Land and Environment Court New South Wales Medium Neutral Citation: Environment Protection Authority v George Weston Foods Limited [2013] NSWLEC 16 Hearing dates: 13 February 2013 Decision date: 15 February 2013 Jurisdiction: Class 5 Before: Pain J Decision: 1. The Defendant is convicted of the offence with which it is charged. 2. The Defendant is fined the sum of $20,000 to be paid to the Registrar of the Court within 28 days of today's date. 3. The Defendant is to pay the Prosecutor's costs of $25,000. 4. The exhibits may be returned. Catchwords: SENTENCE - unsafe transport of dangerous goods - failure of consignor to ensure driver and vehicle licensed for dangerous goods and vehicle placarded - early plea of guilty Legislation Cited: Clean Waters Act 1970 s 16(1) Crimes (Sentencing Procedure) Act 1999 s 3, s 3A, 21A Dangerous Goods (Road and Rail Transport) Act 2008 s 3, s 9 Dangerous Goods (Road and Rail Transport) Regulation 2009 cl 15, cl 78, cl 80, cl 81, cl 99, cl 189, cl 191, cl 192 Environment Protection Act 1970 (Vic) s 31A, s 39, s 45, s 67AC Environmental Offences and Penalties Act 1989 Protection of the Environment Operations Act 1997 s 120, s 250 Road and Rail Transport (Dangerous Goods) Act 1997 s 37(1) Cases Cited: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v BGP Properties Pty Limited [2006] NSWLEC 34; (2006) 145 LGERA 234 Cameron v Eurobodalla Shire Council [2006] NSWLEC 47; (2006) 146 LGERA 349 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Environment Protection Authority v Embridge Crest Pty Ltd [2002] NSWLEC 238 Environment Protection Authority v George Weston Foods Ltd, NSWLEC, Lloyd J, 5 May 1998, unreported Environment Protection Authority v George Weston Foods Ltd [2010] NSWLEC 120 Environment Protection Authority v Moama Refinery Pty Ltd [2002] NSWLEC 244 Environment Protection Authority v Patrick Distribution Pty Ltd [2006] NSWLEC 123 Environment Protection Authority v Ravensworth Operations Pty Ltd [2012] NSWLEC 222 Environment Protection Authority v Waste Recycling and Processing Corp [2006] NSWLEC 419; (2006) 148 LGERA 299 Hoare v R [1989] HCA 33; (1989) 167 CLR 348 R v Sharma [2002] NSWCCA 142; (2002) 54 NSWLR 300 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 R v Visconti [1982] 2 NSWLR 104 Category: Principal judgment Parties: Environment Protection Authority (Prosecutor) George Weston Foods Limited (Defendant) Representation: Ms P Dwyer (Prosecutor) Mr T Howard (Defendant) Office of Environment and Heritage (Prosecutor) Herbert Smith, Freehills (Defendant) File Number(s): 50934 of 2012 Judgment 1The Defendant, George Weston Foods Ltd, has pleaded guilty to a charge under s 9(1) of the Dangerous Goods (Road and Rail Transport) Act 2008 (the Act), that it was involved in the transportation of dangerous goods by road or rail and failed to ensure that the goods were transported in a safe manner. The plea of guilty means that the essential legal elements of the offence have been admitted. It is necessary to sentence the Defendant. 2Section 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) sets out those matters relevant to consider in sentencing. The Prosecutor does not press any of the aggravating matters under s 21A. Offences under the Dangerous Goods Act are properly characterised as environmental offences, having regard to s 3 of the Act; Environment Protection Authority v Patrick Distribution Pty Ltd [2006] NSWLEC 123 at [30]. Dangerous Goods (Road and Rail Transport) Act 2008 3Section 3 of the Act provides: 3 Purpose The purpose of this Act is to regulate the transport of dangerous goods by road and rail in order to promote public safety and protect property and the environment. Duties concerning the transport of dangerous goods 4Section 9 provides: 9 Duties concerning the transport of dangerous goods (1) A person involved in the transport of dangerous goods by road or rail who fails to ensure that the goods are transported in a safe manner is guilty of an offence. (2) If a person involved in the transport of dangerous goods by road or rail fails to comply with a provision of this Act or the regulations in circumstances where the person knew, or ought reasonably to have known, that the failure would be likely to endanger the safety of another person or of property or the environment, the person is guilty of an offence. (3) It is a defence to any proceedings against a person for an offence against subsection (1) if the person proves that: (a) it was not reasonably practicable for the person to comply with the provision, or (b) the commission of the offence was due to causes over which the person had no control and against the happening of which it was impracticable for the person to make provision. Maximum penalty: 500 penalty units or imprisonment for 2 years, or both, for an individual or 2,500 penalty units for a body Dangerous Goods (Road and Rail Transport) Regulation 2009 5The relevant clauses of the Dangerous Goods (Road and Rail Transport) Regulation 2009 (the Regulation) provide: 15 Meaning of "IBC" (1) Subject to subclause (2), IBC or intermediate bulk container means a rigid or flexible portable packaging for the transport of dangerous goods that complies with the specifications in Chapter 6.5 of the ADG Code and that: (a) has a capacity of not more than: (i) for solids of Packing Group I packed in a composite, fibreboard, flexible, wooden, or rigid plastics container-1,500 litres, and (ii) for solids of Packing Group I packed in a metal container-3,000 litres, and (iii) for solids or liquids of Packing Groups II and III-3,000 litres, and (b) is designed for mechanical handling. (2) Rigid or flexible portable packaging that complies with the requirements of Chapter 6.1, 6.3 or 6.6 of the ADG Code cannot be an IBC. 78 When load must be placarded (1) A load of dangerous goods must be placarded if: (a) it contains: (i) dangerous goods in a receptacle with a capacity of more than 500 litres, or (ii) more than 500 kilograms of dangerous goods in a receptacle, or (b) it contains an aggregate quantity of dangerous goods of 250 or more and those goods include: (i) dangerous goods of UN Division 2.1 that are not aerosols, or (ii) dangerous goods of UN Division 2.3, or (iii) dangerous goods of Packing Group I, or (c) it contains dangerous goods of Category A of UN Division 6.2, or (d) it contains an aggregate quantity of dangerous goods of UN Division 6.2 (other than Category A) of 10 or more, or (e) it contains an aggregate quantity of dangerous goods of 1,000 or more. (2) However, a retail distribution load that complies with Chapter 7.3 of the ADG Code is not a load that must be placarded. ... 80 Consignor's duties (1) A person must not consign a placard load for transport if the load is not appropriately placarded. Maximum penalty: 40 penalty units for an individual or 200 penalty units for a corporation. (2) A person must not consign a placard load for transport if the placarding of the load is false or misleading in a material particular. Maximum penalty: 40 penalty units for an individual or 200 penalty units for a corporation. (3) A person must not consign goods for transport in or on a transport unit that does not contain dangerous goods but that is placarded as if it was a placard load. Maximum penalty: 40 penalty units for an individual or 200 penalty units for a corporation. 81 Loader's duties (1) A person who loads dangerous goods on to a vehicle for transport must ensure that the load is appropriately placarded, if the person knows, or reasonably ought to know, that the goods are a placard load. Maximum penalty: 40 penalty units for an individual or 200 penalty units for a corporation. (2) A person who loads a placard load on to a vehicle for transport must not placard the load with placarding that the person knows, or reasonably ought to know, is false or misleading in a material particular. Maximum penalty: 40 penalty units for an individual or 200 penalty units for a corporation. (3) A person who loads goods on to a vehicle for transport must not placard the load as if it was a placard load if the person knows, or reasonably ought to know, that the load does not contain dangerous goods. Maximum penalty: 40 penalty units for an individual or 200 penalty units for a corporation. ... 99 Loader's duties (1) A person who loads for transport in or on a vehicle a load of dangerous goods that is a placard load must ensure that the goods and their packaging are stowed, loaded and restrained in accordance with Chapter 8.1 of the ADG Code. Maximum penalty: 20 penalty units for an individual or 100 penalty units for a corporation. (2) A person who loads for transport in or on a vehicle dangerous goods that are in a transport unit must ensure that the transport unit is restrained in accordance with Chapter 8.2 of the ADG Code. Maximum penalty: 20 penalty units for an individual or 100 penalty units for a corporation. ... 189 Application of Part Despite anything to the contrary in this Part, this Part does not apply to the transport by road of dangerous goods on a vehicle if: (a) the goods are transported in an IBC, and (b) the IBC is not packed or unpacked on the vehicle, and (c) the total capacity of IBCs containing dangerous goods on the vehicle is not more than 3,000 litres. ... 191 Vehicles to be licensed A road vehicle must not be used to transport: (a) dangerous goods that are in a receptacle with a capacity of more than 500 litres, or (b) more than 500 kilograms of dangerous goods in a receptacle, unless the vehicle is licensed under this Part to transport the goods. 192 Drivers to be licensed A person must not drive a road vehicle transporting: (a) dangerous goods that are in a receptacle with a capacity of more than 500 litres, or (b) more than 500 kilograms of dangerous goods in a receptacle, unless he or she holds a dangerous goods driver licence that authorises him or her to drive the vehicle with those goods. 6The maximum penalty for the offence is $275,000, increased from $250,000 in 2009 when the Act came into force. Charges 7The Defendant has pleaded guilty to the matters alleged in the summons. The particulars of the offence as contained in the amended summons are as follows: (a) Involvement in transport of dangerous goods by road (i) The Defendant consigned dangerous goods for transport by road. (ii) The Defendant prepared transport documentation for dangerous goods for transport by road. (iii) The Defendant loaded dangerous goods for transport by road. (b) Dangerous goods (i) F/S oven cleaner 180 cartons (3 x 5 litres per carton) (UN Number:1719. Dangerous Goods Classification: Class 8 corrosive substance). (ii) EL Deckhand (64 drums x 20 litres) (UN Number: 3265. Dangerous Goods Classification: Class 8 corrosive substance). (iii) CIP Alkali NA40 (6 x 1000 litres) (UN Number: 1824. Dangerous Goods Classification: Class 8 corrosive substance). (iv) CIP Alkali (32 drums x 20 litres) (UN Number: 1824. Dangerous Goods Classification: Class 8 corrosive substance). (c) Place where offence committed The Defendant caused the dangerous goods to be transported in the State of New South Wales. (d) Failure to ensure dangerous goods transported in a safe manner (i) The Defendant failed to adequately notify the consignee that the consigned goods were in fact dangerous goods. (ii) The Defendant failed to ensure that the consignee's vehicle was licensed. (iii) The defendant failed to ensure that the consignee's driver was licensed. (iv) The Defendant failed to ensure that the consignee's vehicle was placarded. (v) The Defendant failed to safely load sodium hydroxide solution onto the consignee's vehicle. (vi) The Defendant failed to adequately train and supervise its staff to ensure that: (A) it loaded the dangerous goods onto the consignee's vehicle in a safe manner; (B) the consignee's vehicle onto which it loaded a placard load of dangerous goods was placarded; (C) the consignee's vehicle onto which it loaded dangerous goods was licensed to carry dangerous goods; and (D) a driver of a vehicle onto which it loaded dangerous goods was licensed to drive those dangerous goods. Agreed Statements of Facts 8A statement of agreed facts and supplementary statement was filed by the parties. These are set out below. Background 9The Defendant is one of Australia and New Zealand's largest food manufacturers employing about 6,500 employees across about 60 sites in Australia and New Zealand. 10The Defendant's operations are structured into four divisions, one of which trades as "Jasol". The Jasol division of the Defendant is a manufacturer and supplier of chemicals and products for cleaning and industrial use. Jasol was the division of the Defendant that was involved in the incident that is the subject of these proceedings. 11Kitco is an interstate transport company with depots in Brisbane, Sydney, Melbourne and Koo Wee Rup in Victoria. Kitco has a fleet of over 30 prime movers and 80 trailers. At the time of the offences, Kitco employed drivers Mr Robert Dennis and Mr Ian Temby. Mr Dennis had worked for Kitco on and off for five to ten years doing loading, distributing loads and pickups. He had never held a dangerous goods driver licence. Mr Temby had been employed as a full time driver by Kitco since 28 July 2010. Relationship between Kitco and GWF 12The Defendant and Kitco had an oral contract in relation to Kitco providing interstate transport services to the Defendant. 13As part of the EPA's investigation into the offences, the Defendant produced to the EPA under statutory notice an unsigned draft contract between the Defendant and Kitco titled "Transport Agreement Schedule", which was stated to commence on 1 January 2009 and continue for 24 months, which would have covered the period of the offences. There was no final signed version of the contract. An annexure to the draft contract describes the freight as "High percentage of Dangerous Goods classes include 8, 6, 5, 3". Kitco does not appear to be in possession of the draft contract. Loading of Kitco's vehicle on 23 December 2010 14Prior to 23 December 2010, an employee of the Defendant orally requested that Kitco transport a load of the Defendant's products from the Defendant's premises at 41-45 Tarnard Drive, Braeside, Victoria (the Braeside premises) to GWF's premises in Stapylton, Queensland, approximately 40 km south east of Brisbane. The Defendant's employee who requested the transportation of the load did not advise Kitco that the load would contain dangerous goods. 15Kitco arranged for an employee, Mr Dennis, to attend the Defendant's premises to pick up the load. Mr Dennis was not provided with any documentation or shipping documents prior to attending the Defendant's premises. 16On 23 December 2010, Mr Dennis attended the Braeside premises driving Kitco's prime mover with registration VV97HI and towing trailers with registration VT28FL (Trailer A) and registration VT98FJ (Trailer B). The prime mover, Trailer A and Trailer B were each registered to Kitco. Both trailers were tautliners with curtain sides. 17An employee of the Defendant, most probably the Defendant's main loader Mr Benjamin Drake, loaded Trailer A with the following dangerous goods, all of which are classified as Class 8 (corrosive substances) packing group II: * CIP Alkali NA40 - 6 x 1000L intermediate bulk containers (IBCs) containing sodium hydroxide solution (heavy duty alkaline CIP detergent). * CIP Alkali NA40 - 32 x 20L drums containing sodium hydroxide solution (heavy duty alkaline CIP detergent). * EL Deckhand - 64 x 20L drums (corrosive liquid, acidic, organic). * Oven cleaner - 180 cartons (3 x 5L per carton) (caustic alkali liquid) (heavy duty oven and hot plate cleaner). 18Mr Dennis was present when Trailer A and Trailer B were loaded and saw the Defendant's loader put the six IBCs of sodium hydroxide onto Trailer A. 19The presence of the six IBCs of sodium hydroxide triggered the dangerous goods licensing requirements and placarding requirements, as described in more detail below. 20Also loaded onto Trailer A and/or Trailer B were some non-dangerous goods, including large quantities of laundry liquid, hand soaps and hand wash. 21The Defendant was the consignor of the dangerous goods and Kitco was the prime contractor for the dangerous goods, within the meaning of the Act. 22Once the goods had been loaded, Mr Dennis replaced the metal side gates and curtains on the trailers. One of the Defendant's staff, most likely warehouse supervisor Mr Ray Haylock, provided Mr Dennis with a consignment note no 247228 dated 23 December 2010. 23Mr Dennis did not read the documents he was given prior to departing the Braeside premises. Mr Dennis claims that no one from the Defendant verbally told him that dangerous goods had been loaded onto the vehicle. Neither the Defendant's employees nor Mr Dennis affixed any placards or emergency information panels (EIPs) to the vehicle. No one instructed Mr Dennis to affix placards or EIPs to the vehicle. 24When Mr Dennis drove away from the Braeside premises carrying the load of dangerous goods, there were no placards or EIPs displayed on Trailer A, Trailer B or the prime mover, in breach of the Australian Code for the Transport of Dangerous Goods by Road and Rail (ADG Code) (7th edition, published in 2007). 25Mr Dennis drove the loaded trailers to Kitco's premises at Koo Wee Rup in Victoria (the Koo Wee Rup premises). He parked the vehicle and detached Trailers A and B from the prime mover, so that the trailers could be picked up by another Kitco driver with another prime mover. He left the paperwork the Defendant had provided to him in the tool box of one of the trailers. 26Mr Dennis did not hold a dangerous goods driver licence under the Regulation. Neither trailer driven by Mr Dennis had a dangerous goods vehicle licence under the Regulation. Pick up of load from Koo Wee Rup on 27 December 2010 27On or about 27 December 2010, on instructions from Kitco, Kitco's employee Mr Temby drove prime mover with registration VV35HC (registered to Kitco) to the Koo Wee Rup premises, and attached Trailer A and Trailer B (the prime mover and two trailers together hereafter referred to as the B-double). Trailers A and B still contained the load that had been picked up from the Braeside premises on 23 December 2010. 28Mr Temby then drove the B-double from Koo Wee Rup to New South Wales, towards the intended destination at the Defendant's premises in Stapylton Queensland. 29Mr Temby did not hold a dangerous goods driver licence under the Regulation. 30Neither trailer driven by Mr Temby had a dangerous goods vehicle licence under the Regulation. Inspection by NSW Police on 28 December near Brocklehurst NSW 31Prior to 10.45 am on 28 December 2010, NSW Police officers had stopped the B-double driven by Mr Temby as it was travelling north on the Newell Highway, north of Brocklehurst in central NSW. The truck was stopped for reasons unrelated to the offence. 32A NSW Police officer inspected the paperwork on the B-double that related to the load being transported. There were no placards or EIPs displayed on the B-double at this time. Mr Temby was placed under arrest on unrelated matters and taken into custody. The B-double remained on the side of the highway. NSW Police contacted the EPA to pursue the investigation. 33At the time the events set out in paragraphs 23 to 35 of the SOAF took place, the Defendant did not have any knowledge of those matters. The Defendant paid Kitco in full ($4,761.02 including GST) for the transport of the load of dangerous goods that are the subject of the offences. GWF orally terminated its contract with Kitco on 18 March 2011. Dangerous goods licensing requirements for drivers 34Clause 192(a) of the Regulation provides that a person must not drive a road vehicle transporting dangerous goods that are in a receptacle with a capacity of more than 500 litres, or more than 500 kilograms of dangerous goods in a receptacle, unless the person holds a dangerous goods driver licence under Part 18 of the Regulation. 35As the volume of each of the six IBCs of sodium hydroxide on Trailer A was 1000L, a dangerous goods driver licence was required to be held by any driver transporting Trailer A containing the dangerous goods. Dangerous goods licensing requirements for vehicles 36Clause 191(a) of the Regulation provides that a road vehicle must not be used to transport dangerous goods that are in a receptacle with a capacity of more than 500 litres, or more than 500 kilograms of dangerous goods in a receptacle, unless the vehicle is licensed with a dangerous goods vehicle licence under Part 18 of the Regulation. 37The volume of each of the six IBCs of sodium hydroxide on Trailer A was 1000L. Kitco therefore required a dangerous goods vehicle licence for Trailer A. Placarding requirements 38A "placard" is a label or EIP that is required by the Regulation to be used in transporting dangerous goods (s 4 of the Act). 39A load of dangerous goods is a "placard load" if it meets any one of a number of requirements in cl 78 of the Regulation, including that it contains dangerous goods in a receptacle with a capacity of more than 500 litres or that the aggregate quantity of dangerous goods in the load is at least 1000 litres (cl 9 and cl 78 of the Regulation). A placard load of dangerous goods must have placards affixed to the vehicle in accordance with the Regulation and Chapter 5.3 of the ADG Code. 40The B-double's load constituted a placard load of dangerous goods. The B-double should therefore have been placarded in accordance with the Regulations and Chapter 5.3 of the ADG Code. 41To comply with Chapter 5.3 of the ADG Code: (a) a placard should have been displayed on the front of each prime mover that towed Trailer A (that is, both VV97HI and VV35HC); (b) an EIP should have been displayed on each side of Trailer A; and (c) an EIP should have been displayed on the rear of Trailer B. 42Under Chapter 5.3 of the ADG Code, EIPs on the B-double were required to display: (a) the proper shipping name for the dangerous goods being transported; (b) the UN Number for the dangerous goods; (c) any Hazchem Code assigned to the dangerous goods; (d) the expression: "IN EMERGENCY DIAL 000, POLICE or FIRE BRIGADE"; (e) the class or division label for the dangerous goods and any subsidiary risk label or labels applicable to the dangerous goods; (f) the name of an organisation responsible for providing a telephone advisory service, and a telephone number of the service. Procedures in place at the time of the offences 43Between early 2008 and the time of the offences, Mr Drake was employed by the Defendant as a full time storeman. He had been employed by the Defendant since 2002. In his role as storeman, Mr Drake was responsible for placing ordered items onto pallets, wrapping pallets ready for transport and loading and unloading trucks. 44When Mr Drake first commenced work as a storeman for the Defendant, his supervisor had given him some instructions on how to store and handle dangerous goods in the warehouse. However at the time of the offences, Mr Drake had received no instructions or training in relation to loading, unloading or transporting dangerous goods. He was unaware of the requirement to placard vehicles transporting placard loads of dangerous goods, he did not know what a placard load was and he was unaware of the licensing requirements for the transport of dangerous goods. 45At the time of the offences, the Defendant did not have any written procedures in place relating to the transport of dangerous goods. In particular, it had no procedures in place to ensure that drivers transporting its dangerous goods were licensed to do so, that vehicles transporting its dangerous goods were appropriately licensed, that vehicles were placarded where required or that dangerous goods were safely secured in vehicles. 46At the time of the offences, the Defendant's Warehouse Supervisor, Ray Haycock had completed a one day training course in the management of dangerous goods. Additionally, two other employees of the Defendant completed training in the transport of dangerous goods by road. However, the Defendant's loaders did not receive training in relation to the transport of dangerous goods and were unaware of the legal requirements. Action taken by the Defendant after the offences 47After the offences, the Defendant took the following action: (a) The Defendant produced a checklist procedure where the loader completes a checklist with the driver, to ensure that drivers transporting the Defendant's goods are appropriately licensed, that the driver and loader are aware of the contents of loads and that vehicles are placarded when required. The loader and driver are both required to sign the completed checklist. The Defendant's staff received training in the contents of the checklist. (b) The Defendant's loaders are now required to inspect each vehicle once a load is secured to ensure that the required placards and EIPs are displayed on the vehicle. (c) The Defendant now keeps a store of placards and EIPs to supply to drivers in case drivers require them. (d) In May 2011, 7 employees of the Defendant completed a one day training course in the management of dangerous goods and 36 employees of the Defendant (including Mr Drake) completed a half day training course in the management of dangerous goods. (e) In about August and September 2012, the Defendant introduced four Standard Operating Procedures (SOPs) in support of the checklist procedure. The SOPs relate to despatch, labelling of packaging, order picking - bulk and order picking - packages. The despatch SOP requires warehouse staff to identify all dangerous goods to be despatched and to advise the transport company of the number of pallets and the breakdown of dangerous goods to be transported. Nature of Class 8 dangerous goods and potential for harm 48The dangerous goods that are the subject of these proceedings were Class 8 dangerous goods. 49Class 8 dangerous goods are substances which, by chemical action, will cause severe damage when in contact with living tissue, or, in the case of leakage, will materially damage, or even destroy, other goods or the means of transport. 50Class 8 dangerous goods are divided among three packing groups according to their degree of hazard in transport as follows: (a) packing group I: Very dangerous substances and preparations; (b) packing group II: Substances and preparations presenting medium danger; (c) packing group III: Substances and preparations presenting minor danger. 51All of the dangerous goods in the B-double were classified as packing group II, that is, presenting medium danger. These substances cause full thickness destruction of intact skin tissue within an observation period up to 14 days starting after the exposure time of more than three minutes but not more than 60 minutes. 52Hazchem Codes on EIPs indicate to emergency response personnel what procedure to follow in the event of an accident. In relation to the dangerous goods on the B-double, placarding should have displayed Hazchem Code "2R", which would have indicated to emergency personnel that: (a) in a fire, a fine water spray should be used, (b) there is no risk of violent reaction or explosion; (c) liquid-tight chemical protective clothing and breathing apparatus should be worn; and (d) the chemical may be diluted and washed away with large quantities of water, but wherever practicable, should be contained and prevented from entering drains and watercourses. Prior offences 53The Defendant has no prior convictions under the Act. 54The Defendant has two prior convictions in the Land and Environment Court of NSW for water pollution offences: * On 5 May 1998, the Defendant was convicted of an offence under the Environmental Offences and Penalties Act 1989 in that it polluted waters in breach of s 16(1) of the Clean Waters Act 1970. The Defendant was fined $5000 and ordered to pay legal costs of $11,096 (Environment Protection Authority v George Weston Foods Ltd, NSWLEC, Lloyd J, 5 May 1998, unreported). * On 9 July 2010, the Defendant was convicted of an offence under s 120 of the Protection of the Environment Operations Act 1997 (POEO Act) and ordered under s 250(1)(e) of the POEO Act to pay $67,000 to Tamworth Regional Council for the Peel River Riparian Project and to publicise details of the offence in three newspapers. It was also ordered to pay investigation costs of $12,000 and legal costs of $18,000 (Environment Protection Authority v George Weston Foods Ltd [2010] NSWLEC 120). 55A Supplementary Statement of Agreed Facts (SSOAF) was also read. Some is omitted as I do not consider it relevant to this sentencing exercise. Relationship between Kitco and GWF 56At the time of the offences, Kitco had been transporting dangerous goods interstate between the Defendant's warehouses for eight to nine years, and had been doing so on average on a daily basis for at least four years. Inspection by NSW Police on 28 December 2010 near Brocklehurst NSW 57During the inspection by NSW Police on 28 December 2010, Mr Temby opened the curtains on the sides of Trailer A to reveal six 1000L IBCs full of liquid, each of which was labelled with an EIP with information including: "SODIUM HYDROXIDE SOLUTION", "UN No 1824" "HAZCHEM 2R", "CORROSIVE 8". Each IBC weighed approximately one tonne. 58The six IBCs containing sodium hydroxide in Trailer A were not adequately restrained. The metal side gates of Trailer A were in a vertical position and there was one worn hemp rope tied across the gates, however the rope was not in contact with the top of the IBCs. 59The six IBCs were not restrained in accordance with Part 8 of the Regulation, which incorporates the requirements of Part 8 of the ADG Code. The ADG Code in turn requires compliance with the Load Restraint Guide (prepared by the National Transport Commission and the Roads and Traffic Authority of NSW), 2nd edition, 2004. (These two documents were provided to the Court.) 60Adequate restraint of the six IBCs would have involved the application of force to the top of each IBC in an amount of at least 20 per cent of the weight of each IBC (see p 21 of the Load Restraint Guide), for example by the use of webbing straps. Dangerous goods licensing requirements for drivers 61In order to obtain a dangerous goods driver licence in NSW, a person must apply to the EPA and provide: (a) details of driving history, including any prior convictions for driving offences; (b) a certificate verifying that the person has recently completed the QLD30744 Course in Transport of Dangerous Goods by Road; and (c) evidence that the person is medically fit to drive a motor vehicle as assessed by a medical practitioner in accordance with the standards published by Austroads and the National Road Transport Commission. Dangerous goods licensing requirements for vehicles 62In order to obtain a dangerous goods vehicle licence in NSW, a person must apply to the EPA and provide information including the type of dangerous goods to be transported on the vehicle. The EPA may require an applicant to provide additional information. Procedures in place at the time of the offences 63Between 2008 and the time of the offences, a Kitco truck was loaded at the Defendant's premises almost everyday. Almost all of these loads contained placard loads of dangerous goods. About a third of the time the load contained over 3000L in IBCs, thus triggering the licensing provisions. Over this period, Mr Drake had never seen drivers put placards or EIPs on vehicles at the Defendant's warehouse, mainly because he would go back into the warehouse and continue with his other work after he finished loading a vehicle. Prior offences 64The Defendant has also been prosecuted for pollution offences in Victoria on three occasions: On 15 May 1981, the Defendant was convicted and fined $1,000 on three counts of breaching licence conditions concerning water with costs for $250. On 15 March 2000, the Defendant, without conviction, was fined $15,000 for the pollution of waters contrary to s 39(1)(c) of the Environment Protection Act 1970 (Vic) and a fine of $2,000 for contravening a pollution abatement notice by failing to comply with s 31A(7) of the Environment Protection Act 1970 (Vic) with costs of $6,272. On April 2010, the Defendant, without conviction was ordered under s 67AC of the Environment Protection Act 1970 (Vic) to carry out a specified project for the public benefit by paying $60,000 and publicise the offences of causing waste to be discharged contrary to s 39(4) and polluting land contrary to s 45(1)(c) of the Environment Protection Act 1970 (Vic). Related prosecution 65The EPA is also prosecuting Kitco Transport Australia Pty Ltd ACN 103 712 474 (Kitco) (Land and Environment Court proceedings nos 50928 to 50930 of 2012) for three offences relating to the incident that is the subject of these proceedings. 66Kitco has pleaded guilty to the following offences under the Act: (a) as prime contractor, using a vehicle to transport dangerous goods by road, where the Regulation requires the vehicle to be licensed to transport the goods and the vehicle is not so licensed, in breach of s 6(1) of the Act; (b) employing another person to drive a vehicle transporting dangerous goods by road, if the other person is required by the Regulation to be licensed to drive the vehicle and is not so licensed, in breach of s 7(1) of the Act; and (c) being a person involved in the transport of dangerous goods by road who fails to ensure that the goods are transported in a safe manner, in breach of s 9(1) of the Act. The sentencing hearing in the Kitco matter is set down for 2 April 2013. Further evidence 67The affidavit of Ms Michelle O'Brien dated 29 January 2013 was read in Court. Ms O'Brien is the finance director and a senior executive of Jasol. Ms O'Brien was authorised to make the affidavit on behalf of the Defendant. Ms O'Brien states that the Defendant has cooperated with the EPA at all times by responding to statutory notices to provide information and/or records, employees of the Defendant participated in recorded interviews conducted by the EPA and the Defendant worked with the EPA to prepare an agreed statement of facts. Ms O'Brien has stated that the Defendant entered an early guilty plea. Ms O'Brien also stated that the Defendant "takes safety and environmental matters extremely seriously" and "expresses its genuine deep remorse and contrition" in relation to the failures it has accepted. These failures are not ensuring proper placarding or safe loading, not notifying the transporter of the presence of dangerous goods, not making enquiries into the licences of the transporter and having inadequate training programs concerning all these respects. 68The supplementary affidavit of Ms O'Brien dated 8 February 2013 was also read. It states that the Defendant has no prior convictions under the Act, the Defendant has not been convicted of an environmental offence in relation to Jasol, the Defendant has two prior convictions in the Land and Environment Court of NSW for water pollution offences, the Defendant was convicted in Victoria's Ringwood Magistrates' Court for the breach of a licence condition and the Defendant has been issued with a number of penalty notices, principally for smoky vehicle emissions. Ms O'Brien stated that the circumstances and events surrounding these offences bear no similarities to the offence in the current case. 69The affidavit of Ms Sophie Prudhomme dated 24 January 2013 was also read. Ms Prudhomme was authorised to make the affidavit on behalf of the Defendant. She was the Regional Health, Safety and Environment Manager NSW employed by the Defendant. Ms Prudhomme stated that since approximately April 2011 the Defendant has been in the process of developing and implementing a new health, safety and environment system that is comprehensive and applies to all sites in Australia and New Zealand. New policies have been implemented including a Health and Safety Policy, Environment & Sustainability Policy, and Mr Good has been employed at Braeside as the full time Health, Safety and Environment Coordinator. A Dangerous Goods Dispatch Checklist has been formulated, with effect from 31 March 2011, to ensure placarding, displaying emergency information panels, dangerous goods licensing of drivers and vehicles and appropriate transport documentation. This checklist is to be completed by the warehouse supervisor or the Jasol employee responsible for loading. If dangerous goods are present, the truck driver must also complete the checklist. All Jasol staff involved in transporting, handling or storing dangerous goods attended an external training course on the management of dangerous goods provided by a company accredited by WorkSafe Victoria. 70Mr Good informed Ms Prudhomme that standard operating procedures have been implemented concerning the despatch, labelling, order picking in bulk and order picking packages, the latter two of which are site-specific procedures to Braeside. The despatch standard operating procedure requires warehouse staff to identify all dangerous goods to be despatched and to advise the transport company of the number of pallets and the breakdown of dangerous goods to be transported. The responsible employees informed Ms Prudhomme that enhanced induction training in accordance with the standard operating procedures has also occurred. An ongoing system of internal audits is also in place. The long haul contractor has been changed from Kitco to Northline and the agreement with Northline includes obligations on Northline in relation to dangerous goods. The Defendant is in the process of implementing a learning management system to facilitate, track and provide evidence of training; a risk management database to provide transparency, accountability and communication about incidents; a legislative matrix to ensure that processes meet legislative requirements, and group procedures to instruct how the Defendant meets its legislative obligations and the Defendant's standards. Public purpose of Dangerous Goods Act 71As submitted by the EPA, it is important to have regard to the purpose of the Act, as set out in s 3, which clearly imposes a positive duty on those involved in the transportation of dangerous goods to ensure that they are transported in a safe manner. The offences in the Act relate to breaches of duties which not only actually undermine public safety, but which also have the potential to do so. The legislation is specifically designed to cast a wide net of responsibility over those involved in the various aspects of the transportation of dangerous goods. Both the consignor, this Defendant, and the transporter, Kitco, have been charged with offences under the dangerous goods legislation. The necessity for controls on the transport of dangerous goods is apparent when their destructive qualities are considered, here Class 8 dangerous goods. Extent of harm caused or likely to be caused by the offence 72The EPA submitted that the objective harmfulness of the Defendant's actions were relevant to determining the seriousness of the crime per Bentley v BGP Properties Pty Limited [2006] NSWLEC 34; (2006) 145 LGERA 234. In this case that is adverse impact on road users, the general public and the broader environment. It includes the potential or risk of harm per Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357. No actual harm was caused by the offence but there was potential for harm. 73The dangerous goods that are the subject of these proceedings were Class 8 dangerous goods, being substances which, by chemical action, cause severe damage when in contact with living tissue, or, in the case of leakage, will materially damage, or even destroy, other goods or the means of transport (SOAF, par 54). As set out in the SSOAF, the six IBCs containing sodium hydroxide in Trailer A were not restrained in accordance with the requirements of Part 8 of the Regulations, which incorporates the requirements of Part 8 of the ADG Code. The ADG Code in turn requires compliance with the Load Restraint Guide (prepared by the National Transport Commission and the Roads and Traffic Authority of NSW, 2nd edition, 2004 (SSOAF, par 4). 74Although the IBCs in Trailer A were behind vertical side gates and a rope was tied across the gates, this was clearly inadequate to restrain the load. The rope was not in contact with the top of the IBCs. Adequate restraint of the IBCs would have involved the application of force to the top of each IBC in an amount of at least 20 per cent of the weight of each IBC (see p 21 of the Load Restraint Guide), for example by the use of webbing straps (SSOAF, par 4). 75The purpose of having accurate placards and EIPs in prominent places on a vehicle transporting dangerous goods is to warn other road users of the risks relating to the vehicle's load, and to ensure that emergency response personnel are readily able to determine the most appropriate action to take in the event of an emergency. In the event of an accident involving the vehicle, the contents of the load would not have been immediately apparent to emergency personnel. This had the potential to delay any emergency response whilst the nature of the dangerous goods on board the vehicle was identified. 76The Defendant asked the Court to take into account that IBCs are a type of container defined under cl 15 of the Regulation to meet particular structural and design specifications set out in Chapter 6.5 of the Code to meet the objective of safe transport. The Defendant asked the Court to note that where dangerous goods are transported in IBCs, different requirements for transporting apply where the amount transported is 3,000 litres or less. In that case no licensing of the vehicle or driver is required (cl 189 of the Regulation). The Defendant accepts that 6,000 litres of sodium hydroxide were being transported and that placarding requirements applied regardless of how much was transported in IBCs. I note however that not all the dangerous goods the subject of the charge were in IBCs. 77The EPA's submission that the failure to safely secure the six IBCs of sodium hydroxide increased the risk of human injury or death and increased the risk of environmental harm in the event of an accident was disputed. The Defendant disputed the EPA's submission that as the IBCs each weighed about one tonne and were not secured in accordance with the Regulation there was an obvious risk of these toppling out of the vehicle if it travelled at speed or had to brake sharply, thereby posing a risk of severe injury to any people nearby. The IBCs were in separate cages and stored at the front of the truck next to the gate. There is no evidence adduced to support this and as the Defendant submitted it is not an element of the offence accepted as a result of the guilty plea. Without evidence which establishes these submissions beyond reasonable doubt per R v Olbrich [1999] HCA 54; (1999) 199 CLR 270, the EPA cannot rely on these matters. The Defendant's submission that it accepted there was a theoretical risk of injury resulting from the offence, but no actual risk was proven, is accepted. Practical measures that may be taken to prevent, control, abate or mitigate that harm 78The practical measures that could have been taken to prevent, control, abate or mitigate the environmental harm caused or likely to be caused to the environment by the commission of the offence is another relevant consideration. "An offence is objectively more serious if commission of the offence and the risk of harm occasioned by the commission of the offence, are foreseeable and there are practical measures that could be taken to prevent, control, abate or mitigate the occurrence of the offence or the harm, but those practical measures are not taken": Environment Protection Authority v Waste Recycling and Processing Corp [2006] NSWLEC 419; (2006) 148 LGERA 299 at [173]. 79In this case, simple steps could have been taken to prevent the offence, as indicated by the steps the Defendant put in place after the offence to prevent a recurrence. The Defendant accepted these submissions. Its evidence that substantial measures in terms of changes to procedures and compulsory training had been taken since the offence to ensure there would be no reoccurrence were accepted by the EPA. 80In relation to the events on the day of the offence, the Defendant submitted that on the facts it had no further involvement in the transport of the goods after these were loaded at the Braeside premises in Victoria. One Kitco driver collected the materials from the Defendant's premises and drove them to Kitco's premises. Another Kitco driver drove the goods from the Kitco premises towards Queensland. That driver was stopped by police for reasons unrelated to the carriage of the goods. This resulted in the inspection where the failure to comply with dangerous goods regulatory requirements was noted by the police. While these facts can be accepted the failures that gave rise to the offence first occurred on the Defendant's premises. I acknowledge that the labelling of the IBCs correctly identified the contents as dangerous goods. Foreseeability of the harm caused or likely to be caused by the commission of the offence 81The EPA submitted that the risk of harm caused by the offence was reasonably foreseeable but as discussed above that risk must be considered as theoretical rather than actual on the evidence before the Court. 82The Defendant accepted the EPA's submission that it had full control over the circumstances giving rise to the offence in that: (a) The Defendant was the consignor of the goods and knew their classification as Class 8 dangerous goods; (b) the Defendant failed to properly train its loaders of dangerous goods in the legal requirements for the transport of those dangerous goods; (c) the Defendant failed to have in place systems to ensure that its dangerous goods were transported in a safe and lawful manner; (d) the Defendant failed to adequately advise its transporter that the load contained dangerous goods; (e) the Defendant failed to ensure that its transporter, Kitco, which had been transporting its dangerous goods for 8 or 9 years at the time of the offence, had provided a licensed driver and vehicle to carry the load of the Defendant's dangerous goods; (f) the Defendant was responsible for the training and supervision of its staff. Objective seriousness of the offence 83The objective seriousness of the offence given the purpose of the legislative scheme and the absence of effective procedures of the Defendant considering the size and nature of its business is moderate but at the low end of that scale given there was no actual risk to human health or the environment resulting from the offence. Specific deterrence 84The EPA submitted that specific deterrence should be taken into account in the assessment of penalty in this case, because the Defendant continued to be engaged in the storage, handling and transport of dangerous goods. The Defendant submitted that this consideration does not weigh heavily in the circumstances of this case having regard to the measures taken to prevent recurrence. 85In Environment Protection Authority v Ravensworth Operations Pty Ltd [2012] NSWLEC 222 at [48]-[49] I stated: [48] Specific deterrence is a purpose of sentencing under s 3A(b) of the CSP Act and has been considered relevant where a defendant continues in the same area of operation in which an incident has occurred. In taking specific deterrence into account in Environment Protection Authority v Moolarben Coal Operations Pty Ltd (No 2) [2012] NSWLEC 80 (Moolarben (No 2)) Craig J cited at [113] the following passage in Axer at 359 per Mahoney JA: "The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that in many cases care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur". [49] Specific deterrence is appropriate for corporate defendants to catalyse rehabilitation so that the company takes the required steps to prevent repetition (See BJ Preston, "Principled Sentencing for Environmental Offences", a paper presented to the 4th International IUCN Academy of Environmental Law Colloquium, 16 - 20 October 2006 at p 5.) 86The extensive legislative obligations imposed on consignors and loaders of dangerous goods is identified in cls 80, 81 and 99 of the Regulation. I accept that measures have been taken since the offence which would prevent a recurrence but these were substantially lacking at the time of the offence. The Defendant's employee who placed the order did not advise Kitco that the load contained dangerous goods. The loader, the Defendant's employee, had received no instructions or training in relation to the loading, unloading or transporting of dangerous goods and was unaware of the legislative requirements for placarding and licensing requirements. The Defendant did not have any written procedures in place for the transport of dangerous goods. The warehouse supervisor had received some training in dangerous goods handling and possibly provided the consignment note to the Kitco driver which identified the goods as dangerous but apparently took no other action. 87Given the longstanding operation of the Jasol division, as part of the Defendant since 1986, the substantial size of the Defendant, its business of food manufacturing (SOAF par 13), and that Kitco had been transporting dangerous goods on a daily basis between the Defendant's warehouses for several years (SOAF par 61), it is concerning that there were no effective procedures in place on the day of the offence to ensure compliance with the Act and Regulation. The procedures now implemented were necessary and fundamental if legislative compliance is to be achieved. In these circumstances specific deterrence is a relevant sentencing consideration. General deterrence 88The EPA also correctly submitted that general deterrence is an important consideration. Cameron v Eurobodalla Shire Council [2006] NSWLEC 47; (2006) 146 LGERA 349 at [71] refers to a number of authorities which emphasise the importance of general deterrence in sentencing for environmental offences. The EPA also relied on the case of Axer which held, at 367, that Those who handle dangerous chemicals must be regarded as under a heavy obligation to the rest of the community to do so with the utmost care. 89The transportation of dangerous goods involves the handling of dangerous chemicals and the potential for their exposure to road users and emergency services personnel and sentencing for offences under the Act should consider this. Prior Convictions 90The Defendant has three prior convictions for water pollution offences, two in NSW (as stated at [54] of the judgment) and one in Victoria. It has also been charged with three other offences in Victoria for which a penalty was imposed but without conviction (as recounted in [64] of the judgment). In the second NSW conviction Environment Protection Authority v George Weston Foods Ltd [2010] NSWLEC 120, Craig J at [64] considered that the Defendant company given its size and the scope of its operations had a good environmental record in a relative sense despite an earlier conviction. At [63] Craig J stated that the prosecutor accepted that the circumstances and the events surrounding that offence bore no similarity to the incident giving rise to the offence before him. The same observation can also apply in this matter. Evenhandedness 91The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty (R v Visconti [1982] 2 NSWLR 104). This principle must always be applied subject to the particular circumstances of the case before the Court (Hoare v R [1989] HCA 33; (1989) 167 CLR 348 at 354). 92Previous cases in this Court have dealt with offences under s 37(1) of the Road and Rail Transport (Dangerous Goods) Act 1997, which is equivalent to s 9(1). The maximum penalty was then $250,000. These include Environment Protection Authority v Moama Refinery Pty Ltd [2002] NSWLEC 244 and Environment Protection Authority v Embridge Crest Pty Ltd [2002] NSWLEC 238. In Moama, the defendant was the operator of a refinery which packed and placarded dangerous goods for transport. It was the owner and consignor of these goods. That case involved leaking drums of solvent inside a truck which was not correctly placarded. These leaking drums created a risk of liquid catching fire in the area surrounding the vehicle. The defendant had no written procedure in place for assessing whether the storage drums were suitable for the liquid they contained. Embridge arose from the same incident the subject of which constituted the proceedings in Moama. The Prosecutor accepts that the seriousness of the offence in this case is less than that in Moama and Embridge, where fines of $45,000 and $30,000 were awarded respectively after discounts for mitigating circumstances. 93In Environment Protection Authority v MacDermid Overseas Asia Ltd [2007] NSWLEC 225 where the offence resulted in significant environmental harm, a penalty of $75,000 was imposed and $55,000 costs awarded. The defendant was a manufacturer of chemicals which a different company transported from Victoria to NSW. The chemicals were not packed in accordance with the Road and Rail Transport (Dangerous Goods) Act 1997 then in force. The truck was involved in a serious accident in NSW and the clean up took two days. There was potential for serious harm because of the different chemicals concerned which were toxic and dangerous if mixed. That matter was much more serious than this matter. 94In Environment Protection Authority v Patrick the offence was the failure to placard. A fine of $9,750 was imposed. The defendant had no prior convictions. The Defendant accepted this matter is more serious than Patrick. 95This matter is less serious than the circumstances in Moama, Embridge and MacDermid where actual and greater potential risk of serious harm arose to varying degrees. This matter is more serious than Patrick. Matters in mitigation 96The CSP Act s 22 provides that when determining sentencing regard must be had to a plea of guilty, and the Court can impose a lesser sentence to reflect this. The Defendant entered a guilty plea at the earliest opportunity. A plea of guilty entitles the Defendant to a discount in penalty under s 22 of the CSP Act in the range of 10 - 25 per cent: R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; R v Sharma [2002] NSWCCA 142; (2002) 54 NSWLR 300. 97The Defendant has expressed remorse and contrition, demonstrated by its early guilty plea, the statements of its senior executive Ms O'Brien and the actions it has taken to address its procedures for transporting dangerous goods and staff training procedures as identified in the affidavit of Ms Prudhomme 98The Defendant's cooperation with the EPA can also be taken into account in mitigation. Appropriate Sentence 99I should comment on the parties' submissions concerning the maximum penalty presently being $275,000 as increased in 2009 from $250,000. As the Defendant submitted that is not a particularly large increase and the maximum is nowhere near the maximum of $1.1 million provided for Tier 2 offences under the POEO Act. The amount of the maximum penalty is nevertheless substantial and indicative of the seriousness of the offence in the view of Parliament per Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683. 100The appropriate penalty is $30,000. Allowing for the maximum reduction for a very early plea of guilty and additional mitigating factors particularly contrition and remorse, this should be reduced to $20,000. Costs 101Legal costs of $25,000 are agreed. Orders 102The Court orders that: (1)The Defendant is convicted of the offence with which it is charged. (2)The Defendant is fined the sum of $20,000 to be paid to the Registrar of the Court within 28 days of today's date. (3)The Defendant is to pay the Prosecutor's costs of $25,000. (4)The exhibits may be returned. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 February 2013