Land and Environment Court of New South Wales CITATION : Environment Protection Authority v Smart Skip (NSW) Pty Ltd [2009] NSWLEC 204 PROSECUTOR PARTIES : Environment Protection Authority DEFENDANT Smart Skip (NSW) Pty Ltd FILE NUMBER(S) : 50035 of 2009 CORAM: Pain J KEY ISSUES: PROSECUTION :- sentence - corporation using land as waste facility without environment protection licence - waste operations in excess of threshold where no licence required - no actual environmental harm - efforts made after offence to ensure compliance with legislation- mitigating factors - order for prevention made - publication order made LEGISLATION CITED: Protection of the Environment Operations Act 1997 s 144, 241, 245, 250, Sch 1 Crimes (Sentencing Procedure) Act 1999 s 3A, 21A 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 Forgacs Engineering Pty Limited [2009] NSWLEC 64 Environment Protection Authority v Ghossayn [2009] NSWLEC 181 Environment Protection Authority v Hogan [2008] NSWLEC 125 Environment Protection Authority v Holley [2009] NSWLEC 124 CASES CITED: Environment Protection Authority v Werris Creek Coal Pty Ltd Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77 Hoare v R (1989) 167 CLR 348 at 354 R v Olbrich (1999) 199 CLR 270 R v Sharma (2002) 54 NSWLR 300 R v Thomson; R v Houlton (2000) 49 NSWLR 383 Veen v The Queen [No. 2] (1988) 164 CLR 465 DATES OF HEARING: 30 November 2009 EX TEMPORE JUDGMENT DATE : 30 November 2009 PROSECUTOR Mr M Kelly SOLICITOR LEGAL REPRESENTATIVES: Environment Protection Authority DEFENDANT Mr I Lloyd QC SOLICITOR Colin Biggers & Paisley JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 30 November 2009 50035 of 2009 Environment Protection Authority v Smart Skip (NSW) Pty Limited EX TEMPORE JUDGMENT 1 Her Honour: The Defendant, Smart Skip (NSW) Pty Ltd, is charged with committing an offence under s 144(1) of the Protection of the Environment Operations Act 1997 (the POEO Act) from 1 July 2006 to 30 June 2007, at or near Silverwater that as the occupier of land, it caused the land to be used as a waste facility without lawful authority. Section 48 of the POEO Act requires that specified premises must hold an environment protection licence. These are specified in Schedule 1 to include waste facilities which store, separate and process more than 30,000 tonnes of waste per year. 2 The particulars of the offence set out in the summons were the sorting at the site and/or transferring to and/or from the site more than 30,000 tonnes of waste per year without holding an environment protection licence and the sorting at the site of more than 80 tonnes per day of waste contrary to a development consent. The waste comprised demolition waste including concrete, metal, bricks, plastic and soil. 3 The Defendant pleaded guilty to the offence on 21 August 2009 (the third directions hearing) and has therefore admitted the essential elements of the offence. The offence is one of strict liability so that mens rea is not an element of the offence. It is necessary to determine the appropriate sentence in this matter. 4 Section 144 provides: (1) A person who is the owner or occupier of any land and who uses the land, or causes or permits the land to be used, as a waste facility without lawful authority 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, or (b) in the case of an individual—$250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues. (2) In any proceedings for an offence under this section the defendant bears the onus of proving that there is lawful authority to use the land concerned as a waste facility. 5 A "waste facility" is defined in the Dictionary to the POEO Act as "any premises used for the storage, treatment, processing, sorting or disposal of waste (except as provided by the regulations)." 6 Waste is defined in the Dictionary to the POEO Act as follows: (a) any substance (whether solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such volume, constituency or manner as to cause an alteration in the environment, or (b) any discarded, rejected, unwanted, surplus or abandoned substance, or (c) any otherwise discarded, rejected, unwanted, surplus or abandoned substance intended for sale or for recycling, processing, recovery or purification by a separate operation from that which produced the substance, or (d) any processed, recycled, re-used or recovered substance produced wholly or partly from waste that is applied to land, or used as fuel, but only in the circumstances prescribed by the regulations, or (e) any substance prescribed by the regulations to be waste. A substance is not precluded from being waste for the purposes of this Act merely because it is or may be processed, recycled, re-used or recovered. 7 As identified in s 144(2), the maximum penalty applicable to an offence under s 144 of the POEO Act is $1 million for a corporation with a daily penalty of $120,000 for each day the offence continues. The penalty for this offence was increased to $1 million from $250,000 in May 2006. The maximum daily penalty did not change. 8 The parties usefully agreed a Statement of Agreed Facts (the SOAF). The essential elements of this are as follows: 1. The Defendant, Smart Skip (NSW) Pty Ltd ACN 109 045 552 ("Smart Skip"), is charged with one offence of being the occupier of premises which it caused to be used as a waste facility unlawfully, contrary to section 144(2) of the Protection of the Environment Operations Act 1997 ("the POEO Act") between about 1 July 2006 and 30 June 2007. 2. The unlawfulness involved is the failure to hold an environment protection licence for a waste storage, transfer separating or processing facility that stored, transferred or recovered by way of separating or processing more than 30,000 tonnes a year. In addition, the operation is in breach of the current development consent for the premises which allows the sorting of 80 tonnes of waste per day. 3. The premises are located at 19 Fariola Street, Silverwater in New South Wales, being Lots 3, 4 and 5 of Section 56, Deposited Plan 5818 ("the Premises"). 4. … BACKGROUND 5. Smart Skip is a corporation registered in Australia on 12 May 2004. 6. Mr Dean Leonard Wanless was, at all relevant times, the sole director of Smart Skip. 7. Smart Skip acquired the business on or about July 2004. 8. At all relevant times, Smart Skip was the occupier of the Premises. 9. Smart Skip operates a skip bin business in New South Wales and the majority of waste collected in the skip bins from this business was received at the waste transfer station at the Premises. These skip bins are supplied to demolition and construction businesses and to a lesser extent, domestic private renovators. 10. Some small amounts of waste collected in the skip bins by Smart Skip were sent directly to landfill. These proceedings are not concerned with this waste as it has not passed through the Premises. 11. The waste collected in the skip bins is largely building and demolition waste, which includes bricks, timber, plastic, soil and concrete. This type of waste can be contaminated with other materials such as paint containing lead, asbestos, polycyclic aromatic hydrocarbons and pesticides. 12. Smart Skip has not ever held an environment protection licence issued by the Environment Protection Authority ("the EPA") under the POEO Act authorising any premises-based activities at the Premises. 13. Smart Skip does hold environment protection licence no. 12601 issued by the EPA under the POEO Act for the transport of waste. 14. On 13 November 2008, Smart Skip applied for an environment protection licence in relation to the waste facility activities at the Premises. Under section 50(2) of the POEO Act the EPA cannot grant that application until development consent has been obtained to operate above the transfer of 80 tonnes of waste per day. However, there has been feedback from the EPA on the application. OPERATION OF THE TRANSFER STATION 15. Generally, during the hours of operation, full skip bins are collected and brought to the Premises. There the waste is sorted into separate streams. These separate streams of waste are then either recycled or disposed to landfill. 16. At all relevant times, sorted metal, being steel, was sent to Metalcorp Recyclers Pty Ltd, trading as Smorgon Steel Recycling at Wetherill Park ("Metalcorp"). 17. At all relevant times, sorted concrete was sent to Recycled Resources Pty Ltd at Silverwater ("Recycled Resources"). 18. At all relevant times, waste that could not be recycled was sent to either a landfill at Blacktown, operated by Blacktown Waste Services Pty Ltd ("Blacktown Landfill") or at Huntley near Dapto, operated by HTT Huntley Heritage Pty Ltd ("Huntley Landfill"). 19. At all relevant times, Mr Joe Brcic was the General Manager of Smart Skip. Mr Brcic was not an employee of Smart Skip but Smart Skip contracted with JB Waste Services Pty Ltd (ACN 120 587 073) for Mr Brcic to manage the business at the Premises. DEVELOPMENT CONSENT 20. By letter dated 21 February 1995, R D Booth Architects Pty Ltd made application for development consent to Auburn Council in relation to a number of activities at the Premises. A copy of that letter and application is Attachment D. 21. On 19 May 1995, Auburn Council granted a conditional development consent 45/95 under the Environmental Planning and Assessment Act 1979 for a range of activities at the Premises. A copy of that consent is Attachment E. EVENTS PRIOR TO THE UNLICENSED OPERATION 22. At a meeting on 17 August 2004 between EPA officers and Mr Andrew Darley, the then General Manager for Wastecorp (NSW) Pty Ltd ("Wastecorp"), and Mr Rick Hall, a consultant for Wastecorp, the EPA was advised that Wastecorp had recently acquired the business at the Premises. The EPA's Mr Steve Beaman, then Manager Sydney Waste, advised Wastecorp that it needed to look into whether the operation at the Premises was over the threshold for licensing. It was agreed that the EPA would await advice from Wastecorp in relation to that matter and the EPA expected feedback by 7 September 2004. 23. Mr Dean Leonard Wanless is the sole director of Wastecorp and Smart Skip is a company controlled by the Wanless Wastecorp group of companies. 24. On or about 24 January 2005, the Department of Environment and Conservation ("the DEC"), which includes the EPA, sent a letter to Wastecorp in relation to the Premises. A copy of that letter is Attachment F. 25. On or about 10 February 2005, Wastecorp sent a letter in response to the DEC's letter of 24 January 2005. A copy of that letter is Attachment G. 26. On or about 11 February 2005, the DEC sent a further letter to Wastecorp in relation to the Premises. A copy of that letter is Attachment H. 27. EPA authorised officers conducted an inspection of Smart Skip's activities at the Premises on 4 May 2005. Those officers were accompanied by an authorised officer from Auburn Council. 28. On 23 June 2005, Wastecorp sent a letter to Auburn Council in relation to the Premises. A copy of that letter is Attachment I. 29. On 27 June 2005, Wastecorp sent a letter to Auburn Council in relation to the Premises. A copy of that letter is Attachment J. 30. On 29 August 2005, Smart Skip sent a letter to Auburn Council in relation to the Premises. A copy of that letter is Attachment K. [The letter which is Attachment F notifies Mr Wanless of the Department's belief that the facility is receiving waste in excess of 30,000 tonnes per year. The letter states that this requires an environment protection licence. Mr Wanless is requested to notify the Department of its intention regarding licensing and compliance with the POEO Act by 10 February 2005. The letter which is Attachment G notifies the Department that the Defendant has operated the station for the previous seven months and in that time 17,501 tonnes of waste has been processed. Mr Wanless indicates that Wastecorp wishes to commence discussions with a view to allowing the station to operate above 30,000 tonnes per annum. He states that discussions have already commenced with planning consultants. The letter which is Attachment H advises Mr Wanless that a environment protection licence will be required if the facility is to accept and transfer more than 30,000 tonnes per annum. The letter states the possibility that development consent from the council will be required. The letter which is Attachment I is in response to a prevention notice dated 12 May 2005. Mr Wanless attaches record of water processed at the site over a 4 week period. Mr Wanless estimates a requirement for the facility of 40,000 tonnes per annum by 2007. He describes the site including the treatment of water and sediment. Further to the letter which is Attachment I, the letter which is Attachment J addressed to the council attaches a plan of the stormwater flow for the site. The letter which is Attachment K refers also to the prevention notice, specifically Stage 3. The letter, from the Defendant's commercial manager, provides a response to the requirements of the stage involving control over vehicles tracking dirt and sediments on the public street.] WASTE SORTED AT THE PREMISES 31. The following table sets out the amount, in tonnes, of waste that was sorted at the Premises during the period 1 July 2006 to 30 June 2007 and then sent to those facilities. This does not include any amounts of waste that were sent directly to landfill and did not otherwise pass through the Premises. For example, only that waste that was sent to Blacktown Landfill by a walking floor truck is included in the following calculations. Blacktown Landfill Huntley Landfill Smorgon Steel Total 19,913.90 34,516.24 1,148.07 55,578.21 INVESTIGATION AND FOLLOW UP ACTION 32. On 30 March 2007, EPA officers conducted an inspection of the Premises. Following that inspection, statutory notices were issued to Blacktown Landfill, Huntley Landfill, Recycled Resources and Metalcorp to provide records of waste that they received from Smart Skip. 33. On 11 July 2007, EPA officers conducted a further inspection of the Premises and seized records of waste sent to Blacktown Landfill, Huntley Landfill, Recycled Resources and Metalcorp. 34. On 20 July 2007, EPA officers conducted a further inspection of the Premises. 35. On 30 October 2008, EPA issued a statutory notice to Smart Skip, a copy of which is attached Attachment L. 36. On 28 November 2008, a response was sent on behalf of Smart Skip, a copy of which is attached Attachment M. 37. On 29 January 2009, a further response to the statutory notice was sent on behalf of Smart Skip in which Smart Skip acknowledged that their throughput for the 2006/2007 financial year was at least 38,000 tonnes, notwithstanding denials by Mr Brcic. A copy of that further response is Attachment N. Subsequently, Mr Brcic and the employee Warren Howard were both made available for directed interviews in the presence of Smart Skip's lawyer. [The statutory notice which is Attachment L is a notice to provide information and/or records in relation to the investigation by the EPA of the operation of the Defendant's waste facility. The letter which is Attachment M is a series of answers provided by the Defendant in response to the statutory notice (Attachment L) The letter which is Attachment N provides information as to the quantification of tonnages processed through the Defendant's facility in 2006 and 2007. The letter concludes that in 2007 the ultimate tonnage processed must have considerably exceeded 24,000 tonnes. In 2007 an approximation of 38,0000 tonnes is provided.] ACTION TAKEN BY SMART SKIP AFTER NOTIFICATION 38. In June 2007, Smart Skip made an application to the Department of Planning under the Environmental Planning and Assessment Act 1979 to have its operation declared to be subject to Part 3A of that Act. On 9 August 2007, the Department of Planning declared that its operations at the Premises were subject to Part 3A. A copy of a letter dated 9 November 2007 from BBC Consulting Planners to Auburn Council on behalf of Smart Skip is Attachment O. 39. On 25 July 2007, Henry Davis York sent a letter on behalf of Smart Skip to DECC about immediate action proposed to be undertaken. A copy of that letter is Attachment P. 40. On 8 February 2008, DECC sent a letter to Smart Skip. A copy of that letter is Attachment Q. 41. On 7 March 2008, Henry Davis York responded to that letter on behalf of Smart Skip with a letter attaching a Preliminary Site Environmental Management Plan. A copy of that letter is Attachment R. 42. On 17 March 2008, a further letter was sent from Henry Davis York attaching a current stormwater drainage diagram for the Premises. A copy of that letter is Attachment S. 43. On 13 November 2008, Smart Skip applied for an environmental protection licence in relation to the waste facility activities at the premises. In support of that application they submitted a Draft Preliminary Assessment Report. A copy of that draft report is attached as Attachment T. [The letter which is Attachment 0 is a response to Auburn Council's notice of intention to give an order on the grounds of storage of waste containers without development consent. The letter makes representations as to why the order should not be given and relate to the application by the Defendant for development consent under Part 3A of the Environmental Planning and Assessment Act 1979 (the EP&A Act). The letter which is attachment P is a letter from the Defendant's solicitors denying that water pollution is occurring at the premises. It refers to improvements in the drainage system at the premises and further action to be taken to continue the improvements. The letter which is attachment Q refers to water pollution observed by the EPA in July 2007 and the improvements described in the letter which is attachment P. The Defendant is asked to provide further information and documents relating to the management of water pollution issues by 29 February 2997. The letter which is Attachment R provides information on managing water pollution in response the Department's request in the letter that is Attachment Q. A number of documents are annexed. The letter which is Attachment S is in furtherance of the letter which is Attachment R and includes a stormwater drainage diagram and a page of the Preliminary Site Environmental Management Plan.] HARM TO THE ENVIRONMENT 44. There is no evidence of actual harm to the environment caused by the commission of the offence. 45. During inspections of the Premises by EPA authorised officers on 30 March 2007 and 11 July 2007 and 20 July 2007, they observed that the fine-sized particle fraction of the waste on the Premises was being washed using hoses into the on-site drains. These drains lead to the Council stormwater drainage system which drains to the Lower Duck River wetlands. The Lower Duck River wetlands are registered on the Australian Heritage Commission's Register of the National Estate. The Endangered Ecological Community "Coastal Saltmarsh" is present in the Lower Duck River wetlands. 46. The runoff of suspended solids has the potential to cause a reduction of light penetration into the water column, possible mortality of aquatic organisms, siltation and a decrease in aesthetic value in the Lower Duck River wetlands. 47. If there had been an application for an environment protection licence, the EPA would have been required by subsections 45(c), (d) and (f1) of the POEO Act to take into account any water pollution from the Premises and the measures that could have been taken to prevent or mitigate that pollution. PHOTOGRAPHS 48. Attachment U has captioned photographs from inspections on 30 March 2007 and 11 July 2007. (not attached) CONSEQUENCES OF UNLAWFUL OPERATION 49. As a result of Smart Skip operating the waste transfer station unlawfully, it gained an unfair economic advantage over other lawful operators in that: i. it delayed the expense of seeking a modification of its development consent and, in particular, condition 8 of the consent; ii. it delayed the expense of making an application for an environment protection licence; and iii. it delayed the expense of any environmental improvements that may have been required as a result of seeking a modification of the development consent or an environment protection licence, such as preventing or minimising water pollution from the Premises. PRIOR RECORD 50. According to the Prosecutor's records, Smart Skip has not been convicted for any offence against the environment protection legislation. 51. However, Smart Skip has been issued with the following penalty infringement notices (on-the-spot-fines): [Penalty infringement notice issued by Auburn Council and dated 27 October 2006 for the offence of water pollution contrary to section 120 of the POEO Act. A penalty of $1500 was imposed. The penalty infringement notice involved an employee hosing down the premises and polluted water entering the road gutter.] Defendant's evidence 9 Dean Wanless, director of the Defendant and of the Defendant's ultimate holding company Wanless Enviro Services Group (the Group), swore an affidavit on 12 November 2009. Mr Wanless states that the Defendant failed to comply with the Group's Compliance Policy. He states that he is committed to ensuring the Group and the Defendant comply with all environmental legislation and expresses contrition and remorse that a breach occurred on behalf of the Defendant. 10 Mr Wanless expresses his belief that the breach was a result of a lack of management training and a lack of appreciation as to the vital importance of proper record keeping in order to monitor compliance with legislation. Mr Wanless sets out relevant events leading up to the offence. In May 2004, the Group purchased assets from a third party and established the Defendant as a wholly-owned business. The former owners of the assets were engaged to supervise and manage the Defendant based on Mr Wanless's assumption that they would have the necessary experience, expertise and knowledge of the NSW waste services market and environmental regulatory system to assist the Defendant. In line with the Group's management structure, operation and regulatory compliance issues were devolved to individual site managers. At the time of the offence the manager of the Defendant's operations was a former employee of the previous asset owners. The manager was advised by Mr Wanless of the Department's letter dated 24 January 2005 (Annexure F in the SOAF). He was also provided with the Group's compliance policy at the time of his appointment. Mr Wanlesss acknowledges that he and the Group did not take an active enough interest in the management of the Defendant. The non-interventionist approach weakened compliance oversight. Also at the time of the offence there was no specific written policy of procedure tonnage/throughput limitation for the Defendant. Overall Mr Wanless believes that the offence occurred because the Group did not follow up tonnage throughput restrictions with the previous asset owners in order for records to show possible limit breaches, there was an absence of appropriate training to address such throughput limitations and there was no exception alert provided for by the technology used to monitor throughput levels. 11 Mr Wanless outlines the Group's environmental programmes, policies and general awareness. Since the offence a further specific environmental compliance policy has been put in to effect by the Group. He believes the current management of the Defendant and the Group has, as a result of new policies and the commitment of the offence, developed a far better appreciation of the obligations of the need for environmental compliance. Before Mr Wanless learned of the offence he directed an employee of the Group to commence development of an integrated national compliancy system to be certified to the ISO 9001 standard and an environmental management system that would comply with ISO 14001 standards. The former project is in the process of being implemented to ensure real-time compliance data is visible and monitored daily. An exception alert occurs if data identifies a possible breach. It has cost the Group $500,000 to develop and implement. The Group has also developed and put into practice various training programs and reporting obligations to ensure site managers are aware of tonnage throughput restrictions. Since August 2009, a program for random of audits of weekly throughput has been in force and a discrepancy was effectively detected in September 2009. Mr Wanless is confident that the offence will not be repeated. 12 In relation to the Defendant's application for development consent under Pt 3A of the EP&A Act to increase recycling rates of construction and demolition of waste at the property, the application is progressing. Purposes of sentencing 13 Section 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) sets out the purposes of sentencing as follows: 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community. Relevant sentencing considerations 14 The CSP Act (in particular, Pt 3 Div 1) contains provisions relevant to sentencing procedures. Section 21A of the CSP Act sets out aggravating, mitigating and other factors to be taken into account in sentencing. Section 22 requires the Defendant's early guilty plea to be taken into account. Pursuant to s 23 the Court may also impose a lesser penalty than it would otherwise impose, having regard to the degree to which the Defendant has assisted, or undertaken to assist, law enforcement authorities in the prevention, detection or investigation of, or in proceedings relating to, the offence concerned. 15 An appropriate sentence is to be determined after consideration of each of these matters bearing in mind that: …a basic principle of sentencing law is that a sentence…imposed by a court should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances (see Veen v. The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465, at pp 472, 485-486, 490-491, 496). per Hoare v R (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ). 16 Another relevant factor is consideration of the statutory scheme in which the offence provision appears. An object of the POEO Act includes the prevention of pollution. According to the Prosecutor the Defendant compromised the objectives of the POEO Act by operating the waste facility when there was an identifiable risk of harm to the environment. Further, operating the facility without the necessary environment protection licence undermines the regulatory system and gave the Defendant an unfair commercial advantage. 17 Section 241(1) of the POEO Act identifies the following factors to be taken into consideration in imposing a penalty for offences committed under that Act (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 18 Environment is broadly defined under the POEO Act as environment means components of the earth, including: (a) land, air and water, and (b) any layer of the atmosphere, and (c) any organic or inorganic matter and any living organism, and (d) human-made or modified structures and areas, and includes interacting natural ecosystems that include components referred to in paragraphs (a)–(c). 19 "Harm to the environment" is defined as: harm to the environment includes 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. 20 The SOAF identified agreement on environmental harm in par 44-47. The Prosecutor submitted that there was potential for environmental harm. 21 The Defendant submitted there was no actual, or likelihood of, environmental harm. The potential to cause a reduction of light penetration into the water column with possible mortality of aquatic organisms did not give rise to a likelihood of harm occurring. Finding on environmental harm 22 Contrary to the Defendant's submissions there is a likelihood of harm to the environment where there is potential for alteration of the environment in the manner specified in the SOAF. The definition of harm is broad and the SOAF refers to the potential for change as a result of sediment being introduced into the stormwater from the Defendant's premises. "Likely" means a real and not remote chance or possibility (see, inter alia, Environment Protection Authority v Forgacs Engineering Pty Limited [2009] NSWLEC 64 at [22]) and I consider the SOAF identifies such a likelihood. The extent of that harm is not quantified and is at the lower end of the possible spectrum for likely harm. (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm 23 There were measures that could have been taken to prevent the commission of the offence, namely obtaining an environment protection licence. The SOAF (par 47) identifies the measures that would be required to be taken in relation to water pollution if an application for an environment protection licence were to be made. (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 24 The likelihood of harm was foreseeable. (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence 25 The Defendant had control over the operation of the premises as a waste facility. (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. 26 This provision is not relevant. Other objective circumstances 27 The Prosecutor argued that the Defendant was on notice that the premises required an environment protection licence from shortly after the current sole director, Mr Wanless through his group of companies purchased the business in July 2004. The Prosecutor raised the issue of licensing of the premises at a meeting in August 2004. It wrote in January 2005 to the Defendant stating that it believed the premises were receiving waste at a rate greater than the licensing threshold. The Prosecutor also sought to argue that events after the charge period showed that there had been a tardy response by the Defendant in getting adequate auditing processes in place. The reliance on the previous general manager who had worked in that role before the acquisition by the current director in 2004 is not an excuse. The director chose to contract out the management of the premises and placed a disproportionate trust in that individual in the circumstances. 28 The Defendant argued that it is the undisputed evidence of Mr Wanless that he told the general manager of the Prosecutor's concerns about the limit on the amount of waste able to be processed after receiving the letter dated 24 January 2005. It was reasonable to rely on him as a person familiar with the business and the NSW regulatory environment. The submissions that there was a tardy response by the Defendant after the offence are irrelevant as there is no evidence there was any breach of the limit of 30,000 tonnes of waste per year in the two subsequent financial years since the offence. That the Defendant has now implemented a much more sophisticated auditing system for waste, which has been finalised in the second half of 2009, does not prove there were further breaches subsequent to the offence date. Applying R v Olbrich (1999) 199 CLR 270 the Prosecutor has the onus of proving that there were confirmed exceedances of the threshold since the offence period beyond reasonable doubt and has not done so. Seriousness of objective circumstances 29 The culpability of the Defendant in light of these circumstances is at the low to medium end of the spectrum. The amount of waste on the premises of 55,000 tonnes for the offence period was a substantial exceedance of the threshold of 30,000 tonnes. As identified in the SOAF this provided the Defendant with a commercial advantage over its competitors and saved it from the expense of complying with the development control legislation and the POEO Act. The Defendant is in the profit-making business of transferring and processing waste. The offence came to light as a result of the Prosecutor's actions in seizing waste records from the company and other premises to which waste had been sent from the premises. The offence reflects a failure to comply with the regulatory framework under the POEO Act for the management of waste facilities. Mr Wanless identifies in his affidavit that there was a failure to properly supervise the management of the waste facility. The SOAF also refers to the breach of the development consent for the waste facility at the premises. Fortunately for the Defendant, there was no actual environmental damage caused by the offence and the potential for harm was minimal. 30 While Mr Wanless identifies in his affidavit why he decided as director to continue with the existing management of the company after the purchase in 2004, that does not excuse the seriousness of the offence by the corporate Defendant in the operations of a commercial waste facility. 31 I do not take into account the Prosecutor's submissions that the Defendant has been tardy in responding since the offence to improve its systems of waste auditing. There is no evidence that there has been any subsequent failure to comply with the threshold limit of 30,000 tonnes of waste per year on the premises. Other penalty considerations Maximum penalty 32 In setting a penalty the Court should have regard to the maximum penalty applicable, as this is an expression of the seriousness Parliament attributes to the offence: see Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at [698] and [701] respectively that: The task of a court is to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided… ..the more serious the lasting environmental harm involved the more serious the offence and, ordinarily, the higher the penalty. 33 In addition to the maximum penalty of $1 million a maximum daily penalty of up to $120,000 can be imposed. The Prosecutor is not seeking a daily penalty. This is appropriate as the charge period of a year is necessary to reflect the threshold limit being 30,000 tonnes of waste per year. General deterrence 34 Section 3A(b) CSP Act states that one of the purposes for a court in imposing a sentence is to prevent crime by deterring offenders. Sentences imposed in relation to environmental offences must embrace powerful considerations of general deterrence: see Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357, per Badgery-Parker J at 367. In Axer, Mahoney J stated at 359: The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur. 35 Given the importance of enforcing the regulatory regime for the management of waste by those operating waste facilities for profit, general deterrence is an important consideration. A nominal fine will not be sufficient. Specific deterrence 36 In Veen v The Queen [No. 2] (1988) 164 CLR 465 at 477 the majority judgment of Mason CJ, Brennan, Dawson and Toohey JJ stated that past criminal behaviour is relevant in sentencing: to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law . 37 The Defendant was issued in October 2006 with a penalty infringement notice by Auburn Council for water pollution contrary to s 120 of the POEO Act. A penalty of $1,500 was imposed. Apart from this penalty infringement notice the Defendant has not been convicted for any offence against environment protection legislation. 38 The measures undertaken since the offence to ensure that adequate auditing systems are in place are detailed in the affidavit of Mr Wanless and the SOAF. Mr Wanless attests that he instructed his compliance manager to commence the implementation across the Wanless group of companies of an integrated national compliance system to comply with ISO 9001 before the offence date. There has been a substantial new auditing system implemented at the premises since the offence. Training programs and staff reporting obligations have been implemented to ensure awareness of tonnage restrictions. There is no evidence of any non compliance in the two financial years since the offence in the 2006/07 financial year. There is no necessity to consider specific deterrence in the amount of penalty imposed as I do not consider the Defendant demonstrates a continuing attitude of disobedience to the law. Mitigating factors 39 There are a number of mitigating factors that should be taken into account to reduce any penalty as provided for in s 21A(3) of the CSP Act. Guilty plea - s 21A(3)(k), s 22 CSP Act 40 The Defendant pleaded guilty at an early opportunity, being the third mention of this matter before the Court. A plea of guilty entitles the Defendant to a discount in penalty under s 22 of the CSP Act in the range of 10-25 per cent: R v Thomson; R v Houlton (2000) 49 NSWLR 383; R v Sharma (2002) 54 NSWLR 300. In recent decisions of this Court in Environment Protection Authority v Werris Creek Coal Pty Ltd; Environment Protection Authority v Holley [2009] NSWLEC 124 at [89] and Gosford City Council v Australian Panel Products Pty Ltd [2009] NSWLEC 77 at [100] there has been a reduction of the discount for penalty where a guilty plea has not been entered at the first available opportunity albeit still early in the proceedings. The plea of guilty in this matter was entered at the third directions hearing, not at the earliest opportunity. A slight reduction of the discount is warranted. Contrition and remorse – s 21A(3)(i) CSP Act 41 The affidavit of Mr Wanless, the sole director of the Defendant, expresses his remorse for the circumstances giving rise to the offence. His affidavit also details the extensive activities undertaken by the Wanless group to implement environmental measures at projects such as the Kemps Creek landfill site. I accept his expression of remorse on behalf of the Defendant. Assistance to law enforcement authorities – s 21A(3)(m) CSP Act 42 The Defendant has co-operated with the Prosecutor in the investigation of this matter and the preparations for the hearing. Whether likely to reoffend - s 21(3)(g) CSP Act 43 I consider the Defendant has demonstrated that it has taken reasonable measures to prevent further breaches of the waste tonnage limits under the POEO Act and is unlikely to reoffend as referred to in relation to specific deterrence above. In addition I note that it is taking steps to obtain development consent under Part 3A of the EP&A Act at present for an expanded operation at the premises. Character – s 21A(3)(f) 44 The affidavit of Mr Wanless refers to the group of companies of which the Defendant is a part and the measures taken by the group in relation to environmental matters. Given that the Defendant is a separate legal entity with a limited scope of operation within that group this material is of limited relevance. Ultimately it is the Defendant that must be considered. The Defendant has operated since 2004 and the offence took place during the financial year 2006/2007. Evenhandedness 45 The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty. This principle must always be applied subject to the particular circumstances of the case before the Court. There have been few prosecutions of companies under s 144(1) and none since the penalty for corporations was increased from $250,000 to $1 million in 2006. 46 In Environment Protection Authority v Ghossayn [2009] NSWLEC 181 the defendant was the managing director of a company which operated a waste facility receiving demolition waste. Its environment protection licence was suspended by the EPA and the company continued to transfer waste after the suspension of the licence. The defendant was fined $14,000 taking into account a number of mitigating circumstances and the totality principle as he was also charged with another offence under s 126. He received a more substantial fine for the latter charge. 47 In Environment Protection Authority v Hogan [2008] NSWLEC 125 the general manager of a company which undertook landfill activities was charged with using land as a waste facility without lawful authority. The company held an environment protection licence which had been suspended. The defendant permitted trucks to enter the premises and deposit waste despite the licence suspension. Jagot J considered that the defendant did not take adequate steps to inform himself about the consequences of the suspension. He held the erroneous belief that some of the waste, which was virgin excavated natural material (VENM), was not waste within the meaning of the POEO Act. Her Honour rejected the submission that the defendant should only have been liable for trucks he knew were entering the waste facility and were not carrying VENM because the offence was one of strict liability. It was no excuse that the defendant had excessive work at the time of the offence. No actual harm was cause by the offence, the defendant had no prior convictions and a guilty plea was entered albeit on the second day of hearing. Some weight was given to his difficult financial circumstances. A penalty of $18,000 was imposed (of a maximum $250,000 for individuals) and the defendant was required to pay the prosecutor's costs. 48 I do not derive great assistance from either of these matters. Prosecutor's costs 49 The Defendant has agreed to pay the Prosecutor's costs of $20,000. 50 In light of all the objective and subjective circumstances I think that the Defendant's penalty should be $50,000. Additional orders 51 Additional orders are sought by the Prosecutor under s 245(1)(c) (prevention of reoccurrence of offence) and s 250(1) (publication order) of the POEO Act. The Defendant does not oppose these orders being made. 52 The orders (prayers 4 and 5) sought pursuant to s 245 include an order (prayer 4) that the Defendant not produce more than 30,000 tonnes of waste per year at the premises. This is a statement of what the law already requires. The need for such an order is not apparent in the circumstances of this case and I will not make it. The additional order sought requiring the provision of a monthly written report containing specified information is appropriate. 53 The publication order is appropriate in the terms agreed by the parties but for its amendment to reflect my decision not to make the order in prayer 4. Orders 54 The Court orders that: 1. The Defendant is convicted of the offence with which it is charged. 2. The Defendant is fined the sum of $50,000. 3. The Defendant is to pay the Prosecutor's costs in the sum of $20,000. 4. Pursuant to s 245 of the POEO Act, whilst the Defendant continues to operate a waste facility at the premises, it must provide a written report in electronic format to the Manager Waste Operations or equivalent at the Department of Environment, Climate Change and Water or its successors setting out the amount in tonnes received and removed from the premises for each calendar month and each day in that month. This report must set out the individual waste transactions which have been received or removed. This report must be provided within 14 days of the last day of each month. 5. Order 4 is in effect until the Defendant is granted an environment protection licence for the premises under the Protection of the Environment Operations Act 1997 or it ceases to operate at the premises. 6. The Defendant, within 60 days of the date of this order, is to place a notice in the first ten pages of Inside Waste that is at least one quarter of a page in the form of Annexure A (pursuant to s250(1)(a) of the Protection of the Environment Operations Act 1997). ANNEXURE A PROSECUTION FOR UNLAWFUL WASTE FACILITY On 30 November 2009, the Land and Environment Court of New South Wales found Smart Skip (NSW) Pty Ltd ("Smart Skip") guilty of an offence against the Protection of the Environment Operations Act 1997, in that it was the occupier of premises at 19 Fariola Street, Silverwater, New South Wales, which it caused to be unlawfully used as a waste facility between 1 July 2006 and 30 June 2007. Smart Skip pleaded guilty to the charge and the Court found that, among other things: 1. Smart Skip had been warned by the EPA to stay below the licence threshold. 2. Smart Skip was required to hold an environment protection licence for the premises during that period; 3. Smart Skip was operating at a level of throughput of waste above the limits specified in the development consent for the premises. By way of an appropriate penalty, Smart Skip was ordered to pay a fine of $50,000 and the EPA's costs of $20,000. The Court also ordered Smart Skip to report its throughput monthly to the EPA. Smart Skip was prosecuted by the EPA, a part of the Department of Environment Climate Change and Water. This notice is placed by order of the Land and Environment Court and is paid for by Smart Skip. 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.