Environment Protection Authority v Ramsey Food Processing Pty Ltd

SOLICITORS Environment Protection Authority LEGAL REPRESENTATIVES: DEFENDANT Mr P. O'Connor (Barrister)

SOLICITORS Hannigans Solicitors

JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 50093 of 2002

28/04/2003 ENVIRONMENTAL PROTECTION AUTHORITY Applicant v RAMSEY FOOD PROCESSING PTY LTD Defendant Judgment

1 By summons dated 27 September 2002 the Environmental Protection Authority ("the EPA") charges Ramsey Food Processing Pty Ltd ("the defendant") with an offence committed against s 120(2) of the Protection of the Environment Operations Act 1997 ("the POEO Act"). Such charge alleges that on or about 3 October 2001 the defendant caused waters to be polluted when a pipeline comprising part of the defendant's wastewater treatment system failed. 2 Initially these were defended proceedings but on the second day of the contested hearing the defendant changed its plea to guilty. Accordingly the Court is only required to determine the appropriate penalty.

3 Section 120 of the POEO Act provides:- (1) A person who pollutes any waters is guilty of an offence. (2) In this section: pollute waters includes cause or permit any waters to be polluted. 4 The Court notes that no offence arises under s 120(2) of the POEO Act. The offence is created by s 120(1) of such Act. In Environmental Protection Authority v TransGrid [2003] NSWLEC 18 at par 2 Lloyd J drew attention to a similar misdescription of the offence. Neither in TransGrid nor in these proceedings did the defendant challenge the validity of the charge. Accordingly the Court will assess the penalty on the basis that the charge is correctly laid pursuant to s 120(1) of the POEO Act. The defendant's operations

5 The defendant operates an abattoir ("the abattoir") at Armidale Road, South Grafton and has owned the abattoir since June 1998. The defendant's business is animal slaughtering, processing livestock and rendering or fat extraction. 6 Wastewater is generated from the operations of the abattoir and is likely to contain animal matter including manure; urine; fat, oil, or grease; matter that causes biochemical oxygen demand; matter that causes chemical oxygen demand; liquid that contains suspended solids; matter that contains faecal solids; matter that contains faecal coliforms; matter that contains faecal streptococci; matter that has a pH value of 6.2 to 6.3; matter that contains nitrogen compounds; and matter that contains phosphorous compounds. 7 Such wastewater is collected in a sump, the "save-all", located on the eastern bank of the Musk Valley Creek ("the creek") which runs beside the abattoir. The wastewater is screened to remove any large objects and fat before being pumped from the sump to a flotation tank. From the flotation tank the wastewater is pumped through an underground pipe ("the pipeline") to a series of anaerobic and aerobic dams located west of the creek. 8 At the eastern bank of the creek bank the pipeline emerges from ground level and traverses the creek. The pipeline re-enters the ground on the western bank where stop valves are located, and conveys the wastewater towards the wastewater storage and irrigation area associated with the abattoir. Wastewater was discharged ("the effluent") from the pipeline when it fractured. It is evident that such wastewater contained effluent as found in the creek. 9 At the time of the offence the defendant held an environment protection licence pursuant to the POEO Act. The licence is administered by the EPA. The defendant is required to submit an annual return to the EPA as part of its obligations under the licence which, inter alia, outlines the defendant's compliance with the licence conditions.

The offence 10 The reference to "pollute" and "polluted" in s 120 of the POEO Act can be identified with the definition of "water pollution" or "pollution of waters" found in the dictionary to such Act (see Talbot J in Environment Protection Authority v Brazel (2002) 119 LGERA 72 at p 81). "Water pollution" is defined broadly in the dictionary to the POEO Act as follows:- water pollution or pollution of waters means

(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, or (b) placing in or on, or otherwise introducing into or onto, the waters (whether through an act or omission) any refuse, litter, debris or other matter, whether solid or liquid or gaseous, so that the change in the condition of the waters or the refuse, litter, debris or other matter, either alone or together with any other refuse, litter, debris or matter present in the waters makes, or is likely to make, the waters unclean, noxious, poisonous or impure, detrimental to the health, safety, welfare or property of persons, undrinkable for farm animals, poisonous or harmful to aquatic life, animals, birds or fish in or around the waters or unsuitable for use in irrigation, or obstructs or interferes with, or is likely to obstruct or interfere with persons in the exercise or enjoyment of any right in relation to the waters, or (c) placing in or on, or otherwise introducing into or onto, the waters (whether through an act or omission) any matter, whether solid, liquid or gaseous, that is of a prescribed nature, description or class or that does not comply with any standard prescribed in respect of that matter, 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.

11 The defendant's guilty plea signifies that the essential elements of the offence under s 120 of the POEO Act are satisfied (see Regina v O'Neill [1979] 2 NSWLR 582 at p 588). Investigation of the offence by the EPA

12 Environmental Protection Officers, Peter Lynch and Robyn Smith, and Craig Lamberton, the EPA Director for Coastal Regions, attended the abattoir on 3 and 4 October 2001 to investigate the offence. The following observations were made by them:- (i) At the western perimeter of the abattoir, the waters in the creek were discoloured and the surface of the creek had extensive coverage of green algae. (ii) On the western bank of the creek pools of brown, putrid smelling liquid radiating out from the pipeline were observed where the pipeline entered the ground. The effluent from the pipeline " was following a descending trail into the creek." (see affidavit of Craig Lamberton sworn 10 May 2002). Slit fences made of shade cloth material were in the trailing path of this liquid and "retained large quantities of grey sludge." (see affidavit of Craig Lamberton sworn 10 May 2002). The effluent was not actually observed flowing into the creek by the EPA officers but it was noted that the effluent " had moved both through, over and around those slit fences and on down to the edge of the Creek" and that some of the effluent "had entered the Creek below the path leading down past the slit fences." (see affidavit of Robyn Smith sworn 13 March 2002). (iii) Fat and other material was seen floating on the surface of the creek downstream. (iv) A dead cow was located on the eastern bank of the creek " in the mouth of the concrete stormwater pipe leading from the premises." (see affidavit of Craig Lamberton sworn 10 May 2002). The state of decomposition of the cow indicated its presence for a significant period of time. 13 The EPA officers took samples from various points along the creek. Samples were taken near the stop valves, at a point immediately adjacent to entry of the effluent into the creek and at a location 10 metres upstream. 14 EPA officers returned to the abattoir on 4 October 2001. Robyn Smith and Ian Greenbank, a Senior Regional Operations Officer in the North Coast Region, met with Mrs Renee Park (nee Mortimer), an employee of the defendant, Mr Terry Brown of Rural Irrigation Supplies and Mr Max Murray, apparently another employee of the defendant. 15 Mr Brown had attended at the abattoir in response to a request that urgent repairs were needed to rectify a break in the pipeline. In his affidavit Mr Brown deposed:- "The break was in the junction point where the wastewater pipeline crosses over the Creek and heads up the hill towards the effluent treatment ponds." 16 The EPA officers observed that there were "hundreds of cudgeons" (see affidavit of Robyn Smith sworn 13 March 2002) present in the creek 50 metres upstream from the point at which the effluent entered the creek. The waters of the creek gave the appearance of being anaerobic at a point 150 metres downstream from the pipeline crossing. Moreover no signs of aquatic life were noticed and bubbles were seen coming up from the surface of the creek suggesting that the material in the creek "was fermenting or rotting and releasing a gas." (see affidavit of Robyn Smith sworn 13 March 2002). 17 During their inquiries, the EPA officers became aware of an incident which had occurred 18 months earlier when pumps had been used to remove pollution from the creek. The break in the pipeline was in a different location to the fracture relating to the present offence.

18 The EPA received a written report from the defendant dated 1 November 2001 which provided details of the incident. The report provided information of the remedial action taken by the defendant following the discharge of the effluent and stated as follows:- The company, to eliminate any pollution of the waterway, pumped dry the water hole at the point below the joiner and the next two water holes along the creek. The creek bank was scraped clean. This left the bank naked of vegetation. To restore the vegetation, grass seeds were planted and slit fences erected.

The report concluded:- The layout of the existing pipelines is being reviewed with the intent of modification to eliminate any re-occurrence of a similar situation. Seriousness of the offence 19 Section 241(1) of the POEO Act requires the Court to assess specified matters when imposing a penalty for an offence against the POEO Act. Such considerations enable the Court to determine the seriousness of the offence (see Kirby P in Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at pp 699-700). The Court will deal with each consideration in turn except for s 241(1)(e) which is not relevant in these proceedings. 20 The Court is mindful that it must not be persuaded by facts that are "adverse to the interests of the accused unless those facts have been established beyond reasonable doubt" (see R v Storey [1998] 1 VR 359 per Winneke P, Brooking, Hayne, Callaway JJA and Southwell AJA at p 369). Conversely if there is evidence that would favour the defendant the standard of proof is to be assessed upon the balance of probabilities (see Storey p 369; R v Olbrich (1999) 199 CLR 270 per Gleeson CJ, Gaudron, Hayne and Callinan JJ at p 281).

21 Section 241(1)(a) of the POEO Act provides that the Court must consider:- (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence,

" Harm" is defined in the dictionary to the POEO Act as follows:- harm to the environment includes 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. 22 The word "likely" in the context of water pollution has been held to mean "a real or not remote chance or possibility regardless of whether it is less or more than a fifty per cent chance" (see Mathews v Goulburn Wool Processors Pty Limited (Smart J, Supreme Court NSW, 6 November 1986, unreported at p 15)) and has been adopted in recent decisions including Environment Protection Authority v Anning (1998) 100 LGERA 354 at p 359 and Brazel at p 83. The same meaning should be given to the use of the word "likely" in s 241 (see Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66 at par 44.) 23 The results of the 8 water samples collected by the EPA officers on 3 and 4 October 2001 are summarised in the affidavit of Penelope Ajani, an environmental scientist employed by the EPA. Ms Ajani's evidence indicates the type of harm "likely to be caused". At par 32 she stated:- These results indicate that organic material was present in the discharge entering Musk Valley Creek and in my opinion would most likely cause depletion of dissolved oxygen, which may lead to potential asphyxiation of respiring animals such as fish or eels. It may also lead to the death of macrophytes (plants living in the water). In the end, the water body may become largely anaerobic with no capacity to support aquatic organisms.

Further at par 45 Ms Ajani deposed:- These results show that the discharge dramatically increased the TSS concentration in the Creek, which means that the discharge may have reduced biological activity due to smothering of bottom dwelling organisms and aquatic plants, possible clogging of fish gills as well as decreasing the aesthetic value of the waterbody.

24 The conclusion of Ms Ajani's affidavit further demonstrates that harm was likely to be caused to the environment by the effluent discharge. Ms Ajani deposed:- The concentrations of oxygen demanding materials, total suspended solids and nutrients at the point of effluent discharge at the premises were above the ANZECC (2000) guidelines or other indicative values for the protection of aquatic ecosystems. The BOD/COD levels determined for the samples collected at the point of discharge and below the discharge are significantly in excess of those found in raw effluent or waters receiving effluent. Ultimately, this kind of discharge could result in anaerobic conditions, loss of aquatic life and a strong offensive odour. Similarly, the TSS concentrations at the point of discharge or below the discharge, coupled with the high levels of grease and oil, would reduce the visual clarity and light penetration in the creek therefore reducing photosynthesis and primary production, the basis of many aquatic food chains. In addition, the high ammonia concentrations as measured at the point of discharge would most likely cause death to a range of aquatic organisms (depending on the duration of exposure). Overall these concentrations would mostly likely [sic] an environmental effect on the water quality, and consequently the aquatic flora and fauna in the receiving waterway. The seriousness of the environmental effect from this wastewater would be proportional to the quantity and duration of the discharge. Ms Ajani's evidence establishes that there was contamination of creek waters caused by the effluent which had "the effect of degrading the environment" and that potential harm to the environment was caused . 25 The Court accepts the defendant's submissions that the "extent" of the likely harm was contained to the defendant's premises. Furthermore the concentration of the effluent was diminishing at a distance of approximately 450 metres from the discharge point. The creek was not flowing at the date of the offence and any likely harm to marine life in the creek was substantially curtailed to the ponds in the vicinity of the abattoir. The defendant's remedial measures further reduced harm and lessened the impact of the effluent. Measures to prevent, control abate or mitigate that harm: s 241(1)(b) 26 The Court is obliged under s 241(1)(b) to consider:- (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm. 27 The defendant had no reliable system of regular inspection of its wastewater system. The defendant relied upon the farm manager, Mr Nowlan, to make general observations of the pipeline, but he was not required to report to management. The EPA submits that if a more defined system had existed the fracture of the pipeline would have become more readily apparent. 28 As a result of the prior incident the defendant should have been aware that surveillance of the pipeline was needed to avoid environmental harm. The evidence does not reveal that anything significantly changed in the defendant's surveillance system since April 2000. The precaution of observing the pipeline on a reasonably regular basis should have been taken. Reasonable foreseeability: s 241(1)(c) 29 Section 241(1)(c) requires the Court to consider: (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

30 The previous fracture in the pipeline occurred in similar circumstances to the present. Mr Brown repaired the defect in April 2000 and his inspection of the pipeline on 4 October 2001 revealed that the centrepiece of the joiner, which joined two sections of the 150 millimetre PVC pipeline, had cracked. The joiner was tendered as an exhibit in the proceedings and was described by Mr Brown as being made of cast aluminium with a centre of PVC. Mr Brown could offer no explanation for his failure other than the excessively dry weather. He said that that the joiner he fitted was the most suitable component available. 31 The effluent was a highly contaminated. It was reasonably foreseeable that a crack in the pipeline proximate to the creek would result in discharge into the creek and be likely to cause environmental harm. Control over the causes of the water pollution: s 241(1)(d) 32 Section 241(1)(d) provides that the Court is required to decide upon:- (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence 33 The defendant plainly had control of the pipeline. The pipeline comprised part of the essential components of the abattoir's wastewater treatment system for which the defendant was responsible. The Court accepts that the joiner cracked due to weather conditions, and was a factor beyond its control. Evidence mitigating the seriousness of the offence

Section 241(2) of the POEO Act empowers the Court may take into account other considerations it regards as relevant to the assessment of penalty.

Guilty Plea 34 The defendant changed its plea from not guilty to guilty during the second day of the hearing. Section 22 of the Crimes (Sentencing Procedure) Act 1999 provides that the Court must take into account the defendant's guilty plea when determining penalty. The Court of Criminal Appeal also observed in R v Thomson; R v Houlton (2000) 49 NSWLR 383 that such a plea warrants a reduction in penalty. It remains a matter for the Court's discretion to determine whether the penalty should be mitigated by the guilty plea. It is not mandatory to exercise "a discretion to provide a given reduction in sentence for a plea of guilty." (see Cameron v R (2002) 76 ALJR 382 per Kirby J at p 393).

35 Gaudron, Gummow and Callinan JJ in Cameron acknowledged that a plea of guilty is relevant to mitigation of penalty and stated at p 384:- It should at once be noted that remorse is not necessarily the only subjective matter revealed by a plea of guilty. The plea may also indicate acceptance of responsibility and a willingness to facilitate the course of justice. 36 The timing of the plea has a significant bearing upon the amount of discount to be in recognition of the guilty plea from the defendant's penalty (see Thomson per Spigelman CJ at p 418). Kirby J confirmed such principle in Cameron wherein His Honour stated at p 394:- In many cases such feelings of repentance will continue and manifest themselves in an early plea of guilty that is adhered to at the trial. Obviously, the timing of any plea has a large bearing on the credit that should be given to the prisoner [R v Holder [1983] 3 NSWLR 245; R v Bulger [1990] 2 Qd R 559]. A plea of guilty at the last moment (as on the day set down for trial) will ordinarily attract a smaller discount in sentence than one that is entered at the first reasonable opportunity [cf Dodge (1988) 34 A Crim R 325 at 331; Heferen (1999) 106 A Crim R 89 at 92 [12]; R v Thomson (2000) 49 NSWLR 383 at 414-15 [132]; 115 A Crim R 104 at 134]. But even a belated plea will normally attract a discount. 37 The Court is unable to accept any element of contrition in view of such a late plea of guilty sufficient to warrant a significant discount of the penalty. The defendant's late guilty plea is also of little utilitarian value. Spigelman CJ stated in Thomson at p 415 that the rationale for reducing the penalty from a utilitarian perspective is to save "…considerable expenditure…incurred by the prosecution and the defence in preparing the case…" in addition to preparing witnesses, and court and judicial resources. In this instance, the costs and time necessarily incurred by the prosecutor in proving the offence had already been incurred prior to the change of plea to guilty. 38 Spigelman CJ in Thomson held at p 418 that the appropriate range for a discount for a plea of guilty is from 10 to 25 per cent. The Court will grant the defendant a 10 per cent discount of the penalty in recognition of the plea of guilty.

Defendant's expenditure to prevent pollution 39 The defendant adduced evidence that it has incurred expenditure of approximately $400,000 in the installation of appropriate equipment designed to prevent pollution since acquiring the abattoir in 1998. The Court is conscious that environmental precautions may be costly, but such costs are essential if the defendant wishes to operate its business. The defendant's expenditure was necessary to fulfil its environmental obligations arising from the operation of the abattoir. In 1993 Mahoney JA stated in Axer Pty Limited v Environment Protection Authority (2001) 113 LGERA 357 at p 359:- The cost of precautions to avoid pollution will no doubt become accepted, in due course, as an ordinary cost of operating in an industry where, absent precautions, pollution may occur.

40 In Camilleri's Stock Feeds and Environmental Protection Authority v Timber Industries Ltd [2000] NSWLEC 39 the Court held that expenditure towards remediation of environmental damage caused by the offences was a mitigating factor. In this instance the defendant has not provided evidence of any expenditure incurred following the offence. That is, it cannot be said that "the defendant's hip pocket nerve has already been touched by this incident" (see Timber Industries at par 31). Accordingly the Court does not consider that such expenditure qualifies as a mitigating factor relevant to penalty. Reliance upon advice of third parties 41 The defendant submitted that it relied upon the advice of competent third parties to maintain the pipeline, and that it was dependent upon Mr Brown to effect repairs. Mr Brown testified that he would have expected the joiner which he installed in April 2000 to remain serviceable indefinitely. The defendant submits that on this basis that it is not guilty of any negligence which resulted in this charge. 42 The offence pursuant to s 120(1) of the POEO Act is one of strict liability: Woodward (for and on behalf of the State Pollution Control Commission of New South Wales) v Cleary Brothers (Bombo) Pty Ltd (1984) 54 LGRA 409 per Cripps J at 413; Pace Farm Egg Products at par 56. In State Pollution Control Commission v Tiger Nominees Pty Ltd and Another (1991) 72 LGRA 337 at p 342 Hemmings J (referring to s 16 of the repealed Clean Waters Act 1970 which is now embodied s 120 of the POEO Act) said:- It is well-established that s 16 creates an offence of strict liability in respect of which mens rea, knowledge or negligence are not ingredients. Accordingly the issue of negligence is not an element of the offence, and is irrelevant. 43 In matters involving strict liability offences it is pertinent for the Court to consider whether the defendant could have prevented the offence. That is, could the defendant have done something "directly or indirectly, by supervision or inspection, by improvement of his business methods or by exhorting those whom he may be expected to influence or control…" to avert the offence (see the judgment in Lim Chin Aik v The Queen [1963] AC 160 delivered by Lord Evershed at p 174). The rationale was explained by Spigelman CJ in Thorneloe v Filipowski (2001) 52 NSWLR 60 at pp 74-75:- Even in the case of an offence of strict liability, no pubic purpose is served by recording a conviction or imposing a penalty in circumstances where the relevant accused could not, as a matter of practical reality, have done something to ensure that the offence or, in the case of a result offence, the adverse consequences of the conduct, did not occur.

The Court is satisfied that the defendant could have taken measures to avoid this offence.

44 The defendant's failure to implement a system of surveillance of the pipeline following the April 2000 constitutes a serious shortcoming in the defendant's environmental management procedures. The inference can be drawn that the discharge had continued for several days without detection. A system of observation of the wastewater treatment system was required. 45 The maximum penalty for the offence is $250,000 in respect of a corporation (s 123 of the POEO Act). The Court has considered the submissions of the defendant that the gravity of the offence warrants a penalty in the lower range. Environmental harm was contained and the defendant acted promptly by taking remedial action. But for these facts the Court would have imposed a heavy penalty. 46 Having regard to the principle of "even-handedness" as explained by Kirby P in Camilleri's Stock Feeds at pp 701-702, the range of penalties imposed by the Court in offences with a similar degree of gravity lie between 10 to 30 per cent of the maximum penalty. In view of all the above considerations the appropriate penalty including the reduction granted for the plea of guilty, is $33,750 which lies in the low to middle range. Orders 47 The EPA submitted that orders be made in addition to a penalty under s 245(c) of the POEO Act to "prevent the continuance or recurrence of the offence". The EPA requested that orders be made requiring the defendant to submit a specification for the operation of the defendant's waste disposal system. Such request is necessary in view of the two failures which have occurred at the abattoir, and will make such orders.

1. The defendant is convicted of the offence under s 120(1) of the Protection of the Environment Operations Act 1997.
2. The defendant is fined $33,750.

3. Within two calendar months from the judgment date the defendant must submit a document in writing to the Environment Protection Authority at Grafton specifying: (a) The system current as at the judgment date for inspection of the effluent treatment system at the Ramsey Food Processing Pty Limited premises at South Grafton; (b) The means by which such system is maintained and the procedures for the recording of incidents which are likely to cause or have caused water pollution as defined by the Protection of the Environment Operations Act 1997.

4. The defendant pay the prosecutor's costs.
5. The exhibits be returned.

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