Prosecutor v ADI LTD

Land and Environment Court (NSW)|1999-02-10|Before: Talbot J, Mr P

Land and Environment Court of New South Wales CITATION: Environment Protection Authority -V- Adi Ltd [1999] NSWLEC 14 This judgment revised on: 09/03/99 PARTIES PROSECUTOR: Environment Protection Authority

KEY ISSUES: :- Crimes - Pollution; Prosecution, plea of guilty, admission of tendency evidence in relation to penalty assessment

PROSECUTOR: Mr D A Buchanan SC With Mr C J Leggat Bar Instructed by Environment Protection Authority LEGAL REPRESENTATIVES:

DEFENDANTS: Mr P R Rigg Solicitor Of Deacons Graham & James

IN THE LAND AND MATTER No. 50075 of 1998 ENVIRONMENT COURT CORAM: Talbot J OF NEW SOUTH WALES DECISION DATE: 10 February 1999 ENVIRONMENT PROTECTION AUTHORITY Prosecutor v

On 6 November 1998 I found that the defendant company committed the offence charged that on 23 April 1997 it polluted the waters of the Murray River by introducing solid wastes and ethanol contrary to s 16(1) of the Clean Waters Act.

The Court was not satisfied on the balance of probabilities that the discharge of the waste from the defendant's premises was authorised by conditions of a licence issued to the defendant under the Pollution Control Act and that accordingly s 16(6) of the Clean Waters Act did not provide an excuse, justification or exculpation for not complying with the obligation in s 16(1).

A licence condition permitted a discharge which did not contain more than 45 mg/L of non-filtrable residue (NFR) at an authorised point adjacent to the boundary of the premises. Ethanol was not referred to specifically in the licence conditions.

Samples were taken on 23 April 1997 at or adjacent to the confluence of a drain, leading from the defendant's premises, with the Murray River.

Chemical analysis of two samples taken on 23 April 1997 showed a level of total suspended solids of 330 mg/L and 410 mg/L. Two other samples taken on that day showed presence of ethanol in concentrations of 2,200 mg/L and 2,600 mg/L.

The suspended solids were identified as containing nitrocellulose.

The prosecutor relies on the evidence of Dr Ross Hyne who is a principal research ecotoxicologist at the EPA's Centre for Ecotoxicology and his opinion that the concentration and composition of chemicals in the effluent would be sufficient to cause harm to biota in the Murray River. Dr Hyne was not able to say that the NFR did actually cause toxicity problems to any biota.

The potential for harm must be regarded in the light of the evidence of Bruce Henry Gardiner, an Environment Protection Officer employed by the prosecutor, that the Murray River in the vicinity of the discharge point has significant environmental amenity and is used extensively for recreational purposes. Furthermore, the river water in the area is generally of high quality and provides potable, irrigation and stock water to New South Wales and Victoria.

The Court has been satisfied that the nitrocellulose had its source from a manufacturing process carried on within the defendant's premises.

Mr Gardiner has compiled a table of recorded occasions when the defendant has detected, at the confluence of the drain with the Murray River, by its own sampling and analysis, a presence of NFR which prima facie exceed the limit imposed by the conditions of licence at the authorised discharge point approximately two kilometres up stream. Although the measurements are expressed as parts per million, rather than mg/L, Mr Gardiner gave evidence that although technically speaking the two units of measure may not always be the same, in the case of nitrocellulose the measure would be so close as not to be seen to be different. The purpose of this evidence was explained and justified by Mr Buchanan SC on the basis that, in assessing an appropriate penalty, the Court is entitled to take into account an element of individual deterrence. In that context the Court is not being asked to punish the defendant for any breach of the Act other than that which occurred on 23 April 1997, but the amount of penalty should reflect a deterrent against recurrence having regard to the tendency of the defendant established by a regular course of conduct prior to the commission of the offence and subsequently.

Support for this proposition, which the Court proposes to adopt, is found in the judgment of the High Court in Veen v The Queen [No. 2] 164 CLR 465 at 477:- … the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v. Ottewell ([1970] A.C. 642 at p 650). The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind.

Although Mr Gardiner did not purport to be authoritative and definitive in his evidence regarding a comparison between a measure of mg/L and parts per million, nevertheless, Mr Rigg was not heard to challenge the claim that the measurement of mg/L is generally used to reflect the results of laboratory analysis and that a reference to parts per million is often used colloquially as a rough equivalent.

The defendant took over the operations and activities of the Commonwealth Government's defence production in May 1989. The facility was first commissioned by the Department of Defence as a World War II production facility during 1943. The Court has been told that the site at Mulwala comprises 1,040 ha and that there are approximately 300 buildings within the complex.

In January 1995 a draft concept design report for a new sewage treatment plant was prepared for the defendant and Corowa Shire Council. Following the adoption of a final concept design report, the council agreed to proceed with the project and to seek a New South Wales Government funding subsidy in November 1995. In December of that year, the council agreed to share the costs of the proposed sewage treatment plant with the defendant. The cost share agreement was renegotiated in March 1998 following further development of the design concept. An environmental impact statement was exhibited in late 1998. In the meantime difficulty with the funding of the project has not been finally resolved.

Since 23 April 1997 when the offence occurred, the defendant has carried out works with the result that effluent which was originally discharged directly to the Murray River flows to the effluent treatment plant for treatment. Notwithstanding this change, there is evidence to show that NFR is still discharged to the river in quantities exceeding the prescribed measure of 45 mg/L. The Court is not satisfied that the joint project with the council will be completed in the immediately foreseeable future, nor is it satisfied that the interim remedial measures taken in the meantime will alone ensure that there are no further unauthorised and unacceptable discharges to the river.

It is appropriate therefore that the penalty imposed should not reflect any element of leniency on the basis that the event which occurred on 23 April 1997 may be regarded as an isolated incident or that the defendant has taken all reasonable steps to prevent a recurrence in the future.

The maximum penalty, prescribed in the sum of $125,000, together with the consistent approach taken by this Court clearly demonstrates that an offence against s 16 of the Clean Waters Act must be regarded as a serious offence.

Mr Rigg attempted to persuade the Court that the conditions of the licence recognise that the defendant was entitled to discharge 2,000 kilolitres on any day containing up to 45 mg/L of NFR, creating the potential for the release of 90 million milligrams in any one day. Although this may be mathematically correct, and even if it is, the licence conditions are not framed in terms of the total load of NFR but relate to the concentration of episodic emissions.

Once the conditions of the licence are breached then the extent of environmental harm must be assessed without any account to be taken of the permitted level of discharge. This is because any defence against an act of pollution contrary to s 16(1) of the Clean Waters Act which depends upon compliance with the conditions of licence has been removed. For the purposes of s 9(a) of the Environmental Offences and Penalties Act therefore the offence committed relates to the whole of the pollution which occurred irrespective of any permission given by the licence.

There is no evidence of actual harm caused to the environment by the commission of the offence. However the test results demonstrate that the effluent collected from the discharge channel or in the mixing zone two metres from the river bank caused death to test animals at a concentration of fifty per cent. In contrast, river water collected seventy five metres up stream of the discharge was not toxic at any concentration tested. Although the extent of likely harm cannot be accurately measured, the potential for harm was nevertheless real. In addition there was an impact upon the physical visual appearance of the river by the introduction of the milky coloured substance.

Although the defendant may regard itself as a responsible environmental citizen as demonstrated by its faithful reporting of all discharges to the river which exceeded the levels prescribed by the licence, it is nevertheless apparent from the evidence that the company was aware that the discharges were occurring on a regular basis over a period of time extending through several years and the position was not remedied. The monitoring and recording of wastes is, in any event, a requirement under the licence.

Notwithstanding that the company did not take over the site until 1989, there is no evidence to demonstrate to the Court that any remedy was not in its own hands or that it was not in total control of the industrial operation at the relevant date.

In the Court's opinion, the fact that the company held a licence heightened its responsibility to keep the level of discharge from the premises within the parameters set by the licence.

Against the recognised cooperation and openness on the part of the defendant's employees following the reporting of the incident on 23 April 1997 is the fact that the company was aware before then that unauthorised discharges were taking place. Discharges of nitrocellulose are easily detectable visually by the milky discolouration of the water. Likewise with ethanol, which can be readily detected by its sweet odour.

Although the Court does not know whether the discharges before and after 23 April 1997 contained nitrocellulose or ethanol, it is nevertheless apparent from the company's own records that the control of emissions otherwise than in accordance with the terms of the licence have been ineffective.

The company itself claims that practical measures have been taken to prevent, control, abate or mitigate the level of discharge from the plant. There is no explanation as to why these measures have not proved adequate.

The company has instead attempted to demonstrate its responsible approach by pointing to its willingness to enter into the joint project with the Corowa Shire Council, relying on the delays in the implementation of that scheme, which are beyond its control, to justify the failure to minimise the discharge of waste.

Notwithstanding the delay in the implementation of the joint project, the company had a responsibility to provide adequate interim measures in the meantime. No reasonable explanation for a failure in that regard has been provided.

The company had control over the causes which gave rise to the offence and it could have reasonably foreseen the harm likely to be caused by the commission of the offence.

Having regard to the whole of the circumstances, including taking into consideration the maximum penalty of $125,000, the matters referred to in s 9(a) to (d) of the EOP Act and that there is no record of any prior offence by the company in respect of this type of offence, an appropriate penalty in accordance with the overall pattern of penalties imposed by the Court in similar cases is $25,000.

The parties have been unable to agree on the question of costs, although the defendant recognises that it is appropriate for an order to be made that it pay the prosecutor's costs.

The defendant is convicted of the offence as charged.
The defendant is fined the sum of $25,000.
The defendant is ordered to pay the prosecutor's costs determined in accordance with s 52(2) of the Land and Environment Court Act 1979 and the Regulation.
The exhibits may be returned.

I hereby certify that this and the preceding 7 pages are a true and accurate record of the reasons for judgment herein of the Honourable Justice R N Talbot

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