Our readers will of course be familiar with the old saying that: "The definition of insanity is doing the same thing over and over and expecting a different result".  Equally well might it be said that in New South Wales, where the maximum potential penalty that may be imposed under the Protection of the Environment Operations Act against a corporation for breaching the condition of an Environment Protection Licence is now $1,000,000 (with the possibility of additional penalties of $120,000 for each day that an offence continues) that the definition of "risky business practises" is repeatedly engaging in a pattern of corporate conduct that contravenes the Act.  To do so exposes the corporation to the peril of serial prosecutions by the Environment Protection Authority, and to the imposition of increasingly severe penalties by the Land and Environment Court.

This exact scenario has just unfolded in two recent proceedings brought against M A Roche Pty Ltd, the operator of a quarry located at Wauchope on the "mid-north coast" of NSW. These cases - the first being Environmental Protection Authority v M A Roche Group Pty Ltd (2014) NSWLEC 114 and the second being the very recently decided case of  Environmental Protection Authority v M A Roche Group Pty Ltd (2015) NSWLEC 29  (2 March 2015) - arose from virtually identical conduct. In each case, the company contravened a condition of an Environment Protection Licence that was granted by the EPA that imposed a limit on the quantity of material that could be handled at the quarry within a 12 month period.

The condition of M A Roche's Environment Protection Licence that was at issue in each of these prosecution restricted the quantity of material that could be handled at the quarry during any given 12 month period to 30,000 tonnes. However, in the period from January 2012 - January 2013, Roche actually handled over 88,000 tonnes. This breach occasioned the first prosecution, which was adjudicated by Justice Sheehan in July 2014 and which resulted in a penalty of $30,000 and a costs order.

The second prosecution before the Court involved a somewhat less severe exceedence of the 30,000 tonne handling limit. This prosecution dealt with the amount of materials that were handled during the period from January 2013 - January 2014, which was over 62,000 tonnes. This second prosecution resulted in a fine of $52,000.

A noteworthy aspect of this case is that the defendant disclosed to the EPA during an interview that was conducted in August 2013 that the defendant was aware that it was likely to breach the materials handling limit during the reporting period January 2013 - January 2014. Nonetheless, after this admission was made to the EPA, the defendant continued handle and sell material from the quarry (in other words, increasing the quantity of material over the handling limit and consequently worsening the severity of the breach of the licence condition). Unsurprisingly, this evidence led the Court (Justice Craig) to conclude that the breach was "deliberate".

It goes without saying that such an adverse finding by the Court can spell trouble for a defendant! Even though the POEO is a "strict liability" statute, it is the Land and Environment Court's standard practise in determining sentence to consider a defendant's underlying "state of mind". Evidence that an offence has been committed "intentionally" or "knowingly and purposefully", as was present in this case, can surely result in heavier sanctions.

It is thus our observation that in situations like this case, where a company is aware beforehand that its course of conduct is likely to result in a breach of licence condition, it behooves the company to take all available steps to avoid the offence altogether, or at least to reduce its seriousness.  The defendant could have done so in this case either by suspending operations for the balance of the year once it became aware that it had reached its materials handling limit, or at least by reducing its production and sale of material.

There is one additional aspect of Justice Craig's judgement in this case that is worthy of mention: The defendant in this prosecution had a record of two prior convictions for environmental offences: one of course for the previous breach of the materials handling limit, and another for a water pollution offence at the same quarry. Justice Craig stated in his judgement that he did not consider these previous convictions to be "aggravating circumstances". However, it appears that this conclusion is in conflict with the Crimes (Sentencing Procedure) Act, as section 21A(2)(d) expressly provides that a record of prior convictions is to be considered as an "aggravating factor".

It is our opinion that a future defendant with a string of previous convictions for environmental offences (particularly of offences against an identical licence condition, as in this case) would be at significant risk of having those earlier convictions "weighed in the balance" when the Court calculates a penalty. At the least, a lengthy record of previous environmental convictions would, in our view, work against a finding that a defendant is of "good corporate character" and would prevent a penalty from being mitigated on that basis.

Justice Craig's judgement in this prosecution can be found at the following link:

http://www.caselaw.nsw.gov.au/decision/54f3b447e4b007ec2d9fb3a7