Land and Environment Court New South Wales

• Medium Neutral Citation: Environment Protection Authority v Bulga Coal Management Pty Limited [2014] NSWLEC 5
• Hearing dates: 25, 26, 27, 29 November 2013, 2 December 2013
• Decision date: 05 February 2014
• Jurisdiction: Class 5
• Before: Pain J

Decision

See paragraph [136]

• Catchwords: PROSECUTION - plea of not guilty to charge of failing to notify regulatory authority as soon as practicable after defendant became aware of pollution incident that caused or threatened material harm - that pollution incident causes or threatens material harm subjective element of offence - prosecutor failed to establish elements of offence
• Legislation Cited: Native Vegetation Conservation Act 1997; Protection of the Environment Operations Act 1997 s 3, s 6, s 147, s 148, s 150, s 152, Part 5.7, s 193; Protection of the Environment Operations (General) Regulation 2009 cl 101
• Cases Cited: Director-General of Department of Land and Water Conservation v Greentree [2003] NSWCCA 31; (2003) 140 A Crim R 25; Environment Protection Authority v N (1992) 26 NSWLR 352; He Kaw Teh v The Queen [1985] HCA 43; (1985) 157 CLR 523; Lim Chin Aik v The Queen [1963] AC 160; Pereira v Director of Public Prosecutions [1988] HCA 57; (1988) 35 A Crim R 382
• Category: Principal judgment
• Parties: Environment Protection Authority (Prosecutor); Bulga Coal Management Pty Limited (Defendant)
• Representation: Mr S Rushton SC with Mr B Neild (Prosecutor); Mr T Howard SC; Environment Protection Authority (Prosecutor); McCullough Robertson Lawyers (Defendant)
• File Number(s): 51033 of 2012

Judgment

Plea of not guilty to charge of failing to notify pollution incident as soon as practicable

1 The Defendant is charged with having committed an offence against s 152 of the Protection of the Environment Operations Act 1997 (the PEO Act) by contravening s 148(2). It is alleged that from about 9 October 2011 and continuing to about 10 October 2011 the Defendant was a person carrying on an activity where a pollution incident occurred in the course of the activity so that material harm to the environment was caused or threatened, and as soon as practicable after it became aware of the pollution incident, it failed to notify the appropriate regulatory authority of the incident, and all relevant information about the incident. The Defendant has pleaded not guilty to the charge.

2 At approximately 11.30am on Sunday, 9 October 2011, an employee of the Defendant became aware that tailings had escaped into Nine Mile Creek as a result of a failure in a steel T-piece in its tailings pipeline (the incident). At approximately 11.05 am on Monday 10 October 2011 the Prosecutor was notified via the Environment Line Service.

3 As at 9 October 2011 the PEO Act provided as follows. The objects of the PEO Act were:

3 Objects of Act

The objects of this Act are inter alia as follows:

(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,

(b) to provide increased opportunities for public involvement and participation in environment protection,

(c) to ensure that the community has access to relevant and meaningful information about pollution,

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

(i) pollution prevention and cleaner production,

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

(iia) the elimination of harmful wastes,

(iii) the reduction in the use of materials and the re-use, recovery or recycling of materials,

(iv) the making of progressive environmental improvements, including the reduction of pollution at source,...

4 Part 5.7 is headed Duty to notify pollution incidents in Ch 5 Environmental protection offences. Section 147 of the PEO Act provided:

147 Meaning of material harm to the environment

(1) For the purposes of this Part:

(a) harm to the environment is material if:

(i) it involves actual or potential harm to the health or safety of human beings or to ecosystems that is not trivial, or

(ii) it results in actual or potential loss or property damage of an amount, or amounts in aggregate, exceeding $10,000 (or such other amount as is prescribed by the regulations), and

(b) loss includes the reasonable costs and expenses that would be incurred in taking all reasonable and practicable measures to prevent, mitigate or make good harm to the environment.

(2) For the purposes of this Part, it does not matter that harm to the environment is caused only in the premises where the pollution incident occurs.

5 Sections 148(1) and (2) are contained in Pt 5.7 of the PEO Act.

148 Pollution incidents causing or threatening material harm to be notified

(1) Kinds of incidents to be notified

This Part applies where a pollution incident occurs in the course of an activity so that material harm to the environment is caused or threatened.

(2) Duty of person carrying on activity to notify

A person carrying on the activity must, as soon as practicable after the person becomes aware of the incident, notify the appropriate regulatory authority of the incident and all relevant information about it.

6 Section 148(2) includes expressions which are defined in the PEO Act.

activity means an industrial, agricultural or commercial activity or an activity of any other nature whatever (including the keeping of a substance or an animal).

regulatory authority means the EPA, a local authority or a public authority prescribed for the purposes of section 6 (3).

7 There is no dispute that at the time of the discharge of coal tailings, the Defendant was carrying on an "activity". It was engaged in coal mining and coal washing. Appropriate regulatory authority is also defined in s 6 of the PEO Act. It is common ground that the Prosecutor was the appropriate regulatory authority for the purposes of s 148(2) of the PEO Act.

8 I note that on 6 February 2012 an amendment to the PEO Act commenced replacing the words "as soon as practicable" in s 148(2) with the word "immediately".

9 The following definitions in the Dictionary are also relevant:

environment means components of the earth, including:

(a) land, air and water, and

(b) any layer of the atmosphere, and

(c) any organic or inorganic matter and any living organism, and

(d) human-made or modified structures and areas,

and includes interacting natural ecosystems that include components referred to in paragraphs (a)-(c).

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

pollution means:

(a) water pollution, or

(b) air pollution, or

(c) noise pollution, or

(d) land pollution.

pollution incident means an incident or set of circumstances during or as a consequence of which there is or is likely to be a leak, spill or other escape or deposit of a substance, as a result of which pollution has occurred, is occurring, or is likely to occur. It includes an incident or set of circumstances in which a substance has been placed or disposed of on premises, but it does not include an incident or set of circumstances involving only the emission of any noise.

10 Section 150 provided:

150 Relevant information to be given

The relevant information about a pollution incident required under this Part consists of the following:

(a) the time, date, nature, duration and location of the incident,

(b) the location of the place where pollution is occurring or is likely to occur,

(c) the nature, the estimated quantity or volume and the concentration of any pollutants involved,

(d) the circumstances in which the incident occurred (including the cause of the incident, if known),

(e) the action taken or proposed to be taken to deal with the incident and any resulting pollution or threatened pollution,

(f) other information prescribed by the regulations.

11 Section 152 stated:

152 Offence

A person who contravenes this Part is guilty of an offence.

Maximum penalty:

(a) in the case of a corporation-$1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or

(b) in the case of an individual-$250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.

12 Clause 101 of the Protection of the Environment Operations (General) Regulation 2009 (the Regulation) provided:

101 Notification of pollution incidents

For the purposes of section 149 of the Act, a pollution incident that is required to be notified to the EPA under Part 5.7 of the Act is to be notified verbally to the EPA by telephoning the EPA environment line, followed by notification in writing within 7 days of the date on which the incident occurred.

The elements of the offence

13 The Prosecutor submitted that it is required to prove the following elements to the criminal standard of beyond reasonable doubt:

(a) The Defendant was carrying out an activity;

(b) During the course of carrying out that activity a pollution incident occurred;

(c) The Defendant became aware of the pollution incident;

(d) The Defendant failed to notify the appropriate regulatory authority as soon as practicable thereafter of the pollution incident;

(e) Alternatively the Defendant failed to notify the appropriate regulatory authority of all relevant information about it;

(f) The pollution incident caused, threatened or had the potential to cause material harm to the environment, namely:

(i) actual, threatened or potential harm to an ecosystem that was not trivial; or

(ii) actual or potential loss exceeding $10,000 and on the facts in these proceedings such loss exceeding that amount as "would be" incurred or was incurred in making good the harm to the environment.

14 The Prosecutor advised that the elements in (d) and (e) are interrelated.

15 It is not in dispute that there was a pollution incident (namely water pollution) as defined in the Dictionary, that notification was required to the Prosecutor in accordance with cl 101 of the Regulation and that the incident occurred in the course of an activity. Nor is it in dispute that the Defendant was aware that a pollution incident had occurred on 9 October 2011, that the Defendant cleaned up the discharge from the creek using sucker trucks, that the cost of clean up was $94,550 in internal costs and the external costs amounted to $193,440.

16 Surprisingly given that the words "as soon as practicable"' have been embodied in s 148(2) of the PEO Act since its inception in 1997, this is apparently the first prosecution where a plea of not guilty has been entered for an offence of this nature. There is substantial disagreement about the elements of the offence as conceived by the Prosecutor. Of primary importance for the outcome of this matter is the last element. Element (f) is presented as a stand alone element expressed as the pollution incident caused material harm as defined in s 147(1). The Prosecutor submitted that this element, which arises as a result of the Prosecutor's construction of s 148, must be established by it as an objective fact. That fact could be informed by events after the date of the incident and indeed, in this case, after the notification made on 10 October 2011, the day after the pollution incident came to the attention of the Defendant's employees. To that end the Prosecutor filed an expert report of an ecotoxicologist Mr Julli whose expressed opinion was that material harm to the environment was caused by the incident. This opinion was informed by reports and observations of photographs taken by Environment Protection Authority (EPA) officers after the incident on 9 October 2011 was reported on 10 October 2011 and by site visits on 12 October and 22 November 2011. The Defendant filed expert evidence from Dr Smith, ecologist, whose opinion was that no harm to an ecosystem was caused by the incident. None of that written material could have been available to the Defendant at the time of the offence as it did not then exist.

17 If I do not accept the Prosecutor's construction of s 147 and s 148, element (f) as a separate objective fact to be proved will not arise. The expert evidence will then be irrelevant. As the expert opinion of Mr Julli was based in large part on the photographs taken by EPA officers on 10 October 2011 after notification had occurred and on subsequent days, much of that material will also be irrelevant. Another matter in dispute is the meaning of "as soon as practicable".

Agreed statement of facts

18 The parties agreed some of the relevant facts as follows:

THE DEFENDANT

1 Bulga Coal Management Pty Ltd (ACN: 055 534 391) (the defendant) operates a coal mine located at premises at 779 Broke Road, Broke, near Singleton in New South Wales (the Premises).

BACKGROUND

RELEVANT FACTS REGARDING THE DEFENDANT

2 During the relevant period, the various personnel who worked at the Premises included Rodney de Groot, Paul Amidy, Wayne Bower and Ben Hiatt. Mr de Groot, Mr Bower and Mr Amidy were at the relevant time employees of Oakbridge Pty Ltd ("Oakbridge") and Mr Hiatt was at the relevant time an employee of Xstrata Coal (NSW) Pty Ltd ("Xstrata NSW"), these companies being related to the defendant company.

3 During the period from 9-11 October 2011, the knowledge held by each of Rodney de Groot, Paul Amidy, Wayne Bower and Ben Hiatt of the incident involving the discharge of tailings into a section of Nine Mile Creek at the Bulga Coal Complex the subject of Environment Protection Licence No 563 is knowledge which is attributable to the defendant (noting however that the position of the defendant is that neither Rodney de Groot nor Wayne Bower had any entitlement or responsibility to report the incident to the EPA during the period from 9-11 October 2011).

THE ENVIRONMENT PROTECTION LICENCE

4 The defendant is the holder of Environment Protection Licence Number 563 in relation to the Premises (the EPL). At all relevant times, the defendant carried on the activity of coal mining at the Premises, including during the period 7 October 2011 to 11 October 2011.

RELEVANT FACTS REGARDING THE PREMISES

The Creek

5 Nine Mile Creek (the Creek) is an intermittent waterway.

6 Other plants occurring in the general locality of the Creek (and in some cases the area of the Creek affected by the incident), include Central Hunter Grey Box - Ironbark Woodland (an endangered ecological community); Grey Box (Eucalyptus moluccana); Narrow leave Ironbark (Eucalyptus crebra); Bulloak (Allocasuarina luehmannii); Rough-barked apple (Angophora floribunda); Swamp Oak (Casuarina glauca); Sharp Rush (Juncus acutus).

Coal Handling and Preparation Plant

7 At the Premises the activity of coal mining includes the following. Raw coal is obtained by removing upper layers of overburden and placing those in a dump. Raw coal is then removed and stockpiled. The stockpiled raw coal is then processed. The processed coal is transported by rail to port. Raw coal from both the surface operations and the underground operations is processed at the Coal Handling and Preparation Plant (the CHPP).

8 The CHPP includes a coal washery (the Washery).

9 The Washery comprises two modules, Module One and Module Two. Each module has a thickener and a tailings line (the Tailings Lines). Module One and Module Two are separate, such that each of the Tailings lines can be operated independently.

10 Raw coal removed from the ground by mining is known as "run of mine coal". Run of mine coal includes rock from the mining process, some clay and some very fine coal particles. Run of mine coal is washed to remove the rock and fine coal.

11 Part of the washing process involves adding a substantial volume of mine water to the run of mine coal. The addition of mine water results in a lot of very fine material being rinsed from the course component of the coal and rock. The fine material that is rinsed is known as tailings (Tailings).

12 Tailings is comprised primarily of very fine clay and very fine coal particles, in general less than 0.1 millimetres in diameter. At the stage when the coal is first washed, the Tailings are in a very fluid form, mixed as they are with mine water.

13 Once rinsed, the fluid Tailings are sent to a thickener. At the thickener, the Tailings fluid is thickened with an anionic emulsifier (the Thickened Tailings), effectively reducing the volume of materials to be disposed of.

The Tailings Lines

14 From the thickener, the Thickened Tailings are pumped by centrifugal pump into the Tailings Lines. The Tailings Lines are constructed from poly pipe. At the time of the Incident, the Tailings Lines ran in parallel, also parallel to the coal conveyor belt, with each of the Lines being approximately 3.5 kilometres long. Most of the Tailings Lines are buried, however some sections are above ground. The Tailings Pipes exit the Washery and rise to a highpoint, before dipping to the level of the Creek and rising again to another high point.

15 To address the contingency that there might be a problem with the Tailings Lines, such as a blockage or airlock in the Tailings Lines, the Tailings Lines are fitted with a T-Piece and additional pipe that allows the flow of materials in the Tailings Lines to be redirected (the T-Piece).

16 The Thickened Tailings passes through the Tailings Lines en route to a Tailings Dam. At the Tailings Dam, a flocculent is added, to further separate water from the Thickened Tailings. Once deposited at the Tailings Dam, water either evaporates, or is pumped back to the CHPP, leaving solid tailings, which remain in situ in the Tailings Dam.

17 The flow rate of Thickened Tailings within the Tailings Lines is approximately 300 cubic metres per hour.

The Western Containment Dam

18 The Creek is bounded by two containment dams located to the north of the Tailings Lines, one on the eastern side and one on the western side (the Western Containment Dam). The purpose of the containment dams is to intercept any materials that may leak from the Tailings Lines before the materials enter the Creek. The T-Piece allows the contents of the Tailings Lines between the Span to be redirected into the Western Containment Dam.

19 The capacity of the Western Containment Dam prior to the Incident was 906 000 litres, assuming a freeboard of 500mm below the lowest section of the dam walls.

20 The Western Containment Dam was constructed with a designed spillway on the northern dam wall. The spillway leads to the Creek via a channel (the Discharge Channel).

EVENTS OF 9 OCTOBER 2011

21 On or shortly before 9 October 2011, a small hole developed in the T-Piece within the Tailings Line that services Module One. Thickened Tailings leaked through the small hole and into the Western Containment Dam, mingling with the pre-existing contents of the dam, including Thickened Tailings and rainwater (the Pollutant). The Western Containment Dam's capacity was exceeded, resulting in release of the Pollutant into the Creek.

BACKGROUND TO THE INCIDENT

Events of Friday 6 October 2011

22 On 6 October 2011, Mr Wayne Stedman, the defendant's Supervisor Coal Handling and preparation Plant was on shift from 6:00 am.

23 On 6 October 2011, Mr Stedman conducted an inspection of the Tailings Lines around midmorning but did not see any leak of coal tailings from the Tailings Line into the Western Containment Dam or into the Creek.

Events of Sunday 9 October 2011

24 At or about 10:30am on 9 October 2011, Mr de Groot commenced inspections of the Tailings Lines.

25 At about 11:30am, Mr de Groot brought his vehicle to a point adjacent to the Creek Crossing. From this location, Mr de Groot saw coal tailings on the otherwise dry bed of the Creek at the Creek Crossing.

26 Mr de Groot requested that the flow of Thickened Tailings within the Tailings Lines cease.

Events of Monday 10 October 2011

27 On Monday 10 October 2011, Mr Amidy telephoned Mr Steve Clair of the EPA to notify him of the incident. Shortly thereafter Mr Amidy telephoned the EPA's Environment Line to report the incident.

DUTY TO NOTIFY

MATERIAL HARM CAUSED OR THREATENED

28 The total internal cost of the clean up of the Incident was $94,550. The total external cost of the cleanup was $193,440.

NOTIFICATION

29 The Environment Line was an after-hours service and a regional officer was on call to receive any calls to the Environment Line on 9 October 2011.

30 Condition R2.2 of the EPL states as follows:

R2 Notification of environmental harm

Note: The licensee or its employees must notify the EPA of incidents causing or threatening material harm to the environment as soon as practicable after the person becomes aware of the incident in accordance with the requirements of Part 5.7 of the Act.

R2.1 Notifications must be made by telephoning the Environment Line service on 131 555.

R2.2 The licensee must provide written details of the notification to the EPA within 7 days of the date on which the incident occurred.

EPA INVESTIGATION

INSPECTIONS

31 On 10 October 2011, officers of the EPA inspected the Premises and took samples.

32 On 12 October 2011, officers of the EPA including Mr Clair, Ms Jefferson and Mr Moreno Julli inspected the Premises.

INTERVIEWS

33 Tab 16 of Exhibit DB-01 to the Affidavit of David John Bell sworn 2 October 2012 is a true copy of the EPA's notice to the defendant to nominate a corporate representative. Tab 19 of Exhibit DB-01 to the Affidavit of David John Bell sworn 2 October 2012 is a true copy of the defendant's response to the EPA's notice to the defendant to nominate a corporate representative.

34 Tab 20 of Exhibit DB-01 to the Affidavit of David John Bell sworn 2 October 2012 is a true copy of the defendant's cleanup verification report provided pursuant to condition U3.1 of Environment Protection Licence 563 as varied.

DOCUMENTS

35 On 11 October 2011, the EPA issued a request to the defendant to supply an incident report under condition R3 of Environment Protection Licence 563. Tab 10 of Exhibit DB-01 to the Affidavit of David John Bell sworn 2 October 2012 is a true copy of that request. Tab 12 of Exhibit DB-01 to the Affidavit of David John Bell sworn 2 October 2012 is a true copy of the defendant's response.

36 On 29 May 2012, the EPA issued a notice for information and records under section 193 PEO Act. On 8 June 2012, 13 June 2012, 27 June 2012, 29 June 2012 and 4 September 2013 the defendant provided a response to the notice. Tab 2 of Exhibit DB-03 to the Affidavit of David John Bell sworn 2 October 2012 is a true copy of that notice. Tabs 3 to 19 and 21 to 27 of Exhibit DB-03 to the Affidavit of David John Bell sworn 2 October 2012 is a true copy of the defendant's responses to that notice dated 8 June 2012, 13 June 2012, 27 June 2012 and 29 June 2012 .

37 On 29 August 2012, the EPA issued a second notice for information and records under section 193 PEO Act. On 14 September 2012, the defendant provided a response to the notice. Tab 28 of Exhibit DB-03 to the Affidavit of David John Bell sworn 2 October 2012 is a true copy of that notice. Tabs 29 to 30 of Exhibit DB-03 to the Affidavit of David John Bell sworn 2 October 2012 is a true copy of the defendant's response to that notice.

19 Leaving aside the expert evidence of Mr Julli and Dr Smith for the present, the parties were largely in agreement on the relevant facts as presented in the Defendant's submissions concerning the actions of the Defendant's employees from the time of discovery of the incident on 9 October 2011 to its notification on 10 October 2011. Affidavits were read and oral evidence was given by Mr Clair, EPA officer, and Mr Bell, EPA officer, for the Prosecutor. An affidavit of Ms Jefferson dated 5 February 2013 was also read. The Defendant read affidavits of Mr Hiatt, Mr Amidy, Mr Bower and Mr de Groot. All were cross-examined.

20 A statutory notice issued pursuant to s 193 of the PEO Act dated 29 May 2012 by the Prosecutor required information, inter alia, as to whether the Defendant had in place any policies or procedures in relation to the reporting of pollution incidents, and required production, inter alia, of the records of any such procedures. In a response dated 8 June 2012, the Defendant provided information identifying that it did have such procedures and produced the records of those procedures behind annexures 2 and 3 of its written reply to the notice. Annexure 3 titled BUL SD PRO 0036 Incident Management Procedure effective 1 June 2012 was tendered (exhibit D, tab 6). The Court notes that after the hearing this document was substituted, by consent, by the procedure applicable at the time of the charge period, effective from 26 August 2011.

21 As there was substantial agreement about the basic facts (as opposed to their interpretation) I will not set out all the details of events as recounted in the affidavits. The following paragraphs are taken directly from the Defendant's written submissions omitting footnotes unless a matter is disputed. The few matters disputed by the Prosecutor are identified and the issue of fact resolved where necessary.

22 On or shortly before 9 October 2011, a small hole developed in a T-piece in the tailings pipeline. The function of the T-piece was to connect to the main tailings pipeline a section of pipe which led to a containment dam. If there was a blockage in the main tailings line, the T-piece and the short connected pipe allowed tailings from the main line to be drained into the containment dam, which is constructed in a way that the drainage of tailings from the main line would not go into the creek.

23 The tailings slurry which discharged into the containment dam from the hole in the T-Piece mixed with the rainwater already present in the containment dam. The capacity of the containment dam was eventually exceeded and its contents overtopped a small section of the embankment of the dam which was lower than the rest of the embankment, resulting in a slow-flowing release of the tailings slurry mixed with the dam water down a short drainage gully and into the creek at a point just upstream (south) of the culvert leading underneath the coal conveyor and the adjacent access road. The Prosecutor submitted that the evidence of Mr Julli did not support the real time observation Mr de Groot because it was his opinion that potentially it may have gone "whoosh" then slowed. I consider his opinion, based on indirect evidence of what may have happened, has no weight as against the direct visual inspection of the Defendant's employee at the time of detection of the tailings escape.

24 Nine Mile Creek is an intermittent or ephemeral watercourse. The section of Nine Mile Creek into which the tailings slurry was discharged was dry at the time of the discharge. Mr de Groot described to Mr Bower at the time Mr de Groot noticed the discharge that, upstream of the discharge, the creek was mostly dry and there was no flow of water. The tailings slurry was deposited on the bed of the creek for a section of the creek which was about 250-280 metres long, located wholly within the premises. The Prosecutor disputed that the section of Nine Mile Creek into which tailings slurry was discharged was dry at the time of the discharge because the photographs taken by Ms Jefferson on 10 October 2011 attached to Mr Bell's affidavit do not support this conclusion. This view is not supported by the eyewitness evidence of Mr de Groot as he states that "the creek was a dry creek at the time of the incident."

Sunday 9 October 2011

25 Mr de Groot, Team Leader for the CHPP, who was working on the premises on Sunday 9 October 2011, became aware of the tailings discharge at about 11:30am. He saw that tailings slurry was overflowing the small section of the embankment of the containment dam referred to in par 22 above, which Mr de Groot described as the "wash out point" (namely an area which of the dam embankment, which had been washed out over time lower than the rest of the embankment). That small area of embankment is shown in photographs Nos 66 and 72, behind tab 5 of exhibit B, being photos which were taken the following day (10 October 2011) after the earthen coffer dam had been put in place to stop the dam from continuing to overtop.

26 Mr de Groot saw that, at this point, the tailings slurry was flowing very slowly over the wash out area and very slowly down the drainage gully or "gutter" that led to the section of Nine Mile Creek immediately upstream (south) of the culvert under the coal conveyor and adjacent access road. Mr de Groot told Mr Bower that the flow of tailings into the creek bed was "a trickle". He could not discern any flow downstream of the culvert.

27 Upon noticing the discharge, Mr de Groot immediately arranged for the CHPP control room to turn off the pumps to the tailings lines (so that no further tailings were being pumped into the tailings pipeline). He detected the hole in the T-piece. He quickly stopped the overtopping of the containment dam by placing earthen material on the small section of the embankment which was being overtopped, thus raising the height of that section of the embankment and blocking the overflow. Initially he did this by hand and then he called in his team of workers, who used shovels to make the blockage more robust.

28 Within half an hour of noticing the discharge, Mr de Groot telephoned Wayne Bower, Manager of the CHPP, who was in Newcastle at the time. During this first telephone call, Mr de Groot explained to Mr Bower that there was a tailings discharge into the dry creek bed from the tailings line as a result of a small hole in the T-piece; that he estimated that less than five per cent of the total tailings being produced had entered the creek; that he had stopped the flow from the containment dam by building a small handmade dam at the overflow point; and that he had shut down the tailings line and the CHPP.

29 Mr de Groot described to Mr Bower at the time Mr de Groot noticed the discharge that, upstream of the discharge, the creek was mostly dry and there was no flow of water.

30 During this first telephone call from Mr de Groot to Mr Bower, Mr de Groot told Mr Bower that he (de Groot) had called his team down to the containment dam with shovels to create a more robust additional coffer dam to contain the tailings within the containment dam. Mr de Groot also told Mr Bower that the tailings were about 40-50mm deep in the creek, had gone to the creek bed for at least 30-40m and the flow of tailings into the creek bed was "a trickle".

31 Mr Bower promptly made a telephone call to Paul Amidy, the Superintendent for Environment and Community. Mr Bower informed Mr Amidy that there had been a tailings discharge. Mr Amidy made specific inquiries as to what volume of tailings had entered the creek bed, how far it had travelled down the creek bed and whether there was any water inflow from upstream of the incident. Mr Bower told Mr Amidy that he did not know the volume that had been discharged, but had been advised by Mr de Groot that the tailings were 40-50mm deep and had travelled at least 30-40m down the creek bed. Mr Amidy asked Mr Bower about the flow. Mr Bower told Mr Amidy that Mr de Groot had described the flow as "a trickle" and, given how slowly it had been flowing, he (de Groot) thought it had appeared to have been going for a number of hours. Mr Bower described the incident to Mr Amidy as "a small leak over a number of hours".

32 Mr Amidy was unable to travel to the site that day. His wife was in Newcastle. He was at home with the sole care of his two children, each of whom was under three years of age. He told Mr Bower this during this first conversation.

33 Mr Bower then called Mr Ben Hiatt, the Operations Manager for the Open Cut operations. He did not answer his telephone, so Mr Bower left him a message that there had been an environmental incident and to call him back.

34 Having made those calls, Mr Bower promptly left Newcastle and drove to the premises, via his house to pick up his personal protective equipment (PPE).

35 Mr de Groot continued to address the incident on site. He made arrangements for sand bags to be delivered and placed across the creek bed in a position downstream of the affected section of the creek bed to ensure that the discharge was fully contained.

36 On his way to the site, Mr Bower called Mr de Groot at about 12:15pm. Mr de Groot told Mr Bower that the tailings had travelled around 150m down the creek bed. He said that an old dam downstream of where the tailings had entered the creek bed had captured all of the water that had separated from the tailings solids. Mr de Groot said no ponds had been impacted for the length of the spill in the creek as it was a dry creek bed and that there were no signs of any harm to animals or plant life in the area of the spill, at least from what he had seen in his initial inspection. Mr de Groot told Mr Bower that he had already started making arrangements for sandbags to be delivered to the creek. He confirmed that there were no further tailings entering the creek bed, but he wanted to make sure the tailings could not travel any further down the creek bed if there was any rain.

37 Some time while Mr Bower was on his way to the site, Mr Hiatt called Mr Bower in response to the earlier message left by Mr Bower. Mr Bower informed Mr Hiatt of what he had been told by Mr de Groot. Mr Bower explained to Mr Hiatt that the incident was fully contained on the site and that there was a dam that was capturing the water that had separated from the tailings. He told him that the CHPP had been stopped; that there was no more flow of tailings was occurring from the tailings pipeline and that there were also no more tailings overtopping the containment dam and going into the creek bed.

38 Mr Bower arrived at the site on Sunday afternoon and met Mr de Groot at the location of the incident. He saw that the earthen coffer dam which had blocked the tailings overflow was about 1m wide and about 30mm tall. He observed that the depth of tailings was generally as described by Mr de Groot except that, in some areas, it was deeper than 40-50mm. For example, where it entered the creek bed (at the north side of the culvert) the tailings were approximately 250mm deep. Generally, however, as he walked down the creek, the tailings did not come up over his work boots at any point. As Mr Bower walked down the creek bed, he noticed that there was a lot of "salt bush" in the creek and that, at its widest point, the tailings spanned about 5-6m in the creek. He saw that the tailings had settled out of the water and the water had run away into the downstream dam and the tailings that were left in the creek bed were slimy in appearance due to the clay content. He then inspected the downstream dam. It was evident to him that the dam had been overflowing before he arrived at the site which had pushed some water into the original creek line. Downstream of the dam there was no flow of water and the creek was mainly dry with only some small pools of water. He did not see any animals or wildlife activity in or near the creek.

39 Mr Bower arranged for some water samples to be taken to understand how far the water that had liberated out of the tailings had travelled down the creek (Mr Bower affidavit [26]). He considered it appropriate to take the samples to get an understanding of the quality of the material, the distance the material had flowed and to be able to gather quality data for future analysis (Mr Bower TS p 202 l31-40) The Prosecutor referred to Mr Bower's record of interview (ROI) where he stated that "... any time we suspect that we would have had an environmental incident we'd conduct some sampling so we can at least get an accurate understanding of the potential impacts, if any". There is no discernible difference between what the Prosecutor and Defendant submitted on this point.

40 Mr Bower then called Mr Amidy a second time. Mr Bower described the length of the spill and informed Mr Amidy that the spill had been fully contained and that there was no potential for any tailings to flow further downstream. Mr Bower told Mr Amidy that, in some areas, the tailings were a bit thicker than originally estimated. Otherwise, Mr Bower essentially confirmed what he had already told Mr Amidy in their first discussion. Mr Bower also told Mr Amidy that it was highly unlikely that the water that had separated from the tailings had gone past the downstream dam in the creek.

41 On the Sunday afternoon there were a number of discussions variously between Mr Bower, Mr Amidy and Mr Hiatt (Mr Bower affidavit at [32]). That included a telephone discussion between Mr Hiatt and Mr Amidy at approximately 3:30pm or 4pm (Mr Hiatt TS p 235 l1-p 236 l 3). The Prosecutor submitted that there was no evidence of this call given by Mr Amidy or Mr Hiatt in their affidavits. The Prosecutor also referred to Mr Amidy's ROI (exhibit C, tab 2, A 161) "So Stephen would report to me and I'd report to Ben [Hiatt], as I reported to Ben on the Monday". Mr Hiatt's oral evidence of the telephone call is not contradicted in any affidavit nor by the response in the ROI of Mr Amidy.

42 Arrangements were made to meet on site on the following (Monday) morning. During their discussions on Sunday, Mr Hiatt, Mr Bower and Mr Amidy made arrangements to meet first thing the next morning (Monday 10 October 2011) on the premises to further assess the situation and to settle on the most effective form of clean up.

Monday 10 November 2011

43 On Monday 10 October 2011, at around 7:00am, Messrs Hiatt, Bower and Amidy met on the premises at Mr Hiatt's office. They then inspected the site of the tailings discharge and walked the affected section of the creek.

44 After the inspection of the site, Messrs Hiatt, Bower and Amidy returned to Mr Hiatt's office for a further meeting. They also conferred by telephone during this second meeting with John Watson of Xstrata NSW and Andrew Daly, the Defendant's legal counsel.

45 There is some inconsistency in the evidence about the time of the second meeting in Mr Hiatt's office on Monday morning. Mr Bower said that it started at 8:30am and went for about 45 minutes. Mr Amidy said the inspection went for about two hours and the post-inspection meeting started at about 9:30am. At this meeting, they had discussion mainly about how to clean the incident up and then around whether the incident was reportable.

46 During that discussion, a decision was made to use sucker trucks to clean up the tailings and it was recognised that this clean up option would incur costs exceeding $10,000. At that point, Mr Hiatt made a decision that Mr Amidy was to notify the EPA.

47 In accordance with Mr Hiatt's decision, Mr Amidy notified the EPA of the incident on the morning of 10 October 2013. There is some inconsistency in the evidence as to when Mr Amidy called Mr Clair on Monday morning. However the Court should accept Mr Amidy's unchallenged evidence that he called Mr Clair at about 10:30am and the pollution line at about 11:05am. In respect of the latter call, Mr Amidy made a contemporaneous record of its time being 11:05am. His evidence should be preferred to the evidence of Mr Clair, who deposed to the call from Mr Amidy having come through at about 11:45am, but conceded that this might have been the time when he possibly made a later call to Mr Amidy to inform him that he would come to the site. The Prosecutor submitted that the evidence recorded by the Environment Line of 12.09pm should be preferred. (Nothing hangs on the precise timing of the call to the environment line on 10 October 2013 and I will not be resolving any inconsistencies in this evidence).

November 3 2011 conversation

48 There is one factual dispute about whether a conversation attested to by EPA officer Mr Bell took place on 3 November 2011 when he attended the premises and spoke to Mr Bower and Mr Amidy. As I do not consider that this conversation can play any role in the issues as I find these to arise from the construction of s 148 of the PEO Act I do not need to resolve this dispute. I have not therefore set out the competing written and oral evidence of Mr Bell and Mr Bower and Mr Amidy.

Evidence of awareness of Defendant's employees

49 In dispute are the levels of awareness of the Defendant's employees in relation to both aspects of material harm on the day of the incident 9 October 2011. Mr de Groot said in cross-examination he did not consider whether there was material harm caused or threatened on 9 October 2011, he was focussed on preventing the further discharge of tailings from the containment dam. As the Prosecutor did not ultimately focus its case on his awareness I do not need to further identify his evidence.

50 Mr Bower states in his affidavit dated 5 July 2013 at par 28, 32, 38, 42, 43 and 44:

28 At no point in time did I think that the tailings or the water were doing damage to the dry creek.

32 I recall that on the Sunday afternoon there was a number of discussions between myself, Paul and Ben. We discussed that since there was no potential for the tailings to travel further down the creek bed and that the tailings had all been contained within the limited section of the creek and the water within the downstream dam, the containment measures that had been put in place were sufficient to manage the environmental risk.

38 On the Sunday night there was no thought in my mind that we were not doing the right thing in terms of external reporting. I also believed that there was no permanent harm to the creek due to the non toxic nature of tailings material.

42 We had a meeting in Ben's office with John Watson from Xstrata Coal NSW. Paul informed Ben that we had 24 hours from the time of the incident to report the incident if needed, however since that time had nearly expired we needed to make a decision as to whether we were going to report it.

43 Paul said at the meeting that after seeing the incident he thought that it was reportable. This was because there was more required in terms of cleanup than he originally thought from our discussions on the Sunday and the fact that the cleanup was going to be more difficult than what he imagined from what was told to him on the Sunday.

44 Our meeting started at 8:30am. We reviewed the notification section of the legislation up on the screen of the computer in Ben Hiatt's office. From my review of the legislation on the day, the decision to report was based on an assessment of the cost to clean up the spill and not harm to the creek.

51 Mr Bower was cross-examined about what he was told by Mr de Groot and what he saw when he went on site on 9 October 2011. He recognised that the clean up was going to be a reasonable-sized job. When asked if it would involve expenditure of more than $10,000 he stated he could not really make that judgment as it would depend on how much labour was required which he was not thinking about at all (TS 27.11.13 p 204 l45-50). He did not discuss the use of sucker trucks that day at all. When asked about what he meant by manage the environmental risk he said that it was an environmental incident under the [EPL] licence. Mr Amidy told him the Defendant had 24 hours to report the incident in the office on the Monday morning. By the end of the Monday meeting the decision had been made to report the incident because of the clean up cost. He did not have the knowledge to make the call on whether there was environmental damage caused (TS p 209 l 17).

52 Mr Amidy's affidavit dated 5 July 2013 stated at par 17 - 19, 26, 29, 35-36, 38, 42-43:

17 In the first phone call that I had with Wayne [Bower] and in subsequent phone calls that I had with him that day we discussed whether the incident may be reportable. Because it was contained on site we decided that I would do the inspection the next day and determine whether it warranted reporting. It was difficult for me to make a decision on material harm and reporting without first inspecting the area.

18 In my subsequent phone calls with Wayne following the initial phone call we discussed the extent of the tailings spill and Wayne told me that in some areas the tailings was a bit thicker than originally estimated. However the length of the spill remained essentially the same and generally the description of the incident did not change from our previous discussion. Wayne was essentially verifying what he had already told me in our first discussion based on his observations at site.

19 Wayne also told me that it was highly unlikely that the water that had separated from the tailings had gone past the downstream dam in the creek.

26 I remained of the view throughout these subsequent telephone conversations with Wayne that whether or not to report the incident to the EPA would need to be determined by me after an inspection on the Monday. The words that stuck in my mind were 'reporting as soon as practicable'.

29 The next day I inspected the creek bed of Nine Mile Creek. I observed tailings in the creek. Upstream of the point of entry of the tailings into the creek was some puddles of water but no flow of water. The material downstream in the creek was mostly slurry, being solid material.

35 Following my inspection of the site of the incident, I formed the view that the incident had not caused a significant impact to the environment. This was because it was contained on site and limited to 250m of an intermittent stream.

36 In observing the incident, I realised it was more significant in terms of the extent of it and therefore the associated cleanup that would be required, than the picture that I had in my mind.

38 After deciding on a clean-up method, we realised that it would cost more than $10,000 to remove the tailings from the creek bed. We therefore decided that we had to report the incident to the EPA due to the fact that the clean-up was going to cost more than $10,000.

42 At page 42 of my record of interview I state:

'Upon inspection on Monday I believe that it had caused material harm and hence that's why we reported it, and this is since the completion of those specialist reports, those reports indicate that material harm hasn't been caused. Or that's my understanding.'

43 When I said that 'I believed that it had caused material harm' and that is why we reported it, what I meant by this was that whilst the incident may have caused an environmental impact, that in my view was not significant, it was reported because we formed the view that it was going to cost more than $10,000 to clean-up and it is my understanding of the legislation that the incident therefore had to be reported.

53 Mr Amidy's affidavit dated 12 November 2013 stated at par 10:

10 Based on the information provided to me by Wayne Bower and based on my knowledge of the area of the creek that had been affected by the tailings discharge, I did not form a view on Sunday (9 October 2011) that material harm to the environment had been caused or threatened by the discharge.

54 Mr Amidy's ROI dated 22 November 2011 states in questions 134, 135, 139 and 140:

Q 134. So on Monday, what did you see that made you reach the conclusion that it was a reportable matter?

A. The extent of the tailing, the depth of the tailings and the distance that it had travelled down the stream.

Q 135. Were those things different to what you were told in the phone calls from Wayne Bower or Robert de Groot on the Sunday?

A No, no.

Q. 139. So what you saw on the Monday was virtually the same as what was described to you on the phone by Wayne Bower?

A. Essentially yes.

Q 140. So what was different in your mind to make you say that that [sic] now was an incident that should be reported?

A I guess it is difficult to make a, you know, an image or understanding of these issues when you're not here, over the phone and it wasn't until I was here physically on the Monday and undertook the inspection that I completely understood the extent of the tailings.

55 Mr Amidy stated in cross-examination that he recognised that the flow of tailings in the creek had the capacity to cause an environmental impact. Environmental harm has to be assessed by having physically seen the pollution. He was asked if he recognised that there was a threat of environmental harm which was not trivial if steps to control the flow were not taken. It was standard protocol to take water samples upstream and downstream after an incident. This was done to understand the impact on the environment. Mr Amidy received a full verbal report from Mr Bower on Sunday in at least two telephone calls. He did not accept that he discussed with Mr Bower whether the incident was reportable. The discussion was focussed on the clean up. The scene he saw on Monday morning was different to what he had pictured in his mind from the descriptions received on Sunday in that the tailings had travelled a bit further and were deeper than he had expected. He did not form a conclusive view on whether environmental harm was caused or threatened as tailings are non-toxic. On Monday it became clear to him that the clean up would be quite extensive which was not clear on the Sunday. He thought on the Sunday the clean up would be labour intensive with shovels. He did not form a view on whether it would be substantial. He needed to view the incident himself before having a conclusive view himself on whether it was reportable.

56 Mr Hiatt in his affidavit dated 17 July 2013 said at par 8, 11, 13-17, 20, 31:

8 In my discussions with Wayne throughout Sunday afternoon I believed that the questions that I needed answered before I made a decision as to whether to go to site were: had the spill been stopped? did the downstream dam have the capacity to hold the water from the tailings? and, was there a pump on the dam?

11 I also recall that during our discussions on the Sunday we discussed the weather forecast for that Sunday evening to understand whether we had any exposure to rain or a likelihood of rain. Wayne looked at the weather forecast and told me that there was some, but not high, likelihood of rain and we then decided to put more hay bales and sandbags in the creek that afternoon.

13 I decided not to go to site on the Sunday because I was confident that Wayne had the containment of the spill under control and I felt comfortable with the level of information flowing from Wayne in relation to the incident.

14 On the Sunday afternoon I considered whether or not I was required to report the incident to the EPA. I was aware that the primary considerations in determining whether or not the incident needed to be reported was whether the incident had caused more than minimal harm and whether it could be mitigated or repaired for less than $10,000.

15 On the Sunday I was of the view that given that I had been told that the tailings had been contained within a 250m section of a dry creek bed and given our capacity of being able to flush the creek using our own equipment, from my point of view it was well within our capacity to clean up the tailings for less than $10,000.

16 I also believed on the Sunday that the incident had not caused more than minimal harm. This was because I believed that we could fully recover the situation and get the creek back to its original condition. I also knew that coal tailings were not toxic and believed that the tailings could be removed with minimal or no harm to the reeds in the creek bed. I knew on the Sunday that the tailings had been contained to a limited section of the creek bed, that the creek bed was dry, that the creek bed was full of hardy vegetation and that we had the capacity on site to interact with the distance that I had been told that the tailings had travelled to fully clean-up the spill.

17 On the Sunday it was my view that the incident did not need to be reported based on the information that I had been told by Wayne.

20 Ultimately at the time of the incident I was responsible for the decision as to whether any environmental incidents needed to be reported however I would generally receive advice from Paul Amidy before making a decision. If I was not available or contactable, Steve Hubert was responsible for reporting an incident. If none of us could be contacted then Paul was allowed to make a decision regarding whether or not an incident needed to be reported.

31 I recall that at around 11am we agreed the sucker truck option would be the best option and discussed that the sucker-trucks would definitely cost more than $10,000 . At that point I made a decision that Paul was to get on the phone and report the incident.

57 In cross-examination Mr Hiatt stated that he considered harm if any was minimal after talking to Mr Bower by telephone on Sunday 9 October 2011. He discussed the weather with Mr Bower to check on the likelihood of rain because he wanted to understand if any likelihood of greater exposure might arise and to reduce the potential for further leaking of the tailings because there was potential for harm. His understanding of trivial was that it causes no harm or has some potential but has caused no harm or very little. The tailings were non-toxic and moved slowly down the creek. His decision on Sunday was based on what Mr Bower told him.

What does the Prosecutor have to prove the Defendant was aware of? Construction of s 147 and s 148

Mens rea offence?

58 A measure of the considerable differences between the Prosecutor and the Defendant about the elements of the offence was that the Prosecutor made no mention of the basis of liability of the offence charged and did not address the nature of any mental element it must prove, if any. This may be because in the Prosecutor's case the only matter which the Defendant had to be aware of (arguably a mental element) was the occurrence of a pollution incident. Such awareness was admitted by the Defendant. The Defendant's case is that to prove this offence requires proof of awareness of more than just the fact that a pollution incident had occurred but also awareness that it caused or threatened material harm as defined in s 147. The Defendant submitted that the offence requires proof of mens rea and is not a strict liability or absolute liability offence. I agree with the Defendant that it is not an absolute liability offence given that some mental element is required to be proved on either of the parties' conflicting constructions of the section.

59 As the Defendant submitted, many Tier 2 offences in the PEO Act are strict liability offences meaning that the requisite mens rea is assumed unless a defendant argues an honest and reasonable mistaken belief about facts which if true would render actions innocent. If the defence of honest and reasonable mistake of fact is successfully raised a prosecutor has the burden of negativing such a belief beyond reasonable doubt, He Kaw Teh v The Queen [1985] HCA 43; (1985) 157 CLR 523 at 532-533. The Defendant referred to Environment Protection Authority v N (1992) 26 NSWLR 352 in which the Court of Criminal Appeal (CCA) had to consider the extent to which the prosecutor must establish that an accused person knew of the wrongfulness of his or her actions in relation to an offence of wilfully disposing of waste. Hunt CJ in CL (Enderby and Allen JJ concurring) referred to the High Court in He Kaw Teh reaffirming the common law presumption that knowledge is an essential element of every offence, although the presumption can be displaced by words of the statute creating it or the subject matter with which it deals (354 at E). To determine if the presumption is displaced courts look at the words of the statute, the subject matter with which the statute deals, and whether strict liability will assist in overcoming the mischief which the statute is aimed at (354 at G). These factors can point in different directions, He Kaw Teh at 530.

60 Hunt CJ in CL considered these matters in concluding that it was unlikely that the legislature intended that a grave penalty would fall on a person who was intending to lawfully dispose of waste and had no intention of harming the environment and was unaware that his or her manner of disposal was likely to cause environmental harm (357 at A). The offence required the prosecutor to prove that the defendant wilfully disposed of waste.

61 The presumption that mens rea is an essential element of an offence in He Kaw Teh was recognised by the CCA (Sheller JA, Levine J and Smart AJ) in Director-General of Department of Land and Water Conservation v Greentree [2003] NSWCCA 31; (2003) 140 A Crim R 25 at [68]. The CCA observed that if guilty knowledge was not an ingredient of the offence it may be an offence of strict liability. The CCA identified that a number of Tier 2 offences such as water pollution offences were strict liability. The CCA considered the objects of the Native Vegetation Conservation Act 1997 (NV Act) and the terms of the offence provisions to conclude that the offence before it was one of strict liability.

62 As the Defendant submitted the language of s 148(2) reflects a mental element as a person must notify as soon as practicable after the person becomes aware of the incident. Before finally determining whether this offence is one where the Prosecutor must prove mens rea as part of the elements of the offence, the nature of the awareness that must be proved beyond reasonable doubt by the Prosecutor must be determined as a matter of statutory construction.

Awareness of material harm by Defendant required to be proved

63 Critical to defining the elements of the offence is what the Prosecutor must prove the Defendant was aware of before the obligation to notify as soon as practicable was triggered. The construction of s 148(2) the Prosecutor advanced is that at the time of the offence charged:

(a) the Defendant was aware that a "pollution incident" had occurred or was occurring (admitted); and,

(b) as a matter of "objective fact", the incident caused or threatened material harm to the environment.

64 The competing construction of s 148(2) which the Defendant contended for is that the Prosecutor must prove that, at the time of the offence charged:

(a) the Defendant was aware that a pollution incident had occurred or was occurring in the course of an activity being carried out by the Defendant (admitted); and

(b) the Defendant was aware that the pollution incident was of a type which was required to be notified, as described in s 148(1), namely one which occurred so that material harm to the environment was caused or threatened.

Prosecutor's submissions

65 The Prosecutor submitted that pursuant to s 148(1) of the PEO Act, Pt 5.7 the duty to notify arises when there has been a "pollution incident" and what follows as a matter of objective fact is either material harm or threatened material harm. This is clear from the expression "so that". Those words do no more than express the consequences to the environment which must occur as a matter of objective fact before a failure to notify would have the consequences envisaged by s 152 of the PEO Act.

66 There is no subjective element necessary to trigger s 148(1). If the "pollution incident" causes or threatens material harm, then Pt 5.7 is engaged. A mental element is, however, introduced into s 148(2) of the PEO Act. The person carrying out the activity, here the Defendant, must become "aware of the incident". That is, aware of the "pollution incident". Section 148(2) expressly so provides. Section 148(2) does not expressly or by necessary implication provide that the person must become "aware of the incident and the material harm to the environment caused or threatened". Put another way, the obligation to notify is triggered as soon as a "pollution incident" occurs, whether or not the relevant person is aware that harm to the environment is caused or threatened.

67 What that means in practical terms is that upon becoming aware of a "pollution incident" a judgment must be made by those responsible for notification whether they will report it. They do not have to know "conclusively" or at all that the pollution incident is one which as a matter of fact has caused or threatened actual or potential harm to an ecosystem which is not trivial. Many who have the obligation to notify would not have the capacity to know and might never in fact know whether or not the pollution incident caused or threatened material harm within the meaning of the statute. Indeed to construe s 148(2) in the manner suggested by the Defendant would create an irresistible incentive to avoid finding out whether or not material harm had been caused or threatened thereby avoiding the obligation to notify completely. The obligation would never be enforceable. On the Defendant's construction of the statute there would not even be an obligation to report if an expert such as Mr Julli informed it that in his opinion material harm was caused or threatened. Mr Julli's opinion would be irrelevant. In circumstances where for whatever reason the Defendant claimed that there were defects in the opinion then the obligation of the Defendant to notify would be put to nought. According to the Defendant what is crucial is actual knowledge of the fact that material harm to the environment has been caused or threatened. The knowledge of that fact is not proved by the opinion of some third party that the fact exists.

68 The construction advanced by the Prosecutor is consistent with and promotes the objects of the PEO Act. Section 148(2) shifts the environmental risks associated with carrying out an "activity" away from the environment and places those risks squarely upon the shoulders of those carrying out the "activity". If there is a pollution incident then those carrying on the activity will in many cases be the only ones who know that it has occurred. They must make a judgment call as to whether the regulator will be notified. That judgment might be exercised one way if a litre of oil is spilt on a factory floor. It might, and should, be exercised very differently if the pollution incident involves hundreds of kilolitres of coal tailings entering a natural remnant waterway.

69 Consistently with the purposes of the PEO Act and the high value which Parliament has placed on the protection of the environment, those carrying on activities which might harm the environment have an obligation to report. It cannot have been Parliament's intention that unless or until they were subjectively satisfied that material harm had been caused or threatened, they were entitled to sit by and not report an incident. They must make a judgment based upon what they have observed and not upon what might turn out to be the case ex post facto depending upon how convinced they might be of the opinions of others. If they make an error of judgment and it is subsequently established that material harm to the environment was caused or threatened by the pollution incident caused by their activity then they shoulder the consequences. If, as events turn out, there was as a matter of objective fact no material harm to the environment caused or threatened then there would be no consequences.

70 To construe the expression "aware of the incident" in s 148(2) of the PEO Act to mean "aware of the incident and the material harm to the environment caused or threatened thereby" would be entirely unorthodox. In particular:

(a) The task of statutory construction must begin with a consideration of the text itself. That may require consideration of the context which includes the general purpose and policy of a provision, in particular, the mischief it is seeking to remedy. To construe the expression "aware of the incident" as necessitating an actual awareness of material harm or that it was threatened would undermine the purposes and objects of the PEO Act. The construction advanced by the Prosecutor accords with a purposive and contextual approach to statutory interpretation. It avoids construing the PEO Act by reading words into it;

(b) The mischief here is that pollution incidents which, as a matter of objective fact, have caused or threatened environmental harm will go undetected and that what is threatened comes to pass. The word "threaten" means to put at risk or to endanger. It connotes a need for an urgent response. It cannot be the case that Parliament intended that a person carrying on an activity causing a pollution incident could sit by and wait to be convinced at some point by a third party expert that in fact what had occurred had threatened environmental harm or that what was then threatened had now occurred. Such a consequence would be entirely antithetical to the statutory purpose of protecting the environment.

Defendant's submissions

Not all pollution incidents are required to be notified under Part 5.7 of the PEO Act

71 It is fundamental at the outset to appreciate that the legislative policy embodied in the provisions of Pt 5.7 of the PEO Act did not at the relevant time require all pollution incidents to be notified to the appropriate regulatory authority (the Prosecutor's case). The legislation requires only the type of pollution incident described in s 148(1) be notified, namely one which "occurs in the course of an activity so that material harm to the environment is caused or threatened".

The two alternative triggers for material harm under s 147 of the PEO Act

72 Section 147 of the PEO Act defines "material harm to the environment" for the purposes of s 148(1). Section 148(2) of the PEO Act requires an evaluation to be made as to whether a pollution incident which occurs in the course of an activity is one which causes or threatens material harm to the environment by reason of either or both of the two triggers in s 147 of the PEO Act.

73 Someone has to make that evaluation. The person who needs to make it is the person carrying on the activity, on whom the obligation to notify is cast. Otherwise, the obligation would be cast on persons carrying on relevant activities to notify all pollution incidents and allow the appropriate regulatory authority to make the evaluative judgment required by s 148(1) and s 147. One may reasonably infer the legislature's purpose in deliberately deciding to require only that the prescribed sub-set of pollution incidents be the subject of compulsory notification to the appropriate regulatory authorities is because of a perception that it would serve no useful purpose to notify incidents which did not cause or threaten material harm and, if all such incidents were reported, there would be an inappropriate drain on the limited resources of those authorities.

74 On its terms, s 148(2) requires the Prosecutor to prove that the Defendant was aware of "the incident". One needs to look closely at what that expression means in its context. The Defendant submitted that the expression, "the incident", must take its meaning from s 148(1) of the PEO Act, which identifies the kinds of incidents to be notified, namely, not all pollution incidents, but only those which occur in the course of an activity so that material harm to the environment is caused or threatened.

The decision of the Court of Criminal Appeal in EPA v N

75 The Prosecutor's position that the legislature does not care that a person may be criminally liable for a contravention of s 148(2) without being aware that the pollution incident caused or threatened material harm to the environment does not accord with fundamental principles of statutory construction. Conversely, the construction of s 148(2) advanced by the Defendant is consistent with the fundamental presumption that the mental element of a statutory provision creating criminal liability must apply to all elements of the offence, so that an offender has knowledge of the wrongfulness of the offender's actions.

Language and context

76 The Defendant derived support for its proposed construction of s 148(2) of the PEO Act from the language and context of s 147 and s 148 of the Act, including the following:

(a) Section 148(1) provides that Pt 5.7 of the PEO Act applies where a pollution incident occurs so that material harm is caused or threatened. As a matter of logic, whether a consequence is "threatened" is a matter of perception, calling for a subjective assessment by the person who becomes aware of the pollution incident. The proposition that one can objectively discern whether a consequence is threatened involves an artificial, strained use of the word "threatened". Moreover, the proposition that, at some later point in time, post-facto, one can retrospectively determine whether a consequence was threatened at an earlier point in time involves a distortion of the language of s 148(1).

(b) Section 147(1)(b) expressly includes within the ambit of the concept of actual or potential property loss, "the reasonable costs and expenses that would be incurred in taking all reasonable and practicable measures to prevent, mitigate or make good harm to the environment". On a natural reading of this provision, it calls for an inquiry by the person on whom the duty is cast to make an assessment of the anticipated clean up costs, rather than to call for a post-facto, retrospective inquiry of what costs "would be incurred". Moreover, the use of the adjective "reasonable" to qualify the nouns "costs and expenses" calls for someone to make the assessment of what costs and expenses are "reasonable". Likewise the adjectives "reasonable" and "practicable" qualify the noun "measures" and call for the person on whom the duty is cast to make a judgment call as to those matters.

77 Contrary to the Prosecutor's contention, the use of the words "so that" in s 148(1) does not support the proposition that, as a matter of proper construction of s 148(2), the Prosecutor need only establish that the person was aware of a "pollution incident", and then, as a matter of objective fact, that the incident caused or threatened material environmental harm. The Defendant agreed with the Prosecutor that the words "so that" are expressive of the consequence that material harm to the environment is caused or threatened by a pollution incident, but that is the whole point. By using the words "so that" to introduce those particular consequences, it is evident that the words of s 148(1) define the sub-set of pollution incidents which fall within the ambit of the duty to notify under s 148(2). Thus, the syntax and context suggest that, when s 148(2) uses the phrase "after the person becomes aware of the incident", it is intended that "the incident" means a pollution incident which is defined, inter alia, by references to its consequences, as described in s 148(1).

The Prosecutor's construction would lead to unfair results

78 The Prosecutor contended for a construction of s 148(2) of the PEO Act which would lead to unfair results. It would promote neither the purposes of s 148(2) of the PEO Act, nor the broader objectives of the PEO Act, to make a person criminally liable for omitting to notify a pollution incident, if the person was not aware that the pollution incident was of the type of pollution incident which was required to be notified as described in s 148(1) of the PEO Act.

79 The reasoning of the Court in EPA v N (at 354 to 357) is instructive. In particular, it should not be imputed to the legislature that it intended criminal liability to be imposed on a "luckless victim" (to use the language of Lord Evershed in Lim Chin Aik v The Queen [1963] AC 160, as cited by Hunt CJ at CL in EPA v N at 357B) who did not notify a pollution incident because the person did not believe that it was the type of incident which was required to be notified.

80 On the construction advanced by the Prosecutor, a person could be criminally liable for a contravention of the person's duty to notify under s 148(2) of the PEO Act in circumstances where the person was neither aware of the facts which trigger the obligation to notify, nor wilfully blind to the likelihood of the existence of those facts.

Prosecutor must prove that Defendant subjectively aware pollution incident caused or threatened material harm to the environment

81 As both the Prosecutor and Defendant submitted, it is necessary to apply a purposive construction to the words of the statute to ensure its objects are achieved but each claims that its approach is supportive of the objects of the legislation. The objects of the PEO Act identified in s 3 are broadly to protect the environment, to reduce risks to human health and prevent the degradation of the environment, to rationalise, simplify and strengthen the regulatory framework for environment protection and to improve the efficiency of administration of the environment protection legislation.

82 Section 147 specifies that harm to the environment is "material" in the requisite sense:

(a) if and when a pollution incident causes or threatens harm to the environment which "involves actual or potential harm to ecosystems that is not trivial", then "material" harm to the environment is caused or threatened: s 147(1)(a)(i),

(b) if and when the reasonable costs and expenses that would be incurred, or are incurred, in taking all reasonable and practicable measures to prevent, mitigate or make good harm to the environment occasioned by the incident (that is, clean up costs) exceed $10,000, then, by a combination of s 147(1)(a)(ii) and s 147(1)(b), material harm to the environment is deemed to have been caused or threatened.

83 It is evident from the language of s 148(2) that an element of awareness on the part of the person carrying out the activity is required before any obligation to notify will arise. Section 148(2) imposes a duty on a person to as soon as practicable after the person becomes aware of the incident notify the authority of the incident. Incident means pollution incident referred to in s 148(1) which specifies what kinds of incidents are to be notified.

84 I adopt the Defendant's submissions set out above at par 76 - 77 concerning the language and context for s 147 and s 148, which must be considered as a whole in construing the meaning of s 148(2). Additionally, the use of the word "potential" in s 147 in the assessment of whether harm is material seems to involve a forward looking enquiry which must be subjective. Material harm being an objective assessment by the person upon who the duty to notify is cast is not supported by the use of the word "potential" in s 147. The words "so that" require an assessment by a person of whether material harm to the environment defined in s 147(1) applies. The Prosecutor's submission above at par 65 that the words following "so that" must occur as a matter of objective fact does not reflect the statutory context of s 147 and s 148 as a whole. The Defendant's approach does not require the reading in of extra words in the statute.

85 I agree with the Defendant that the Prosecutor's submissions would lead to unfair results whereby a person could be criminally liable for not reporting a pollution incident when not aware that, or making an incorrect judgment concerning whether, the incident was of a type that should be reported. The Prosecutor's construction would lead to a luckless victim, here the Defendant, contrary to the principles identified in EPA v N.

86 As the Defendant submitted, if the Prosecutor's contention is accepted then later information about whether a pollution incident caused more than trivial harm to an ecosystem, or in relation to the costs of a clean up, can be retrospectively determinative of whether a defendant had an obligation to notify. Such information cannot be available to a defendant at the time a decision is being made whether to notify. In this case the information relied on by the Prosecutor dates from after the Defendant notified the EPA of the incident. I consider that construction of these provisions gives rise to an unfair result.

87 The Prosecutor's submission that becoming aware of a pollution incident is sufficient to give rise to the obligation to report yet, as a practical matter, another judgment has to be made by that person whether to report in terms of whether material harm as defined was caused or threatened is contradictory. That submission if correct would lead to uncertainty about whether an offence was being committed, never a desirable outcome for a person potentially committing a criminal offence.

88 Further, the Prosecutor argued that its approach to construction would not result in all pollution incidents being reported because a judgment call would be made as to whether this was necessary. To the contrary I consider the inevitable result of this approach, if accepted, is that once awareness of a pollution incident, no matter how seemingly trivial, arises that would be reported in order to avoid the possibility of a later charge with a criminal offence. The Defendant's construction does accord with the objects of the PEO Act and makes much practical sense. It requires a person carrying out a specified activity to consider whether a pollution incident causes or threatens material environmental harm and therefore whether it must be reported. I agree with the Defendant's submission set out above at par 73 that the Prosecutor's approach would have the appropriate regulatory authority having to make the assessment required by s 148(1) and s 147. No useful purpose in the regulatory framework is served by the notification of pollution incidents which do not cause or threaten material harm to the environment. Reporting of all pollution incidents will I infer lead to a substantial drain on the finite resources of those authorities. The purpose of notification is to enable a regulatory authority to make decisions about what if any action needs be taken in relation to a pollution incident which causes or threatens material harm. I agree with the Defendant that not all pollution incidents are required to be notified under Pt 5.7 of the PEO Act.

89 The Prosecutor submitted that the Defendant's approach would lead to a person carrying on an activity not informing themselves about the matters of material harm identified so that environmental harm would go undetected and that what is threatened would then come to pass. This conflates taking action to control pollution with reporting to a regulatory authority, which are two separate matters. The drafting in s 147 and s 148 does not inhibit prompt action by a defendant to prevent and mitigate pollution pending a decision to notify a pollution incident causing material harm. There is no requirement in the PEO Act that a person must wait to take action until a regulatory authority has been notified and presumably attended a site where a pollution incident is occurring. This implication arises from the Prosecutor's submissions, but is not grounded in the PEO Act as drafted. In this case efforts to control the flow of tailings began immediately after discovery of the tailings on 9 October 2011 by the Defendant's employees, which action was unrelated to any obligation to notify.

90 The evidence in this case illustrates the reasoning in the previous paragraph. Mr Julli's evidence was that no additional harm to the environment was caused as a result of notification being made to the EPA on 10 October 2011 rather than 9 October 2011 (report at [68]). I should note for completeness that Dr Smith does not agree that any environmental harm resulted from the pollution incident. Because of my findings I will not need to resolve this difference. Accepting Mr Julli's evidence for illustrative purposes only shows that clean up efforts to minimise environmental harm occurred before notification. There was no effective difference in this case in terms of harm to the environment being caused or threatened because notification occurred on 10 October rather than 9 October 2011.

91 The Prosecutor submitted that the Defendant's construction would result in incentives for a potential defendant not to find out whether or not material harm had been caused or threatened and so completely avoiding the obligation to notify. This submission is understandable given that the phrase as soon as practicable refers in s 148(2) to notification, not to the gaining of awareness. This is answered by the Defendant's submission that, to use lawyer's shorthand, wilful blindness can apply per Pereira v Director of Public Prosecutions [1988] HCA 57; (1988) 35 A Crim R 382 at 385, He Kaw Teh at 536 to infer actual knowledge whereby an accused person can be found to be aware of suspicious circumstances which can be an element of an offence and a deliberate failure to inquire as to whether that circumstance does or does not exist. The Prosecutor stated that this approach is dangerous, discredited and is not a substitute for actual knowledge where a defendant knows of sufficient facts that viewed objectively would lead to the conclusion that they had actual knowledge of potential or threatened harm. This was accepted by the Defendant and reflects cautionary words to that effect in Pereira at 385 (references omitted):

Even where, as with the present charges, actual knowledge is either a specified element of the offence charged or a necessary element of the guilty mind required for the offence, it may be established as a matter of inference from the circumstances surrounding the commission of the alleged offence. However, three matters should be noted. First, in such cases the question remains one of actual knowledge. It is never the case that something less than knowledge may be treated as satisfying a requirement of actual knowledge. Secondly, the question is that of the knowledge of the accused and not that which might be postulated of a hypothetical person in the position of the accused, although, of course, that may not be an irrelevant consideration. Finally, where knowledge is inferred from the circumstances surrounding the commission of the alleged offence, knowledge must be the only rational inference available. All that having been said, the fact remains that a combination of suspicious circumstances and failure to make inquiry may sustain an inference of knowledge of the actual or likely existence of the relevant matter. In a case where a jury is invited to draw such an inference, a failure to make inquiry may sometimes, as a matter of lawyer's shorthand, be referred to as wilful blindness. Where that expression is used, care should be taken to ensure that a jury is not distracted by it from a consideration of the matter in issue as a matter of fact to be proved beyond reasonable doubt.

92 I consider the ability of a prosecutor to prove actual knowledge by inference from known facts answers the criticism of the Prosecutor that a defendant could avoid becoming aware that a pollution incident was causing or threatening environmental harm.

93 Part of the Prosecutor's reasoning that a person could shut their eyes to the possible impact of a pollution incident was that all the relevant information in s 150 which must be reported under s 148(2) could take months to obtain. Read literally that is correct. It is agreed that determining concentrations of pollutants can take some time because of the need for sample testing, for example. Both the Prosecutor and the Defendant submitted that these sections should not be read as requiring that all information in s 150 must be available before the obligation to report as soon as practicable arises. On the assumption that "as soon as practicable" means "able to be done or put into practice successfully" requires that action be taken that is reasonable in all the circumstances and appropriate to the requirements of the situation, as the Prosecutor submitted, I agree that s 150 should not be read in absolute terms but with a view to encouraging the reporting of as much information as is practically feasible within a relatively short time frame. I do not consider the Defendant's approach to construction, which I have adopted, results in a person being able to sit on his or her hands and ignore threatened or actual harm.

94 I referred to the authorities such as He Kaw Teh above at par 59 to 61 which recognise a presumption that mens rea must be proved as part of a criminal offence unless excluded. That determination requires consideration of the statutory framework, its subject matter and the mischief sought to be dealt with. Now informed by the analysis of s 147 and s 148 set out above, I agree with the Defendant that this offence requires proof of mens rea by the Prosecutor. The factors which Hunt CJ in CL referred to in EPA v N are also relevant to consider given the large maximum penalty for a company of $1 million and $250,000 for an individual together with provision for a daily penalty for an offence under s 152. By parity of reasoning I do not consider the legislature intended that a grave penalty would fall on a person who mistakenly did not notify a pollution incident which he or she considered did not cause or threaten environmental harm as defined in s 147. I note that the provision dealt with in EPA v N used the word "wilfully" but this does not alter the reasoning applicable here. The practical uncertainty surrounding the offence if the Prosecutor's submissions were accepted as referred to above in par 87, also supports my conclusion that knowledge of material harm must be established by the Prosecutor. In Greentree the statutory provision under consideration, s 65(4) of the NV Act, is quite different in nature to s 147 and s 148 of the PEO Act. The CCA's reasoning based on consideration of the purpose of the NV Act and that subsection, which concerns the attribution of intention of an employee to a corporation, does not assist in this statutory context.

95 The offence created by s 152 for contravening the obligation imposed by s 148(2) is not a strict liability offence. The offence being one where the mental element of mens rea must be proved beyond reasonable doubt by the Prosecutor means the Prosecutor must prove as a subjective fact that the Defendant was aware of a pollution incident which caused or threatened material harm which it failed to notify as soon as practicable on Sunday 9 October 2011.

When was Defendant subjectively aware that pollution incident caused or threatened material environmental harm?

96 I have accepted that the Defendant's construction of s 147 and s 148 is correct and that mens rea applies as part of an element of the offence. The Prosecutor must prove awareness on the Defendant's part beyond the elements of the offence as conceived by the Prosecutor. My finding means that element (f) (above at par 13) cannot arise in the case as conceived by the Prosecutor, namely whether the incident caused or threatened material harm as a matter of objective fact. To succeed the Prosecutor must prove that during the offence period (9 October to 10 October) the Defendant was aware that a pollution incident had occurred in the course of an activity carried out by it (admitted) and that the Defendant was aware that the pollution incident caused or threatened material harm to the environment (and, separately, failed to notify as soon as practicable). The expert evidence about ecosystem harm or lack thereof of Mr Julli and Dr Smith is irrelevant to prove this element. The Prosecutor's investigation as detailed in the affidavits of Mr Clair and Mr Bell undertaken after the notification on 10 October 2011 is also largely irrelevant to the proof of what the Defendant's employees were aware of. The ROIs conducted by the Prosecutor's officers with Mr Bower and Mr Amidy which are in evidence will be mentioned briefly.

97 Regardless of my finding on the construction of s 147 and s 148, the Prosecutor's case evolved so that it submitted that the offence arose in the afternoon of Sunday 9 November 2011 because that is when the Defendant's employee(s) were aware that a pollution incident had occurred which caused or threatened material harm as defined in s 147. Precisely who should have notified in accordance with cl 101 of the Regulation changed over the course of the Prosecutor's case. Originally it appeared to be Mr de Groot who first discovered the incident on 9 October 2011. It was later submitted orally by the Prosecutor's counsel that the call should have been made shortly after Mr Bower went on site at about 2pm on Sunday. Alternatively Mr Amidy or Mr Hiatt should have made the call sometime on Sunday afternoon.

98 As a result of my finding on construction of s 147 and s 148 the Prosecutor must prove beyond reasonable doubt the subjective awareness of material harm as defined in s 147 by the Defendant's employee(s) on the afternoon of Sunday 9 October 2011. The Defendant submitted that it, through its employee Mr Hiatt, became aware on the morning of Monday 10 October 2011 that the pollution incident was likely to cause material harm as defined in s 147 because clean up costs were likely to result in loss greater than $10,000 (s 147(1)(a)(ii) as defined in s 147(1)(b)) and the incident was then notified as soon as practicable on that day.

Prosecutor's submissions

99 The evidence of the Defendant's employees does not establish that it did not turn its mind to the question of whether material harm was caused or threatened as a consequence of the pollution incident on 9 October 2011. The Prosecutor was critical of Mr Hiatt's evidence of what he knew on Sunday 9 October 2011. He was said to be cavalier about the reporting obligation because he made the decision without inspecting the site, that the environmental officer need not attend the site, that the incident need not be reported on 9 October 2011 without talking to the environment officer, inter alia. The information the Defendant possessed throughout the day on 9 October 2011 was not materially different from that which it possessed at the time of notification on 10 October 2011. It should therefore have notified the pollution incident on 9 October 2011.

100 The Prosecutor also submitted that absent an explanation for its notification on 10 October rather than 9 October 2011 the Court should conclude that the environmental harm caused by the pollution incident necessitated notification. If the Court rejects the explanation that the trigger for reporting was $10,000 clean up costs then all the matters relevant to the other trigger of involving actual or potential harm to ecosystems that is not trivial were known to the Defendant's employees on Sunday 9 October 2011. It was practicable to report on that day shortly after Mr Bower came on site at 2pm. The state of awareness of the Defendant on 9 October 2011 was such as to trigger the obligation to notify on that day.

101 The contention that the Defendant reported on 10 October 2011 because clean up costs would exceed $10,000 was not advanced by its employees on the day. It was not reported in the internal notification report of Mr Amidy that that was the reason for reporting. It was not given as the reason for reporting in the ROIs with Messrs de Groot, Bower and Amidy. The reason the incident was reported was because of the likely cause of material harm to the environment. As what was observed on Sunday was the same as on Monday there was no reason why the incident was not reported on Sunday. It was practicable to report because any of the company's officers could have telephoned the Environment hot line.

102 The Defendant's awareness can be inferred from what it admitted in the investigation and in the proceedings and how it behaved on site on 9 and 10 October 2011. Mr Amidy recognised that the incident had the potential to cause an environmental impact, that there was a definite threat of an environmental impact as a consequence of the pollution incident, and there was a threat of environmental harm and potential for harm to the creek caused by the accident. Mr Amidy recognised that there was the potential for environmental harm if the incident was not controlled at all, that measures were needed so as not to create further impacts, and samples were taken to assess what impact had been caused by the incident on the environment. Mr Hiatt understood that samples were taken to see if there had been damage to the creek (TS 236.50 - 237.05). The matters known to Mr Amidy on Sunday led to notification on Monday. In his ROI Mr Amidy did not say that the reason he reported the matter on Monday was because of a view that he had formed that the clean up would exceed $10,000. Mr Bower in his ROI said that the matter was reported on Monday because Paul (Mr Amidy) and Ben (Mr Hiatt) had come to the site. Between the three of them it was decided that the incident should be reported.

103 The Defendant must have known on 9 October 2011 that the clean up of 250-280m of coal tailings from the creek bed would likely far exceed $10,000 whether by reason of internal or external costs. On any view there was at the very least the "potential" for such loss within the meaning of s 147(1)(a)(ii) and (b) of the PEO Act. Mr Amidy considered that the clean up would be a labour intensive "substantial" job although he later claimed that he did not form a view that it would be substantial on 9 October 2011. Nevertheless he acknowledged that the clean up would involve a number of people for a number of days.

104 The meaning of harm is wide in terms of its statutory definition in the Dictionary and its consideration by the Court. If there is an act which results in pollution it is presumed to have caused "harm" to the environment.

105 For the purposes of s 147 of the PEO Act the concept of "harm" to the environment has been circumscribed by the need to demonstrate that the harm is "material". That is, that it is "not trivial". However even with that limitation the concept of "harm" to the environment in s 147 is broad and the threshold at which conduct will fall within the meaning of the expression "material harm to the environment" as defined in s 147 is low. That is so because:

(a) s 147 necessarily incorporates as its starting point the meaning of the word "harm" to the environment as defined in the Dictionary;

(b) the threshold for "harm" to the environment as defined in the Dictionary is low. It includes any act or omission which results in pollution;

(c) relevantly in this matter "pollution" as defined in the Dictionary includes "water pollution";

(d) "water pollution" as defined in the Dictionary includes conduct which does not necessarily cause "harm" beyond changing the physical characteristics of the waters. By way of an example which is relevant to these proceedings "water pollution" as defined in the Dictionary includes:

"(a) placing in or on, or otherwise introducing into or onto, waters (whether through an act or omission) any matter, whether solid, liquid or gaseous, so that the physical, chemical or biological condition of the waters is changed"

(e) "harm" which is "material" within the meaning of s. 147 includes not only "actual" harm but also "potential" harm.

106 Trivial needs to be assessed in light of this definition of harm. Whether material harm occurs is a question of degree. Nevertheless the threshold for what is not trivial harm to the environment including an ecosystem cannot be high.

Defendant's submissions

107 The Defendant submitted it was aware on Sunday 9 October 2011 that a pollution incident occurred at the premises but was not aware on that day the incident caused or threatened material harm to the environment as defined in s 147 so that the duty to notify did not arise on that day.

108 In particular, the evidence of Mr Hiatt, the person who carried the responsibility to externally report incidents, is that, on Sunday 9 October 2011, he formed the belief that:

(a) the incident had not caused or threatened more than trivial or minimal environmental harm; and

(b) it was well within the Defendant's capacity to clean it up for less than $10,000.

109 After receiving the description of the incident and having dialogue with Mr Bower, Mr Hiatt deemed the harm to the environment to be minimal. In cross examination he gave this evidence:

Q. Minimal, all right. You understand, don't you, that the statutory requirements concerning reporting draw a distinction between actual harm and threatened harm? Do you understand that is a distinction?

A. Correct.

Q. In making your decision that it didn't need to be reported on the Sunday did you form a view that there was no threatened harm?

A. I formed the view on minimal harm that there was no more than trivial harm to people and to the ecology and to the environment.

Q. You formed that opinion as a person who had no background or training in environmental matters. Correct?

A. I haven't had formal training but I have quite a lot of experience and background with different operations and roles that include a responsibility of environment, as much as safety and other facets.

110 In forming the view that the incident had caused no more than minimal harm, Mr Hiatt deposed that he believed that the Defendant could fully recover the situation and get the creek bed back to its original condition. He also knew that coal tailings were not toxic and could be removed with minimal or no harm to the reeds in the creek bed. He knew that the tailings had been contained to a limited section of the creek bed, that the creek bed was dry, that the creek bed was full of hardy vegetation and that the Defendant had the capacity on site to interact with the distance that he had been told that the tailings had travelled to fully clean up the spill.

111 In cross-examination, Mr Hiatt was tested as to the evidence summarised in the previous paragraph. It is submitted that his evidence under cross-examination supports a conclusion that the view he formed was both genuine and reasonable for him to form on the known facts.

112 Mr Hiatt also specifically turned his mind on Sunday 9 October 2011 to the question of whether the incident could be cleaned up for less than the threshold $10,000. On Sunday, Mr Hiatt was contemplating flushing the creek using the Defendant's own equipment and considered it was well within the company's capacity to clean up the tailings for less than $10,000. As the Operations Manager, he was in a good position to forecast such costs. Significantly, Mr Hiatt was not challenged in any respect in giving that evidence.

113 The evidence does not establish that, on Sunday 9 October 2011, Mr Amidy believed or perceived the incident to be one which caused or threatened material harm to the environment under either of the two notification triggers under s 147 of the PEO Act. To the contrary, the evidence of Mr Amidy is that, as at Sunday 9 October 2011, he was aware of both triggers and, based on the information he was provided by Mr Bower by telephone that day, he (Mr Amidy) did not form a view that material harm to the environment had been caused or threatened by the discharge.

114 Mr Amidy did not believe that the environmental impact of the incident was significant. He was aware of the section of creek into which the tailings had had been introduced, that it was generally dry and only flowed during significant rain events, and that it was unlikely to be flowing at that time because there had not been significant recent rain. He understood the types of vegetation present to be typical in saline drainage lines in the local area. He was of the view that there were unlikely to be fish in the affected section but that macroinvertebrates might be present. He knew from his conversations with Mr Bower that the tailings had only travelled down a small section of the creek and were contained on site and he believed that the tailings were non-toxic, being comprised of 90 per cent water, coal fines and clay. He also believed at that time that the Defendant could contain the tailings on site and clean it up relatively quickly. He had not formed a conclusive view and considered that he could not form that view until he inspected the site on Monday.

115 As for the clean up, the view in Mr Amidy's mind on Sunday was that the Defendant would be able to remediate the spill quite easily by physical removal with shovels. He agreed that this would be a very labour intensive job, but did not accept the Prosecutor's proposition to him that it would have been a "substantial job". Significantly, the Prosecutor never put the proposition to Mr Amidy that he believed on Sunday 9 October 2011 that the clean up job would be one which would, or would be likely, to exceed the $10,000 threshold for notification.

116 There is no evidence that any other person, whose state of mind properly could be attributed to the Defendant company, formed the belief or perception on Sunday 9 October 2011 that the incident was one which caused or threatened material harm to the environment. In particular, the evidence discloses that neither Mr de Groot nor Mr Bower formed a perception that the incident was causing any significant environmental harm.

117 The evidence establishes that Messrs Hiatt, Amidy and Bower met on site early on Monday morning, inspected the site of the tailings discharge and then conferred in Mr Hiatt's office (including by telephone with Mr Watson and Mr Daly) as to the most appropriate clean up method and also about whether the incident should be notified to the EPA.

118 Upon seeing the incident that morning, Mr Amidy realised that it was more significant in terms of its extent and therefore the associated clean up that would be required, than the picture that he had in his mind based on the briefings he had received on Sunday. He did not think that it was vastly different from what had been described to him, but it was much bigger than he had imagined. Mr Hiatt, on seeing the site, concluded that the length of the spill (250m) was a little more than the original estimate (200m) and that the depth of the tailings was a bit thicker than he had anticipated, but not spread as wide. That both Mr Amidy and Mr Hiatt formed a somewhat different perception of the extent of the discharge after viewing the site that morning, as compared with pictures these gentlemen had formed in their minds the preceding day based upon briefings from Mr Bower by telephone, accords with common human experience. Onsite discussion of appropriate clean up methods ultimately by the use of sucker trucks meant that Mr Hiatt then became aware that clean up costs were likely to exceed $10,000.

Defendant aware on Monday 10 October 2011 of material harm

119 In order to succeed the Prosecutor must prove beyond reasonable doubt that the Defendant was aware that the pollution incident caused or threatened material harm on the afternoon of Sunday 9 October 2011. The Prosecutor sought to challenge the Defendant's evidence of its subjective consideration of whether material harm was caused by questioning when various employees of the Defendant formed an opinion about environmental harm and/or clean up costs. It submitted that the Defendant's explanation provided through Mr Hiatt and other employees that the incident was reported on 10 October 2011 because of awareness arrived at on that day that clean up costs would exceed $10,000 was not genuine.

120 The Prosecutor's submissions stressed that harm must be given a broad meaning as that was the nature of the definition in the PEO Act and in case law. That broad meaning should also inform the approach to "trivial" in s 147(1)(i) which submission I accept given the broad definitions of harm, pollution and water pollution in the PEO Act as outlined in the Prosecutor's submissions above in par 104 to 106.

121 As at 9 October 2011 the Defendant had in place a procedure concerning the internal and external notification of environmental incidents, which formed a component of its environmental management system. The Defendant tendered its "Incident Management Procedure, (BUL SD PRO 0036). The stated purpose of the procedure, which is stated to be "applicable to all persons onsite", is "to give clear guidance on incident reporting requirements at Bulga Coal Surface Operations Bulga Coal in line with regulatory, corporate and site standards". Section 4.1 of that document identifies that all personnel and contractors are responsible for immediate reporting of incidents within their work environment to their team leader or task co-ordinator. Section 4.2 requires that all external reporting will be undertaken by the Operations Manager or delegate including of the Department of Climate Change and Water (as it then was) in accordance with s 148.

122 Section 5 of the Incident Management Procedure sets out "accountabilities" and identifies that the Operations Manager has accountability to "submit internal and external notifications within specified timeframes". It also requires all personnel to "report all hazards and incidents to your immediate supervisor". Mr Hiatt, as Operations Manager at the time of the incident, was the person responsible for notifying incidents in appropriate circumstances to the EPA. As the Defendant submitted the evidence given by Mr Hiatt was entirely consistent with that procedure. He said that it was his responsibility to make that decision. On Sunday 9 October 2011 he formed the view on the basis of his telephone briefing by Mr Bower that the incident did not need to be reported because he did not consider clean up costs would exceed $10,000 or that more than trivial harm to the ecosystem occurred or was threatened, as identified in par 14-17 of his affidavit set out above at par 56.

123 The Prosecutor submitted that the Defendant's awareness that material harm as defined in s 147 arose or should have arisen on Sunday 9 October 2011. I have held the test is a subjective one. The best evidence is, as the Defendant submitted, that Mr Hiatt did not form the required opinion on 9 October 2011 that the incident should be reported. His evidence is that his conclusion was that he did not consider on that day that the statutory triggers for material harm in s 147 arose. That he did cause the incident to be reported by Mr Amidy on 10 October 2011 because he formed the requisite opinion on that day also confirms when his subjective opinion was formed. He was not called to attend an interview. Therefore his evidence is not able to be challenged as being inconsistent with what he might have said in an ROI.

124 As the Defendant identified in its submissions (above at par 108, 110 and 112) Mr Hiatt explained in his affidavit the reasons for his decision not to report on Sunday 9 October 2011 and to report on 10 October 2011. Mr Hiatt was tested in cross-examination, as summarised above in par 57, but I do not consider his evidence was undermined. The Defendant's submissions (above at par 109) identify Mr Hiatt's answers in cross-examination as to the basis for his opinion that no more than trivial harm to the environment was caused. There is no basis provided by the Prosecutor as to why Mr Hiatt's evidence of his subjective thought processes and reasons for his decision on Sunday that the incident did not need to be reported and his change of mind on Monday 10 October were not genuine. As the Defendant also explained in its submissions (above at par 112) Mr Hiatt on Sunday was of the view that the clean up could be undertaken for less than $10,000. Mr Hiatt's evidence in this regard was not challenged. The Prosecutor has not established beyond reasonable doubt that Mr Hiatt had the requisite awareness on Sunday 9 October 2011 that material harm was caused or threatened.

125 The Prosecutor also sought to identify awareness of material harm by Mr Bower and Mr Amidy on Sunday 9 October 2011. The evidence concerning the states of mind/awareness of Mr Bower and Mr Amidy in their affidavits is identified above in par 50, 52 to 53.

126 Mr Bower's affidavit (set out partly at par 50) states in par 28 that he did not consider environmental harm to the creek was occurring at any time. The decision to report was made on Monday after discussion with various people because of the extent of the clean up costs, par 43-44. In cross-examination (above at par 51) he stated that he did not have knowledge to determine whether environmental harm was caused. His oral evidence (above at par 51) was that on Sunday 9 October 2011 he did not consider costs of any clean up action. That topic was first considered with other employees on Monday 10 October 2011.

127 According to his affidavit evidence, set out in part in par 52 and 53, Mr Amidy did not form any view on Sunday 9 October 2011 when he was contacted by telephone by Mr Bower of whether environmental harm to an ecosystem was or could occur or about clean up costs as he believed a site visit was necessary to determine if the incident was reportable. His cross-examination, summarised above in par 55, does not suggest that any relevant awareness of material harm was arrived at by him on the Sunday, or should have been (assuming that is a submission able to be made by the Prosecutor). He accepted that there could be environmental impact from the non-toxic tailings flowing in the creek and that was why samples were taken from the creek above and below the tailings. He reiterated that it was necessary to see the incident himself before he could draw any conclusion about environmental harm.

128 The statements of Mr Amidy in his ROI in particular were relied on by the Prosecutor to suggest that the reason given closer to the time of the incident suggested that he did consider that environmental harm was likely to be caused. This is not the tenor of his evidence before the Court. In oral evidence Mr Amidy accepted that there was potential for environmental impact, rather than harm. The Prosecutor submitted that Mr Amidy did accept that there was potential for environmental harm if no controls were in place. That does not mean that Mr Amidy was aware that there was actual or threatened material harm as defined in the PEO Act.

129 That there is no reference in Mr Amidy's internal report completed in accordance with internal company procedures that the reason for reporting was the amount of clean up costs is irrelevant. There is no requirement or prompt on the form suggesting that such a response is sought. That there was no reference to the consideration of clean up costs at the time of the incident as stated in the ROIs of Mr de Groot (whose evidence was that he did not direct his mind to any such issue), Mr Bower and Mr Amidy, also does not assist the Prosecutor in my view. That there is no reference in the ROIs to clean up costs in relation to 9 October 2011 is a neutral factor. The evidence before me of Mr Bower and Mr Amidy's contemporaneous thought processes on 9 October 2011 that clean up costs were not considered by them on 9 October was not undermined in cross-examination. I accept the Defendant's submission that the Prosecutor's suggestion that the evidence is a recent invention was not put to any of the three witnesses who gave that evidence, as it fairly should have been as a foundation for making that submission.

130 Given the evidence before me, the Prosecutor has not proved beyond reasonable doubt that Mr Bower or Mr Amidy formed a view subjectively that material harm as defined in the PEO Act was caused or threatened on 9 October 2011.

131 Although not needing to be decided given my conclusion about Mr Bower and Mr Amidy's respective lack of awareness of material harm on 9 October 2011, an issue that could have arisen is whether Mr Hiatt's awareness alone, given his responsibilities as operations manager, is relevant to a finding of awareness by the Defendant, not the awareness of other employees. I accept the Defendant's submission that the evidence discloses a process of decision-making by the Defendant's employees acting in accordance with the Defendant's internal operational manual which resulted in awareness of the potential for material harm and notification on 10 October 2011 by the employee nominated by the Defendant as the person responsible, Mr Hiatt. The Prosecutor's submission that awareness on the part of any employee is awareness of the Defendant cannot be accepted as practical or reasonable in all circumstances. As demonstrated in this case, large scale operations require complex environmental management and strict protocols for managing incidents, such as occurred in this case. It is reasonable and proper that the Defendant have in place the procedures identified in its operating manual, about which no complaint has been made by the Prosecutor. In this case that complexity results in a decision-making process shared amongst a number of employees culminating in a decision by the person tasked with the responsibility, Mr Hiatt, after receiving advice from other employees.

132 As the Defendant submitted, the incident was fully contained in a small section of dry creek bed which subjectively it was reasonable to consider was marginal as to whether it caused or threatened material, meaning non-trivial, harm to an ecosystem. It was reasonable that the officers of the Defendant vested with relevant responsibilities have an opportunity to confer together on site in relation to the incident in order to determine whether to notify the incident. The relevant officers of the Defendant were there early on Monday morning. As the evidence demonstrates, they notified the incident to the EPA having conferred with Mr Hiatt who formed the view that it should be notified. I make that finding embracing the Prosecutor's submissions about the broad definition of harm and pollution in the Dictionary coupled with s 147. The application of the statute must be given realistic application reflecting the circumstances before this Defendant.

133 I do not accept the Prosecutor's submission that Mr de Groot, Mr Bower, Mr Amidy and Mr Hiatt all knew precisely what had occurred on 9 October 2011 and that nothing they observed on Monday 10 October 2011 departed materially from what they knew on Sunday 9 October 2011 because Mr Bower was communicating by telephone with Mr Amidy and Mr Hiatt. I agree with the Defendant that the assertions of the Prosecutor ignore usual human experience as related by the Defendant in the events as they unfolded. When Mr Amidy and Mr Hiatt saw the tailings on Monday 10 October 2011 they were more extensive and of greater depth than the impression gained by telephone the day before.

134 There is no evidence that Mr Amidy's erroneous belief that the Defendant had 24 hours to report under its environment protection licence (that being a development consent condition according to his oral evidence) according to advice he gave on Monday 10 October 2011 to Mr Bower and Mr Hiatt had any role in Mr Hiatt's decision-making processes on 9 October 2011.

Pollution incident was reported "as soon as practicable"

135 The next element identified by the Prosecutor, necessarily modified by my finding in the previous section as set out in par 13 is whether after becoming aware of the pollution incident and that it was causing or threatened material environmental harm, the Defendant failed to notify the appropriate regulatory authority as soon as practicable of the incident. Notification occurred on the morning of Monday 10 October 2011.

136 The short answer to whether notification was made as soon as practicable is that it was, given my finding that the Prosecutor has not established that the Defendant was subjectively aware through Mr Hiatt or any other employee of a pollution incident threatening material harm as defined in s 147 on Sunday 9 October 2011. Consequently, the duty to notify as soon as practicable did not arise on Sunday 9 October 2011. No complaint is made by the Prosecutor that there was delay in notifying on 10 October 2011, its case is that notification should have happened in the afternoon on 9 October 2011. It is straightforward to conclude that there was notification as soon as practicable on 10 October 2011 given that this occurred shortly after the decision by Mr Hiatt on that day that the incident should be notified. This element of the offence has not been established by the Prosecutor.

137 The Prosecutor has not proved the elements of the offence under s 152 for contravening s 148(2) that the Defendant failed to notify the appropriate regulatory authority of the incident and all relevant information about it "as soon as practicable". The summons should be dismissed.

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Decision last updated: 07 February 2014