Environment Protection Authority v Ravensworth Operations Pty Limited

Yang v R [2012] NSWCCA 49 Texts Cited: Sentencing Bench Book, Judicial Commission of NSW Category: Sentence Parties: Environment Protection Authority (Prosecutor) Ravensworth Operations Pty Limited (Defendant) Representation: Mr P Barley (solicitor) (Prosecutor) Mr T Howard (Defendant) Department of Premier and Cabinet, Office of Environment and Heritage (Prosecutor) McCullough Robertson Lawyers (Defendant) File Number(s): 50196 of 2012

Judgment 1Ravensworth Operations Pty Limited (the Defendant) is charged under s 120 of the Protection of the Environment Operations Act 1997 (the PEO Act) that at or near Ravensworth in NSW, it polluted waters, namely Bowmans Creek by causing sediment laden waters to flow through a pipe installed through sediment control structures along a gully and into the Creek. The Defendant was the occupier (within the meaning of s 257 of the PEO Act) of the premises from which pollution occurred. 2The Defendant has pleaded guilty and has therefore admitted the essential elements of this offence. The offence is one of strict liability so that mens rea is not an element of the offence. It is necessary to sentence the Defendant for the offence. The maximum penalty applicable to offences under s 120(1) of the PEO Act is $1M for a corporation. The penalty for this offence was increased to $1M from $250,000 in May 2006. 3The PEO Act is directed to the protection, restoration and enhancement of the environment of NSW including by reducing harm to the environment through pollution prevention (s 3).

Background 4A Statement of Agreed Facts (SOAF) was tendered and states as follows:

1. Ravensworth Operations Pty Limited (Ravensworth) is wholly owned and managed by Xstrata Coal. At the date of the offence, Ravensworth operated two open cut mines at Singleton in the Hunter Valley of New South Wales, namely the Narama mine and the Ravensworth West mine
2. Ravensworth holds an Environment Protection Licence (EPL) number 2652 under the Protection of the Environment Operations Act 1997 (the Act) which permits mining for coal and coal works at the Ravensworth/Narama mine.
3. Relevantly, the EPL allows Ravensworth to discharge the pollutant "Total Suspended Solids" (TSS) into Bowmans Creek at one discharge point. (This is not the point at which the discharge the subject of these proceedings occurred.) The allowable concentration of the TSS discharge is 120 milligrams per litre. This discharge is further regulated under the Hunter River Salinity Trading Scheme. ... Circumstances of the offence
4. Relevant personnel at the time included: Graham Saggus - excavator operator - contractor Greg Newton - Environment and Community Coordinator Tony Morris - Operations Manager Ben Seaborn - Environment and Community Manager Martin Vallender - Mine Manager Neil Clifford - Mining Superintendent Steve Morrison - environmental field officer - contractor.
5. Ravensworth is expanding the open cut mining area at the Narama mine. In order to do this about 30 centimetres of topsoil was stripped off an area of about 45 hectares. In order to undertake this safely, an internal document called a Ground Disturbance Permit (the Permit) was created. This is a seven page form with accompanying plans ... Relevantly the form acknowledges the fact that there is a water course in the vicinity of the works.
6. Running from the 45 hectare area that was cleared is a drain that diverted what would have been clean water (prior to the clearing) direct towards Bowmans Creek (the Clean Water Diversion Drain).
7. In addition to the Permit, a sediment and erosion control plan was developed in accordance with the 'Blue Book' - Managing Urban Stormwater: Soils and Construction. One means of preventing sediment laden runoff reaching watercourses, in particular Bowmans Creek, was for sediment laden runoff that ran down the Clean Water Diversion Drain to be directed to a large collection dam, known as the '1000ML dam'. Run off was to be diverted from the Clean Water Diversion Drain by placing an earthen blockage in the drain and removing a section of its north wall allowing the waters to be channelled beside a bank and into the 1000 ML dam, creating a dirty water diversion drain.

Post discovery activity 21. On Friday 18 March 2011 some further water samples were taken by Ravensworth. These samples were sent to Steel River Testing laboratory on the same day. The results were received by Ravensworth on 24 March 2011. The water samples taken on 18 March 2011 showed that the day after the discharge occurred the following levels of TSS were recorded: Pollutant 18/03/2011 Bowmans upstream Bowmans downstream Oaklands Pump Station, Hunter River TSS milligrams per litre 56 (note this sample was taken significantly further upstream than the upstream samples taken on 17/03/11 and 19/03/11) 111 54

22. The sample points are shown on [a] plan ...
23. On Friday 18 March 2011 at about 6.15 pm, Mr Seaborn reported the incident to the EPA's Environment Line to the following effect: 'an unauthorised discharge of surface water was occurring. Flowing into Bowmans Creek. Rectified immediately.'
24. On 19 March 2011, EPA officers, Mr Clair and Mr Jamieson, attended the site.
25. The EPA officers took more samples. The location of these samples is shown in [a] plan ... The results of these samples were as follows: Pollutant Bowmans upstream Runoff down- gradient of pipe Bowmans downstream TSS milligrams per litre 9 190 32 EPA 19/03/11

26. Ravensworth prepared an Incident Cause Analysis Method report on 23 March 2011, ....
27. This incident report identifies that sediment laden water was released into Bowmans Creek through a poly pipe which had been placed through the base of the earthen blockage. The incident report states that the poly pipe allowed the direct flow of water offsite. The incident report also states that the installation of the pipe was not part of the Erosion and Sediment Control Plan that had been developed by Ravensworth for the works and that it was installed in error.
28. The incident report sets out that there were a number of factors that contributed to the erroneous installation of the poly pipe through the diversion bank. These are set out at page 4 of the incident report to include the following: · confusion as to the status of the diversion drain · communication confusion between excavator operator and Task Coordinator · poor understanding of Task Coordinator as to the objectives for the erosion and sediment control plan · not following the sediment erosion and control plan · not following Work Authorisation/ Ground Disturbance permit process.

Environmental harm 5The Prosecutor read the affidavit of Dr Ling, senior environmental scientist, Office of Environment and Heritage, dated 21 February 2012. Dr Ling has expertise in wetland ecology including monitoring and assessment of wetlands using aquatic macroinvertebrates and plants. Her expertise does not extend to fish sensitivities to fine sediments. Dr Ling was asked in August 2011 to provide her expert opinion on the environmental impacts of the discharge of approximately 1 - 2ML of sediment laden water from erosion and sediment control structures on the Ravensworth property into Bowmans Creek. Dr Ling did not attend the property and relied on a sample taken by officers of the Office of Environment and Heritage on 19 March 2011, a report by the Defendant dated 24 March 2011, and photographs taken at the property. Dr Ling states that the analysis of water samples suggests that there was significant unnatural discharge of sediment. 6Dr Ling did not believe that any samples were taken or data recorded about any impact of the discharge on the flora or fauna of the site. After investigating the Office of Environment and Heritage's databases and conducting a literature search of ecological studies, Dr Ling compiled a list of potential aquatic flora and fauna recorded in the vicinity of Bowmans Creek. No species of fish or aquatic macroinvertebrates listed under the Fisheries Management Act 1994 or the Environment Protection and Biodiversity Conservation Act 1999 (Cth) were recorded. 7Attached to Dr Ling's affidavit is a table of macroinvertebrates and aquatic vegetation that would have been most affected by the discharge in her opinion. She identified the immediate potential impacts of fine sediment on aquatic flora and fauna. The fine sediment would result in reduced light and subsequently reduced photosynthesis for any submerged vegetation. If the increase in turbidity was only for a short period, with follow-up flushing of the sediment with freshwater, the effect on submerged vegetation would have been minimal. If the affected area was not flushed with fresh water, the smothered flora and fauna would have started to decompose, seriously affecting water quality. The fine sediment may have smothered and killed, or affected the ability of many macroinvertebrates to uptake oxygen. The short and long term effects of the sediment on macroinvertebrates depends on the follow-up flushing and the duration the fine sediment was in the water. Animals such as fish and turtles may have been affected by the reduction in abundance of their food source. Native fish may have had difficulty breathing with suspended solids in the water column. 8Over a long period of time, sediment covering plants and other natural substrates can result in reduced invertebrate richness and density, and alteration of species composition. Excessive sedimentation affects the invertebrates by burying essential detrital (rock particles) and algal food sources, reducing flow of interstitial water necessary to supply dissolved oxygen, and killing macrophytes (aquatic plants) that provide attachment structures and shelter to the invertebrates. Resuspension of deposited sediment through mixing induced by surface wind or fish such as carp can further damage invertebrate communities. Smothered organisms and vegetation would then decompose, resulting in low water quality. 9The long term effects on flora and fauna in the area depend on how much, and how long, fine sediment will remain in the system; and the likelihood, amount, and length of time of resuspension. In Dr Ling's expert opinion, the release of sediment laden water was likely to have resulted in immediate short term harm to wetland fauna and flora immediately downstream of the discharge point. The resilience of flora and fauna would have been likely to aid recovery if the impact was mitigated by flushing or not repeated. 10The Defendant relied on an affidavit of Dr Lincoln Smith, aquatic ecologist director of Cardno Ecology Lab. Dr Lincoln Smith is familiar with Bowmans Creek having previously undertaken ecological studies in the Creek in 2006 and 2010. The results of the water sampling data collected by Ravensworth establishes that there was a large pulse of highly turbid water caused by high concentrations of total suspended solids (TSS) in water entering Bowmans Creek between the upstream and downstream water sampling positions. Its extent is unknown. On 17 March 2011 the TSS concentration downstream in Bowmans Creek was 1,690mg/L. By the next day the TSS of water sampled downstream had fallen to a concentration of 111mg/L, and 32mg/L the following day. The upstream readings were 23 (17 March), 56 (18 March) and 7 and 9 (19 March) respectively. He considered the water quality data was inadequate as scientific data as it was unreplicated and more sampling should have been done at multiple sites from the discharge point into Bowmans Creek to its confluence with the Hunter River. No information on the extent of sedimentation within the Creek was obtained. The downstream extent of sediment deposited does not appear to have been measured with accuracy. No biological data was collected which would have provided some indication of ecosystem health to be determined. 11Rainfall data was also assessed. Dr Lincoln Smith considered that it was possible a second rain event upstream would have helped flush out any residual water from the incident. Dr Lincoln Smith went on a site visit on 30 May 2012. General observations of the Creek did not reveal any apparent residual effects from the discharge associated with the incident, such as large deposits of sand. He considered that the extent of actual harm was some physical harm through short term increase in TSS and a poorly understood degree of sedimentation which was probably flushed away by June 2011 and certainly by May 2012. 12It was likely there was potential for harm but the extent of this harm was considered comparatively trivial in the context of the existing environment given the short timeframe of the discharge, the limited spatial and temporal extent of the disturbance, and the nature of the discharge. There was no information to suggest the sediments were contaminated with toxic chemicals. The potential for smothering of the creek bed with loss of habitat and potential clogging of sensitive gills or filter-feeding organs of aquatic fish and invertebrates existed but the sediment particles appeared very fine and alluvial, and therefore likely to have caused less impact. 13Dr Lincoln Smith did not agree with all aspects of Dr Ling's report. The very high reading of 4,540mg/L was taken in the gully 20m from Bowmans Creek. This can be contrasted with 1,690mg/L measured downstream in Bowmans Creek. These samples represent different environmental conditions and should not be considered as replicates. Dr Lincoln Smith agreed that there was an immediate increase in TSS below the discharge point but the sampling regime did not enable an assessment of long term impacts. There is no data on the extent of deposition of sediment at the site, requiring assumptions about the spatial and temporal extent of deposition. In relation to predicted impacts, Dr Lincoln Smith considered the potential for reduced light, and therefore photosynthesis for submerged vegetation, was unlikely to have occurred as a result of the incident given the short term nature of the disturbance. Dr Lincoln Smith considered there was some evidence that some habitat was smothered but no evidence that invertebrates were, so that Dr Ling's statement suggesting they would have been was speculative. Further there was no evidence of the spatial and temporal extent of deposition. There was no evidence of fish or turtle kills as a result of the incident. There was no evidence to support Dr Ling's statement that any sedimentation that might have occurred was excessive. 14In cross-examination Dr Lincoln Smith agreed that his statement in his report that more sediment may have been collected in the gully which had exposed dirt likely to be eroded and transported into Bowmans Creek meant there was a likelihood that more sediment could have been collected between the point of the high reading sample in the gully and Bowmans Creek. 15The Defendant also read the affidavit of Mr O'Brien, General Manager, Environment and Community of the Defendant's parent company, Xstrata Coal NSW (Xstrata), dated 5 July 2012. There was an environmental management system in place on 17 March 2011. A key part of that was the erosion and sediment control plan, the purpose of which included: (a)to identify activities that could generate sediment (b)to describe the location, function and capacity of sediment control (c)structures required to minimise soil erosion and the potential for sediment downstream (d)to ensure erosion and sediment control structures are appropriately maintained (e)to meet the requirements of the EPA publication NSW Managing Urban Stormwater: Soils and Construction (known as the blue book) 16The following processes were in place before the incident to prevent it from occurring: (a)requiring a contractor to have a ground disturbance permit for works on site issued by Ravensworth to ensure that the blue book requirements were met, and having a site surveyor check this permit (b)requiring a work authorisation for a contractor to work on site, and ensuring that the contractor had completed the appropriate inductions (c)completion of a safe work method statement or risk assessment before any work (d)inspections of structures according to defined intervals 17The incident occurred despite the above processes primarily due to: (a)confusion on behalf of the contractor carrying out the works as to the status of the diversion drain and the change in surface water classification running into that drain (b)failure to comply with the sediment and erosion control plan (c)failure to follow the work authorisation/ground disturbance permit process (d)inadequate supervision by Ravensworth's personnel of contractors on site 18Mr O'Brien agreed with the incident cause analysis method (ICAM) (SOAF par 26) document (prepared six days after the incident) that non-compliance with, and deficiencies in, the environmental management system were causal factors. 19Immediately after Ravensworth's personnel became aware of the pollution incident on 17 March 2011, it acted without delay to control the pollution and prevent further discharge of water from the premises. The mine manager and mining superintendent immediately went to the location of the incident. They made arrangements to stop the flow of sediment laden water down the clean water diversion drain into Bowmans Creek and divert the water into the 1000ML dam. Mr Newton, Environment and Community Coordinator at Ravensworth, then took samples and photographs of the flow path of the discharge in the sediment and within Bowmans Creek. The samples were sent to a laboratory for testing. 20Mr O'Brien and Ravensworth regret that the incident occurred. Mr O'Brien has overseen actions aimed at ensuring that this incident does not recur. In the days immediately following the incident Ravensworth reviewed drainage structures at the mine site to verify integrity and compliance with the erosion and sediment control plan, took additional water samples upstream and downstream of the entry point 24 and 48 hours after the incident, and communicated the incident to other Xstrata sites in NSW. Ravensworth also took numerous actions to prevent such an incident from occurring by addressing the deficiencies in the environmental management system. The total expenditure in response to the incident was approximately $1.35M. Ravensworth also developed a water management permit system requiring approval from the mine manager before any pump or pipeline works are undertaken on site. Ravensworth's personnel have undergone training aimed at greater oversight and control of contractor authorisations and the importance of adhering to the work authorisation process. 21Mr O'Brien states that Ravensworth has a good environmental performance record and refers to a guide relating to erosion and sediment control developed by Xstrata to guide its operations. He also identifies numerous contributions Xstrata has made to community initiatives in the Hunter Region since 2008, including funding the Hunter Central Rivers Catchment Management Authority's Wybong Catchment Improvement Project and the Hunter River Rehabilitation Project.

Relevant sentencing considerations 22Section 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) sets out the purposes "for which a court may impose a sentence": (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community. 23Section 21A of the CSP Act identifies numerous aggravating (subsection (2)) and mitigating (subsection (3)) factors which a court must take into account. It is also to take into account any other factor that affects the relative seriousness of the offence (s 21A(1)(c)). These matters are additional to other matters a court must take into account under any Act or rule of law. 24The Court must apply the instinctive synthesis approach by identifying all the relevant factors, discussing their importance and making a "value judgment as to what is the appropriate sentence given all the factors of the case": Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 at [26] unanimously following Markarian v R [2005] HCA 25; (2005) 228 CLR 357 at [51] per McHugh J. The sentence must reflect all the relevant objective circumstances of the offence and subjective circumstances of the Defendant: see Veen v R [1979] HCA 7; (1979) 143 CLR 458 at 490; Veen v R (No 2) at 472 - 473, 490 - 491. The sentence should not exceed what is "justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances": Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465, at pp 472, 485-486, 490-491, 496; Hoare v R [1989] HCA 33; (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ). 25The Court must consider the objective gravity of the offence when determining sentence. The issue arises of whether the matters to be considered include not only the physical acts of the offender and their consequences, but also circumstances personal to the offender that are causally connected to the commission of the offence. As observed by Biscoe J in Environment Protection Authority v BMG Environmental Group Pty Ltd [2012] NSWLEC 69 at [93], in R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168 the Court of Criminal Appeal at [86] identified that some of the circumstances relevant to objective gravity while personal to the offender are relevant because of their causal connection to the commission of the offence. The Court of Criminal Appeal referred to matters of motivation and mental state where these are causally connected to the commission of an offence. These principles have been questioned in Muldrock at [27] where the High Court referred to R v Way and held that The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of the offending. 26As also identified in BMG Environmental Group at [95], in Yang v R [2012] NSWCCA 49 per R A Hulme J (Macfarlane JA and R S Hulme J agreeing) at [28] - [36] the Court of Criminal Appeal identified that the view expressed in Muldrock had not been universally accepted in numerous identified cases. The Court of Criminal Appeal considered it was unnecessary to decide any issue in relation to Muldrock in that matter. The approach in R v Way has been adopted in this Court on many occasions. In BMG Biscoe J at [98] decided to adhere to the view in R v Way in considering the state of mind of an offender and reasons for committing the offence as relevant to the objective seriousness of the offence. Muldrock was not referred to in submissions to him and was concerned with mental disability, observations which apply to this matter also. His Honour also held that such considerations remained relevant to assessing moral culpability, relying on Yang v R at [30]. I adopt this approach in this matter also. 27The Court may take facts into account adverse to the Defendant's interest if proved beyond reasonable doubt. It may take facts into account in a way that is favourable to the Defendant if they have been proved on the balance of probabilities: R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at 281 per Gleeson CJ, Gaudron, Hayne and Callinan JJ.

Objective circumstances 28In identifying the relevant objective circumstances, s 241(1) of the POEO Act identifies the following factors to be taken into consideration in imposing a penalty for offences committed under that Act (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 29Both parties relied on expert evidence in relation to the extent of harm caused or likely to be caused to the environment. The Prosecutor relied on the affidavit of Dr Ling summarised above. The Defendant relied on the statement of Dr Lincoln Smith also summarised above. The TSS in water samples taken about an hour after the incident by the Defendant's staff on Thursday 17 March 2012 (par 20), the reduced TSS levels in water samples taken the next day 18 March 2012 (par 21) and further reduced levels in water samples taken on 19 March 2012 (par 25) identify the very high readings immediately after the incident and substantial reduction of these by the following day. The unreliability of this data is identified by Dr Lincoln Smith because it was not collected in accordance with necessary scientific procedures to ensure reliability of data but it appears to be accepted as broadly indicative of possible TSS levels. The sample showing a very high reading of 4,540mg/L was taken 20m from Bowmans Creek in the gully on the Defendant's land. The sample on 17 March 2012 showing 1,690mg/L was taken downstream in Bowmans Creek not at the junction with the gully. The precise amount of TSS at that junction point was therefore not measured. The Prosecutor submitted this was likely to be higher than 1,690mg/L, the downstream reading, because as admitted by Dr Lincoln Smith in cross-examination more sediment probably washed from the gully between the sample point 20m from Bowmans Creek and the creek junction. The Prosecutor otherwise submitted that 1.64ML was a large amount of sediment deposited into Bowmans Creek in a short time period. There is no evidence that any sediment reached the Hunter River. 30The definition of "harm" as contained in the dictionary to the PEO Act which "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". The Prosecutor relied on this definition to argue that any pollution incident causes harm. It is common ground that the actual harm caused was minimal, being a short duration "pulse event" which resulted in sediment being deposited in Bowmans Creek for a short period. There is no evidence the sediment reached the Hunter River in any measurable quantity. This is confirmed by Dr Lincoln Smith's statement in particular. 31The extent of disagreement related to whether likely harm was caused in the terms identified by Dr Ling. The parties agreed that "likely" means a real and not remote chance or possibility, regardless of whether it is less or more than a 50 per cent chance: Pace Farm Egg Products Pty Ltd v Newcastle City Council [2006] NSWCCA 403; (2006) 151 LGERA 260 at [54] - [58] per Handley JA (Kirby J agreeing). Dr Ling's evidence is that the incident was likely to have caused macroinvertebrate mortality by smothering (par 23 of her affidavit). 32Dr Lincoln Smith did not agree with this conclusion as he considered it was speculative and not properly based on any collected data. Dr Lincoln Smith is familiar with Bowmans Creek having investigated it before the incident and having also visited the site after the incident, albeit over 12 months after the incident (May 2012) at which time he did not see any evidence of additional sediment. Dr Ling has not visited the site. The Defendant's counsel submitted that the Prosecutor's evidence of likely harm to the environment could not be accepted in these circumstances given that the Prosecutor had to establish facts adverse to the accused beyond reasonable doubt per Olbrich. 33Given the onus of proof borne by the Prosecutor Dr Ling's opinion of the possibility of likely harm does not establish that fact. It is relevant at a broad level to consider cumulative impact as part of the actual harm caused given the deposition of sediment in Bowmans Creek, and the potential for harm where a single event contributes to an existing sediment load. Even with that observation, the environmental harm caused was low in these particular circumstances.

(b) the practical measures that may be taken to prevent, control, abate or mitigate that harm 34On the assumption that the consideration applies to practical measures which could have been implemented before the incident, the Prosecutor submits that the pipe should never have been installed. If it had not been there, there would have been no discharge. There is no evidence as to why the pipe was installed other than that there was apparently confusion on behalf of the contractor. This confusion does not reduce Ravensworth's responsibility and, to be fair to the Defendant, it does not claim otherwise. There was plainly a lack of supervision of the works, lack of training of the contractor and/or the Defendant's employees and later inspection of the finished product. Had there been either better supervision and/or final inspection, it seems likely that the error would have been identified and the pipe removed. 35The Defendant's counsel emphasised that the pipe was mistakenly installed by a contractor who did not conform with the erosion and sediment control plan. It accepted that more practical steps could have been taken by its personnel to prevent the actions which resulted in the incident. Had the plan been implemented the incident would have been avoided. 36If the measures relate to alleviating harm after the incident, the Defendant can rely on the evidence of Mr O'Brien at par 14 of his affidavit that it took prompt steps to remove the offending pipe and block the flow path to Bowmans Creek. The Defendant did act quickly and effectively after the incident to identify the scope of the incident, including that the ICAM report was prepared six days after the incident.

(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 37As the Prosecutor submitted, the harm arising from the pollution incident was foreseeable. The ground disturbance permit (behind Tab 1 of the SOAF) includes the "Important Conditions of Approval" which are relevant to show that the Defendant was alert to the possible drainage off the clearing site and also refers to the need for an erosion and sediment control plan. The potential for clearing to cause sediment laden run off is well understood. I also accept the Defendant did attempt to address the potential for sediment run-off through its erosion and sediment control plan.

(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence 38The Defendant had control over the events leading up to the offence and both in the ICAM report (behind Tab 5 of the SOAF) and through the affidavit of Mr O'Brien it frankly acknowledges the shortcomings leading up to the event. The Defendant accepted that it had control over the causes of the commission of the offences.

(e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. 39Not applicable.

Defendant's state of mind 40The Defendant's state of mind in the circumstances which resulted in the offence being committed is relevant to assessing the objective seriousness of the offence. "A strict liability offence that is committed intentionally, negligently or recklessly will be objectively more serious than one not so committed": Director-General, Dept of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [42]. See also Gittany v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [123]; Garrett v Freeman (No 5) [2009] NSWLEC 1; (2009) 164 LGERA 287 at [68] and [356]; Director-General, Department of Environment and Climate Change v Hudson [2009] NSWLEC 4; (2009) 165 LGERA 256 at [75]; Hardt v Environment Protection Authority [2007] NSWCCA 4; (2007) 156 LGERA 337 at [53] and Pittwater Council v Scahill [2009] NSWLEC 12; (2009) 165 LGERA 289 at [69]. As this is a corporate defendant the state of mind must be gauged from the actions and statements of its representative and/or employees. 41The affidavit of Mr O'Brien identifies those matters which the Defendant accepts were lacking in its procedures which resulted in the contractor's actions. These circumstances arising from the actions, or more accurately, lack of actions of the Defendant's employees do not suggest intentional, negligent (inadvertence to a risk of harm that was foreseeable to a reasonable person in the position of the defendant) or reckless (advertent; foresight of a possible consequence of given behaviour). The circumstances can be correctly described as accidental. I therefore accept the Defendant's submission that the objective gravity is reduced, relying on Environment Protection Authority v Albury City Council [2009] NSWLEC 169 at [59] - [60]. 42There were no aggravating factors as listed in s 21A(2) of the CSP Act.

Conclusion on objective seriousness 43The environmental harm was in the low range of seriousness. The matters considered in relation to s 241(b), (c) and (d) suggest a low level of culpability on the part of the Defendant. Adequate controls were planned which would have been effective if they had been properly complied with by the contractor. The ICAM report identifies and Mr O'Brien accepts that there were deficiencies in the EMS system and inadequate supervision of the contractor. Mr O'Brien also admits that there was a failure by the Defendant to comply with the sediment and erosion control plan and a failure to follow the work authorisation/ground disturbance permit process including communicating the purpose of the plan to the contractor. Taking into account all these factors, I consider the objective seriousness of this matter is at the lower end of the low to moderate range of seriousness.

Maximum penalty 44In setting a penalty the Court should have regard to the maximum penalty applicable, as this is an expression of the seriousness Parliament attributes to the offence. In Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 the Court of Criminal Appeal stated at [698] and [701] respectively that: The task of a court is to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided ... ... the more serious the lasting environmental harm involved the more serious the offence and, ordinarily, the higher the penalty. 45As submitted by the Prosecutor offences must continue to be assessed as to their level of criminality so that the relative seriousness is determined in relation to the worst case for which the maximum penalty is provided, see Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 at 312 per Giles JA. I also accept the Defendant's submissions also relying on Cabonne at 312 that offences of low criminality remain as such notwithstanding that the Parliament specifies a large maximum penalty for offences in the worst category.

General deterrence 46Section 3A(b) of the CSP Act states that one of the purposes for imposing a sentence is to prevent crime by deterring other potential offenders. Sentences imposed for environmental offences must embrace powerful considerations of general deterrence: see Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 367 per Badgery-Parker J. Mahoney JA stated at 359: The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur. 47The Prosecutor submitted that the Defendant was one of twenty large open cut mines operating in the Upper Hunter Valley between Singleton and Muswellbrook. All these operations have the potential to impact adversely on the receiving environment in the area, including through the release of sediment. I accept that a clear message to other mines in this area underlining the need to take adequate precautions is necessary by way of general deterrence.

Specific deterrence 48Specific deterrence is a purpose of sentencing under s 3A(b) of the CSP Act and has been considered relevant where a defendant continues in the same area of operation in which an incident has occurred. In taking specific deterrence into account in Environment Protection Authority v Moolarben Coal Operations Pty Ltd (No 2) [2012] NSWLEC 80 (Moolarben (No 2)) Craig J cited at [113] the following passage in Axer at 359 per Mahoney JA: The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that in many cases care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur. 49Specific deterrence is appropriate for corporate defendants to catalyse rehabilitation so that the company takes the required steps to prevent repetition (See BJ Preston, "Principled Sentencing for Environmental Offences", a paper presented to the 4th International IUCN Academy of Environmental Law Colloquium, 16 - 20 October 2006 at p 5.) 50The Prosecutor considered this to be a relevant consideration as the Defendant is part of Xstrata, the parent company which operates a number of similar mining operations throughout the state. As the systems for sediment control have been found lacking in numerous areas of communication, training and procedures, specific deterrence is relevant to this Defendant. While Mr O'Brien estimates that $1.3M has been spent since the incident to prevent a repeat this could and should have been spent earlier to avoid it. 51The Defendant argued that it has taken appropriate measures at significant expense to avoid the reoccurrence of any similar incident in the future, relying on par 14 to 21 of Mr O'Brien's affidavit. While the Defendant accepted that specific deterrence had a role to play as it will continue to operate a coalmine on the premises, it submitted that this did not weigh heavily in the circumstances of the case. I agree with that submission.

Retribution and denunciation 52The Prosecutor submitted that retribution and denunciation are identified as sentencing purposes, and referred to Environment Protection Authority v Hanna [2010] NSWLEC 98 at [34]. That decision refers to the relevance of denunciation when sentencing. The Prosecutor submitted that as Parliament has chosen to criminalise the Defendant's conduct, that demonstrates that the incident is serious and not merely a minor aberration and needs to be treated as such. 53This submission was criticised by the Defendant because it ignored the necessity of determining when sentencing the seriousness of the offence based on the subjective and objective considerations and circumstances of the offence. The Defendant submitted that retribution in particular was more relevant to crimes where an essential element of an offence required mens rea to be established, in contrast to strict liability offences which do not. Reference was made to water pollution offences as being within a category of offences identified by Wright J in Sherras v De Rutzen [1895] 1 QB 918 at 922 as acts which "are not criminal in any real sense, but are acts which in the public interest are prohibited under a penalty". This decision was described by Street CJ in Caralis v Smyth (1988) 65 LGRA 303; (1988) 34 A Crim R 193 at 198 as the locus classicus on the point. In Majury v Sunbeam Corporation [1974] 1 NSWLR 659 at 663 - 664 McClemens CJ at CL characterised the water pollution offence under s 16 of the Clean Waters Act 1970 (repealed) as falling within the class described by Wright J as "not criminal in any real sense". 54The purposes in s 3A of the CSP Act are recognised as including retribution (by implication in subsection (e)) and denunciation (expressly in subsection (f)). In Veen (No 2) at 476 Mason CJ, Brennan, Dawson and Toohey JJ said: The purposes of criminal punishment are various: protection of society, deterrence of the offender and of others who might be tempted to offend, retribution and reform. The purposes overlap and none of them can be considered in isolation from the others when determining what is an appropriate sentence in a particular case. They are guideposts to the appropriate sentence but sometimes they point in different directions. 55The Sentencing Bench Book, Judicial Commission of NSW, states at [2-210] "Section 3A": The High Court said of s 3A in Muldrock v The Queen (2011) 244 CLR 120 at [20]: The purposes there stated [in s 3A] are the familiar, overlapping and, at times, conflicting, purposes of criminal punishment under the common law (Veen v The Queen (No 2) at 476-477]. There is no attempt to rank them in order of priority and nothing in the Sentencing Act to indicate that the court is to depart from the principles explained in Veen v The Queen (No 2) [at 476] in applying them. [relevant footnote references included in square brackets] Therefore, even after the enactment of s 3A, the common law approach to the purposes of punishment continues to apply whereby they "overlap and none of them can be considered in isolation": Veen v The Queen (No 2) (1988) 164 CLR 476; R v MA (2004) 145 A Crim R 434 at [23]; R v MMK (2006) 164 A Crim R 481 at [10]. 56I agree with the Defendant's submission that it is necessary in every case to consider the objective seriousness of a matter and consider the subjective factors when balancing the various matters relevant to sentencing as identified in Veen (No 2). Only once that consideration has been undertaken will the various purposes of sentencing be able to weighed up. To the extent the Prosecutor's submissions suggest otherwise, that is incorrect. 57The Defendant submitted that sentencing for a strict liability offence is different because mens rea is not an essential element of the offence. However, as identified above at par 25 - 26, and 40, part of analysing the objective seriousness of a strict liability offence involves considering a defendant's state of mind, that is whether an act was done intentionally, negligently, or recklessly. In the circumstances of this case retribution and denunciation have less relevance given the absence of intention as the cause of the incident was essentially accidental. In balancing up relevant sentencing considerations the need to consider retribution or deterrence is greater for more serious crimes, be they strict liability as in Hanna or otherwise.

Mitigating factors 58A number of mitigating factors in s 21A(3) of the CSP Act should be taken into account in determining the appropriate penalty.

Guilty plea (s 21A(3)(k), s 22) 59The Defendant pleaded guilty at the earliest opportunity, the first mention of the matter, as accepted by the Prosecutor. A plea of guilty entitles the Defendant to a discount in penalty under s 22 of the CSP Act in the range of 10 - 25 per cent: R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; R v Sharma [2002] NSWCCA 142; (2002) 54 NSWLR 300. There should be a maximum discount on this basis.

Remorse (s 21A(3)(i)) 60The affidavit of Mr O'Brien expresses the Defendant's remorse and identifies actions taken to confirm that remorse, see par 18 to 20 above. Further, that the Defendant pleaded guilty to the charge on the first return date of the summons is evidence of contrition. 61The Prosecutor criticised the Defendant for failing to report the incident immediately on the day it occurred. This was submitted to be relevant to assess whether the actions of the Defendant indicated remorse. The incident occurred at about 2pm on Thursday 17 March 2011 and was reported in the evening of the following day. At the time of the incident s 148(4) of the PEO Act required reporting of a pollution incident as soon as practicable. Section 150 specified what had to be reported including the nature, estimated volume and the concentration of any pollutants, and actions taken or proposed to be taken to deal with the incident and any pollution. Section 148 has since been amended to require immediate reporting of a pollution incident but that was not the legal requirement at the time of the offence. The Prosecutor's submission that there was some failure on the Defendant's part in not reporting on the day of the incident is not consistent with the legal requirements under the PEO Act at that time. The Defendant reported when the information required by s 150 was known to it. This required knowledge of the results of the initial water sampling data. This behaviour is not a basis for concluding there was a lack of remorse by the Defendant. I accept that the Defendant acted promptly to prevent further harm and timely notification was provided to the Prosecutor given the requirements of s 148 as then in force.

Assistance to law enforcement authorities (s 21A(3)(m)) 62The Prosecutor conceded that the Defendant had cooperated with law enforcement authorities, except in failing to report the incident sooner. The Defendant complied with the reporting requirements in force at the time of the incident and therefore assisted the law enforcement authorities. I take this factor into account.

Other mitigating factors (s 21A(3)(b), (e), (f), (g)) 63I accept that the offence was not part of a planned/organised criminal activity (s 21A(3)(b)) and that the Defendant has not previously been convicted of any environmental offence (s 21A(3)(e)), as submitted by the Defendant. 64The Defendant also argued that it had a good corporate character which should be taken into account under s 21A(3)(f). It relies on the affidavit of Mr O'Brien (at par 23 to 26) which identifies the record of environmental performance of the Defendant and Xstrata, particularly in relation to the rehabilitation of mine sites. The Defendant and Xstrata had in place a comprehensive and substantive environmental management system with the objective of complying with environmental laws. The Defendant relied on par 28 of Mr O'Brien's affidavit which states that Xstrata's operations, like its operations worldwide, are subject to stringent internal environmental and sustainability controls. Further, the Defendant relied on Mr O'Brien's identification of Xstrata's financial contributions to local community groups and projects (at par 27). On the basis of this evidence I accept that the Defendant is of good corporate character.

Evenhandedness 65The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty (R v Visconti [1982] 2 NSWLR 104). This principle must always be applied subject to the particular circumstances of the case before the Court. 66The Prosecutor submitted that Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65 (Moolarben (No 1)) and Moolarben (No 2) were comparable as these involved broadly similar circumstances of a mine discharging sediment laden water following clearing land of vegetation. The similarity of these cases ends there and I agree with the Defendant that the circumstances in those two cases were more serious given the actions of or, more accurately, lack of action of the defendant in both cases. 67In Moolarben (No 1) the defendant conducted earthworks including constructing an earthen bank across Bora Creek which it effectively dammed. Water dammed by the earthen bank contained sediment run off from a disturbed upstream catchment. About 150m downstream of that bank a sediment dam had been constructed, off the line of Bora Creek. There were four discrete events in June 2009 that resulted in pollution of Bora Creek and the Goulburn River, involving overflow of the earthen bank, the sediment dam, and an existing farm dam which the defendant enlarged. The sediment laden water contained nutrients. The total volume discharged was not known. No erosion and sediment control measures were in place before the earthworks commenced. The environmental harm was found to be towards the lower end of the range. There was minimal actual harm but there was potential for serious environmental harm. The offence was found to be of moderate objective gravity, warranting a fine in the sum of $150,000, which was discounted to result in a penalty of $105,000. The Court took into account the fact that the defendant agreed to pay the prosecutor's legal and investigation costs. 68In Moolarben (No 2) a deliberate discharge of sediment laden water in December 2009 resulted in pollution of Bora Creek and extended to a point in the Goulburn River that was approximately 72km from its confluence with Bora Creek. After the June discharge events the defendant installed a three cell culvert containing pipes at the base of the railway embankment to allow water within Bora Creek to pass beneath the embankment and prevent it acting as a dam. The culvert was then blocked on the upstream side to prevent the flow of sediment laden water through the culvert. The sediment control measures were far less developed than in this case. The Department of Environment, Climate Change and Water advised against the use of Bora Creek as a sediment basin. Heavy rainfall resulted in the build up of water behind the embankment. Due to the pressure mounting, the defendant deliberately released that water into Bora Creek by partially unblocking the culvert. The volume of sediment laden waters discharged was not known but was likely to be approximately 18.7ML. The environmental harm was found to be low to moderate. While no actual harm was evidenced, there was potential for significant environmental harm. The offence was found to be of moderate objective gravity. The appropriate fine was $150,000, which was discounted resulting in a penalty of $112,500. 69I also reviewed several water pollution cases involving sediment discharges to water bodies in Environment Protection Authority v Sibelco Australia Limited [2011] NSWLEC 160 at [97] - [99]. While not all related to mining, the cases there referred to provide additional indications of sentences imposed in broadly similar circumstances. Sibelco concerned the discharge of up to 5ML of sediment laden water from a dam at a bentonite mine owing to the failure of part of a dam wall. The sediment flowed into a gully and then Middle Brook. According to the mine operations and water management plans that dam was not to be used for storage of sediment laden water. There was evidence of actual harm. The environmental harm caused was in the low to moderate range and the offence was of low to moderate objective gravity. The circumstances were more serious in that substantially more sediment was discharged and the environmental harm was greater. The appropriate penalty was $120,000. After mitigating factors were taken into account an environmental services order under s 250(1)(e) in the amount of $78,000 was made in lieu of a penalty. Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732 has some similarity in that a mining operation which disturbed the soil had a detailed soil and water management plan which was not complied with when site works were undertaken, resulting in water pollution from run-off from the site. Sediment flowed into a creek and then Lake Macquarie. The maximum penalty was then $250,000. An environmental services order under s 250(1)(e) in the amount of $50,000 was made in lieu of a penalty. 70Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273 concerned a series of related incidents which occurred over four days while a contractor carried out spillway upgrade and outlet works in, and immediately downstream of, the Jindabyne Dam. Between 4 and 11 tonnes of sediment were discharged into the Snowy River as a result of the works, stretching 15km downstream of the only sediment control, a permeable silt curtain. The environmental harm was minor and short term. The offence was of moderate objective seriousness. Snowy Hydro was fined the sum of $100,000 after discounting for subjective circumstances. The contractor was convicted of the identical offence and was also fined $100,000: Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268; (2008) 163 LGERA 345. 71I consider the circumstances of this matter are less severe than the cases identified above given the relatively modest level of environmental harm and the surrounding circumstances suggesting lesser objective gravity.

Conclusion on sentence 72Weighing up the objective and subjective considerations outlined above, informed by the cases reviewed at par 66 - 70, I consider that a penalty of $80,000 is warranted which should be reduced in light of the various mitigating factors identified including the early plea of guilty to $50,000.

Costs 73The Defendant has agreed to pay the Prosecutor's costs of $26,500 and investigation costs of $2,000.

Type of penalty 74Under s 250(1) of the PEO Act the Court can consider the imposition of different orders. Such orders can be made in addition to or regardless of whether any penalty is imposed (s 244(2), (3)). 75The parties have agreed the terms of a publication order under s 250(1)(a) of the PEO Act. They have also agreed where publication should occur and I will make such an order when final orders are made.

76Before imposing sentence the parties should explore whether a suitable project for the making of an environmental services order under s 250(1)(e) is available. A time frame for doing so must be agreed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 September 2012