If mulch contains asbestos, it’s necessary to trace the source along the supply chain, which might be asbestos waste from a demolition or excavation.
The decision of ACE Demolition & Excavation Pty Ltd v Environment Protection Authority [2024] NSWCCA 4 (Leeming JA, Garling J and Cavanagh J) (09 February 2024) illustrates the excavator’s/demolisher’s liability if they falsify delivery records for asbestos waste to a processing facility.
In that decision, the Environmental Protection Authority of New South Wales prosecuted ACE, an excavator/demolisher, for providing false certification for excavated material (waste). The Court of Criminal Appeal of the Supreme Court of New South Wales imposed substantial fines for breach of environmental laws.
This is an analysis.
The offences
The Court of Appeal considered an appeal by ACE against the severity of fines imposed by the primary judge for offences under s 144AA of the Protection of the Environment Operations Act 1997 (NSW).
The offences are:
s 144AA(1) supplying information about waste in the course of dealing with waste which was false or misleading in a material respect. Maximum penalty $250,000.
s 144AA(2) knowingly supplying information about waste in the course of dealing with waste which was false or misleading in a material respect. Maximum penalty $500,000.
At trial, ACE pleaded guilty to one offence under subsection 144AA(1) and three offences under subsection 144AA(2).
Notes:
(1) these were the maximum penalties before 2022, when they doubled to $500,000 and $1,000,000 per offence.
(2) the subsection 144AA(1) is an offence of strict liability (no intent is needed), while the subsection 144AA(2) offence requires intent, hence the higher penalty.
The facts
Waste from excavations and demolitions is delivered to various processing facilities, and weighbridge dockets are generated which classify the waste. One common category of waste is ACM or Asbestos Containing/Contaminated Material. If the waste contains ACM, the percentage is stated on the docket.
ACE provided demolition and excavation services in the construction industry.
In 2017, ACE contracted with Top Pacific Group to excavate and dispose of material from a development site in Wolli Creek for a contract value of $3,600,000. It was a condition of the development consent that there be a Waste Management Plan which required “Trucking docket records … to be kept on site to check that fill is going to the nominated landfills”.
ACE issued invoices to Top Pacific for “Bulk Excavation – ACM impacted fill”. When Top Pacific Group asked for dockets, ACE supplied weighbridge dockets it fraudulently generated for the disposal of material from a site in Terrey Hills, which had nothing to do with the Wolli Creek site. The dockets were altered by inserting “wolli creek” next to “Order No”. The false or misleading dockets represented the disposal of excavated material in the order of 5,500 – 6,000 tonnes.
In 2017, ACE contracted with Westbourne Constructions to excavate and dispose of material from two large development sites in Zetland for a contract value of $19,000,000. It was a condition of the development consent that “all excavated materials at the site must be tracked from cradle-to-grave and sufficient documentation provided in the validation report to allow the site auditor to check the movement and management of these materials”.
Similarly to the Top Pacific contract, ACE supplied dockets for disposal of excavated material from other sites to Westbourne Constructions which it had fraudulently altered to purport to be for material taken from the Zetland sites. The dockets were altered by inserting “Zetland” next to “Order No”. They related to 622 truckloads of soil contaminated with asbestos said to have been removed from that site.
In both cases, the offences committed were the supply of false or misleading weighbridge dockets to the developer and the site auditor. The supply chain was not known, and so no harm to the environment could be proved.
The contract manager of ACE, Mr Al Sarray, was responsible for the fraudulent conduct. He was fined two amounts of $135,000 in separate proceedings. He knowingly supplied the false information, which knowledge was attributed to his employer, ACE.
The economic benefit to ACE was that the developer was invoiced for 50% of ACM impacted fill, for which the amount invoiced was higher. The amount of the financial benefit was not proven due to ACE’s guilty plea.
The fines payable by ACE
The Court of Appeal concluded:
“It is the combination of an absence of any proven financial gain, and an absence of any proven harm to the environment, together with ACE’s favourable subjective case, that results in fines for offending at the high end of the mid-range of objective seriousness being somewhat less than (in the case of the first, second and third offences) or approximately equal to (in the case of the fourth offence) half of the maximum.” [115]
“The scale of the offending is very substantial, involving hundreds of truckloads and thousands of tonnes of waste. The period of the offending over almost eight months is also very substantial. The man involved, Mr Al Sarray, was not a junior employee receiving a kickback; instead he was the second most senior man in the company. And in an attempt to prevent detection, ACE continued to produce false documents. I am satisfied that an aggregate fine of $774,000 is a just and appropriate punishment reflective of ACE’s total criminality.” [118]
In addition to the fines, a notice was to be published. No costs orders were made.
Rozelle Parklands (in inner city Sydney) provides an illustration of what can happen if asbestos is allowed to travel along the supply chain and end up in mulch used for landscaping a park – the park is fenced off until it is remediated (note: this illustration is of a supply chain and has no connection to the ACE proceedings) ((c) author’s image 18.02.2024)