Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Lyons v Rentokil Initial Pty Ltd [2002] NSWIRComm 321 PROSECUTOR Inspector David Lyons PARTIES : DEFENDANT Rentokil Initial Pty Limited FILE NUMBER: IRC2025 of 2001 CORAM: Peterson J CATCHWORDS : Occupational health and safety - prosecution - charge under s16(1) - plea of guilty - pesticide chemicals sprayed near air conditioning unit - severe irritation and discomfort suffered by persons exposed - penalty at lower end of scale appropriate - second offence - penalty imposed. LEGISLATION CITED : Occupational Health and Safety Act 1983 s16(1) WorkCover Authority of New South Wales v Goodman Fielder Mills Ltd [1994] NSWIRC140, 30 November 1994 CASES CITED : WorkCover Authority of NSW (Inspector Milligan) v Hydromet Operations (Southern) Ltd [1998] NSWIRComm 219 WorkCover Authority of New South Wales (Inspector Huber) v State of New South Wales, known as the Hunter Area Health Service, unreported 18 June 1999, IRC98/2261 HEARING DATES: 06/27/2002 DATE OF JUDGMENT: 11/29/2002 PROSECUTOR Mr R Reitano of counsel SOLICITOR Phillips Fox SYDNEY. LEGAL REPRESENTATIVES: DEFENDANT Mr J W Nolan of counsel SOLICITOR Clayton Utz SYDNEY. JUDGMENT: - 10 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: PETERSON J DATE: 29 NOVEMBER 2002 Matter No. IRC2025 of 2001 INSPECTOR DAVID LYONS v RENTOKIL INITIAL PTY LIMITED Prosecution under s16(1) of the Occupational Health and Safety Act 1983. JUDGMENT 1 The defendant, Rentokil Initial Pty Limited, is charged by David Lyons, an Inspector in the employ of the WorkCover Authority of New South Wales, in relation to a breach of s16(1) of the Occupational Health and Safety Act 1983 ('the Act'). The proceedings were commenced on 16 March 2001, 23 months after an incident which occurred on 12 April 1999. On 2 April 2001, Hungerford J ordered ex parte the defendant to attend the Commission in Court Session on 10 May 2001 to answer to the offence alleged by the prosecutor. It was then referred to the Registrar's list and came before the Registrar on 7 June 2001 and on 13 other occasions, on the last of which a plea of guilty was entered. It was suggested in the course of the hearing that the delay was occasioned by lengthy discussions between the parties concerning the formulation of an agreed statement of facts. This raised an issue concerning the countervailing propositions advanced by the prosecutor and the defendant as to the earliness of the plea of guilty. 2 The offence the subject of the charge related to an incident at Shellharbour when an employee of the defendant attended business premises to utilise a chemical spray to treat fleas which were infesting an underground storage area, an adjacent work area and a hallway connecting them. The chemical spray was taken up by the air intake of a nearby air conditioning plant which was servicing offices above. This had a detrimental effect upon certain occupants of those offices; two required medical attention. Accordingly, the prosecutor relied upon s16(1) of the Act which creates an offence where an employer fails to "ensure that persons not in the employer's employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work". 3 The entry of a plea of guilty accepts that there was a relevant proximity between the persons in the upstairs offices and the workplace of the defendant's place of work. 4 The matter proceeded upon the basis of an agreed statement of facts which recognised the authority of the Inspector to prosecute, the incorporation of the defendant and contained the following material matters: 3. At all material times the Defendant: (i) Was engaged in administering a pest control treatment at premises located at 134-134A Lamerton House, Shellharbour, Blackbutt in the State of New South Wales ("the premises"); (ii) Employed Peter Raymond Carberry as a licensed pest control operator ("Carberry"); 4. On 12 April 1999 Carberry was carrying out a pest control treatment for fleas at the premises. Carberry sprayed the insecticide Dursban Micro Lo Termiticide and Insecticide ("Dursban") to the underground storage area, a room adjacent to this underground storage area housing the building's air conditioning system and the hallway linking these two areas to the outside of a building at the premises known as Lamerton House. 5. At the time of the pest control treatment, four office areas in the building were serviced by an air conditioning system that was located in the plant room. Three of these office areas were occupied. During the treatment and afterwards, occupants present in the office areas of the building began to experience eye, nose and throat irritation as well as headaches and nausea as a result of exposure to Dursban insecticide. The incident resulted in two of the affected workers requiring medical attention. 6. On 12 April 1999, an Inspector of the Workcover Authority of New South Wales attended the premises and observed as follows: (i) Lamerton House, a four level building situated south of Shellharbour Square Shopping Centre. (ii) At ground level there were four shop front offices. Office 1 was occupied by the Illawarra Credit Union, office 2 was occupied by the Government Insurance Office and office 3 by WorkCover NSW. Office 4 was vacant. (iii) To the west, behind office(s) 3 and 4, was a storage area and air conditioning plant room. Access to both these areas is gained via a hall walkway between offices 2 and 3. (iv) A door in the southern wall of the plant room opened outwards into a storage area beneath the building. (v) Several boxes and paper and other office material were situated along the eastern wall of the storage area. (vi) The western side of the storage area was bare rock face and earth batter, the rock face being approximately two metres above the floor level and the earth batter being approximately two metres in height above the rock section. The floor of the storeroom was concrete up to the bottom of the rock face. (vii) The concrete floor, boxes, rock face and soil surface had a damp appearance. (viii) Within the plant room was an air conditioning unit manufactured by Sanyo, model number SP-M200DB with a capacity of 54,000 kilocalories per hour. (ix) On the western side of the air conditioning unit was a fan unit which had pleated fibre material filters on the intake side. (x) The filter area measured 1,850 millimetres in width and 1240 millimetres in height. The bottom of the filter area was 670 millimetres from the floor of the plant room and the face of the filters was 685 millimetres from the western wall of the plant room. 7. As a result of the Prosecutor's investigations in this matter, he concluded as follows: (i) The fan and air conditioning unit provided air, via ducting to each of the four office areas. No other office areas within the building were serviced by this air conditioning unit. Air was drawn into the air conditioning unit directly from the plant room area and no direct ducting was utilised to channel outside air into the unit. (ii) A hole in the plant room wall above the hall permitted air to be drawn through a vent situated above the external hall door and then into the plant room above the false ceiling of the hall. (iii) An odour was present in the storeroom, plant room and hallway. (iv) Both doors in the hall were open and portable extraction fans were placed at the entrance point of the hall and in the open doorway to ventilate the affected rooms and office areas. (v) Three offices had been vacated by workers and extraction fans were located in the entrance areas of each of these office areas. An odour was detectable in all three office areas. (vi) In one office area there were four air conditioning ceiling mounted air outlets situated within the false ceiling. In another office area there were eight ceiling mounted air outlets situated within the false ceiling. In a third office area there were five ceiling mounted air outlets within the false ceiling. A fourth office area was locked and unoccupied at the time of the incident. (vii) Atmospheric and wipe sample monitoring for the organophosphate, chlorpyrifos was carried out in three office areas at the premises on 14 April 1999. Chlorpyrifos is the active ingredient of Dursban constituting 450g/L. Hydrocarbon solvents in the quantity of 326.5g/L are the other main ingredients of Dursban. (viii) The atmospheric and wipe sample monitoring conducted two days after the incident indicated the presence of minor chlorpyrifos contamination in the office areas sampled. The level of contamination at the time of the incident would have been at higher levels than the results obtained two days after the incident. (ix) Chlorpyrifos is a hazardous organophospate substance which acts as a anti-cholinesterase agent. Short term exposure to Dursban (the active ingredient of which is chlorpyrifos) by inhalation, skin absorption or ingestion can result in immediate detrimental health effects. (x) Employees of WorkCover NSW, the Illawarra Credit Union Limited and GIO Australia who reported exposure to the pesticide shortly after the treatment had been applied by Carberry, were interviewed. A number of the employees present in the office areas who were affected by exposure to the pesticide sought medical treatment. (xi) The pesticide mixture sprayed consisted of 1.1 litres of Dursban to 100 litres of water. Between 30 and 40 litres of this mixture was used in the treatment of the premises. Occupants of the offices at the premises were exposed to the pesticide chlorpyrifos for the following reasons: The pesticide was applied near the intake ducts for the air-conditioning unit in the plant room area of the premises and was drawn through ducts to the office areas at the premises. The insecticide treatment was carried out during working hours and there was no attempt to warn the occupants of the office spaces or arrange for evacuation of the office spaces prior to the treatment being carried out. The air-conditioning unit was not shut down prior to the treatment taking place. Carberry did not carry out a risk assessment, nor did he inform the occupants of offices at the premises of the insecticide treatment, prior to the application of the insecticide. 8. Subsequent to the incident, the Defendant has included a risk assessment checklist in the "Rentokil Pest Control Service Agreement" to avoid a repeat of the incident that occurred on 12 April 1999. 9. The Prosecutor alleges that the Defendant, Rentokil Initial Pty Limited (ACN 000 034 597), an employer, breached Section 16(1) of the Occupational Health & Safety Act 1983 on 12 April 1999 at 134-134A Lamerton House, Shellharbour Square, Blackbutt in the State of New South Wales ('the premises'), in that it failed to ensure that persons not in its employment were not exposed to risks to their health and safety arising from the conduct of its undertaking while they were at its place of work. In particular, the Defendant failed to: (a) To provide an adequate system of risk assessment for the use of the insecticide chlorpyrifos (known by the trade name Dursban Micro Lo Termiticide and Insecticide) in or about the premises. (b) To ensure that persons not in its employment who were at risk of exposure to the insecticide chlorpyrifos were adequately warned of the risks of exposure prior to the application of the insecticide in or about the premises. (c) To ensure that persons not in its employment were adequately protected from inhaling and being otherwise exposed to the insecticide chlorpyrifos at the premises. (d) To evacuate a building at the premises prior to the application of the insecticide chlorpyrifos in or about the premises. (e) To shut down an air conditioning unit located in a plant room in a building at the premises prior to carrying out the application of the insecticide chlorpyrifos in the plant room. 5 In addition, the Commission had evidence from John Cornish, the National Technical Manager of the defendant and Peter Vymys, the general counsel of the defendant. 6 Mr Cornish's evidence included the following in relation to the insecticide used, Dursban Micro-Lo: 8. Due to my experience with the use of chemicals generally and my experience with the Company, I have an extensive knowledge of the use of the chemical Dursban Micro-Lo. This chemical continues to be used by the Company mainly as a termiticide but also in the area of general insect control. The active ingredient in Dursban Micro-Lo is Chlorpyrifos which is an organophosphate. In its pure form, Chlorpyrifos is moderately toxic however humans are at no stage exposed to the pure form of Chlorpyrifos in the use of Dursban Micro-Lo. Chlorpyrifos is mixed with solvents to produce Dursban Micro-Lo. When Dursban is purchased, it is made up of 450g per litre of Chlorpyrifos and 332 grams per litre of liquid hydrocarbon solvent. The solvent is a mixture of chemicals that are needed to ensure that the Chlorpyrifos dissolves in the water to form an emulsion when Dursban is diluted. The prescribed formula for dilution is 10 litres of water per 110ml of Dursban Micro-Lo. This must then be applied at the rate of 1 litre of spray per 10 square metres of the area that requires treatment. 9. Dursban Micro-Lo has been used for many years as a safe and effective general purpose insecticide for use against a variety of pest species including cockroaches, spiders and fleas. In latter years, with the banning of the organochlorine insecticides, it has found widespread use in Australia as a termiticide. Dursban Micro-Lo was formulated so as to contain a lower concentration and less odorous organic solvent in order to improve its acceptance for use in the general 'domestic' environment. 10. Chlorpyrifos is one of a large group of organophosphate insecticides which act by interfering with nerve transmission. It blocks the delivery of an enzyme that is used to break down the transmitters involved at the nerve/muscle synapse that are required for the transmission of muscle movement. In its pure form Chlorpyrifos is classified as moderately toxic, laboratory tests showing that approximately 50% of test animals (rats) would die if given 310mg orally. This would be equal to 49g for a human. Laboratory tests have also shown that in terms of exposure by inhalation of Chlorpyrifos in its form 2.4gms/m3 continuously over a 4 hour period would be lethal to 50% of a test rat population. This would be equivalent to approximately 384g for a human dose. In this instance the amount of Chlorpyrifos used was equivalent to 0.495g/m2 of treated surface (some 440m2 all told was treated). The samples taken from the affected areas two days after the spraying demonstrated that the chlorpyrifos concentration (mg per m3 of air) was at least 1000 times lower than the relevant exposure standard. 11. In this case, the health effects sustained by the individuals at the Shellharbour site are consistent with health effects suffered as a result of exposure to the hydrocarbon solvent component that is used in Dursban Micro-Lo. The odour identified by the persons at the offices is consistent with the odour of the solvents. This is a particularly distinctive odour and would have been enhanced by the ongoing recirculation of air via the air conditioning system. 7 The evidence of Mr Vymys dealt with matters of a more general kind concerning occupational health and safety and the company's circumstances. The company has been operating in Australia since 1965 and employs 600-700 persons throughout Australia. At the time of the incident, the subject of these proceedings, the defendant had in place a "Safe Working Practices Manual". It imposed a responsibility on technicians to undertake risk assessments and to give particular thought to the way in which the application of the pesticide will affect themselves, others and the environment. As a result of this incident the defendant has implemented a Risk Assessment Procedure, with training, emphasising the need for its application, becoming more extensive in that regard. 8 Since 2000 the company has sought to achieve optimum performance in OHS management with the appointment of a National Occupational Health and Safety Manager. The site managers at each branch are responsible for maintaining health and safety policy. Occupational health and safety standards have been developed specifically for each site taking into account the different needs of the sites. New accident reporting procedures and a review system have been instituted and a new policy for training employees has been implemented. Pest control technicians are subject to a six-week training course, the main aim of which is to ensure the practical application of pesticides is fully understood and successfully performed. Safety issues in that context are dealt with specifically. Ongoing training is applied. 9 Mr Reitano did provide references to four decisions of members of the Commission in relation to prosecutions under the OHS Act of employers where employees had been exposed to gas emissions of various kinds such as chlorine gas, arsine and selenium. These were not as advanced as authorities or instructive as to penalty. It was readily accepted that they might easily be distinguished from the present matter. I accept that is so although I would observe that in each matter the penalties imposed were of the order of 13-20 percent of the maximum penalty applicable. In one matter (WorkCover Authority of New South Wales v Goodman Fielder Mills Ltd [1994] NSWIRC140, 30 November 1994), Marks J, in imposing a fine of $50,000 in relation to a maximum of $250,000, expressed the view that, in the light of the defendant's inactivity to known danger: I can but only conclude that the defendant had a less than wholesome respect for its obligations under the Occupational Health and Safety Act . . . In my assessment all of the employees of the defendant were exposed to a risk of injury at the Summer Hill plant by reason of the failure of the defendant to identify the leaking of chlorine gas as a safety problem over a long period of time. This is the core situation which must be taken into account, in my opinion, in assessing penalty. Whilst the degree of injury sustained (or the lack of it) may impact in a peripheral way on the final determination by a court as to what is a relevant penalty to be imposed for a breach of the Act, it is the fact that there is a risk of injury which is created and the potential consequences of that risk which are, in my opinion, of greater significance. In addition, this was not the case of one isolated incident; there was a course of conduct which persisted over a long period of time. 10 Similarly, in WorkCover Authority of NSW (Inspector Milligan) v Hydromet Operations (Southern) Ltd [1998] NSWIRComm 219 Schmidt J dealt with a s15(1) prosecution concerning an employee who suffered arsine gas poisoning when placing zinc dust into a 23,000 litre tank at his employer's place of work. Having regard to the facts of the matter her Honour concluded that: It seems to me that a relatively heavy penalty is warranted in these circumstances. In imposing penalty I have nevertheless taken account of the defendant's accepted early plea of guilty, its cooperation with the WorkCover Authority, as well as its expressed contrition, all of which warrant a substantial discount from the penalty which would otherwise be imposed. I have also taken note of the defendant's financial position and the measures it implemented after the accident to address the identified deficiencies, as well as the evidence of its commitment to safety, which on the evidence is of an ongoing and serious nature. I also accept that the earlier offence of which the defendant was convicted under the Act was unrelated and while of some relevance to the level of penalty, should not weigh substantially in the fine which is imposed. 11 Schmidt J assessed penalty at $50,000 in a range of $500,000. 12 I consider the present matter does not exhibit the same characteristics of seriousness as were considered by the trial judges in those two cases. A case of perhaps greater utility here is WorkCover Authority of New South Wales (Inspector Huber) v State of New South Wales, known as the Hunter Area Health Service, a judgment which I gave on 18 June 1999 (Matter No IRC98/2261). In that matter the Area Health Service was prosecuted under s15(1) of the Act in connection with an incident where leaking gases from a 20 litre drum of solvent were taken up by an air conditioning unit and transmitted to the operating room suite and other rooms in the particular building. A number of employees exposed to the gas complained of symptoms ranging from dry retching, difficulty in breathing, sore throats, coughing, a burning sensation and irritation of the eyes and headaches. Two employees were admitted to hospital. As can be seen, the effects of the gaseous substance emitted in that matter were in general terms not dissimilar to that which occurred here. The penalty imposed was $25,000 in the context of a $500,000 maximum penalty. 13 It is clear from the agreed facts and Mr Cornish's evidence that the irritation and discomfort experienced by the persons exposed to the substance was not in any sense life threatening and was of the order of a severe irritant. Without seeking to minimise the effect or impact upon the individuals, and appreciating that incidents of this kind are not to be tolerated as a normal result of activities such as those conducted by the defendant, it is impossible to view the nature and quality of the offence here as anything greater than low range. 14 I consider that a penalty towards that end of the range, $825,000 being the relevant maximum, is appropriate in the present matter. The higher maximum penalty arises here because of the effect of s51A(2) of the Act, in the light of the defendant's record, which shows a conviction in the Local Court in 1996 for which it was fined $2,000. I give the defendant the benefit of its entry of a plea of guilty by affording a discount of penalty of 20 percent. I take into account the actions of the defendant in addressing its safety procedures after this incident and impose a fine of $40,000. WorkCover should have a moiety of penalty and its costs as agreed. In the event of disagreement on costs, I grant liberty to apply. 15 The Court orders: 1. The defendant is convicted of the charge. 2. The defendant is fined the sum of $40,000. 3. The WorkCover Authority of New South Wales is to have a moiety of penalty. 4. The defendant shall pay the prosecutor's costs in an amount as agreed or, in the absence of agreement, as fixed by the Court. 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.