Secretary, Department of Planning and Environment v Boggabri Coal Pty Limited

Objective seriousness of the offence 14The objective circumstances of the offence in this case include: the nature of the offence; the maximum penalty for the offence; the objective harmfulness of the offence; the state of mind of the offender; and the reasons for committing the offence.

The nature of the offence 15The objective seriousness of an offence is illuminated by the nature of the statutory provision, contravention of which constitutes the offence and its place in the statutory scheme. A fundamental consideration with particular relevance to environmental offences is the degree to which, having regard to the maximum penalty prescribed by the statute, the offender's conduct would offend against the legislative objective expressed in the statutory provision. 16The objects of the Act are stated in s 5 to include encouraging: (1) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment (s 5(a)(1)). 17One of the principal means by which these objects are achieved is by the Act controlling the carrying out of development depending on its likely impact on the environment. Environmental planning instruments specify the purposes for which development may be carried out without development consent or only with development consent and for which development is prohibited. A person wishing to carry out development that may be carried out only with development consent must lodge a development application with the relevant consent authority for development consent to carry out that development. Depending on the type of development, the development application will need to include information or be accompanied by documents that assess the impacts, including environmental impacts, of the development and the means to mitigate these impacts. Again, depending on the type of development, there are differing procedures for public notification and public participation, including making submissions objecting to the development in the development application. There may need to be consultation with other regulatory authorities. The consent authority, in determining the development application, is required to consider a range of matters, including the impacts of the proposed development on the environment, and to impose relevant and appropriate conditions of consent. Again, depending on the type of development, there are different rights of appeal against a decision of a consent authority to refuse or to approve development consent. 18There is a need for the upholding of the integrity of the system of planning and development control. The system depends on persons taking steps to obey the law by ascertaining when development consent is required, obtaining development consent when required, and carrying out development in accordance with any development consent obtained: Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [104], [105] and Director-General, Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [18]. 19Offences that undermine the integrity of the regulatory scheme are objectively serious. Use of the criminal law ensures the credibility of the regulatory scheme. 20The actions of Boggabri Coal in carrying out the development of the construction and operation of the Boggabri open cut coal mine and associated infrastructure otherwise than in accordance with the development consent it had obtained and that was in force offended against the legislative objective of the statutory provision concerned (s 76A(1)) and also thwarted the attainment of the objects of the Act. There was not the opportunity for there to be any application for approval, assessment or approval of the stockpile of the material of the kind used (interburden), in the quantity stored, at the location selected, and under the conditions that happened, prior to the stockpiling being undertaken. The fact that subsequently, after the breach had already occurred and the stockpile was already emplaced, an application for approval was made and approval was given to stockpile interburden material at that location is not to the point. The statutory scheme requires the application for approval, assessment, and approval of a development to be undertaken before the development is carried out. The failure to do so denied the consent authority the opportunity to refuse approval or to grant approval on conditions requiring the stockpile to be in a different location or of a different size or extent, or to be carried out on particular conditions, including conditions to prevent or minimise any environmental impacts.

The maximum penalty for the offence 21The maximum monetary penalty for the commission of the offence is $1.1 million. This significant penalty is a public expression of the New South Wales Parliament of the seriousness of the offence.

The objective harmfulness of the offence 22The commission of the offence involved the stockpiling of interburden material in a disused rock quarry. The material was interburden conglomerate from the open cut pit that had been preferentially selected and crushed to be used in the rail formation. The product was inert and gravel-like, of less than 150 millimetres in diameter. The volume of interburden stockpiled was sizeable, being approximately 90,000 cubic metres. The photographs tendered showed the sizeable extent and height of the stockpile. However, the stockpile was screened from most views by its location within a disused rock quarry. The only view into the quarry and hence of the stockpile was along the access route into the quarry. 23Neither the prosecutor nor Boggabri Coal put before the Court any evidence as to the environment in which the stockpile was emplaced (other than to state that it was in a disused rock quarry) or any evidence of the impact that stockpiling of interburden material in that environment caused or was likely to cause. 24I am, therefore, not in a position to make any findings as to whether the commission of the offence by Boggabri Coal caused or was likely to cause harm to the environment. I am unaware of what injury, loss or damage occurred, if any, by commission of the offence. This means I cannot find that there was injury, loss or damage caused by the offence that was substantial, so as to be an aggravating factor under s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999 ('the Sentencing Act'), or that there was injury, loss or damage caused by the offence that was not substantial, so as to be a mitigating factor under s 21A(3)(a) of the Sentencing Act.

The state of mind of the offender 25The offence against s 125 of the Act is a strict liability offence and mens rea is not an element of the offence. Nevertheless, the state of mind of an offender at the time of the offence can have the effect of increasing the seriousness of the offence. A strict liability offence that is committed intentionally, negligently or recklessly will be objectively more serious than one not so committed: Gittany at [123]. 26The prosecutor submitted that the Court should find that Boggabri Coal's conduct was deliberate in the sense that it purposefully created the stockpile at its location outside the project boundary over the charge period. However, the prosecutor did not allege that the commission of the offence was deliberate - that would require establishing that Boggabri Coal knew that its conduct was in breach of the development consent and the Act. The evidence does not so establish. Nevertheless, the prosecutor submitted Boggabri Coal's conduct was negligent. The prosecutor submitted that, at the time of the offence, Boggabri Coal's procedures aimed at ensuring compliance with the development consent were deficient and that the training of staff in relation to compliance awareness was inadequate, giving rise to a negligent failure on the part of Boggabri Coal to appreciate that the creation of the stockpile at that location was not permitted under the development consent. 27Neither the prosecutor nor Boggabri Coal adduced evidence explaining why the stockpile was located where it was put or how the offence came to be committed. The agreed statement of facts tendered simply noted a comment in an email from Mr Dingle of Boggabri Coal dated 6 August 2013 that the "instructions about the placement of each stockpile came from 'the project team, in consultation with [Boggabri Coal's] senior management and potential construction contractors.'" 28Boggabri Coal submitted that the evidence was insufficient for the Court to find, to the requisite standard of beyond reasonable doubt, that Boggabri Coal committed the acts constituting the offence negligently. It submitted that the evidence did not allow the Court to find, not merely a departure from the appropriate standard of care, but a departure which was sufficiently gross to warrant criminal punishment, citing Environment Protection Authority v Ampol Ltd (1993) 81 LGERA 433 at 439. 29There is force in Boggabri Coal's submission. The statutory provision, breach of which constitutes the offence, imposes a duty not to do the act impugned (namely, not to carry out development otherwise than in accordance with a development consent that has been obtained and is in force) and Boggabri Coal did that act. But the mere doing of the act impugned does not establish the further requirement, in order for the act to be done negligently, that the offender fell below the standard of conduct required of the offender. 30Whether an offender's doing of the impugned act was negligent must be assessed having regard to the particular conduct of the offender and the circumstances of the case. 31In this case, I know nothing about why or how Boggabri Coal came to place the stockpile in the rock quarry which was on land to which the development consent applied, namely Lot 159, but outside the delineated project boundary on that lot. Evidently, whatever were the procedures in place at the time to ensure compliance with the development consent, including training of staff, were not sufficient to have alerted Boggabri Coal to the fact that the stockpile would be outside the project boundary and hence not in accordance with the development consent. But it does not follow that the only inference available to be drawn is that Boggabri Coal was negligent under the criminal law in deciding to locate the stockpile where it did. 32Equally, the evidence does not allow me to find, beyond reasonable doubt, that Boggabri Coal had any other heightened state of mind in committing the offence.

The reasons for committing the offence 33The criminality involved in the commission of an offence is to be measured not only by the seriousness of what occurred but also by reference to the reasons for its occurrence. The carrying out of an offence to make a profit, or to save incurring an expense, or to avoid the cost of obtaining and implementing a statutory permission such as a development consent, increases the seriousness of the offence: Gittany at [140] and Rae at [47]. 34Boggabri Coal's creation of a stockpile occurred in conjunction with the construction of the rail spur line approved under the development consent. The stockpile was to provide material for the construction of the rail formation. The stockpile was, therefore, part of implementing the commercial venture of the Boggabri open cut coal mine and associated infrastructure. 35However, the evidence does not establish that locating the stockpile outside of the project boundary, and hence in breach of the development consent, was done to make a profit, or to save an expense, or to avoid the cost of applying for and obtaining approval to modify the development consent. As I have noted, the evidence is silent as to why and how Boggabri Coal decided to locate the stockpile in the location of the rock quarry outside of the project boundary. The evidence does not allow me to draw the inference the prosecutor submitted I should draw, namely that the impugned conduct was to avoid the process required under the Act for making an application to modify the development consent. Moreover, this seems unlikely given that, in 2011, Boggabri Coal made an extensive application to modify the development consent in many ways. This shows Boggabri Coal was not reluctant to apply to modify the consent. 36I am, therefore, unable on the evidence to find what were the reasons for Boggabri Coal committing the offence or that those reasons increase the seriousness of the offence.

Conclusion on objective seriousness of the offence 37Having regard to these matters, the offence is of low objective seriousness.

Subjective circumstances of the offender 38The subjective circumstances of Boggabri Coal include its early plea of guilty, no prior record, its contrition and remorse, its good character, and its cooperation with the prosecutor.

Early plea of guilty 39Boggabri Coal entered a plea of guilty at the earliest available opportunity, being the first time it was required to attend before the Court to answer the offence charged. This maximises the utilitarian value of the plea of guilty to the criminal justice system and Boggabri Coal is entitled to the maximum discount of 25%: see s 21A(3)(k) and s 22 of the Sentencing Act and R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383.

No prior record 40Boggabri Coal and its parent company Idemitsu Australia Resources Pty Ltd ('Idemitsu') have no prior convictions for environmental offences: s 21A(3)(e) of the Sentencing Act.

Contrition and remorse 41Genuine remorse shown by an offender for the offence is a mitigating factor but only if the offender has provided evidence that he or she has accepted responsibility for his or her actions and the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both): s 21A(3)(i) of the Sentencing Act. 42The Chief Executive Officer of Idemitsu, Mr Toshiro Shibahara, swore an affidavit that was read at the sentence hearing. He expressed, on behalf of Idemitsu and its subsidiary Boggabri Coal, "deep regret and remorse to the Court." He said the "stockpiling of material at the quarry should not have occurred without the appropriate approval." He said that the company's remorse and contrition was reflected in: (a)Boggabri Coal voluntarily bringing the issues regarding the stockpiles to the attention of the prosecutor; (b)Boggabri Coal cooperating fully with the relevant regulatory authorities, being the prosecutor and the Environment Protection Authority, in their investigations by volunteering information, supplying requested details and documents, and taking the actions recommended or required by the regulators; (c)Boggabri Coal submitting an application for modification of the development consent to expressly include the stockpile within the defined project boundary; (d)Boggabri Coal and Idemitsu implementing, at a management/governance level, the following measures to prevent a reoccurrence of the incident (namely, a breach of the Act by acting without development consent or not in accordance with development consent): a monthly review of compliance issues at Boggabri Coal Mine meetings and a review of the overarching compliance procedures for the Idemitsu Group; (e)Boggabri Coal pleading guilty at the first available opportunity; and (f)Boggabri Coal cooperating with the prosecutor in producing an agreed statement of facts. 43Boggabri Coal also read affidavits of Mr Chase Dingle, the Superintendent Environmental Systems for the Boggabri open cut coal mine part of the project, and Mr Chris Walsh, the General Manager-Commercial and Legal for Idemitsu. Mr Dingle explained the steps that had been taken to improve environmental management and compliance with relevant statutory approval. Mr Walsh advised that Idemitsu has appointed a specific Compliance Engineer to manage planning and environmental approvals in relation to the expansion components of the project, including the rail spur line. In Environment Protection Authority v Waste Recycling and Processing Corp [2006] NSWLEC 419; (2009) 148 LGERA 299 at [203][214], I suggested that actions underlying genuine contrition and remorse may take at least four forms: First, the speed and efficiency of action to rectify any harm caused or likely to continue to be caused by the commission of the offence is the clearest indication of contrition and remorse. Where it occurs it justifies a reduction in the sentence... Secondly, voluntarily reporting the commission of the offence and any concomitant environmental harm to relevant authorities indicates a genuine desire to act responsibly. Environmental regulation depends upon the integrity of persons making full disclosure. Voluntarily reporting breaches should therefore be acknowledged as a mitigating circumstance by the courts in sentencing... Thirdly, the taking of action to address the causes of the offence, such as designing and installing improved pollution prevention and control systems, also indicates a genuine desire to act responsibly... Fourthly, the personal appearance of corporate executives in court and their personal evidence outlining the company's genuine regret and stating future plans to avoid repetition of such offences is an indication of genuine corporate contrition...": at [204], [210], [212] and [214]. 44In this case, Boggabri Coal firstly acted sufficiently quickly after recognising that a breach of the Act had occurred to rectify the breach by applying to modify the development consent to permit the stockpile to be within the project boundary and hence to be in accordance with the consent. 45Secondly, Boggabri Coal voluntarily reported the breach to the prosecutor. 46Thirdly, Boggabri Coal has taken steps to improve its environmental management and compliance with statutory approvals and hence attempt to address the causes of the offence and avoid repetition. However, none of the executives who gave evidence explained how or why Boggabri Coal decided to locate the stockpile outside the project boundary and hence in breach of the development consent. They were not able, therefore, to offer any insight into the causes of the offence. That leaves some doubt as to whether the measures that have since been taken to improve environmental management and compliance will in fact address the very causes of the offence in this case. 47Fourthly, executives of Boggabri Coal and Idemitsu gave evidence by affidavit, and Mr Walsh also attended court personally, outlining the company's genuine regret and stating their plans to avoid repetition of the offence. 48Together, these actions indicate genuine contrition and remorse of Boggabri Coal for the offence.

Good character 49Boggabri Coal is of good corporate character: s 21A(3)(f) of the Sentencing Act. Mr Shibahara gave evidence of its corporate citizenship and its commitment to the environment and the community.

Cooperation with the prosecutor 50Boggabri Coal cooperated fully with the prosecutor in the investigation and prosecution of the offence, including by agreeing a statement of facts: s 21A(3)(m) and s 23 of the Sentencing Act. 51Boggabri Coal has agreed to pay the prosecutor's costs of the proceedings in the agreed sum of $38,000.

Appropriate sentence and orders 52I take into account the objective seriousness of the offence, as mitigated by the subjective circumstances of Boggabri Coal, outlined above. 53I take into account the purposes of sentencing in s 3A of the Sentencing Act. The purposes of punishment, retribution and denunciation are relevant. There is a need for the Court, through the sentence it imposes, to ensure Boggabri Coal is adequately punished for the offence, to hold it accountable for its actions, and to denounce the conduct of Boggabri Coal, in proportion to the seriousness of the offence. 54The sentence also needs to act as a deterrent, both to Boggabri Coal to prevent re-offending and to other persons to prevent them committing similar offences. Boggabri Coal's remorse and taking of steps to prevent similar breaches of statutory approvals lessens the prospect of Boggabri Coal re-offending. Specific deterrence, therefore, need not be given great weight. 55There is, however, still a need for general deterrence. The sentence of the Court needs to operate as a general deterrent to prevent the commission of similar offences by persons who might be tempted to do so by the prospect that, if they are caught, only light punishment will be imposed. The purpose of general deterrence is particularly relevant when imposing sentences for offences of carrying out development without consent or not in accordance with consent under the Act. 56I have had regard to the sentences imposed by this Court in other cases involving mining companies carrying out development otherwise than in accordance with consent in breach of the Act. These include: Director- General, Department of Planning and Infrastructure v Integra Coal Operations Pty Ltd [2012] NSWLEC 255; (2012) 192 LGERA 281; Minister for Planning v Moolarben Coal Mines Pty Ltd [2010] NSWLEC 147; (2010) 175 LGERA 93; Minister for Planning v Coalpac Pty Limited [2008] NSWLEC 271; and Minister for Planning v Hunter Quarries Pty Ltd [2010] NSWLEC 246. I consider the decision in Integra Coal to be the most comparable to the present case. 57Synthesising these factors, I consider that an appropriate penalty for the offence is a fine of $110,000. This figure should be discounted by 25% for the utilitarian value of the plea of guilty, resulting in a fine of $82,500. In addition, Boggabri Coal should be ordered under s 257B of the Criminal Procedure Act 1986 to pay the prosecutor's costs in the sum of $38,000. 58The prosecutor sought a direction under s 122(2) of the Fines Act 1996 that one half of the fine payable by Boggabri Coal be paid to the prosecutor. Section 122 applies where the Act imposing or authorising the imposition of a fine or other penalty does not make any provisions for its application when recovered and the prosecutor is not a police officer (s 122(1)). 59In this case, s 122 does apply as the Environmental Planning and Assessment Act, which authorises the imposition of a fine for an offence against the Act, does not make any provision for application of the fine when recovered and the prosecutor is not a police officer. The fine in the amount of $82,500 that I consider should be imposed does not include an amount of the kind referred to in s 4(1)(e) or (f) of the Fines Act, namely witnesses' expenses or any costs payable by a person under an order made by a court in proceedings for an offence that were brought by a law enforcement officer: see s 122(3) of the Fines Act. 60The Court has a discretion as to the portion of the fine that it may direct be paid to the prosecutor, but it may not exceed one half. The prosecutor seeks a moiety of one half of the amount of the fine. 61Boggabri Coal does not oppose the Court making a direction under s 122 that one half of the fine be paid to the prosecutor. 62A justification for making a direction under s 122 of the Fines Act in this case is that, under the Environmental Planning and Assessment Act, the Court cannot make an order that the prosecutor be paid the costs and expenses it reasonably incurred during the investigation of the offence, unlike under s 248(1) of the Protection of the Environment Operations Act 1997. An order that the offender pay the prosecutor's legal costs of the proceedings does not include costs and expenses incurred during the investigation of an offence and before the prosecution has been commenced. Payment of a moiety in the fine to the prosecutor may compensate the prosecutor for the costs and expenses it incurred during the investigation of the offence. 63I consider that in the circumstances of this case it is appropriate to direct, under s 122(2) of the Fines Act, that one half of the fine imposed is to be paid to the prosecutor. 64The Court orders: (1)The defendant is convicted of the offence as charged. (2)The defendant is fined the sum of $82,500. (3)The defendant is to pay the prosecutor's costs of the proceedings in the sum of $38,000. (4)Under s 122(2) of the Fines Act 1996, $41,250, being one half of the fine imposed by order 2, be paid to the prosecutor.

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: 26 September 2014