Background
Maules Creek Coal Pty Ltd (MCC) operates an open-cut coal mine near Boggabri in north-west New South Wales under a Project Approval and an Environment Protection Licence (EPL) issued under the Protection of the Environment Operations Act 1997 (NSW) (POEO Act). On 20 August 2020, MCC carried out an overburden blast specifically designed to address poor rock fragmentation experienced in a previous blast. The blast was conducted in circumstances where adequate fragmentation of “caprock” — conglomerate material near the ground surface — had proved difficult, and MCC had retained expert advice from Dr Cameron McKenzie to assist in modifying blast parameters including stemming length and timing.
After the blast, measurements at all four EPL-mandated monitoring points (BM1–BM4) showed that airblast overpressure and ground vibration levels complied with Conditions L4.1–L4.4 of the EPL. Notwithstanding that compliance, the Environment Protection Authority (EPA) prosecuted MCC for four offences: three under s 64(1) of the POEO Act for designing and carrying out the blast otherwise than in a competent manner (in breach of Condition O1.1 of the EPL) on account of the blast’s timing, stemming length, and overloading of blast holes; and one under s 140 of the POEO Act for dealing with materials (explosives) in a manner that caused noise without handling them in a proper and efficient manner.
The Land and Environment Court (Pritchard J) found MCC guilty on all four charges on 4 October 2024 and imposed a penalty of $50,000 per offence — $200,000 in total — along with costs orders. MCC appealed its convictions. The EPA cross-appealed on sentence, arguing the penalties were manifestly inadequate. The two appeals were heard concurrently before Ward P, Leeming JA, and Fagan J.
The Court’s Holding
The Court of Criminal Appeal, in reasons delivered by Ward P (with Leeming JA and Fagan J agreeing), allowed the conviction appeal in full and entered verdicts of acquittal on all four charges. The Court upheld the primary judge’s construction of the EPL in part: Condition O1.1 (the obligation to carry out licensed activities in a competent manner) is a freestanding obligation, separate from and not displaced by the specific numerical limit conditions in L4.1–L4.4. Compliance with those specific limits does not serve as a “proxy” for, nor as an implied defence to, a breach of the general competence obligation. The Court also affirmed that assessing competence may include consideration of potential environmental consequences and reference to the relevant Australian Standard (AS 2187.2) and the Blast Management Plan.
However, the Court found that the primary judge erred in concluding that breach of Condition O1.1 was established beyond reasonable doubt for the three section 64 charges. Where competing expert evidence existed on the question of whether the blast was carried out competently, it was insufficient to simply prefer one expert’s opinion over another’s in order to satisfy the criminal standard of proof. The same reasoning applied to the noise charge under s 140: while compliance with EPL conditions does not provide an implied defence, the expert modelling by Dr McKenzie raised a reasonable doubt that the explosives were not handled in a proper and efficient manner. Overloading was not pleaded as a particular of the noise charge, and the expert evidence indicated that overloading was not the cause of the airblast in any event. Because the convictions were quashed and acquittals entered, the EPA’s sentence appeal became moot and was dismissed.
The monetary penalties and costs orders of the Land and Environment Court were set aside. The matter was remitted to that Court on the question of first-instance costs only.
Key Takeaways
- A general “competent manner” obligation in an EPL operates independently of specific numerical limit conditions; compliance with blast overpressure and vibration limits does not immunise a licensee from prosecution for incompetent conduct.
- However, specific limit compliance is relevant to the competence inquiry and, in the face of competing expert evidence, may be sufficient to raise a reasonable doubt that precludes criminal conviction.
- Where expert evidence is genuinely contested at trial, a court cannot satisfy the criminal standard of proof merely by preferring one expert over another — the competing evidence itself may give rise to reasonable doubt.
- Compliance with an EPL condition does not create an implied defence to a general statutory offence (such as s 140 of the POEO Act), but it is a material indicator going to whether the statutory standard was met.
- Deviations from a Blast Management Plan’s non-prescriptive design standards are not, in themselves, sound evidence of incompetence where the blast was not a standard blast and was specifically modified to address known engineering difficulties.
Why It Matters
This decision clarifies the relationship between specific numerical licence limits and broader “manner of conduct” obligations in environmental licences — a distinction that affects prosecutorial strategy and licensee compliance programs across the resources and heavy industry sectors in New South Wales. Regulators can still prosecute for incompetent conduct even when monitored outputs are within prescribed limits, but they must adduce evidence sufficient to establish incompetence beyond reasonable doubt, not merely rely on deviations from design standards or prefer one expert witness over another.
For mining operators and their legal advisers, the judgment is a significant reminder that meeting output-based EPL limits is a necessary but not always sufficient condition of regulatory compliance. At the same time, it raises the bar for the EPA when bringing criminal charges premised on manner-of-conduct obligations: contested expert evidence as to best practice will routinely engage the reasonable doubt standard, and prosecutors must build their evidentiary case accordingly.