Zagami v Waste Service of New South Wales [2005] NSWADT 60

CITATION: Zagami v Waste Service of New South Wales [2005] NSWADT 60 DIVISION: General Division APPLICANT PARTIES: Paul Joseph Zagami RESPONDENT Waste Service New South Wales FILE NUMBER: 043297 HEARING DATES: 1/02/2005-2/02/2005 SUBMISSIONS CLOSED: 02/02/2005 DATE OF DECISION: 03/18/2005

BEFORE: Montgomery S - Judicial Member APPLICATION: access to documents - business affairs - Freedom of Information Act - access to documents - business affairs MATTER FOR DECISION: Principal matter LEGISLATION CITED : Freedom of Information Act 1989 Re Day and Collector of Customs 33 ALD 777. Re Ewer and Australian Archives (1995) 38 ALD 789 CASES CITED: Re McKnight and Australian Archives (1992) 28 ALD 95. Re Milliss and Australian Archives (1998) 47 ALD 427 Neary -v- Treasurer of New South Wales [2001] NSWADT 161 Searle Australia Pty Limited v Public Interest Advocacy Centre (1992) 108 ALR 163 APPLICANT REPRESENTATION: C Jackson, barrister RESPONDENT N Williams, SC ORDERS: 1. Documents, 1.1, 1.8 and 1.13 are exempt from disclosure pursuant to Clause 7(1)(a) of Schedule 1 to the FOI Act because they contain matter the disclosure of which would disclose trade secrets; 2. Documents 1.3, 1.5, 1.6, 1.11, 1.12, and 1.14 do not fall within the scope of the application as it is presently framed and need not be produced; 3. The matter is to be listed for further directions in relation to documents 1.2 and 1.9

REASONS FOR DECISION 1 Mr Zagami is the NSW Public Affairs Manager of Collex Pty Ltd ("Collex"). Collex is a sizeable waste management company. Its principal activities in New South Wales relate to domestic, commercial, building and commercial waste. Collex operates a site at Horsley Park that is used for landfilling operations for building, construction, demolition and green waste in quarry voids caused by excavations associated with the Austral brickworks operation. 2 The Austral brickworks site is adjacent to the main Sydney Water pipeline, the western Sydney gas pipeline and construction works being undertaken for the Western Sydney Orbital Road. Neighbouring the Collex/Austral site is the Eastern Creek Waste Management Centre, a putrescible waste landfill owned and operated by Waste Service NSW ("Waste Service"). Waste Service is a State-owned corporation and is subject to the Freedom of Information Act 1989 ("the FOI Act"). 3 In about November 2003, Collex became aware of elevated levels of methane in a ground water monitoring borehole located on its Horsley Park site. Collex notified the Department of Environment and Conservation ("the regulator") of the issue and in May 2004 that Department issued Waste Service with a Notice to Variation of Licence. Also in May 2004 Mr Zagami sought access to certain documents under the FOI Act. He sought: "Copies of all landfill gas monitoring results conducted at Waste Service's Eastern Creek Waste Management Centre in the period 1 October 2003 to 30 May 2004, including in that period: - all monitoring results, including location of gas wells and other points where monitoring has been undertaken; and - all documentation which outlines Waste Service's plans to manage elevated gas levels and monitor gas levels on and around the Eastern Creek landfill." 4 Waste Service identified 14 documents as falling within the scope of the application. It denied access to each of documents on the basis that they were exempt documents within the meaning of clause 7(1)(b) and/or 7(1)(c) of Schedule 1 to the FOI Act. An internal review affirmed this determination to refuse access to the documents although Mr Zagami had indicated that he no longer sought access to some of those documents. 5 A schedule to the internal review determination identified the documents in issue and the basis for the exemption claimed. That schedule provided: Ref. No .: 1.1 Document: Letter from Waste Service NSW to Mr Steve Beaman of the Department of Environment and Conservation dated 6 February 2004. Exemption clauses: Clause 7(1)(b) of schedule 1. Ref. No.: 1.2 Document: Report of Odorous and other VOCs analysed prepared by ANSTO dated 6 February 2004. Exemption clauses: Clause 7(1)(b) of schedule 1. Ref. No.: 1.3 Document: Letter from Wal Hammonds of Energy Developments to Phil Grace of Waste Service NSW dated 25 February 2004. Exemption clauses: Clause 7(1)(c) of schedule 1. Clause 7(1)(b) of schedule 1. Ref.No.: 1.4 Document: Access no Longer sought. Exemption clauses: N/A Ref.No.: 1.5 Document: Email from Reg Blair of Energy Developments to Ezio Di Giovanni of Waste Service NSW dated 4 March 2004. Exemption clauses:Clause 7(1)(c) of schedule 1. Clause 7(1)(b) of schedule 1. Ref.No.: 1.6 Document: Letter from Wal Hammonds of Energy Developments to Phil Grace of Waste Service NSW dated 4 March 2004. Exemption clauses: Clause 7(1)(c) of schedule 1. Clause 7(1)(b) of schedule 1. Ref.No.: 1.7 Document: Access no Longer sought. Exemption clauses: N/A Ref.No.: 1.8 Document: Letter from Waste Service NSW to Mr Steve Beaman of the Department of Environment and Conservation. Exemption clauses: Clause 7(1)(b) of schedule 1. Ref.No.: 1.9 Document: Letter from Holmes Air Sciences to Waste Service NSW dated 3 May 2004. Exemption clauses: Clause 7(1)(b) of schedule 1. Ref.No.: 1.10 Document: Access no Longer sought. Exemption clauses: N/A Ref.No.: 1.11 Document: Report on installation of sub-surface landfill gas monitoring wells, Eastern Creek WMC prepared for Waste Service NSW by Consulting Earth Scientists (Report ID CES030503-WS-01-F dated 7 June 2004. Exemption clauses: Clause 7(1)(b) of schedule 1. Ref.No.: 1.12 Document: Report on installation of sub-surface landfill gas monitoring wells, southern boundary area, MBO25, MBO26, MBO28, Eastern Creek WMC prepared for Waste Service NSW by Consulting Earth Scientists (Report ID CES030503-WS-02-F) dated 7 June 2004. Exemption clauses: Clause 7(1)(b) of schedule 1. Ref. No.: 1.13 Document: Letter from Waste Service NSW to Mr Steve Beaman of the Department of Environmental and Conservation dated 10 June 2004. Exemption clauses: Clause 7(1)(b) of schedule 1. Ref. No.: 1.14 Document: Gas Migration Monitoring Report dated 10 June 2004. Exemption clauses: Clause 7(1)(b) of schedule 1. 6 Waste Service subsequently asserted that some of the documents are also exempt from disclosure pursuant to clause 7(1)(a) of Schedule 1 to the FOI Act - Trade Secrets. 7 Waste Service contends that each of the documents contains information concerning its landfill gas management strategies and systems. These are commercial activities. It has at all times sought to limit the disclosure of this information and does not widely publicise it. Waste Service asserts that landfill gas management is an issue in any waste landfill operation and its effective management is a key part of any viable commercial operation. It has invested significant resources in its landfill gas management strategies and systems. 8 Waste Service also determined that access should not be granted to copies of any of the exempt documents with the exempt matter deleted on the basis that the material in the documents that was asserted as being exempt is so interwoven with any potentially non-exempt material that it is not practicable to separate the potentially non-exempt material in any meaningful way. 9 Mr Zagami has applied to the Tribunal for review of the determination to deny access to the documents that he sought. He subsequently narrowed his application indicating that he did not press a request for documents relating to gas management. His application is limited to material that would show the nature and extent of the gas migration from the Waste Service site at Eastern Creek. The Issues for determination 10 The issue is whether the documents that fall within the scope of Mr Zagami's application are exempt from production by virtue of any or all of Clauses 7(1) (a) (b) or (c) of Schedule 1 to the FOI Act. 11 Under these provisions a document is exempt from production if its production would disclose trade secrets, or information that has a commercial value and production could reasonably be expected to destroy or diminish the commercial value of the information, or if its production would disclose information concerning the business, professional, commercial or financial affairs of an agency or other person, and could reasonably be expected to have an unreasonable adverse effect on those affairs or to prejudice the future supply of such information to the Government or to an agency. 12 Waste Service bears the onus of proving that an exemption applies to each of the identified documents. Waste Service's Case 13 Waste Service asserts that an exemption applies to all of the documents set out in the table above. Waste Service contends that documents 1.1, 1.5, 1.8, 1.11, 1.12 and 1.14 are exempt from disclosure pursuant to Clause 7(1)(a) of Schedule 1 to the FOI Act because they contain matter the disclosure of which would disclose trade secrets. Each of these documents contains information concerning the landfill gas management strategies and systems in which Waste Service has invested significant resources. Landfill gas management is an issue in any waste landfill operation and its effective management is a key part of any viable commercial operation. The information is used in connection with the commercial activities of Waste Service. 14 Waste Service also says that documents numbered 1.1, 1.2, 1.3, 1.5, 1.6, 1.8, 1.9, 1.11, 1.12, 1.13 and 1.14 contain information that has a commercial value to it and information concerning its business, professional, commercial or financial affairs. It is also asserted that disclosure of these documents would disclose that information. 15 Waste Service further contends that documents 1.3, 1.5 and 1.6 contain information concerning the business; financial and commercial affairs of both Waste Service and its consultants and disclosure of these documents would disclose that information. In particular, these documents contain information regarding financial and commercial arrangements and the terms of the services to be provided under these arrangements. 16 Documents 1.1 and 1.2 are said to contain a description of the gas management and monitoring systems Waste Service has in place at the site; an assessment of the management and monitoring systems at the site; and a diagrammatical description of key gas management systems at the site. This information is said to be of commercial value to Waste Service. 17 Documents 1.3 and 1.6 are said to contain information relating to gas field installation activities and this information is said to be of commercial value to Waste Service. 18 Document 1.5 is said to contain information regarding further management and monitoring programs, plant and equipment and gas management systems for the site. This information is said to be of commercial value to Waste Service. 19 Documents 1.8 and 1.9 are said to contain information regarding the technical management actions taken by Waste Service in relation to the landfill gas at the site; the effectiveness of those actions; and further management action to be taken by Waste Service. This information is said to be of commercial value to Waste Service. Document 1.9 contains results of chemical analysis of gas samples, being the product of Waste Service's commercial activities; and discussions concerning its future management of gas sampling at the Eastern Creek site. 20 Documents 1.11, 1.12, 1.13 and 1.14 are said to contain details of the gas fields, plant and equipment and other systems present at the site; the measures taken and systems used by Waste Service in relation to the management and monitoring of landfill gas; and further action to be taken by Waste Service in relation to this monitoring and management. This information is said to be of commercial value to Waste Service. 21 Document 1.14 is said to contain information concerning Waste Service's business and commercial activities of at the Eastern Creek site, including details of gas extraction installations; details of landfill gas migration; the volume of gas detected; location of monitoring wells; the type of gas monitoring being conducted; the results of the monitoring; the additional proposed gas extraction works; and the proposed monitoring program. 22 Waste Service contends that the information contained in the documents is valuable to for the purpose of carrying on its commercial activity and is important to the viability of its continued business operations. The information is also valuable as it concerns technical strategies and systems relating to gas landfill management in which Waste Service has invested significant time and effort. This technology is state of the art and has been designed to enable the most efficient management and operation of the facility at the site. A genuine arms length buyer would be prepared to pay for that information. 23 Waste Service also contends that the disclosure of matters contained in these documents could reasonably be expected to destroy or diminish the commercial value of that information. Disclosure of the information would provide competitors with sensitive information to facilitate research and testing into improved gas management programs and systems. This would enable competitors to improve the costs and efficiency of their operations, particularly as the commercial value of the information is related to the fact that it concerns state of the art technology, which competitors have yet to develop and which have been used to minimise the cost of the service provided by Waste Service. Disclosure would undermine the competitive position of Waste Service in the market. 24 Waste Service argues that the disclosure of the information could reasonably be expected to have an unreasonable adverse effect on its business, commercial and financial affairs in that members of the public who do not possess a proper understanding of the operations of such a site and the regulatory framework within which it operates, may wrongly conclude that Waste Service is engaged in conduct which is detrimental to the environment. Further, publicity could lead to an adverse public perception and Waste Service's competitors may seek to obtain commercial advantage exploiting such adverse perception. Its competitors might use the information to harm Waste Service's business and commercial operations and/or to place Waste Service at a competitive disadvantage. 25 With respect to those documents that comprise correspondence between Waste Service and the regulator, Waste Service contends that full and frank disclosure to the regulator is very relevant. The correspondence between Waste Service and the regulator show how Waste Service has addresses the gas migration problem at its Eastern Creek site. Waste Service referred to comments by the regulator's Director General, Ms Corbyn, to the Parliamentary Environment Estimates Committee on 17 September 2004, which suggests that Collex has gas migration problems at its Riverstone site. Knowledge of how Waste Service has responded to its problem could be useful to Collex in the management of similar problems at its Riverstone site. 26 Waste Service says that it has a substantial investment in the knowledge it has accumulated from its long experience. Collex has an interest in accessing that knowledge. Waste Service is entitled to make full use of and guard its local knowledge but it is subject to the FOI Act unlike its competitors. The protections provided in Clause 7 of Schedule 1 to the FOI Act ensure that it is not placed at a competitive disadvantage. 27 Waste Service relies heavily on the evidence of its Director Environment and Safety, Ms Anita Mitchell. Ms Mitchell provided affidavits, including a confidential affidavit and gave oral evidence. She conceded that she was not an expert on gas migration and gas landfill issues and that she was reliant upon information provided to her by her staff for her assertions in relation to Waste Service's gas monitoring and gas management systems. 28 It is not in dispute that this is the first of some 8 requests made by Mr Zagami under the FOI Act for information concerning the operation of a number of Waste Service's waste management facilities in New South Wales. Waste Service asserts that this is part of a deliberate tactic by Collex to obtain small amounts of information that can then be used in conjunction with other pieces of intelligence to construct a picture of Waste Service's operations that can give Collex a competitive advantage. Waste Service refers to various authorities from the Commonwealth Administrative Appeals Tribunal that dealt with exemptions from production based on an application of the 'mosaic theory'. The 'mosaic theory' points to the possibility that, in certain cases, disclosure of a piece of information in issue, when combined with other available information, could enable the deduction of further information. Accordingly, disclosure of the information in issue in a particular case should not necessarily be viewed in isolation. 29 The 'mosaic theory' has been recognised by the AAT, principally in cases involving intelligence information. In particular it referred to decisions of the Deputy President McMahon of the AAT in Re Ewer and Australian Archives (1995) 38 ALD 789 and Re Milliss and Australian Archives (1998) 47 ALD 427. Each of those cases relied on an earlier decision in McKnight and Australian Archives, Re (1992) 28 ALD 95. The 'mosaic theory' has also been recognised in the case of 'commercial-in-confidence' information as was the case in Re Day and Collector of Customs 33 ALD 777. The theory does not give rise to any separate exemption and can only be used to establish a factual basis for satisfaction of one of the exemption provisions within the FOI Act. 30 Waste Service submitted that the general principles applied in those cases are capable of applying in the present case, where the applicant is able to assemble small pieces of information to construct a picture of Waste Service's operations. That being the case disclosure of a small amount of information. Mr Zagami's Case 31 Mr Zagami contends that the Tribunal should order the disclosure of those documents that do not fall within the exceptions created by clause 7 of Schedule 1 of the FOI Act. Alternatively he argues that even if the Tribunal considers that any or all of the documents are "exempt documents", discretion remains under section 25 of the FOI Act to release those documents. He states that he does not seek confidential commercial information. His request is directed at material that would show the nature and extent of the gas migration problem at Waste Service's Eastern Creek site. 32 He also asserts that the public has a right to know about the environmental performance of a key government body at a sensitive site. He says that his concerns are significant and legitimate. It is uncontested that gas migration is occurring from the Eastern Creek site. The gas is explosive, and there are possible health implications. Collex owns a significant site adjacent to Waste Service's site, and monitoring indicates that gas migration has occurred onto Collex's site. 33 He says that the FOI Act has, as its object, openness and accountability in government. If Parliament wished to exclude Waste Service from this legislation, it could do so. It has not. It cannot be that bodies such as Waste Service can hide behind these exemptions to avoid providing important information in the public interest. He maintains that the risk posed to public health and safety, including that of Collex employees and clients, by migrating landfill gas containing methane is of fundamental importance. Such risks to public health and safety lead to a need for such information to be made publicly available so all relevant parties can undertake all necessary precautionary actions. 34 Mr Zagami argues that the bulk of the documents appear to relate to gas monitoring, and gas monitoring test results, not gas management. He says that this distinction is important because revealing gas monitoring techniques, and gas test results will reveal nothing about the methods used by the Respondent to contain gas within the site, other than whether they are working or not. He disputes that the revealing of test results, or positioning of test bore holes, or even methods of testing for levels of gas migration is commercially valuable, nor that the revealing of any of the documents could diminish any marginal commercial value they may have. He says that this information is in the public domain, and that it is the culture of the industry, keen to show its environmental credentials, to freely share and publish research and information in this area. The revealing of this information does not provide any insight into potentially more commercially sensitive information about the way in which gas is actually managed from the site. 35 Mr Zagami relies on the evidence of Dr Yann Moreau. Dr Moreau's evidence is that very little of this information regarding methods of management of gas migration contained within the documents would be confidential. He says that, as with most scientific research, systems of waste management, and techniques for its management are widely published by those who develop them. He urges the Tribunal to contrast the value of Dr Moreau's evidence with that of Ms Mitchell and find that the value of Ms Mitchell's evidence is reduced because of her concession that she was not an expert on gas migration and gas landfill issues. Waste Service has adduced no expert evidence to support its claim. 36 Mr Zagami argues that most of the documents contain tables of test results from bore holes of exactly the kind requested. The cell should not leak. These tests show whether it is leaking. The bore holes are outside the cell and therefore revealing their location would not involve revealing confidential information. He says that even should there be some material in the documents that is exempt there is no credible explanation as to why it cannot be severed. He should have the material that he requested with any exempt parts removed. 37 Dr Moreau gave evidence that there is no way to work backwards from test results outside the cells to in any way work out how the cell does or doesn't contain gas, and how it breaks down waste. There are simply too many unknown variants. 38 Mr Zagami contends that Waste Service's reluctance to release the documents is due to its concerns that the release of these documents will potentially be damaging to the way in which it is perceived. He says that any information can be misrepresented, and the appropriate remedy lies elsewhere if it is. Findings 39 Waste Service has asserted that the documents sought are exempt from production under the various arms of Clause 7 of Schedule 1 to the FOI Act. It is for Waste Service to satisfy the Tribunal that an exemption applies. Each of the documents in issue has been provided to the Tribunal and I have considered the arguments raised in reference to those documents. Correspondence between Waste Service and the regulator 40 I agree with Waste Service in relation to the correspondence between it and the regulator. It is apparent that those documents, 1.1, 1.8 and 1.13 relate to the management of gas migration issues. I am satisfied that documents 1.1 and 1.8 are exempt from disclosure pursuant to Clause 7(1)(a) of Schedule 1 to the FOI Act because they contain matter the disclosure of which would disclose trade secrets. 41 The expression "trade secret" in clause 7(1)(a) does not have a technical legal meaning, rather it is an ordinary term of the English language and the determination of what is a trade secret is primarily a question of fact: Searle Australia Pty Limited v Public Interest Advocacy Centre (1992) 108 ALR 163. In Searle the full Federal Court stated at paragraphs28-29 "28. However, the term has come to be an ordinary term of the English language. Thus, the Oxford English Dictionary gives "trade secret" the meaning "a device or technique used in a particular trade or (trans.) occupation and giving an advantage not generally known." … 29. The term may have been used more frequently in judicial decisions than in common parlance to describe secrets the confidentiality of which courts of law will protect." 42 After considering these documents I am of the view that the information contained within them falls within the scope of the term trade secret. Accordingly they should not be produced. In any event, these documents relate to gas management and Mr Zagami did not press a request for documents relating to gas management. 43 Document 1.13 is a covering letter enclosing a report. I do not consider that disclosure of this letter would disclose information that has a commercial value to it however given that Mr Zagami is not pressing a request for documents relating to gas management, it is my view that this document need not be produced. Other documents relating to gas management. 44 Waste Service also says that documents numbered 1.2, 1.3, 1.5, 1.6, 1.9, 1.11, 1.12, and 1.14 contain information that has a commercial value to it and information concerning its business, professional, commercial or financial affairs and that disclosure of these documents would disclose that information. 45 I have examined these documents and it is my view that the majority of these documents relate to gas management and do not fall within the scope of the application as it is presently pressed. The exceptions to this finding are documents numbered 1.2 and 1.9. Accordingly, it is my view that documents 1.3, 1.5, 1.6, 1.11, 1.12, and 1.14 need not be produced. 46 I note Mr Zagami's submission that the Tribunal should order the production of the exempt documents pursuant to section 25 of the FOI Act. I do not accept his argument in relation to the Tribunal's discretion in this regard. The matter was thoroughly canvassed by the Tribunal's President in the matter of Neary -v- Treasurer of New South Wales [2001] NSWADT 161. I agree with the views expressed in that matter and I do not propose to revisit the issues here. Nevertheless, I agree with Mr Zagami's submission that if Parliament wished to exclude Waste Service from this legislation, it could have done so. Waste Service is required to comply with the obligations imposed by the FOI Act but it is also entitled to the exemptions provided by it. Documents 1.2 and 1.9 47 Document 1.2 is a report of gas analysis. It is my view that this document falls within the scope of Mr Zagami's application. Document 1.9 contains results of chemical analysis of gas samples. It is my view that this document also falls within the scope of Mr Zagami's application. I note the lack of expert evidence on behalf of Waste Service. I am satisfied that these documents contain information concerning Waste Service's business, professional, commercial or financial affairs however I am not yet satisfied that the disclosure of this information could reasonably be expected to have an unreasonable adverse effect on those affairs. 48 At this stage I do not propose to determine the issue finally because of the Waste Service's argument that the documents may be exempt from production based on an application of the 'mosaic theory'. 49 As has been indicated above, this application is one of several. I agree with the Waste Service's argument that the information in issue in this case should not be viewed in isolation. Accordingly it will be necessary for this issue to be considered further in light of the evidence produced at hearing of the remaining applications. 50 I propose that the matter be listed for further directions in relation to this issue at a time suitable to the parties and the Tribunal. Orders 1. Documents, 1.1, 1.8 and 1.13 are exempt from disclosure pursuant to Clause 7(1)(a) of Schedule 1 to the FOI Act because they contain matter the disclosure of which would disclose trade secrets. 2. Documents 1.3, 1.5, 1.6, 1.11, 1.12, and 1.14 do not fall within the scope of the application as it is presently framed and need not be produced. 3. The matter is to be listed for further directions in relation to documents 1.2 and 1.9.

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