Australia: Remondis to pay $982,206 for Chain of Responsibility mass breaches by contractor

Last Updated: 3 September 2017
Article by Nathan Cecil

This case note regarding a 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 3 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 Court ultimately finding 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 (who 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 which equals liability and the Court 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.

Whilst 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 Remondis was not granted the 25% penalty reduction that is usually awarded for an early plea of guilty. Remondis only received a 15% 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 – see here and here).

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Nathan Cecil
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.