Submission to EPA
Environment Protection Authority
Licensing and Regulation Services
GPO Box 2607
ADELAIDE SA 5001
20 January 2010
Re – SANTOS Licence Condition Relaxations – Interception Trench
Dear Sir / Madam,
We are writing to express our deep objection & disagreement with the proposal to relax the conditions of Santos’ licence at Port Bonython, as advertised in the Whyalla News on
5th January 2010. This submission relates to Licence no 888 held by Santos Ltd.
Save Point Lowly group, a Whyalla-based community action group, outlines in the following pages the basis for our objections. We have made a number of recommendations to the EPA and request they be duly considered. We have included an analysis of other Companies that have been successfully prosecuted for breaches of EPA conditions, which we strongly suggest should apply to Santos in this instance. Also, we have included is an analysis and commentary of the EPA’s own Compliance and Enforcement policy and principles and how they relate to this particular issue.
Members and Staff of the Save Point Lowly group are available to discuss this representation further, at a time and location convenient to the EPA.
Yours sincerely,
Dr. Andrew Melville-Smith
Chairperson – Save Point Lowly
SANTOS Licence Condition Relaxations – Interception Trench
This document is constructed in the following way:
Section 1 – Objections – to the extension
Section 2 – Recommendations - to the EPA (Including comparable conditions)
Section 3 – EPA Successful Prosecutions – similar cases
Section 4 - EPA Compliance and Enforcement Policy – analysis and comment
Section 5 - EPA Principles of compliance and enforcement decisions – analysis and comment
Section 1 - OBJECTIONS – from Save Point Lowly group
Summary - The basis for our objections, detailed below, is due to the numerous issues that demonstrate a failure by Santos to manage the Port Bonython facility responsibly.
Save Point Lowly group assert that, with regard to the Port Bonython leak, Santos:
- Is in breach of its licence conditions;
- Has provided what can only be described as a weak excuse for non-completion of a foreseeable issue;
- Has had an extensive period of time to rectify the problem already (over 18 months); and
- It is unrealistic for Santos to claim they encountered ‘unexpected hard rock’ when they have operated from this location for 26 years. Also they drilled many boreholes in the area to track and monitor the contamination prior to undertaking the trenching.
1) Breach of Conditions - The licence provisions are in place for a reason. Santos is fully aware of their licence conditions and responsibilities. For the EPA to approve the request, and be complicit in allowing pollution to continue, constitutes what we consider to be a failure of the EPA’s duty of care. We assert that this current leak is a serious breach of Santos’ conditions, and as such, Santos should be required to halt ALL production at Port Bonython until such time as the leak has been identified and contained. For the EPA to simply modify the licence conditions temporarily is a breach of trust of the people of Whyalla and the fragile marine environment of Upper Spencer Gulf.
There is no indication in any published material from either Santos or the EPA that a third party, or the EPA itself has conducted any independent testing. On what basis has the EPA satisfied itself that the leak is not making its way into the Spencer Gulf? We contend that the EPA has NO BASIS for making any such claims or determinations if there is no independent verification. How can the EPA guarantee the people of Whyalla, that the situation is as Santos suggested, when there is no independent verification of Santos’ claims?
Correspondence from Santos to Save Point Lowly group on 14 Jan 2010 stated: “The groundwater contamination plume size has not appeared to increase since fully identified through the monitoring bore network in September 2008. Santos continues quarterly assessment of the Marine environment and to date no impacts have been identified as a result of Santos’ activities.”
Save Point Lowly group asserts that ‘quarterly monitoring’ is a thoroughly inadequate regime for such a fragile marine environment. If the leak were to become ‘catastrophic’, how long would it take Santos to notice? How much damage to the marine environment would be allowed to occur as a result of this lax monitoring regime? The Upper Spencer Gulf is a fragile marine environment that supports highly lucrative fishing, aquaculture, tourism and recreational jobs. Testing only quarterly, which equates to four-times a year, fails to properly value this marine environment.
2) Foreseeable - We are very concerned with EPA’s assessment of the situation, mainly because it appears as though the EPA has not made any rigorous assessment of the situation. We fail to see how the EPA can be satisfied with Santos’ weak excuse. Santos has operated from this facility for 26 years. The facility at Port Bonython was designed and built to operate for 20 years. This is now 6 years (30%) past its use-by-date. Santos has made vast profits during this time; their failure to re-invest in their facilities is a breach of trust, and gross negligence on their part. It is a fact of life that these types of facilities deteriorate over time. A facility becoming unreliable once they have exceeded their lifetime is probable, foreseeable and avoidable. Failing to anticipate and prevent a problem that is probable, foreseeable and avoidable, qualifies as a definition of ‘negligence’.
3) Have had 18 months – Santos advised the Save Point Lowly group they had alerted the EPA about the leak, in May 2008. The Whyalla News article and press release from Santos in November 2009 stated that Santos first learned of the leak some 12 months ago. To still be battling away to identify, control and contain such a leak is, we assert, not in the spirit or intention of the legislation, process or procedures. Simply put, this negligence should not go unpunished. The fact it is still yet to be rectified implies that Santos has failed to demonstrate any sense of urgency or seriousness. The fact that Santos allocated additional people and resources to ameliorate this issue, yet still persist after 18 months, demonstrate the level of resources directed to resolving this were clearly insufficient. This failure on Santos’ part demonstrates their ability to anticipate, foresee and schedule repairs is neither sufficient nor acceptable.
4) Unacceptable - For Santos to claim they ‘encountered very hard rock’ demonstrates their lack of understanding they still have of the area after 26 years at Port Bonython. It verges on unlikely and unbelievable that this ‘very hard rock’ is a new issue – it is the exact same rock that has been there for millions of years and Santos has drilled approximately 80 bore holes in the area. Santos’ issue with the interception trench demonstrates their ability to underestimate their environmental obligations. When combined with the fact the Port Bonython facility has exceeded its planned operations by 30%, the issue is compounded.
Section 2 - RECOMMENDATIONS
Save Point Lowly hereby calls on the EPA to:
1) Order Santos to spare no expense and utilise every effort to complete the interception trench IMMEDIATELY;
2) Direct Santos to cease ALL operations at Port Bonython until the interception trench has been completed and it has been verified as being capable of stopping the creep of the contaminated groundwater towards the gulf;
3) Prosecute Santos as per the EPA guidelines, rules, laws and policies provided;
4) Undertake a six-month intensive monitoring analysis of the interception trench to assess its efficacy;
5) Institute a moratorium on the approval or installation of any additional Petrochemical Industries at Point Lowly (such as Stuart Petroleum’s Diesel Storage facility), for at least 9 months beyond the identification and repair of the leak to allow the monitoring of the impact of the leak to be mapped, tested, measured and analysed. This is necessary to establish a comprehensive defendable set of baseline data on contamination of the Lowly Peninsula to compare future contamination from any activities current or future; and
6) Ensure that the same conditions are applied and enforced with Santos as were imposed on Stuart Petroleum’s Diesel Storage facility. IE -
Condition 2. Listed waste produced at the site (for example, oily water and hydrocarbon residue waste) must be disposed of via a licenced waste transporter to a suitably licenced disposal facility.
Condition 3. All hydrocarbon tanks with on-ground tank bottoms must be fitted with underfloor leak detection systems.
Condition 10. To prevent escape of any diesel spills and chemicals, bunds must comply with the requirements of AS1940 and EPA Guideline 080/07 – "Bunding and spill management" June 2007. The integrity of bund floors and walls must be maintained over the life of the facility to prevent the passage of spills through underlying soil and prevent long-term site contamination.
Condition 12. Spilled chemicals or fuels (including diesel) spilled within bunded areas must be collected and removed from the site by an approved environmental contractor to an EPA approved disposal facility.
Condition 15. Water collected from all bunded or curbed areas (i.e. truck loading bays, refuelling bay, pump stations, tank storage) including water used to wash down or clean equipment must be passed to the “oily water system” which comprises a “slops tank” (for primary separation of water, oil and sediment), a full retention oil water separator and an evaporation basin constructed in accordance with EPA guideline EPA 509/04 Wastewater and evaporation lagoon construction 2004.
Condition 16. Water collected in the evaporation pond must be prevented from passing to natural water courses. If water needs to be removed from the evaporation pond, it must be removed from site by an approved environmental contractor to an EPA approved disposal facility.
Condition 21. No discharge into the marine environment either directly or by processes such as seepage or infiltration or stormwater or by the rising of the water table must occur beyond pre development levels.
Section 3 - EPA’s SUCCESSFUL PROSECUTIONS - Historical
The following is a list of EPA Enforcement & Compliance activity over the past few years. An analysis of these successful prosecutions demonstrates that companies and individuals that have breached their conditions have been successfully prosecuted and fined. This action has enabled the regulatory regime to remain robust.
Save Point Lowly group asserts the negligence demonstrated by Santos in failing to prevent the leak is at least equal to, if not greater than the failures demonstrated by the entities listed below. As such, in order to maintain consistency and relevance, Santos must be treated in the same way and those listed below.
SUMMARY OF PROSECUTIONS - EPA
NoNAMEBREACHFINE1Auspine LimitedAllowed rain to wash excess chemicals onto unsealed ground and into stormwater ponds, with the possibility of contaminating groundwater.$40,8002Shannon KernickDairy effluent escaped to the roadside in breach of the Environment Protection (Water Quality) Policy 2003.$5,1903TransAdelaideEquipment used for pumping diesel fuel to railcars failed. Approximately 15,000 litres of diesel fuel spilled over bunding into the stormwater system, and the River Torrens.$148,7574SA WaterBurst in the sewer pipe in Laguna Drive Port Lincoln when 20,000 litres of sewage was pumped into the stormwater system from an excavation pit. The wastewater subsequently entered a marina.$13,5005Shannon KernickAllowed dairy effluent to escape from a milking shed into a roadside stormwater drain, and potentially into a watercourse.$5,0006BRL Hardy LimitedDisposed of winery effluent to land without EPA approval, contravening a condition of their environmental authorisation$127,5007Mobil Refining Australia Pty Ltd, Pt StanvacCrude oil was transferred from a ship to onshore storage at the refinery. At the completion of the transfer Mobil used procedures to evacuate oil from the transfer hose. A pressure surge occurred causing a marine breakaway coupling fitted to the hose to activate. The coupling did not activate as designed and approximately 270,000 litres of oil entered the waters of Port Stanvac.$100,0008Pasminco Pt Pirie Smelter Pty Ltd, Port PirieZinc electrolyte solution (ZE) escaped the system and into the holding tank. This tank then overflowed into a bunded area. A sluice gate in the bunded area was open and it allowed approximately 20 kilolitres of ZE to flow to the marine environment near First Creek. Fifty fish were later found dead in this area.$40,0009Southcorp Wines Pty Ltd, NuriootpaBecause of the electrical failure winery effluent had entered a drain and flowed to the North Para River. It is estimated that approximately 10 megalitres of winery effluent entered the river.$139,00010Holden Limited, ElizabethDischarged waste, namely water containing Henkel SDC, into the stormwater system that entered the Little Para River at Salisbury causing an unsightly and offensive condition.$25,000TOTAL$644,747
Previous prosecutions have been undertaken where hazardous material has:
- Had the potential to contaminate (as opposed to actual contamination);
- Escaped due to negligence, machinery failure or by accident;
- Contravened existing environmental authorization; and
- Entered or potentially entered a drain, watercourse, marina or marine environment.
Save Point Lowly group suggests the Santos Port Bonython leak, meets ALL of these criteria, and thus the probability of successful prosecution rates highly.
Section 4 - EPA Compliance and Enforcement Policy
The following section provides an overview of EPA Compliance & Enforcement Policy (in italics). Save Point Lowly group has provided comment. We assert our recommendations comply with these policies.
∑ The EPA will not ignore any criminal or negligent act by any person which threatens or damages the environment or which undermines the regulatory regime.
SAVE POINT LOWLY asserts:
- The Santos leak is a negligent act that threatens the marine environment of the Upper Spencer Gulf.
- It was probable and foreseeable that the holding tanks would degrade after 26yrs despite only being built to last for 20yrs.
- Failure to undertake a level of replacement and repair shows that the leak was preventable.
- Not prosecuting Santos undermines the regulatory regime, especially given all the successful fines handed out for similar leaks of effluent.
∑ The EPA will have regard to and seek to further the objects of the EP Act, including taking into account social, environmental and economic factors, when making regulatory decisions.
SAVE POINT LOWLY asserts:
- The Upper Spencer Gulf is a marine environment of high social, environmental and economic value.
- It is a known fish nursery, has been earmarked as a marine park, and is the home of the world-famous Giant Australian Cuttlefish.
- Any activity that potentially pollutes this region should be dealt with to the full extent of the law.
∑ Environmental legislation provides the EPA with a variety of regulatory tools and the ability to exercise discretion to determine which tool is appropriate for particular circumstances. The suite of enforcement tools includes criminal prosecution and administrative and civil proceedings. The various tools may be used in conjunction with one another where necessary.
SAVE POINT LOWLY asserts:
- The EPA has the discretion to pursue Santos for this leak.
- Approval by the EPA for Santos to continue to leak is a poor choice of regulatory tool.
∑ In determining an appropriate course of action, the EPA will consider a variety of factors including, but not limited to the:
o Seriousness of the contravention, for example the nature and extent of the impact, harm or potential harm to the environment or the potential to undermine the regulatory regime
o Extent and speed of remediation action required
o Compliance history.
SAVE POINT LOWLY asserts:
- The potential harm of an ongoing, uncontrolled and unidentified leak is potentially catastrophic for the Upper Spencer Gulf. This fragile marine environment supports an $800 million per year fishing industry, as well as aquaculture, tourism, recreation and quality of life.
- To allow Santos to escape without prosecution would drastically undermine the regulatory regime, given how many other smaller leaks of less importance or severity have been successfully prosecuted (as per section 3).
- 18 months is well beyond a reasonable period of time to fix a leak of hazardous material. The speed of remediation leaves a lot to be desired.
- Santos’ compliance history is unclear to the Save point Lowly group. However, we highlight the 1992 Oil spill at Port Bonython by the ‘Era’ tanker and associated damage that was caused to mangrove populations. Regardless of who was ultimately responsible for the 1992 oil leak, it is clearly as a result of Santos’ operations at Port Bonython. This oil spill demonstrates the risks to the Upper Spencer Gulf are real, that accidents happen. It demonstrates the consequences persist for many years to come – as evidenced by the dead mangroves to the west of Port Pirie.
Section 5 - EPA Principles for compliance and enforcement decisions
The following section provides an overview of EPA Compliance & Enforcement Principles (in italics). The Save Point Lowly group asserts that our recommendations comply with the EPA’s principles. In particular, we suggest that prosecution (as opposed to approval) of Santos is proportional, consistent, targeted and timely.
The EPA’s compliance and enforcement approach is based on the foundation of firm but fair regulation. We are guided by the following five core principles:
Proportional - We will ensure that any measure taken is proportional to the risks posed to the environment and the seriousness of the offence. As far as the law allows, the EPA will take into account the circumstances of each case when considering the action we will take.
SAVE POINT LOWLY asserts:
- An unidentified and uncontrollable leak of petrochemical product into groundwater, in direct breach of licenced conditions, poses an extremely high risk to the marine environment.
- The Port Bonython facility is 30% beyond its expected lifespan, and thus a leak was foreseeable.
- The fragility of the Giant Australian Cuttlefish, & the fishing Industry demonstrates this is a serious issue and simply allowing Santos an extension of time is NOT proportional to the risks involved.
Consistent - We will be fair, equitable and apply consistent processes in all cases. We will ensure all officers are trained and there are effective systems and operational policies in place to support them.
SAVE POINT LOWLY asserts:
- A failure by the EPA to bring legal proceedings against Santos for this breach is not fair, equitable or consistent, given the number of successful prosecutions listed previously.
- Santos are a large company, they made $1.6 Billion profit in 2008/09. The fact they allowed their facility to deteriorate in such a way that it would leak demonstrates a level of contempt that is frightening.
Transparent - We will openly share information about our decisions and actions. We will assist the regulated community to understand what is required of them and what they should expect from the EPA. We will record information on the public register as required by the law.
SAVE POINT LOWLY asserts:
- It is reasonable to assume the EPA made Santos aware of the licence conditions.
- As part of the regulated community, it is reasonable to assume Santos would know that such a leak in a facility that has exceeded its planned life by 30% is probable, foreseeable and avoidable.
- Santos has no excuse for allowing this situation to happen or for taking beyond 18 months to rectify.
Targeted - We will ensure our regulatory effort is directed primarily towards those activities that pose the greatest risks, cause the greatest environmental damage or undermine the regulatory regime.
SAVE POINT LOWLY asserts:
- An uncontrolled, unidentified leak at Port Bonython poses the single greatest risk of environmental damage to the Upper Spencer Gulf marine environment, especially the Giant Australian Cuttlefish.
- The leak has the potential to cause the ‘greatest environmental damage’.
- Given at least ten (10) Companies / Individuals have had action brought against them for lesser transgressions, a breach that has potential to cause such extreme harm should be prosecuted.
Timely - We will work in a timely manner to manage, inform and progress without delay.
SAVE POINT LOWLY asserts:
- Santos advised the EPA of the leak in May 2008. At the time of seeking an extension to complete the interception trench early December 2009, the leak had been ongoing for over 18 months.
- Such an extensive period of time hardly meets the EPA standard of ‘progress without delay’.
Completed prosecutions – details
Enforcements and compliance – EPA South Australia.
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1) Defendant Auspine Limited
Incident
Failure to roof a concrete drip pad by September 2004 in line with licence conditions, allowing rain to wash excess chemicals onto unsealed ground and into stormwater ponds, with the possibility of contaminating groundwater.
Outcome ERDC 3 February 2006
Auspine has pleaded guilty to the charge of contravening Condition 11, contrary to sections 45(5) and 127(1)(a) Environment Protection Act 1993 and a conviction has been recorded.
Charge: breach of licence condition; guilty plea
Fined: $40,800
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2) Defendant Shannon Kernick
Incident
In July 2005 at the Kernick's dairy on Munetta Road, Pages Flat, dairy effluent escaped to the roadside in breach of the Environment Protection (Water Quality) Policy 2003.
Outcome ERDC 9 February 2006
Charge: two counts of breaching a mandatory condition of the Water Quality Policy and one count of breaching an Environment Protection Order. Her Honour Judge Trenorden fined Mr Kernick a total of $5,000, which is 40% of the maximum available. Technical costs of $190 were awarded to the EPA for sampling.
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3) Defendant TransAdelaide
Incident
Between 21 and 24 July 2003 equipment used for pumping diesel fuel to railcars failed. Approximately 15,000 litres of diesel fuel spilled over bunding into the stormwater system, and the River Torrens.
Outcome ERDC 15 November 2004
Charge: Causing serious environmental harm by polluting the environment recklessly and with the knowledge that environmental harm would or might result [section 79 (1)], guilty plea.
Fined: $120,000 plus costs of $28,757.09.
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4) Defendant SA Water
Incident
SA Water is the operator of the sewage network in Port Lincoln. On 24 May 2002 there was a burst in the sewer pipe in Laguna Drive Port Lincoln when 20,000 litres of sewage was pumped into the stormwater system from an excavation pit. The wastewater subsequently entered a marina.
Outcome ERCD 7 May 2004
Charge: Causing an environmental nuisance (section 82); guilty plea.
Fined: $13,500.
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5) Defendant Shannon Kernick, Myponga; dairy farmer
Incident
April 2003: allowed dairy effluent to escape from a milking shed into a roadside stormwater drain, and potentially into a watercourse.
Outcome ERDC 30 January 2004
Charge: Committed an offence pursuant to section 7(1) of the Environment Protection (Milking Shed Effluent Management) Policy 1997; a dairy effluent spill; found guilty.
Fined: $5,000.
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6) Defendant BRL Hardy Limited
Incident
On three occasions between February 2000 and April 2003, BRL Hardy at Renmark disposed of winery effluent to land without EPA approval, contravening a condition of their environmental authorisation. The defendant also failed to ensure that all employees carrying out a task controlled by the licence were advised of the requirements of the licence.
Outcome ERDC 20 May 2003
Charge: Four counts of breaching the conditions of an environment authorisation [Section 45 (5)]; guilty plea.
Fined: $97,600 plus $19,912.71 costs.
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7) Defendant Mobil Refining Australia Pty Ltd, Pt Stanvac
Incident
28 June 1999: Crude oil was transferred from a ship to onshore storage at the refinery. At the completion of the transfer Mobil used procedures to evacuate oil from the transfer hose. A pressure surge occurred causing a marine breakaway coupling fitted to the hose to activate. The coupling did not activate as designed and approximately 270,000 litres of oil entered the waters of Port Stanvac. The oil spill was successfully cleaned up.
Outcome Christies Beach Magistrates Court 13 June 2001
Charge: Discharged oil from apparatus. Section 26 Pollution of Waters by Oil and Noxious Substances Act 1987.
Fined: $50,000.
Costs: $50,000.
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8) Defendant Pasminco Pt Pirie Smelter Pty Ltd, Port Pirie
Incident
3 May 1999: Zinc electrolyte solution (ZE) was placed into a holding tank at the smelter. As a result of a possible blockage at the top of cooling towers, ZE escaped the system and into the holding tank. This tank then overflowed into a bunded area. A sluice gate in the bunded area was open and it allowed approximately 20 kilolitres of ZE to flow to the marine environment near First Creek. Fifty fish were later found dead in this area.
Outcome ERDC 16 March 2001
Charge: Caused material environmental harm, section 80(2) Environment Protection Act 1993.
Fined: $40,000.
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9) Defendant Southcorp Wines Pty Ltd, Nuriootpa
Incident
5 May 2000: Numerous complaints from residents of the Barossa Valley were received of polluted water and dead fish in the North Para River. An investigation showed that Southcorp Wines, who operated a winery on the banks of the river, had an electrical problem with a winery effluent sump. The sump was designed to pump effluent to lagoons on the property but because of the electrical failure winery effluent had entered a drain and flowed to the North Para River. It is estimated that approximately 10 megalitres of winery effluent entered the river. A successful cleanup was undertaken.
Outcome ERDC 18 December 2000
Charges: Caused serious environmental harm, section 79(2) Environment Protection Act 1993; Failure to report incident, section 83 Environment Protection Act 1993; Breached licence conditions, section 45(5) Environment Protection Act 1993.
Fined: total of $118,000.
Costs: $21,000.
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10) Defendant Holden Limited, Elizabeth
Incident
5 June 1998: Employees of the defendant at its Elizabeth premises discharged waste, namely water containing Henkel SDC, into the stormwater system that entered the Little Para River at Salisbury causing an unsightly and offensive condition.
Outcome ERDC 18 October 1999
Charge: Caused environmental nuisance, section 82 Environment Protection Act 1993; contravened conditions of an environmental authorisation.
Fined: $20,000 for environmental nuisance. $5,000 for breach of licence condition.
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Lights back on
The Whyalla Council has turn the Point Lowly Lighthouse light back on with a dimmer yellow light