Environment Protection Authority v Steggles Foods Mt Kuring-gai Pty Ltd

Judgment

1. The Defendant Steggles Foods Mt Kuring-gai Pty Ltd has pleaded guilty to breaching a condition of its environment protection licence (EPL) contrary to s 64(1) of the Protection of the Environment Operations Act 1997 (POEO Act). The breach occurred on 3 December 2015 owing to a failure to maintain plant and equipment installed at 4-6 Mundowi Road, Mt Ku-ring-gai (the Premises) in a proper and efficient manner. As particularised in the amended summons dated 6 December 2017, the breach arose because the Defendant failed to ensure that a flange joint which formed part of the refrigeration system at the Premises was maintained in a proper and efficient condition. On 3 December 2015 anhydrous ammonia leaked from the flange joint. The person who contravened the licence condition is unknown but was likely to have been an employee of the Defendant's maintenance contractors.
2. The offence of contravention of a condition of an EPL is one of strict liability so that a mental component is not part of the elements of the offence. A plea of guilty means that the Defendant admits all the essential elements of the offence, R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at 275. Such an offence has been referred to as a "status" offence as it results from the Defendant's status as the holder of an EPL regardless of who contravened the licence and how it was contravened, Environment Protection Authority v Werris Creek Coal Pty Ltd; Environment Protection Authority v Holley [2009] NSWLEC 124 at [1].

Protection of the Environment Operations Act 1997

1. Section 64 of the POEO Act states: Part 3.4 Licence conditions … 64 Failure to comply with condition (1) Offence If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence. Maximum penalty: (a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or ... (2) Defence The holder of a licence is not guilty of an offence against this section if the holder establishes that: (a) the contravention of the condition was caused by another person, and (b) that other person was not associated with the holder at the time the condition was contravened, and (c) the holder took all reasonable steps to prevent the contravention of the condition. A person is associated with the holder for the purposes of paragraph (b) (but without limiting any other circumstances of association) if the person is an employee, agent, licensee, contractor or sub-contractor of the holder.
2. Relevant definitions in the POEO Act include: Dictionary air impurity includes smoke, dust (including fly ash), cinders, solid particles of any kind, gases, fumes, mists, odours and radioactive substances. air pollution means the emission into the air of any air impurity. ... environment means components of the earth, including: (a) land, air and water, and (b) any layer of the atmosphere, and (c) any organic or inorganic matter and any living organism, and (d) human-made or modified structures and areas, and includes interacting natural ecosystems that include components referred to in paragraphs (a)-(c). … 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. ... pollution means: (a) water pollution, or (b) air pollution, or (c) noise pollution, or (d) land pollution.

Statement of Agreed Facts

1. The parties usefully agreed a Statement of Agreed Facts (SOAF) filed on 22 November 2017. It is set out as follows omitting annexures: ... 3 SFMK holds environment protection licence number 13244 (the EPL) in respect of the activities at 4-6 Mundowi Road, Mt Kuring-gai in New South Wales (the Premises). 4 The EPL at all relevant times included the following condition: O2.1 All plant and equipment installed at the premises or used in connection with the licensed activity: a) must be maintained in a proper and efficient condition; and b) must be operated in a proper and efficient manner. 5 A copy of the EPL is at Tab 1. 6 Condition O2.1(a) of the EPL was contravened by a person(s) in the manner described below at paragraph 8. 7 The identity of the person who contravened the condition is not known, but it is likely that the person was a contractor engaged by SFMK, being Drummoyne Group Services Pty Ltd (DGS) and/or Gordon Brothers Industries Pty Ltd (Gordon Brothers), or an employee of DGS or Gordon Brothers. 8 The charge the subject of the proceedings relates to an incident (Incident) that took place at the Premises on or about 3 December 2015. A compressor which operated a refrigeration system (described more fully at paragraphs 13 to 19) at the time of the Incident had not been maintained in a proper and efficient condition, in that: a. a nut used to secure one of eight bolts on a flange joint located on a discharge pipe was not attached to that bolt at the time of the Incident; and b. a gasket used to secure that flange joint located on a discharge pipe failed. When the flange joint was opened after the Incident, it was observed that the gasket was brittle, a section of the gasket was missing, the gasket appeared to have been used or compressed several times as indicated by markings on the seal face and by reduced sectional thickness. 9 The Incident involved the escape of ammonia gas from a flange joint located on a discharge pipe, leading from a compressor which operates a refrigeration system at the Premises. Two of SFMK's employees were exposed to the ammonia gas as it escaped and were harmed as described in more detail at paragraphs 56-59 below. One employee suffered injuries and was subsequently taken by ambulance to hospital. THE DEFENDANT 10 SFMK is owned by Baiada Holdings Pty Limited. THE ENVIRONMENT PROTECTION LICENCE 11 The EPL permits the activities of livestock processing and general animal products production (the Licenced Activities) at the Premises. The Licensed Activities involve: a. receiving fresh, dressed poultry meat; b. treating and processing the meat into formed product (such as nuggets, schnitzel, and the like); c. adding batter, crumbing and/or breading; d. flash frying and freezing the product; e. bagging and boxing the product; f. storing and despatching the product; and g. ancillary functions associated with the above activities. CARE AND CONTROL 12 SFMK was the holder of the EPL at all relevant times. 13 SFMK engaged and used specialist third-party refrigeration maintenance contractors for the maintenance of the refrigeration system at the Premises, as described below (Refrigeration System). 14 Between December 2011 and approximately August 2015, SFMK engaged Gordon Brothers to undertake maintenance of the Refrigeration System. 15 Between approximately August 2015 until the time of the Incident (and for some time following the Incident), SFMK engaged DGS to undertake maintenance of the Refrigeration System. 16 DGS was required to inspect and service the Refrigeration System on a monthly basis in accordance with the scope prepared by DGS dated 11 August 2015, and also attend the Premises as and when required by SFMK to perform various additional services. A condition report was completed by DGS at the end of each service and provided to SFMK. 17 SFMK also employed a number of maintenance staff at the time of the Incident at the Premises including five mechanical fitters and three electricians. These staff were involved at the time of the Incident in monitoring of the Refrigeration System, and turning the Refrigeration System on and off, however, they were not responsible for the servicing of it. THE REFRIGERATION SYSTEM 18 The Refrigeration System is used at the Premises as part of the livestock processing process. This Refrigeration System provides refrigeration to two spiral freezers, one of which is known as the "900 spiral freezer". 19 The Refrigeration System is made up of a number of major components including compressor packages, oil separators, oil coolers and interconnecting pipework. 20 A compressor, a Mycom model 250VLD, operates the Refrigeration System by compressing the refrigerant gas (anhydrous ammonia) from low pressure to high pressure thereby increasing the energy level of the gas. 21 A flange joint is located in a discharge pipe within the Refrigeration System between the Mycom compressor and the respective oil separator. 22 The flange joint ought to be secured by eight (8) nuts and bolts so as to maintain tension and prevent the leak of anhydrous ammonia. 23 The flange joint ought to be sealed by a gasket to prevent the leak of anhydrous ammonia. 24 The above plant and equipment is located in part of the Premises known as the refrigeration compressor room (Refrigeration Compressor Room). THE INCIDENT 25 On 3 December 2015, at about 12.20 am, one of SFMK's Maintenance Fitters, Mr Benjamin Hutt, was walking from the production line to the packing line. He described what happened next as follows. I came up alongside the plant room. I heard the compressor start up, so I turned left in the front of the plant room where the open door was. I looked in, because the compressor was starting up and to my mind it shouldn't have been starting at that time because production was finished. That's what got my attention first of all. And as I looked in the door I stood there and waited for it to start up, because I always do, just to make sure everything starts okay. The compressor started up and then there was a cloud of white smoke emitted from the - what I thought was the motor first. I thought- my first thought was the motor had caught fire. Obviously it turned out it was ammonia and then the - the white sort of smoke came out and while I was standing there going, I've got to raise the alarm sort of, there's going to be a fire, that's when the gas hit me, the ammonia. So there was like a visible cloud of it, like a white smoke, and then there was an invisible wall of it as well and that's when I couldn't breathe and couldn't see and basically dropped my stuff. I had my toolbox and stuff in my hand. I dropped them and ran. 26 Mr Hutt subsequently clarified where he was standing when observing the compressor start up, and when the Incident occurred: As the back left hand corner compressor was obscured from the doorway by pipe work and framework, to visually inspect it, I always needed to take one step into the compressor room. At the time of the incident the subject of these proceedings, I had only taken one step past the compressor room doorway, when the ammonia leak occurred from the back left hand corner compressor. 27 Mr Hutt further described what happened as follows: I just dropped my toolbox and just sprinted down the corridor to get out. And, yeah, as I was sort of running down the corridor I was trying to breathe again, but the gas was, like, basically as fast as I was down the corridor. So I couldn't breathe. And so I got sort of to the front. While I was doing that, I was pulling my phone out to call triple-0 because I knew it was bad. I also knew there was personnel still inside the factory who were behind where I was with not as good access to emergency escapes as I did. So I was calling triple-0. As that happened, as I was coming out of the factory, I was talking on the phone to triple-0 and I saw Matt Travers and told him that there'd been - there was a bad chemical leak and our first priority was to get everyone out. And I told - I was - I - I think I was still on the phone to the fire brigade then. While I was on the phone to the fire brigade the alarm started going off, because it hadn't gone off until that point. 28 The alarm that Mr Hutt heard was an automated alarm, which repeatedly says words to the effect of "Emergency, evacuate now," accompanied by a siren Mr Hutt described as "Whoop, whoop." 29 At that time, Mr Hutt quickly spoke with Mr Travers. Mr Hutt told Mr Travers that he thought "other guys were inside". As a result of that conversation Mr Travers went back into the Premises. Mr Travers described what subsequently occurred as follows: I had to stop because the - basically, the air was sucked out of the corridor- out of this corridor just there, so I couldn't go any further. It was - it was - like, just - there was no way I could go any further to get to the guys to - to get past this white cloud that was pumping down the hallway. 30 NSW Fire and Rescue arrived at the Premises at approximately 12:30 am. Three (3) NSW Fire and Rescue crews attended the Premises, namely: a. a Hazardous Material unit; b. a Hazardous Materials Response unit; and c. a Fire and Rescue Hazmat unit. 31 At 12.35 am, a staff head count was completed at the Premises' evacuation point. All staff were accounted for. 32 Also at about 12.35 am, NSW Police arrived. After arriving, NSW Police contacted the Ambulance Service of NSW as there were concerns about Mr Hutt's health. Soon after an Ambulance attended the site, assessed Mr Hutt, and took him to Hornsby Hospital. 33 At 1.27 am, Mr Ron Estepa, SFMK's Maintenance Manager, contacted Mr Marcel Lavarack. Mr Lavarack is a director of DGS, a specialist refrigeration maintenance company engaged by SFMK under a contract dated 11 August 2015. The signed contract was described as a "Proposal to maintain and repair critical refrigeration and comfort air conditioning" at the Premises. Mr Lavarack arrived at the Premises at about 2.00 am. 34 After a discussion between NSW Fire and Rescue, Mr Lavarack and Ms Madelline Frampton (Workplace Health and Safety Officer at the Premises), it was decided that a NSW Fire and Rescue Officer and Mr Lavarack would enter the Refrigeration Compressor Room in an attempt to contain the ammonia leak. 35 For that purpose, a NSW Fire and Rescue Officer and Mr Lavarack put on personal protective equipment (PPE), including safety breathing apparatus. On entering the Refrigeration Compressor Room, the source of the ammonia leak was identified, being the red arrow in Figure 1 [not included in this judgment] pointing to the "compressor package", and Figure 2 [not included] as the "Point of Leakage" (although the photographs in fact depict all eight (8) nuts and bolts on the flange joint in place). 36 It was observed that one of the eight bolts on the flange joint identified in Figure 1, at the underside of the point identified in Figure 2, was not secured by a nut. The nuts attach to the bolts on the underside of the flange joint identified in Figure 2. 37 Mr Lavarack observed that "this bolt was also in a spot where you couldn't- you wouldn't see it by looking at it. It was underneath the flange but the bolt was missing. So, to find that, you would have got down on the floor on this side of the machine [the underside] and stuck your head up under the flange..." 38 At the time of the inspection by Mr Lavarack the ammonia leak was thought to be isolated by closing the compressor set's suction inlet isolation valve, the oil separator outlet discharge valve and the economiser compressor inlet valve. The noise of the leak then stopped and for safety reasons, Mr Lavarack and the NSW Fire and Rescue Officer left the Refrigeration Compressor Room. 39 At about 2.30 am, NSW Fire and Rescue commenced passive venting of ammonia from the Premises in an attempt to reduce the ammonia to a safe level and to effect repairs. However, the ammonia levels did not reduce. 40 From about 3.30 am - 4.00 am, NSW Fire and Rescue used mechanical extraction fans in an attempt to ventilate the Premises and reduce the ammonia levels. 41 At 4.51 am, SFMK notified neighbouring properties about the ammonia escape. 42 At 5.14 am, SFMK's Ms Elaine Dickson reported the incident to the Prosecutor's Environment Line. 43 At about 8.00 am NSW Fire and Rescue and Mr Lavarack again entered the Refrigeration Compressor Room wearing PPE including breathing apparatus. At that time ammonia was still escaping, however, after Mr Lavarack tightened the discharge valve of the oil separator valve further, the leak was contained. Mr Lavarack also attempted to repair the flange joint (referred to above under the heading "Refrigeration System") that was not secured. However, Mr Lavarack could not complete those repairs due to the PPE being unwieldy. 44 Between about 11.00 am and 11.30 am, NSW Fire and Rescue determined that the levels of ammonia within the Premises was safe. At that time Mr Lavarack again entered the Refrigeration Compressor Room to carry out repairs to the flange joint (referred to above). Mr Lavarack removed the seven remaining nuts and bolts on the flange joint (referred to above under the heading "Refrigeration System"). 45 Mr Lavarack also removed the gasket that ought to have sealed the flange joint. Mr Lavarack identified that a section of the gasket had broken away and was no longer in the flange joint. A photograph of the gasket is below. 46 By about 11.45 am, a new gasket had been installed and the flange joint had been tightened using eight (8) nuts and bolts. 47 At 12.14 pm, NSW Fire and Rescue handed control of the Premises back to the Premises' Manager Mr Feraydon Soltani. CAUSE(S) OF THE INCIDENT 48 The cause or causes of the Incident included: a. a nut used to secure one of eight bolts on a flange joint located on a discharge pipe was not attached to that bolt at the time of the Incident; and b. a gasket used to secure that flange joint located on a discharge pipe failed. When the flange joint was opened after the Incident, it was observed that the gasket was brittle, a section of the gasket was missing, the gasket appeared to have been used or compressed several times as indicated by markings on the seal face and by reduced sectional thickness. 49 Each of these causes resulted from a failure to maintain the relevant equipment in a proper and efficient condition contrary to EPL condition O2.1(a). 50 It is possible that the flange joint may have been holding for some time in this condition and an abnormal condition in operation occurred, causing the gasket to immediately blowout. This was a third contributing factor. This abnormal condition could have been due to liquid refrigerant entering the compressor, which should not occur under normal operating conditions. AMMONIA VOLUMES AND CONCENTRATIONS RELEASED 51 The initial concentration of ammonia measured by NSW Fire and Rescue was 850 ppm. 52 The concentration of ammonia gas in the compressor room was about 900 ppm at 2.00 am on 3 December 2015. 53 The concentration of ammonia gas in the compressor room was about 25 ppm at 12.10 pm on 3 December 2015. 54 The volume of ammonia gas released is not known. 230 kg of ammonia was required to replenish the ammonia tank, but it is unknown how much ammonia was in the tank prior to the Incident. The ammonia tank had last been filled approximately six (6) months before the Incident. INCIDENT AMMONIA EXPOSURE AT 850-900 PPM 55 The concentrations of ammonia released during the Incident were measured to be between 850 and 900ppm. HARM TO THE ENVIRONMENT CAUSED BY THE INCIDENT 56 Mr Hutt sustained harm as a result of the ammonia release. Matt Travers also sustained harm as a result of the ammonia release. 57 Mr Hutt sustained actual harm as a result of the ammonia release. This included: a. upper abdominal burning; b. chest burning; c. dyspnoea (Breathlessness); d. eye irritation; e. light-headedness; f. epigastric tenderness (Upper abdomen tenderness); g. nausea. 58 Mr Hutt was treated with intravenous pantoprazole at Hornsby Hospital and was given an endoscopy. He was deemed fit for discharge on the day of the Incident. Mr Hutt was diagnosed the following day with chemical burn to upper airway and was deemed unfit for work for four days. 59 Mr Travers suffered a sore throat as a result of the ammonia release. 60 Ammonia gas with the potential to cause harm to humans, flora and fauna did not escape the boundaries of the Premises on 3 December 2015. MAINTENANCE AND TRAINING PRIOR TO INCIDENT Maintenance 61 Prior to the Incident, there was a failure by the person(s) referred to in paragraph 7 above to ensure: a. the flange joint was secured by all 8 nuts; b. the flange gasket was in good working order. Training 62 On 18 March 2015, Pollution Incident Response Management Plan training was provided to five (5) staff at the Premises, including the site manager, maintenance manager and production manager for the Premises. 63 Additional training provided by SFMK to employees prior to the Incident included annual Emergency Management Plan (EMP) training, with the EMP training including the procedures to be followed in the event of both a major and minor ammonia release. 64 Prior to the Incident, training had not been provided to any staff member(s) in relation to: a. specific ammonia plant procedures, apart from that included in the Emergency Management Plan training already provided; b. incident prevention and response specifically relevant to the Refrigeration Compressor Room; TRAINING AND ACTIONS POST INCIDENT 65 Since the Incident, training, including but not limited to the following training has been carried out: a. 14 December 2015 - Pollution Incident Response Management Plan competency training, including competency quiz completed by trainees after the training, was provided for six (6) staff, including the maintenance manager and the site manager for the Premises; b. 21 December 2015 - work health and safety procedures training relevant to ammonia was provided for ten (10) staff including the maintenance manager and the site manager for the Premises; c. 19 January 2016 - restricted access training relevant to ammonia was provided for eight (8) staff; d. additional regular Emergency Management Plan (EMP) training, with the EMP including the procedures to be followed in the event of both a major and minor ammonia release; e. additional PIRMP training, including competency quiz completed by trainees after the training; f. emergency response training as part of Unit PUAWER005B "Operate as part of an emergency control organisation" from Triple 000 Solutions , a registered training organisation. GUlLTY PLEA ENTERED 66 SFMK entered a plea of guilty on 7 April 2017. COOPERATION WITH THE PROSECUTOR 67 SFMK has cooperated with the Prosecutor throughout the investigation of the Incident by the provision of interviews, documents and information, and through the preparation of an agreed statement of facts. PRIOR CONVICTIONS 68 SFMK has no prior convictions for environmental offences in NSW.
2. The parties agreed a supplementary SOAF on 5 December 2017 which was tendered with the SOAF as Exhibit A. The supplementary SOAF stated: MATTERS RELATING TO HEALTH AND AMMONIA EXPOSURE Impacts of Ammonia Exposure 1 Exposure to ammonia gas presents a risk of harm to human health. 2 The risk of harm to humans following exposure to a toxin such as ammonia is dependent on the specific compound, the route of exposure (ingestion, inhalation etc.) and the magnitude of exposure, both in terms of the length of exposure (minutes, hours, days etc.) and the concentration of the toxic compound. 3 Ammonia gas is a stable, colourless gas that is pungent with a characteristic smell at concentrations above 5ppm. 4 Ammonia is hygroscopic and as such if contact is made, will readily accumulate and dissolve in moist areas of the body including eyes, nose, throat etc. Once ammonia combines with water it forms ammonia hydroxide, an alkaline corrosive agent. Ammonia gas may therefore lead to chemical burns if present at high enough concentrations within the tissues it comes in contact with. 5 The major source of exposure to ammonia gas is via inhalation and as such may lead to irritation of the points of contact such as the throat and respiratory tract and may also irritate the eyes if contact is made. As the magnitude of exposure increases, nasopharyngeal and tracheal burns may occur, pulmonary edema and airway destruction resulting in respiratory distress or failure may occur. 6 Whilst the constellation of symptoms following exposure to ammonia gas are difficult to predict due to the many variables such as concentration of ammonia, length of exposure, individual susceptibility etc., the following are symptoms that might be expected following high concentration, short-term exposure (minutes or hours): shortness of breath (dyspnoea), dizziness, headache, nausea, lacrimation (tearing), irritation of the throat and coughing. As the concentration increases painful breathing, impaired vision, cyanosis, suffocation and death may occur. 7 Whilst the reported concentrations associated with specific symptoms vary somewhat it is reported that at concentrations of 20ppm eye irritation may occur; at 50ppm nose and throat irritation may become evident and at concentrations above 2500ppm for up to 2 hours death may occur. 8 The potential short-term exposure (minutes/hours) to ammonia at 900ppm could include irritation of the eyes, lacrimation, irritation of the throat, coughing and reduced breathing capacity, dizziness and headache among others. If exposure was persistent, then serious irreversible adverse affects could likely occur and may include breathing difficulties and cyanosis. 9 A number of regulatory and health agencies have published various types of exposure limits for inhaled ammonia. The reviewed literature and various regulatory and health organisations suggest that whilst noticeable odour may occur at concentrations of approximately 5ppm, depending on the amount of time an individual is exposed, adverse effects such as irritation to the eyes and throat would not be expected until concentrations approached 20 to 25ppm. At these levels, the symptoms would be reversible and resolve after removal of the individual from the source of exposure. 10 The Acute Exposure Guideline Levels for Selected Airborne Chemicals: Volume 6, published by the Committee on Acute Exposure Guideline Levels, Committee on Toxicology, National Research Council, contains a table that summarises the AEGL values for Ammonia exposure between 10 minutes and 8 hours, which is reproduced immediately below. AEGLs represent threshold exposure limits for the general public and are applicable to emergency exposure periods ranging from 10 minutes (min) to 8 hours (h). Three levels-AEGL-1, AEGL-2, and AEGL-3-are developed for each of five exposure periods (10 min, 30 min, 1 h, 4 h, and 8 h) and are distinguished by varying degrees of severity of toxic effects. Summary of AEGL Values for Ammonia Classification 10 min 30 min 1 h 4 h 8 h End Point (Reference) AEFL-1 30 ppm 30 ppm (21 30 ppm (21 30 ppm (21 30 ppm (21 (nondisabling) (21 mg/m3) mg/m3) mg/m3) mg/m3) Mild irritation (MacEwen et al. (1970) mg/m3) AEGL-2 (disabling) 220 ppm (154 220 ppm (154 160 ppm (112 110 ppm (77 110 ppm (77 Irritation: eyes and throat; urge to cough (Verberk 1977) mg/ m3) mg/ m3) mg/ m3) mg/ m3) mg/ m3) AEGL-3 (lethal) 2,700 ppm (1,888 1,600 ppm (1,119 1,100 ppm (769 550 ppm (385 390 ppm (273 Lethality (Kapeghian et al. 1982; MacEwen and Vernot 1972) mg/ m3) mg/ m3) mg/ m3) mg/ m3) mg/ m3)

11 In the context of this case, 30 second exposure values corresponding to the AEGL 1, AEGL2 and AEGL3 values are as follows: - 30 seconds, AEGL1, 134 ppm, non-disabling effects - 30 seconds, AEGL2, 984 ppm, disabling effects - 30 seconds, AEGL3, 12,075 ppm, lethal effects Length of ammonia exposure 12 The length of time that Mr Hutt was exposed to ammonia gas would be regarded as acute rather than chronic. Effects of Ammonia exposure on Mr Hutt 13 It is improbable that a length of exposure of less than 30 seconds would lead to long lasting effects to Mr Hutt such as effects associated with repeated exposure, ie, chronic irrigation of the eye and note [sic], chronic dyspnea, cough and obliterate bronchiolitis. MATTERS RELATED TO REFRIGERATION ENGINEERING 14 As referred to at [48] of the Statement of Agreed Facts, the cause or causes of the Incident included: a. a nut used to secure one of eight bolts on a flange joint located on a discharge pipe was not attached to that bolt at the time of the Incident; and b. a gasket used to secure that flange joint located on a discharge pipe failed. When the flange joint was opened after the Incident, it was observed that the gasket was brittle, a section of the gasket was missing, the gasket appeared to have been used or compressed several times as indicated by markings on the seal face and by reduced sectional thickness. 15 Reuse and the brittleness of the gasket was a contributing factor. The reuse or re­compression of the gasket should not have occurred. Standard practice would be to replace gaskets if the joint had been opened up, at major service intervals and or 25,000 hour overhauls. 16 Most industrial facilities rely on third party contractors to maintain and service their ammonia refrigeration plants. 17 It is common for the refrigeration contractor to propose maintenance contract scope and terms. 18 Regular monthly maintenance is common. Maintenance contractors would identify additional works to be undertaken as additional works. 19 Visual inspection and leak detection (via odours) of flange joints in ammonia refrigeration plants is standard practice. 20 The overall maintenance regime and frequency in place at the Premises was appropriate providing it was being performed properly. 21 Checking tightness of the bolts may have prevented the incident, however, checking tightness of bolts is not normal industry practice.

Affidavit of Mr Camilleri

1. Mr Camilleri Managing Director of the Baiada corporate group which includes the Defendant company affirmed an affidavit on 11 August 2017. Mr Camilleri stated that Baiada had planned extensive upgrades to the site since mid-2014, well before the incident occurred. This included plans for a new purpose-built ammonia plant room located outside the main building at the site. These works commenced in November 2015 and have now been completed. The original plant room and compressor the subject of the incident have been removed.
2. Mr Camilleri attested to actions taken by Baiada since the incident to reduce the risk of recurrence. These include the creation of new roles in risk and compliance, an external audit and risk assessment of all ammonia refrigeration systems in facilities owned by Baiada in NSW, implementation of a new ammonia management standard and voluntary certification of Baiada's environmental management system (EMS).
3. Mr Camilleri attested to Baiada's strong ties to the community and numerous charitable pursuits. It sponsors 42 grassroots sporting teams and provides considerable financial support to 11 children's charities including Ronald McDonald House, Royal Children's Hospital Brisbane, St Vincent's Hospital, Autism SA and Lifestart.
4. Mr Camilleri expressed on behalf of Baiada his sincere regret for the harm caused to Mr Hutt and for the occurrence of the incident.

Affidavit of Mr Onley

1. Mr Onley National Human Resources Manager for Baiada affirmed an affidavit on 11 August 2017. Mr Onley's responsibilities cover all entities of Baiada including the Defendant. Mr Onley referred to numerous documents in his affidavit which were compiled in a bundle and became Exhibit 1 in these proceedings.
2. The Defendant engaged specialist qualified contractors to do refrigeration system maintenance. It changed contractors in August 2015 after having used the same contractor for several years. Mr Onley was not involved in the process of engaging these contractors. Mr Onley stated that he was surprised to learn that a gasket had been reused at the flange joint from which the ammonia escaped as this is contrary to his understanding of industry norms. Mr Onley has had discussions with the management of the Defendant who informed him that they were not aware of any occasion where a contractor suggested maintenance work or repairs that were not acted on by the Defendant. Mr Onley attested that Baiada has undertaken a review of its procedure for the management of contractors and updated its contractor management standard which forms part of its workplace health and safety (WHS) system known as "BSafe". Mr Onley described the BSafe system and use of internal and external audits to manage WHS risks.
3. Mr Onley outlined Baiada's EMS which is the primary means by which it manages environmental risk. The EMS is voluntarily certified to the ISO14001 standard for environmental management systems by British Standards International every three years. Baiada also conducts biannual internal audits of the EMS in respect of each processing site, including the site operated by the Defendant. A Site Environmental Operations Manual (SEOM) applies to each processing facility owned by Baiada. The SEOM consists of documents which comprise the site-specific implementation of the EMS including procedures for the management team on site and environmental management plans relating to identified environmental risks. Mr Onley attested that each site also has an emergency management plan which sets out procedures for a range of possible emergency situations including the release of ammonia gas. The plan incorporates a pollution incident response management plan as required by the terms of the Defendant's EPL. A copy of the emergency management plan for the Premises dated 27 March 2015 was included in Exhibit 1.
4. Mr Onley attested that at the time of the incident the ammonia plant room was designated a "restricted area", contained an ammonia detection system and alarm and included a ventilation hole in the ceiling. A new ammonia plant room has since been constructed at a cost of approximately $5.5 million. Baiada engaged external consultants to design and install the new refrigeration equipment, which includes new compressors, detectors, alarms, personal protective equipment and a vertical discharge extractor fan.
5. Mr Onley attested to numerous measures implemented by Baiada and the Defendant in response to the incident. These were described at length and can be summarised as follows: 1. added additional requirements to the contract with the Defendant's refrigeration maintenance contractors including an express requirement to check the tightness of all nuts, bolts and flanges on refrigeration and ammonia plant every three months; 2. commissioned an external consultant who undertook a comprehensive risk assessment of all ammonia refrigeration systems at Baiada-owned sites. Implemented recommendations from this assessment; 3. hired new risk and compliance personnel; 4. upgraded and standardised Baiada's maintenance software platform to allow for centralised monitoring of maintenance works across all Baiada sites; 5. introduced a new ammonia management standard including a leak response plan; 6. updated Baiada's contractor management standard which has been implemented at the Premises; 7. provided further staff training in a number of areas including the ammonia plant room.
6. Mr Onley attested to the voluntary sustainability initiatives undertaken by Baiada across its operations which have contributed to the Defendant exceeding its targets for water, electricity and gas usage for the 2016-17 financial year.

Purposes of sentencing

1. Section 3A of the Crimes (Sentencing Procedure) Act 1999 (CSP Act) identifies the purposes of sentencing. It states: Part 1 Preliminary 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (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.
2. Section 21A of the CSP Act identifies numerous matters which a court must take into account when sentencing including in relation to aggravating (s 21A(2)) and mitigating (s 21A(3)) factors.
3. In reaching a decision on the appropriate penalty, the Court must consider both the subjective and the objective circumstances of the offence in the context of the relevant legislative framework, Director-General of the Department of Environment and Climate Change v Rae (2009) 168 LGERA 121; [2009] NSWLEC 137 at [15]-[19] and Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234; [2006] NSWLEC 34 at [51]-[71], [168]-[169].

The nature of the offence

1. The degree to which a defendant's conduct offends against the legislative scheme under which an offence arises is relevant to sentencing for environmental offences. The objects of the POEO Act include: 3 Objects of Act (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, (b) to provide increased opportunities for public involvement and participation in environment protection, … (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, … (iv) the making of progressive environmental improvements , including the reduction of pollution at source, (v) the monitoring and reporting of environmental quality on a regular basis, (e) to rationalise, simplify and strengthen the regulatory framework for environment protection, (f) to improve the efficiency of administration of the environment protection legislation ...
2. The Prosecutor submitted that the legislative scheme reflected in the objects and operative provisions of the POEO Act requires that proper and strict precautions be taken by those whose activities may cause proscribed pollution. The adoption of that legislative scheme reflects a stern policy against pollution on the part of the community, Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359. Maintenance of plant and equipment in a proper and efficient condition is vital to prevent pollution, Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80 at [52]. Failing to maintain plant and equipment in a proper and efficient condition undermined the statutory scheme. In Environment Protection Authority v Orica Australia Pty Ltd (the Ammonia Incident) [2014] NSWLEC 107 Pepper J held at [74] that given the potentially toxic and very harmful qualities of ammonia it is a central requirement that plant and equipment is maintained in a proper and efficient manner in accordance with the relevant condition in an EPL. To do otherwise is contrary to the statutory purpose enshrined in s 3 of the POEO Act.
3. These submissions are all accepted but the Prosecutor's submissions did not appear to acknowledge [16]-[21] of the supplementary SOAF. In a nutshell, the supplementary SOAF confirms that the Defendant's approach of engaging a specialist refrigeration consultant was in accordance with industry practice as was the manner of engagement of the contractor. The Prosecutor submitted that if the Defendant was not held liable for the actions of its contractor it would be able to contract out of its responsibilities. This is clearly not correct given that the Defendant, as it accepted, is guilty of an offence under s 64(1). It cannot contract out of that statutory responsibility which reflects the statutory scheme's objectives through imposing strict obligations on licence holders.

Objective circumstances

1. The contravention of an EPL in relation to offences under s 64 is serious because it involves a breach of public trust, Environment Protection Authority v Port Kembla Copper Pty Ltd (2001) 115 LGERA 391; [2001] NSWLEC 174 at [23]-[27] and Environment Protection Authority v Port Kembla Copper Pty Ltd [2003] NSWLEC 256 at [57]. Offences that undermine the integrity of the regulatory system are objectively serious, Director-General v Rae at [19].
2. Section 241(1) of the POEO Act sets out the following factors that the Court is required to take into account when imposing a penalty for offences under the Act: (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.

Extent of harm caused or likely to be caused to the environment by the commission of the offence (s 241(1)(a))

1. The extent of harm caused or likely to be caused to the environment by the commission of the offence is a mandatory consideration pursuant to s 241(1)(a). "Environment" is widely defined in the POEO Act to include land, air and water and any layer of the atmosphere inter alia. "Harm to the environment" is defined to include any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution. The definition of "pollution" in the POEO Act extends to the emission into the air of gases, fumes, mists and odours.
2. The volume of ammonia emitted as a result of the offence is unknown. Ammonia was emitted between approximately 12:20 am and 8:00 am (SOAF at [25], [43]) measured at concentrations up to 900 ppm (SOAF at [51]-[53]).
3. The actual environmental harm caused by the commission of the offence is agreed between the parties (SOAF at [25], [57], [59]). The emission of ammonia into the air was "pollution" and, thereby, "harm to the environment" for the purposes of the POEO Act. The injuries suffered by Mr Hutt are identified in the SOAF at [57]. Mr Hutt required hospitalisation and leave from work for four days. The injuries suffered by Mr Travers were limited to a sore throat (SOAF at [59]). The actual harm caused was serious.
4. As to potential harm, the Prosecutor submitted that short-term exposure to high concentrations of ammonia has a number of potential human health effects, ranging from nausea to death. While the reported concentrations associated with specific symptoms vary somewhat it is reported that at concentrations of 20 ppm eye irritation may occur, at 50 ppm nose and throat irritation may become evident and at concentrations above 2500 ppm for up to two hours death may occur. The potential harm posed by short-term (minutes/hours) exposure to ammonia at that level could include irritation of the eyes, lacrimation, irritation of the throat, coughing and reduced breathing capacity, dizziness and headache among others. If exposure was persistent, then serious irreversible adverse effects could occur and may include breathing difficulties and cyanosis.
5. The Prosecutor's submissions do not recognise the circumstance that very shortly after the leak was detected by Mr Hutt, as he was running from the refrigeration room, the emergency alarm went off at the Premises and all personnel on site were evacuated. The only other person exposed to the ammonia for a very brief period was Mr Travers who went back into the Premises to look for other employees (SOAF at [29]). It is also agreed that ammonia which was vented from the building by the fire brigade did not move beyond the boundary of the Premises (SOAF at [39]-[49], [60]). Given the prompt evacuation of the Premises the potential for harm in terms of human health was reduced. The concentrations of ammonia recorded did not exceed 900 ppm and were never near the lethal range identified in the table in the supplementary SOAF at [10].
6. Harm is an aggravating factor in this case as accepted by the Defendant. I note that the harm to Mr Hutt was serious but fortunately short term.

Practical measures that may have been taken to prevent, control, abate or mitigate that harm (s 241(1)(b))

1. The Prosecutor submitted that the Defendant was under a positive obligation to take proper precautions to ensure that pollution did not occur and to arrange its business activities accordingly, Environment Protection Authority v Baiada Poultry Pty Ltd (2008) 163 LGERA 71; [2008] NSWLEC 280 at [31] citing Axer v Environment Protection Authority at 359. A visual inspection of the flange joint is a practical measure that could have been taken to avoid or mitigate the harm caused in this case, but was not. Checking the tightness of bolts, while unusual, is another practical measure that could have been taken. The failed gasket appeared to have been used or compressed several times. This should not have occurred and standard practice would be to replace gaskets if the joint has been opened up at major service intervals and/or 25,000 hour overhauls.
2. As the Defendant submitted and the Prosecutor accepted in the supplementary SOAF it had engaged specialist contractors to maintain the refrigeration system. It was entitled to consider they would carry out their work diligently and not reuse a compromised gasket. Without taking the flange joint apart the compromised gasket was invisible and the missing nut could not be seen without crawling under the pipe near the compressor where the flange joint was situated. The Defendant had a fully compliant WHS system and an EMS certified to an ISO14001 standard. Engaging contractors in accordance with that system was common and accepted industry practice. The Prosecutor has not suggested the specialist contractor was deficient in skills or knowledge to carry out specialist functions. The Prosecutor has not submitted that the Defendant should have supervised the contractors differently.
3. The practical measures that this Defendant could reasonably have taken to avoid the offence or mitigate the harm caused have not been identified by the Prosecutor. A bootstrap argument that because the Defendant has made changes since the offence designed to prevent a recurrence these could and should have been taken before does not reflect the facts contained in the supplementary SOAF and the fact that the failed gasket was invisible. It could only be detected by taking the flange joint apart, the job of the specialist refrigeration consultant. As the Defendant submitted it could not have reasonably anticipated that its specialist contractor would do such shoddy work.
4. The Defendant's contractor's maintenance regime now includes a tightness check of all nuts, bolts and flanges on refrigeration and ammonia plant every three months, see par 15(a) above. Doing so is not normal industry practice (supplementary SOAF at [21]). The Prosecutor accepted that the measures implemented by the Defendant as detailed in Mr Onley's affidavit are stricter than the usual industry practice.
5. Additional substantial measures taken since the offence include building a new ammonia room as part of a planning process that commenced before the offence occurred, upgrading and standardising Baiada's maintenance software, a new ammonia management standard and an updated contractor management standard, see pars 14-15 above.

Extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused by the offence (s 241(1)(c))

1. The Prosecutor submitted that the Defendant could reasonably have foreseen that a failure to maintain the flange joint in a manner that prevented the leak of ammonia would lead to air pollution and may cause harm to human health. At issue in that statement is whether the Defendant could reasonably have foreseen the shoddy work of its contractor, a matter I have dealt with in relation to s 241(1)(b) and concluded it could not.
2. I do not accept the oral submission made by the Prosecutor's counsel that having in place an emergency system suggested that the harm was reasonably foreseeable. Given the toxicity of ammonia to human health it is clearly prudent, and no doubt a legal requirement, that there be an adequate emergency warning system in place, such as the one that operated appropriately on the day of the offence.

Extent to which the person who committed the offence had control over the causes that gave rise to the offence (s 241(1)(d))

1. In response to the Prosecutor's submission that the Defendant had control over the causes of the offence, the Defendant submitted, and as stated in the SOAF, it had engaged specialist contractors to maintain the refrigeration system and was entitled to consider they would carry out their work diligently and not reuse a compromised gasket. Without taking the flange joint apart the compromised gasket was invisible and the missing nut could not be seen without crawling under the pipe near the compressor where the flange joint was situated. The Defendant had a fully compliant WHS system and an EMS certified to a standard of ISO14001. Engaging contractors in accordance with that system was common and accepted industry practice. The Prosecutor has not suggested the specialist contractor was deficient in skills or knowledge to carry out specialist functions. The Prosecutor has not submitted that the Defendant should have supervised the contractors differently.
2. The Defendant submitted that under a status offence the liability of the Defendant arises from being the holder of an EPL. It contracted out the maintenance of the refrigeration equipment to a specialist contractor in accordance with industry practice. The Defendant was entitled to expect that the contractor would not use or reuse a compromised gasket. The Defendant was reasonably entitled to expect that if the contractors took apart the flange joint that when they rejoined it they would screw all the of the nuts onto the bolts of the joint. The Defendant's submissions are accepted.

Whether, in committing the offence, the person was complying with orders from an employer or supervising employee (s 241(1)(e))

1. This factor is not relevant to this offence.

Maximum penalty

1. The maximum penalty for a corporation is $1,000,000 under s 64(1) of the POEO Act. A maximum penalty is a public expression by Parliament (and, by extension, the general community) of the seriousness of the offence. The gravity of any particular offence should be measured by reference to the range of penalty available, Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 at 698 per Kirby P.

Conclusion on objective seriousness

1. The determination of objective seriousness must reflect the particular circumstances of each case. According to the Prosecutor the objective seriousness of the offence is in the moderate range because of the harm caused. The Prosecutor submitted that the seriousness of the injuries suffered by Mr Hutt as a result of the commission of the offence is an aggravating factor which I have accepted in par 30 above. The challenge of sentencing in this matter is how that circumstance should be weighed up with the other sentencing considerations outlined above where I have concluded that the Prosecutor has not identified steps that the Defendant could have reasonably taken to avoid the escape of ammonia. Nor could the Defendant have been expected to control the work of the specialist refrigeration consultant to a greater extent.
2. The Defendant emphasised the nature of a status offence by reference to Thorneloe v Filipowski (2001) 52 NSWLR 60; [2001] NSWCCA 213 concerning a spill of oil in Botany Bay, a status offence under s 27(1) of the Marine Pollution Act 1987 (now repealed) which provided: Part 4 Pollution relating to transfer operations ... 27 Prohibition of discharges to which Part applies (1) If a discharge to which this Part applies occurs, each appropriate person in relation to the discharge, and any other person whose act caused the discharge, are each guilty of an offence punishable, upon conviction, by a fine not exceeding: (a) if the offender is a natural person - 2 000 penalty units, or (b) if the offender is a body corporate - 10 000 penalty units. (2) Subsection (1) does not apply to a discharge: (a) if the discharge was for the purpose of combating specific pollution incidents in order to minimise the damage from pollution and was approved by a prescribed officer, or (b) if the discharge was carried out by the holder of a licence under the Protection of the Environment Operations Act 1997 in accordance with that licence.
3. Both the owner and master of a ship as appropriate persons pleaded guilty and were convicted of offences under s 27. The discharge resulted from the failure of the chief officer to adequately monitor or fix a gauge during the loading of petrol onto the ship. Some of the petrol was discharged into the surrounding waters. On appeal in relation to the severity of the sentence by the master the Court of Criminal Appeal accepted that he should be given the benefit of a dismissal of the charge pursuant to s 10(1) of the CSP Act and held that the fine of $7,000 imposed by the trial judge was excessive. Spigelman CJ (Hulme and Howie JJ agreeing) held that in the exercise of the s 10 discretion it is relevant to consider, even for strict liability offences, what the defendant could have done to avert the incident, at [178]. His Honour held at [186] that "[n]o doubt some further guidance or training might have made a difference in each case, but it is difficult to identify any effective step which the Master could have taken that does not require virtual perfection".
4. The Defendant also relied on Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304; [2001] NSWCCA 280, a water pollution case in which raw sewage disposed of by a council employee at a landfill site flowed down a dry gully. The trial judge took into account as an aggravating factor that the offence was committed intentionally by the employee. On appeal the Court of Criminal Appeal addressed this issue at [29] per Giles JA (Hulme and Adams JJ agreeing): ... The person charged with the offence was the appellant, not [its employee]. It would be material to consider the education and instruction given to [the employee] and the procedures put in place by the appellant in order to guard against disposal of septic waste other than in a proper manner. That [the employee's] actions were deliberate would, however, be a consequence of deficiencies in these respects, material because reflecting on the appellant but not itself a matter counting against the appellant in arriving at the penalty to be imposed. To illustrate the point, if an employer had done everything it could possibly have done to guard against an employee wrongly disposing of polluting matter, it could hardly be held against the employer that the employee, for reasons of his own, deliberately did so.
5. Giles JA held at [33] that the appellant did not commit the offence intentionally. Although the appellant could have done more in the way of giving further instructions in relation to the disposal of septic waste it did not act unreasonably. Accordingly the fine was reduced from $75,000 to $11,250, at [38].
6. I agree with the Defendant that similar considerations to those referred to in Thorneloe which concerned a status offence under the Marine Pollution Act and Cabonne which concerned the level of culpability of an employer for an employee acting outside what the employer could have reasonably expected arise in this case. In those cases the Court of Criminal Appeal emphasises that a court when sentencing must consider the culpability of the defendant before it and what could be reasonably done by them.
7. By way of contrast, the circumstances in this case are different to Environment Protection Authority v Baida Poultry which the Prosecutor relied on. In that case the work of a plumbing contractor resulted in faulty welding of an underground pipe which caused a leak of a substantial amount of effluent. The Court found that there were several measures which could have been taken to avoid the leak such as the use of telemetry devices to alert the operator to leaks. The evidence in this case does not give rise to a similar conclusion.
8. Having regard to all of the above matters, I find that the offence to which the Defendant has pleaded guilty is at the high end of the low range of objective seriousness.

General deterrence

1. The Prosecutor submitted that the sentence of the Court is a public denunciation of the conduct of the offender. The sentence must ensure that the offender is held accountable for his or her actions and is adequately punished or given his just deserts. The sentence must deter the offender from committing similar offences in the future, Director-General v Rae at [8]).
2. The sentence of the Court needs to operate as a general deterrent to prevent the commission of similar offences by persons who might be tempted to do so by the prospect that, if they are caught, only light punishment will be imposed. The purpose of general deterrence is particularly relevant when imposing sentences for environmental offences, Bentley v BGP Properties at [140].
3. The objects of pollution control legislation require a substantial sentence to punish the offender, deter others and encourage full compliance with the relevant statute by the offender and others, Camilleri's Stock Feeds at 701. The object of the POEO Act is to prevent pollution and to do this, at least in part, by the deterrent effect of a substantial fine and by persuading the industries concerned to adopt preventative measures, Axer v Environment Protection Authority at 359. Offenders will not be deterred from committing environmental offences by the imposition of nominal fines, Bentley v BGP Properties at [140].

Specific deterrence

1. The Prosecutor also submitted that an element of specific deterrence was warranted in light of the circumstances discussed. No basis for doing so exists given the Defendant's systems in place before the incident were in accordance with industry practice and could not have identified the cause of the leak. The systems implemented since then go above and beyond what is industry practice.

Retribution and denunciation

1. Retribution and denunciation are further factors that must be considered, as set out in ss 3A(a) and (e) of the CSP Act. These are factors that the Court needs to take into account when determining penalty.

Subjective factors

1. The mitigating factors relevant to sentencing are referred to in s 21A(3) of the CSP Act.

Discount for early guilty plea (ss 21A(3)(k), 22)

1. An early plea of guilty may entitle a defendant to a discount in penalty in the range of 10-25%, R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 at 419. This range is intended to be a guide only, it does not create a presumption or entitlement to a particular discount in a given situation, R v Araya (2005) 155 A Crim R 555; [2005] NSWCCA 283 at [44].
2. The Defendant pleaded guilty at an early stage of proceedings (SOAF at [66]). The Defendant submitted that the time it pleaded guilty on 7 April 2017 was the first reasonably available opportunity to do so. I accept this submission and that the Defendant should be entitled to a discount of 25% for the full utilitarian value of its plea.

Cooperation with Prosecutor (ss 21A(3)(m), 23)

1. The Defendant has cooperated with the Prosecutor during the investigation and in relation to the preparation of a SOAF and supplementary SOAF (SOAF at [67]).

Prior record and good character of defendant (ss 21A(3)(e)-(f))

1. The Defendant does not have any prior convictions for environmental offences in NSW.
2. The affidavit of Mr Camilleri outlined Baiada's strong ties to local communities throughout Australia and the significant support it offers to charities and other organisations, see par 9 above. I am satisfied that the Defendant as a wholly-owned entity of the Baiada corporate group is of good corporate character.

Remorse and contrition (s 21A(3)(i))

1. I accept the Defendant's expression of remorse and contrition through Mr Camilleri its Managing Director. Further, the substantial actions taken since the offence as identified by Mr Onley further demonstrate the Defendant's remorse.

Even-handedness

1. The principle of even-handedness 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, Hoare v The Queen (1989) 167 CLR 348; [1989] HCA 33. The principle of even-handedness in sentencing so that like offences receive like sentences is recognised, but each case must be determined on its own facts, Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45. A history of sentencing in other cases does not limit my sentencing discretion.
2. The Prosecutor referred to a number of cases where a corporation was sentenced for failure to comply with a licence condition contrary to s 64(1). The most relevant cases are summarised below.
3. In Environment Protection Authority v Delta Electricity [2009] NSWLEC 11 the defendant failed to maintain its premises in a condition so as to minimise or prevent the emission of dust. The breach of the relevant licence condition occurred when a specialist contractor failed to ensure that a mound of fly ash, a type of dust produced during coal mining operations, was capped and kept sufficiently damp to prevent fly ash from escaping from the premises on a day of strong, gusting winds. The potential environmental harm was found to be not substantial and there was no actual harm, at [19]-[20]. The objective seriousness of the offence was low, at [41]. The defendant's culpability was low as it had attempted to address risks from its operations although some of these were not known until an investigation carried out subsequent to the incident, at [43]-[44]. It had taken steps to ensure that the contract was complied with, at [32]. The defendant was fined $45,000 and ordered to pay the prosecutor's costs of $35,000, at [60]-[62].
4. In Environment Protection Authority v Werris Creek Coal a coal mining company and its director pleaded guilty and were convicted of offences under s 64(1) of the POEO Act. The breach of a licence condition arose when the concentration of total suspended solids in a sediment dam on the mine site exceeded the maximum level permitted under the EPL. The responsibility for the operation of the mine including water runoff control and management was held by a contractor. The offence occurred after the wall of a pit dewatering dam was intentionally breached by a contractor, contrary to instructions, which caused water to flow from that dam into the sediment dam downstream, at [19]-[21], [29]. The environmental harm was minor, at [39]. The trial judge considered Thorneloe and Cabonne and concluded that the culpability of the defendants, who did not act carelessly in their management of the contract, was low, at [111]. The company was fined $70,000 reduced to $49,000 on account of mitigating factors with the penalty directed to an environmental rehabilitation project, at [126]-[127]. Costs were ordered as was the publication of the offence. The director received an order under s 10(1)(a) of the CSP Act dismissing the charge without proceeding to a conviction, at [134]-[146].
5. While referred to by the Prosecutor the circumstances of Environment Protection Authority v Orica Australia Pty Ltd (the Ammonia Incident) which also arose from the escape of ammonia are substantially different to this case. Nine individuals were affected by unlawful releases of ammonia, with symptoms ranging from discomfort to nausea, sore throat and dry retching. These effects were treated as an aggravating factor, at [95]. The trial judge considered the extent of the harm which included potential harm based on the toxic nature of ammonia to be moderate to serious, at [94]. The offence was found to have been committed due to the defendant's negligence, at [99]. The defendant was fined $250,000 discounted by 30% to $175,000 accounting for mitigating factors including an early guilty plea, at [140].
6. The circumstances of Delta and Werris Creek are similar but the harm in this case is aggravated unlike in those cases where it was found not to be substantial or was minor.

Penalty

1. The 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 The Queen (2011) 244 CLR 120; [2011] HCA 39 at [26] unanimously following Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 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 The Queen (1979) 143 CLR 458; [1979] HCA 7 at 490 and Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14 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", per Veen (No 2) at 472, 485-486, 490-491, 496 and Hoare v The Queen at 354 per Mason CJ, Deane, Dawson, Toohey and McHugh JJ.
2. The appropriate penalty is $120,000 which I will reduce by 30% in light of mitigating factors to $84,000.

Publication order

1. The Prosecutor seeks an order under s 250(1)(a) of the POEO Act that the Defendant take specified action to publicise the offence (including the circumstances of the offence) and its environmental and other consequences, and any other orders made by the Court against the Defendant.
2. Publicising sentences for environmental crime improves the effectiveness of sentences as a deterrent, particularly for corporate offenders, who are susceptible to criminal stigma, Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299; [2006] NSWLEC 419 at [241]-[244].
3. It is appropriate to make a publication order in this case to enhance the deterrent value of the sentence in the terms set out in Annexure "A" to this judgment. Such orders are to be made in addition to any other penalty imposed as provided by s 244(2) of the POEO Act.

Costs

1. The Prosecutor seeks an order for its costs, as agreed or assessed, pursuant to s 257B of the Criminal Procedure Act 1986. The Defendant has agreed to pay the Prosecutor's legal costs and submitted that this should be taken into account by the Court when determining the appropriate sentence. The amount of costs can be taken into account as part of the consideration of penalty, Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78], [88] per Kirby J (Mason P and Hoeben J agreeing). That the approach to costs in the exercise of sentencing discretion in Barnes was acceptable does not mean that approach must be applied in every case before the Court. Payment of the Prosecutor's costs of itself is not a reason for reducing a penalty in a particular case lower than that suggested by the general pattern of sentencing for the relevant offence.

Order

1. The Court makes the following orders: 1. The Defendant Steggles Foods Mt Kuring-gai Pty Ltd is convicted of the offence under s 64(1) of the Protection of the Environment Operations Act 1997 as charged. 2. A penalty of $84,000 is imposed. 3. The Defendant is to pay the Prosecutor's costs of the proceedings in the amount as may be determined under s 257G of the Criminal Procedure Act 1986. 4. Pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 the Defendant is, at its expense and within 28 days of the date of this order, to cause a notice in the form of Annexure "A" to be placed within the first five (5) pages of the following publications, at a minimum size of 10 cm x 18 cm: 1. The Sydney Morning Herald; and 2. The Hornsby Advocate. 1. Within 35 days of the date of this order, the Defendant must provide to the Prosecutor a complete copy of the pages of the publications. 2. The exhibits be returned.

ANNEXURE "A" Steggles Foods Mt Kuring-gai Pty Ltd convicted of breaching licence offence and ordered to pay $84,000 Steggles Foods Mt Kuring-gai Pty Ltd (SFMK) has been convicted and fined $84,000 by the Land and Environment Court of NSW following the breach by a third party maintenance contractor of a condition of the Environment Protection Licence (EPL) issued to SFMK by the Environment Protection Authority (EPA). The EPL authorises activities at SFMK's' food processing plant located at Mt Kuring-gai near Hornsby. The offence occurred in December 2015 when ammonia gas escaped from a refrigeration system that was not maintained properly by a third party maintenance contractor. As licence holder, SFMK was found guilty for the breach of its licence. As a result of the ammonia escape, two workers were injured and one suffered burns to his airways requiring admission to hospital. On 15 December 2017 the Land and Environment Court convicted SFMK and ordered it to:

1. Pay a fine of $84,000;
2. Pay the EPA's legal costs; and
3. Place and pay for this publication notice. 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: 18 December 2017