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

Last Updated: 3 September 2017
Article by Nathan Cecil
Most Read Contributor in Australia, August 2018

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
Similar Articles
Relevancy Powered by MondaqAI
 
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”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions