Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Ian Lancaster v BHP Steel (AIS) Pty Ltd [2001] NSWIRComm 261 PROSECUTOR: Inspector Ian Lancaster PARTIES : DEFENDANT: BHP Steel (AIS) Pty Ltd FILE NUMBER: IRC 4083 of of 2000 CORAM: Haylen J CATCHWORDS : Occupational Health and Safety Act 1983 - s 15(1) - clearing of a coal pit clogged by wet coal - extraordinary weather conditions - rain causes fluidisation of coal - unexpected rush of fluidised coal leads to injury of employee - cleaning clogged machinery by standing under hopper on uneven wet coal - absence of proper supervision - absence of safe system of work - plea of guilty - defendant accepts seriousness of offence - risk clearly foreseeable - simple measures to eliminate risk - defendant having numerous previous convictions - relevance of size of undertaking, number of employees and inherently dangerous process - relevance of defendant's continual assessment and review of its systems of work - defendant engages independent consultants on safe systems of work - early plea and discount allowed - factors relevant to penalty LEGISLATION CITED : Occupational Health and Safety Act 1983 Occupational Health and Safety Act (Confined Spaces) Regulation 1990 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd and anor (2001) 105 IR 346 at 384 Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (Inspector Ch'ng) (1999) 90 IR 464 at 476 CASES CITED : Tyler v Sydney Electricity (1993) 47 IR 1 at 5 WorkCover Authority (NSW) (Inspector Glass) v Kellogg (Aust) Pty Ltd (No2) (2000) 101 IR 261 at par 46 WorkCover Authority (NSW) v Abigroup Contractors Pty Ltd (2000) 99 IR 196 at 215 par 27 WorkCover Authority (NSW) v Taco Controls Pty Ltd (1998) 82 IR at 85 HEARING DATES: 08/30/2001 EXTEMPORE JUDGMENT DATE : 10/26/2001 PROSECUTOR: Mr M Shume of counsel SOLICITOR: Peter Punch Carroll & O'Dea LEGAL REPRESENTATIVES: DEFENDANT: Mr J N West QC SOLICITOR: Stephen Nettleton Blake Dawson Waldron JUDGMENT: - 14 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HAYLEN J 26 October 2001 Matter No. IRC 4083 of 2000 Inspector Ian Lancaster v BHP Steel (AIS) Pty Ltd. Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2001] NSWIRComm 261 1 In this matter the defendant, BHP Steel (AIS) Pty Ltd, has entered a plea of guilty to a charge that it breached s 15(1) of the Occupational Health and Safety Act 1983 in relation to an accident which occurred on the 18 August 1998 at the BHP Port Kembla Steelmaking Plant at Five Islands Road, Port Kembla. The amended summons charged that the defendant, being an employer, did fail to ensure the health, safety and welfare at work of all its employees, in particular Jovan Mirceski, for undertaking cleaning work in the 4D pit of the coal preparation area in that: (a) the defendant at all material times employed a number of personnel in the coal preparation area of the BHP Port Kembla Plant; (b) the defendant failed to provide or maintain systems of work in the cleaning of the 4D pit of the coal preparation area so as to ensure the health and safety of employees at work; (c) the defendant failed to provide or maintain systems of work to comply with the Occupational Health and Safety (Confined Spaces) Regulation 1990 for undertaking cleaning work in the 4D pit of the coal preparation area; (d) the defendant failed to provide or maintain systems of work for employees undertaking cleaning in the 4D pit of the coal preparation area whilst coal was at risk of becoming fluid and engulfing the conveyor and chute area; (e) the defendant failed to provide such training as may be necessary for its employees in undertaking cleaning in the 4D pit of the coal preparation area; (f) the defendant failed to provide such training as may be necessary for its employees in working in a confined space pursuant to the Occupational Health and Safety (Confined Spaces) Regulation 1990; (g) as a result of the said failures Jovan Mirceski was placed at a risk of injury. 2 On the hearing of the plea the parties tendered an agreed statement of facts which, for present purposes, stated the essential surrounding facts as follows: 3. At all material times, the defendant conducted a steel making plant at the BHP Port Kembla Plant at Five Islands Road, Port Kembla in the State of New South Wales. 4. At all material times the defendant employed a number of the coal preparation area of the said plant including Jovan Mirceski, 58 years of age, as a Plant Operator in the coal preparation area. 5. On 18 August 1998, at about 5.45am, Jovan Mirceski was hosing coal off the conveyor belt in the 4D pit of the coal preparation area of the BHP Port Kembla Plant. While doing so, Jovan Mirceski suffered a dislocated left shoulder, pain in his left elbow, and a sore left lower leg. 6. An inspection of the coal preparation area was undertaken by the prosecutor during two visits on 13 October 1998 and 16 November 1998. Factual inspection reports were prepared and photographs were taken. 7. The investigation revealed that, in the 4D pit coal stockpile area on the northern side of coal Preparation Road, there are two openings covered by grids. These openings are where coal is loaded into the hoppers by Front End Loaders. These grids are approximately 4 metres wide X 4.8 metres in length. They consist of 11 squares in width X 14.5 squares in length in their design. Each square is 270 millimetres X 270 millimetres. The 11 squares in width are separated by approximately 20 millimetre steel and 14.5 squares in its length are separated by approximately 35 millimetre steel. 8. On the southern side of the Coal Preparation road there is a tunnel opening covered by corrugated sheet metal. The tunnel diameter is approximately 2.7 metres. Further Tunnel specifications have been derived from drawing number 365816. The following details have been taken from this drawing: · Tunnel length = 29.830 metres · Tunnel descends approximately 6.571 metres · Incline of the main section of the tunnel is 7 degrees. 9. There was a sign on the left hand handrail. The sign read: CAUTION Contact Coal Handling Control Room on P.A. System or ph 75 7467 for entry conditions 10. Tunnel lighting was fair at the time of inspection by the Prosecutor. 11. There was a metal pipe running the length of the tunnel which is used by a supersucker type vehicle to remove a coal/water mixture from the 4D pit. 12. The 4D pit is a below ground installation consisting of 2 X 23 that each feed onto a vibro feeder which then drops coal onto a conveyor belt. 13. There are 2 hoppers constructed of steel that are directly beneath the grids on the surface in the stockpile area. The hoppers are 24 cubic metres each and hold approximately 23 tonnes of coal. 14. The vibro feeds are tray-like in structure and are directly beneath each hopper. They are designed to vibrate so that the coal flows from the vibro feeder into an enclosed chute-like arrangement above the conveyor belt. At the time of the accident involving Mr Mirceski the coal in the hopper could not be completely stopped. The flow gates have since been modified to achieve this. 15. The chute into which the coal falls from the vibro feeders was approximately 4900 millimetres in length and 590 millimetres wide at the conveyor belt and 1000 millimetres in width at the level of the vibro feeders. 16. The height of the chute varied from 540 millimetres at the coal exit end and 1600 millimetres at the point beneath the vibro feeders and was of steel construction. 17. The chute was enclosed except for the end through which the coal was transported on the conveyor belt. 18. The prosecutor observed no signage denying access to the chute or the lower pit area which was accessed by two sets of concrete steps, one on each side of the pit. 19. On the day of the accident Mr Mirceski was instructed to clean belt and tail area in 4D pit by Gordon Gillespie, the Shift Operations Engineer. Gordon Gillespie instructed Mr Mirceski not to go into the chute area between the vibro feeders when he was cleaning the conveyor. 20. At the time of the accident, Mr Mirceski was hosing coal up the belt to the point where the steel sides of the chute stop and over the side of the belt. Mr Mirceski performed this task by moving backwards then hosing uphill then back again. Hosing, at that time, was the usual method of cleaning off the conveyor where coal had obstructed its tail. (Hosing remains the usual method of cleaning the conveyor). At the time, the coal in the hoppers became saturated enough to flow in a fluidised manner, due to a combination of wet coal being loaded into the hoppers and rainwater entering from the grids on the surface mixing with the coal in the hoppers. Mr Mirceski was working from within the chute area on top of the coal pile between the vibro feeders. 21. Mr Mirceski was swept off his feet when a substantial volume of fluidised coal flowed out from the hopper and he was moved up the conveyor belt to the mouth of the chute where he collided with the concrete wall before he was washed over the side, off the conveyor, falling approximately 1.2 metres to the walkway below. It was at this time Mr Mirceski dislocated his left shoulder, suffered pain in his elbow and a sore left lower leg. Mr Mirceski was lying on the walkway along side the conveyor with the coal continuing to flow over him when he was lifted up by Michael Bensley, Coal Handling Operator. Mr Akapai Mailei, Contractor, assisted Mr Bensley in getting Mr Mirceski out of the pit up the stairs and out via the tunnel. 22. Prior to the accident a procedure was put in place for Wet weather on the 23 March 1996 (Part 1). This procedure relates to the steps required to keep coal handling running during wet weather. It was put in place to prevent stoppages in the system as a result of sloppy coal. Sloppy coal is defined in the Wet Weather Procedure (Part 1) as "coal which has been exposed to heavy or constant rain and as a result has become liquid to a point where it begins to flow". This procedure does not address sloppy coal as a risk to the safety of personnel. It addressed the commercial risk of stoppages in the Coal Handling system. 23. Since the accident, the Wet Weather procedure (Part 1) was amended to reflect the risk to the persons. Over twenty (20) years prior to the accident on 18 August 1998 sloppy coal had interfered with the operation of the conveyor by bogging the conveyor on ten (10) to twelve (12) occasions. 24. Prior to the accident, BHP also had a Restricted Area Procedure which was dated 30 January 1998. This is classified as a Safety Critical Procedure. This procedure categorises restricted areas according to risk. It had rated 4D pit as a Category 3 restricted area. BHP did not classify the 4D pit as a confined space as set out in the Occupational Health and Safety (Confined Spaces) Regulation 1990. 25. BHP currently classifies the 4D Pit as a confined space as set out in the Occupational Health and Safety (Confined Spaces) Regulation 1990. 26. On 28 July 1999 the defendant requested Combined Training and Consulting Pty Ltd (CTC) to conduct a risk assessment on the "clearance of a blockage" in the 4D hopper/conveyor area. 27. Within this assessment, CTC classified the 4D pit vibros and chute as a confined space in certain circumstances. This risk assessment determines the safest method of cleaning blockages if certain actions were put in place and adhered to. The method of choice included working from the Vibro Platform without entry to the chute area. 28. Coal Preparation comprises three areas - Raw Coal, Battery Coal and Clean Coal. In order to work in all three areas of Coal Preparation, Mr Mirceski was required to be trained in a total of 64 procedures. Mr Mirceski had been trained in 24 of those procedures. 29. The training records for Mr Mirceski establish that he was trained and accredited to work in the Raw Coal and Battery Coal areas of Coal Preparation. At the time when the accident occurred Mr Mirceski was training to gain accreditation to work in the Clean Coal area. The records also establish that Mr Mirceski was trained in the Wet Weather Procedure (Part 1) on 5 July 1995 and that he was trained in the Restricted Area Procedure on 26 September 1996. 30. The 4D Pit where the accident occurred is a Raw Coal area and Mr Mirceski was training and accredited to work in that area. 31. As Mr Mirceski was trained in the Wet Weather Procedure (Part 1) in July 1995 he was unaware of the revision of the document that was issued in March 1996. 32. As a result of an initial inspection on the 13 October 1998, Prohibition Notice No. 115488 was served on BHP Steel (AIS) Pty Ltd to prevent persons entering between the hoppers, whilst on the conveyor, until a hazard identification, risk assessment and control measures were undertaken and then the appropriate training to be given to persons. 3 The WorkCover Authority's prior convictions data base showed that between June 1958 and July 2000 the defendant had been convicted on 71 occasions with 23 convictions under the Factories Shops and Industries Act, 14 convictions under the Construction Safety Act and thirty-four convictions under the Occupational Health and Safety Act of which thirty-two were under s 15(1). In June 1994 the defendant was convicted of an offence under s 15(1) of the Act and fined $100,000; in September 1999 the defendant was fined $65,000 in relation to a breach of s 15(1) of the Act, and in May 2000 the defendant was convicted of a breach of s 15(1) of the Act and fined $80,000. These last three convictions are the most significant convictions in recent times. It was common ground that the history of convictions brought into operation s 51A of the Act. It was also common ground that the maximum penalty was $825,000. 4 The defendant read and relied upon two affidavits which annexed numerous documents. The first affidavit was sworn by Mr Roger Fermino, who was the superintendent of Coal Preparation, who had held that position for approximately eight years. His role involved the planning, directing and controlling of all processes associated with washing, blending and grinding of coal and "the equipment effectiveness to achieve departmental business plan objectives". Mr Fermino described 4D pit as one of several underground installations at the Port Kembla steelworks used in the coal preparation process. The process involved raw coal being placed into two hoppers located in the pit and being discharged on to a conveyor belt using "vibro feeders". The conveyor belt operated on average for approximately twelve hours per day. 5 Just prior to the accident to Mr Mirceski on 18 August 1998, the Illawarra region had experienced extreme weather conditions with major flash flooding. Mr Fermino stated that, as a result of the severe rains, the coal feed to the 4D pit had become saturated with water and had bogged down the conveyor belt. 6 A wet weather procedure dated March 1996 was in operation at the time of the accident. It had been developed in consultation with staff including a day shift supervisor who had worked in the Coal Preparation Department for approximately 20 years. Mr Fermino said the weather conditions on the day of the accident were, however, unusual in that the coal feed to the hoppers became extremely wet and "sloppy". Notwithstanding the system had been stopped, the "sloppy" coal flowed from the hopper on to the conveyor belt at the time Mr Mirceski was cleaning the conveyor belt "at a speed and volume that had not been anticipated or experienced" by him. 7 There was immediate concern for Mr Mirceski's health and he was accompanied to hospital by the shift supervisor, Mr Gillespie, and Mr Fermino also visited him in hospital "to offer support". Mr Fermino took steps to ensure that Mr Mirceski's family was advised of the accident and assured them that he was in a satisfactory condition and receiving medical care. Mr Mirceski, at the time of the hearing, was receiving workers compensation entitlements for his medical expenses. 8 An investigation of the accident was commenced when Mr Fermino arrived at the workplace. The 4D pit was cleaned out with a piece of equipment known as a "super sucker" which involved the connection of a mobile vacuum pump and a receival tank sitting on a semi trailer above ground. All supervisors were advised on the day of the incident that cleaning of the conveyor belt in 4D pit was to be carried out by a nominated crew using the mobile super sucker equipment. 9 All front end loader operators were then advised that they must not pick up sloppy coal and that care was to be taken to ensure that feed into the hopper was not saturated. Only a bucket at a time was to be fed through the hopper. 10 The investigation into the accident was commenced by Mr Gillespie, shift supervisor, on 18 August and an initial investigation was completed by 19 August. That initial investigation identified wet coal, underestimation of the risk of fluidised coal, and poor egress from the top of the 4D conveyor as root causes of the accident. Mr Fermino issued a "Significant Safety Occurrence" notification on or about 21 August which was communicated to all staff throughout the steelworks. That notice identified the details of the incident, the injury received by Mr Mirceski and the corrective actions taken including carrying out a hazardous analysis involving the O H and S Committee "… which identified modifications to design out the need to stand on the conveyor". On the same day, a representative of the National Safety Council of Australia was invited by the Coal Preparation O H and S Committee to participate in an inspection of the 4D pit and to help conduct a risk assessment and to develop recommendations to reduce the potential for a recurrence of the incident. The investigation team made a number of recommendations. The Mechanical Inspector was then engaged to develop recommendations for mechanical solutions to design feasible means of safely cleaning the hopper. These recommendations were evaluated and acted on by their Mechanical Analysists and the Mechanical Planner shortly after the accident. 11 Mr Fermino stated that the defendant worked closely with Inspector Lancaster who visited the site on several occasions to inspect the pit and make recommendations to BHP. The Inspector was invited and attended a meeting of the Coal Preparation Staff in order to convey to that staff WorkCover's perspective of the accident. This was designed to lift the awareness of all staff within Coal Preparation and to convey to them the responsibilities they have to ensure that safe systems are followed. The Inspector accompanied safety teams on visits to the 4D pit to assess what modifications to the procedure and equipment could be reasonably and practically implemented. 12 Following the accident, the procedures for cleaning the conveyor belt were modified and were notified through safety meetings in January and February 1999. Changes were also made to the wet weather procedure. Mr Fermino outlined the current procedure for cleaning the conveyor belt which require the following steps to be taken by all staff required to clean and clear the 4D pit area, namely: · a job safety analysis and tool box meeting must taken place prior to commencing work; · no one is to proceed below the vibro feeder level at any time during normal operating conditions. If there is a need to proceed below this level then a risk assessment must be completed and appropriate control measures implemented to control any risks; · try to close the hopper gates as far as possible to stop/reduce any more spillage from coming out of the feed hopper; · operators required to hose the material off the conveyor from a level above the vibro hopper. 13 Mr Fermino also gave evidence of physical adjustments to the 4D pit which have been introduced in order to minimise the risk of harm to workers required to clear the conveyor belt. These adjustments were described as follows: (a) A platform has been installed on which workers are required to stand when they are cleaning and hosing the belt. The platform is located above the vibro feeder. This allows the belt to be cleaned without the worker standing on the conveyor belt. An access flap at the back of the conveyor was installed in December 1998 and this assists in removing coal from the conveyor belt and reduces the risk associated with the worker hosing the belt whilst in a potentially dangerous location. This flap is opened remotely from the vibro feeder level by the use of a pulley system. (b) Special flow gates have been installed to stop the flow of coal from the hoppers if and when it is required. These flow gates ensure that if the hoppers become full and the risk of coal fluidising is present then the flow of coal can be controlled or immediately stopped with the correct placement of the flow gate. (c) New self closing gates have been installed which are clearly labelled "No Entry beyond this point whilst system operating". 14 An affidavit from Mr Michael Cassar, Manager, Safety Health and Risk, was also read by senior counsel for the defendant. Mr Cassar had held the position of Manager, Safety Health and Risk of BHP Flat Products (a division of BHP that operates the steelworks) since April 1997. The Safety Health and Risk section of BHP Flat Products comprised some 35 employees. Mr Cassar descried the Port Kembla steelworks as occupying an area of 8 square kilometres traversed by 90 kilometres of railway lines and 50 kilometres of roadway. The steelworks commenced operation in 1928 and now constituted Australia's largest integrated steel making centre. He said that about 5,300 people are currently employed at the steelworks which has a plant capacity of 500 million tonnes of slabs per year and produces the bulk of Australia's flat steel products. The steelworks plant manufactures steel slabs, hot rolled coils, plate, tinplate and strapping. 15 The steelworks were described as comprising five main areas of operations. One such area was the No. 2 Works which included Raw Materials Handling, Cokemaking, Ironmaking and Steelmaking: the Coal Preparation Department falls within the No. 2 Works. Each area of operation was broken down into Departments. Mr Cassar said that the potential hazards and risks for safety arising from the operation in each area were different. 16 In relation to the Coal Preparation Department, it employed about 100 persons. It was responsible for managing the processes which convert raw coal into a coal product and those processes included: (a) Receiving and processing raw coal to produce both a coking and energy coal fraction; (b) Dispatch of energy coal and coke to stockpiles; (c) receiving and blending of coking coal from various supplies into a blended bed capable of being converted into metallurgical coke; and (d) recovery and treatment of the blended coal to supply the coke making process. 17 Mr Cassar gave evidence about the Occupational Health and Safety policy for all BHP group companies and how each employee had access to the policy. The fundamental principles underlying the defendant's approach to safety (its safety beliefs) were: (a) all injuries can be prevented; (b) all operating exposures can be safeguarded; (c) every person is responsible for safety; (d) management is accountable for safety performance; (e) working safely is a condition of employment; (f) training employees to work safely is essential, and (g) every person has the right to challenge or refuse to work in unsafe situations. The defendant also had in operation a safety management system which described the processes used by BHP to actively manage the safety requirements that "exist across the very complex and inherently dangerous steelworks site". Detailed evidence was given about the safety initiatives and programmes implemented across the steel works to ensure the health and safety of employees. These included specialist committees to suggest improvements and monitor particular hazards; the implementation of a behaviour based safety approach across steelworks; departmental hazard registers identifying risks arising from such hazards; an incident and "near miss" reporting system to aid investigation and to communicate all accidents and incidents at the steelworks; induction for all employees and contractors working at the steelworks, which may involve induction at two additional levels, namely departmental and job specific levels; job safety analysis and tool box meetings, including training in "take two" programmes involving taking time before commencing each job to stop, think and plan; Personal Safety checklist, which is a pocket sized card issued to employees and contractors and intended to be used as a reference and reminder guide to general safe working practices and safety audits for all personnel. 18 In relation to standard procedures and training Mr Cassar said that the defendant's system of procedures was Divisional Procedures applicable across the steelworks which cover all known hazards and set guidelines and standards which must be followed by each department with each department adapting the procedure to their own specific operation. There were also standard departmental operating procedures that set out general requirements for the performance of types of work and hazards associated with the operations of that department and there were task or job specific standard operating procedures developed by the department for the performance of specific tasks. Certain of the divisional and departmental procedures had been identified as "critical procedures", which were procedures involving actionable tasks associated with jobs and events that, if not carried out correctly, had a potential for serious injury. These critical procedures had to be reviewed at least once a year to ensure that they were effective and used correctly. There were job procedure checks conducted for all critical procedures: all personnel were to be trained or competency assessed for using a critical procedure for the first time. 19 In the Coal Preparation Department Mr Cassar stated that, if there was a change to a procedure or a new procedure developed, a standard form was sent to each supervisor detailing the change or new procedure. Each supervisor was required to return the signed form after having read it and understood the change or new procedure. If the record of returned forms indicated that a supervisor had not complied with the system that supervisor must address the issue. Compliance with this system, he said, was part of the performance review of each supervisor and there had been 89 procedural changes since 1996 and there was an average of 94.35 per cent compliance with the system. 20 In relation to external safety advice Mr Cassar's affidavit noted the following matters: 18. In 1995 BHP conducted a worldwide search and identified Du Pont, an American based explosives and chemical producer, as the leader in safety. Since 1995 Du Pont has provided BHP (worldwide) with safety advice and ideas at a general level. This involves BHP personnel visiting the Du Pont sites and also Du Pont making regular visits to BHP sites. BHP currently obtains advice from Du Pont on an as required basis. BHP has implemented some safety initiatives developed by Du Pont, for example: (a) The auditing technique of safe act observation where safe acts as well as unsafe acts is identified in audits across BHP; (b) the premise that line management is responsible for safety is now inherent in BHP's safety systems. 19. At the Coal Preparation Department Du Pont has been involved in training all supervisors in auditing techniques, providing exposure to new ideas and initiatives and conducting risk assessments. 20. The National Safety Council of Australia ("NSCA") has been engaged by BHP to provide the following safety services to Departments at BHP: (a) Occupational Health and Safety Committee training; (b) Five Star Safety Management System described in par 21 (c) Cardio Pulmonary Resuscitation for confined spaces and as required for electricians. 21. The Five Star Safety Management System is not a mandatory system across BHP and participation in the System is at the discretion of each Department … the Coal Preparation Department has adopted the Management System. NSCA audits, about three times per year, the safety systems in place within the participating Departments. At the completion of each year, the department is given a star rating by NSCA based on its systems performance and injury performance (measured by the Lost Time By Injury Frequency Rate). The highest star rating is Five Star. The Coal Preparation Department has been awarded a Five Star rating for the past three years. The NSCA also provides the Department with recommendations for improvements resulting from the audits conducted during the year. 22. BHP and the NSCA entered into a formal training and consultancy agreement on 26 July 2001 … Under this agreement, the NSCA continues to provide a Five Star Safety Management System referred to in par 21. 23. The Coal Preparation Department has previously engaged Combined Training Consultancy Pty Ltd ("CTC") to perform risk assessments. For example, CTC carried out a risk assessment when new equipment was introduced at Coal Preparation. Coal Preparation has implemented the recommendations given by CTC. CTC was also engaged to provide training to Coal Preparation operators in the safe cleaning around conveyors. 21 It was Mr Cassar's expressed opinion that Coal Preparation had a good safety record. He referred to safety statistics for the Department showing that it is currently achieving a lost time injury frequency rate of 0. He also stated that the last lost time injury occurred on 14 February 2000. 22 The Court was taken, in some detail, through the practices, procedures and initiatives undertaken and put into operation by the defendant. A graphic representation of lost time injury frequency rates since 1992/1993 indicated a significant improvement in the frequency rate especially since 1996/1997 and continuing until the present time. SUBMISSIONS 23 On one particular matter there was significant disagreement between the prosecution and the defendant. During the course of the hearing, I raised with the prosecution whether the flow of liquified coal in a slurry form, which swept Mr Mirceski off his feet, put him at risk of being engulfed by the slurry and therefore in danger of drowning in the liquified coal. In raising this questio, I had in mind the possibility that, in falling from the force of the slurry, an employee might be rendered unconscious or perhaps simply unable to raise themselves above the level of the slurry and therefore be in danger of suffocation or drowning. The prosecution stated that the fluidised coal could still flow to an area below the conveyor but if it did continue to flow and built up it could flow over an employee. Whether or not this was technically "engulfment" as used in the Confined Spaces Regulation, was not so clear. Senior Counsel for the defendant pointed out that, at about the area where Mr Mirceski was swept off the conveyor, he was grabbed by the person working with him and pulled out of danger. Further, there was a sump further up and lower down into which the coal flows. Therefore, at the time of this incident, there was no risk of Mr Mirceski being engulfed or drowned by the coal building up over his head. After this statement for the defendant, the prosecution accepted that, for the definition of "engulfment", there was most likely not a risk that an employee in Mr Mirceski's position would be completely covered and therefore drowned. However, it appeared that there may be a greater risk of the flow carrying an employee to a point where he could be drowned. 24 The prosecutor submitted that the risk in this particular matter was serious to the extent that there could have been a fatality. That could have arisen in three different ways: the first was the possible engulfment on the conveyor; the second was in relation to falling from the conveyor and the possible ramifications flowing from that; and the third was not so much engulfment but the effect of the flowing or moving down the stairs with the flow of liquified coal which could have led to engulfment. 25 This was an offence which would carry a maximum penalty of $825,000. The prosecution regarded the offence as falling "in the mid range". 26 In reference to the defendant's evidence as to its system of work, attention was drawn to the judgment of Walton J, Vice-President in Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd and anor (2001) 105 IR 348 at 384: 139. The systems of work adopted by the employer must include searching for and identifying all possible risks in the institution of safety measures to guard against those risks: WorkCover Authority (NSW) (Inspector Kelsey) v University of Sydney (unreported Hill J, Matter No CT 1280 of 1995, 2 April 1997 at 21) Employers are required to maintain constant vigilence and take all practicable precautions to ensure safety in the work place; Capral Aluminium v WorkCover Authority (NSW) (2000 NSW LR 610); 99 AR 29 at par 77. A corporate defendant will, in particular, need to ensure that those in its employ meet such obligations. That duty includes the superintendence of the conduct of staff of the first defendant charged with the responsibility of ensuring the establishment of and adherence with safe systems of work. 27 It was submitted that in this case the focus was on a failure to maintain a safe system. The prosecution highlighted foreseeability as an important issue. Again three matters were identified: the first being a failure to conduct a risk assessment of the space in terms of its being a confined space; the second was in relation to a risk assessment of the conveyor and that the system really identified a commercial risk in clogging the mechanism rather than safety risks; and lastly, the defendant's awareness of the problem of fluidisation. 28 It was submitted that the Court in imposing a penalty should incorporate the concepts of both general and specific deterrence. The discussion of these matters in Capral Aluminium Ltd v Workcover Authority of NSW (2000) 49 NSWLR 610 was relied on and in particular that part of the judgment stating that the concept of specific deterrence has a role to play where the offender continues to be an employer and thereby risks to the safety of its employees or contractors may exist or be possible. The judgment also noted that employers must adopt an approach to safety which is pro-active and not merely reactive, citing WorkCover Authority (NSW) v Taco Controls Pty Ltd (1998) 82 IR at 85, and that, in view of the scope of the obligations, in most cases it would be necessary to have regard to the need to encourage a sufficient level of diligence by the offender in the future. This was said to be particularly so where the offender conducts a large enterprise which involves inherent risks to safety (see WorkCover Authority (NSW) (Inspector Glass) v Kellogg (Aust) Pty Ltd (No 2) (2000) 101 IR 261 at par 46. 29 The prosecution accepted that the defendant pleaded guilty at the earliest opportunity in relation to the amended summons and the relevance of that fact for the purposes of mitigation. The prosecution also accepted that there has been an ongoing process by the defendant in relation to actual, physical remedies and in relation to changes and amendments in procedures. 30 Dealing with the defendant's safety record, the prosecution submitted that on the basis of the nature of the industry, the number of employees, the size of the plant, the number of processes involved within the business and the length of the business operation, the defendant's record indicates that it is making a reasonable effort to reduce the number of workplace accidents. 31 Lastly, the prosecution noted the co-operation given by the defendant in relation to the investigation of the matter and the involvement of WorkCover in assessing and assisting in the implementation of remedial steps following the accident. 32 Senior counsel for the defendant accepted the objective seriousness of the offence. What the company had not fully appreciated was that the slurry would behave in the way it did on this particular day. There was no doubt that standing on the coal and using it as a kind of ramp to get access to the coal to clear it away was a risk that was not appreciated. Nevertheless, it was not a case where the particular employee was unsupervised or left alone. Further, the task which he had been required to perform and was in the process of performing did not require him to go where he went. The presence of another person was part and parcel of the working system which the company had in operation; it was not doubted that that person's quick action saved Mr Mirceski from the possibility of more serious injury. Further, it was not a case where there was no appreciation of the risk because the risk was inherent. The defendant simply did not appreciate the extent of the risk because of the unexpected way in which the slurry acted on this day. 33 The defendant accepted that these factors did not detract from the seriousness of the breach. It was also accepted that the prosecution's assessment that this breach fell within the mid range was "… not an unrealistic assessment". 34 It was an important fact to note that the company had acted quickly, thoroughly and in a comprehensive way to carry out corrective measures not just of procedures but to design a new and safer way of performing the work. 35 The defendant discounted the prosecution's suggestion that a risk assessment conducted on the basis that the working area was a confined space would have exposed this particular risk. The defendant accepted that such a risk assessment might have identified this risk but that is as high as it could be put. The defendant did not treat the area as a confined space and there was a real doubt that, if a risk assessment had been conducted before this particular accident, the defendant would have been advised that it was a confined space and to be treated as such. Even if it had been treated as a confined space nothing may have changed and the defendant may have been in the same position as it was in when the accident occurred. Nevertheless, following the accident, the defendant has been prepared to treat the area as a confined space, has had a risk assessment conducted by an independent company and has adopted the recommendations as to how the clearing and cleaning work may now be performed without exposing employees to the risks that confronted Mr Mirceski. 36 In the defendant's submission there was no evidence of the defendant having previously experienced a rush of slurry as occurred in this instance. There had previously been difficulty with wet coal which clogged the mechanism but nothing of the nature experienced on this day. The defendant accepted that, in circumstances where wet slurry causes problems and a system in operation where the hopper opening was not fully closed, there is then an obvious danger of the wet coal coming through the hopper opening. The defendant also accepted that those factors went to the issue of foreseeability because it was clear that the company had knowledge "… of the foreseeable effects on the production process of slurry coming out of these hoppers". Indeed, that was what the wet weather procedures of 1996 were all about. The defendant appreciated that there was a risk and that that operated at a number of levels. There was a work process but inadequate surrounding backup to "drive that process home". The gates were not there; the particular directions about where not to stand were not there. Employees were simply told that they were not to go between the vibro feeders. The company got itself into trouble by reason of not properly thinking through what might be the logical effect of a person in the position of an employee charged with cleaning out the tail of this machine; it had gone part of the way but it had not gone the whole way. This was the proper description of what occurred on the day. Nevertheless, Mr Mirceski was "very lucky" in two respects: firstly, he had another person working with him close by and, secondly, he did not suffer further or different injuries. Even if he had hurt his head or knocked himself unconscious, under the system, there was still somebody else with him. That was a factor that had to be considered. 37 In relation to quantification of the penalty having regard to the seriousness of the offence and taking into account all of the particular circumstances of this case, the Court should be convinced that the offence comes within the medium range and towards the lower end of the medium range. In addition, there were a number of discounting factors to be taken into account. The prosecution had conceded the early plea of guilt. The company had shown contrition, demonstrated by its immediate and comprehensive reaction to the accident, by determining precisely what happened and then seeking to put in place revised work practices which, when followed properly, in connection with revised structural alterations would avoid a similar situation. The action was not simply one of producing "pieces of paper" but there were plainly appropriate alterations to the equipment. There was also to be taken into account the treatment of Mr Mirceski himself by the defendant. From the earliest time, the defendant, as the prosecution conceded had co-operated and continued independently to refine the particular place from which this procedure was to be carried out by installing a platform. Nobody else had recommended the platform but it was something done at the defendant's own initiative. It was submitted that these are all very significant matters when considering the appropriate penalty. 38 Senior counsel for the defendant accepted that the record of the defendant called into operation the provisions of s 51A of the Act. There were three or four recent convictions that might be considered of significance and would position the nature of this particular offence just on the inside of the mid range against the sort of penalties that have been recently imposed on the company bearing in mind that it is engaged in an inherently dangerous industry. It was submitted that the record, which no one would claim is good, is certainly not atrocious nor was it a bad record. The record of the defendant was a pretty fair record given the circumstances of its operation: "the company's in situ safety operations are substantial". For those reasons the defendant was entitled to the benefit of the positive features of its conduct. 39 A comparison was made with the decision of Wright J, President in WorkCover Authority (NSW) v Abigroup Contractors Pty Ltd (2000) 99 IR 196 at 215, par 27 where his Honour noted that in that case the system was inherently unsafe and that there was a lack of a short and simple work method statement reflecting the work methods actually being used, and where there was an absence of other devices such as warning stickers which were installed after the accident. In that case, the accident was readily foreseeable and in fact the defendant had been made aware of deficiencies in the manual and by the fact that an employee had developed his own procedure to overcome the deficiencies, but nothing had been done by the defendant to address those issues. In that case, the defendant had been fined the sum of $125,000. Senior counsel for the defendant submitted that there was a "balance and symmetry" between the circumstances of the cases whilst recognising that in Abigroup the defendant had an exemplary safety record. That company, however, was not operating in the same high risk industry as the defendant in this particular case. The defendant here had a "pretty fair record" given the circumstances of its operations. 40 Finally, it was submitted that in the case of this defendant the necessity for particular deterrence was "… not of a high order" bearing in mind that, progressively, lost time for injuries had been substantially reduced as an indication that the company's policies were working. DELIBERATION 41 The parties are in general accord as to the proper approach to take in this matter. It is a sign of the overall co-operation which has been shown by the defendant in assisting the investigation and utilising the experience and services of the WorkCover Authority in promulgating new procedures and installing a new method of cleaning the pit that this co-operation has continued in the addresses, and the helpful categorisation made by both the prosecution and the defendant that this matter falls within the mid range of penalties. 42 The defendant has frankly and properly accepted the objective seriousness of the offence, its foreseeability and the relatively simple steps which could have been taken to avoid the risk to which Mr Mirceski was exposed. In dealing with this matter I propose to be guided by the following principles: · The true measure of penalty lies in the nature and quality of the offence: subjective factors which mitigate against the seriousness of the offence or exculpate the accused must be secondary consideration (Lawrenson at 474). · The gravity of the consequences of an accident does not of itself dictate the seriousness of the offence. However, the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and culpability of the defendant (Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Lawrenson at 476. · It will be considered a serious offence where there is an obvious risk or a foreseeable risk to safety and where appropriate measures were not taken although those measures were available, feasible and relatively simple to adopt (Lawrenson Diecasting v WorkCover Authority (NSW) (Inspector Ch'ng) (1999) 90 IR 464 at 476. 43 In this particular case, the work task was simple. It involved unclogging the machinery which had been affected by wet coal. This was a well known feature of the work and the simple remedy was to hose down the effected area to remove the wet coal. The wet coal procedure, as correctly pointed out by the prosecution, directed itself to the commercial aspects of the machinery being clogged by wet coal and did not mention or give any consideration to the risk to safety that may attend upon such a situation occurring. The defendant knew that the hopper did not close over completely and that wet coal could drop through it. The defendant knew that cleaning out the hoppers and the associated machinery was hazardous. Notwithstanding Mr Mirceski performed this cleaning task in company with another employee, he stood on unstable and irregularly heaped wet coal under the hopper in order to wash it clean. The rush of liquified coal caused by unseasonable weather was just the next step in the progression from wet coal to liquified coal and as such could have logically and reasonably been foreseen. 43 I conclude that this was, indeed, a serious offence. That finding is one not only anticipated by the defendant but is one frankly acknowledged during the address of its senior counsel. 44 There was some evidence of the defendant's contrition demonstrated by Mr Fermino's evidence as to the prompt notification and assurances to Mr Mircesksi's family and Mr Fermino's personal attendance at the hospital to check on Mr Mircesksi's medical progress. The prompt response to the accident and the notification to the workforce of both the accident, the injuries received by Mr Mirceski, and the early steps taken to investigate and look for alternative measures and procedures, also provides some evidence of the defendant's contrition. In this particular case, the element of contrition, nevertheless, does not loom large in the assessment to be made of an appropriate penalty. To the extent that there is evidence of contrition as indicated above the defendant is entitled to have it taken into account. 45 The steps taken by the defendant to remedy the deficiencies exposed by the accident (whilst in some way, as noted above, relevant to contrition) is also a factor to be considered in its own right. The defendant presented quite impressive evidence of its commitment to workplace safety. These measures have been more recently enhanced by engaging independent advisers and consultants. Diagrammatic evidence suggested that the various steps and measures taken by the defendant over recent years has led to a significant decrease in time lost through injuries at work and I am prepared to accept the defendant's submission that the fair inference is that the measures that have been taken are working. 46 In relation to the only matter seriously contested between the parties, namely, whether a risk assessment conducted on the basis that the work was undertaken in a confined space would have exposed this particular risk I am unable to conclude with any certainty that such is the case. It may well have been that a risk assessment conducted on the basis that the work was being conducted in a confined space would have raised the issue of engulfment and that in turn may have concentrated attention upon the properties of wet coal becoming saturated and the hopper not properly and fully closing so as not to prevent or inhibit a surge of slurry as occurred in this particular instance. The defendant concedes that it is a possibility, but a mere possibility, that such a conclusion would have been reached if the work place was treated as an enclosed space. 47 In my view, not a great deal turns upon this issue in any event. It is sufficiently demonstrative of the defendant's culpability that it already knew of the problem of wet coal and fluidity and was aware that the hopper did not completely close. The defendant describes the combination of extraordinary weather conditions leading to the production of a slurry from what was previously just wet coal as creating a circumstance not experienced before. As I have already indicated that submission does not detract from the defendant's culpability nor from the seriousness of the offence. 48 The defendant also seeks to make a virtue of the presence of another employee as demonstrating the basics of a safe system. It is then suggested that the presence of the second employee ensured that Mr Mirceski was not subjected to even greater risk and injury. This may also be a matter of some conjecture. Much might have depended on where the second employee was positioned as to how much assistance could have been readily offered, and it cannot be excluded from consideration that circumstances might have conspired so that, quite unexpectedly, both employees became involved in standing on the unstable and heaped wet coal in order to unclog the machinery. In relation to this aspect the presence of a second person may be more a matter of good fortune than necessarily linked to good safety management. As senior counsel conceded, Mr Mirceski was very lucky; the requirements of the Act do not hinge upon luck but rather require the employer to ensure the safety of its employees at work. 49 I accept the prosecutor's submission that general and specific deterrence should feature in the assessment of the penalty in this case. As the Full Court of the Commission in Court Session noted in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610: 73. Although general deterrence and specific deterrence have differing purposes or aims, the varying aims of deterrence are particularly relevant in Occupational Health and Safety prosecutions in light of the objects and terms of the Act. As Hungerford in Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 said: The fundamental duty of the Court in this important area of public concern … [is] to ensure a level of penalty for a breach as will compel attention to occupational, health and safety issues so that persons are not exposed to risks to their health and safety at the work place. 74 We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industries Pty Ltd accurately states the approach that members of this Court should take in relation to the question of deterrence, both general and personal, or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both aspect of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Wilco Hoists Rentals Pty Ltd (No 2) [2000] NSWIRComm at 40 - 43) we would expect such cases to be very rare and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. The fact that an offender conducts a large enterprise, which involves inherent risks to safety, will not remove the necessity to encourage the offender to achieve a higher level of safety in the future ( Capral at 77; WorkCover Authority (NSW) (Inspector Glass) v Kellogg (Aust) Pty Ltd [2000] NSWIRComm 53 at 46). In that sense, both general and specific deterrence is a consideration in the present case although the need for a specific deterrent is properly adjusted here because of the evidence of the defendant's extensive efforts to not only implement but to continually review and improve its safety programme. 50 The defendant is entitled to have the benefit of an early plea of its guilt. Applying the guideline judgment of the Court of Criminal Appeal in R v Thomson; R v Houlton [2000] 49 NSWLR 383, this factor should not be diminished by considerations concerning suggestions of the inevitable success of the prosecution. In this case I am of the view that an appropriate discount for the early plea and its utilitarian value is 20 per cent. 51 A consideration of the defendant's record presents some difficulties. As the evidence indicates the defendant conducts a very large undertaking in an inherently dangerous industry and employs many people. Its senior counsel frankly conceded that the record was not good but I believe he was correct to categorise it in a comparative sense. It would not be correct to approach the defendant's record on the basis that it was "atrocious". The numerous convictions have to be seen against a recent history of diminishing work place injuries and the prosecutor's concession that, considering the nature of the industry, the number of employees, the size of the plant, the number of processes involved within the business and the length of the business operation, the record indicates that the defendant is making reasonable effort to reduce the number of work place accidents. I intend to approach the setting of penalty on that basis. 52 In all of the circumstances, and taking the abovementioned matters into account, I determine that the defendant should be fined $200,000, being a final sum reflecting a 20 per cent discount for utilitarian considerations. ORDERS 53 I therefore make the following orders: 1. The defendant is convicted of the offence charged under s 15(1) of the Occupational Health and Safety Act 1983. 2. The defendant is fined the sum of $200,000, with moiety of that fine to the prosecutor. 3. The matter to be re-listed to deal with the issue of costs. It is my intention that the defendant should pay the prosecutor's costs of these proceedings. If the costs are either agreed or not agreed, the matter may be re-listed pursuant to Order 3 to permit the making of a specific order as to the level of costs awarded. oo00oo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.