Environment Protection Authority v M A Roche Group Pty Ltd

EXTEMPORE Judgment 1The defendant is a family company which operates a quarry, trading as "Volcanic Resources", at or near 129 Milligans Rd, Wauchope, and also does contract crushing and carrying, off-site. 2It is charged with breaching the terms of its 2005 environment protection licence ("EPL") No. 12364 by exceeding the 30,000 tonne handling limit in condition A1.2(b), in the year January 2012 - January 2013. The maximum penalty for the offence is $1M. 3The operations of the quarry are fully described in documentation before the Court, and several photographs are also in evidence. 4In the course of agreement upon two statements of relevant facts (Exhibits P1 and P2), the defendant conceded that it had also exceeded its limit in earlier years by a minimum of 5,000, if not 15,000 tonnes (agreed fact ("AF") 21). 5The agreements on facts have greatly assisted the Court, but I will not repeat all of those facts in this judgment. 6In the year under review it is agreed that production reached 88,949 tonnes (AF 31). 7The company's record keeping, and its statutory reporting to the Environment Protection Authority ("EPA"), over the years of holding the licence (condition R1), would appear to have been poor (AF 34 and 57, and attachments 4 - 6), and its representative, its only active director Mark Andrew Roche, seems to rely upon the suggestion that exceedence of such limits is common across the industry. 8In January 2010, the EPA emphasised to Mr Roche the need for the licence limit to be observed, and for any breaches of it to be declared (AF 21 and 51), and, on 1 March 2013, he declared extractions of only 66,737 tonnes in the charge period (AF 24). 9In October/November 2012, the defendant company commenced action to secure an increase in the limit prescribed in its EPL, to 250,000 tonnes (AF 39), or perhaps 490,000 tonnes (Roche subs, par 10), by seeking a new development consent from Port Macquarie-Hastings Council (AF 39 - 45), but there has been much delay. 10Mr Roche told the Court he expected to have his development application ("DA") and environmental impact statement ("EIS") to the Council within two months. 11The company had poor trading figures in calendar years 2011 and 2012, due to the impact, on its "other income" items, of very serious rainfall and flooding events (AF 33). In the charge period some 95% of its output to market was relatively low value product (AF 54 - 55). 12It has striven hard to preserve employment, but has tried to offload surplus equipment to avoid going into administration. 13While the prosecutor relies on the defendant's financial motivation for this offence, the defendant claims its losses have grown over time. 14The defendant entered a very early plea of guilty, and relied on an affidavit sworn by Mr Roche, and his oral evidence. The relevant EPL is attached to both that affidavit and Exhibit P1. 15The prosecutor established the agreed offending amount (88,949.10, cf the reported 66,737 tonnes) by checking the defendant's records with those of its major customers (AF 31 and 52). Mr Roche explains (par 8) the under-reporting on that occasion on the basis of computer problems. 16In November 2013, the defendant was convicted in this Court of a water pollution offence (committed in June 2012), and of an offence of delaying and/or obstructing an authorised officer (in October 2012). 17Pain J found the defendant's culpability to be objectively "low", fined the company $17,000 and $5,000 respectively, and ordered payment of agreed legal costs of $24,500 and $9,800, and investigation expenses of $14,700 (Environment Protection Authority v M A Roche Group Pty Ltd; Environment Protection Authority v Roche [2013] NSWLEC 191). On the water pollution offence the defendant also received a publication order. 18In Her Honour's judgment, the applicable, and well-known, sentencing principles were spelled out to the defendant (see [6] - [12], [19], [38], [53] ff, [62] and [63]), and are fairly summarised in the prosecutor's written submissions to me, so I will not repeat them here. Sections 3A, 21A, 22 and 23 of the Crimes (Sentencing Procedure) Act 1999, and ss 64 and 241 of the Protection of the Environment Operations Act 1997 are of particular importance in this matter. 19In the present case the alleged harm has two elements - one is the risk that such an exceedence of the approved limit, whether by 60,000 or 220,000 tonnes, at least potentially creates additional pressure on dust, water and noise factors, and the other is that disobedience of the licence fundamentally undermines the regulatory scheme for potential environmental damage from industrial activity. 20One cannot be dogmatic about the first element, in the absence of a proper environmental study such as should emerge from the current EIS/DA process, but one can certainly be dogmatic that flouting the licence definitely causes harm of the second kind. 21The Court accepts the defendant's genuine concern to protect the livelihood of family men it employs, but it knowingly breached its EPL conditions in doing so, choosing, on its own admission, to "trade out" of its financial difficulties. It was also clearly in breach of the EPL limit to some extent prior to the two very wet years Mr Roche complains of. 22It is not for the Court to make a finding on the viability of this business, but clearly the generation of revenue was the objective of the continued operation of the quarry in breach of the EPL. The purpose of financial gain is established, even if no profit resulted in fact. 23In terms of mitigating factors, the defendant's very early plea qualifies it for the full 25% discount (R v Thomson, R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383), and its agreement to pay costs, even though not yet agreed as to quantum, and its assistance to the prosecutor (despite earlier concealment or understatement of production figures) are to be taken into consideration to its credit. 24I agree with the prosecutor that much of the defendant's behaviour negates any allowance for remorse and/or contrition. However, having been somewhat tardy in addressing the need to have increased production approved, I accept that every effort is currently being made by the company to finalise its DA/EIS documentation. 25No ground for mitigation can be found in the company's environmental record, nor in its allegation that large operators receive preference in the government's pursuit of wrongdoing, nor its complaints about the prosecutor. Mr Roche may be assured that this Court is scrupulous in its "evenhandedness", when sentencing in environmental matters brought before it. 26In terms of objective seriousness, I rate this breach at a "low" level, but not at the "lowest", nor at the "medium", level. 27That leaves, for consideration, the defendant's claim of impecuniosity as a ground for reducing any penalty, and its objection to a publication order. 28The principles to apply on the impecuniosity point rely upon the judgments in R v Rahme (1989) 43 A Crim R 81, as discussed and applied by me in Environment Protection Authority v Pal [2009] NSWLEC 35, at [114] - [133]. 29The presentation here of financial information to support some discount is quite inadequate (cf, eg, Environment Protection Authority v Chillana Pty Ltd [2010] NSWLEC 255, at [104] - [112]), but the stress on the defendant's financial position is accepted by the Court. Mr Roche says he gave all the relevant material to the prosecutor, and I note that some was also before Pain J. I accept his sworn oral evidence in general terms on these matters. 30There is a need for both general and specific deterrence in this case, and more than a nominal fine must be imposed (Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234, at [140]), as was done in cases such as Minister for Planning v Hunter Quarries Pty Ltd [2010] NSWLEC 246, even though it may further impact on the defendant's viability. 31Obedience to the EPL conditions is crucial, and the Parliament prescribes a very heavy penalty for breaches. 32I consider a fine of $50,000 before deductions is appropriate. 33After the 25% discount for the plea, the amount of $37,500 will be further discounted for the other mitigating factors, and the financial distress of the defendant, to $30,000. 34In those circumstances the publication order as drafted in Annexure A, to the prosecutor's submissions, should also be made. 35I accept that the defendant wants to test the prosecutor's claim for costs, and will make the usual "as agreed or assessed" order. 36The formal orders of the Court will therefore be: (1)The Defendant is convicted of the offence charged in the summons. (2)The Defendant is fined the sum of $30,000. (3)The Defendant is ordered to pay the Prosecutor's costs as agreed, or assessed according to law. (4)Pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997: (a)The Defendant, at its expense, must within 28 days of the date of this order cause a notice in the form of Annexure A to this judgment to be placed within the first 5 pages of the following publications at a minimum size of 10 cm x 18 cm: (i)Wednesday edition of the Port Macquarie News; and (ii)Wauchope Gazette. (b)Within 35 days of the date of this order, the Defendant must provide to the Prosecutor a complete copy of the page of the publications in which the notice appears. (5)The Exhibits are retained. ANNEXURE A M.A. Roche Group Pty Ltd convicted of licence breach near Wauchope M.A. Roche Group Pty Ltd (the Company) has been convicted in the Land and Environment Court of NSW under section 64 of the Protection of the Environment Operations Act 1997 for breaching a condition of its environment protection licence. The Company operates a quarry known as Volcanic Resources approximately 24 kilometres southwest of Port Macquarie. The Company's licence permits it to extract and handle up to 30,000 tonnes of material at the quarry in any 12 month period. Between 5 January 2012 and 4 January 2013 the Company extracted 88, 949.1 tonnes of material. The Company was prosecuted by the EPA in relation to the offence and pleaded guilty to the charge. On 28 July 2014 the Company was fined a total of $30,000 and was ordered to pay the EPA's legal costs as agreed or assessed. This notice was paid for by the Company as a result of an order of the Land and Environment Court of NSW.