What’s Happened?

A recent decision of the NSW land and Environment Court sheds new light on the duty to report a pollution incident under section 148 of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act). In Environment Protection Authority v Bulga Coal Management Pty Limited [2014] NSWLEC 5 Justice Pain held that the duty to report does not arise until the defendant is actually aware that the incident is of a type which should be reported. While section 148 has recently been amended to require ‘immediate’ notification, it is likely to be interpreted in the same way. In practice, this means that:

  • If a pollution incident occurs during the carrying on of an activity by a company, the company’s internal processes can be followed to assess whether or not the pollution incident caused or threatened to cause material harm to the environment, and
  • the duty to notify the pollution incident to the EPA will only be triggered once the company (by its employees) is in fact aware that the pollution incident caused or threatened to cause material harm to the environment.

Who needs to know?

Anyone carrying on any operations in NSW which have the potential to cause pollution.

Analysis

At the relevant time, section 148 of the POEO Act required that a person carrying on the activity associated with a pollution incident which causes or threatens to cause material harm to the environment must notify the appropriate regulatory authority of the incident ‘as soon as practicable after the person becomes aware of the incident’.

On a Sunday in October 2011, an overflow from a tailings dam at the Bulga coal mine contaminated a nearby creek. Bulga was aware of the incident almost immediately but did not report it to the EPA until the next day, being a Monday. The EPA commenced a prosecution against Bulga for failing to notify the incident ‘as soon as practicable’ as required by section 148.

None of the material facts relating to the incident were in dispute, including the fact that the incident was of a type which required reporting under section 148 of the POEO Act. However, Bulga argued that it did not commit an offence against section 148 as it was only required to report the incident after it became aware that the incident was a reportable incident. It had done so by reporting the incident the next day. Against this, the EPA argued that the offence was made out as it was only required to prove, as a matter of objective fact, the incident was of that type.

Justice Pain accepted Bulga’s argument. She held that 'an element of awareness on the part of the person carrying out the activity is required before any obligation to notify will arise' under section 148(2) of the POEO Act.

Importantly, she held that the EPA's argument, if adopted:

  • 'would lead to unfair results' - 'a person could be criminally liable for not reporting a pollution incident when not aware that, or making an incorrect judgment concerning whether, the incident was of a type that should be reported', and
  • would be contrary to the principles identified by the Court of Criminal Appeal which reaffirmed the common law presumption that knowledge is an essential element of every offence unless expressly displaced by the drafting of the relevant statute.

Accordingly, Justice Pain held that, in order to successfully prosecute for a failure to notify under section 148 of the POEO Act the EPA ‘must prove beyond reasonable doubt the subjective awareness of material harm as defined in [section] 147 by the [Bulga’s] employee(s)' at the relevant time.

This means, in practice, that notification of pollution incidents under section 148 is only required once a relevant person (including an employee of a corporation) becomes aware that the pollution incident has in fact caused or threatened to cause material harm to the environment. This does not mean that a company could avoid the duty to report by not enquiring into whether or not the duty to report was triggered. Nor will it reduce the number of incidents which require reporting. But it does allow companies to take comfort that the EPA will not be able to prosecute them for a breach of the duty to notify if they take sufficient and appropriate time to follow internal processes to assess whether or not the pollution incident did, in fact, cause or threaten to cause material harm to the environment prior to reporting environmental incidents.

‘Immediate’ Notification

At the time of the incident, section 148(2) of the POEO Act required notification ‘as soon as practicable’ after the occurrence of an incident that would or could cause material harm. Section 148 has since been amended to require notification ‘immediately after the person becomes aware of the incident’. However, the reasoning adopted by Justice Pain would still apply to the modified duty to report ‘immediately’. Accordingly, it appears likely that the duty to report under section 148 will still only be triggered once the person carrying out the activity is in fact aware that the pollution incident caused or threatened to cause material harm to the environment.

The decision can be viewed here.