Environment Protection Authority v Orica Australia Pty Ltd - [2014] NSWLEC 103 - NSWLEC 2012 case summary — Zoe

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Environment Protection Authority v Orica Australia Pty Ltd

[2014] NSWLEC 103

Land and Environment Court (NSW)|2012-12-12|Before: Pepper J

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Source facts

Court

Land and Environment Court (NSW)

Decision date

2012-12-12

Before

Pepper J

Source

Original judgment source is linked above.

Judgment (11 paragraphs)

[1]

The Application of the Totality Principle 230Orica submitted that the totality principle was applicable and that it operated at two levels in the circumstances of these proceedings. First, the principle applied in order to ensure that any sentence should reflect the totality of Orica's criminality given that the Court was sentencing for "multiplicities of offending", in order to avoid a "crushing effect". Second, the principle applied at a narrower level, with the result that the overlap or commonality of underlying facts and circumstances, or conduct, must be considered and accommodated in the overall sentence. 231Therefore, Orica submitted that the totality principle applied not only within each pollution incident where multiple charges were laid, but also across all seven incidents (comprising nine offences), because all offences arose out of Orica's operation of the same site, namely, the KI premises, and under the same licence. 232The EPA submitted that because the seven separate incidents occurred on different dates (including one incident at the Botany premises) and involved different conduct giving rise to different charges, the totality principle did not apply to reduce the aggregate total sentence of all nine charges across the seven separate matters. The EPA noted that it had been a matter of procedural efficiency and cost minimisation that the seven matters were heard together. 233With respect to the Nitric Acid Air Lift Incident the EPA submitted that the two charges did not share common elements to enliven an application of the totality principle. 234The EPA relied on the decision of the Court in Moolarben (No 2) (the facts of which are discussed above) in support of its position. In that case, the defendant had argued that the penalty imposed in the earlier decision in Moolarben (also see above) should be taken into account for the purpose of applying the totality principle. The Court refused to do so, Craig J reasoning that (at [131]): 131 While I do not suggest that the defendant in the present case has indulged in a deliberate course of criminal behaviour, the observations contained in the cases that I have cited in relation to the totality principle seem to me, in the present circumstances, to be apposite. The offence in the present case was committed six months after the first offence. While each involved an offence against s 120 of the POEO Act, each was a discrete offence arising from different causes. While the cause of the first offence is one of the three causes attributed to the present offence, that circumstance, for reasons earlier explained, does not seem to me to involve a continuity of conduct of the kind ordinarily considered when applying the principle of totality to multiple offences. Each involved different and separate episodes of conduct breaching s 120 (cf R v Finnie [2002] NSWCCA 533 at [57]-[58]). 235In Connell v Santos, the defendant pleaded guilty to four charges of failing to comply with the conditions of a petroleum title under s 136A(1) of the Petroleum (Onshore) Act 1991. The first charge was for failing to report an incident causing or threatening material harm to the environment. The second charge was for failing to lodge an accurate environmental management report with respect to the salinity levels of water discharged into a creek. The third and fourth charges were similar to the second charge. The defendant submitted that the three charges involved an essentially identical course of conduct repeated on three, albeit separate, occasions in very similar factual circumstances that therefore attracted the operation of the totality principle. The Chief Judge, Preston J, disagreed. He held that the three offences could not be regarded as involving a continuous "(as opposed to identical)" period of conduct. This was because there were three separate obligations to report and the facts in each reporting period were different. Thus each of the three offences were temporally separate and discrete offences (at [153]). His Honour also rejected the application of the principle with respect to the first charge on the basis that it involved a different factual substratum to the second, third and fourth charges and was distinct from those charges in terms of criminality. The defendant had submitted that the totality principle should apply because it arose under the same petroleum title and in relation to the operation of the same water treatment plant (at [154]). 236Similarly, Lani concerned the imposition of an appropriate sentence for offences committed contrary to the NPWA. Four summonses were before the Court, two of which were heard concurrently, followed by the remaining two, also heard concurrently (at [2]). In separate proceedings to determine the penalty to be imposed with respect to the first two charges, the first defendant, Lampo Pty Ltd ("Lampo"), pleaded guilty to an offence against s 118D(1) of the NPWA in that it caused damage to habitat, not being critical habitat, of a threatened species (the squirrel glider), knowing that the land concerned was habitat of that kind. The second defendant, Mr Rinaldo Lani, likewise pleaded guilty to an offence against s 118D(1) by reason of s 175B(1) in his capacity as a director of Lampo. Each of those two offences therefore arose from the same facts (at [3]-[4]). With respect to the proceedings on the remaining two matters, the first defendant, Bombala Investments Pty Ltd ("Bombala") pleaded guilty to an offence against s 118D(1) of the NPWA and the second defendant, Mr Lani, as a director of Bombala, likewise pleaded guilty under that provision by reason of s 175B(1) (at [71]). The defendants submitted that the totality principle should apply across both sets of proceedings with respect to all four charges. The Court did not agree. Although the latter two charges also arose pursuant to ss 118D(1) and 175B(1) of the NPWA and also related to damage caused to the habitat of the squirrel glider, the Court emphasised that the latter two offences occurred on a different property and at a different time and were therefore "not so related as to involve the totality principle" (at [62]-[63]). 237Likewise, Gittany concerned three separate offences against s 125(1) of the Environmental Planning and Assessment Act 1979 for unlawful development. The three offences occurred on 9 August 2004, and involved the removal of trees and indigenous bushland. One of the offences involved the breach of a condition of a development consent by failing to retain, protect and enhance the patches of indigenous bushland. The other two offences involved the breach of a condition of development consent by removing two Eucalyptus gummifera trees. The Court determined that a fine of $10,000 was appropriate for each offence involving the removal of trees and a fine of $45,000 for the offence of failing to retain and protect indigenous bushland. Cumulatively, however, the aggregate sentence of $65,000 would exceed marginally what was appropriate in the circumstances, having regard to the fact that the two trees removed were in close proximity, and the contemporaneous nature of the conduct. A downward adjustment of the penalties for these two offences to $7,500 each was considered appropriate. However, the offence involving the removal of the indigenous bushland was held to involve different criminal conduct to that which resulted in the removal of trees offences. Therefore, the Court held the criminality involved in the two sets of offences should not be conflated and no further downward adjustment should be made to the amount of the fine for the third offence (at [2]-[3] and [196]-[206]). 238So too in Genkem Pty Ltd v Environment Protection Authority (1994) 35 NSWLR 33 (which was prosecuted under the predecessor statutory scheme to the POEOA), the appellant operated a chemical plant at Tomago and was charged with twelve environmental offences committed between 18 and 29 May 1990 at that site. The appellant pleaded guilty to six of the charges, and the respondent did not press three. Of the three charges that remained, the appellant was convicted of two and acquitted of one. The appeal was against those two convictions and against the severity of the penalties that were imposed in respect of all eight offences (at 34F-35A). There were a number of grounds of appeal, one of which involved the trial judge's application of the totality principle. The trial judge had concluded that substantial penalties were called for in respect of three offences, namely those relating to a blocked drain in the lead plant, the pollution of waters by wastewater discharge from the lead plant, and the improper storage of drums from which sodium dichromate had been leaking. Significantly, his Honour rejected a submission that the offences were all "related" for the purpose of the application of the totality principle. The Court of Criminal appeal agreed with Bignold J (at 44F-45D and 50A per Gleeson CJ, Dunford J agreeing). 239The totality principle has, however, been applied in a number of cases involving environmental offences that have been committed on different dates in order to adjust downwards the ultimate penalty imposed. But what is notable about these decisions is that on each occasion the offence had the same factual basis so that the contravening conduct or failure was the same. 240In Pipeline Drillers, as noted above, the defendant was fined $18,000 for a first pollution of waters offence involving the discharge of bentonite slurry into a wetland. Applying the totality principle, a reduced fine of $12,000 was imposed for a second offence involving the same conduct that had occurred four days later (at [113]-[116]). 241Transpacific Industries concerned convictions for two offences against s 64(1) of the POEOA. The licence had transferred from the one defendant to another in the intervening period between the commission of the offences. Applying the totality principle, the defendants were fined $9,750 and $6,500 respectively (this was in addition to being fined $14,000 for a contravention of s 66(2) of the Act). The offences against s 64(1) concerned breaches of a licence emission limit. On each occasion the breach was the same, namely, volatile organic compounds containing the toxic air pollutant benzene were emitted from the defendant's reprocessing facility at levels in excess of the licence limit (at [14]-[19] and [146]-[147]). 242And in Environment Protection Authority v Burrangong Meat Processors Pty Ltd [2003] NSWLEC 102, the defendant, who operated an abattoir, was charged with four offences. The first offence involved a breach of s 64(1) of the POEOA (an excess of effluent being pumped through the system that produced offensive odours) because one of the conditions of the company's environmental protection licence was contravened insofar as the defendant failed to operate its effluent treatment system in a proper and efficient manner. The other three offences involved contraventions of s 129(1) of the Act insofar as the defendant was the occupier of premises at which a licensed scheduled activity was carried out and which caused an offensive odour. All four incidents occurred between 11 October and 22 November 2001 and were premised on the emission of odours due to the defendant's effluent treatment system being overloaded. The maximum penalty at that time for each offence was $250,000. The Court considered that a fine of $50,000 was warranted for each offence. However, applying the totality principle, Pain J considered that a further 'substantial' downwards adjustment to the total amount imposed was warranted by virtue of the totality principle, resulting in a penalty of $32,500 for the first offence and penalties of $16,250, $2,000 and $8,125 for the remaining three offences, resulting in a total penalty of $58,875 (at [53] and [58]-[59]). Although two different provisions of the POEOA were engaged, the conduct and resultant emissions arose from the same offending conduct and all four incidents occurred within a relatively short timeframe between 11 October and 22 November 2001. 243Finally, Camilleri's Stock Feeds involved an appeal against sentence for three offences against the former Clean Air Act 1961. The offences involved the emission of similar offensive odours on three separate occasions between January and March 1991. Having regard to the "close time frame of the three offences" and because remedying the defect that was causing the odours would have taken longer than the time that had elapsed between the first and third offence, Kirby P applied the totality principle and reduced the penalties imposed by the trial judge (at 703-704). 244I do not accept the EPA's submission that the totality principle has no application to the two offences the subject of these proceedings. The two offences arose out of the same factual substratum and contain common elements. The two offences arose from essentially the same failing with respect to the proper maintenance of the Air Lift pipe and weld, thereby resulting in nitric acid escaping to the environment. In other words, the two offences shared the same conduct. A form of double punishment would result if the overall sentence did not reflect these shared circumstances. 245The High Court described this aspect of the totality principle in Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 as follows (at [40]): To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts. 246Accordingly, the Court must justly and appropriately impose a sentence that reflects the overall total criminality of the conduct that resulted in the Nitric Acid Air Lift Incident (Lee v Office of Environment and Heritage [2012] NSWLEC 9 at [67] and Gittany at [196] and [199]-[200]). 247However, having regard to the principles and authorities referred to above, I do not accept the submission that the totality principle applies across the seven pollution incidents so as to require a further downwards adjustment of the penalty for the Nitric Acid Air Lift Incident by reference to the penalties imposed by the Court with respect to the other six incidents which were prosecuted consecutively with the proceedings for the Nitric Acid Air Lift Incident. 248The seven incidents are discrete incidents that occurred on separate occasions over a period of more than one year (19 October 2010, 22 March 2011, 17 June 2011, 8 August 2011, 27 September 2011, 9 November 2011, 7 December 2011). They do not, in my opinion, reflect a continuing course of conduct on the part of Orica. Moreover, the incidents bear no commonality of fact. Each incident involved different species of plant or equipment failures and the release of different chemical pollutants resulting from those failures. The fact that six of the seven incidents occurred at the same site (the KI premises) is insufficient to impart the requisite commonality so as to engage the application of the totality principle. 249Therefore, each of the seven incidents must be considered separately for sentencing purposes and no additional global downward adjustment by reason of the application of the totality principle is appropriate.

[10]

50919 and 50920 of 2011 (6)all future references by the defendant to its funding of the Hunter River Health Monitoring Program shall be accompanied by the following passage (pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997): "Orica Australia Pty Limited's contribution to the funding of the Hunter River Health Monitoring Program is part of a penalty imposed on it by the Land and Environment Court of NSW after it was convicted of offences against ss 64(1) (breach of licence condition) and 120(1) (water pollution) of the Protection of the Environment Operations Act 1997 (NSW)." (7)pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997, the defendant, at its own expense, is to place a notice in the form of annexure "B" in the following publications: (a)the Australian Financial Review within the first 21 pages at a minimum size of 20cm x 11cm, within 30 days of this order; (b)the Sydney Morning Herald within the first 21 pages of the General News Section at a minimum size of 18.6cm x 12.9cm, within 30 days of this order; (c)the Newcastle Herald within the first four pages at a minimum size of 18.6cm x 12.9cm, within 30 days of this order; (d)the Southern Courier within the first five pages at a minimum size of 18.6cm x 12.9cm, within 30 days of this order; and (e)the Journal of Chemical Engineering and Process Technology at a minimum size of 18cm x 12cm, within 60 days of this order; (8)the defendant is to provide to the prosecutor a complete copy of the page of the publications in which the notice appears within 14 days of the date of publication of the notices set out in order 7; (9)the defendant is to pay the prosecutor's legal costs as agreed or assessed; (10)pursuant to s 248(1) of the Protection of the Environment Operations Act 1997, the defendant is to pay the prosecutor's investigation costs in the sum of $960.91; (11)the exhibits are to be returned; and (12)liberty to restore on seven days' notice for the purpose of amending the form of any of the orders made above.

Annexure A Annexure B

Parties

Applicant/Plaintiff:

Environment Protection Authority

Respondent/Defendant:

Orica Australia Pty Ltd

Legislation Cited (2)

Environment Operations Act 1997(NSW)

Environmental Protection Act 1994(Qld)

Cases Cited (124)

64 Environment Protection Authority v Centennial Newstan Pty Ltd [2010] NSWLEC 211 Environment Protection Authority v Chillana Pty Ltd [2010] NSWLEC 255 Environment Protection Authority v Coal and Allied Operations Pty Ltd [2013] NSWLEC 134 Environment Protection Authority v Coastal Recycled Cooking Oils Pty Limited [2008] NSWLEC 242 Environment Protection Authority v CSR Building Products Limited [2008] NSWLEC 224 Environment Protection Authority v Delta Electricity [2009] NSWLEC 11 Environment Protection Authority v Forbes Shire Council [2014] NSWLEC 26 Environment Protection Authority v Forestry Commission of New South Wales [2013] NSWLEC 101 Environment Protection Authority v Forgacs Engineering Pty Limited [2009] NSWLEC 64 Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268; (2008) 163 LGERA 345 Environment Protection Authority v Hanson Precast Pty Limited [2008] NSWLEC 285 Environment Protection Authority v Hochtief AG [2006] NSWLEC 200 Environment Protection Authority v Hochtief AG and Thiess Pty Ltd [2007] NSWLEC 177 Environment Protection Authority v Huntsman Corporation Pty Ltd (No 4) [2011] NSWLEC 39 Environment Protection Authority v Incitec Limited [2003] NSWLEC 381; (2003) 131 LGERA 176 Environment Protection Authority v Lithgow City Council [2007] NSWLEC 695 Environment Protection Authority v M A Roche Group Pty Ltd; Environment Protection Authority v Roche [2013] NSWLEC 191 Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65 Environment Protection Authority v Moolarben Coal Operations Pty Ltd (No 2) [2012] NSWLEC 80 Environment Protection Authority v Orica Australia Pty Ltd [2005] NSWLEC 621 Environment Protection Authority v Peak Gold Mines Pty Limited [2013] NSWLEC 158 Environment Protection Authority v Pipeline Drillers Group Pty Ltd [2012] NSWLEC 18 Environment Protection Authority v Port Kembla Copper Pty Ltd [2001] NSWLEC 174; (2001) 115 LGERA 391 Environment Protection Authority v Port Kembla Copper Pty Ltd [2003] NSWLEC 256 Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220; (2012) 192 LGERA 415 Environment Protection Authority v Ramsey Food Processing Pty Ltd [2010] NSWLEC 23 Environment Protection Authority v Ravensworth Operations Pty Ltd [2012] NSWLEC 222 Environment Protection Authority v Rethmann Australia Environmental Services Pty Ltd [2003] NSWLEC 351; (2003) 131 LGERA 422 Environment Protection Authority v Sibelco Australia Ltd [2011] NSWLEC 160 Environment Protection Authority v Snowy Hydro Limited [2008] NSWLEC 264; (2008) 162 LGERA 273 Environment Protection Authority v State of New South Wales (Department of Environment, Climate Change and Water) [2010] NSWLEC 67; (2010) 174 LGERA 19 Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114; (2010) 174 LGERA 314 Environment Protection Authority v Tea Garden Farms Pty Ltd [2012] NSWLEC 89 Environment Protection Authority v Transpacific Industries Pty Limited; Environment Protection Authority v Transpacific Refiners Pty Limited [2010] NSWLEC 85 Environment Protection Authority v Unomedical Pty Limited (No 3) [2010] NSWLEC 198 Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131 Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 Environment Protection Authority v Werris Creek Coal Pty Ltd; Environment Protection Authority v Holley [2009] NSWLEC 124 Genkem Pty Ltd v Environment Protection Authority (1994) 35 NSWLR 33 Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 Gordon Plath of the Department of Environment and Climate Change v Fish [2010] NSWLEC 144; (2010) 179 LGERA 386 Gore v The Queen; Hunter v The Queen [2010] NSWCCA 330 Harrison v Baring (No 2) [2012] NSWLEC 145 Hili v The Queen; Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520 Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616 Lee v Office of Environment and Heritage [2012] NSWLEC 9 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 R v Booth (NSW Court of Criminal Appeal, 30 September 1997, unreported) R v De Simoni [1981] HCA 31; (1981) 147 CLR 383 R v Harris [2007] NSWCCA 130; (2007) 171 A Crim R 267 R v Holder; R v Johnston [1983] 3 NSWLR 245 R v Johnson [2004] NSWCCA 76 R v MAK; R v MSK [2006] NSWCCA 381; (2006) 167 A Crim R 159 R v MMK [2006] NSWCCA 272; (2006) 164 A Crim R 481 R v Morgan (1993) 70 A Crim R 368 R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 R v Wheeler [2000] NSWCCA 34 R v Wickham [2004] NSWCCA 193 State Pollution Control Commission v CSR Ltd (1989) 75 LGRA 1 Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 Category: Sentence Parties: Environment Protection Authority (Prosecutor) Orica Australia Pty Ltd (Defendant) Representation: Mr S Rushton SC and Mr D A Hughes (Prosecutor) Mr T A Game SC, Mr D Jordan SC and Ms K Edwards (Defendant) Office of Environment and Heritage (Prosecutor) Ashurst Lawyers (Defendant) File Number(s): 50919 and 50920 of 2011

Sentencing Principles 80A basic principle of sentencing law is that the sentence imposed for an offence must reflect, and be proportionate to, the objective circumstances of the offence and the personal or subjective circumstances of the offender (Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 at 490 and Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472). 81The instinctive synthesis method is the correct method of sentencing. The Court identifies all the factors relevant to the sentence and weighs their significance to arrive at an appropriate sentence (Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 at [26] and Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [35]-[39], [50]-[84] and [136]-[139]). 82Although Orica's plea of guilty to both charges entails acceptance of the proof beyond reasonable doubt of the elements of each offence, the Court must not take facts into account in a manner that is adverse to Orica unless those facts have been established beyond reasonable doubt by the EPA. But if there are circumstances that the Court proposes to take into account in favour of Orica, it is enough that these circumstances are proved on the balance of probabilities (R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at [27]; Gore v The Queen; Hunter v The Queen [2010] NSWCCA 330 at [27] and [105] and R v Wickham [2004] NSWCCA 193 at [26]). 83Section 3A of the Crimes (Sentencing Procedure) Act 1999 ("the CSPA") sets out the purposes of sentencing an offender. Relevant purposes in these proceedings are those contained in ss 3A(a), (b), (c), (e), (f) and (g). 84In addition, s 21A of the CSPA identifies the matters that the Court must take into account when determining the appropriate sentence, including factors in aggravation under s 21A(2) and factors in mitigation under s 21A(3). Section 21A of the CSPA provides: 21A Aggravating, mitigating and other factors in sentencing (1) General In determining the appropriate sentence for an offence, the court is to take into account the following matters: (a) the aggravating factors referred to in subsection (2) that are relevant and known to the court, (b) the mitigating factors referred to in subsection (3) that are relevant and known to the court, (c) any other objective or subjective factor that affects the relative seriousness of the offence. 85The matters referred to in this section are in addition to any other matters that are required or permitted to be taken into account by the Court under any Act or rule of law, such as s 241(1) of the POEOA (see below). 86Potential aggravating factors for the commission of the two offences with which Orica has been charged in these proceedings are limited to those contained in ss 21A(2)(d), (g) and (o) of the CSPA. Potential subjective circumstances or mitigating factors are those contained in ss 21A(3)(e), (f), (g), (i), (k) and (m) of the CSPA. These factors are discussed in further detail below. 87It is also important to note that when assessing the objective gravity of an offence, the Court not only establishes the upper limit of the appropriate penalty but also the lower limit beneath which the penalty should not go. Subjective mitigating features should never produce a sentence that fails to reflect the gravity of the incident or the objectives of punishment which include both retribution and deterrence (Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65 at [44] and Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 at [140]). 88Furthermore, in determining an appropriate sentence, the Court must consider the objective and subjective circumstances of the offence in the context of the relevant legislative framework (Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234; Environment Protection Authority v Aargus Pty Ltd; Kariotoglou; Kelly [2013] NSWLEC 19 at [53] and Moolarben at [42]). 89A proper understanding of the purpose of creating an offence is usually assisted by a consideration of the objects of the statute (Connell v Santos New South Wales Pty Ltd [2014] NSWLEC 1; (2014) 199 LGERA 84 at [59]). Therefore, regard ought to be had to the objects set out in s 3 of the POEOA and the matters to be considered in imposing a penalty listed in s 241 of the POEOA. 90The objects of the POEOA set out in s 3 relevantly include: (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, ... (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, ... (iv) the making of progressive environmental improvements, including the reduction of pollution at source, (v) the monitoring and reporting of environmental quality on a regular basis, (e) to rationalise, simplify and strengthen the regulatory framework for environment protection, (f) to improve the efficiency of administration of the environment protection legislation, ... 91Section 241(1) of the POEOA provides: 241 Matters to be considered in imposing penalty (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. 92The legislative scheme reflected in the objects and operative provisions of the POEOA requires that "proper, and strict, precautions be taken by those whose activities may cause proscribed pollution". Indeed, the adoption of that legislative scheme reflects on the part of the community "a stern policy against pollution" (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359 and Moolarben at [43]).

Objective Circumstances of the Offences 93The primary factor the Court must consider in determining an appropriate sentence is the objective gravity or seriousness of the offences. In determining the objective seriousness of each offence, the circumstances to which the Court may have regard include (Bentley at [163]; Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [110] and Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 at [48]): (a)the nature of the offences; (b)the maximum penalty for the offences; (c)the harm, if any, caused to the environment by the commission of the offences; (d)Orica's state of mind in committing the offences; (e)Orica's reasons for committing the offences; (f)the foreseeability of the risk of harm to the environment by the commission of the offences; (g)the practical measures available to Orica to avoid harm to the environment; and (h)Orica's control over the causes of harm to the environment.

Nature of the Offences 94A fundamental consideration of relevance to environmental offences is the degree to which the offender's conduct would offend against the legislative objectives expressed in the statutory offence (Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [15] and Plath at [49]). 95The objects of the POEOA disclose that the central mischief to which the Act is directed is to avoid, or at least, reduce pollution in order to prevent harm to human safety and the natural environment for both present and future generations (Environment Protection Authority v Unomedical Pty Limited (No 3) [2010] NSWLEC 198 at [188]).

Pollution of Waters 96As Preston J has observed in the context of an offence against s 120 of the POEOA (Environment Protection Authority v Baiada Poultry Pty Limited [2008] NSWLEC 280; (2008) 163 LGERA 71 at [23] and see Environment Protection Authority v Pipeline Drillers Group Pty Ltd [2012] NSWLEC 18 at [44]): Pollution of waters is a result offence where the proscribed result directly undermines the object of the Protection of the Environment Operations Act 1997. 97Section 120 of the POEOA states: 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. 98The POEOA Dictionary defines pollution to include "water pollution" and defines "water pollution" or "pollution of waters" to mean: (a) placing in or on, or otherwise introducing into or onto, waters (whether through an act or omission) any matter, whether solid, liquid or gaseous, so that the physical, chemical or biological condition of the waters is changed, ... and, without affecting the generality of the foregoing, includes: (d) placing any matter (whether solid, liquid or gaseous) in a position where: (i) it falls, descends, is washed, is blown or percolates, or (ii) it is likely to fall, descend, be washed, be blown or percolate, into any waters, onto the dry bed of any waters, or into any drain, channel or gutter used or designed to receive or pass rainwater, floodwater or any water that is not polluted, or (e) placing any such matter on the dry bed of any waters, or in any drain, channel or gutter used or designed to receive or pass rainwater, floodwater or any water that is not polluted, if the matter would, had it been placed in any waters, have polluted or have been likely to pollute those waters. 99The POEOA relevantly defines "waters" to mean "the whole or any part of": (a) any river, stream, lake, lagoon, swamp, wetlands, ... dam or tidal waters (including the sea), or (b) ...any underground or artesian water. 100The offence created by s 120 of the POEOA is one of strict liability. 101The Nitric Acid Air Lift Incident involved the release of 47% nitric acid into the environment, part of which flowed into the Hunter River and part of which soaked into the ground, contaminating groundwater. Nitric acid has the potential to harm any organisms present at the discharge site. Consequently, the breach of s 120 of the POEOA undermined the objects of that Act by degrading the environment, because it polluted both the local groundwater and the Hunter River. Both types of water pollution plainly offended against the legislative objects in s 3 of the POEOA, particularly ss 3(a) and (d). 102Orica sought to argue that actual or potential environmental degradation is inherent in the s 120 water pollution offence, thereby diminishing the force of any suggestion that the commission of the offence offended against the objects of the Act. Leaving to one side the inherent circularity of this argument, it is an objective fact that by polluting the groundwater and the Hunter River, degradation of the environment ensued, thereby undermining the objects of the POEOA that are expressly directed to preventing pollution and environmental harm. Breach of Licence 103The failure to comply with a licence condition in contravention of s 64(1) of the POEOA is also an offence of strict liability. Section 64(1) provides as follows: 64 Failure to comply with condition (1) Offence If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence. Maximum penalty: (a) in the case of a corporation-$1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, ... 104It is difficult to envisage industrial production that would not, having regard to the broad definitions ascribed to the various forms of pollution regulated by the POEOA, give rise to conduct that would otherwise, but for a proscribed licensing regime under that Act, be unlawful. Compliance with licence conditions is the price that entities must pay for permission to engage in potentially polluting manufacturing processes. The conditions imposed in any licence are aimed at maximising beneficial environmental outcomes and minimising environmental harm. They represent a balancing exercise between fostering economic growth and development, on the one hand, and protecting and preserving the environment now and for the future, on the other. Strict compliance with the conditions of any environmental licence is therefore necessary to ensure that this balance is achieved and that the objectives of the POEOA are met. 105The Nitric Acid Air Lift Incident as described above breached condition O2.1(a) of Licence 828 by Orica's failure to maintain its equipment in a "proper and efficient condition", thereby contravening s 64(1) of the POEOA. The transgression was clearly incompatible with the statutory scheme and offended against the objects established by the Act for the protection of the environment, especially s 3(d) (reducing risks to human health and preventing the degradation of the environment by the use of mechanisms that promote pollution prevention and the reduction of discharges of harmful substances).

Was There a Breach of Public Trust by Orica? 106In addition, the EPA submitted that because licence holders, such as Orica, are (under the POEOA) licensed to carry out activities that, if not carried out in accordance with their licence, have the potential to cause harm to the environment and to human safety, the licence holders are in a position of public trust or privilege. This trust is necessarily broken and the privilege is abused if the holder of the environmental licence breaches a condition of its licence, as Orica did in the present case. 107The EPA relied on the following evidence in support of its submission, namely, that in cross-examination Ms Woodroffe was asked if she shared the view that a breach of licence was a breach of public trust and she answered "certainly" (T93.15-T93.33). 108There is authority holding that such a breach of public trust is a matter that can be taken into account under s 241(2) of the POEOA as a factor increasing the objective gravity of the offence (State Pollution Control Commission v CSR Ltd (1989) 75 LGRA 1 at 4-5; Environment Protection Authority v Port Kembla Copper Pty Ltd [2001] NSWLEC 174; (2001) 115 LGERA 391 at [21]-[24] and [27]; Environment Protection Authority v Port Kembla Copper Pty Ltd [2003] NSWLEC 256 at [23] and [57]; Environment Protection Authority v Hochtief AG [2006] NSWLEC 200 at [95]; and Harrison v Baring (No 2) [2012] NSWLEC 145 at [52]-[54] and [68]). 109But contrary views have been expressed regarding the application of any breach of public trust doctrine (Environment Protection Authority v BlueScope Steel (AIS) Pty Limited [2004] NSWLEC 400 at [35] and [58] per Talbot J and Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289; (2006) 148 LGERA 278 at [77]-[82]). In Ballina Shire Council Preston J opined as follows (at [79]-[83]): 79 This was said in relation to a charge pursuant to s 64(1) of the Act that a condition of a licence has been contravened. Talbot J said further at [58]: "Mr Jordan made a submission on behalf of the EPA, as prosecutor, that as the holder of a licence under the PEO Act, the defendant has a duty in the nature of a public trust not to cause pollution, otherwise than to the extent authorised by the licence. I have previously expressed reservations about attempting to equate the duty of a licence holder to an obligation arising out of a public trust. I accept that the operator of an industrial undertaking in the nature of that conducted by the defendant has a high responsibility to protect the environment from harm as a consequence of its operations. The legislation recognises the level of this duty by providing that a breach of the Act attracts strict liability. Condition O2.1 of the licence sets an absolute standard that places a strict obligation on the licence holder. The conditions of the licence reflect the nature and extent of the duty imposed upon the licence holder. I would prefer to find the strict obligations of the defendant within the terms of the licence, rather than seeking to extract some abstract principle out of an implied public trust." 80 In my opinion, there is force in what Talbot J has said. It is true that a person, who although initially prevented by a statutory provision from being able to carry out activities that are of a certain nature (scheduled activities) is then permitted to carry them out by the grant of the licence, is afforded a privilege. However, the statute recognises the fact that a licence holder has been given a privilege by requiring that the licence holder comply with the conditions of the licence so issued. Failure to do so constitutes an offence. That Parliament considers a breach of a condition of a licence to be serious is evidenced by this fact and by the magnitude of the penalty that is imposed. As of 1 May 2006, the maximum penalty imposed for such a breach by a corporation is $1 million. However, as indicated earlier, at the time of the commission of the offence, it was $250,000. 81 It is not necessary in order to emphasise the seriousness of the offence of contravening conditions of a licence, to graft onto this statutory scheme the concept of an implied public trust. The seriousness of the offence is evident in the statutory scheme and s 64 of the Act in particular, and in the magnitude of the penalty for breach of the statutory provision. 82 Moreover, it adds nothing to say that there has been a breach of an implied public trust when one comes to sentence an offender who has committed an offence against s 64 of the Act. This is because the very section itself involves the conduct of breaching a condition of licence. Every single offender against that statutory provision would be guilty of the same breach of implied public trust. 83 For these reasons, I prefer the approach taken by Talbot J in Environment Protection Authority v BlueScope Steel (AIS) Pty Limited of finding the strict obligations of the defendant within the terms of the licence and the statutory provision in question, rather than seeking to extract some abstract principle out of an implied public trust. 110In Harrison v Baring (No 2) Pain J, however, said (at [52]-[53]): 52 As submitted by the Prosecutor, significant trust and reliance is placed upon licence holders by the State to ensure that they abide by the licences and approvals granted under the WM Act. Environment protection licences which allow pollution subject to specified conditions have long been recognised as involving an important public trust: Environment Protection Authority v Port Kembla Copper Pty Ltd [2001] NSWLEC 174; (2001) 115 LGERA 391 at [23] - [25]; and Environment Protection Authority v Incitec Limited [2003] NSWLEC 381; (2003) 131 LGERA 176. 53 Holders of licences and approvals under the WM Act should also be regarded as being placed in a special category over and above other persons because they are allowed to take and use a limited (and at times very scarce) resource, water, in accordance with the conditions of the licences and approvals. That is, they are trusted to construct water supply works that can take significant volumes of water, and they are trusted to use those water supply works to take water, but only as permitted under their licences and approvals. Breaches of licence conditions and approvals should therefore be regarded as involving breaches of public trust. 111I prefer the position articulated by Preston J in Ballina Shire Council. Having regard to the text and context of the POEOA, there is no warrant for such a gloss being put on the legislative scheme created by that Act. I note in fairness to her Honour, that in Harrision v Baring (No 2) it does not appear that the Court was taken to Preston J's decision in Ballina Shire Council.

Environmental Harm Caused by the Commission of the Offences 116The environmental harm caused by the commission of an offence is a central consideration in determining the objective gravity of the offence. The concept of harm in the context of environmental offences is broad (Waste Recycling and Processing Corp at [145]-[147]). 117Harm includes the potential or risk of harm, not merely actual harm (Waste Recycling and Processing Corp at [145]; Axer at 366 and Bentley at [175]). Harm can be direct, indirect or cumulative and "[a]ctivities that contribute incrementally to the gradual deterioration of the environment, even when they cause no discernable direct harm to human interest, should also be treated seriously" (Waste Recycling and Processing Corp at [147]). 118Furthermore, s 241(1)(a) of the POEOA makes it clear that, in sentencing, the Court is to consider the "extent of the harm caused or likely to be caused to the environment by the commission of the offence". The POEOA defines "harm to the environment" to include: ...any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution. 119It is also important to observe that harm is not mitigated by the fact that the waters into which a pollutant is discharged are, at the time, already disturbed or modified (Moolarben at [48]; Waste Recycling and Processing Corp at [149] and Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220; (2012) 192 LGERA 415 at [159]). Although the disturbed condition of receiving waters is not a mitigating factor, it is relevant to the assessment of the extent of harm or likely harm caused by the commission of the offence (Waste Recycling and Processing Corp at [149]; Environment Protection Authority v Hanson Precast Pty Limited [2008] NSWLEC 285 at [66] and Environment Protection Authority v Hochtief AG and Thiess Pty Ltd [2007] NSWLEC 177 at [19]). 120The parties agreed that an estimated 70m2 of groundwater had been polluted by water contaminated with nitric acid causing a low pH plume, with a pH in the range of 1-2. In addition, low pH water measuring a pH of 2.9 onsite was discharged via Orica's stormwater system into the Hunter River, although the quantity of that discharge is not known. It was not a matter of dispute that the acidic discharge to the Hunter River "would have been neutralised ... within a short period" and hence the effect was likely to have been localised and short term. 121The parties agreed that water with a pH of 2.9 is toxic to certain aquatic organisms, but that there was no evidence available of actual environmental harm to aquatic life caused by the groundwater and river pollution and any potential environmental harm was expected not to be significant. 122In the immediate aftermath of the Incident, Orica undertook several measures that in all likelihood reduced the environmental harm caused by the Incident including: removing contaminated soil from the vicinity of the Air Lift; obtaining approval for, and sinking, groundwater wells to monitor the groundwater; and preparing a detailed RAP. 123The EPA submitted that the potential or risk of harm was a relevant consideration in this case (Axer at 366; Bentley at [175] and Waste Recycling and Processing Corp at [145]) and that the discharge of nitric acid into the groundwater and the River incrementally contributed to the degradation of the environment and must be treated seriously (Waste Recycling and Processing Corp at [146]-[149]). 124Orica, however, emphasised that the environmental harm to the Hunter River was expected to be short term, localised and not significant, and that generally the environmental harm resulting from the Incident was not substantial with respect to the underlying groundwater aquifer. Given the long history of industrial activities at the KI premises since 1969, Orica submitted that this water "was disturbed by that long history of chemical production activity" and that although not a mitigating factor, this fact was relevant as a "baseline reference" in the assessment of environmental harm pursuant to s 241(1)(a) of the POEOA. In light of the evidence before the Court, I agree with Orica's submission, and I find that the potential or risk of harm caused by the commission of the offence was minimal. 125Taking all of the evidence into account, I find that the commission of the offences caused environmental harm at the lower end of the spectrum. 126Significantly, the commission of the two offences did not result in "substantial" harm as required to enliven s 21A(2)(g) of the CSPA. It is therefore not to be taken into account as an aggravating factor under that Act.

Orica's State of Mind and the De Simoni Principle 127Both offences are offences of strict liability, which means that mens rea is not an element of the offence. However, the state of mind of Orica at the time of committing the offence is a relevant consideration when imposing a sentence. This is because a strict liability offence that is committed intentionally, negligently or recklessly will be objectively more serious than one committed accidentally (Rae at [42]-[43] and Gittany at [123]). 128In the present case there was no question of Orica having intentionally or recklessly committed the offences with which it had been charged. Rather the issue was whether Orica had committed the offences negligently. 129However, Orica submitted that it would be an error of law to consider its state of mind in the commission of the offences because this would amount to sentencing it for a more serious offence than that with which it has been charged (R v De Simoni [1981] HCA 31; (1981) 147 CLR 383 at 389). 130The submission arose in the following way. Orica has pleaded guilty to a "Tier 2" offence against s 120 of the POEOA. The more serious "Tier 1" offence, with which Orica has not been charged, is an offence against s 116 of the Act, which states: 116 Leaks, spillages and other escapes (1) If a person wilfully or negligently causes any substance to leak, spill or otherwise escape (whether or not from a container) in a manner that harms or is likely to harm the environment: (a) the person, and (b) if the person is not the owner of the substance, the owner, are each guilty of an offence. 131The rule against punishment for a higher offence than that which the defendant has been charged was set out in R v De Simoni ("the De Simoni principle") per Gibbs CJ (at 389 and 392): However, the general principle that the sentence imposed on an offender should take account of all the circumstances of the offence is subject to a more fundamental and important principle, that no one should be punished for an offence of which he has not been convicted. Section 582 reflects this principle. The combined effect of the two principles, so far as it is relevant for present purposes, is that a judge, in imposing sentence, is entitled to consider all the conduct of the accused, including that which would aggravate the offence, but cannot take into account circumstances of aggravation which would have warranted a conviction for a more serious offence. At common law the principle that circumstances of aggravation not alleged in the indictment could not be relied upon for purposes of sentence if those circumstances could have been made the subject of a distinct charge appears to have been recognized as early as the eighteenth century ... It is not only in cases in which the offence has been accompanied by circumstances of aggravation that a trial judge may be required, in sentencing, to take an artificially restricted view of the facts. This will be so also in cases where the jury's verdict is inconsistent with the view of the facts that the judge himself has formed, for the judge cannot act on a view of the facts which conflicts with the jury's verdict. However, where the Crown has charged the offender with, or has accepted a plea of guilty to, an offence less serious than the facts warrant, it cannot rely or ask the judge to rely, on the facts that would have rendered the offender liable to a more serious penalty. 132Accordingly, a sentencing judge cannot take into account a factor which would constitute an element of a more serious offence than the one with which an offender has been charged and of which the offender has been convicted, or to which the offender has pleaded guilty (Cassidy v R [2012] NSWCCA 68; (2012) 220 A Crim 420 at [1]). 133An offence is more serious than another offence for the purposes of the De Simoni principle if it renders the offender liable to a heavier penalty than the offence for which the offender is being sentenced (Environment Protection Authority v Snowy Hydro Limited [2008] NSWLEC 264; (2008) 162 LGERA 273 at [147] citing R v Booth (NSW Court of Criminal Appeal, 30 September 1997, unreported), Environment Protection Authority v Tea Garden Farms Pty Ltd [2012] NSWLEC 89 at [101] and Chief Executive of the Office of Environment and Heritage v Rinaldo (Nino) Lani [2012] NSWLEC 115 at [35]-[39]). 134The maximum penalty for an offence against s 116 of the Act in the case of a corporation is $5 million for an offence that is committed wilfully, or $2 million for an offence that is committed negligently (according to s 119), whilst the maximum penalty for an offence against s 120 is $1 million. The offence in s 116 is, therefore, a more serious offence than the offence to which Orica has pleaded guilty and the De Simoni principle therefore potentially applies. 135The De Simoni principle has been applied in statutory contexts, including in the sentencing for environmental offences. In Snowy Hydro, Biscoe J considered the application of the De Simoni principle in the context of s 120 of the Act. His Honour stated that (at [148]-[149]): 148 The principle has been applied in statutory contexts. For example, it was applied to the Criminal Code (WA) in De Simoni and to the Criminal Code (Tas) in Lovegrove v R [1961] Tas SR 206, which was approved in De Simoni at 390-391. In determining whether the De Simoni principle applies in a particular statutory context, the task is to interpret the language used and not to construe the statutory provisions on the assumption that they were intended to reproduce the common law. But if the meaning of the statutory provisions is doubtful, resort may be had to the common law for the purpose of aiding their construction: De Simoni at 391-392. 149 The question then is whether the De Simoni principle applies in the context of the POEO Act. There is appellate authority that it does. In Hardt v Environment Protection Authority (2007) 156 LGERA 337 at 348-349 [53] (NSWCCA) Giles JA (Grove and Harrison JJ agreeing) held in the context of a strict liability offence under the POEO Act, that: Subject to R v De Simoni (1981) 147 CLR 383 considerations, it is relevant to sentence for a strict liability offence or an offence with a mental element less than intention to commit the offence to consider with what intention and appreciation of the offence it was committed. Depending on the intention, the offence may be regarded as more serious. 136His Honour concluded in Snowy Hydro that the De Simoni principle precluded the Court from considering whether the conduct of the defendant was negligent because of the more serious offence under s 116 of the Act. His Honour reasoned that ([150]-[151]): 150 Section 241(1) of the POEO Act (set out at [135] above) does not list negligence among the matters that it mandates must be taken into consideration. However, findings adverse to an offender charged under s 120 in relation to matters listed in s 241(1) could lead the court in some circumstances to conclude that the conduct of an offender charged under s 120 was negligent. There is artificiality in the court then stopping short of describing the conduct as negligent, having regard to s 116 and the De Simoni principle. Nevertheless, it has come to be accepted that the application of the De Simoni principle means that an offender may be sentenced on the fictitious basis that a circumstance of aggravation does not exist when a trial judge would otherwise find that it did exist. In such a case, the price of the principle is an artificially restricted view of the facts. This was recognised in De Simoni at 389, 392. However, at a practical level, if matters listed in s 241(1) were to be decided adversely to an offender, in some circumstances the degree of aggravation may not be much greater if the offender's conduct was also described as negligent. 151 On the basis of the De Simoni principle, I do not propose to entertain the question whether the conduct of Snowy Hydro was negligent. 137Likewise, Craig J in Tea Garden Farms reasoned (at [101]-[102]): 101 The defendant submits that to punish the defendant on the basis that its actions were reckless would contravene the principles enunciated by the High Court in R v De Simoni [1991] HCA 31; (1991) 147 CLR 383. A finding of recklessness would be tantamount to finding an element of aggravation that would warrant conviction for a more serious offence, namely an offence against s 116 of the POEO Act. That approach would offend the dictum of Gibbs CJ (Mason and Murphy JJ agreeing) in De Simoni at 389. 102 I accept the submission of the defendant. While the provisions of s 116 of the POEO Act proscribe, in terms, conduct that "wilfully or negligently causes any substance to leak, spill or otherwise escape", it seems to me that "recklessly" causing a substance to escape is also conduct that is proscribed by the section. I would regard reckless conduct to involve a lower order of fault than "wilful" but to involve an equivalent, if not higher order of fault than "negligent" conduct. As conduct involving fault of the latter kind engages the provisions of s 116, it would make no sense to interpret the section as being inapplicable to conduct that was "reckless"... 138A similar finding was made by Sheahan J in Chief Executive, Office of Environment and Heritage, Department of Premier and Cabinet v Powell [2012] NSWLEC 129 at [118] (citing Rae at [42]-[43]) and Queanbeyan City Council (No 3) at [169]-[178]). 139In this case, I accept that the operation of the De Simoni principle prevents me from considering whether Orica acted negligently in committing the offence in contravention of s 120 of the Act by reason of the more serious offence of wilfully or negligently causing any substance to leak, spill or otherwise escape contained in s 116 of the Act. 140However, the parties disagreed as to whether Orica's state of mind could be taken into account in relation to the breach of licence offence under s 64(1) of the POEOA. Orica submitted that its breach of licence condition under s 64(1) caused a polluting substance to 'escape' to the environment and because s 116(1) of the POEOA also prohibits the escape of pollutants into the environment and is a more serious offence (maximum penalty $5 million) involving the aggravating circumstance of 'wilfully or negligently' causing that escape 'in a manner that harms or is likely to harm the environment', the De Simoni principle applied. 141The authorities are equivocal on this question. In Environment Protection Authority v Rethmann Australia Environmental Services Pty Ltd [2003] NSWLEC 351; (2003) 131 LGERA 422, the Court appeared to apply the De Simoni principle to a breach of licence (at [53] per Talbot J). 142The EPA submitted that Rethmann was wrongly decided on this point and relied upon several decisions of this Court that have considered, contrary to the approach in Rethmann, the state of mind of the offender in relation to a licence condition breach under s 64(1) of the POEOA (Environment Protection Authority v Transpacific Industries Pty Limited; Environment Protection Authority v Transpacific Refiners Pty Limited [2010] NSWLEC 85 at [98] and Environment Protection Authority v Lithgow City Council [2007] NSWLEC 695 at [35]-[39]). 143In none of the decisions above was the issue squarely raised by the parties and thus properly considered by the Court. I agree with the submission by Orica that there is nothing in the text or context of either the POEOA or the CSPA that discloses a legislative intention to abrogate the De Simoni principle from theoretical application to s 64(1) of the POEOA (indeed s 21A(4) appears to embrace it). 144However, the principle has no practical application with respect to a breach of s 64(1) of the POEOA because there is no 'more serious offence' of breaching a licence condition than that with which Orica has been charged and has pleaded guilty to. Accordingly, to take into account whether or not Orica breached a condition of its licence negligently is not to infringe the principle. While the De Simoni principle is not narrowly confined to situations where there is another specific offence in aggravated form that is otherwise identical to the offence in question, the offences must nevertheless be of the same general character. Were it otherwise, it would, given the potential breadth of the acts and omissions giving rise to the commission of an offence contrary to ss 115 and 116 of the POEOA, preclude an examination of the state of mind of an offender in most of the strict liability offences created by the POEOA. 145In my opinion, therefore, the De Simoni principle does not apply to a breach of licence offence under s 64(1) of the POEOA because there is no more serious aggravated form of that general character of offence in the POEOA. Therefore it is open to me to consider whether Orica's state of mind in committing this offence was negligent. 146The EPA submitted that Orica had breached the licence condition negligently because of Orica's failure to properly implement its safety management systems and, because having identified several welds of "poor workmanship", Orica did not adequately inspect the other Air Lift welds nor question the impact of stress on the Air Lift welds. It emphasised the joint conclusion of the experts that Orica had failed to maintain its plant and equipment in a proper and efficient condition. Moreover, because Orica had previously been convicted of a breach of licence offence regarding nitric acid discharged from the Plant in 2005 it "should have had full appreciation of the risk". In other words, Orica was well aware of the risks associated with the management and handling of dangerous chemicals at its KI premises and had been put on notice, as a result of the 2005 incident, of the particular and specific risk of discharge of nitric acid from improper management of its plant and equipment. 147But as was stated in Gordon Plath of the Department of Environment and Climate Change v Fish [2010] NSWLEC 144; (2010) 179 LGERA 386 at [81], albeit in relation to an offence against s 118 of the National Parks and Wildlife Act 1974 ("the NPWA"), "in the criminal context, negligence means more than a breach of a duty of care". To amount to criminal negligence (at [81]): ... the degree of carelessness must be such as to show such a disregard for the objects of the statute as to amount to a crime against the state (R v Bateman [1925] All ER Rep 45; (1925) 19 Cr App R 8; see also Andrews v DPP [1937] AC 576 per Lord Atkin at 583; applied in Cittadini v The Queen [2009] NSWCCA 302 at [38]-[40]). For there to be negligence, there must have been an indifference to an obvious risk (R v Taktak (1988) 14 NSWLR 226 at 247, applied in Cittadini). 148In my view, the EPA has failed to demonstrate beyond reasonable doubt that Orica breached its licence condition negligently. I have arrived at this conclusion having regard to the fact that prior to the Nitric Acid Air Lift Incident there was a scheduled maintenance program that included the removal and internal inspection and testing of the Air Lift approximately every four years; the Air Lift was removed and hydrostatically tested and inspected by video probe in October 2006. It was removed and all welds were externally visually inspected in 2008. Welds that were identified then as inferior were replaced even though they were still functional. A more limited external inspection of the above ground components of the Air Lift was undertaken in June 2010. Orica commissioned a risk assessment from a specialist contractor, MPT Solutions. That risk assessment did not identify any known or high potential corrosion degradation mechanism for weak acid piping, such as the piping in the Air Lift. That is to say, the risk assessment did not identify that a different corrosion mechanism could occur when weak nitric acid and compressed air were brought together in the presence of mechanical stress. Moreover, although, as the joint experts agreed, it was the change in production process in 2008 that caused the increased stress on the weld due to cavitation, prior to this change, the imperfect weld that was replaced in 2008 had not degraded significantly from 1969 to 2008. 149I therefore do not find that in breaching its licence condition, Orica acted negligently.

Orica Has a Record of Previous Convictions for Environmental Offences 169The EPA submitted that an aggravating factor to be taken into account by the Court was Orica's record of previous environmental convictions (s 21A(2)(d) of the CSPA). 170A Statement of Agreed Facts on Antecedents was tendered detailing Orica's prior convictions for environmental offences. Orica has seven prior recorded convictions for environmental offences. 171In New South Wales, Orica has: (a)a prior conviction in 2005 for an environmental offence under the POEOA for breach of a licence condition pursuant to s 64(1) of the POEOA at the KI premises for the discharge of wastewater with a pH outside the range specified in the licence, for which it was fined $10,500; and (b)a prior conviction in 1987 for an environmental offence at the Botany premises under the former Clean Waters Act 1970 for the discharge of distillate into Botany Bay, for which it was fined $10,000. 172In Victoria, Orica has four prior convictions that occurred between 20 to 30 years ago for air pollution offences. 173In Queensland, Orica pleaded guilty to six breaches of the Environmental Protection Act 1994 (Qld) for water pollution (two concerned discharge of nitrogen in excess of development approval and four for unauthorised release of cyanide in effluent and stormwater), for which Orica was fined but no conviction was recorded. 174I do not consider Orica's prior convictions for air pollution in Victoria to be relevant given that they occurred between 20 to 30 years ago and were factually very different to the conduct that has occasioned the present charges. However, in my opinion, regard must be had to Orica's criminal history in New South Wales and Queensland given that the offences were either water pollution offences or contraventions of environmental licence conditions. 175The EPA submitted that Orica's prior convictions, particularly the not dissimilar breach of licence condition offence for discharging nitric acid into the Hunter River in 2005, amounted to an aggravating factor in sentencing for the present offences. 176Orica rejected this proposition, submitting, first, citing R v Johnson [2004] NSWCCA 76 (at [33]-[35]) and Veen (No 2) (at 477) that a prior conviction cannot be an aggravating factor, and second, that because the technical cause of the relevant discharge in the 2005 conviction was different to the cause of the discharge in the present case, and therefore, the steps taken to prevent a recurrence of that incident "had no application to the present incident", it should be ignored. 177However, an exact conformity between the nature of the prior conviction and the current offence is not required. Moreover, the statements of principle contained in both Johnson (at [31]-[37]) and Veen (No 2) do not, in my view, go as far as Orica suggested. 178In Johnson the Court stated as follows (at [32]-[37]): 32 In terms of s21A(2)(d), Mr Johnson had a record of previous convictions. That record was, therefore (subject to s21A(4)), an "aggravating factor" to be taken into account in determining the appropriate sentence (although, as set out in s21A(5), not necessarily increasing that sentence). 33 What is a "rule of law" for the purposes of s21A(4)? No guidance is given by the Act, or by authority. However, it is reasonable to regard a sentencing principle, established by the common law, and not abrogated by the Act, as such a law. 34 In R v Veen [No 2] (1988) 164 CLR 465, the High Court considered the impact of the criminal history of an offender upon sentence. The majority (Mason CJ, Brennan, Dawson and Toohey JJ) wrote: (at 477) "There are two subsidiary principles which should be mentioned. The first is that the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v Ottewell [[1970] AC 643 at 650]. The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalty." 35 Howie J, in R v Shankley [2003] NSWCCA 253, expressed the principle in Veen [No 2] in these words: (para 31) "The effect of the prior criminal record of the offender, where it is relevant to sentencing, is not to increase the objective seriousness of the offence committed but rather that 'retribution, deterrence and protection of society may indicate a more severe sentence is warranted'." 36 Here the applicant made the following submission, having again referred to the gap in convictions between the early 1980's and 1995. "... Thus there were reasons in this case to find that the applicant was capable of leading long periods of crime free existence, that he understood the nature and seriousness of the punishment that was to be imposed upon him and that there were reasonable prospects that he would not return to his criminal activity. This was not a case where the applicant's moral culpability showed a dangerous propensity that required the imposition of condign punishment to give effect to specific deterrence. The applicant had not been to jail since the early 1980s. Any substantial jail sentence imposed on this man who is no longer young was likely to bring about substantial specific deterrence." 37 His Honour, in using the phrase "aggravating feature", may have been adverting to s21A(2)(d), or he may have been alluding to the principle in Veen [No 2] although, with respect, using language which was not entirely apposite. The criminal record of Mr Johnson, and especially the repetition of certain offences, was capable (as his Honour recognised), of "illuminating" the "moral culpability" of the applicant, and demonstrating the need for deterrence, particular and general. The applicant's five previous convictions for the possession of household implements demonstrated a need for a sentence which would deter him from committing such an offence again. The same can be said of the charges relating to firearms. Viewed in the light of his criminal history, his actions demonstrated "a continuing attitude of disobedience to the law". We believe his Honour was saying no more than that in the passage from his remarks which has been criticised. As such, his remarks conformed to Veen [No 2] and were warranted by the criminal history. 179In Aargus, Craig J took into account a prior Queensland conviction of the defendant when sentencing that defendant for POEOA offences committed in New South Wales. In doing so, his Honour stated, consistent with the principles in Veen (No 2), that (at [89]-[91]): 89 The prior conviction upon which reliance is placed is that recorded in the Verdict and Judgment Record of the Brisbane Magistrate's Court on 30 July 2003 (Exhibit J). That document indicates that Aargus was then fined the sum of $10,000 together with costs of $990.35 for an offence against the Environmental Protection Act 1994 (Qld) involving the making of a false or misleading statement to an authorised person, contrary to s 481(1) of that Act. Aargus had submitted a report to the Queensland EPA stating that all contaminants had been removed from potentially contaminated land when, in fact, that was not so. 90 Aargus pleaded guilty to the offence, the commission of which then carried a maximum penalty of $62,000. The transcript of proceedings before the Magistrate indicates that the relevant report had been prepared by a contractor to Aargus whose legal representative informed the Court that the Company would not "be carrying out [its] business like this in the future and it has been a learning experience ... ". 91 The fact of the prior conviction seems to me to attract the operation of s 21A(2)(d). This does not mean that it can impact upon the objective seriousness of the offence but rather is a factor informing a determination as to where within the boundaries set by the objective seriousness of the offence, an appropriate penalty should lie (Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465; R v McNaughton [2006] NSWCCA 242; 66 NSWLR 566 at [26]). Clearly, the commission of an offence of like kind is relevant to be considered in this context. It discloses that more weight may need to be given "to retribution, personal deterrence and the protection of the community than would be the case if such a record did not exist" (R v M.A.K.; R v M.S.K. [2006] NSWCCA 381; 167 A Crim R 159 at [51]). 180Given the similarity of Orica's previous convictions for environmental offences in New South Wales and Queensland to the present offences, in my opinion, it is appropriate that Orica's relevant prior criminal history be taken into account as an aggravating factor informing my determination as to where "within the boundaries set by the objective seriousness of the offence, an appropriate penalty should lie". 181Having said this, there is some substance to Orica's further submission that its previous convictions must be viewed in the context of its size and the nature of its operations, which includes its long history of operating at the site and the inherently high-risk nature of chemical production, storage and transportation, and that it operates at 121 sites and employs 2900 people across Australia, and that the offences all involved relatively modest penalties and in some instances, no convictions at all were recorded. 182I therefore take into account Orica's previous environmental criminal history as an aggravating factor under s 21A(2)(d) of the CSPA, but not to the extent contended for by the EPA.

Mitigating Factors 183A proportionate sentence requires the Court to take into account any mitigating factors that are personal to the defendant (Rae at [55]; Gittany at [144] and s 21A(3) of the CSPA). Relevant subjective circumstances include: (a)whether Orica has a prior criminal record (s 21A(3)(e) of the CSPA); (b)whether Orica is of good character (s 21A(3)(f) of the CSPA); (c)whether Orica is unlikely to re-offend (s 21A(3)(g) of the CSPA); (d)whether Orica has demonstrated remorse for the commission of the offences (s 21A(3)(i) of the CSPA); (e)whether, and when, Orica entered guilty pleas (ss 21A(3)(k) and 22 of the CSPA and R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152]-[155]); (f)whether Orica provided assistance to the regulatory authorities in the investigation and prosecution of the offences (ss 21A(3)(m) and 23 of the CSPA); and (g)whether Orica is likely to pay the prosecutor's legal and investigation costs of the proceedings.

Agreement to Pay the EPA's Costs 208The Court is empowered to order an offender to pay the prosecutor's legal costs of the proceedings pursuant to ss 257B and 257G of the Criminal Procedure Act 1986 and its investigation costs pursuant to s 248 of the POEOA. 209The payment of a prosecutor's costs is an aspect of punishment and should be considered in the determination of the appropriate penalty as a factor that acts to reduce the penalty (Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78] and [88]; Queanbeyan City Council (No 3) at [248] and Rae at [68]), and therefore, should be factored into the determination of the appropriate penalty. 210Orica has agreed to pay the EPA's reasonable legal costs as agreed or assessed. Although not quantified, it may reasonably be inferred that these costs will not be insubstantial. Additionally, Orica has agreed to pay the investigation costs incurred by the EPA in investigating the two offences fixed in the sum of $960.91.

Consistency in Sentencing 219A relevant consideration in sentencing is the ascertainment of the existence of a general pattern of sentencing by the Court for offences such as the offence in question (Gittany at [179]-[182] and Rae at [69]). The proper approach is for the Court to look at whether the sentence is within the range appropriate to the gravity of the particular offence and to the subjective circumstances of the particular offender, and not whether it is more severe or more lenient than some other sentence that merely forms part of that range (Gittany at [182] quoting R v Morgan (1993) 70 A Crim R 368 at 371). 220Of course care must be taken because each case is different and a sentence in one case does not demonstrate the limits of a sentencing judge's discretion, given the wide divergence of facts and circumstances leading to the imposition of specific penalties (Axer at 365; Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 at 312 and Hili v The Queen; Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520 at [54]). 221The pattern of sentencing against which the present case falls to be determined is established through an examination of the relevant sentencing cases dealing with water pollution offences under s 120 and breach of licence offences under s 64(1) of the POEOA and other similar legislation.

Sentencing Trends for Water Pollution Offences 222Both parties referred the Court to a plethora of comparable sentencing cases dealing with a breach of s 120(1) of the POEOA. A survey (not exhaustive) of some of the more recent relevant decisions of this Court referred to by the parties display the range of penalties imposed on corporate offenders for the commission of this offence: (a)in Environment Protection Authority v Greater Taree City Council [2014] NSWLEC 88, the defendant council pleaded guilty to polluting a creek with leachate and ammonia from green and domestic waste, contaminating approximately 535,000L of water. The environmental harm was low, the defendant accepted full responsibility for the offence, had no prior convictions, responded to the incident promptly and at its own and considerable expense, was unlikely to re-offend, expressed "sincere" remorse and pleaded guilty early. The Court ordered the defendant to pay $37,500 to a local urban waterways regeneration project in lieu of a fine, noting the defendant's undertaking to increase that contribution to $50,000; made an investigation and legal costs order totalling $57,492; and made a publication order; (b)Environment Protection Authority v Forbes Shire Council [2014] NSWLEC 26 concerned, amongst other things, a plea of guilty to a charge that the defendant polluted water by the accidental surface runoff from an irrigation area of 11,000L of effluent, sewage, septic waste and animal manure into a stormwater drain flowing into creeks and dams. No actual harm to the environment occurred but there was the potential for environmental harm by the escape of pathogens. The offence was held to be in the middle range of objective seriousness. The defendant pleaded guilty early, had no prior convictions, expressed remorse and at all times cooperated with the prosecutor. The defendant was fined $130,000; (c)in Environment Protection Authority v Bulga Coal Management Pty Limited [2014] NSWLEC 55, the defendant was fined $65,000 for polluting a creek with 340 KL of coal tailings slurry from a mine. The incident occurred because of an overflow in a containment dam due to a leak in a pipe. Actual harm to the creek within a distance of 250-280m of the discharge occurred. Level sensor alarms in the containment dam have subsequently been installed. The defendant accepted full responsibility for the incident, expressed contrition, pleaded guilty early, had no prior convictions and cooperated fully with the EPA; (d)the corporate defendant in Environment Protection Authority v M A Roche Group Pty Ltd; Environment Protection Authority v Roche [2013] NSWLEC 191 pleaded guilty to two charges of polluting waters contrary to s 120(1) of the POEOA. The accidental pollution occurred as a result of an unspecified amount of sediment-laden water being discharged twice from a quarry pit through a dam wall. The contaminated water ultimately entered Herons Creek. There was actual harm and a likelihood of harm, albeit for a limited time and in a limited geographical area. The defendant implemented measures to prevent further recurrences of the pollution. The defendant also entered early pleas of guilty, assisted the prosecuting authority and expressed remorse for the pollution. It was fined a total of $23,000 and ordered to pay the prosecutor's legal costs of $24,500 and investigation costs of $14,700. A publication order was also made; (e)Environment Protection Authority v Coal and Allied Operations Pty Ltd [2013] NSWLEC 134 concerned 6.8ML of sediment-laden water flowing via a drainage channel into a creek and lagoon. There was no actual harm, but there was the potential for low level short term harm following the incident. Practical measures could have been taken to prevent the incident and the harm was foreseeable. The defendant showed remorse by implementing measures to improve sediment controls. The Court imposed a fine of $45,000, the defendant was ordered to pay the prosecutor's costs of $51,000 and a publication order was made; (f)in Environment Protection Authority v Peak Gold Mines Pty Limited [2013] NSWLEC 158, water contaminated with tailings from the defendant's gold mining processing plant discharged from a tailings dam during rainfall events into a clean water drain and remained onsite. The tailings were contaminated with cyanide and heavy metals. There was actual harm to the environment and a low level of potential harm to flora and fauna. The defendant pleaded guilty early, expressed remorse and contrition, cleaned up the discharge and cooperated with the prosecutor. A fine of $50,000 was imposed, directed towards a nominated environmental project. The defendant was ordered to pay the prosecutor's legal and investigative costs of approximately $57,000 and a publication order was made; (g)in Environment Protection Authority v Ravensworth Operations Pty Ltd [2012] NSWLEC 222, the mining company was fined $50,000 and ordered to pay the prosecutor's professional costs of $28,500. Approximately 1.64ML of sediment-laden water polluted a creek. Despite plans for adequate controls, a contractor did not implement them. The circumstances were accidental. The level of culpability was low. There was no likely harm. The environmental harm was low. Objective seriousness of the offence was at the lower end of the low to moderate range. The defendant pleaded guilty at the earliest opportunity; (h)in Moolarben, the defendant was convicted for one offence under s 120(1) of the POEOA, fined $105,000, taking into account a 30% sentencing discount, and ordered to pay the prosecutor's legal and investigation costs of $53,000 and $8,632 respectively. A publication order was also made. The offence involved four discharges of sediment-laden water into a nearby creek and then into the Goulburn River. The pollution was held to have caused serious environmental harm towards the lower end of the range, despite the potential for substantial harm. The defendant had complete control over the causes, the risk was foreseeable, and practical measures could have been taken to prevent the harm. However, subjective features including an early guilty plea and the defendant's lack of prior convictions, cooperation with authorities and expressions of remorse, all operated to mitigate the penalty (at [17], [56]-[74], [81]-[83], [90]-[91] and [107]); (i)in Environment Protection Authority v Moolarben Coal Operations Pty Ltd (No 2) [2012] NSWLEC 80, the defendant was again convicted under s 120(1) of the POEOA for releasing 18.7ML of sediment-laden water into a creek. The release had the potential for significant environmental harm but did not cause any actual harm. It was deemed to be of moderate objective seriousness. The defendant had one prior conviction. Mitigating factors included the defendant's early guilty plea, remorse and assistance to authorities. The Court rejected the proposition that the totality principle should be applied to adjust down the penalty in this case by reference to the defendant's conviction in the first Moolarben case. The Court reasoned in this regard that the first offence had occurred six months prior to the second offence and was a discrete offence. The defendant was fined $112,500 and ordered to pay the prosecutor's costs of $63,314 and a publication order was made (at [79], [85], [90]-[104], [132]-[133] and [139]); (j)in Queanbeyan City Council (No 3), the defendant council pleaded guilty and was convicted under s 120(1) of the POEOA for the release of between 915,336 and 1,112,830L of sewage which flowed into the Queanbeyan River. The Court found the actual harm was low but there was the potential for harm to human health. Subjective circumstances were mixed and only operated to mitigate the penalty to a limited extent. The defendant was ordered to pay $80,000 (taking into account a 15% discount) towards the completion of an environmental improvement project pursuant to s 250(1)(e) of the Act, and ordered to pay the prosecutor's investigation costs of $1,189 and legal costs of $343,000 (at [280]-[286]); (k)Tea Garden Farms involved the pollution of waters contrary to s 120(1) of the POEOA due to the discharge of sediment-laden water from a rural dam into the waters of a marine park. An 11m section of the dam wall partially collapsed when an employee of Tea Garden Farms excavated the base of the dam wall to replace a blocked pipe. The environmental harm was in the "relatively low range" with overall objective seriousness lying in the low to moderate range. The defendant's remorse, early guilty plea and assistance to authorities operated to mitigate the sentence to some degree. In the circumstances of this case, the defendant was ordered to pay a total of $77,000 towards two environmental protection and remediation projects pursuant to s 250(1)(e) of the POEOA. In addition, a publication order was made and the defendant was ordered to pay the prosecutor's legal and investigation costs totalling $121,464 (at [154]); (l)in Pipeline Drillers, Craig J fined the defendant $18,000 for a first pollution of waters offence contrary to s 120(1) after it discharged bentonite slurry into a wetland. Applying the totality principle, a reduced fine of $12,000 was imposed for a second offence that occurred four days later. The defendant had complete control over the causes, the risk of frac-out (the cause of the discharge) was a recognised and thus foreseeable risk, and practical measures had been available to prevent the likelihood of harm. However, the defendant's early guilty plea, assistance to authorities, remorse, and lack of prior convictions mitigated the penalty. The defendant had also agreed to pay the prosecutor's investigation and legal costs (at [38], [47]-[72], [85]-[89], [99]-[107], [113] and [116]); (m)in Environment Protection Authority v Sibelco Australia Ltd [2011] NSWLEC 160, the defendant mining company was penalised $78,000, paid professional costs of $35,000, and was the subject of a publication order. Approximately 2.8-5ML of sediment-laden water escaped from a dam into a brook via the wall of the dam which failed. Culpability was low to moderate. There was short-term moderate harm and no likely harm or cumulative harm. Environmental harm was in the low to moderate range. The objective seriousness of the offence was low to moderate. The defendant pleaded guilty at the earliest opportunity; (n)in Environment Protection Authority v Austar Coal Mine Pty Ltd [2011] NSWLEC 252, an unknown quantity of water containing two pollutants (a detergent and an effluent) were discharged from a bathhouse into a creek, contrary to s 120(1) of the POEOA. The environmental harm was found to be low, partly due to the defendant's actions in containing the incident. Subjective mitigating factors included the defendant's lack of prior convictions, an early guilty plea, a genuine expression of remorse and assistance to authorities. Taking into account a 25% discount, a monetary penalty of $75,000 was imposed and was directed towards a rehabilitation project pursuant to s 250(1)(e) of the Act. As agreed, the defendant was ordered to pay the prosecutor's legal and investigation costs totalling $42,269.13. A publication order was also made (at [22], [46] and [66]); (o)in Environment Protection Authority v Big River Group Pty Ltd [2011] NSWLEC 80, the defendant spilled 6,000L of a chemical pollutant known as Hexion Cascophen MPLY 4550, some of which flowed into a stormwater drain and then to a wetland, contrary to s 120(1) of the POEOA. The pollutant was classified as a Class 8 dangerous good, contained phenol and the carcinogen formaldehyde, and had a pH of more than 10. The pollutant had a potential lethal toxicity to various aquatic organisms. However, the environmental harm was found to be in the low to moderate range and overall the offence was of moderate objective seriousness. The defendant had two prior convictions for environmental offences, but little weight was placed on these as they dated back to 1990, were relatively minor, were materially different, and did not manifest a pattern of disregard for environmental laws. The defendant was otherwise of good character, entered a guilty plea at the first opportunity, expressed remorse and fully cooperated with the prosecutor. The Court imposed a fine of $67,000 and ordered the defendant, as agreed, to pay the prosecutor's legal and investigation costs totalling $59,644.80 (at [3]-[4], [95]-[107], [116], [124]-[125]); (p)in Centennial Newstan, 1.4-1.8ML of sediment-laden water was discharged from a pipeline into a creek, contrary to s 120(1) of the POEOA. Environmental harm was relatively low, particularly in the long term and the offence was overall of moderate objective seriousness. Appropriate mitigatory measures had been taken since. The defendant had one prior conviction for a pollution of waters offence, but was otherwise of good character, entered a guilty plea at the first opportunity, expressed remorse and fully cooperated with authorities. Taking these factors into account, a 30% discount was applied, resulting in a monetary penalty of $105,000. This was directed towards an environmental protection program pursuant to s 250(1)(e) of the POEOA. The defendant had also agreed to pay the prosecutor's costs in the sum of $28,500 and its investigation costs agreed in the sum of $10,000. A publication order was also made (at [74], [80], [90]-[107], [123]-[126]); (q)in Environment Protection Authority v Ramsey Food Processing Pty Ltd [2010] NSWLEC 23, untreated abattoir effluent escaped into a creek and its tributary. Environmental harm was actual and immediate but no long term harm was likely and the objective seriousness was low to medium. The defendant had one prior conviction, but pleaded guilty at the earliest opportunity and expressed remorse. The defendant was fined $40,000 for the first offence of polluting the creek and $10,000 for polluting the tributary. The defendant was also ordered to pay the prosecutor's costs, which were expected to exceed $200,000 and investigation costs of $13,477.82. A publication order was imposed (at [176] and [186]-[193]); (r)in Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114; (2010) 174 LGERA 314, a fine of $50,000 was imposed in relation to the release of some 1,000-3,000 tonnes of toxic slime which spread 300m along a road and a grassed area and 200m along a dry creek bed. No environmental harm (apart from the presence of the toxic slime) was caused, and potential harm to the receiving waters was low (if it had reached the waters). A fine of $50,000 was imposed with costs totalling $24,000; (s)Sheahan J in Environment Protection Authority v Chillana Pty Ltd [2010] NSWLEC 255 fined the defendant $60,000 after a discount of 33% for a cracked pipe that led to 98,000L of untreated abbattoir effluent spilling into a nearby creek and river. There was significant actual harm to the creek lasting two months. The defendant had a prior conviction but his Honour held that it was unlikely to reoffend, had expressed remorse, had pleaded guilty early and had cooperated with the authorities. The defendant was also ordered to pay costs of approximately $58,000 and a publication order was made; (t)in Environment Protection Authority v Albury City Council [2009] NSWLEC 169, a pump failure caused sewage effluent to overflow and ultimately the discharge flowed into the Murray River. While potential harm to the environment was present, no actual harm occurred. The defendant was fined $45,500, which included a discount of 35% for an early guilty plea together with other mitigating factors, and was ordered to pay the prosecutor's legal costs of $15,500 and investigation costs of $2,544 (at [2], [4] and [97]); (u)Hanson Precast concerned the accidental escape of 200-300L of heat transfer oil via a stormwater drainage system into a watercourse. The offence caused actual environmental harm, killing some fish and damaging reeds that had to be removed during the clean up. There was substantial short term environmental harm but no long term harmful effects anticipated, and the overall objective seriousness was towards the lower end of the scale. The defendant's good character, lack of prior criminality, early guilty plea, remorse and assistance to authorities, including substantial clean up efforts at a cost of $63,000, resulted in a discount on penalty of 33%. The defendant was fined $50,000 and ordered to pay the prosecutor's legal costs of $17,680 and investigation costs of $4,320 (at [27], [65] and [73]); (v)in Baiada Poultry, about 1ML of effluent from a poultry rendering plant escaped from a defective weld in an underground pipeline and descended into a watercourse in a paddock owned by the defendant contrary to s 120(1) of the POEOA. The actual harm was minimal and there was no likely environmental harm onsite or downstream. The defendant did have prior convictions but other mitigating factors operated to mitigate the penalty by 25%, including an early guilty plea and assistance to authorities. The defendant was ordered to pay $120,000 towards a local council conservation project and pay prosecution legal and investigation costs totalling $34,872. A publication order was also imposed (at [2], [12]-[13] and [63]); (w)in Snowy Hydro, which concerned the discharge of sediments into the Snowy River, the Court accepted that the environmental harm was minor and short term while the offence was described overall as being "of moderate objective seriousness". After applying a discount for mitigating factors, including the defendant's prior good character, remorse, lack of prior criminality and assistance to authorities, a fine of $100,000 was imposed and the defendant was ordered to pay legal costs of $84,289 and investigation costs of $1,897.50 (at [221]). In the related prosecution against Fulton Hogan Pty Ltd (the defendant's contractor) for the same offence, an identical fine and costs order were imposed (Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268; (2008) 163 LGERA 345 at [204]); and (x)lastly, in Environment Protection Authority v CSR Building Products Limited [2008] NSWLEC 224, the defendant pleaded guilty to a pollution of waters offence resulting from a chemical spill affecting waters of the Parramatta River. The chemical (GEP2) was a flammable liquid containing various substances and classified as both a S5 Poison and a hazardous substance. It was rated as "moderately toxic", and capable of harming both aquatic organisms and the environment. The pollution caused substantial short term environmental harm and temporary suspension of the River's ferry service. The offence was considered to fall in the mid-range for water pollution offences. Mitigating factors included the defendant's remorse, however its guilty plea had been made quite late. An overall discount of 20% was applied. The defendant was ordered to pay a fine of $280,000 and legal costs of $75,000. The defendant had agreed to pay $83,407.09 for clean up and investigation costs (at [10] and [58]-[60]).

Sentencing Trends for Breach of Licence Condition Offences 223Again both parties referred the Court to numerous sentencing cases concerning breach of an environmental licence condition. It is both unnecessary and unhelpful to discuss them all, however, relevant decisions of this Court for such an offence by a corporate defendant under the POEOA and other similar regulatory regimes, are summarised below: (a)in Environment Protection Authority v Forestry Commission of New South Wales [2013] NSWLEC 101, the Court ordered the defendant to pay $7,000 towards an environmental project and ordered the defendant to pay the prosecutor's legal and investigation costs, for, amongst other things, contravening a condition of a threatened species licence contrary to s 133(4) of the NPWA. The condition was breached when a bush fire hazard reduction burn did not proceed as planned. Although the defendant had a criminal history, the environmental harm caused by the breach was low, there was a reasonably low likelihood of the defendant re-offending, the defendant pleaded guilty early, demonstrated remorse and cooperated fully with the EPA; (b)Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131 concerned an offence of contravening s 128(2) of the POEOA, which required an occupier of licensed premises to carry on any activity, or operate any plant, in or on the premises so as to minimise air pollution where no emissions standard or rate was prescribed for the relevant air impurity. The maximum penalty was $1 million. The Court concluded that the offence was of low objective gravity and the harm was not substantial. The mitigating factors, including the defendant's lack of prior convictions, its good character, its assistance to authorities, and its unlikelihood of re-offending, all operated to mitigate the ultimate penalty. However, the defendant had neither pleaded guilty nor expressed remorse and as such a discount of only 15% was applied. The Court imposed a fine of $90,000, made a publication order and imposed a costs order for $140,000 (at [97]-[112] and [157[-[158]); (c)in Director-General, Department of Environment, Climate Change and Water v Forestry Commission of New South Wales [2011] NSWLEC 102, the Court directed the defendant to pay $5,600 towards an environmental project and ordered costs of $19,000, for a breach of s 175(1)(a) of the NPWA for breaching a condition of a threatened species licence by burning an exclusion zone during bush fire hazard reduction activities. The defendant had environmental antecedents but pleaded guilty early, assisted the prosecutor and expressed contrition. The environmental harm occasioned by the breach was deemed to be "low to moderate"; (d)Environment Protection Authority v Huntsman Corporation Pty Ltd (No 4) [2011] NSWLEC 39 concerned a breach of licence condition contrary to s 64(1) of the Act. The condition required licensed activities to be carried out in a competent manner, which included the handling and storage of substances and waste. The Court concluded that there was no actual environmental harm and the potential for harm was low. The offence was overall of low to moderate objective seriousness. There was an early guilty plea, genuine remorse was expressed and assistance was provided to the prosecutor. With a sentence discount of more than 25%, the defendant was ordered to pay $28,000, directed towards an environmental project, and to pay the prosecutor's costs of $40,000 (at [89], [142] and [149]); (e)Environment Protection Authority v State of New South Wales (Department of Environment, Climate Change and Water) [2010] NSWLEC 67; (2010) 174 LGERA 19 concerned a breach of licence condition contrary to s 64(1) of the Act for failing to operate equipment in a proper and efficient manner, with respect to the defendant's operation of a sewage treatment plant. A penalty of $80,000 was imposed. The Court ordered that this be directed towards an environmental project in the area of the incident. The defendant was also ordered to pay the prosecutor's costs in the sum of $65,000 (at [98]). There was no actual environmental harm and the likelihood of harm was low. The mitigating factors included that the defendant had pleaded guilty early, expressed remorse and fully cooperated with the prosecution; (f)in Transpacific Industries, the defendant pleaded guilty to two offences against s 64(1) and one offence against s 66(2) of the POEOA. The maximum penalty was $1 million for each offence. For the two offences against s 64(1), the defendant was fined $6,500 and $9,750. This was in addition to being fined $14,000 for the offence against s 66(2) of the Act. The defendant was also ordered to pay the prosecutor's costs of the proceedings in the sum of $40,000 and a publication order was made. The offences against s 64(1) concerned breaches of a licence condition relating to the emission of certain gaseous substances into the atmosphere on two occasions. Those penalties were imposed in circumstances where the potential environmental harm was deemed to be low. Moreover the defendant pleaded guilty early, had no prior convictions, was of good character, expressed remorse and cooperated with the authorities, leading to a 35% sentencing discount for the two s 64(1) offences and 30% for the s 66(2) offence (at [110]-[122] and [146]-[147]); (g)Sheahan J fined the defendant a total of $80,000 for five offences concerning the emission of excessive air impurities in the M5 East Tunnel in Environment Protection Authority v Bowport All Roads Transport Pty Limited (No 2) [2009] NSWLEC 180. The environmental harm was significant. Deterrence was a significant element of the penalty imposed. The defendant had prior infringement notices for emission offences. Factors in mitigation included the defendant's expression of remorse and involvement in "relevant programmes" run by the RTA and the industry. The defendant was also ordered to pay the EPA's costs of $48,000 and a publication order was made; (h)in Environment Protection Authority v Causmag Ore Company Pty Limited [2009] NSWLEC 164, the breach of licence condition concerned a failure to maintain a plant in a proper and efficient condition, contrary to s 64(1) of the Act, by the defendant failing to repair or replace filter bags and fabric filters that had become damaged and deteriorated, thus causing dust emissions. In addition to a publication order, the Court fined the defendant $20,000 in circumstances where the defendant entered an early plea of guilty, expressed contrition and remorse, cooperated fully with the prosecutor, was of good corporate character, was found unlikely to re-offend, had prior convictions similar to the offence charged and was suffering considerable financial difficulties. The defendant was also ordered to pay the prosecutor's legal costs of $26,500 and pay a total of $45,000 to a rehabilitation project (at [60]-[65] and [83]); (i)Environment Protection Authority v Werris Creek Coal Pty Ltd; Environment Protection Authority v Holley [2009] NSWLEC 124 concerned a breach of an environment protection licence held by Werris Creek Coal Pty Ltd ("Werris Creek") contrary to s 64(1) of the POEOA. Mr Holley was the director of Werris Creek. The breach occurred because the concentration of total suspended solids at a monitoring point (being a dam) on the mine site was higher than required by the licence. Werris Creek was fined $49,000 with the penalty directed to an environmental rehabilitation project. Costs were ordered as was the publication of the offence. The environmental harm was "minor", the defendant had no prior criminal record, there was no likelihood of re-offending, the defendant pleaded guilty early and assisted the prosecutor and expressed remorse for its actions; (j)in Environment Protection Authority v Delta Electricity [2009] NSWLEC 11, the defendant was convicted of an offence against s 64(1) for failing to maintain the premises in a condition so as to minimise or prevent the emission of dust from the premises. The potential environmental harm was found to be not substantial. The defendant's early guilty plea, remorse, lack of prior convictions, cooperation with authorities and unlikelihood of re-offending operated to mitigate the penalty imposed. The defendant was fined the sum of $45,000 and ordered to pay the prosecutor's costs of $35,000 (at [49]-[53] and [60]-[62]); (k)Environment Protection Authority v Forgacs Engineering Pty Limited [2009] NSWLEC 64 concerned a failure by the defendant to prevent the emission of particles from a ship repair business in breach of its licence conditions. There was short term actual harm due to amenity impacts and potential ecological harm. The defendant pleaded guilty at the earliest opportunity and a number of other mitigating factors were present. The defendant was ordered to pay $45,000 to Newcastle City Council for an environmental improvement project. A publication order and costs order for the sum of $20,883 were also imposed (at [72]); (l)Environment Protection Authority v Coastal Recycled Cooking Oils Pty Limited [2008] NSWLEC 242 concerned a breach of a licence condition (failure to maintain) contrary to s 64(1) occasioned by the failure to close a lid on a storage tank releasing offensive odours from the tank. The release was for a limited duration and the environmental harm was found to be minimal. The defendant had no prior convictions and there were other mitigating factors present. The defendant was ordered to pay $18,000 towards a weed management project and to pay the prosecutor's costs of $13,000; (m)in Environment Protection Authority v Caltex Refineries (NSW) Pty Ltd [2008] NSWLEC 194, the defendant, contrary to s 64(1) of the Act, breached a licence condition to operate a plant and equipment in a proper and efficient manner, causing odours. There was no evidence of actual harm. The defendant received a substantial discount of 35% for mitigating factors which included an early guilty plea, cooperation with the prosecutor and demonstrated remorse. The objective circumstances such as the unforeseeable and unusual nature of the failure were also taken into account. The monetary penalty imposed was $78,000 and the defendant was ordered to pay the prosecutor's costs of approximately $48,000 (at [70]-[73]); (n)Environment Protection Authority v Caltex Refineries (NSW) Pty Ltd [2006] NSWLEC 335 concerned a breach of s 124(b) of the POEOA, which creates an offence where the operator of a plant and equipment fails to operate it in a proper and efficient manner causing air pollution. The defendant company pleaded guilty and was fined $77,000 (taking into account a 30% discount for mitigating factors). The maximum penalty at the time was $250,000. The defendant was also ordered to pay the prosecutor's costs of $81,311. The offence involved the spillage of a waste by-product that had a rotten egg odour and in turn caused black smoke to be emitted, inducing nausea, headaches and diarrhoea. The matter was overall of serious objective gravity albeit of short duration. The defendant had several prior convictions for environmental offences. However, the Court took into account mitigating factors including an early guilty plea, the defendant's quick response to minimise the harm caused, remorse, and cooperation with authorities (at [87] and [89]); (o)in Environment Protection Authority v Orica Australia Pty Ltd [2005] NSWLEC 621, Orica was convicted for a breach of licence condition contrary to s 64(1) of the POEOA. The maximum penalty at the time was $250,000. The condition imposed a discharge limit and the breach involved exceeding this limit by discharging wastewater containing 683kg of nitric acid into the Hunter River. There was no evidence of actual harm and the Court accepted that any potential harm would have been short term and localised. Mitigating factors included the defendant's guilty plea at the first opportunity, expression of remorse, cooperation with the prosecutor and good corporate character. This resulted in a total discount on the penalty of 30%. The defendant was fined $10,500, ordered to pay the prosecutor's costs and a publication order was made; and (p)finally, in Environment Protection Authority v Bluescope Steel (AIS), the defendant, contrary to s 64(1) of the Act, breached a licence condition to maintain a plant and equipment in a proper and efficient condition when it failed to maintain a circuit breaker and back up batteries in a proper condition, causing the emission of waste gas. The maximum penalty at that time for each offence was $250,000. There was no actual harm but the potential to cause harm. After applying a discount for mitigating factors that included an early guilty plea, expressions of remorse and cooperation with the prosecutor, the defendant was fined $70,000 and ordered to pay the prosecutor's costs (at [68]-[70]).

The Totality Principle 224The totality principle is a relevant consideration when determining an aggregate penalty in sentencing for multiple offences. In R v Holder; R v Johnston [1983] 3 NSWLR 245, Street CJ explained the application and policy underpinnings of the totality principle as follows (at 260B-E): The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straightforward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences. 225The High Court in Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 relied on the following passage from DA Thomas, Principles of Sentencing (2nd ed) (1979) at pp 56-57 (at 62 to 63 of Mill): "The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is 'just and appropriate'. The principle has been stated many times in various forms: 'when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong('); 'when ... cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences'." 226This was echoed by the High Court in Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616 (at [18]) and the Court of Criminal Appeal in R v MMK [2006] NSWCCA 272; (2006) 164 A Crim R 481 (at [11] and [13]). The task of the Court is to ensure that the overall sentence is neither too harsh nor too lenient. 227The principle will most often be invoked when an offender is being sentenced at the one time for multiple offences arising out of common or related criminal acts. However, the principle may still be applied when sentences are imposed at different times and even by different judges (R v MAK; R v MSK [2006] NSWCCA 381; (2006) 167 A Crim R 159 at [99] and Mill at 64). 228Care must nevertheless be taken "to ensure that any adjustment of individual sentences does not cause the aggregate sentence not to reflect the total criminality of the offender's conduct or the sentence for any individual offence to become disproportionate to the objective gravity of that offence" (Plath at [222]). The identified risk is that, if "sentences are reduced substantially, offenders may view that they can escape punishment for successive deliberate discrete offences" (Gittany at [199] and [201]; R v Harris [2007] NSWCCA 130; (2007) 171 A Crim R 267 at [46] and R v Wheeler [2000] NSWCCA 34 at [36]-[37]). That is to say, the application of the principle must not cause public confidence in the administration of justice to be undermined by any perception that "what is in effect being offered is some kind of discount for multiple offending" (R v MAK; R v MSK at [18]). 229As Sully J opined in Wheeler (at [36]-[37]): 36 The countervailing factor, no less legitimate, is the need to ensure public confidence in the administration of criminal justice; and, in particular, to ensure that there does not emerge in the community at large a perception that there is not all that much to choose between the person who commits one or two offences, and the person who commits six or seven offences, for the reason that somehow or other they all manage to finish up with effective sentences between or among which there is hardly anything in practical terms to choose. 37 It needs to be clearly understood by all concerned that a person who commits a deliberate series of discrete offences, - and the present applicant's case, is a good example of the kind, - he must not be left with the idea that by intoning references to the principle of totality as though it were some magic mantra, he can escape effective punishment for the offences which follow successively one upon another throughout the whole course of a studied and deliberate course of criminal behaviour.

[2005] HCA 25

[1998] HCA 57

[1991] HCA 31

(1993) 113 LGERA 357

(2006) 145 LGERA 234

(2001) 115 LGERA 304

(1993) 32 NSWLR 683

(2014) 199 LGERA 84

(2009) 168 LGERA 121

(2008) 163 LGERA 71

(2006) 148 LGERA 278

(2008) 163 LGERA 345