Land and Environment Court New South Wales

• Medium Neutral Citation: Environment Protection Authority v Big Island Mining Pty Ltd [2014] NSWLEC 131
• Hearing dates: 11-12 August 2014
• Decision date: 26 August 2014
• Jurisdiction: Class 5
• Before: Pain J

Decision

See paragraph 115

• Catchwords: ENVIRONMENTAL OFFENCES - sentence - pleas of guilty to three charges of water pollution at gold mine - extent of liability of defendant for actions of contractor - strict liability offences - low to medium level of objective seriousness - totality principle applied - mitigating factors considered
• Legislation Cited: Criminal Procedure Act 1986 s 247E, s 257B; Crimes (Sentencing Procedure) Act 1999 s 3A, s 21A, s 22, s 23; Environmental Trust Act 1998; Protection of the Environment Operations Act 1997 Ch 5, s 120, s 123, s 241, s 237, s 244, s 248, s 250
• Cases Cited: Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683; Environment Protection Authority v Bulga Coal Management Pty Ltd [2014] NSWLEC 55; Environment Protection Authority v Centennial Newstan Pty Ltd [2010] NSWLEC 211; Environment Protection Authority v Coal and Allied Operations Pty Ltd [2013] NSWLEC 134; Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268; (2008) 163 LGERA 345; Environment Protection Authority v M A Roche Group Pty Ltd [2013] NSWLEC 191; Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65; Environment Protection Authority v Moolarben Coal Operating Pty Ltd (No 2) [2012] NSWLEC 80; Environment Protection Authority v Ravensworth Operations Pty Limited [2012] NSWLEC 222; Environment Protection Authority v Sibelco Australia Limited [2011] NSWLEC 160; Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273; Environment Protection Authority v Tea Garden Farms Pty Ltd [2012] NSWLEC 89; Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299; Hoare v R [1989] HCA 33; (1989) 167 CLR 348; Kyluk Pty Ltd v Chief Executive, Office of Environment and Heritage [2013] NSWCCA 114; (2013) 298 ALR 532; Markarian v R [2005] HCA 25; (2005) 228 CLR 357; Minister for Planning v Moolarben Coal Mines Pty Limited [2010] NSWLEC147; (2010) 174 LGERA 93; Mill v R [1988] HCA 20; (1988) 166 CLR 59; Muldrock v R [2011] HCA 39; (2011) 244 CLR 120; Pearce v R [1998] HCA 57; (1998) 194 CLR 610; R v Olbrich [1999] HCA 54; (1999) 199 CLR 270; R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; R v Visconti [1982] 2 NSWLR 104; Veen v R [1979] HCA 7; (1979) 143 CLR 458; Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465; Walden v Hensler [1957] HCA 54; (1987) 163 CLR 561
• Texts Cited: Ivan Potas, Sentencing Manual, Law, Principles and Practice in New South Wales (2001, Lawbook Co), Judicial Commission of New South Wales
• Category: Sentence
• Parties: Environment Protection Authority (Prosecutor); Big Island Mining Pty Limited (Defendant)
• Representation: Ms Z Shahnawaz (Prosecutor); Mr T Howard SC (Defendant); Environment Protection Authority (Prosecutor); Baker & McKenzie (Defendant)
• File Number(s): 50083-50085 of 2014

Judgment

Sentencing of defendant for water pollution charges

1 Big Island Mining Pty Limited (the Defendant) has pleaded guilty to three charges that it polluted waters in breach of s 120 of the Protection of the Environment Operations Act 1997 (PEO Act) at or near Majors Creek NSW. Offence 1 occurred between 23-25 February 2013, offence 2 on 1 March 2013 and offence 3 between 28 February and 1 March 2013. The offences are ones of strict liability. A plea of guilty means that the Defendant admits the essential elements of the offences.

2 Section 120(1) of the PEO Act states:

120 Prohibition of pollution of waters

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

Note. An offence against subsection (1) committed by a corporation is an offence attracting special executive liability for a director or other person involved in the management of the corporation-see section 169.

(2) In this section:

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

Evidence

3 The Environment Protection Authority (the Prosecutor) tendered the Statement of Agreed Facts (SOAF) which provides (attachments omitted):

The Pollute Waters Charges

...

3. The particulars of the offences are contained in the Summonses filed with the Court. The three separate water pollution offences occurred as follows:

Pollution incident	Summons No.
Discharge from the Box Cut from 23 February to 25 February 2013 (Incident 1)	50085 of 2014
Discharge from the Box Cut on 1 March 2013 (Incident 2)	50084 of 2014
Discharge from the Site Access Road from 28 February to 1 March 2013 (Incident 3)	50083 of 2014

Big Island Mining

4. Big Island Mining operates the Dargues Gold Mine located at Majors Creek Road, Majors Creek, NSW (the Premises).

5. In February 2012, project approval was granted under the Environmental Planning and Assessment Act 1979 for the Dargues Gold Mine (the Project Approval). A copy of the Project Approval as issued by the Land and Environment Court is at Annexure A. The Project Approval was subsequently modified on 12 July 2012, but those amendments are not relevant to these proceedings.

6. Under the terms of the Project Approval (condition 26), a Water Management Plan was required to:

a. be prepared in consultation with various authorities;

b. contain an erosion and sediment control plan;

c. be submitted to the Director-General of the Department of Planning prior to the commencement of construction; and

d. be implemented.

7. A Water Management Plan was prepared by R.W.Corkery & Co Pty Limited and Strategic Environmental and Engineering Consulting (SEEC) in consultation with the various authorities, including the Office of Environment and Heritage, as required (the Water Management Plan). A copy of the Water Management Plan is at Annexure B.

8. The Water Management Plan contained an Erosion and Sediment Control Plan prepared by SEEC and dated April 2012 (the 2012 ESC Plan) (Appendix 2 to Annexure B).

9. The Water Management Plan (including the 2012 ESC Plan) was approved by the Director-General on 16 May 2012.

10. The 2012 ESC Plan required certain sediment and erosion controls, and certain practices and procedures, to be implemented to ensure that water quality within Spring Creek and Majors Creek was not adversely impacted.

11. Big Island Mining holds Environment Protection Licence number 20095 (the EPL), which, at the relevant time, authorised the carrying out of scheduled development work, including ground disturbing activities and construction activities. Other than the discharge of water from a particular discharge point (which is not relevant for the purposes of this proceedings), the EPL does not permit the pollution of waters. A copy of the EPL is at Annexure C.

12. Big Island Mining is owned by Dargues Gold Mine Limited (ACN 117 848 790) which is itself owned by Unity Mining Limited (ACN 005 674 073).

13. Big Island Mining does not employ any staff. The staff that work on site on behalf of Big Island Mining are employed by Dargues Gold Mine Limited or Unity Mining Limited.

14. In the period of 23 February to 1 March 2013 the works carried out on the Premises involved works associated with the construction of:

a. a Site Access Road from Majors Creek Road on the east of the Premises to the Site Office on the west of the Premises (Site Access Road); and

b. a Box Cut, being an excavated area on the site where access is provided to the underground gold mine (Box Cut) on the west of the Premises.

15. Annexure D is an aerial photograph of the Premises that has been marked to show the location of the following areas:

a. the Site Access Road;

b. the Box Cut;

c. the Temporary Basins;

d. Unnamed Drainage Line 1;

e. Unnamed Drainage Line 2;

f. Spring Creek;

g. Majors Creek;

h. temporary site office and car park area;

i. Culvert Crossing 1; and

j. the boundary of the Premises.

Divalls Earthmoving and Bulk Haulage

16. Big Island Mining entered into an agreement with Denrith Pty Ltd (ACN 060 434 871), trading as Divalls Earthmoving and Bulk Haulage (Divalls) that was titled "General Works Agreement" and dated 4 February 2013 (the Divalls Agreement). The Divalls Agreement is at Annexure E.

17. As part of the tender process for construction work at the Premises, on 29 November 2012, Divalls were informed that all data for the Box Cut, Site Access Road and Tailings Storage Facility could be downloaded from Cortona's File Transfer Protocol site. The Water Management Plan was on this site.

18. Under the terms of the Divalls Agreement:

a. Divalls were required to execute and complete the 'Contract Works' in accordance with the terms of the Divalls Agreement (clause 2.1);

b. the 'Contract Works' were defined to mean "the work specified in Item 2 of Schedule 1 and as described in the Drawings, Specification and any materials or manuals to be supplied as part of that work and includes any Variation" (clause 1.1);

c. Item 2, Schedule 1, set out the details of the Contract Works as being "the excavation and construction of the boxcut, access road, tailings storage facility and associated works at Unity Mining Limited's (Unity) Dargues Gold Mine, as further set out in Schedule 3" (Item 2, Schedule 1);

d. Schedule 3, the "Scope of Contract Works", further attached a 10-page document detailing the scope of services. Page 3 of the document stated "Best practice erosion and sediment control measure to be implemented";

e. The "Drawings" were defined to mean "the Drawings listed or contained in Schedule 7" (clause 1.1);

f. The Drawings listed at Schedule 7 included:

i. construction design drawings for the Box Cut prepared by CRC, Geohart Consultants and Geotesta Consulting Engineers (the Box Cut Plans - Annexure F); and

ii. construction design drawings for the Site Access Road prepared by K & C Brown and Associates (the Site Access Road Plans - Annexure G).

19. On 22 January 2013, Greg Cozens, Project Manager, instructed Divalls by email to download copies of certain relevant documents from the public web site for the project, including a copy of the Water Management Plan, which included the 2012 ESC Plan. The Water Management Plan was not attached to the Divalls Agreement.

20. Divalls commenced work on 11 February 2013.

SEDIMENT AND EROSION CONTROL MEASURES

21. The 2012 ESC Plan contained:

a. notes recommending that works be staged and carried out in a certain way;

b. plans showing the location of certain sediment and erosion control works; and

c. construction notes and diagrams showing how certain sediment and erosion control works were to be implemented.

22. The Box Cut Plans did not contain any information in relation to erosion and sediment control.

23. The Site Access Road Plans showed the location of certain sediment and erosion control works and some of the construction notes on those plans related to sediment and erosion control works.

The Box Cut

24. The Project Approval conditions and the 2012 ESC Plan required the following controls to be installed and practices be followed during the construction phase of the Box Cut:

a. ensuring that best-practice erosion and sediment control measures are implemented during both the construction and operational stages of the project;

b. ensuring that appropriate staging be undertaken to minimise the area of land disturbed at any one time;

c. ensuring that surface water flows are diverted away from disturbed areas and that potentially sediment laden flows from disturbed areas are directed or pumped to sediment controls, this includes installation of:

i. water diversions to ensure that clean water cannot enter the Box Cut construction area; and

ii. water diversions to ensure that dirty water collected at the Box Cut construction area drains or can be pumped from the Box Cut area toward either Sediment Basin 1 or Sediment Basin 2;

d. the installation of Sediment Basin 1 and Sediment Basin 2 near the Box Cut;

e. ensuring that the only dirty water to be captured in the Box Cut is storm water that falls within the surface area of the Box Cut itself;

f. the installation of other erosion and sediment controls, such as sediment fences and straw bales to minimise the risk of sediment from entering downstream drainage lines and Spring Creek;

g. complying with the specifications in relation to the location of soil stockpile areas and practices to control erosion of and catch sediment from soil stockpiles;

h. identification of procedures to ensure adequate capacity in the sediment basins (i.e. treat, de-water and de-silt the basins within 5 days of the conclusion of any rain event); and

i. ensuring that each of the sediment basins has a stabilised outlet to ensure stability for overflows.

The Site Access Road

25. The Project Approval conditions and the 2012 ESC Plan required the following controls and procedures to be put in place during the construction phase of the Site Access Road:

a. ensuring that best-practice erosion and sediment control measures are implemented during both the construction and operational stages of the project and that all roads within the Premises are constructed in accordance with the relevant document;

b. ensuring that surface water flows are diverted away from disturbed areas and that potentially sediment laden flows from disturbed areas are diverted to sediment controls, this includes the installation of:

i. clean water diversions to divert clean water around the entire up-gradient side of the Site Access Road during construction; and

ii. culvert crossings to divert clean water underneath the Site Access Road during construction;

c. inspection of all surface water control structures at least weekly and following any rainfall event of more than 10mm in 24 hours, and maintain a log of inspections to ensure their adequacy and identify where remedial action is required;

d. installation of a sediment fence along the entire down gradient side of the Site Access Road construction area;

e. stockpiling to be undertaken in accordance with the drawings and notes in the 2012 ESC Plan, including the installation of sediment fences around the lower perimeter of the stockpiles;

f. installation of 'energy dissipaters' at set locations along the Site Access Road;

g. adherence to clean water diversion drain sizing and detailing calculations including slope, width, depth and side slope ratio and recommended lining material for each clean water diversion drain around the Site Access Road construction area so that the drains would be capable of conveying a specific size rainfall event;

h. use of specified lining material for clean and dirty water diversion drains (i.e. Jute mesh or vegetated or hard stand such as asphalt);

i. implementation of recommended exposed slope lengths along the Site Access Road construction area; and

j. ensuring that each of the sediment basins has a stabilised rock outlet to ensure stability during a rainfall event.

26. The Site Access Road Plans required that the following controls be installed and practices be followed during the construction phase of the Site Access Road:

a. implementing sediment and erosion control measures which comply with procedures and specifications of the "Blue Book" Landcom, Managing Urban Stormwater - Soils and Construction - Volume 1 - 4th Edition March 2004;

b. stockpiles shall be avoided unless shown in the stormwater management plan; and

c. ensuring silt traps are constructed, including downstream of the culvert crossing construction site in Unnamed Drainage Line 2 prior to commencing which was to be a gabion wall wrapped in bidum membrane with a spillway.

THE WATERS POLLUTED

27. Spring Creek is a small headwater stream. Spring Creek is a tributary of Majors Creek, a larger headwater stream. Spring Creek is generally 2 metres or less in width. It is comprised of still pools and flowing runs with beds of sand, stone and clay, and at the points inspected by Dr Bruce Chessman, had abundant aquatic vegetation and well-vegetated banks.

28. Downstream of its junction with Spring Creek, Majors Creek enters a steep and heavily vegetated gorge. After emerging from this gorge, Majors Creek flows into Araluen Creek, which in turn is a tributary of the Deua River. The Deua River catchment provides 60 per cent of the Eurobodalla water supply for the people of Eurobodalla. Majors Creek provides a water source for rural properties along its course.

29. An Aquatic Ecological Assessment was prepared in relation to the project in November 2011. That report is Appendix 4 to Annexure B.

30. The waters that were polluted included two separate unnamed channels (referred to as "Unnamed Drainage Line 1" and "Unnamed Drainage Line 2" and shown on the map at Annexure D) as well as Spring Creek and Majors Creek.

31. During Incident 1 the discharging water left the incomplete Box Cut excavation, drained into a small sediment basin, drained across the office car park (past the site offices), drained through a culvert pipe underneath the Old Dargues Gold Mine Access Track into Unnamed Drainage line 2 and then into Spring Creek and then flowed to Majors Creek.

32. During Incident 2 the discharging water left the incomplete Box Cut excavation, drained into a small sediment basin and then into two temporary basins, drained across the office carpark (past the site offices), drained through a culvert pipe underneath the Old Dargues Gold Mine Access Track and into Unnamed Drainage Line 2. The discharging water then entered Spring Creek and then flowed to Majors Creek.

33. During Incident 3, the discharging water ran from the Site Access Road construction area, between the intersection with Majors Creek Rd and Culvert Crossing 4, into Unnamed Drainage Line 1, and became yellow and turbid as it continued to flow downstream of the Site Access Road construction area.

34. During each incident, the sediment in the discharging water included soil, earth, silt, clay and/or other suspended solids and/or similar inorganic matter.

THE WATER POLLUTION INCIDENTS

35. There is a weather reporting station located at the Premises that collects rainfall data (Premises' Weather Station).

36. The Bureau of Meteorology has three weather reporting sites in the Majors Creek area. These three sites are:

a. Braidwood (Wallace Street) (Site No. 6910) which is approximately 14.2km from the Premises;

b. Braidwood Racecourse AWS (Site No. 69132) which is approximately 16.2km from the Premises; and

c. Bettowynd (Condry) (Site No. 69006), which is approximately 15.9km from the Premises,

(together, the Three Reporting Sites).

37. The location of the Three Reporting Sites in relation to the Premises is shown on the map at Annexure H.

38. On Wednesday 20 February 2013:

a. the Premises' Weather Station recorded rainfall of 1.1mm; and

b. the Bureau of Meteorology recorded rainfall of:

i. 1.8mm at Braidwood (Wallace Street);

ii. 2.2mm at Braidwood Racecourse AWS; and

iii. 1mm at Bettowynd (Condry).

39. On Thursday 21 February 2013;

a. the Premises' Weather Station recorded rainfall of 0.2mm; and

b. the Bureau of Meteorology recorded rainfall of:

i. 0.6mm at Braidwood (Wallace Street);

ii. 0.4mm at Braidwood Racecourse AWS; and

iii. 0mm at Bettowynd (Condry).

40. On Friday 22 February 2013:

a. the Premises' Weather Station recorded rainfall of 0.9mm; and

b. the Bureau of Meteorology recorded rainfall of:

i. 14.6mm at Braidwood (Wallace Street);

ii. 11.8mm at Braidwood Racecourse AWS; and

iii. 1mm at Bettowynd (Condry).

23 to 25 February 2013 (Incident 1)

41. On Saturday 23 February 2013:

a. the Premises' Weather Station recorded rainfall of 24.6mm; and

b. the Bureau of Meteorology recorded rainfall of:

i. 18.6mm at Braidwood (Wallace Street);

ii. 15mm at Braidwood Racecourse AWS; and

iii. 57mm at Bettowynd (Condry).

42. On Saturday 23 February 2013 at approximately 1:00pm, Greg Cozens (Project Manager, Dargues Gold Mine Limited) was conducting an ad-hoc site inspection of the Premises when he observed turbid water with suspended clay draining from the Box Cut, through the sediment fences and straw bales to the south of the Box Cut, through a small sediment basin, past the temporary offices and into Spring Creek.

43. Greg Cozens contacted Ajanth Saverimutto (Operations Manager, Unity Mining) on Saturday 23 February 2013 to inform him that water was discharging offsite.

44. Greg Cozens returned to the Premises on Sunday 24 February 2013. He again observed that water was discharging from the Box Cut, past the site offices and into Spring Creek. The discharge of sediment laden water was also observed by Rebecca Bigg (Environment Officer, Dargues Gold Mine Limited) on Sunday 24 February 2013.

45. On Sunday 24 February 2013:

a. the Premises' Weather Station recorded rainfall of 44.7mm; and

b. the Bureau of Meteorology recorded rainfall of:

i. 36.2mm at Braidwood (Wallace Street);

ii. 54.6mm at Braidwood Racecourse AWS; and

iii. 62mm at Bettowynd (Condry).

46. On Sunday 24 February 2013, Big Island Mining directed Divalls to excavate two additional sediment basins (the Temporary Basins) along the flow path of the water discharging from the Box Cut towards Unnamed Drainage Line 2. The Temporary Basins were dug in an attempt to slow the water down and to settle out the sediment before it ran offsite. The photos at Annexure I show where the Temporary Basins were dug on 24 February 2013. The location of these temporary basins is shown on the map at Annexure D.

47. On the same day, at Big Island Mining's direction, Divalls commenced the construction of a temporary wall to seal up the point of discharge of the Box Cut, but this work was not completed on this day.

48. On the morning of 24 February 2013, Mr Matthew Dickinson observed the confluence of Spring Creek and Majors Creek, and saw that Spring Creek was, what he described as, a chocolate colour and that Majors Creek was clear. He observed that the water at the confluence of Spring Creek and Majors Creek was, what he described as, brown in colour. He walked downstream of the confluence of Majors Creek and Spring Creek and observed that Majors Creek was, what he described as, a chocolate colour downstream of this point.

49. During the morning of 24 February 2013, at the confluence of Spring Creek and Majors Creek, Mr Bill Waterhouse observed, what he described as, mustard coloured muddy water in Spring Creek. He observed Majors Creek, downstream of the confluence of Majors Creek and Spring Creek was, what he described as, the same mustard colour as Spring Creek and that the water in Majors Creek upstream of the confluence was not particularly dirty and it was, what he described as, a transparent grey, blue, green colour.

50. At approximately 10.40am on the morning of 24 February 2013, Ms Jackie French observed, what she described as deep muddy orange water flowing in Majors Creek at her property (which is approximately 4km downstream of Dargues Reef Mine).

51. On Monday 25 February 2013:

a. the Premises' Weather Station recorded rainfall of 20.8mm; and

b. the Bureau of Meteorology recorded rainfall of:

i. 8mm at Braidwood (Wallace Street);

ii. 7.6mm at Braidwood Racecourse AWS; and

iii. 8mm at Bettowynd (Condry).

52. On 25 February 2013 Mr James Dornan (Project Engineer, Unity Mining) called the EPA Environment Line to report an incident of a discharge of sediment laden water from the Premises to Spring Creek.

53. On Monday 25 February 2013, EPA Officer Matthew Rizzuto inspected the Premises and at the Box Cut, he observed that Sediment Basin 1 had not been installed, the Temporary Basins were full of orangey brown water, a significant amount of loose orangey brown soil around the edges of those sediment basins (see photos at Annexure J) and construction of the wall across the point of discharge from the Box Cut Construction Area had not been completed (the wall was two metres in length and the width of the discharge point was 5 metres in length).

54. On the eastern side of the Box Cut adjacent to Spring Creek, EPA Officer Matthew Rizzuto observed disturbed and cleared soil over a large area which was bounded by a sediment fence. EPA Officer Matthew Rizzuto observed that the surface of the area was directed towards a drainage line which contained hay bales covered in geotextile across part of the drainage line, and that there was sediment on the down-gradient side of the hay bales.

55. The discharge of water from the Box Cut and into Spring Creek stopped sometime between Monday 25 and Tuesday 26 February 2013.

26 to 28 February 2013

56. On Tuesday 26 February 2013:

a. the Premises' Weather Station recorded rainfall of 0.2mm; and

b. the Bureau of Meteorology did not record any rainfall at the Three Reporting Sites.

57. On Tuesday 26 February 2013, EPA Officers Nigel Sargent and Sandra Jones attended the Premises. During this inspection the EPA issued Big Island Mining with a draft Clean up notice.

58. On Wednesday 27 February 2013:

a. the Premises' Weather Station recorded rainfall of 0.1mm; and

b. the Bureau of Meteorology did not record any rainfall at the Three Reporting Sites.

59. On Wednesday 27 February 2013, the EPA issued Big Island Mining a final Clean up notice. Annexure K is a copy of that Clean up notice.

60. Between Monday 25 February and Thursday 28 February 2013 a series of works were carried out at the Premises by Divalls at Big Island Mining's direction, including the following:

a. the completion of the construction of a temporary wall to seal up the discharge point of the Box Cut;

b. the excavation of a deeper sump in the Box Cut enabling it to collect a large amount of water; and

c. the installation of more sediment fences towards the east of the Box Cut.

61. Between Monday 25 February and Thursday 28 February 2013 various works were carried out at the Premises by Big Island Mining, including the following:

a. the installation of a number of strawbale barriers and polythene sediment fences and controls down-slope of the Box Cut;

b. repairing straw bale sediment barriers to the north of the Box Cut (these are shown in Annexure L);

c. the installation of straw bale sediment barriers from the main access road leading into Culvert Crossing 1;

d. the installation of additional sediment fencing along both sides of Culvert Crossing 1; and

e. the installation of additional straw bale structures on the slopes leading down into Culvert Crossing 1.

62. On 27 February 2013,EPA Officers Matthew Rizzuto and Tristan Johnson inspected the Premises at the Box Cut. They observed that the Temporary Basins were full of turbid water. They also observed that the raised wall being constructed at the discharge point of the Box Cut was not complete, that there was no formally constructed discharge controls (such as a rock gabion outlet or lined discharge channel) at the discharge location of the Box Cut and that there was no clean-water diversions installed on the up gradient sides of the Box Cut to stop clean water entering the Box Cut. Photographs at Annexure M show the Box Cut Construction Area and were taken by EPA officers during an inspection undertaken on 27 February 2013.

63. During the inspection on 27 February 2013, EPA Officers Rizzuto and Johnston also inspected the New Site Access Road construction area and observed that there were earthworks across Unnamed Drainage Line 1 at Culvert Crossing 1. The Officers also observed that there was a significant volume of loose soil located in and around the Culvert Crossing 1, that there were a number of sediment fences which had been installed since their inspection on 25 February 2013 but that these sediment fences had exposed soil on both sides of the fences and that there were no structures installed to divert clean water around the construction area which meant that clean water was allowed to move across freshly excavated exposed soil.

64. On 27 February 2013, EPA Officers Nigel Sargent and Sandra Jones inspected Majors Creek at the property at 381 Major's Creek Rd, Araluen, owned by Ms Jackie French, approximately four kilometres downstream of the Premises. On that date, Majors Creek was running and the water within the creek was clear.

65. On Thursday 28 February 2013;

a. the Premises' Weather Station recorded rainfall of 1.3mm; and

b. the Bureau of Meteorology recorded rainfall of:

i. 2.6mm at Braidwood (Wallace Street);

ii. 3mm at Bettowynd (Condry); and

iii. 0mmat Braidwood Racecourse AWS.

1 March 2013 (Box Cut- Incident 2)

66. On Friday 1 March 2013:

a. the Premises' Weather Station recorded rainfall of 24.2mm; and

b. the Bureau of Meteorology recorded rainfall of:

i. 29.4mm at Braidwood (Wallace Street);

ii. 26mm at Braidwood Racecourse AWS; and

iii. 38mm at Bettowynd (Condry).

67. On 1 March 2013 EPA Officers Johnson and Rizzuto observed orangey brown, sediment laden water discharging from the Box Cut into a depression in the ground and then into the Temporary Basins. The water had not been emptied from the Temporary Basins prior to 1 March. Photograph at Annexure N shows the water discharging from the Box Cut. Photographs at Annexure O show the water in the depression in the ground and in the Temporary Basins.

68. The turbid water then discharged from the temporary basins, through and around a number of sediment control structures, across the office car park and into the upstream end of a concrete culvert pipe adjacent to the temporary site offices.

69. The turbid water continued to discharge through the concrete culvert pipe and into Unnamed Drainage Line 2. The turbid water flowed down Unnamed Drainage Line 2 and into Spring Creek. The photograph at Annexure P shows water from Unnamed Drainage Line 2 flowing into Spring Creek.

1 March 2013 (Site Access Road- Incident 3)

70. Unnamed Drainage Line 1 runs perpendicular to the Site Access Road. On 1 March 2013, EPA Officers Johnson and Rizzuto observed that the water in Unnamed Drainage Line 1 upstream of the Site Access Road construction area was clearer than the water downstream of the Site Access Road. The downstream waters were observed to be yellow and turbid. Photograph at Annexure Q shows Unnamed Drainage Line 1 upstream of the Site Access Road.

WATER SAMPLES COLLECTED AT OR IMMEDIATELY SURROUNDING THE PREMISES

71. Greg Cozens and Rebecca Bigg took water samples on Friday 23 February and Saturday 24 February 2013. Rebecca Bigg took water samples on Saturday 25 February 2013.

72. Matthew Rizzuto, of the EPA, took water samples on 27 February and 1 March 2013. The sampling points are shown on the map at Annexure R.

73. A summary of some of the results is set out as follows.

Date sample collected	Identity of collector	Sample Location	Result - Turbidity	Result - Total Suspended Solids (TSS)
23 Feb 2013 sample 1 s	G Cozens or Rebecca Bigg	Unnamed Drainage Line 2 at the Site Office (sample 5)	N/A	1700mg/L
23 Feb 2013 sample 2	G Cozens or Rebecca Bigg	Spring Creek above confluence with Unnamed Drainage Line 2 (sample 4)	N/A	20mg/L
23 Feb 2013 sample 3	G Cozens or Rebecca Bigg	Spring Creek below where water enters from Unnamed Drainage Line 2 (sample 2)	N/A	800mg/L
23 Feb 2013 sample 4	G Cozens or R Bigg	Below the confluence of Spring Creek and Majors Creek (sample 3)	N/A	100mg/L
27 Feb 2013 (Box Cut) sample 5	M Rizzuto	Spring Creek, upstream of the Box Cut construction area (DR3)	15 NTU	<15mg/L
27 Feb 2013 (Box Cut) sample 6	M Rizzuto	Temporary basin below Box Cut area (DR 5)	1000 NTU	45mg/L
27 Feb 2013 sample 7	M Rizzuto	Spring Creek, approximately 50m upstream of confluence with Majors Creek (DR 15).	6.9 NTU	<6 mg/L
27 Feb 2013 sample 8	M Rizzuto	Majors Creek, approximately 20m downstream of the confluence with Spring Creek (DR 17).	6.9 NTU	<6 mg/L
1 Mar 2013 (Box Cut) sample 9	M Rizzuto	Spring Creek, immediately upstream of the Box Cut construction area (DR 23)	49 NTU	<15mg/L
1 Mar 2013 (Box Cut) sample 10	M Rizzuto	Pool 5m down-gradient of the Box Cut (DR 25)	2000 NTU	580mg/L
1 Mar 2013 (Box Cut) sample 11	M Rizzuto	5m downstream of confluence of Unnamed Drainage Line 2 and Springs Creek (DR 31)	120 NTU	24mg/L
1 Mar 2013 (Box Cut) sample 12	M Rizzuto	Unnamed Drainage Line, 1m from where it enters Springs Creek (DR 33)	880 NTU	480mg/L
1 Mar 2013 (Box Cut) sample 13	M Rizzuto	Temporary basin below Box Cut area (DR 35)	470 NTU	380mg/L
1 Mar 2013 (Site Access Road) sample 14	M Rizzuto	Unnamed Drainage Line 1, immediately upstream of culvert crossing 1 (DR 39)	41 NTU	<30mg/L
1 Mar 2013 (Site Access Road) sample 15	M Rizzuto	Unnamed Drainage Line 1, 50m downstream of culvert crossing 1 (DR 40)	310 NTU	300mg/L

INSPECTION OF SPRING CREEK, MAJORS CREEK AND ARALUEN CREEK OF 1 MARCH 2014 AND RELEVANT SAMPLING RESULTS

74. On 1 March 2013 EPA officers Sargent and Jones and Chessman inspected waterways at and downstream of the discharge from the Premises at the following points:

a. Majors Creek and Spring Creek at and around their confluence, including:

i. Majors Creek 50m upstream of its confluence with Spring Creek;

ii. Spring Creek upstream of its confluence with Majors Creek;

iii. The confluence of Spring Creek and Majors Creek;

iv. Majors Creek 100m downstream of its confluence with Spring Creek;

b. Majors Creek about four kilometres downstream of the Premises at the point where it flows through the property of Ms Jackie French;

c. Majors Creek about six kilometres downstream of the confluence of Spring Creek and Majors Creek at a point where it flows past an Anglican cemetery;

d. Araluen Creek and Majors Creek at and around their confluence, including:

i. Araluen Creek immediately upstream of its confluence with Majors Creek;

ii. Majors Creek immediately upstream of its confluence with Araluen Creek

iii. The confluence of Majors Creek and Araluen Creek; and

iv. Araluen Creek immediately downstream of its confluence with Majors Creek.

The waters at and near the confluence of Major Creek and Spring Creek

75. On 1 March 2013 EPA Officers Jones and Sargent, and Dr Bruce Chessman inspected Spring Creek and Majors Creek at and around their confluence. The discharge from the Premises flowed into Spring Creek and from Spring Creek into Majors Creek. The waters of Majors Creek upstream of its confluence with Spring Creek were not affected by the discharge from the Premises.

76. Upstream of the Spring Creek confluence, Majors Creek was flowing strongly and was turbid and a muddy brown colour.

77. The waters of Spring Creek were more turbid in appearance than the waters of Majors Creek upstream of the confluence. The water flowing in Spring Creek was an orangey colour and stood out from the browner colour of Majors Creek.

78. Where Spring Creek flowed into Majors Creek, the difference in the colours of the two creeks could be seen at the point where they mixed at the confluence. Photos at Annexure S show the water from Spring Creek mixing with and entering Majors Creek, showing the difference in the colours between the waters in the two creeks.

79. The following table shows the results obtained for turbidity and suspended solids samples taken at and near the confluence of Spring Creek and Majors Creek on 1 March 2013.

Sample Location	Turbidity	Total Suspended Solids
Majors Creek 50 metres upstream of its confluence with Spring Creek sample 16	29 NTU	8 mg/L
Spring Creek 10 metres upstream of its confluence with Majors Creek sample 17	190 NTU	120 mg/L
Majors Creek 100 metres downstream of its confluence with Spring Creek sample 18	72 NTU	25mg/L

The waters of Majors Creek at 381 Majors Creek Rd, Araluen

80. On 1 March 2013 EPA officers Jones, Sargent and Chessman also inspected Majors Creek where it flowed through the property of Ms French, about four kilometres downstream of the confluence of Majors Creek and Spring Creek.

81. At this point, the EPA officers observed that Majors Creek was flowing fast and was an orangey-brown colour similar to that of Majors Creek just downstream of its confluence with Spring Creek.

82. The following table shows the results obtained for turbidity and suspended solids of samples taken in Majors Creek at the property of Ms French on 1 March 2013.

Sample location	Turbidity	Total suspended solids
Majors Creek at the French property sample 19	82 NTU	40 mg/L

The waters of Majors Creek at the Anglican Cemetery

83. EPA Officers Jones and Sargent, and Dr Bruce Chessman also inspected the waters of Majors Creek at a point where it flows past an Anglican cemetery about six kilometres downstream from its confluence with Spring Creek, and about two kilometres downstream of the property owned by Ms French. At this point, the EPA officers saw a strong flow of orangey brown turbid water in Majors Creek.

84. The following table shows the results obtained for turbidity and suspended solids of samples taken in Majors Creek at the Anglican Cemetery on 1 March 2013.

Sample location	Turbidity	Total suspended solids
Majors Creek at the Anglican Cemetery, about 6kms downstream of the confluence with Spring Creek. sample 20	63 NTU	19 mg/L

The waters of Majors Creek and Araluen Creek at and near their confluence

85. On 1 March 2013, EPA Officers Jones and Sargent, and Dr Bruce Chessman also inspected the waters of Araluen Creek and Majors Creek at and near their confluence, which, following the course of Majors Creek, was about 8-9 km downstream of the confluence of Majors Creek and Spring Creek. The waters of Araluen Creek, upstream of its confluence with Majors Creek, were not affected by any discharge from the Premises.

86. At this point, the EPA officers observed Araluen Creek upstream of its junction with Majors Creek was turbid.

87. The following table shows the results obtained for turbidity and suspended solids of samples taken in Araluen Creek and Majors Creek near their confluence on 1 March 2013.

Sample location	Turbidity	Total suspended
Araluen Creek upstream of its confluence with Majors Creek sample 21	51 NTU	18 mg/L
Araluen Creek immediately downstream of its confluence with Majors Creek at a bridge across Araluen Creek sample 22	49 NTU	< 15 mg/L

88. A map of the sampling points (shaded in pink) is attached at Annexure T.

CAUSE OF INCIDENT 1 AND 2

89. Incidents 1 and 2 were both caused, in part, by the incomplete installation of sediment and erosion controls on the construction site and in part because of rainfall events which mobilised sediment.

90. There was an intervening period of 3 days between Incident 1 and Incident 2. The measures taken in that time did not rectify the inadequacies in the sediment and erosion controls that lead to Incident 1.

91. The map at Annexure U shows the sediment and erosion controls present at the Box Cut prior to Incident 1.

92. The Map at Annexure V shows the sediment and erosion controls present at the time of Incident 2.

93. The sediment and erosion control measures installed prior to Incident 1 and Incident 2 did not fully comply with the requirements of the Project Approval or the 2012 ESC Plan.

94. Prior to Incident 1 and Incident 2 the sediment and erosion controls around the Box Cut area were inadequate in the following ways:

a. staging was not carried out as required by the 2012 ESC Plan;

b. there were no clean water diversions as required by the 2012 ESC Plan (see photos at Annexure W);

c. stripped soil was stockpiled adjacent to the bank of Spring Creek immediately north of the Box Cut without sufficient sediment and erosion controls (see photo at Annexure X);

d. there were inadequate sediment and erosion controls around the temporary site office and site car park areas;

e. the Temporary Basins were not provided with a stable spillway, the soil excavated from the basins was loosely stockpiled around the edge of the basins with no pollution controls to contain dirty water runoff from that material;

f. if the Box Cut was proposed to be used as a sediment basin, it should have been provided with a stable spillway;

g. the point at which the stormwater discharged from the Box Cut was not designed or stabilised (such as via a rock gabion outlet or lined discharge channel) to convey a specific sized flow without eroding or entraining sediment; and

h. construction works to clear vegetated areas were not staged to ensure that the construction site had capacity to prevent / minimise the risk of sediment from entering downstream drainage lines and Spring Creek.

95. The water pollution that resulted from Incidents 1 and 2 could have been avoided / minimised if:

a. the requirements of the 2012 ESC Plan were complied with;

b. best practice erosion and sediment control measures were adopted in accordance with the NSW Blue Book (Landcom 2004);

c. Divalls had complied with the terms of the Divalls Agreement;

d. appropriate staging of sediment and erosion controls had been undertaken;

e. adequate "clean" water diversions had been installed, which would include temporary or permanent clean water catch drains constructed upslope of the works; and

f. adequate controls had been adopted to capture and treat runoff onsite before discharge, which would include functional sediment basins with stabilised spillways.

CAUSE OF INCIDENT 3

96. Incident 3 was caused, in part, by the incomplete installation of sediment and erosion controls on the construction site, and in part because of rainfall events which mobilised sediment.

97. Prior to Incident 3 the sediment and erosion controls were inadequate in the following ways:

a. approximately 1km of the Site Access Road had been cleared between Majors Creek Road and Culvert Crossing 5 with topsoil placed in loose stockpiled windrows on either side of the cleared area;

b. controls to capture and treat runoff on site had insufficient temporary drains on the Site Access Road to reduce surface flow lengths, flow velocities and scouring potential;

c. no sediment fences were implemented along the windrows and the windrows were created through all 5 drainage lines (see photo at Annexure Y);

d. water was running directly down Unnamed Drainage Line 1 and across the areas of stockpiled soil and there were no erosion controls to prevent / minimise the risk of soil in the stockpile from being washed down the Unnamed Drainage Line 1;

e. the roads were cleared though steep terrain without any of the typical sediment and erosion controls for this type of works such as energy dissipaters, sediment check-dams, sediment fences, contours, clean water drainage (see photo at Annexure Z);

f. the only sediment and erosion controls were placed within the drainage lines themselves;

g. at Unnamed Drainage Line 1 there were two straw bales located at the downstream end of the construction works and a geotechnical material covered straw bales approximately 100 meters further downstream;

h. stockpiles of soil had been placed within the banks of the drainage line and on the actual drainage line bank slopes without sediment and erosion controls;

i. there were no clean water bypasses constructed to convey clean water through culvert crossings without entraining sediment.

98. The map at Annexure AA shows the sediment and erosion controls present at the Site Access Road prior to Incident 3.

99. Incident 3 could have been avoided / minimised if:

a. the 2012 ESC Plan had been followed;

b. the sediment and erosion control measures referred to on the Site Access Road Plans had been installed;

c. best practice erosion and sediment control measures had been adopted in accordance with the NSW Blue Book (Landcom 2004);

d. Divalls had complied with the terms of the Divalls Agreement;

e. appropriate staging of erosion and sediment controls had been undertaken;

f. adequate "clean" water diversions were put in place, including temporary clean water controls to convey flows through works in drainage lines crossing the Site Access Road; and

g. adequate controls to capture and treat runoff onsite had been put in place before the discharge described above, including temporary drains on the Site Access Road to reduce surface flow lengths, flow velocities and scouring potential and sediment fences being constructed in key areas.

ENVIRONMENTAL HARM

Actual harm from Incidents 1, 2 and 3

100. The discharge of turbid water from Dargues Gold Mine resulted in actual environmental harm from Incidents 1, 2 and 3 in that there were elevated levels of total suspended solids in Spring Creek and Majors Creek downstream of the Dargues Gold Mine Project.

101. The Australian and New Zealand Environment and Conservation Council Guidelines for Fresh and Marine Water (ANZECC Guidelines) provide guideline trigger values. These trigger values are concentrations, that if exceeded, will indicate a potential environmental problem, and so 'trigger' further investigation. These default trigger values are not designed to be threshold values at which an environmental problem is inferred if they are exceeded. Rather they are designed to be used in conjunction with professional judgement, to provide an initial assessment.

102. Spring Creek and Majors Creek are upland rivers in south-east Australia for the purposes of the ANZECC Guidelines. According to the ANZECC Guidelines, the values for all ecosystem types in south-east Australia reflect high site-specific and regional variability. The explanatory note for this value states that most good condition upland streams have low turbidity but that high values may be observed during high flow events.

103. The elevated levels of total suspended solids resulted in direct alteration of the environment that had the effect of contributing to degradation of the environment by rendering the waters of Majors Creek of an unsightly appearance to at least 4km downstream of the Premises.

104. This harm was limited in duration.

105. After 1 March 2013, the EPA did not inspect Spring Creek or Majors Creek until 15 March 2013. By that date, turbidity levels had returned to low levels, but it is likely that turbidity levels had returned to low levels within a day or two of the rainfall ceasing.

Likely harm resulting from Incidents 1 and 2.

106. Suspended sediment in Spring Creek due to the discharge from Unnamed Drainage Line 2 during Incident 1 and Incident 2 was likely to have caused some minor harm to aquatic life in Spring Creek and Majors Creek after 1 March 2013 which would have been limited in duration. This minor harm would likely have included:

a. reduced photosynthesis and interference with feeding due to reduced light penetration below the water surface;

b. contact of suspended particles with sensitive body parts; and

c. deposition of particles on bottom-dwelling organisms and their habitats.

107. During a survey conducted on 10 December 2013 by an expert engaged by the EPA, two species of frogs were found in Majors Creek, namely, the Stoney Creek Frog (Litorialesueri) and Southern Green Stream Frogs (Litorianudidigitus). It was not possible to assess the actual or likely impacts of the sedimentation events, however, it is possible that the impacts were negligible as the majority of tadpoles would have already attained metamorphosis and left the aquatic stream environment. In addition populations of both appeared healthy at the time of the survey.

ACTIONS TAKEN SINCE THE WATER POLLUTION INCIDENTS OCCURRED

108. On 27 February 2013, the EPA issued Big Island Mining with a Clean up notice (Annexure K). In response to the Clean up notice issued by the EPA, Big Island Mining commissioned SEEC to prepare:

a. a report titled "Erosion and Sediment Control Recommendations for Dargues Reef Gold mining Construction Site Big Island Mining" and dated 5 March 2013 (SEEC Recommendations Report), which identified the erosion and control measures in place at the Premises and made recommendations to improve those measures and minimise the potential for pollution from further construction activities; and

b. a revised Erosion and Sediment Control Plan.

109. On 15 March 2013, the EPA sent a letter to Big Island Mining. A copy of that letter is at Annexure AB. On 21 March 2013, Big Island Mining responded to the EPA. A copy of that letter is at Annexure AC.

110. On 20 March 2013, EPA Officer Nigel Sargent conducted a site inspection at the Premises and observed the new sediment and erosion controls at the Box Cut and at the Site Access Road.

111. On 5 April 2013, EPA Officers Nigel Sargent, Tristan Johnston and Matthew Rizzuto conducted a site inspection of the Premises to inspect the sediment and erosion control measures on the Premises.

112. Big Island Mining:

a. complied with, and required Divalls to comply with, all of the recommendations made by SEEC in the SEEC Recommendations Report within the timeframes agreed with the EPA;

b. complied with, and required Divalls to comply with, the recommendations made in SEEC's weekly reports dated:

i. 5 March 2013;

ii. 21 March 2013;

iii. 26 March 2013;

iv. 5 April 2013;

v. 12 April 2013; and

vi. 19 April 2013.

RAINFALL DURING THE WATER POLLUTION INCIDENTS

113. Annexure AD is a report from the Bureau of Meteorology titled "Significance of four rainfall events near Majors Creek, New South Wales".

4 The Prosecutor tendered the SOAF (exhibit A), an agreed tender bundle (exhibit B), the Australian and New Zealand Guidelines for Fresh and Marine Water Quality (ANZECC guidelines) volume 1 (exhibit C), and a bundle of various documents (exhibit D). Paragraph 14(i) of the affidavit of Mr Matthew Rizzuto, senior operations officer south-east region of the Prosecutor, was read and a photograph taken by him on 25 February 2013 tendered (exhibit E). Marked up maps contained in the SOAF showing where samples 1-21 were taken (exhibit F) were also tendered.

5 Exhibit B contains the transcript of the record of interview (ROI) of Ms Rebecca Bigg dated 15 November 2013 (tab 1), the transcript of the ROI of Mr Greg Cozens dated 23 April 2013 (tab 2), the transcript of the ROI of Mr Andrew McIlwain dated 15 November 2013 (tab 3), the expert report of Mr Brian Wright, soil conservationist, on behalf of the Prosecutor dated 17 April 2014 (tab 4), the expert report of Mr Andrew MacLeod, environmental scientist, on behalf of the Defendant dated 18 June 2014 (tab 5) and their joint expert report dated 14 July 2014 (tab 6). Mr Wright states (at p 23 of his report):

However, the ESCP [erosion and sediment control plan] prepared by SEEC did not provide site specific detail in relation to the temporary management of upper catchment or 'clean' water flows in drainage lines crossing the access road alignment prior to and during construction of culverts (eg piped crossings for plant and vehicles, 'clean' water diversion channels around works, pumping/piping from upstream bunds through works). In my opinion, site specific ESCPs for drainage line management and culvert construction should have been prepared, especially at the west end of the access road. The function of 'clean' water diversion channels and associated crossings is to maintain the quality of 'clean' upper catchment flows across a work area. Failure to implement these temporary measures will result in 'clean' water contamination from bare/disturbed areas and decreased water quality outcomes.

The Stormwater Management Plan for the Access Road prepared by K & C Brown & Associates and accepted by Palerang Council addressed erosion and sediment control. Similarly to the ESCP prepared by SEEC, in my opinion, the plan did not provide site specific detail in relation to the 'clean' water management in drainage lines at culvert sites. The only control shown appeared to be a straw bale sediment trap downstream of each culvert outlet. An example of this limited control is shown in Photograph 6, where a sediment fence has been substituted for straw bales.

6 Mr MacLeod states (at p 18 of his report):

While this is a true statement, I do not believe that a conceptual plan could be expected to contain this level of detail. This is because the ESCP was prepared well before construction commenced to demonstrate the feasibility of the project to adequately manage erosion and sediment control and to satisfy the requirements of the planning approval. It was prepared long before construction methodologies were known on the assumption that such details would be addressed once the construction contractor was engaged and construction methodologies were established.

As noted in Volume 2D of the Blue Book (DECC, 2008), it is usual for erosion and sediment control on road projects to include a 'Primary' ESCP with overarching details, and a series of 'Progressive' ESCPs prepared for each stage or each parcel of construction. This should have been the case for the construction of the access road at the Dargues Reef Gold Mine site.

Although the ESCP dated 3 April 2012 did not include details for clean water management in drainage lines for the reasons detailed above, I concur with Mr Wright that appropriate water management in drainage lines should have been undertaken by the construction contractor during the culvert installation.

7 Their joint report states:

1.2 On the matter of whether the incidents (i.e. the release of sediment-laden water from the premises) could have been prevented or avoided, we agree on the following:

1.2.1 The cumulative rainfall at the site at the time of both incidents exceeded the design capacity of the sediment control devices that would normally be required on a site such as this under the guidelines and recommendations contained in the NSW Blue Book (Landcom, 2004). As a result, sediment laden water would most likely have discharged into Spring and Majors Creeks from the site even if best-practice erosion and sediment controls as defined in the NSW Blue Book were in place because of the volume of rainfall. However, the presence of best-practice erosion and sediment controls as defined by the NSW Blue Book would most likely have reduced the volumes of sediment in discharge water compared to them being absent. We note that best-practice erosion and sediment controls were largely absent at the time of the incidents.

8 In his ROI Mr McIlwain was asked "...Did Divall's have any management or control over the site or does Big Island Mining consider that they had any management or control over the site?" which was clarified to mean in the ordinary use of words, not their specific legal meaning. Mr McIlwain responded by stating "sure. All the activity that's undertaken on site was ultimately done under the guidance of people employed by Dargues Gold Mining" (exhibit B tab 3 p 8 question 46).

9 In his ROI Mr Cozens agreed that Dargues Gold Mine Pty Limited (Dargues) maintained a person on site during all construction works (exhibit B tab 2 p 8 question 45). Mr Cozens stated that Divalls Earthmoving and Bulk Haulage (Divalls) were there as the task specialist, being an earthmoving contractor. Dargues always maintained a presence on site of himself or site supervisors (p 8 question 46). Dargues gold mine had site supervisors including Mr Graham Blowes (p 8 question 47) and Mr Steven Doyle, production manager (p 8 question 48). Mr Cozens stated that there was a pre-start meeting a week prior to construction commencing (p 15 question 83). Mr Cozens also stated that there were pre-start meetings every morning which Graham [Blowes] arranged with Divalls, which would look at what is going to be happening for the day (p 18 question 105).

10 Ms Bigg stated in her ROI that her duties in the lead up to the first incident on 23 and 24 February 2013 were environmental monitoring. She was also working with Greg [Cozens] to ensure that all the erosion and sediment controls had actually been constructed and put in place before works commenced (exhibit B tab 1 p 3 question 16). Her duties are relatively the same now as they were then but site inspections have increased as a result of the incidents, which are undertaken and signed off by her manager (p 3-4 question 7). In the last two weeks of February 2013 Ms Bigg's role concerning sediment and erosion control matters was ensuring that Divalls put those controls in place according to the sediment and erosion control plans, communicating with Mr Cozens at the time the controls were in place, and taking photographs (p 4 question 18). There was a similar set up for the access road (p 4 question 20). If there were any issues Ms Bigg would report them to Mr Cozens who would communicate to Divalls and ensure that it was fixed (p 4 question 21). There was one instance where Ms Bigg reported a sediment and erosion control issue to Mr Cozens concerning the top soil stockpile that had come from the box cut where Ms Bigg felt the height of it did not meet compliance. Mr Cozens communicated that to Divalls (p 4 question 22).

11 It was Divalls's role to install the sediment and erosion controls according to what was on the plan (p 5 question 24). Ms Bigg was asked "did your responsibility extend to setting any of the controls up like sed fences or hay bales or you know, earthworks?" to which Ms Bigg answered "we were involved in putting them in, but it wasn't my responsibility to say what had to be put in place" (p 5 question 25). Ms Bigg was asked whether it was her responsibility or was it someone else's responsibility to check the sediment and erosion controls. Ms Bigg stated that it was collaborative with everybody doing it until the natural environmental manager was put in place (p 5 question 26). Ms Bigg did not remember the exact date the environmental manager was put in place but that it was after the clean-up notice. In the interim, they went back to having Strategic Environmental and Engineering Consulting (SEEC) inspecting every week and putting in additional controls where needed (p 5 question 27).

12 Ms Bigg has an awareness of the "Blue Book" Landcom, Managing Urban Stormwater - Soils and Construction - Volume 1 - 4th edition March 2004 (Blue Book) (p 5-6 question 29) which she had before the first incident, but all the controls were done through the plan with SEEC to that standard (p 6 question 30). The Defendant has given Ms Bigg training as to the checking of sediment and erosion controls (p 6 question 32). The Defendant was supervising the construction of the access road (p 6 question 34). The sediment and erosion control plans being worked towards were the plans incorporated into the actual construction of the access road (p 6 question 35). The process of checking was a daily activity by the Defendant (p 6 question 36).

13 Exhibit D contains a s 193 notice issued under the PEO Act requiring information and records dated 17 June 2013 to the Defendant, a response to that notice by the Defendant, an email from Mr Greg Cozens of the Defendant to Mr John de Groote of Divalls dated 22 January 2013, meeting minutes from 19 February, 11 February and 5 February 2013, daily mine supervisor checklists dated 13 to 28 February 2013, and pre-start and toolbox talk meeting minutes dated 13 to 28 February 2013. A Dargues mine supervision daily inspection sheet by Mr Blowes dated 19 February 2013 states that the "silt fence at south end of boxcut needs redoing. Phill has organised for this to be completed" (p 67). On a Dargues Mine supervisor daily inspection sheet by Mr Doyle dated 20 February 2013 a handwritten note next to the comments section states "raised with Divalls" (p 66). On a Dargues Mine supervisor daily inspection sheet by Mr Blowes dated 21 February 2013 a handwritten note in the comments section states "notify Divalls by hazard report" (p 64).

14 The Dargues box cut meeting minutes on 5 February 2013 state attendees were Mr Cozens, Mr Doyle, Mr Blowes (Dargues/Cortona), Mr de Groote (Divalls) and Mr Beasley (Geohart) (p 57). Discussion of construction drawings, key geotech issues and water drainage from uphill catchment occurred. The action list for Mr Beasley as requested by Mr Cozens includes "review Divalls' procedures (installation and testing)" (p 58). Meeting minutes for phase 1 of the box cut dated 19 February 2013 at which Mr Doyle, Mr Blowes, Mr Cozens (all Dargues employees) and Mr de Groote (Divalls) were present (p 49), state that Mr de Groote and Mr Cozens were to investigate "fast track access road between boxcut and TSF - completed in about 1 month" (p 51). The minutes state concerning box cut drainage "the in-pit drainage has not been designed by Geohart, need to check out options - gutters of run over batter. Will need to be designed for construction." Also concerning daily meeting "John to talk with Simon, junior engineer, re daily meeting and providing information" (p 52).

15 The Defendant tendered extracts from volume 1 and 2 of the ANZECC guidelines (exhibit 1), surface water monitoring results from various locations on the premises conducted by the Defendant on 19 February 2013 (exhibit 2) and an email from Dr Sandie Jones, head operations unit south east region for the Prosecutor, to Mr Cozens inter alia dated 21 March 2013 where Dr Jones states concerning a view of the premises on 20 March 2013 that "Nigel and I were pleased with the opportunity to visit and discuss the works, the improvements made and obvious commitment to continued environmental protection across the site demonstrated by all who showed us around" (exhibit 3).

16 The Defendant read the affidavit of Mr Andrew McIlwain sworn 6 August 2014. Mr McIlwain is the managing director and chief executive officer of Unity Mining Limited (Unity Mining), a director of Dargues, which is a wholly owned subsidiary of Unity Mining, and a director of the Defendant which is a wholly owned subsidiary of Dargues (par 1). On 9 January 2013 Unity Mining acquired Cortona Resources Limited (Cortona). Shortly after its acquisition by Unity Mining, Cortona changed its name to Dargues (par 9). The Defendant operates the Dargues gold mine. The Defendant does not employ any staff. The personnel acting for the Defendant at the Dargues gold mine are employed directly or engaged by Dargues or Unity Mining. Dargues and Unity Mining provide services to the Defendant through its staff in relation to the day to day operation of the Dargues gold mine (par 11).

17 On or around 20 February 2013 Mr McIlwain executed an agreement on behalf of the Defendant between the Defendant and Divalls (the Divalls agreement) (par 13). Divalls was contracted to construct the box cut for the Dargues gold mine, the access road to the mine site, the intersection between the site access road and Majors Creek Road and the tailings storage facility for the Dargues gold mine (contract works) (par 14). Prior to executing the Divalls agreement Mr McIlwain made enquiries and was satisfied that sufficient due diligence had been carried out by employees of Cortona and Unity Mining in relation to Divalls's ability to competently carry out the contract works under the Divalls agreement (par 16).

18 The Defendant engaged Divalls as a task specialist for the physical works required to construct the box cut, the site access road and the tailings storage facility, inclusive of all the associated erosion and sediment control works necessary to comply with the relevant standards. As a result the Defendant relied on Divalls's expertise in relation to those works and did not direct Divalls as to how it should undertake the construction works or the erosion and sediment control works until after the first offence. At that time it became apparent that the Defendant could not rely on Divalls alone to undertake the works necessary to implement the erosion and sediment controls or to recover effective pollution control (par 26).

19 Dargues and Unity Mining employees were generally expected to induct people at the premises, liaise with the local community, conduct regulatory monitoring and reporting, ensure appropriate facilities were available at the premises and off the premises as required, coordinate day to day operations and ensure workplace health and safety requirements were met (par 27). Dargues and Unity Mining employees were neither qualified nor instructed to closely monitor or supervise the execution of the contract works. Unity Mining and Dargues employees were required to coordinate activities on the premises generally rather than to direct or manage Divalls in relation to its obligations under the Divalls agreement (par 28).

20 From 24 February 2013 the Defendant initiated and was actively involved in the implementation and supervision of works undertaken to mitigate the amount of sediment laden water being discharged from the premises (par 31). From the weekend of 24 February 2013 Mr McIlwain requested all Unity Mining and Dargues employees to ensure whatever works were required to mitigate further pollution events were carried out (par 32). Paragraphs 46, 47, 60 and 61 of the SOAF set out the works Unity Mining and Dargues employees and Divalls carried out between 24 and 28 February 2013 in an attempt to stop the flow of sediment laden water. Due to site conditions there were particular workplace and health and safety challenges in the period while it was raining between 23 February and on or around 26 February 2013 which limited the capacity of the Defendant to carry out works associated with the installation and/or repair of erosion and sediment controls in that period (par 33).

21 On 27 February 2013 the Prosecutor issued the Defendant with a clean-up notice. In response to the clean-up notice the Defendant appointed SEEC to make recommendations for such pollution control works as they considered necessary to minimise the potential for continued pollution from the activities occurring at the premises (par 34). The Defendant complied with, and specifically instructed Divalls to comply with all the recommendations by SEEC in their initial recommendations report and their subsequent weekly reports within the timeframes agreed with the Prosecutor (par 35). The Defendant brought additional personnel to the premises to assist with directing and managing the clean-up works (par 36).

22 The Defendant took additional steps to minimise the risk of a similar event occurring including creating the new position of environment and community manager who is responsible for managing the ongoing statutory requirements during the construction, commissions and operation of the Dargues gold mine, and by April 2013 implementing a sediment and erosion control weather procedure that required monitoring weather forecasts and where works may be affected by rainfall events, the installation of all necessary and additional temporary erosion and sediment controls and cessation of works as deemed necessary (par 37). Mr McIlwain now believes that the premises fully comply with the obligations regarding erosion and sediment controls for the works and that these controls go beyond the design criteria required by the Blue Book (par 38).

23 The Defendant accepted that during the offences sediment laden water discharged from the premises and entered Spring Creek and Majors Creek (par 40). Mr McIlwain sincerely apologises on behalf of the Defendant for the occurrence of the offences (par 42). Following the occurrence of the offences the Defendant is committed to minimising the risk of sediment laden water leaving the premises (par 43).

24 Unity Mining is the entity that engages with the community on behalf of its subsidiaries including the Defendant (par 45). Unity Mining has sponsored various local community events and sports teams and facilities referrable to the premises (par 46). Further community benefits were provided in accordance with the planning agreement with Palerang Council (par 47).

25 Mr McIlwain was cross-examined about which officers of Dargues were on site at various times between the commencement of work on 11 February 2013 and the first incident on 23-28 February 2013. Several staff members were on the premises performing various functions none with expertise in sediment control hence the need to obtain outside expert assistance. As to whether the contract works included specific plans for erosion and sediment control measures and whether the schedule of rates in the Divalls contract included all work done on the premises, Mr McIlwain said not, that some work was paid on an ad hoc basis (there being no specific mention of sediment control works in the rates schedule). The Defendant submitted that the content of the contract works was defined by the Divalls contract, not the rates schedule.

Purposes of sentencing

26 Section 3A of the Crimes (Sentencing Procedure) Act 1999 (CSP Act) states the purposes for which the Court may impose a sentence on a defendant are as follows:

(a) to ensure that the offender is adequately punished for the offence,

(b) to prevent crime by deterring the offender and other persons from committing similar offences,

(c) to protect the community from the offender,

(d) to promote the rehabilitation of the offender,

(e) to make the offender accountable for his or her actions,

(f) to denounce the conduct of the offender,

(g) to recognise the harm done to the victim of the crime and the community.

27 The objective and subjective circumstances of the offences must be weighed up in the context of the legislative framework under the PEO Act.

28 The Court must apply the instinctive synthesis approach by identifying all the relevant factors, discussing their importance and making a "value judgment as to what is the appropriate sentence given all the factors of the case": Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 at [26] unanimously following Markarian v R [2005] HCA 25; (2005) 228 CLR 357 at [51] per McHugh J. The sentence must reflect all the relevant objective circumstances of the offences and subjective circumstances of the defendant: see Veen v R [1979] HCA 7; (1979) 143 CLR 458 at 490; Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472-473, 490-491. The sentence should not exceed what is "justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances": Veen v The Queen (No 2) at 472, 485-486, 490 -491, 496; Hoare v R [1989] HCA 33; (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ).

Objective seriousness of water pollution offences

Nature of the offence

29 The nature of the offences is informed by the statutory scheme. The objects of the PEO Act include the protection and enhancement of the environment of New South Wales and prevention of degradation of the environment by the use of pollution prevention and cleaner production. Chapter 5 identifies a range of offences including s 120(1). That offence has an important role in achieving the objects of the PEO Act, as the Prosecutor submitted. The PEO Act in s 241(1) identifies particular factors to be considered where relevant in sentencing for offences under that Act.

Maximum penalty

30 The maximum penalty prescribed by the NSW Parliament for a breach of s 120(1) of the PEO Act is $1,000,000 for a corporation (s 123(a) PEO Act). Maximum penalties are reserved for the worst cases. The gravity of any particular offence should be measured by reference to the maximum penalty for the offence. A maximum penalty is a public expression by Parliament (and, by extension, the general community) of the gravity of the offence: Kirby P in Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 at 698.

Section 241(1)(a) - The extent of the harm caused or likely to be caused to the environment by the commission of the offence

31 Harm to the environment is defined in the Dictionary to the PEO Act to include:

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.

32 Pollution is defined in the Dictionary of the PEO Act to include water pollution. Water pollution or pollution of waters means:

(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, or

(b) placing in or on, or otherwise introducing into or onto, the waters (whether through an act or omission) any refuse, litter, debris or other matter, whether solid or liquid or gaseous, so that the change in the condition of the waters or the refuse, litter, debris or other matter, either alone or together with any other refuse, litter, debris or matter present in the waters makes, or is likely to make, the waters unclean, noxious, poisonous or impure, detrimental to the health, safety, welfare or property of persons, undrinkable for farm animals, poisonous or harmful to aquatic life, animals, birds or fish in or around the waters or unsuitable for use in irrigation, or obstructs or interferes with, or is likely to obstruct or interfere with persons in the exercise or enjoyment of any right in relation to the waters ...

33 In Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 Preston J at [145] held:

Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account.

34 The Prosecutor relied on water quality monitoring data as follows. The total suspended solids (TSS) reading for offence 1 (23-25 February 2013) in Spring Creek was 800mg/L (sample 3) compared to 20 mg/L beforehand (sample 2). For offence 2 also in Spring Creek (1 March 2013) turbidity upstream was 49 nephelometric turbidity units (NTU) and TSS sampled as <15mg/L (sample 9) (already a high reading) compared to 120NTU and 24mg/L in Spring Creek five metres from the confluence with unnamed drainage line 2 (sample 11).

35 For offence 3 (28 February-1 March 2013) the site access road showed turbidity in Spring Creek 10m upstream of the confluence with Majors Creek at 190NTU and TSS of 120mg/L (sample 17), compared to 6.9NTU and TSS of 6mg/L in samples 6 and 7 on 27 February 2013 taken in between the two rainfall events.

36 In relation to Majors Creek, turbidity and sediment were also significantly higher following the discharges being affected by discharges from the box cut and the site access road. On 27 February 2013, turbidity in Majors Creek at its confluence with Spring Creek was recorded as 6.9NTU (sample 8). On 1 March 2013, turbidity in Majors Creek at the confluence with Spring Creek was 72NTU (sample 18), compared with 29NTU upstream of that junction (sample 16).

37 The concentration of TSS in Majors Creek downstream of its confluence with Spring Creek on 27 February 2013 was recorded as less than 6mg/L (sample 8). On 1 March 2013, the concentration of TSS in Majors Creek 100m downstream of its confluence with Spring Creek was recorded as 25mg/L (sample 18). Upstream of the confluence, the concentration of TSS in Majors Creek was 8mg/L (sample 16).

38 The Prosecutor submitted that the ANZECC guidelines provide trigger values which are concentrations that if exceeded indicate a potential for an environmental problem. The trigger value for turbidity for upland streams in NSW as provided in Table 3.3.3 is a surge of 2-25 NTU. Background levels as found in the Aquatic Ecological Assessment commissioned by the Defendant for the Project Approval show turbidity levels generally well within the ANZECC guidelines in Spring Creek and Majors creek but for one site (SW-6) upstream of the affected waters. These levels were substantially exceeded for each of the offences. The environmental harm is objectively serious.

39 The introduction of sediment into the waters of Spring Creek and Majors Creek caused actual harm as follows:

(a) An unknown quantity of discoloured sediment laden water was discharged from the premises and entered into Spring Creek and Majors Creek, from the box cut for a duration of two days from 23-24 February 2013, and for one day on 1 March 2013, and from the site access road for two days from 28 February-1 March 2013;

(b) The incident caused elevated levels of sediment and turbidity as outlined above;

(c) The waters affected were rendered of unsightly appearance. This interfered with the rights of persons to enjoy the waters, as per the definition of harm under the PEO Act. These persons included residents Mr Matthew Dickinson, Ms Jacqueline French and Mr Bill Waterhouse: SOAF at par 48-50. This effect continued for at least 4km: par 103.

40 Likely harm was also caused as an increase in sediment load can result in harm to aquatic biota which would have been for a limited duration, as outlined in the SOAF at par 106, 107.

41 The Defendant submitted that other water quality data must be considered to provide relevant context for the consideration of actual and likely environmental harm. The Prosecutor relied selectively on certain water quality data obtained by the Defendant pursuant to its monitoring obligations. Baseline data for Spring Creek and Majors Creek was obtained as part of the project assessment, reported in the Aquatic Ecological Assessment dated November 2011 (SOAF tab B). The catchment is disturbed by previous mining activity. Water quality was measured in a range of locations within the premises since September 2006, in particular at SW-1 to SW-11 (at locations identified in Table 10 p 44 of the Water Management Plan (WMP)). The range for TSS across various sites was 5mg/L to 180 mg/L with significant fluctuations between sampling locations. From December 2010 to October 2011 upstream of the premises in Spring Creek at SW-1 big fluctuations in TSS from 5 to 1890mg/L were identified. At SW-5 (Majors Creek upstream of the confluence with Spring Creek) there were three occasions when TSS (46mg/L, 68mg/L and 70mg/L) exceeded the concentration of TSS measured on 1 March 2013 in the affected section of Majors Creek just downstream of the Spring Creek confluence (sample 18 showing 25mg/L). At SW-6 in Majors Creek downstream of the premises TSS ranged from 46-70mg/L on three occasions. This site is the same as the site sampled by the Prosecutor on 1 March 2013 (sample 18) which showed 25mg/L.

42 Also overlooked is significantly probative water quality data obtained in Spring Creek and Majors Creek on 19 February 2013 by the Defendant (exhibit 2), just a few days prior to the first of the two rainfall events in question. This shows that the concentration of TSS in Majors Creek downstream of the confluence with Spring Creek (SW-6) before the first incident was 28mg/L, which is slightly higher than the concentration of 25mg/L measured at around the same location on 1 March 2013 (sample 18) during the second incident. Allowing for the sampling variation these figures are of similar magnitude.

43 Water quality data obtained on 27 February 2013 the period in between rainfalls by EPA officer, Mr Rizzuto is summarised at par 73 of the SOAF (samples 5-8). One significant aspect of that data is that, within two days of the cessation of the first rain event, readings for turbidity and TSS had returned to low levels, demonstrating the transience of the turbid, "unsightly" appearance of the waters attributable, in part, to discharge from the premises. (See also par 105 of the SOAF).

44 A measurement taken on 1 March 2013 upstream from Majors Creek in Araluen Creek (sample 21) shows 51NTU and TSS of 18mg/L. That sample is unaffected by Majors Creek and shows relatively high readings. The water quality in Majors Creek 4km downstream of the Spring Creek confluence on 1 March 2013 (sample 19) shows 82NTU and TSS of 40mg/L. This can be contrasted with sample 18 taken near the premises in Majors Creek showing 72NTU and 25mg/L. The samples were taken on the same day. That raises an inference that there were other sources of sediment laden runoff into Majors Creek between the premises and the sampling site 4km downstream.

45 Discharges occurred from the premises during heavy rainfall events in a disturbed catchment. The pollution events were of short duration. The data demonstrates that the actual and likely environmental harm resulting from the three offences was at the lowest end of the possible spectrum of harm.

Finding of environmental harm subsection (a)

46 Incident 1 concerns a discharge of sediment-entrained runoff water from the area of the box cut into Spring Creek during the first of the two rain events on 23-25 February 2013. Incident 2 and incident 3 concern discharge of sediment-entrained runoff water from the area of the box cut and from the site access road into Spring Creek during the second of the two rain events on 28 February-1 March 2013. The SOAF par 89 and 96 state that incidents 1, 2 and 3 were caused in part by the incomplete installation of sediment and erosion controls and in part by rainfall which mobilised sediment. The SOAF par 27, 28 and 30 identifies the waters polluted as two separate unnamed channels, Spring Creek which flows into Majors Creek which in turn flows into Araluen Creek, a tributary of the Deua River. The paths of the polluted waters is identified in the SOAF at par 31 (incident 1), par 32 (incident 2) and par 33 (incident 3).

47 The effects of elevated levels of TSS and turbidity in water as detailed in the SOAF is agreed. Actual harm is described at par 100 and 103 as resulting in direct alteration of the environment by contributing to degradation of the environment in that Majors Creek was unsightly for 4km downstream of the premises. Likely minor harm for incidents 1 and 2 is identified in par 106 and 107 of the SOAF.

48 The trigger values for turbidity in the ANZECC guidelines are concentrations that if exceeded indicate potential environmental problems warranting further investigation (SOAF par 101). Spring Creek and Majors Creek are upland rivers as referred to in the ANZECC guidelines (SOAF par 102). The SOAF does not refer to the actual trigger levels for upland rivers in the ANZECC guidelines as the parties disputed how they apply. The Defendant tendered extracts of volumes 1 and 2 because it wished to show that the NSW EPA had submitted a trigger level of 25NTU for upland rivers was appropriate. The Prosecutor contended the trigger level was the range of 2-25 NTU as found in volume 1. I do not consider that dispute has much role to play, as the exceedance of a trigger level whether considered to be 25NTU (Defendant) or 2-25 NTU (Prosecutor) does not mean that environmental harm does not occur at lesser levels, as the ANZECC guidelines state.

49 Numerous cases state that where the fact that a receiving environment is degraded cannot be used as an argument that pollution has caused no or minimal harm, and the Defendant properly does not seek to make such a case. The investigation undertaken for the Aquatic Ecological Assessment identified a disturbed catchment due to earlier mining activity. Essentially in dispute is the extent to which elevated turbidity impacts and TSS levels in Spring Creek and further downstream in Majors Creek, into which it flows, following the two rainfall events can be attributed to these offences given that there are likely to be other sources of sediment in the catchment and the rain was heavy.

50 The sampling on 23 February 2013 (samples 1, 3, 4), 1 March 2013 (samples 10, 11, 12, 13 box cut samples, 14 and 15 site access road) in the immediate vicinity downstream of the discharge points show high to very high NTU and TSS levels, well in excess of a trigger level whether 35 mg/L or 2-25 mg/L. Environmental impacts occurred at these points. Further samples were taken upstream and downstream of the premises before, in between (27 February 2013) and after the incidents which provide variable results and more context for understanding the environment in which water pollution occurred.

51 The water monitoring data undertaken for the Aquatic Ecological Assessment took samples at various locations above and below the premises and identified a wide range of readings from 5mg/L to 1800mg/L in samples taken over the sampling period of December 2010 to October 2011, as identified extensively in the Defendant's submissions summarised above in par 41. The sample results obtained by the Defendant on 19 February 2013 (exhibit 2) also show results of a similar order to the results of samples following the second incident (par 42 above in the Defendant's submissions). Samples taken between the rainfall events on 27 February (samples 7-8 par 73 SOAF) show low levels compared to the samples immediately after the discharge on 23 February 2013 at the box cut. Yet sample 5 taken upstream of the box cut also on 27 February 2013 shows slightly higher levels (15NTU, <15mg/L) than samples 7 and 8, demonstrating again the variability in readings upstream of the premises. The sampling sites referred to in par 79 of the SOAF taken on 1 March 2013 at or near the confluence of Spring Creek and Majors Creek (samples 17-18) show elevated levels of NTU and TSS. The contrast between samples 19, 20 and 21 (par 82, 84 and 87 SOAF) taken in Majors Creek some distance from the confluence with Spring Creek are identified by the Defendant (par 44).

52 As the Defendant submitted the sampling results referred to above show a wide range of readings across the catchment upstream and downstream of the premises before and after the offences, suggesting the catchment is likely to have other sediment runoff sources within it. These samples suggest that the two rainfall events resulted in elevated turbidity and TSS in the two creeks regardless of the activity at the premises. The offences contributed to turbidity and TSS and therefore to actual environmental harm, particularly close to the discharge points where very high readings were obtained in samples. That impact was likely to dissipate quickly given the relatively low readings achieved on 27 February 2013, in between the two rainfall events. Likely environmental harm, to the extent there was any, also occurred close to the discharge points. The effect of the incidents was likely to be of short duration of a couple of days at most, as the Defendant submitted (par 43). The level of harm was low in the circumstances of these offences.

Section 241(1)(b) - Practical measures that may have been taken to prevent, control, abate or mitigate that harm

53 The Prosecutor submitted that there were practical measures which could have been taken to prevent the offences from occurring, and to control, abate or mitigate the harm. The Defendant failed to take practical measures available to it by:

(a) failing to obtain adequate sediment and erosion control plans with site-specific measures, the erosion and sediment control plan (ESCP) being conceptual only;

(b) failing to provide the ESCP to Divalls as part of the contract documents;

(c) failing to supervise compliance with sediment and erosion control plans (including the ESCP, part of the WMP); and

(d) failing to implement adequate mitigation measures after the first incident.

54 The Prosecutor submitted firstly the ESCP was a conceptual document only with no site specific erosion control plans. The box cut construction plans had no site specific sediment and erosion control plans which contributed to the failure to install adequate measures by the contractor Divalls. It is accepted that the plans for the site access road did have site specific erosion control plans. Compliance with the Blue Book (SOAF par 26(a)) was required and was not achieved (accepted by the Defendant). It is agreed that more than compliance with the Blue Book was needed in order to avert the three incidents but had the Blue Book been complied with the severity of the water pollution would have been reduced. Secondly, the Defendant failed to provide a copy of the ESCP to Divalls. It was simply identified as being available to be downloaded in an email dated 22 January 2013 from Mr Cozens of the Defendant to Mr de Groote of Divalls. More should have been done by the Defendant to ensure that it was downloaded by Divalls (it was agreed that it was not). Thirdly, there was a failure to supervise compliance of Divalls with the ESCP site specific plans by the Defendant. The Defendant exercised control of the work through its numerous employees on the premises and these employees should have taken a more active role in ensuring that measures were implemented when they clearly were not. Fourthly, the measures that were implemented after incident 1 were inadequate and failed to prevent incident 2. The measures implemented by the Defendant since the incidents took place could and should have been implemented earlier, such as creation of the Environment and Community Manager position and the implementation of wet weather procedures.

55 In response to (a)-(c), the Defendant relied on the contract with Divalls to demonstrate that that company was contractually obliged under the Divalls Agreement to implement and maintain erosion and sediment controls in accordance with the Project Approval which included the statement of commitments and the ESCP which called up the Blue Book standards as part of the WMP.

56 The Defendant entered into a General Works Agreement with Divalls (SOAF tab E). Under cl 2.1 of the Divalls Agreement, Divalls was required to execute and complete the "contract works" in accordance with the agreement. The contract works are defined in cl 1.1 to be the works specified in item 2 of Sch 1 (p 2) which states that contract works are the excavation and construction of the box cut, access road, tailings storage facility and associated works at Unity Mining Limited's Dargues gold mine, as further set out in Sch 3 (p 33). Schedule 3 states that the scope of services included within the requirements of this agreement shall be for the excavation and construction of the box cut, access road, tailings storage facility and associated works at Unity Mining Limited's Dargues gold mine. The scope of services is more fully detailed in a document, the icon for which PDF is shown below this statement (p 37) entitled "Cortona Resources Limited, Dargues Reef Mine, Majors Creek NSW, Combined Scope of Works, Box Cut, Access Road, Tailing Storage Facility dated 26 October 2012" (combined scope of works). Under the combined scope of works (p 3), Divalls was put on notice that the premises is at the headwaters of the Deua/Moruya River catchment and that a spring fed creek runs across the premises. It includes the statement that environmental sensitivities at the site include runoff into local drainages (first dot-point) and "best practice erosion and sediment control measure to be implemented" (second dot point) (p 3).

57 Under cl 6.1 (p 7-8), Divalls warranted that:

(a) Divalls had the qualifications, skill and expertise (including the necessary personnel) to carry out and complete the contract works and perform its other obligations under the agreement in accordance with the terms of the agreement;

(b) Divalls was experienced in carrying out works in the nature of the contract works;...

(d) All work under the agreement will be carried out in accordance with:

(i) all applicable laws;

...

(iii) the requirements of all authorities having jurisdiction over the contract works;

...

(vii) the terms of all permits and approvals relating to the site and the contract works, including statements of commitments, environmental management plans and mine operations plans;

(e) the contract works will be completed with due diligence, with the degree of skill and care that may reasonably be expected of a contractor who is appropriately qualified and experienced in carrying out works in the nature of the contract works...

58 Under cl 6.5(a) Divalls was liable to engage and provide all contractor personnel required to ensure that the contract works are carried out in accordance with the agreement and shall engage only competent and sufficiently experienced contractor personnel who have passed all necessary clearances, inductions and training (p 11). Under cl 6.7(a) Divalls was required to ensure compliance with all applicable safety, health and environment laws.

59 Under the special conditions (Sch 2 to the Divalls Agreement p 35), Divalls was required, inter alia, to:

(a) comply with the conditions of the Project Approval and Statement of Commitments, Environmental Management Plans and Mine Operations Plans; and

(b) maintain erosion and sediment control measures around work and laydown areas to minimise impact on surrounding areas and prevent contaminated water entering streams.

60 Under cl 20.7 Divalls could only assign, subcontract, dispose of, declare a trust over or otherwise create an interest in its rights under the agreement if it first obtains the Defendant's written consent (p 30). Clause 20.13 states that this agreement constitutes the entire agreement between the parties in relation to its subject matter and no earlier agreement, understanding or representation (p 31).

61 The Project Approval includes conditions which require compliance with the Statement of Commitments. That requires preparation of an erosion and sediment control plan and a number of other measures, including compliance with the Blue Book. The WMP includes the ESCP (Appendix 2). Surface Water Monitoring occurred at various locations as found in the WMP table 10. The ESCP includes the description of measures to be employed across the premises supported by general notes and drawings ESCP02-ESCP10 incorporating the Blue Book. Surface Water Quality data is contained in Appendix 3. The Aquatic Ecological Assessment by Cardno Ecology Lab (Appendix 4) refers to the water quality testing done over a ten month period between the source of Spring Creek and Majors Creek. The ESCP has detailed drawings of the types of erosion and sediment controls to be employed across the premises and is not a conceptual plan only. Further the site access road plans had detailed erosion and sediment controls, the problem was that these were not implemented by Divalls as was required under the Divalls Agreement. The Defendant relied on the expertise of Divalls in entering into the agreement and while it accepts partial responsibility for what occurred does not consider it should be held entirely responsible for the three incidents given these circumstances.

62 In response to par 53(d) the Defendant accepted as stated in the SOAF that interim measures were attempted to be implemented but these failed to minimise further pollution.

Finding on practical measures to minimise harm subsection (b)

63 As detailed in the SOAF par 94, there were a number of inadequacies in relation to works at the box cut before incidents 1 and 2, such as no staging of works in compliance with the ESCP, no clear water diversions, and soil excavated during construction was stockpiled adjacent to Spring Creek without any pollution controls to prevent that stockpile from then contributing to further discharges, inter alia. Measures that could have been taken to minimise the harm are identified in par 95 of the SOAF as complying with the ESCP, application of best practice measures in conformity with the Blue Book, compliance by Divalls with the Divalls Agreement, staging of sediment and erosion control works, and the installation of adequate clean water diversions, inter alia. The inadequacy of the sediment and erosion control measures at the site access road works is identified in par 97 of the SOAF as clearing with loose stockpiles of topsoil placed in windrows, insufficient temporary drains, no sediment fences along the windrows of soil, and the road was cleared through steep terrain without any typical sediment and erosion controls such as energy dissipaters, sediment fences, clean water drainage inter alia. Measures that could have been taken to minimise pollution are detailed in par 98 and are similar to those in par 95.

64 There were clearly practical measures that could have been taken to minimise the pollution and therefore the harm caused by the three incidents at the premises, and that is accepted by the Defendant. Compliance with the Blue Book was required by the Project Approval which incorporated the WMP. While this was not achieved no more was required by the Project Approval, contrary to the Prosecutor's submission at one point in its written submissions that more should have been done by the Defendant. It is agreed by the two scientists Mr Wright and Mr MacLeod (joint report) that even had the Blue Book been complied with there would have been a discharge of water from the premises given the volume of rain that fell between 23-25 February 2013 and again on 1 March 2013. Had the correct measures been implemented however the water discharged would have been cleaner, meaning less polluted with less harm to the environment.

65 In relation to par 53(a), the experts agreed that more detailed site specific plans were required than the ESCP provided. The Prosecutor's submission that the document was conceptual does not accurately reflect its contents as the Defendant identified that a number of specific measures for use across the premises were identified. Regardless of how it is described, more detailed site-specific plans were required than were available to Divalls. According to the experts Divalls should have prepared these.

66 In relation to par 53(b) the WMP which included the ESCP was clearly part of the contract works given cl 6.1(d) incorporates all approvals relating to the premises. That the ESCP was not physically provided to Divalls by the Defendant is irrelevant. The email dated 22 January 2013 alerting Divalls to its location for downloading (exhibit D p 45, SOAF par 19) is part of the contracting process and does not suggest of itself any failure by the Defendant. There is no evidence before me as to whether Divalls did or did not download the ESCP. That it did not is inferred to be an agreed fact as between the Prosecutor and the Defendant (otherwise there would no point in the Prosecutor raising it). I have not heard from Divalls. Any finding of failure by Divalls is made solely on the basis of what is before me, and lacks knowledge of what Divalls would say about these matters. I accept that the Defendant was reasonably entitled to consider that Divalls would download the WMP as a relevant part of the contract.

67 In relation to par 53(c) concerning the failure to supervise Divalls in undertaking sediment control works, the SOAF par 17-19 identifies the contract documents executed by Divalls. These have been elaborated upon in the Defendant's submissions set out above at par 56-60. The documents do confirm the Defendant's submissions that Divalls gave certain warranties about its expertise to undertake the necessary sediment control works inter alia. This issue is dealt with more appropriately under subsection (d) as it relates to the extent to which the Defendant had or should have had control over the causes of the offences namely whether it should have better supervised Divalls' execution of the works required under the Divalls Agreement.

68 Measures which could have been taken to minimise harm are reflected in what has occurred since, as identified in the SOAF at par 95 and 99 and in Mr McIlwain's affidavit summarised above in par 21 and 22, such as implementing a weather procedure and filling a new position of environment manager to ensure statutory compliance.

69 In relation to par 53(d) criticising the interim measures implemented by the Defendant, additional measures to those undertaken by the Defendant were required, which the Defendant accepted.

Section 241(1)(c) - The extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused by the offence

70 The Prosecutor submitted that the test of foreseeability has been set down by the Court of Criminal Appeal in Kyluk Pty Ltd v Chief Executive, Office of Environment and Heritage [2013] NSWCCA 114; (2013) 298 ALR 532 per Price J at [130]-[131]:

... The question that must be asked is to what extent (if any) the reasonable person in the position of the offender could have foreseen the harm caused or likely to be caused by the commission of the offence. The position of the offender involves a consideration of all the available evidence including what the offender actually knew or ought reasonably to have known.

71 As the holder of Environment Protection Licence 20095, the Defendant was aware of the possibility of harm to the environment through water pollution. This would have been evident from the Project Approval Conditions, the WMP, and the ESCP. The Aquatic Ecological Assessment, commissioned by the Defendant as part of the Project Approval, clearly outlined the risks of harm which could be caused by sediment from earthworks entering the aquatic habitat: (p 25-26 of the Aquatic Ecological Assessment, Annexure B, Appendix 4). The potential for harm therefore was not only foreseeable, but was the subject of previous advice and therefore was actually known in the sense explained in Kyluk Pty Ltd above. The Defendant accepted the harm was foreseeable.

Section 241(1)(d) - The extent to which the person who committed the offence had control over the causes that gave rise to the offence

72 The causes of the offences were insufficient sediment and erosion controls being in place, and rainfall events which mobilised sediment: par 89 and 97 of the SOAF. According to the Prosecutor a further fact which increased the severity of the third offence was the inadequate repairs conducted in the intervening period between the offences. An important cause of the offences according to the Prosecutor's case was the failure to exercise control of Divalls by employees of Dargues acting on behalf of the Defendant. A number of issues relevant to this factor were considered in relation to subsection (b).

73 The Prosecutor essentially argued that the Defendant should have exercised greater control over Divalls to ensure that the Blue Book inter alia was complied with in the control of erosion and sediment at the premises. The Defendant is the licence holder and the operator of the premises as well as the occupier. The Defendant had complete control over the manner in which the construction activities were carried out. The Defendant failed to a commission site-specific sediment and erosion control plan and provided the subcontractors who undertook the installation of the sediment and erosion controls with inadequate instructions.

74 The responses of Mr McIlwain, Ms Bigg and Mr Cozens in their ROIs, the meeting minutes dated 5 and 19 February 2013 summarised above in par 8-14 identify that the Defendant through Dargues's employees had overall control of the premises at all material times and failed to exercise that control appropriately. Under the terms of the Divalls Agreement, the contractors were required to comply with any direction given by the Defendant: cl 3. Also under the terms of the Divalls Agreement, Divalls was to "maintain erosion and sediment control measures around work and lay down areas to minimise impact on surrounding area and prevent contaminated water entering streams". The Prosecutor submitted that this condition did not supersede the actual control and supervision exercised by the Defendant over the contractor's works. The Prosecutor submitted that the Court should give less weight to the special condition contained in the Divalls Agreement schedule than to the practical operations at the premises which are established by the facts. This is particularly so given the lack of specific instruction to Divalls to obtain and comply with the ESCP.

75 The Prosecutor accepted that the rainfall exceeded the design capacity of the sediment basins even if constructed in accordance with the Blue Book, so that the sediment basins would have been overtopped under the rainfall conditions. Had the required controls been in place the quality of water escaping from the premises would have been cleaner. The Project Approval contemplates the discharge of surface water which must comply with a maximum of 50mg/L of TSS in any discharge from sediment collection ponds and this level was clearly exceeded.

76 The Defendant accepted that it was liable for the offences but submitted that its culpability should be regarded as less because it was entitled to rely, and did rely, on the contract with Divalls to deliver the necessary sediment controls effectively on the premises. Divalls were specialists in this area and that expertise was relied on.

Finding on subsection (d)

77 Under s 257 of the PEO Act the Defendant is liable as the occupier of the premises from which pollution has discharged. The question arises of the extent of the Defendant's culpability in the circumstances of these offences given the Prosecutor's submission that the Defendant failed to exercise adequate control over its contractor Divalls in relation to applying sediment and erosion control measures. I found in relation to subsection (b) that there was no failure by the Defendant to provide the WMP to Divalls, it being an explicit part of the contract works which was readily available to Divalls. It was reasonable for the Defendant to expect that Divalls, employed after a due diligence search would make sure it had all relevant contract documents for the work it was to undertake and to follow these.

78 If it is the case that the ESCP, which did contain detailed plans of the types of sediment controls to be employed across the premises was not downloaded by Divalls, there was a gap in the documents apparently used by Divalls. According to the SOAF the construction drawings for the box cut did not contain site specific sediment control measures. The site access road plans did have site specific sediment control measures. I should also refer to the experts' opinion that both the ESCP and the site access road plans provided inadequate site specific plans for sediment control. Mr MacLeod and Mr Wright considered that Divalls should have prepared water management plans for drainage lines once the site specific nature of the work was known. That failure also contributed to the offences occurring.

79 The SOAF at par 95 in relation to incidents 1 and 2 and par 99 in relation to incident 3 identifies the measures that would have minimised the runoff of polluted water, also referred to above in relation to subsection (b) in par 63. The inadequacies in the work that occurred are identified in par 94 in relation to incidents 1 and 2 and par 97 in relation to incident 3. The failures were substantial, should have been obvious to someone with relevant expertise, and relate directly to how Divalls carried out (or did not) the contract works.

80 The issue which arises is should the Defendant have done more before work by Divalls commenced in early February 2013 and during the box cut and site access road work to supervise Divalls to ensure adequate controls as required by the project approval were in place.

81 As identified above in relation to subsection (b), the Defendant emphasised the responsibilities of Divalls under the Divalls Agreement to implement erosion and sediment control measures, as demonstrated by the parts of the Divalls Agreement referred to at par 56-59. Nevertheless, and as the Prosecutor submitted, the ROIs with the Defendant's employees Mr McIlwain, Mr Cozens and Ms Bigg identify their understanding that overall supervision of works remained with the Defendant. Ms Bigg stated in her ROI that her role was to check whether sediment control measures specified in plans were implemented. Mr McIlwain's evidence was that the Defendant through Dargues's employees lacked the expertise to undertake sediment and erosion control works and relied on Divalls's expertise in this area. It follows that the Defendant lacked expertise to ensure that measures were implemented by Divalls in accordance with the contract works generally and in relation to the need for site-specific plans. Expertise to assess on the ground work was also lacking. Given that the failure to provide any or adequate sediment control works appears to have been obvious given the extent detailed in the SOAF, there was failure by the Defendant to adequately supervise Divalls.

Intervening works on the premises

82 The Defendant essentially stepped in after the first incident and had control of the causes of the subsequent incidents in the sense that it caused measures to be taken by Divalls on 24 February 2013 as detailed in Mr McIlwain's affidavit as summarised in par 20 to minimise runoff which were not successful. Work undertaken by Divalls at the Defendant's instruction at the box cut site is detailed in par 60 and 61 of the SOAF. A clean-up notice was served by the EPA on 27 February 2013 which required extensive work to be done including the preparation of a further report by SEEC (par 108 SOAF). Those measures were implemented satisfactorily (par 112 SOAF, email from EPA officer exhibit 3).

83 I am mindful that the experts agreed that it was not possible even if the Blue Book measures had been followed to prevent water pollution occurring given the heavy rain. The intervening works organised by the Defendant carried out on the premises between 25-28 February 2013 included the partial construction of a temporary wall, the excavation of a deeper sump, installation of more sediment fences and repairs to existing controls, inter alia. They were inadequate because drainage lines, discharge controls, and diversions were not installed, and loose soil was stockpiled around the premises including on both sides of the sediment fences (SOAF par 62-63). The temporary basins (constructed on 24 February 2013) were not stabilised and no structures were installed to divert clean water around the construction area inter alia.

84 The Defendant submitted that the work that it was able to complete in the intervening period was limited by the conditions on the premises given the heavy rain as identified by Mr McIlwain in his affidavit summarised above in par 20. The Prosecutor submitted that the evidence only established that some works were done, and that those works were inadequate in preventing the second and third incidents. The Prosecutor submitted that there is insufficient evidence for the Court to make a finding as to the extent of the works that the Defendant was capable of doing. Findings of fact adverse to the Defendant must be established by the Prosecutor beyond reasonable doubt per R v Olbrich [1999] HCA 54; (1999) 199 CLR 270. The Prosecutor has the onus of establishing the inadequacy of the Defendant's actions. According to Mr McIlwain's unchallenged evidence it was impractical for the Defendant to have done more on or after 24 February 2013 given the site conditions. This aspect of the circumstances of the offences is a neutral factor in considering subsection (d).

85 Overall I consider that the Defendant shares culpability with the contractor Divalls for the pollution which discharged from the premises, to a greater degree than the Defendant submitted. As the operator of a gold mine of this size the Defendant should have ensured it had sufficient expertise to confirm that its project approval was being complied with, including where a contractor selected for its particular skills was being employed. That obligation included the ability to ensure adequate implementation of controls on the ground. As the Prosecutor submitted it is concerning that these offences occurred in the first two weeks of work on this new project, accepting that runoff was not entirely preventable given weather conditions.

Conclusion on objective circumstances

86 The circumstances of the offences are that, while environmental harm was low, practical measures were available to minimise that harm and there appears to have been a substantial failure to implement appropriate sediment control measures on the premises at two locations, the harm was foreseeable and the Defendant shares culpability with the specialist contractor. This matter falls within the low to medium range of objective seriousness.

Subjective circumstances

87 There are several mitigating factors which suggest that any penalties imposed should be reduced. These are identified in s 21A(3) of the CSP Act.

Early guilty pleas

88 An early plea of guilty is a mitigating circumstance (s 21A(3)(k), s 22 of the CSP Act). The Defendant entered pleas of guilty to the charges on their first mention in Court on 4 April 2014. The Defendant is entitled to the full discount of 25 per cent for the utilitarian value of an early plea of guilty as stated in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152]. The utilitarian value of a plea is generally intended to reward an early plea which saves a prosecutor and the Court expenditure of time and money in case preparation and management.

The Defendant's cooperation with the Prosecutor's investigation

89 The Court is also required to take into account the assistance provided by the Defendant to law enforcement authorities (s 21A(3)(m), s 23 of the CSP Act). The Defendant has at all times cooperated with the Prosecutor in its investigation of the incidents. The Defendant made staff who were involved with all three water pollution incidents available for interviews with the EPA. The Defendant has promptly provided answers to all statutory notices. The Defendant has negotiated with the Prosecutor to reach an agreed position on the SOAF.

Good corporate citizen

90 Mr McIlwain's affidavit (par 24) sets out the extent of community contributions made by the Defendant. The Prosecutor submitted this should be accorded less weight as it was required under the Project Approval in any event.

No prior convictions

91 The Defendant has no prior convictions for any environmental offence in NSW: s 21A(3)(e) of the CSP Act.

Unlikely to reoffend

92 I consider the Defendant is unlikely to reoffend, a relevant matter under s 21A(3)(g) of the CSP Act. It has implemented procedures as identified by Mr McIlwain which will minimise the risk of a repeated offence.

Contrition and remorse

93 The Defendant has unreservedly expressed its contrition (affidavit of Mr McIlwain at par 42). I accept the Defendant's counsel's submission that the actions of the Defendant are consistent with that expression of contrition in that in addition to pleading guilty at the earliest opportunity:

(a) the Defendant acted promptly and vigorously to attempt to rectify the deficiencies in the erosion and sediment controls when it was alerted to them;

(b) in the period since those deficiencies were identified, the Defendant has never sought to shy away from them or disguise them.

94 To the extent that the Defendant also submitted that it had worked hard and consistently towards the re-engagement and support of the local communities since the commission of the offences where that was required by the Project Approval in any event such actions carry less weight. That the Defendant has agreed to facts, and has adduced evidence, in which its deficiencies have been identified has already been considered in the context of cooperation with the Prosecutor above.

Further sentencing considerations

General deterrence

95 The Prosecutor submitted and I accept that the need for general deterrence is one of the main purposes of punishment. The offences should be seen in the broader context of pollution control and in that context general deterrence is important. Any penalty ultimately imposed on the Defendant must incorporate an element of general deterrence because:

(a) the objects of pollution control legislation require a substantial sentence to punish the Defendant, to deter others and to encourage full compliance with the relevant Act by the Defendant and others;

(b) the object of the legislation is to prevent pollution and to do this, inter alia, by the deterrent effect of a substantial fine and by, in consequence, persuading the industries concerned to adopt preventative measures;

(c) offenders will not be deterred from committing environmental offences by the imposition of nominal fines; and

(d) a penalty for a breach must be sufficient to compel attention to environmental issues to ensure that the Defendant, and others, are encouraged to comply with the law and that the environment is not exposed to risk of harm.

96 A clear message needs to be sent to other companies engaging in similar operations that positive steps must be taken to ensure water pollution does not occur. Minister for Planning v Moolarben Coal Mines Pty Limited [2010] NSWLEC 147; (2010) 175 LGERA 93 at [46] was relied on.

97 The Defendant accepted that general deterrence is relevant but submitted that for strict liability offences the penalty imposed should not place an unfair burden on community education citing Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561 at 570.

Specific deterrence

98 The Prosecutor submitted that specific deterrence is a matter to which the Court should give weight. Specific deterrence is a purpose of sentencing identified in s 3A(b) of the CSP Act and has been considered relevant where a defendant continues in the same area of operation in which an incident has occurred as is the case for this Defendant. The pollution occurred within two weeks of commencement of construction works on a new and substantial mining project. While significant steps have been taken to improve sediment and erosion control monitoring and management, given the nature of the Defendant's activity this consideration applies in sentencing.

Evenhandedness

99 The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty (R v Visconti [1982] 2 NSWLR 104). This principle must always be applied subject to the particular circumstances of the case before the Court (Hoare v R).

100 I have set out cases which both parties relied upon in earlier judgments such as Environment Protection Authority v M A Roche Group Pty Ltd [2013] NSWLEC 191 at [54]-[58] inter alia. Some of the same summaries are repeated below. The Prosecutor relied in particular on Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65, Environment Protection Authority v Tea Garden Farms Pty Ltd [2012] NSWLEC 89, Environment Protection Authority v Sibelco Australia Limited [2011] NSWLEC 160, Environment Protection Authority v Ravensworth Operations Pty Limited [2012] NSWLEC 222, Environment Protection Authority v Coal and Allied Operations Pty Ltd [2013] NSWLEC 134, Environment Protection Authority v M A Roche, Environment Protection Authority v Moolarben Coal Operating Pty Ltd (No 2) [2012] NSWLEC 80, Environment Protection Authority v Snowy Hydro Limited [2008] NSWLEC 264; (2008) 162 LGERA 273 and Environment Protection Authority v Centennial Newstan Pty Ltd [2010] NSWLEC 211. All are cases concerning the discharge of sediment into waterways. An additional case referred to by the Defendant was Environment Protection Authority v Bulga Coal Management Pty Ltd [2014] NSWLEC 55. The Defendant submitted this matter is less serious than all these cases.

101 Snowy Hydro Ltd concerned a series of related incidents which occurred over four days while a contractor carried out spillway upgrade and outlet works in and immediately downstream of Jindabyne Dam. Between 4 and 11 tonnes of sediment were discharged into the Snowy River as a result of the works, stretching 15km downstream of the only sediment control, a permeable silt curtain. The environmental harm was minor and short term. The offence was of moderate objective seriousness. Snowy Hydro was fined $100,000 after discounting for subjective circumstances (head sentence approximately $125,000). The contractor was convicted of the identical offence and was also fined $100,000: Environment Protection Authority v Fulton Hogan Pty Ltd [2008] NSWLEC 268; (2008) 163 LGERA 345.

102 In Centennial Newstan the defendant pleaded guilty to polluting an unnamed creek (the waters of which ultimately flowed into Lake Macquarie) over four days a second offence under the PEO Act. The defendant was the owner and operator of a longwall mining operation. The defendant agreed that between 1.4ML and 1.8ML of sediment laden water was discharged into the unnamed creek. On discovery of the discharge the defendant's response was immediate and appropriate. The defendant continued mitigatory, clean-up and rehabilitation works and officers of the prosecutor advised that no further work was required. The offence was of moderate objective gravity. While the incident gave rise to potential for serious environmental harm, the actual environmental harm was in the relatively low range in the long term. The defendant entered an early guilty plea. Subjective circumstances included that the defendant was remorseful and cooperated with authorities in relation to the management and clean-up of pollution. The defendant was fined a penalty of $150,000 reduced to $105,000.

103 Sibelco concerned sediment laden waters being discharged into a gully and then Middle Brook. The discharge was estimated to be between 2.8ML and 5ML of water containing sediment. The Court found there was moderate actual harm to the environment given the volume of sediment in the creek and the impacts. Environmental harm caused was found to be in the low to moderate range. There were practical measures which could have been taken by the defendant. Those measures have since been implemented and could have been implemented before the incident. The harm was foreseeable. The objective gravity was considered to be low to moderate. The Court made an environmental services order in the amount of $78,000 in lieu of a penalty (head sentence $120,000).

104 Moolarben concerned sediment laden water comprised of soil, mud and clay being discharged into Bora Creek, an ephemeral stream which was more often dry than wet. There were four incidents of discharge, in three the quantity was unknown, in one it was estimated to be 16,200L. The actual harm was limited to the visual effect of the discharges and the elevated levels of suspended solids, turbidity and nutrients. The potential harm arose from the degraded quality of the water that was discharged. The environmental harm, particularly in the long term, was found to be towards the lower end of the range. The Court found that the defendant was aware of the practical measures that could have been taken to prevent or mitigate harm. The harm was found to be foreseeable. Specific deterrence was warranted. The offence was considered to be in the medium or mid-range objective gravity. A discounted fine of $105,000 was imposed with reduction of a head sentence of $150,000.

105 In Moolarben (No 2) a deliberate discharge of sediment laden water resulted in pollution of Bora Creek a second time and extended to a point in the Goulburn River approximately 72km from its confluence with Bora Creek. The environmental harm was found to be low to moderate. While no actual harm was evidenced, there was potential for significant environmental harm. The offence was found to be of moderate objective gravity. The appropriate fine was $150,000, which was discounted to $112,500.

106 In Tea Garden Farms while an employee of the defendant was excavating at the base of a dam wall to replace a blocked drainage pipe an 11m section of the dam wall partially collapsed, resulting in sediment laden water from the dam flowing approximately186m into North Arm Cove which forms part of the Port Stephens Great Lakes Marine Park. Environmental harm was caused because the physical condition of the waters of the Marine Park was altered by reason of the flow of sediment from the property into those waters. There was potential for harm to the oysters growing in North Arm Cove. The environmental harm was found to be in the relatively low range and was foreseeable. There were practical measures which could have been taken to prevent or mitigate harm. The defendant should have engaged a suitably qualified engineer or experienced dam builder to reduce the risk of a collapse and to avoid the escape of polluted water. The objective seriousness of the offence was low to moderate. The defendant was ordered to pay $77,000 towards two environmental projects (head sentence $110,000).

107 Ravensworth concerned sediment laden water (approximately 1.64ML) being discharged into Bowman's Creek, a tributary of the Hunter River. The Court found the actual harm was minimal and the environmental harm was low. There were practical measures that could have been taken to prevent the harm which was foreseeable. The defendant was found to have had a low level of culpability as the erosion and sediment control plan, the breach of which led to the offence, would have been adequate if it had been properly complied with by a contractor. The case was at the lower end of the low to moderate range of seriousness. The Court imposed a discounted fine of $50,000 (head sentence $80,000).

108 Coal and Allied Operations concerned sediment laden waters (6.8ML over five days) flowing from premises into a drainage channel which flows to Salt Pan Creek and Newport Farm Lagoon. The Court found there was no actual harm but there was short-term potential harm for two or three weeks following the incident. The environmental harm was assessed as low. Practical measures could have been taken to prevent the incident and the harm was foreseeable. The Court found that the defendant showed remorse by implementing measures to improve sediment controls and having a proactive approach to the incident. The offence was found to be at the upper end of the spectrum of low objective seriousness. The Court imposed a discounted fine of $45,000 (head sentence approximately $60,000).

109 Each case must be determined on its own facts so that none of the cases surveyed is directly analogous. I consider the matter is more serious than in Ravensworth and Coal and Allied. The circumstances in Snowy Hydro, where I note the contractor was also prosecuted, have some similarity. The circumstances of Moolarben (No 2) are clearly more serious given the deliberate discharge of sediment laden waters by the defendant in that matter.

Totality principle

110 The principle of totality in sentencing applies given the similar nature of the three offences by the Defendant and their close proximity in time, see Mill v R [1988] HCA 20; (1988) 166 CLR 59 and Pearce v R [1998] HCA 57; (1998) 194 CLR 610. Ivan Potas, Sentencing Manual, Law, Principles and Practice in New South Wales (2001, Lawbook Co), Judicial Commission of New South Wales, at p 27 states:

The totality principle is a well-established principle of sentencing to be applied by the court when sentencing an offender for more than one offence. It requires a judge or magistrate to determine an appropriate sentence for each offence, consider questions of cumulation or concurrence and then, reviewing the aggregate sentence, consider whether it is "just and appropriate".

Conclusion on penalty

111 Taking account of the objective and subjective factors relevant to this sentencing exercise I consider that were I to impose penalties for the offences these should be in the order of $120,000 reduced by 35 per cent to $78,000 for offence 1, $15,000 for offence 2 and $10,000 for offence 3. As I consider below, I will make an environmental services order.

Costs

112 The Prosecutor seeks and is entitled to its legal costs under s 257B of the Criminal Procedure Act 1986. It also seeks an order for the payment of its investigation costs as provided for in s 248 of the PEO Act. I will order that these costs be payable by the Defendant.

Publication order made

113 Under s 250(1) of the PEO Act the Court can consider the imposition of additional orders. Such orders can be made in addition to or regardless of whether any penalty is imposed (s 244(2), (3)). The parties have agreed the terms of a publication order under s 250(1)(a) of the PEO Act and where publication should occur and I will make such an order.

Environmental services order

114 The parties have agreed that this is an appropriate matter for an alternative order under s 250(1)(e) which provides that payment be made to a specified organisation for the purposes of a specified project for the restoration or enhancement of the environment. The parties have provided details of a possible project for such an order. I agree with the parties that such an order is appropriate in this matter and can be ordered instead of the imposition of a fine by way of penalty.

Orders

115 The Court makes the following orders:

(1) Big Island Mining Pty Ltd is convicted of each charge.

(2) Pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997 Big Island Mining Pty Ltd is to pay to the Upper Deua Catchment Landcare Group Inc within 28 days of this order, the amount of $103,000 to be used for the Riparian health works in and around Araluen Creek, as set out in Annexure A.

(3) All future references by Big Island Mining Pty Ltd to its funding of the Riparian health works in and around Araluen Creek shall be accompanied by the following passage (pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997):

Big Island Mining's contribution to the funding of the Riparian health works in and around Araluen Creek is part of a penalty imposed on it by the Land and Environment Court of NSW after it was convicted of offences against s 120(1) (water pollution) of the Protection of the Environment Operations Act 1997(NSW).

(4) Big Island Mining Pty Ltd, under s 250(1)(a) of the Protection of the Environment Operations Act 1997 must at its expense, within 28 days of the date of this order cause a notice in the form of Annexure B to be placed within the first 5 pages of the following publications at a minimum size of 10cm x 18cm:

(a) The Braidwood Times;

(b) The Sydney Morning Herald; and

(c) Australian Mining Magazine.

(5) Within 35 days of the date of this order, Big Island Mining Pty Ltd must provide to the Environment Protection Authority a complete copy of the page of the publications in which the notice appears.

(6) Pursuant to s 257B of the Criminal Procedure Act 1986, Big Island Mining Pty Ltd is to pay the Environment Protection Authority's professional costs of $70,000.

(7) Pursuant to s 248 of the Protection of the Environment Operations Act 1997 Big Island Mining Pty Ltd is to pay the investigation costs of the Environment Protection Authority of $23,000.

(8) Exhibits to be returned.

 

 

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Annexure A (PDF)

Annexure B (PDF)

 

Decision last updated: 28 August 2014