THE NSW Department of Trade and Investment this week initiated prosecution action against gas multinational Santos for breaches of the Petroleum Onshore Act in 2010-11.
The alleged breaches occurred at a CSG operation in the Pilliga Forest in the state's central north, then owned and operated by Eastern Star Gas (ESG).
ESG, later acquired by Santos in November 2011, allegedly failed to report a spill of untreated water from its main holding pond or lodge mandatory environmental management reports.
In a media release, Santos said the Pilliga facilities were shut down soon after the acquisition as they were found to not meet Santos' stand- ards and it had committed some $17 million to remediation works in the Pilliga operations.
NSW Labor shadow environment minister Luke Foley claimed Energy Minister Chris Hartcher ignored these historical breaches in granting Santos a continued licence to operate in the Pilliga last year.
The Santos proposal includes 1100 wells, and 1000 km of road and pipeline.
Last year Mr Hartcher defended the licence renewal in Parliament, saying the Eastern Star breaches were "not ongoing issues; therefore they do not need to be addressed in relation to the renewal".
But NSW Greens spokesman on mining Jeremy Buckingham said Santos was a joint-venture partner in the Eastern Star development and "always had an interest in it".
He said Santos representatives accused the community of vandalising the sites. When the pollution was initially reported in 2011, Santos had claimed the pollution was "discolouration from eucalyptus leaves".
Underneath the forest lies one of Australia's biggest onshore gas deposits.