensured that its budget allocation is available for the augmentation works which it needs to carry out on the Lithgow STP but the Defendant is still waiting for the relevant State government funds. In the meantime, outbreaks of blue green algae occur from time to time in Farmer's Creek downstream from Lithgow STP, particularly during warmer weather. There is little that can be done to avoid that occurring. Section 241 of the Protection of the Environment Operations Act 1997 11. Submissions were put to me in relation to the factors contained in s 241 of the PEO Act which are to be taken into account, in so far as they are relevant, by the Court when imposing a penalty. Section 241(a) - the extent of the harm caused or likely to be caused to the environment by the commission of the offence 12. The Prosecutor noted, in submissions, that the provisions of s 241 are not necessarily directly applicable to a breach of licence conditions such as occurred here. The Prosecutor did, however, submit that the significance of the breach of the licence condition is that such licence conditions are important in the overall legislative scheme for the protection of the environment and the public. The requirement for the toxicity testing imposed on the Defendant's licence is, the Prosecutor submitted, intended to enable an assessment to be made of the level of potential for harm created by algal contamination in Farmer's Creek. It was said by the Prosecutor that neither the Defendant nor any other government body was in a position to understand the exact character of the hazard posed by this algal contamination without the toxicity testing required by the condition. As a result, it was impossible for the Defendant or anyone else to give the public accurate and complete information about the condition of the creek.

13. The Defendant's submissions in this regard were, as has already been noted, that there was no actual or likely harm caused to the environment by the breach of this licence condition. The Defendant submitted that there was already a system in place, implemented by the Metropolitan South Coast Regional Algal Coordinating Committee, of which the Defendant is a member, which ensures that the public is alerted to concentrations of blue green algae that are likely to be harmful. The public is notified as to harmful concentrations of blue green algae by letter box drops, newspaper articles and the placement of signs along the watercourse. The Defendant argues that over the period the offence was committed, namely on or about 11 March 2002, there was already in place an alert issued by the Metropolitan South Coast Regional Algal Coordinating Committee in relation to the algae in Farmer's Creek. The Defendant also submitted that no further specific action is required under the EPA licence as a result of toxicity testing to be conducted under condition R5.1 in the licence and that there was no evidence produced by the Prosecutor as to what use the toxicity testing results would, in any event, be put. Section 241(b) - practical measures that may be taken to prevent control, abate or mitigate harm 14. The Prosecutor submitted that, as evidenced by the steps that have since been taken by the Council, there clearly were actions which could have been taken to ensure compliance with the R5.1 licence condition. The Defendant submitted that as there was no harm resulting from the breach of the licence condition, the subject of this charge, s 241(b) did not apply in any event. Section 241(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 15. The Prosecutor submitted that it was reasonably foreseeable that the potentially toxic species of blue green algae would be discharged by the Lithgow STP. This was not disputed by the Defendant. However, the Defendant once again submitted that this section did not apply because there was no harm that was caused directly or likely to be caused by the commission of this particular breach of licence condition. Section 241(d) - the extent to which the person who committed the offence had control over the causes that gave rise to the offence 16. There was no dispute amongst the parties that the Defendant had control over the causes that gave rise to the offence at all relevant times.

17. Section 241(e) is not applicable in the circumstances of this matter.

18. If I look at the factors that might apply pursuant to s 241, it appears to me that, in circumstances where there is no actual harm caused or likelihood of harm caused as a result of the breach, consideration of the practical measures that could have been taken and whether the harm was reasonably foreseeable under s 241(b) and (c) simply does not arise. Section 241 is not, in this case, particularly relevant. General sentencing principles 19. General sentencing matters dictate that regard must be had to the culpability of the Defendant and the individual circumstances which led to the commission of the offence in deciding what penalty should be imposed. Further, the sentence must be proportional to the gravity of the crime and the Court must have regard to the maximum penalty applicable as this is an expression of the seriousness Parliament attributes to the offence. Generally, reference is made to Camilleri Stock Feeds v Environment Protection Authority (1994) 82 LGERA 21 in making that submission and certainly that decision has been applied many times in this Court.

20. It is also important to consider this is a breach of a licence condition issued under the regulatory framework for protecting the environment contained in the PEO Act. The Prosecutor relied on the decision of Bignold J in the matter of Environment Protection Authority v Pasminco Broken Hill Mine Propriety Limited 2002 NSWLEC (8 May 2002), particularly par 36 where his Honour held that the effect of a thoroughly conducted environmental monitoring programme was not an administrative type of breach only. His Honour noted that such obligation is substantive, in as much as monitoring and reporting serve the important twin functions of self regulation and full disclosure to the regulatory authority of the results of the requisite monitoring. The Prosecutor argued this same observation should apply in this case.

Evenhandedness 21. The sentencing principle of evenhandedness needs to be considered. The only case which the Prosecutor relied on as being comparable was that of Pasminco . That case concerned a breach of licence conditions which required the monitoring of ground level vibration caused by blasting operations. In that case the defendant pleaded guilty to the two charges. The Court imposed penalties for the two offences of 10 percent and 20 percent of the maximum penalty respectively, the maximum penalty being $60,000. These were reduced by a further factor of 40 percent to $3,600 and $7,200. The Prosecutor argued that this case before me is more serious than that in Pasminco because the failure to comply with the monitoring conditions here may give rise to more serious environmental harm than that threatened in Pasminco . The Prosecutor noted the maximum penalty applicable is now much higher than it was in Pasminco . Further, the Prosecutor submitted that many of the mitigating factors identified by the Court in Pasminco are absent from this case. The Prosecutor submitted the fine imposed should be higher than that in Pasminco .

Finding 22. The submission of the Prosecutor referred to at par 20 above needs to be balanced against the situation that is before me, where a monitoring condition contained in a licence which has been in place since April 2000, if not before, has been breached. The breach has not previously been the subject of any discussion or action by the Prosecutor, or at least, no such evidence has been adduced to the Court. The Defendant has been providing the Prosecutor with a monthly report as required by the conditions of the licence. Due to the surrounding circumstances involving Lithgow STP and the way health alerts in relation to algal concentration in Farmer's Creek are managed by the Council, there has been no actual or potential harm caused by the breach itself. The release of algae from Lithgow STP is beyond the control of the Council to fix without financial support from the State government.

I do not think the breach of the condition R5.1 is serious in this context. However, in general, a breach of a licence condition is not a matter to be considered lightly. The Prosecutor submitted that while the Defendant was a council, its status as a public authority was not grounds for leniency of itself and I accept that submission. The Prosecutor relied in particular on the decision of Lloyd J in Environmental Protection Authority v Tenterfield Shire Council (2000) 112 LGERA 173 to that effect. I also agree with the Defendant's solicitor, who submitted that ultimately each case must be determined on its own facts. This was confirmed by Lloyd J in Tenterfield .

The Prosecutor also argued there had been a breach of public trust, as recognised by Pearlman J in Environmental Protection Authority v Port Kembla Copper Pty Limited (2001) 115 LGERA 391, and that this was also relevant in imposing a sentence. In the context of this particular case, I did not find that submission to be a particularly strong one. I note there was no suggestion by the Prosecutor there was need for specific deterrence in the case of this Defendant.

Taking into account all of the factors outlined above, including the need for evenhandedness, in my opinion, a penalty of $10,000 representing 4 percent of the maximum penalty should be imposed. It is also important to note there are a number of mitigating factors that should be taken into account which will reduce that penalty. I need to consider the fact there has been a guilty plea and that this was done at a very early opportunity in these proceedings. A plea of guilty entitles the Defendant to a discount in penalty and it has been noted that this can be in the range of 10 percent to 25 percent see R v Thompson ; R v Houlton (2000) 49 NSWLR 383. I consider the Defendant is entitled to the full 25 percent reduction on the basis of an early guilty plea.

The Defendant's legal representative submitted from the bar table that he was instructed by the Mayor and the General Manager of the Defendant to express to the Court the Defendant's remorse for its actions. While it is preferable that such submissions be supported by a sworn affidavit, I accept the Defendant has been remorseful, that there has been full co-operation with the Prosecutor and that steps have been taken to ensure there will be no further breach of the licence condition. The Defendant fully co-operated with the Prosecutor throughout the prosecution. The Defendant entered a plea of guilty at an early opportunity, has taken steps to ensure that there will be no repeat of the offence and, prior to being notified of the Prosecutor's intention to prosecute to combat blue green algae releases from Lithgow STP, commenced a dosing programme to minimise environmental harm.

The Defendant understands that it is liable for the Prosecutor's costs. These have not yet been agreed. In all these circumstances, I consider the Defendant's penalty should be discounted by a total of 40 percent and consider that a fine of $6,000 is therefore appropriate.

I note that the Prosecutor intends to withdraw the prosecution in matter no 50124 of 2002.

Orders 29. The Court orders that; 1. The Defendant is convicted of the offence with which it is charged. 2. The Defendant is fined the sum of $6,000 to be paid to the Registrar of the Court within twenty-eight days of today's date. 3. The Defendant must pay the Prosecutor's costs of the proceedings against it as agreed or assessed. 4. The exhibits may be returned.

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