Environment Protection Authority v Sydney Water Corporation

The events of the offences

1. The Plant treats sewage effluent from a considerable part of Sydney. The effluent goes through a process of primary treatment that involves screening, degritting and sedimentation to remove solids. No chemical process is applied at the Plant.
2. The effluent is treated in sedimentation tanks and then flows into a concrete channel ('the Effluent Channel'). The treated effluent flows from south to north along the Effluent Channel towards an inlet to the deep water ocean outfall pipe. The deep water ocean outfall pipe extends 3.6km into the Tasman Sea. The discharge of treated effluent through this deep water ocean outfall pipe is authorised by the Licence.
3. Some of the treated effluent in the Effluent Channel is captured, before entering the inlet of the deep water ocean outfall pipe, by a reclaimed effluent pipeline ('RE Pipe'). The reclaimed effluent is used at the Plant for various purposes so as to save on the use of potable water.
4. The RE Pipe runs horizontally from north to south back along the Effluent Channel that is otherwise full of effluent flowing from south to north towards the deep water ocean outfall. The RE Pipe then turns and travels through a concrete wall in the Effluent Channel into a largely dry section of another concrete channel called the Overflow Channel.
5. The concrete wall that separates the Effluent Channel from the Overflow Channel is designed so that it does not reach the ceiling of either channel. It is designed so that, in the event of disruption of the flow through the deep water ocean outfall pipe, effluent coming from the sedimentation tanks can spill over the wall from the Effluent Channel into the Overflow Channel and be discharged into the ocean near Malabar headland via the Shoreline Pipe.
6. The Overflow Channel has a horizontal section of approximately 23m, then a nine metre vertical shaft called a Stilling Well. At the bottom of the vertical Stilling Well, the Overflow Channel is connected to a channel running underground from west to east through Malabar headland and ending at the Shoreline Pipe.
7. The RE Pipe, after passing through the concrete wall separating the Effluent Channel and the Overflow Channel, travels inside the horizontal section of the Overflow Channel. This horizontal section of the Overflow Channel is 3.7m below the concrete floor of the Plant, which is itself underground. In this section of the Overflow Channel, the RE Pipe is constructed so that two lengths of pipe are joined together by a Gibault joint ('the Joint'). This is the joint that split and leaked effluent during the incident.
8. After leaving the horizontal section of the Overflow Channel, the RE Pipe travels down the vertical section of the Overflow Channel (the Stilling Well). In this vertical section, the RE Pipe was meant to be affixed to the wall of the Stilling Well by a metal bracket. This is the bracket that broke and was severed from the wall, allowing the RE Pipe to move. The RE Pipe was also supported by concrete support pillars on the floor of the Overflow Channel and by additional metal brackets at the base of the Stilling Well.
9. At a point before reaching the bottom of the Stilling Well, the RE Pipe travels through a wall away from the Overflow Channel into other sections of the Plant.
10. The alignment of the RE Pipe in the dry section of the Overflow Channel is such that any leak of effluent from the RE Pipe in this part of the Overflow Channel would flow to the Shoreline Pipe and then be discharged into the ocean from that pipe.
11. The metal bracket affixing the RE Pipe to the vertical wall of the Stilling Well broke by at least May 2010 and remained broken throughout the period of the incident between 5-7 September 2013. The metal bracket may have corroded by the hydrogen sulphide gas created by the effluent.
12. The absence of the bracket holding the RE Pipe to the wall allowed the RE Pipe to move when reclaimed effluent flowed through the pipe. The movement of the RE Pipe placed stress on the Joint between the two links of the RE Pipe in the horizontal section of the Overflow Channel. By at least 5 September 2013, the Joint split and commenced leaking.
13. Reclaimed effluent flowed out of the RE Pipe through the split joint into the Overflow Channel. The effluent flowed horizontally along the Overflow Channel, vertically down the Stilling Well, and then into the channel that flowed into the Shoreline Pipe. The effluent then mixed with seawater in the Shoreline Pipe and from there the mixture of seawater and effluent flowed into the sea near Yellow Rock on Malabar headland.

Events after the offences

1. On 5 September 2013, at around 11.00am, a local fisherman, Mr Ferguson, noticed a foul smell and dark discolouration on the surface near Yellow Rock in the vicinity of the Shoreline Pipe while he was motoring past in his dinghy. Mr Ferguson recognised the foul smell as being sewage. Mr Ferguson motored closer to the headland and observed a clear oily sheen on the water and a circular patch of water with a dark colour, approximately 2.5m to 3m in diameter. Mr Ferguson had also noticed the odour while motoring past the area in his dinghy on the three previous days, although he had not motored closer to the headland on those days. Later that evening at approximately 6.50pm, Mr Ferguson reported his observations to the EPA. The EPA notified Sydney Water via its contact centre at 7.41pm. Neither Mr Ferguson nor the EPA contacted the Plant directly on 5 September 2013.
2. Sydney Water civil maintenance crews investigated the Shoreline Pipe in failing light in the evening of 5 September 2013 and during choppy seas in the morning of 6 September 2013. No odour or discoloration was detected. The civil maintenance crew returned to the Plant and undertook investigations between 7.35am to 10.50am on 6 September 2013 to try to discover any leak. They lifted various hatch covers over the underground channel leading from the Overflow Channel to the Shoreline Pipe. These investigations did not detect any flow coming from the Plant towards the Shoreline Pipe or any odour that would indicate a leak from the Plant into the Overflow Channel.
3. However, at 9.00am on 6 September 2013, another Sydney Water employee, Mr Tiku, who was independently undertaking a routine visual inspection of the underground areas of the Plant, detected an unusual sound and odour. He lifted covers on the concrete floor of the Plant above the Effluent Channel and Overflow Channel to find the source. He discovered that the Joint in the RE Pipe was leaking effluent in the dry section of the Overflow Channel.
4. Sydney Water then investigated how to stop the leak that Mr Tiku had discovered. There was no isolation valve in place to stop inflow of effluent from the Effluent Channel into the RE Pipe. Sydney Water concluded that the RE Pipe inlet should be plugged to stop the inflow. However, no Sydney Water production officers were qualified for the very specialised confined space, entry and diving work required to access the Effluent Channel and Overflow Channel. Sydney Water therefore engaged specialist divers, McLennans Diving Service ('MDS') to enter the Effluent Channel by the Overflow Channel and to then plug the inlet to the RE Pipe.
5. Sydney Water accessed the plans of that part of the Plant containing the Effluent Channel, Overflow Channel and the RE Pipe. These plans showed the inlet of the RE Pipe within the Effluent Channel to be at 0.25m above the floor of the Effluent Channel at the point where the RE Pipe passes through the wall that separates the Effluent Channel from the Overflow Channel. The Effluent Channel carries fast-flowing treated effluent at a typical depth of 1.8m.
6. However, Sydney Water's plans of the RE Pipe system were not accurate and the inlet was not in the location shown on the plans. The actual location of the inlet was at the extreme northern end of the Effluent Channel (in the ocean outfall penstock stilling well), some 55m from the location shown on the plan.
7. When the inlet to the RE Pipe could not be located, despite following the RE Pipe through the Effluent Channel for approximately 40m, the strategy of plugging the inlet of the RE Pipe was put on hold. Instead, sandbags were placed directly on the leaking joint to reduce the flow from the leak and within the Overflow Channel to create a dam to trap the leaked effluent and prevent it from flowing into the Stilling Well. When the leaked effluent pooled to a sufficient depth within the dry section of the Overflow Channel, it was pumped back to the Effluent Channel for discharge via the deep water ocean outfall pipe. The leak was contained by these means by 11.00am on 7 September 2013.
8. On 8 September 2013, the inlet to the RE Pipe was located and then plugged. Subsequently, Sydney Water replaced the broken bracket and the split joint.

Actions taken to prevent reoccurrence of the offences

1. Sydney Water has taken various actions to prevent a reoccurrence of the incident at the Plant or the occurrence of a similar incident at other Sydney Water sewage treatment plants, including: (a) replaced the broken Bracket and Joint; (b) replaced support brackets beneath the RE Pipe at the bottom of the drop shaft at the end of the Overflow Channel; (c) replaced all bolts on the RE Pipe flanges; (d) installed an isolation valve on the horizontal section of the RE Pipe to allow the flow of reclaimed effluent in the RE Pipe to be immediately stopped, such as in the event of a leak. The isolation valve is operated from the floor level above via an access point in the floor, so that the operator does not need to enter the confined space of the Overflow Channel; (e) constructed a weir in the Overflow Channel and installed and calibrated a new level sensor to trigger a remote alarm if water ponds behind the weir, to detect any possible future pipe leak and allow a response before any discharge occurs. Visual surveillance of the weir is also undertaken daily; (f) installed a conductivity instrument within the Stilling Well which detects the presence of sewage (as opposed to industrial water) and allows 24/7 monitoring of the conductivity. This will detect a leak from the horizontal and vertical parts of the RE Pipe within this section of the Plant due to the increase in conductivity in the Stilling Well and trigger a remote alarm; (g) undertook a review of the Plant to determine if there were any other opportunities for leakage of effluent to the Overflow Channel or other unauthorised discharge points; (h) undertook a review of other Sydney Water Sewage Treatment Plants to check for opportunities for leakage of effluent from those plants; (i) implemented a more detailed daily surveillance regime for the RE Pipe at the Plant and inspection hatches were identified and painted for this purpose; (j) added the RE Pipe to the Plant's risk register known as "KnowRisk", and updated the Plant's Integrated Management System to include required inspections and training of staff. Sydney Water Corporation also included this specific location of the RE Pipe in Maximo; (k) tested the thickness of the RE Pipe within the Overflow Channel by use of an ultrasonic tester to determine whether there were any other likely failure or leakage points. The thickness of RE Pipe was found to be acceptable and no repairs were deemed necessary; and (l) for each of the Bondi and North Head Sewage Treatment Plants, the inspection of the reclaimed effluent pipe at each was added to the relevant risk register even though each of these pipes is easily visible and monitored, and designed to automatically capture and contain any possible leakage within the Plant.
2. Sydney Water has said that it plans to replace and relocate the RE Pipe to a more easily accessible and observable location and reroute it so that any leak will remain in the Plant. Sydney Water proposes to do this work as part of a $115 million upgrade works project and has decided to bring forward this part of the upgrade project so that the RE Pipe is relocated by mid to late 2015. The cost estimate for this work $1.57 million. The concept design for the RE Pipe relocation and replacement was completed in 2014 and detailed design work is underway. Contracts have been awarded for new pumps and filters/strainers to be supplied. Tenders have been called for new stainless steel pipe work. Work has commenced to remove redundant pipe work in galleries to prepare for installation of the new pipe work.

The environmental harm caused by the offences

1. As a result of the incident, treated effluent was discharged into the sea at a location that was not authorised by the Licence. The Licence authorised the discharge of effluent of the kind that was discharged from the deep water ocean outfall which ends 80m underwater and approximately 3.6km east of the cliff face at Yellow Rock on Malabar headland. In addition, the Licence authorises the discharge of such effluent into the sea from the Shoreline Pipe near the cliff face at Yellow Rock if inflows of sewage to the Plant exceed a specified volume. Hence, the treated effluent that leaked from the RE Pipe and flowed into the Shoreline Pipe and was discharged into the sea was of a kind that could be discharged (treated effluent) and was discharged into the sea at a point where, in certain circumstances, it could be discharged (at the Shoreline Pipe).
2. However, in this case, the inflows to the Plant at the time of the incident did not exceed the specified volume and hence Sydney Water was not able to lawfully discharge effluent out of the Shoreline Pipe.
3. The volume of treated effluent discharged out of the Shoreline Pipe into the sea as a result of the incident is not clear, as it is not known when the leak in the Joint in the RE Pipe began. Two rough calculations were made by Sydney Water employees, from a low of 117,000 litres to a high of 500,000 litres, for the volume of effluent that might have leaked from the time that Sydney Water was notified of the incident on 5 September 2013 (7.41pm) to the time Sydney Water contained the flow on 7 September 2013 (11.00am), a period of about 39 and a half hours. However, both of these are underestimates.
4. Mr Ferguson noticed what he recognised as effluent in the sea near Yellow Rock in the vicinity of the Shoreline Pipe at 11.00am on 5 September 2013, about eight and a half hours before Sydney Water was notified of the incident. Effluent was therefore likely to have been discharged from the Shoreline Pipe by at least 11.00am on 5 September 2013. Indeed, effluent might have been discharged for the three previous days. Mr Ferguson said he had noticed the odour that he recognised as sewage while motoring in his boat in the area on the three previous days of 2, 3 and 4 September 2013. The volume of effluent discharged into the sea near Yellow Rock is likely to have therefore been significantly greater than the volumes roughly calculated by Sydney Water employees.
5. The effluent was discharged out of the Shoreline Pipe into the sea at Yellow Rock, which allowed for rapid dispersal of the effluent.
6. Effluent can potentially cause a deterioration in water quality, which can have detrimental impacts on marine organisms and associated ecological communities. It can also cause human amenity impacts and human health risks through bacterial contamination.
7. However, there was no evidence that the effluent discharged as a result of the incident had any impacts on marine organisms or ecological communities or that it resulted in bacterial contamination or caused any impacts on human health.
8. The EPA and Sydney Water agreed that the relatively short duration of the incident, the volume of effluent discharged and the nature of the receiving environment (allowing for rapid dispersal) were such that the incident could not be said to have caused any actual environmental harm in an ecological sense, other than the water pollution itself.
9. The discharge of effluent from the Shoreline Pipe into the sea off Malabar headland also had the potential to affect the water quality of the two nearby beaches, Maroubra Beach to the north and Malabar Beach to the south, and the amenity and recreational enjoyment of beachgoers at those beaches. However, the evidence does not establish that the discharge resulted in effluent or increased pollutants being detected in the waters at either beach. Sydney Water undertook sampling and analysis of water quality at Maroubra and Malabar beaches on 6, 7 and 8 September 2013. The sampling on each occasion did not detect the presence of sewage or any pollutant increases linked to the incident. Sydney Water provided the results of the testing to Randwick City Council ('the Council'), Beachwatch and the EPA. On 6 September 2013, the Office of Environment and Heritage emailed the Council stating that the samples collected by Sydney Water showed negative ammonia and that the impacts of the incident were quite localised in the vicinity of the Shoreline Pipe only.
10. Nevertheless, the Council decided to close Malabar Beach as a precautionary measure on 7 and 8 September 2013. The Council engaged a lifeguard to patrol the beach and to advise people using the beach against swimming and erected signs at the beach and the baths advising against swimming. The lifeguard advised approximately 150 to 200 people each day. As a consequence, some people who may have wished to swim on these days were unable to do so.

The offences committed

1. The discharge of treated effluent out of the Shoreline Pipe into the sea during the period of the incident involved the pollution of waters, in contravention of s 120(1) of POEO Act. This pollution was not authorised by the Licence held by Sydney Water. Under the Licence, effluent can only be discharged through the Shoreline Pipe lawfully when the inflow of sewage to the Plant exceeds a specified volume. The inflow did not exceed that volume during the incident. Hence, there was no defence of authority conferred by the Licence under s 122 of the POEO Act.
2. The Licence required, by condition O2.1 that: 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; …
3. The leak of effluent from the RE Pipe was caused by deficiencies in two pieces of plant and equipment at the Plant. First, the bracket holding the RE Pipe to the wall of the Stilling Well broke and was severed from the wall. This allowed the RE Pipe to move and cause stress to the Joint joining two lengths of the RE Pipe. The Joint then split, allowing effluent to leak out of the RE Pipe. Sydney Water failed to maintain these two pieces of plant and equipment in a proper and efficient condition.
4. The RE Pipe was not recorded in the Plant's maintenance scheduling software, called Maximo. Maximo includes a list of pieces of plant and equipment and enables maintenance scheduling. However, the version of Maximo used by Sydney Water did not record linear assets such as pipes because it used a specific location to identify and track assets. Hence, the RE Pipe was not recorded in Maximo and no maintenance was thereby scheduled for the RE Pipe.
5. Sydney Water also did not have a specific inspection or maintenance schedule for the RE Pipe in general or the bracket or the Joint in particular. Instead, pieces of plant and equipment not recorded in Maximo were inspected in the form of daily Plant inspections known as "Level One Condition Monitoring" or by regular asset condition assessment.
6. Level One Condition Monitoring is a monitoring method, required by Sydney Water's standard operating procedures to be undertaken, whereby plant operators with experience in the operation of the Plant use sight, smell, touch, and sound in ascertaining whether there are any abnormal conditions within the Plant and, if any are detected, investigating and reporting on these matters and any maintenance required. Mr Tiku was undertaking such monitoring when he detected by sound and odour the leak in the Joint on 6 September 2013.
7. An asset condition assessment of the underfloor/underwater channels and structures at the Plant was undertaken in May 2010. Sydney Water retained MDS to undertake these inspections. MDS inspected the Effluent Channel and dry Overflow Channel. MDS noticed that the dry Overflow Channel was heavily affected by corrosion of its concrete surfaces. MDS did not inspect the Stilling Well (the vertical part of the Overflow Channel) or the vertical section of the RE Pipe. The bracket holding the RE Pipe to the wall of the Stilling Well was not visible from the Overflow Channel. MDS did take two photographs of the bracket by holding a camera out into the Stilling Well. MDS used one of these photographs in its inspection report provided to Sydney Water. However, the photograph was cropped and the part of the bracket that later broke was omitted from the image provided. After the incident, MDS re-examined and enhanced the original photograph, which showed the bracket to be heavily corroded.
8. MDS's incident report did not particularly discuss the RE Pipe, the bracket or the Joint. The cropped photograph of the RE Pipe and bracket in the inspection report showed some corrosion of the RE Pipe and bracket but Sydney Water did not consider the corrosion indicated any short term need for any repair or replacement work.
9. Subsequently, Sydney Water did not take any action in relation to the bracket or the RE Pipe. There were some maintenance works undertaken between February to August 2012, such as the sealing of the concrete wall penetrated by the RE Pipe, where there was weeping of effluent from the Effluent Channel into the Overflow Channel around the outside of the RE Pipe. This work was in very close proximity to the Joint and no leak was reported at this time.
10. Other than through Level One Condition Monitoring and the inspection and maintenance of the RE Pipe around where it passed through the Overflow Channel wall where concrete was sealed, none of the bracket, Joint, Stilling Well or RE Pipe was inspected or maintained between the period of the MDS inspection in May 2010 and the incident between 5 and 7 September 2013.
11. Sydney Water, therefore, failed to maintain the RE Pipe, the bracket and the Joint in a proper and efficient condition, in contravention of condition O2.1(a) of the Licence. The contravention of this condition of the Licence is an offence under s 64(1) of the POEO Act. No defence under s 64(2) of the POEO Act applies.

Sentencing considerations

1. The sentence imposed by the Court must reflect both the objective seriousness of the offences and the subjective circumstances of the offender, Sydney Water. The Court must consider the factors of relevance in s 21A of the Crimes (Sentencing Procedure) Act 1999 ('CSP Act') and s 241(1) of the POEO Act.
2. The Court must consider the purposes for which the Court may impose a sentence in s 3A of the CSP Act. Paragraphs (a), (b), (e), (f) and (g) are relevant to the offences and the offender in this case.

Objective seriousness of the offences

1. The objective circumstances of the offences of relevance are: the nature of the offences; the maximum penalties; the environmental harm; the foreseeability of the risk of environmental harm; the practical measures to prevent environmental harm, the control over the causes giving rise to the offences; and whether the offences were committed with any heightened state of mind or for financial gain.

Nature of offences

1. The objects of the POEO Act include to protect the quality of the environment and to prevent pollution of it. Provisions of the POEO Act prohibit various forms of pollution, including pollution of water. The prohibitions can be relaxed by obtaining various forms of authority, such as an environment protection licence. The application for and approval of an environment protection licence requires environmental impact assessment of the activity and imposition of conditions on a licence to prevent, control, abate or mitigate pollution and other harm to the environment. Such conditions may include regulating where, when, and how pollution can occur and the measures that are to be taken to prevent, control, abate or mitigate pollution.
2. Sydney Water's conduct of polluting waters, other than in accordance with the conditions to which its environment protection licence was subject relating to the pollution of waters, undermined this statutory scheme. Sydney Water was not authorised to discharge the effluent pollutant at the location (the Shoreline Pipe at Yellow Rock) and at the time it did (when the inflows to the Plant did not exceed the specified volume). Sydney Water therefore polluted waters other than in accordance with the scheme prescribed by the Licence.
3. Sydney Water's conduct in failing to maintain its plant and equipment in a proper and efficient condition also undermined the statutory scheme. Maintenance of plant and equipment in a proper and efficient condition is vital to prevent pollution. The Licence, by imposing a condition, uses this mechanism to promote pollution prevention. Sydney Water's failure to maintain certain pieces of plant and equipment not only contravenes the condition of the Licence intended to prevent pollution, but in fact also resulted in pollution.

Maximum penalty

1. The maximum penalty for each offence against s 120(1) and s 64(1) of the POEO Act is $1,000,000 for a corporation. There is also a daily penalty of $120,000 per day for continuing offences, but Sydney Water is not charged with committing a continuing offence. These high maximum penalties reflect the seriousness with which Parliament views the offences against s 120(1) and s 64(1) of the POEO Act.

The environmental harm caused

1. The harm caused or likely to be caused to the environment by commission of the offence is a consequence of the offence that is relevant to the objective seriousness of the offence: s 241(1)(a) of the POEO Act and s 21A(2)(g) of the CSP Act.
2. Commission of the offences in this case caused pollution of the waters of the Tasman Sea near Malabar headland. The treated effluent was a pollutant that affected the condition of the receiving waters. The pollution lasted certainly for two days (from 5 to 7 September 2013) but possibly up to five days (from 2 September when Mr Ferguson smelt an odour he recognised as sewage in the area of the Shoreline Pipe until 7 September 2013). The volume of pollutant discharged into the waters was sizeable, certainly hundreds of thousands of litres of effluent and likely much more.
3. Sydney Water submitted that this actual pollution of waters needed to be viewed in the context that the pollutant was of a kind that Sydney Water was able to lawfully discharge under its Licence (sewage treated by primary treatment) and that the point of discharge was a point from which Sydney Water was able to lawfully discharge under its Licence in certain circumstances (when inflows to the Plant exceed a certain volume). Both those points can be accepted. However, the fact remains that pollution of waters occurred at that point of discharge at a time and in circumstances where the Licence did not permit the discharge. There was, therefore, pollution of waters beyond what the law permitted. Effluent of the nature and volume that was discharged to the sea from the Shoreline Pipe at the cliff face off Malabar headland by law should have been discharged 3.6km offshore and 80m underwater, from the deep water ocean outfall. The two receiving marine environments are quite different.
4. The evidence does not establish that this actual pollution of waters caused ecological harm, such as impacts on marine organisms or ecological communities, or harmed human health, such as bacterial contamination. The evidence does not establish that humans were exposed to, or had their health affected by, water containing sewage or increased pollutants linked to the incident.
5. There is also no evidence that the pollution directly caused amenity impacts. The evidence does not establish that the effluent discharged as a result of the incident reached the nearby beaches so as to adversely impact on the amenity and enjoyment of nearby beaches. Sampling and testing at Maroubra and Malabar beaches on 6, 7 and 8 September 2013 did not detect the presence of sewage or increased pollutants linked to the incident. There is no evidence of the effluent being seen or smelt in the waters and beaches of Maroubra or Malabar.
6. Nevertheless, the pollution indirectly caused amenity impacts. Randwick City Council decided to close Malabar Beach for two days (7 and 8 September 2013) as a precautionary measure so long as the leak of effluent from the Plant was causing discharge into and pollution of the sea. Lifeguards engaged by the Council advised 150 to 200 people each day against swimming. Some of these people, who may have wished to swim, were thereby prevented from doing so. This impacted on their amenity and enjoyment of the beach. This decision of the Council to close the beach was a reasonable response that, whilst the discharge of effluent from the Shoreline Pipe continued, there was a risk that the quality of waters at Malabar Beach and hence the health of swimmers might be adversely affected. The effluent discharge can, therefore, still be seen to be a cause of the diminution in public amenity and enjoyment at Malabar Beach for the two days it was closed.
7. Neither the EPA nor Sydney Water contended that the environmental harm caused by the commission of the offences was "substantial" within the meaning of s 21A(2)(g) of the CSP Act, so as to be an aggravating factor. I disagree. I consider that the harm caused by the offences can be considered to be substantial, having regard to: the nature of the pollutant (sewage that was treated only by the primary treatment of screening, degritting and sedimentation to remove solids, but not treated by any chemical process); the number of days over which the pollutant was discharged into the receiving waters; the sizeable volume of pollutant that was discharged (many hundreds of thousands of litres of effluent); the difference in the marine environment that actually received the pollutant (near the cliff face off Malabar headland) compared to the marine environment that ought to have received the pollutant (the deep ocean 3.6km east of the cliffs off Malabar headland); and the interference with public amenity and enjoyment of Malabar Beach for the two days that was a reasonably foreseeable consequence of, and during the period of, the discharge of the pollutant.

Foreseeability of risk of harm

1. The extent to which Sydney Water could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence is a relevant objective circumstance: s 241(1)(c) of the POEO Act.
2. The risks that the RE Pipe might leak and that effluent might pollute waters were reasonably foreseeable. The RE Pipe carried effluent which, by its inherent characteristics, had a high potential to pollute waters. The RE Pipe was in a corrosive environment. Hydrogen sulphide gas created by the effluent processed in the Plant is dispersed, including through the channels. This gas can cause corrosion of concrete and steel. The inspection by MDS noted the corrosion of concrete surfaces of the dry section of the Overflow Channel in which the RE Pipe travelled.
3. The corrosion of the metal bracket holding the RE Pipe to the wall in the Overflow Channel was clearly reasonably foreseeable. The purpose of the bracket, as with other support structures, was to prevent movement of the RE Pipe during effluent flow. Movement of the RE Pipe places stress at the joints that join lengths of the RE Pipe and this can lead to splitting or other loss of integrity of the joints. Hence, it was reasonably foreseeable that a failure of the structures, such as the bracket, securing the RE Pipe would lead to movement of the pipe and stress on the joints of the pipe, which would lead to the joints splitting and losing integrity.
4. The RE Pipe was located in the Overflow Channel. Any loss of integrity of the RE Pipe would cause escape of effluent into the Overflow Channel. Any escaped effluent would travel down the Overflow Channel into the Shoreline Pipe and be discharged into the sea at Yellow Rock. It was reasonably foreseeable that a loss of integrity of the RE Pipe would result in pollution of waters or the sea.
5. Hence, Sydney Water could and should have reasonably foreseen the environmental harm caused or likely to be caused to the environment by the commission of the offences.

Practical measures to prevent risk of harm

1. Another factor relevant to the objective seriousness of the offences is the practical measures that could have been, and may be, taken to prevent, control, abate or mitigate harm to the environment by the commission of the offence: s 241(1)(b) of the POEO Act.
2. There were practical measures that Sydney Water could have taken that would have prevented the pollution of waters. Sydney Water did not have a proper inspection and maintenance system for the RE Pipe, the bracket holding the pipe, or the joints of the pipe. The maintenance schedule software used by Sydney Water, Maximo, did not record the RE Pipe and hence no maintenance of the RE Pipe was scheduled. The Level One Condition Monitoring was opportunistic in detecting any deficiencies in the condition of plant and equipment. It depended upon whether any abnormal conditions were observed. This monitoring method was also inappropriate for pieces of plant and equipment in confined spaces in underground or underwater channels where Sydney Water plant operators are not trained to enter and inspect. The only other method of inspection was the asset condition assessments of plant and equipment at the Plant. Sydney Water last performed an asset condition assessment of the Effluent Channel and Overflow Channel in May 2010. That assessment was not as thorough as it ought to have been and no particular assessment was undertaken of the RE Pipe, the bracket, or the Joint.
3. A practical measure that could and should have been taken was to have particularly assessed the condition and the integrity of the RE Pipe and the brackets and structures holding the pipe and preventing movement and the joints in the pipe. This could and should have been undertaken in May 2010, but then repeated at regular intervals thereafter.
4. Sydney Water did not have any measures in place to alert it to any loss in integrity of the RE Pipe and any leak of effluent from it. Sydney Water could have installed measuring instruments that detected leakage from the RE Pipe.
5. As noted earlier, Sydney Water has undertaken a considerable number of measures after the incident to prevent reoccurrence of the incident and harm being caused to the environment if an incident were to occur. These were all practical measures that could have been taken before the event and would have prevented or minimised the pollution of waters. These included replacing brackets supporting the RE Pipe, repairing the Joint and replacing bolts on the RE Pipe flanges; installing a conductivity instrument within the Stilling Well to detect any presence of effluent leaking from the RE Pipe; installing a sensor to trigger an alarm if water ponds behind a newly constructed weir in the Overflow Channel because of a leak from the RE Pipe; installing an isolation valve in the RE Pipe to immediately stop the inflow of reclaimed effluent into the RE Pipe, such as in the event of a leak; and adding the RE Pipe to the Plant's risk register, updating the Plant's integrated management system to include required inspections and training of staff, and including the specific location of the RE Pipe in the Plant's maintenance scheduling software, Maximo.
6. Such actions were measures which a reasonable person, foreseeing the risks of loss of integrity in the RE Pipe so as to cause escape of effluent and pollution of waters, would reasonably have taken.

Control over causes giving rise to the offences

1. The extent to which Sydney Water had control over the causes which gave rise to the offences is another factor relevant to the objective seriousness of the offences: s 241(1)(d) of the POEO Act.
2. Sydney Water was the holder of the Licence in relation to the Plant and was the owner and operator of the Plant. Sydney Water had complete control over the Plant and the RE Pipe conveying the reclaimed effluent.
3. Sydney Water had control over the causes that gave rise to the offence. Sydney Water could and should have taken the practical measures I have identified above and that Sydney Water subsequently took to maintain the RE Pipe, the bracket and the Joint in a proper and efficient condition. If Sydney Water had taken such measures, the leak of effluent from the RE Pipe and the pollution of waters would have been prevented. The taking or not taking of these practical measures were decisions within the control of Sydney Water.

No heightened state of mind or financial gain

1. A factor that can increase the objective seriousness of a strict liability offence, such as the two offences with which Sydney Water is charged, is if the commission of the offence is premeditated or committed intentionally, recklessly, or negligently. In this case, the evidence does not establish that there was any premeditation to commit either offence or that Sydney Water's failure to undertake the maintenance that was required under the Licence constituted negligence on the part of Sydney Water.
2. Another factor that can increase the objective seriousness of an offence is if the offence was committed for financial gain, such as to make a profit or to save incurring an expense: s 21A(2)(o) of the CSP Act. In this case, there is no evidence that Sydney Water committed the offences for financial gain, such as to avoid the incurring of the expense of maintaining the RE Pipe, the bracket or the Joint in a proper and efficient condition.

Conclusion on objective seriousness

1. Considering all of the objective circumstances, the offence is in the low to moderate range of objective seriousness for offences of these kinds. The foreseeability of the risk of loss of integrity of the RE Pipe and thence pollution of waters by leaked effluent, the practical measures available to prevent that loss of integrity of the RE Pipe and pollution of waters, and Sydney Water's complete control over the taking of those practical measures, increase the objective seriousness of the offences. The failure to maintain the RE Pipe, bracket and Joint in a proper and efficient condition continued for many years. Sydney Water's slow response to detecting and fixing the leak in the RE Pipe was also a product of Sydney Water's failure to have a proper system to inspect and maintain those pieces of plant and equipment. The commission of the offences did cause the pollution of waters around Malabar headland, but ecological harm or harm to human health was not established.

Subjective circumstances

1. Within the boundaries set by the objective seriousness of the offences, the Court may consider the subjective circumstances of Sydney Water, including: its prior record of convictions; its pleas of guilty; its remorse for the offences; its good corporate character; the unlikelihood of reoffending; and its assistance to authorities.

Record of prior convictions

1. Sydney Water does have a record of prior convictions for environmental offences: 1. On 18 December 1996, Sydney Water was convicted of an offence against the Environmental Offences and Penalties Act 1989 ('EOP Act') in that, in May 1995, it polluted waters with sewage from pumping stations at Penrith, contrary to s 16(1) of the Clean Waters Act 1970, was fined $7,500 and was ordered to pay the Prosecutor's costs of $8,540: Environment Protection Authority v Sydney Water Corporation Ltd (1996) 93 LGERA 43. 2. On 19 March 1999, Sydney Water was convicted of an offence against the EOP Act in that, in March 1995, it contravened condition L4 of its licence, by failing to maintain penstock controls at the North Head Sewage Treatment Plant, contrary to s 17D(9) of the Pollution Control Act 1970, was fined $100,000 and was ordered to pay the prosecutor's costs as agreed or assessed: Environment Protection Authority v Sydney Water Corporation Ltd [1999] NSWLEC 60; (1999) 102 LGERA 232. 3. On 3 March 2000, Sydney Water was convicted of an offence against s 16(1) of the Clean Waters Act in that, in October 1998, it polluted waters with aluminium sulphate (alum) from the West Camden Sewage Treatment Plant, was fined $30,000 and was ordered to pay the prosecutor's costs of $5,000: Environment Protection Authority v Sydney Water Corporation [2000] NSWLEC 80. 4. On 21 July 2000, Sydney Water was convicted of an offence against the EOP Act in that, in October 1998, it polluted waters with sewage from a blocked pipe at Helensburgh, contrary to s 16(1) of the Clean Waters Act, was fined $40,000 and was ordered to pay the prosecutor's costs of $25,522: Environment Protection Authority v Sydney Water Corporation [2000] NSWLEC 156.
2. These prior convictions do not form part of the objective circumstances of the current offences committed by Sydney Water. Nevertheless, prior convictions can still legitimately be taken into account in fixing where, within the boundaries set by the objective circumstances of the current offences, the sentences should lie. A significant record of prior convictions can be taken into account as an aggravating factor: s 21A(2)(d) of the CSP Act. Prior criminality is relevant to show whether the latest offences are an uncharacteristic aberration or whether the offender has manifested a continuing attitude of disobedience of the law. If the latter, the purposes of retribution, deterrence and protection of society may all indicate that a more severe penalty should be imposed for the current offences: Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 477; R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566 at [26]-[34]. Prior convictions can also be relevant to the purposes of sentencing, particularly individual deterrence. Punishment may need to be increased for persistent offenders, such as by increasing the quantum of fines, to deter reoffending.
3. Sydney Water has had four prior convictions over the last 20 years. The most recent conviction related to conduct in 1998, about 15 years before the conduct giving rise to the current offences in 2013. The prior offences related to different plants and different infrastructure to the Plant at Malabar. The causes of, and circumstances giving rise to, the prior offences were different to the causes of, and circumstances giving rise to, the current offences. The consequences of the offences, including the nature and extent of environmental harm caused, in each case was different to one another and to the current offence. In these circumstances, I do not consider that Sydney Water's prior convictions manifest a continuing attitude of disobedience of the law or that Sydney Water has not been deterred from reoffending by the sentences imposed for the prior offences, or that it has a propensity to reoffend. I do not view Sydney Water's record of prior convictions as an aggravating factor: s 21A(2)(d) of the CSP Act.
4. On the other hand, it cannot be viewed as a mitigating factor under s 21A(3)(e) of the CSP Act. Sydney Water does have a record of four prior convictions for environmental offences arising from its operation of the sewerage system in Sydney. It cannot be treated as a first time offender or as an offender with little criminal history.

Pleas of guilty

1. Sydney Water entered pleas of guilty at the second directions hearing of each proceeding. This should be considered as a plea at an early opportunity and as providing full utilitarian value to the criminal justice system. A discount of 25% should be afforded for the utilitarian value of the pleas of guilty.

Remorse for the offences

1. Sydney Water has expressed genuine remorse for the offences. The early pleas of guilty are consistent with Sydney Water being remorseful. In addition, Sydney Water has demonstrated its remorse in four ways (see Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 at [203]-[214]).
2. First, Sydney Water took action immediately upon being notified by the EPA of the discharge of effluent on 5 September 2013 to investigate the cause of the discharge and to take measures to abate the flow of effluent. Sydney Water continued working until it was able to stop the leak at 11.00am on 7 September 2013. Sydney Water located and plugged the inlet to the RE Pipe on 8 September 2013. Subsequently, Sydney Water replaced the broken bracket and the split joint.
3. Secondly, Sydney Water cooperated with the EPA and the Council, including in relation to sampling and testing waters for pollution, and keeping them informed of the results of testing and progress in investigating and rectifying the leaking RE Pipe.
4. Thirdly, Sydney Water has taken action subsequently to implement precautions to prevent reoccurrence of the offences. These include the practical measures I have earlier described. Mr Paul Higham, Manager, Product and Asset Management at Sydney Water, also gave evidence by affidavit of the policies, processes and approaches adopted by Sydney Water to ensure that the assets at the Plant are maintained in a proper and efficient condition.
5. Fourthly, corporate executives of Sydney Water personally attended the sentence hearing. These included: Mr Eric de Rooy, General Manager - Service Delivery Division; Mr Bernie Sheridan, Manager, Treatment; Mr Ian Gabriel, Treatment Manager South; and Mr Greg Melville, Plant Manager - Malabar Wastewater Treatment Plant. Mr de Rooy also wrote a letter to the Court and gave oral evidence at the sentence hearing. Mr de Rooy expressed, on behalf of Sydney Water, sincere regret that the incident occurred, affirmed Sydney Water's commitment to sound environmental management and to continually improving its environmental performance to minimise the impacts of its activities on the environment, and noted Sydney Water's actions taken after the incident to prevent reoccurrence at the Plant or other plants.
6. All of these actions speak of Sydney Waters' genuine remorse: see s 21A(3)(i) of the CSP Act.

Good corporate character

1. Sydney Water is of good corporate character: s 21A(3)(f) of the CSP Act. Mr Norm Nikolich, the Community Relations Manager at Sydney Water, gave evidence by affidavit of the community works undertaken by Sydney Water. These include projects of environmental benefit, such as the educational program for local councils to find and fix private sewer leaks, Sydney Water's Water Recycling Education Centre, and its Stream Watch Program. Sydney Water has provided considerable money (about $750,000) for sponsorship and charities, including for sporting events such as ocean swims and fun runs, and the Keep New South Wales Beautiful Program. Sydney Water has undertaken particular programs with Randwick City Council to improve water quality at Malabar Beach, including diverting stormwater pipes away from the beach. Sydney Water has also almost finished a program to naturalise 1.1km of the Cooks River.

Unlikelihood of reoffending

1. Another mitigating circumstance to be taken into account in determining the appropriate sentence is if the offender is unlikely to reoffend: s 21A(3)(g) of the CSP Act. I find that Sydney Water is unlikely to reoffend for at least three reasons. First, Sydney Water is genuinely remorseful for the offences. Secondly, Sydney Water has taken effective action to avoid a reoccurrence of the incident, or similar incidents, at the Plant.
2. Thirdly, Sydney Water, as a statutory corporation, has objectives to protect the environment. One of the principal objectives of Sydney Water is "to protect the environment by conducting its operations in compliance with the principles of ecologically sustainable development contained in s 6(2) of the Protection of the Environment Administration Act 1991" (s 21(1)(b) of the Sydney Water Act 1994). In implementing the principal objectives: Sydney Water has two special objectives: (a) to reduce risks to human health, (b) to prevent the degradation of the environment (s 22(1) of the Sydney Water Act)
3. Sydney Water is obliged each quarter to publish a statement as to the implementation of its special objectives and the EPA, in turn, must evaluate this statement and publish its evaluation (s 22(6) and (7) of the Sydney Water Act). As Sydney Water submitted, this introduces significant institutionalised supervision and review of the environmental performance of Sydney Water.

Assistance to authorities

1. Sydney Water cooperated with and provided assistance to the EPA and the Council at the time of, and in the days after, the incident concerning the leak, its causes, and its consequences. Sydney Water has agreed to a statement of agreed facts that assisted this sentence hearing. Sydney Water has also agreed to pay the EPA's costs of the proceedings, as agreed or assessed. Such assistance to authorities is a mitigating factor: s 21A(3)(m) and s 23 of the CSP Act.

Appropriate sentences for the offences

1. I take into account the objective circumstances of the offences and the subjective circumstances of Sydney Water, as I have discussed above.
2. I take into account the purposes of sentencing in s 3A of the CSP Act. The purposes of punishment, retribution and denunciation are relevant. There is a need for the Court, through the sentence it imposes, to ensure that Sydney Water is adequately punished for the offences, to hold it accountable for its actions, and to denounce the conduct of Sydney Water, in proportion to the seriousness of the offences.
3. The sentence also needs to act as a deterrent. The purpose of general deterrence is relevant to ensure that operators of scheduled activities near waters do not pollute waters and take the necessary precautionary and preventative measures, and undertake their scheduled activities strictly in accordance with all conditions of their licence. The sentence of the Court must act to deter other operators of scheduled activities from committing like offences to those committed by Sydney Water.
4. In the circumstances of this case, having regard to Sydney Water's record of prior convictions not manifesting a continuing attitude of disobedience of the law or a propensity to reoffend, its genuine remorse for the offences, its good corporate character, its actions taken at the time of and following the incident to address the causes of the incident and to prevent reoccurrence, and its unlikelihood of reoffending, there is no particular need for individual deterrence of Sydney Water.
5. In determining the appropriate penalty, the Court should be consistent with the pattern of sentencing for like offences. I have had regard to the sentences imposed by this Court in other cases, involving pollution of waters and breaches of an environment protection licence by corporate offenders, to which the parties have drawn my attention. I have considered the sentences imposed and the objective and subjective circumstances of the offences and the offenders involved that led the sentencing court to impose those particular sentences. These cases include Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103; (2014) 206 LGERA 239, and the cases summarised therein. The sentences that I consider appropriate to be imposed on Sydney Water for these offences are not inconsistent with the sentences imposed in similar cases that provide a check or yardstick.
6. Synthesising all of the relevant objective and subjective circumstances of the offences and this offender, and considering the relevant purposes of sentencing, I consider that the appropriate monetary penalty is $140,000 for the offence against s 120(1) and $140,000 for the offence against s 64(1) of the POEO Act. These amounts should be discounted by 25% for the utilitarian value of the pleas of guilty. This makes the amounts $105,000 for each offence.
7. Because there are two offences arising out of the same incident, the totality principle needs to be considered. The effect of the totality principle is to require the court which has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed, to review the aggregate sentence and consider whether the aggregate is just and appropriate and reflects the total criminality before the court. In the case of fines, adjustment may be made by reducing the amount of the fine for each offence. Care needs to be taken, however, to ensure that any adjustment of individual sentences does not cause the aggregate sentence not to reflect the total criminality of the offender's conduct or the sentence for any individual offence to become disproportionate to the objective gravity of that offence.
8. In this case, I consider that the totality principle does require there to be an adjustment of the combined fines for the offences. I consider the aggregate of the amount of the fines of $210,000 to exceed what is just and appropriate in the circumstances and the total criminality involved.
9. The two offences were caused in the circumstances by the same conduct of Sydney Water - its failure to maintain its plant and equipment (the RE Pipe, the bracket and the Joint) in a proper and efficient condition. That failure led to the RE Pipe leaking and leaked effluent being discharged into and polluting the sea.
10. However, the boundaries of the offences against s 120(1) and s 64(1) of the POEO Act are drawn so as not to be coterminous. Both offences are strict liability offences, but the external or physical elements of the offences are different.
11. The external or physical element of the offence against s 120(1) is the result - the offence is committed when the proscribed result of pollution of waters occurs. It does not matter how that result occurs, such as by a failure to maintain plant and equipment in a proper and efficient condition. The conduct that gives rise to the result proscribed by the offence of pollution of waters is not an element of the offence.
12. It is a defence if the pollution of waters was regulated by an environment protection licence held by the person and the conditions of the licence relating to the pollution of waters were not contravened (s 122 of the POEO Act). This, of course, does not make contravention of a condition of a licence an element of the offence against s 120(1). Rather, pollution of waters not in contravention of the conditions of an applicable licence is a defence to the offence of pollution of waters.
13. The external or physical element of the offence against s 64(1) is the conduct of the offender - the offence is committed by the offender's conduct of contravening a condition of a licence held by the offender. The result of the proscribed conduct of contravening a condition of a licence (such as pollution of waters) is not an element of the offence against s 64(1).
14. It is a defence if the holder of the licence establishes that the contravention of the condition of the licence was caused by another person, that other person was not associated with the holder at the time the condition was contravened, and the holder took all reasonable steps to prevent the contravention of the condition (s 64(2)). This other conduct is, however, not an element of the offence, but rather a defence to the offence.
15. There is, therefore, no overlap of the external or physical elements of the offences. Commonly, the totality principle is applied where two or more offences, of which an offender has been convicted, contain common elements. As was said in Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 at [40]: To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.
16. In this case, because the boundaries of the offences against s 120(1) and s 64(1) of the POEO Act have been drawn in a way that means there is no overlap or elements in common, Sydney Water would not be punished twice for the commission of the elements of each offence.
17. However, the criminality involved by Sydney Water committing the two offences is not limited to only the commission of the elements of each offence. The objective seriousness of the two offences committed by Sydney Water is raised or aggravated by the relevant factors in s 241(1) of the POEO Act and s 21A(2) of the CSP Act. I have found earlier that Sydney Water's commission of each offence caused or was likely to cause harm to the environment, which harm can be considered to be substantial within s 21A(2)(g) of the CSP Act. There were practical measures that could and should have been taken to prevent, control, abate or mitigate the environmental harm and Sydney Water could and should have foreseen the environmental harm caused or likely to be caused by the commission of the offences. Sydney Water had full control over the causes that gave rise to the offences. These matters increase the objective seriousness of each of the offences committed by Sydney Water and hence the criminality involved in Sydney Water's committing each of the offences.
18. Viewing each offence individually, the sentence of the court for each offence needs to be, and has been, increased to reflect the increase in the objective seriousness and criminality involved in the commission of the offences by reason of these matters. This results, however, in areas of overlap of aggravation being reflected in the commission of each offence by Sydney Water. It would be wrong to punish Sydney Water twice for its conduct in committing the offences in these areas of overlap. Rather, it is just and appropriate to adjust the sentences for the offences in a way that avoids double punishment and takes account of any specific circumstances of aggravation reflected in the elements of the separate offences: Pearce v The Queen at [120].
19. In the circumstances of the offences committed by Sydney Water, I consider that the appropriate adjustment that should be made to remove the extent of double punishment and to reflect the total criminality involved, is to reduce the aggregate of the fines by 25% to $157,500, which should be evenly divided between each offence, namely $78,750 each. I note a similar adjustment was made in Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Airlift Incident) at [244]-[246] where the defendant was convicted of offences against s 120(1) and s 64(1) of the POEO Act.
20. In addition, Sydney Water should be ordered, under s 250(1)(a) of the POEO Act, to publicise the offences (including the circumstances of the offences) and their environmental and other consequences, and the monetary penalties imposed and other orders made against it. The parties have agreed on the terms of the publication order that should be published in the appropriate newspapers. I consider that some adjustment should be made to reflect my findings. Publicising the apprehension, prosecution and punishment of Sydney Water for the offences improves the effectiveness of general deterrence.
21. Sydney Water should be ordered to pay the prosecutor's costs, under s 257B of the Criminal Procedure Act 1986. As the amount of costs has not yet been agreed, the appropriate order is that Sydney Water pay to the EPA such costs as may be determined under s 257G of the Criminal Procedure Act 1986.
22. Finally, both the EPA and Sydney Water sought that the amounts of the monetary penalties that the Court determined are appropriate for the offences be paid to a specified organisation for environmental purposes under s 250(1)(e) of the POEO Act, instead of as fines.
23. The EPA sought for the amounts to be paid to the Environmental Trust established under the Environmental Trust Act 1998. Any amount paid to the Environmental Trust would be used by the Trust for environmental purposes pursuant to its objects under s 7 of the Environmental Trust Act.
24. Sydney Water, on the other hand, sought for the amounts to be paid for the purposes of a specific project for improving the quality of stormwater discharges to the beaches in the Randwick local government area. The project was proposed to the Council by Sydney Water and was originally to be carried out by Sydney Water rather than paying the Council to carry out the project.
25. Sydney Water's original proposal to carry out the project itself faced a number of difficulties. First, Sydney Water would not actually pay any amount to the Council or anyone else for the project, but would use its own staff and resources to undertake the project. Such a proposal would not have fallen within s 250(1)(e) of the POEO Act, but rather would have been pursuant to s 250(1)(c) of the POEO Act. Secondly, there would be no or only limited additionality: Sydney Water would not be paying an amount in addition to what expenses it might otherwise incur or be obliged to incur in the proper performance of its functions under the Sydney Water Act, POEO Act and other environmental legislation. Thirdly, there would be no transparency or accountability: it would not be possible to ascertain when Sydney Water paid the amounts ordered by the Court as penalties for the offences. Fourthly, it would lessen the sting and stigma of the punishment: Sydney Water would simply make book entries in its financial accounts adding up to the total amounts ordered to be paid as penalties for the offences. This would not achieve as effectively the sentencing purposes of ensuring that Sydney Water was adequately punished for the offences, making Sydney Water accountable for its actions, properly denouncing the conduct of Sydney Water, and deterring Sydney Water and other persons from committing similar offences.
26. On expressing my concerns about Sydney Water's original proposal to undertake the work itself and thereby work off the monetary penalties, Sydney Water proposed as an alternative that it pay the monetary amounts to the Council for the Council to carry out the project proposed by Sydney Water.
27. The sentence hearing was then adjourned for a week to allow the Council to consider whether it was prepared to undertake the project proposed by Sydney Water.
28. At the resumption of the hearing today, a letter from the Council to the Court was tendered. The letter confirmed that the Council is prepared to administer the project to test dry weather flows in its stormwater systems to improve the quality of discharges to beaches in the Randwick local government area. The letter outlined the general scope of the project as involving, in Stage 1: Undertake field sampling and testing to determine any pollution sources. Test 25 sites where stormwater outlets discharge onto the beach. [The sites were listed]. Undertake catchment investigations by undertaking CCTV surveys, dye testing or further sample testing upstream of any source detection to isolate source. Utilise caffeine as a trial method for determining whether pollution sources originate from humans. Report on findings of the investigation. The final report and project costings will be presented to the NSW EPA.
29. The letter outlined the costs involved in the project, comprising project management ($10,000), investigation (sampling, testing and fieldwork) ($18,000), catchment investigation ($25,000) and reporting ($2,000), totalling $55,000.
30. The Council stated in the letter that the project will be completed by June 2016. The Council noted that it intends to utilise the Sydney Water testing facility to undertake the testing of samples, and that it will work closely with Sydney Water on the trial to test stormwater samples for caffeine to identify whether pollution has originated from humans.
31. Sydney Water proposed that the Court should order that the amount of $55,000 be paid to the Council to undertake this project and that any additional amount of penalty that the Court considers appropriate be paid to the Environmental Trust as the EPA had proposed.
32. After considering Sydney Water's new proposed orders, the EPA changed its position to agree that it was appropriate for the Court to make these orders. The factors influencing the EPA's change of mind included that Sydney Water would be ordered to pay a specific amount ($55,000) to a suitable organisation (Randwick City Council) for a specific project for the restoration or enhancement of the environment (improving the quality of stormwater discharges to beaches in the Randwick local government area) that is appropriate and worthwhile. The Council, by its letter has agreed to administer and undertake the project. The Council has also committed to preparing a report on the project and the cost expended in undertaking the project and presenting that report to the EPA. This ensures transparency and accountability.
33. In the way in which the project is now to be undertaken, I consider that it is appropriate to order under s 250(1)(e) that Sydney Water pay an amount of $55,000 to the Council to undertake the project proposed. I agree that the factors identified by the EPA make such an order appropriate. That order could be made in either or both proceedings. I consider that it is appropriate to make it in the proceedings concerning the offence of polluting waters, as the project has as its objective improving the quality of stormwater discharges to the beaches. The balance of the monetary penalty I consider appropriate should be ordered to be paid to the Environmental Trust for general environmental purposes. The Environmental Trust can determine the particular purpose for which the amount should be used, consistent with the objects of the Trust in s 7 of the Environmental Trust Act. These amounts to be paid under s 250(1)(e) are in lieu of a fine for that offence.
34. I consider that the whole of the monetary penalty I consider appropriate for the offence of breaching a condition of a licence should be paid to the Environmental Trust for general environmental purposes in lieu of a fine for that offence.

50705 of 2014 (breach of licence offence) 1. The defendant is convicted of the offence as charged. 2. Pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, the defendant is ordered to pay, within 28 days of this order, an amount of $78,750 to the Environmental Trust established under the Environmental Trust Act 1998 for general environmental purposes.

50706 of 2014 (pollute waters offence) 1. The defendant is convicted of the offence as charged. 2. Pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, the defendant is to pay to Randwick City Council, within 28 days of this order the amount of $55,000 for the Council to carry out the project entitled "Improving the quality of stormwater discharges to Randwick LGA beaches", as described in Annexure "A" to this order, in accordance with the Project Scope prepared by Randwick City Council which is Annexure "B" to this order. The Court notes that the Council has agreed as part of the project to report to the prosecutor on the findings and outcomes of the project. 3. Pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, the defendant is ordered to pay, within 28 days of this order, an amount of $23,750 to the Environmental Trust established under the Environmental Trust Act 1998 for general environmental purposes.

In both 50705 and 50706 of 2014 1. The defendant is to pay the prosecutor's costs, in such amount as may be determined under s 257G of the Criminal Procedure Act 1986. 2. The defendant, at its expense and pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997, is to: 1. within 28 days of the date of this order cause a notice to be published in the form of Annexure "C" to this order to be placed within the first 12 pages of The Sydney Morning Herald and The Southern Courier at a minimum size of 9cm x 12cm; and 2. within 35 days of this order, the defendant must provide to the prosecutor a complete copy of the pages of the publications in which the notice appears.

1. Annexures "A" and "B" are the documents I have identified in Exhibit 6 and Annexure "C" will read as follows. Sydney Water convicted of water pollution and breach of licence for sewage leak at Malabar. Sydney Water Corporation has been convicted by the Land and Environment Court of New South Wales of two offences under the Protection of the Environment Operations Act 1997. Sydney Water was prosecuted by the Environment Protection Authority (EPA) and pleaded guilty to one offence of water pollution and one offence of contravening a condition of its Environment Protection Licence by failing to maintain plant and equipment in a proper and efficient condition. The offences resulted from an incident in September 2013 when treated effluent leaked from a broken pipe at Sydney Water's Malabar Waste Water Treatment Plant. The treated effluent flowed into the sea near Malabar headland. The leaking of the effluent resulted from Sydney Water's failure to maintain the pipe and its fittings in a proper and efficient condition. The treated effluent flowed into and polluted the sea for a number of days. Sampling and testing did not detect sewage or increased pollutants at Malabar or Maroubra Beaches on those days. Malabar Beach was closed by Randwick City Council for two days as a precautionary measure. On 21 April 2015, the Land and Environment Court convicted Sydney Water of the two offences and ordered Sydney Water to: 1. pay an amount of $55,000 to Randwick City Council to carry out a project to improve the quality of stormwater discharges to beaches in the Randwick local government area; 2. pay a total amount of $102,500 to the NSW Environmental Trust for general environmental purposes; 3. pay the EPA's legal costs of the prosecution; and 4. 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 May 2015