Australia: Dealing with incidents: managing your environmental and safety risk

A recent decision of the Land and Environment Court (Court) in Environmental Protection Authority v Environmental Treatment Solutions [2015] NSWLEC 160 highlights the importance and necessity of staff adherence to both environmental and workplace safety policies, particularly when dealing with dangerous goods.

Facts

Environmental Treatment Solutions (ETS) is a waste storage and processing business that processes liquid and solid wastes from commercial and industrial sources across NSW and interstate. In February 2014, 2 ETS employees were undertaking a licensed activity under the Protection of the Environment Operation Act 1997 (NSW) (POEO Act), an acid alkali neutralization. At the time ETS had a number of workplace procedures for undertaking the licensed activity, and a week prior to the incident ETS had started a waste identification system. The creation of this system was prompted by an environmental audit by the Environmental Protection Authority (EPA).

However, the system had not been fully implemented at the time of the incident, and the 2 employees unwittingly mixed together hydrosulphide with acid. A chemical reaction caused the release of 42 kilograms of toxic hydrogen sulphide gas. Seven employees were effected, with symptoms including loss of consciousness, memory and tightness of the chest. ETS was charged with the offence of failing to comply with a condition of their environmental protection licence, in breach of section 64(1) of the POEO Act, by failing to carry out the licensed activity in a competent manner (as was required by the licence).

Findings

Pepper J noted that objectively environmental harm at the higher end of the spectrum occurred. The Court took into account that the potential harm could have been very higher had the incident occurred in a confined space as the toxic gas could have been lethal. The commission of the offence was also clearly foreseeable: ETS had been previously warned by an audit carried out at the direction of the EPA about its failure to label dangerous chemicals appropriately. No written instructions or job running sheet were provided to the employees prior to commencing the licensed activity, and the onsite chemist was not actually there at the time of the activity.

Fortunately, ETS responded immediately to the incident, which the Court took into consideration as one factor in assessing the objective gravity of the offence. A director of ETS immediately visited the site, and started ETS' "Pollution Incident Response Management Plan." The director visited neighbouring properties and a nearby school, to see if the incident had caused any adverse impact. ETS also held a community meeting to discuss the incident with concerned community members.

In the assessing subjective sentencing circumstances, Pepper J noted that ETS displayed remorse after the offence, and noted ETS' early guilty plea attracted a discount to the penalty of 25%.

Further, ETS made efforts to mitigate the damage caused, discipline staff members, and cooperate with the EPA, they had their original $100,000 penalty discounted by a total of 33% to $67,000. ETS also agreed to pay the EPA's substantial court costs.

Minimising your environmental and safety risk

Although no separate prosecution has been commenced against ETS under the Work Health & Safety Act 2012 (NSW) (WHS Act), both the POEO Act and WHS Act expose directors and managers to liability for failing to take reasonable steps to ensure their organisation does not breach those laws. As such, all managers should ensure that appropriate policies are in place for managing environmental and safety risks, that staff are provided with training with respect to these policies and that the policies are implemented in the event of an incident. While incidents can and do occur, having appropriate policies in place is not only fundamental in minimising the risk of harm to employees and the environment; but regulators and courts will also take into account the existence of measures in place to manage risk when assessing the amount or type of penalties to be imposed.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.