Environment Protection Authority v Metalcorp Recyclers Pty Limited

IN THE LAND AND MATTER No. 5009-15 of 2001 ENVIRONMENT COURT CORAM: Cowdroy J OF NEW SOUTH WALES DECISION DATE: 30/10/01

Environment Protection Authority Prosecutor v Metalcorp Recyclers Pty Limited Defendant JUDGMENT

By judgment delivered on 7 September 2001 the defendant was convicted of seven offences against s 64(1) of the Protection of the Environment Operations Act 1997 ("the Act"). The details concerning each offence are set out in such judgment (Environment Protection Authority v Metalcorp Recyclers Pty Ltd [2001] NSWLEC 207). The Court is now required to assess the penalty in respect of each offence. The maximum penalty for each offence is $60,000 pursuant to s 64(1) of the Act.

The Court is required to consider the provisions of s 241 of the Act when assessing penalty.

The prosecutor has drawn attention to the environmental harm caused by each breach of the Act. The effects of each breach have been to disturb surrounding residents. Several residents were frightened by the explosions, some were awakened from their sleep, others were concerned for the safety of their houses and in some cases children were frightened.

The evidence of Mr John Wassermann, Manager, Noise Assessments Unit of the Environment Protection Authority ("the EPA"), establishes that overpressure levels from the seven explosions exceeded the ANZECC guidelines and were considered by him to 'typically fall in the moderate risk of noise complaints from the noise guidelines used by the US military'. He concluded as follows:- That these levels have the potential to interfere with the comfort and repose of the closest residential receivers and should be considered offensive noise.

The Court has the benefit of expert evidence concerning the practical measures that could have been taken to prevent, control, abate or mitigate the harm of each offence. The recycling plant has been conducted by the defendant at the Chipping Norton site ("the site") since 1996. Mr Henry David Yendoll, a consultant in metal recycling based in the United Kingdom with eminent qualifications, had reviewed the defendant's policies and procedures for the receipt and inspection of shredder scrap at the site and assessed the operations. Mr Yendoll had visited the site on several occasions. He concluded as follows:- There is no doubt in my mind that the procedures undertaken by Metalcorp to seek to minimise explosions from its Chipping Norton facility accord with the World's Best Practice. It has taken all reasonable steps to prevent explosions from occurring. However, no shredder operator in the world, processing a similar raw material in feed to that being used at Chipping Norton, can guarantee that explosions will not occur .

Mr Tony Hewett, a Chartered Professional Engineer and an associate of Environmental Resources Management, who has significant qualifications and experience in environmental issues, provided his assessment of the defendant's operations following inspections of the site. He also concluded, inter alia, that delivery of scrap material and inspection procedures are equivalent with 'industry best management practices'. He observed also that explosions were being progressively reduced by hazard assessment and risk reduction techniques. He concluded:- However, it is unlikely, given the nature of the material being processed, that shredder explosions could ever be fully eliminated.

The prosecutor did not challenge the evidence of either expert but relies on the comments of Mahoney JA in Axer Pty Ltd v Environment Protection Authority (2001) 113 LGERA 357 at 359 namely that 'business must be arranged and precaution taken so as to ensure that pollution will not occur'.

In these proceedings the Court considers that the defendant had taken sufficiently practical measures to control the harm although there was no evidence that measures relating to inspection were adequate in respect of each offence.

The harm to the environment resulting from explosions was foreseeable. The defendant was well aware of the disturbance which was likely to be occasioned in the event of explosions.

The evidence establishes that the defendant, even adopting world's best practices, would render it impossible to prevent explosions occurring in its shredding operations. In respect of the offences the evidence does not establish whether the explosions resulted from concealed containers such as LPG gas bottles or whether they resulted from a failure to inspect the delivered raw material. The degree of control over the cause of the offences should be resolved in favour of the defendant.

The defendant has pleaded not guilty to each charge. However, such plea was entered to enable the defendant to raise a statutory defence to each charge. The defendant did not challenge any of the factual material relied upon by the prosecutor and has co-operated with the prosecutor from the outset. Accordingly whilst the principle in R v Thomson (2000) 49 NSWLR 383 cannot be applied, the Court will take into account such co-operation and the corresponding value in having little time taken up by factual dispute in assessing penalty.

The defendant may be accorded a further reduction in penalty reflecting the principle referred to in Mill v The Queen (1988) 166 CLR 59 at 63 and Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 703 known as the totality principle.

The defendant, being the holder of a pollution licence under the Act, is placed in a unique position of privilege. The licence entitles the holder to commit an act which would otherwise be offensive to the community. Such principle was clearly recognised by Cripps J in State Pollution Control Commission v CSR Ltd (1992) 75 LGERA 1 at 4-5 and more recently by the Chief Judge in Environment Protection Authority v Port Kembla Copper Pty Ltd [2001] NSWLEC 174. Taking into account the nature of the defendant's operations and the measures which were already in place prior to the commission of the offences which were designed to minimise explosions, the Court is satisfied that the defendant was fully mindful of the responsibility to the community imposed upon it by the licence and was concerned to prevent such occurrences.

In Environment Protection Authority v Bega Valley Shire Council (16 July 1998, NSWLEC, unreported) Sheahan J observed that the factual circumstances of the behaviour of the defendant is relevant in addition to any question of environmental harm in assessing the gravity of the offence. Since explosions are acknowledged to be an inevitable consequence of recycling operations the Court is prepared to regard the offences as not warranting a penalty that will serve as a deterrent. As was recognised recently by the Court of Criminal Appeal in Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280 at para [37] a penalty should reflect the gravity of the offence.

The Court considers that in these proceedings the appropriate penalties are in the low range because the procedures adopted by the defendant were designed to address the risk of explosions and because of the absence of any permanent environmental effect. The Court is also aware that the defendant has taken active steps to improve its existing measures designed to prevent explosions.

The defendant has been conducting its operations for almost five years and only one other offence has been recorded: see Environment Protection Authority v Metalcorp Recyclers Pty Limited [2000] NSWLEC 259.

The seven offences were committed during a five month period. The prosecutor has argued that each offence should be regarded as a separate offence and therefore not entitled to a significant benefit as a result of an application of the totality principle. The prosecutor relies upon the judgment of this Court in Environment Protection Authority v Norco Co-Operative Limited (1999) 108 LGERA 137 in support of its submission.

The purpose of the totality principle is to ensure that where there is more than one offence committed the total penalty is not disproportionate to the criminality of the offences so that it would impose an unfair and excessive burden on the defendant: See Mill v The Queen at 63; R v Major, Brett (1998) 100 A Crim R 66 at 75. Although Bignold J did not apply the totality principle in EPA v Norco the application of such principle will depend upon the circumstances in each case. In the present proceedings the Court considers that the defendant is entitled to the benefit of the totality principle. The offences are the same, and the full imposition of a separate penalty for each offence would lead to a disproportionate and therefore unjust result.

In respect of charge 50009 of 2001 the Court imposes a penalty of $10,000.

In respect of charge 50010 of 2001 the Court imposes a penalty of $5,000.

In respect of the remaining charges (50011-50015) the Court imposes a penalty of $2,500.

These penalties will be reduced by a further 20% to reflect the co-operation of the defendant with the prosecution on these charges. Accordingly the penalty in each case will be as follows.

In respect of charge 50009 of 2001 the Court imposes a penalty of $8,000.

In respect of charge 50010 of 2001 the Court imposes a penalty of $4,000.

In respect of charges 50011-50015 the Court imposes a penalty of $2,000 in respect of each offence.

The defendant is to pay the prosecutor's costs of the proceedings.

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