Environment Protection Authority v Tomingley Gold Operations Pty Ltd

Maximum Penalty

1. The maximum penalty that can be imposed by the Local Court for each offence is $110,000 as set out in s 215 POEO Act. Had the matter been prosecuted in the Land and Environment Court using the same agreed facts for the same offences, the maximum penalty for each count is $1,000,000 with further penalty of up to $120,000 per day for each day that the offence continues: see s 123(a) POEO Act.
2. "The statutory provision imposing a ceiling on the maximum sentence that may be imposed by the Local Court is a jurisdictional maximum and not a maximum penalty for any offence triable within that jurisdiction. The Local Court should impose a penalty reflecting the objective seriousness of the offence, tempered if appropriate by subjective circumstances, taking care only not to exceed the statutory jurisdictional limit": BJ Preston (Hon Justice) "Principled Sentencing for Environmental Offences" (paper presented to the 4th International IUCN Academy of Environmental Law Colloquium, New York), October 2006, citing R v Doan (2000) 50 NSWLR 115 at [35]. See also H Donnelly, Z Baghizadeh, P Poletti, "Environmental Planning and Protection Offences Prosecuted in the NSW Local Court", Sentencing Trends Number 43, November 2014, Judicial Commission of NSW at p 4, citing R v El Masri [2005] NSWCCA 167 at [30].
3. "The jurisdictional maximum…..in the Local Court should not affect the actual level of sentence imposed. Magistrates must not regard the jurisdictional limit as some form of maximum sentence reserved for a worst case" : Re Attorney General's Application under s. 37 Crimes (Sentencing Procedure) Act 1999 (No. 2) [2002] NSWCCA 515 at [27], following Doan (at [34]). See also Veen v R No. 2 (1988) 164 CLR 465 at 478.

Assessment of Criminality - Objective Seriousness

1. "The nature of the offences is informed by the statutory scheme. The objects of the POEO Act include the protection and enhancement of the environment of New South Wales and prevention of degradation of the environment by the use of pollution prevention and cleaner production": Environment Protection Authority v Big Island Mining Pty Ltd [2014] NSWLEC 131.
2. Section 241 POEO Act provides as follows: 241 Matters to be considered in imposing penalty (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. (2) The court may take into consideration other matters that it considers relevant.
3. Harm to the environment is defined in the Dictionary to the POEO Act, and 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." It includes water pollution, which has an extended definition.
4. Actual harm and the potential or risk of harm must be taken into account: see Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 at [175] citing Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366. Bentley at [176]: The culpability of the defendant depends in part on the seriousness of the environmental harm. In Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 701, Kirby P, said: In environmental matters the court has previously exercised its discretion in relation to penalty on the principle that the more serious the lasting environmental harm involved the more serious the offence and, ordinarily, the higher the penalty.
5. The actual harm includes the visual effect of the discharges, elevated levels of total suspended solids and turbidity. Simply because there is no evidence of actual environmental harm in the form of dead aquatic organisms from either incident does not mean that actual harm has not occurred. It was not until the defendant company had finally installed measures to prevent discharges that the EPA issued a Clean-Up Notice in September 2014 to remove discharge sediments 20 metres either side of the Newell Highway. This is further evidence of actual harm to the environment. The prosecutor cites Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419 at [147] per Preston CJ: Harm can be direct or indirect, individual or cumulative. Activities that contribute incrementally to the gradual degradation of the environment, even when they cause no discernible direct harm to human interest, should also be treated seriously.
6. There was potential harm to aquatic plants and animals living in the dams by reason of the sediment laden water reducing light penetration. There was a potential of the cumulative effect of the second offence upon the first offence by increasing the duration of the reduced light penetration caused by increased turbidity and total suspended solids.
7. It is therefore somewhat surprising that the agreed facts state that the duration of the actual and potential harm was at least one day for the first offence and three to four days for the second offence. If the duration was truly that short, why would there be a need for a Clean-Up Notice nearly six months later? The statement of agreed facts refers to the sediment the subject of the Clean-Up Notice and the fact that a visual layer of sediment was left on the McNiven property. The defence submissions concede at [44] that the presence of sediment on the ground of the paddock and the road reserve constitute harm.
8. The defence submit at [35] that "there was no evidence of actual environmental harm flowing from the incidents", quoting from [73] of the agreed facts. The quotation is selective and incomplete. The facts at [73] are, "there is no evidence of actual environmental harm in the form of dead aquatic organisms from the incidents". The defence further submit at [38] that "there was no, or negligible, potential environmental harm as a result of the two discharges." The defence point out that the operational farm dams are of no ecological significance (at [34]), and that the sediment in the water in the dams did not breach livestock drinking guidelines (at [36]).
9. The defence claim (at [10] - second submissions), "the SOAF states (my emphasis) that no actual environmental harm arose from the first or second discharge, including any actual environmental harm arising from any visual impacts as a result of the discharge of sediment." I am unable to find such a statement in the agreed facts. Great care should be taken by practitioners in ensuring that submissions put forward on behalf of their clients have a legal or factual basis. I reject the submission that there was no environmental harm and no potential environmental harm. Reliance is placed upon the agreed facts: see Khanwaiz v R [2012] NSWCCA 168 at [94] and [96] per Beech-Jones J.
10. In regard to section 241(1)(b) (at [15] above), the defendant company was required to construct surface water management infrastructure and implement soil and erosion control measures as part of its development consent and Environment Protection Licence. It should be noted that the defendant is not being prosecuted for a breach of its EPL. The defendant accepts, as it must, that practical measures could have been taken to prevent the incident occurring, such as by affecting a more timely completion of the water management plan. Not only could such measures have been taken, they should have been taken. Apart from the obligations under the development consent and EPL, there is the overriding obligation pursuant to s 120(1) POEO Act not to pollute waters.
11. It is of some concern that the company applied for a licence variation to commence mining operations without having completed its obligations under the development consent. It is also of some concern that the EPA did not appear to have a system of adequate checks and balances to ensure that the required measures were in fact completed prior to giving approval for the mining operations.
12. The company submitted a Licence Variation Application (see annexure 6) to change the Licence from construction to mining. At 5.2.1 the company noted activities which still need to be completed, but failed to disclose to the EPA that the water management plan and related requirements had not been completed.
13. In "Principled Sentencing for Environmental Offences", reference is made of the steps to be undertaken to uphold the integrity of the regulatory system - of which the third step is "complying with the terms and conditions of the approval in undertaking the conduct". Clearly this was not done. "Offences which undermine the integrity of the regulatory system are objectively serious" (at p 13 where a number of cases are cited).
14. Regarding s 241(1)(c) (at [15] above), the defendant was well positioned to have reasonably foreseen the harm caused or likely to be caused by each offence. After all, the company conducted its own assessment as to what was required under the development consent, developed a water management plan and erosion and sediment control plan with the intention of preventing these types of offences from occurring.
15. Regarding s 241(1)(d) (at [15] above), the cause of the first offence involved the failure by the company to implement measures discussed previously, coupled with rainfall described in the factual summary. The cause of the second offence involved the continuing failure by the company to implement the said measures, further rainfall, and the inadequacy of emergency temporary stabilisation works (see [12] and [13] supplementary facts) frustrated by wet ground conditions. There had been extended drought conditions prior to the heavy rainfall which affected the seeding of the Caloma Drain - however the Caloma Drain was merely one component of the required works to have been completed in the development phase
16. Looking at the Environment Protection Licence (annexure 2), under the heading Operating Conditions O4, "A stormwater management scheme must be prepared for all aspects of the construction phase of the development and must be implemented. Implementation of the scheme must mitigate the impacts of stormwater runoff from and within the premises during the construction."
17. In annexure 4, the Tomingley Gold Project Erosion & Sediment Control Plans, General Notes, note 3: "Erosion and sediment controls are to be installed prior to each nominated stage of construction."
18. The company's Water Management Plan at 5.1 (annexure 3) states, "The mine site plan will be reviewed upon completion of construction and be amended to be suitable for mining operations."
19. Whilst the company is not being prosecuted for a breach of the Environment Protection Licence, it had control over the causes that gave rise to the offences. The company concedes this point in the outline of submissions at [50] and [51]: "TGO accepts that it had control over the causes which gave rise to the commission of the offences. As the operator of the mine, TGO had control over the timing of the implementation of the WMP. The late implementation of the WMP meant that the existing facilities were not fully capable of withstanding run-off from a heavy rainfall event such as those encountered on 7 March 2014 and between 24-27 March 2014." It should be noted that it was not a "late implementation"- it had not been implemented as required.
20. In R v Carroll [2008] NSWCCA 218 at [39], it was said that "the objective seriousness of the offence has two principal components: the precise acts or omissions of the offender and the consequences of those acts or omissions." Notwithstanding that the actual harm and potential for harm are at the lower or towards the lower end of matters of this type, the fact that the harm was foreseeable and under the control of the company, places the objective seriousness at an approximate midpoint of upper-low to lower-mid level.

No prior convictions

1. The defendant has no prior convictions for any environmental offence.

Subjective Circumstances

1. The defendant company self-reported the water pollution events and co-operated with the EPA investigation. It was submitted that this is a mitigating factor under both s 21A(3)(m) and s 23, Crimes (Sentencing Procedure) Act. However, it is noted under POEO Act Part 5.7 and under the EPL, there is a duty to notify the EPA of pollution incidents that cause or threaten material harm to the environment. Since that actual and potential harm in the current case was not assessed until well after the event, it is unclear, but on the balance of probabilities more likely that the company was merely complying with legislation and EPA Licence condition R2 (annexure 2, p 20) on the basis that the unassessed harm could have been material harm, rather than reporting the matter for some other reason.
2. Similarly, there appears to be a positive or statutory obligation under Chapter 7 POEO Act for information and records etc to be provided to the EPA and for a level of co-operation to be afforded.
3. Section 21A(3)(m) requires that "assistance by the offender to law enforcement authorities (as provided by section 23)" be taken into account as a mitigating factor. It forms part of the overall instinctive synthesis of the sentencing process, whereas section 23 contemplates a separate and distinct additional discount for assistance to law enforcement authorities.
4. Care must be taken not to double count the effect on sentence of this mitigating factor. Assessment must also be made of the weight to be given to assistance in circumstances where there was a legal obligation upon the company to provide that assistance. It is noted that the Land and Environment Court has taken into account assistance to authorities as a mitigating factor even where that assistance was provided pursuant to statutory obligations (see Prosecution supplementary submissions at [26] and cases cited).
5. In the present case, there was a level of co-operation identified at [77] of the facts which will be taken into account in weighing up the appropriate sentence, but no separate discount will be applied. There is no basis to justify such a discount, and to give a separate discount in this case would result in a penalty unreasonably disproportionate to the nature and circumstances of the offence: see s 23(3), Crimes (Sentencing Procedure) Act.
6. The true nature and meaning of assistance to authorities is discussed in SZ v R [2007] NSWCCA 19 and should be considered essential reading for EPA matters. Some examples of Land and Environment Court decisions applying remarkably significant discounts are Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65 (30%); Environment Protection Authority v Big Island Mining Pty Ltd [2014] NSWLEC 131 (35%); Environment Protection Authority v Ravensworth Operations Pty Ltd [2012] NSWLEC 222 (37.5%); Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419 (40%); Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242 (35%).
7. Without listing all of the mitigating features, there is demonstrated remorse; the company has taken action to implement the measures that should have been in place earlier; the company has complied with other requests of the EPA including a clean-up order; the company has agreed to pay the prosecutor's costs. It should be noted that failure to implement the measures and/or comply with the clean-up notice would have exposed the company to further legal process- though it does establish that rehabilitation has occurred. No adverse finding is made as to the company's 'state of mind'. It is accepted that it is unlikely that the company will re-offend.

Even-Handedness

1. The principle of even-handedness requires the court to have regard to the general pattern of sentencing of offences of the kind under consideration, i.e. consistency in sentencing. In that regard, the prosecutor provided a schedule of 6 cases (annexure B, first submissions): Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65; Environment Protection Authority v Coal and Allied Operations Pty Ltd [2013] NSWLEC 134; Environment Protection Authority v Ravensworth Operations Pty Ltd [2012] NSWLEC 222; Environment Protection Authority v MA Roche Group Pty Ltd [2013] NSWLEC 191; and Environment Protection Authority v Peak Gold Mines Pty Ltd [2013] NSWLEC 158.
2. As noted in Moolarben at [99]: …care must be taken in essaying the task, as the wide divergence of facts and circumstances leading to the imposition of penalties in a given case for water pollution render guidance from other cases to be of limited utility.
3. Of the decisions referred to, those of Big Island and Moolarben have greater factual closeness to the present case. The defendant did not respond or offer alternative cases to those submitted by the prosecutor.
4. Instead, the defendant annexed (appendix 2, first submissions) NSW Local Court Sentencing Statistics for s 120(1) POEO Act offences from October 2010 to September 2014. Such statistics are of no utility. In the first table, there are only eight cases, of which one received no conviction pursuant to s 10, Crimes (Sentencing Procedure) Act and the remaining seven received a fine. The factual circumstances of those eight cases are not known. In any event, the jurisdictional limit of the Local Court was increased effective 6 February 2012 from $22,000 to $110,000. The penalties set out in the second table have no similarity to penalties in any other case referred to in these proceedings or in this judgment. That table reveals seven offences with the highest fine imposed of $5,000. There is no indication as to when it was imposed- i.e. pre- or post-change of jurisdictional limit.
5. The decisions of the Land and Environment Court have greater ability to inform appropriate penalty considerations- it is a superior court with specialised jurisdiction which "deals with the more serious environmental crimes which often require the reception of complex expert evidence, lengthy conviction and sentence proceedings, a familiarity with LEC decisions, and an in-depth understanding of sentencing principles as the relate to environmental offences": see "Environmental Planning and Protection Offences Prosecuted in the NSW Local Court" (above, p 3)

General deterrence

1. "The necessity for those engaged in mining activities to ensure that water pollution does not occur, by undertaking appropriate erosion and sediment control measures in advance of work, is a message that needs to be given by the imposition of an appropriate penalty. A means by which such a message is given is the imposition of a penalty for beach that includes an appropriate component for general deterrence": (Mooralben at [95]).
2. "It is the duty of the court to see that the sentence that is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only light punishment will be imposed": B J Preston above), p 4 (citing R v Rushby [1977] 1 NSWLR 94 at 597-598).
3. "Sentences imposed for environmental offences must embrace powerful considerations of general deterrence": see Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 367 per Badgery-Parker J.

Specific deterrence

1. Specific deterrence does not cease to be a relevant sentencing consideration merely because the offending company has taken steps to minimise or prevent the risk of future environmental harm. Taking such steps post-offence when there was a pre-existing obligation to have done so pre-offence, is quite frankly little more than finally complying with its legal obligations, though it may diminish the significance of specific deterrence as a component of penalty.
2. It has been said that specific deterrence has relevance where a defendant continues in the same area of operation in which an incident has occurred- see Environment Protection Authority v MA Roche Pty Ltd [2013] NSWLEC 191 at [44]. In relation to specific deterrence, "the message conveyed by the sentence is not only to refrain from committing the offence, but also to take such steps as are necessary to guard organisationally against repetition": B J Preston (above), p 5.
3. Given the circumstances in which the offence occurred, but taking into account the subsequent steps taken by the defendant company, specific deterrence still has relevance to these proceedings. This is particularly so given the company's failure to disclose to the EPA in its licence variation to commence mining operations that it had not completed the water management plan or erosion and sediment controls.

Totality

1. The totality principle has application in the present case. The two offences arise from similar facts, circumstances and conduct and occurred 17 days apart. The defendant took some stabilisation steps following the first offence and prior to the second offence. Those steps were wholly inadequate to prevent the second offence. Further steps were in place by 1 April 2014: see agreed facts at [54]. However, wet ground conditions prevented the company from being able to undertake more substantive mitigation works prior to the second offence: see agreed supplementary facts at [11] and [12]. The penalty for the second offence will be less than the first offence.

Publication Order

1. Having considered the submissions by both parties in relation the issue of whether a Publication Order should be made pursuant to s 250(1)(a) POEO Act, as well as various cases referred to in this judgment, the court is firmly of the view that it is entirely appropriate to make such an Order.
2. The question then arises as to whether the publication should be confined to a local newspaper, such as the Narromine News- a local paper in the Tomingley area, as first suggested by the defendant (if such an Order were to be made at all)- or whether publication should be to a wider area.
3. A publication order "improves the effectiveness of sentences as a deterrent, particularly in the case of corporate offenders": see Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419 at [242]. As indicated previously, there is a 'powerful need' for general deterrence. Publication Orders are often used in sentencing for environmental offences.
4. It is entirely artificial to suggest that the only persons affected by the pollution offences are persons living locally to the mine. There is significant public interest in the compliance, or otherwise, by mining companies with the obligations cast upon them. Such public interest extends well beyond the local area. Mining is an activity undertaken not only in Tomingley. It is widespread in NSW, and indeed throughout Australia.
5. The defendant's resistance to a Publication Order could be seen as being contrary to or in defiance of the purposes of sentencing as set out in section 3A, Crimes (Sentencing Procedure) Act, including general deterrence, denouncing the conduct of the offender, recognising the harm done to the community and making the offender accountable for their actions. On one hand the company submits a document indicating remorse, but on the other hand wants to keep it reported locally, or not at all.
6. The Publication Order as set out in Annexure A of the prosecutor's first submissions is suitable. It should include the date of judgment and the total fine.
7. I direct that publication shall occur in the Sydney Morning Herald, Daily Liberal Dubbo and Australian Mining Magazine.

Conclusion on Penalty

1. Taking into account all of the circumstances, the penalty for count 1 will be $100,000 and for count 2, $50,000. Doan's case (above) applies. Applying a 25% discount, the fines reduce to $75,000 and $37,500 respectively. Consistent with Environment Protection Authority v Hardt [2007] NSWLEC 284 at [66], the total penalty imposed should take into account an order for the defendant to pay the prosecutor's costs, which in this case are agreed at $15,000 with investigation costs of $1,797: s 248(1) POEO Act. In accordance with the principles of totality, the fine for count 1 will be reduced to $60,000. Count 2 will be $35,000. I am satisfied that those amounts are just and appropriate and reflect the total criminality involved.

Orders

1. The defendant company is convicted of both offences against s 120, POEO Act as charged. 1. On count 1, the defendant is fined $60,000. 2. On count 2, the defendant is fined $35,000. 3. Pursuant to section 250(1)(a) of the POEO Act, the defendant is to place a notice in the first five pages of the following publications within 21 days, at a quarter of a page in size and in the form annexed to the prosecutor's initial submissions with date and fine amounts added: 1. Sydney Morning Herald 2. Daily Liberal Dubbo 3. Australian Mining Magazine 1. Within 35 days of the date of these Orders, the defendant is to provide to the prosecutor a complete copy of the page of the publications in which the notice appears. 1. The defendant is to pay the prosecutor's legal costs in the sum of $15,000 inclusive of GST and the prosecutor's investigation costs in the sum of $1,797. Magistrate P Stewart Dubbo Local Court 15 October 2015

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: 21 December 2015