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Company and director charged and fined for waste tyre offences

A waste tyre processing company (Carbon MF Pty Ltd) and its sole director, secretary and shareholder (Mr Mark Fair) have been fined approx $500,000 and $60,000 respectively for failing to comply with an EPA issued Clean Up Notice and for polluting land in relation to their activities at a site in Thurgoona, near Albury.

Key Takeaways

  • The NSW EPA prosecuted both the company and its sole director, secretary and shareholder. Mr Fair was charged under the executive liability provisions under the POEO Act under which a director is automatically guilty of offences conducted by their company under certain circumstances.
  • These are the latest in a number of fines imposed as a result of regulatory action taken by the NSW EPA in relation to excess tyre storage.

Background and the offences as charged

Carbon MF operated a business that received waste tyres for processing at its facility in Thurgoona. The development consent that Carbon MF had obtained for this purpose included a condition that required that no more than 5 tonnes of waste tyres, 500 waste tyres or 50 cubic metres of waste tyres could be stored on site at any one time.

From 1 February 2021 to 21 January 2022, Carbon MF was paid over $303,639.35 to receive over 22,000 4WD tyres, over 45,000 car tyres, and over 12,000 truck tyres.

In February 2022, the NSW EPA conducted a survey of the facility and found 6,543 cubic metres of tyres, which was equivalent to more than 184.26 tonnes or 23,000 tyres.

The NSW EPA also inspected the facility with a representative of Fire and Rescue NSW and noted that the facility housed a tyre shredder and welding and grinding equipment and adjoined an LPG gas filling station, all of which were considered to pose fire risks.

As a result, on 1 March 2022 the NSW EPA issued a clean-up notice to Carbon MF requiring the number of tyres stored at the facility to be reduced to below 500 whole tyres by 5:00pm on 31 May 2022.

On 9 June 2022, the EPA returned to the facility and found that the number of tyres stored at the facility had increased by approximately 5,000 since the clean-up notice was issued.

On 17 June 2022, the EPA issued a clean-up notice to Mr Fair that required him to restrict access to the facility, while continuing to allow tyres to be removed.

It is an offence under the Protection of the Environment Operations Act 1997 (NSW) (POEO Act) to fail to comply with a clean-up notice. This is an executive liability offence, which means that each director (and any person concerned in the management of the corporation who was in a position to influence the conduct of the corporation in relation to the commission of the offence) is also taken to have contravened the same provision, if the prosecutor satisfies the Court that the person:

  • knew or ought reasonably have known that the offence (or an offence of the same type) would be or was being committed; and
  • failed to take all reasonable steps to prevent or stop the commission of that offence.

Carbon MF was charged with the offence of failing to comply with a clean-up notice. Mr Fair was also charged with the same offence as a director of Carbon MF.

It is also an offence under the POEO Act to pollute land. Placing more than 5 tonnes of waste tyres or more than 500 waste tyres on land is prescribed to be the pollution of land. This is a special executive liability offence, which means that each director (and any person concerned in the management of the corporation) is also taken to have contravened the same provision, unless the person satisfies the court that:

  • they were not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or
  • if they were in such a position, that they used all due diligence to prevent the contravention by the corporation.

Carbon MF was charged with the offence of polluting land. Mr Fair was also charged with the same offence as a director of Carbon MF.

Carbon MF and Mr Fair plead guilty to all charges.

The sentence

The Court found that while there was no evidence of actual harm to the environment, there was a real risk of potential harm in the event of a fire that was real and substantial. The Court also found that the offences were committed for financial gain and without regard to public safety, that Mr Fair was aware of the requirements of the clean-up notice and that neither defendant expressed contrition and remorse.

The defendants argued that the amount of any fine should be reduced as a result of their reduced capacity to pay – Carbon MF had been served with a Winding Up application and Mr Fair was an undischarged bankrupt. The Court reduced the fine imposed upon Mr Fair by 70% to reflect his ‘strained financial circumstances’. It did not, however, reduce Carbon MF’s fines as the Court considered that the risk of winding up a company so as to avoid the payment of a fine was a consequence ‘antithetical to the objects of the legislative regime that created the offences and the purposes of sentencing’.

As a result:

  • Carbon MF were fined $262,500 for the clean-up notice offence and $262,500 for the pollution of land offence.
  • Mr Fair was fined $18,000 for the clean-up notice offence and $39,375 for the pollution of land offence.

The defendants were also ordered to pay the EPA’s investigation costs ($33,228.55) as well as the EPA’s legal costs in the proceedings, in addition to being subject to a publication order.

Jennifer Hughes

This material has been produced by Beatty Hughes & Associates for the purposes of providing general information and does not constitute legal advice.