Land and Environment Court of New South Wales CITATION : Environment Protection Authority v Ramsey Food Processing Pty Ltd [2010] NSWLEC 150 PROSECUTOR Environment Protection Authority PARTIES : DEFENDANT Ramsey Food Processing Pty Ltd FILE NUMBER(S) : 50069 of 2009 CORAM: Sheahan J KEY ISSUES: PROSECUTION :- defendant's solicitors removed by defendant, defendant unrepresented, no appearance by defendant, plea of Not Guilty, application for adjournment by defendant in writing, application by prosecutor to proceed ex parte, charge of polluting waters, effluent from abattoir, effluent escaping from bunded area into nearby creek Criminal Procedure Act 1986 LEGISLATION CITED: Protection of the Environment Operations Act 1997 Protection of the Environment Operations (General) Regulation 1998 DATES OF HEARING: 9 and 10 August 2010 EX TEMPORE JUDGMENT DATE : 10 August 2010 PROSECUTOR Mr D K Jordan SOLICITORS LEGAL REPRESENTATIVES: Deparment of Environment Climate Change and Water DEFENDANT No appearance JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Sheahan J 10 August 2010 50069 of 2009 Environment Protection Authority v Ramsey Food Processing Pty Ltd JUDGMENT Introduction 1 His Honour: By summons dated 12 November 2009 the EPA alleges that between about 3 and 4 December 2008 inclusive, at or near South Grafton, the defendant company committed an offence against s 120(1) of the Protection of the Environment Operations Act 1997 ('POEO Act') in that it caused or permitted to discharge into the waters of Musk Valley Creek, effluent from an abattoir containing the following: (a) animal matter of any description and/or (b) excreta, manure or urine and/or (c) oil or grease of any description and/or (d) matter that causes biochemical or chemical oxygen demand 2 Under Item 1 of Schedule 3 of the Protection of the Environment Operations (General) Regulation 1998, as in force at that time, "animal matter of any description" is "prescribed matter" for the purpose of the offence. 3 The particulars of the breach describe the placing of the pollutant into a bund unsuitable for holding it, and/or failing to prevent the pollutant from escaping from the bund, as a result of which the pollutant was placed in, or introduced into, or on, the waters of the creek system, and/or was placed in a position where it fell, descended or was washed into those waters. In the alternative, or additionally, the company is charged with being the occupier of premises at or from which pollution occurred. 4 In submissions on the question of guilt the prosecutor has relied on the following elements of the POEO Act dictionary definition, under which "water pollution"/"pollution of waters" means: "(a) placing in or on, or otherwise introducing into or onto, waters (whether through an act or omission) any matter, whether solid, liquid or gaseous, so that the physical, chemical or biological condition of the waters is changed, or … (c) placing in or on, or otherwise introducing into or onto, the waters (whether through an act or omission) any matter, whether solid, liquid or gaseous, that is of a prescribed nature, description or class or that does not comply with any standard prescribed in respect of that matter, and, without affecting the generality of the foregoing, includes: (d) placing any matter (whether solid, liquid or gaseous) in a position where: (i) it falls, descends, is washed, is blown or percolates, or (ii) it is likely to fall, descend, be washed, be blown or percolate, into any waters, onto the dry bed of any waters, or into any drain, channel or gutter used or designed to receive or pass rainwater, floodwater or any water that is not polluted …" 5 A plea of Not Guilty was entered on 11 June 2010, but none of the directions given for the filing of evidence on behalf of the defendant have been complied with. 6 The prosecutor also seeks in the summons an order under Part 8.3 of the POEO Act. The relevant provision was mistakenly referred to in the original summons as "section 8.3" of the Act, rather than Part 8.3, and leave was granted to the prosecutor to so amend the summons, notice to that effect having been given to the defendant company. 7 The defendant failed to appear when the matter was called on for hearing on 9 August 2010, and the court granted the prosecutor leave to proceed in the absence of the defendant, pursuant to s 250 of the Criminal Procedure Act 1986. After the prosecutor's documentary evidence was placed before the court I adjourned to read it and directed the prosecutor to notify the defendant while I did so that the matter was proceeding (see Exhibit P10). 8 Late last Friday 6 August the defendant's CEO, Stuart Bruce Ramsey, had emailed and/or faxed both the prosecutor and the court applying for the prosecution to be adjourned until after some class 1 proceedings are concluded. As I was satisfied that the defendant has received all the documents filed by the prosecutor in support of the charge, which has nothing to do with any subject matter of class 1 proceedings, and that the defendant was clearly on notice that the hearing of these class 5 proceedings was fixed to proceed today, I refused the adjournment. 9 Having heard and considered the prosecution case, I announced at the end of the hearing on 9 August that I was satisfied that the elements of the offence charged had been proven, and I now publish my reasons, as follows. The Defendant 10 ASIC searches before the court indicate that Mr Ramsey and his wife Patricia Anne Ramsey have been the directors of the defendant company since June 1998, and that its shares are owned by Ramsey Wholesale Meats Pty Ltd. The relevant abattoir plant is located on lands owned by other companies associated with Mr Ramsey on Armidale Road, South Grafton. 11 It is clear from the evidence that Mr Ramsey is the guiding mind of the defendant company and its related entities, and that Mrs Ramsey is an inactive director who relies upon him. Their residential address is given as 100 Regatta Parade, Southport, Queensland, but the company has offices in Casino. 12 On 20 November 2009, Francis Gregory Hannigan, solicitor of "Hannigans", Casino, filed an appearance on the defendant's behalf, but, on 7 July 2010, Mr Hannigan filed a Notice of Removal of Solicitor signed by Mr Ramsey as director of the defendant company on 28 June 2010. The prosecutor was not notified of this event until 28 July 2010. I note that the registered office of the two Ramsey companies is at the same address as Hannigans, namely 92 Centre Street, Casino. 13 There was no appearance by or on behalf of the defendant before Pepper J as List Judge on 30 July 2010, or later that day before the Registrar, at which time this matter was fixed for hearing to commence at 10am yesterday, 9 August 2010. 14 On 18 June 2010 Mr Hannigan filed two class 1 applications on behalf of the defendant company against the prosecutor (matters 10466 and 10467 of 2010). These seek orders that the defendant company's application to transfer its environment protection licence ('EPL') 1598 for the subject abattoir premises to Ramsey Wholesale Meats Pty Ltd be approved (Matter 10/10466), and that variations in the EPL 1598, described in the EPA's notice of 26 May 2010, be deleted (Matter 10/10467). 15 Hannigans has confirmed to the prosecutor that they are still instructed in those class 1 proceedings, which presently stand adjourned to 10 September 2010 for further directions. 16 Once the solicitor for the prosecutor (Mr Hill) received notification on the afternoon of 28 July 2010 that Mr Hannigan had been removed by the defendant, he wrote to the solicitors and sought an assurance that the prosecutor's letters of 26 and 28 June 2010 had been passed on to the defendant. Apparently the prosecutor has received no response. On 29 July 2010 the prosecutor again made clear to the defendant company that it would seek a hearing date the next day. 17 Letters were hand delivered to the defendant by a departmental officer Donohoe on 30 July 2010, as ordered by Pepper J. The correspondence included the orders and directions made on that day, confirmation that the hearing would proceed on 9 August 2010, and a note that the hearing could take place in the absence of the defendant. 18 On Monday 2 August 2010 Mr Hill made a series of phone calls, and at one point spoke personally to Stuart Ramsey. On 6 August 2010, a letter (1) notifying the company of the intention to amend the order sought in the summons to read "Part 3", rather than "s 3", and (2) serving a copy of orders being sought pursuant to s 250(1)(d) of the POEO Act, was delivered to the defendant. The Evidence 19 The court has considered affidavits from the following officers of the prosecuting department: (a) Roberto Antonio Pupo, 9 November 2009. See also Exhibit P4 . (b) Ian Paul Greenbank, 9 November 2009 and 27 May 2010. See also Exhibit P3 . (c) Scott Christopher Ensbey, 9 November 2009, and 30 March 2010. See also Exhibit P2 . (d) Jeremy Black, 23 April 2010. See also Exhibit P1. (e) Merino Julli, 29 April 2010. See also Exhibit P5. (f) Anthony Alexander Hill, 30 July 2010 and August 2010. 20 Greenbank and Ensbey are senior local officers of the department, very familiar with the defendant's operation, and with relevant contract personnel. 21 The following additional documents were also tendered: 1. Title searches and deposited plans in respect of licensed premises covered by EPL 1598 ( Exhibit P6 ). 2. An irrigation management plan submitted to the EPA in Grafton on 14 December 2001, related to EPL 1598 ( Exhibit P7 ). 3. Certified extracts from the official meteorological records of the Commonwealth ( Exhibit P8 ). 4. A certificate from the analyst Yarong Li ( Exhibit P9 ). The Facts 22 At all times on the relevant dates the defendant managed and controlled the abattoir premises, including the land, the infrastructure and the licensed activities. 23 EPL 1598 (Exhibit P3, tab 2) expressly mandates total compliance with s 120, and includes no express concessions to the contrary. It authorises the defendant to carry out licensed livestock processing and rendering activities on the site. It was carrying out those activities at all times on 3 and 4 December 2008, but it has no employees on site, working through contractors (such as Paul Allen Contracting Services Pty Ltd) and their employees. Mr Paul Allen himself is said by Mr Ramsey to be the defendant company's "eyes and ears on the ground" at the plant. 24 The plant is located approximately 10m from the eastern bank of Musk Valley Creek. Both the creek and its relevant tributary flow through the licensed premises, and after passing the plant the creek runs under Armidale Road and meanders towards Grafton, and into the Clarence River just east of South Grafton. The creek and its tributary are each natural watercourses, but they generally run only in times of reasonable rain. The tributary is otherwise comprised of a series of interconnected pools of water of varying size and depth. 25 Neither the tributary nor the creek is a pristine water system. The prevailing dissolved oxygen concentrations both upstream and downstream are said to be "likely to be at least stressful and perhaps lethal to a wide range of aquatic organisms". The prosecutor puts its case no more highly than "that it is likely that the number and variety of aquatic life present in the creek at the time of the incident would be significantly less than what would be expected in a relatively healthy creek system". 26 Ensbey deposes that the condition of the creek varies greatly depending on pollution from the defendant, rainfall events, creek flow and ambient air temperature. It was at its worst condition following the pollution event of October 2007 and he would rate it at that point as most degraded. At best the condition of the creek could be rated 4-5 out of 10 on a scale of "pristine". 27 There is an effluent treatment system in place, which includes a "save all" feature, the function of which is to collect and strain all abattoir waste product and cattle by-product (the raw effluent) from the slaughter floors and meat processing rooms. That raw effluent includes a combination of blood, fat, and the remains of cattle offal, flesh and bones. The "save all" reduces the viscosity of the raw effluent and is the first part of a three-stage screening process of abattoir waste. The resulting untreated liquid effluent is pumped through underground pipes across paddocks, from the plant to a series of anaerobic and aerobic treatment ponds some 750m to the south. The ponds break down untreated abattoir effluent through a series of chemical biological and physical processes prior to the dispersal of the resulting liquid by irrigation. 28 The EPL requires the defendant to then irrigate treated effluent to the irrigation paddocks in accordance with the Irrigation Management Plan (Exhibit P7). The irrigation paddocks are sprayed with treated effluent from the ponds on a rotational basis. The plan was submitted to the EPA on 14 December 2001, but notes (1) that the abattoir operations and the land treatment of the waste water have been in place for approximately 70 years, but (2) that Ramsey over 3½ years had vastly improved the quality and disposal practices of waste water from the abattoir. Ramsey had constructed secondary treatment ponds and replaced flood irrigation with spray irrigation. 29 The by-products area of the plant is approximately 8m from the top of the bank of the adjoining part of the creek. A dirt laneway runs along the western side of the plant between the entrance to the by-products area and the top of the eastern bank. Immediately opposite the entrance to the by-products area there are three pipes protruding from the bank of the creek. 30 Paul Allen notified the department early on 4 December 2008 of an incident at the site and Ian Greenbank responded. Allen told Greenbank that a large spill of "tallow" had spilt into the creek beside the plant. Greenbank and Allen observed a cream-coloured fatty material on the surface of the water, and confirmed its identification as tallow (see Exhibit P3, tab 18, Q 39-59). On site personnel responded quickly to the challenge posed by the spill. 31 Tallow is a fatty material produced from cattle carcases. It is composed primarily of saturated and monounsaturated fats, generally lighter than water, so tallow tends to float in the absence of active mixing or other turbulence. It has a tendency to breakdown chemically and biologically, and can become rancid. Its presence in water is undesirable due to its high energy content. Its bacterial breakdown in creek waters will consume oxygen from them and from the atmosphere. 32 The flow path of the tallow was observed to commence at one of the three pipes near the by-products area, but the pipe was not flowing at the time of inspection. The tallow was seen as a plume of white residue under the pipe. On 4 December 2008, there was little flow, if any, in the creek, and the tallow scum in fact travelled upstream from the point of entry for about 40m, mainly along the western shore of the creek. At and above the point of entry, the creek was about 6m wide. Along the western shore above the point of entry where the tallow scum was at its thickest, it was about 5mm thick, according to Greenbank, and had the consistency of molten butter. 33 By the time Greenbank made his initial inspection on that first day (4 December), the defendant's workers had constructed a metal boom (in place some time before 9am) to restrict the flow of tallow downstream. After scooping floating solidified tallow from the creek, a skimmer box was fashioned by the defendant's agents and placed into the line of the metal boom to catch floating tallow. 34 Mr Greenbank observed that from the point of entry to about 60m below it, the tallow scum covered the full width of the creek to a thickness of about 5mm. 35 The tapering of the creek in the 10m before the first metal boom caused the tallow to "choke" and to build-up upstream in the direction of the point of entry. Upstream of that choke, the tallow had mostly accumulated on the surface of the water on the western side of the creek. At its thickest, the tallow is estimated, again by Greenbank, to have been 5mm thick. 36 A second boom was placed 60m downstream of the first. All but about 10% of the tallow scum was caught by the first boom, and between the two booms the tallow scum was patchy. There was no significant amount of tallow scum below the second boom, which was about 100m above the Armidale Road bridge. By the time the creek reached the bridge, the water appeared to Greenbank to be clear of the scum. 37 The material which entered the creek's waters was actually a mixture of tallow, and boiler engine water mixture, both emanating from the plant. 38 The prosecutor's expert, Moreno Julli, opines that the presence of tallow in or on waters can be detrimental to the health of those waters. In sufficient quantities and warm temperatures, tallow can form a smothering or fouling layer on the water surface, and impede the transfer of gases such as oxygen, leading to a reduction in the amount of dissolved oxygen ordinarily carried in the waterway. 39 Mr Julli opines that the entry of the polluting mixture into Musk Valley Creek changed the chemical, biological and physical condition of the water and resulted in actual environmental harm. It covered the surface of sections of the creek in an oily layer, which contributed to the deoxygenation of the waters to the point that the water became both "black" and anaerobic in places. That condition was still visible and detectable during testing on 8 December, according to Ensbey. On that date, other sites in the creek near the point of entry, had low to very low levels of dissolved oxygen ('DO'). That absence of DO on 8 December 2010 was caused by the spill on 3-4 December 2008. 40 Mr Julli opines that the actual harm to the creek was minor and restricted to a relatively small section, probably less than 100m. Less mobile organisms were likely to have been killed by those conditions, but no fish alive or dead were observed in or near the black water. They may ordinarily not be present in the creek, or may have moved, or been removed by scavengers, prior to human observation. If the creek had been flowing at the time of the spill, the impact would have been more extensive downstream. Julli opines (Exhibit P5, pars 24-25) that, due to the low flow in the creek at the time, and the quick booming and skimming operations of the defendant's agents, the length of presence and downstream migration of the tallow was minimised. There was limited potential for the spill as it occurred and as a result of remediation efforts to cause long-term impact to the creek. 41 There was a significant rain event on the night of 8-9 December (see charts in Exhibit P8), which probably resulted in a flushing of the creek and a dilution of its waters. This is likely to have assisted in the re-oxygenation of the waters of the creek where the black water had occurred. The cause of the spill 42 The key players on the site, including Mr Ramsey and Mr Allen, were formally interviewed (in the presence of Hannigans) by officers of the prosecutor and the records of those interviews are in evidence. (See Mr Allen's interview of 6 March 2009 at tab 18 of Exhibit P3, and Mr Ramsey's and others, conducted 25-26 February and 20 March 2009, in Exhibit P4). An independent contract plumber, Bob Miller, was called in early on the day to fix the spill, and he too was interviewed (on 26 February 2009). The other interviewees were Mark Geary (an electrician in charge of maintenance), Malcolm McFarlane (a labourer who does the afternoon shift in the by-products section), and Michael O'Connor (who manages the by-products section and staffs it on the morning shift). 43 According to Geary and O'Connor, tallow from the plant is collected in a pipe system and passes through a sump. It enters the pipe system hot, and its flow through the system is designed on the basis that it will remain hot and fluid. The sump has a submersion pipe in it. 44 Ensbey opines (par 29) that when the sump became blocked with solidified tallow and vegetation, and the tallow became cool, and congealed, further blocking the pipe system flowing away from the sump. As a result, and as further tallow flowed into the blocked sump, the tallow flow backed up and flowed into a bund area surrounding the tallow tank. The bund area was designed to prevent flow of such material away from the plant and into the creek. 45 The defendant called Miller in on 4 December. He identified the blockage, and removed about 20 litres of blocked material. He also identified the pipe that allowed the escape of the tallow into the creek. On instructions from Mr Ramsey, Mr Miller cemented up that pipe, and diverted the water pipe, which formerly fed into the bunded area, so that it fed more directly into the "save all". He also engaged the local Council staff to make "endoscope" tests of some pipes near the creek. 46 Ensbey records (par 29) that Geary explained to him the drainhole in the middle of the floor in the bunded area had become blocked by solidified tallow and that the bund had filled with the liquid and had overflowed towards the sump. He observed cracking in the concrete adjacent to the bund wall, which he and Greenbank inspected and found to be 20m in length and 5cm wide. That cracking was later filled. 47 Ramsey's EPA incident report of 11 December 2010 (at tab 14 of Exhibit P2) identified the cause of the spill as tallow entering a disused pipe "previously thought to be blocked off and unused for as long as any of our staff have been at the abattoir e.g. over 25 years". 48 When McFarlane left for the night on 3 December 2008 he noticed no problem with the bunded area or the drain in it. He cannot explain the incident, but when O'Connor and Geary commenced work early on the morning of 4 December 2008 the bunded area had overflowed with a watery tallow mixture. 49 McFarlane says the drain had blocked only once before in his seven years at the plant, but O'Connor (Q 161) estimates it occurs once a year. Geary has worked at the plant for 22-23 years and says (Q 181) the drain has blocked on a few occasions over the years. 50 All the on-site witnesses agree on where the material discharged into the creek, namely through remnants of an old pipe which sits lowest of three in the creek wall, and there has been much conjecture about how it got to that pipe from the overflowing bund. I am satisfied on the evidence that it escaped from that area of the plant through the cracking of the concrete adjacent to the outer wall of the bund, and I accept Miller's observation that there is much subsidence or erosion under the area between the bund and the creek wall (Q 262). 51 Much of the piping from the early days of the abattoir has been superseded by treatment facilities and a more planned drainage regime and no one on site seems in any way certain of the functions formerly performed by old pipes such as the one identified, and of the risks their continued presence pose for strict compliance with the EPL. The court also notes that none of, at least, Miller, Geary, O'Connor or McFarlane among the Ramsey personnel had any real knowledge of the EPL and its requirements. 52 The blockage of the drainpipe in the bunded area was caused by a mixture of tallow, leaf litter, bark, timber waste (including possibly sawdust), and possibly rag (O'Connor Q170). Miller is critical of the poor cleaning practices on site (p6 of Part 2 of his ROI, LL27-28), particularly as windy and rain conditions are common (Q63), and there are many gum trees nearby (Q136ff). Had overnight drainage of water from the water tanks not come into the bund as a matter of course at the time, the overflow would not have occurred. Finding 53 I find that the proscribed animal tallow material fell or descended or percolated into prescribed waters, namely a length of approximately 100m of Musk Valley Creek, so as to constitute an offence of "pollute waters" under s 120 of the POEO Act, by reason of failures on the part of the defendant company as holder of EPL 1598 to secure, maintain, and supervise its premises, and adopt better work and training practices. 54 There is no evidence to support any defence provided for in ss 121 and 122 of the POEO Act. 55 I will now hear argument on conviction, penalty, costs and other ancillary orders. 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