Land and Environment Court New South Wales Medium Neutral Citation: Environment Protection Authority v Koppers Carbon Materials & Chemicals Pty Ltd (the Spill Incident) [2021] NSWLEC 12 Hearing dates: 21 October 2020 Date of orders: 16 February 2021 Decision date: 16 February 2021 Jurisdiction: Class 5 Before: Robson J Decision: See orders at [106] Catchwords: ENVIRONMENT AND PLANNING — Offences — Breach of licence condition — Sentencing Legislation Cited: Crimes (Sentencing Procedure) Act 1999 (NSW) ss 3A, 21A, 22 Criminal Procedure Act 1986 (NSW) s 257B Protection of the Environment Operations Act 1997 (NSW) ss 64, 124, 241, 250 Cases Cited: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280; (2008) 163 LGERA 71 Environment Protection Authority v Borg Panels Pty Ltd [2016] NSWLEC 71 Environment Protection Authority v Caltex Refineries NSW Pty Ltd [2008] NSWLEC 194 Environment Protection Authority v Crown in the Right of New South Wales [2019] NSWLEC 178 Environment Protection Authority v Dyno Nobel Asia Pacific Pty Ltd [2017] NSWLEC 64 Environment Protection Authority v Hunter Water Corporation [2016] NSWLEC 76 Environment Protection Authority v Huntsman Corporation Australia Pty Ltd [2011] NSWLEC 39 Environment Protection Authority v Koppers Carbon Materials & Chemicals Pty Ltd (the Emission Incidents) [2021] NSWLEC 13 Environment Protection Authority v Morgan Cement International Pty Ltd [2016] NSWLEC 140 Environment Protection Authority v Nulon Products Australia Pty Ltd [2015] NSWLEC 153 Environment Protection Authority v Orica Australia Pty Ltd (the Evaporator Incident) [2014] NSWLEC 104 Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103; (2014) 206 LGERA 239 Environment Protection Authority v Steggles Foods Mt Kuring-gai Pty Ltd [2017] NSWLEC 178; (2017) 230 LGERA 24 Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131 Environment Protection Authority v Viva Energy Pty Ltd [2019] NSWLEC 13 Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 Environment Protection Authority v Whitehaven Coal Mining Limited [2019] NSWLEC 27 Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 Harris v Harrison (2014) 86 NSWLR 422; [2014] NSWCCA 84 Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57 Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 R v Einfeld (2008) 71 NSWLR 31; [2008] NSWCCA 215 R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 Texts Cited: Land and Environment Court COVID-19 Pandemic Arrangements Policy Category: Sentence Parties: Environment Protection Authority (Prosecutor) Koppers Carbon Materials & Chemicals Pty Ltd (ACN 003 947 699) (Defendant) Representation: Counsel: J Walker (Prosecutor) D Jordan SC with A Bonnor (Defendant) Solicitors: Environment Protection Authority (Prosecutor) Ashurst Australia (Defendant) File Number(s): 2019/00315949 Publication restriction: Nil Judgment 1. Koppers Carbon Materials & Chemicals Pty Ltd ('Koppers') is a chemical manufacturing company and the operator of a plant located at 133 Woodstock Street, Mayfield North ('Plant') at which it distils coal tar (a by-product from Australian steelworks) into various chemical products. 2. On 22 November 2019, Koppers pleaded guilty to the charge that it committed an offence under s 64(1) of the Protection of the Environment Operations Act 1997 (NSW) ('POEO Act'), namely that it breached a condition of its environment protection licence relating to a spill of partially processed heated coal tar pitch into a bunded area releasing fumes into the atmosphere, which occurred at the Plant on 20 and 21 October 2018 ('spill incident'). A sentence hearing was held on 21 October 2020 and this judgment concerns the imposition of an appropriate sentence. 3. The summons filed 10 October 2019 states as follows: "The Prosecutor claims: 1 An order that the Defendant, Koppers Carbon Materials & Chemicals Pty Ltd (ACN 003 947 699), Level 5, 53 Walker Street, North Sydney in the State of New South Wales, appear before a Judge of the Court to answer the charge that, from about 21 May 2018 to about 21 October 2018 (inclusive), at or near 133 Woodstock Street, Mayfield North in the State of New South Wales (the Premises), it committed an offence against section 64(1) of the Protection of the Environment Operations Act 1997 in that it was the holder of a licence, a condition of which was contravened by a person. Particulars a. Licence Environment Protection Licence number 2156. b. Licence condition contravened Condition 02.1, which states: "02.1 All plant and equipment installed at the premises or used in connection with the licensed activity: a) must be maintained in a proper and efficient condition..." c. Manner of breach The Defendant failed to maintain a valve (Valve 14) installed at the Premises and used in connection with the licensed activity of chemical production in a condition in which it did not leak heated coal tar pitch. As a consequence, heated coal tar pitch was released from a hole in Valve 14, into a bunded area at the Premises between about 7:25pm on 20 October 2018 and about 12am on 21 October 2018 inclusive and fumes were released to the atmosphere. 2 That the Defendant be dealt with according to law for the commission of the above offence. 3 An order that the Defendant pay the Prosecutor's costs. 4 Such orders pursuant to Part 8.3 of the POEO Act as the Court in its discretion sees fit to make. 5 Such other orders as the Court in its discretion sees fit to make." 1. In separate proceedings commenced on 6 May 2020, the Environment Protection Authority ('EPA') prosecuted Koppers for committing two offences against s 124(b) of the POEO Act relating to the release of soft pitch fumes at the Plant on 21 and 22 May 2019 ('emission incidents') and guilty pleas were entered on 3 July 2020. The sentence hearing for the emission incidents was also held on 21 October 2020 (with some common evidence being relied upon in each of the proceedings) and judgment given concurrently with this judgment: Environment Protection Authority v Koppers Carbon Materials & Chemicals Pty Ltd (the Emission Incidents) [2021] NSWLEC 13 ('EPA v Koppers (the Emission Incidents)'). Background 1. The factual background to the spill incident and the evidence marshalled in this sentence hearing are largely uncontentious. 2. The primary evidence received by the Court comprised a detailed statement of agreed facts filed 9 April 2020 and an affidavit of Richard Lyons, Koppers Vice President of Australian Operations, affirmed 25 September 2020. A summary of the salient facts follows. 3. Koppers is a chemical manufacturing company which distils coal tar into chemical products. Koppers is the only Australian producer of a product called "coal tar pitch" which is an essential raw material used in aluminium smelters. Koppers has operated its business at the Plant for approximately 50 years. 4. Although the Court received detailed evidence explaining the precise conduct of the processing system, it is sufficient to record that the coal tar is processed through a "tar distillation unit" and a "naphthalene distillation unit", being a system comprised of a number of pipes, pumps, joints and valves ('System'). The material being processed moves continuously through the System at the Plant. 5. At all relevant times, Koppers was in possession of Environment Protection Licence number 2156 issued under the POEO Act ('Licence'). The Licence permitted the carrying out of chemical production, chemical storage and "shipping in bulk" at the Plant, and, relevantly, contained a condition providing that all plant and equipment installed at the Plant "… must be maintained in a proper and efficient condition…" The spill incident 1. In the early evening of 20 October 2018, severe storms in the Newcastle area caused disruption to the electricity network and a corresponding power outage caused the temporary stoppage of processing operations at the Plant. This halt in operations caused the flow of partially processed heated coal tar pitch through the System to cease as the pumps necessary for movement had stopped. 2. Electrical power to the Plant was restored shortly thereafter and the System resumed operation. The partially processed heated coal tar pitch resumed flowing through the System, however some of the partially processed heated coal tar pitch began to spill out of a hole in a suction valve into a contained bunded area at the Plant ('spilled material'). The spilled material was at an "intermediate stage" of production, meaning that it was neither a raw material (being "soft pitch") nor was it the future finished product (being "pitch" or "hard pitch"). 3. The spilled material was released at a temperature of approximately 338ºC and emitted fumes into the atmosphere resulting in a smell of tar. Steam was also generated as rain and water came into contact with the spilled material. 4. Approximately 20 tonnes (20,000kg) of material was spilled between 7.25pm on 20 October 2018 and about 12.30am the following day. 5. The suction valve responsible for the spill incident (referred to as "Valve 14") had been in a "throttled" position, that being part way between "closed" and "open", since 21 May 2018. Valve 14 was scheduled for replacement in late October 2018. 6. The spill incident was first observed by a plant operator at approximately 7.35pm on 20 October 2018 (being 10 minutes after the spill incident commenced). A shift supervisor then shut down the System, called the operations superintendent and directed an operator to contact Fire and Rescue NSW. The operations manager was informed of the incident at 7.37pm by the operations supervisor; Fire and Rescue NSW was contacted at 7.43pm; and two attempts at contacting the EPA Environment Line were made at 7.40pm and 7.55pm, which were unsuccessful. 7. Water was applied to the spilled material by Koppers' employees in an attempt to reduce the temperature of the spilled material, minimise the risk of fire and suppress the fumes. The temperature of the spilled material decreased following exposure to air and rain (and presumably the water applied by Koppers), which caused the spilled material to change from a liquid to a solid state as it cooled. Despite this, given the ongoing high temperature of the spilled material, the shift supervisor considered that it was not safe for either Koppers' employees or Fire and Rescue NSW to attempt to shut Valve 14 and stop the flow of spilled material, irrespective of whether protective gear was being worn. 8. A hole in Valve 14 was confirmed to have caused the spill incident at approximately 12.30am on 21 October 2018 and Valve 14 was subsequently replaced in the early hours of the morning. Circumstances preceding the spill incident 1. Valve 14 was first identified to be in a throttled position by a Koppers' employee during a maintenance shutdown on 21 May 2018. Valve 14 was not leaking at that time nor was there any indication of damage to the body of the valve. 2. The fact that Valve 14 was in a throttled position was reported to the shift supervisor, who notified the operations superintendent, who then instructed plant operators to attempt to open Valve 14 the following day. Two unsuccessful attempts at opening the valve were made by the night shift operator that evening, meaning that Valve 14 was left in a throttled position. A further unsuccessful attempt was made after 21 May 2018. 3. As the throttled position of Valve 14 was considered by Koppers not to affect the operation of the System, the valve was scheduled to be replaced during a planned maintenance shutdown between 29 October and 17 November 2018. Koppers had no knowledge that a throttled valve would cause accelerated wear and therefore did not anticipate potential leakage of partially processed heated coal tar pitch from the valve (or any other similar risk) and no formal risk assessment was undertaken. 4. Although a suitable replacement valve was available at the Plant on 21 May 2018, Koppers decided to keep this valve as a spare in case of a more critical valve failure prior to the planned maintenance shutdown. As a result, Koppers decided to delay the replacement of Valve 14. Koppers' procedures and actions taken following the spill incident 1. Koppers had a number of procedures in place which related to start-up processes to be followed in the event of planned maintenance shutdowns; pitch spills; and a general "emergency procedure". Prior to and at the time of the spill incident, Koppers did not have any written procedures in place which specifically addressed valve issues. 2. Although it was standard practice at the Plant for the shift supervisor to record any faults through a "work order system", no record was made that Valve 14 had seized in a throttled position or of the unsuccessful attempts to open the valve. 3. Despite no specific work order having been recorded in relation to Valve 14, Koppers was intending to replace all of the suction valves in that area of the System in late October 2018. Enquiries about obtaining replacement valves for all of the suction valves in the area had been made to Koppers' supplier on 30 May 2018, however Koppers was advised that these replacement valves were not available until 4 September 2018. The replacement valves were received by Koppers between 21 September and 1 October 2018 in preparation for the planned maintenance shutdown later that month. 4. Prior to the spill incident, Koppers' procedures included that Koppers' employees received training on the operation of valves at the Plant by way of a "buddy system", which involved pairing new plant operators with senior plant operators when they commenced working at the Plant. Koppers' employees also undertook regular incident management training which included training with Fire and Rescue NSW and other relevant NSW Government agencies. 5. A joint incident management training exercise had been undertaken by Koppers with Fire and Rescue NSW ten days prior to the spill incident. This involved a mock coal tar pitch spill, which "caught fire and was required to be extinguished" and was carried out during a rain event. 6. Following the spill incident, Koppers has implemented the following procedures and undertaken the following actions to prevent recurrence of a similar spill incident: 1. Implemented "Throttle Thursday" which involves plant operators checking whether any valves are in a throttled position and, if so, whether they are required to be in that position; 2. Organised more frequent scheduled replacement of valves; 3. Arranged thickness testing of valves during both installation and after 12 months to determine their rate of wear; and 4. Appointed a Koppers' employee to the newly created role of "Process Safety and Environmental Management Engineer" at the Plant. Impact of the spill incident on the environment and the community 1. The spill incident produced steam and fumes containing a number of polycyclic aromatic hydrocarbons ('PAHs') of unknown composition and concentration which were released into the atmosphere. 2. A Koppers' employee, who initially approached the spill and thought the fumes were steam, described that after inhalation he felt "like he was choking", and he put on a respirator to address his difficulty in breathing. 3. Six members of the public made calls to the EPA Environment Line complaining of strong odours between 8.02pm on 20 October 2018 and 8.10am on 21 October 2018. One complainant experienced a strong chemical smell for approximately 20 to 30 minutes at around 8pm; one complainant experienced an overpowering odour for approximately 20 minutes between 7pm and 8pm; and one complainant reported a "sharp, pungent smell". 4. Six people – being a Koppers' employee, three local residents, and two employees at a neighbouring premises – provided statements regarding their experiences on the evening of 20 October 2018 through to the morning of 21 October 2018. 5. One employee working at a neighbouring industrial premises experienced a strong odour "even when the doors were closed" and on 21 October 2018 he observed a film of material on his car "that was similar to ice". 6. A second employee working at the same neighbouring industrial premises experienced an irritated throat and consequently wore a P2 face mask for the duration of his shift on 20 October 2018. He also reported what appeared to be "a thick fog" in the carpark of the neighbouring premises. On 21 October 2018, he experienced a smell of a strong odour and developed a sore throat and headache (with the headache lasting about two days). He observed a film of material on his car which he described to be "like sand". 7. An expert toxicologist engaged by the EPA considered that the experience of each of these individuals could reasonably be categorised as acute or short-term exposure to the fumes, as opposed to chronic or long-term exposure to the fumes. 8. The parties agreed that the impacts of exposure to fumes containing PAHs for a short period of time may cause headaches, nausea, irritation of the throat and eyes, coughing and, where higher concentrations of PAHs are present, fatigue, malaise, confusion, and coma. It was also agreed that it is likely that most of the symptoms caused by short term exposure to such fumes, with a low concentration of PAHs, will resolve completely. Principles of sentencing 1. In imposing a proportionate and appropriate sentence for the offence, the instinctive synthesis process of sentencing necessitates consideration of the objective circumstances of the offence and the subjective circumstances of the offender. This process requires the Court to identify and weigh the significance of the factors relevant to sentence. 2. The Court must have regard to the legislative framework, which includes the purposes of sentencing as contained within s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('Sentencing Act'); any aggravating, mitigating and other factors of relevance as set out in ss 21A and 22 of the Sentencing Act; the objects of the POEO Act; and relevant matters to be taken into account as required by s 241 of the POEO Act. 3. Section 64(1) of the POEO Act, being the provision creating the offence committed by Koppers in relation to the spill incident, provides: 64 Failure to comply with condition (1) Offence If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence. Maximum penalty— (a) in the case of a corporation—$1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues… … 1. In considering aggravating and mitigating factors, the prosecutor carries the onus of proving beyond reasonable doubt any aggravating factors for the purposes of sentencing, while the offender carries the onus of proving on the balance of probabilities any mitigating factors: R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at [27]. 2. Section 21A of the Sentencing Act sets out a number of aggravating and mitigating factors which the Court is to take into account. The prosecutor does not rely on any aggravating factors under s 21A(2). The mitigating factors under s 21A(3) which are relevant to the spill incident include: … (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, … (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, … (i) the remorse shown by the offender for the offence, 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), … (k) a plea of guilty by the offender (as provided by section 22 or Division 1A), … (m) assistance by the offender to law enforcement authorities (as provided by section 23), … 1. Further, s 241 of the POEO Act provides: 241 Matters to be considered in imposing penalty (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant)— (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, … … Objective seriousness of the offence 1. The objective gravity or seriousness of the offence committed by Koppers is the principal factor to be considered in determining the appropriate sentence. This requires the Court to take into account the nature of the offence, including the maximum penalty; the extent of harm caused to the environment by the commission of the offence and the extent to which harm was reasonably foreseeable by Koppers; the state of mind of Koppers including its reasons for committing the offence; Koppers' control over the causes that gave rise to the offence; and whether practical measures were available to prevent the harm caused. Nature of the offence 1. The nature and purpose of s 64(1) of the POEO Act and its place within the statutory scheme are illustrative of the legislative intent and the objective seriousness of the offence to which Koppers has pleaded guilty: Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 at [59]. 2. Conditions that may be imposed upon an environment protection licence cover a spectrum of obligations, balance public and private interests, and regulate conduct which, but for the grant of a licence, would otherwise be unlawful. As such, a breach of a condition undermines the integrity of the regulatory scheme and the objects of the POEO Act. 3. Compliance with conditions of an environment protection licence, such as Condition O2.1 of the Licence, which requires "All plant and equipment installed at the premises be maintained in a proper and efficient condition…", is therefore essential to upholding the integrity of the regulatory framework for environmental protection. 4. Koppers has pleaded guilty to conduct that relates to the failure to maintain Valve 14 in a proper and efficient condition. Maximum penalty 1. The maximum penalty for an offence committed by a corporation against s 64(1) of the POEO Act is $1,000,000. This is indicative of the seriousness of the offence as expressed by the legislature. In sentencing Koppers for the offence it has committed, the Court is required to assess the relative seriousness of Koppers' offence against the worst case for which the maximum penalty is provided: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698. Extent of harm 1. The extent of harm caused, or likely to be caused to the environment, by the commission of an offence is relevant in determining the objective seriousness of an offence pursuant to s 241(1)(a) of the POEO Act. Harm simpliciter is not a discrete element of an offence under s 64 of the POEO Act. 2. The Dictionary to the POEO Act defines "harm" as including "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". Relevant to these circumstances, "pollution" is defined to include "air pollution". Further, "air pollution" and "air impurity" are defined in the following manner: air pollution means the emission into the air of any air impurity. air impurity includes smoke, dust (including fly ash), cinders, solid particles of any kind, gases, fumes, mists, odours and radioactive substances. 1. It is not necessary for actual harm to be caused; a potential or risk of harm will be sufficient: Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 ('Waste Recycling') at [145]. 2. The prosecutor submits that harm was caused to individuals in that one person felt like he was "choking", and he put on a respirator because he had difficulty breathing and another person suffered a "sore throat and a headache" (with the headache lasting two days). The prosecutor also submits that, having regard to the failure of Koppers to maintain the plant in a proper and efficient condition, the likely harm caused could have been worse if, for example, the leak was more significant or if the rain had not assisted in suppressing the fumes. 3. While Koppers submits that no harm to the environment was caused, or was likely to be caused, from the spilled material itself as it was entirely contained within the bunded area, it accepts that actual harm was caused by the fumes generated from the spill. Koppers emphasises that the fumes generated were partially suppressed by water spray and also decreased over time. Further, although the fumes contained PAHs, their specific compounds and concentrations cannot be determined on the available evidence. 4. I accept the prosecutor's submission and find that the emission of fumes containing air impurities in the form of PAHs resulted in harm to the environment as defined by the POEO Act, and that harm was caused to at least two individuals who were exposed to the fumes (albeit on a temporary basis). The evidence suggests that the individuals who were exposed to the fumes suffered relatively mild but certainly not insignificant, symptoms and that their short-term exposure would not lead to any future adverse medical effects. Given this, the harm was not substantial and is therefore not an aggravating factor. Foreseeability of risk of harm 1. The objective seriousness of an offence may increase if the environmental harm caused by the commission of the offence was reasonably foreseeable by Koppers. 2. The prosecutor submits that the risk of harm was foreseeable by Koppers, noting that it is the risk associated with the hazardous nature of the substances produced by Koppers (which the prosecutor submits was clearly apparent given that Koppers had a Coal Tar Pitch Safety Data Sheet) that is required to be foreseen rather than the precise cause of the spill incident. The prosecutor therefore submits that the risk of a maintenance error causing a spill, which in turn could cause harm to the environment, was foreseeable if not "obvious". 3. Koppers denies that the spill of partially processed heated coal tar pitch and the subsequent emission of fumes was foreseeable. Although Koppers accepts the hazardous nature of the chemicals involved in its manufacturing, it submits that the circumstances of the case require Koppers to have foreseen the possibility that leaving Valve 14 in a throttled position would lead to a spill of partially processed heated coal tar pitch and the subsequent release of fumes into the atmosphere. Although Koppers was aware that Valve 14 was throttled, it was considered by Koppers not to affect the operation of the System and it notes that it has not experienced a similar circumstance in the last 10 years and could not have anticipated the erosion of the valve which caused the spill incident. It also notes that there was no indication that the integrity of Valve 14 had been compromised and submits that the evidence does not establish that a formal risk assessment would have identified that risk in any event. 4. Koppers also submits that a particular combination of events led to the spill incident and that it was not caused by the erosion of the valve alone. While Koppers accepts that it clearly foresaw the need to maintain the System and regularly change its components, it notes that Valve 14 was already scheduled for replacement and that this would have been "well within" the 5-year expected lifetime of the valve. 5. I consider that the risk of a maintenance error causing a spill, and the risk that harm would be caused as a result of a maintenance error, was reasonably foreseeable by Koppers. For harm to be foreseeable, the precise cause of an incident is not required to be foreseen: Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280; (2008) 163 LGERA 71 at [31]-[32]. Koppers was aware that Valve 14 had seized in May 2018 and had unsuccessfully sought to open the valve on a number of occasions on and after 21 May 2018 and knew that the valve was to be replaced later in the year. The risk of a maintenance error causing a spill which could cause harm to the environment was reasonably foreseeable by Koppers. Practical measures available to prevent, mitigate, abate or control the harm caused 1. Koppers accepts that, with the benefit of hindsight, measures could have been taken to prevent the spill incident. However, Koppers notes that Valve 14 had not been leaking prior to the spill incident; there was no evidence that there was a hole in the valve prior to the spill incident; and again submits that it had not experienced any similarly accelerated erosion of a valve in a throttled position at any point in the last 10 years. 2. The prosecutor submits, and I find, that Koppers had available to it a number of measures (being those summarised at [27] above) which, had they been implemented prior to the incident rather than afterward, could have prevented the harm. Control over causes of the offence 1. Although Koppers clearly did not have control over the circumstances leading to the sudden disruption to the electricity network in the Newcastle area, the prosecutor submits, and I accept, that the proper and efficient maintenance of plant and equipment (as required by Condition O2.1) would include ensuring the ability of the plant and equipment to continue operating in unforeseen circumstances including power outages. As such, at all relevant times, Koppers had control over the maintenance of the plant and equipment which caused the offence. State of mind and reasons for committing the offence 1. Although the state of mind of an offender at the time of an offence may make a strict liability offence such as s 64(1) of the POEO Act objectively more serious if committed intentionally, recklessly or negligently, Koppers is not alleged to have conducted itself in such a manner. Similarly, while an offence that is carried out for financial gain may be of increased seriousness, the prosecutor does not allege that Koppers had a "reason" for committing the offence. Conclusion on objective seriousness 1. Conscious that the task in which the Court is engaged is one of instinctive synthesis and not what may otherwise be described as 'two-staged' sentencing, and that an assessment of objective seriousness referable to a notional point on a spectrum of culpability, despite being a convenient shorthand descriptor, is not a necessary component of the sentencing task, I consider that on account of the objective factors noted above, the offence is of low objective seriousness for offences of this kind. Subjective circumstances of the offender 1. In determining the appropriate sentence for Koppers within the limits set by the objective seriousness of the offence, the Court must also take into account the subjective factors relevant to Koppers. Early plea of guilty 1. Koppers entered an early guilty plea and is thus entitled to a 25% discount for the full utilitarian value of its early guilty plea. Remorse 1. An expression of remorse may be a mitigating factor pursuant to s 21A(3)(i) of the Sentencing Act, 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), 1. Although the prosecutor accepts that Koppers has expressed "regret" for the offence it committed, it submits that Koppers has not complied with the requirements of s 21A(3)(i) of the Sentencing Act as it has not provided evidence that it has accepted responsibility for the spill incident and recognised the harm caused as a consequence of the commission of the offence. 2. Koppers submits that it has demonstrated genuine remorse and has done so through the actions it has taken rather than through "smooth apologies" which the Court has sought to avoid: Waste Recycling at [203]. 3. Koppers makes four submissions in this regard. First, the speed and efficiency of actions taken by Koppers to rectify the harm caused by the spill incident, including the prompt response of Koppers' employees at the Plant and the provision of car detailing vouchers to individuals who had cars affected by the fumes, is indicative of remorse. Secondly, Koppers acted with diligence and commitment in informing the EPA of the spill incident only 15 minutes after the spill began and positively engaged with the prosecutor in relation to the investigation and subsequent prosecution. Thirdly, Koppers has implemented a number of procedures and undertaken a number of corrective actions to prevent recurrence of a similar incident. Finally, the actions and statements of Koppers' senior executives indicate that Koppers is genuinely remorseful. This includes: 1. Statements by Mr Lyons in his affidavit; 2. Attendance by Mr Lyons and two senior executives at the sentence hearing; 3. Attendance of Koppers Global Chief Executive Officer and other Koppers' executives at a meeting with the EPA; and 4. Attendance at the Plant by Koppers Global Chief Executive Officer who sought to emphasise the importance of environmental compliance with Koppers' personnel. 1. Koppers submits that each of the above actions demonstrates that it accepts responsibility for the spill incident, acknowledges its impact to the community, and is committed to preventing any further incident. 2. I find that Koppers' conduct, as demonstrated by the matters noted above, is indicative of "taking actions" in the sense considered in Waste Recycling. As such, I accept the evidence of Mr Lyons, the most senior executive of Koppers, in relation to his personal acknowledgment of Koppers' responsibility for the spill incident and concerns regarding its past environmental performance and commitment to furthering environmental objectives. I note that Mr Lyons and two other senior executives of Koppers were present (virtually, in accordance with the Court's COVID-19 Pandemic Arrangements Policy) at the sentence hearing and I find that Koppers has demonstrated contrition and remorse and has taken responsibility for its actions, including a public apology, and, has acknowledged that harm was caused as a consequence of the commission of the offence. Lack of prior convictions 1. Koppers does not have any prior convictions for environmental offences. This is a mitigating factor: s 21A(3)(e) of the Sentencing Act. Good character 1. In considering whether Koppers is of good character (being a mitigating factor pursuant to s 21A(3)(f) of the Sentencing Act) the prosecutor submits that the Court should have regard to the fact that Koppers has received four penalty infringement notices – two of which relate to events that have occurred following the commission of the offence the subject of these proceedings. 2. The prosecutor also submits that, as observed by Preston CJ of LEC in Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 ('Plath v Rawson'), good character should be given less weight by the Court when sentencing for an environmental offence as such offences are typically committed by persons without prior convictions. 3. Koppers submits that the receipt of the penalty infringement notices is not a relevant factor for the purposes of sentencing and notes that it does not have any prior convictions for environmental offences. Koppers notes that the issuing of a penalty infringement notice is a statutory, administrative mechanism that is neither curial nor does it result in a conviction. 4. Koppers further submits that it was regularly in contact with the EPA prior to the spill incident to manage and enhance environmental compliance at the Plant including undertaking relevant studies and programs and upgrading equipment. 5. Koppers also submits that it has undertaken significant upgrades and programs since 2009, well before the spill incident, to achieve additional environmental controls. Koppers points to the evidence of Mr Lyons who details a number of specific measures which have been implemented by Koppers, including: engagement in a number of programs and studies primarily related to the management of emissions; the replacement, upgrading and installation of various pieces of equipment (such as back-up generators, pumps, water cooling towers etc.) at an estimated cost of $16 million; and the fact that Koppers has undertaken a number of thermal oxidation improvements to reduce pollutants and risks. Koppers also notes that it has engaged third parties for the purposes of gaining certification under ISO 14001 Environmental Management System for approximately 15 years. 6. Koppers finally submits that the circumstances before the Court are different to those considered by Preston J in Plath v Rawson and that Koppers' situation is more akin to that considered by Pepper J in Environment Protection Authority v Whitehaven Coal Mining Limited [2019] NSWLEC 27 ('Whitehaven'), with the consequence being that the Court would not give less weight to Koppers' good character and lack of prior convictions by reason of the nature of the offence which has been committed. 7. The parties made submissions regarding the weight that should be attributed to the penalty infringement notices. I consider that it is clear that the penalty infringement notice regime is a statutory mechanism to provide a procedure for the imposition and recovery of penalties as an alternative to court proceedings in relation to certain offences. The recipient of a penalty infringement notice who does not elect to have the matter dealt with by a court is deemed to be guilty of the offence: R v Einfeld (2008) 71 NSWLR 31; [2008] NSWCCA 215 at [30]. Even so, there can be no conviction until some act on the part of a court whereby it has determined the question of guilt and, as such, the receipt or otherwise of a penalty infringement notice cannot be a conviction to be taken into account pursuant to s 21A(3)(e) of the Sentencing Act. Despite this, a question of some nicety arises in relation to whether the receipt of such notices can be taken into account in relation to a party's good character. 8. My review of the various authorities indicates that the Court in the past has considered whether particular penalty infringement notices concern matters which are related to the offence then before the Court, and it follows that if the notices are unrelated, they should be given minimal, if any weight. 9. The Court did not receive evidence of the circumstances surrounding the penalty infringement notices however it was agreed that two of the notices (one relating to a breach of s 64(1) of the POEO Act and one relating to a breach of s 129(3) of the POEO Act) occurred prior to the subject charge and two notices (each relating to a breach of s 64(1) of the POEO Act) were issued after the subject charge. While the receipt and payment of the penalty infringement notices were admitted by Koppers, it was submitted that the conduct which lead to the issue of the notices is not before the Court. I accept this submission. As such, and apart from noting the fact that three of the notices related to a breach of a condition of its environment protection licence and one notice related to emission of offensive odours, given the present state of the evidence, I attribute minimal weight to the notices. 10. While I accept the comments of Preston J in Plath v Rawson in relation to the weight to be given to good character in environmental offences generally, I note that his Honour also emphasised at [146] that consideration of the weight to be given to good character requires examination of the character of the offence that has been committed. I consider that the approach taken by Pepper J in Whitehaven was more nuanced in that her Honour was concerned with the specific character of s 64 of the POEO Act, being strict liability offences committed by environment protection licence holders. This is, relevantly, the same offence with which Koppers has been charged. 11. Given the evidence before the Court, I consider that Koppers is a corporation of good character such that this is a mitigating factor. General and specific deterrence 1. In sentencing Koppers, I take into account the purposes of sentencing including punishment, retribution and denunciation and note that a sentence must act to deter the offender and others from committing like offences in the future. Proceedings involving offences under s 64 of the POEO Act are common in this Court and, given the fundamental role of s 64 of the POEO Act in enforcing the system of licencing enabled by that legislation, a sentence must deter others from risking breaches of licence conditions in the hope that only a nominal penalty would be received as punishment for that conduct: Environment Protection Authority v Huntsman Corporation Australia Pty Ltd [2011] NSWLEC 39 ('Huntsman Corporation') at [119]-[120]. 2. The prosecutor submits that Koppers is at risk of reoffending as it continues to operate the Plant pursuant to its environment protection licence. Although the prosecutor acknowledges that Koppers has since taken steps to reduce the likelihood of future valve failure, it submits that specific deterrence is nonetheless appropriate to prevent further (and possibly other) breaches of Condition O2.1. 3. Although specific deterrence is of lesser relevance given my findings below in relation to Koppers' likelihood of reoffending, general deterrence is nonetheless a factor that is relevant to the imposition of an appropriate sentence and, as such, I include an element of general deterrence so holders of environment protection licences maintain their plant and equipment in a proper and efficient condition. Prospects of rehabilitation and likelihood of reoffending 1. Koppers submits it has good prospects of rehabilitation, being a mitigating factor in accordance with s 21A(3)(g) of the Sentencing Act. If an offender is unlikely to offend then this will also be a mitigating factor: s 21A(3)(h) of the Sentencing Act. 2. Given my findings above that Koppers has demonstrated contrition and remorse, and noting the actions taken by Koppers subsequent to the incident to prevent future occurrences, I consider that Koppers is unlikely to reoffend and has good prospects of rehabilitation. I therefore take these matters into account in sentencing Koppers. Assistance to authorities 1. The prosecutor accepts that Koppers cooperated fully with the EPA investigations into the offence. This is a mitigating factor: s 21A(3)(m) of the Sentencing Act. Other sentencing matters Even-handedness 1. The Court should be consistent with any patterns of sentencing for like offences when determining the appropriate penalty for an offence. However, each case turns upon its own facts and will be subject to different objective and subjective circumstances: Environment Protection Authority v Borg Panels Pty Ltd [2016] NSWLEC 71 at [45]. 2. The prosecutor provided the Court with a table of seven cases (detailing their salient characteristics) relating to breaches of s 64 of the POEO Act which it submits are comparable with the present circumstances, including: Environment Protection Authority v Viva Energy Pty Ltd [2019] NSWLEC 13; Environment Protection Authority v Steggles Foods Mt Kuring-gai Pty Ltd [2017] NSWLEC 178; (2017) 230 LGERA 24; Environment Protection Authority v Morgan Cement International Pty Ltd [2016] NSWLEC 140; Environment Protection Authority v Hunter Water Corporation [2016] NSWLEC 76; Environment Protection Authority v Nulon Products Australia Pty Ltd [2015] NSWLEC 153; Environment Protection Authority v Orica Australia Pty Ltd (the Evaporator Incident) [2014] NSWLEC 104; Environment Protection Authority v Caltex Refineries NSW Pty Ltd [2008] NSWLEC 194. 3. Koppers submits that the Court should have regard to Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131 and Huntsman Corporation as comparable cases. 4. I have given consideration to each of the above cases and their objective and subjective circumstances in sentencing Koppers for the offence it has committed. Totality 1. As noted at [4] above, while this judgment concerns Koppers' contravention of s 64 of the POEO Act in relation to the breach of a condition of its Licence which resulted in the spill incident, Koppers has also pleaded guilty to two later offences in relation to the emission incidents. Although the offence relating to the spill incident and the offences relating to the emission incidents have been discretely considered in separate judgments, the totality principle nonetheless requires the Court to consider whether, having regard to the totality of the criminal behaviour, the aggregate sentence imposed across the series of sentences is just and appropriate: Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 at 63; Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [196]; Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57 at [40]. 2. Koppers submits that the totality principle applies in relation to the spill incident and the emission incidents as all three offences arise out of the operation of the same premises and the same environment protection licence. It also submits that the principle applies "with added force" in relation to the emission incidents. 3. The prosecutor submits that the totality principle should not be applied across the spill incident and the emission incidents, although it accepts that the totality principle ought to apply between the two emission incidents. I accept that submission. 4. I find that the spill incident the subject of this judgment and the emission incidents were not part of the same continuous course of conduct and are conceptually and temporally distinct and, as such, the totality principle does not apply. 5. It is clear that while the spill incident concerned a failure to maintain a valve and resulted in the spill of material, the emission incidents were instead the result of operator error, involved different equipment, and concerned breaches of a different legislative provision. The mere fact that the offences occurred at the same location is "insufficient to impart the requisite commonality so as to engage the application of the totality principle": Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103; (2014) 206 LGERA 239 at [248]. Costs of proceedings 1. Koppers has agreed to pay the prosecutor's costs as agreed or assessed. I take this into account in considering the appropriate penalty: Harris v Harrison (2014) 86 NSWLR 422; [2014] NSWCCA 84 at [100]. 2. The prosecutor has proposed that the monetary penalty imposed on Koppers be paid to Port Stephens Koala & Wildlife Preservation Society Ltd for the purposes of volunteer personnel training and associated veterinary costs at the Port Stephens Koala Hospital, pursuant to s 250(1)(e) of the POEO Act. Koppers does not oppose this order. 3. Having considered the evidence in relation to such an order, including a proposal signed by the Chief Executive Officer and Secretary of Port Stephens Koala & Wildlife Preservation Society Ltd, I consider it appropriate that such an order be made. Publication order 1. The publication of information relating to environmental offences and their repercussions is relevant to any sentence imposed as it enhances public perception and the deterrent effect of the sentence imposed: Waste Recycling at [242]; Environment Protection Authority v Dyno Nobel Asia Pacific Pty Ltd [2017] NSWLEC 64 at [163]; Environment Protection Authority v Crown in the Right of New South Wales [2019] NSWLEC 178 at [86]. 2. The prosecutor seeks an order pursuant to s 250(1)(a) of the POEO Act requiring Koppers to publicise this offence (and that such order include details of the offences arising in relation to the emission incidents (EPA v Koppers (the Emission Incidents)) in a number of newspapers and has provided a draft publication notice. Koppers does not oppose the order sought by the prosecutor. 3. I consider it appropriate that such an order be made and that the publication be in the form of Annexure "A" to this judgment which reflects the combined findings and sentences imposed in both this judgment and EPA v Koppers (the Emission Incidents). Conclusion on sentence 1. Considering each of the objective and subjective circumstances noted above and adopting an instinctive synthesis approach, I consider that the appropriate penalty for the offence is $40,000. Applying a discount of 25% for the utilitarian value of the early guilty plea, the final penalty for the commission of the spill incident is $30,000. Orders 1. The orders of the Court are: 1. Koppers Carbon Materials & Chemicals Pty Ltd ('Koppers') is convicted of an offence against s 64(1) of the Protection of the Environment Operations Act 1997 (NSW) ('POEO Act') as charged. 2. Koppers is to pay the Environment Protection Authority's legal costs as agreed or assessed, pursuant to s 257B of the Criminal Procedure Act 1986 (NSW). 3. Pursuant to s 250(1)(e) of the POEO Act, Koppers is ordered to pay, within 28 days, the amount of $30,000 to the Port Stephens Koala & Wildlife Preservation Society Ltd (ACN 614 265 833) for the purpose of training volunteers to assist veterinary staff at the Port Stephens Koala Hospital and associated facilities. 4. Pursuant to s 250(1)(a) of the POEO Act, Koppers is, at its own expense and within 28 days of the date of this order, to cause a notice in the form of Annexure "A" to this judgment to be placed within the first 11 pages of the following publications, at a minimum size of 14cm x 13cm: 1. Australian Financial Review; 2. Sydney Morning Herald; and 3. Newcastle Herald. 1. Within 35 days of the date of this order, Koppers must provide to the Environment Protection Authority a complete copy of the pages of the publications in which the notices have appeared pursuant to Order (4). ********** Annexure A (97584, pdf) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 February 2021