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District Court of New Zealand |
Last Updated: 7 October 2022
IN THE DISTRICT COURT AT CHRISTCHURCH
[2022] NZDC 18662 CRI-2021-076-001026
CANTERBURY REGIONAL COUNCIL
Prosecutor v
ALLIANCE GROUP LIMITED
Defendant
Hearing: 12 September 2022 Appearances: V Sugrue for the Prosecutor
K de Silva for the Defendant Reserved Reasons: 27 September 2022
RESERVED REASONS FOR SENTENCING OF JUDGE J J M HASSAN
[1] On 12 April 2022, Alliance Group Limited (‘Alliance’) pleaded guilty and was convicted of a charge under the Resource Management Act 1991 (‘RMA’) for the unlawful discharge of a contaminant (CRN ending 265). The offending concerned a discharge of stickwater1 and tradewaste by an employee at its Smithfield Timaru plant.
[2] As the notes on sentencing record, Alliance was sentenced to a fine of $57,000 and an enforcement order under s339(5). The terms of that order were read in summary, to be confirmed in these reserved reasons.2
1 A partially processed product of rendering.
[2022] NZDC 18662 – CANTERBURY REGIONAL COUNCIL v ALLIANCE GROUP LIMITED – RESERVED REASONS FOR SENTENCING
Background
[3] The discharge was onto land and thence to water (namely a ring drain and coastal water). Not being allowed by resource consent, plan rule or any national environmental standard or regulation, the discharge contravened ss 15(1)(b) and 338 RMA.
[4] The maximum available sentence by way of fine is $600,000. In addition, an enforcement order can be made as part of sentencing and the defendant has proactively proposed this in cooperation with the Council.
[5] Alliance is a registered company that operates meatworks. Its Smithfield plant is in an industrial area on the outskirts of Timaru in the Waitarakao/Washdyke catchment. The Plant is adjacent to the coastal marine area and the Waitarakao/Washdyke Lagoon. The Lagoon is some 400m from the coastal marine area. A popular coastal walkway traverses the area including the Alliance land. It is agreed to be an area of significant importance in cultural, ecological and recreational terms.
[6] The ring drain where the contaminants flowed on their way to the sea is an artificial watercourse. It intercepts flows from Washdyke Creek and also receives flows from the lagoon, discharging these direct to the sea via concrete culverts. As such the drain has an interconnected function with the creek, lagoon and coastal waters. Together with the lagoon, it is part of the Waitarakao Mātaitai in respect of which Te Rūnanga o Arowhenua as Manawhenua hold exclusive rights. The area is important for mahinga kai and a habitat for taonga species.
[7] In the morning on 26 March 2021, Alliance notified Canterbury Regional Council (‘CRC’) officers that there had been a discharge from the Plant to the ring drain. It also notified Timaru District Council (‘TDC’) as owners of the tradewaste network. CRC officers attended without delay and observed green and red tinged odorous effluent flowing down a cliff, through a culvert under the walkway and into the ring drain. From there, the effluent flowed on the outgoing tide via culverts to the coastal marine area.
[8] Alliance Technical Manager (Ms Navaro) explained to the attending CRC officers that the incident was as a result of a blockage in a tradewaste pipe. When the relevant Alliance manager had first become aware of the blockage (about 45 minutes before alerting CRC), he immediately contacted a plumbing company to resolve it. Over the following two and a half hours, various remedial measures were taken. A ‘fat berg’ was removed and a sucker truck deployed to unblock the pipe. At approximately 10.15 a.m., the Plant was shut down to stop further stickwater and tradewaste inflow. Bunding was put in place along the coastal walkway downstream of the flow path to prevent further contaminant inflow to the ring drain. By 11.00 am, Alliance had dug a pit to contain overflow.
[9] Effluent from Smithfield’s manufacturing and rendering operations is disposed of via a TDC tradewaste network under a tradewaste discharge consent. The ‘tradewaste’ here is essentially liquid waste from livestock processing.
[10] Rendering is a separate operation at the Plant. ‘Stickwater’ refers to partially processed material from rendering. It includes fat that can solidify when cooled. As stickwater has some financial value and can be reprocessed, it would not generally be discharged to the TDC tradewaste network. However, the Plant’s effluent system provides for the contingency that it can be so discharged in the event of a Plant malfunction or a lack of reprocessing ability. This involves passing the stickwater through coarse and fine contra-shears to remove solids.3
[11] That screening system is not failsafe as the discharge incident reveals. At the time of the incident, the Plant was fully operational. Water jets used to clean the fine contra-shear had been partially shut down. Unscreened fats then cooled and blocked pipes. There was a backup and overflow of stickwater and also tradewaste from the manufacturing operations. These contaminants then discharged over land to the ring drain and ultimately to sea.
[12] It is estimated, from Alliance’s root analysis review, that the discharge was in
the order of 77,000 litres.
[13] Laboratory testing by Hill Laboratories of samples taken by CRC at the initial attendance at the incident, that afternoon and on 7 April 2021 showed the presence of ammoniacal nitrogen, E. coli., organic compounds and nutrients. In her report on these matters, Shirley Hayward, CRC Team Leader Water Quality and Ecology identifies related potential adverse effects of the tradewaste discharge on the ring drain and the coastal marine area. She concludes that there would have been immediate and potentially lethal effects on aquatic fauna with limited mobility. High concentrations of faecal indicator bacteria would have rendered the ring drain and rocky reef unsuitable for collection of mahinga kai in the Mataitai areas for several days. There would have been associated risks to human health. Furthermore, the overall high nutrient inputs would have degraded habitat.
[14] In his peer review of Ms Hayward’s report, ecologist Mark James as a consultant to Alliance generally concurs. He identifies the parameters of most concern are ammoniacal-N toxicity and E.coli. He comments that the toxicity effects would have been short term (acute toxicity being for a few hours and close to the discharge). In his view, it is unlikely there would have been any long-term measurable ecological effects. Fortuitously, the discharge coincided with an outgoing tide. He acknowledges there was an impact on the gathering of mahinga kai and a short-term impact on safe passage of inanga and elvers.
[15] The discharge has caused cultural harm in flowing through Waitarakao Mātaitai and adversely affecting taonga species and the mana and mauri of the wai flowing into Waitarakao Lagoon. In a letter dated 24 June 2021, John Henry as chair of Te Rūnanga o Arowhenua commented:
The shocking errors by Alliance Smithfield site are, in the opinion of Arowhenua, disgraceful and disappointing. The latest incident compounds these feelings as Alliance Smithfield has reassured Arowhenua and the community that measures had been put in place to prevent such a discharge from occurring again. This latest discharge has affected not just taonga species but the mana and mauri of the water that flows into the Waitarakao Lagoon. Arowhenua are frustrated that the effects of this one negligence will persist long after the actual residues of the discharge have dissipated. Arowhenua
therefore consider it crucial for ECan to address this incident with Alliance Smithfield to ensure further incidents do not occur.
[16] There was a previous discharge incident at the Plant on 14 May 2020, involving an overflow and discharge to land and to the ring drain, due to a mechanical failure of the fine contra-shear. This resulted in issuance of an abatement notice requiring immediate and continued cessation of the discharge. Alliance undertook an internal investigation of this incident and identified three preventative actions. It completed two of these but not a third, namely installation of a block wall to bund the area of the fine contra-shear and its tradewaste system. On that action, it had gone so far as to order the bricks and inform CRC that the wall would be built. It is accepted that, had the bund been built, it could have confined the offending discharge to the Alliance Site.
[17] Alliance has now completed this bunding (doing so within a few days of the offending discharge incident).
[18] Alliance participated in a restorative justice process with representatives of two victims:
- (a) Te Rūnanga o Arowhenua as Manawhenua; and
- (b) Te Aitarakihi Society Inc a kaupapa Māori organisation which operates a multi-cultural centre (marae-a-iwi) or Maata Waka at 50 Bridge Street, Smithfield near to the offending meatworks. This centre serves 450 registered members, includes an early childhood centre (He Manu Hou) and a health care centre and currently employs 17 staff.
[19] These processes have concluded although they had not reached their final outcome at the time the prosecution submissions were filed. Ms de Silva helpfully updated the court.
[20] Senior managers of the Alliance who attended at these sessions were its Plant Manager Karen Morris, its Processing Environmental Compliance Manager Dan Cairns and its General Manager – Manufacturing Willie Weise. They expressed regret and a commitment to ensure there would be no repeat. In support of that assurance,
they explained Alliance’s intended plant improvements and a timeline for completing these.
[21] Te Wera King, upoko and cultural consultants to Te Rūnanga o Arowhenua, acknowledged that these initiatives were a “start”. However, there were no definitive outcomes with respect to Te Rūnanga o Arowhenua.
[22] As for Te Aitarakihi Society Inc, their business development manager Mr David Jack followed up by letter of 23 August 2022. The letter acknowledged the steps taken by Alliance to stop the discharge and mitigate its effects and expressed support for the planned upgrade. It also traversed the collaborative efforts of Alliance in regard to community gardens, observing that this “further demonstrates how our neighbourly relationship is developing”.
[23] I will return to these matters later in sentencing as they are a significant focus of differences between counsel on the appropriate sentencing outcome.
Submissions
[24] Counsel concur on the relevant purposes and principles of sentencing and the approach to deriving the sentencing outcome. Submissions indicate relatively confined differences as to sentencing outcome. In particular, they concur that:
- (a) the appropriate starting point for sentencing should be $70,000;
- (b) there should be an uplift of $15,000 for the abatement notice and failure
to install the bund;
(c) an enforcement order on terms agreed with the CRC should be part of sentencing.
[25] Differences on the sentencing outcome pertain to the basis for and extent of any discount from the starting point for a fine as part of sentencing. It is agreed that there should be a 25% discount for the early guilty plea. The substantive differences pertain mainly to consideration of the restorative justice conference and outcomes:
- (a) Ms Sugrue submits that there should be a discount of “up to 5%” for
these matters; whereas
(b) Ms de Silva submits that this component should attract a discount in the order of 10-15%.
Relevant purposes and principles of sentencing
[26] In regard to ss 7 and 8 SA:4
- (a) sentencing purposes include holding Alliance accountable for the harm done, promoting in the offender a responsibility for and acknowledgement of that harm, denouncing the offending and deterring offending (ie specific and general deterrence);
- (b) sentencing principles include taking account of the gravity of the offending, including Alliance’s culpability and the seriousness of the offence, imposing the least restrictive outcome appropriate in the circumstances and having regard to the desirability of consistency in sentencing levels (in terms of which I consider comparable cases).
[27] As this is RMA offending, case law identifies the RMA s5 purpose of sustainable management (including as to the safeguarding of the life-supporting capacity of water and ecosystems) as relevant.5 Case law also identifies that, subject to the SA, sentencing purposes can encompass imposing costs or penalties that cause a polluter to internalise environmental costs6 and fostering environmentally responsible corporate citizenship.7
[28] These matters are usefully tested by reference to the criteria identified in
Machinery Movers8 (which Thurston confirms remain appropriate in terms of the
SA).9 In the context here, I summarise these as:
(a) the nature and sensitivity of the environment and the harm inflicted; and
(b) culpability and attitudinal factors including any deliberateness in the offending.
[29] A two stage approach is to be applied in deriving sentence:10
Stage 1: calculate a starting point, considering aggravating and mitigating
features of the offence;
Stage 2: incorporate any factors (aggravating, mitigating) personal to the offender.
Nature and sensitivity of the environment and the harm inflicted
[30] Whilst I acknowledge there are some differences in the perspectives of the two ecologists, these are not material in light of the agreed Summary of Facts. What I now discuss is on a premise that Mr James’ peer review differences from Ms Hayward are sound.
[31] On the basis I have described, I find the offending caused serious harm to an environment of high value and vulnerable sensitivity. The value is in te mana o te wai and the related cultural importance of Waitarakao Mātaitai to Manawhenua, important freshwater and coastal ecology (including vulnerable inanga and tuna (elvers), the popularity of the coastal walking track, and related cultural, and recreational associations for communities.
[32] There was unmeasured harm or destruction to vulnerable coastal fauna, ecology and biodiversity. At least at an ecological scale, this was temporary. There was temporary endangerment to human health. There was harm to amenity values and community enjoyment of our environment. In most respects that harm was also
10 Moses v R [2020] NZCA 298 at [45] – [47].
temporary.
[33] There was a violation of taonga and te mana o te wai, impacting personally on Manawhenua and therefore environmentally. Specifically, the offending harmed the relationship of Te Rūnanga o Arowhenua to its whenua, including Waitarakao Mātaitai, te mana o te wai, taonga species living there, kaitiakitanga and cultural wellbeing. These are matters I weigh in light of ss 6(e), 7(a), 8 and 5 of the RMA. This harm extends beyond temporary ecological effects as I have described because it impacts on the relationship of Manawhenua to their whenua. I return to this in my discussion of the enforcement order.
Culpability and attitudinal factors including any deliberateness in the offending
[34] This was not deliberate offending but due to a high degree of body corporate carelessness. It is accepted that Alliance is vicariously responsible in those terms. That is particularly in its failings leading up to the offending. Running effluent of known risk to flora and fauna and ecology through a mātaitai via a watercourse and in close proximity to a coastal lagoon and the coastal marine area plainly demanded care. Alliance was forewarned about the need to bund by the issuance of an abatement notice for an earlier failing of the contra-shear system. As a well-resourced operator, it failed to follow through on commitments it then made to diligently install bunding.
[35] Some credit is due for the promptness of Alliance’s notifications to CRC and TDC once it discovered it had a problem, its cooperation with CRC officers and its proactive steps to bring an end to the discharge with involvement of its plumbing contractors.
[36] Alliance’s participation in the restorative justice process reflects sincere remorse including by its senior managers. In a relationship and confidence sense, the process was relatively more restorative for Te Aitarakihi Society Inc than for Manawhenua. It is not surprising that these processes are described only as a “start” for Te Rūnanga o Arowhenua. From a matauranga Māori perspective, Alliance must appreciate that having so harmed the whenua by its offending, it must continue its efforts towards relationship repair with Manawhenua. It should do this in person and
in accordance with tikanga so as to help restore the mana as is associated with tikanga responsibility for this part the whenua of Te Rūnanga o Arowhenua. I have accounted for this in modifications I make to the recommended enforcement order.
[37] In an overall sense I find Alliance displayed a moderately high culpability in its offending.
[38] I will return to matters of personal and general deterrence shortly.
Derivation of the fine component of sentence
[39] As those notes also record, counsel were informed that the $57,000 fine was derived as follows:
- (a) a starting point was determined of $80,000, in view of the court’s addition of 15% to what counsel had recommended and what the Regional Council submitted in view of considerations of general deterrence;
- (b) a 15% uplift was applied on this for personal aggravating factors,
deriving an uplift amount of $92,000;
(c) a 25% discount was applied for the early guilty plea, calculated to derive
the sum of $69,000;
(d) a further discount of 15% was accorded for other factors showing significant remorse, in particular in regard to steps taken in participation and follow-up of restorative justice processes and proactive auditing of its systems and promoting a sentencing outcome that includes an enforcement order to underpin systems upgrade commitments, calculated to derive the sum of $58,650;
(e) considering that derived calculation in the round, accounting for the modified terms of the enforcement order to be imposed in sentencing, that sum was generously rounded down to $57,000.
Starting point
[40] Ms Sugrue referred me to various cases for consideration of the starting point.11 As I have noted, counsel are agreed as to the appropriate starting point.
[41] Those more closely similar to the present case are AFFCO ($80,000) and Land Meats ($70,000). Similarly, each involved meat processing discharges by large body corporate offenders. The discharges were similarly to land and then waters. Each was similarly a result of a high levels of carelessness in terms of the design and operation of waste discharge systems. Each inflicted similar scales of harm culturally and ecologically. Relatively speaking, AFFCO indicates a more serious scale of offending in terms of the duration of the discharge (continuous 52.5 hr discharge until discovered).
[42] I find the other cases less comparable. GrainCorp involved comparatively more serious offending (from tallow tanks, with a $120,000 starting point). Blue Sky involved materially different factual circumstances at least insofar as the relatively degraded nature of the receiving environment is concerned (Waihopai River, albeit an important whitebait breeding ground and a focus for enhancement; $50,000 starting point).
[43] However, in light of AFFCO and Land Meats, I consider the present case is revealing of a concerning pattern of similar meat processor industry offending. The common thread is of deficient mechanical and operational effluent systems. Typically, when things go wrong with meat manufacturing, our waterways are impacted. When that occurs, there are typically ecological and cultural harm outcomes. Those outcomes are not acceptable to our community, as the National Policy Statement for Freshwater Management 2020 including its directions as to te mana o te wai signals. It is timely for a general deterrence message to be sent to the meat industry to accord due respect to our waters including by diligent choice of technology and adherence to
sound effluent management systems.
[44] Therefore, I elevate the proposed starting point for this offending by 15% to
$80,000. That is in addition to my imposition of an enforcement order as part of sentencing, aspects of which I will also change in view of the cultural impacts of this offending.
Aggravating or mitigating factors personal to the offender
Aggravating factors
[45] I agree with counsel that there should be an uplift of 15% on the starting point in view of the prior abatement notice and failure to install the bund as promised; a promise that if delivered could have contained the discharge here to the Site.
[46] On my adjusted starting point that would mean an uplift to $92,000.
Mitigating factors
[47] I agree that the matters I have traversed concerning the abatement notice count against a discount for good character, despite the clean conviction history.
[48] However, I accord a 25% discount for the early guilty plea, deriving $71,000.
[49] I accept that Alliance has displayed significant remorse, in particular in regard to its participation in and follow-up of restorative justice processes, its proactive auditing of its systems and its initiatives in seeking an enforcement order as part of sentencing to underpin the commitments it has made. That enforcement order outcome was substantially supported by CRC. Therefore, I find a further discount of 15% is appropriate for significant remorse.
[50] That derives a derive find in the order of $58,650, prior to my consideration of the enforcement order aspect of sentencing.
Enforcement order
[51] Helpfully counsel conferred and agreed a form of enforcement order under s339(5) RMA as part of sentencing. On Friday 9 September 2022, I convened a pre- sentencing teleconference to invite counsel to take instructions on whether the draft order could be enhanced to better reflect the principle of reciprocity in respect to the harm inflicted on the whenua and to Manawhenua. Specifically, I noted that the draft order did not appear to provide for the defendant to engage according to tikanga with Manawhenua about the steps required under the draft order for remedial works. I noted that, while there are statements of regret made and certain assurances during the restorative justice process, these only go so far.
[52] By joint memorandum filed later that afternoon, counsel proposed an amendment to the order adding a clause 3 as follows:
- Pursuant to sections 314(1)(b)(i) and 339(5)(a) of the Resource Management Act 1991, the Applicant/Defendant, Alliance Group Limited shall undertake the following works to upgrade wastewater infrastructure at its Smithfield Plant at Bridge Street, Smithfield, Timaru.
- Full replacement by 31 January 2023 of the trade waste pipeline with above ground high density polyethylene piping
- Installation by 31 January 2023 of flow meters and pressure sensors at key discharge points to identify pipeline failure or obstruction.
- The key discharge points will be established in accordance with expert advice, and once established, the key discharge points will be identified in the written reports required by Order number 2.
- The flow meters and pressure sensors shall be linked to the onsite supervisory control and data acquisition system and alarmed on low/high differential pressures.
- The Applicant/Defendant, Alliance Group Limited will provide written reports by email to the Canterbury Regional Council (Michael.nolan@ecan.govt.nz) on the last working day of each month about the progress for the works required by these Enforcement Orders.
These Orders shall take effect from the date these Orders are issued.
[53] As the notes of sentencing record, I determined that the enforcement order should be substantially modified to read:
- [1] Pursuant to ss 314(1)(b)(i) and 339(5)(a) of the Resource Management Act 1991, the defendant, Alliance Group limited, is ordered as follows:
- (a) the defendant must, by 31 January 2023, undertake the following works to peer-reviewed industry standard and design to upgrade wastewater infrastructure at its Smithfield plant at Bridge Street, Smithfield, Timaru:
- (i) full replacement of the trade waste pipeline with above-ground high-density polythene pipeline, and
- (ii) installation of flow meters and pressure sensors at key discharge points linked to the on-site supervisory control and data acquisition system and alarmed on low-high differentiated pressures.
- (b) the defendant must report in writing by email to the Canterbury Regional Council (Michael Nolan at his email address) as follows in regard to progress towards and full compliance with order (a):
- (i) provide a progress report on the last working day of each month, the first such report to be provided by 31 October 2022, and
- (ii) provide a final report, including as-built designs, within five working days of completion of all works required by order (a).
- (c) the defendant must email or provide written copies of the reports in order
(b) to Aoraki Environmental Consultancy on the same day as each report is provided to Canterbury Regional Council under this order, and
(d) the defendant, by appropriate senior manager, must offer to te upoko of Te Rūnanga o Arowhenua to attend at Arowhenua Marae if requested to report on progress in completing order (a) at regular times during completion of compliance with this order.
[2] Those orders shall take effect from the date of sentencing.
[54] My decision to add order ‘[1](c)’ is to better reflect my reasons as now recorded concerning the importance of seeking ongoing repair of the Alliance’s relationship with Manawhenua as a victim of its offending and in a manner properly respectful of tikanga. This was intended to enhance what the parties proposed in their order 3. I have since identified that the summary should also have read in the balance of that order so express it fully in the enforcement order attached.
[55] Other changes are to improve enforcement clarity.
Conclusion
[56] Therefore, on 12 September 2022, on the charge (CRN ending 265) that it unlawfully discharged a contaminant, namely stickwater and trade waste, onto land, and in circumstance where it discharged to water in breach of the RMA, the defendant Alliance Group Limited was convicted and sentenced as follows:
- (a) Alliance was sentenced to a fine of $57,000 and an enforcement order under s339(5) as set out in the Annexure on terms summarised in delivering sentence but to be confirmed on the terms in the Annexure to these reserved reasons for sentencing;
- (b) it was ordered under s342 RMA for that fine less 10% to be payable to
the prosecuting Council; and
(c) it was ordered that Alliance pay court and solicitor costs at standard rates as confirmed by the registrar.
J J M Hassan
District Court Judge and Environment Judge
Annexure
ENFORCEMENT ORDER MADE AS PART OF SENTENCING IN CRN ENDING 265
Pursuant to ss 314(1)(b)(i) and 339(5)(a) of the Resource Management Act 1991 as part of sentencing for the offence in CRN ending 265, the defendant Alliance Group Limited (‘Alliance’) is ordered as follows:
[1] Alliance and its successors and assigns must:
- (a) by 31 January 2023, undertake the following works to peer-reviewed industry standard and design to upgrade wastewater infrastructure at its Smithfield plant at Bridge Street, Smithfield, Timaru:
- (i) full replacement of the trade waste pipeline with above-ground high-density polythene pipeline, and
- (ii) installation of flow meters and pressure sensors at key discharge points linked to the on-site supervisory control and data acquisition system and alarmed on low-high differentiated pressures; and
- (b) report in writing by email to the Canterbury Regional Council (Michael Nolan at his email address) as follows in regard to progress towards and full compliance with order [1](a):
- (i) provide a progress report on the last working day of each month, the first such report to be provided by 31 October 2022, and
- (ii) provide a final report, including as-built designs, within five working days of completion of all works required by order [1](a); and
- (c) provide email or hard copies of the reports in order [1](b) to Aoraki Environmental Consultancy on the same day as each report is provided to Canterbury Regional Council under this order; and
- (d) through its appropriate senior managers:
- (i) write and offer to te upoko of Te Rūnanga o Arowhenua to attend at Arowhenua Marae if and when invited to do so, to report on and answer any questions concerning progress in completing order [1](a) at regular times during completion of compliance with that
order; and
(ii) if and when so invited, attend at the Marae for those purposes.
[2] The orders in [1] shall take effect from the date of sentencing, being 12 September 2022.
J J M Hassan
District Court Judge and Environment Judge
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