Environment Protection Authority v Metalcorp Recyclers Pty Limited [2000] NSWLEC 259

Land and Environment Court of New South Wales

CITATION : Environment Protection Authority v Metalcorp Recyclers Pty Limited [2000] NSWLEC 259 PROSECUTOR: Environment Protection Authority PARTIES : DEFENDANT: Metalcorp Recyclers Pty Limited ACN 002 707 262 FILE NUMBER(S) : 50078 of 1999 CORAM: Lloyd J KEY ISSUES: Environmental Offences :- breach of licence condition - noise pollution - explosion at metal recycling plant - guilty plea - penalty Crimes Act 1900 s 439 Environmental Offences and Penalties Act 1989 s 9 LEGISLATION CITED: Interpretation Act 1987 s 30 (1)(b) Pollution Control Act 1970 s 17D (9) Protection of the Environment Operation Act 1997 s 241 CASES CITED: DATES OF HEARING: 14/02/2000 DATE OF JUDGMENT: 02/14/2000

PROSECUTOR: Mr D Samuels (Solicitor) SOLICITORS: Stephen Garrett LEGAL REPRESENTATIVES: DEFENDANT: Mr S M Berveling (Solicitor) SOLICITORS: Abbot Tout

JUDGMENT: 8

IN THE LAND AND Matter No: 50078 of 1999 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 14 February 2000

Environment Protection Authority

Prosecutor

v

Metalcorp Recyclers Pty Limited

ACN 002 707 262

Defendant

EXTEMPORE JUDGMENT

HIS HONOUR: 1. The defendant is charged with the offence that on or about 29 October 1998 at Chipping Norton it committed an offence against the Environmental Offences and Penalties Act 1989 in that being a holder of a licence granted under the Pollution Control Act 1970 it did contravene a condition of that licence contrary to section 17D(9) of the Pollution Control Act 1970. 2. The summons was filed on 20 October 1999, by which time the Pollution Control Act had been repealed and replaced by the Protection of the Environment Operations Act 1997. By dint of section 30(1)(b) of the Interpretation Act 1987, however, the repeal of an Act does not affect the previous operation of the Act or anything duly suffered, done, or commenced under the repealed Act. 3. The defendant is the holder of a pollution control licence, which was in force from 1 January 1998 to 1 January 1999. The defendant operates a metal recycling business from premises at Nos. 53-57 Riverside Road, Chipping Norton. Condition N3 of that licence provides: Offensive noise arising from explosions on the premises is not to be emitted from the premises at any time. "Offensive noise" means any noise that, by reason of its level, nature, volume, intensity or the time at which it is made is likely to: (a) be harmful to; or (b) to interfere unreasonably with the comfort or repose of; any person outside the premises who is not associated with the management or operation of the licensee. 4. The defendant receives scrap metal at the premises in a variety of forms and thicknesses that require further processing. Light gauge metals, including car bodies and white goods, are placed on a conveyor that takes it to a shredder. Explosions can occur in the shredder when items such as gas cylinders or motor vehicle petrol tanks are shredded, or even due to the presence of dust under certain conditions. 5. An explosion occurred at the premises at about 7.20 am on 29 October 1998. The defendant immediately reported the incident to the prosecutor's pollution control line and followed that up with a written report on the following day. 6. The prosecutor received a number of complaints on its pollution control line on 29 and 30 October 1998 from eight nearby residents affected by the explosion. A relatively new residential subdivision is situated approximately 100 to 150 metres from the boundary of the premises. There are also residences, from which two complaints came, located to the east of the premises on the opposite side of Georges River in the suburb of Georges Hall. This residential area begins about 500 metres from the boundary of the premises. 7. The cause of the event which gave rise to this prosecution is not known. In a report furnished by the defendant to the prosecutor on 30 October 1998 it is stated that an examination of the contents of the shredder was inconclusive. The report also states that in the defendant's experience, gas explosions in a shredder tend to be directional to a certain extent, they are loud in one direction and not so loud in the other three directions, as this explosion was. The report states that a debriefing with the inspectors has shown up a couple of problem areas upon which to concentrate, including openly accepting gas bottles at the premises to avoid their concealment within scrap, scrap quality inspections and identifying cars.. 8. In this instance, the air blast over-pressure was recorded peaking at 136.5 decibels and the effects of the event on the over-pressure was apparent for 216 milliseconds. This recording was apparently made by the defendant at its premises. 9. The defendant, in its report on the incident states that it is difficult to say what specifically caused the event. I quote from the report: We can only deduce that someone supplying scrap material to us has ignored our prominent signs showing items that we will not accept under any circumstances and that this flammable or explosive material has escaped our thorough inspection and acceptance procedure. There were three inspectors in the area at the time who are all very experienced and trained in inspection of scrap for combustible items. 10. The report concludes: We apologise for any nuisance caused to our neighbours from this event and ensure them we are endeavouring to educate our customers to minimise a recurrence. We will inform you if we achieve any progress in our continuing investigation of this event. 11. Evidence has been furnished by eight residents who were affected by the explosion. Some of them have experienced several explosions in the past. One has kept records since 27 July 1997 and this shows that since that time thirty one (31) explosions were recorded. The explosion in this case caused some alarm to the residents. One said that her daughter woke up screaming. Another said that her heart started to race from fear. Another said that the explosions are distressing. In the case of another resident, the explosion caused a picture to fall from the wall, shattering glass, waking her youngest son, who then cut his foot on the glass. Another resident said that the explosion woke her four- and- a half year old son and pieces of a dinner set fell from a buffet and were smashed. I should add that the cost of replacing the dinner set was promptly met by the defendant. 12. Although the precise cause of the explosion on this occasion is not known, the defendant has in place and had in place a number of steps to prevent items that are likely to cause explosions from entering the shredder. These include the inspection of materials by grab operators when separating the scrap metal from its semi-compacted form. Up to four full time inspectors physically sift through the scrap to look for any potentially explosive items and to drain fuel from fuel tanks. The defendant also injects water into the mill area of the shredder to reduce the potential for explosions and inspection of materials in the conveyor by video camera are carried out on their way to the shredder. The videotape can be viewed closely after an explosion occurs to aid in determining the cause of the explosion. On this occasion, three inspectors were present to physically sift through the scrap metal and the video did not show the presence of any item that might have caused the explosion. 13. During 1998 the defendant reported twenty eight (28) explosions occurring at its premises. The defendant has no prior convictions for environmental offences. 14. The manager of the defendant has deposed as to the nature of the operations on the site, the inherent problem in operating the metal shredder and proffered suggestions as to the possible cause of the subject explosion. He states that in 1998 nearly 180,000 tonnes of metal were received for recycling at the premises. This included about 50,100 automobiles. An average of 176 automobiles are received each day. Material that is to pass through the shredder is inspected by four full time inspectors who are responsible for searching and removing items such as fuel in fuel tanks, LPG cylinders, gas barbecue bottles, propane cylinders, modified nitro burning racing-car tanks and long range fuel tanks. To assist the inspection, bonnets, boot lids and roofs are pulled off motor vehicles in order to provide the inspectors with increased accessibility to the inside of the vehicle. Where practical, the petrol tank is also ripped out or spiked to help fuel to drain from the tank. Much of the fuel can be reduced in this way but not always all the fuel is intercepted in this way. According to the manager a cup of fuel is sufficient to cause an explosion. 15. The defendant has experienced numerous instances of explosive material being delivered to its premises, despite a large sign at the front of the site banning customers from doing so. The defendant has found acetylene bottles tucked under motor vehicle seats and even a gas cylinder jammed into the freezer compartment of a refrigerator. Often motor vehicles are used as waste receptacles for all manner of materials, from spare motor parts to drums of paint thinners or mower fuel and aerosol cans which can all be explosive. 16. During 1998 over 980 gas bottles were extracted from the scrap to be recycled, each one of which was a potential explosion. Twenty eight (28) explosions during 1998 equates to an incident rate of one explosion per 2003 vehicles and gas bottles received, or one explosion per 6420 tonnes of scrap metal accepted for recycling. The inspection and pre-processing procedures utilised by the defendant intercepted a possible 56,080 explosions during 1998, equating to a success rate of some 99.95 percent. 17. The defendant has implemented an incentive scheme for its inspection employees for the past two years in an attempt to improve the recovery of gas cylinders and other explosive items from the scrap stream. An amount of $10 is paid for each gas bottle found and this costs the defendant about $2,000 a month, given that an average of some 200 bottles are found per month. This money is apparently shared between the four inspectors and two to three other yard personnel involved in the process. 18. As to the possible cause of this explosion, according to the defendant's manager, the magnitude and brevity of the event leads him to suspect that the likely cause of the explosion was an acetylene gas bottle. Explosions from acetylene gas bottles are more difficult to stop due to the ease by which small bottles can be inadvertently hidden, or not detected within the scrap. At the smaller end of the scale, these bottles are no larger than a milk carton, yet still capable of generating a significant explosion. 19. If the operations were to be moved from the subject premises, a new plant would need to be constructed. The defendant's most recently built shredder in Brisbane cost $9.8 million. To this figure would have to be added over $300,000 for the cost of preparing development consents, building approvals and associated information. It would not be unreasonable, in the manager's opinion, to expect the replacement costs for the present plant to be in the order of $20 million. Nevertheless shredder explosions still occur. 20. The defendant has through its manager adduced evidence of the public importance of recycling. Without recycling, items such cars, white goods and other metallic items would quickly fill up scarce landfill. The shredding of motor vehicles reduces 90 percent of the volume which a motor vehicle would otherwise take up in landfill. Not recycling also means that the metals must be extracted from ores with the inherent environmental impact of mining, the high energy demand to produce metal from raw ore and the subsequent greenhouse impact from generating this energy from the burning coal. Recycling encourages people to do the right thing, to not abandon their motor vehicles and white goods beside roads, in vacant lots, in public parks and bush reserves. 21. The maximum penalty for this offence is $30,000. Mr Samuels submits that there is a need to impose a penalty which reflects a need for a general deterrence to discourage repetition of the offence. 22. Mr S Berveling appearing for the defendant refers to the beneficial activity of recycling, to which I have referred. He refers to the difficulty in locating potential explosive items in the scrap metal received, despite the measures that the defendant has in place. He refers to the 99.95 percent success rate in removing potentially explosive material from the scrap metal before it enters the shredder. He refers to the fact that most of the complaints came from a recently developed urban area in Chipping Norton, that the shredder has been where it is since 1977, more than twenty two years. He refers to the fact that the incident was notified promptly by the defendant to the prosecutor. Finally, he refers to the very early plea of guilty. 23. I take into account, pursuant to section 439 of the Crimes Act 1900, the very early plea of guilty and the expression of contrition and regret which that plea involves. 24. There are a number of matters that have to be taken into account under section 9 of the Environmental Offences and Penalties Act. Although the Environmental Offences and Penalties Act has now been repealed and replaced by the Protection of the Environmental Operations Act 1997, section 241 of the latter Act is to the same effect as section 9 of the former Act. That section sets out the factors that have to be taken into consideration in considering what penalty to impose. 25. First is the extent of the harm caused or likely to be caused to the environment by the commission of the offence. In the present case there was direct and immediate harm caused to the eight persons whose evidence I have received and I have described that evidence. Although it was instantaneous, it had an effect on the particular residents who have given evidence and (in two cases) upon their children. 26. Next I take into account the practical measures which may be taken to prevent, control, abate or mitigate that harm. It seems to me that the defendant has done reasonably well in this respect. Mr Samuels, however, has pointed to two areas where an improvement could be made. He refers to the report of the incident furnished by the defendant to the prosecutor on the day following the incident. That report states that a "debrief" with the inspectors has demonstrated to the defendant problem areas upon which to concentrate, including openly accepting gas bottles to avoid their concealment, scrap quality from tips and identifying cars per customer. Mr Samuels also refers to the statement in the same report that the defendant is endeavouring to educate its customers to minimise a risk of explosion. A success rate thus far of 99.95 per cent seems to be quite high. Mr Samuels suggests that this success rate could be improved as shown by the statements in the defendant's report. It seems to me that by openly accepting gas bottles and the like, the defendant may discourage their concealment in scrap. But it seems to be an inherent part of the business of shredding metal that this kind of thing may happen from time to time. 27. Next I am required to consider 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 the present case, the event was foreseen and I have described the steps that have been taken to avoid the kind of thing that happened from happening. 28. Next I am required to consider the extent to which the person who committed the offence had control over the causes which gave rise to the offence. In this case the defendant was the owner of and operator of the plant and it had the necessary control. 29. I also take into account the expression of concern for explosions on the part of the defendant in his dealings with nearby residents. It has encouraged residents to report explosions directly to it. It promptly replaced the dinner set that had been broken at one residence as a consequence of this incident. 30. I take all those matters into account, together with the early guilty plea and the expression of regret and contrition which that implies. 31. Having regard to the extent of environmental harm and the other matters to which I have had regard, I am of the opinion that some kind of monetary penalty should be imposed. Since this is the first offence for this defendant and in view of the long period of time during which the defendant has been operating, I think that the offence should be at the lower end of the scale. I therefore impose a penalty in this instance of $5,000. 32. The formal orders of the Court are: 1. The defendant is convicted of the offence as charged. 2. The defendant must pay a penalty of $5,000. 3. The defendant must pay the prosecutor's costs in the sum of $4,500.