Industrial Relations Commission of New South Wales in Court Session CITATION: Rodney Dale Morrison v Clough Engineering Limited [2005] NSWIRComm 442 Prosecutor Rodney Dale Morrison PARTIES: Defendant Clough Engineering Limited (ACN 009 093 869) FILE NUMBER(S): 3191 of 2003 CORAM: Backman J CATCHWORDS: Occupational Health and Safety - sentencing of corporate defendant under s 15(1) of the Occupational Health and Safety Act 1983 - plea of guilty - maximum penalty - system of work - reasonable foreseeability of the risk to safety - consequences of the breach - general and specific deterrence - culpability of defendant and others - contribution of defendant and others to the commission of the offence - contrition and remorse - cooperation - post-accident measures - absence of prior convictions - corporate reputation - assessment of costs - penalty - orders - costs. Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Occupational Health & Safety Act 1983 Abigroup Construction Pty Ltd v WorkCover Authority of New South Wales (2004) 135 IR 317 Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 Department of Mineral Resources (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 Maddaford v CSR Limited & Mulgoa Quarries Pty Limited (2004) NSWIRComm 337 R v Thompson, R v Houlton (2000) 49 NSWLR 383 CASES CITED: Rodney Morrison v Cobar Management Pty Ltd [2005] NSWIRComm 124 South Sydney Rugby League Club Limited v Inspector Bestre (2005) 142 IR 373 Winchester (1992) 50 A Crim R 345 WorkCover Authority (Inspector Farrell) v Ross Colin Morrison (2001) NSWIRComm 325 WorkCover Authority of New South Wales v Hitchcock (2004) 135 IR 377 WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 HEARING DATES: 04/26/2005 DATE OF JUDGMENT: 11/30/2005 Prosecutor: Mr M. Cahill, of counsel Solicitor: Crown Solicitors Office LEGAL REPRESENTATIVES: Defendant: Mr S. Rushton, of Senior Counsel Ms W. Thompson, of counsel Solicitor: Corrs Chambers Westgarth JUDGMENT: - 28 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Backman J Wednesday, 30 November 2005 Matter No IRC 3191 of 2003 Rodney Dale Morrison v Clough Engineering Limited Prosecution under s 15(1) of the Occupational Health and Safety Act 1983. JUDGMENT [2005] NSWIRComm 442 1 Clough Engineering Limited (the defendant) has pleaded guilty to an offence under s 15(1) of the Occupational Health & Safety Act 1983 (the Act), in that being an employer, at the CSA Mine Cobar in the State of New South Wales, between about 7pm on 13 June 2001 and 7am on 14 June 2001, it failed to ensure the health, safety and welfare at work of its employees in particular, Tasman Dukeson. The particulars which are encompassed in the plea of guilty are set out in the Amended Application for Order in the following terms: (i) the defendant failed to ensure that its employees, in particular, Tasman Dukeson, were provided with a safe place to work whilst inspecting the retaining wall at the 9070 adjacent to the K402 stope; (ii) the defendant failed to ensure that the backfill operation for the K402 stope, including the preparation of the cemented hydraulic fill (CHF), the delivery of the fill, the placement of the fill in the stope and the checking for the presence of ponded water on the surface of the fill in the stope, at the CSA mine, did not constitute a risk to the health and safety of its employees, in particular, Tasman Dukeson, in that: - the defendant failed to ensure the average slurry density of the CHF delivered to and placed in the K402 stope complied with the target density of between 1.7 to 1.75 tonnes per cubic metre; - the defendant failed to ensure there was a safe and adequate cycle of pouring and resting from pouring of the fill into K402 stope and failed to allow for adequate periods of drainage; - the defendant failed to ensure that the top of the CHF in the K402 stope was checked for the presence of ponded water; - the defendant failed to ensure that its employees and other workers who had responsibility of ensuring the safety of the backfill operation were adequately trained and had received information or instruction; - the defendant failed to adequately assess the risk to safety of its employees that arose from the backfill operation of the K402 stope. 2 The incident giving rise to the offence concerned an underground mine worker who, at about 9pm on 14 June 2001, could not gain access to the 9070 level of the mine because that level had been inundated with CHF and water. Further investigation established that the fill wall at the base of the K402 stope had failed with most of the CHF, which had been placed in the stope prior to the wall failure, mobilising, that is, running out of the K402 stope into adjacent parts of the mine. Approximately 1,000 m3 of slurry flowed into the mine travelling about 150 metres from the stope along the level. No injuries to personnel, nor any damage to equipment, occurred directly as a result of the event. Factual background to the offence 3 The background to the offence has been conveniently set out in the Statement of Agreed Facts and in the prosecutor's submissions on sentence. 4 The CSA mine was an underground copper mine which was located about 11 kms north-north-west of Cobar. It was owned by a joint venture between two companies, Isokind Pty Limited and Acelight Pty Limited. Another company, Cobar Management Pty Limited (CMPL) managed the mine in New South Wales. The joint venture obtained the mining lease which entitled it to recommence mining at the CSA mine in about late-1998 or early-1999. The defendant was a company specialising in underground metalliferous mining. On 1 April 2000, a contract between CMPL and the defendant commenced operation. It included partnering provisions under which CMPL and the defendant undertook to work co-operatively in the management and operation of the mine. CMPL and the defendant established an integrated management structure for the mine. In particular, the defendant agreed to manage underground mining operations and to supply skilled labour to work in underground mining operations at the mine with CMPL providing all of the mine design and technical services to support mining production. A further contract between CMPL and another company, Combined Mining and Maintenance Services Pty Limited (CMMS), was also in operation at the time of the offence. CMMS was a labour hire company which provided operating labour, maintenance personnel and frontline supervisors to CMPL to operate the fixed plant. This included the surface treatment plant and the backfill plant which was associated with the treatment plant. Specifically, the role of CMMS employees in the operation of the backfill plant was to monitor the flow rates, clear any blockages, monitor density, and collect samples for fines levels. ("Fines" being finely crushed or powdered material consisting, for example, of crushed rock or ore). The directions for the operation of the backfill plant were provided primarily by CMPL's mill co-ordinator, Chris Gregory. CMMS supervisors and employees exercised control of the backfill plant on an hour-by-hour basis that covered both operational responsibilities (materials handling) and monitoring to ensure that technical parameters were being met. 5 The integrated management structure consisted of an operations management team which oversighted the operation of the mine and a mine management team with responsibility for the day-to-day operations of the mine. The defendant employed Christopher Woodall as its project manager at the mine. Mr Woodall was appointed as the Statutory Production Manager. He was a member, together with an employee of CMPL, David Hackett, of the mine management team. The mine management team reported to the operations management team. The operations management team was constituted by David Woodall, an employee of CMPL, and the statutory general manager of the mine, and Paul Harper who was an employee of the defendant and the defendant's operations manager. 6 Mr Dukeson was employed by the defendant as a mine shift co-ordinator. 7 Underground mining at the mine was carried out in a cycle. Initially, the access development, drawpoints, drill drives and other works were put on two levels. The upper level provided access to the ore body with drilling and blasting, while the lower level was used for "mucking" (removing) the broken ore. Once a development was complete, the stope (block of ore) was drilled out with holes extending down from the top sub-level. These blast holes were fired progressively as the ore was removed from the bottom level. Once the ore had been removed from the stope, the void was to be "backfilled". 8 Backfill was produced by removing the fines from the tailings by use of cyclone and the addition of other materials, including dry cement. The CHF was manufactured at the fill plant located on the surface of the mine and then transported through a series of pipes to the stope. CMPL was responsible for the manufacture, monitoring and testing of the fill. (Tailings are the remnants of the mineral-bearing ore after that ore has been ground, made into a slurry (by the addition of water) and processed to remove the minerals.) 9 Prior to the commencement of the backfilling of K402 stope, a barricade wall had been erected by a company, Every Day Hire Pty Limited (EDH), in accordance with the specifications of CMPL. The wall was made of permeable concrete blocks and it was of approximate dimensions 5.5 metres high and 6.5 metres wide. The wall was approximately 190 millimetres thick and was built in a straight line across the access drive on the 9070 level. 10 The system for the backfill operation using CHF, which was used when backfilling K402 stope, was based on the following design concepts: (i) a cemented plug was to be formed between the bottom of the stope and a height greater than the height of the fill wall by the addition of 10% cement additive to the backfill until the height of nominally 2 metres above the brow was reached. Thereafter, the percentage of cement additive was to be reduced to about 4% for the remainder of the fill. Once the cemented plug containing 10% cement had been allowed to cure to its minimum design strength (200 kpa), the plug would act as support for the earth pressure and the pressure of the hydraulic fill subsequently placed on top of it in the stope. The defendant had been previously advised that the fill plug should be allowed to set to achieve the design strength of 200 kpa; (ii) cemented fill was to be made from de-slimed tailings (that is, tailings that have been further processed to remove fine particles) and was to have an average target slurry destiny within the range of 1.7 to 1.75 tonnes per cubic metre; (iii) water was not allowed to accumulate on the surface of the fill (ponding) and all surface water was to be drained away within a few hours of cessation of each fill run. This would be achieved by controlling the amount of water the fill slurry contained (its density), the proportion of fine particles the fill contained (which controlled its permeability) and by stopping the fill to allow time for water to drain; (iv) there was to be a programme of visual inspections by employees at the top of the stope to ensure that water did not pond excessively on the fill's surface and at the barricade walls to ensure that water was draining away. 11 The CHF had to contain sufficient water to enable it to be pumped underground for placement. This required a balance to be struck between the amount of water needed for pumping underground and the need to de-water the slurry prior to placement to assist in controlling the risk of barricade failure followed by inrush of the fill into adjacent areas of the mine. 12 Once the CHF was placed underground it was essential that the build-up of water be controlled. Excess water build-up or "ponding" is a potential source of wall failure and also provides a medium in which fill can be mobilised if a wall or barricade failure occurs. The presence of excess water on top of the fill can create the potential for liquefaction and mobilisation of the fill, including the liquefaction and mobilisation of both consolidated and cured cemented fill. The greater the excess of water present in the stope the greater the potential for liquefaction and mobilisation of fill if a barricade failure occurs. The accumulation of significant amounts of water on the surface of the fill in the stope, that is, ponding, for extended periods of time, is a clear indication of the presence of excess water in the stope. To this end, it was essential that the top of the fill be inspected regularly. 13 The backfill operation of the K402 stope commenced on 9 June 2001 and continued until 14 June 2001. During that period, there was no programme of visual inspections of the top of the fill for the ponding of water undertaken by employees of the defendant or other mine workers because the protrusion of a ledge at the top of the stope prevented safe access for visual inspections of the top of the fill. Further, no alternative methods of determining whether there was water ponding on top of the fill were implemented during that time. 14 The backfill operation commenced on 9 June 2001 under the supervision of Mr Dukeson. A fill line was run through the top access drive adjacent to the top of the K402 stope. A haulage crew was then utilised to run and connect the fill line into the top of the K402 stope on 9105 level. The placement of the CHF in stope K402 at the 9070 level of the mine was also commenced. The fill height of the stope was to be 30 metres. The placement process of the CHF continued through to 12 June 2001 when it was stopped because of leakage of fill from the wall. It resumed, but was stopped again due to further leaks. Until 12 June 2001, the CHF that was placed in the K402 stope only had an average content of 4% cement. This reduced the shear strength of the cemented fill at the level at which the fill was supposed to be at its strongest. The system required CHF to contain 10% cement. On or about 12 June 2001, the fact that the CHF contained only 4% cement was detected. When the error in the cement additive was discovered, an instruction was given for the remaining fill added to the stope to have 10% cement. Nonetheless, neither the defendant, nor CMPL, took any steps to assess the strength of the fill which had already been placed in the K402 stope. 15 The system in place at the mine at the time of this backfill operation required either CMPL or the defendant to advise the backfill plant of the purpose for which that backfill was to be used so that the backfill plant operators could ensure that the correct percentage of cement and other additives were placed in the slurry. On this occasion however, neither CMPL, nor the defendant, advised the operators of the relevant changes in the uses of backfill and as a consequence the incorrect percentage of cement was added up to 12 June 2001. 16 A further problem which beset the backfill operation was that during the manufacture of the CHF in the treatment plant, water containing fines which had previously been removed from the fill was inadvertently added back to the fill in place of fresh water before the fill was piped underground. This reduced the permeability or capacity of the cemented fill to allow water to drain from the stope and increased thereby the risk of excess water ponding on top of the fill as more fill was placed in the stope. In addition the average slurry density of the CHF which had been placed in the K402 stope was approximately 1.65 tonnes per cubic metre, which was outside the target density of between 1.7 to 1.75 tonnes per cubic metre. 17 Prior to the nightshift commencing on 13 June 2001, a decision was taken to blast the ledge away from the end of the access drive to the top of K402 stope to improve access to the top of the stope. This would have allowed for both inspection of the backfill being placed in the stope and for the addition of mullock (waste rock) as part of the backfilling process. The first attempt to blast the overhanging ledge was made during the shift changeover from the dayshift to the nightshift on 13 June 2001. The attempt, however, failed. Following that first attempt during the nightshift on 13 June 2001, Mr Dukeson, as part of his duties as shift co-ordinator, inspected the retaining wall at the 9070 level of K402 stope. At or about 7pm on 14 June 2001, before the commencement of the nightshift, a second attempt was made to remove the overhanging ledge. This time, part of the ledge was dislodged and fell into the stope. It was shortly after that event, at about 9pm, that an underground mine worker found that he could not obtain access to the 9070 level because of an inrush of water and fill from the stope. He left the area and reported the incident. 18 Further investigation established that the barricade wall at the base of the K402 stope had failed with a significant proportion of the fill running out of the stope into adjacent parts of the mine. The stope had continued to be filled for some 30 minutes after the incident was reported. 19 The precise time of the inrush of water and fill from the stope is not known. It was first detected at approximately 9pm on Thursday, 14 June 2001 when CHF was found to have entered the 9070 level of the mine. According to a report prepared by Anthony Grice in June 2004 entitled "Report on barricade failure at CSA mine - June 2001", the barricade wall could have failed at any time from the last inspection of the nightshift on 13 June 2001. In Mr Grice's opinion, the likely time of failure was shortly before 7.30pm on 14 June 2001 when the water and backfill in 9070 was first reported. This opinion is based on the high visibility of the spilled material which Mr Grice surmises would have been seen by the first person to pass the area. Mr Dukeson was the last known person to be in the area prior to the time when the inrush was first detected. Mr Dukeson inspected the retaining wall at the 9070 level of K402 stope during the nightshift on 13 June 2001. At that time, there was a risk to his health, safety and welfare from the possibility of an inrush of fill and water into the area where Mr Dukeson was inspecting the wall. The evidence 20 The prosecution tendered in the sentencing proceedings an Agreed Statement of Facts and a number of annexures. The salient features of the Agreed Statement of Facts have already been referred to above. The annexures are contained in a folder entitled "Tender Bundle". One of the documents comprising the tender bundle was an expert report of Mr Grice headed "Report on barricade failure at CSA mine - June 2001", dated June 2004. A later edition to the tender bundle was an earlier report of Mr Grice entitled "Cobar Management Pty Limited CSA Backfill Audit" and dated 21 December 2001. That earlier report contained a description of the incident, the subject of the offence, in the following terms: 2 Description of Incident At approximately 2100 hrs on Thursday 14th June, 2001 cemented hydraulic fill was found to have entered 9070m level of the CSA mine following the failure of the barricade in 402 Stope. Approximately 1000m3 of slurry flowed into the mine and travelled about 150m from the stope along the level. No injuries to personnel nor any damage to equipment occurred directly as a result of the event. On inspection of the barricade by CSA, it was found that nearly all of the bricks were missing and photos taken by the local Inspector of Mines shortly afterwards show only one or two bricks remaining. The entire quantity of fill in the stope appears to have been mobilised by the failure of the barricade. AMC was unable to directly view the site of the barricade failure due to access restrictions. At the time of the failure, two fill runs had been placed into the stope and CSA estimates the height of the fill to have been 6.5m above the floor of the drive. Cement was being placed at a rate of about 4% by dry weight. The barricade was constructed of permeable concrete blocks laid in a running bond with dimensions of 5.5m high and 6.5m wide. The barricade was 200mm thick and built straight (with no curvature). The barricade was constructed by EDH contractors and located and built to CSA specifications. No shear pins were used in the structure. There are two unusual aspects of this incident: - It was originally thought that the low 6.5m height of fill in the stope made it unlikely that failure was initiated by static loading conditions alone unless some gross defect was present in the barricade. Subsequent investigations revealed that the wall was too thin and was therefore not capable of withstanding moderate lateral loading conditions. - Despite being cemented and the last fill run being placed approximately 72 hours prior to the failure, the fill had not developed sufficient cohesion or shear strength to prevent liquefaction occurring following the failure event. 21 Another document comprising the tender bundle was the underground mining agreement between CMPL and the defendant. Under clause 7.2.2 headed "Operation of Equipment" the defendant is responsible for operating all equipment and providing equipment to CMPL as well as observing the obligations of CMPL under separate agreements for the supply of equipment. Under clause 7.3 headed "Variation to Works" CMPL has the right at any time from time to time at its sole discretion to vary the works as set out in Appendix 1 of the agreement. Variations may include for example changes to the mine production programmes, rates sequences and priorities and the character or quality of materials and equipment used in mining operations. In Appendix 1 under Clause 4 headed "Responsibilities" the defendant under Clause 4.1 had responsibilities which were set out as follows: 4.1 Clough Further to the general divisions of responsibility expressed in the Underground Mining Agreement, Clough will be responsible for; (a) mobilising and providing qualified labour to operate all mobile equipment, drilling rigs, charging equipment, service vehicles and light vehicles to effect mining operations, (b) providing the drilling equipment and service vehicles as required on a hire basis with insurance cover, (c) installing and maintaining service lines for water, compressed air and pumping reticulation, low voltage power supply, telephone and radio communications underground and incidentals to carry out mining, (d) drilling, blasting and excavating of accesses to levels and developments including associated crosscuts, truck loading bays, return airways and other miscellaneous developments and stripping work in Waste and Ore, (e) preparing face markups and layouts from permanent survey control points, (f) installing ground support in new and existing developments and excavations, (g) mucking, loading and hauling of Ore, Waste and broken material from development headings and any other sources underground, (h) maintaining all roads in underground work areas, (i) draining and pumping underground excavations to existing pump stations and pump sumps, cleaning out sumps and drainholes within the work areas and transporting of sump muck to dump points, (j) providing and maintaining all secondary and temporary ventilation facilities, 9k) demobilising of personnel upon completion. 22 In Appendix 1 under Clause 4.2 CMPL had responsibilities which were set out as follows: 4.2 Cobar Further to the general divisions of responsibility expressed in the Underground Mining Agreement, Cobar will be responsible for; (a) providing the Equipment as required and maintaining all fixed plant and mobile mining equipment underground. (b) supplying, transporting and storing of explosives including materials, ancillary equipment, licences and permits, (c) supplying and storing of fuel underground, (d) crushing, conveying, and hoisting of Ore and Waste, (e) excavating major ventilation rises, (f) constructing permanent pump stations, (g) installing HV electrical substations and associated electrical reticulation, (h) maintaining primary ventilation, (i) day to day survey control including the establishment of permanent survey control stations and the survey pickup of development drives and excavations, (j) providing the Site services set out in clause 5.0, (k) supplying all materials and consumables as well as controlling procurement, supply and stores activities, (l) performing all mine design, production planning and scheduling, (m) analysing and monitoring exhaust gases from diesel powered equipment. 23 The defendant in the sentencing hearing relied on an affidavit of Trevor Pleass, sworn on 26 April 2005. Mr Pleass has been employed by the defendant from 2002 and is currently employed as the health, safety and environment (HSE) group manager. Mr Pleass explained in his affidavit that the defendant is a wholly owned subsidiary of Clough Limited and was incorporated in Australia on 8 May 1984. At the time of the inrush the defendant employed approximately 40 to 50 employees at the CSA mine. Since the inrush Mr Pleass says that the defendant has taken a number of measures to improve its occupational health and safety procedures and management. The defendant also made available its mining manager to assist in the investigation the subject of the offence. Since the incident the defendant engaged a number of experts for the purposes of reviewing the incident. A number of reports from those experts have been annexed to Mr Pleass' affidavit. A report by Emeritus Professor E.T. Brown dated March 2005 makes a number of observations as to why the barricade failed and the inrush occurred when it did. According to Professor Brown two things changed on 14 June 2001, namely: (i) filling of the stope continued possibly increasing the pressure on the barricade and certainly increasing the height of liquid still in the stope; and (ii) the second blast was fired on the 9105 level at about 6.30pm on 14 June. 24 According to Professor Brown there was a possibility that ground vibrations, overpressure effects and the impact of detached blocks of rock associated with the blast of 14 June could have applied a sufficient additional loading to a barricade that was in a precarious or close to meta-stable state, to cause it to fail. These effects possibly also contributed to the liquefaction of the fill required to produce an inrush of the failed barricade. A further report annexed to Mr Pleass' affidavit headed "Failure of Masonry Barricade in Mining Stope" dated February 2005 by Peter Ansourian contains an analysis into the causes of failure and the design of the masonry barricade in stope K402 at the CSA mine and reaches a number of conclusions, some of which are: (i) the barricade wall as designed and constructed was always in a precarious state and according to normal design principles must fail under a low fluid pressure estimated at 45 kpa and reducing towards the roof. (ii) the above estimated failure pressure may easily double if swelling of the wall occurred upon contact with liquefied slurry. (iii) a correct design of the straight wall taking into account its temporary nature and the gradual setting of the slurry would require a thickness of a minimum of 450mm or well over twice the thickness of the subject wall. 25 A third report headed "Report on the Failure of Backfill Grout" at the Cobar copper mine compiled by Mahaffey Associates and dated 3 August 2001 suggests that the most likely cause of the incident was that the sand used in the grout was very fine which in turn caused an increase in water demand without a corresponding increase in cement. In conclusion the report states: ... it now appears highly likely that the failure noted on site was directly related to the combination of lower than usual cement content (5% rather than the previously used 10%) and the fineness of the sand. 26 Mr Pleass also states in the affidavit that at the time of the incident a comprehensive OH&S system was in place. The defendant had for example a manual entitled "Health, Safety and Environment Manual" dated 1992-2004 as well as a HSE Management manual (revision 3) 2004. Consideration Maximum penalty 27 The Court was informed by the prosecutor represented by Mr Cahill of counsel during the sentencing proceedings that the defendant had no prior convictions. The maximum penalty applicable therefore to the defendant being a corporation at the time of the offence is $550,000. Defendant's system of work 28 As the background facts referred to earlier recount, the defendant specialised in underground mining, and, pursuant to its contract with CMPL it agreed to manage underground mining operations and supply skilled labour to work underground at the mine. In addition the integrated management structure established by the contract, consisted of an operations management team and a mine management team with the defendant's employee, Mr Christopher Woodall the statutory production manger, and appointed as a member of the mine management team. There is no doubt that the defendant's role as described in the contract involved a high level of responsibility at the CSA mine, and was a direct role in the management of the mine. On the evidence, the backfill system was beset by a number of failures, many of which are directly attributable to the defendant. During the period when the backfill operation occurred, that is between 9 June and 14 June 2001, the defendant was responsible for ensuring that the top of the fill was inspected for ponding water. This was because the ledge, which had been the subject of two blasting attempts, and which protruded into the top of the stope prevented safe access during that period. No alternative methods of determining whether there was ponding on top of the fill were implemented during that time. In addition the system required the CHF to contain 10% cement. On 12 June 2001 it was realised that the CHF contained only 4% cement but no steps were taken by the defendant to assess the strength of the fill which had already been placed in K402 stope. The backfill operation required either CMPL or the defendant to advise the backfill plant of the purpose for which the backfill was to be used so that the plant operators could ensure the correct percentages of cement and other additives were placed in the slurry. On this occasion however neither CMPL nor the defendant advised the operators of the relevant changes in the use of backfill. As a consequence the incorrect percentage of cement was added up to 12 June 2001. These circumstances indicate systemic defects for which the defendant was responsible either directly or jointly with CMPL. 29 Nevertheless at the time of the offence the defendant had in place a number of safety procedures as set out in Mr Pleass' affidavit. Mr Pleass said that the defendant has been developing its occupational health and safety system since 1992. This has resulted in the two manuals referred to earlier in these remarks as well as the development and implementation of a number of safety procedures including procedures for sub-contract HSE Assessment; procedures for hazard reporting, for job safety analysis, safety induction, safety inspections and meetings. Part of the defendant's OH&S systems which were in place at the time of the offence also included daily pre-start briefings by supervisors, site tool-box meetings, inspections and audits, HSE training and supervisor training. The defendant's senior management have also been extensively and regularly involved in occupational health and safety matters, for example by ensuring the project-specific HSE plans are prepared and reviewing incident/injury investing, reporting and notification. The defendant also had at the time of the offence an intranet site which was developed and implemented to provide a means to communicate OH&S information to personnel. The site displayed OH&S information relating to policies, procedures, legislation and safety alerts. 30 The existence of such safety systems which were in place at the time of the offence and the implementation of those systems by the defendant is a factor which mitigates against the seriousness of the offence; Department of Mineral Resources (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 25, per Walton J, Vice-President. Reasonable foreseeability 31 The prosecutor submitted that the risk to safety was reasonably foreseeable because the risk of barricade failure and inrush of mobilised fill was widely known in the industry prior to the incident as was the fact that failure to adequately control the risk could result in an inrush of fill material. It was also well known within the industry, according to the prosecutor that the risks of barricade failure and inrush carried with them a real risk of serious injury to and/or death of workers present in and about the area of a mine where the failure occurred. In addition, prior to the incident, CMPL possessed advice that directly identified the risk of wall failure associated with the use of CHF as a backfilling medium, as well as the potential for inrush consequent upon a wall failure. This information was readily available to the defendant according to the prosecutor if not already in its actual possession. But even if the specific information and advice had not found its way to the defendant the prosecutor contends that the information and advice in relation to ensuring the safe design and implementation of the backfill was generally available. Based on these considerations the only conclusion available was that the defendant knew or should have known of the extent of the risk to persons working underground in the vicinity of K402 stope, particularly workers such as Mr Dukeson who were required as part of their duties to examine the barricade wall bordering the fill process in order to check visually on drainage from the stope and to check on the integrity of the wall. 32 Given that the risks of barricade failure and inrush were widely known, and, given the context of the defects in the backfill operation disclosed in the evidence, some of which were known to the defendant, for example its inability and therefore failure to inspect for ponding, and, its awareness that K402 stope had an average of 4% cement instead of the required 10% cement on 12 June 2001, the risk to safety, in my view, was reasonably foreseeable. As was observed by the Full Bench in Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610, at [81-82] foreseeability is relevant to the assessment of the seriousness of an offence and the existence of a reasonably foreseeable risk to safety necessarily resulted in the offence being more serious in nature. Consequences of the breach 33 Actual injuries sustained as a result of failures by a defendant under the occupational health and safety legislation do not dictate penalty. Sentencing courts in the occupational health and safety jurisdiction assess the seriousness of an offence by reference to the likely consequences of various breaches of the provisions. In other words, what could have happened, as opposed to what did happen. 34 In relation to this sentencing principle the defendant represented by Mr Rushton, of senior counsel submitted that the possible consequences of the relevant failures were not as grave as the prosecution suggests. One basis for this appears to be that the exact time, circumstances and mechanism of the inrush is no more than a matter of conjecture. Another basis put forward is that the magnitude of the risk to safety is far from clear in relation to the period leading up to 14 June 2001, that is, at the time when the inrush was detected. 35 In my view the submission has little support in established principles. It is not necessary to have precise details of the time, circumstances, mechanism or magnitude of the inrush, because it is the risk of inrush, and not the fact of inrush with which the offence is concerned. 36 The distinction has been dealt with in a number of cases in this jurisdiction. In Abigroup Construction Pty Ltd v WorkCover Authority of New South Wales (2004) 135 IR 317, the appellant had submitted at first instance that as a charged gas pipe was protected by pavers which lay above it, the position of the pipe did not expose any employee of the appellant to a relevant risk for the purposes of s 15(1) of the Act. The submission was rejected by the trial judge on the basis that the pavers covered the charged gas supply line in an area which was to be a construction site. In upholding the trial judge's finding the Full Bench said (at [54 - 55]): We do not consider that the appellant's submissions in this area of its appeal should not (sic) be accepted. We consider that her Honour correctly found (for the reasons recorded) in her judgment that there was a relevant risk to the health and safety of employees and other persons on 10 November 1995. Generally speaking, we accept the approach of the respondent that the appellant's submissions confuse risk with present danger. The conclusion that ss 15 and 16 of the Act are concerned with not merely present danger but also risk to the health and safety of employees and non-employees, in the latter case, arising from the conduct of the employer's undertaking at the employer's place of work, is plain from the text of both statutory provisions. 37 Again in WorkCover Authority of New South Wales v Hitchcock (2004) 135 IR 377 Walton J, Vice-President commented at [282]: I also note that the defendant's submission suffers from the mistake discussed recently by the Full Court in Abigroup Contractors Pty Ltd v WorkCover Authority (NSW) (2004) 135 IR 317. In that case, which concerned two gas explosions during the upgrade of Kogarah railway station, the second of three issues on appeal was solely concerned with the determination of what constituted a relevant risk for the purposes of ss 15 and 16 of the Act. The appellant submitted that there could not be a finding of a risk to health and safety on 10 November 1995 because (a) the charged gas supply was covered with pavers and not subject to construction work and (b) although it was a building site, demolition work involving machinery and equipment (which may come into contact with a charged gas supply under pavers) was not scheduled to take place at the time. The Full Bench held that such a submission confused "risk" (which connotes the possibility of danger) with "present danger", noting that the obligation imposed by the Act was to ensure against the former, not the latter. In the present case, the defendant's insistence that the prosecution establish that Mr Haynes was fatigued at the time of the accident is in reality an insistence that the prosecution establish present danger. This submission would, if accepted, unjustifiably restrict the operation of ss 15 and 16 of the Act, contrary to the principles established in Abigroup v WorkCover . 38 By analogy, the combination of defects in the backfill operation system led to, or resulted in, the possibility of the danger of inrush. It does not matter that the exact manner, time and mechanism of the inrush which constituted the 'present danger' was not known. This principle was expressed for example by Walton J, Vice-President in WorkCover Authority (Inspector Farrell) v Ross Colin Morrison (2001) NSWIRComm 325 at [43] in the following way: It is not necessary to arrive at a precise conclusion as to how the accident occurred. It is now axiomatic that the general duties created by the Act are directed at obviating risks to the health and safety of persons in the workplace rather than to the circumstances or causes of a particular accident. 39 The defendant also submitted that the risk of inrush which in fact occurred was largely due to an excessively high level of fines placed in the fill so that for example no matter what the cement content of the CHF that went into K407 stope was, the fill would not have set. The defendant's admitted failures therefore it said had little, if any, impact on the resultant risk to safety, and, it followed that the defendant's conduct as encompassed by its particulars must be at the lowest end of the scale. 40 The submission suffers however from two obvious defects. First, it does not accurately reflect the law, and, secondly it does not accurately refect the evidence. 41 In relation to the first matter, the submission suffers from the vice, all too often encountered in this jurisdiction, that is, an impermissible concentration on the incident and its immediate circumstances instead of on the general risk to safety. A recent exposition of this appears in South Sydney Rugby League Club Limited v Inspector Bestre (2005) 142 IR 373 where the Full Bench said (at [42]): We agree that focusing too closely on the specific risk posed by the robber on the day of the offence could lead to the error of concentrating on the incident or accident instead of the general risk to safety: O'Sullivan v The Crown in Right of the State of New South Wales (Department of Education and Training) (2003) 125 IR 361. 42 In relation to the second matter, it is instructive to analyse the various expert reports which have dealt with the incident as part of the parties' respective cases on sentence. 43 Mr Grice concluded in his reports that the inrush was initiated by the fact that the barricade wall was too thin and was therefore not capable of withstanding moderate lateral loading conditions. An additional fact was the failure of the fill to develop sufficient cohesion or shear strength to prevent liquefaction. Professor Brown concluded that the inrush occurred when it did (that is sometime on 14 June 2001) because continued filling of the stope possibly increased the pressure on the barricade, and, there was a second blast of the ledge on 9105 level at about 6.30pm on 14 June. Mr Ansourian concluded that the barricade wall as designed was "...always in a precarious state and according to normal design principles must fail under a low fluid pressure...". The Mahaffey Report concluded that the most likely cause of the incident was directly related to a combination of two factors, namely a lower than normal cement content and the "fineness of the sand". 44 None of the abovementioned reports conclusively state that the risk of inrush was largely the result of an excessive level of fines in the fill. 45 To return to the consequences of the breach, it is my view that the likely consequences, unquestionably, were of the utmost seriousness. This finding aggravates the objective seriousness of the defendant's breach: Maddaford v CSR Limited & Mulgoa Quarries Pty Limited (2004) NSWIRComm 337 at [17 - 18]. General and specific deterrence 46 The principle of general deterrence is clearly applicable to the circumstances of this matter. Underground mining operations are notoriously dangerous enterprises. Accidents when they occur are likely to involve serious injuries. General deterrence is relevant in this matter in order to draw attention to the occupational health and safety obligations of employers operating in underground mines, utilising heavy pieces of machinery and equipment, and, contracting personnel to supplement the workforce. 47 The significance of general deterrence in the context of occupational, health and safety obligations was dealt with by Walton J, Vice-President, in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 at [69]-[70]: The purpose of the Act is well known and often referred to in judgments of this Court. In my view, it is important, when considering notions of general deterrence, that the Court be cognisant of the fact that the Act is for the benefit of the public generally and particularly employees at work. The goal is the prevention, deterrence and punishment of breaches of health and safety requirements. The notion of general deterrence is well understood. However, in my view, and in accordance with what was stated by the Full Court in Capral Aluminium (at pars 72-74), in cases such as this, it should be reiterated that "one of the main purposes of punishment, ... is to protect the public from the commission of such crimes by making it clear to the offender and to other persons with similar impulses that, if they yield to them, they will meet with severe punishment. (emphasis added): R v Rushby [1977] 1 NSWLR 594 at 597 per Street CJ citing R v Radich [1954] NZLR 86 at 87 (adopted by this Court in Capral Aluminium at par 72). 48 Specific deterrence is also relevant. The defendant has been operating in a highly dangerous work environment for many years and continues to conduct its operations in that environment. It has a sizeable workforce. The fact that it has had until the present transgression an unblemished safety record, coupled with its comprehensive safety procedures which were in place prior to 25 June 2002, serves to reduce the impact of this principle to some extent on penalty. The importance of the application of this principle however in occupational health and safety breaches cannot be overlooked: Capral Aluminium. Respective culpabilities 49 The defendant submits that its culpability and contribution to the seriousness of the offence is low or of a substantially lesser nature than other entities whose conduct materially contributed to the risk. 50 The defendant in this context maintains that it had no contractual responsibilities for operations on the surface. CMPL was responsible for the design of the backfill system including the backfill wall, and, both CMPL and CMMS were responsible for the operations of the backfill plant on the surface. Another entity, EDH, constructed the barricade walls. The defendant was responsible for the operation and routine maintenance of the backfill pipework and the delivery of the backfill into the stope voids. These duties were underground, or sub-surface duties. 51 The prosecutor contends that the defendant effectively abrogated its obligations under the Act. The defects in the backfilling system at the mine reflected management failures with which the defendant was culpably associated, it having a direct role in the management of the mine. These facts indicate, according to the prosecutor, a high degree of culpability. 52 Despite these matters, the prosecutor acknowledges a difference in the respective roles of the defendant and CMPL. That acknowledgement insofar as the prosecutor is concerned however is not reflective of any significant differentiation of respective culpabilities. 53 CMPL came before Haylen J for sentence on 12 April 2005 in relation to the same incident. CMPL was charged with two offences and was fined $55,000 for each offence after the totality principle was taken into account: Rodney Morrison v Cobar Management Pty Ltd [2005] NSWIRComm 124. 54 In my view the shared management role of the defendant and CMPL, and the responsibilities of the defendant in relation to activities underground, enable a conclusion that the culpabilities of the two entities are approximately equal. 55 This means that their contribution to the circumstances leading up to the defendant's offence is approximately the same. CMMS, which was not prosecuted, must according to the evidence also have contributed to the circumstances of the offence, although to a lesser degree than the defendant and CMPL. This is because CMMS, a labour hire company, had a more limited non-management role which was directed towards the backfill plant operations, on the surface of the mine. EDH has also contributed to the circumstances of the offence because it constructed the barricade wall which the majority of the expert reports condemned as being too thin or otherwise in a precarious state. 56 The significance of the respective culpabilities of the various parties, who may be found on the evidence to have contributed to some greater or lesser extent to the risk to safety was explored by Walton J, Vice-President, in Schrader. For the purposes of an assessment of penalty in these proceedings I adopt the comments of Walton J at [55] - [61], parts of which are extracted below: In the context of such a place of work; that is, a place of work in which numerous people are engaged in varying capacities and where "risks of injury may arise as a result of failings by a number of parties involved in an operation" it is, in my view, of the utmost importance to reiterate the extent of the duty cast by the Act upon employers and those who are self-employed to ensure that their undertaking does not create a risk to the health and safety of persons, be they employees or otherwise, that may arise from that undertaking. In short, the duty is to be proactive. This duty was, in my view, correctly and forcefully stated by Bauer J in WorkCover Authority (NSW) (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (unreported, CT94/1037, 13 April 1995, at p 18) (approved recently by Full Benches of this Court in Profab at par 37 and Riley v Australian Grader Hire (2001) 103 IR 143: "... the Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry." . . . . . In the present circumstances, the defendant's submission is untenable. The duty to be proactive falls equally upon each and every employer or self-employed person on a particular site, subject, of course, to a consideration of whether the risk emanated from the relevant "undertaking" and "place of work". However, when determining an appropriate penalty in circumstances where more than one individual or legal entity can be said to have contributed to the relevant risk, it is important to view the nature and seriousness of the defendant's offence by reference to the contribution of the defendant to the relevant risk: Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd (2001)105 IR 348; WorkCover Authority (NSW) (Inspector Ankucic) v McDonalds Australia Ltd (2000) 95 IR 383 at 437; WorkCover Authority (NSW) (Inspector Victor Page) v Walco Hoist Rentals Pty Ltd (No 2) (2001) 99 IR 163at par 31; Nesmat Pty Ltd v WorkCover Authority (NSW) (1998) 87 IR 312 and Alcatel Australia Ltd v WorkCover Authority (NSW) (1996) 70 IR 99. Plea of guilty 57 I turn next to consider the defendant's plea of guilty. The defendant acknowledges that the plea was not entered immediately but points to the recent abandonment of a particular in the charge which was followed by an Amended Application for Order, filed on 24 September 2004. Another feature which the defendant urges the Court to take into account is that the matter was particularly complicated and required analysis by a number of experts. 58 The prosecutor takes issue with any contention that the plea is an early plea. The amended application did not fundamentally change the nature of the charge or the way it was particularised. Nevertheless, the prosecutor concedes that the defendant is entitled to a discount with respect to the utilitarian value of the plea: R v Thompson; R v Houlton (2000) 49 NSWLR 383. 59 In the circumstances I consider an appropriate discount for the utilitarian value of the plea is 20 percent. Contrition and remorse 60 In addition, the entering of a plea at a relatively early stage is a reflection of contrition which also attracts leniency: Winchester (1992) 50 A Crim R 345. Cooperation 61 The defendant reminds the Court that it cooperated with the prosecutor throughout the investigation into the offence. It permitted access to staff and made its own earnest endeavours to ascertain why the incident on 14 June 2001 occurred. Post-accident measures 62 The defendant also implemented a number of post-accident safety measures which have already been referred to in these sentencing remarks. This entitles the defendant to some further discount on penalty. Absence of prior convictions 63 I also take into account on sentence the fact that the defendant has no prior convictions. This entitles it to leniency which is normally extended to offenders who are otherwise not adversely recorded. Corporate reputation 64 Mr Pleass in his affidavit sets out the defendant's commitment, through its membership of the Clough Group of companies, to being a socially responsible corporation and a supporter of the community. The Clough Group has been involved in numerous community activities including the Constable Care Safety Education Programme, the Young Achievement Australian Trade Fair and Industry Awards. It has also made a number of donations to public charities including $50,000 to Camp Quality. 65 These matters, personal to the defendant I take into account on mitigation of penalty. Costs 66 The defendant seeks its costs associated with an application to adjourn the hearing then before Haylen J because of service by the prosecutor of the second report of Mr Grice and service of the Amended Application for Order. The defendant also seeks it costs associated with the preparation of Professor Brown's report which it says was necessitated by service on it of a statement by Roger Jackson. Otherwise, the defendant consents to orders sought by the prosecutor for his costs. 67 The prosecutor objects to any costs order made in the defendant's favour in relation to the adjourned hearing before Haylen J. The report of Mr Grice dated 11 June 2004 directly addressed issues relevant to the present proceeding. The report addressed matters pertaining to CMPL. It was merely a reformulation of the earlier report dated 21 December 2001. The defendant had been in possession of the later report from the time of service of the brief of evidence. The prosecutor had also strenuously opposed the defendant's application for an adjournment before Haylen J. In these circumstances the prosecutor proposed that each party pay its own costs. 68 I have examined and compared the two reports of Mr Grice. The two reports are substantially different in approach. The later report attempts to answer a number of questions provided by the prosecutor. The report is clearly tailored towards resolving issues considered by the prosecutor to be relevant to a contested prosecution under the Act. In those circumstances I propose to grant the defendant its reasonable legal costs incurred on the day the adjournment was granted by Haylen J. I do not consider that the defendant is entitled to any costs which it says arose by reason of the Amended Application for Order. As I view the particulars they are all representative of the same factual background or part of that background. Particular 2(b) which was abandoned by the prosecutor dealt with the allegation of excessive fines as a contributor to the risk to safety. Even though this particular was no longer pressed against the defendant the subject matter necessarily formed part of the factual background in this proceeding. 69 The defendant also seeks cost arising from the Jackson statement and the preparation of Professor Brown's report. Mr Cahill also opposed this application on behalf of the prosecutor on the basis that as a matter of prosecutorial fairness, when the statement first came to the attention of the prosecutor, he was obliged to serve it on the defendant, which he did. It seems to me in those circumstances the prosecutor should not have to pay costs associated with simply taking an appropriate and, indeed, required, course of action. The defendant's application in relation to the Jackson statement is therefore refused. Penalty 70 In determining penalty against both defendants I have taken into account the objective seriousness of the offence, the personal factors described above and the absence of prior convictions. All of these factors have been considered by reference to the Crimes (Sentencing Procedure) Act 1999 in particular s 21A. I have also taken into account the respective culpabilities of the defendant, CMPL, CMMS and EDH, and the contribution of each of those parties to the risk to safety. Orders 71 In Matter No IRC 3191 of 2003 I make the following orders: 1. The defendant Clough Engineering Limited is convicted of the offence. 2. The defendant Clough Engineering Limited is fined $90,000 with a moiety to the prosecutor. 3. The defendant Clough Engineering Limited is to pay the prosecutor's costs as agreed or in the absence of agreement as assessed by the Court. Those costs are to be reduced by the amount of reasonable legal costs incurred by the defendant on the day the proceeding was adjourned by Haylen J. In the absence of agreement as to the amount of reasonable legal costs incurred by the defendant on the day of the adjournment, those costs are also to be assessed 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.