Environment Protection Authority v Pasminco Broken Hill Mine Pty Ltd

The Defendant has pleaded guilty to two separate charges of an offence against the Protection of the Environment Operations Act 1997, s 64(1) (PEO Act) in that on or about 31 August 2000 at Broken Hill it was the holder of a licence issued under that Act when a condition of that licence was contravened. By consent, the two charges have been heard together.

Section 64(1) of the PEO Act relevantly provides as follows: If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence. ………………… Maximum penalty (where it is an offence relating exclusively to noise): In the case of a Corporation - $60,000

According to the particulars endorsed upon the two summonses charging the offences, the Defendant at the relevant time was the holder of Environment Protection Licence No 2688 which includes the following condition: M7.1 . The Licensee, must in a manner acceptable to the EPA, continuously monitor the ground level vibration caused by blasting operations at the premises, at the following locations: (i) 9A Westside Drive Broken Hill (ii) Broken Hill Nursing Home, 1A Wentworth Road, Broken Hill (iii) 3 Creedon Street, Broken Hill; and (iv) 53 Rainbow Avenue, Broken Hill

The "premises" so referred to, are the Pasminco Broken Hill Mine Southern Operations, Eyre Street, Broken Hill.

The two separate contraventions of Condition M7.1 occurred on the same day (31 August 2000) at two of the aforesaid locations, namely (i) No 53 Rainbow Avenue, Broken Hill; and (ii) No 9A Westside Drive, Broken Hill. B. THE RELEVANT FACTS

According to the Statement of Agreed Facts (Exhibit 1), the Defendant conducted blasting operations at the premises on 31 August 2000 causing ground level vibrations in circumstances when the ground level vibration monitors installed at the locations known as No 53 Rainbow Avenue, Broken Hill and No 9A Westside Drive, Broken Hill were not operating. (The circumstances of the monitors not operating will be presently mentioned.)

Environment Protection Licence No 2688 (the Licence) authorises the carrying out of the following scheduled activities -

(i) crushing, grinding or separation works; (ii) mines; (iii) waste facilities environmentally sustainable landfill

at premises known as the "Pasminco Broken Hill Mine Southern Operations" being the area comprising Consolidated Mining Leases numbered 8, 9, 10, 11,12 and 13.

The Licence was issued subject to a large number of conditions which may be imposed pursuant to s 63(1) of the PEO Act. It is only necessary to note those conditions which are relevant to noise generated by the authorised mining activities. Condition L6 imposes the following "Noise Limits" L6.1 Ground vibration caused by blasting operations at the premises between 0630 hours and 2340 hours must not exceed a peak particle velocity of 10mm/s when measured at any at:-

(i) any noise sensitive location including residential premises, school or hospital or (ii) any ground vibration monitoring location specified in this licence.

L6.2 Ground vibration caused by blasting operations at the premises between 0630 hours and 2340 hours during any 12 month period, must not exceed a peak particle velocity of 5mm/s for more than 5% of the total number of blasts during any 12 month period when measured at:-

(i) any noise sensitive location including residential premises, school or hospital; or (ii) any ground vibration monitoring location specified in this licence. L6.3 Ground vibration caused by blasting operations at the premises between 0000 hours and 0630 hours, and between 2340 hours and 2400 hours must not exceed a peak particle velocity of 2mm/s, or 1mm/s for blasts greater than 5 seconds when measured at:-

(i) any noise sensitive location including residential premises, school or hospital; or (ii) any ground vibration monitoring location specified in this licence.

Relevant "Operation Conditions" of the Licence include the requirement that licensed activities be "carried out in a competent manner" (Condition 01.1) and that all plant and equipment installed at the premises be "maintained in a proper and efficient condition and be operated in a proper and efficient manner" (Condition 02.1). Condition 0.4.1 (dealing with noise emissions) provides as follows: Prior to an extensive blasting program being undertaken, pilot blasts must be conducted to assess the effect on sensitive areas such as residences, schools or hospitals.

"Monitoring and recording conditions" are contained in Condition M7.1 the contravention of which is the subject of the present two admitted charges.

An additional "noise monitoring" condition is imposed by Condition R5.1 which provides as follows: 5.1 The licensee must forward to the EPA, within 6 weeks from the end of each calendar quarter, a written report of all ground vibrations levels recorded at the monitoring locations referred to in this licence. This report must include:- (i) firing details for each blast that results in ground vibration being recorded, (ii) a blasting statement and wave form for any blast that exceeds the limits in this licence; and (iii) the reason why any monitoring equipment was not functioning as designed or outside the manufactures recommended calibration period, and the dates when this occurred.

It is to be noted that before 1 October 1996 the relevant Licence that was held by the Defendant under the Pollution Control Act 1970 (the predecessor to the PEO Act) did not contain any condition requiring the continuous monitoring at the closest residential premises or at specific locations of ground vibration from the Defendant's premises. On that day, the EPA varied the Licence conditions by imposing a condition requiring the continuous monitoring of ground vibration measured at the "closest residential premises" (This condition was the predecessor to Condition M7.1 the contravention of which is the subject matter of the present charges.)

The Defendant is the sole person currently undertaking mining of the Broken Hill ore body (zinc, lead and silver) known as the "Line of Lode" which commenced to be mined soon after the discovery of the deposits in 1883. The "Southern Operations" Mine has been continuously worked for more than a century and the Defendant has been involved in the undertaking since 1988.

The six consolidated mining leases (comprising the "premises" to which the Licence relates) held by the Defendant involve an area of some 40 square kilometres and include the "Town Lease" area of some four square kilometres located directly beneath the main business district of Broken Hill. At its deepest point, the mine reaches about 1100 m below the surface and there are some 90 kilometres of accessible areas.

The Defendant which currently employs 452 personnel at the Broken Hill mine was placed under voluntary administration in September 2001.

By Notice dated 15 September 2000 issued pursuant to the PEO Act, s 193, the EPA required the Defendant to provide information and records pertaining to the monitors maintained by the Defendant to monitor blast ground vibrations at the mine. On 21 September 2000, the Defendant provided written information to the EPA which stated that there were 5 separate ground vibration monitoring sites and that three of the monitors were operating so as to record the blast event that occurred on 31 August 2000 and that of these three, only the Creedon Street monitor recorded the event (and a printout of the waveform from that recording was attached).

In respect of the two monitors that were not operating on 31 August 2000, the information supplied to the EPA stated the following: · 9A Westside Drive is located in a residential part of the Mine lease near the Railwaytown area of Broken Hill. This monitor has been out of operation since late May due to a software problem causing memory breakdown. A spare monitor that was used as a temporary replacement also failed when heavy rain flooded the instrument in mid July causing electrical damage. Repairs to this monitor have been completed and it is expected to be re-established within the next working week. · 53 Rainbow Avenue is also located in a residential section of the Mine Lease. This monitor was not in operation at the time of the firing on the 31st August due to the power to the unoccupied residence being turned off. The monitor had been previously checked on the 21st August when it was found to be in working order and firing data from the previous month downloaded. This monitor has been re-set, power to the site re-established, and since that time has recorded ground vibration events.

Thereafter, on 18 October 2000, the EPA conducted a formal interview with representatives of the Defendant concerning the blast incident that occurred on 31 August 2000. In the course of that interview the question of non-compliance with Condition M7.1 of the Licence was discussed when the Defendant's representatives expressed their belief that the non-operation of two of the monitors on 31 August 2000 did not involve any contravention of the condition because the condition required the monitoring to be done "in a manner acceptable to the EPA". It was in response to this statement of belief that Mr Harvey, one of the EPA officers conducting the interview, interposed with the comment that it was not acceptable to the EPA if the monitors were not operating, whether or not the EPA had been notified of that fact.

It should be noted at this point that according to his affidavit sworn 23 May 2001 (Exhibit 3), Mr Harvey, when attending a meeting with the Defendant's Environment Superintendent on 27 July 2000, had been told by the latter that the monitor at Westside Drive was flooded and that the Defendant was "going to have to fix it up".

The fact that the Westside Drive monitor was not operating had also been disclosed in the reports scheduled by the Defendant to the EPA for the monitors of July, August and September 2000 as required by Condition R5.1 of the Licence (although the Reports did not state the reasons for the non-operation of the Monitor).

It was not until after the occurrence of incident, the subject of the present charges, that the EPA sought advice from the Defendant as to the meaning of the of the term "U/S" which had been noted in the said Reports. The Defendant thereupon advised that the term meant "unserviceable or not operating as expected".

Under cross-examination, Mr Harvey agreed (i) that when told on 27 July 2000 by the Defendant that the Westside Drive monitor was flooded, he had not given any instructions to the Defendant to have the monitor replaced; and (ii) that when he had stated at the interview with the Defendant's representatives that he had conducted on 18 October 2000 that it was not acceptable to the EPA for the monitors to be non-operational, that had been the first occasion that he had so informed the Defendant.

Following the interview with the Defendant, the EPA by letter dated 7 November 2000 sought further information from the Defendant concerning the blast incident that occurred on 31 August 2000. In responding to that letter, the Defendant also submitted a statement concerning the incident that it had prepared following the interview. That statement included the following content in respect of the Defendant's monitoring obligation pursuant to Condition M7.1 of the Licence: Monitoring during the Event Three of the five monitors were operating at the time of the Event. Two of the three operating monitors (Nursing Home & Kanandah Road) recorded no reading for the Event. They each have recorded vibration readings for subsequent underground firings. The third operational monitor, Creedon Street, was the monitor to record 10.4mm/sec. A full explanation has been given to the EPA in regard to the non-operational status of the other two monitors. In summary, the Rainbow Avenue monitor was not known to be non-operational due to the inadvertent (by a maintenance contractor) removal of the power supply to a vacant residence. The Westside Drive location had sustained two failed monitors in quick succession (one belonging to PBHM and one borrowed from the DMR as a replacement). All monitors were checked as part of the routine checks about ten days prior to the firing and the size of the intended blast was not considered to be any reason to change routine. Monitoring in a manner acceptable to the EPA. Prior to the issue being raised by the EPA in its interview with Mark Hine on 18 October 2000, PBHM believed that monitoring was being undertaken in a manner acceptable to the EPA for a number of reasons including: (a) The monitoring program has been in place for approximately 4 years and during that period PBHM has consistently discussed the program with the EPA in particular with the District Operations Officer responsible for the Site. The EPA has had input into the monitoring program, for example to vary the location of the monitors, and has never advised PBHM that its program was not acceptable to the EPA. (b) Monitoring results, together with the condition and operational status of the monitors at individual prescribed sites, are set out in monthly reports communicated to the EPA on a quarterly basis. No objection to the program has ever been received by PBHM in response to these communications. (c) The fact that the Westside Drive monitor was not operating was communicated to the EPA both verbally and in the monthly summary reports and no indication was received that this was not to the satisfaction of the EPA. (d) An annual environmental management review has been undertaken for at least 10 years by PBHM with EPA, DMR, Department of Land and Water Conservation, Broken Hill City Council and other interested organisations. No concerns about PBHM's monitoring program have been raised.

According to the evidence of Mr John Burgess, a long serving employee and currently employed by the Defendant as Manager Metallergy and Environment, the Defendant conducts annually at the Mine some 2000 blasts and 400 firings. Mr Burgess' affidavit evidence (Exhibit A) otherwise deposed to matters in mitigation of sentence which I shall presently consider. C. SENTENCE

Except for matters of mitigation (which are not in dispute and will be presently noted), the parties' submissions diverge on the question of the proper evaluation for sentencing purposes, of the gravity of the offences, with the Prosecutor submitting that the offences justify a penalty at the low to mid range of the overall spectrum of gravity for an offence against the PEO Act, s 64(1) and the Defendant submitting that the offences only justify a penalty at the very lowest end of that overall spectrum. This means that the competing submissions only diverge on a matter of degree and that divergence itself only encompasses a narrow band, ie "lowest" or low to mid-range" expressed as a matter of an adjectival appreciation of an appropriate penalty commensurate to the assessed gravity of the offences.

Subject to consideration of the prevailing range of penalties imposed for offences of the kind here involved in recognition of the sentencing principle of "even-handedness", the adjectival graduations within the overall spectrum of gravity adopted by the competing submissions adequately serve a legitimate sentencing purpose and cannot be improved upon by recourse to arithmetic assessment because that does not provide an appropriate sentencing criterion.

Underlying the competing adjectival assessments of the gravity of the present offences is the submission made by the Prosecutor (which is disputed by the Defendant) that the offences were committed in aggravating circumstances, namely that since the Defendant knew that the planned blasting undertaken on 31August 2000 was "a very large blast utilising a quantity of explosive greater than that employed in any previous explosion during the prior period of 12 months", (the Creedon Street monitor recorded the ground vibration generated having a peak particle velocity of 10.4 mm/second), the Defendant ought to have made sure that all ground vibration monitors were operational so as to record the ground vibration caused by that planned blasting event.

I have some difficulty in appreciating this submission. If the Prosecution case had been that the Defendant had deliberately brought about the circumstances that two of the four required monitors were not operating so as to mask or otherwise diminish or avoid the full and proper recording of the ground vibration caused by the planned blast, that circumstance would have created aggravated offences inasmuch as the commission of the offences would have had more serious consequences and the Defendant's culpability would have been the greater. However this was not the Prosecution case and on the facts, it could not have been since the Creedon Street monitor did record the ground vibration of the blast exceeding the limit imposed by Condition L 6.1 of the Licence and the other two operating monitors did not register the blast. Whether the blast would have been registered at the two monitors which were not operating, is an entirely speculative enquiry, upon which no evidence was adduced.

In these circumstances, I do not think that the Prosecutor has established a case of the commission of aggravated offences, bearing in mind that "a sentencing judge may not take facts into account in a way that is adverse to the interests of the accused unless those facts have been established beyond reasonable doubt": per R v Storey (1998) I VR 359 at 369 approved by the High Court of Australia in R v Olbrich (1999) 199 CLR 270 at 281.

For similar reasons (ie for want of proof) I do not accept the Prosecution submission that there was any culpability on the Defendant's part in conducting the blast activity on 31 August 2000 because it was influenced by the "financial incentive to avoid sterilising mineral deposits". There is nothing reprehensible per se in a commercial mining operator wishing to avoid the sterilisation of assets.

I have similar difficulty with the Prosecutor's submissions based upon the provisions of the PEO Act, s 241(1)(a), (b), and (c). Section 241 is in the following terms: 241. (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.

It is readily apparent that the factors stipulated in pars (a), (b) and (c) are commonly concerned with aspects of "harm" caused or likely to be caused to the environment". Despite this, the Prosecutor advanced a sophisticated argument that the offences admitted by the Defendant in the present case involved "the likelihood of harm being caused to the environment in the future". In this respect, the Prosecutor submitted that the failure of the two monitors to record the ground vibration caused by the blasting activity undertaken on 31 August 2000 "prevented the EPA, the public of Broken Hill, and most importantly the Defendant from knowing the intensity of the blast".

This submission does not take account of the fact that one of the operating monitors recorded the ground vibration caused by the blast and the two other operating monitors did not record the ground vibration so caused. Moreover, the submission simply does not make good its claim that the failure of operation of two of the monitors was itself the "cause of likely future environmental harm".

Although I have not accepted the Prosecutor's submissions that the admitted offences involve aggravating factors, I readily accept the Prosecutor's submission as to the importance of monitoring conditions of environmental protection licences granted under the PEO Act and of the monitoring condition contravened in the case of the Licence held by the Defendant. The PEO Act, s 66(1) enables conditions to be imposed requiring monitoring to be undertaken by the holder of a licence with respect to, inter alia: (a) (i) the operation or maintenance of premises or plant;

Subsection (2) prescribes the offence of supplying to the regulatory authority false or misleading information, with a maximum penalty far greater than the maximum penalty for the offences admitted by the Defendant in the present case. Subsection (5) provides that information so supplied to a regulatory authority is admissible in evidence in any prosecution brought against the licence holder for an offence against the Act.

In accepting the Prosecutor's submission as to the importance of a monitoring condition such as that contained in Condition M7.1 of the Licence, I reject the Defendant's competing submission that the offences involved an "administrative" type breach of statutory obligation. I am satisfied beyond reasonable doubt that Condition M7.1 and Condition R5.1, do not impose administrative type obligations on the licence holder. Rather, they impose substantive obligations of a significant nature inasmuch as monitoring and reporting serve the important twin functions of self-regulation and full disclosure to the regulatory authority of the results of the requisite monitoring.

I readily accept that conditions imposed upon an environment protection licence potentially cover a wide range of obligations imposed upon the licence holder. Within that overall range monitoring and reporting obligations are in principle important obligations, albeit generally being of an auxiliary or subordinate nature to a primary obligation eg to observe pollution limits fixed by the licence, as is attested by the provisions of the Licence in the present case where Conditions L6.1, 6.2 and 6.3 prescribe noise limits (ground vibration caused by blasting) and Conditions M7.1 and R5.1 impose monitoring and reporting obligations in respect of such blasting activities.

Having regard to the objective gravity of the admitted offences, including the nature of the particular condition of Licence that was contravened, and to the Defendant's subjective culpability in the commission of the offences, I would regard the offences as falling within the lower end of the overall spectrum of gravity of the offence created by the PEO Act, s 64(1).

The Defendant's culpability, I think, is mitigated by its belief that the monitoring Condition was being observed in a manner that was satisfactory to the EPA, even in circumstances where the Defendant knew that the Westside Drive Monitor had not been operating since April 2000 and had revealed that fact to the EPA both orally in the remarks made to Mr Harvey in July 2000 and in its reports submitted to the EPA conformably to Condition R5.1.

That mitigation of culpability did not wholly excuse the Defendant from its statutory obligations, but the belief was reasonably founded and it was not until after the offences were committed and the matter had come up in the interview with the EPA that Mr Harvey had stated that the arrangement was not satisfactory to the EPA.

However, the mitigating effects of the Defendant's belief and the lack of enforcement action by the EPA cannot be extended to the offence committed in respect of the Rainbow Avenue monitor. In this case, the Defendant's explanation of why that monitor was not operational bespeaks an altogether too casual approach to the observance of its obligation under Condition M7.1.

In respect of the failure of that monitor I would regard the Defendant's culpability as being significant. The matter was clearly within its control. It was at the very least, negligent, in failing to ensure that the monitor was operational on the date of the offences, especially in the light of its knowledge that the Westside Drive monitor had not been operating since April 2000.

In all of the circumstances, I would assess the gravity of the offence in respect of the Westside Drive monitor as warranting a penalty of some 10 per cent of the maximum penalty and the gravity of the offence in respect of the Rainbow Avenue monitor as warranting a penalty of some 20 per cent of the maximum penalty.

However, each of these penalties needs to be significantly reduced to reflect the relevant mitigating factors which can be summarised as follows -

(i) the Defendant's prior excellent environmental record since being involved in the mining activity in 1988 with only one penalty notice issued in 1999 for an offence against the Pollution Control Act imposing a penalty of $500 ;

(ii) the post offence improvements voluntarily made to the monitoring system by the Defendant at a cost of some $50,000 which will avoid the recurrence of the circumstances which gave rise to the present offences;

(iii) the contrition expressed by the Defendant for the offences;

(iv) the entire co-operation by the Defendant with the EPA investigations into the incident;

(v) the Defendant's significant employment presence in Broken Hill;

(vi) the Defendant's commitment to environmental responsibility in undertaking mining;

(vii) the fact that the Defendant is currently placed in voluntary administration; (viii) the entry of pleas of guilty to both charges at the first opportunity and the co-operation with the Prosecutor in efficiently presenting the case to the Court; and

(ix) the application of the sentencing principle of totality given that both offences involve the same offence committed at the same time in the course of a common blasting event.

Taking all these mitigating factors into consideration, an overall reduction in penalty for each offence in the order of 40 per cent is considered appropriate.

Applying this reduction factor produces a penalty of $3,600 and a penalty of $7,200 for the respective offences. D. CONCLUSIONS AND ORDERS

1. The Defendant is convicted of each offence as charged.

2. In respect of proceedings No 50084 of 2001 a penalty of $3,600 is imposed in respect of the conviction.

3. In respect of proceedings No 50085 of 2001 a penalty of $7,200 is imposed in respect of the conviction.

4. The Defendant shall pay the Prosecutor's costs as determined in accordance with the Land and Environment Court Act 1979, s 52(2).
5. Exhibits to remain on the Court file.

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