Chain pros­e­cu­tion

Re­mondis to pay $982,206 for chain of re­spon­si­bil­ity mass breaches by con­trac­tor

Australian Transport News - - Contents -

The most re­cent and sig­nif­i­cant chain of re­spon­si­bil­ity (COR) pros­e­cu­tion high­lights the on­go­ing pol­icy to pur­sue con­signors, load­ers and con­signees, the critical im­por­tance of manag­ing the com­pli­ance of con­trac­tors and third par­ties in the chain, and the es­sen­tial need to have in place con­trac­tual com­pli­ance regimes and doc­u­mented busi­ness com­pli­ance prac­tices in or­der to avoid sub­stan­tial fi­nan­cial penal­ties.

THE FACTS

Re­mondis con­tracted with Lake Mac­quarie Coun­cil to re­ceive, process, com­post and re­move house­hold ‘green bin’ waste at its Awaba Waste Man­age­ment fa­cil­ity. Af­ter pro­cess­ing and com­post­ing, Re­mondis con­tracted Jet Group to trans­port the waste from the Awaba Waste Man­age­ment fa­cil­ity to Jet Group’s premises.

The Jet Group heavy ve­hi­cle was weighed on each jour­ney at a weigh­bridge op­er­ated by Lake Mac­quarie Coun­cil. The driver was pro­vided with a weigh­bridge docket, but this was not re­viewed or acted upon in the case of over­load­ing. The weigh­bridge docket fig­ure was in­serted into an in­voice to Re­mondis, which paid based on weight. Re­mondis re­ceived and paid the in­voices, de­spite the fact that ev­ery in­voice recorded the mass over­load, had Re­mondis thought to con­duct any check.

These pro­ceed­ings re­lated to 50 of­fences, some­times oc­cur­ring twice per day, over the course of more than a year. The mass limit for the Jet Group ve­hi­cle in ques­tion was 42.5 tonnes. The over­mass breaches ranged be­tween three and 16 tonnes over­weight, with the ma­jor­ity be­ing at least 10 tonnes over­weight.

THE PRO­CEED­INGS

Re­mondis was ini­tially charged, as the con­signor of the loads, with 312 mass breach con­ven­tions.

De­spite the Lo­cal Court ul­ti­mately fi nd­ing that “there was noth­ing done by Re­mondis at the con­sign­ment (or load­ing) stage to en­sure such com­pli­ance”, that there was a “lack of any weigh­ing or mea­sur­ing de­vices on the part of Re­mondis” and that there was “ap­par­ently a lack of any mea­sures on the part of Re­mondis to en­sure that they were load­ing or con­sign­ing mulch that met the trucks’ load lim­its”, Re­mondis ini­tially pleaded not guilty to the of­fences.

How­ever, af­ter re­con­sid­er­ing its po­si­tion over some months, Re­mondis sub­se­quently pleaded guilty to 50 mass con­tra­ven­tions, com­prised of 28 sub­stan­tial and 22 se­vere breaches.

As a re­sult, the pro­ceed­ings con­tin­ued only on the ba­sis of the 50 charges to which Re­mondis pleaded guilty.

In sep­a­rate pro­ceed­ings, Jet Group was also charged as op­er­a­tor of the heavy ve­hi­cle.

DE­FENCE AR­GU­MENTS AND THE COURT’S VIEWS

In de­fence, Re­mondis ar­gued that it rea­son­ably re­lied upon Jet Group (it­self also a party in the chain and with an in­de­pen­dent com­pli­ance obli­ga­tion) and the Lake Mac­quarie Coun­cil (which op­er­ated the weigh­bridge) to en­sure that loads were within le­gal lim­its and/or to re­port any over­load­ing.

How­ever, the court said that “this sub­mis­sion falls some­what flat how­ever when viewed, as it must be, through the prism of chain of re­spon­si­bil­ity leg­is­la­tion”, the cen­tral prin­ci­ple of which is that ev­ery party in the chain has a joint and sev­eral prin­ci­pal duty to en­sure com­pli­ance – both by it­self and by oth­ers within the chain.

The court stressed that even where road trans­port is con­ducted by a con­trac­tor or third party in the chain, it is critical that ev­ery party in the chain has an “ac­tive sys­tem in place to man­age the risk and to min­imise the chances of road trans­port law be­ing breached”.

In the cir­cum­stances of this case, the court said that “it was never open to Re­mondis to rely on Jet to be prop­erly trained and in­formed as to the over­weight ve­hi­cles, es­pe­cially when it was Re­mondis it­self that loaded the mulch, us­ing their ma­chin­ery, without any pro­vi­sion for each load to be mea­sured or weighed as it was go­ing into the Jet truck”.

Fur­ther, the court held that “it is in­escapable that Re­mondis had con­trol over the pri­mary step in the process – the con­sign­ment of the loads of mulch”.

Un­der the COR prin­ci­ples, con­trol equals re­spon­si­bil­ity equals li­a­bil­ity, and the court

“Un­der COR prin­ci­ples, con­trol equals re­spon­si­bil­ity equals li­a­bil­ity”

con­cluded that “ul­ti­mately, it was Re­mondis’ leg­isla­tive re­spon­si­bil­ity to en­sure that the mulch that was con­signed to Jet was within law­ful bounds”.

In the court’s view, Re­mondis should have en­sured that it had ac­cess to “im­me­di­ate, real-time” weigh­bridge data.

Re­mondis fur­ther re­lied on its driver and op­er­a­tor man­u­als as ev­i­dence of its aware­ness and train­ing in re­la­tion to COR com­pli­ance. How­ever, the court was quick to point to the fact that “nei­ther of those man­u­als makes any ref­er­ence to the ap­pli­ca­ble ve­hi­cle mass re­quire­ments and/or over­load­ing. It does not go be­yond what Re­mondis’ own driv­ers should do, and ob­vi­ously does not cover load­ing and con­sign­ment weight com­pli­ance”.

Once alerted to the breaches, Re­mondis co­op­er­ated fully with RMS in the in­ves­ti­ga­tion and im­ple­mented sig­nif­i­cant re­sponse and rec­ti­fi­ca­tion mea­sures, in­clud­ing: • Im­ple­ment­ing a load­ing pro­to­col, so that ap­pli­ca­ble mass lim­its are iden­ti­fied and can be ver­i­fied at the point of load­ing • In­stalling load cells at the loader bucket to en­sure that the le­gal load lim­its are not ex­ceeded • Im­ple­ment­ing com­mu­ni­ca­tion pro­to­cols be­tween Re­mondis and the weigh­bridge or driver of the heavy ve­hi­cle so as to en­sure that no truck is al­lowed to exit the site over­weight • Pro­vid­ing su­per­vi­sion to en­sure com­pli­ance or cor­rec­tive ac­tion when non-com­pli­ance oc­curs.

While the court looked upon these mea­sures favourably, it was critical of the “some­what glar­ing ab­sence [of such mea­sures] at the out­set of the con­trac­tual ar­range­ment”.

THE PENALTY

The fact that Re­mondis ini­tially pleaded not guilty meant that it was not granted the 25 per cent penalty re­duc­tion usu­ally awarded for an early plea of guilty. Re­mondis only re­ceived a 15 per cent dis­count for its even­tual plea of guilty. In the cir­cum­stances of this case, that was a costly de­ci­sion.

The court noted the very strong need for the size of the penalty to act as a warn­ing to in­dus­try as a whole of the costs of breach­ing the COR laws, stat­ing that “the sen­tence … needs to op­er­ate as a pow­er­ful fac­tor in pre­vent­ing the com­mis­sion of sim­i­lar of­fences”.

Owing to the num­ber, du­ra­tion and ob­jec­tive se­ri­ous­ness of the of­fences, Re­mondis was or­dered to pay a penalty of $732,206 out of a max­i­mum pos­si­ble penalty of $2.1 mil­lion.

In ad­di­tion, Re­mondis was or­dered to pay the pros­e­cu­tion’s le­gal costs of $250,000, re­sult­ing in a to­tal penalty to Re­mondis of $982,206.

LESSONS LEARNED

This case high­lights: • You can­not af­ford not to be COR

com­pli­ant • The on­go­ing fo­cus of the pros­e­cu­tors

on par­ties up/down the chain, who can and are be­ing pros­e­cuted and fined re­gard­less of the fact that they do not op­er­ate the heavy ve­hi­cles con­cerned • The critical im­por­tance of prop­erly manag­ing the com­pli­ance con­duct of con­trac­tors and third par­ties within the chain • The es­sen­tial need to in­clude COR com­pli­ance as­sur­ance con­di­tions in all sup­ply chain con­tracts • Where con­trac­tors do not have their own re­li­able com­pli­ance sys­tems in place, the need to sub­ject con­trac­tors to in­ter­nal aware­ness, train­ing and com­pli­ance con­trols • The need to en­sure that busi­nesses have a doc­u­men­tary com­pli­ance frame­work and for this to be com­plete and sub­stan­tive. This will be­come even more critical once an­tic­i­pated changes are made to the COR laws in mid-2018, when pre­ven­ta­tive busi­ness prac­tices will be­come the pri­mary com­pli­ance fo­cus • The on­go­ing role that lo­cal coun­cils play in com­pli­ance and the risks faced by them if they fail to prop­erly scope, ten­der and su­per­vise sub­con­tracted pro­cesses (for ex­am­ple, with the City of Glen Eira hav­ing been pros­e­cuted in 2010 for 88 of­fences re­lat­ing to over­load­ing by its waste col­lec­tion con­trac­tor).

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