Industrial Relations Commission of New South Wales in Court Session CITATION: Morrison v Zinifex Australia Limited (formerly Pasminco Australia Limited) [2005] NSWIRComm 340 PROSESCUTOR Inspector Rodney Morrison PARTIES: DEFENDANT Zinifex Australia Limited (formerly Pasminco Australia Limited) FILE NUMBER(S): 1563 of 2001 CORAM: Marks J CATCHWORDS: OH&S Prosecution - early guilty plea - expert evidence adduced regarding specific mining issues - objective seriousness of offence - forseeability of risk possible not probable - failure to act on a report of possible risk - company no longer operates in NSW but continues to act throughout Australia - specific deterrence - other subjective factors considered - penalty imposed - defendant charged. LEGISLATION CITED: Occupational Health and Safety Act 1983 Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 CASES CITED: Morrison v Coal Operations Australia Limited (No 2) [2005] NSWIRComm 96 R v Olbrich (1999) 199 CLR 270 HEARING DATES: 04/12/2005; 09/15/2005 DATE OF JUDGMENT: 11/18/2005 PROSECUTOR Mr R J Burbidge QC and Mr J Kernick Solicitor: Ms A Paul Crown Solicitors Office LEGAL REPRESENTATIVES: DEFENDANT Mr K Bennett of counsel Solicitor: Mr S Nettleton Blake Dawson Waldron JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Marks J Friday 18 November 2005 Matter No IRC 1563 of 2001 RODNEY MORRISON v ZINIFEX AUSTRALIA LIMITED (FORMERLY PASMINCO AUSTRALIA LIMITED) (ACN 004 074 962) Prosecution under s.15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2005] NSWIRComm 340 1 These proceedings concern a prosecution brought by the prosecutor, now of the Department of Primary Industries, against the defendant, Zinifex Australia Limited, formerly known as Pasminco Australia Limited, for a breach of s 15(1) of the Occupational Health and Safety Act 1983 ("the Act"). The proceedings were originally commenced by summons filed in February 2001 and were the subject of an amended application filed on 24 February 2005. The amendment significantly reduced the particulars of the offence alleged against the defendant. The proceedings were significantly delayed by reason of the fact that Pasminco Australia Limited entered into administration in September 2001 and did not come out of administration until April 2004, following its acquisition by Zinifex Australia Limited. 2 Immediately after the particulars against the defendant were amended in the manner which I have indicated, the defendant entered a plea of guilty. This judgment deals only with the question of penalty. 3 A statement of agreed facts was filed in the proceedings. It is in the following terms: 1. At all material times the Prosecutor was Assistant Director of Performance Improvement at the then Department of Mineral Resources (now the Department of Primary Industries) and had been given written consent to institute proceedings in this matter by a prescribed officer within the meaning of section 48 of the Occupational Health & Safety Act 1983 (NSW) and clause 3 of the Occupational Health & Safety (Administration) Regulation 1992. 2. At all material times the Defendant, Zinifex Australia Limited (formerly Pasminco Australia Limited) (ACN 004 074 962), was an incorporated company with its registered office located at 380 St Kilda Road, Melbourne, Victoria 3004. 3. At all material times, the Defendant owned and operated Elura Mine via Louth Road, Cobar, in the State of New South Wales. Elura Mine is located approximately 45 kilometres north of Cobar. 4. Elura Mine is an underground base metals mine at which zinc and lead is extracted and refined. Elura Mine is established to mine an ore body which is an oval shaped near vertical pipe. The main ore body extends close to the surface. 5. The Defendant no longer owns or operates Elura Mine and has ceased to conduct any mining operations in New South Wales. Elura Mine is now operated by another entity unrelated to the defendant. 6. At all material times at Elura Mine, the ore body was mined by a series of open stopes, each stope being about 70 metres high, normally extending the full east-west thickness of the ore body (up to 120 metres) and having a width of between 20 metres and 40 metres. The primary stopes were separated by pillars of ore which could be subsequently mined. There were a number of stopes at each level. A level of stopes was referred to as a block. At Elura Mine, by way of example, block 2 extended from about 150 metres to 225 metres below the surface, block 3 from about 225 metres to 310 metres and block 5 from about 400 metres to 480 metres below the surface. 7. The stopes and pillars in each block were numbered from North to South. For instance, stope 5/1 was the northern most stope in block 5 and stope 5/9 was the southern most stope. The second number in the sequence referred to a pillar initially left between primary stopes. For instance, the 5/2 stope was the pillar between primary stopes 5/1 and 5/3. The basic method of mining was to excavate a stope thereby forming a large open cavern. This cavern (open stope) was then back-filled with cemented or uncemented waste material to facilitate support of the rock mass as further stopes were extracted. 8. Above each block of stopes was a drill horizon from which blast holes were drilled using a 13MD Rotary Drill Rig to extract the stopes. Beneath each block of stopes was a haul horizon from which the blasted ore was removed through large rock funnels created in the base of each stope. 9. By 1 March 1999, the ore body had been mined out down to 4 haulage level, approximately 10 metres above 5 drill level. The 5 level block of stopes between the 5 drill and 5 haulage levels had been mined out with the exception of the 5/5 stope and mining was taking place in the 5/5 stope, the 6/6 stope between 6 drill level and 6 haulage level and in the northern lodes. 10. For the purposes of this Statement of Agreed Facts, and only for the purposes of this Statement of Agreed Facts, David Kittel was employed by the Defendant as a Rotary Drill Operator at Elura Mine. Mr Kittel was an experienced underground operator having performed work at Elura Mine since 18 November 1988. 11. On 28 February 1999 David Kittel commenced work on the night shift which operated between 8.00pm to 8.00am. He was assigned the task of drilling production holes in the 5/5 stope on the 5 drill level. 12. The supervisor of Mr Kittel, Mr Anthony Macleavy, had checked on Mr Kittel every 2 hours during the night shift on 28 February 1999. During the last such check at approximately 5.30am, Mr Kittel was seen by Mr Macleavy to be hosing away cuttings from a drill hole with a water hose. Mr Kittel was seen by Mr Macleavy to be located between the drill rig and the southern wall of the 5/5 stope in a crouching position beside the drill rig. 13. At approximately 5.36am during the night shift on 1 March 1999, Mr Kittel was struck by rocks which were ejected as a result of a dynamic rockburst from the wall of the drive. 14. David Kittel suffered fatal injuries when he was struck by the rocks. 15. Following an investigation conducted by the Defendant of the area of the accident, the following observations were made relating to the nature of the rockburst: (a) the rockburst or spalling included a failure through intact rock from the side wall (it was not just along pre-existing discontinuities in the rock mass); (b) the rockburst or spalling occurred over a length of the southern sidewall of the 5/5 south drill drive but was worst in the vicinity of the fatality. However, a brick wall constructed across a break-through in the southern side wall showed no signs of disturbance; (c) the rockburst was sudden and instantaneous and resulted from high stress levels present in the rocks in the 5/5 stope; and (d) the rocks which struck Mr Kittel came from the lower portion of the southern sidewall of the 5/5 south drill drive, being at or below 2.5 metres from the ground. 16. There was a risk of stress induced rockburst in the vicinity of the 5/5 stope on 1 March 1999. 17. In relation to the 5/5 stope, the back (crown or roof) of the 5/5 south drill drive was supported with rockbolts and mesh to about the front of the rotary drill which Mr Kittel was operating. There were only rockbolts east of the rotary drill. There were rockbolts in the middle and upper parts of the side wall next to Mr Kittel. The rockbolts in the lowest line of rockbolts varied in height between approximately 2.5m and 3.5m above the ground. The rock ejected in the rockburst came from both between and below the rockbolts in the side wall. 18. The Ground support regime in the walls of the 5/5 south drive, 5 drill level did not include rockbolts being installed in the lower portions of the side walls of 5/5 south drive, 5 drill level. Nor did the ground support regime include meshing and/or shotcreting between the rock bolts installed in the side walls in 5/5 south drive, 5 drill level. 19. The Defendant, Zinifex Australia Limited (ACN 004 074 962), an incorporated company with its registered office located at 380 St Kilda Road, Melbourne, Victoria 3004, an employer, breached section 15(1) of the Occupational Health & Safety Act 1983 on 1 March 1999 at the Elura Mine located via Louth Road, Cobar, in the State of New South Wales, in that it failed to ensure the health, safety and welfare of its employees at work and in particular David Kittel. In particular, the Defendant failed to provide support to the walls of the 5/5 south drive, 5 drill level adequate to ensure the safety of Mr Kittel, an employee, who was working therein. 4 A number of expert reports, plans and photographs were tendered into evidence. These included a report tendered by the prosecutor of Pells Sullivan Meyniek Pty Ltd, Engineering consultants, which was prepared some two years after the incident. The evidence on behalf of the defendant was significantly comprised of an affidavit and extensive documentation annexed thereto of Peter John Fairfield, a mining engineer who at the time of the incident was the mine manager at the mine. Mr Fairfield was cross-examined on his affidavit and also gave oral evidence by way of re-examination. 5 The starting point for the consideration of what is an appropriate penalty is the objective seriousness of the offence (see Morrison v Coal Operations Australia (No 2) [2005] NSWIRComm 96 and the authorities cited therein). It is well established that, in determining the objective seriousness of the offence, the foreseeability of the creation of a risk to health and safety is a factor which is to be taken into account (see Capral Aluminium v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at 646). Accordingly, the extent to which the risk was foreseeable will assist in determining the level of culpability of each defendant. In Morrison, a Full Bench of this Court observed that foreseeability was not necessarily the only factor to be taken into account in assessing the objective seriousness of an offence. In making this observation, the Full Bench had regard to the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (1999) 92 IR 188. His Honour (at 210-211) said that the "proactive approach" required by persons bound by the Act entitled the court to take into account the fact that work being undertaken was "very dangerous or perhaps even inherently unsafe" by reference to the particular industry or part of the industry with which the defendant was involved. In those proceedings, his Honour was dealing with circumstances involving the construction of a bridge 16 to 18 meters above a gorge or gully, which his Honour noted involved a significant risk to health and safety which was not a remote possibility. 6 The controversy between the parties in the context of these proceedings centred around whether and to what extent the risk of injury was foreseeable. The defendant submitted that, in effect, the risk was extremely unlikely to occur. The prosecution submitted that the risk was clearly foreseeable and that the defendant had chosen not to do anything about it, had declined to carry out tests which would or may have detected the particular risk to injury which occurred, and which had led to the breach with which the defendant is charged. 7 In order to deal with the arguments and counter-arguments in this regard it is necessary to draw attention to some of the evidence contained within the reports to which I have referred and which was given orally in the proceedings. 8 The Prosecutor relied substantially on the report of P J N Pells, dated 25 February 2005. Dr Pells was of the opinion that incident was caused by "rock burst" which occurs "when rock is very highly stressed and the energy stored in the rock by virtue of this high stress is released in a brittle and violent manner". He was of the opinion that there was evidence of natural rock stress in the vicinity of this particular mine, displayed from measurements obtained in 1997. He said that the stresses which were found naturally within the ore body changed substantially as mining operations progressed. This was pertinent also to the particular area where the deceased employee was working at the time of the incident. 9 The defendant had retained Peter O'Bryan & Associates Mining Geomechanic Consultants, to undertake a geotechnical review of the mine in August 1998. A "draft" report was prepared on 17 November 1998. The report dealt with the stability of the mining area at that time, and particularised observations with respect to a number of specific areas, not being the precise area where this incident occurred. The report noted a failure in the 5/3 stope area and said that there was "in some areas" minor evidence of stress-induced "notching". With respect to the 6/6 stope area, recommendation was made to undertake structural geological mapping "to obtain data to permit re-assessment of the support regime". With respect to the 5/5 stope area it was stated that the formation of the void "will lead to further load concentration in the remaining portion of the 5/5 block" and, that later "mass blasting/pillar wrecking in 5/5 stope will result in additional load being directed through the northern portion of the block…". 10 With respect to stress measurement, the report of O'Bryan & Associates concluded that "conduct of further absolute stress measurements is not critical to the prediction of rock mass response to proposed mining. Consideration should, however, be given to measuring mining induced stress changes in stope crowns and/or ribs". In oral evidence, Mr Fairfield said that the company considered measuring the stress changes but decided against it. 11 A document entitled "Risk Assessment Mining Strategy, March 1998" prima facie suggests that there was a detailed and comprehensive risk assessment undertaken by the defendant at that stage encompassing all aspects of the mining operations, and all areas which were the subject of mining operations. In making these observations I do not and, on the basis of the evidence, cannot, comment as to the adequacy of the steps outlined in the document to be undertaken by the defendant to reduce risk of injury and those measures which the defendant deemed unnecessary to undertake. 12 A regional inspector of mines carried out an inspection of the 5/5 stope area on February 5 1999 following concerns raised by employees about noise levels in the mining operations which were indicative of some movement in the ore body. After discussions with mine personnel and after an inspection, the Inspector concluded that with respect to the 5/5 stope area it was likely that no adverse event would occur because of the way in which the mining operation was being conducted. However, the report said that it was "highly likely that there will be a progressive collapse of the 5/3 stope crown" and recommended careful monitoring and the removal of people from affected areas. Furthermore, the report said that "The booting and movement in 5/5 Haulage Drive is of more concern". The report recommended that after work had been undertaken in the 5/5 stope area that "a review by your geotechnical consultant may be beneficial in view of the stress being encountered…". 13 If seems that the defendant did not undertake any activities in response to the concerns raised by the Inspector's report, at least prior to the incident occurring on 28 February 1999 which gave rise to these proceedings. 14 In response to the reliance by the Prosecutor on the Inspector's report as indicating that there was a risk of injury which was foreseeable, the defendant submitted that the report was directed to a progressive collapse of the 5/3 stope crown, and not to the possibility of a rock burst. 15 In dealing with the respective submissions of counsel, I take into account the undoubted expertise of Dr Pells and the authors of the various technical reports admitted into evidence. I also take into account that although Mr Fairfield was, at the relevant time, the mine manager employed by the defendant he does have expertise as a mining engineer. I do not perceive that Mr Fairfield's evidence, especially that given orally, was indicative of any particular bias. It is my impression that Mr Fairfield was prepared to accommodate contrary positions put to him in cross-examination where he thought it appropriate to do so. 16 It is quite clear from the expert evidence that it is possible to differentiate a stress-induced failure in the nature of a "rock burst" as occurred in this incident, from what was described by Dr Pells as "gravitation induced fallout of blocks of rock from the backs (roofs or crowns) and sides of excavation. Purely gravitational induced fallout is when a block of rock, defined by pre-existing joints, falls out like a Newtonian apple. Stress may induce new fractures which, combined with existing joints, allows a block of rock kinematic freedom to fall under gravity". This was to be compared with what Dr Pells described as "…violent stress-induced failure (where) sufficient energy is released to forcibly eject rock from sidewall or crown". 17 It is quite clear from the evidence that a great deal of consideration was given to risk of injury created by gravitational induced fallout of rock. It seems to me from the evidence that not a great deal of concern was given to the possibility of rock burst. However, there appears in my opinion to be little evidence which is indicative that rock burst was likely to create a problem although there was an acknowledgment that it existed as a phenomenon. Although the Prosecutor, on the basis of the report of Dr Pells, pressed a submission that virgin stresses in the mine could be measured, the impression that I have from the overall evidence is that measurements and calculations of virgin rock stresses, from time to time after the commencement of mining operations, are not precise, and are not necessarily indicative that a rock burst might occur at any particular area. 18 I conclude that the risk of rock burst which occurred in this incident could not be said to be either remote or fanciful. I conclude that there was a risk of rock burst which was present throughout the whole of the mining operations, including the area where this incident occurred, although it was, on the evidence, not sufficiently obvious as to put these proceedings in anything like a worst possible case. I would characterise my understanding of the evidence as indicating that the risk of injury was a possibility rather than a probability. This is particularly so in general terms. 19 It is necessary to bear in mind that in drawing inferences adverse to the interests of the defendant it is necessary for the Prosecutor to prove any particular matter in accordance with the usual criminal standard (see the joint judgment of Gleeson CJ, Gaudron, Hayne and Callinan JJ in the High Court of Australia in R v Olbrich (1999) 199 CLR 270 at paragraphs [25] and [27]). 20 There are a number of other matters which need to be taken into account in assessing penalty. These include matters of general and particular deterrence. In fixing penalty, I will have regard to the general deterrent effect that the imposition of an appropriate penalty will create. In terms of this particular defendant, I note that it no longer carries on any mining activities in New South Wales and there is evidence to the effect that it has no intention of doing so. Nevertheless, it does carry on mining activities in other parts of Australia. In my opinion it is thus necessary to take into account the specific deterrent effect on this defendant, albeit to a lesser extent. 21 It is agreed between the parties that the defendant cooperated fully with investigations being undertaken by the then Department of Mineral Resources, that it had demonstrated contrition, that it had in place both prior to and after the incident a proactive policy and regime directed to its Occupational Health and Safety obligations, and that after the incident it ceased all mining operations in the particular area concerned. Furthermore, the defendant entered a plea at the "earliest possible opportunity" after agreement had been reached between the defendant and the prosecutor, leading to a significant amendment to the charge by confining the particulars in the manner currently pleaded. I will accept this as representing a plea at the earliest possible opportunity and apply a discount in accordance with well-established authority. 22 The defendant having no prior convictions, the maximum penalty is the sum of $510,000. Having regard to the objective seriousness of the offence and all of the matters to which I have referred, I conclude that an appropriate penalty in these proceedings is the sum of $115,000. 23 The prosecutor sought orders for the payment of a moiety and costs which were not opposed. 24 I make the following orders: 1. The defendant is found guilty and convicted of the charge brought against it by reason of the amended order. 2. The defendant is fined the sum of $115,000 with a moiety to the prosecutor. 3. The defendant is to pay the costs of the prosecutor as assessed by the court in default of agreement. 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