Land and Environment Court New South Wales

• Medium Neutral Citation: Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65
• Hearing dates: 10 November 2010
• Decision date: 30 March 2012
• Before: Craig J

Decision

1.The defendant is convicted of the offence against s 120(1) of the Protection of the Environment Operations Act 1997, as charged.

2.The defendant is fined the sum of $105,000.

3.The defendant must pay the prosecutor's legal costs of the proceedings, agreed in the sum of $53,000.

4.The defendant must pay the prosecutor's investigation costs under s 248 of the Protection of the Environment Operations Act agreed in the sum of $8,632.

5.The defendant, at its expense, and pursuant to s 250(1)(a) of the Protection of the Environment Operations Act must, within 28 days of the date of this order, cause a notice in the form of Annexure "A" to be placed within the first 12 pages of the following newspapers at a minimum size of 10cm x 20cm:

(i)the Sydney Morning Herald in the early general news section;

(ii)the Mudgee Guardian.

6.Exhibits may be returned.

• Catchwords: ENVIRONMENTAL OFFENCE: water pollution - s 120(1) of the Protection of the Environment Operations Act 1997 - multiple discharges of pollutant sediment-laden waters into creek - plea of guilty - conditional approval for coal mining under Pt 3A of the Environmental Planning and Assessment Act 1979 required water management plan - water management plan included erosion and sediment control plan - latter plan required measures to be in place before land clearing commenced - majority of measures not in place when substantial clearing commenced - defendant's failure to implement practical measures at time of offence - harm reasonably foreseeable - contrition and remorse - deterrence - parity - publication order
• Legislation Cited: Crimes (Sentencing Procedure) Act 1999; Environmental Planning and Assessment Act 1979; Protection of the Environment Operations Act 1997
• Cases Cited: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357; Environment Protection Authority v Albury City Council [2009] NSWLEC 169; Environment Protection Authority v Bathurst City Council (1995) 89 LGERA 79; Environment Protection Authority v Boral Australian Gypsum Limited [2009] NSWLEC 26; Environment Protection Authority v Hanson Precast Pty Limited [2008] NSWLEC 285; Environment Protection Authority v Illawarra Coke Company Pty Limited [2005] NSWLEC 296; Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd [2003] NSWLEC 70; (2003) 128 LGERA 240; Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273; Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114; (2010) 174 LGERA 314; Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299; Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77; Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357; Minister for Planning v Moolarben Coal Mines Pty Ltd [2010] NSWLEC 147; (2010) 175 LGERA 93; R v Tadrosse [2005] NSWCCA 145; (2005) 65 NSWLR 740; R Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383
• Category: Sentence
• Parties: Environment Protection Authority (Prosecutor); Moolarben Coal Operations Pty Ltd (Defendant)
• Representation: Ms C Ronalds AM SC (Prosecutor); Ms S A Duggan SC (Defendant); Department of Environment, Climate Change and Water (Prosecutor); Sparke Helmore Lawyers (Defendant)
• File Number(s): 50031 of 2010

Judgment

1 The defendant, Moolarben Coal Operations Pty Ltd, pleads guilty to a charge that from 8 June 2009 and continuing until about 23 June 2009 it polluted waters, contrary to s 120(1) of the Protection of the Environment Operations Act 1997 (the POEO Act). It is now necessary to sentence the defendant for this offence.

2 Commission of the offence involved the discharge of sediment-laden water into Bora Creek near Ulan in the Central Tablelands of New South Wales. Bora Creek is a tributary of the Goulburn River. After being discharged into Bora Creek, the sediment-laden waters flowed into the Goulbourn River. The sediment comprised soil, mud and clay.

3 Section 120 of the POEO Act provides:

"120 Prohibition of pollution of waters

(1)A person who pollutes any waters is guilty of an offence.

(2)In this section:

pollute waters includes cause or permit any waters to be polluted."

4 The essential facts pertaining to the commission of the offence are not in contest between the parties. They are recorded in a Statement of Agreed Facts prepared cooperatively between the prosecutor and the defendant. That Statement is supplemented by documents appended to the Statement. In addition, an affidavit sworn by Peter Barton, the mine manager of the Site at Ulan, has been read and the defendant has also tendered an Erosion and Sediment Control Audit Report prepared in May 2010.

Moolarben Coal Project

5 On 6 September 2007, Moolarben Coal Mines Pty Ltd obtained project approval under Pt 3A of the Environmental Planning and Assessment Act 1979 (the EPA Act) to carry out what was described as the Moolarben Coal Project (the Project). The Project involves the construction and operation of both open cut and underground coal mines as well as coal handling, coal washing and rail loading facilities together with associated infrastructure. When operational, the mines will be capable of producing approximately 10 million tonnes of coal per annum.

6 Moolarben Coal Mines Pty Ltd holds a mining lease over the area to which the Moolarben Coal Project relates.

7 Work preparatory to the commencement of mining required the establishment of what was described as an infrastructure area. It is the area within the Project Site on which facilities such as coal handling, preparation and coal washing plants were to be located as well as the construction of a rail spur and rail loop in order to facilitate the transport of coal from the Site (the Infrastructure Area).

8 Bora Creek passes through the Infrastructure Area. It is an ephemeral creek which, when running, drains the surrounding catchment and flows in a westerly direction to the Goulbourn River. The confluence of the Creek with the River occurs only a short distance from the western boundary of the Infrastructure Area.

Licences and approvals

9 The defendant is said to be the operator of the Moolarben Coal Project Area. For this purpose it holds an environment protection licence issued by the prosecutor under the POEO Act. That licence is for coal mining of the Project Area.

10 As I have already indicated, an approval for the Project was granted in 2007 under Pt 3A of the EPA Act. As a condition of that approval, Moolarben Coal Mines Pty Ltd was required to implement a Water Management Plan. A component of that Plan was an Erosion and Sediment Control Plan. Such a Plan was approved by the General Manager of Moolarben Coal Mines Pty Ltd in December 2008 (the ESCP). It was a Plan to cover the construction phase of the Moolarben Coal Project, anticipated to take approximately 15 months. In essence, it was directed to those activities intended to be undertaken within the Infrastructure Area.

11 Section 3.1 of the ESCP stated that the activities having the potential "to cause or increase soil erosion and/sedimentation will be primarily from land clearing." Section 3.2 then identified potential impacts in the following terms:

"Construction of the infrastructure and environmental bund will result in the alteration of existing surface water flow patterns, large areas of land disturbance which will increase the propensity for erosion and discharge of sediment and other pollutants to land and/or water courses. Many of the soils present within the Moolarban Coal Project Area possess an erosion hazard of moderate to very high, therefore requiring special management to prevent severe land degradation.

Potential impacts from the construction of the mine, infrastructure area, and coal handling and stockpiling areas include:

• Pollution of clean water running onto the site;
• Increased surface erosion from disturbed and rehabilitated areas through the removal of vegetation and the stripping of topsoil;
• Increased surface runoff from road construction and hard stand areas;
• Increased movement of sediments resulting in an increase pollutant load entering the natural water system; and
• Siltation and/or erosion of water courses and water bodies."

12 Section 5 of the ESCP again identified the "high erodibility hazard of the soils" of the Moolarben Coal Project Area, indicating that land degradation should be prevented through the adoption of appropriate soil conservation practices. The need to prepare ESCP drawings for all construction activities was stated, the purpose of those drawings being to detail the erosion and sediment control measures required to be implemented. Temporary sediment control dams were proposed to be provided to reflect detailed design criteria contained in an appendix to the ESCP. Importantly, the following statement appears in section 5.2 of the Plan:

"There will be no disturbance of the site until erosion and sediment controls have been established and approved by the ECRM and the Construction Manager.

All runoff from undisturbed catchments will be diverted around the construction activities via diversion drains and banks to discharge into natural watercourses. Run off from disturbed areas will be retained on-site in sediment dams and either utilised for dust suppression or allowed to settle prior to natural discharge from the site."

13 Apart from the statement appearing in the ESCP as to the establishment of sediment and erosion control measures and structures prior to undertaking any earthworks, the requirement that they be in place at that time was imposed by a condition of the approval granted by the Minister for Planning under Pt 3A of the EPA Act. Plans indicating the location of the various structures and measures required to be implemented to manage sediment and erosion were attached to and formed part of the ESCP.

Construction activity

14 Earthworks within the Infrastructure Area commenced on 13 March 2009. Between that date and 23 June 2009, approximately 53 hectares of this area was cleared and the ground surface disturbed. Photographs tendered at the hearing indicated that heavy earthmoving equipment was used for this purpose and that most of the area was left as bare earth with little vegetative cover. At the time of commencing earthworks the majority of sediment and erosion control measures and structures identified in the ESCP had not been put in place. Indeed, those measures and works were still incomplete at the end of the charge period on 23 June 2009.

15 Prior to 8 June 2009, a 2m high earthen bank was constructed across Bora Creek, approximately 800m upstream of its junction with the Goulburn River. The earthen bank was intended to have a rail line associated with the proposed rail loop constructed across the top of it. This earthen bank dammed water in Bora Creek. The body of water dammed by that bank contained sediment run-off from the upstream section of the Infrastructure Area. That sediment-laden water body extended upstream of the earthen bank for a distance of about 50m.

16 The earthen bank constructed across Bora Creek was located some hundreds of metres east of the western perimeter of the Infrastructure Area. Earthworks involving clearing and surface disturbance prior to 8 June included works in the area west of the earthen bank. About 150m downstream of that bank a sediment dam had been constructed, off the line of Bora Creek. This sediment dam is described as "the original sediment dam". Below that dam a silt fence had been erected.

Discharge of pollutant

17 Although the defendant pleads guilty to the offence that from about 8 June 2009 and continuing until about 23 June 2009 it polluted waters at the site of the Moolarben Coal Project, the evidence establishes that there were four discrete events that resulted in pollution of both Bora Creek and the Goulburn River. It is not a case in which there is evidence of a continuous discharge of pollutant from the Infrastructure Area and it is therefore appropriate to focus upon the discrete events that are identified in the evidence (cf Environment Protection Authority v Bathurst City Council (1995) 89 LGERA 79 per Hunt CJ at Common Law (Grove and Allen JJ agreeing) at 85-86). Those discharges will be referred to by number according to the order in which they occurred.

Discharges 1 and 2: 8 June 2009

18 Monday 8 June 2009 was a public holiday. Mr Robert Miller, the defendant's Construction Supervisor was the only employee present on the Infrastructure Area. Rain had fallen on that day, as it had over the previous six days. About 35mm of rain was recorded as having fallen at Ulan during that time.

19 At about 1.00pm on 8 June, Mr Miller observed about an inch of dirty water overtopping the earthen bank that had been constructed across Bora Creek. This water was flowing into Bora Creek in a westerly direction. It is not known when, prior to 1.00pm, water commenced overtopping the bank. However, once discovered it was observed by Mr Miller to continue for about two hours. He stated that after about an hour the rate of overflow slowed and after about two hours it ceased. This flow of dirty or sediment-laden water over the earthen bank is described in the evidence as Discharge 1. The volume of water involved in Discharge 1 is not known.

20 On that same afternoon, Mr Miller observed dirty or sediment-laden water flowing over the top of the silt fence that had been constructed below the dam earlier described as the "original sediment dam". That dam was the source of the dirty water. The water was first overtopping the dam wall and then flowing over the sediment fence, along a drainage channel and then discharging into Bora Creek. This is described in the evidence as Discharge 2.

21 Mr Miller observed the location of Discharge 2 for about two hours. In an interview with officers of the prosecutor, Mr Miller described the flow when first observed as being about an inch over the silt fence, with that flow continuing for about one and a half hours. Once the flow had ceased, Mr Miller remained for about a further half hour in order to be satisfied that the flow of water over the silt fence did not resume.

22 Having observed Discharges 1 and 2, Mr Miller did not report them to any other employee of the defendant. He was unaware of any person with whom contact should be made to report the discharges that he had observed. As I have indicated, there was no other employee of the defendant present at the Infrastructure Area on that day.

23 No check was made by Mr Miller or by any other person on behalf of the defendant to determine whether the sediment-laden water that discharged into Bora Creek had reached the Goulburn River. No doubt because of Mr Miller's failure to report his observations to any other employee of the defendant, the fact that Discharges 1 and 2 had occurred was not reported to the prosecutor at that time.

Discharge 3: 9 June 2009

24 At about 9.30am on Tuesday 9 June 2009, a local resident, Ms Julia Imrie, observed sediment-laden water in the Goulburn River approximately 5kms downstream of its junction with Bora Creek. At about 12 noon on that same day Ms Imrie went to the Ulan Road Bridge over Bora Creek, located west of the Infrastructure Area and close to the confluence of the Creek with the Goulburn River. There she observed muddy water in Bora Creek flowing towards the Goulburn River. It is accepted that this flow of sediment-laden water in Bora Creek was the consequence of a further discharge from the Infrastructure Area. This is referred to in the evidence as Discharge 3.

25 It is also accepted by the defendant that Discharge 3 originated from the sediment dam that was the source of Discharge 2 on 8 June. Further rain was recorded as having fallen on that day as well as on 9 June.

26 At a chance meeting between Ms Imrie and an employee of the defendant on the afternoon of 9 June, Ms Imrie reported her observations of dirty water in Bora Creek. Although the defendant accepts that Discharge 3 occurred on 9 June in the manner described, no person on its behalf checked whether sediment-laden water from that discharge had reached the Goulburn River. It did, however, report the incident to the prosecutor on Wednesday 10 June, some two hours after Discharge 3 had been reported to the prosecutor by Ms Imrie.

Discharge 4: 22 June 2009

27 As part of the site works undertaken after March 2009, the defendant had enlarged an existing farm dam located in the western part of the Infrastructure Area. On 22 June 2009, sediment-laden water discharged from this dam and flowed into Bora Creek. This discharge followed rainfall of 14.4mm on 21 June. The discharge of this water is reported to have lasted for approximately 90 minutes and it was estimated by the defendant that the volume of the sediment-laden discharge was approximately 16,200 litres. This is referred to as Discharge 4. The defendant reported this discharge to the prosecutor that same day.

28 Once again, the defendant accepts that no person on its behalf checked whether the sediment-laden water from Discharge 4 had reached the Goulburn River.

Inspection by officers of the prosecutor

29 The Infrastructure Area was first visited by officers of the prosecutor on Wednesday 10 June 2009. At that time they observed a slight flow of dirty water into the Goulburn River from Bora Creek. They described the water in the River a few metres upstream from the confluence between the Creek and the River as being "relatively clear". Observation of the Goulburn River about 2kms downstream of the confluence indicated the water "to be discoloured and turbid but nowhere near as discoloured as the water observed in the River at the junction of Bora Creek." Water samples were taken at that time within Bora Creek at the point at which sediment-laden waters had discharged from the original sediment dam and also at a point close to where the Creek joined the Goulbourn River.

30 The area was again inspected on 15 June 2009. At that time, the investigating officers observed:

(i)erosion of the downstream face of the earthen bank;

(ii)quantities of sediment deposited along the bed of Bora Creek; and

(iii)a 5m wide trail of sediment and mulch on the ground leading from the original sediment dam towards Bora Creek.

They also observed that there was no evidence of sediment or dirty water upstream of a farm dam that had been constructed on the Creek east or upstream of the earthen bank.

31 The third inspection carried out by officers of the prosecutor occurred on 23 June 2009 following the occurrence of Discharge 4. Photographs taken by them at that time showed brown/orange coloured water in the drainage line from the enlarged farm dam to Bora Creek, the same coloured water within the Creek leading to the Goulbourn River and a similarly coloured pond within the Goulburn River where the waters of the Creek fall into the River.

32 The final visit undertaken for the purpose of providing evidence occurred on 31 August 2009. The evidence reveals that a large body of sediment-laden water continued to be retained behind the earthen bank constructed across Bora Creek, while below that point there were brown/orange deposits of sediment or sediment-laden pools along the course of the Creek.

Water sample measurements

33 I have referred to the fact that officers of the prosecutor took a number of water samples at different locations when inspecting Bora Creek and its environs. Water sampling was also undertaken by the defendant on two occasions. Both the prosecutor and the defendant acknowledge that following each of the discharges, sediment remained in Bora Creek, both suspended in the water column and as deposits on dry parts of the creek bed. This has the consequence that the result of sampling taken in the Creek cannot be attributed solely to any particular one of the four discharges.

34 Among the analytes measured to indicate the sediment load within the waters of Bora Creek were total suspended solids (TSS), recorded in milligrams per litre (mg/L). Measurements taken by the defendant on 9 June indicated a TSS measurement of 9,740 mg/L immediately below the original settlement dam that was the source of Discharges 2 and 3. Sampling, on that same day, of waters in an unnamed tributary of Bora Creek, upstream of the Infrastructure Area, indicated a TSS measure of 27 mg/L. A sample of the water retained in Bora Creek by construction of the earthen bank indicated a measure of 704 mg/L.

35 Water samples taken on behalf of the prosecutor on 10 June indicated a TSS measure of 340 mg/L in Bora Creek between Ulan Road and the Goulburn River and a similar measure of TSS in Bora Creek at the entry point of discharge from the original sediment dam, being the source of Discharges 2 and 3. Sampling of dam water upstream of the Infrastructure Area on that same day yielded a TSS measure of 15 mg/L.

36 On 22 June 2009, following Discharge 4, the defendant sampled the water in Bora Creek at the point where sediment-laden water flowing from the enlarged farm dam had entered Bora Creek. The sample taken at that time showed a TSS measurement of 192 mg/L

37 Samples taken the following day at different points along Bora Creek showed that the TSS measurement by that time was considerably lower. At the point that was approximately 10m downstream of the entry point of discharge from the enlarged farm dam, the TSS measurement had fallen to 43 mg/L.

38 Some context for these measurements is provided from two separate sources. The first source is the Environment Protection Licence issued by the prosecutor to the defendant for coal mining within the Project Area. A condition of the licence had nominated two dirty water storage and treatment ponds proposed for the area from which discharge of pollutants was permitted. None of the four discharges that are identified in the evidence occurred from the licence discharge points. Relevantly the licence condition set a TSS limit of 50 mg/L for any discharge from the specified discharge points.

39 The second source of contextual reference comes from water quality data collected from a site on the Goulburn River approximately five kilometres upstream of the Bora Creek confluence. This data had been collected on a monthly basis since 2005. A summary of the relevant data from 2005 to 2008 is recorded in the table below:

Summary Statistics Monthly Water Quality Data Site SW5 Ulan Village 2005 to 2008
Analyte	Units	Minimum	Maximum	Mean
Turbidity	NTU	2.8	4200	238.35
TSS	mg/L	2	2600	127.81
Total Phosphorus	mg/L	.01	.87	.10
Total Nitrogen	mg/L	.53	2.70	1.02

40 Total suspended solids measured in samples taken following the four discharges that are the subject of evidence is the only analyte recorded in detail in the Statement of Agreed Facts. However, that Statement indicates that turbidity levels and phosphorous concentrations were also measured. These latter analytes were measured at elevated levels by reference to the Guidelines published by the Australian and New Zealand Environment Conservation Council for fresh and marine water quality. They were also many times higher than the mean level concentration deduced from the data collected from the sampling point in the Goulburn River that I have identified.

41 There is a long-term water quality sampling site within the Goulburn River approximately six kilometres downstream of its confluence with Bora Creek. The prosecutor accepts that at this sampling site there was no discernible change from baseline water quality during and after the four discharges relevant to the present charge.

Sentencing considerations

42 In determining an appropriate sentence, the Court must consider both the subjective and objective circumstances of the offence in the context of the relevant legislative framework. Relevantly, consideration of this framework commences with a reference to the objects of the POEO Act. They are expressed in s 3 and include:

"(a)to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development,

...

(d)to reduce risks to human health and prevent degradation of the environment by the use of mechanisms that promote the following:

(i)pollution prevention ... ,

(ii)the reduction to harmless levels of the discharge of substances likely to cause harm to the environment,

... "

43 The legislative scheme reflected in the objects and operative provisions of the POEO Act requires that "proper, and strict, precautions be taken by those whose activities may cause proscribed pollution" (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 per Mahoney JA at 359). As was also observed by Mahoney JA in Axer, the adoption of that legislative scheme reflects on the part of the community "a stern policy against pollution."

44 The objective circumstances attending the commission of an offence are vital to be considered in determining an appropriate sentence. When assessing the objective gravity of that offence, the Court not only establishes the upper limit of the appropriate penalty but also the lower limit beneath which the penalty should not go. Subjective mitigating features should never produce a sentence that fails to reflect the gravity of the incident or the objectives of punishment which include both retribution and deterrence (Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 at [140]).

45 Section 241(1) of the POEO Act provides a legislative template for assessing the objective circumstances of an offence against that Act. The matters which the subsection requires to be considered and relevant to the present case are:

"(a)the extent of the harm caused or likely to be caused to the environment by the commission of the offence,

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

(c)the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence,

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

... ".

46 In addition to those matters that I have just identified, s 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) must also be considered. That section identifies the purpose for which a sentence may be imposed by a court. The provisions of s 21A of that Act must also be addressed, directing attention to both aggravating and mitigating factors that weigh upon the appropriate penalty. Ultimately, that penalty should be determined by an instinctive synthesis of all relevant objective and subjective circumstances (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357).

Objective circumstances

Maximum penalty

47 The maximum penalty for an offence against s 120 of the POEO Act by a corporation is $1,000,000: s 123. While imposition of the maximum penalty is reserved for the worst or most reprehensible case for which the penalty is prescribed, that maximum nonetheless reflects the seriousness with which an offence involving the pollution of waters is regarded by the legislature.

Actual or likely harm: s 241(1)(a) of the POEO Act

48 An assessment of harm in the present case requires further consideration of the immediate environment of both Bora Creek and the Goulburn River. However, before turning to that consideration, it is important to notice the definition of the phrase "harm to the environment" as defined in the Dictionary to the POEO Act. That definition includes:

"any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or emission that results in pollution."

It is also important to notice that harm is not mitigated by the fact that the waters into which pollutant is discharged are, at the time of discharge, already disturbed or modified (Environmental Protection Authority v Waste Recycling and Processing Corporation at [149]).

49 I have already described Bora Creek as an ephemeral stream. In the section affected by the four discharges relevant to the charge and downstream to its confluence with the Goulburn River, the Creek is described as being more often dry than wet, with pools formed following rain present only for a short time after stormwater discharges. The Statement of Agreed Facts acknowledges that there is no established aquatic ecology in the lower sections of the Creek above the Goulburn River confluence. Macroinvertebrate fauna sampled in that section of the Creek after stormwater events are generally derived from overflows from the permanent inline farm dams constructed within the Creek catchment.

50 Further, there are no native fish in Bora Creek as it is isolated from the Goulburn River by a high vertical waterfall discharge from the Creek to the riverbed. That waterfall is impassable to fish. At the point where Bora Creek discharges over this waterfall into the Goulburn River, the riverbed is described as supporting an almost total cover of water reeds (Cumbungi and Phragmites) that are established on deep sediment beds. This water reed ecosystem acts as a major nutrient and sediment filter to the Goulburn River catchments. These catchments are acknowledged contributors of sediments, turbidity and nutrients to the River.

51 The volume of sediment-laden water entering the Bora Creek and Goulburn River systems from Discharges 1, 2 and 3 is not known. The evidence records observations of Discharges 1 and 2 to which I have already referred. The first of these involved discharge observed for two hours while the second involved discharge for about one and a half hours. The period during which any discharge was occurring prior to the observations being made is not known.

52 Discharge 4 resulted in an estimated volume of 16,200 litres of dirty water flowing into Bora Creek. This discharge is said to have occurred over a period of about 90 minutes. While the total volume of sediment-laden water discharged between 8 June and 23 June from the Infrastructure Area cannot be calculated, it may be deduced from the observations made that it was not insignificant.

53 The evidence indicates and the defendant accepts that the commission of the offence resulted in the visible pollution of Bora Creek and a stretch of the Goulburn River for a distance of something less than six kilometres. Mr Miller described the water in Bora Creek from Discharge 1 as "yellow" in colour. Officers of the prosecutor described the water in Bora Creek and the Goulburn River at its confluence with the Creek as "the colour of milky coffee".

54 On 9 June Ms Imrie observed sediment-laden water in the Goulburn River five kilometres downstream of its junction with Bora Creek. When observation of the River was made by officers of the prosecutor on 10 June at a location approximately two kilometres downstream of the Bora Creek confluence, they described the waters in the River as being "discoloured and turbid" but not as discoloured as the water observed in the River at its confluence with the Creek.

55 In addition to the visual impact, the water sample data to which I have earlier referred indicates that the quality of water discharged both to Bora Creek and the Goulburn River was carrying significantly elevated concentrations of total suspended solids, significantly elevated levels of turbidity and significantly elevated concentrations of nutrients such as nitrogen and phosphorous. These elevated levels had potential to impede healthy aquatic productivity and harm the health of the habitat of aquatic organisms, particularly bottom dwelling organisms such as snails and bivalves. They also had the potential to impact upon minute invertebrates and algae that use the surface of aquatic plants or other substrates as habitats.

56 The prosecutor submits that actual harm occasioned by the four discharges was minimal. It also submits that there were no long term effects from each of the discharges or from their cumulative effect.

57 Apart from the visual effect of the discharges and the elevated levels of suspended solids, turbidity and nutrients, it is correct to observe, as the defendant submitted, that there is no evidence of other actual harm. Clearly, there was potential for harm. That potential arose from the degraded quality of the water that was discharged. The potential effect upon aquatic ecosystems and biota cannot be ignored. Increased concentration of nutrients such as nitrogen and phosphorous in Bora Creek and the Goulburn River resulting from the offence had the potential to stress the aquatic environments of those waterways. One of the consequences of that increased nutrient load was potential for excessive growth of nuisance aquatic plants and the development of algal blooms.

58 The four discharges that are the subject of evidence gave rise to the potential for serious environmental harm. However, taking into account the matters to which I have referred, including the submission of the prosecutor, I consider that the environmental harm, particularly in the long term, was towards the lower end of the range.

Practical measures: s 241(1)(b) of the POEO Act

59 In the context of the present case, the consideration mandated by s 241(1)(b) weighs heavily upon the determination of the objective seriousness of the offence. The practical measures available to the defendant to prevent or mitigate harm from the mobilisation of surface materials within the Infrastructure Area were well known to it. They were made apparent by the ESCP that had been prepared by or on behalf of the defendant prior to commencement of work in March 2009.

60 The defendant had chosen not to carry out the majority of the erosion and sediment control measures indicated by the ESCP as being required prior to commencement of work. As recorded at [47] of the Statement of Agreed Facts, the defendant accepts that the primary cause of water pollution resulting from the four discharges was the undertaking of extensive earthworks without sediment and erosion control structures being in place.

61 The adoption of the ESCP by the Defendant, containing the Statement that I have earlier quoted from section 5.2 of the ESCP to the effect that there would be no disturbance of the Site until the erosion and sediment control measures identified had been established, is evidence of the fact that those measures were practical measures able to be taken to prevent or, at least, mitigate any harm to the environment by discharge of sediments from the Infrastructure Area. The concession by the defendant as to the "primary cause" of water pollution is correctly made.

62 The rainfall that occurred in June 2009 and which gave rise to the four discharges that are the subject of evidence, was unexceptional. The evidence revealed that the average monthly rainfall for June as measured at the nearest location for collection of data on behalf of the Bureau of Meteorology was 51mm. The rainfall measured at the Infrastructure Area between 1 June and 22 June 2009 was 54.6mm. It is not submitted that even had all the erosion and sediment control structures identified in the ESCP been in place, they would not have fulfilled their purpose in respect of that rainfall.

Reasonable foreseeability of harm: s 241(1)(c) of the POEO Act

63 Like the preceding head of consideration, the extent to which the defendant could reasonably have foreseen the harm caused or likely to be caused to the environment by the discharge of sediment-laden water from the Infrastructure Area is significant in the determination of the objective seriousness of this offence. The foreseeability of that harm was made apparent by the provisions of the ESCP.

64 I will not repeat all of those parts of the ESCP that I have earlier quoted and that are relevant to this head of consideration. Particularly relevant are the statements made in section 3.2 of the Plan. In that section reference is made to the erosion hazard of soils on the Moolarben Coal Project Area as being "moderate to very high". By reason of that fact "special management to prevent severe land degradation" is identified.

65 Of particular relevance is the identification in section 3.2 of the ESCP of the potential impacts from construction activities upon the area including the Infrastructure Area. The potential impacts there identified were the impacts realised in the events that occurred in June 2009.

Control over causes: s 241(1)(d) of the POEO Act

66 The matters that I have identified in addressing the previous head of consideration are also relevant to this head of consideration.

67 As I have already indicated, the defendant acknowledges that the primary cause of water pollution was the undertaking of earthworks without first completing sediment and erosion control structures. The undertaking of those works was entirely within the control of the defendant.

Reasons for commission of the offence

68 A factor by which the objective seriousness of an offence may be measured are the reasons for its occurrence. In the case of the present offence, I can accept that the four discharges between 8 June and 23 June 2009 were not deliberate.

69 However, why earthworks were undertaken before the sediment and erosion control measures were put in place remains unexplained in the evidence.

Conclusion on objective seriousness

70 All of the factors that I have identified bear upon the determination of the objective seriousness of the offence. Those factors of particular significance to that determination in the present case are the potential for environmental harm together with the practical measures that could have been taken to prevent harm and the reasonable foreseeability of that harm as evidenced by the ESCP. Taking account of all factors, I consider that the offence is of medium or mid range objective gravity or seriousness.

Subjective factors

71 While the objective gravity of the offence sets the limits both above which and also below which to fix an appropriate sentence, the Court is required to take into account both favourable and unfavourable factors personal to the offender (Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465). Consideration of a number of subjective factors is also directed by s 21A(1) of the CSP Act.

"A series of criminal acts"

72 The prosecutor submits that an aggravating factor to be considered in the present case is that each of the four discharges involved a criminal act. This had the consequence, so it was submitted, that there were "a series of criminal acts" which is an aggravating factor under s 21A(2)(m) of the CSP Act. I do not accept this submission.

73 The submission was not fully developed. However, it is to be noticed that there is a single charge against the defendant alleging pollution of Bora Creek between 8 June and 23 June 2009. While the evidence indicates four discrete events, it seems to me that this is not a circumstance that would engage the provisions of s 21A(2)(m) of the CSP Act. The four discharges to which I have referred are facts relevant to the commission of the offence. They establish the pollution of Bora Creek for which the defendant is charged. They go to the commission of the offence and speak to its objective seriousness. Consideration of them as aggravating factors would, to my mind, involve double counting. That is not the purpose of the subsection (R v Tadrosse [2005] NSWCCA 145; (2005) 65 NSWLR 740 at [17] and [29]).

Prior offences by a related corporation

74 The prosecutor accepts that there is no previous conviction recorded against the defendant. The absence of any recorded previous conviction is a mitigating factor identified in s 21A(3)(e) of the CSP Act. The prosecutor submits that the provision should not be applied in the present case.

75 In Minister for Planning v Moolarben Coal Mines Pty Ltd [2010] NSWLEC 147; (2010) 175 LGERA 93 the defendant in that case was convicted of an offence against s 125 of the EPA Act as a result of clearing about four hectares of vegetation in order to construct a boundary fence. The clearing was undertaken at an early stage of implementing the Moolarben Coal Project. That clearing required approval of the Minister under Pt 3A of the EPA Act but no such approval had been sought or obtained at the time the work was carried out.

76 There are four "factual" matters upon which the prosecutor relies in support of its submission. First, is the fact that both offences relate to the carrying out of the Moolarben Coal Project. Second, Moolarben Coal Mines Pty Ltd holds the approval under the EPA Act, which authorises the work for the purpose of that Act and for which the present defendant accepts responsibility in the present prosecution. Third, reference is made to a search made of records kept by the Australian Securities and Investment Commission, tendered in these proceedings and which shows that each of the present defendant and Moolarben Coal Mines Pty Ltd have common directors, with the chain of shareholding indicating that both companies are ultimately subsidiaries of a single public company.

77 The fourth factor upon which reliance is placed are the terms of my judgment, as sentencing judge, in Minister for Planning v Moolarben Coal Mines Pty Ltd. When addressing the facts in that case, I recorded that in response to a claim by the Department of Planning that Moolarben Coal Mines Pty Ltd had carried out the clearing work for which that Company was ultimately charged and pleaded guilty, the response to that claim initially came in the form of a letter from the present defendant. In that letter an explanation was offered as to why some clearing work had been undertaken (at [21]). The judgment reveals that thereafter the correspondence with the Department of Planning was taken up by Moolarben Coal Mines Pty Ltd. It is submitted by the prosecutor that at an operational level, both companies operate cooperatively with each other and share responsibility for implementation of the Moolarben Coal Project.

78 No authority was cited by the prosecutor for the proposition that the conviction for an offence by one company should be taken into account when a different, but related company, is convicted of an offence. Indeed, it was fairly acknowledged by Ms Ronalds SC who appeared for the prosecutor that her researches had not revealed the existence of such authority.

79 I can accept, for the purpose of the Corporations Law, that the two companies in question are related companies. However, the proposition that a conviction recorded against one subsidiary of a holding company is a conviction that should be considered when sentencing another subsidiary of the same holding company requires something more than proof that they are related corporations. Proof beyond reasonable doubt that the present defendant was, in a relevant sense, working under the control of Moolarben Coal Mines Pty Ltd would be required. While the latter company held the approval under the EPA Act, I would not assume on the evidence before me that any other company working on this Project Site was doing so under the control and direction of the holder of the consent (cf Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd [2003] NSWLEC 70; (2003) 128 LGERA 240).

80 Findings of fact directed to correspondence tendered in the earlier proceedings involving Moolarben Coal Mines Pty Ltd cannot be used as evidence for the purpose of drawing inferences in the present proceedings. They involve different offences and, more importantly, involve findings of fact made for the purpose of that case. There may well have been other correspondence or documents which would bear upon the nature of the relationship between these corporations. As a factor to be weighed against the present defendant and not implicit in its plea of guilty, the onus of establishing the requisite relationship lay solely upon the prosecutor. That onus has not been discharged.

81 Accordingly, I will approach the determination of an appropriate sentence on the basis that there is no recorded conviction against the defendant.

Early plea of guilty

82 The present charge is brought pursuant to an Amended Summons filed in Court on 20 August 2010. A plea of guilty was entered to the amended charge on that day. That fact must be considered in mitigation: ss 21A(3)(k) and 22 of the CSP Act. The defendant is entitled to the benefit of a discount of up to 25 per cent for that plea (R Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152]).

Contrition and remorse

83 In his affidavit evidence, Mr Peter Barton expressed regret "that the discharge of polluted water took place in June 2009". Mr Barton is the Chief Operating Officer of Yancoal Australia Limited, the ultimate holding company of the defendant, and has responsibility for day to day management of the mine operation at the Moolarben Coal Project Site. Mr Barton commenced his employment on 1 August 2010, that is after the events that gave rise to the present offence.

84 Mr Barton indicated that following his appointment as Chief Operating Officer, he instigated an independent external audit of the Moolarben Coal Project Site in order to ensure compliance with all conditions of approvals and licences. The auditor reported in October 2010 that "the vast majority of recommended actions have been completed" and indicated that those still requiring completion were "immaterial", posing no threat to the integrity of the Site's erosion and sediment control system. However, an audit report prepared in May 2010 indicated that a number of works directed to erosion and sediment control which, if not undertaken, would pose extreme risk of environmental harm, were works that had not commenced until February 2010 and were not completed until May of that year.

85 In Environment Protection Authority v Waste Recycling and Processing Corporation Preston CJ stated that contrition and remorse would more readily be demonstrated by an offender "taking actions" rather than offering "smooth apologies" through legal representatives. His Honour identified four forms which those actions demonstrating genuine contrition and remorse might take (at [203]). They were described by his Honour as:

(i)the speed and efficiency of action to rectify harm caused or likely to continue to be caused by the commission of the offence (at [204]);

(ii)voluntarily reporting the commission of the offence and any concomitant environmental harm to relevant authorities (at [210]);

(iii)taking action to address the cause of the offence (at [212]); and

(iv)appearance of corporate executives in court and evidence outlining these company's regret with a statement of plans to avoid repetition of such offences (at [214]).

It is appropriate to direct attention briefly to each of these four factors by reference to the evidence before me.

86 It is acknowledged by the defendant in the Statement of Agreed Facts that following each of the four discharge events, no inspection was carried out in Bora Creek of the sediment-laden waters downstream of each discharge, including any inspection to determine whether sediment had discharged into the Goulburn River. Moreover, there is no evidence of any action having been taken by the defendant to remove sediment from the Creek or River or otherwise address the consequence of these discharges.

87 While Discharges 3 and 4 were reported to the prosecutor, Discharges 1 and 2 were not reported. It would seem that this was due to a lack of awareness on the part of Mr Miller that it was either required or at least appropriate so to do.

88 As I have earlier recorded, the defendant accepted that the cause of the discharges was the undertaking of earthworks without first completing adequate sediment and erosion control structures. The audit report and correspondence provides evidence that these structures were eventually put in place but that the work directed to their completion, including those identified as being essential to avoid potentially extreme environmental harm, had not been commenced until nearly eight months after the four discharges in question and not completed until nearly 11 months after those discharges had occurred. No explanation appears in the evidence for that delay.

89 I have already referred to the evidence of Mr Barton expressing regret on behalf of the defendant for the pollution events that occurred in June 2009. I accept that evidence as a genuine expression of regret. However, the significance that might otherwise be given to such an expression of regret as a mitigating factor is somewhat lessened by the other factors to which I have directed attention in considering the defendant's contrition and remorse: cf s 21A(3)(i) of the CSP Act.

Assistance to authorities

90 The defendant has cooperated with the prosecutor in relation to the investigation and prosecution of the present offence. It made admissions when requested so to do by notice or correspondence from the prosecutor and made staff available for interview by the prosecutor. Among the staff members made available was the defendant's then General Manager. Further, it had provided its program of works to the prosecutor prior to them being implemented.

91 The defendant's cooperation is evidenced by two further factors. First, it cooperated, through its solicitor, in settling and agreeing upon the Statement of Agreed Facts and accompanying documents, thereby facilitating the presentation of the case to the Court. Second, it has agreed to pay the prosecutor's legal costs of $53,000 and its investigation costs in the sum of $8,632.

The appropriate sentence

92 The imposition of a sentence serves a number of purposes. As the provisions of s 3A of the CSP indicate, these purposes include retribution and denunciation, as well as deterrence, both specific and general.

General deterrence

93 The need for general deterrence when fixing an appropriate penalty is an important consideration in the sentencing process. That penalty must be sufficient to deter others who, by oversight or inadequacy in process systems, run the risk of committing an offence against the POEO Act in the hope that should any oversight or inadequacy be exposed, only nominal penalties will be imposed.

94 An object of the POEO Act is to prevent pollution. A means by which this is achieved is the imposition of penalties that are sufficiently substantial to encourage industry to adopt preventative measures (Axer Pty Ltd v Environment Protection Authority at 359-360).

95 The circumstances giving rise to the offence in the present case are far removed from those in respect of which it might be said that there is nothing more that a defendant could have done to avoid the commission of the offence. This offence occurred because the defendant failed to take those measures that had been identified as being required to be undertaken before clearing works were commenced. Had those measures been taken they would, in all probability, have avoided the commission of the offence or, at the very least, substantially ameliorated its impact. The necessity for those engaged in mining activities to ensure that water pollution does not occur, by undertaking appropriate erosion and sediment control measures in advance of work, is a message that needs to be given by the imposition of an appropriate penalty. A means by which such a message is given is the imposition of a penalty for breach that includes an appropriate component for general deterrence.

Specific deterrence

96 The conduct of the defendant satisfies me that some element of the penalty to be imposed needs to reflect specific deterrence. Having regard to the evidence, I do not regard this consideration as having the same significance as that which pertains in respect of general deterrence.

97 I have earlier referred to the fact that neither Discharges 1 or 2 were reported to the prosecutor by Mr Miller. There was an obligation imposed by the Environment Protection Licence held in respect of the Moolarben Coal Project for polluting events to be reported. While the defendant is not charged with any offence related to a breach of its licence conditions, it would seem that there was an absence of appropriate instruction to an employee responsible for the Infrastructure Area as to the obligations of the Company in the event of incidents such as those that occurred on 8 June 2009. The penalty needs to have the defendant reflect more closely upon the proper instruction of staff so that all measures addressed to pollution control are well understood and implemented.

98 The second factor relevant to this head of consideration is the time taken by the defendant to implement measures necessary to address the need for proper erosion and sediment control. I have already referred to this aspect of the defendant's conduct when addressing its contrition and remorse. By referring to it again I do not intend any double counting. However, that conduct seems to bear upon both issues.

Parity

99 The principle of even-handedness or parity in sentencing requires the Court to have regard to the general pattern of sentencing for offences of the kind being considered. However, care must be taken in essaying that task, as the wide divergence of facts and circumstances leading to the imposition of penalties in a given case for water pollution render guidance from other cases to be of limited utility. So much is acknowledged in the written submissions of both parties.

100 I have been referred by the defendant to a number of cases including Environment Protection Authority v Albury City Council [2009] NSWLEC 169; Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77; Environment Protection Authority v Boral Australian Gypsum Limited [2009] NSWLEC 26; Environment Protection Authority v Hanson Precast Pty Limited [2008] NSWLEC 285; Environment Protection Authority v Illawarra Coke Company Pty Limited [2005] NSWLEC 296; and Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114; (2010) 174 LGERA 314. I have considered those cases. While all involved a breach of s 120(1) of the EPA Act, none involved the discharge of sediment-laden waters into a watercourse.

101 In Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273, Biscoe J was required to sentence the defendant corporation, following a plea of guilty, to an offence against s 120 of the POEO Act. In a series of related events occurring over four days, somewhere between 4 and 11 tonnes of sediments were discharged into the Snowy River consequent upon works being carried out by a contractor to the defendant. The sediment comprised soil, earth, clay or similar inorganic matter. It was accepted that environmental harm was minor and short term while the offence was described by Biscoe J as being "of moderate objective seriousness".

102 After applying discounts for all mitigating factors, a fine of $100,000 was imposed and, in addition, the defendant ordered to pay legal costs of $84,289 and investigation costs of $1897.50. The contractor responsible for the work was also fined an identical amount (Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268; (2008) 163 LGERA 345).

103 In Snowy Hydro the subjective circumstances that attracted the discount included the absence of prior convictions, the Company's cooperation with the prosecutor and the fact that it had devoted considerable resources to mitigating the effect of the pollution. It had analysed the cause of the pollution, resulting in the formulation and implementation of new programs and procedures to avoid a recurrence.

104 In addition to the cases earlier referred to, I find the decision in Snowy Hydro of some assistance although not directly applicable. The quantum of pollutant discharged in that case is higher than that which the facts in the present case establish. The circumstance in which the discharge came to occur and the subjective circumstances of the respective defendants also differ. Importantly, I do not accept the submission of the defendant that the decision in Snowy Hydro reflects a penalty above that appropriate to be imposed in the present case.

Conclusion as to penalty

105 The objective gravity of the present offence warrants a fine in the sum of $150,000. To this sum I would apply a discount of 30 per cent for subjective or mitigating factors resulting in a penalty of $105,000. In fixing this sum, I take account of the fact that the defendant has agreed to pay the prosecutor's legal and investigation costs in the sums I have earlier stated.

Publication order

106 The prosecutor has sought, and the defendant has agreed, that there should be a publication order made under the provisions of s 250(1)(a) of the POEO Act. The parties have agreed upon the form of publication notice and the newspapers in which publication should take place. I agree that a publication order is appropriate to be made. The publication of such an order improves the effectiveness of sentences as a deterrent, particularly in the case of corporate offenders (Environment Protection Authority v Waste Recycling and Processing Corporation at [243]).

Orders

107 The orders that I make are as follows:

1.The defendant is convicted of the offence against s 120(1) of the Protection of the Environment Operations Act 1997, as charged.

2.The defendant is fined the sum of $105,000.

3.The defendant must pay the prosecutor's legal costs of the proceedings, agreed in the sum of $53,000.

4.The defendant must pay the prosecutor's investigation costs under s 248 of the Protection of the Environment Operations Act agreed in the sum of $8,632.

5.The defendant, at its expense, and pursuant to s 250(1)(a) of the Protection of the Environment Operations Act must, within 28 days of the date of this order, cause a notice in the form of Annexure "A" to be placed within the first 12 pages of the following newspapers at a minimum size of 10cm x 20cm:

(i)the Sydney Morning Herald in the early general news section;

(ii)the Mudgee Guardian.

6.Exhibits may be returned.

**********

Annexure "A"

MOOLARBEN COAL OPERATIONS PTY LTD

Guilty of polluting waters

On 30 March 2012, the New South Wales Land and Environment Court

found Moolarben Coal Operations Pty Ltd ("Moolarben Coal Operations") guilty of polluting waters at Ulan NSW. The offence occurred between about 8 June 2009 and 23 June 2009 inclusive.

The pollution occurred when Moolarben Coal Operations failed to install adequate sediment and erosion controls prior to carrying out clearing and earth works on approximately 53 hectares at the site of the Moolarben Coal Project near Ulan Road and Wollar Road, Ulan. This resulted in sediment-laden waters discharging from the site, entering Bora Creek and flowing into the Goulburn River for an unknown distance of less than 6 kilometres downstream.

Moolarben Coal Operations pleaded guilty to the charge.

On 30 March 2012 Moolarben Coal Operations was convicted and ordered by the Land and Environment Court to:

1.pay a fine of $105,000;

2.pay the prosecutor's costs of $53,000;

3.pay the prosecutor's investigation costs of $8,632; and

4.place this publication notice (paid for by Moolarben Coal Operations).

Moolarben Coal Operations was prosecuted by the Environment Protection Authority, now part of the Office of Environment and Heritage.

Amendments

30 March 2012 - typographical error
Amended paragraphs: 4

Decision last updated: 02 April 2012