News & Blog Posts · Energy & Climate

Abbot Pt & Caley Valley Wetlands: what’s the legal situation?

04 December, 2017

EDO lawyers prepare a legal wrap-up of the latest developments on the issue of coal contamination from Adani's Abbot Point.

In short….

  • Adani has contested DEHP’s infringement notice fine of $12,190 for breaching the temporary licence limit for discharge to the marine environment. DEHP now has to decide whether or not to lay charges. Adani risks much larger fines if found guilty of any offence.
  • Adani has appealed to the Planning and Environment Court against DEHP’s decision to require it to conduct an environmental investigation into the causes and impacts of the contaminated discharge into the Caley Valley wetlands. While the investigation requires a report on stormwater management before Christmas, on 6 December 2017 Adani will be asking the Court to stay all investigation requirements until the appeal is decided next year.
  • EHP has concluded the discharge into the wetlands was under the temporary licence limit. However, how it reached that conclusion is perplexing because it appears there was no monitoring of the discharge during the cyclone when contamination was likely to have been at its highest.
  • Adani is also opposing DEHP’s decision under right to information laws to give public access to the temporary licence application and assessment documents. 

Background

  • Abbot Point port terminal is run by Abbot Point Bulkcoal Pty Ltd (APBC), whose ultimate holding company is Adani Ports and Special Economic Zone Ltd.  APSEZ is part of the Adani Group.
  • In March 2017, the Queensland Department of Environment and Heritage (DEHPissued, and then amended, a temporary emissions licence (TEL) to APBC due to predictions of major rainfall associated with Tropical Cyclone Debbie.  
  • The TEL permitted a temporary increase of the discharge limit for total suspended solids (TSS) over the normal limits in APBC’s environmental authority. It allowed this for two release points - into the Caley Valley Wetland (W1), and onto the beach north of the terminal (W2). 
  • APBC exceeded the TEL release limit onto the beach by over 800%.  DEHP issued an infringement notice for the breach with a $12,190 fine, which ABPC has contested.  DEHP now has to decide whether or not to prosecute ABPC.
  • In September 2017, the Queensland Government released a preliminary report about coal contamination of the Caley Valley wetlands after the cyclone.  While the report stated sediment in the wetland downstream of the terminal discharge point had approximately 10% coal, it concluded that coal fines do not appear to have caused widespread impacts in the wetland.
  • DEHP has stated that APBC did not exceed the TEL discharge limits into the wetlands. However, it appears that there was no monitoring of the discharge during the cyclone at all, making it impossible for DEHP to have validly reached that conclusion.
  • DEHP has required APBC to conduct an environmental investigation of the port terminal’s water management operations, and to conduct a monitoring program that assesses any wetland contamination. However, APBC has appealed that decision to the Planning and Environment Court.  If it is unsuccessful in obtaining a Court stay of the decision, APBC must still provide an initial report to DEHP by 22 December 2017 about stormwater management, with a final monitoring and impact assessment report due by November 2018.

UPDATE 4 DECEMBER 2017:  Adani applies to stay investigation requirements

On 1 December 2017, Adani applied to the P&E Court for a stay, or freeze, of the investigation requirements until the Court decides the appeal.

In the court documents filed, Adani claims that there is no urgency to do the investigation, and that preliminary estimates of costs of doing the investigation are in the range of $1.8 to 2.3 million.

The stay application is listed to be heard on Wednesday 6 December.  Adani’s main challenge to the decision has not yet been given a hearing date in the new year.


UPDATE 30 NOVEMBER 2017: Adani appeals environmental investigation to court

Today Adani has filed an appeal in the Planning and Environment Court against DEHP’s decision to require an environmental investigation.

In its notice of appeal, Adani’s grounds of challenge include that its actions were lawful, that any environmental harm is trivial or negligible, and that the investigation requirements are vague, uncertain, unreasonable and disproportionate.

No court date has yet been set for the appeal, and it does not appear that Adani yet sought a stay, or freeze, of the investigation requirements.


UPDATE 6 NOVEMBER 2017: DEHP confirms environmental investigation decision

DEHP’s internal review has confirmed the requirement for Adani to conduct an environmental investigation into the discharges into the wetlands.  DEHP has amended some of the notice wording, and has also:

  • extended the date for the review of the initial site water management strategy from 8 to 22 Dec 2017; and
  • given dates for the REMP report and any required toxicity report as 31 Oct 18 and 11 Jan 19, respectively.

UPDATE 6 OCTOBER 2017: Adani makes further challenges

Review of investigation requirement

APBC has sought an internal review of DEHP’s decision to require the environmental investigation.  It can make submissions to DEHP that there was no basis to require the investigation at all, or that the scope or requirements of the investigation are inappropriate in the circumstances. DEHP is required to complete the internal review process by about 24 October.

The review does not stay (or freeze) the DEHP’s decision and so ABPC must continue to meet the obligations in the investigation. However, APBC can apply to the Planning and Environment Court to obtain a stay until the review process has completed.  At this time, it does not appear that APBC has made such an application.

If ABPC is unsatisfied with DEHP’s review decision, it can appeal to the Planning and Environment Court and argue against the merits of the decision. 

Opposes RTI release of documents

In April this year, a community group sought access under the Right to Information Act 2009 to the application and assessment documents for the TEL held by DEHP.  DEHP decided to grant access.

However, a third party (assumed to be APBC) sought internal review of the decision, which DEHP again confirmed last month.  APBC has now sought external review of the decision by the Information Commissioner to prevent release of the documents.


UPDATE 25 SEPTEMBER 2017: Queensland Government report on wetland sampling; DEHP requires an environmental evaluation

On 20 September 2017, DEHP issued a media release stating it had received a report by the Department of Science, Information Technology and Innovation (DSITI) on its findings with respect to a preliminary assessment of the condition of the Caley Valley Wetlands following the stormwater discharge from the cyclone. DEHP’s website has a timeline of events and its findings relating to the stormwater discharge into the wetlands.

The DSITI report, dated July 2017, states that the objective of the preliminary assessment was to assess the presence of coal fines and whether contamination has impacted the wetlands. Due to access limitations, the contaminant investigation was confined to eight sites on the edges of the wetland, with the sediment and water sampling done between 27 and 28 April 2017.

The coal in sediment results show that one of the sampling locations is immediately downstream of authorised discharge point W1 – this sample showed the highest percentage of coal contamination with approximately 10% found. Up to 2% coal contamination was detected in another nearby wetland sample.

Samples to test water quality were taken for total suspended solids (TSS) analysis and in situ water quality data. TSS exceeded the Queensland Water Quality Guidelines at two sites; pH levels exceeded the guidelines at four of the seven sites; and dissolved oxygen concentration exceeded the guidelines at all sites. However, the report states that, overall, and in light of past studies, the water quality results were within historical limits of the wetland.

The DSITI report concludes that the ‘coal fines do not appear to have caused widespread impacts in the wetland’.   Despite this, we have identified a number of issues with the report.

  • The report states that APBC sampling indicated that the discharge into the wetlands was below the TEL limit.   However, that sampling by APBC at W1 was on 30 March when staff returned to site, after the cyclone passed.  It is almost certain that this sampling missed any ‘first-flush’ of contaminants from the terminal, when contaminant levels were likely to be at their peak.  Given the late timing of sampling, and with no other apparent in-situ monitoring in place, it appears that contamination concentrations were unknown from when discharge commenced until the time ABPC sampled on return to the site.  The report does not address this apparent shortcoming at all.
    • The DSITI sampling was done some 4 weeks after the discharge event. The report fails to address any factors (such as rainfall or wetland flow patterns) during the period following the cyclone and prior to the sampling, and how such factors may have affected the distribution and concentration of contaminants.
    • Only two DSITI sampling sites were located in the area immediately adjacent to the licenced discharge point.  There were no other sites in the ‘arm’ of the wetland leading from W1 south-west down to the main body of water for the wetland  (see Figure 2 of the report).  The remaining sampling points may have been too remote to the discharge point to capture potential contamination.

The report states DSITI only conducted a preliminary assessment and concludes with a call for further assessment ‘to more accurately delineate the area potentially impacted downstream of the licensed discharge point, and to monitor the response of the wetland to the authorised discharge.’  

What happens next?

On 18 September 2017, in response to the DSITI report, DEHP issued a notice requiring APBC to conduct an environmental investigation under section 326B of the EP Act. DEHP based its decision on being reasonably satisfied that activities at the coal terminal are ‘likely to cause environmental harm in high intensity rainfall events’.

The environmental evaluation requires APBC:

  • by 8 December 2017, to submit a report to DEHP on a review of APBC’s water management strategy (including discharge and monitoring practices) – see requirements 1 and 2;
  • by 18 September 2018, to submit a report to DEHP on the development, implementation and results of a Receiving Environment Monitoring Program (REMP), which must monitor, identify and describe any adverse impacts to the environmental values of the wetlands from the terminal – see requirements 3 to 5;
  • if the REMP demonstrates a high level of toxicity risk from coal contaminants, by 18 November 2018 to submit a report on a further direct toxicity assessment – see requirements 5 to 7.

Under the EP Act, APBC can apply for an internal review of the DEHP decision to issue an environmental evaluation notice (see section 521 of the EP Act). APBC can also appeal the review decision to the Planning and Environment Court to have the merits of the matter decided. Unless APBC applies to the Court for a stay (or freeze) of DEHP’s decision, ABPC must continue to comply with the requirements of the investigation – regardless of whether or not it has sought a review or appeal.

If APBC does not apply for review or further appeal, then DEHP must decide whether or not to accept the report on the REMP findings.  It can also request more information.  If DEHP refuses the report, it can request another environmental investigation and an additional report. Alternatively, if DEHP accepts the report it can do one or more of the following (see section 326H of the EP Act):

  • require APBC to prepare and submit a transitional environmental program;
  • amend the conditions of the environmental authority;
  • serve an environmental protection order on APBC; and / or
  • take any other action considered appropriate.

Depending on the type of action DEHP elects to undertake, and if the APBC fails to comply with a direction, APBC may be subject to further enforcement action. Any further action is considered pursuant to DEHP’s Enforcement Guidelines.

Failure to comply with a notice to conduct an environmental investigation, without a reasonable excuse, is an offence carrying a current maximum penalty of $189,255 for a corporation.

This was not the first time DEHP has authorised higher contamination releases from the Port

In April 2014, DEHP granted a TEL for the coal terminal in anticipation of Tropical Cyclone Ita. At that time, Glencore (not Adani) was the parent company of ABPC; Adani appears to have taken over APBC in September 2016.

The 2014 TEL had no water quality or volume limits for the discharges.  However, it did not authorise discharge from W1 into the wetlands.  Suspended solids of 686 mg/L were recorded at release point W2 (into the marine environment), and discharges to land at two other sites also ranged from 433 to 779 mg/L. In an April 2014, a Glencore report stated that ‘no evidence of an accumulation of coal, or adverse effect’ resulted from the discharges. 

Glencore did not outline any substantial actions it would take to limit coal contamination on the receiving environment (such as a review of its stormwater management system), or to do any ongoing monitoring for potential impacts or accumulation. Instead, the actions were limited to cleaning out sumps when adverse weather was pending, improving access to Bureau of Meteorology warnings, and adjusting preventative action accordingly when implementing existing cyclone procedures. However, it did state that it would review ‘event management effectiveness’ after a cyclone. It remains to be seen whether or not Adani conducted any such review itself after Cyclone Debbie, rather than only doing so because of DEHP’s investigation notice.

It appears that, given events in 2017, APBC has made little progress since 2014 to adequately manage the terminal to minimise the potential impacts of high rainfall events. Further, APBC’s current EA monitoring requirements are inadequate to record contaminant discharge concentrations and net volumes. 

PIN challenge about ‘the principle’

Meanwhile, also on 20 September The Guardian reported an Adani spokesman as saying that Adani’s challenging of the PIN fine for discharge to the ocean is about "the principle, not the amount [of the fine]".

It will be interesting to see what legal principles Adani argues in any prosecution DEHP brings in court regarding the breach.


UPDATE 25 AUGUST 2017: Adani to contest $12,190 fine

ABC News has reported that Adani will contest the $12,190 penalty infringement notice, but that a spokesperson for Adani declined to comment as the matter is before the courts.

To challenge the PIN, Adani simply notifies DEHP it chooses to do so. It does not need to lodge any court documents itself.  DEHP must then decide whether or not to prosecute in the ordinary way by pursuing any charge/s, which could include against any individual executive officers of the company. Under section 497 of the Environmental Protection Act 1994, DEHP generally has one year after an offence to commence summary proceedings. Any prosecution would most likely be commenced in the Bowen Magistrates Court.

In choosing to contest the PIN, Adani risks higher fines that come with prosecution. The maximum penalty for a corporation for failure to comply with a condition of a TEL is 22,500 penalty units ($2,742,750), or 31,250 units ($3,809,375) if the offence was committed wilfully (section 357I, EP Act).  However, any fine that a court may impose against Adani is unlikely to approach anywhere near the maximum, which is usually reserved for cases with factors such as repeat offending and/or widespread and severe damage.


UPDATE 11 AUGUST 2017: Adani issued with $12,190 fine

Today, EHP issued a media release stating that on 20 July it issued APBC with a $12,190 penalty infringement notice (PIN) for breaching a condition of the TEL.  This relates to the release of stormwater from the terminal into the ocean containing suspended solids recorded at 806 mg per litre, more than eight times the TEL permitted level.

The fine for a corporation for breach of a TEL condition is a fixed amount of 100 penalty units under the State Penalties Enforcement Regulation 2014.  The exact dollar amount is determined by the penalty unit values at the time of the incident (which was $121.90). 

DEHP makes it clear that the PIN relates to stormwater released to marine waters and not to the adjacent Caley Valley wetlands.  DEHP’s investigations into releases into the wetlands are ongoing.

APBC has until 17 August 2017 to elect to contest the PIN in court.

On 31 May, EHP issued a media release about sediment samples taken from Dingo Beach, below the discharge point that recorded significant exceedance of the temporary emissions licence sediment limits.  While EHP stated that “trace amounts of coal of between one and two percent were found”, it concluded that naturally occurring minerals and magnetite were “the most likely reason for the dark colouration observed at Dingo Beach” after the cyclone, and that those trace amounts “would be unlikely to cause environmental harm to the surrounding area”.

EHP took the sediment samples on 20 April, some 21 days after Adani returned to site after the cyclone on 30 March and discovered the discharge exceedance. In the release, EHP does not address the effect of this delay in its sampling, in what is likely to be in an area affected by tidal processes.

EHP stated that its investigation into the discharge of stormwater and assessment of any impacts into the Caley Valley wetlands is ongoing.


UPDATE 8 MAY 2017: Adani reports exceedance to EHP

Last week, EHP published a media statement that Adani Abbot Point Bulkcoal had advised it that:

  • an exceedance of the water discharge limits in the temporary emissions licence occurred on 30 March 2017;
  • the discharge contained 806 mg/L of sediment;
  • the non-compliant discharge did not enter the Caley Valley wetland, but was from a licenced discharge point on the northern side of the terminal; and
  • further investigations by ‘port management’ indicated that ‘no coal-laden water entered any marine environment’.

EHP stated that it will prepare an investigation report to inform what compliance action it will take, if any, in accordance with its enforcement guidelines.  On 20 April, EHP took sand samples on the beach to check for coal in the discharge, with results “expected to be available by the week beginning 8 May 2017.”  There is no explanation offered as to what contaminants caused the high sediment levels, or what total volume of water over the 100mg/L limit was discharged.

It also stated that "There are serious penalties for corporations whose non-compliance with their environmental authorities or temporary emissions licences causes environmental harm…”. While this is true, causing environmental harm (which includes potential adverse effects) is not strictly required for serious penalties for contravening a licence condition.  However, any harm or potential harm is one factor that EHP will consider under section 3 of its enforcement guidelines in choosing any compliance action. It is not a certainty that EHP will elect to prosecute Adani and seek penalties, given the range of enforcement tools available to it.

Since EHP’s statement, Adani posted on its Facebook site a refute to assertions that it had discharged contaminated water, and that it had advised EHP of “a high sediment level in a sump pond inside the Abbot Point designated area”. Adani has also been reported in the media as stating that “no water was discharged or released into any marine environment” (ABC News). This reply is somewhat perplexing given that the TEL (and EA) limits relate to discharge, and required Adani to monitor discharge during a release from site.  Those requirements did not require Adani to notify EHP of contaminant levels in stormwater simply being held onsite, such as in a sump pond.  Instead, condition A9 of Adani’s EA requires Adani to notify EHP within 24 hours of a spill or release that, amongst other things, ‘may result in any observable environmental impact’.

EHP’s statement does not address any discharge that occurred to the Caley Valley Wetlands.  As such, there is not yet any departmental explanation of the apparent contamination in the aerial photographs initially published in the media, and whether environmental harm was caused by a discharge there.


UPDATE 11 APRIL 2017: Environmental regulation of T1 coal terminal

You may have seen news reports of what looks like spillage from the Abbot Point coal terminal into the Caley Valley Wetlands in the aftermath of Cyclone Debbie. What Environmental regulation applies to the T1 coal terminal?

  • Abbot Point Bulk Coal Pty Ltd (APBC) were required to obtain an environmental authority (EA) under the under the Environmental Protection Act 1994 (Qld) (EP Act) to conduct the environmentally relevant activities (ERAs) of bulk material handling (ERA 50-(1a)) and sewage treatment (ERA 63(1)(b)(i)) on land adjacent to the Caley Valley Wetlands at Abbot Point. Abbot Point Bulk Coal Pty Ltd (APBC) currently holds an environmental authority for the T1 coal terminal at Abbot Point.
  • Under the EP Act it is an offence to unlawfully cause serious or material environmental harm.However, an act causing environmental harm won’t be ‘unlawful’ if it is authorised under an environmental authority (EA).
  • APBC’s EA for coal stockpiling only permits discharges to waters at two locations if it meets certain water quality criteria including, for example, that suspended solids are below 30mg/L.
  • It is an offence to contravene a condition of an environmental authority.
  • APBC obtained a temporary emissions licence (TEL) to increase the release limits for total suspended solids from 30 mg/L to 100 mg/L during a 4 day period from 27 March 2017 to 30 March 2017 at two locations.
  • It is an offence to contravene a condition of a TEL.
  • It is also an offence to place a contaminant where serious or material environmental harm may be caused.

Want to know more? Click here for more detailed information with footnotes and links.