In November 2016 former Linc Energy chief executive Peter Bond along with four former
staff members – Donald Schofield (managing
director), Stephen Dumble (chief
operations officer), Jacobus Terblanche
(chief operations manager) and Darryl
Rattai (former general manager) – were summonsed
for breaching environmental law.
However their matters were adjoined until after The Queen v. Linc Energy Ltd was
concluded and are all five are now due to face a committal hearing in the Brisbane
Magistrates Court this month.
BRIEF BACKGROUND
A gas company has been
fined a record $4.5 million for causing serious environmental harm at its
underground coal gasification plant on Queensland's western Darling Downs.
The company was charged
with five counts of wilfully and unlawfully causing serious environmental harm
between 2007 and 2013 at Hopeland near Chinchilla.
Linc Energy mismanaged
the underground burning of coal seams, which caused rock to fracture and
allowed the escape of toxic gases which contaminated the air, soil and water on
site.
The court heard the
highest fine imposed upon a company so far in Queensland for similar offending
was $500,000.
Linc Energy did not
defend itself during the trial because it is now in liquidation.
Five executive directors
have been charged with failing to ensure compliance of the company and are due
to face a committal hearing in the Brisbane Magistrates Court in July.
Prosecutor Ralph Devlin
told the court the company knew it was causing damage but pressed ahead with
operations, and described its offending as "serious".
"The defendant
acted in devious and cavalier way … its motivation was commercial gain,"
he said.
"It pursued
commercial interests over environmental safeguards."
The court heard there
would be monitoring and remediation of the site for decades to come, and it
will take potentially between 10 to 20 years for groundwater to recover.
“It was an undefended
case, the liquidators chose not to defend it, so, of course, there is going to
be a guilty verdict,’’ he [Peter
Bond] told The Australian of Monday's court ruling.
“It means nothing; there
was no one in court to call bullshit and there was a lot of bullshit to that
case."
Excerpt from THE
QUEEN v. LINC ENERGY LTD (IN LIQUIDATION), 11 May 2018, Sentence:
HIS HONOUR: On the 9th
of April 2018, Linc Energy Limited in liquidation was found guilty by a jury of
five counts of wilfully and unlawfully causing serious environmental harm. That
followed a 10-week trial, and the offence is contained in the Environmental
Protection Act. There was no appearance by the defendant in in liquidation pursuant to an order of the
Supreme Court under the Corporations Law. The liquidators did not have to
appear. That caused particular difficulties during the trial and also has an
impact on sentence proceedings as I have not been assisted by any submissions
on behalf of the defendant in relation to penalty.
As the defendant is a
corporation, the only penalties that are open are financial: either a fine or
compensation. The provision in relation to the imposition of fines is covered
by sections 45 to 48 of the Penalties and Sentences Act. The first aspect of
that is that, pursuant to section 48(1)(a) and (b) and subsection (2) of that
Penalties and Sentences Act, the Court must take into account:
…so far as is practicable,
the financial circumstances of the offender and the nature of the burden the
imposition of the fine would have on the offender.
Section 48, subsection
(2) provides the Court may fine if it is unable to find out the matters referred to in subsection (1). There
is no information before me as to the circumstances of the liquidation of the
corporation. I am unaware of any of its assets or liabilities, or whether it
will have the capacity to pay fines. As to the utility of imposing a financial
penalty on a corporation in liquidation, there are no restrictions in law as to
that. Indeed, the cases referred to me demonstrate it is appropriate, 25
whether as a need for denunciation or general deterrence of specific criminal
conduct…..
In relation to counts 1
to 3, a combination of section 437 of the Environmental Protection Act 1994 and
45 section 181B of the Penalties and Sentences Act 1992 provides a maximum
penalty of five times the 4165 penalty units, that is, a total of 1,561,875
thousand dollars for each of the offences covered in counts 1 to 3……
In my view, the
defendant put its commercial interests well above its duty to conduct its
processes in a way that safeguarded the environment. This is shown by its continued
efforts to be seen as a successful Gas to Liquid producer on a commercial
scale, where it operated gasifiers clearly above hydrostatic pressure to
produce suitable gas for the GTL process, well knowing that contaminants were
escaping widely and that damage to the land structure was occurring. As I have
noted during the course of argument, there are varying degrees of wilfulness,
which is an element of each offence.
The Prosecution have
submitted that the appropriate way to approach the quantum is 45 by assessing
the maximum and then reaching an appropriate proportion to address each
offence. In terms of the section I earlier quoted in relation to the quantum of
fines, it seems to me the damage
occasioned by each of these offences is significant and needs to be taken into
account in the calculation of a quantum. In relation to each of counts 1 to 3,
I accept the Prosecution’s submission that it is appropriate to impose 50 per
cent of the maximum in relation to those.
In relation to each of
counts 4 and 5, as I have noted, there are aggravating features. The defendant
was well aware of the problems with the site and proceeded in disregard of its
own experts. They had clearly advised the site was unsuitable because of the
earlier gasifier operations; however, the defendant persisted simply 10 on a
commercial basis.
In relation to the final
count, the defendant purposely hid the issue of groundwater contamination from
the regulator. I accept the Prosecution’s submission that fines in relation to
each of those later offences should be at 75 per cent of the maximum.
I intend to reduce each
of those fines to recognise the totality issues that I have spoken about,
including the interplay between each offence and the damage that has actually
been occasioned. On each of counts 1, 2 and 3, I fine the defendant the sum of
$700,000. On each of counts 4 and 5, I fine the defendant the sum of
$1,200,000. Convictions are recorded. The Prosecution does not seek its costs
in relation to this Prosecution.
