Neutral Citation Number: [2007] EWCA Crim 1759
Case No: 200605494A7
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM WARWICK CROWN COURT
MR RECORDER M STEVENS
S20060178
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 18/07/2007
Before :

LORD JUSTICE MAURICE KAY
MR JUSTICE TUGENDHAT
and
HH JUDGE CHAPMAN
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Between :

	R	Crown	
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	CEMEX CEMENT LIMITED	Appellant	

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Mr Jonathan Salmon (instructed by The Environment Agency) for the Crown
Mr Andrew Prynne QC (instructed by Wragge & Co LLP) for the Appellant

Hearing date : 27th June 2007
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Judgment

Mr Justice Tugendhat : 
1.	On 26th July 2006 at Rugby Magistrates Court, the Appellant (“Cemex”) pleaded guilty to a single offence under regulation 32(1)(b) of the Pollution Prevention Control Regulations 2000, of failing to comply with Condition 2.1.2 of the Permit granted under those Regulations, by the Environment Agency (“EA”).  The offence consisted of failing to ensure that an external door on a part of the works known as the reject clinker silo was maintained in a good operating condition.  
2.	Condition 2.1.2 of the Permit required that:
“All plant equipment and technical means used in operating the permitted installation shall be maintained in good operating condition”.
3.	Both the prosecution and defence were content for the matter to be dealt with by the magistrates.   But the magistrates decided that their powers of sentence (limited in the case of a fine to £20,000) were inadequate and they committed the case to the Crown Court for sentence.  
4.	On 3rd October 2006 at Warwick Crown Court Mr Recorder Michael  Stephens imposed a fine of  £400,000 and ordered Cemex to pay the prosecution costs £12,429.14.
5.	Cemex appeal by leave of the single judge.
6.	Cemex acquired the cement works at Lawford near Rugby in March 2005.  There have been cement works on that site owned or controlled by different proprietors since the middle of the 19th Century.  The works are very large, with a capacity to manufacture 1.3 million tonnes of cement a year.  A mixture of raw materials is converted to cement by means of being fed into a massive kiln and heated to very high temperatures.  Thereafter the product, known at that stage as clinker, is cooled, stored and mixed with additional ingredients ready for milling into the finished cement powder.  Sometimes clinker emerges from the kiln that has been insufficiently converted and is substandard.  This reject clinker is diverted to a container adjacent to the main storage silo.  This container is referred to the reject clinker silo.  It is some 45 meters high, with a capacity of 2000 tonnes.  There is a door near the top of the silo for personnel access, and that door is the one which was not maintained in good operating condition, giving rise to this offence.
7.	The Recorder did not have before him a basis of plea in the normal form, that is a document signed by or on behalf of the defendant. Instead, he had a large number of documents, including a bundle of 169 pages prepared by the EA and one of 142 pages prepared on behalf of Cemex. No one asked for there to be a Newton hearing to resolve any issues of fact. 
8.	Before the Recorder Mr Berlin (who appeared for the Crown at that hearing, but not before us) opened the facts to the Recorder. He started (at p2B) by drawing attention to the last document in the Crown’s bundle, which was a document entitled Points of Agreement, prepared by experts instructed by each side, Professor Harrison for the EA and Dr Gair for Cemex. He stated that the parties had an agreed view on how to put the case before the court, which made a Newton hearing unnecessary. The position was perhaps not as clear as it might have been. But while we have no transcript of the submissions in mitigation made by Miss Allen (who appeared for Cemex at that hearing, but not before us), it does not appear that, at the end of submissions before the Recorder, there remained any issue of fact between the parties.
9.	The Grounds of Appeal are settled by Mr Andrew Prynne QC who appeared for Cemex before us. The grounds are that the sentence was wrong in principle and manifestly excessive. The submission that the sentence was wrong in principle was advanced on the footing that it was based on a serious misinterpretation of the evidence. The errors alleged are as to the quantity of dust emitted from the defective door (as opposed to dust lawfully emitted from the chimney stack), the risk that the dust presented to health of the exposed population and the extent to which the dust was toxic or hazardous. 
10.	The submission that the sentence was manifestly excessive was advanced on the basis that the Recorder failed to apply the principles in R v Howe [1999] 2 All ER 249, and that he failed to take into account sufficiently or at all the absence of recognised aggravating features and the presence of mitigating features identified in that case.
11.	At the start of his sentencing remarks, the Recorder summarised what had happened.  He said that the door at the top of the reject clinker silo was open and dust was allowed to escape, which the prevailing winds dispersed over a wide area.  When that dust settled it caused a sticky substance to be found on cars and structures.   However, as he noted at once, thankfully it appears that no one had actually been physically harmed by what had occurred.  There is very little distance, approximately 100 yards, between the cement works and a nearby housing estate.  
12.	The offence was committed on or before 14th October 2005.  The precise date at which it was first committed is not known.   On either Monday 10 or Tuesday 11 October 2005, according to a statement he made 19th October 2005, Mr Fereday, a shift manager, went to the top of the reject clinker silo and saw that the door was not damaged.  That was the most recent evidence of the door being in an undamaged condition before the offence.
13.	The offence came to light on Friday 14 October 2005 at about 8.30 am.  A member of the public, Mr Walsh, saw dust coming out of the access door intermittently.  About 1 ½ to 2 hours later he saw the same thing happening.  He reported the matter to the EA, indicating that a small piece of cladding was also missing from the silo.
14.	The EA informed Cemex about the complaint sometime during that morning.  At 1.10 pm Mr Andrews, Cemex’s quality manager and Mr Fereday climbed up the silo to inspect the door.  A short way from the top they saw that a piece of cladding some 2 feet square was missing from where some pipes entered the silo.  They also found that the silo door was hanging off its top two out of three hinges.  Mr Fereday effected a temporary repair.  He pulled it off and then wedged it in place with a scaffold pole.  This did not provide a close fit.  The temporary repair left a gap of about one inch between the door and the edge of the frame.  This was completed by about 2.30 to 2.45 pm. At 3pm he notified those responsible for carrying out maintenance work that the door required urgent repair.
15.	The repair was fully carried out by contractors the following day Saturday 15 October 2005 by about 2 pm.
16.	The Recorder observed that one would expect a responsible company to have a good method of working in place and that checks would be made to ensure that there was no possibility of damage to the environment caused, or, where unavoidable, its being limited.  He referred to an internal document of Cemex bearing the title “Environmental Checks” which is dated 19th May 2005.  As he noted, that contains the following provision:
“6.7.1 All external doors should be kept closed when not in use to minimise potential noise or fugitive emissions.  An inspection of the site must be made at least once per shift, issues should be acted upon and actions taken should be noted in the comments section of the check sheet”.
17.	Immediately above, under the heading “fugitive dust”, there is the paragraph:
“6.5.1 An inspection should be made of the whole site to check for any fugitive dust emissions, any adverse findings should be acted upon and actions taken should be noted in the comments section of the check sheet”.
18.	Cemex accepted that there was no evidence before the Recorder of an inspection having been made between Monday or Tuesday 10 or 11 October 2005 and Friday 14 October 2005, nor any documentation recording an inspection over that period.  Accordingly, the Recorder stated that environmental checks did not appear to have been complied with in this instance.
19.	The Permit under which Cemex operated the works included limits on the emission of particles.  But the limits did not apply when the kiln was starting up or during what is referred to as a kiln flush, because it is accepted that excess emissions of dust from the main stack are unavoidable at such times. The Recorder accepted this but commented that it was only more incumbent on Cemex to ensure that its plant is kept in as safe a condition as possible, given these technical limitations on the control of emissions.  
20.	It so happened that the kiln had been stopped on 14 October before the dust emissions had been reported.  It had been restarted at about 2pm.  The Recorder was critical of this.  He regarded as aggravating features first, that there was a delay in the repair for the period already noted, secondly that when the repair was first done it was imperfect, but most importantly that the kiln was restarted without the door having been properly repaired.  A considerable tonnage of reject clinker was produced on 14th October.  The Recorder stated that in his view it was a recipe for disaster and would have the inevitable consequence that there would be an emission of dust, if the kiln was restarted at a time when the door was an imperfect fit as occurred.
21.	The Recorder was not satisfied that Cemex had given a satisfactory explanation for the time it took to effect the repairs whether temporary or permanent.  He queried whether the kiln should not have been shut down altogether.  However, he accepted submissions from Ms Allen.  She had stated on instructions that there are consequences of a technical nature in a complete shutdown.  The Recorder accepted that there was a good explanation for Cemex not having shut the kiln completely.  On the other hand he commented that that meant it was all the more incumbent on Cemex to ensure the repair was fully carried out as soon as possible.
22.	The Recorder also accepted evidence from Cemex as to further instability in the kiln at about 7pm on 14th October.  At 7.45 pm there was a kiln flush which brought hot raw material through the kiln and into the cooler.  That resulted in a dust emission and the emitted dust was too hot to clear up that day.  It was cleared up on 15th October. 
23.	In his submissions to us, Mr Prynne made criticisms of how this part of the case was set out in a Case Summary prepared by the prosecution. However, that Case Summary was not the basis upon which the prosecution opened the facts to the Recorder, and the Recorder, in his sentencing remarks does not misstate the position, nor demonstrate a misunderstanding of the true position.  He repeats the observation that this spillage occurred at a time when the door was imperfectly fitted and when the one inch gap would permit the escape of a quantity of dust.  He found that the quantity of dust to have been emitted was substantial, but he did not identify the quantity involved.  
24.	In his submissions on the factual position, Mr Prynne submitted that the prosecution had misinterpreted the evidence as to the source of the dust emissions and the level or quantity of dust emissions.  He submitted that the evidence demonstrated that there were likely to have been emissions both from the main chimney stack, (which were not alleged to be unlawful or part of the offence for which Cemex were being sentenced, given the terms of the Permit), and emissions from the gap around the broken door.  He submitted that the evidence indicated that the principal source of emissions of dust was not the gap by the broken door, but the lawful emissions from the chimney stack.
25.	We do not have to reach any conclusion on that point.  The Recorder did not reach the conclusion as to which was the principal source.  He confined himself to stating that he found that a substantial quantity of dust escaped through the one inch gap.  Mr Prynne did not submit and could not submit that the Recorder was wrong to proceed on that basis.
26.	Given the evidence, or the lack of evidence, on when the door had been inspected before 14 October, the Recorder stated that the conclusion he had to come to was that there was simply not a regular inspection system in place.  It was obviously insufficient.  There was no or no adequate record keeping of inspections.  The Recorder described this situation as “simply not good enough” and referred to “a sloppy attitude”.  He called it sloppy in part because there had been previous warnings issued to Cemex, or to those from whom Cemex had acquired the works.  These had not resulted in any criminal prosecutions, and the Recorder noted that Cemex had no convictions recorded against it.  The Recorder also accepted that Cemex had taken steps to remedy the matter and had not sat on their hands.  Ms Allen submitted that the problem was a short lived incident.  The Recorder stated that he accepted that submission.
27.	The second main point which Mr Prynne advanced to us on the facts related to the risk to health.  The experts’ Points of Agreement are set out in nine paragraphs.  The paragraphs relating to risk include the following:
“6. The epidemiological evidence from the scientific literature on the human health impacts of PM2.5 and PM10 pollution indicates that the health impact increases with increasing exposure and that within the range of measured concentrations there is no demonstrable threshold concentration below which no adverse effects occur.
7. Consequently an increase in concentrations, as is predicted to have occurred although not supported by Rugby Borough Council’s monitoring data, implies an increased adverse health risk in the exposed populations, although it is recognised that 
•	The assessment provided is likely to be representative of the worst case; 
•	The maximum calculated exposures due to release from the Rugby Cement Works on 14 and 15 October 2005 contributed less to overall exposure than the background pollution arising from other sources;
•	It was limited to two days, whilst the background pollution occurs throughout the year;
•	The extent of predicted elevated concentrations is small and only affects the south eastern boundary of Long Lawford;
•	There was no evidence of elevated concentrations at the monitoring stations in Long Lawford, but the plume of fine particles may not have crossed there.
8. Based upon the likely worst case concentrations predicted to have occurred in Townsend Lane Central, together with the mean concentration of PM10 measured at site AQMS 3 for 2005, the estimated contribution of additional exposures on 14 and 15 October 2005 amounts to 0.25% of the annual PM10 exposure.
9 On the basis of the likely worst case numerical modelling, the dust release from the cement works would have resulted in an increase in PM10 and PM2.5 concentrations but any adverse impact on human health would have been small in relation to that arising from long term exposure to particles arising from other sources.  Monitoring data showed no observable increase in PM10 or PM2.5 although it is possible that the plume for the incident did not pass over the monitoring station”.
28.	The Recorder paraphrased paragraphs 6 and 7 of the Points of Agreement at some length at the start of his sentencing remarks.  Having done that, he repeated, as he had already noted, that no one appears to have been harmed by this exposure and there was, at the date of sentencing, some twelve months after the incident, no report of adverse health consequences.  The Recorder specifically stated that he accepted Ms Allen’s submission that this was the position as far as concerned consequences in terms of adverse health.
29.	The submission that Mr Prynne made in relation to this aspect of the matter focussed on the part of the sentencing remarks in which the Recorder set out the contents of a document issued by Cemex and entitled “Material Safety Data Sheet Portland Cement Clinker”.  The document is introduced by the words:
“It is important that you or any persons working for you or to whom you have supplied clinker, become familiar with the information given on both pages of this data sheet, before handling, using or disposing of the material”.
30.	The hazards identified in the Data sheet included that, when clinker comes into contact with water, for example sweat or tears, a strong alkaline solution is produced, which may cause burns to the eyes or skin.  The Recorder stated that he referred to that because it forms the background to the seriousness with which the court should view this matter.
31.	The Recorder was entitled to refer to that Data sheet as background information, in the context of the emissions that had occurred through the broken door in this case.  In our judgment the Recorder made clear that he fully accepted the submissions of Ms Allen for Cemex as to the absence of adverse impact on the health of residents or employees of Cemex resulting from the offence in this case. 
32.	 For those  reasons we do not accept that the Recorder approached the sentencing exercise on any erroneous basis of fact, whether as to the source and quantity of the emissions, or as to the adverse risk or adverse consequences to the health of those who might come into contact with the dust, whether employees or local residents.  We are indebted to Mr Salmon for his submissions, assisting us in particular with the submissions made by Mr Prynne on the facts.
33.	We turn therefore to the final basis upon which Mr Prynne submitted that the Recorder erred namely that the sentence was manifestly excessive. 
34.	The case of Howe concerned sentencing under the Health and Safety at Work Act 1974 (“the 1974 Act”). Unlike offences under the 1974 Act, the offence in the present case was one of strict liability. Nevertheless,  we accept that it is of assistance in cases of environmental pollution. In that case an accident had occurred and a young man was electrocuted. The premises were those of a small business. The appellant had been fined £48,000 and ordered to pay £7,500 costs in respect of four offences under the 1974 Act and related regulations The company had failed to keep its electrical systems in a safe condition. Giving the judgment of this court, Scott Baker J (as he then was) stated (at p254-255):
“We shall endeavour to outline some of the relevant factors that should be taken into account. In doing so we emphasise that it is impossible to lay down any tariff or to say that the fine should bear any specific relationship to the turnover or net profit of the defendant. Each case must be dealt with according to its own particular circumstances.
In assessing the gravity of the breach it is often helpful to look at how far short of the appropriate standard the defendant fell in failing to meet the reasonably practicable test.
Next, it is often a matter of chance whether death or serious injury results from even a serious breach. Generally where death is the consequence of a criminal act it is regarded as an aggravating feature of the offence. The penalty should reflect public disquiet at the unnecessary loss of life.
Financial profit can often be made at the expense of proper action to protect employees and the public. Cost cutting is a crucial tool in achieving a competitive edge. A deliberate breach of the health and safety legislation with a view to profit seriously aggravates the offence…
Other matters that may be relevant to sentence are the degree of risk and extent of the danger created by the offence; the extent of the breach or breaches, for example whether it was an isolated incident or continued over a period and, importantly, the defendant's resources and the effect of the fine on its business.
Particular aggravating features will include (1) a failure to heed warnings and (2) where the defendant has deliberately profited financially from a failure to take necessary health and safety steps or specifically run a risk to save money.
Particular mitigating features will include (1) prompt admission of responsibility and a timely plea of guilty, (2) steps to remedy deficiencies after they are drawn to the defendant’s attention and (3) a good safety record.
Any fine should reflect not only the gravity of the offence but also the means of the offender, and this applies just as much to corporate defendants as to any other (see s 18(3) of the Criminal Justice Act 1991)…. 
The objective of prosecutions for health and safety offences in the workplace is to achieve a safe environment for those who work there and for other members of the public who may be affected. A fine needs to be large enough to bring that message home where the defendant is a company not only to those who manage it but also to its shareholders.”
35.	The Court in that case held that the Judge had given inadequate weight to the financial position of the appellant. This Court reduced the fine by £15,000.
36.	Mr Prynne submitted that the Recorder failed to take into account a number of features of the case, of which the following are the most significant. 
i)	There was no evidence that Cemex decided to put profit before ensuring appropriate environmental controls. 
ii)	The failure was not in the absence of a proper system, but in properly carrying out the system that there was. 
iii)	Cemex had completed the temporary repair by 2.45pm on the day that the EA notified it, and the full repair by about a day later. 
iv)	Much of the dust that escaped on 14 and 15 October came lawfully from the chimney stack.
v)	There were a limited number of complaints from the public, and no complaints of ill health or damage to property. The estimated quantity of additional exposure amount to 0.25% of the annual PM10 exposure. 
vi)	Cemex cleaned up the dust deposits the following week and reviewed and tightened its systems. 
vii)	Cemex co-operated with the EA, tendered a prompt plea and an apology to members of the community who had been affected. It had a good record.
37.	These are features of this case. The Recorder expressly accepted that all of them were present.
38.	Finally, Mr Prynne submitted that the fine of £400,000 was disproportionate to the gravity of the failure to conform to the requirements of the Permit and to the consequences of, or the harm done as a result of, that failure.
39.	We accept, as did the Recorder, that there are present in this case none of the aggravating features expressly mentioned in Howe and that there are present all of the mitigating factors referred to in that case. We also accept that the Recorder was entitled to find that there were present the factors which he identified as aggravating.
40.	Mr Prynne drew our attention to a recent decision of this Court made on 13 June 2007 in R v Clifton Steel Ltd [2007] EWCA Crim 1537, in which case the appellant company had been fined £150,000 following its pleas of guilty to breaches of the 1974 Act. A man died manoeuvring steel coil using a crane. In that case the failures were not deliberate, nor did they arise out a desire to save money. The Court substituted a fine of £100,000. In doing so the court applied the principles set out in R v Yorkshire Water Services [2001] EWCA Crim 2635; [2002] 2 Cr App R (S) 13. So far as relevant to the present case, those principles are similar to the ones set out in Howe.
41.	In the present case the Appellant is a part of a multinational group of companies with very substantial financial resources. There is no question of the Recorder giving insufficient weight to the financial position of the Appellant.
42.	The point in this case is a short one. It is whether, absent any fatality, or any actual damage to health, or any deliberate failure by Cemex, and given the mitigating factors referred to, this was a case requiring a fine of £400,000. In our judgment, a fine of £400,000 was disproportionate. Having regard to the considerations referred to in the cases we have referred to, the fine did not need to exceed £50,000. The sentence imposed by the Recorder will be quashed and a fine of £50,000 substituted.