Environment Protection Authority v MacDermid Overseas Asia Ltd

Land and Environment Court (NSW)|2007-04-26|Before: Jagot J

CITATION : Environment Protection Authority v MacDermid Overseas Asia Ltd [2007] NSWLEC 225

PROSECUTOR PARTIES : Environment Protection Authority DEFENDANT MacDermid Overseas Asia Ltd

KEY ISSUES: Prosecution :- sentence - failure to ensure dangerous goods transported in a manner as safe as practicable - failure to segregate incompatible dangerous goods - failure to complete consignment documents - penalty

Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357; Environment Protection Authority v Embridge Crest Pty Ltd [2002] NSWLEC 238; Environment Protection Authority v Hopley [2003] NSWLEC 112; CASES CITED: Environment Protection Authority v Moama Refinery Pty Limited [2002] NSWLEC 244; Environment Protection Authority v Patrick Distribution Pty Ltd [2006] NSWLEC 123; R v Thomson (2000) 49 NSWLR 383; The Queen v De Simoni (1981) 147 CLR 383; The Queen v Olbrich (1999) 199 CLR 270

PROSECUTOR Mr M Buscombe SOLICITORS Environment Protection Authority LEGAL REPRESENTATIVES: DEFENDANT Mr S Stanton SOLICITORS DLA Phillips Fox

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

ENVIRONMENT PROTECTION AUTHORITY Prosecutor

MACDERMID OVERSEAS ASIA LTD Defendant

JUDGMENT Jagot J: A. The charge 1 MacDermid Overseas Asia Ltd (the defendant) is an international company that manufactures chemicals in Australia. Its head office is in Revesby, New South Wales, with its warehouses in Queensland, South Australia and Victoria. From those warehouses, the defendant receives and sends products, including dangerous goods, to locations throughout Australia.

2 The defendant has pleaded guilty to a charge that on or about 24 February 2003, at or near Mittagong in the State of New South Wales, it committed an offence against s 37(1) of the Road and Rail Transport (Dangerous Goods) Act 1997. Section 37 provides as follows: (1) A person involved in the transport of dangerous goods by road or rail who fails to ensure, as far as is practicable, 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 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. Maximum penalty: (a) if the failure results in death or serious injury to a person - $100,000 or imprisonment for 4 years, or both, for an individual or $500,000 for a body corporate, or (b) in any other case - $50,000 or imprisonment for 2 years, or both, for an individual or $250,000 for a body corporate.

3 By its plea of guilty, the defendant admitted the essential legal elements of the offence charged. Many of the circumstances surrounding the offence were the subject of a statement of agreed facts. Other circumstances were not agreed. These matters must be resolved recognising that any facts adverse to the defendant additional to the essential legal elements of the offence must be proved beyond reasonable doubt (The Queen v Olbrich (1999) 199 CLR 270 at [27]).

4 The particulars in the summons identified the dangerous goods and the defendant's involvement in the transport of those goods. The agreed facts reflected those particulars. The particulars also identified the acts or omissions alleged by the prosecutor to constitute the defendant's failure to ensure that, as far as practicable, the dangerous goods were transported in a safe manner. The agreed facts reflected those particulars in part only. The particulars alleged were as follows: (i) failing to properly segregate the dangerous goods in accordance with the requirements of the Australian Code for the Transport of Dangerous Goods by Road and Rail; and (ii) loading on the same pallet "incompatible goods", as defined in the Australian Code for the Transport of Dangerous Goods by Road an Rail; and (iii) failing to ensure that the shrink wrapped pallet was properly marked to indicate the dangerous goods contained on that pallet; and (iv) failing to properly complete the shipping documentation so as to indicate the presence and details of all the dangerous goods on the pallet; and (v) failing to provide Border Express Pty Ltd with the emergency procedure guide for silver cyanide; and (vi) failing to inform Border Express Pty Ltd that the silver cyanide was packed on the pallet with the hydrofluoric acid; and (vii) failing to appropriately instruct and train and supervise persons employed and engaged by the Defendant and permitted by the Defendant to perform tasks involved in the transport of the dangerous goods by road.

5 These may be compared to the more limited agreed facts recorded in paragraph 9 below.

6 On 21 February 2003, the defendant requested Border Express to attend its warehouse in Blackburn, Victoria to collect a mixed load of goods for transport to the defendant's Revesby premises. The load consisted of four empty 200 litre drums, two empty intermediate bulk containers, and a single shrink wrapped wooden pallet. Mark Gibson, an employee of the defendant, prepared this pallet. He was not supervised when he packed the pallet. He placed a 200 litre steel drum of ethylhexanoic acid in one corner of the pallet and a 22 kilogram drum of hydrofluoric acid beside it. He placed three or four 25 litre drums of Multibond 100Z and Multibond 100B on the pallet. He placed four bags of aluminium sulphate on the opposite side of the pallet. After the load on the pallet had been assembled, Janine White, another employee of the defendant, requested Mr Gibson add to the load a one kilogram white plastic container with a screw top containing silver cyanide. Mr Gibson placed this container between the bags of aluminium sulphate. He shrink-wrapped the pallet in black plastic after he completed packing it, and address labels were placed on the plastic. He packed the pallet to ensure stability when lifted by a forklift.

7 This load was unsafe. Silver cyanide and hydrofluoric acid are identified in column 2 of Appendix 2 to the Australian Dangerous Goods Code and thus are dangerous goods under regulation 2.2(1)(a) of the Road Transport Reform (Dangerous Goods) Regulations 1997 (Cth) as adopted by s 5 of the Road and Rail Transport (Dangerous Goods) (Road) Regulation 1998 (NSW). Silver cyanide is a class 6 dangerous good, packing group II, UN No 1684. Hydrofluoric acid is a class 8 dangerous good, packing group I or II, depending on its acidity, UN No 1790. Silver cyanide and hydrofluoric acid are incompatible dangerous goods as specified in table 9.1 of the Australian Dangerous Goods Code and are subject to segregation requirements with which the load did not comply. Metal cyanides, including silver cyanide, are highly toxic and reactive. Hydrofluoric acid is highly corrosive and toxic and requires the highest standard quality dangerous goods packaging. For example, the emergency action code (also known as the Hazchem code) in the Australian Dangerous Goods Code for hydrofluoric acid incidents includes the warning symbol "E" for evacuation. Only a small proportion of all dangerous goods include this warning symbol in the emergency action code. The packing of the pallet with hydrofluoric acid and silver cyanide resulted in a dangerous and unsafe situation, given the toxic and dangerous nature of these incompatible goods. Appendix 2 of the Australian Dangerous Goods Code states that, on contact with acid or acid fumes, silver cyanide will produce hydrogen cyanide gas, which is a highly toxic and flammable gas.

8 The defendant supplied Border Express with consignment notes, shipping documents and an emergency procedure guide for hydrofluoric acid. The shipping documents were not complete, as the dangerous goods section had not been filled out. Completing the shipping documents was a primary responsibility of the defendant, as this is the main way in which consignors communicate the contents of the load to transporters and emergency personnel in the event of an emergency. The lack of completed shipping documents, coupled with the risk of the silver cyanide and hydrofluoric acid combining, also made the transport of the goods unsafe.

9 The defendant was responsible for the consignment of the dangerous goods by road (being both consignor and consignee) and was responsible for packing, loading, marking and completing documents that accompanied the consignment. The defendant failed to ensure that the dangerous goods, as far as was practicable, were transported in a safe manner by: (i) failing to properly segregate the dangerous goods in accordance with the requirements of the Australian Code for the Transport of Dangerous Goods by Road and Rail; (ii) loading on the same pallet "incompatible goods", as defined in the Australian Code for the Transport of Dangerous Goods by Road and Rail; (iii) failing to properly complete the shipping documentation so as to indicate the presence and details of all the dangerous goods on the pallet; and (iv) failing to appropriately supervise persons employed and engaged by the defendant and permitted by the defendant to perform tasks involved in the transport of the dangerous goods by road.

10 At approximately 5.30am on 24 February 2003, the B-double semi-trailer containing mixed dangerous goods, including the load identified above, was involved in a road accident that led to a chemical spill on the Hume Highway near Mittagong. The prime mover and both trailers ended up on their sides, with the prime mover and the A trailer blocking the north and south bound lanes of the Hume Highway and the B trailer on the edge of the southbound lane in bushland. Some of the contents of each trailer spilled onto the road and road edge. Hazardous materials teams worked for two days to render the accident site safe. Because the shipping documents were incomplete, emergency officers had to communicate with Border Express at a higher level (I infer, than the driver). The incomplete shipping documents increased the level of uncertainty during the operation and the time taken to clean up the site and render it safe.

11 The unsafe circumstances caused by the manner in which the pallet was loaded with both silver cyanide and hydrofluoric acid and the incomplete shipping documents involved the potential for harm to human health and the environment. A range of personnel was present at the scene of the accident and there was a creek and bushland in the vicinity. The manner in which the silver cyanide and hydrofluoric acid had been packed onto the pallet involved a real risk of danger to humans handling them in the event of an emergency. The incomplete shipping documents also involved greater potential for harm during an accident.

12 It was within the defendant's capacity to take several practicable steps to ensure that the goods were transported in a safe manner as follows: o ensuring the dangerous goods were packed separately and in appropriate packages; o training the employees who were packing and loading the dangerous goods before transport; o supervising employees when packing and loading goods, particularly dangerous goods; o taking more time to check the packing and loading of goods, including whether the dangerous goods were compatible for transport; o having systems in place to ensure the load was checked and signed off before it left the warehouse; and o having safety protocols in place to encourage employees to check loads and get them signed off when the load contained dangerous goods.

13 The prosecutor agreed that it had no knowledge of any prior convictions of the defendant for environmental matters. Further, the defendant co-operated in the investigation of the offence and agreed to pay the prosecutor's costs in the sum of $55,000.

14 The prosecutor and defendant relied on additional evidence, much of which overlapped with the agreed facts. The following summary does not repeat parts of this evidence the subject of the agreed facts.

15 Mark Gibson operated a company known as MMDL Transport Pty Ltd. Between about December 1999 and June 2000 the defendant employed Mr Gibson as a sub-contractor taxi truck driver. From about July 2000 to October 2005, the defendant had a direct contract with Mr Gibson as a storeman/driver at its Blackburn premises in Victoria. After he shrink-wrapped the pallet, Mr Gibson did not think it possible for a person to observe the container of silver cyanide. He could not recall making any change to the documents after he placed the container of silver cyanide on the pallet. The practice was for the person who attached the emergency procedure guidelines to the consignment note to fill in the dangerous goods section with the words "see attached". That did not occur with respect to this consignment. Mr Gibson does not recall attaching the emergency procedure guidelines to the consignment documents. Mr Gibson said that, before being employed by the defendant, he had not had any training with respect to dangerous goods. There was a Hazchem chart on the wall of the warehouse setting out details for dangerous goods and segregation requirements. Mr Gibson did not fully understand this chart until he received dangerous goods training from the defendant in June 2003, after the incident. In cross-examination, Mr Gibson confirmed that he had not received any formal training about dangerous goods from the defendant. He had received general instructions from Mr Tony Toniolo, but it was too long ago for Mr Gibson to recall the details other than that the general instructions were limited, "loose" and "non-specific", perhaps involving a couple of days to a week or so about load preparation.

16 The defendant employed Janine White as an administrative assistant between June 1995 and January 2006. Ms White's duties included ordering stock from Sydney and local suppliers, taking customers' orders and the associated paperwork, banking, and stock control. Ms White filled in the delivery docket (but not the Borders Express consignment note) for the consignment of the load. The delivery docket identified that the load included one kilogram of silver cyanide and 22 kilograms of hydrofluoric acid. Ms White recalled having to search for the emergency procedure guidelines for silver cyanide and attaching those guidelines, and the guidelines for hydrofluoric acid, to the Borders Express consignment note. Mr Gibson completed the consignment note (but not the section relating to dangerous goods). The defendant's practice then involved providing the delivery docket and the emergency procedure guidelines to Border Express with their consignment note, with a copy of the docket and consignment note to be filed in the defendant's filing system.

17 On the day of the incident Ms White spoke to someone from the accident site about the contents of the load. These discussions started in the morning before lunch. Ms White made it clear in that conversation that the load included silver cyanide and hydrofluoric acid. She recalled spelling the latter to ensure that it was not confused with hydrochloric acid. She also identified the type of container the silver cyanide was in and answered other questions about the contents of the load.

18 Gregory Abood and Stephen Durrington, officers of the Department of Environment and Conservation, attended the scene of the accident on 24 and 25 February 2003. They observed the overturned prime mover and trailers as identified in the agreed facts, and a surrounding area that had been cordoned off by the NSW Fire Brigades. They observed that the shipping documents recovered from the cabin of the truck did not include a reference to, or emergency procedure guidelines for, silver cyanide. Their conversations with emergency personnel were consistent with the agreed fact that the incomplete shipping documents increased the level of uncertainty during the operation and the time taken to clean up the site and render it safe. They conducted various records of interview after the incident.

19 Ian Pearce is an employee of Border Express. Mr Pearce attended the accident scene on 25 February 2003 to assist in the identification of dangerous goods. He was shown two photographs at the scene. One photograph showed the plastic shrink-wrap used to cover the pallet showing an attached delivery docket and address label, a sticker of a skull and crossbones labelled "toxic" and a sticker marked "corrosive 8" with diagrams demonstrating the corrosive qualities of the material. The prosecutor and defendant agreed that the delivery docket shown in the photographs is the docket Ms White completed (which referred to both silver cyanide and hydrofluoric acid).

20 Alan Ritchie is employed by the Department of Environment and Conservation. Mr Ritchie holds a Bachelor of Science. His primary responsibilities include developing and implementing guidelines and enforcing legislation with respect to the transport of dangerous goods in New South Wales by road and rail. Mr Ritchie has over 30 years experience in dangerous goods transport and hazardous materials incident management. Mr Ritchie concluded that packing the silver cyanide and hydrofluoric acid on the same pallet was a dangerous and unsafe situation even absent the goods mixing, as a spill of either would have involved highly toxic material which could have killed or injured people handling the damaged load without protective clothing and could have contaminated foodstuffs. Silver cyanide and hydrofluoric acid are incompatible goods as they react together to create hydrogen cyanide. Hydrogen cyanide is a liquid at room temperature, but highly volatile, producing an extremely toxic vapour that has caused many deaths. The plastic container for silver cyanide was not strong enough except if protected by further outer transport packaging such as a cardboard box. The silver cyanide and hydrofluoric acid packed by the defendant on the same pallet could have generated large quantities of hydrogen cyanide. If they mixed in a closed area (such as the curtain sided trailer in which they were located) then any person who entered that area or opened the door to the trailer could have been killed or seriously injured. If they mixed in an open area, then anyone within a 2 metre radius could have been seriously harmed by the toxic vapours. The gas generated by 0.5kg of the silver cyanide reacting with the acid would result in a concentration of hydrogen cyanide five times that needed to cause a fatality if a person breathed the air in an enclosed space for 30 to 60 minutes and is 200 times the maximum limit permitted for the workplace. The fact that the goods were packed right next to each other and the accident increased their chance of mixing. Breaking of both containers was likely given the weight of the load and the damage that occurred during the accident. The way the load shifted during the accident meant that the containers did not break. Had they both broken the probability of the two chemicals mixing and releasing the highly toxic hydrogen cyanide was high.

21 Philip Turner is an occupational hygiene consultant specialising in workplace hazards. He holds a Bachelors degree in Applied Chemistry and a Masters degree in Safety Science. He has been involved with the transport of dangerous goods since the early 1980's. Mr Turner knows Mr Tim Elley, the defendant's managing director, through their involvement with certain industry associations. Mr Elley periodically refers work to Mr Turner. In Mr Turner's opinion, the quantity of dangerous goods incorrectly segregated and shipped was relatively small. As suppliers to the surface finishing industry, the defendant shipped thousands of kilograms of acids and cyanides annually. Industry organisations can use thousands of litres of acid and cyanides in tanks in relatively close proximity. Despite the hazards, the risks are well controlled. Mr Turner was aware of two significant incidents (including one fatality) due to cyanide exposure over the last 30 years. The load was packed by a professional truck driver and shipped on a vehicle operated by a reputable transport company which, Mr Turner considered, contributed to the containers not breaking in the accident. Mr Turner said that although he would not have failed to segregate the dangerous goods as required, the regulation of chemicals involves many threshold values and the Australian Code for the Transport of Dangerous Goods by Road or Rail is complex and difficult to read and understand. While the Code clearly identifies silver cyanide and hydrofluoric acid as incompatible substances, Mr Turner did not consider the Code made the consequences of that designation clear. While he agreed with much of Mr Ritchie's evidence, Mr Turner concluded that Mr Ritchie had overstated the hazard of the load. He characterised Mr Ritchie's scenario of a person remaining in the enclosed trailer for 30 to 60 minutes as highly implausible. He did not agree with Mr Ritchie's characterisation of the capacity of the goods, if they mixed, to cause "large quantities" of hydrogen cyanide, but accepted the general thrust of Mr Ritchie's calculations and that one kilogram of silver cyanide was sufficient (if it mixed with the acid) to generate a toxic plume that could cause ill health to people nearby. Mr Turner's affidavit contained other material relating to the defendant's practices (including training). However, it was apparent from cross-examination that Mr Turner did not have personal knowledge of those matters. Mr Turner agreed that a corporation involved in shipping quantities of dangerous goods as a central part of their business, such as the defendant, should have focused its training on the tasks it was performing. Mr Turner also thought the Borders Express consignment note inhibited the identification of all dangerous goods on the load, as it only had one space for dangerous goods.

Training and steps taken by defendant after incident

22 The defendant employed Anthony (Tony) Toniolo between about March 1997 and August 2002. Before that, Mr Toniolo was employed by Ajax Chemicals Pty Ltd for about ten years, in a position involving the handling of both laboratory grade chemicals and dangerous goods. When employed by the defendant, Mr Toniolo's duties included taking sale orders, ordering stock and making up loads of material for transport and delivery. When making up loads, Mr Toniolo's tasks included: (i) inspecting the delivery docket; (ii) obtaining the materials required for the load. For dangerous goods, these materials were obtained from an established segregated area within the premises; (iii) placing materials that required segregation in segregation boxes and making up the pallets as required by the docket; (iv) shrink wrapping the pallet and placing stickers on it relating to the type of goods contained in the load; and (v) loading the made up pallets onto delivery trucks. Mr Toniolo said the truck driver would then inspect the documents and the defendant would sign the consignment note before the truck departed from the premises. The receiver would inspect and sign the consignment note on receipt.

23 Mr Toniolo had completed the basic electroplating course and the metal finishing technician's course. Part of the courses involved a thorough treatment on the storage, handling and transport of chemicals, although Mr Toniolo agreed that the principal focus was metal finishing, with the transport of chemicals being a relatively small component overall. Mr Toniolo also received instruction while employed by the defendant and became quite proficient in the requirements of dangerous goods handling and storage, sufficient to train and instruct personnel accordingly. The instruction did not involve formal training. Most related to the handling and storage of chemicals, as he dealt with requirements for sending dangerous goods on an irregular basis, with the majority of his work involving the receipt of materials. When goods arrived, Mr Toniolo would inspect the containers for leaks, ensure the containers were properly sealed, structurally sound and not corroding, and that the right sticker was on the right product. If not, the company sending the goods would be contacted and the goods would either be collected or their disposal would be arranged. Dangerous goods were stored in confined or segregated areas. Segregated areas were above ground cages and poisons were kept under lock and key, with a poisons register required to be completed for moving goods in and out of any poisonous storage area.

24 Mr Toniolo worked with Mr Gibson for about 12 months before Mr Toniolo left the defendant's employ in August 2002. He provided Mr Gibson with on the job training in regard to load preparation and the consignment process for the delivery and receiving of materials at the premises. This training was basically "hands on" at the warehouse by helping Mr Gibson to make up loads and to put goods away. This instruction was fairly general, but Mr Toniolo worked with Mr Gibson daily. However, they did not dispatch dangerous goods daily, as the main function of the warehouse was receiving goods. Mr Toniolo had dispatched silver cyanide and hydrofluoric acid.

25 Jeffrey Webster is the defendant's National Product Administration Manager, with responsibility for the defendant's quality and environmental systems, regulatory requirements, manufacturing and maintenance issues, and product stewardship. Mr Webster said that the defendant's transport of goods intrastate mainly involved dangerous goods (with 140 deliveries of approximately 70 tonnes of material in New South Wales per month on average). Interstate transfers were mainly from the manufacturing site at Revesby, with deliveries throughout Australia of about 1,080 tonnes per year of dangerous goods. The defendant also imports and exports smaller quantities of dangerous goods (about 330 and 260 tonnes per year respectively). Total stock movements equate to about 4000 tonnes per year, with the great majority being dangerous goods.

26 Mr Webster noted that the defendant had no prior convictions with respect to handling, labelling or transporting dangerous goods in New South Wales or elsewhere in Australia.

27 Mr Webster gave evidence about training given by Mr Toniolo to Mr Gibson. It was apparent from cross-examination that Mr Webster had no personal knowledge of this training. I do not consider that any weight can be given to Mr Webster's evidence about training.

28 Mr Webster said that, after the incident, the defendant had improved its handling and transportation of dangerous goods by having: (i) all existing and new employees of its Victorian office complete the Victorian Work Cover Authority's Packaged Dangerous Goods Transport Awareness Course; (ii) all existing and new employees of its New South Wales office complete a course in the Transport, Storage and Handling of Dangerous Goods in Small Packages and Bulk Dangerous Goods, (iii) all existing and new employees of its Queensland office complete a Bulk Dangerous Goods training course, run over a full day, (iv) all employees nationally undergo an in house first day induction course, including providing them with the defendant's environmental guidebook in accordance with the defendant's environmental management system under ISO 14001; and (v) all employees undergo annual in house training videos on dangerous goods' storage, handling and transport.

29 Mr Webster said that the defendant had also improved its dangerous goods handling protocols since the incident. Specifically, the defendant has: (i) upgraded specialised computer software to produce fully compliant load manifest and emergency procedure guides specific to individual shipping consignments. This software is available in all of the defendant's offices; (ii) modified its software to identify individual product dangerous goods class, sub-risk and UN information and packaging group on all delivery documents so as to clearly identify the nature of the dangerous goods; (iii) updated its written transferring of stock interstate handling, packaging and transport procedures and expanded its quality assurance documents as part of its ISO 9002 Quality Systems Standard; and (iv) carried out annual audits of its contracted goods transports to ensure they comply with dangerous goods regulations, including audits of new contractors. These audits are managed as part of the defendant's ISO 14001 certification and are audited by an external consultant.

30 In early 2006 the defendant attained accreditation under the international standard ISO 14001 Environment Management Systems Standard. Mr Webster said that obtaining third party certification to this standard had assisted the defendant in improving its environmental management practices associated with the handling, labelling and transportation of dangerous goods.

31 The defendant's counsel made a general submission that the prosecutor's additional evidence contravened the principle in The Queen v De Simoni (1981) 147 CLR 383 that circumstances of aggravation may not be relied upon for the purpose of sentence if those circumstances could have been made the subject of a separate charge (at 389, 392). I do not consider that to be so as the prosecutor's additional evidence did nothing more than disclose the circumstances of the particular offence.

32 It is apparent from the agreed facts (paragraphs 41(b) and 42) that the defendant admitted that its training of employees with respect to dangerous goods before the incident was inadequate. The disputed evidence, in substance, involved a debate between "no training" and "no formal training". I accept Mr Toniolo's evidence that he provided some informal on the job training to Mr Gibson about dangerous goods. I am satisfied beyond reasonable doubt that, before the incident, the defendant did not have in place any formal training program for its employees with respect to dangerous goods and that its approach to employee training with respect to dangerous goods was manifestly inadequate, being a direct cause of the defendant's failure to ensure the required segregation of the silver cyanide and hydrofluoric acid. The significant steps taken by the defendant after the incident to introduce formal training for all employees (or their equivalent) could (and should) have been in place at all times. Relying on informal and unstructured training of Mr Gibson, when he was permitted to pack these dangerous goods for interstate transport, was patently deficient, as the evidence of Mr Gibson and Mr Toniolo disclosed.

33 I accept Ms White's evidence that she attached emergency procedure guidelines for silver cyanide and hydrofluoric acid to the consignment note. Although the guidelines for silver cyanide were not recovered from the cabin of the truck, there are many explanations for that consistent with Ms White's evidence. Accordingly, I am not satisfied beyond reasonable doubt that the defendant failed to provide Border Express with the emergency procedure guidelines for silver cyanide or to inform it that the silver cyanide was packed on the pallet with the hydrofluoric acid. Mr Pearce's record of interview, referred to by the prosecutor, does not suffice for that purpose. I am also not satisfied beyond reasonable doubt that the defendant failed to ensure that the shrink-wrapped pallet was properly marked to indicate the dangerous goods contained on that pallet. The delivery docket completed by Ms White, referring to the contents of the load, was attached to the shrink-wrap. I am satisfied beyond reasonable doubt that the inadequate shipping documents referred to in the agreed facts must be understood as a reference to the Borders Express consignment note. The defendant was required to complete that document by disclosing the dangerous goods on the load but did not do so. I accept that the defendant had procedures requiring the consignment note to be completed. I infer that the failure to do so in this case was an oversight, albeit a serious one, having the consequences, actual and potential, identified in the agreed facts.

34 The evidence of Mr Ritchie and Mr Turner about the nature of the dangerous goods was largely consistent with the agreed facts. The agreed facts disclosed the hazardous nature of silver cyanide and hydrofluoric acid and the real risk to human health and the environment associated with packing these chemicals together by reason of their reactive and highly toxic character. I do not accept that any complexity associated with the Australian Code for the Transport of Dangerous Goods by Road or Rail ameliorates the defendant's admitted default. Persons in the position of the defendant are required to ensure, as far as is practicable, that dangerous goods are transported in a safe manner. Segregating incompatible dangerous goods for transport in accordance with the Code is self-evidently of fundamental importance. I also do not accept that the form of the consignment note (with its one space for dangerous goods) has any relevance to this matter. The defendant made no disclosure about dangerous goods at all on the consignment note. As the agreed facts disclose, the defendant failed to complete this document, which was one of its primary functions and its main way of communicating the contents of the load to transporters and emergency personnel in the event of an emergency.

35 I am satisfied beyond reasonable doubt that the packing of the load carried a real risk of the containers breaking during an accident and the chemicals mixing and releasing toxic hydrogen cyanide gas. I do not consider the balance of the differences between Mr Ritchie and Mr Turner (that is, whether the chemicals mixing would have created a large quantity of hydrogen cyanide and the plausibility of Mr Ritchie's scenario) particularly pertinent, given the agreed facts to which I have referred. By the agreed facts, the defendant admitted that its failure to comply with segregation requirements for these incompatible dangerous goods created a dangerous and unsafe situation, including potential harm to humans and the environment, with a real risk to people handling the goods in the event of an emergency.

36 Although the written submissions on behalf of the defendant referred to an error made by Mr Ritchie about the quantity of silver cyanide (two kilograms instead of one kilogram), I did not understand the defendant suggested anything ultimately turned on that reference. As counsel for the prosecutor submitted, the error had been corrected on the basis that Mr Ritchie's opinions remained unaffected and Mr Ritchie was not cross-examined.

37 I accept Mr Webster's evidence, insofar as it related to the defendant's business, the absence of any prior convictions, and the steps taken by the defendant to introduce formal training for all employees and to improve its overall environmental management and performance, including by obtaining third party certification under the international standard ISO 14001.

38 The prosecutor accepted that the defendant's plea of guilty had been entered at the first reasonable opportunity and that the defendant had co-operated with the prosecutor, but submitted that the defendant's conduct belied any real contrition on its part. The prosecutor said that the defendant had conducted the plea in a manner suggesting that the offence was the fault of Mr Gibson rather than its own grossly deficient training and did not involve any particularly serious default, both suggestions being inconsistent with real contrition. I do not accept that characterisation of the defendant's conduct of the hearing. The defendant entered a plea of guilty. It agreed facts relating to most circumstances surrounding the offence. It accepted that those circumstances could only be characterised as objectively serious given the nature of its default. The disputed circumstances were limited in scope as described. The defendant radically revised its obviously and gravely deficient procedures with respect to training of employees dealing with dangerous goods, commencing in June 2003 (within four months of the incident and nearly three years before the prosecution was commenced). It has continued to implement programs to ensure compliance with its obligations with respect to dangerous goods thereafter. I do not consider that any inference adverse to the defendant can be drawn from the evidence of Mr Webster and Mr Turner that I have not accepted or characterised as immaterial.

39 The purpose of the Road and Rail Transport (Dangerous Goods) 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. Section 37(1) (the duty on persons involved in the transport of dangerous goods to ensure, as far as is practicable, that the goods are transported in a safe manner) is fundamental to that legislative purpose. The maximum penalty ($250,000) discloses the seriousness of an offence against s 37(1).

40 The defendant's counsel appropriately acknowledged that the potential danger associated with the defendant's offence required a finding that the offence was objectively serious. The significant potential for harm by reason of the defendant's failure to segregate the incompatible goods silver cyanide and hydrofluoric acid permits no other conclusion. The defendant's failure to complete the dangerous goods section of the consignment note also contributed to the unsafe consignment and hampered the clean-up, increasing the uncertainty for emergency personnel. The informal training provided to, and supervision of, Mr Gibson with respect to the transport of dangerous goods was grossly deficient given the nature of the defendant's business (a central part of which involves the storage, handling and transport of dangerous goods). The offence was, as the defendant conceded, foreseeable. The truck accident was outside the defendant's control. However, the causes of, and circumstances leading to, the offence were wholly within the defendant's control, as the agreed facts disclosed. These circumstances make considerations of specific and general deterrence particularly relevant (s 3A(b) of the Crimes (Sentencing Procedure) Act 1999) although, as the defendant submitted, the penalty to be imposed must not be disproportionate to the overall circumstances of the particular offence. Consistent with the submissions on behalf of the prosecutor, I consider the concept of risk to public safety is inherent in the offence to which the defendant has pleaded guilty and, thus, is not an aggravating circumstance of the offence under s 21A(2)(i) of the Crimes (Sentencing Procedure) Act. The prosecutor acknowledged that no other aggravating circumstances within the meaning of s 21A(2) were present.

41 The defendant's counsel fairly characterised the subjective considerations in the defendant's favour. The defendant has no convictions or record of any kind with respect to environmental legislation in New South Wales or throughout Australia, although a central part of its business involves the storage, handling and transport of dangerous goods. This is a relevant factor under s 21A(3)(e) of the Crimes (Sentencing Procedure) Act. The defendant's previously unblemished record and the steps it promptly commenced in 2003 to rectify its defaults in employee training and to improve its environmental management systems disclose its good character (s 21A(3)(f) of the Crimes (Sentencing Procedure) Act). Those steps, including the defendant achieving third party accreditation for its environmental management systems under the international standard ISO 14001 in 2006, support the submission of the defendant's counsel that there had been a "radical transformation" in the defendant's work culture after the incident. The continuation of those steps, consistent with Mr Webster's evidence, indicate that the defendant is unlikely to re-offend (s 21A(3)(g) of the Crimes (Sentencing Procedure) Act). The defendant entered its plea of guilty at the first opportunity (s 21A(3)(k) and s 22 of the Crimes (Sentencing Procedure) Act). I have accepted that, through its conduct and co-operation with the prosecutor, the defendant has shown its contrition and remorse. It has also agreed to pay the costs of the prosecutor, agreed in the amount of $55,000.

42 I am satisfied that the plea of guilty had material utilitarian value. I consider the defendants should have the benefit of a discount of 25% on account of the utilitarian value of their early guilty plea (R v Thomson (2000) 49 NSWLR 383 at [151] - [161]).

43 The prosecutor and defendant referred to the four decisions of this Court relating to offences against the Road and Rail Transport (Dangerous Goods) Act (Environment Protection Authority v Moama Refinery Pty Limited [2002] NSWLEC 244, Environment Protection Authority v Embridge Crest Pty Ltd [2002] NSWLEC 238, Environment Protection Authority v Hopley [2003] NSWLEC 112 and Environment Protection Authority v Patrick Distribution Pty Ltd [2006] NSWLEC 123). I have considered those matters, although each turned on their own facts (as must also be the case for this defendant). In particular, the decision in Moama Refinery (which, on its face, appears the most relevant) did not involve placing two incompatible dangerous goods subject to segregation requirements on a single pallet. The dangerous goods in that case involved a risk of ignition if the leaking vapours or liquid came into contact with an ignition source. Mr Ritchie (who also gave evidence in that matter) "significantly tempered" his opinions about the risks in cross-examination (at [51]).

44 As the prosecutor submitted, the observations of Badgery Parker J in Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 367 are particularly apt to the circumstances of this case, namely, 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. This Court should not be seen to send any message other than that". When it failed to segregate the silver cyanide and hydrofluoric acid, the defendant failed to fulfil that heavy burden in a most fundamental respect, creating a real risk of harm to people and the environment. This default was compounded by the failure to complete the dangerous goods section of the Borders Express consignment note. Adequate training and supervision of Mr Gibson were available practicable steps the defendant could have (but had not) taken to ensure the dangerous goods were transported in a safe manner. Although the defendant has subsequently implemented formal training and improved procedures (which I accept make the risk of this defendant re-offending unlikely), this offence was serious, involving significant culpability on the defendant's part. I consider that a penalty of $100,000 reflects the overall circumstances of this matter. As the defendant should have the benefit of a discount of 25% on account of the utilitarian value of its early guilty plea, the penalty to be imposed is $75,000.

45 In paragraph 4 of the summons, the prosecutor sought an order under s 43 of the Road and Rail Transport (Dangerous Goods) Act (relating to recovery of certain other costs). The prosecutor called no evidence and made no reference to any such order being made in its submissions.

46 Accordingly, I make the following orders: (1) The defendant is convicted of the offence charged.

(3) The defendant is ordered to pay the prosecutor's costs agreed in the amount of $55,000.

(4) The exhibits may be returned other than Exhibit A.

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.

Road and Rail Transport (Dangerous Goods) (Road) Regulation 1998(NSW)s 5

(1993) 113 LGERA 357

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