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A Revised Standard of Proof in New South Wales’ Waste Offence Laws
Last year the NSW Environmental Protection Authority (EPA) brought charges against the former mayor of Port Stephens, Robert Mackenzie, and his company Grafil Pty Ltd. The defendants operated a sand quarry, trading as Macka’s Sand and Soil Supplies, but were accused of running an illegal waste dump at their business in Salt Ash, a rural suburb of Port Stephens. The company potentially faced a $1 million fine and substantial clean-up costs if found guilty. However, they were not found guilty, and the case (Environment Protection Authority v Grafil Pty Ltd; Mackenzie  NSWLEC 99) heralds a significant change to the interpretation of waste laws in NSW.
The EPA believed that Grafil Pty Ltd was using its site as a waste facility without lawful authority in contravention of section 144(1) of the Protection of Environment Operations Act 1997 (PEOA). The company, however, claimed that it had lawful authority as it was using the site as a resource recovery rather than for waste dumping and specific exemptions apply for resource recovery activities.
The EPA was required to demonstrate that the material placed on the site was indeed waste and that the site was being used as a storage and disposal facility for the waste.
In addition, a further issue arose that, when testing the waste, evidence was found of asbestos in excess of that allowed by the resource recovery special exemptions.
Grafil Pty Ltd and Mr Mackenzie were charged with allowing trucks to unlawfully dump demolition waste at its site between October 2012 and May 2013. However, during the hearings in early 2018, the EPA were obliged to reduce the estimated amount of material by nearly a half, from 60000 tonnes to 35500 tonnes, after the Judge, Justice Pain, found its assessment to be “deeply flawed” because, for example, the estimated tonnage was based on invoices that were double counted.
The Judge also rejected the EPA’s assessment that two large stockpiles of 44000 tonnes of demolition was “special waste” because it contained asbestos after the company successfully challenged sampling and testing methods used. The Court heard that 634 grams of asbestos was found in 575 kilograms sampled which the Judge described as very small and low risk when used as road base. That said, the Judge also remarked that it remained the case that the “broader challenge of managing asbestos in Sydney building waste is not addressed by this particular offence”.
As a matter of compliance, the company successfully argued that the EPA had incorrectly held it responsible for ensuring the demolition material did not contain asbestos and other chemicals, instead of the demolition and recycling companies that provided and processed the materials. The company argued that the EPA’s case produced an outcome where a “customer is potentially criminally liable for events over which he or she has no control” when asbestos is found in material certified as compliant with current NSW exemptions that are granted when demolition material is recycled.
The Judge rejected that the company had breached environmental law by allowing the stockpiled material near a waterway, though it did find that the company had not kept proper records of what was delivered to the Salt Ash site, contrary to requirements under the exemptions granted for accepting demolition material.
The Court ruled that the material was not waste as defined under NSW environmental law. It was temporarily stockpiled and not “deposited on land”, and there was no requirement for the company to hold an environment protection licence.
What does it mean?
Grafil Pty Ltd successfully argued that the material was not waste under the terms of the PEOA as recovered material only becomes waste when it is “applied to land” or “used as fuel”. Here the material in question was earmarked for roads, and the temporary stockpiling did not constitute being “applied to land”. As the material was deemed not to be waste, clearly the site was not being operated as a waste facility. Accordingly, no offence under s144(1) POEA had been committed. Nevertheless, and importantly, the Court went on to consider the “without lawful authority” element of a potential offence.
Section 144(2) states that a defendant bears the burden of proof that the place where the waste was transported to can lawfully be used as a waste facility. Grafil Pty Ltd argued that the special exemptions gave it lawful authority and that the EPA had to prove beyond reasonable doubt that the exemptions did not provide this authority. This argument was accepted, re-interpreting the precedent in Environment Protection Authority v Foxman Environmental Services  NSWLEC 105 under which it was evident that the defendant had to prove, on the balance of probabilities, that the requirement for lawful authority was satisfied. The Court noted that the arguments used by each party reflected “entirely different constructions of the system of waste regulation in NSW”.
This case has raised the bar in terms of the evidential requirements for a successful prosecution and overturned a former authority. The case is now a leading judgment regarding waste offences in NSW and, as such, will inevitably impact significantly in the way the EPA will need to approach future waste investigations and prosecutions.
The EPA had not referred to the resource recovery exemptions believing that the company needed to prove that the exemptions applied. For s144(1) offences, where applicable, the onus will now be on the EPA to prove that a resource recovery exemption does not apply as part of proving that the defendant lacked lawful authority to operate a waste facility.
The decision lifts the standard of proof needed meaning the EPA will have to prove, with far more rigour, all the elements if it is to succeed in a waste offence prosecution.
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