Not So Quality Food (Aus – civil)

The Fair Work Ombudsman litigated against Quality Food World Pty Ltd in the Federal Court, seeking a range of orders, including pecuniary penalties.  The case sets out, concisely, matters the court considered in determining the appropriate pecuniary penalty ($85,000).
The defendant failed to produce sufficient evidence of its financial circumstances, so it appears the court was satisfied that the penalty figure proposed by the ombudsman was appropriate, the defendant having been unable to establish it would be ‘crushing’.  It begs the question: how can an ombudsman, or court, determine an appropriate penalty for a company in need of specific deterrence, without an accurate understanding of its financial position? And should companies be protected from crushing financial penalty?  Why? In what circumstances?

Unsafe Stairs Lead To Patron’s Injury And Criminal Prosecution (NZ)

“Waipa Workingmen’s Club Incorporated was sentenced at the Te Awamutu District Court after pleading guilty to one charge under sections 16(2)(b)(ii) and 50 (1)(a) of the Health and Safety in Employment Act.  A female patron was seriously injured at the club in March 2015 after she fell three metres from an unguarded landing on an emergency stairway while attending a quiz night at the club’s bar… The victim will receive $45,000 in court ordered reparation and Waipa Workingmen’s Club has been fined $39,375.”

It’s interesting that the offence was nested within OHS legislation, although the victim was not an employee.

The Cookie Crumbles (UK – regulatory)

What does a regulator do when a company discloses its misconduct?  Very often, and depending on the circumstances, the regulator negotiates a mild out-of-court agreement, designed to provide some redress for the wrongdoing, but also to encourage other companies to disclose wrongdoing when it is uncovered.  The aims are, frequently, competing.

In this case, “[u]nder rules relating to the use of packaging, Bahlsen [LLP, a multinational company] failed to register with the [Environment] Agency to report the amounts of packaging they imported when they were legally obliged to do so. This continued for 15 years from 1997 until the company identified it should have been registered through due diligence procedures. During the period of non compliance the company had an unfair financial advantage against registered compliant competitors and caused the Environment Agency to lose revenue that would be used for compliance monitoring and regulation.”

The Agency warned that “[w]e would encourage any other operators who may be eligible to offer an EU to get in touch, before our investigations identify non compliance and we seek a larger penalty.” But given their inspectors did not identify non compliance over the 15 year period, this is unlikely to provide effective motivation for others in similar circumstances.

Gold Mine Leaks Cyanide Into Fish-Bearing Waters (Canada – Criminal)

“Wesdome Gold Mines Ltd. was fined $175,000 in the Ontario Court of Justice after pleading guilty to contraventions of the Fisheries Act related to the deposit of substances harmful to fish in fish‑bearing waters. Of the total fine, $131,250 will be directed to the Environmental Damages Fund with the remaining $43,750 to be directed to the court.

A joint investigation conducted by Environment and Climate Change Canada and the Ontario Ministry of the Environment and Climate Change determined that Wesdome Gold Mines Ltd. had deposited effluent deleterious to fish and had failed to take reasonable measures to prevent the deposit. The company also failed to report the incidents…”

Illegal Grease Dumping Causes Sewerage Strife (USA)

“Southern Grease Company, a grease hauling company … was sentenced yesterday to pay a criminal fine of $280,000 and to forfeit an additional $113,500 …  Southern Grease pleaded guilty in May 2015 to four felony violations arising from its illegal disposal of waste grease into municipal sewer systems.  U.S. District Court Judge Aleta A. Trauger … also ordered Southern Grease to make restitution to municipal authorities in Dickson and Clarksville, Tennessee.

Southern Grease, which contracted with restaurants and other customers in Tennessee and Kentucky to collect and dispose of the customers’ waste grease, illegally discharged waste grease into grease interceptors that were connected to the municipal sewer systems.  This illegal dumping of grease caused substantial damage to municipal sewer systems by clogging pipes and interrupting the operation of pump stations.”  Two executives found to be involved were given jail sentences.

When Corporations Stay Silent (USA)

“”You aren’t NASA. You aren’t [Morton] Thiokol [Inc],” he said. “I hadn’t heard any of those people.””

I sometimes hear people dismiss the corporate form as entirely meaningless – fictional in the truest sense.  But corporations have personality and being, apart from their human parts.  This story about  Bob Ebeling, a former Thiokol engineer, who tried to keep the Challenger grounded, reminds me of that.