Industrial Relations Commission of New South Wales in Court Session CITATION : WorkCover Authority of New South Wales (Inspector Chadwick) v BHP Steel (AIS) Pty Limited [2000] NSWIRComm 75 PROSECUTOR WorkCover Authority of New South Wales (Inspector Christopher Chadwick) PARTIES : DEFENDANT BHP Steel (AIS) Pty Limited FILE NUMBER: IRC 6503 of 1998 CORAM: Hungerford J CATCHWORDS : Occupational Health and Safety - Plea of guilty - Failure to provide and maintain a safe system of work - Fatal injury - Non-standard procedure of work adopted - Measure of degree of culpability - Subjective factors in mitigation - Fine imposed LEGISLATION CITED : Occupational Health and Safety Act 1983 s15(1) and (2) CASES CITED : Broomham v BHP Steel (AIS) Pty Limited t/as BHP Steel Flat Products Division (unreported, Hungerford J, IRC98/3440, 17 September 1999) HEARING DATES: 04/05/2000 DATE OF JUDGMENT: 05/10/2000 PROSECUTOR Mr P M Skinner of counsel SOLICITOR Mr Gregory McCann WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: DEFENDANT Mr J A Timbs QC SOLICITOR Ms L Constantine Blake Dawson Waldron JUDGMENT: - 25 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HUNGERFORD J Wednesday, 10 May 2000 Matter No IRC 6503 of 1998 WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR CHRISTOPHER CHADWICK) v BHP STEEL (AIS) PTY LIMITED Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 This is a prosecution of BHP Steel (AIS) Pty Limited by Christopher Chadwick, as an inspector of the WorkCover Authority of New South Wales, for an offence against s 15(1) of the Occupational Health and Safety Act 1983. The summons set out the charge and the particulars thereof as follows : On the 12 December 1996 at Port Kembla Steelworks at Five Islands Road, Port Kembla, in the State of New South Wales, the defendant, being an employer, DID FAIL to ensure the health safety and welfare at work of all its employees and in particular Stanley Balding and Frank Mellado contrary to section 15(1) of the Occupational Health and Safety Act , 1983, in failing to provide and maintain systems of work in undertaking work upon an oxygen lance that were safe and without risk to health. The Particulars of the charge are: 1. The defendant at all material times employed Stanley Balding and Frank Mellado. 2. The defendant failed to provide and maintain systems of work for water leakage testing of the oxygen pipe of the oxygen lance that were safe and without risk to health. 3. As a result of the said failure, Stanley Balding suffered fatal injuries and Frank Mellado was placed at risk of injury. 2 Section 15(1), in terms, requires that "Every employer shall ensure the health, safety and welfare at work of all the employer's employees". Sub-section (2) of the section, as particularly relevant for present purposes, provides that an employer contravenes sub-s(1) if "the employer fails: (a) to provide or maintain … systems of work that are safe and without risks to health". 3 The proceedings were originally defended and were set down for hearing on 3, 4 and 5 April 2000. However, on 31 March advice was received that the defendant would change its plea to guilty and the hearing proceeding on 5 April accordingly. 4 An agreed statement of facts was settled between the parties, the terms of which were as follows: 1. At all material times, the Prosecutor was an Inspector duly appointed and empowered by section 48 of the Occupational Health and Safety Act 1983 ("the Act") to institute proceedings in this matter. 2. At all material times, the defendant, BHP Steel (AIS) Pty Ltd (ACN 000 019 625) was a company duly incorporated with registered office at Five Islands Road, Port Kembla, in the State of New South Wales. 3. At all material times, the defendant conducted a steel making business in its slab and plate products division in the Port Kembla Steelworks at Five Islands Road, Port Kembla, in the State of New South Wales. 4. At all material times, the defendant employed a number of personnel including: (a) Mr Stanley Charles Balding ("Mr Balding"), 51 years of age, as a trades assistant; and (b) Mr Frank Mellado ("Mr Mellado"), 52 years of age, as a welder. Both persons were employed in the oxygen lance repair area at the 90 foot level, Basic Oxygen Steelmaking ("BOS") Plant in the above factory premises. 5. Employed as a supervisor to the above personnel was Mr Frank Parovel ("Mr Parovel"), 54 years of age as the boiler maker supervisor. Mr Parovel supervised 11 personnel in general plant maintenance in the slab making repair department which included the above two persons in the oxygen lance repair area. 6. Mr Balding acted as Mr Mellado's assistant generally in accordance with Mr Mellado's direction. Mr Mellado had given Mr Balding on the job training at the plant. 7. On 12 December 1996, at 1.30 pm, Mr Balding suffered fatal injuries when he was struck by a fitting which had been used to carry out a water leak test of an oxygen pipe which was located in the oxygen lance repair area of the above premises. 8. On the date of the accident photographs were taken and the scene was preserved. On 13 December 1996 a Factual Inspection Report was completed. Such report and photographs are attached hereto. 9. The investigation revealed that an oxygen lance is used in the steel making process to inject oxygen into molten steel. When a lance is in need of repair, it is then placed in the oxygen lance repair area for repairs. Mr Balding and Mr Mellado were involved in undertaking such repairs. 10. The lance pipe is approximately 23 metres in length and consists of 3 concentric pipes being 219, 273, 323 mm in diameter. The 219 mm pipe contains oxygen, the 273 mm pipe contains cooled water and the 323 mm pipe contains heated water which is returning back out of the oxygen lance. 11. Oxygen lance number 11 was first taken out of service and a tip replaced on 5 December 1996. On 9 December 1996, Mr Mellado and Mr Balding noticed a leak in the expansion joint. Repairs were attempted to the expansion joint, but those repairs were ineffective. A water leak test of the oxygen lance assembly was carried out by Mr Parovel, Mr Mellado and Mr Balding. This water leak test determined that the expansion joint required replacement. After discussions with the work planner, it was decided that the expansion joint was to be replaced. This required the tip of the lance to be removed again. It was decided between the employees concerned that the tip would be re-used. 12. On 11 December 1996, Mr Balding and Mr Mellado removed the tip and the outer pipe so that work could be performed on the expansion joint. Whilst doing this, Mr Balding noticed that there was water in the oxygen pipe. Mr Balding told Mr Mellado about this and also told Mr Parovel about this. Mr Balding and Mr Mellado removed the inner pipe to expose the oxygen pipe so that they could inspect it. 13. On the morning of 12 December 1996, work procedures to test the oxygen pipe were discussed between Mr Parovel and Mr Mellado and between Mr Mellado and Mr Balding. Mr Parovel instructed Mr Mellado to weld a steel plate on the end of the oxygen pipe to seal that end and conduct a water leak test of the oxygen pipe. 14. Mr Balding then fitted a victaulic type inlet coupling to the inlet end of the oxygen pipe, to conduct the water test. The coupling is fitted to a fire hose which is connected to the fire hydrant outlet. The fire hydrant is situated approximately 14 metres from the inlet of the oxygen pipe. Mr Balding turned on the water tap of the fire hydrant. Other than the method of pressure relief proposed to be employed by Mr Mellado, there was no provision to release any air and water that had become trapped in the oxygen pipe. 15. The pipe was checked for any leaks. No leaks were found except for a small leak around the welded plate on the end of the pipe. The tap of the fire hydrant was then turned off. Mr Mellado then indicated to Mr Balding that he was going to gouge the end plate to release the pressure. As he was preparing to undertake that process, he heard a noise that sounded like a clapping sound. He turned around and he saw Mr Balding at the other end of the pipe lying on his back. Lying nearby was the victaulic type inlet coupling and a ring spanner that Mr Balding had used to tighten the bolts which secured the coupling to the oxygen pipe. 16. The investigation revealed that Mr Balding had suffered the impact of the inlet coupling and hose to his body and chest area causing fatal injuries. 17. It was revealed that the two men had been working in the lance area for approximately 2 years. During that time they had repaired many oxygen lance assemblies, but this was the first occasion they conducted a water leak test of the oxygen pipe, rather than the oxygen lance assembly as a whole. 18. The defendant had a system of work for conducting water leak testing of the oxygen lance assembly. This system involved a coupling with a tap being fitted on the 323 mm pipe, and the water test being undertaken. At the completion of the test, the tap is then opened which releases the pressure from the pipe. The couplings are then removed. 19. It was also revealed that Mr Mellado and Mr Balding had not received any documented training procedures regarding the repair and water leak test procedure for the oxygen lance assembly. They had received on the job training in relation to the water leak test of the oxygen lance assembly. 20. The water pressure was measured at the site at the hydrant as 800 kpa (116 pounds per square inch). Engineers of the defendant determined that the force of the victaulic type inlet coupling at the time of ejection was 3 tonne. The weight of the victaulic type inlet coupling once removed from the fire hose was 8.55 kg. 21. Immediately following the accident, BHP sent a high priority fax to other users of the same process within BHP, making users aware that a fatality had occurred and to take precautions. 22. At about 3.00 pm on 12 December 1996, the defendant ceased steelmaking operations to communicate the nature of the incident to all employees in slab making. 23. WorkCover issued a Prohibition Notice to the defendant directing that all water leakage tests of oxygen lances without means of a pressure relief mechanism cease immediately. 24. The defendant implemented changes to the work procedures for water leakage testing of oxygen lances and also has procedures in a documented format. This document clearly sets out all the necessary safety precautions that must be in place to allow for a test to proceed and also sets out in a diagram those necessary steps. The test which was undertaken on 12 December 1996 is no longer employed and has not been utilised since the accident. 25. It is alleged that the defendant has breached section 15(1) of the Occupational Health and Safety Act 1983 on 12 December 1996, at the 90 foot level, Basic Oxygen Steel Making Plant, Five Islands Road, Port Kembla, in the State of New South Wales, being an employer, did fail to ensure the health, safety and welfare at work of all its employees, in particular Stanley Balding and Frank Mellado in failing to provide and maintain systems of work in undertaking work upon an oxygen lance that were safe and without risk to health, in that: (a) the defendant at all material times employed Stanley Balding and Frank Mellado; (b) the defendant failed to provide and maintain systems of work for water leakage testing of the oxygen pipe of the oxygen lance that were safe and without risk to health; and (c) as a result of the said failure, Stanley Balding suffered fatal injuries and Frank Mellado was placed at risk of injury. 5 Having reviewed the agreed facts, I am satisfied that the offence has been proven. The defendant's plea of guilty was properly made and I will enter a verdict to that effect. It remains to deal with the questions of penalty and costs. 6 A schedule of the defendant's prior convictions, including those under its former name of Australian Iron and Steel Pty Limited, was admitted into evidence and covered the period from 17 June 1958 to 17 September 1999 during which period 68 convictions for breaches of occupational health and safety legislation were recorded. 7 As the present offence was committed after 1 February 1996, it was common ground, with which I agree, that the maximum penalty is $750,000: see Broomham v BHP Steel (AIS) Pty Limited, t/as BHP Steel Flat Products Division (unreported, Hungerford J, IRC98/3440, 17 September 1999 at pp 10-15). 8 The incident to which this prosecution relates occurred on 12 December 1996 in the Basic Oxygen Steelmaking Plant at the defendant's steelworks at Port Kembla while two employees, Mr Frank Mellado and Mr Stanley Balding, were repairing an oxygen lance. Mr Frank Parovel was the boilermaker supervisor in the repair area, Mr Mellado was a welder and Mr Balding acted as the trades assistant working under Mr Mellado's on-the-job direction. An oxygen lance is used in the steelmaking process to inject oxygen into the molten steel; it is a large and heavy piece of equipment about 23 metres long consisting of three pipes containing respectively oxygen (219 mm diameter), cooled water (273 mm diameter) and heated water (323 mm diameter). A 1:23 scale model of the lance in question, together with photographs taken by the prosecutor of the lance and the work environment where the incident occurred were admitted into evidence and referred to by the various witnesses - I found that evidence of considerable assistance in following and understanding what occurred and I express my gratitude for the preparations made in those respects. 9 It transpired that on 9 December 1996 a leak was noticed in the expansion joint of the subject lance and a water leak test indicated replacement of the joint was necessary. However, on 11 December 1996, during the removal of the tip of the lance to permit access to the expansion joint, water was seen in the oxygen pipe; that required testing of the oxygen pipe for leaks. And, so, Mr Parovel instructed Mr Mellado to weld a steel plate on the end of the oxygen pipe to seal that end to allow a water leak test to be done. The test was performed on 12 December 1996 by Mr Mellado and Mr Balding. 10 What then occurred was stated by Mr Mellado in his record of interview by the prosecutor on 17 December 1996 as follows : Q31: "Have you ever had to do a water test on the oxygen pipe of a lance before?" A31: "Never I have never done before, we have never done before." Q32: "Did Frank explain to you how he wanted you to water test the lance?" A32: "No." Q33: "Did Frank explain to you how he wanted you to relieve the water pressure after the test was complete?" A33: "No." Q34: "Did you question Frank how you were supposed to relieve the water pressure?" A34: "No." Q35: "When you have a problem such as a leaking oxygen pipe, what are your instructions on how to seek advice or assistance?" A35: ""The only one I have got if I have a problem is Frank my supervisor." Q36: "How long did you do the water test on the oxy pipe?" A36: "Once I welded the plate Stan fitted only on the middle pipe the water fitting he switched on the water on the main tap around the corner the water started to run inside the oxy pipe we can see the plate I welded on to block was dripping water so we started to walk from one end of the pipe to check for leaks Stan on one side and myself on the other." Q37: "On which side did you check?" A37: "I was on the side nearest to the wall." Q38: "What did you do after you had inspected the pipe?" A38: "There was no leak, so I asked Stan to go and turn off the water tap and then I told him I was going to gouge out the plate I had welded on to relieve the pressure, I started to put the gouging tip into the torch and Stan came over and said did I realise that there was going to be a lot of water over by the lockers and I said yes I know so what I did, I take out the cutting tip from the torch and put in the gouging tip and I had my back to Stan and I heard a clapping sound, a soft sound it was not loud." Q39: "How long was the time from when Stan spoke to you to when you heard the noise?" A39: "It could be a couple of minutes." Q40: "What did you do when you heard the noise?" A40: "I turn around and I see he is flat on the floor." Q41: "Where on the floor was he laying?" A41: "I think he was in the walkway with his leg over the track." Q42: "Can you recall where the water test fitting was laying?" A42: "I saw a clamp near the next lance." Q43: "What did you do when you realised Stan was hurt?" A43: "I put me knee on the floor and lifted his head with my left hand I notice his head was relaxed. I called his name a couple of times and clapped and I clapped his face I never heard any answer so I left him and I ran to our crib room and I rang 6000 our emergency number and people came." Q44: "Is there anything further you wish to say on this matter at this time?" A44: "No." 11 It was revealed from the later investigation that Mr Balding suffered the impact of the inlet coupling and hose to his body and chest area as they were released under pressure causing him fatal injuries. 12 The usual system of work for conducting water leak testing of oxygen lances involved placing two victaulic couplings, one with a fitted tap to a water supply on the inlet end of the oxygen pipe to enable the release of pressure by using the tap to bleed the pipe; the fitting was then removed and necessary repairs undertaken. However, on this occasion the "skin" (outer sleeve) of the water return pipe had been removed so that the smaller diameter of the oxygen pipe precluded the fitting of the usual tap attached to the victaulic coupling. Instead, a victaulic coupling, minus the release valve tap assembly, was fitted to the inlet end of the oxygen pipe for the entry of the water and the other or outlet end was sealed with a blank welded metal plate. As to the system used on this occasion as not being in accordance with that usually followed, and as to which Mr Mellado said "we have never done before", Mr Parovel said to the prosecutor on 13 December 1996, as noted in the record of his interview : Q64: "Did you raise your problem of not having a means of fitting the relief valve, with anyone?" A64: "No." Q65: "Once the lance had been charged with water, how were you going to relieve the pressure from within the oxygen pipe?" A65: "Had I been there we would have just pierced a hole in the end of it." Q66: "Are you referring to the blanking plate on the end of the oxygen pipe?" A66: Yes." Q67: "Who did you instruct to weld the blanking plate onto the oxygen pipe?: A67: "Frank Mellado." Q68: "Who selected the material for the blanking plate?" A68: "Frank Mellado." Q69: "Does Frank Mellado hold a recognised welding certificate?" A69: "I would assume so, yes." Q70: "Did you make either Frank Mellado or Stan Balding aware of the intended method of relieving the water pressure?" A70: "No." Q71: "Did you make either Stan Balding or Frank Mellado aware of the dangers of releasing the victaulic inlet valve fitting without first venting the internal pressure?" A71: "No I didn't." Q72: "Were Stan or Frank aware of what the system was that had been created on that day?" A72: "I would say yes to that, basically because it was no different from the other one, the other testing method." 13 Mr P Skinner of counsel, for the prosecutor, called Mr Mellado to give evidence. Under cross-examination by senior counsel for the defendant, Mr Timbs QC, Mr Mellado gave the following evidence concerning the method used to carry out the water test and his view of the consequence of Mr Balding's action in releasing the coupling : Q. And did he tell you how to test the oxy pipe? A. Yes. Q. What did he say? A. Weld a plate right to the end of the oxy pipe so that the only way to check up, to do the water test of course. Q. Then did he tell you to conduct the water test after the plate had been welded to the end of the oxy pipe? A. Yes. … Q. And did you understand that the water test would involve pressure testing with the water? A. Yes. Q. And there would be water and air in the pipe? A. Water in the pipe, yeah. … Q. Mr Balding went to the pipe at the other end - at the other end of the oxygen pipe. He left you and went there. Did you know he was going to go to that end of the oxygen pipe? A. Which end are you talking about? Q. Well, as you recorded it, the right-hand end? A. Oh yes, he turn off the water first. Q. He turned off the water first? A. Yes. Q. But then it appears he went to the victaulic coupling at the end of the oxygen pipe? A. No, I never seen him go there. Q. And you never knew he was going there? A. No. Q. You didn't tell him to do what he did? A. No. Q. And would you have done what he did? A. No. Q. Why not? A. What do you think? Are you asking me why I never went to do it? I say never, I can never do that, for sure, I know the consequence. Q. What is the consequence? A. Well, the water and all the pressure come out, released. 14 On 13 December 1996 the prosecuting inspector issued to the defendant a prohibition notice pursuant to s 31S of the Occupational Health and Safety Act preventing the hydrostatic testing of oxygen lances without a pressure release device fitted. 15 It is plain on the evidence thus called by the prosecution that the essential ingredient alleged in the summons that the defendant failed to provide and maintain a system of work for water leakage testing of the oxygen pipe that was safe and without risk to health has been established. In particular, as Mr Timbs very properly acknowledged in identifying the hazard to safety here, "the method of pressure relief was not adequately discussed between supervisor (Mr Parovel) and Mr Mellado, Mr Mellado and Mr Balding, such that there was an understanding by Mr Balding that the last thing he should have done was to go near that end of the pipe. … we accept as the defendant in the circumstances there should have been some explicit discussion and that that may have made a difference and that is the breach that we acknowledge occurred". 16 In mitigation of penalty, Mr Timbs relied on oral and affidavit evidence, together with details of the safety performance of and initiatives made by the defendant at the Port Kembla steelworks in its Flat Products Division since 1994/95. That material was not the subject of any challenge by the prosecutor. 17 An affidavit sworn by Gerard John Whelan on 5 April 2000 was read into evidence in which the deponent commented upon the water leak test procedure of the oxygen pipe as followed here and upon the safety performance and initiatives concerned. Mr Whelan had been employed by the defendant since 1972 and in June 1993 he was appointed to his present position as Superintendent - Slabmaking Maintenance at the steelworks. In his affidavit, he detailed the standard practice followed since 1972 for water leak testing of oxygen lances, as I have earlier summarised, and the non-standard procedure adopted to test the subject oxygen pipe on 12 December 1996. Although, perhaps ironically, asserting that the procedure adopted by Mr Mellado and Mr Balding was a response to a perceived problem which did not exist, albeit conceived by Mr Parovel as the supervisor to meet the requirements of an unusual situation, Mr Whelan concluded : 17. I believe that Mr Mellado and Mr Balding were acting in a climate of lack of previous experience with water leak testing of the oxygen pipe alone. The water leak testing of the oxygen pipe as opposed to the lance assembly and the non-standard procedure described in paragraph 12 are not BHP's preferred method of testing, nevertheless BHP believes that the method of testing described in paragraph 12 was, if followed, safe under the circumstances. 18. BHP does not understand why Mr Balding removed the victaulic coupling under pressure. BHP concedes that the method of pressure relief to be used in the non-standard procedure should have been explicitly discussed with Mr Balding and Mr Mellado and it was not. In the absence of discussion and clear understanding of a new procedure the incident occurred. 18 As to the safety performance over recent years at the steelworks, Mr Whelan referred to the defendant's target as "zero serious illnesses, injuries and incidents" and the safety initiatives outlined by him, following the adoption of the DuPont Safety Resources Business in 1994 to assist in achieving "World's Best Practice", may be summarised as follows : (1) Significant safety occurrence system to alert all concerned of newly identified hazards and key learnings from occurrences. (2) Safety programmes developed, with direct involvement of employees, covering eye care, manual handling, elimination of electric shock, hazard awareness, safety directives, vehicle interaction and signs. (3) Critical work procedures involving regular audits and retraining if necessary. (4) Job safety management training for all supervisors and team leaders in respect of work systems. (5) Pocket safety cards issued to all employees for use as prompts on jobs, including, as most relevant for this case, a personal safety check for pressure system isolation. (6) Auditing procedure for supervisors. (7) Special focus safety committees to promote better practices and share information. (8) Health information provided by health professionals to employees. (9) Injury management covering reporting of all injuries and incidents, focus on people, investigation of root cause of incidents, refresher training, special attention for apprentices and rehabilitation programme. (10) Maintenance procedures by way of written instructions on the safe way to do jobs. (11) Risk management sessions involving all employees to reduce risks to an acceptable level. (12) A safety network established for contractors working on the site, including employees of contractors participating in departmental training. (13) Management commitment as to expectation that every employee will stop a job if it cannot be done safely even if that means a plant stop. (14) Desk top exercises of simulated emergencies. (15) Reporting system for all "near misses" of injury. 19 Kenneth John Hinds, a consultant engineer to the building and engineering industries, swore an affidavit ready by Mr Timbs in which he said he had "been briefed about the factual circumstances of this matter". He then stated his opinion in the following way : 11. I have considered the method of pressure relief which was contemplated by Mr Mellado, namely, gouging a short distance of fillet weld which had been laid between the cylindrical pipe and the flat end plate. 12. I consider that this method would have produced the desired depressurisation of the oxygen pipe as a result of the "hydrostatic" test carried out by the BHP employees. 13. In my opinion, this method, if undertaken, would not have endangered the safety of the employees involved. 20 Mr Skinner did not challenge Mr Hinds' qualifications or the basis upon which he gave his expert opinion. However, in cross-examination, Mr Skinner suggested there was a safety hazard in the proposed work system whereby Mr Mellado was to use oxy-acetylene equipment to "gouge" a hole in the blank steel plate at the outlet end of the oxygen pipe as the means to release the pressure. In denying any hazard, particularly at the point of breakthrough when the pressure would be released, Mr Hinds said : I am saying if the person stood in front of where he was cutting it would then depend upon the state of his clothing. If he stood away from it, it is just my experience, having spent, I don't know, ten years in production shops that welders know what needs to be done. Or arc gouging is something that is done all the time and they don't stand in front of it. If they did then it would be functional on the protective clothing. If they didn't, I don't think it would be functional on the protective clothing. … … If the breakthrough occurs you have an instantaneous reaction to move the piece of equipment you are using out of the way. I have never seen anyone hit when they are gouging - I couldn't comment as to the situation. It was the fact on the evidence that Mr Mellado had the appropriate protective clothing. 21 Mr Timbs called evidence from a former welder's assistant at the steelworks, Timoteo Alfonso Exposito, who for 5 or 6 years until January 1995 performed the same type of job in the repair of oxygen lances as that done by Mr Balding. He had assisted Mr Mellado. After being informed of the detail of the work system used here for the non-standard testing of the oxygen pipe in the lance, Mr Exposito gave this evidence : Q. Now, when the tap is on and the water is in the pipe you do the test and at the end of the test would you go anywhere near the victaulic coupling at the inlet end of the oxygen pipe? A. You take the pressure off. A lot of pressure there, but it is dangerous. 22 Mr Timbs provided statistics of the safety performance record of the defendant's Flat Products Division at the Port Kembla steelworks and for the maintenance repair area of the Slabmaking Department where the incident here occurred. The defendant employed about 6,800 persons at the steelworks at the time of the present incident, of whom 105 were engaged in the maintenance repair area. Significant details disclosed by the statistics were that over the period from July 1996 to February 2000 for the defendant's operations at the steelworks as a whole the Lost Time Injury Frequency Rate (the number of lost time injuries for each one million hours worked) was reduced from 8.3 to 2.5 (69.9%) but in the directly relevant maintenance repair area of the Slabmaking Department the reduction was from 8.4 to zero (100%). By comparison, during the same period, Lost Time Injury Frequency Rates in relevant industries elsewhere were : NSW Manufacturing Industry 44.49 Gary Steel (USA) 7.30 Bethlehem Steel (USA) 23.20 British Steel (Llanwern Works) 8.60 Hoogovens Steel (Netherlands, Belgium and Switzerland) 12.00 Usinor Steel (France) 0.40 DuPont 0.16 US Industry Average 9.50 World Class Steel Industry 2.00 23 Tendered into evidence by Mr Timbs was a booklet (Issue 2, September 1999) produced by the defendant's parent corporation, The Broken Hill Proprietary Company Limited, entitled "BHP - Safety Management Standards". I do not intend to dwell too much on its contents, except to record I have perused it and consider it demonstrates an unequivocal and comprehensive commitment to occupational health and safety best performance. The booklet covers subject matters such as The BHP Safety Management System, Operation of the Standards and BHP Safety Management Standards in their very many aspects. It is sufficient for present purposes to recite the fundamental principles as stated in the booklet, as follows : The following represent the fundamental principles underlying BHP's approach to safety which must be inherent in the application of the BHP Safety Management Standards and overall BHP Safety Management System. · All injuries can be prevented. · All operating exposures can be safeguarded. · We are all responsible for safety. · Management is accountable for safety performance. · Working safely is a condition of employment. · Training employees to work safely is essential. · Everyone has the right to challenge, or refuse to work in, unsafe situations. 24 In his final submissions, Mr Skinner conceded, I think very fairly and properly and notwithstanding the death caused to Mr Balding, that he "could not say this is the gravest breach". Counsel described the detriment to safety here in terms "that a work safe system has been adapted to a different procedure. There has really been no discussion about it. … It should have been self evident … A new procedure was being used. The dangers of the message from similar procedures, which is being applied without thinking through whether they were strictly applicable, were there and that is, in fact, what happened". I regard counsel's description as an accurate statement of the position. In a very real sense, the evidence left me with the impression that there was simply inadequate attention by the defendant's supervision to ensure that the two employees required to perform the non-standard water leak test on the oxygen pipe would do so in a safe manner. Mr Skinner amplified the relevant failure of the defendant in this way : Your Honour, the system's failure on the evidence has, perhaps, two levels and the first is as I opened and as is pleaded that what they actually did just seemed to be an ad hoc approach to a problem which hadn't occurred before, on the evidence but of which there really was no system. That is, as I understand the evidence of Mr Whelan, that there was a system with testing the oxygen pipe being a visual test but it seemed the work requirements on the day in question, 12 December 1996, had gone beyond that. Once a decision had been made to use the water to test this oxygen pipe there was no system in place for that to be done safely. The second level of failure of the system is a failure in such system as there should have been and it would seem on the evidence that the defendant has tendered today that there was an instruction coming down the chain from the supervisor, Mr Parovel, to the workmen. 25 Mr Skinner referred to my decision of 17 September 1999 in Broomham v BHP Steel (AIS) which concerned the same defendant and he adopted the principles contained therein (at pp 25-26) as to the proper approach to sentencing. For convenience in this case, I repeat them thus : Given that the maximum penalty for the instant offence is $750,000 as providing for the worst case, it seems clear to me on the settled authorities that in assessing penalty I am required to do so by reference to the objective seriousness of the offence in terms of its relative seriousness to a worst case: see Camilleri's Stock Feeds Pty. Limited v. Environment Protection Authority (1993) 32 N.S.W.L.R. 683 at 698 per Kirby P., as he then was, as applied recently in Tuckley v. The Crown in Right of the State of New South Wales (Department of Community Services) (unreported, Hungerford J., IRC97/7324, 7 September 1999 at pp.22-23). In that respect, however, and again as Kirby P. suggested in Camilleri's Stock Feeds (32 N.S.W.L.R. at p.698) - "The Court must keep in mind not only the facts which establish the seriousness of the offence but also those which tend to mitigate that seriousness or exculpate the offender". But, as was observed by me in WorkCover Authority of New South Wales (Inspector Dowling) v. Overtop Pty. Ltd. (1998) 86 I.R. 319 at 333 and cases cited therein, "subjective considerations going to mitigation are necessarily subsidiary to the objective factors of the nature and quality of the offence". The applicable principles to follow in the sentencing process were, with respect, conveniently collected by a Full Bench (Wright J., President, Walton J., Vice-President and Peterson J.) of the Court recently in Fletcher Construction Australia Limited v. WorkCover Authority of New South Wales (Inspector Fisher) (1999) 90 IR 66 at 77-81 and where their Honours' earlier decision in Lawrenson Diecasting Pty. Limited v. WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 91 IR 464 at 472-472 was affirmed. I have had recourse to those authorities in considering the present task. 26 Further in relation to the decision in Broomham v BHP Steel (AIS) , Mr Skinner and Mr Timbs were on common ground, as Mr Skinner said, that I have in this case "received much the same assistance as … received in that case" so that if I were "to adopt some of [my] findings in the previous case [counsel] make no submissions to the contrary". Although not expressly identified by Mr Skinner, I agree that certain findings, or rather approaches in the sentencing process, made in that previous case are indeed reasonably open on the evidence to apply in the present case - both cases have as the particular detriment to safety the defendant's failure to ensure that a safe system of work was complied with. In Broomham v BHP Steel (AIS), the relevant failure of the defendant was not to ensure rail wagons not parked in a stable location were secured by handbrakes and chocks so that they moved and fatally crushed a shunter; in this case, the defendant failed to ensure the safe release of pressure from the oxygen pipe so that Mr Balding, albeit for some inexplicable reason or mere inadvertence, was able to remove the victaulic coupling and so be fatally struck by it from the considerable pressure thus released. 27 It is timely to note that immediately following the incident the defendant ceased steelmaking operations to communicate the nature of it to all employees in the Slabmaking Department. Measures were taken, as para 24 of the agreed statement of facts said, to ensure safety in future in the following manner : The defendant implemented changes to the work procedures for water leakage testing of oxygen lances and also has produced the procedures in a documented format. This document clearly sets out all the necessary safety precautions that must be in place to allow for a test to proceed and also sets out in a diagram those necessary steps. The test which was undertaken on 12 December 1996 is no longer employed and has not been utilised since the accident. 28 Mr Timbs approached the matter of penalty in his final submissions on the basis of the proposition "that the reason for Mr Balding doing what he did is incomprehensible … he embarked upon a course which was ex facie hazardous in circumstances where other people including his predecessor in the job, Mr Exposito, … wouldn't have gone anywhere near that pipe because of the danger involved in the pressure". I too share Mr Timbs' question as to the conduct of Mr Balding in removing the victaulic coupling when, on Mr Mellado's evidence, the only task of Mr Balding was to turn off the water supply at the inlet end of the oxygen pipe leaving it to Mr Mellado to release the pressure at the outlet end by gouging a hole in the blank steel plate, a method considered safe by Mr Hinds. 29 Nevertheless, and as Mr Timbs properly conceded, that circumstance goes to penalty in assessing the qualitative seriousness of the detriment to safety otherwise existing. That detriment, identified and accepted in the affidavit evidence of Mr Whelan, was the failure of the defendant to explicitly settle with the employees concerned the system of work to follow with safety in what was a non-standard procedure used for the first time. The action taken by the defendant after the tragic incident in no longer using the particular test and by specifying the procedures to be followed for water leak testing of oxygen lances, including all necessary safety precautions, amply demonstrates the objective seriousness of what occurred. True it is the incident would not have occurred if Mr Balding had not proceeded to the inlet end of the pipe and, for some unknown reason, unscrewed the victaulic coupling when Mr Mellado told him he (Mr Mellado) was going to release the pressure. 30 Inattention or mere inadvertence of an employee only serves to show the need for an employer in ensuring safety to be astute in meeting all reasonable contingencies. This concept, in my view, is the measure of the real culpability of the defendant in this case where almost a "one-off" situation arose to be dealt with away from, as the evidence showed, the defendant's well and long-established procedures for the water testing of oxygen lances in a safe manner. The remedial steps taken so promptly by the defendant represented, I think most importantly in its favour and consistent with its policy to safety in the workplace, a clear example of its endeavours to ensure safety requirements are met. In that sense, it does not seem to me that factors going to deterrence weigh heavily in the sentencing process. 31 In all the circumstances, I consider the essential nature and quality of the subject offence to be in the lower quartile of the range of culpability. 32 In terms of mitigating what might otherwise be a penalty consistent with the degree of culpability found, I am of the view that the subjective factors for this defendant, as set out in the evidence, call for a significant reduction. As I found in Broomham v BHP Steel (AIS) (at p 22), and confirmed in this case, the statistics of the defendant's safety performance in recent years "give cogency to the defendant's occupational health and safety policies and manifest a responsible attitude supported by an effective safety programme". The defendant is entitled, in my view, to receive due credit for that as reflected in the penalty to be fixed. 33 With one exception, I repeat the following finding in Broomham v BHP Steel (AIS) as being entirely applicable to the instant case : The factors subjective to the defendant, in my view, call for a sizeable reduction in the penalty otherwise applicable. Primarily in that respect, I have in mind the considerably improved safety performance of the defendant over the period from 1995 to 1999, particularly in the rail operations area of the steelworks, and its undoubted good-standing as an industrial and corporate citizen. The defendant's commitment to occupational health and safety issues, as evidenced by its stated policy and safety performance, I think, also are in its favour in terms of mitigation. The defendant entered an early plea of guilty, it was acknowledged by the prosecutor to have "fully and frankly co-operated in the investigatory process" and it has implemented remedial action to prevent a recurrence. In the result, I am of the view that those factors operate to significantly reduce what the penalty might otherwise be. 34 The exception relates to the plea of guilty, always a most relevant factor in determining penalty, which, unlike in Broomham v BHP Steel (AIS) , was entered quite late. Indeed, the plea was only changed on the Friday before the 3-day defended hearing was due to commence on the Monday. Given that a defendant is entitled to full consideration for an early plea of guilty, the lateness of the plea here must result, I think, in only minimal credit being allowed. Even so, the defendant's case at the hearing was conducted with full co-operation, frank acknowledgement of its failure and, importantly, the provision to the Court of factual material which facilitated proper consideration of the issues. 35 It is to be noted also, having in mind the fine of $65,000 imposed in Broomham v BHP Steel (AIS) and therefore endeavouring to provide some parity in the sentencing of this defendant, that here the offence was committed about 6 months later. 36 I find the charge proven and enter a verdict of guilty against the defendant. I am of the view that an appropriate penalty is a fine of $80,000. 37 I order that the defendant is convicted of the subject charge and that it is fined an amount of $80,000 with a moiety to the prosecutor. The defendant is to pay the prosecutor's costs. 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.