Failure to notify a pollution incident “as soon as practicable”: Environment Protection Authority v Bulga Coal Management

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14 February 2014 | By Louise Camenzuli (Partner)

Recently, the NSW Land and Environment Court handed down its decision in Environment Protection Authority v Bulga Coal Management Pty Limited [2014] NSWLEC 5 (Bulga). While over the years there have been prosecutions for failure to notify a pollution incident “as soon as practicable” under section 148 of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act), this was the first occasion that an alleged offender has pleaded not guilty to the offence. Consequently, Bulga provides useful guidance on the interpretation of the elements of the offence and the phrase “as soon as practicable”.

Facts

At approximately 11.30am on Sunday, 9 October 2011, an employee of Bulga Coal Management Pty Ltd (BCM), became aware that thickened tailings escaped into Nine Mile Creek as a result of a failure in a steel T-piece in its tailings pipeline (Incident). The tailings slurry was deposited on the bed of the creek for a section of the creek which was about 250-280 metres long, located wholly within BCM’s premises. The function of the T-piece was to connect to the main tailings pipeline a section of pipe which led to a containment dam. At approximately 11.05am on Monday, 10 October 2011, shortly after deciding that the Incident was reportable, BCM notified the Environment Protection Authority (EPA) of the Incident.

The EPA charged BCM with having committed an offence by contravening section 148(2), which provided:

(2) Duty of person carrying on an activity to notify

A person carrying on the activity must, as soon as practicable after the person becomes aware of the incident, notify the appropriate regulatory authority of the incident and all relevant information about it.

If guilty of the offence, the penalty provision under section 152 of the POEO Act applied.

It was alleged that, from about 9 October 2011 and continuing to about 10 October 2011:

  • BCM was a person carrying on an activity (i.e. coal mining and coal washing) where the Incident occurred;
  • the Incident occurred in the course of that activity;
  • the Incident caused or threatened to cause material harm to the environment; and
  • BCM failed to notify the appropriate regulatory authority (i.e. the EPA) of the Incident or, alternatively, all relevant information about the Incident as soon as practicable after it became aware of the Incident.

BCM pleaded not guilty to the charge.

In order for harm to the environment to be material, the EPA needed to satisfy the Court that either:

(a) actual, threatened or potential harm to an ecosystem was not trivial; or

(b) actual or potential loss exceeded $10,000.

The term “loss” includes the reasonable costs and expenses that would be incurred in taking all reasonable and practicable measures to prevent, mitigate or make good harm to the environment.

There was no dispute between the parties that:

  • the Incident was a pollution incident (i.e. water pollution) for the purpose of the POEO Act;
  • the Incident occurred in the course of an activity undertaken by BCM;
  • BCM was aware that the Incident occurred on 9 October 2011; and
  • the cost of the clean up of the Incident was $94,550 in internal costs and $193,440 in external costs.

However, there was substantial disagreement between the parties in respect of the elements of the offence. Of primary importance to the outcome of the prosecution was the EPA’s submission that the question of whether or not the Incident caused material harm to the environment is an objective fact and, therefore, determinable having regard to material not available to BCM at the time the Incident occurred. To that end, the parties filed expert evidence in respect of whether material harm to the environment was caused by the Incident. However, if the EPA’s submission was incorrect and this element of the offence is a subjective fact (i.e. whether BCM was in fact aware of the materiality of the Incident at the time it occurred), the extraneous expert evidence would be irrelevant in light of the fact that it was not available to BCM at the time of the Incident.

Findings

Awareness of material harm to the environment

For the purposes of determining liability of the offence and the nature of any mental element, the Court accepted BCM’s submission that the offence required proof of mens rea (state of mind of the offender) rather than a strict liability or absolute liability offence. In the circumstances, it was necessary for the EPA to prove beyond reasonable doubt that BCM was aware that the Incident caused or threatened material harm as defined by section 147 of the POEO Act.

The Court held that, for the purpose of section 148(2) of the POEO Act, there must be an awareness on the part of the person carrying out the activity that material harm to the environment has been caused or threatened before any obligation to notify will arise. If the material harm threshold was an objective fact, her Honour observed that this may give rise to unfair outcomes. In particular, her Honour was concerned that it may result in a person being criminally liable for not reporting a pollution incident when not aware that, or making an incorrect judgment concerning whether, the relevant incident is reportable.

BCM submitted that it is not the intention of the legislative regime to require all pollution incidents to be notified, rather it only requires incidents causing or threatening material harm to be reported. In the circumstances, as a practical matter, the Court held that the obligation to notify a pollution incident requires judgment to be made by the person carrying on the activity as to whether there is material harm to the environment.

The Court rejected the EPA’s submissions to the effect that the subjective element of the offence would lead to persons failing to:

  • Inform themselves about the matters of material harm identified, resulting in environmental harm going undetected. Her Honour noted that this submission conflated taking action to control pollution with the reporting obligation, which are two separate matters.
  • Investigate whether or not material harm occurred. Her Honour noted that actual knowledge could be inferred if an offender could be found to be aware of suspicious circumstances or deliberately failed to inquire (i.e. wilful blindness).[1]

Ultimately, the Court found that the EPA did not establish beyond reasonable doubt that BCM had the requisite knowledge on 9 October 2011 that material harm was caused or threatened. To the contrary, BCM’s witness evidence indicated that its employees formed the view that, on 9 October 2011, no more than trivial harm was involved and the clean up could be undertaken for less than $10,000. In attempting to undermine this evidence, the EPA failed to establish that the subjective thought processes and reasons for the decision of BCM’s employees were not genuine. The Court accepted BCM’s evidence that it was not until 10 October 2011 that, following discussions with various employees regarding clean up costs, BCM was of the view that the Incident was reportable.  

As soon as practicable

In light of the finding that the Incident was not reportable on 9 October 2011, the Court held that the Incident was notified as soon as practicable given that the EPA was notified “shortly after the decision” was made by BCM’s employees that the Incident was reportable on 10 October 2011.

All relevant information

In respect of the provision of relevant information “as soon as practicable” under section 150 of the POEO Act, the Court held that the obligation requires action to be taken that is reasonable in all the circumstances and appropriate to the requirements of the situation. Noting that the sample testing of pollutants could take months to obtain, the Court observed that the intention of the obligation is to encourage reporting of as much information as is practically feasible within a relatively short time. Consequently, the Court held that the relevant information was provided as soon as practicable on 10 October 2011.

Reforms

On 6 February 2012, the Protection of the Environment Legislation Amendment Act 2011 (NSW) (Amendment Act) commenced which, amongst other things, amended the POEO Act:

(a) to require pollution incidents causing or threatening material harm to be notified “immediately” rather than “as soon as practicable” (section 148); and

(b) doubled the maximum penalty for offences in relation to the notification of pollution incidents to $2 million for corporations and $500,000 for individuals (section 152).

The Dictionary of the POEO Act does not define the term “immediately”. As such, the term “immediately” will be interpreted by its ordinary meaning which the EPA’s Environmental Guidelines provide means “promptly” and “without delay”.[2] It remains to be seen whether the amendment from “as soon as practicable” to “immediately” will be interpreted by the Courts any differently.

The obligation to notify an incident will still only arise after the person carrying on the activity has decided that material harm to the environment has occurred. Therefore, despite these reforms, the judgment nevertheless provides useful guidance in respect of the failure to notify offence under section 148 of the POEO Act.

Implications

The judgment is significant because it is the first prosecution where a plea of not guilty has been entered for the offence of failure to notify a reportable pollution incident and confirms that:

  • the material harm element of the offence is a subjective matter;
  • the question of materiality is not to be determined by reference to extraneous expert evidence or other written material not available to the alleged offender at the time of the offence;
  • the prosecution must prove beyond reasonable doubt that, at the time of the alleged offence, the person knew that material harm to the environment had occurred; and
  • a person must report an incident causing or threatening material harm “as soon as practicable” or “shortly after the decision” is made.

Importantly, the decision warns against persons sitting on their hands, ignoring threatened or actual harm and delaying investigations which may constitute wilful blindness and lead the Court to infer actual knowledge of the existence of the relevant matter.


[1]  Pereira v Director of Public Prosecutions (1988) 35 A Crim R 382 at 385; He Kaw Teh v The Queen (1985) 157 CLR 523 at 536.

[2]  Environment Protection Authority, Environmental Guidelines: Preparation of Pollution Incident Response Plans (March 2012), 2.


The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.


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Louise Camenzuli

Partner. Sydney
+61 2 9210 6621

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