Land and Environment Court of New South Wales CITATION : Environment Protection Authority v Timber Industries Ltd [2000] NSWLEC 39 Prosecutor: PARTIES : Environment Protection Authority Defendant: Timber Industries Australia Ltd (ACN 000 049 221) FILE NUMBER(S) : 50079 of 1999 CORAM: Lloyd J KEY ISSUES: Environmental Offences :- water pollution - guilty plea - penalty Clean Waters Act 1970, s16(1) Crimes Act 1900, s439 LEGISLATION CITED: Environmental Offences & Penalties Act 1989, s9 Interpretation Act 1987, s30(1) Protection of the Environment Operations Act, s241 CASES CITED: DATES OF HEARING: 23/02/00 EX TEMPORE 02/23/2000 JUDGMENT DATE : APPLICANT: D Samuels (solicitor) SOLICITORS: S Garrett LEGAL REPRESENTATIVES: DEFENDANT: A L Hill (barrister) SOLICITORS: Pryor Tzannes & Wallis JUDGMENT: IN THE LAND AND Matter No: 50079 of 1999 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 23/02/00 Environment Protection Authority Applicant v Timber Industries Pty Ltd Respondent JUDGMENT HIS HONOUR: 1. The defendant has pleaded guilty to an offence against the Environmental Offences and Penalties Act 1989 in that on or about 3 November 1998 it did pollute waters contrary to s 16(1) of the Clean Waters Act 1970. 2. The Clean Waters Act has since been repealed and its provisions have been largely repeated in the Protection of the Environment Operations Act 1997. Liability for offences committed under legislation which is subsequently repealed however, continues (s 30(1), Interpretation Act 1987.) 3. The defendant is and was at all relevant times the occupier of a factory premises at 369 Stewart Street Bathurst. The main operation carried out within the factory is the treatment and moulding of dried timber. The process involves the storage and use of a product called Vascol Clear N-RTU Solution. The product is used as a wood preservative for the protection of timber against fungal and insect attack. The product was apparently kept in a steel tank within the plant, the level of the product within the tank being regulated by a float switch. 4. According to the evidence of Mr IJ Murray, who was the manager of the factory at the time, the float switch in the tank was set too high and at times the product seeped out at a gasket between the tank and a vent line. 5. 28 October 1998 the head operator employed by the defendant, Mr RB Wilson, had prepared a maintenance job request to have the high level switch lowered. According to the maintenance job request, the float switch was required to be lowered "as tank is over-filling and fluid is escaping into bund area". 6. On the morning of 3 November 1998 a contract electrician, Mr JV Ellison, worked on the float mechanism and adjusted it. Mr Ellison was unfamiliar with the switch mechanism. There was nothing written on the switch itself, except for a telephone number of a company called Temperature Control. He was unaware of the details of the mechanism of the switch. Mr Ellison had not received any specific training on the particular type of switch. He nevertheless adjusted it in consultation with Mr Wilson. In adjusting the switch, Mr Ellison inadvertently moved the float mechanism out of the range of the switch so that no matter how much fluid entered the tank the switch was never going to turn itself off and stop the process. 7. Mr Ellison told Mr Wilson that he was unfamiliar with the operation of the switch and to keep an eye on the level of liquid in the tank. 8. Shortly after 9am on the same morning, Mr Wilson started to charge the tank. Unknown to him, the float switch did not work. The tank was fitted with a vent to the roof on the building. Mr Wilson realised that something was wrong when he observed the product overflowing off the roof and running down the face of the building. Because the float switch had not turned off, the product had continued to fill the tank and came out in the vent line onto the roof. Mr Wilson immediately shut the system off. The period of time between Mr Wilson noticing the overflow and his shutting down of the plant was about fifteen seconds. 9. The defendant's employees quickly pulled down the downpiping away from the walls to stop the product from flowing into the stormwater system and placed absorbent material around the base of the downpipes. The manhole covers in the main stormwater system were lifted and absorbent material was dropped to soak up any of the product. The product had by then entered a stormwater drain outside the property which Mr DJ Patterson, a Bathurst City Council works engineer, said was known as Jordan Creek. 10. A plan was tendered which was prepared by the council in 1977 which shows the drain as Jordan Creek but which has since been piped for much of its length. 11. Mr WS Rooney, an aquatic ecologist, who was called to give evidence for the defendant described the drain as an open formed stormwater drain rather than a natural watercourse. This drain joins a larger watercourse also known as Jordan Creek about one kilometre downstream, which in turn enters the Macquarie River a further one kilometre downstream. Fortunately, the product did not reach either the Macquarie River or the larger watercourse also known as Jordan Creek. There was at the time very little flow in the drain. 12. About an hour after the spill was first noted both the prosecutor's Bathurst office and the Fire Brigade were notified. The Fire Brigade placed booms in the drain and managed to contain the product before it could enter the larger watercourse. The defendant arranged for a super-sucker and three tankers to attend and pump out the drains at the defendant's premises and pump out the creek. 13. Mr Wilson estimated that about 200 litres of the product was lost and that forty litres had left the site and entered the drain but he admitted that these were very inaccurate guesses. 14. Mr S Robinson, a site engineer employed by the defendant, said that the roof gutter on the factory was about half full of sawdust and shavings which had contained most of the product. The presence of sawdust blocking the gutters was apparently the main reason why the product had overflowed off the roof. 15. Mr S Ryan, the depot manager of Cleanaway which had attended with the suction equipment and tankers, said that a total of 53,100 litres was removed. In Mr Ryan's opinion no more than sixty litres of the product, which had a distinctive red colouration, escaped from the defendant's premises, the rest being water. 16. In my opinion the most accurate assessment of the amount of product which escaped from the defendant's premises is that of Mr Ryan, whose organisation took the material away. Mr Ryan is an independent witness whose evidence I accept without question. 17. I am thus satisfied beyond a reasonable doubt that the amount of the product which escaped into the drain was about sixty litres. 18. I am also satisfied that virtually all of the product was recovered from the drain before it could proceed into the larger arm of Jordan Creek and into the Macquarie River. 19. The product contains three major ingredients: permethryn, tributal tin napthenate and white spirits. There seems to be no difference between the experts called for the prosecutor and for the defendant respectively as to the toxicity of these ingredients. Permethryn is a broad spectrum synthetic pyrethroid insecticide with a particularly high toxicity to aquatic organisms. Tributal tin napthenate is likely to have a similar toxicity to other tributal tin compounds which have widespread use in anti-fouling paints and wood preservation. Hence its toxicity is likely to be high to extremely high. White spirit is similar to highly refined mineral oils which generally have low toxicity. Like all oils, white spirits may smother or suffocate aquatic organisms that come into direct contact with the oil slick on the water surface. The two most toxic compounds, permethryn and tribunal tin napthenate, have low water solubility and would tend to partition into the oil layer. According to the material safety data sheet held by the defendant, the solution used to treat the timber is insoluble. If this is literally true, then virtually all of the active ingredients diluted in the carrier solution should also be insoluble. 20. The prosecutor accepts that no actual environmental harm was caused in this case. Both parties accept, however, that the product is a dangerous substance which could be harmful to humans as well as to aquatic life. Its active ingredients are accepted as being quite toxic. If it comes into contact with humans, it is said to be irritating to the eyes, may be absorbed by the skin and cause burns and vapour or mist will irritate the upper respiratory tract. The material safety data sheet states that all personal contact should be avoided, including inhalation. 21. An environment protection officer employed by the prosecutor, Ms CL Dwyer, noted an odour in the drain on the day of the spill which she described as a very strong odour of a white spirit type. Mr TJ Knowles, an environment protection officer employed by the prosecutor, also smelled a very strong odour. 22. On Thursday 5 November 1998, two days after the spill and the cleanup, Ms Dwyer noted a slight odour of white spirit in the drain but there was no longer the red appearance of the product in the drain. 23. The defendant shut down its plant for about a week, during which time it installed a new system of handling the product. The new works include removing the vent pipe from venting directly to the roof. The new system involves venting to a secondary tank located within a bunded area and venting from that tank to the roof. The secondary tank is also fitted with a float switch and an audible alarm. In the event of an overflow, the spill would be contained within the secondary tank and within the bunded area and the audio alarm would sound warning of the situation. Moreover, if the float switch in the secondary tank is activated, it automatically shuts down the plant operations. 24. The defendant engaged an independent consultant on the new system. The modifications cost the defendant the sum of $16,917. 25. I turn now to the question of penalty. Section 9 of the Environmental Offences and Penalties Act sets out a number of matters which the Court must take into consideration in addition to any other matter the Court considers relevant. The matters listed in s 9 are, coincidentally, the same as those set out in s 241 of the Protection of the Environment Operations Act. Paragraph (a) of s 9 refers to the extent of the harm caused, or likely to be caused to the environment by the commission of the offence. This requires the Court to have regard to the seriousness of the offence. I have noted that the prosecutor accepts that in this case there is no evidence of actual environmental harm. There was however a potential for considerable environmental harm if the pollutant had reached the principal arm of Jordan Creek and particularly so if it had reached the Macquarie River. The undisputed evidence in this case is that the pollutant was a dangerous substance if it came into contact with either humans or aquatic life. The defendant's expert witness, Mr Rooney, described it as a very dangerous substance, the active ingredients of which are quite toxic. 26. The next consideration, paragraph (b) of s 9, is the practical measures that may be taken to prevent, control, abate or mitigate the harm. In this respect, I note that a new system has been installed involving a second tank, a second float switch with an audio alarm and an automatic cutoff. I also note that the defendant engaged an independent consultant on the new system. It seems to me that such measures having been taken they could and perhaps ought to have been taken before the incident that gave rise to this prosecution. 27. The next consideration is paragraph (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. In this respect, I accept the prosecutor's submission that the defendant knew it was dealing with a hazardous material. It also knew that the vent pipe on the tank went onto the roof. I take those factors into account. 28. The next consideration, paragraph (d), is the extent to which the person who committed the offence had control over the causes which gave rise to the offence. In this case, I accept the defendant's submission that the electrician made a mistake and that he was a contract electrician upon whose expertise the defendant relied. However, the evidence of Mr Ellison, the electrician, is that he told Mr Wilson that he was unfamiliar with the operation of the switch and told Mr Wilson to keep an eye on the level of liquid in the tank. This, it seems, Mr Wilson failed to do. 29. I do accept, however, that the defendant acted promptly to control the spill and that its acts in controlling the spill were completely effective in avoiding any actual environmental harm. 30. The final consideration under s 9, paragraph (e), is whether in committing the offence the person was complying with orders from an employer or supervising employee. That consideration is in my opinion not relevant in this case. 31. I also take into account a number of other matters. Firstly, the fact that the defendant has pleaded guilty to the offence. As required by s 439 of the Crimes Act, I am required to take that into consideration and to discount the penalty that would otherwise be imposed for that reason. The plea of guilty demonstrates that the defendant accepts that it has committed the offence and it is contrite and remorseful. The evidence also discloses that the defendant has co-operated fully both at the time of the commission of the offence, and subsequently, with the prosecutor. The defendant incurred, in addition to the rectification works, the cost of the cleanup which I am informed was about $30,000. Thus it might be said that the defendant's hip pocket nerve has already been touched by this incident. This is an important consideration. 32. I also accept that there was no environmental harm. It is a principle in considering what is an appropriate penalty that the more serious and lasting the environmental harm involved the more serious the offence and, ordinarily, the higher the penalty. 33. Having regard to those considerations, it seems to me that the penalty to be imposed in this case should be at the lower end of the scale. The maximum penalty prescribed by the legislature is $120,000. The maximum, of course, is reserved for the most serious category of offence. The matters to which I have referred demonstrates that this is in the less serious category. 34. When imposing a penalty, a Court should also have regard to the principle of even-handedness. That is to say regard should be had to the collective wisdom of other sentencing judges in imposing penalties for similar offences. I also take that consideration into account. 35. Having regard to all these considerations, I am of the opinion that in this case a penalty of $15,000 is called for. 36. Accordingly, I make the following formal orders: (1) The defendant is convicted of the offence as charged. (2) The defendant must pay a penalty of $15,000. (3) The exhibits may be returned. 37. On the question of costs, I note that the parties have agreed that there should be an order that the defendant pay the prosecutor's costs in the sum of $5250. 38. Accordingly, there is a further order that: (4) the defendant pay the prosecutor's costs in the sum of $5250. 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.