Australia: Criminal negligence established by failure to comply with conditions of a project approval

In a recent decision in Secretary, Department of Planning and Environment v Charbon Coal Pty Ltd [2016] NSWLEC 106, the Land and Environment Court (Court) found Charbon Coal Pty Ltd (Company) was criminally negligent and committed an offence against section 125(1) of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) following the Company's breach of a condition of its Part 3A approval (Approval). This decision highlights the importance of complying with conditions of approval, particularly a condition which requires compliance with an environmental assessment (EA). While a number of other cases have dealt with a breach of conditions of approval, including in connection with mining or quarrying operations,1 the Court distinguished this case on the basis that the active decision on the part of the Company to construct a haul road in a different location to that which was approved warranted a finding of negligence.

Facts

The Company, a subsidiary of Centennial Coal Company Ltd (Centennial), engaged Big Rim Pty Limited (Contractor) to manage and carry out all open cut operations at Charbon Colliery (Colliery), an open cut and underground coal mining operation. In 2010 the Approval for the expansion of the Colliery was granted, a condition of which required that a haul road be constructed in a location identified in the EA, to ensure an Indigenous heritage site was not disturbed.

The Contractor proposed constructing the haul road in a different location, on the basis that the location proposed by the EA was sub-optimum because of its steeper grade. The Company's Environment and Community Manager (ECM) authorised the Contractor to take this course of action, and in 2012 the haul road was constructed, in breach of the Approval.

The Court's decision

As the Company pled guilty to the offence, the Court had only to determine an appropriate sentence, by taking into account relevant aggravating and mitigating factors.

Aggravating factors

An important consideration in this case is upholding the statutory scheme for orderly planning in NSW under the EP&A Act. The Company acknowledged that it was complicit in the breach, and sanctioned it. The Court found that the Company's substantial and easily avoided failure to comply with the conditions of the Approval in relation to the protection of the Indigenous heritage site resulted in archaeological and cultural harm. Further environmental harm by way of clearing 0.59 ha of Box Gum Woodland (BGW), a threatened ecological community under the Threatened Species Conservation Act 1995 (NSW) also occurred. While the Company submitted that the impact the clearing had on BGW was minor in this instance, the Court held this submission ignored the cumulative impacts of multiple clearing events which have resulted in that community being threatened.

The Court also considered whether the Company was negligent, as this would increase the objective seriousness of the offence. The Company argued that the offence was the result of a systemic failure to ensure appropriate systems were in place to check and monitor the Contractor's compliance with the Approval. The Court found however that the Company, through its ECM, was aware of and facilitated the construction of the haul road in a different location to that which was specified in the EA. A person in the ECM's position should have been aware of the need to comply with the conditions of the Approval, and accordingly the Court found the Company had been negligent.

Mitigating factors

The Company's involvement in the local community and expression of remorse (such as writing letters to Aboriginal stakeholders and issuing a media statement) were found to be mitigating factors. The extensive measures put in place by Centennial after the offence to improve environmental management and compliance procedures, and ensure further breaches of conditions of approval would not occur, were found to reduce the perceived likelihood of reoffending. However, the Court did not accept that the Company's work to rehabilitate the Colliery following its closure demonstrated that the Company was of good corporate character, as the rehabilitation was a condition of the Approval.

Conclusion

The penalty of $250,000 was reduced by 30% to $175,000 in light of the early guilty plea and other mitigating factors. The Company was also ordered to pay costs. The Court commented that the penalty should serve as a general deterrent, including to Centennial, which operates other mines.

When undertaking projects, it is now more important than ever to ensure that conditions of consent are complied with to prevent breaches of the EP&A Act and possible enforcement action being taken. Significant penalties can apply for breaches of the EP&A Act, particularly following amendments to the EP&A Act which commenced on 31 July 2015.

In addition, the Department of Planning and Environment (DPE) has expanded its compliance team, and this year released its Prosecution Guidelines and Compliance Policy. The DPE's compliance reports show a marked increase in compliance monitoring activities by the DPE in the last year, evidencing its commitment to ensure that high standards of compliance with environmental planning and assessment legislation are achieved.2

Footnotes

1 Secretary, Department of Planning and Environment v Boggabri Coal Pty Limited [2014] NSWLEC 154; Director-General, Department of Planning & Infrastructure v Integra Coal Operations Pty Ltd [2012] NSWLEC 255; Minister for Planning v Hunter Quarries Pty Ltd [2010] NSWLEC 246.

2 The Compliance Report published by the DPE in June 2016 indicates that the DPE carried out 1391 compliance activities in the 2015/2016 financial year, as compared with 1046 in the 2014/2015 financial year and 840 in the 2013/2014 financial year (as disclosed in the reports for those years).

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.

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Authors
Rebecca Hiscock
 
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