Land and Environment Court New South Wales

• Medium Neutral Citation: Environment Protection Authority v Moolarben Coal Operations Pty Ltd (No 2) [2012] NSWLEC 80
• Hearing dates: 14, 15 July 2011
• Decision date: 19 April 2012
• Jurisdiction: Class 5
• Before: Craig J

Decision

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

2. The defendant is fined the sum of $112,500.

3. The defendant must pay the prosecutor's legal costs of the proceedings, agreed in the sum of $63,000.

4. The defendant must pay the prosecutor's investigation costs under s 248 of the Protection of the Environment Operations Act, agreed in the sum of $314.

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

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

(ii) the Mudgee Guardian.

6. Exhibits may be returned.

• Catchwords: ENVIRONMENTAL OFFENCES:- water pollution - s 120(1) of the Protection of the Environment Operations Act 1997 - release of sediment-laden water by unblocking a culvert beneath an embankment retaining that water - inadequate pumping capacity to move retained sediment run-off to dirty water storage dams - failure to carry out adequate erosion and sediment control works - potential for discharge of sediments identified before the offence was committed - plea of guilty - sentencing principles - utilitarian value of early guilty plea when evidence on sentence is contested - prior offence - application of the totality principle - publication order
• Legislation Cited: Crimes (Sentencing Procedure) Act 1999; Environmental Planning and Assessment Act 1979; Protection of the Environment Operations Act 1997; Threatened Species Conservation Act 1995
• Cases Cited: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2011] NSWLEC 36; Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65; Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299; Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357; Minister for Planning v Moolarben Coal Mines Pty Ltd [2010] NSWLEC 147; (2010) 175 LGERA 93; R v AB [2011] NSWCCA 229; R v Borkowski [2009] NSWCCA 102; (2009) 195 A Crim R 1; R v Finnie [2002] NSWCCA 533; R v Harris [2007] NSWCCA 130; (2007) 171 A Crim R 267; R v Holder (1983) 3 NSWLR 245; R v M.A.K.; R v M.S.K. [2006] NSWCCA 381; (2006) 167 A Crim R 159; Regina v MMK [2006] NSWCCA 272; (2006) 164 A Crim R 481; R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566; R v Olbrich [1999] HCA 54; (1999) 199 CLR 270; R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383
• Category: Sentence
• Parties: Environment Protection Authority (Prosecutor); Moolarben Coal Operations Pty Limited (Defendant)
• Representation: Mr D K Jordan (Prosecutor); Ms S A Duggan SC (Defendant); Department of Environment, Climate Change & Water (Prosecutor); Sparke Helmore Lawyers (Defendant)
• File Number(s): 50042 of 2010

Judgment

1 The defendant, Moolarben Coal Operations Pty Ltd, pleads guilty to a charge that on or about 27 December 2009 it polluted waters, contrary to s 120(1) of the Protection of the Environment Operations Act 1997 (the POEO Act). It is now necessary to sentence the defendant for this offence.

2 The offence occurred when, at about 3.30pm on 27 December 2009, a volume of sediment-laden water was discharged into Bora Creek near Ulan in the Central Tablelands of New South Wales. Bora Creek is a tributary of the Goulburn River. After being discharged into Bora Creek, the sediment-laden waters flowed into the Goulburn River. The sediment comprised soil, earth, mud and clay.

3 Section 120 of the POEO Act provides:

"120 Prohibition of pollution of waters

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

(2)  In this section:

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

4 The facts pertaining to the commission of the offence are not disputed between the parties. They are recorded in a Statement of Agreed Facts prepared cooperatively between the prosecutor and the defendant. That Statement has been supplemented by further evidence led by each party. Ultimately, much of that additional evidence was not in contest.

Moolarben Coal Project

5 On 6 September 2007, Moolarben Coal Mines Pty Limited obtained project approval under Pt 3A of the Environmental Planning and Assessment Act 1979 (the EPA Act) to carry out what was described as the Moolarben Coal Project (the Project). The site of the Project was a large area of land at Ulan approximately 40km north-east of Mudgee (the Project Site). The approval of the Project authorised the construction and operation of an open cut and underground coalmining operation that included facilities for coal handling, coal washing and rail loading together with associated infrastructure. The estimated cost of the Project was $220M. When operational, the mines were anticipated to have a capacity to produce about 10 million tonnes of coal per annum.

6 Moolarben Coal Mines Pty Limited holds mining leases over the area to which the Project relates. Work preparatory to the commencement of mining operations involved the establishment of what is described as an infrastructure area. It is the area within the Project Site upon which the various facilities that I have earlier described were intended to be located. This included the area upon which a rail spur and rail loop were to be located so as to facilitate the transport of coal from the site by rail. It is convenient to describe the area upon which these various works were intended as "the Infrastructure Area".

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

Licences and approvals

8 The defendant is the operator of the Project Site. It holds the Environment Protection Licence under the POEO Act for the carrying out of coalmining and the conduct of coal works. Included among the conditions imposed by the Environment Protection Licence was a condition limiting the discharge of waters from the site to two discharge points together with a condition controlling the quality of water authorised to be discharged.

9 A condition of the project approval granted by the Minister under Pt 3A of the EPA Act to Moolarben Coal Mines Pty Limited required the adoption and implementation of a water management plan. A component of that plan was an erosion and sediment control plan. Such a plan was approved by the General Manager of Moolarben Coal Mines Pty Limited in December 2008 (the ESCP). That plan was one prepared for the construction phase of the Project, anticipated to take approximately 15 months. Its provisions were directed to those activities intended to be undertaken within the Infrastructure Area.

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

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

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

          •Pollution of clean water running onto the site;

•Increased surface erosion from disturbed and rehabilitated areas through the removal of vegetation and the stripping of topsoil;

•Increased surface runoff from road construction and hard stand areas;

•Increased movement of sediments resulting in an increased pollutant load entering the natural water system; and

•Siltation and/or erosion of watercourses and water bodies."

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

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

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

12 The statement in the ESCP to the effect that erosion and sediment controls are to be established before any site disturbance takes place is important to be noticed. That statement reflected one of the obligations imposed by a condition of the approval granted by the Minister for Planning under Pt 3A of the EPA Act. Plans identifying the location of the various structures and measures required to be implemented to manage erosion and sediment were appended to and formed part of the ESCP.

Construction activity

13 Earthworks within the Infrastructure Area commenced on 13 March 2009. Between that date and early June 2009 approximately 53 hectares of the Project Site were cleared or the ground surface disturbed. Most of this area was left as bare earth with little vegetative cover. At the time of commencing earthworks the majority of erosion and sediment control measures and structures identified as being required by the ESCP had not been put in place. Indeed, those measures and works were still incomplete in December 2009.

14 Among the earthworks that had been undertaken within the Infrastructure Area prior to June 2009 was the construction of a 2m high earthen bank across Bora Creek. This bank was located approximately 800m upstream of the confluence of the Creek with the Goulburn River. The earthen bank was constructed in order to accommodate the proposed rail loop. The rail line for that loop was intended to be located along the top of the bank once constructed to its design height.

15 Construction of the earthen bank had the effect of damming Bora Creek. Water dammed by the bank contained sediment run-off from the disturbed upstream catchment of the Infrastructure Area.

Pollution incidents in June 2009

16 Between 8 and 23 June 2009 there were four discharges of sediment-laden water from the Infrastructure Area into Bora Creek and then to the Goulburn River (the June 2009 Discharges). The first of the four discharges that occurred in June 2009 was the result of sediment-laden water overtopping the earthen bank as then constructed across Bora Creek. As a consequence of the June 2009 Discharges, pollutant extended into the Goulburn River for a distance of something under 6km.

17 Consequent upon the June 2009 Discharges, the defendant was prosecuted for an offence against s 120(1) of the POEO Act. The defendant pleaded guilty to that offence and has been fined (Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65) (EPA v Moolarben (No 1)). The primary cause of the water pollution resulting from that offence was the undertaking of extensive earthworks within the Infrastructure Area without erosion and sediment control structures being in place (at [60]-[61]).

Interim erosion and sediment control measures

18 Following the first three of the June 2009 discharges, the site was visited by officers of the Department of Environment Climate Change and Water (DECCW), the Department of State of which the prosecutor was then part. Those officers identified the need for the defendant to identify interim measures necessary to address the escape of sediment-laden water from the Infrastructure Area. In response, the defendant's interim measures were set out in a letter from it to DECCW on 17 June 2009. Some 11 measures were then identified. They included:

(i) the construction of a "Dirty Water Dam" within the rail loop area, intended to prevent sediment-laden water from entering Bora Creek within that area. That rail loop area was the area contained by the embankment that had already been constructed and which, when completed to its design height, would carry a rail line. It is convenient to refer to this as "the railway embankment";

(ii) the construction of a "Clean Water Dam" within the rail loop;

(iii) desilting of the area inside the rail loop; and

(iv) development "of a weekly inspection regime for construction works".

19 Construction of some of the measures identified in the letter of 17 June had already commenced at the time at which it was written, with completion of other works anticipated by 24 July 2009. The measures that the letter identified as temporary measures were completed in accordance with the schedule which the defendant provided. However, they were not intended to replace measures that were identified in the ESCP.

Blocking of Bora Creek by the railway embankment

20 On 31 August 2009, a detailed inspection of the Project Site was undertaken by officers of DECCW, focussing particularly on works undertaken within the Infrastructure Area. The blocking of Bora Creek by the railway embankment and use of the area upstream of it was noted. The officers were accompanied on their inspection by the defendant's Environment and Community Relations Manager, Mr Peart, and also by the defendant's then General Manager, Mr Livingstone-Blevins. Each of the defendant's employees was then told that use of the railway embankment as a dam across Bora Creek retaining sediment was not acceptable to DECCW. The damming of Bora Creek by construction of the railway embankment had not been approved either by DECCW or by the Minister for Planning under the Pt 3A approval.

21 The inspection was followed by a letter from DECCW to the defendant on 4 September 2009. In that letter the following is recorded:

"In relation to the containment and management of dirty water upstream of the rail loop Moolarben is relying on the rehabilitation of all disturbed areas and thus stormwater runoff in that area entering directly into Bora Creek. At present Bora Creek is still being used as a sediment basin until works are completed and rehabilitation is at a point where clean stormwater flows can safely enter Bora Creek.

The Department does not agree with this as a long term strategy for dirty water management from that part of the site and is concerned that rehabilitation and revegetation of the subject areas may be a lengthy process. It is not acceptable for Moolarben to use Bora Creek as a sediment basin any longer than is absolutely necessary to fix the current issues.

Under normal circumstances the Department would not approve the use of a natural waterway such as Bora Creek for use as a sediment basin".

The defendant was requested to provide a report detailing the proposed rehabilitation works upstream of the rail loop area.

Further works are undertaken

22 Between 14 and 30 September 2009, a three cell culvert was installed at the base of the railway embankment. Each cell consisted of a two metre diameter pipe passing through the base of the embankment. The apparent purpose of installing the culvert was to allow, in time, water within Bora Creek to pass beneath the embankment and thus prevent it acting as a dam. By the time the culvert was installed the earthen railway embankment had been increased in height.

23 However, having installed the culvert, the defendant immediately placed plywood sheets on the upstream side of each cell so as to prevent the flow of water through the culvert. Mounds of earth or clay were pushed against the plywood sheets so as to secure the closure of each cell. This was done in anticipation that had the cells been left open at that time, they would have allowed the flow of sediment-laden water through the culvert, given that the areas upstream of the culvert remained in a disturbed state.

24 The defendant responded to the letter from DECCW by letter dated 15 October. Relevantly, the defendant wrote:

"An earthen wall currently remains above the Hel-core pipes at the main Bora Creek crossing, preventing water flows between the area upstream of the rail loop and the lower section of Bora Creek. Whilst the Department does not agree with this as a long term strategy for dirty water management, Moolarben Coal proposes to maintain the earthen wall in the short term to minimise the risk of sediment-laden water entering the lower section of Bora Creek. The earthen wall will be removed following rehabilitation and revegetation of the creek line within the rail loop and following an assessment of the potential for sediment to enter the lower section of Bora Creek. Moolarben Coal proposes to remove the earthen wall and re-instigate the free flow of water within Bora Creek in March 2010."

25 Meantime, further earthworks were being undertaken within the Infrastructure Area. These works resulted in soil being moved around the site which exposed more soil batters than had been exposed in June 2009. In addition, two stockpiles of disturbed material had been placed within the rail loop area. These were said to be stockpiles of "unsuitable material" in that they comprised subsoil, having neither nutrient value nor organic structure, thereby rendering the material unsuitable for either site rehabilitation or for construction purposes. Any water run-off from these stockpiles was able to flow into that part of Bora Creek which was upstream of the railway embankment.

26 Prior to the defendant's letter of 15 October, there had been a meeting between Mr Peart and Mr Clyne, an investigating officer employed by DECCW. At that meeting, Mr Peart had indicated the defendant's intention to retain the blocked culvert beneath the railway embankment until March or April 2010. Mr Clyne had repeated the objection of DECCW to the use of Bora Creek as a sediment basin and asked Mr Peart what he anticipated would happen if a large rainfall event should occur, with inflow of water to the catchment upstream of the embankment. Mr Peart is recorded as responding to the effect that any rainfall event "could be handled". He stated that there were many large capacity pumps at the disposal of the defendant and that he was intending to order additional pumps which would "more than cover any storm".

Environmental audit: December 2009

27 On 4 December 2009 the defendant engaged a firm named GSS Environmental to conduct an audit of works at the Project Site and provide technical advice on water management. GSS Environmental is a firm specialising in erosion and sediment control.

28 An engineer from GSS Environmental, Mr Dean Jarvis, visited the Project Site, including the Infrastructure Area, on 8 December 2009. On the following day he forwarded a Memorandum to the defendant, focussing upon erosion and sediment control measures and practices required to be observed. In his Memorandum, Mr Jarvis made observations about the state of works in general and then directed comments and recommendations in relation to specific areas.

29 In relation to the Infrastructure Area generally, he recorded, under the heading "Key High Risk Deficiencies", a number of matters, the first of which was the "[u]nnecessary large disturbance footprints". He continued:

"[i]t is essential that future disturbance areas are limited by planning and marking out the maximum area to be disturbed via survey pegs etc to limit the amount of exposed soil. This is essential in soils that are dispersive and have a high potential of erodibility as is the case for the MCM Area. There seemed to be no effort made to limit the disturbance area around the site."

30 Among the specific areas identified in the Memorandum of 9 December 2009 was the rail loop area. Mr Jarvis identified a number of what he described as "key ESC" (erosion and sediment control) deficiencies in this area. Included under this head are:

"• No ESCs have been implemented for the unsuitable material stockpiles located on the northern side of the rail loop.

• The unsuitable material stockpiles have not been shaped to allow for suitable drainage control and ESC.

• The unsuitable material stockpiles have led to the destruction of the Bora Creek drainage line upstream of the north-eastern     culvert under the rail loop. The drainage line is now completely bare with compacted stockpile material.

• Bora Creek has been heavily disturbed at the inlet point to the western (blocked) culverts under the rail loop.

• No ESCs are present along many sections of the rail loop batters."

31 Having identified the deficiencies in the rail loop area, the Memorandum then contained the following recommendations:

"• Purely for ESC, do not unblock the eastern rail loop culvert of Bora Creek until the works upstream have been successfully re-vegetated and suitable ESCs in place. This will stop the potential for large sediment loads from reaching the lower reaches of Bora Creek and ultimately the Goulburn River. Any future ponding caused by blocked culverts should be immediately pumped to other mine water dams on site after excessive rainfall to prevent rail loop embankment failure. A geotechnical engineering assessment of this ESC recommendation should be considered prior to implementation of this recommendation. Similarly, a ruling with regard to impeding flow of Bora Creek by blocking culverts should be sought by MCM.

• Continue to pump water from the dam within Bora Creek into the Process Water Dam to limit the amount of water reaching the blocked eastern culvert.

• Undertake a detailed design of the disturbed section of Bora Creek on the upstream side of the north-eastern culvert. ...

• Reshape unsuitable material stockpiles to redirect runoff away from Bora Creek and into appropriately sized sediment basins.

• Place sediment fence along the upper banks of the redesigned section of Bora Creek to limit the sediment flowing into the Creek.

• Construct silt fence on the down stream side of all disturbance areas within rail loop disturbance footprint. Ideally, construct sediment dams to contain sediment laden water from flowing offsite and into neighbouring drainage lines."

Circumstances of the offence: discharge in December 2009

32 During the two week period prior to Christmas 2009, the defendant became aware of forecasts by the Bureau of Meteorology that significant rainfall was expected in the area of the Project Site during the Christmas/New Year period. On 24 December 2009, Mr Peart met with his General Manager, Mr Livingstone-Blevins and the defendant's Construction Manager, Mr Jim McGeachie, in order to discuss the possible consequences of the heavy rain forecast to fall. They discussed the possible consequences of accumulated water upon the structural integrity of the rail loop formation as well as possible damage to infrastructure already in place on the site. The potential for sediment-laden water to discharge into Bora Creek was also discussed. In short, areas of the Infrastructure Area required to be monitored in the event that heavy rain eventuated were identified.

33 On that same day, Mr Peart telephoned the Manager of the DECCW office at Bathurst, Mr Richard Whyte. Mr Peart advised Mr Whyte of the rainfall predicted to fall over the Project Area and indicated that the defendant had arranged for additional pumps and personnel to be on site in order "to deal with the situation". Mr Peart advised that a pumping strategy was in place to deal with any run-off.

34 On Saturday 27 December 2009, being the date of the offence, the defendant's weather station, located within the Infrastructure Area, recorded rainfall of 76mm. How much of this total rainfall had fallen by 3.30pm, the time of the offence, is not known.

35 Mr McGeachie was present at the Infrastructure Area on 27 December. At about 1.00pm he telephoned Mr Livingstone-Blevins, to inform him of the water accumulating behind the earthen railway embankment, indicating that the pump then in place was not proving to be effective in reducing the volume of water as run-off into the area continued.

36 Mr McGeachie expressed concern that if water flowed through the area onto other construction areas there was the potential to damage vital infrastructure including a tunnel and conveyors. Mr McGeachie sought approval from Mr Livingstone-Blevins to release water from the dammed section of Bora Creek by unblocking the culvert. Approval to this course was not given at that time. Mr Livingstone-Blevins attended the site at about 1.45pm. He accompanied Mr McGeachie upon an inspection of the area and noted that portions of the rail loop embankment were slumping. They maintained watch on the water level behind the embankment, observing that although the single pump in place continued to operate, the water level continued to rise. At about 2.30pm Mr Livingstone-Blevins telephoned Mr Peart to inform him of the prospect that water may need to be released downstream into Bora Creek if the water level behind the embankment continued to rise.

37 By about 3.30pm, the water level had risen to the top of the concrete headwall of the three cell culvert constructed at the base of the earthen railway embankment. At that time the water level was only about 40cm below the edge of an earthen platform on the upstream side of the rail loop embankment. The opinion was then formed by Mr Livingstone-Blevins, in consultation with Mr McGeachie, that there was serious risk of the rail loop formation eroding and potentially collapsing which, if it occurred, would occasion significant environmental and infrastructure damage.

38 Having formed that opinion, an earthworks supervisor, also present on the site, was instructed to remove at least the top two thirds of the plywood board blocking one of the cells in the culvert at the base of the railway embankment. An excavator was then deployed to break the plywood barrier to the southernmost of the three culvert cells. The lower section of the barrier was left in place in the belief that it would act as a weir and thereby reduce sediment load that would otherwise be transported in the escaping water.

39 Once the plywood barrier had been broken, sediment-laden water flowed through that cell of the culvert, moving downstream in Bora Creek and then into the Goulburn River. As the water passed through the cell, it also collected earth from a mound that had been constructed in front of the culvert and carried that earth down to Bora Creek. The volume of sediment-laden waters discharged into Bora Creek on 27 December is not known. However, a subsequent calculation based upon the water level height and relative levels of the retaining embankments indicated a likely discharge of approximately 18,700,000 litres or 18.7 megalitres.

40 At the time of the offence in December 2009, some of the measures recommended in the GSS Environmental Memorandum of 9 December had been commenced. However, none of the recommended works relating to the rail loop area had been completed by 27 December.

41 At about 3.45pm on 27 December, Mr Peart telephoned the DECCW Environment Line in order to report the discharge of sediment-laden water into Bora Creek. In doing so, he was complying with a condition of the Environment Protection Licence held by the defendant, requiring that any pollution incident be reported.

42 The majority of the sediment-laden water discharged through the embankment culvert flowed into Bora Creek. However, a rock structure and geofabric sediment fence had been constructed on the downstream side of the culvert. Although the discharged water had overflowed these structures, the prosecutor accepted that an unquantified volume of sediment had been retained by them.

Inspection by officers of DECCW

43 Following the discharge of sediment-laden waters that occurred on 27 December 2009, the Project Site was visited on 30 December by Mr Whyte, the Bathurst Manager of the DECCW office. He observed that there was water in Bora Creek downstream of the earthen railway embankment. He described the water as being "heavily discoloured", a caramel brown colour, that appeared to be full of suspended solids. He described the water retained in a pool behind the railway embankment as having the same appearance as that which he saw downstream in Bora Creek. The colour of the water that he described was the same colour as the exposed or excavated earth in the Infrastructure Area.

44 After leaving the Infrastructure Area, Mr Whyte went to the confluence of Bora Creek with the Goulburn River. He there observed the same caramel brown coloured water flowing in Bora Creek and "trickling" into the Goulburn River below. He also noted that the bed of the Goulburn River at this point was heavily vegetated with reeds which appeared to have been flattened in the downstream direction of the River. The flattening of the reeds was consistent with a large flow of water from Bora Creek into the River at this point.

45 Mr Whyte then travelled to an area known as "The Drip" picnic area, about 6km downstream from the confluence of Bora Creek with the Goulburn River. He noted that the water flowing in the River was a caramel brown colour with the riverbed not visible. Water samples were collected by Mr Whyte in the course of his visit.

46 The Project Site was next visited on 5 January 2010 by Mr Clyne and Ms Sheridan Ledger, Environment Protection Officers employed by DECCW. They observed that within the Infrastructure Area there were large areas of exposed soil on batters and road surfaces. There were also stockpiles of soil. In the areas upstream of the rail loop area there were no erosion and sediment control structures in place to control run-off. They observed erosion of soil batters, with the erosion lines indicating that eroded material had flowed in the direction of Bora Creek.

47 Mr Clyne and Ms Ledger also observed the "unsuitable material" stockpiles. One such stockpile was about 250m long x 50m wide while the other stockpile was about 400m long x 50m wide. They assessed that, by its nature, this material was "highly dispersible and erodible". There were no erosion and sediment controls or structures around the stockpiles. They were in such a position that any run-off from them could freely enter Bora Creek.

48 In the course of their visit on 5 January, Mr Clyne and Ms Ledger spoke with Mr Livingstone-Blevins. They were informed by him that on 27 December only one pump was operating to pump water accumulating behind the railway embankment. He stated that it had not been appreciated, in sufficient time, that the pump being utilised was inadequate to deal with the inflow of water. The potential inflow had been underestimated when sizing the pump or number of pumps required to undertake the task. By the time the inadequacy of the pump to deal with the inflow was appreciated, site conditions were so boggy that they could not move additional pumps into the area.

Other observations of water pollution

49 Mr Gregory Lowe was employed in the Parks and Wildlife Group of DECCW, attached to its Mudgee office. His duties included that of Ranger for the Goulburn River National Park. As the Ranger for that Park he was responsible for a number of public camping areas along the Goulburn River, including areas known as Big River and Spring Gulley. The Big River camping area is located approximately 72km downstream of the Bora Creek confluence while the Spring Gulley camping area is approximately 76km downstream of Bora Creek. Each of these camping areas was inspected by Mr Lowe on 27, 28 and 30 December 2009. On each occasion he inspected the water of the Goulburn River, indicating that it was "relatively clear" and typical of the water colour for the River at those locations.

50 However, when those same areas were visited on 1 January 2010, Mr Lowe observed that the water flowing in the River was heavily affected by fine sediment. He identified the water as being of a colour unlike that that he had seen previously in times of flood flow at those locations. He described the water colour on that occasion as being a light sandy colour. He indicated that it was similar to the colour that he had observed in the River on 27 December 2009 where it is crossed by the Ulan-Cassilis Road. That crossing is only several kilometres downstream form the confluence of Bora Creek with the Goulburn River.

51 Mrs Julia Imrie is a resident of the Ulan area. She resides on land that has frontage to the Goulburn River. On 29 December 2009, Ms Imrie went to a location upstream of the Bora Creek and Goulburn River confluence. She observed that the water was only slightly turbid "with some organic staining from tannins". She could see through the water column to the bed of the River. She then went to the confluence of the two water bodies and walked to a point where she could observe both Bora Creek and the Goulburn River. There she observed "dirty water" flowing through culverts in Bora Creek under the Ulan Road and saw large pools of dirty, muddy water in the Creek. The Creek water was the same colour as the water she had seen in the Creek flowing within the Infrastructure Area. She observed the dirty water flowing from the Creek into the Goulburn River.

52 Ms Imrie then drove to "the Drip" picnic reserve on the Goulburn River and also a point further downstream known as "Corner Gorge". This latter point is about 10km downstream from the Bora Creek confluence. At each location she observed "dirty muddy water" flowing in the Goulburn River, that colour being the same colour as the water she had seen flowing in Bora Creek at the confluence with the River. She observed that she could not see more than 1cm into the water column. The right bank of the Goulburn River at "Corner Gorge" is part of the Goulburn River National Park.

Water sample measurements

53 On 27 December 2009 and again on the days that followed, a number of water samples were taken both from Bora Creek and the Goulburn River. These samples were taken by the defendant with further samples taken by Mr Whyte on 30 December. According to the evidence, the samples taken were measured for both total suspended solids (TSS), recorded in milligrams per litre (mg/L), and for turbidity, expressed as Nephelometric Turbidity Units (NTU). In the afternoon of 27 December, prior to the release of water from behind the railway embankment, the TSS measure in Bora Creek downstream of the premises was 1340mg/L. At about the same time on that afternoon, the TSS level in the Goulburn River, upstream of its confluence with Bora Creek, was 119mg/L. Turbidity was not measured at that time.

54 On 28 December 2009 water samples from the Goulburn River upstream of the confluence with Bora Creek resulted in a TSS level of 71mg/L and turbidity of 160 NTU. On the same day levels of these analytes in Bora Creek, downstream of the Infrastructure Area revealed a TSS level of 1630mg/L and turbidity level of 3400 NTU. In the Goulburn River at "the Drip", approximately 6km downstream of the Bora Creek confluence, the levels were 287mg/L and 370 NTU respectively.

55 Water samples taken on 30 December indicated that while TSS levels had fallen significantly in both Bora Creek and the Goulburn River, turbidity levels remained high. The turbidity level of a water sample taken that day from Bora Creek at a point approximately 10m upstream of its confluence with the Goulburn River, indicated a turbidity level of 1800 NTU while TSS had fallen to 41mg/L.

56 The TSS level measured in these water samples is necessary to be placed in context. Condition L3.1 of the Environment Protection Licence issued to the defendant limited the concentration of TSS in water discharged from the authorised discharge points to 50mg/L.

Sentencing considerations

57 The principles to be applied in determining an appropriate sentence were identified by me in EPA v Moolarben (No 1) at [42]-[46]. It is unnecessary to repeat those principles. Suffice to observe that I have applied them when considering the appropriate sentence in the present case. I also observe that the maximum penalty for an offence against s 120 of the POEO Act remains at $1M, as it was at the time of commission of the offence which is the subject of my decision in EPA v Moolarben (No 1).

 

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

58 The evidence reveals that approximately 800m of Bora Creek and a stretch of the Goulburn River downstream of the Bora Creek confluence was visibly polluted by sediment as a result of the discharge that occurred on 27 December 2009. The evidence of Mr Lowe suggests that the visual impact of sediment-laden waters from the Infrastructure Area on 27 December had, by 1 January 2010, extended to a point in the Goulburn River that was approximately 72km downstream of its confluence with Bora Creek. According to the evidence of Dr Kobayashi, a senior research scientist employed by DECCW, that observation implied elevated TSS and/turbidity levels in the River at that location although he fairly acknowledged that in the absence of any water samples from that location, no opinion could be formed as to potential environmental harm at that location. Dr Kobayashi was only prepared to express an opinion on potential harm based on available data from water samples. The sampling point furthest downstream from the confluence of Bora Creek with the Goulburn River was approximately 7.5km from that confluence.

59 Aside from visual pollution, water quality in both Bora Creek and the Goulburn River was affected by elevated concentrations of TSS and turbidity as a consequence of the discharge of sediment-laden waters that is the subject of the present charge. Suspended particulate matter expressed as TSS consists of silt, fine particles of inorganic and organic matter, plankton and other microscopic organisms. Suspended particulate matter may affect aquatic eco-systems both when in suspension and as it settles out. In suspension, the main impact of particulate matter is optical, as it can reduce light penetration, affecting photosynthesis-based plant production in the form of algae and other aquatic plants. The reduction in plant production, in turn, affects bottom-living and bottom-feeding organisms that are dependant, directly or indirectly, on plants for food.

60 Suspended particulate matter has also been shown to directly affect fish by clogging or coating gills which can lead to mortality if the levels are sufficiently high. Such particulate matter can also interfere with feeding mechanisms of filter-feeding animals that strain food particles from the water, causing stress or mortality. It is accepted that there are no fish naturally occurring in Bora Creek due to its ephemeral flow and its vertical separation from the Goulburn River by a 4m high waterfall. At the point at which Bora Creek falls to the Goulburn River, the only fish known to that section of the River is the Plague Minnow, a pest species identified as a key threatening process under the provisions of the Threatened Species Conservation Act 1995. There is no evidence of any fish killed further downstream resulting from the 27 December discharge.

61 Turbidity is also a measure of the amount of suspended matter in water. It is identified as one of the stressors that are not toxic but can directly affect aquatic ecosystems and biota. That affect is the result of turbidity scattering and absorbing incoming light, thereby affecting the production of algae and other aquatic plants.

62 In the year 2000, the Australian and New Zealand Environment Conservation Council (ANZECC) published the revised Australian and New Zealand Guidelines for Fresh and Marine Water Quality [the ANZECC Guidelines]. These Guidelines were published in order to provide a framework for assessing water quality. Included in the Guidelines are default trigger values relating, amongst others, to the protection of slightly-disturbed aquatic ecosystems for upland rivers and streams in south-eastern Australia. The trigger values are concentrations that, if exceeded, indicate a potential environmental problem and thus the need for further investigation. Bora Creek and the Goulburn River fall within the definition of "upland rivers and streams". The recommended trigger value for turbidity is 2 NTU to 25 NTU.

63 According to the evidence of Dr Kobayashi and accepted by the defendant, the TSS measured in the affected section of Bora Creek between 27 December 2009 and 2 January 2010 ranged between 2 and 296 times higher than the mean concentration of TSS measured in water samples taken from the Creek that were unaffected by the discharge. The average exceedence over that time was 76 times higher than the mean concentration.

64 In the period between 27 December 2009 and 1 January 2010 the concentration of TSS water discharge from Bora Creek to the Goulburn River ranged between 5 and 85 times higher than the concentrations in River water upstream of that confluence. When measured against the long term water quality data available in respect of the Goulburn River upstream of the confluence, trigger values by reference to the ANZECC Guidelines were exceeded in respect of six of seven sampling events, those exceedences ranging from 2.6 to 76.4 times that trigger value.

65 An exercise of a similar kind could be undertaken in respect of the turbidity levels in both Bora Creek and Goulburn River. It is sufficient for present purposes to notice that levels of turbidity in the Goulburn River on 28 December, upstream of the confluence with Bora Creek were 21 times lower than the turbidity levels of the water discharged into the Goulburn River at the Bora Creek confluence. However, if the mean of long term data is used to derive a trigger level, as the ANZECC Guidelines suggest, then the evidence reveals that turbidity decreased from being 3.5 times above the trigger level on 28 December to below the trigger level on 1 January.

66 This data is important in determining the potential harm occasioned by the defendant's discharge of sediment-laden waters. That potential is made manifest by the elevated levels of TSS and turbidity. Dr Kobayashi expressed the opinion that the elevated levels of these analytes in Bora Creek between 27 December 2009 and 2 January 2010 had the potential to impede the healthy in-stream productivity of plants and animals and to harm the healthy in-stream conditions for aquatic organisms, especially bottom-living organisms such as snails and bi-valves together with organisms including minute invertebrates and algae that use the surface of aquatic plants or other substrates as habitats. That potential for harm also existed in the section of the Goulburn River downstream of the confluence with Bora Creek. As I earlier recorded, that potential harm by reason of elevated levels of TSS and turbidity can be attributed to a stretch of the River extending 7.5km downstream of the confluence.

67 The conclusion drawn as to the potential for harm is unsurprising given the calculation made by the defendant that the volume of water likely to have been released through the culvert located beneath the earthen railway embankment was 18.7 megalitres. The fact that the discharge took place into streams that were not, at the time of discharge, in pristine condition does not mitigate the fact of potential harm. As Dr Kobayashi opined, the imposition of additional environmental stress on the receiving waters still had the potential to cause harm by reducing the ability of the receiving water environments to maintain ecosystem health and adversely affecting the ability of those systems to recover from such incidents.

68 In all, I conclude that the harm referred to in s 241(1)(a) of the POEO Act was low to moderate.

Practical measures and reasonable foreseeability of harm: s 241(1)(b) and 241(1)(c) of the POEO Act

69 It is convenient to deal with these heads of consideration together. As was the case when considering these heads in EPA v Moolarben (No 1), they are significant in determining the objective seriousness of the offence.

70 The Statement of Agreed Facts at [97] records the cause of pollution flowing into the lower section of Bora Creek and the Goulburn River on 27 December 2009 to have been:

(a)  the defendant's removal of the plywood block to the southernmost cell in the culvert installed in the    railway embankment;

(b)  the defendant's failure to implement adequate erosion and sediment controls; and

(c)   the inadequate capacity of the pump installed by the defendant to control the build-up of water behind the railway embankment.

71 The totality of the evidence reveals that the immediate cause of the water pollution event with which the defendant is charged was the first of those three causes, namely the removal of the plywood block from the culvert beneath the railway embankment. The present charge does not relate directly to the retention of sediment-laden water in Bora Creek upstream of the embankment. The particulars of the charge provided to the defendant by the prosecutor make that apparent (cf Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2011] NSWLEC 36).

72 It will be recalled that the 9 December 2009 Memorandum to the defendant from Mr Jarvis of GSS Environmental had identified the potential for large sediment loads reaching the lower reaches of Bora Creek and ultimately the Goulburn River if the block to the culvert was not kept in place. While the consequence of removing the block was, so it would seem, apparent to the personnel of the defendant present on site on 27 December 2009, if further evidence is needed then the 9 December Memorandum makes clear that environmental harm from removal of the block was reasonably foreseeable.

73 The potential for surcharge from the pond of sediment-laden water retained by the railway embankment in the event of heavy rainfall had also been identified in conversations which I have earlier identified as having taken place between Mr Clyne, the DECCW Investigation Officer and Mr Peart of the defendant. The prospect was also implicit in correspondence passing between DECCW and the defendant concerning the railway embankment that dammed Bora Creek. In this context, the evidence indicates that when the defendant's employees were challenged as to the capacity of pumps to remove sediment-laden water from behind the railway embankment, those employees assured Mr Clyne and Ms Ledger that pumps adequate to the task would be deployed. The indication was that existing pumps together with additional pumps to be brought to the site would be utilised to transfer sediment-laden water, as necessary, to other storage dams located within the Infrastructure Area, thereby avoiding surcharge from behind the railway embankment.

74 These statements were evidence of the fact that practical measures were available to avoid the harm occasioned by the discharge of sediment-laden waters accumulated behind the railway embankment. In the context of practical measures available to avoid or mitigate the harm, the fact that the potential inflow of water to the retained area following heavy rainfall had been miscalculated is not to the point. Only a single pump had been deployed to serve the purpose of controlling water levels when other pumps were available onsite to ensure adequate capacity for excess water removal. In conversation between Mr Livingston-Blevins and Mr Clyne on 5 January 2010, the former acknowledged that at the time leading up to the discharge on 27 December, there was "plenty of storage" in other dams on the site. By the time the inadequacy of the single pump being deployed behind the railway embankment was appreciated, ground conditions prevented the moving of other pumps into that area so as to transfer dirty water to these other dams. This represents clear evidence that practical measures were available to address the third of the three causes of the water pollution that occurred on 27 December 2009.

75 I have earlier quoted from section 5.2 of the ESCP to the effect that there would be no disturbance of the Project Site until erosion and sediment control measures identified in that document had been established. It will also be remembered that the ESCP was prepared in order to comply with a condition of the project approval granted by the Minister under Part 3A of the EPA Act and that it was a document endorsed by the then General Manager of Moolarben Coal Mines Pty Limited on 10 December 2008. Notwithstanding the statement of intent contained in the ESCP, the failure of the defendant to carry out many of the erosion and sediment controls required to give effect to the ESCP remains unexplained.

76 It is the failure to give effect to the ESCP that is acknowledged as the second cause of the offence that occurred on 27 December 2009. Had those controls been implemented, then it is probable that the first and third causes would not have arisen as the use of the railway embankment to dam Bora Creek so as to provide a sediment basin would not have been necessary. The need for pumping of sediment-laden waters from that area would not then have arisen.

77 Moreover, the identification in the ESCP of principles informing the installation of sediment control measures prior to undertaking any clearing works demonstrates that practical measures were available to prevent or mitigate harm to the environment by the discharge of sediments from the Infrastructure Area. The foreseeability of harm arising from the failure to carry out those works was apparent from the terms of the ESCP, particularly those statements earlier quoted from section 3.2 where, among other matters, the erosion hazard of soils within the Project Site are described as being "moderate to very high".

Control over causes, s 242(1)(d) of the POEO Act

78 For reasons that would be apparent from the facts and observations that I have just recorded, it is readily apparent that the defendant had control over each of the three causes giving rise to the offence. That conclusion requires brief further elaboration.

79 I accept, as does the prosecutor, that confronted by the site conditions as they existed at about 3.30pm on 27 December 2009, the defendant was left with little practical choice other than to release waters retained by the railway embankment. While that release had the potential to occasion significant environmental harm, even greater harm was in prospect had water not been released through the culvert and a collapse of the railway embankment and other infrastructure works had occurred. However, had the defendant properly considered the adequacy of pumps necessary to remove water from the dammed area in the event of high rainfall, then the need for release of waters through the culvert was unlikely to have arisen.

80 Moreover, the requirement to unblock the culvert in order to address the exigencies of the moment or the need to consider the capacity and number of pumps required to remove accumulated water are needs that, in all probability, would not have arisen had appropriate erosion and sediment control measures been first established, conformably with the ESCP. The evidence indicates that the rainfall that occurred on 27 December was heavy. However, there is no evidence to suggest that the rainfall was of such magnitude that, even had erosion and sediment control measures been established, a pollutant discharge to Bora Creek would nonetheless have occurred.

81 It is with this further explanation that I find the defendant did have control over the causes giving rise to the offence on 27 December 2009.

Reasons for commission of the offence

82 A factor relevant to the determination of the objective seriousness of an offence is the reason for its occurrence. In the present case, I accept that the discharge from the Infrastructure Area on 27 December 2009 was not deliberate in the sense that it was pre-planned. For reasons already given, it was responsive to the exigencies of the occasion.

83 In essence, the defendant took a number of risks. It took the risk that by effectively damming Bora Creek, albeit "temporarily", by constructing the railway embankment without the ability of the Creek to flow through or beneath it, the embankment had sufficient integrity to act as a dam wall for sediment-laden waters accumulating behind it. The defendant also took the risk that by placing a single pump in the retained waters of the Creek, that pump would be adequate to remove surcharging waters to storage dams without affecting the structural integrity of the embankment and necessitating release of stored waters through the culvert. The defendant took the further risk that it could clear and disturb a significant area of the Project Site, absent identified or adequate sediment and erosion and sediment control measures, without occasioning discharge of sediment-laden water from disturbed areas into Bora Creek following rainfall.

84 The evidence reveals that the taking of these risks could not reasonably be justified.

 

Conclusion on objective seriousness

85 It was submitted on behalf of the defendant that the offence was of low gravity or seriousness. I do not accept that submission. Having regard to the factors that I have addressed, including the potential for significant environmental harm, albeit that no actual harm was demonstrated, the practical measures available to the defendant to avoid or mitigate harm, the foreseeability of that harm and the failure of the defendant to address the risks of water pollution from acting as it did, I conclude that the offence is of medium or moderate objective gravity or seriousness.

Subjective factors

86 As I indicated in EPA v Moolarben (No 1) at [71], within the limits set by the objective seriousness of the offence, the Court is required to take into account subjective factors, both favourable and unfavourable to the offender. Consideration of a number of subjective factors is also directed by s 21A(1) of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act).

Prior offences by the defendant

87 I have earlier indicated that the defendant was convicted for an offence against s 120(1) of the POEO Act arising from the June 2009 Discharges (EPA v Moolarben (No 1)). For that offence the defendant was fined the sum of $105,000 and ordered to pay legal and investigation costs totalling $61,632.

88 I do not approach that conviction as an aggravating factor within the meaning of s 21A(2)(d) of the CSP Act. As the Court of Criminal Appeal observed in R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566, the relevance of the prior conviction bears upon the weight to be given to other principles of sentencing, namely retribution and personal deterrence compared to the weight that might otherwise be given to those principles if the defendant had no prior record of conviction (R v M.A.K.; R v M.S.K. [2006] NSWCCA 381; (2006) 167 A Crim R 159 at [51]). Clearly, the defendant cannot rely upon the absence of a prior record as a matter in mitigation of penalty (cf s 21A(3)(e) of the CSP Act) as it was entitled to do in EPA v Moolarben (No 1).

89 In Minister for Planning v Moolarben Coal Mines Pty Ltd [2010] NSWLEC 147; (2010) 175 LGERA 93 the defendant company in that case was convicted of an offence against s 125 of the EPA Act for undertaking development on the Project Site without obtaining a consent or approval under that Act when such consent or approval was required for that work. The prosecutor sought to rely upon the conviction entered in that case as relevant to the determination of penalty in the present case. In so doing it relied upon the same grounds as those advanced in EPA v Moolarben (No 1). For the reasons indicated by me in that case at [74]-[80], which I do not repeat, I do not intend to take into account that conviction when imposing the sentence in the present case.

Early plea of guilty

90 The defendant entered a plea of guilty at the first opportunity after the prosecutor had identified, by particulars, the act of pollution relied upon to found the charge. The fact that the defendant pleaded guilty must be considered in mitigation: ss 21A(3)(k) and 22 of the CSP Act. Ordinarily, the defendant would be entitled to the benefit of a discount of up to 25 per cent for the utilitarian value of the plea that it entered (R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152]).

91 The prosecutor submits that the discount for plea should be reduced in the present case because the defendant was confronted by "an overwhelming prosecution case". It also supports the submission by contending that the sentence hearing was prolonged because the defendant disputed "many of the facts relevant to sentencing".

92 I do not accept those submissions in this case. As both Thomson and the later decision of the Court of Criminal Appeal R v Borkowski [2009] NSWCCA 102; (2009) 195 A Crim R 1 have made clear, the discount for the utilitarian value of a plea is determined largely by the timing of the plea, that is, the earlier the plea the greater the discount. Further, those cases make clear that the utilitarian value of the discount does not take account of the strength of the prosecution case (Borkowski at [32]). The utilitarian value that is identified by the early plea is directed to the value to the administration of justice in avoiding the necessity of a trial in which the Crown or prosecutor is put to proof of all the elements of the offence with which a defendant or accused is charged. The fact that the prosecutor sought to prove facts relevant only to sentence in the present case seems to me to have no significant bearing upon the discount, particularly as the imposition of a fine only is involved and an order for costs can be expected. If a prosecutor is ultimately successful in proving disputed facts to the relevant standard (cf R v Olbrich [1999] HCA 54; (1999) 199 CLR 270) then ordinarily the costs of so doing will be costs that the defendant will be ordered to bear.

93 I do acknowledge that despite an early plea of guilty, the utilitarian value of that plea may be eroded if the defendant unsuccessfully contests issues of fact that the prosecutor properly seeks to adduce. The extent to which that value is eroded, if at all, will depend upon the manner in which the sentencing hearing is conducted (R v AB [2011] NSWCCA 229 at [2], [33]).

94 The utilitarian value of the plea is not lost in the present case, having regard to the manner in which the sentence hearing was conducted before me. There was substantial agreement on matters material to the commission of the offence as was reflected in the Statement of Agreed Facts. The defendant did not require any of the prosecution witnesses for cross-examination. Three of the defendant's witnesses were required for cross-examination by the prosecutor. While their evidence was explained and expanded by that process, their affidavit evidence in chief was not challenged as to its accuracy.

95 I propose to give the defendant the benefit of a 25 per cent discount by reason of its early plea of guilty.

Contrition and remorse

96 Section 21A(3)(i) of the CSP Act identifies as a factor to be considered, when determining the sentence to be imposed for an offence, the remorse shown by the offender but only if:

"(i)  the offender has provided evidence that he or she has accepted responsibility for his or her actions, and

(ii)  the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), ... "

Direct evidence of remorse in the present case is to be found in the evidence of Mr Frances Fulham, the defendant's General Manager.

97 Mr Fulham has held the position of General Manager of the defendant since May 2011. He was not employed by the defendant at the time of commission of the present offence. The ultimate holding company of the defendant, namely Yancoal Australia Limited, only acquired its interest in the Project in January 2010.

98 Mr Fulham has familiarised himself with the operations of the defendant on the Project Site, both past and present. His familiarity with the defendant's operations enabled him to agree in cross-examination that as of May 2010, that is five months after the commission of the present offence, the defendant had not fully implemented necessary erosion and sediment control works on the Project Site.

99 He has also stated that although Yancoal Australia Limited had no interest in the Project at the time of the commission of the present offence, the defendant, Yancoal Australia Limited and its fellow joint venturers in the Project, all sincerely regretted the discharge event that occurred on 27 December 2009, "particularly as it followed an earlier event in June 2009." Mr Fulham further indicated that the defendant and its parent company have been anxious to ensure that there is no reoccurrence of that event as it has suffered a loss of reputation by reason of the prosecutions against it. This is said to be the case even though those events occurred prior to Yancoal Australia Limited acquiring its interest in the defendant company.

100 Following his appointment to the defendant, Mr Fulham also familiarised himself with the erosion and sediment control audit carried out by GSS Environmental. It was the report of that firm in May 2010 that enabled him to express the conclusion that, as of May 2010, implementation of erosion and sediment control works remained incomplete. However, reports of inspections carried out in October 2010 and April 2011 by that firm confirmed his own assessment that by October 2010 all necessary erosion and sediment control works had been completed conformably with both the ESCP and further recommendations made by GSS Environmental. Mr Fulham stated that all structures built and commissioned on the site are to a high standard and are capable of managing and controlling any event similar to that which occurred on 27 December 2009. The defendant is said to be building "a world class operation in all aspects of environment and community responsibility, licensing and approvals compliance", it being the defendant's policy that mitigation measures in relation to erosion and sediment control be strictly maintained. As I understand the prosecutor's evidence, it is accepted by it that this is the position that now pertains.

101 I accept that both the evidence of Mr Fulham and the actions of the defendant since the commission of the offence do demonstrate remorse within the context of s 21A(3)(i) of the CSP Act. Three of the four forms of action demonstrating genuine contrition and remorse identified by Preston CJ in Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 at [203]-[214] have been demonstrated. These involved the voluntary reporting of the commission of the offence, taking action to address the cause of the offence and the evidence of a senior executive of the defendant corporation expressing regret coupled with the identification of measures to avoid repetition. The one element that diminishes the significance of the defendant's expression of remorse is the length of time taken by it to implement fully all necessary erosion and sediment control measures. This is a matter that will be further addressed when considering the element of deterrence to be reflected in the penalty imposed.

Assistance to authorities

102 The defendant has cooperated with the prosecutor both in the investigation and in the prosecution of the present offence. It reported the prospect of a pollution event occurring when Mr Peart made a report to that effect on 24 December 2009. Moreover, immediately following the release of sediment-laden water through the culvert in the railway embankment on 27 December, that release was reported to DECCW by Mr Peart.

103 Thereafter, Mr Livingston-Blevins and Mr Peart readily cooperated with Messrs Whyte and Clyne and with Ms Ledger in discussing the events both leading to and surrounding the commission of the offence. Written disclosure was made and Mr Livingston-Blevins agreed to participate in a record of interview with Mr Clyne.

104 The defendant's assistance to authorities is evidenced by two further factors. First, it cooperated, through its solicitor, in settling the Statement of Agreed Facts tendered in these proceedings. Although all facts upon which the prosecutor sought to rely for the purpose of the sentence hearing were not agreed, the defendant's cooperation in preparing the Statement of Agreed Facts did facilitate the conduct of the sentence hearing. Second, the defendant has agreed to pay the prosecutor's legal costs of $63,000 and investigation costs of $314.

 

The appropriate sentence

105 The purposes for which a court may impose a sentence are identified in s 3A of the CSP Act. Those purposes include not only a penalty that sufficiently punishes the offender for the offence and denounces the conduct of the offender in so doing but also is sufficient to prevent crime by deterring the offender and other persons from committing similar offences. There is a need for deterrence in the present case.

General deterrence

106 Observations as to the need for general deterrence in a case of the present kind were made by me in EPA v Moolarben (No 1) at [93]-[94]. I do not repeat those observations but record that they are equally apt to be considered in respect of the present matter.

107 As was the case in respect of the prosecution for the June 2009 Discharges, the circumstances giving rise to the present offence indicate that it was readily avoidable. I have earlier identified why that is so in respect of each of the identified causes of the offence.

108 The facts pertaining to the commission of this offence readily demonstrate why those engaged in activities involving significant surface disturbance of land and the carrying out of earthworks, having the effect of damming natural water courses, must have in place adequate measures to ensure that surface run-off and retained sediment-laden water can be kept on site so as to avoid the discharge of pollutants to natural streams and rivers. A means by which the message is given that measures of this kind must be taken in a timely manner is by the imposition of a penalty that includes an appropriate component for general deterrence.

Specific deterrence

109 The conduct of the defendant satisfies me that an element of the penalty to be imposed must reflect specific deterrence. In so determining, I do not accept the submission made on behalf of the defendant that, having regard to the conduct of the defendant, no element for specific deterrence is required. I accept that, under its present controlling interest by Yancoal Australia Limited, the defendant is less likely to reoffend than perhaps was the case prior to the interest being acquired by Yancoal. Nevertheless, there are two factors that are persuasive of inclusion of a component for specific deterrence.

110 First, it is the conduct of the defendant as the separate legal entity, Moolarben Coal Operations Pty Ltd, with which I am directly concerned. As it has submitted when addressing why I should not take account of the conviction recorded against Moolarben Coal Mines Pty Ltd for the purpose of considering the sentence in this matter, I should be careful to focus upon the actions of the separate legal entities involved in the implementation of the Project.

111 Second, even if I do take account of the ultimate interest in the defendant as being held by Yancoal Australia Limited, it has not been demonstrated to my satisfaction that under the stewardship of the latter company, the defendant acted with an appropriate degree of urgency in implementing the recognised need for erosion and sediment controls. The evidence indicates that Yancoal acquired its interest in the Project in January 2010. Mr Fulham accepted that the measures necessary for effective erosion and sediment control were not in place as of May 2010. That position was confirmed by the evidence of Mr Masters, the author of the GSS Environmental Audit Report published in May 2010. It was not until October of that year that Mr Masters reported the completion of erosion and sediment control works to a satisfactory standard.

112 Why it took so long to complete the necessary erosion and sediment control works is not explained by the evidence. A submission from the bar table indicated that because of the size of the Project, those works could not be completed "overnight". However, that submission would need to be founded upon some evidence directed to the detail of the works required, the time required for their completion and, perhaps, their cost. No evidence of that kind was tendered.

113 There can be no doubt that the defendant was obliged to act promptly to address and implement appropriate erosion and sediment controls. In this context, the observations of Mahoney JA in Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 remain pertinent. Although addressing legislation that preceded the POEO Act, that legislation operated to the same effect as the current legislation when proscribing water pollution. When addressing its purpose, his Honour said (at 359):

"The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that in many cases care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur."

The business of the defendant does not appear to have been arranged with sufficient expedition to ensure that pollution would not occur.

114 I do accept that by December 2009 the defendant was implementing a number of measures directed to erosion and sediment control. These were incomplete at the time of the present offence. I also accept that following the June 2009 Discharges, the defendant had identified to officers of DECCW its plans to implement erosion control measures so that the Department was made aware of the defendant's intentions. As the correspondence to which I have earlier referred makes clear, not all of the defendant's proposals were supported by the Department.

115 There are two matters favourable to the defendant in this context that need to be noticed. First, at the time of committing the present offence, no prosecution for the June 2009 Discharges had been instituted. While the defendant was aware that those offences were being investigated, its action in proceeding with sediment and erosion control works, albeit incomplete, was proactive rather than being reactive to a current prosecution.

116 Second, following the commission of the offence in December 2009, the defendant offered to the prosecutor to undertake a pollution reduction program in implementing its environment protection licence. It has proceeded with that program.

117 These are matters which, I accept, mitigate the significance that might otherwise attach to the factor of specific deterrence. Nonetheless, for reasons explained, it is a factor that I take into account.

Parity

118 The principle of evenhandedness or parity and those cases relevant for consideration in considering the appropriate penalty for a water pollution offence of the present kind were considered by me in EPA v Moolarben (No 1) at [99]-[104]. Those considerations are apt to be applied in the present case.

119 The case which now seems to me to be most relevant to the determination of penalty in the present case is my decision in EPA v Moolarben( No 1). The penalty for that offence was, as I have earlier indicated, a fine of $105,000 together with legal and investigation costs totalling $61,632. There are, however, some additional matters that require consideration.

120 The aggregate volume of sediment-laden water discharged that was the subject of EPA v Moolarben (No 1) was not known. It is likely to have been less than the 18.7 megalitres that was released through the culvert in the present case. The volume of one of the four discharges in the previous case, said to have occurred over a period of about 90 minutes, was estimated by the defendant to have been 16,200 litres. Visible pollution in that case was found to have extended into the Goulburn River for a distance of something less than 6km. In the present case there is evidence of sediment-laden waters extending for a distance in excess of 70km into the Goulburn River while elevated levels of turbidity and suspended solids due to the discharge in the present case extended for a distance of 7.5km downstream from the confluence of the Goulburn River with Bora Creek. These are factors suggesting that the environmental consequence of the present offence were more serious than those of the prior offence.

121 The defendant submits that the penalty in the present case should be less than that imposed for the prior offence. It makes this submission on the basis that the accepted cause of the prior offence was the failure to have sediment and erosion controls in place and for that the defendant has been punished. That same failure is a contributing cause to the present offence. Therefore the defendant submits, there would be an element of double counting if the fine imposed in the present matter reflected imposition of a penalty for that same cause.

122 I do not accept that submission. As I have earlier indicated, the immediate cause of the present offence was the removal of the plywood barrier to the southernmost cell of the culvert beneath the railway embankment. Closely related to that is the failure of the defendant to have recognised the need for adequate pumping facilities to remove excess sediment-laden water from the pond retained by the railway embankment to other dirty water storage dams. Those are causes that are unique to the commission of the present offence.

123 A requirement to have in place adequate erosion and sediment control measures was a continuing obligation upon the defendant so as to avoid committing an offence against s 120 of the POEO Act. Relevantly, there was no evidence led in the present case demonstrating why sediment control measures could not have been taken following the June 2009 Discharges which addressed run-off from the catchment into the railway embankment "dam". This is not a situation where, according to the evidence, there is nothing that could have been done to address erosion and sediment control requirements between June 2009 and December 2009.

124 For these reasons, I do not discern any double counting when taking account of the third cause of the pollutant discharge with which the defendant is presently charged. Relevantly, the absence of erosion and sediment control measures as a cause of the present offence is an appropriate element of comparison when referring to the sentence imposed in EPA v Moolarben (No 1) for the purpose of considering parity.

125 I recognise that a factor attending the present sentence that was not present in those facts attending the earlier offence is the extent to which erosion and sediment control measures were addressed, particularly at a planning level. I have already referred to the temporary measures that were put in place following commission of the earlier offence, those measures being implemented following consultation with officers of DECCW. Subsequent contact between the defendant and DECCW also demonstrated the formulation of the defendant's proposals for implementation of appropriate erosion and sediment control measures as did the defendant's retainer of GSS Environmental to undertake a site audit. This factor is one favourable to the defendant when comparing the decision on penalty in respect of the earlier offence.

Totality

126 The defendant has submitted that in determining the penalty to be imposed in the present case, I should apply the principle of totality. It submits that the penalty imposed in EPA v Moolarben (No 1) should be taken into account for the purpose of applying this principle. For its part, the prosecutor denies that this is a case appropriate for any adjustment of penalty by reason of application of the principle of totality.

127 In Regina v MMK [2006] NSWCCA 272 the Court of Criminal Appeal adopted (at [12]) the description of the principle of totality articulated by Street CJ in R v Holder (1983) 3 NSWLR 245. In the latter case, the Chief Justice described the principle as follows (at 260):

"The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straight-forward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences."

128 As the passage just quoted indicates, application of the principle will most often be invoked when an offender is being sentenced at the one time for multiple offences arising out of common or related criminal acts. However, the principle may still be applied when sentences are imposed at different times and even by different judges (R v M.A.K., R v M.S.K.).

129 In Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Kirby P observed (at 704) that the principle of totality has application where the penalty imposed is by way of fine. His Honour continued by indicating that the principle "may not have the same force in the case of the imposition of fines, as opposed to the imposition of imprisonment where it has a special operation".

130 A note of caution has been sounded in decided cases as to the use of the principle, lest it be seen to undermine public confidence in the administration of justice. In R v M.A.K., R v M.S.K. the Court of Criminal Appeal indicated that care must be taken when applying the totality principle in order "to avoid any suggestion that what is in effect being offered is some kind of discount for multiple offending" (at [18]). This same approach to application of the principle was reflected in R v Harris [2007] NSWCCA 130 where at [46] the Court endorsed the remarks of Sully J in an earlier judgment in which his Honour had said:

"It needs to be clearly understood by all concerned that a person who commits a deliberate series of discrete offences ... must not be left with the idea that by intoning references to the principle of totality as though it were some magic mantra, he can escape effective punishment for the offences which follow successively one upon another throughout the whole course of a studied and deliberate course of criminal behaviour".

131 While I do not suggest that the defendant in the present case has indulged in a deliberate course of criminal behaviour, the observations contained in the cases that I have cited in relation to the totality principle seem to me, in the present circumstances, to be apposite. The offence in the present case was committed six months after the first offence. While each involved an offence against s 120 of the POEO Act, each was a discrete offence arising from different causes. While the cause of the first offence is one of the three causes attributed to the present offence, that circumstance, for reasons earlier explained, does not seem to me to involve a continuity of conduct of the kind ordinarily considered when applying the principle of totality to multiple offences. Each involved different and separate episodes of conduct breaching s 120 (cf R v Finnie [2002] NSWCCA 533 at [57]-[58]).

132 For these reasons, I would not be disposed to adjust the penalty otherwise considered appropriate for the present offence by reason of the defendant's conviction for the offence arising from the June 2009 Discharges.

Conclusion on penalty

133 The determination of an appropriate penalty ultimately requires an instinctive synthesis of all relevant factors (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357). Undertaking that synthesis leads me to conclude that the appropriate fine in the present case, before discount, is $150,000. That sum should be discounted by 25 per cent to allow for the defendant's early plea of guilty, resulting in a penalty of $112,500. In determining this sum, I take into account the quantum of legal and investigation costs which the defendant has agreed to pay.

Publication order

134 The prosecutor has sought, and the defendant has agreed, that there should be a publication order made under the provisions of s 250(1)(a) of the POEO Act. While the parties have agreed upon the newspapers in which such a notice should be published, they have not agreed upon the form which the publication notice should take. Each party has tendered a form of notice for which publication is sought.

135 In resolving this controversy, I do not intend to dilate upon drafting style or syntax. The difference of substance between the parties concerns reference within the notice pertaining to the present offence to the fact that this is a second offence, with a description given of the circumstance and consequences of the first offence. As might be expected, it is the prosecutor that seeks inclusion of that material while that course is opposed by the defendant, essentially on the basis that its inclusion is not sanctioned by the legislation.

136 As I have indicated, the publication order is sought under the provisions of s 250(1)(a) of the POEO Act. Subsection (1) of s 250 relevantly provides:

"(1)  Orders

The court may do any one or more of the following:

(a)  order the offender to take specified action to publicise the offence (including the circumstances of the offence) and its environmental and other consequences and any other orders made against the person, ...".

137 The terms of paragraph (a) of subsection (1) are clearly directed to publicising the offence and orders that are the subject of the proceedings currently before the Court. Reference to "any other orders made against the person" is, to my mind, reference to those orders made in the current proceedings and not those in some earlier proceeding. Furthermore, the "environmental and other consequences" that may be the subject of a publication order are those consequences that are the result of the offence being considered. The penalty imposed for some earlier offence and the consequences of that offence are not the subject of paragraph (a).

138 I propose to make a publication order in accordance with the subsection. The publication of such an order improves the effectiveness of sentences as a deterrent, particularly in the case of corporate offenders who, so it seems, are sensitive to publicity (Environment Protection Authority v Waste Recycling and Processing Corporation at [243]). The notice will not include reference to the prior offence of the defendant as I do not consider that the provisions of s 250(1)(a) authorise publication in the terms sought.

Orders

139 The orders that I make are as follows:

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

2. The defendant is fined the sum of $112,500.

3. The defendant must pay the prosecutor's legal costs of the proceedings, agreed in the sum of $63,000.

4. The defendant must pay the prosecutor's investigation costs under s 248 of the Protection of the Environment Operations Act, agreed in the sum of $314.

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

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

(ii) the Mudgee Guardian.

6. Exhibits may be returned.

 

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Annexure "A"

MOOLARBEN COAL OPERATIONS PTY LIMITED

Guilty of polluting waters

On 19 April 2012, the New South Wales Land and Environment Court found Moolarben Coal Operations Pty Limited ("Moolarben Coal Operations") guilty of polluting waters at Ulan NSW. The offence occurred on 27 December 2009.

The pollution occurred during a rain event when Moolarben Coal Operations released into Bora Creek around 18.7 million litres of water containing sediment and earth from the site of the Moolarben Coal Project near Ulan Road and Wollar Road, Ulan. The dirty water flowed down Bora Creek and then into the Goulburn River.

Moolarben Coal Operations pleaded guilty to the charge. It was convicted of the offence and ordered by the Land and Environment Court to:

1. Pay a fine of $112,500;

2. Pay the prosecutor's costs of $63,000;

3. Pay the prosecutor's investigation costs of $314; and

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

Moolarben Coal Operations was prosecuted by the Environment Protection Authority.

Amendments

24 April 2012 - Incorrect date
Amended paragraphs: 2

Decision last updated: 26 April 2012