The pollution occurred into Sandy and Gilmore Creeks after workers failed to close a valve while transferring water from a dam to the mill and a secondary valve partially failed.

Visy was charged by the NSW Environment Protection Authority (EPA) with one water pollution offence and three licence breaches and was ordered by the NSW Land and Environment Court to pay $175,000 to the Environmental Trust and the EPA's legal and investigation costs of $65,000.

EPA Director Operations, Scott Kidd said every operator needs to ensure their equipment is operating properly and there are checks in place to avoid pollution incidents like this one.

"There was a failure to check the equipment was functioning properly resulting in the discharge continuing for nearly six hours," Mr Kidd said.

"To make matters worse, the flow meter attached to the outlet didn't record the volume of liquid discharged so Visy couldn't say how much ended up in the environment.

"When our officers went to sample the creek, there was a significant amount of foam in the water which had a foul smell and matched the untreated wastewater dam.

"Fortunately, in this instance there was no significant environmental harm and the creeks returned to normal levels the next day.

"Businesses have both a legal and moral obligation to maintain their environmental controls otherwise they can expect the EPA to take regulatory action which can be costly."