|
|
Home
| Databases
| WorldLII
| Search
| Feedback
District Court of New Zealand |
Last Updated: 19 October 2023
|
IN THE DISTRICT COURT AT HAMILTON
I TE KŌTI-Ā-ROHE KI KIRIKIRIROA
|
|
CRI-2022-039-000125
via AVL [2023] NZDC 18882
|
|
WAIKATO REGIONAL COUNCIL
Prosecutor
|
|
v
|
|
WAITOA INDUSTRIAL ESTATE LIMITED
Defendant
|
|
Hearing:
|
28 June 2023
|
|
Appearances:
|
C Macklin for the prosecutor E Boshier for the defendant
|
|
Judgment:
|
12 October 2023
|
SENTENCING DECISION OF JUDGE MJL DICKEY
[1] The defendant faces one charge of unlawfully discharging a contaminant, namely treated wastewater, into water (specifically the Waitoa River) in breach of s 15(1)(a) of the Resource Management Act 1991 (RMA), when that discharge is not expressly allowed by a national environmental standard, a rule in a regional or proposed plan or a resource consent, from approximately 1:00pm on 12 May 2021 until 11:10am on 14 May 2021.
[2] The defendant pleaded guilty to the charge and is liable to a maximum fine of
$600,000.
WAIKATO REGIONAL COUNCIL v WAITOA INDUSTRIAL ESTATE LIMITED [2023] NZDC 18882 [12
October 2023]
[3] Waikato Regional Council seeks a starting point in the region of $200,000 -
$220,000 with an additional fine of $10,000 for the two days of continuing discharge. The defendant submits that a starting point in the order of $90,000 is appropriate and opposes a further fine for the continuing offence.
[4] No application for discharge without conviction was made.
Background1
[5] Waitoa Industrial Estate Limited (WIEL) is the current owner of the former Wallace Group Limited Partnership industrial processing site at 266d Wood Road, Waitoa, situated between the rural Waikato towns of Morrinsville and Te Aroha. The site sits alongside the Waitoa River and has been home to a rendering plant and tannery business over a number of decades, supporting the meat industry principally by processing offal biproducts, hides and fallen (dead) stock.
[6] WIEL was established as a joint venture company with three equal shareholdings owned by Greenlea By-Products Limited, Wilson Hellaby Limited, and Wallace Proteins Limited. The six directors of these companies make up the board of directors of WIEL.
[7] WIEL was incorporated on 19 May 2020, to take ownership of the site, the wastewater treatment plant, and the composting operation and to provide equitable services, such as electricity, gas, engineering support, wastewater treatment and environmental management for the site. The various resource consents for the site were also transferred to WIEL.
[8] During 2020, Wallace Group Limited Partnership sold its interest in the site to a number of entities and there are currently four distinct operations carried out on, or adjacent to, the site as follows:
- Rendering Plant
- Tannery
- Abattoir
1 Agreed Summary of Facts at [2] – [14].
[9] Each of these four operations generates its own wastewater streams and these are directed into a single wastewater treatment plant on the site owned and operated by WIEL.
[10] WIEL employs an Environmental Manager responsible for exercising and monitoring the various resource consents held by WIEL for the site. She is responsible for managing the wastewater treatment plant and supervising the two wastewater irrigation staff also employed by WIEL.
[11] The Environmental Manager makes the decision on when and if the consented discharge of treated wastewater to the Waitoa River is permitted and at what rate.
[12] The Environmental Manager had previously held the same role with the previous owner of the site, having been the Environmental Operations and Compliance Manager between 2009 and 2019. She left this employment at the end of 2019, returning in January 2021 when she was employed by WIEL in her current role.
[13] WIEL did not provide any direct supervision or training to the Environmental Manager, nor did it monitor her performance. There was no issue with the competency or experience of the Environmental Manager, who is someone that is highly regarded within the industry. However, WIEL simply relied on the experience of the Environmental Manager to perform her role, its view being she was sufficiently experienced and competent to carry out her responsibilities and ensure environmental compliance was met, given she had worked at the site previously.
[14] Also relevant is the fact that the Fonterra Waitoa Dairy Factory is 4.86km downstream of the WIEL site. Fonterra Waitoa have a resource consent to take water from the Waitoa River at their site, which is treated to a potable standard for use in their dairy processing factory and as the drinking water for approximately 180 homes in the nearby Waitoa Village.
Wastewater treatment plant2
[15] Early on in its due diligence process as part of purchasing the site, WIEL identified that the existing wastewater treatment plant was no longer fit for purpose and while it was compliant with current resource consent conditions, it would not be able to meet the improved resource consent discharge standard limits due to come into effect in 2021 and 2024 respectively without a significant upgrade.
[16] Prior to the discharge event which led to this prosecution, WIEL had designed and started work on constructing a new $18.7m wastewater treatment plant to replace the existing seven pond treatment system. That work has now been substantially completed.
[17] The wastewater treatment plant utilises a biological treatment system consisting of a series of aerobic and anaerobic ponds, aerated ponds, and dissolved air flotation (DAF) tanks. The wastewater treatment plant is designed to remove contaminants such as organic material, oils and grease, nitrogen and phosphorus, sulphides, and chromium from the wastewater prior to disposal.
[18] The wastewater ends the pond treatment process in a settling pond referred to as Pond 6. From there, wastewater is either irrigated onto farmland via an irrigation system using a series of travelling irrigators pursuant to a specific resource consent permitting the discharge of wastewater onto land or is discharged directly into the Waitoa River via a small wetland pond, pursuant to another consent, subject to a number of resource consent conditions.
[19] It is a resource consent requirement that the treated wastewater pumped out of Pond 6 for discharge to the Waitoa River, passes through a small wetland pond on its way to the river. The wetland is bunded at one end where a decant pipe riser is installed with a discharge pipe directing flow via an open drain to the river. The purpose of the wetland pond is to slow down the discharge on its way to the river and to provide additional settling time for solids in the wastewater to settle out and remain in the
2 Agreed Summary of Facts at [8], [9], [15] – [21].
wetland pond, while the final treated wastewater should decant off the top and discharge into the river.
[20] The preferred and priority method of wastewater disposal is to irrigate the wastewater to land pursuant to a separate resource consent, and three WIEL owned dairy farms surrounding the site are used for this purpose.
[21] Each processing business on the site contributes wastewater to the wastewater treatment plant, with each treatment process differing depending on the nature of the wastewater generated by that particular business. In May 2021, approximately 800m3
- 1,000m3 (800,000 - 1,000,000 litres) of wastewater was entering the wastewater treatment plant each day and the system had very limited capacity volume available to store wastewater volumes if treated wastewater was not able to be disposed of daily. The contingencies available at the time were to divert wastewater production from two of the plants to the covered anaerobic pond, providing an additional 24 hours of storage capacity to the wastewater treatment system, or to stop accepting raw product into the rendering plant and stop processing.
[22] The basic treatment process involves process and/or wash water going to a DAF tank to remove solids, then to covered anaerobic ponds, then an aerated pond, then an anoxic pond, then a clarifier and balancing pond and finally to Pond 6 for storage, balancing and disposal via a wetland pond and drain into the river.
[23] There are three electric pumps installed in Pond 6. Two of these pumps are irrigation pumps, set up to pump treated wastewater from Pond 6 to a series of travelling irrigators for land disposal, while a third pump, referred to as the river discharge pump, pumps wastewater from Pond 6 directly into an adjacent wetland pond that flows via an outlet pipe and open drain directly into the Waitoa River.
Resource consent AUTH130915.04.023
[24] WIEL currently holds Resource Consent AUTH130915.04.02, authorising the discharge of treated wastewater at a rate of up to 3,440 cubic metres per day from the wastewater plant to the Waitoa River, subject to certain conditions and limits.
3 Agreed Summary of Facts at [22] – [25].
[25] The specific resource consent conditions and limits that are relevant to this prosecution are as follows:
3 The direct discharge to the Waitoa River shall not occur when the Waitoa River flow is less than 1000 litres per second during winter (1 May to 30 November) or less than 2000 litres per second during summer (1 December to 30 April).
15A The ammoniacal-N load discharged to the Waitoa River shall not exceed the following, in any 24-hour period, and shall be discharged as evenly as possible over that 24-hour period.
Notwithstanding the above ammoniacal-nitrogen loads, the discharge shall not cause the concentration of ammoniacal-nitrogen in the Waitoa River to exceed
0.88 grams per cubic metre beyond the reasonable mixing zone.
[26] Based on the November 2020 Waitoa River Flow comparisons carried out for WIEL by Hydro Logic New Zealand Ltd (to comply with condition 24 above), this ratio has the Waitoa River flow rate at the WIEL site as being approximately 50% less flow than at the Mellon Road flow gauge site. In other words, if the flow rate is 1000 L/sec at Mellon Road, it will be approximately 500 L/sec at the consented discharge site – therefore no discharge of wastewater would be permitted pursuant to resource consent condition 3.
River discharge calculations4
[27] WIEL relies on a computer based Environmental Database System to calculate the allowable rate of discharge of treated wastewater into the Waitoa River when exercising its discharge consent. The Environmental Manager is responsible for inputting the data into the system to calculate the discharge flow rate. Based on the information provided by the Database, she would make a decision when and if a discharge of treated wastewater to the Waitoa River is permitted, and if so, at what rate.
[28] The discharge scenario spreadsheet sets a number of threshold tests to determine the allowable rate of discharge and based on that calculation, the river discharge pump is set to an exact flow rate, with the pump data captured hourly and recorded electronically, to satisfy the requirements of resource consent condition 23.
[29] In general terms, the criteria used to determine the possible rate of discharge to the Waitoa River are set as follows:
- Record of daily stream flow rate at Mellon Road gauging station for the Waitoa River flow.
- Calculation of the correlated stream flow rate at the WIEL site – applying the ratio estimated from annual flow gauging comparisons.
- Record of the latest laboratory analysis of a Pond 6 wastewater sample, to establish allowable mass loads.
- Analysis of the thresholds allowed for the discharge of each key analyte in the wastewater.
- Setting the discharge point at the lowest allowable rate from the discharge scenario spreadsheet output (i.e., discharge rate in litres per second).
4 Agreed Summary of Facts at [26] – [29].
[30] At the time of this incident, the system operating at the WIEL site allowing for discharges of treated wastewater to the Waitoa River did not contain any peer review nor any system for checking the data the Environmental Matter inputted. There was no safeguard in place to account for user error or miscalculation, and there was no direct supervision of the Environmental Manager’s decision-making as to whether a discharge to the river was permitted.
Circumstances of the offending5
[31] At about 8:40am on Thursday 13 May 2021, the water treatment plant at the Fonterra Dairy Factory at SH26, Waitoa, alarmed and indicated that free available chlorine (FAC) was below 0.5ppm. FAC would normally sit at around 1.0-1.1ppm. Trend data indicated an abnormal organic contaminant load in the raw Waitoa River water.
[32] From 8:00am that morning, Fonterra was unable to continue producing treated water from the Waitoa River and therefore had to shut off its dairy factory processing plants in stages throughout the day as treated water reserves ran out. At 3:53pm that day it shut off water supply to the Waitoa Village and by 5:49pm it had shut off the last of its processing plants at the site.
[33] Fonterra staff took a series of raw water samples from the Waitoa River at its site, that were subsequently analysed by Hill Laboratories. The sample analysis shows that total ammoniacal-nitrogen was high in the Waitoa River on the dates sampled – 13 and 14 May 2021.
[34] The sample taken at 8:00pm on 13 May 2021 indicated an ammoniacal- nitrogen level of 5.6g/m3, with the highest ammoniacal-nitrogen level being 8.2g/m3 from a sample taken at 7:00am on 14 May 2021. Upstream (at SH27) and downstream (at SH26) sampling indicated that the likely source of the contamination as coming from the WIEL site, which is upstream of the Fonterra Waitoa dairy factory and upstream of where Fonterra Waitoa take water from the Waitoa River.
5 Agreed Summary of Facts at [30] – [45].
[35] Just after 10:00am on 14 May 2021, the Environmental Manager at Fonterra Waitoa contacted the Waikato Regional Council with their concerns and the Council commenced an investigation. At about 11:15am Council staff arrived in the area and initially took river water samples at the SH26 Waitoa River Bridge downstream of the WIEL site, and then at the SH27 Waitoa River Bridge, upstream of the WIEL site.
[36] The conductivity reading at the upstream sampling point and at the downstream sampling point had significantly increased. The conductivity measurement detects a change in chemical concentrations in water, and in this case indicates a contamination source such as ammoniacal-nitrogen, was adversely affecting water quality between these two points.
[37] A subsequent analysis of these samples by Hill Laboratories, indicated an ammoniacal-nitrogen level of 0.010g/m3 in the upstream sample and an ammoniacal- nitrogen level of 5.9g/m3 in the downstream sample.
[38] The Waikato Regional Plan water quality standard for fishery class rivers such as the Waitoa River states that ammoniacal-nitrogen shall not exceed 0.88g/m3. Condition 15A of WIEL’s discharge consent also states that any discharge of wastewater into the Waitoa River shall not cause the ammoniacal-nitrogen level to increase above 0.88g/m3.
[39] Council staff arrived at the WIEL site at 12:18pm and spoke to the Environmental Manager. She stated that she had started the consented discharge of treated wastewater from Pond 6, via the wetland pond to the Waitoa River, by turning on the river discharge pump at about 3:00pm on Thursday 13 May 2021, set at a flow rate of seven litres/sec, and that she had stopped the discharge pump at 11:00am on 14 May 2021 after concerns of water quality were raised by Fonterra Waitoa.
[40] Council staff noted that although an attempt had been made to stop the residual flow of wastewater from the wetland pond into the Waitoa River by blocking the discharge drain with a sheet of plywood, wastewater was still discharging into the river. They took a water sample from the Waitoa River downstream of the reasonable mixing zone below this discharge point and another sample immediately upstream of the discharge point.
[41] A subsequent analysis of these samples by Hill Laboratories indicated an ammoniacal-nitrogen level of 5.1g/m3 in the downstream sample compared to an ammoniacal-nitrogen level of 0.037g/m3 in the upstream sample. This sampling established that the source of contamination to the Waitoa River was as a result of the discharge of treated wastewater into the river from the WIEL wastewater system and that the discharge had caused the concentration of ammoniacal-nitrogen in the Waitoa River to exceed 0.88g/m3 beyond the reasonable mixing zone, in breach of condition 15A of the discharge consent, referred to above.
[42] Council staff established that the decant riser built into the wetland pond outlet pipe had been broken off approximately one year earlier and had not been repaired until the morning of the 14th of May 2021, when WIEL staff had been alerted to the Waitoa River contamination issue being experienced by Fonterra Waitoa. This had the effect of allowing wastewater to free flow through the wetland pond and discharge into the Waitoa River with little to no retention time in the wetland pond to allow solids to settle out.
[43] The Environmental Manager confirmed she had not checked this pipe when initiating the river discharge the day before and was in fact unaware it had been broken off for at least a year and at this point, she instructed irrigation staff to replace it. Council staff noted that although the discharge pipe riser had been replaced, the discharge pipe remained damaged, allowing residual wastewater flow to continue flowing into the discharge drain and into the river.
[44] At 1:02pm that afternoon, Council staff directed the Environmental Manager to cease the continued discharge of wastewater via the wetland pond to the Waitoa River. As a result, the outlet drain to the Waitoa River was blocked by installing an earth bund, effectively stopping the discharge at 3:00pm that afternoon.
[45] Early in the investigation it became apparent from data supplied by Fonterra Waitoa, that contamination of the Waitoa River had been occurring prior to the time the Environmental Manager stated she had commenced the consented river discharge. The investigation established that the following circumstances contributed to the incident:
wastewater from Pond 6 to a series of travelling irrigators for land disposal failed, removing three of four irrigators from the system;
(b) on Monday 10 May 2021, the faulty pump was examined by WIEL
irrigation staff and was removed from Pond 6. The failure of this pump reduced the volume of wastewater able to be irrigated to land from 16L/sec to 6L/sec. This put severe pressure on Pond 6, increasing the risk of freeboard being compromised and the pond overflowing. There was no spare or replacement pump kept on site as a contingency measure;
(c) on Tuesday 11 May 2021, the Environmental Manager decided to initiate the discharge of wastewater from Pond 6 to the Waitoa River to take
pressure off Pond 6 volumes. She made an error calculating the river flow rate at the Mellon Road flow gauge. The actual flow rate at the WIEL site, would have only been an estimated 500L/sec – and therefore well below
the consented winter flow rate limit permitting a discharge to the Waitoa River;
(d) on 11 and 12 May the river discharge pump faulted and tripped out;
(e) at 1:00pm on 12 May 2021, with two Pond 6 pumps now out of service and wastewater still entering the wastewater treatment plant from onsite processes, the Environmental Manager decided to use an old, disused gravity feed discharge pipe installed in Pond 6, to start the river discharge via the wetland pond. She instructed an irrigation staff member to remove the cap from this pipe to start the discharge and to replace it with an
‘orifice cap’ designed to restrict the flow through the outlet pipe. This started the river discharge at an estimated flow rate of 10L/sec;
(f) as the Waitoa River flow at the WIEL site was less than the consented
limit of >1000L/sec, this discharge was in breach of condition 24 of the resource consent and therefore unlawful. The uncontrolled discharge from Pond 6 was not being measured or recorded, in breach of condition 23 of
the resource consent and was therefore also unlawful;
(g) on Thursday 13 May 2021, the river discharge pump was repaired and reinstalled into Pond 6. At the same time, the Environmental Manager
calculated the allowable discharge volume and again made an error by not applying the correct flow ratio to estimate the river flow volume at the WIEL site. The flow rate at WIEL would have been 520L/sec, well below the level that would permit a river discharge. She then made a second error when she input the river flow rate into the discharge scenario spreadsheet, resulting in the calculation defaulting to an historic flow rate entry of 2,200L/sec, resulting in a higher permitted discharge rate being calculated;
(h) the discharge was in breach of condition 24 of the resource consent and therefore unlawful;
(i) the Environmental Manager did not close off the gravity feed discharge pipe but left it open, discharging wastewater from Pond 6 to the river resulting in a combined discharge flow rate of 17L/sec from 2:18pm on Thursday 13 May 2021;
(j) between 10:30 and 11:00am on Friday 14 May 2021, the Environmental Manager was made aware that Fonterra Waitoa had a water treatment issue indicating contamination of the Waitoa River, so she turned off the river discharge pump at 11:04am, and instructed irrigation staff to recap and
close off the gravity feed discharge pipe, which was done soon after; and
(k) the duration of the discharge was 25.18 hours at a rate of 10L/sec,
increasing to a discharge rate of 17L/sec when the river discharge pump was turned on for a further period of 21 hours. The total estimated wastewater discharge over this 46-hour period is calculated at 2,194 m3, or
2.194 million litres.
[46] Throughout the investigation, WIEL, its Environmental Manager and other employees of WIEL were fully cooperative with Council staff members.
Regulatory framework6
[47] Section 15(1)(a), Resource Management Act 1991 (RMA) states:
- (1) no person may discharge any
- (a) contaminant or water into water;
- (b) ...
unless the discharge is expressly allowed by a national environmental standard or other regulations, a rule in a regional plan as well as a rule in a proposed regional plan for the same region (if there is one), or a resource consent.
[48] Treated wastewater is a contaminant as defined in Section 2 of the RMA.
[49] Waikato Regional Plan Rule 3.4.5.4 – Discretionary Activity Rule – Discharges – General Rule states:
any discharge of a contaminant into water, or onto or into land, in circumstances which may result in that contaminant (or any other contaminant emanating as a result of natural processes from that contaminant) entering water, that is not specifically provided for by any rule, or does not meet the conditions of a permitted activity rule in this plan, is a discretionary activity, (requiring resource consent).
[50] There is no national environmental standard that allows for a discharge of treated wastewater into water. WIEL holds a resource consent to discharge treated wastewater into the Waitoa River, subject to conditions and limits. The defendant breached certain conditions and limits imposed by the resource consent; therefore the discharge of treated wastewater into the Waitoa River between 12 May 2021 and 14 May 2021 is unlawful.
Sentencing principles
[51] The purposes and principles of the Sentencing Act 2002 are relevant. The High Court in Thurston v Manawatu Wanganui Regional Council7 provides a useful summary of the approach to be taken to sentencing, which includes consideration of culpability; precautions taken to prevent discharges; the vulnerability or importance
6 Agreed Summary of Facts at [46] – [49].
7 Thurston v Manawatu Wanganui Regional Council HC Palmerston North CRI-2009-454-24, 25, 27, 27 August 2010.
of the affected environment; extent of damage; deterrence; capacity to pay a fine; disregard for abatement notices; co-operation and guilty pleas.
[52] I address first the environmental effects of the offending, then the defendant’s culpability. I then turn to consider the appropriate starting point for the offending followed by any aggravating or mitigating factors personal to the defendant.
Environmental effects8
[53] The Waitoa River is classified in the WRP as a Contact Recreation class (Rule 3.2.4.4), and a Significant Indigenous Fishery and Fish Habitat class (3.2.4.5a) waterway.
[54] Assessments of water quality and environmental effect were completed by:
- (a) Dr Eloise Ryan, a Senior Water Quality Scientist;
- (b) Dr Bruno David a Senior Water Quality Scientist; and
- (c) Dr Donna Sutherland of Pattle Delamore Partners (PDP). PDP was engaged by the defendant to peer review the reports of Dr Ryan and Dr David.
[55] The conclusions of the scientists are set out in their respective reports. Following discussion with Dr Donna Sutherland, both Dr Ryan and Dr David confirm that the methodology and conclusions in the PDP report are correct.
[56] Dr Sutherland’s conclusion was the discharge event was of short duration and that an assessment of environmental harm needed to be made by researching published literature for acute toxicity for New Zealand aquatic organisms, rather than applying the Australia New Zealand Guidelines (ANZG 2018) default guidelines for protection of aquatic organisms.
[57] The difference between the approaches taken by the WRC scientists and that of Dr Sutherland relates to whether the event was assessed as a chronic or an acute
8 Agreed Summary of Facts at [50] – [56].
exposure event. The event being some 46 hours in duration meant it was not a chronic event as the Council experts had assumed.
[58] In terms of actual or potential harm, Dr Sutherland concluded:
- (a) The discharge resulted in elevated total ammoniacal nitrogen and dissolved chromium. Both contaminants have the potential to negatively impact aquatic organisms, including by causing death.
- (b) The in-river concentration of both contaminants downstream of the mixing zone exceeded both the ANZG (2018) default guideline values (DGVs) and the National Policy Statement – Freshwater Management attributes for the protection of aquatic organisms. However, as the DGVs are based on chronic toxicity exposure, the guidelines do not apply in this instance.
- (c) Some species comprising the microbial community in the Waitoa River may have experienced a chronic toxicity to both TAN and chromium. However, with no known current data on the microalgal community in the river, it is difficult to assess what impacts, if any, this may have had. Wholesale losses of the community were unlikely, as many microalgal species that inhabit waterbodies in the Waikato region are capable of growing in degraded waters, including wastewaters. Due to their short life cycle, both the microalgal community composition and biomass concentrations most probably reverted back to baselines levels within the following days.
- (d) Of the 13 native macroinvertebrate and fish species which have been reported in the Waitoa river, some members of one species (the crustacean Paracalliope fluviatilis) might have been affected, but the crustacean would not have been affected at a population level. There was no likelihood of harm to the remaining 12 species.
- (e) It was unlikely that that kākahi, mud snails or native fish were negatively affected.
- (f) Ammonia concentrations in the river did not exceed Drinking Water Standards for New Zealand. E.coli concentrations did exceed the Drinking
Water Standards but were within the typical range for the river.
[59] Fonterra Waitoa was also adversely impacted as a result of this incident; in that it was forced to shut down its dairy factory processing operations for three days and was unable to continue supplying treated water to Waitoa Village from its treatment plant, and so used alternative sources. Fonterra seeks no reparation as part of the sentencing process.
[60] However, I received a victim impact statement from Fonterra that outlined the effects of no water supply to the Village:9
9. A decision was made to prioritise the alternative supply of water to the local village. Fonterra staff purchased and supplied water to the village via tanker and bottled water. Portable toilets and showers were also brought in and set up in the community village. During this time numerous staff spent many hours dealing with the community who were at this time very confused and very upset. As the situation became more apparent that the water supply would not be available immediately and as we had no understanding of particular community needs, this caused considerable distress as the ablutions were not wheelchair or mobility accessible. This resulted in a formal complaint to the Human Rights Commission several days later and caused additional stress and staff time in responding to and resolving this complaint
[61] Mr Boshier argued that the evidence about effects on drinking water was limited to a statement in the Summary of Facts and the above statement made by Fonterra. He said that the discharge event “does not appear to have caused an objective threat to drinking water supply, at least by the time sampling was done on 14 May, i.e. it appears that despite the discharge, the water generally remained capable of being treated for drinking water purposes as it had been previously”.10 However, that submission is one made with the benefit of hindsight, and the scientific analysis undertaken after the event. It seems to me that, in the face of trend data which included an “abnormal organic contaminant load in the raw Waitoa River water”,11 Fonterra had to shut off its processing plants and shut off water supply to the Village. That was entirely sensible. I do not consider that the effects on the Village can be minimised by pointing out that the River quality was not much different on the last day of the
9 Victim Impact Statement from Fonterra Waitoa dated 28 February 2023.
10 Defence submissions, paragraph 28.
11 Summary of Facts, paragraph 30.
discharge than it normally was – for the purpose of calculating its quality for drinking water.
Conclusion on environmental effects
[62] I accept the advice from Dr Sutherland as to the potential adverse effects on the microbial community and macroinvertebrate and fish species – which I assess as being of limited duration and low. However, this discharge would have had a cumulative adverse effect on the environment that cannot be ignored. Further, the effects on the local community comprising the Fonterra Waitoa Dairy Factory and the Waitoa community dependant on the factory for their potable water are clearly more serious. Water is a necessity and if its supply is compromised that has obvious and serious effects. The disruptions to those in the Waitoa community, comprising 180 homes and 250-300 family members for the number of days they were without reticulated water would have been serious. Fonterra’s victim impact statement graphically illustrates that point. The impact on Fonterra’s operations was serious also, but I record that it does not seek reparation as part of the sentencing process.
[63] I determine that this offending had serious repercussions for the Waitoa community albeit for a limited time.
Culpability
[64] Mr Macklin, counsel for the prosecutor, submitted that there can be no dispute that the discharge was deliberate. He classifies it as a serious management failure. While the Environmental Manager completed a series of miscalculations that led to the discharge, her failures must be attributed to her employer WIEL. WIEL accepted that the system was discovered, on purchase, to be somewhat deficient, and the Environmental Manager indicated that the site had been lacking in basic maintenance over recent years and was under pressure to cope with the existing wastewater streams generated on site.
[65] Mr Macklin submitted that WIEL was lacking in so far as it placed complete faith in the Environmental Manager to ensure environmental compliance. He observed
that WIEL did not provide any direct supervision or training nor did it monitor her performance.
[66] The Environmental Manager was placed under pressure at the time of the incident due to the pumps that allowed irrigation to land failing. There was no contingency available for dealing with the treated wastewater.
[67] In terms of working out compliance with the resource consent, the calculations were not subject to peer review nor was there any system for checking the data that was inputted. There was no safeguard in place to guard against user error, as occurred here. The prosecutor attributed the Environmental Manager’s errors to management failure by WIEL. Finally, he submitted that the discharge is not a one-off failure but a failure of the system as a whole to adequately respond to an operational incident. Given the magnitude of WIEL’s operations and the risk of damage when something goes wrong, Mr Macklin highlighted the need for extreme caution and robustness in the systems.
[68] Mr Macklin characterised WIEL’s conduct as highly careless.
[69] Mr Boshier, for WIEL, submitted there was no intent on WIEL’s part to discharge unlawfully which he submitted is an important point when it comes to culpability.
[70] Regarding the miscalculation of the river flow rates by the Environmental Manager, Mr Boshier submitted there is no suggestion that it was anything other than a genuine mistake. He outlined her experience with the previous owner, having held essentially the same role as an Environmental Manager for ten years, and that she knew the consents and how to operate the system. He submitted she was knowledgeable and experienced. He advised that it is unclear to WIEL precisely what lies at the heart of the Council’s complaint that there needed to be further management of the Environmental Manager or who was supposed to have a better knowledge of the consent in the wastewater system than she did. Having said that, he noted that peer review of the calculation method has been introduced as a safety against similar mistakes.
[71] I note that when interviewed by the Council, representatives of the defendant said that they relied on the Environmental Manager to manage the wastewater system as she had previously done on the site and observed that she was well regarded. They accepted however that the wastewater treatment ponds had not been de-sludged in the three and the half to four years prior to WIEL’s ownership and that nitrogen levels in ponds had risen because of various equipment failures. They also accepted that the ponds had come under capacity pressure due to the pumps breaking down and the volume of wastewater already in the system.
[72] I was advised that the defendant has since employed a Site Manager who the Environmental Manager now reports to. Improvements on the site have included de- sludging of ponds, purchasing onsite spare parts and providing a larger dilution and settling area for wastewater using a larger wetland. The peer review that I have mentioned is now in place to check discharge scenario calculations before a discharge is made.12
[73] The Environmental Manager explained during her interview with the Council that there was infrastructure pressure at this site. At the time of the discharge event, she was juggling compliance with nitrogen limits, land discharge consents, odour, gas, compost, stormwater from rendering, riparian planting and neighbour relations.13 The Environmental Manager explained that prior to the change in ownership of the site, plant maintenance and repairs had not been kept up to date which meant she was very busy trying to get infrastructure fixed and the wastewater plant running efficiently.14 She acknowledged that she made a number of errors, and in explanation said she simply forgot about applying certain calculations and about how the gravity discharge pipe was open when she eventually started the river discharge pump. She explained that other workers at WIEL had updated the discharge scenario spreadsheet during her time away, which led to flow-on effects in calculations.15
[74] There was an unfortunate combination of events which led to this offending. Those events were underpinned by a deficient wastewater management system that
12 Agreed Summary of Facts at [57] – [59].
13 Agreed Summary of Facts at [65]. 14 Agreed Summary of Facts at [64]. 15 Agreed Summary of Facts at [62].
WIEL inherited from the previous owner. WIEL and the Environmental Manager were aware of the deficiencies in the system, which made it difficult to safely manage the treatment and disposal process. While WIEL had instituted a major upgrade of the system at the time the discharge occurred, I was not advised of any steps taken by WIEL to put in place any precautionary or contingency measures to guard against operational or management failures. I understand it was business as usual.
[75] What is now clear is that the Environmental Manager was concerned about the infrastructure pressures. Representatives of WIEL, however, stated their view that the system was compliant with its consent and able to cope with wastewater volumes. Those views, however, must be set in context and against the significant work that had been commissioned to construct a new wastewater treatment plant.
[76] WIEL relied completely on the Environmental Manager. It provided no direct supervision or training. It did not monitor her performance. Indeed, it accepted her competency and experience as someone highly regarded in the industry.
[77] The failings in the days of the offending arose from equipment failure, miscalculations of river flow rates and an under-pressure system. There was a domino effect that led to the discharges. While there is no question of WIEL’s responsiveness when the issues came to light, I find that WIEL’s confidence in one person to manage an aging and under-pressure system receiving wastewater from four different sources to have been misplaced. That is not to be taken as a criticism of the Manager. I find she had the unenviable task of managing a vulnerable system which all those involved had clearly accepted needed to be replaced. Any failures in the process had the potential to result in wastewater entering the River in a way that breached the consent. The consequences of such a discharge were foreseeable and potentially serious. I would expect WIEL to have done significantly more to insulate the system. I find it highly careless.
Starting point
[78] The Council proposed a starting point in the region of $200,000 to $220,000, with an additional $10,000 fine for the two days of continuing discharge. The
defendant proposed a starting point of $90,000 and opposed any additional fine for the two days of continuing discharge.
[79] Mr Macklin drew the following cases to my attention: Waikato Regional Council v Hamilton City Council (Hamilton City Council);16 Taranaki Regional Council v New Plymouth District Council and City Care Limited (New Plymouth District Council);17 Canterbury Regional Council v Emergent Cold Limited (Emergent);18 Gisborne City Council v Juken New Zealand Limited (Juken);19 and Waikato Regional Council v Contact Energy Ltd (Contact Energy).20
[80] Mr Macklin accepted that those cases do not represent any binding authority on the Court and may be of limited value in the sentencing exercise. He submitted that the sentencing exercise may best be undertaken with reference to first principles.
16 Waikato Regional Council v Hamilton City Council [2022] NZDC 17901 – one charge of unlawfully discharging wastewater (including sewage) into water, over a 9-day period. The Court found the offending would have had high adverse effects on the tributary and local environment, with low to moderate effects on the Waikato River. HCC found to be highly careless; there was a communication breakdown and insufficient awareness of ways to notify suspected problems. Monitoring of a partial blockage was not as noticeable as a full blockage. HCC had since implemented several measures to improve the system. Starting point of $90,000.
17 Taranaki Regional Council v New Plymouth District Council and City Care Limited [2021] NZDC 3372 – one charge relating to discharge of industrial wastewater and untreated sewage from a pump station into a stream over nine hours. The discharge created an odour and discoloration which extended for 1km and was lethal to fish (estimated 1,000 – 15,000 were killed). The Court considered there to be a high degree of culpability, with inadequate response to the alarms that went off. Starting point of
$150,000.
18 Canterbury Regional Council v Emergent Cold Limited [2019] NZDC 23930 – one charge of discharging ammonia or ammonia contaminated water onto land where it entered water. Spread over 5km in the creek, which is part of an extensive network of wetlands and streams that is an important food gathering source for Maori. The effect on the creek was devastating and constituted complete kill within the creek in the short term. A total of 1,779 fish were killed, mostly eels. Fish species have since recovered. The defendants dealt with the highly toxic material in an unsatisfactory manner and there was a lack of bunding to contain spills. One of the defendants had not been provided with adequate instructions or equipment for the job. Starting point of $180,000 for Emergent Cold Ltd and $120,000 for R Trent.
19 Gisborne City Council v Juken New Zealand Limited [2019] NZDC 24075 – one charge related to logging debris/slash, waste logging material and sediment discharged to land and which subsequently entered various tributaries. The Court was satisfied that the adverse effects of the discharges were substantial and widespread. Juken’s culpability found to be at the higher end of the moderate category. Starting point of $200,000.
20 Waikato Regional Council v Contact Energy Ltd [2020] NZDC 24794 – one charge, permitting discharge of contaminants, namely sediment and geothermal fluids, onto land where it may enter water. CEL's failure to respond to the alarms raised by its system and so to avoid any discharge meant that the overall gravity of its offending and its culpability for that offending was very high. Starting point of
$250,000.
[81] Mr Macklin observed that a large number of discharge cases that come before the Court do so due to an external event (for example a period of heavy rain). He submitted that this case stands apart from those cases given that the discharge arose due to a solely internal combination of circumstances; lack of basic maintenance, lack of contingency plans, and poor supervision and oversight of staff. Mr Macklin submitted that this case has parallels with Emergent and Contact Energy in that respect, where the cause was simply a result of a failure and the defendants’ operating systems.
[82] Mr Macklin also observed that while WIEL may not have had the intention to breach the consent, a complete lack of oversight led directly to a deliberate decision to discharge to the Waitoa River. He submitted that sets this case apart from Hamilton City Council, New Plymouth District Council, Emergent and Contact Energy all of which involved cases where the contaminant was inadvertently discharged through a system fault.
[83] In support of his submission that the offending is serious, Mr Macklin referred to the following elements:
- (a) size and scale – 2,194 m³ million litres of treated wastewater discharged into the Waitoa River over a 46-hour period. He notes this was significantly larger than the trade waste or wastewater discharges in Emergent (200 – 400 litres), Hamilton City Council (1,272 m³) and New Plymouth District Council (1,500 m³);
- (b) the discharge of treated wastewater was deliberate, although WIEL has acknowledged that the Environmental Manager thought it was consented. There was no oversight of her decision;
- (c) the discharge had serious environmental effects. Further, it severely affected downstream users and impacted the local community as their drinking water was shut off for a number of days. Fonterra’s dairy processing site was required to shut for three days;
- (d) the offending did not occur due to an external cause, for example a weather event as in Juken, but can be solely attributed to a total system and
management failure;
(e) WIEL’s culpability is high – it did not have adequate safeguards in place to protect against the risk of a discharge event. The discharge occurred due to a serious management failure – failure to maintain the site or have contingency plans in place, failure to upgrade its systems and failing to properly train, peer review and supervise staff; and
(f) overall, WIEL’s offending should be properly categorised as highly careless. Its poor practices directly contributed to the offending.
[84] Mr Macklin submits that a starting point in the region of $200,000 - $220,000 would be appropriate and in line with other cases:
(a) there is a much larger discharge direct to a river than in Hamilton City Council, New Plymouth District Council and Emergent;
(b) the discharge is of a smaller scale than Contact Energy and Juken. However, this factor is offset because the discharge was deliberate;
(c) the discharge came about due to pressures at the site, as a result of lack of maintenance and contingency plans and adequate training and supervision of staff. The offending has parallels with Contact Energy;
(d) Mr Macklin acknowledged that the proposed starting points sits above the
$200,000 starting point adopted in Juken where the defendant’s offending was characterised as “careless in the extreme”. He submitted the offending shares similarities with Juken, being a significant discharge event caused by a large commercial entity, with impacts on a vulnerable environment. In Juken the ecological effects were confined to the streams within the forest without impacts on the wider public (including the local community, as here). Further in Juken, the offending occurred following rain events which led to landslides rather than being a result of an internal failure. Mr Macklin echoed the sentiments expressed by Judge Dwyer in Juken; commercial entities undertaking activities in vulnerable environments have obligations to manage their operations properly. Where a failure to do so is significant,
as was the case here, the penalty must be pitched at a level which deters any repetition; and
(e) in Juken and Contact Energy, the Court found that the deterrent aspect of sentencing must be commensurate with WIEL’s substantial financial capacity. The key to deterrence is to impose a fine with enough “sting” in it to be felt on the offender’s financial bottom line. This factor is expressly recognised in s 40(2) of the Sentencing Act 2002 as well as s 339 of the RMA, in permitting a higher fine to be imposed on a corporate defendant than an individual.
[85] Mr Boshier distinguished the cases referred to by Mr Macklin. He noted that in Hamilton City Council the discharge was of untreated wastewater, arguing that the environmental harm was more egregious than that caused by WIEL and was for a longer period of time. In New Plymouth District Council, he noted that the discharge was again of untreated sewage as well as industrial wastewater. The harm caused was demonstrable and more serious than this case. He also noted the substantial and added inadequacies and failures on the part of City Care staff and systems. That can be contrasted with WIEL’s employment of an experienced manager for its system.
[86] Mr Boshier submitted Emergent involved a discharge of more severe toxicity, caused widespread actual harm, and that Emergent Cold Limited seemed to be operating a system which posed an inherent risk. He distinguished Contact Energy on the basis of the significant volume of material discharge, the demonstrable harm caused, and the extended period of the discharge.
[87] Mr Boshier referred to another case which he said provided assistance, Hawke’s Bay Regional Council v Affco New Zealand Limited (Affco).21 He submitted that the facts of Affco are similar to those here, excepting that Affco discharged a much greater volume of wastewater unlawfully and potentially over a slightly longer period.
21 Hawke’s Bay Regional Council v Affco New Zealand Limited [2022] NZDC 14474 - two charges, one of which related to the discharge of treated meat works and fellmongery wastewater into the Wairoa River in breach of resource consent conditions. Affco discharged treated wastewater for approximately 56 hours against the consent duration limit of four hours. The Court noted that duration, volume, improvement in physical effects were relevant to the starting point. Starting point of $80,000.
[88] As to the additional amount sought by way of an uplift for the continuing offence, Mr Boshier said that approach is inconsistent with similar decisions and should not be adopted. He observed that none of the cases cited by Mr Macklin appear to involve a separate or specific uplift on account of the offending being continuing despite it obviously being so. Mr Boshier submitted that it was unclear why the Council urges a different approach in this case to the approach taken in those other cases. I agree. In this case, the charge is clear on its terms alleging a breach of the RMA between 12 May and 14 May 2021. In these circumstances, I do not see there is any need to add to the starting point for this offence an allowance for the continuing aspect of the offending.
[89] I place the appropriate starting point for this offending somewhere between that proposed by the prosecutor and the defendant. I regard the appropriate range as between $140,000 and $180,000.
[90] There are a number of factors that contribute to my assessment of the starting point. The first is that the defendant was aware of the weaknesses in its system. That is why it had commenced a significant upgrade. Being aware of that weakness required a greater level of attention to its operation and to compliance. It is not enough to place total reliance on one person to ensure the compliance of a compromised system. WIEL has now recognised that, because it has appointed a manager with oversight of the Environmental Manager and put in a place a system of peer review of the way in which river flow rates are calculated before discharges are made into the stream.
[91] With any system of wastewater treatment and disposal, it is important that there be systems and protocols governing that treatment and disposal and back-up systems in the event that aspects of the system or the system itself breaks down. It cannot simply be a matter of hoping for the best. It must be a case of planning for the worst. WIEL’s hands off approach to the treatment and disposal of treated wastewater fell short of accepted standards.
[92] While the environmental effects of the unlawful discharge on river health were not significant, the impact on Fonterra’s Dairy Factory and the local Waitoa
community cannot be discounted. I note that Fonterra does not seek reparation as part of the sentencing process. However, the Waitoa community was deprived for some days of a reticulated potable supply of water. Fonterra had to bring tankers in and provide other means of water supply for the community. Some 180 homes were affected, and I view that as a serious effect of the offending. WIEL must not only have regard to the effects of its activity on the natural environment, it must also consider the effects on the wider community as it is, of course, part of that environment.
[93] In those circumstances, I determine that a starting point near the top of the range indicated is appropriate, being $170,000.
Aggravating and mitigating factors
Any profit or benefit gained
[94] Mr Macklin acknowledged that WIEL did not profit directly from the offending. He submits that it did benefit from not expending money by undertaking improvements to its system and undertaking basic maintenance. Mr Macklin submitted that an important aspect of sentencing is to ensure that it is economically unattractive to offend in this way.
[95] Mr Boshier denies that WIEL profited from this event and also refuted the claim that this case involves a kind of indirect benefit to which the prosecutor referred. He noted that WIEL was already committed to its upgraded wastewater treatment plant at the time of the event, and deferred its implementation (with the Council’s consent) only due to COVID-19.
[96] The Council advised that the new system is now substantially complete. The cost of the new treatment plant is in the order of $18.7 million. I accept, in those circumstances, that there was no profit to WIEL from this event.
Previous good character and co-operation
[97] The Council is not aware of WIEL having previously appeared before the Court.22 Further, it accepts that the work undertaken to upgrade the system and the
22 Agreed Summary of Facts at [66].
company’s cooperation with the Council are mitigating factors. In considering discounts for personal mitigating factors, it reminded me of the High Court’s concerns in Stumpmaster v Worksafe New Zealand23 that discounts of 25-30 per cent routinely allowed for mitigating factors (e.g. reparation, cooperation and previous good character) can distort the sentencing process and result in outcomes that are too low.
[98] In the circumstances, I allow a discount of 15 per cent for previous good character, co-operation and the responsible upgrade of its systems. I record that Mr Egan, for WIEL, apologised to Fonterra. He assured Fonterra and the community of Waitoa that the company respects the mauri of the river. He said that the company has taken extreme measures to improve the situation.
[99] I was informed that no reparations were sought by Fonterra as part of this sentencing process. I received no advice, however, about the community of Waitoa. I would have expected there to have been some effort to address the effects of the offending on that community but can take the matter no further.
Early guilty plea
[100] All accept that WIEL pleaded guilty at the earliest opportunity. I allow a discount of 25 per cent.
Outcome
[101] WIEL is convicted and fined $102,000. Ninety per cent of the fine is to be paid to the Council, pursuant to s 342 of the Resource Management Act. I order that it pay costs under the Costs in Criminal Cases Act 1967.
Judge MJL Dickey
District Court Judge | Kaiwhakawā o te Kōti ā-Rohe
Date of authentication | Rā motuhēhēnga: 12/10/2023
23 Stumpmaster v Worksafe New Zealand [2018] NZHC 2020 at [64] to [67].
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZDC/2023/18882.html