MEDIA RELEASE

21 November 2008

Wallace Corp defendants hit with highest fines total under RMA

Defendants in the Wallace Corporation PCB toxic waste burial case in the Waikato have collectively been hit with fines of $120,000, the highest total ever handed down in a prosecution brought under the Resource Management Act.

Wallace Corp has also been ordered to promptly locate and remove the toxic material from where it is buried, and to spare no expense in doing so - a result Environment Waikato described as very satisfying after a long legal battle.

In a reserved Auckland District Court decision from Environment Judge Fred McElrea this week, two senior Wallace Corp employees, Neville Cross and Barry Dew, were fined $45,000 and $40,000 respectively over the illegal burial of the highly toxic PCBs (polychlorinated biphenyls).

Wallace Corp itself – described as having a low level of culpability for the offending – was fined $35,000.

All up, the three defendants were ordered to pay fines and costs of just over $150,000.

The PCBs – a substance linked to causing cancer – were inside old electrical equipment buried during the construction of a new building at Wallace Corp’s Waitoa site in 1998. Use of PCBs is heavily restricted in New Zealand. They cannot be legally disposed of here, and must be sent overseas for destruction.

The judge said removal of the PCBs from under building could well cost Wallace Corp “six figures”.

The sentencing followed last year’s defended hearing which saw the defendants found guilty on a range of charges related to the burial.

Environment Waikato launched an investigation in 2005 after the EPMU, a union with members at the site, blew the whistle on the company. The council saw the PCBs as a ticking environmental timebomb, said complaints and enforcement manager Rob Dragten.

“We were particularly concerned about the PCBs getting into groundwater and waterways eventually.

“The threat this poses to human health may not be immediate but these chemicals could potentially cause a risk decades into the future if they’re not cleaned up.

“Longer-term there is also the threat that future land use changes could expose people directly to the buried PCBs, and the risk of cancer, if they aren’t removed.”

Mr Dragten said if the PCBs had been disposed of properly in the first place it would have cost Wallace Corp about $6000.

“Now the company is facing significant fines and legal costs, and the expense of having to remove the PCBs.”

Judge McElrea said in his sentencing decision that if the union had not alerted EW after finding out about the burial “remedial steps would not have been taken, and PCBs could have entered the food chain many years hence, to the great detriment of future generations and the reputation of this country’s primary industries”.

He said a “major catastrophe” could have occurred under certain circumstances and that it was “good luck rather than good management” that had constrained damage to the soil where the PCBs were buried.

On the level of the fines to be imposed, Judge McElrea said deterring others from similar offending was important in RMA cases. “A strong signal needs to be sent by the courts that conduct of this nature is very serious and will have expensive repercussions.”

The facts of the case had put the offending in the “upper range of seriousness” for RMA offences. “This is so having regard to the deliberate nature of the offending, the known hazardous nature of PCBs, the potential at the time for very serious environmental (and consequently economic) harm, and a continuing element of risk to the environment.”

Commenting on evidence about the likely spread of the PCBs into groundwater and eventually waterways, Judge McElrea said: “I find beyond reasonable doubt that here is a low but real risk of the PCB material reaching groundwater.”

He said the future movement of the groundwater cannot be predicted, except that in general terms it would move towards the Waitoa river.

“Risking the contamination of groundwater in this case is not a responsible approach.”

Mr Dragten said EW would closely monitor Wallace Corp’s development of plans to remove the PCBs. “We want to ensure it is done quickly and safely.

“This has been a difficult and prolonged case for Environment Waikato, but where there is serious offending and a significant potential threat to the environment and people’s health we are determined to act.”

Wallace Corp’s conviction in the PCB case followed the company having previously been found guilty of a range of other unrelated environmental offences committed between 1997 and 2004.

ends

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