A steel tank holding solvent and contaminated water collapsed onto a retaining wall, releasing the fluids into the surrounding land.
The 340 tonnes of solvent and water was potentially hazardous and highly flammable, according to the Health and Safety Executive (HSE).
The tank was found to have been damaged by internal corrosion.
A second tank was damaged during the accident, knocking off a valve which also released contaminated waste water on to the site and neighbouring property.
The area was cordoned off by East Sussex Fire for two days due to the potentially hazardous nature of the incident.
The HSE investigation, which was assisted by the Environment Agency, found Solvent Resource Management Ltd had failed to manage the examination and inspection of the tanks at the site.
HSE inspector, Trevor Jones, said: “”The consequences of not operating a plant in accordance with accepted international standards can be catastrophic both to people and the environment.
“It was only timing that prevented this incident being more than a significant disruption to local residents and businesses.
“If the company had put in place suitable and effective measures to manage the tank inspection programme, according to its contents and use, then this incident would have been prevented.”
Alison Brown