Environment Protection Authority v Mobil Oil Australia Ltd and Anor

Environment Protection Authority Prosecutor v Mobil Oil Australia Limited Taymab Pty Ltd Defendants

HIS HONOUR: Both defendants are charged that on 11 August 1998 they committed an offence against the Environmental Offences and Penalties Act 1989 (as it then was) in that they did pollute waters contrary to s 16(1) of the Clean Waters Act 1970.

On that day, in order to meet some registration requirement in respect of the truck regularly used at the aviation fuel depot at Coffs Harbour Airport, two employees of the defendant Taymab Pty Ltd engaged in a process of removing aviation fuel from a road tanker into one of the storage tanks on the site.

Following on from a misreading of a gauge in the tank, the pumping process resulted in the removal of more fuel from the tanker than the remaining capacity in the ground tank. As a consequence, something in the order of 5000 litres spilled to ground through an air vent at the top of the tank.

Unfortunately the two employees of the defendant Taymab Pty Ltd were unsighted due to the nature of the duties they were undertaking. The noise of the pumping did not permit either of them to detect that an overflow was occurring.

The fuel overflowed on to the ground within a bunded area. Such was the extent of the release through the air vent of the tank, the bunded area was inundated up to something like eight inches from the ground.

The evidence is that fuel leaked through the bund either as a consequence of penetrating the wall through cracks in the wall itself or by seeping under the wall, thereby escaping in a southerly direction across the property through a fence where it accumulated in a grass swale. The grass swale serves as a waterway in the event of heavy rain and consequent run-off. It is not a waterway that permanently holds water.

The site is leased by Mobil from the Coffs Harbour Council. Pursuant to the terms of the arrangement between Mobil and the other defendant, Taymab, Mobil has the obligation to maintain structures, buildings and equipment on this site. Taymab operates the site under the terms of a licence agreement with Mobil. Taymab has operated the business on the site for some 12 years.

The two employees were familiar with the site and the operations on the site. It appears that the pumping operation might normally have been conducted without such an incident being in contemplation. This unusual event occurred as a consequence of an oversight and conflicting priorities, the wrong reading of the gauge on the tank and the juxtaposition of the two employees of Taymab to the actual point of overflow.

The evidence shows that if there had been a fall of rain sufficient to cause a flow in the grass swale at the southern boundary of the site, that water would have flowed in the swale in an easterly and a westerly direction.

The easterly flow would have continued to a drain which runs alongside General Aviation Drive in a southerly direction and then picks up another drain which runs east in the direction of Hogbin Drive.

The westerly flow in the swale would have run north along the western boundary of the site. It would have picked up a separate north westerly flow out of the site which could have contained some of the contaminant. The flow would then have continued in a westerly direction in a drain towards Hogbin Drive.

When they reach Hogbin Drive, both drains pass under the road and discharge into a significant channel of water flowing in a southerly direction. That channel could then have led to an area of some wetlands, identified pursuant to State Environmental Planning Policy No 14 and into the vicinity of a creek known as Newport's Creek. The flow possibly could have continued through to the estuary with the sea. Fortunately that did not occur.

The actual harm was that the spilt material went to ground. There was a significant burning of grass within the immediate vicinity of the discharge through the bund wall across to the swale and in the swale itself. There is evidence that fuel entered the ground water system. Although it diminished over time it remained there for at least several months.

Without going into the detail of the scientific examination and explanation of the extent to which the fuel was found to be present in the ground water and the soil, it is sufficient to recognise that there was a significant impact on the ground water and the soil, giving rise to heightened levels well beyond accepted guidelines.

As a consequence of prompt action on the part of the employees of Taymab, the relevant authorities were notified and a clean up operation was undertaken expeditiously.

Nevertheless, as I said, there was some remnant harm which was gradually dissipated over time by degradation of the fuel.

The prosecutor's case is that Mobil, as the company responsible for maintenance of structures on the site, had a responsibility to ensure that the bund wall was maintained in a condition which was adequate for its purpose, namely, to prevent the spread of a spill beyond the area of the bund. That it did not do, notwithstanding that several years earlier, I think it was 1994, following a spill of a different kind, reports had been prepared which recognised that the bund wall was inadequate and that some work was required.

The submission put by the prosecutor is that those reports show that the work required may have only cost in the order of $1,500.

I think to be fair to the defendant it should be recognised that the work contemplated by the particular report referred to was not necessarily all that was required. Apart from the consequential costs involved in temporarily decommissioning the site, if that was necessary, or re-locating tanks in order to enable continued operations elsewhere on the airport facility, problems associated with the sealing of the floor of the bund, undertaken subsequently to the subject incident, would have involved much more than that.

There is some controversy and disagreement in respect to the necessity to have a concrete floor to the bunded area. The evidence on behalf of the defendant is that the area was covered with gravel. The gravel was spread over an impervious clay layer which would have been adequate to prevent any fuel spill penetrating into the soil. That is as it may be.

Nevertheless following this incident, the advice of authorities involved and no doubt the concerns which arose out of the incident, have been the catalyst for completion of a fully concreted bunded area.

It is of some significance that both defendants have been involved with this site for a considerable period of time. There has been no prior incident leading to a prosecution or complaint beyond the report of the incident I referred to earlier.

It is particularly significant in the case of Mobil, which is a name well-known in the industry and obviously involved in many sites throughout New South Wales, that the company has not been previously before the Court for a charge of this nature.

The defendants both entered a plea of guilty and they did so at an early stage.

The measures that could have been taken to prevent the consequences of the events which occurred on 11 August 1998 were relatively simple.

It was a matter in one case of ensuring that there was an adequate bund.

It was a matter in the other case of ensuring that established procedures were followed and that care was taken to ensure that when pumping occurred there was adequate capacity in the receiving vessel.

Indeed, it was a mistake. It was a misreading of a gauge. However, it has also been established that the usual procedures were not followed. The Court is prepared to infer that failure to follow the established routine led to the unfortunate error on this occasion.

Both defendants are well experienced in their field. Both defendants could reasonably have foreseen that in the event of the spill the consequence might be a discharge. Furthermore, a discharge or release of materials of the type handled on this site could have serious potential for causing adverse impacts on the environment in many respects.

Pursuant to the agreement, Mobil had sufficient control of the premises to enable it to deal with the shortcomings in the bund. In terms of control Taymab certainly had the capacity to ensure that its employees carried out their functions properly.

What occurred was something that both parties could have foreshadowed easily. Accordingly, the degree of culpability that each of them bears is comparable.

The prosecutor has suggested that there should be some distinction between the penalties that should be imposed and that Mobil should be seen as bearing a higher degree of responsibility.

The Court finds that a difficult concept to adopt. As I said in the course of discussions during submissions, each defendant failed to fulfil its duty and obligations in the sense of a responsibility to ensure that there was no environmental harm caused in the course of their operations. But each was in a different respect.

On the one hand, if the Taymab employees had performed their tasks according to the established procedures, it is reasonable to assume no spill would have occurred. The fact that they failed to follow those procedures was the initiating cause of the particular incident and in that respect it is that event which led to the commission of Taymab's offence.

On the other hand, Mobil failed in its responsibility to ensure that there was a proper bund around the area occupied by the subject tank. If Mobil had acted in accordance with its obligations and responsibilities, by maintaining a proper bunded area then notwithstanding the actions of Taymab, there would have been no offence.

In terms of culpability I can make no distinction between the two defendants except in one respect and that is that Mobil was on notice. According to the records produced to the Court, the matter was raised in 1994. The question of security of the site in terms of a spill had been the subject of a report. Admittedly, the Coffs Harbour Council saw fit to rest on the report provided to it and did not follow up. There was that element in the case of Mobil, that distinguish its responsibilities from that of Taymab.

On the other hand, Taymab had been operating the site when there had been a previous spill. Taymab was well aware of the fact that the site may not have been up to scratch and that some action might have been required, either to encourage Mobil or to be additionally careful, knowing that the bund wall was not entirely satisfactory.

Having taken into account all of the matters in mitigation that have been put to me and which I have referred to and having taken into account all of the matters that I am required to take into account pursuant to s 241 of the Protection of Environment Operations Act 1997 and to which I have made some reference and being satisfied for the reasons that I have given that each of the defendants did commit the offence with which they are respectively charged, I propose to fine each defendant the sum of $18,000.

Accordingly, I make the following orders: 1. I find that the offence in matter No 50045 is proved.

2. The defendant, Mobil Oil Australia Limited, is convicted.

3. Mobil Oil Australia Limited is fined the sum of $18,000.

4. Mobil Oil Australia Limited is ordered to pay one half of the costs of the proceedings.

8. Taymab Pty Ltd is ordered to pay one half of the costs of the proceedings.

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