Environment Protection Authority v Olex Australia Pty Ltd

Land and Environment Court (NSW)|2005-04-22|Before: Bignold J

CITATION : Environment Protection Authority v Olex Australia Pty Ltd [2005] NSWLEC 475

PARTIES : DEFENDANT: Olex Australia Pty Ltd

KEY ISSUES: Environmental Offences :- water pollution caused by overflow of chemical solution in factory - plea of guilty - application for discharge - mitigating factors - conviction and penalty justified

CASES CITED: Thorneloe v Filipowski (2001) 52 NSWLR 60

Solicitors: Solicitor for the Environment Protection Authority

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

50075 OF 2004 ENVIRONMENT PROTECTION AUTHORITY V OLEX AUSTRALIA PTY LTD JUDGMENT CORAM: HIS HONOUR A. INTRODUCTION 1 The Defendant has pleaded guilty to the charge of an offence against s120(1) of the Protection of the Environment Operations Act 1997 (the PEO Act) in that on or about 27 January 2004 at Wetherill Park it did pollute waters. 2 According to the Particulars endorsed upon the Summons:

(i) the pollutant was "drawing solution containing oil and /or copper;" (ii) the waters were "Wetherill Park drainage channel adjacent to and downstream of premises known as No. 29 Davis Road Wetherill Park"; and (iii) the manner in which the pollution occurred was A. " During the course of the defendant's operations at the premises, the pollutants overflowed from a floor waste pit adjacent to the Rod Breakdown machine and escaped into a stormwater drain on the premises, from which the pollutants flowed into the Wetherill Park drainage channel and then into Prospect Creek"

3 Section 120(1) of the PEO Act provides as follows: 120 Prohibition of pollution of waters (1) A person who pollutes any waters is guilty of an offence. (2) In this section: "pollute" waters includes cause or permit any waters to be polluted. 4 The terms "pollute" and "waters" are expansively, defined in the Dictionary to the PEO Act. 5 Section 123 of the PEO Act prescribes a maximum penalty of $250,000 where the offence is committed by a corporation. B. THE RELEVANT FACTS 6 The relevant facts are chiefly found in the Agreed Statement of Facts (Exhibit 1) jointly prepared and tendered by the parties. This is a very comprehensive Statement which admirably sets forth the background facts, the circumstances in which the admitted offence was committed and the nature and extent of the pollution incident, the resulting clean up operations and the immediate follow up action taken by the Defendant. 7 The Statement is far too lengthy to recite and it will be sufficient if I merely extract in these reasons a very abbreviated summary. The facts included in the Agreed Statement substantially emanate from the evidence of Mr Dennis Dogger who up to February 2005 had been for 18 years employed by the Defendant as its Maintenance Manager at the Defendant's factory situate at 29 Davis Road Wetherill Park. He had reported the pollution incident to the Prosecutor's "Pollution Line" in the afternoon of the pollution incident (which had occurred about 9.30 that morning) and he had provided a written incident report to the Prosecutor on 4 February 2004. 8 In addition to the Agreed Statement other relevant facts are found in the three affidavits (including that of Mr Dogger) tendered by the Defendant. 9 The Defendant's factory premises at Wetherill Park from which the pollution incident occurred are situate within the Wetherill Park Industrial Estate which is traversed by the Wetherill Park drainage channel in the form of an open concrete lined stormwater canal which a further 1 kilometre downstream of the Defendant's premises connects with Prospect Creek. 10 The Defendant's factory premises were relevantly licensed under the PEO Act but that licence did not authorise any water pollution. Included in the manufacturing activities undertaken at the factory was the manufacture of copper wire. It was in the course of this manufacturing activity that the pollution incident occurred. (In October 2004 the Defendant ceased manufacture at the Wetherill Park premises (which had been undertaken for the previous 18 years) when in relocated its manufacturing operations to new premises in Lilydale, Victoria.) The Defendant's factory premises were relevantly licensed under the PEO Act but that licence did not authorise any water pollution. Included in the manufacturing activities undertaken at the factory was the manufacture of copper wire. It was in the course of this manufacturing activity that the pollution incident occurred. (In October 2004 the Defendant ceased manufacture at the Wetherill Park premises (which had been undertaken for the previous 18 years) when in relocated its manufacturing operations to new premises in Lilydale, Victoria.) 11 On the day the pollution incident occurred the manufacturing processes for the production of copper wire had been operational for at least 2 hours when there was an undetected overflow from the rod breaking machine (RB3) of foaming drawing solution. Normally any overflow would be detected by level sensors which would detonate an alarm and pump which would transfer the drawing solution into a holding tank. However on this occasion the sensors did not detect the overflow because they operated on a light/ dark receptor basis which did not register the foam because of its highly aerated composition. 12 As a consequence of this non-detection the foamed drawing solution overflowed from the pit situate below RB3 into the adjacent waste pit where its presence was detected by the relevant sensor which was triggered by a flotation ball. This sensor sounded the alarm and would normally have activated the waste pit pump (which would in the normal course have transferred the contents from the waste pit into an outside tank). However instead of so operating the pump seized and the drawing solution thereupon overflowed to an adjacent drain which flowed into the stormwater drain constructed in the Defendant's premises and ultimately discharged into the Wetherill Park drainage channel. 13 However the Defendant had installed in this stormwater drainage system an isolation valve which was manually operated which when in the closed position would prevent the discharge of liquids through the drainage system by arresting them in a stormwater pit about 3 metres deep. This valve was manually closed by the Defendant's personnel a short time after the overflow into the dish drain was first noticed by a staff member responsible for the operation of RB3 who had been absent from the plant on a morning tea break from 9am and had returned to duty at approximately 9.25am when he observed the overflow into the dish drain and stormwater drain. At that point he stopped the operation of the RB3 machine and reported the overflow incident to his supervisor. 14 When that supervisor informed Mr Dogger of the incident at approximately 9.30 the latter immediately proceeded to the stormwater pit containing the isolation valve to make sure that it was closed. Upon arrival he observed that the valve was already closed and he observed the drawing solution slowly trickling into the pit. However he could not make any observation of the pipe downstream the isolation valve as the system at that point is a closed pipe. 15 At approximately 10am Mr Dogger accompanied a Fire Brigade Officer and a Council Officer (who had arrived at the Defendant's premises) to the point where the stormwater system discharges into the Wetherill Park drainage channel where he observed "evidence that some of the drawing solution had entered the canal and travelled some 150 metres downstream". Mr Dogger, upon making this observation, assumed that some of the overflowing drawing solution had entered the canal before the isolation valve had been closed. He observed that the area of discolouration of the water in the Wetherill Park drainage channel was spreading but this was a property or propensity of the drawing solution when introduced into water which would become milky in colouration. It did not occur to him at the time that the drawing solution was traversing the entire stormwater system to its ultimate discharge point, notwithstanding the isolation valve being in the closed position, being a discovery he made later that day when in consequence of his observation of a trickle of drawing solution discharging from the stormwater drain into the Wetherill Park drainage channel he directed an employee into the stormwater pit to check on the seal of the isolation valve, when the presence of a pebble or piece of blue metal 3-4mm long and wide was found in situ thereby preventing the valve to be properly sealed. 16 Before that discovery the Defendant's employees had flushed some 800 litres of water into the drainage system in order to move any remnant drawing solution into the pit so that it could be pumped out. The Defendant's employees had at an earlier stage pumped approximately 100-150 litres of the drawing solution from the pit. 17 Unbeknown to the Defendant's employees some of the liquid stored in the pit (both the undiluted drawing solution and the water flushed drawing solution remnant) would have escaped by virtue of the ineffective sealing of the isolation valve. 18 As a major component of its clean up operations the Defendant had called Collex to the premises at approximately 12.15pm on the day of the pollution incident. Collex retrieved (by pumping activity) some 14,000 litres of discoloured water from the Wetherill Park drainage channel. It also collected approximately 1000 litres that had been pumped out of the stormwater pit by the Defendant's employees and any remaining drawing solution stored in the pit. These clean up activities had been directed to be done by the Counci As a major component of its clean up operations the Defendant had called Collex to the premises at approximately 12.15pm on the day of the pollution incident. Collex retrieved (by pumping activity) some 14,000 litres of discoloured water from the Wetherill Park drainage channel. It also collected approximately 1000 litres that had been pumped out of the stormwater pit by the Defendant's employees and any remaining drawing solution stored in the pit. These clean up activities had been directed to be done by the Council Officer when she attended the factory premises earlier that day. (Her oral direction was confirmed by an official clean up notice issued by the Council pursuant to s91 of the PEO Act). 19 Paragraphs 34 to 37 (inclusive) pf the Statement of Agreed Facts record the following facts under the heading "Causes of the Incident": 34. The alarm and pump system in the RB3 pit were not activated due to the failure of the sensors in the RB3 pit to sense the foaming drawing solution due to the level of aeration in the foam. Olex had sought to control the high levels of foam in the drawing solution but had been unsuccessful.

Failure of the pump in the waste pit (only the alarm was activated). It is not known why the pump in the waste pit failed.

Olex usually tested the sensors and pumps in the RB3 pit and the waste pit on Mondays. However, given the public holiday on 25 January 2005, the defendant had not tested the sensors and pumps in the pits since Monday 19 January 2004 (9 days prior).

Failure of the isolation valve to adequately seal the flow of the drawing liquid was due to a small piece of blue metal / gravel (3-4 mm by 3-4 mm) being trapped beneath the slide gate. This blue metal / gravel was not visible from ground level but was removed the afternoon of the incident. This blue metal / gravel stopped the total closure of the isolation valve and therefore allowed some of the drawing solution to leak from the stormwater pit. The isolation valve was serviced on a 12 monthly basis. The last service of the isolation valve before the incident was on 4 March 2003. 20 Following the incident the Defendant immediately replaced the faulty pump system in the waste pit and arranged for the drainage pit and isolation valve to be cleaned. On the following day it installed new sensors in the RB3 return pit. 21 There was no evidence that the pollution incident caused actual environmental harm (putting aside the fact that in terms of the PEO Act water pollution per se constitutes environmental harm) but it is an agreed fact that there was potential environmental harm. This is because of the nature and property of the drawing solution which comprised some 90% of water and 10% of a lubricant known as "Richards Apex HDSL - 24MW CPD". 22 Laboratory analysis of the sample of the drawing solution collected from the RB3 pit indicated that each litre of the drawing solution contained 800mg of dissolved copper. In order to satisfy the ANZECC/ARMCANZ Water Quality Guidelines the discharge into receiving waters of each litre of the drawing solution would require for dilution well over 500,000 litres of receiving water. Copper and its compounds have high acute and chronic toxicity to aquatic life. (It is to be noted that any matter containing copper substance is a "prescribed matter" for the purposes of paragraph (c) of the definition of "water pollution" contained in the Dictionary to the PEO Act - vide cl 52 of the Protection of the Environment Operations (General) Regulation 1998). 23 According to the agreed facts "up to 200 litres" of the drawing solution overflowed into the stormwater drainage system (paragraph 2) and "approximately 100-150 litres of the drawing solution was recovered from the isolation pit (paragraph 20). Accordingly an amount of between 50 and 100 litres of drawing solution was discharged into the Wetherill Park drainage channel. In addition to that amount there was also discharged into that drainage channel some unquantified volume comprising the residue of the mix of drawing solution and flushing water when the stormwater drainage system was flushed to direct the residue into the isolation pit from which there was the unintended leakage by virtue of the valve not being properly sealed. 24 Laboratory testing of other samples collected from the Wetherill Park drainage system by the Prosecutor on the day following the pollution incident and approximately 1 month later did not provide a "match" with the laboratory results of the sample of the drawing solution collected from the RB3 pit. The sample collected 1 day after the pollution incident 100 metres downstream from the discharge point from the Defendant's premises contained more elevated levels of copper than were contained in the water samples collected upstream from that discharge point on the same day. 25 The overall laboratory data of the various samples collected from the Wetherill Park drainage system soon after the pollution incident and then 1 month thereafter revealed variable background toxicity levels in the channel water indicating sources of water pollution emanating from premises other than the Defendant's factory. C. THE COMPETING CASES ON SENTENCE 26 The Prosecutor submitted that this was a case where it was appropriate to enter a conviction and to impose a penalty commensurate with the objective gravity of the admitted offence including the Defendant's culpability in its commission. That culpability was described as its failure to prevent water pollution occurring from the operation of its factory premises in circumstances where the pollution incident could have been prevented by the deployment of better equipment (the sensors to the RB3 return pit and the waste pit pump) and the employment of better maintenance and inspection (the waste pit pump and the sealing of the valve in the isolation pit in the stormwater drainage system) and better supervision (the absence of personnel from the operation of the RB3 machine during a morning tea break). 27 The submissions of Senior Counsel for the Defendant were that the Defendant should be accorded the benefit of the favourable exercise of the discretion conferred by s10(1) of the Crimes (Sentencing Procedure) Act 1999 by no conviction being recorded in respect of the admitted offence and by no penalty being imposed. 28 The alternative Defence submission in the event of the Court not exercising the statutory discretion in favour of the Defendant but instead proceeding to convict the Defendant was for the imposition of a penalty at the lowest end of the spectrum of gravity of the offence charged, commensurate with the proper assessment of the objective gravity of the admitted offence and with the Defendant's criminality in its commission. 29 These alternative Defence submissions were made in the context of its concession that "any contravention of s120 of the PEO Act is serious". 30 In elaboration of the Defence submission seeking favourable exercise of the discretion conferred by s10 of the Crimes (Sentencing Procedure) Act the following submissions were made in respect of each of the relevant factors enumerated in s10(3) of that Act: Para (a): The Defendant's character, antecedents, age, health and mental condition

The Defendant has no antecedents of environmental offences. This record is an enviable one (particularly given the Defendant's long history at the site) and one of which the Defendant, to date, has rightly been proud.

It is submitted that a conviction will negatively impact on the Defendant's business. (This submission reflects the concern expressed by Mr Flavell , the Defendant It is submitted that a conviction will negatively impact on the Defendant's business. (This submission reflects the concern expressed by Mr Flavell , the Defendant's Group Risk Manager in par 8 of his affidavit that disclosure in its tender documentation for major contracts of a conviction for an environmental offence could prejudice its tender prospects with major Energy Companies.)

While it is acknowledged any contravention of section 120 of the PEO Act is serious, given the objective and subjective factors relevant to the commission of the offence, it is submitted that the Defendant's culpability is trivial given:

(a) the small quantity of pollutants actually released into the drainage channel;

(b) the prompt and effective clean-up action taken to mitigate harm to the environment;

(d) the incident did not result in any actual harm to the environment.

It is submitted that the incident was caused by a combination of equipment malfunction creating unusual circumstances. In particular, it is submitted that the Defendant's decision to flush the on-site stormwater drain was reasonable given the Defendant's belief that the isolation valve had sealed.

It is submitted that there are other matters that mitigate the Defendant's culpability and which support the submission that the Court should apply section 10 of the Sentencing Act in favour of the Defendant and not record a conviction for the admitted offence. Some of these matters are:

(a) Incident was accidental : The incident was entirely accidental. It was caused by equipment malfunction rather than any deliberate or malicious act on the part of the Defendant.

(b) Volume of overflow : Only a limited quantity of pollutants (less than 50-100 litres) escaped from the Defendant's site in to the drainage channel which serves other industrial premises in the locality.

(c) Clean-up action and modifications : The Defendant took immediate mitigation action when it discovered that pollutants had overflowed into the on-site stormwater drain. The Defendant also modified its equipment to ensure that the incident would not be repeated.

(d) Co-operation with EPA and Council : The Defendant fully co-operated with Council and the EPA in their responses to the incident. Prior to the decommissioning of the site, the Defendant enjoyed a good working relationship with both the EPA and Council.

(e) Self-report to the EPA : The Defendant, as soon as practicable after becoming aware of the incident, reported it to the Prosecutor. In this regard, it is noted that the Defendant reported the incident to the Prosecutor after first accompanying the Fairfield Council officers on a site inspection and attending to clean-up actions required by those officers.

(f) Costs: The Defendant has agreed to pay the Prosecutor's costs in these proceedings being an agreed sum of $13,000.00. 31 In advancing these submissions Senior Counsel for the Defendant placed considerable reliance upon the decision of the Court of Criminal Appeal in Thorneloe v Filipowski (2001) 52 NSWLR 60 where that Court gave extensive consideration to the scope of judicial discretion conferred by the Crimes (Sentencing Procedure) Act 1999, s10. (It also considered this Court's approach to the exercise of that discretion in respect of environmental offences, noting the fact that the decided cases had consistently declared that the discretion would " rarely " be exercisable in respect of those offences.) The Chief Justice discussed the wide ranging discretion in the following passages at pp 72 and 73: [151] The discretion conferred by s10 is wide-ranging. There is no warrant for treating the scope and range of matters which it is "proper" for a sentencing judge to take into account in a narrow way. Nevertheless, it is a discretion which must be exercised judicially. The identification of relevant considerations turns on the scope and purpose of s10.

[152] As Windeyer J said in the context of concluding that the then equivalent of s10 in South Australia applies to the offence there under consideration:

The whole history of criminal justice has shewn that severity of punishment begets the need of a capacity for mercy. The more strict a rule is made, the more serious become the consequences of breaking it, the less likely it may be that Parliament would intend to close all avenues of exception. Especially when penalties are made rigid, not to be reduced or mitigated, it might seem improbable that Parliament would not retain a means of escaping the imposition of a penalty which must follow upon conviction, that it would abolish it, not directly but by a side wind. This is not because mercy, in Portia's sense, should season justice. It is that a capacity in special circumstances to avoid the rigidity of inexorable law is of the very essence of justice. (Cobiac v Liddy (1969) 119 CLR 257 at 269). [153] The last sentence of this passage was quoted with approval by Gleeson CJ when he said in R v Ingrassia (1997) 41 NSWLR 447 at 449:

The essence of s556A is that it empowers a court which considers that a charge has been proved, in certain circumstances, to take certain steps 'without proceeding to conviction'. The legal and social consequences of being convicted of an offence often extend beyond any penalty imposed by a court. [154] Notwithstanding, the width of the ameliorative purpose of s10, it does, in terms, direct attention to "the relevant charge". The scope and purpose of s10 will, to some extent at least, vary from one offence to another.

[155] I have not found it easy to determine whether a factor which is not relevant on sentencing for the charge, can nevertheless be a "proper" matter to be considered when exercising the discretion under s10. On balance, I have concluded that s10 does have a scope and purpose which extends beyond the elements of the offence of the "relevant charge". I refer in particular to the effects of the act of recording a conviction, to which Gleeson CJ referred in Ingrassia. 32 Later in his judgment in Thorneloe the Chief Justice expounded on the application of s10 to a strict liability offence in circumstances where the accused "as a matter of practical reality" could not have done anything to ensure that the offence did not occur. The relevant passages (which commence at 74) are as follows: [171] Even in the case of an offence of strict liability, no public purpose is served by recording a conviction or imposing a penalty in circumstances where the relevant accused could not, as a matter of practical reality, have done anything to ensure that the offence or, in the case of a result offence, the adverse consequences of the conduct, did not occur.

[172] Lord Scarman expressed the purpose of imposing strict liability in Gammon (Hong Kong) Ltd v Attorney General of Hong Kong [1985] AC 1 at 14: "... the creation of strict liability will be effective to promote the objects of the statute by encouraging greater vigilance to prevent the commission of the prohibited act."

[173] To similar effect are the observations of Lord Evershed in Lim Chin Aik v The Queen [1963] AC 161 at 174:

"It is pertinent also to inquire whether putting the defendant under strict liability will assist in the performance of the regulations. That means there must be something he can do, directly or indirectly, by supervision or inspection, by improvement of his business methods or by exhorting those whom he may be expected to influence or control, which will promote the observance of the regulations. Unless this is so, there is no reason in penalising him, and it cannot be inferred that the legislature imposed strict liability merely in order to find a luckless victim." [174] In He Kaw Teh v The Queen (1984-1985) 157 CLR 523, immediately prior to quoting this passage from Lim Chin Aik, Brennan J said:

"It requires clear language before it can be said that a statute provides for a person to do or to abstain from doing something at his peril and to make him criminally liable if his conduct turns out to be prohibited because of circumstances that that person did not know or because of results that he could not foresee. However grave the mischief at which a statute is aimed may be, the presumption is that the statute does not impose criminal liability without mens rea unless the purpose of the statute is not merely to deter a person from engaging in prohibited conduct but to compel him to take preventive measures to avoid the possibility that, without deliberate conduct on his part, the external elements of the offence might occur. A statute is not so construed unless effective precautions can be taken to avoid the possibility of the occurrence of the external elements of the offence." [175] Brennan J, Lord Evershed and Lord Scarman were concerned with determining whether a particular offence required mens rea. However their Honours' reasoning suggests that in the case of any criminal offence the Parliament will be strongly presumed to be concerned to impose liability only in the case of events that could have been avoided by some action on the part of the accused.

[176] As Lord Salmon said in the Federal Steam Navigation case, immediately after the passage quoted above, at 526:

"I can see nothing unfair in making the master guilty for any contravention of section 5. If the vessel is not fitted with the proper equipment and the master knows it, he should refuse to put to sea until the vessel is properly equipped. If he puts to sea when there has been some contravention of section 5 of which he could not have known, no court, were he to be prosecuted, would do more than impose a nominal fine, or give him an absolute discharge." [177] Although Lord Salmon understated the responsibility of the owner - which extends to establishing systems, guidelines and practices - nevertheless, there is a difference between the absentee character of ownership and the direct involvement in operations of the Master. Both share responsibilities. The object of ensuring greater vigilance in the context of strict liability is served by imposing as the Parliament has done, coordinate, and not merely derivative, obligations on both.

[178] It is, in my opinion, relevant to the exercise of the discretion under s10 of the Sentencing Act, in the context of a strict liability offence, to consider what the applicant for the benefit of s10 could have done to avert the event that has occurred. While questions of weight are always for the sentencing judge, it is unlikely that this consideration will be given determinative weight in the case of a serious offence or a repeat offender. Where, as here, there was a comparatively minor pollution by a first offender, this consideration is entitled to weight.

33 In response to the Defence submission invoking s10 of the Crimes (Sentencing Procedure) Act Prosecuting Counsel made the following submission: It is conceded that the company is otherwise of good character. It is not conceded that the offence was trivial. The discharge was small but was potentially toxic to the environment. It is submitted that there were no extenuating circumstances in which the offence was committed. This is not an incident where the defendant could not have done anything to prevent the offence. (see Thorneloe v Filipowski [2001] NSWCCA 213) Rather, the incident was foreseeable and could have been prevented by better equipment, maintenance, inspection and supervision. 34 In my judgment the Prosecutor's submissions more accurately reflect the relevant facts of this case than do the competing Defence submissions. 35 The Prosecutor's submissions also accord with my evaluation of the relevant factors enumerated in s10(3) of the Crimes (Sentencing Procedure) Act. 36 In so evaluating the relevant factors I do not accept the Defence submissions that the Defendant's culpability was trivial or that there were extenuating circumstances in which the offence was committed. 37 The fact that the pollution incident occurred only because of the concatenation of (i) the failure of the sensors to detect the overflow from the RB3 machine, (ii) the failure of the waste pit pump to be activated to pump the overflowed drawing solution to a holding tank and (iii) the failure of the isolation valve installed in the stormwater drainage system to be properly sealed because of the presence in the valve of a pebble does not elevate the pollution incident into some freakish or extraordinary or inevitable accident. But apart from that consideration each of these three failures was readily avoidable by the employment of more effective sensors and by reasonable maintenance and supervision of the waste pit pump and the isolation valve. 38 Moreover the risk of each of the three failures was readily foreseeable in the sense that each of the three items of machinery is readily capable of failure or breakdown (the sensors, the pump and the isolation valve). 39 Finally it is to be observed that the overall system employed by the Defendant to avoid spillages or overflows of chemicals etc from the copper wire manufacturing process was by no means a fail-safe system. In particular the ready accessibility of any liquid overflow into the stormwater drainage system installed in the Defendant's premises posed an obvious risk of the occurrence of a water pollution incident into the adjacent drainage channel unless the liquids flowing through the stormwater drainage system were arrested by the manual closing of the isolation valve located in that system. On the agreed facts (paragraph 19) the isolation valve was manually closed "at around the time that the discharge from the RB3 pit was discovered". By the time that discovery was made the drawing solution had already entered the stormwater drainage system (paragraph 18 of the Statement of Agreed Facts). 40 When full regard is given to the nature of the system employed at the Defendant's factory premises to avoid water pollution emanating from those premises into the adjacent waters of the Wetherill Park drainage channel it simply cannot be reasonably held that as a matter of "practical reality" there was nothing more that the Defendant could have done to have ensured that there would be no water pollution incident emanating from its factory premises. 41 In examining the discretion conferred by s10 I have weighed in favour of the Defendant its excellent character and record in industry, the risk to its business reputation of conviction of an environmental offence and all the mitigating factors (that I shall later mention). However in my judgment these matters are outweighed by my findings that the admitted offence is not trivial (nor is the Defendant's culpability in its commission) and there are no extenuating circumstances in which the offence was committed (accepting as I do that the pollution incident was accidental rather than intentional, albeit involving elements and degrees of negligence on the part of the Defendant) and the resulting balance justifies the imposition of a sentence on the Defendant conformably to the purposes and objects stated in s3A of the In examining the discretion conferred by s10 I have weighed in favour of the Defendant its excellent character and record in industry, the risk to its business reputation of conviction of an environmental offence and all the mitigating factors (that I shall later mention). However in my judgment these matters are outweighed by my findings that the admitted offence is not trivial (nor is the Defendant's culpability in its commission) and there are no extenuating circumstances in which the offence was committed (accepting as I do that the pollution incident was accidental rather than intentional, albeit involving elements and degrees of negligence on the part of the Defendant) and the resulting balance justifies the imposition of a sentence on the Defendant conformably to the purposes and objects stated in s3A of the Crimes (Sentencing Procedure) Act. 42 This brings me finally to the question of the appropriate penalty to be imposed in the present case. 43 Senior Counsel for the Defendant submitted that the appropriate penalty was "at the lowest end of the spectrum" of overall gravity for an offence against s120(1) of the PEO Act having regard to the proper evaluation of the objective gravity of the admitted offence and the Defendant's subjective culpability. 44 But for the significant discount on account of relevant mitigating factors I would consider, having regard to the relevant matters referred to in s241(1) of the PEO Act, a penalty of $30,000 to be appropriate and commensurate with my scaling of the admitted offence as one at the lower end of the overall spectrum of gravity relevant to that offence. My relevant findings in respect of the s241(1) matters are contained in the agreed facts and my findings in relation to the Defence submission based upon s10(3) of the Crimes (Sentencing Procedure) Act and need not be repeated here. 45 The mitigating factors include the matters raised by the Defence submission based upon s10(3) of the Crimes (Sentencing Procedure) Act and additionally the following matters: (i) the Defendant's plea of guilty being recorded at the earliest opportunity;

(ii) the genuine remorse and contrition expressed on behalf of the Defendant for the commission of the offence;

(iii) the Defendant's previous long and unblemished record in industry; and

(iv) the Defendant's co-operation with the Council and the Prosecutor in clean-up activities and in reporting and investigating the water pollution incident and in presenting to the Court a comprehensive Statement of Agreed Facts. 46 In my judgment the combined impact of these mitigating factors justifies an overall discount in penalty of 50%, resulting in a penalty of $15,000. This level of penalty in my judgment is appropriate in the present case and is compatible with the range of penalties that have been imposed by the Court in respect of offences against s120(1) of the PEO Act which the Court has evaluated as being of low gravity. D. ORDERS 47 For all the foregoing reasons I make the following orders: 1. The Defendant is convicted of the offence charged. 2. A penalty of $15,000 is imposed in respect of that conviction. 3. The Defendant shall pay the Prosecutor's reasonable costs in the agreed sum of $13,000. 4. The exhibits to remain on the Court file.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

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