JUDGMENT
1 His Honour: The Defendant is a reputable family company of long and respected standing in both its industry of chemical manufacture, and its local district of Nowra. It is heavily engaged in making "alum".
2 The company has pleaded guilty to a Tier 2 offence in that, in breach of s.120 of the Protection of the Environment Operations Act 1997 ("POEO Act"), it polluted waters with 1700 litres of diluted sulphuric acid, which caused admitted actual environmental harm.
3 Although Mrs Leotta, counsel for the company, suggests that in view of its exceptional record, and the impressive testimonials tendered by her as Exhibit N1, s.10 of the Crimes (Sentencing Procedure) Act 1999 ("CSP Act") might be appropriate, she conceded that the Court is likely to impose a monetary penalty, and the parties have agreed that orders should be made under s.250 of the POEO Act instead of the imposition of a fine.
4 The Court has been greatly assisted by an extensive agreed statement of facts ("ASF") with comprehensive annexures, and by fulsome written submissions.
5 The most relevant important facts from those documents can be briefly summarised.
6 On 18 January 2007, after a process failure at the factory, a warm mixture of sulphuric acid and water was stored in an unbunded and uncommissioned tank fitted with a non-compliant flange. The flange was not suitable for that purpose - it was corroded by the hot acidic contents and failed overnight. The acid mixture leaked from the tank and, with the assistance of some well-intentioned hosing by employees, flowed eventually into a stormwater easement which fortunately was very dry at the time, as was the path the mixture followed to it.
7 The company's EPA licence does not allow discharge of pollutants from its factory. Most of its storage facilities are properly bunded and drain into designated pits and tanks below the premises.
8 Emergency procedures and incident response training focus on spills within the catchment of the "first flush system" on site.
9 The stormwater channel was heavily vegetated at the time, and all the vegetation was considered mostly healthy, albeit not of high ecological significance. When the channel flows as and into an ephemeral watercourse, the waters in it could end up in Flat Rock Dam, travelling via the Triplarina Nature Reserve. The actual environmental harm admitted by the Defendant was quite severe on common plant species within 22m of the non-concreted section of the stormwater channel, for a maximum period of 15 months. Some vegetation had to be removed for clean up purposes in any event.
10 There was certainly a potential for greater and more far-reaching harm, but the dry conditions and thorough clean up alleviated the risks. The chemical evidence included in the ASF shows that, despite the welcome dilution of the acid waters, the pollutant remained highly toxic and lethal to many species. The clean up was thorough, as I have said, and the follow-up precautions extensive, until overtaken by heavy rains one month later. Some 5000 litres of diluted acidic water had been recovered.
11 The decision to retain the failed "alum" process ingredients on site was commercially understandable, but the decision, based on storage limitations, to put such a dangerous liquid into an unbunded tank proved highly unsound. I accept that the inadequacy of the flange which failed was not readily obvious to the company's personnel, but the facts indicate that much more observation of the storage arrangement should have been carried out between 12.30am and 5.55am on 19 January 2007.
12 All the relevant management decisions were made at a high level in the company, and there were some relevant failures by company personnel. Chemical operations with harmful potential should be carried out in safe places by skilled persons, and a close watch maintained.
13 A substantial penalty is called for in cases such as this. It is not a case for the use of s.10 of the CSP Act.
14 In arriving at that decision, and the appropriate amount of penalty, I have had regard to all the important considerations mandated by s.241 of the POEO Act, and ss.3A, 10, 21A, 22 and 23 of the CSP Act, and to the many judgments of this Court and the Court of Criminal Appeal on their application.
15 I have had particular regard to Hunter Water Board v State Rail Authority of New South Wales (No.2) (1992) 75 LGERA 22, Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357, Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683, EPA v Colenden Pty Ltd [2007] NSWLEC 289, EPA v Cargill Australia Limited [2007] NSWLEC 337, Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299, and my own judgment in Environment Protection Authority v Bega Valley Shire Council [1998] NSWLEC 187.
16 Both counsel are agreed on the legal principles.
17 This was a pollutant of a very dangerous and corrosive character. There are no extenuating circumstances. The storage process was in breach of the licence conditions. The spill was objectively serious in every way. Actual harm is admitted, and very serious harm could easily have been caused. The possibility of a harmful liquid escaping from an unbunded area into a nearby drain and then downhill to the easement were clearly foreseeable events. A safe level of dilution as identified by the experts, and agreed by the Defendant in the ASF, is clearly well beyond the capacity of the Defendant to achieve when a spill occurs. Actual and likely harm were clearly foreseeable. The response of the company was less than optimum.
18 The Prosecutor has put the case very fairly to the Defendant, acknowledging subjective factors to be considered in the Defendant's favour. It has acknowledged the many practical measures that have been implemented by the Defendant, but only after the event, and it puts the level of seriousness of the offence well towards the bottom of the scale.
19 A penalty must be arrived at which deters both this offender and all those industries which handle dangerous and environmentally hazardous liquids.
20 Objectively, I can assess the seriousness of this offence at no lower than 15% of the worst case. However, I accept the Prosecutor's and Mrs Leotta's submissions that: