The Land and Environment Court has found a coal mine operator not guilty of a charge of failing to notify the Environment Protection Authority (EPA) as soon as practicable after becoming aware of a pollution incident, in Environment Protection Authority v Bulga Coal Management Pty Limited [2014] NSWLEC 5.

The Court held that Bulga Coal Management Pty Limited's (Bulga) duty to notify the EPA of the pollution incident was only triggered once it became "subjectively" aware that the pollution incident caused or threatened material harm to the environment. At this point, Bulga did report the incident to the EPA.

Although the statutory timeframe for reporting pollution incidents has subsequently been amended, this decision is significant as the first example of a not guilty plea for this offence and in clarifying the subjective elements of the offence.

The spill and notification to the EPA

On Sunday 9 October 2011, a Bulga employee became aware that tailings had escaped into a nearby creek. A small hole in a T-piece in the tailings pipeline had caused tailings slurry to enter a containment dam. When the containment dam's capacity was eventually exceeded, it resulted in a slow-flowing release of the tailings slurry mixed with the dam water onto a nearby dry creek bed.

The Bulga employee immediately arranged measures to halt the flow of the tailings slurry and contain the discharge in the creek. He also notified a manager of the incident, who attended the site and in turn, notified certain Bulga employees responsible for reporting pollution incidents externally. The manager confirmed by telephone the extent of the spill, that the discharge had been halted and fully contained, and that there was no potential for the tailings to flow further downstream.

On Monday 10 October 2011, further inspections and discussions took place on site, this time attended by those Bulga employees notified by telephone on Sunday. It was then decided to use sucker trucks to clean up the tailings, an option that would incur costs exceeding $10,000. At this point, a decision was made to notify the EPA, as the relevant regulatory authority.

The duty to notify

Failure to notify the relevant authority of a pollution incident in contravention of s148(2) is an offence under s152 of the Protection of the Environment Operations Act 1997 (POEO Act).

At the time of the incident, s148(1) and (2) set out the duty to notify of pollution incidents as follows:

148 Pollution incidents causing or threatening material harm to be notified
(1) Kinds of incidents to be notified
This Part applies where a pollution incident occurs in the course of an activity so that material harm to the environment is caused or threatened.
(2) Duty of person carrying on 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.

The POEO Act was subsequently amended in February 2012, shortening the timeframe to notify of a pollution incident from "as soon as practicable" to "immediately". However, nothing turned upon this in the present case.

"Material harm" is also defined in s147 of the POEO Act:

  1. For the purposes of this Part:
    1. harm to the environment is material if:
      1. it involves actual or potential harm to the health or safety of human beings or to ecosystems that is not trivial, or
      2. it results in actual or potential loss or property damage of an amount, or amounts in aggregate, exceeding $10,000 (or such other amount as is prescribed by the regulations).

What did the parties argue?

The EPA and Bulga offered competing versions of what triggered the duty to notify in s148(2) and what the EPA had to prove as to Bulga's awareness in order to make out the offence.

The EPA argued that the duty to notify is triggered once a person becomes aware that a pollution incident has occurred, which, as a matter of objective fact, caused or threatened material harm to the environment. The key element of this argument is awareness of the incident itself. Accordingly, the EPA argued that Bulga should have reported the spill on Sunday, when it first became aware of the spill.

On the other hand, Bulga argued that awareness of the bare fact that a pollution incident had occurred did not trigger the duty to notify. Instead, it also had to be proved that a person was subjectively aware that the incident caused or threatened material harm to the environment. Bulga argued that, accordingly, it was only required to report the spill on Monday, as it did, once it became aware that the clean-operation would cost more than $10,000 (as per the definition of material harm in s147(1)(a)(ii)).

What did the Court say?

The Court accepted Bulga's submissions with the result that the EPA had failed to prove beyond a reasonable doubt that Bulga (through its relevant employees whose state of mind was attributable to the company) was aware on Sunday 9 October, that a pollution incident which caused or threatened material harm had occurred and, that Bulga had failed to notify of the incident as soon practicable after becoming so aware.

The Court considered that the Bulga employees' actions and chain of decision-making were in accordance with Bulga's internal operational manual and that such procedures were "reasonable and proper". The Court was also satisfied that the evidence given by Bulga's employees regarding their awareness was genuine.

W(h)ither the duty?

The decision is not an invitation to shut one's eyes to the possible impact of a pollution incident or delay notification; nor is it an indication that the Court will be any less strict in enforcing the duty to report pollution incidents imposed by s148(2).

Indeed, as the Court noted, defendants will not be able to rely on 'wilful blindness', as it may be possible to infer actual knowledge where there are suspicious circumstances combined with failure to make appropriate enquiries.

Accordingly, companies or individuals should ensure they have robust and comprehensive internal procedures for managing and notifying pollution incidents coupled with training to ensure that employees are able to appropriately assess (by reference as to what might constitute ''material harm") when to report pollution incidents. This is particularly important given notification must now occur "immediately".

Norton Rose Fulbright has a market leading environmental practice. Please contact Jacinta Studdert if you would like to know more about the legislation and the implications for your business. We would be happy to assist you with drafting robust internal procedures for managing and notifying pollution incidents and provide you with the appropriate training.

Please see our earlier updates regarding the amendments to the duty to notify of pollution incidents for more information:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.