Environment Protection Authority v Forgacs Engineering Pty Limited [2009] NSWLEC 64

Land and Environment Court
of New South Wales

	CITATION :	Environment Protection Authority v Forgacs Engineering Pty Limited [2009] NSWLEC 64

	PARTIES :	PROSECUTOR Environment Protection Authority DEFENDANT Forgacs Engineering Pty Limited

	FILE NUMBER(S) :	50087 of 2008

	CORAM:	Pain J

	KEY ISSUES:	PROSECUTION :- sentence - breach of environment protection licence condition - failure to prevent the emission of particles from ship repair business in breach of licence condition - potential for ecological harm - actual harm due to amenity impacts - steps taken to mitigate and prevent further harm - one of two causes of the harm foreseeable - whether loss of business after offence should be considered as extra-curial punishment - mitigating factors - publication order and order for contribution to environmental project made

	LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999 s 3A, 21A, 22 Protection of the Environment Operations Act 1997 s 64, 241, 250

	CASES CITED:	Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Environment Protection Authority v Ampol Refineries (NSW) [1998] NSWLEC 134 Environment Protection Authority v BHP Steel (AIS) Pty Ltd [2000] NSWLEC 19 Environment Protection Authority v BHP Steel (AIS) Pty Ltd [2003] NSWLEC 46 Environment Protection Authority v Biosolids Management Pty Ltd (2004) 141 A Crim R 573 Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732 Environment Protection Authority v Coastal Recycled Cooking Oils Pty Ltd [2008] NSWLEC 242 Environment Protection Authority v Delta Electricity [2009] NSWLEC 11 Environment Protection Authority v Incitec Limited [2003] NSWLEC 381 Environment Protection Authority v Lithgow Coal Company Pty Ltd [2003] NSWLEC 430 Environment Protection Authority v Port Kembla Copper Pty Ltd [2003] NSWLEC 256 Environment Protection Authority v Shoalhaven Starches Pty Ltd [2003] NSWLEC 107 Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419 Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 Hoare v R (1989) 167 CLR 348 Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66 R v Sharma (2002) 54 NSWLR 300 R v Thomson; R v Houlton (2000) 49 NSWLR 383 State Pollution Control Commission v White Wings Pty Ltd, NSWLEC, Bignold J, 1 Nov 1991, unreported Veen v. The Queen (No. 2) (1988) 164 CLR 465

	DATES OF HEARING:	29 April 2009

	DATE OF JUDGMENT:	30 April 2009

	LEGAL REPRESENTATIVES:	PROSECUTOR Ms K Frank (solicitor) SOLICITORS Department of Environment and Climate Change DEFENDANT Mr C Ireland SOLICITORS O'Sullivan Saddington

JUDGMENT:

THE LAND AND

ENVIRONMENT COURT

OF NEW SOUTH WALES

Pain J

30 April 2009

50087 of 2008 Environment Protection Authority v Forgacs Engineering Pty Limited

JUDGMENT

1 Her Honour: The Defendant is charged with an offence under s 64(1) of the Protection of the Environment Operations Act 1997 (the POEO Act) in that it was the holder of an environment protection licence, a condition of which was breached. The offence occurred between 30 December 2007 and 1 January 2008 at Dennison Street, Carrington when the Defendant caused grit blast dust to escape from its premises such that it was blown by the wind onto surrounding waters, land and other premises.

2 The Defendant is the holder of Environment Protection Licence No. 6001 (the licence) for carrying on at its premises the scheduled activities of “Marinas and Boat Repair Facilities” and “Waste Activities”. Relevantly, condition O6.1 of the licence reads:

All activities carried out at the premises must be conducted in a manner that will not cause dust or particulate emissions to the surrounding waters, land, air or premises or to anything on the surrounding waters, land or premises.

3 The Defendant has pleaded guilty and has therefore admitted the essential elements of this offence. The offence is one of strict liability so that mens rea is not an element of the offence. The Defendant must now be sentenced.

4 The maximum penalty applicable to offences under s 64(1) of the POEO Act is $1 million for a corporation. The penalty for this offence was increased to $1 million from $250,000 in May 2006.

Background

5 The parties agreed a Statement of Agreed Facts (SOAF) which provides as follows:

Background

…

5) Forgacs operates a floating dry dock facility (‘floating dock’) at its premises located at 81 Denison Street, Carrington (‘the Premises’) for the purpose of carrying out maintenance work on ships.
6) The Premises are located on the eastern side of the Throsby Basin within the Port of Newcastle, in the Newcastle Local Government Area.
7) The principal business carried out at the Premises operated by Forgacs is ship repair, and this involves docking ships, and the associated blasting (including abrasive grit blasting), painting, structural repairs, electrical and some mechanical repairs. All the major repair work is carried out within the floating dock itself on both commercial ships and ships of the Royal Australian Navy.
8) The floating dock is a vessel itself. Raising and lowering the dock involves using the harbour’s salt water. To sink the dock, valves are opened to sink the dock in a controlled fashion. The ship to be repaired then moves into the dock. The dock and ship are then raised by pumping the salt water out of the dock tanks and into the harbour.
9) The vessel in the floating dock at the time of the incident was the “Searoad Mersey”, which was a commercially owned vessel trading in Australian waters. The scope of work included abrasive grit blasting and spray painting of the external hull. There was some structural repair work inside, some minor electrical repair and some mechanical repair work.
10) Abrasive grit blasting is a process undertaken to remove the paint which coats the hulls of vessels and involves air blasting the hull of a vessel with an abrasive medium such as copper slag.
11) The marine paint removed through the abrasive grit blasting process can sometimes contain “anti-fouling” components such as Tributyltin (‘TBT’) which are included in the paint to prevent the build up of marine organisms on the hulls of vessels.
12) TBT is a very highly toxic chemical which has both acute and chronic effects on marine organisms at very low microgram per litre levels. TBT bioaccumulates in tissues of many organisms, especially molluscs and it is particularly detrimental to marine organisms such as oysters and mussels, resulting in shell deformities, reduced growth and mortality of juveniles. It also severely affects marine snails (gastropods) causing “imposex” which is when female snails develop male characteristics, leading to a lack of reproductive capacity. These toxic effects resulted in an International Maritime Organisation ban on the use of TBT on vessels which became effective in 2008.
13) Although the use of TBT has been banned, it can enter the environment when the hulls of ships, treated prior to the international ban, are blasted through the abrasive grit blasting process described above in paragraph 10. TBT can be leached from paint flakes if the material falls onto water surfaces and, because the flakes have a high surface area, the leaching rate will be greater than when the paint was as coating on the hull.

Background to incident

16) In recent years the Department of Environment and Climate Change (‘DECC’) has received a number of complaints regarding particulate emissions and painting overspray from activities carried out on the floating dock at the Premises.
17) On 29 October 2001 DECC issued a Notice of Variation of Licence that included PRP Condition U1 (Paint and Abrasive Material Drift) that required Forgacs to implement works outlined in the report titled “Prevention of Paint and Abrasive Blast Material Drift from the Floating Dock Muloobinba Report” dated 9 March 2001(‘the Report’). The works outlined in the Report required Forgacs to make improvements to the encapsulation system, which was not considered satisfactory. The required work was carried out by Forgacs.
18) On 26 February 2003 DECC issued a penalty notice to Forgacs for breaching Licence Condition O6.1 on 5 January 2003. In this instance, several boats moored at Newcastle Cruising Yacht Club (‘NCYC’), 91 Hannell Street, Wickham, were affected by particulate matter originating from abrasive grit blasting activities conducted at the floating dock.
19) On 28 November 2003 DECC issued a Notice of Variation of Licence that included the removal of PRP Condition U1 as the required works had been carried out.
20) On 29 December 2003, DECC’s Environment Line received 2 reports of excessive dust levels coming from sandblasting a ship in the dry dock at the Premises. At NCYC, a number of boats moored at NCYC and surrounding waters were affected by the particulate emission originating from the Premises. On 29 March 2004 DECC issued a penalty notice in response to this incident for breaching Licence Condition O6.1.
21) Consistently with Forgacs’ obligations under the Licence, the Premises have a range of environmental control measures to control any dust emissions from grit blasting. The gap between the vessel and the floating dock is encapsulated with a shade cloth type material. Such encapsulation has been the practice at the Premises for a number of years. The encapsulating material was in place prior to the Incident involving the Searoad Mersey occurring and is referred to variously in the evidence as “shade cloth”, “green shade cloth”, “shrouding”, “shade cloth shroud” and “green shade-cloth cover” (“shade cloth shroud”).
Events of 30 December 2007
22) On 30 December 2007 at about 7.30am, Paul Booth, Dock Manager at NCYC, conducted an inspection of berths and vessels at the NCYC marina.
23) NCYC operates a marina adjacent to the Premises, and is located on the western side of the Throsby Basin within the Port of Newcastle. A map which shows the location of NCYC and its proximity to the floating dock at the Premises is included at Tab 2 in the Tender Bundle.
24) During his inspection of the NCYC marina Mr Booth observed a black brown coloured grit substance deposited on most of the vessels in the marina including his own boat which was moored at Finger wharf “B”. He hosed down his boat to remove the grit substance. During the day he also received a number of complaints from other boat owners advising of deposits on their boats.
25) After being advised by Mr Booth that boats in the marina and marina walkways were covered with fine black grit, on 30 December 2008 Mr Ernest Keegan, Club Captain and Company Secretary of NCYC, drove to NCYC at approximately 9.00am to inspect the boats and marina.
26) Mr Keegan observed that the whole marina complex, including marina fingers, shore-based buildings and boats moored at the marina were covered with a black dust. He could see that there was a ship in the floating dock at the Premises and heard the sound of grit blasting machinery operating. He observed that there were gaps in the shade cloth shroud covering the ship in the floating dock and could see fine particles being emitted from the floating dock at the Premises and being driven across the water towards NCYC by wind.
27) Later that day Mr Keegan phoned Forgacs to report the incident and lodge a formal complaint.
28) Also on 30 December 2007 DECC’s Environment Line received a report (Reference No. 104013) from a representative of NCYC advising that Forgacs was abrasive grit blasting a ship and that residue from the activity had escaped, contaminating the water and boats moored at the NCYC’s finger wharves. A copy of the Environment Line report No.104013 is included at Tab 3 in the Tender Bundle.
29) DECC Officer Hamish Rutherford received details of the Environment Line report and at approximately 7.15pm he attended the NCYC premises.
30) From the NCYC premises Mr Rutherford saw a vessel docked in the floating dock, most of which was shrouded in a green shade cloth shroud. He did not see any work being carried out at the floating dock and left the premises as a result of the fading light.
Events of 31 December 2007
31) On 31 December 2007 DECC’s Environment Line received another seven pollution incident reports alleging that dust emissions blown across the harbour from the floating dock were impacting vessels moored at the NCYC marina. Copies of these reports are included at Tab 4 in the Tender Bundle.
32) These pollution incident reports were referred to DECC’s Newcastle Office for investigation.
33) On 31 December 2007 at approximately 10.30am, DECC Officer Grahame Clarke arrived at the NCYC marina. Mr Clarke observed a heavy coating of particulate matter on the decking, cabin and rigging of various vessels moored at berth “C”. He proceeded to collect samples from a vessel named ‘Plastic Toy’ berthed at mooring C17 and a vessel named ‘Funnel Web’ berthed at mooring C27. The granular material sampled from the surfaces of the boats was black, fine grained and gritty to touch.
34) Photographs were taken of the surfaces before the dust sample was collected. Some of these photographs are included at Tab 5 in the Tender Bundle.
35) Mr Clarke observed and took samples of a floating red/black slick on the surface of the water around finger wharf “C” and elsewhere at the marina. The slick extended from the western side of the floating dock at the Premises to the NCYC marina. Sample analysis indicates that the solid material in the water contained high levels of tin and titanium which is consistent with paint material containing tin. Analysis also showed levels (greater than) > 5000ng Sn/g for each of TBT and its break down products, Dibutyltin (‘DBT’) and Monobutyltin (‘MBT’) in the solid material, consistent with the presence of antifouling paint. Analysis of the liquid component of the slick sample indicated that the material contained 23,000 ng/L of TBT 27,000 ng/L of DBT and 860 ng/L of MBT.
36) Mr Clarke took several photos of the material he observed floating on the surface of the water in the marina which are included at Tab 6 in the Tender Bundle.
37) While standing on finger wharf “C” Mr Clarke could see clearly that particulate matter was escaping from a green shade cloth shroud fixed over a vessel docked in the floating dock at the Premises. The prevailing light breeze was blowing the visible particulate matter from the mid section of the floating dock at the Premises towards the marina. Activities identifiable as abrasive grit blasting were clearly audible at this location above the low background noise at the NCYC marina.
38) Mr Clarke contacted a representative of Forgacs at approximately 12.00pm to arrange to inspect the floating dock. He left NCYC shortly thereafter.
39) At approximately 12.15pm Mr Clarke inspected the floating dock at the Premises in the company of two Forgacs representatives, Ms Sarah Neil and Mr Michael Sweeney. At this time, no abrasive grit blasting or other works were taking place. Ms Neil advised that work had stopped at approximately 12.00pm and was not due to commence until the following day.
40) Upon inspecting the shade cloth shroud covering the ‘Searoad Mersey’, the boat docked in the floating dock, Mr Clarke noted the shade cloth shroud covering the vessel was not contiguous for the length of the vessel and there were substantial gaps through which particulate matter could escape the shade cloth shroud. Ms Neil acknowledged that there were gaps in the shade cloth shroud. He also observed that there was a heavy layer of gritty black material along the upper deck of the floating dock. Mr Clarke sampled this material using a new paintbrush and glass sample jar.
41) Mr Clarke noted the similarity in appearance and touch of this material to the material he had sampled on the two vessels at the NCYC marina. Ms Neil advised Mr Clarke that Forgacs were using copper slag material to grit blast paint from the vessel.
42) Before leaving the Premises, Mr Clarke instructed Forgacs to submit a written report, within 14 days, to DECC in accordance with condition R3.1 of the Licence.
3 January 2008 DECC inspection of NCYC and Premises
43) On 3 January 2008 a team of DECC officers including Hamish Rutherford, Christy Groves, Sian Harris and Peter Hughes, attended NCYC to collect samples of particulate matter from the decks of vessels moored at the NCYC finger wharves.
44) Vessels moored along the various NCYC finger wharves were visually inspected for the deposition of particulate matter on their exterior. Varying amounts of particulate matter were observed on the exterior of the majority of vessels moored at the time of the inspection.
45) The officers observed that the particulate matter on the vessels was black. The quantity of particulate matter deposited on a particular vessel varied depending on where it was moored. In general, the deposition of particulate matter appeared to be more concentrated on boats moored along finger wharves “C”, “D” and “E” and increased from west to east along the finger wharves as the proximity to the floating dock at the Premises increased. The map included at Tab 2 of the Tender Bundle shows the relative proximity of the floating dock to NCYC. NCYC is denoted on the map by the yellow shaded area labelled “Marina Yacht Club” and the floating dock is denoted on the map by the yellow shaded area labelled “Floating Dock”.
46) Where possible, samples were collected from each vessel that was observed to have a deposition of particulate matter on the exterior decking. Particulate samples were collected from the decks of a total of 48 vessels moored at NCYC. The samples were collected by using a paint brush to sweep particulate matter from the vessel’s deck into a sample container. Photographs were taken of each vessel moored at the marina at the time of the inspection. Some of these photographs are included at Tab 7 in the Tender Bundle.
47) Following the sampling procedure at NCYC, Mr Rutherford, Ms Groves and Ms Harris attended the Premises. At the time of the inspection the vessel ‘Searoad Mersey’ was still docked in the floating dock and was enclosed in a shade cloth shroud, with the dock raised out of the water. There were four abrasive blasting crews in operation. Samples were collected of the spent grit blasting material which was deposited on the floor of the dock underneath the vessel and from the upper dock on the external side of the shade cloth shroud.
48) Analysis results have confirmed that the particulate matter collected from the decks of the vessels moored at NCYC (samples #200800559 – 570) had a high degree of similarity with material collected from Forgacs (samples #200800571-574). Both groups of samples contained high levels of TBT (greater than 5000 ng/g) which is consistent with the presence of antifouling paint.
49) Whilst standing on the edge of the dock on its upper level, it was observed that particulate emissions of fine grit blasting material were passing through the shade cloth shroud and escaping into the atmosphere and away from the Premises. As a result of these emissions Ms Groves, Ms Harris and Mr Rutherford became covered in fine grit blast material. Photographs were taken of the Premises during the inspection and some of these are included at Tab 8 in the Tender Bundle.
50) On 3 January 2008 Mr Alan Evans, a representative of Forgacs, contacted Mr Clarke by telephone and advised him that Forgacs had installed a second layer of shade cloth and would station observers with water sprays on the upper deck of the floating dock to hose down any particulate matter escaping the shade cloth shroud. Mr Evans advised that if these measures were unsuccessful Forgacs would suspend abrasive grit blasting operations until weather conditions were more favourable to preventing dust from the floating dock escaping the Premises.
51) After the Incident, Forgacs liaised with NCYC and had officers attend the NCYC wharf. On or around 5 January 2008, Forgacs provided a work team to NCYC to clean up the grit blast material deposited on the marina walkways and the vessels moored at the marina. Over the following days Forgacs staff cleaned the affected vessels and the finger wharves of the NCYC marina. NCYC wrote to Forgacs to say that the clean up had been carried out to their satisfaction.
52) On 29 January 2008 Forgacs sent DECC an incident report in relation to particulate emissions from the Premises occurring on 31 December 2007. A copy of the incident report is included at Tab 9 in the Tender Bundle. In the incident report Forgacs explained:
� “During a routine grit blasting activity on the floating dock grit blast medium escaped from the environmental encapsulation erected over a vessel which was at the floating dock”;
� The particles escaped the Premises because “the blasting of one area of the vessel intensified the concentration of grit blast medium in that area and fine dust particles passed through the encapsulation and were blown towards the marina by the wind”;
� Upon notification by DECC, Forgacs took immediate action to prevent further escape of particulate emissions from the Premises; and
� Long term actions to ensure effective encapsulation of dust particles.
53) On 4 June 2008 DECC conducted a recorded interview with Mr Stephen Morley, Operations Manager at Forgacs.
54) During that interview Mr Morley:
� Stated that the name of the vessel in the floating dock at the time of the Incident was named the ‘Searoad Mersey’;
� Admitted that the paint on the ‘Searoad Mersey’ contained TBT;
� Admitted that Forgacs does not test the paint of vessels to determine if the paint contains TBT;
� Acknowledged that the blast medium used by Forgacs is a copper slag product; and
� Admitted that the encapsulation in place at the time of the Incident did not cater for the finer particles escaping through and that resulted in the outfall.
55) Also on 4 June 2008 DECC conducted a recorded interview with Mr Michael Sweeney, Dockyard Operations Manager at Forgacs.
56) During that interview Mr Sweeney:
� Admitted that at the time of the Incident there were holes in the shade cloth shrouding the ‘Searoad Mersey’; and
� Outlined the procedures undertaken by Forgacs to prevent the further escape of particulate matter from the Premises.

6 In relation to environmental harm the parties obtained reports from their respective experts who provided a joint report to the Court. Dr John Chapman was engaged by the Department of Environment and Climate change (DECC) to provide an opinion of the potential environmental effects of Tributyltin (TBT) on marine life in Newcastle Harbour. Associate Professor Ross Coleman was engaged by the Defendant to conduct a peer review of Dr Chapman’s evidence. The points of agreement in the joint reports are as follows:

AGREED FACTS

1) We agree that TBT is a highly toxic material of anthropogenic origin, and it is toxic in both laboratory and field situations, and its release into the environment has the potential to cause environmental harm
2) We agree that some release of TBT from the waste particles into water is likely to have occurred, both from the water sample results and because the material would have had a greater surface area in this finely divided form, compared to the paint on the boat.
3) We agree that TBT levels in the aqueous phase of the sample of water plus solid material (which had been stored at 4oC for several months before analysis) could not be directly related to the ambient concentration of TBT in the Hunter estuary at the time of the incident.
4) We agree that, due to its relatively hydrophobic nature, much of any leached TBT would initially reside in the surface layer of the water.
5) We agree that no actual environmental harm was observed, nor was any field assessment of actual harm made.
6) We agree that it is not possible to definitively conclude that there were any adverse toxicity effects on marine organisms from the release of the material from Forgacs; and neither is it possible to conclusively rule out that there may have been such toxic effects.
7) We agree that the rise and fall of tides would be likely to expose intertidal organisms to a greater extent than for water-column organisms.
8) We agree that it is not possible to accurately calculate the concentrations of TBT that would have resulted from the incident at Forgacs, as the amount of material spread over the harbour is not known and neither is the degree of leaching of TBT into the water column within the first few days.
9) We agree that in flow conditions in the Hunter estuary it is possible that exposure may have been brief.
10) We agree that it is equally possible that eddies in the current may have caused some potentially detectable adverse conditions in some organisms.
11) We agree that, while localised effects may have occurred, adverse ecological consequences for the Hunter River estuary were unlikely.
12) We agree that this incident would have added to any effects that TBT from international shipping may have already been having in Newcastle Harbour.
13) We agree that the dispersal of this material would have added to the burden of TBT in the estuary from international shipping, it is impossible to determine how much additional burden of TBT this incident would have had, given that the mass of dispersed material is not known, and that any effects would have been localised.
14) We agree that if the material collected in localised areas for a tidal cycle this may have caused some adverse conditions in some organisms but that significant ecological effects in the Hunter estuary were unlikely.

7 The areas of disagreement between the experts concerned methodological matters and are unnecessary for me to resolve in this judgment.

8 An agreed bundle of documents referred to in the SOAF was filed by the Prosecutor and contained, inter alia, the environment protection licence issued to the Defendant and a large number of photographs taken during the sampling operation conducted by the Environment Protection Authority (EPA) at the Newcastle Cruising Yacht Club (NCYC) on 3 January 2008. They include photographs taken of the particulate matter which was deposited on boats at the NCYC and a photograph of the Defendant’s dock showing the Searoad Mersey covered almost entirely in shade cloth.

Additional evidence of the Defendant
9 An affidavit of Mr Alan Evans affirmed 24 April 2009 was read in part for the Defendant. Mr Evans, general manager of the Defendant, details the history of the operations of the Forgacs Group of Companies (Forgacs), which the Defendant is a part of, including its acquisition of the floating dock in Newcastle in 1987. Mr Evans describes Forgacs as one of Australia’s leading ship repairers with operations undertaken at seven sites across Queensland and New South Wales. It has completed 24 naval projects for the Department of Defence including HMAS Kanimbla. Forgacs has a quality assurance system that meets the requirements of ISO 9001:2000. In addition to standard operating procedures, Mr Evans attests that an Environmental Management Plan is developed specific for each naval ship repair project and work instructions are provided to the “shop floor” by a series of “work packages” which are produced after a risk assessment addressing environmental compliance is undertaken.

10 In 2003 the Defendant was issued with two penalty notices, one due to the escape of particulate matter from grit blasting and the other due to paint overspray. Mr Evans attests that the Defendant paid the fines and as a result of the incidents improved its shade cloth encapsulation procedures to the satisfaction of the EPA. Mr Evans believes that occasional emissions of errant paint or particulate matter to the surrounding air is inevitable given the scope of the operations conducted at the dock and that the release of TBT is contemplated by the licence condition requiring TBT levels in water discharged to be monitored. Mr Evans attests however that the Defendant operates a “zero tolerance” approach to emissions and understands this to be the requirement of Condition O6.1. Mr Evans believes that the avoidance of all grit particulate release between December 2003 to the date of the incident reflects a highly effective environmental performance.

11 Mr Evans attests that since the events giving rise to the offence the Defendant has reviewed its standard operating procedures and has amended its hazard review form and work method statement. Supervisors now ensure no grit blasting occurs until environmental screens are in place and such screens are checked daily for their integrity. Mr Evans stated that at the time of the offence the Defendant was supplied with abrasive grit of an abnormal or unusual amount of finer particles. This was only discovered after the offence as a result of external laboratory testing commissioned by the Defendant. The supply of such fine grit had not previously been experienced and the Defendant prohibited the supply of such fine grit by its supplier subcontractor. Since the offence, the Defendant has reverted to a larger particle size blast medium which is now screened to ensure particle size and does not rely on contractual stipulation alone. Mr Evans stated that this new medium has been successfully used by the Defendant on two major naval docking repair units during 2008. Mr Evans acknowledged that there were some gaps at sheet joins or ties in the shade cloth shroud used at the time of the offence but neither he nor any employees were aware of these gaps. A permanent “sentry” at the top of the dock has a sole task to monitor any escape of particulate matter from the dock boundaries. The Defendant has also intensified its monitoring of adverse weather conditions. Mr Evans is certain the Defendant will not reoffend with these improvements and the renewed awareness of the workforce.

12 Mr Evans attests that the Defendant incurred costs of about $4,675 in cleaning up boats affected by the offence. Mr Evans regrets that the grit was deposited on the boats and recognises that the company must be mindful of its neighbours in conducting its operations. Mr Evans described how the offence and subsequent prosecution have caused material damage to the Defendant’s commercial interests due to irreparable damage to its reputation. An example is the loss of a Commonwealth government tender for repairs to the HMAS Parramatta which the company anticipated it would win and was worth around $5 million. Mr Evans stated that the Defendant is remorseful and contrite. Mr Evans expressed the willingness of the Defendant to assist in completing a community project and comply with a publication order which are both proposed by the Prosecutor. The Defendant is also willing to submit to any order for specific environmental retraining of its staff.

13 The documents exhibited to the affidavit of Mr Evans include, inter alia, the Defendant’s Environmental Management Standard Operating Procedure (issued 25 July 2007) which includes in section 2.3.6 the means by which the Defendant would comply with condition M7.1 of the licence (which requires wastewater discharged from the site to be monitored for TBT), the Defendant’s Surface Preparation and Paint Standard Operating Procedure (issued 25 July 2007) which includes a section on abrasive grit blasting (section 3.3.5), the Environmental Management Plan and Work Method Statement for the HMAS Kanimbla contract and the invoice for the order of 1.3mm grit from Burwell Technologies, the abrasive grit supplier, dated 23 November 2007.

14 The Defendant also relied on parts of two records of interview which occurred on 4 June 2008. In the first interview, Mr Steve Morley, Operations Manager of the Defendant for two years, was interviewed by a DECC representative. In the interview Mr Morley described the incident on 30 December. He explained that on the day there was concentrated blasting of one small area. He states that the grit blast used was later found to contain an abnormal and unusual amount of finer particles. Prior to this, they had not had any problems like this from the supplier from whom they had ordered the product for a period of several years. The smallest size of grit that should have been supplied was 0.75mm but testing after the offence showed 11 per cent of particles in the sample had a diameter less than 0.6mm. Mr Morley also emphasised in the interview that the Defendant took the complaints about the incident seriously. He stated that the Defendant is continually looking at what are the best products on the market and the copper slag abrasive grit blast is the best product. The change to larger particle size is a means of reducing the potential for using smaller particle sizes which cannot be contained by the encapsulating material. The screening of the material is also a means of ensuring quality. The supplier of the product used at the time of offence is no longer used and they have been made aware of the potential impact of supplying the fine grit. At the time of the interview, the Defendant had successfully used the new product but continues to research new products and technology including by liaising with other shipyards. The Defendant seriously recognises the requirements of being a good corporate citizen.

15 In the second interview, Michael Sweeney, Operations Manager of the Defendant, was interviewed by a DECC representative. During the interview, Mr Sweeney acknowledged that the EPA officer inspecting the dock had noted a few gaps in the shade cloth shrouding. Mr Sweeney explained that when the shade cloth is erected sections of it are joined together with clips and then cable ties. On the day the EPA officer conducted his inspection, Mr Sweeney observed that the ties had come undone and created a gap. The safety sentry person and the supervisor neglected to report this. Mr Sweeney stated that since the offence a number of new measures have been put in place and since then two ships have been worked on without incident.

Relevant sentencing considerations

16 The Crimes (Sentencing Procedure) Act 1999 (the CSP Act) (in particular, Pt 3 Div 1) contains provisions relevant to sentencing procedures. Section 21A of the CSP Act sets out aggravating, mitigating and other factors to be taken into account in sentencing.

17 An appropriate sentence is to be determined after consideration of each of these matters bearing in mind that:

…a basic principle of sentencing law is that a sentence…imposed by a court should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances (see Veen v. The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465, at pp 472, 485-486, 490-491, 496).

per

Hoare v R

(1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ).

18 In Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [163] and Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 at [110] relevant factors to determine the objective gravity of an offence were identified for offences under the Environmental Planning and Assessment Act 1979. The factors include the maximum penalty, the objective harmfulness of the defendant’s actions, the reasons for the commission of the offence and the state of mind of the offender. These factors are also relevant to offences under the POEO Act. Another relevant factor can be consideration of the statutory scheme in which the offence provision appears.

19 In terms of the statutory scheme, the importance of complying with environmental protection licences issued under the POEO Act has been recognised by this Court on numerous occasions. In Environment Protection Authority v Incitec Limited [2003] NSWLEC 381 McClellan J observed at [49], in relation to specific deterrence for a second offender (different circumstances to those before me), that:

A licence provides a privilege, permitting the holder to pollute within the terms of that licence. It carries with it an obligation to ensure that any pollution is kept within the parameters provided by the licence conditions.

20 Pearlman J emphasised that contravention of a pollution licence involves a breach of public trust in Environment Protection Authority v Shoalhaven Starches Pty Ltd [2003] NSWLEC 107. Her Honour stated at [49]:

The defendant is entrusted, by its pollution licence, to pollute and that places it in a special category so far as other members of the public are concerned. But that permission is conditional upon the standards and limits specified in the pollution licence.

21 Section 241(1) of the POEO Act identifies the following factors to be taken into consideration in imposing a penalty for offences committed under that Act (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

22 The agreement in the joint report of the two experts briefed by the parties is set out above in par 6. The environmental harm alleged by the Prosecutor is in two categories. Firstly, ecological harm to Newcastle Harbour resulting from paint and grit particles containing TBT falling into the water, and secondly the amenity impacts of grit and paint particles falling on boats at the NCYC. The Prosecutor argued that while no actual environmental harm was established and there was no field assessment of actual harm conducted there was a likelihood of environmental harm. This arises from the definition of “environment” and “harm to the environment” in the POEO Act and the risk of harm occurring per Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366, cited in Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419. Likely means a real and not remote chance or possibility regardless of whether it is less or more than a 50 per cent chance; Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66 at [44]. The paint being removed by grit blasting at the Defendant’s premises included TBT which is highly toxic to marine organisms at very low concentrations. It bioaccumulates in the tissues of many organisms and can impact on reproductive capacity. TBT has now been banned from use on vessels due to its toxic effects. While the concentrations of TBT in the water as a result of the offence are unknown it is agreed that some release of TBT from the particles in the water is likely to have occurred. That release had potential to cause environmental harm. Toxic effects on marine organisms cannot be ruled out. Eddies in the water current may have caused some potentially detectable adverse conditions in some organisms. Intertidal organisms would be exposed to more harm than water-column organisms. The TBT adds incrementally to the existing chemical load in the harbour environment. That there are preexisting chemicals in the harbour is not a mitigating factor per State Pollution Control Commission v White Wings Pty Ltd (NSWLEC, Bignold J, 1 Nov 1991, unreported).

23 There were amenity impacts on the boat owners of the NCYC marina affected by the grit and therefore impact on their quality of life. Samples and photographs of 48 vessels at the marina were taken and these showed the deposits on the boats had a high degree of similarity with material collected from the Defendant’s premises. These circumstances had the same potential for harm as found in Environment Protection Authority v Port Kembla Copper Pty Ltd [2003] NSWLEC 256.

Defendant’s submissions

24 The Defendant submitted that the amenity impacts were temporary only and no more than an irritant to the boat owners at the marina as the grit material was cleaned up promptly by the Defendant. There is no evidence that there was any potential for impact on human health. The circumstances in Port Kembla Copper are far more serious than in this case.

25 The photographs in the SOAF (Tab 7) show that the grit on the yachts was light, intermittent and patchy. The level of coverage of the yachts and water was minor.

26 In relation to ecological harm, based on the joint report of the experts there is no evidence of actual environmental impact on marine organisms in Newcastle Harbour as a result of the offence. There was no attempt to determine whether there was harm in the field. There is little likelihood that harm to the environment would have resulted from the incident. The agreement of the experts is essentially hypothetical as to the potential for harm. TBT is likely to be present in the harbour due to the presence of international shipping using the harbour. The licence condition M7.1 referred to at par 13 requires testing of TBT levels in the wastewater suggesting that some release of TBT is to be expected.

27 The Prosecutor bears the onus of proving beyond reasonable doubt matters beyond the elements of the offence conceded by a plea of guilty. There is no evidence proving beyond reasonable doubt that any potential harm to marine organisms was likely, meaning a real or not a remote chance or possibility. Nor is there any evidence of any lasting environmental harm, suggesting a low level of seriousness.

Finding

28 There is no evidence of actual ecological harm. In relation to the likelihood of ecological harm resulting to marine organisms in the harbour, the experts’ agreement is that some release of TBT into water is likely to have occurred but they were not able to definitively conclude that there were any adverse toxicity effects on marine organisms, or that there were no such effects. They agreed that while localised effects may have occurred, adverse ecological effects in the Hunter River and estuary were unlikely. I consider there was potential for some harm from the TBT floating in the water and finally settling on the bottom of the harbour, meaning a real, not remote, possibility, but given the lack of specific data in the field it is impossible to quantify. TBT is highly toxic to marine organisms at low concentrations. The existing harbour environment is likely to have TBT present due to the presence of international shipping but that is not a mitigating factor as the Prosecutor submitted. TBT bioaccumulates so that this incident further added to that chemical load in the environment (agreement of experts in par 6 above at par 12, 13 of agreed facts). As stated by Preston J in Environment Protection Authority v Waste Recycling and Processing Corporation (2006) at [147] harm can be cumulative so that activities which contribute incrementally to the gradual deterioration of the environment should be treated seriously.

29 The definition of “environment” in the POEO Act is broad. The definition of “harm to the environment” in the POEO Act encompasses the amenity impacts at the marina resulting from the deposit of grit material on the boats and walkways. Any harm was short term as on 5 January 2008 the Defendant’s employees cleaned up the grit material on the marina walkways and vessels moored at the marina to the satisfaction of the NCYC (SOAF 51). The Defendant’s counsel sought to demonstrate from the photographs in evidence that the deposited material was patchy and a light cover only. While that appears correct from the photographs there were nevertheless 48 boats which had material on them suggesting the incident resulted in particles being reasonably widespread.

30 I agree with the Defendant’s counsel’s submissions that the circumstances in Port Kembla Copper were more serious than in this matter as the nature of the chemical deposited as brown spots caused damage to surfaces, was deposited over a wider area and was harder to remove. The actual harm caused in this matter was short-term. The level of environmental harm caused by the offence is low in these circumstances.

(b) the practical measures that may be taken to prevent, control, abate or mitigate that harm

Prosecutor’s submissions

31 There were several measures that could have been taken to prevent the offence. The shade cloth in place should have gone for the length of the ship and not contain any holes or gaps through which particulate matter could escape. Testing for the presence of TBT was also warranted. The measures implemented after the offence included adding another layer of shade cloth, placing a sentry on top of the dock to monitor the escape of dust from the floating dock and watering down the shade cloth. All these measures if already implemented could have prevented the actual and potential harm from arising.

Defendant’s submissions
32 The offence arose from unusual circumstances being the incorrect supply by the contractor of grit that was too fine and not the diameter of 1.3mm specified by the Defendant. That the grit was too fine was not discovered until after the offence had occurred. This is confirmed by the evidence of Mr Evans (par 11) and Mr Morley (par 14). The job also required concentrated blasting operations being carried out on the ship which had potential for more concentrated dust (see evidence of Mr Morley par 14). There were gaps in the shade cloth but the primary means of escape of particles was through the shade cloth itself. This occurred because the grit was too fine.

33 The abnormally sized grit issue indicates, even if the Defendant had taken further practical measures prior to the incident, the incident would still have occurred. If there had been no gaps in the shade cloth, the extent of the escape may not have been as great but, insofar as the incident was caused by the abnormal grit, as is established on the evidence, the incident would still have occurred, even if all the environment protection measures that have since been taken by the Defendant were in place at the time.

34 As detailed in the affidavit of Mr Evans, the Defendant had in place environmental management systems. There was prompt improvement of the existing environmental protection measures already in place following the notification to the Defendant that there was a problem. These included numerous measures identified already in the Prosecutor’s submissions, and also improving the instruction and supervision of blasting workers and ensuring that the small diameter grit was not used again and that normal sized grit was supplied.

Finding

35 In terms of measures which could have been taken to prevent the harm occurring, the SOAF par 37, 40 refers to the observations of Mr Clark of DECC that particles were escaping from the shade cloth, the shade cloth did not cover the whole of the boat and there were significant gaps in the shade cloth. The Defendant’s employee Mr Sweeney admitted that there were gaps in the shade cloth which were not reported by the sentry. Ensuring the shade cloth was fully in place with no gaps was a measure which could have been taken before the circumstances giving rise to the offence occurred. In relation to the supply of incorrectly sized grit by its contractor the Defendant argued that was a circumstance beyond its control and it could not therefore be expected to foresee the problem with the shade cloth being inadequate to contain grit of that size. The Defendant’s counsel submitted that there was no specific evidence of particles escaping through the gaps rather than directly through the cloth itself as a result of the incorrect supply of very small grit which was able to fall through the shade cloth. While I accept that submission it does not answer the evidence that all particles whether of grit or paint are required to be prevented from leaving the premises by condition O6.1.

36 The evidence of Mr Evans concerning the nature of the Defendant’s business and the SOAF is that improvements have been made to environmental practices at the premises over time, including better encapsulation (par 11 and SOAF par 17). Improved measures required by the EPA were implemented in 2001. Two penalty notices were issued concerning particle emissions and paint spray in 2003. Given the heavy industrial nature of the Defendant’s business, conducted over a long period of time at the premises, this suggests that generally the environment management systems have been working successfully. That supports the Defendant’s submissions that the change in grit supplied (being too small) gave rise to the offence. In these circumstances the Defendant could not have been expected to be aware that the shade cloth itself was inadequate, a relevant matter also to s 241(1)(c) as to whether the harm was foreseeable.

37 I do not consider testing for TBT was necessary given that condition O6.1 of the licence requires that no dust or particles be emitted in any event and there is no specific requirement for testing of paint in the licence conditions. I accept the Defendant’s submissions that it aimed to prevent any abrasive grit being released whether containing TBT or otherwise.

38 In terms of mitigating the harm caused by the offence, steps were taken promptly to clean up the marina and the affected boats moored there as submitted by the Defendant and as recognised in the SOAF at par 51. The additional measures taken at the floating dock are identified in the parties’ submissions and these have proved satisfactory since. The evidence of the Defendant’s general manager Mr Evans is that there was an environmental management system in place at the time of the incident which has since been improved and now includes screening of the size of the grit particles. Adequate practical measures were taken to mitigate and abate the harm caused by the offence.

(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

39 The Prosecutor submitted that given the gaps in the shade cloth and the likely presence of TBT in the paint being grit blasted the actual harm caused and the likelihood of harm was foreseeable by the Defendant.

40 The Defendant submitted the unusual circumstances meant that there was a low level of foreseeability of harm. The primary cause of the incident was the inadvertent supply of incorrectly sized grit and that was not known to the Defendant’s employees at the time of the offence. Nor were they aware of gaps in the shade cloth.

Finding

41 I made observations relevant to s 241(1)(c) at par 36 above concerning the nature of the Defendant’s operations. The likelihood of harm resulting from the offence was ecological harm from TBT particles in the water which would end up on the bottom of the harbour adding to the chemical load in the environment with potential to affect marine organisms. The actual harm was the short-term amenity impacts on boat owners from the grit particles deposited on the boats and walkways of the marina. As submitted by the Defendant it is unknown on the evidence what volume of grit and paint particles escaped through gaps in the shade cloth rather than through the shade cloth itself. It is highly likely that some particles escaped through gaps in the shade cloth and the harm that resulted from this was foreseeable.

42 As the Defendant submitted however, it is also likely the particles moved through the shade cloth itself and given the circumstances as to why that occurred I consider the harm or likelihood of harm from that cause of the particles escaping was not foreseeable. All of the harm or likely harm caused as a result of this offence was not foreseeable by the Defendant.

(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence

43 The Prosecutor argued the Defendant had control over the causes giving rise to the offence. The Defendant submitted that it was not responsible for the supply of the incorrectly sized grit so that while it accepts responsibility for the offence it was not in control of all the circumstances giving rise to it. The supply of the wrong sized grit was beyond the Defendant’s control. The Defendant accepted that the elimination of gaps in the shade cloth was within the Defendant’s control. I accept the submissions of the Defendant on this aspect of the matter.

(e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee.

44 Not relevant.

45 Overall I consider the level of seriousness of the offence in relation to the factors in s 241 is low.

Other objective circumstances

46 Regard must be had to the culpability of the Defendant and the individual circumstances which led to the commission of the offence. This has been considered above in the context of s 241(1).

47 In setting a penalty the Court should have regard to the maximum penalty applicable, as this is an expression of the seriousness Parliament attributes to the offence: see Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 and 701 respectively that:

The task of a court is to assess the relative seriousness of the offender’s particular offence in relation to a worst case for which the maximum penalty is provided…

..the more serious the lasting environmental harm involved the more serious the offence and, ordinarily, the higher the penalty.

48 As already noted the maximum penalty increased in 2006 from $250,000 to $1 million so that requires an assessment of penalty in light of the maximum now available for serious matters.

General/specific deterrence

49 Section 3A(b) CSP Act states that one of the purposes for a court in imposing a sentence is to prevent crime by deterring offenders. Sentences imposed in relation to environmental offences must embrace powerful considerations of general deterrence: see Axer Pty Ltd v Environment Protection Authority (1993), per Badgery-Parker J at 367. In Axer, Mahoney J stated at 359:

The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur.

50 A nominal fine would not be adequate given the need for general deterrence.

51 The Prosecutor argued there was also a need for specific deterrence given that the Defendant was aware of the potential for particle emissions from its operations, particularly in light of the two penalty notices issued in 2003 in relation to condition O6.1. Mr Evans gave evidence in his affidavit about the loss of recent business and potential for future losses summarised in par 12. The Defendant argued that in light of the impact on the business in the loss of a valuable government tender which its general manager considers was very likely to be a result of this offence, the Defendant is unlikely to reoffend.

52 Based on the evidence of Mr Evans concerning the loss of potential business because of having to disclose the offence as part of any government tender process, there is a clear commercial incentive for the Defendant not to commit a further offence. Specific deterrence was referred to in Veen v The Queen [No. 2] (1988) 164 CLR 465 at 477 as being a defendant who displays:

uncharacteristic aberration

or whether the offender has manifested in his commission of the instant offence a

continuing attitude of disobedience of the law

53 The Defendant does not fall into this category and I do not consider that any penalty should include an amount for specific deterrence.

Whether extra-curial punishment

54 The Defendant’s counsel also submitted that the Defendant had suffered extra-curial punishment as a result of the offence because it has missed out on at least one tender from the Commonwealth which it had expected to win and was concerned about its future relationship with the Commonwealth. That is a factor which should be taken into account as a mitigating circumstance because it is extra-curial punishment. Reliance for this submission was placed on Environment Protection Authority v Ampol Refineries (NSW) [1998] NSWLEC 134 at [21] but that paragraph does not consider such a submission. Lloyd J held that the defendant would be very likely to take all measures within its power to prevent a recurrence of a similar offence because there had been a loss of productivity resulting in a far greater financial burden than any penalty (a matter I have taken into account in relation to specific deterrence above in par 51 and 52). His Honour was not considering whether the financial loss was extra-curial punishment resulting from the financial loss occasioned by the offence.

55 In this matter the actual incident did not cause substantial loss to the Defendant in terms of lost productivity or loss of a specific contract. It did incur costs of cleaning up and implementing additional environmental protection measures but these are not relevant to this argument and are in any event a necessary cost of doing business in such a way that the environment protection licence is complied with. I have some difficulty with the submission that I should take into account as extra-curial punishment the potential loss of business because the offence has to be disclosed in tender processes. It is a matter of public record in any event. All offences are a matter of public record and there is potential for loss of personal or business reputation as a result of conviction in most matters before the Court.

56 The Defendant’s counsel’s submission, although not couched in these terms, is suggesting that a loss of business reputation which in turn results in financial loss is extra-curial punishment that should be taken into account. The evidence to support that loss is the opinion evidence of the general manager of the Defendant. I doubt whether such financial loss constitutes extra-curial punishment resulting from this offence which would warrant a reduction in penalty.

57 I would need further submissions and authority to consider before adopting this submission and will not do so in this case.

Mitigating factors

58 A number of mitigating factors should be taken into account to reduce any penalty, as provided for in s 21A(3) of the CSP Act. Section 22 requires the Defendant’s early guilty plea to be taken into account. Pursuant to s 23 the Court may also impose a lesser penalty than it would otherwise impose, having regard to the degree to which the Defendant has assisted, or undertaken to assist, law enforcement authorities in the prevention, detection or investigation of, or in proceedings relating to, the offence concerned.

Guilty plea - s 21A(3)(k), s 22 CSP Act

59 The Defendant pleaded guilty at the earliest opportunity. A plea of guilty entitles the Defendant to a discount in penalty under s 22 of the CSP Act in the range of 10-25 per cent: R v Thomson; R v Houlton (2000) 49 NSWLR 383; R v Sharma (2002) 54 NSWLR 300. The Prosecutor accepts that there has been a guilty plea at the earliest opportunity. There should be a large discount on this basis.

Contrition and remorse – s 21A(3)(i) CSP Act

60 The Defendant has expressed remorse through its general manager, Mr Evans, and I accept that expression of remorse on behalf of the Defendant. I note that the principal of the Defendant, Mr Forgacs, and the general manager Mr Evans, were present in Court for the sentence hearing, further supporting evidence of contrition.

Assistance to law enforcement authorities – s 21A(3)(m), s 23 CSP Act

61 There has been full cooperation with the Prosecutor in relation to the offence and in relation to the preparation for this hearing as evidenced by the SOAF.

62 The Defendant has no previous convictions (s 21A(3)(e) CSP Act) and is unlikely to reoffend (s 21(3)(g)).

Good character - s 21(3)(f) CSP Act

63 As set out in Mr Evans’ affidavit, the Defendant has operated the floating dock at the same site since 1987 and has a large commercial ship repair business. It has completed 24 naval projects which have included very large ships. It employs 400 to 500 persons at any one time including 65 apprentices. Given the size of the undertaking and the nature of its business the Defendant generally has a good environmental record. It was issued with two penalty notices in 2003, one concerning a similar escape of grit blasting material and the other concerning paint spray. It has implemented environmental management procedures over a long period. I accept the Defendant’s submissions that the Defendant has a good environmental record given the nature of its operations.

Evenhandedness

64 The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty. This principle must always be applied subject to the particular circumstances of the case before the Court. The Defendant referred to Environment Protection Authority v Coastal Recycled Cooking Oils Pty Ltd [2008] NSWLEC 242 as particularly relevant because of some factual similarity to this matter.

65 I considered a number of cases in Environment Protection Authority v Delta Electricity [2009] NSWLEC 11 which concerned a breach of licence condition under s 64 of the POEO Act at [55]-[58] which I include here. The maximum penalty was $250,000 in Environment Protection Authority v BHP Steel (AIS) Pty Ltd [2000] NSWLEC 19, Environment Protection Authority v BHP Steel (AIS) Pty Ltd [2003] NSWLEC 46 and Environment Protection Authority v Lithgow Coal Company Pty Ltd [2003] NSWLEC 430. These cases generally concerned the emission of dust or particles from premises, as did Delta. I referred to Coastal Recycled Cooking Oils (maximum penalty $1 million) at [58] in Delta. I consider the facts of this matter are more serious than those in Coastal Recycled Cooking Oils given the actual harm caused and the potential for harm in light of the toxic nature of TBT in the marine environment. The duration of this offence was also longer than in Coastal Cooking Oils.

66 In Delta I imposed a penalty of $45,000 in circumstances where there was a breach of a licence condition due to the failure to minimise or prevent dust emissions on the defendant’s very large flyash mound. There was no actual harm to the environment but there was potential for harm to the amenity of members of the general public by dust settling on personal property such as motor cars. This potential for harm was not substantial. No dust left the premises of the defendant. The level of seriousness in relation to the factors in s 241 was generally similar to this matter although the harm or likelihood of harm is greater in this matter.

67 In addition to the cases referred to in Delta, both parties referred to Environment Protection Authority v Port Kembla Copper Pty Ltd. In that case the defendant, which operated a copper smelter, contravened a licence condition on three occasions in relation to the prevention of “brown spotting” beyond its premises. Spotting occurred over three separate occasions. On one occasion substantial damage was caused to the property of residents in the area. This environmental harm was considered serious. The harm on the other occasions was small. On all three occasions the spotting occurred because of equipment failures and, although it was found that there were practical measures that could have been taken to prevent and control the harm, the harm caused was not reasonably foreseeable. The maximum penalty at the time was $250,000. After considering mitigating factors including the defendant’s early plea of guilty, its cooperation with the authorities, its expression of contrition and remorse and its clean up efforts, a total fine of $95,000 was imposed for the three offences. The circumstances of that case are markedly more serious than in this matter.

68 The Defendant has agreed to pay the Prosecutor’s costs of $20,883.

69 In all the circumstances, if I were to impose a penalty I consider an amount in the vicinity of $45,000 is appropriate. I have allowed a substantial reduction in penalty in light of the numerous mitigating circumstances outlined above.

Section 250 orders under the POEO Act

70 Section 250 sets out orders the Court can make if it wishes. The Prosecutor seeks, and the Defendant does not oppose, the making of a publication order under s 250(1)(a) of the POEO Act. Such orders can be made in substitution or in addition to a penalty. There is good reason to publicise environmental offences in the community and such an order is appropriate in relation to deterrence as stated by Lloyd J in Environment Protection Authority v Biosolids Management Pty Ltd (2004) 141 A Crim R 573 at [32].

71 An order under s 250(1)(e) is also sought by the Prosecutor and is not opposed by the Defendant concerning a contribution by the Defendant to the work of a local community at Carrington on an environmental project. The Prosecutor provided details of the project from Newcastle City Council as the replacement of 250m of a 1.2m wide timber deck over mangroves as well as the replacement of interpretative signage. The project is to provide access to the mangroves for the purpose of environmental education about the importance of mangroves. The Prosecutor also provided a form of order which I intend to make as I consider there is utility in having useful environmental projects undertaken in the local area where the offence occurred. The making of both s 250 orders is supported by Environment Protection Authority v Centennial Newstan Pty Ltd [2006] NSWLEC 732 at [141] and I consider both should be made. I do not consider a penalty is otherwise warranted.

Orders

72 The Court orders that:
1. The Defendant is convicted of the offence with which it is charged.
2. Pursuant to section 250(1)(a) of the POEO Act, the Defendant cause a notice in the form of Annexure A to be placed within the first four pages of the Newcastle Herald at a minimum size of 12cm by 8cm.
3. Pursuant to section 250(1)(e) of the POEO Act, the Defendant pay to the Newcastle City Council the amount of $45,000 for the purpose of replacing 250m of 1.2m wide timber decking over mangroves between Elizabeth and Hargrave Streets, Carrington (Throsby Creek Boardwalk Upgrade) to provide environmental education access to mangroves and to provide access for maintenance and litter removal.
4. All future references by the Defendant to its funding of the Throsby Creek Boardwalk Upgrade shall be accompanied by the following passage (pursuant to s 250(1)(a) of the POEO Act):

“Forgacs’ funding of the Throsby Creek Boardwalk Upgrade is part of a penalty imposed on Forgacs by the Land and Environment Court after it was convicted of breaching a condition of its environmental protection licence by causing TBT containing grit blast dust to emit from its floating dry dock premises in Carrington so that it was blown by the wind onto surrounding waters, land and premises, an offence against s 64(1) of the Protection of the Environment Operations Act 1997.”

5. The Defendant is to pay the Prosecutor’s costs in the amount of $20,883.
6. The exhibits may be returned.

ANNEXURE A

LAND AND ENVIRONMENT COURT PROCEEDINGS

On 21 April 2009, Forgacs Engineering Pty Limited was convicted of an offence in the Land and Environment Court. The company pleaded guilty to a breach of its environment protection licence in proceedings brought by the Environment Protection Authority (EPA).

On or about 31 December 2007 to 1 January 2008 Forgacs Engineering Pty Limited caused grit blast containing the anti-fouling agent Tributyltin (‘

TBT

’) to emit from its floating dry dock premises in Carrington so that it was blown by the wind onto surrounding waters, land and premises. As a result, the Land and Environment Court ordered Forgacs Engineering Pty Limited to contribute $45,000 for the purpose of replacing 250m of 1.2m wide timber decking over mangroves between Elizabeth and Hargrave Streets Carrington to provide environmental education access to mangroves and to provide access for maintenance and litter removal.

This advertisement was placed by order of the Land and Environment Court.

This notice is placed by order of the Land and Environment Court and is paid for by Forgacs Engineering Pty Ltd.

The EPA is part of the Department of Environment and Climate Change.

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.

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