The company's West Cliff coal mine operates under an environmental protection licence that does not require limits on the pollutants that are of concern, according to Greens MP Cate Faehrmann.

She said salt, nickel, zinc and turbidity were the pollution problems from the mine but the Environment Protection Authority only had discharge limits on oil and grease, pH and suspended solids that were not linked to any environmental damage.

"The reason Illawarra Coal has not faced any fines for the ongoing, chronic pollution it spews into a Georges River tributary is because the pollution is effectively sanctioned under the government's current pollution regime," Faehrmann said.

"This licensing arrangement is typical of the EPA's laissez-faire approach to pollution regulation.

“Polluters tell the EPA how much pollution they want to make to run their business and the EPA grants a licence for it."

Faehrmann said the Georges River fiasco should be a wake-up call for the environment minister to undertake a major overhaul of the state's pollution laws.

"So far the minister has tinkered with pollution laws and improved the independence of the EPA but this falls short of the major shake-up required," she said.

ILN did not receive comment from Illawarra Coal by publication time.

Last week Illawarra Coal reported a record annual production of 7.9 million tonnes following the successful commissioning of the $160 million West Cliff coal preparation plant upgrade project in March.

In June BHP Billiton approved an investment of $845 million to sustain operations at Illawarra Coal by establishing a replacement mining area west of its Appin mine.

The replacement area – Appin area 9 – would have a production capacity of 3.5 million tonnes per annum of metallurgical coal and would sustain Illawarra Coal’s production capacity at 9Mtpa.