Australia: Contractor fined $120,000 for unsafe transportation of dangerous goods

Last Updated: 23 November 2017
Article by Geoff Farnsworth
Most Read Contributor in Australia, September 2018

Environment Protection Authority v Hill and Stockwell International Pty Ltd [2017] NSWLEC 72

The Land and Environment Court has fined a driver $4,000 and a transport company $120,000 plus $27,000 in costs for failing to ensure that dangerous goods transported by road were transported in a safe manner contrary to s 9(1) of the Dangerous Goods (Road and Rail Transport) Act 2008 (NSW). Although this is not a Chain of Responsibility (CoR) decision, the Court's consideration of the reasonable steps the defendants should have taken to ensure compliance down the chain are instructive in a CoR context.


On 17 October 2014, Toll Global Forwarding Pty Ltd (Toll) engaged Stockwell International Pty Ltd (Stockwell) to transport 16 tonnes of expandable polymeric beads, a classified dangerous good. Stockwell engaged Darren Hill, a truck driver employed by another company, to deliver the goods to the customer. Neither Mr Hill nor the vehicle he was driving were licenced to transport dangerous goods. Mr Hill drove the goods through tunnels in which dangerous goods are prohibited. These breaches came to the attention of the authorities after Mr Hill's vehicle was stopped at a heavy vehicle checking station on the M5 Motorway at Kingsgrove.

Mr Hill stated that he noticed the dangerous goods diamond logo on the bags carrying the polymeric beads but did not say anything because he did not want to create conflict with his employer or jeopardise his employer's relationship with Stockwell.

Stockwell acknowledged that it failed to provide adequate training or supervision to staff or have in place appropriate policies and procedures to ensure that dangerous goods were identified and transported appropriately by licenced subcontractors.

Toll was also charged as the consignor but was yet to enter a plea at the time of the decision. Stockwell and Mr Hill pleaded guilty at the earliest opportunity and received a 25 per cent discount on the penalties noted above, as well as a further 5 per cent reduction for other mitigating factors.

Subcontractor control over the offending

In deciding the penalties, the Court considered (among other things) the amount of control that the defendants had over the causes that gave rise to the offence. Although both Stockwell and Mr Hill were subcontractors and were not provided with compliant transport documentation, the Court considered that they had control over the offending because there were reasonable steps they could have taken to avoid it, such as requesting the documentation and refusing to drive the vehicle.

What the Court considered to be reasonable steps

In its decision, the Court considered the steps that Stockwell, Mr Hill and Toll could reasonably have taken to avoid the breaches. Many of these steps are also steps that should be taken in order to comply with Chain of Responsibility legislation.

The Court held that Stockwell should have had adequate dangerous goods/CoR policies and procedures in place, provided training, instruction and supervision to staff, made enquiries to ensure the driver and vehicle were appropriately licenced, requested appropriate transport documentation from Toll, maintained a register of subcontractors' vehicle licences, ensured the vehicle was placarded, provided appropriate safety equipment or required it to be carried, instructed the driver not to travel through prohibited areas, and enquired as to the driver's level of instruction and training in carrying dangerous goods.

After being charged, Stockwell engaged an external consultant to review its policies and procedures, adopted and revised relevant policies and procedures, created new forms to ensure compliance of subcontractors, provided training to staff and management, implemented an audit program for Stockwell and subcontractors, and created a register of dangerous goods licences for vehicles and drivers of Stockwell and subcontractors. Each of these steps was held to have been reasonable at the time the offending occurred.

Although Toll was not sentenced in this decision, the Court discussed its actions. Toll failed to undertake any prequalification checks, provide training and instruction to Stockwell on the safe transport of the goods or subcontracting requirements, provide refresher training to Toll staff or maintain records of training provided to staff. Subsequent to being charged, Toll improved its processes by developing a release form for dangerous goods requiring the carrier to certify compliance, and provided training to relevant staff and management.

The Court found that Mr Hill ought reasonably to have known that the goods were dangerous goods and had a responsibility to refuse to drive the vehicle despite what the Court acknowledged to be difficult circumstances.

Guidance on how to manage contractors and subcontractors

In considering how the defendants failed to fulfil their obligations, this decision provides clear guidance as to what the Court will consider to be reasonable steps towards ensuring compliance down the supply chain. Of course, what is reasonable will depend on the individual facts and circumstances of a business. However, this decision demonstrates the types of things that are expected of contractor and subcontractor relationships, such as:

  • Written contracts which set out how CoR/dangerous goods obligations should be managed and that these extend to any subcontracting;
  • Induction and refresher training provided to staff and management; and
  • Prequalification checks carried out on contractors and subcontractors to ensure adequate licencing and training.

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.

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Geoff Farnsworth
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