However, the authority has opted against prosecuting HNEH and Specialised Waste Treatment Services PTY Ltd, which could have attracted fines up to $1million, after it determined that the error was not intentional, both parties were cooperative and had already introduced new measures so the incident would not be repeated.

Instead, it fined both parties $8000 after its investigation into how strict protocols had been breached to allow the legs to be disposed of at the Wallsend facility.

It concluded that the legs had been incorrectly placed in the wrong disposal bin at NSW Health Pathology before the bin was taken away, its contents treated before being dumped.

EPA Manager Waste Compliance Cate Woods said both parties were fined because they had each “made errors independent of each other’’.

The Newcastle Herald revealed in February that the legs, which had been cut from below the knee and had originated from different people, had been uncovered by a bulldozer driver along with various forms of clinical waste.

An investigation later discovered that the legs had originated from NSW Health Pathology, which later confirmed the legs had come from patients who were still alive when the limbs had been amputated, but had died before the dumping debacle was discovered.

The identity of the patients has not been released and NSW Pathology decided against telling relatives.

“The EPA has concluded that the clinical waste originated from anatomical bins at the mortuary and pathology departments of John Hunter Hospital,’’ the authority said in a statement released on Tuesday.

“This type of waste should have been incinerated and was instead incorrectly classified as appropriate for landfill.

“The investigation identified a lack of clear procedures between John Hunter Hospital and Specialised Waste Treatment Services.’’

Ms Woods said that while there had been no deliberate unlawful action from either party, a serious communication breakdown between the hospital and waste services provider led to the alarming and sensitive discovery.

“Both Hunter New England Health and Specialised Waste Treatment Services have been fined for their actions in the failure to transport waste to a lawful facility. Additionally, both are required to audit and report back to the EPA on their waste management systems and procedures,” Ms Woods said.

“This incident was a combination of inadequate separation, classification and disposal of waste which should have been incinerated. It’s important for organisations to strictly adhere to the requirements around clinical waste, not only to reduce risks to the environment and the community, but also to avoid potentially distressing situations, like this one.”

Ms Woods said a decision was made against prosecuting the parties because they had been cooperative with the investigation, had independently change their protocols and that the error was not deliberate.

Newcastle City Council operate the Summerhill Waste Management Centre and have not been the subject of any regulatory action as a result of the investigation.

Acting Hunter New England Health chief executive Karen Kelly said in a statement that HNEH had met with the authority about the dumped legs.

“We are working with all organisations that provide services from the John Hunter Hospital campus, including NSW Health Pathology, to ensure that waste disposal processes and policies are followed correctly,’’ Ms Kelly said.

“We are also working closely with the contracted waste supplier to tighten our systems and ensure this does not happen again.

“Many recommendations arising from the EPA’s investigation have already been actioned and we will report back to the agency in due course.’’

Phone calls to Specialised Waste Treatment Services Pty Ltd were not returned.

The Herald, Newcastle