Industrial Relations Commission of New South Wales in Court Session CITATION : WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd, t/as Rod, Bar & Wire [2000] NSWIRComm 241 PROSECUTOR WorkCover Authority of New South Wales (Inspector Steven Finlay McMartin) PARTIES : DEFENDANT The Broken Hill Proprietary Company Limited, trading as Rod, Bar & Wire FILE NUMBER: IRC 4583 of 1999 CORAM: Hungerford J CATCHWORDS : Occupational Health and Safety - Prosecution for breach of statutory duty - Use of oxy-propane cutting equipment - Explosion causing serious injuries to two workers employed by contractors - Degree of culpability of defendant - Objective seriousness of offence in terms of its nature and quality - Subjective features in mitigation of penalty - Early plea of guilty - Co-operation with investigating authorities - Contrition - Remedial measures implemented - Improved safety performance - Nature of the industry and inherent risks - Record of prior convictions - Application of guideline judgment - Defendant convicted - Fine imposed. LEGISLATION CITED : Occupational Health and Safety Act 1983 s 16(1) Alcatel Australia Ltd v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Carrington Slipways Pty Ltd v Callaghan [1985] 11 IR 467 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 R v Cartwright (1989) 17 NSWLR 243 R v Gallagher (1991) 23 NSWLR 220 R V Thomson, R v Houlton [2000] NSWCCA 309 Tyler v Sydney Electricity (1993) 47 IR 1 Warman International Ltd v WorkCover Authority of New South Wales (Inspector Ankucic) (1998) 80 IR 326 CASES CITED : WorkCover Authority of New South Wales (Inspector Chadwick) v BHP Steel (AIS) Pty Ltd (2000) 98 IR 122 WorkCover Authority of New South Wales (Inspector Dawson) v Waugh (1995) 59 IR 89 WorkCover Authority of New South Wales (Inspector James) v Australian Refined Alloys Pty Ltd [2000] NSWIRComm 224 WorkCover Authority of New South Wales (Inspector McKenzie) v Waste Recycling & Processing Services of New South Wales [2000] NSWIRComm 218 WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd (1999) 90 IR 277 WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd (1999) 96 IR 32 WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd [2000] NSWIRComm 39 WorkCover Authority of New South Wales (Inspector Plowright) v Forgacs Engineering Pty Ltd [2000] NSWIRComm 226 WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales [2000] NSWIRComm 179 WorkCover Authority of New South Wales (Inspector Wong) v Aluminium Contractors Sales (NSW) Pty Ltd [2000] NSWIRComm 233 HEARING DATES: 07/21/2000; 08/24/2000 DATE OF JUDGMENT: 11/29/2000 PROSECUTOR Mr D B O'Neil of counsel Solicitor: Ms M Lagana WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: DEFENDANT Mr R R Stitt QC and Ms A J Silink of counsel Solicitor: Ms Lea Constantine Blake Dawson Waldron JUDGMENT: - 24 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HUNGERFORD J Wednesday, 29 November 2000 Matter No IRC 4583 of 1999 WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR STEVEN FINLAY McMARTIN) v THE BROKEN HILL PROPRIETARY COMPANY LIMITED, TRADING AS ROD, BAR & WIRE Prosecution under s 16(1) of the Occupational Health and Safety Act 1983. JUDGMENT [2000] NSWIRComm 241 1 The present matter involves the prosecution of The Broken Hill Proprietary Company Limited, t/as Rod, Bar & Wire by Steven Finlay McMartin, an inspector of the WorkCover Authority of New South Wales, for a breach of s 16(1) of the Occupational Health and Safety Act 1983. That sub-section provides that "Every employer shall ensure that persons not in the employer's employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at his place of work". The charge and the particulars thereof were stated in the initiating summons as follows : On the 25 March 1998 at Selwyn Street, Mayfield, in the State of New South Wales, the defendant, being an employer DID FAIL to ensure that persons not in its employment, and in particular, Andrew Scott Swan and Mark Boyce, were not exposed to risks to their health or safety arising from the conduct of its undertaking, to wit, maintenance of its Steelmaking Ladle No 1, while they were at its place of work contrary to Section 16(1) of the Occupational Health and Safety Act 1983. The particulars of the charge are: a) The defendant failed to provide or maintain systems of work, for the maintenance of the Steelmaking Ladle No 1, that were safe and without risks to health, in that it failed to: (i) Utilise forced ventilation inside the ladle, either above the top work platform or between it and the lower platform, capable of ensuring that the concentration of LP gas sourced from gas hoses and cutting equipment remained less than the flammable range. (ii) Utilise an air monitoring system to identify LP gas concentrations inside the ladle. (iii) Isolate the LP gas supply at the regulator outlet when left unattended or not otherwise in use. (iv) Purge the hoses of LP gas and oxygen when left unattended or not otherwise in use. (v) Ensure that Job Tickets were only issued by Work Supervisors accredited in accordance with Standard Operating Procedure NSRM-SOP-07-16-03. b) The defendant failed to provide or maintain oxy/propane cutting equipment, to wit, two 10 millimetre inside diameter hoses, one 900 millimetre long CIG Multi-purpose blowpipe and one Cigweld 48GB oxy/LP gas gouging nozzle, that was safe and without risks to health As a result of the said failures, Andrew Scott Swan and Mark Boyce were injured. 2 The defendant pleaded guilty and a statement of agreed facts was admitted into evidence. It emerged from those facts that the defendant was an employer who conducted a steelworks at Selwyn Street, Mayfield near Newcastle in the State. As part of its steelmaking operations, the defendant required maintenance work to be carried out to the equipment and included in that requirement was the maintenance of steelmaking ladles. It seems that the defendant on 30 July 1997 made a contract with Transfield Pty Limited, t/as Transfield Maintenance to perform such maintenance at the steelworks and for that purpose Transfield Maintenance used its own employees and also persons employed by Readiskill Pty Limited on hire to Transfield Maintenance. On 25 March 1998, maintenance work was being performed to one of the steelmaking ladles by Andrew Scott Swan, a boilermaker employed by Readiskill, and by Mark Boyce, a boilermaker employer by Transfield Maintenance. At approximately 9.50 pm on that day an explosion occurred within the ladle from the ignition of LP gas that had leaked from oxy-propane cutting equipment and had accumulated inside the ladle. As a result of the explosion, Mr Swan sustained burns to his face and left arm, lacerations to the back of his head, a severed muscle within his right knee, a fractured right ankle and contusions to various parts of the body; Mr Boyce sustained multiple abrasions and contusions to the right side of his body, right arm and head. 3 The prosecutor attended the premises at about 11.20 pm on the night of the incident and again on 26 March 1998 when he conducted a detailed investigation, including photographs of the scene. The agreed statement of facts set out the observations made by the prosecutor and the results of his investigation, including the detailed work procedure followed by Mr Swan and Mr Boyce in carrying out their tasks to the ladle, as follows : 11. At 4:00 pm on the day of the accident Swan and Boyce commenced mechanically repairing the rim of the ladle. The work was performed from within the ladle. Access to the rim was facilitated by the placement of one bricklayer platform on top of another, resulting in a work platform 1230 millimetres from the top of the ladle. The top work platform consisted of four steel channel legs supporting a circular steel 10 millimetre thick plate floor weighing a total of 1080 kilograms. Also located in the ladle, on the work platform, was a steel parts tub measuring 1420 millimetres long, 950 millimetres wide and 640 millimetres high. 12. The ladle repair involved: a) Removing steel and slag from the lip of the ladle. b) Replacing any damaged brick band segments around the top of the ladle. c) Replacing all the bolts on the brick band segments. 13. The removal of the steel and slag was carried out using oxy/propane cutting torches and took about 5 hours. Boyce cut away the steel and slag from the ladle lip while Swan replaced the bolts in the brick band segments using a ratchet gun and spanner. Two sets of oxy/propane cutting equipment were connected to the regulator outlets of the first defendant's piped gas supply at the mezzanine floor level above the ladle. … 4 It was then recorded in the statement that the two persons concerned stopped work at about 9.30 pm to have a break and placed the cutting torches over the rim of the ladle with parts of the hoses remaining inside the vessel; the oxy/propane gas supplied to the cutting torches from the regulator outlets was not isolated. It was stated that gas leaked from the hoses inside the ladle and accumulated therein because the valves at the regulator outlets were not closed and the gas in the hoses was not purged. On resuming work at about 9.50 pm, Mr Boyce prepared to re-commence cutting but on activating the oxygen lever on the torch the accumulation of LP gas/air mixture within the ladle ignited and the explosion occurred. What then took place was recorded in the statement as follows : 19. The explosion forced the top working platform within the ladle 2400 millimetres upwards, striking the underside of a fixed handrail on the mezzanine floor bending it 200 millimetres upwards. The platform then fell back into the ladle and wedged itself at an angle of approximately 45 degrees. Boyce was catapulted over the side of the ladle, but he managed to grab the side and climb back in. Swan landed on the inclined floor of the work platform striking the back of his head on the cleat of the brick band segment and was trapped at the neck by the portable aluminium access ladder that came down upon him. 20. Emergency services arrived a short time later. Approximately 20 minutes after the explosion Swan was extricated from the ladle and both he and Boyce were conveyed to hospital for treatment. Both men have since resumed work on normal duties. 21. One of the four steel channel legs of the top work platform was severed. A number of refractory bricks were damaged. The access platform handrail was significantly deformed by the impact with the platform as was the portable aluminium ladder used for access to the ladle from the mezzanine floor. 22. An oxygen hose was severed as a result of the steel parts tub landing on it following the explosion. 23. At the time of the accident, both Swan and Boyce were wearing personal protective equipment suitable for their respective tasks. 5 The defendant arranged on 26 March 1998 for E & K Repair Service Pty Limited to inspect and test the four hoses (identified respectively as hoses A, B, C and D) and the cutters (identified respectively as cutters A and B) used by Mr Swan and Mr Boyce to repair the ladle. The later report by E & K Repair Service concluded : a) All four hoses had leaks. b) Hoses C and D had severe leakage on the cutter end and Hose C on both ends. c) Hoses B, C and D were in poor condition with numerous obvious physical defects. d) Hose B was not suitable for use with natural gas, LPG or propane as it was an oxy-acetylene hose. e) Cutter A whilst itself was not leaking had severe leaks where the flashback arrestors connected to the inlet connections of the cutter. Being an acetylene cutter it was not suitable for use with natural gas, LPG and propane as the mixers are different to accommodate for different mixing properties between acetylene, natural gas, LPG and propane. f) Cutter B had had leakage from the rear plug and the fuel gas control valve when the valve was open. It also leaked where the flashback arrestor connected to the oxygen inlet connection. 6 As I have said, the maintenance work to the steelmaking ladles was performed by Transfield Maintenance under contract to the defendant and pursuant to which contract a system was in place to identify safety hazards. Under that system, the defendant issued what was known as a Long Term Work Safety Permit covering the critical safety hazards and precautions normally applicable in the area of the plant concerned and the issue of individual job tickets for each particular task. The job tickets were created electronically by Transfield Maintenance by entering the defendant's computer system and the draft job ticket produced was then reviewed by a responsible officer of the defendant before being issued to Transfield Maintenance to action. In the present case, that work system was followed for the repair of the ladle but its major deficiencies in the instant case, having in mind the particulars of the charge, were identified in the statement of agreed facts in the following way : 32. The job ticket was created by cutting and pasting sections of an existing job ticket involving maintenance for a freight lift. The maintenance of the freight lift had involved the entering of a lift well area which is a designated confined space. Clause 8.1 of that job ticket identified hazards associated with the risk of gas accumulation in the lift well area. That part of Clause 8.1 as used in the job ticket for the work to be performed by Swan and Boyce was blacked out by Dowman (an acting works supervisor for the defendant). The balance of the clause stated, "NB only required when inside or below top of platform area of ladle. Forced ventilation must be used if changing the atmosphere in the ladle by welding, oxygen cutting or burning etc." 33. Dowman deleted that part of the clause because Boyce and Swan were not working in the lift well area or what he understood was a designated confined space. In a record of interview with the Prosecutor on 30 July 1998 Dowman stated that, "Technically I should of deleted the whole clause because we did not intend working below the top platform level." 34. Clause 8.8. of the Job Ticket stated, "Possible explosions caused by oxy/propane cutting equipment inside the ladle with the valves left on. Ladle could fill with propane gas and be ignited when work is commenced on the ladle. Ensure all oxy/propane cutting equipment is removed from the ladle while it is unattended. Oxy and propane valves MUST be closed while the equipment is not in use. Remove any flammable materials from the ladle during burning and welding activities." 35. Clause 8.8 of the job ticket was not complied with by Swan and Boyce. They did not remove all the cutting equipment from the ladle when they left the ladle to take a break. The hoses connected to the cutting equipment were left inside the ladle and the oxy and propane valves were not closed at the regulator outlets. 36. As an acting Work Supervisor, Dowman, in accordance with Clause 4.4 of RBPD-SOP-07-16-01, was responsible for ensuring that: a) The critical hazards of the job and the work area were identified. b) The necessary precautions to minimise danger were identified. c) He was satisfied that those hazards and precautions had been communicated to, and were understood by, the Service Provider and his employees prior to work commencing. d) The job was completed and the plant fit for duty. 37. Dowman made no provision in the Job Ticket to: a) Utilise forced ventilation inside the ladle, either above the top work platform or between it and the lower platform. b) Utilise an air monitoring system to identify LP gas concentrations inside the ladle. c) Purge the hoses of LP gas and oxygen when left unattended or not otherwise in use. … 43. There was no forced air ventilation for the ladle. 44. It was a still night. There was little or no natural ventilation. 45. Neither Boyce nor Swan smelt or otherwise noticed leakage from the cutting equipment prior to the explosion. 46. No air monitoring equipment was used to identify LP gas concentrations in the ladle. 47 The solid bricklayer platform formed gas collection spaces. 48. Prior to the accident, both Swan and Boyce only carried out a visual inspection of the hoses without the assistance of another medium, such as soapy water, to detect gas leaks. … 52. Clause 8.8 of the Job Ticket provided in part that:- "(the workers should) ensure all oxy/propane cutting equipment is removed from the ladle while it is unattended." Compliance with Clause 8.8 of the Job Ticket would have averted the accident. 53. However, whilst Boyce and Swan placed the cutting implements outside the ladle, they left part of the oxygen and propane hoses hanging inside the ladle. 7 As a result of the explosion, the defendant now requires similar maintenance work to be carried out using natural gas, rather than LP gas, and forced air ventilation. Also, open mesh has been installed on the platform floor and the job procedure now requires hoses to be disconnected from the regulator if not required for more than 30 minutes. Safety alerts concerning the work system were forwarded to other plants of the defendant and to its contractors. 8 After reviewing the agreed facts, and in light of the charge and the particulars thereof, I am satisfied the offence has been proven. The plea of guilty by the defendant was properly made and I will enter a verdict accordingly. 9 It remains to deal with the questions of an appropriate penalty and costs. It was common ground, correctly in my view, that the maximum penalty for the offence at the time it was committed, and taking into account the defendant's prior convictions, is $825,000. A schedule of those convictions was admitted into evidence and covered the period from 26 March 1962 to 19 October 1999, and during which period there were 33 convictions for offences against occupational health and safety legislation incurring fines ranging from $30 to $200,000. I interpose the comment as to the impact of the defendant's prior industrial safety record what I said in WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd (1999) 90 IR 277 at p 295, and repeated by me in WorkCover Authority of New South Wales (Inspector McMartin) v Broken Hill Pty Co Ltd (1999) 96 IR 32 at p 39, namely: I do not think the defendant on that record is entitled to any real degree of leniency in the view to be taken of the serious circumstances of the present case or in reduction of what otherwise is considered an appropriate penalty. Again, I affirm that view for present purposes. 10 Mr R R Stitt QC, who appeared with Ms A J Silink of counsel for the defendant, tendered into evidence a statement made by Jeffrey Biddlecombe, the defendant's Engineering and Safety Superintendent at the Newcastle steelworks. Mr Biddlecombe's evidence detailed the defendant's safety procedures for contractors at the time of the present incident, the response thereto, changes implemented thereafter and the defendant's safety performance for the year ended 31 August 1999. As to that latter aspect, Mr Biddlecombe pointed out that in the Steelmaking and Caster Division there were only two lost-time injuries during the 12-month period and, overall, he expressed the opinion that the safety performance statistics "demonstrate an excellent safety record, considering the nature of steel-making processes, the high rates of production achieved during this period with pending shut-down of the Steelmaking and Caster Division". 11 I can well understand Mr Biddlecombe having the view he expressed on the defendant's safety performance, but I must reiterate that it is to be seen in the context of the historical industrial safety record as shown by the schedule of prior convictions referred to earlier. It is true that enormous improvements have occurred over the years but the fact that serious accidents, such as the present incident, continue to occur must be a matter for concern. Indeed, that both Mr Swan and Mr Boyce were not killed may be seen as very fortunate, and the incident occurred where the identified risks to safety leading to the explosion were readily foreseeable and avoidable. Nevertheless, it is only appropriate to attend to the facts as disclosed in Mr Biddlecombe's unchallenged statement and to the agreed facts in assessing Mr Stitt's fundamental submission in this case, namely : It is necessary to assess the nature and quality of the conduct of the Defendant bearing in mind the following : (i) there is a significant and relevant distinction between an employer who has no system at all (or who makes no attempt to enforce a system) on the one hand; and (ii) an employer who has a proper system in place which, if followed, would avoid the accident and remove the risk of injury on the other hand. That distinction bears directly on the question of the degree of culpability of the employer and its conduct. And so it was that Mr Stitt submitted that the Court "could confidently impose a simple penalty in monetary terms affecting all the facts. It is a matter that does not warrant substantial penalty at all." 12 As to the safety procedures in place for contractors at the time of the incident, Mr Biddlecombe referred to the three-tiered system, together with specific safety check lists, standards and procedural requirements. The three tiers involved: first, a general site induction, including a training session and a written assessment, with respect to safety and emergency procedures; second, a safety induction in the particular department where the person concerned was to perform work, also comprising a written assessment; and, third, on-the-job training and direction to each worker in relation to the particular job to be performed, including the "job ticket" or "work permit" system which outlines the work to be performed, the tools required and the critical hazards and precautions to be taken in relation thereto. That system operated in the present case. In addition, on Mr Biddlecombe's evidence, a system was in place for checking all cutting equipment and hoses used by Transfield Maintenance in welding and cutting work, including a requirement imposed by the defendant on a contractor to ensure its workers inspected the condition of equipment before use to ensure it was not faulty or worn and that the correct equipment was used for the job concerned. 13 Mr Biddlecombe stated that immediately following the subject incident the defendant conducted an internal investigation and commissioned E & K Repair Service to inspect and test the hoses and associated equipment involved. Also, he said the defendant complied with all requests by the WorkCover Authority in its inquiries and that the defendant co-operated with the WorkCover Authority and its inspectors during their investigations of the incident. Following the defendant's investigation, a number of recommendations were made and the defendant implemented them. Those recommendations included : (a) A ladle ventilation system was implemented to ensure that an explosive concentration of LPG could not occur. This was done by the use of a venturi air supply device; (b) The solid work platforms around the ladle were replaced with "Anderson mesh" (which is a steel grid-like surface) so as to facilitate ventilation and ensure that there was no opportunity for gas to accumulate in the restricted spaces of the ladle; (c) Employees at all levels throughout the company were further educated about LPG and its properties. For example, the accident was highlighted to employees and contractors at daily toolbox meetings and was highlighted during BHP's safety meetings and in the review of its procedures; (d) The company investigated and replaced LPG with natural gas as a primary fuel source for maintenance work. Natural gas was chosen as it is lighter than air and will not accumulate in the restricted spaces of the ladle; (e) A review of the entire operations of the Newcastle Steelworks was undertaken so that all risks could be identified and assessed; (f) The Newcastle Gas Regulations Committee conducted an investigation into the safety of the usage of gas cutting equipment. This investigation resulted in amendments to existing procedures. In particular; (i) the One Page Daily Safety Summary entitled "Oxy Welding and Cutting Daily Inspection and Handing" was amended and re-issued on 19 June 1998 so as to require as part of the daily inspections that hoses are purged in a well-ventilated area and that the equipment is tested for leaks in accordance with the procedure outlined before use. Annexed and marked "E" (not reproduced) is a copy of the amended Safety Summary; (ii) the procedure for quarterly inspection was also amended and re-issued on 19 June 1998 to expressly provide for the manner in which hoses are checked for leaks. Annexed and marked "F" (not reproduced) is a copy of the re-issued quarterly inspection procedure. (g) BHP provided and implemented documented safe work procedures for welding and allied processes in accordance with Australian Standard 1674.1. This recommendation resulted in the development of a hot work permit. Annexed and marked "G" (not reproduced) is a copy of the hot work permit which was developed to comply with and emphasise all aspects of Australian Standard 1674.1. (h) It resulted in the review of and, in some cases, the amendment of, various other existing procedures. 14 Mr D B O'Neil , counsel for the prosecutor, submitted that the objective features of the offence called for "the imposition of a substantial monetary penalty". Those features were - (1) The maximum penalty available for the offence of $825,000 reflected the "public expression" by parliament of the seriousness of the subject offence: WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd [2000] NSWIRComm 39 at para 23 per Wright J, President. (2) The task was to assess the relative seriousness of the particular offence in relation to a worst case for which the maximum penalty was provided: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at pp 698-699. (3) In the present case, both general and specific deterrence should be given significant weight in determining the objective seriousness of the offence. (4) The nature of the risk and its gravity were both extreme and self-evident from the nature of the explosion as set out in the agreed facts. (5) The defendant was well aware of the subject risk prior to this incident as shown by the job ticket identifying the risk of "possible explosion caused by leaving oxy-propane cutting equipment inside the ladle with the valves left on"; the defendant, nonetheless, failed to ensure that the work directions contained in the job ticket were complied with. (6) Also, the defendant failed to ensure that simple well-known procedures and safe working methods capable of obviating the subject risk were followed. In particular, the defendant did not identify the risk of gas entrapment within the ladle created by its design and use of a solid work platform; neither did the defendant require the use of forced ventilation to prevent a build-up of flammable gases within the ladle. (7) The defendant failed to provide any relevant equipment to enable the two workers to test for the presence of flammable gas and/or vapour prior to re-commencing work. (8) The defendant failed to maintain a system of inspection and repair of the oxy-propane cutting equipment which it provided to the two workers so as to ensure the equipment was free from leaks. (9) The defendant, as a matter of public policy applicable to all employers, had a positive obligation to inform itself of proper and safe work methods. The circumstances here made the defendant's obligation more significant as it was aware of the risks concerned. (10) It was an aggravating factor in the present case that the defendant's failure to ensure basic safe work methods were adopted so that that aggravation should be taken into account in assessing the objective seriousness of the offence and so be reflected in the level of penalty. 15 The prosecutor accepted that in determining an appropriate penalty the defendant was entitled to have taken into account subjective features tending to mitigate the objective seriousness of the subject offence. Mr O'Neil in that respect referred to Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at p 476. Very properly also, counsel referred to the proposition that there were good policy reasons for the encouragement of early pleas of guilty and the assistance given to the investigating authorities, including that the plea reflected contrition on the part of the defendant - in the present case, those aspects had been satisfied by the defendant and a degree of leniency in sentence should follow: see Alcatel Australia Ltd v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99 at pp 106-107; R v Cartwright (1989) 17 NSWLR 243; and R v Gallagher (1991) 23 NSWLR 220. 16 Nevertheless, Mr O'Neil put that the degree of discount to be allowed to the defendant for the various subjective features should have regard to the circumstances in which the plea of guilty was provided, that is, where "the defendant failed to ensure that a grave and evident risk, which it had already identified, was obviated by use of proper work procedures". It was submitted that the defendant's breach of the Occupational Health and Safety Act was obvious and that the plea was entered in the face of a strong prosecution case. Reference was made also by counsel to the defendant's record of prior convictions as being a most relevant factor to take into account in assessing penalty. 17 In the result, and in support of the imposition of a significant monetary penalty, Mr O'Neil emphasised that "the subject incident arose out of a known and perceived danger", "the defendant's systems of work were inadequate to meet that risk", "as a consequence of the failing in the defendant's systems of work, Mr Swan and Mr Boyce were subjected to an explosion that presented a grave risk of the ultimate injury, namely death" and "the seriousness of the defendant's acts and omission is not open to denial and the subject offence should be dealt with on that basis". 18 As indicated earlier, Mr Stitt's basic submission was that the defendant had a proper system in place which, if followed, would have avoided the accident and removed the risk of injury. That bore directly upon reducing the culpability of the defendant in terms of the nature and quality of the offence in comparison with a situation where an employer had no system at all in place to ensure workplace safety. The elements of the work system identified by Mr Stitt included that - · before any work was undertaken an evaluation of the scope of the work and site hazards was made; · every job ticket was reviewed and approved by responsible employees of the defendant before any work was undertaken; · regular three-monthly checks were to be made by Transfield Maintenance of all welding and cutting equipment used by it; · all workers were required to visually inspect the condition of the equipment before commencing work; · managers and senior employees of the defendant constantly monitored and reviewed the effectiveness and level of compliance with the job tickets; and · although forced ventilation was required while work was done within the well of the ladle it was not at the time required for work performed above the rim of the ladle in the open air. 19 The immediate and direct cause of the explosion was said by senior counsel to have occurred because of a combination of three things: first, the failure by the two workers to turn off the gas at the regulator outlets, contrary to the express requirement to do so in the job ticket; second, the failure by the two workers to completely remove the cutting equipment from the ladle when they took the 20 minutes break; and, third, on the cutter being ignited on the resumption of work a flare spark had travelled along the hose connected to the cutting equipment and the accumulated gas within the ladle exploded. Mr Stitt submitted that the real failure of the defendant in this case was in not appreciating the risk of injury from non-compliance with its primary safety directives contained in the job ticket and it was at no time alleged that prior to leaving the ladle to take a break the workers were at risk. In the result, senior counsel put that had the requirements of the job ticket in the form in which it was issued been complied with then this accident would never have occurred. Nevertheless, and with the benefit of hindsight, the defendant conceded there were other measures, now implemented and as detailed above, which could have been employed in addition to the requirements set out in the job ticket; it was with that in mind the defendant entered the plea of guilty and to which the particulars in the charge related. 20 I interpose at this point a claim made by Mr Stitt that the prosecutor in submissions added two fresh allegations not contained in the particulars, that is, the defendant failed to maintain a system of inspection and repair of the oxy-propane cutting equipment and did not require or provide equipment to the workers to test for the presence of gas. The prosecutor maintained that such allegations were in fact within the particulars in the summons. I am far from satisfied that Mr Stitt's point was made good, because, after all, the primary particular alleged was a failure "to provide or maintain systems of work for the maintenance of the [ladle] that were safe and without risks to health"; the secondary particular alleged a failure "to provide or maintain oxy-propane cutting equipment … that was safe and without risks to health". However, for present purposes and in deference to the position of the defendant, I propose to consider the question of penalty by disregarding the two aspects resisted by Mr Stitt and to view the relevant safety detriments strictly in accordance with the particulars in the summons as settled in the statement of agreed facts. 21 In the result, Mr Stitt characterised the defendant's culpability in his written submissions as follows : 25. The factor which was not foreseen by the defendant (nor, by the supervisor of the injured workers who was responsible for preparing the first assessment of the nature of the job and the inherent risks) was that the workers would not comply with the requirements of the job ticket. It is noteworthy that the safety requirements of the Job Ticket were not onerous. In fact, not only were they simple, they were absolutely elementary to safe oxy-welding and cutting practice, procedures which any person trained in using such equipment, as the two contract workers were, would ordinarily do and know to do without instruction. There is nothing more basic and fundamental in welding work than turning off the gas. The Defendant was entitled to assume that the procedure which had been laid down would be followed. 26. This is not a case of a defendant who is aware of a particular risk and yet ignores it or takes grossly inadequate measures to safeguard against it. The measures adopted were quite adequate to guard against the risk if they were complied with. A failure to have in place a back-up or second tier safety procedure when the primary regime of precautions should be totally sufficient is a very different situation and the distinction should be reflected in the penalty awarded. 27. It is quite incorrect to cast the defendant as one which failed to take precautions in light of an evident risk of which it was aware, as WorkCover is seeking to do. 28. Whilst the breach occurred and the Defendant has pleaded guilty to it, the nature and quality of that breach must be assessed and considered against the surrounding circumstances of this accident. 29. The objective gravity of the Defendant's breach, in light of these circumstances, is not so serious as to warrant a heavy penalty. 22 As to the mitigating factors, Mr Stitt referred to the early plea of guilty, co-operation by the defendant with the investigating authorities, the obvious recognition by the defendant of its obligations concerning occupational health and safety, the preparedness of the defendant to take prompt, extensive and appropriate remedial action and the defendant's continuing awareness of the need to attend to workplace safety at all levels. The defendant's overall safety record, including in particular the prior convictions, were said by senior counsel to be seen in the context of the nature of its industrial activities in the heavy steelmaking industry. In short, Mr Stitt emphasised that "the defendant had in fact adopted and taken a procedure for the work which it considered reasonable and adequate although it unfortunately did not prevent the accident occurring in the circumstances". 23 The particular detriment to safety giving rise to the offence here was, in my view of the facts and as consistent with Mr Stitt's analysis, the defendant's failure to fully appreciate the prudence in establishing measures to support or supplement the primary steps laid down in what was thought to be an otherwise safe work system. This case, I think, emphasises the duty cast on an employer in absolute terms to ensure workplace safety in the sense of guaranteeing, securing or making certain: see Carrington Slipways Pty Ltd v Callaghan [1985] 11 IR 467 at 470. Also, it emphasises the need for an employer to be pro-active in fully informing itself so as to ensure a safe work environment. As was said by a Full Court of the former Industrial Court in WorkCover Authority of New South Wales (Inspector Dawson) v Waugh (1995) 59 IR 89 at 100 - "When considering a statute giving expression as a matter of public policy to standards of safety, management has a positive obligation of informing itself of circumstances of safe working." Even given a system which, if followed, was safe, it seems to me that in order to properly ensure safety an employer who fails to provide for the contingency of a breakdown in the system necessarily has not discharged the positive obligation cast by the statute. Where, as here, the defendant employed persons and utilised employees of contractors in an admittedly dangerous industry with inherent risks, then, it seems to me, the positive obligation is even stronger and, as in Waugh (59 IR at p 100), "amounts to an aggravation of the offence". 24 In such a situation, the question is what is the true degree of culpability. Mr Stitt put it at the lower end of the spectrum as "a comprehensive system for the identification of risks and appropriate precautionary action to be taken" and where "the defendant was entitled to assume that the procedure which had been laid down would be followed". On the other hand, and in light of the defendant's admitted knowledge of the possibility of explosion from the use of oxy-propane equipment, Mr O'Neil called for imposition of "a significant monetary penalty" in circumstances where "the subject incident arose out of a known and perceived danger" and "the failing in the defendant's systems of work … presented a grave risk of the ultimate injury, namely death". It is, of course, well settled that the consequences of an accident, as resulting in serious injury or even death, does not, of itself, dictate the seriousness of the offence although the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the culpability of the defendant: see Tyler v Sydney Electricity [1993] 47 IR 1 at 5 and Lawrenson Diecasting v WorkCover Authority (90 IR at p 476). I accept Mr O'Neil's submission that the failure of the defendant's system of work subjected the two workers to an explosion presenting a grave risk of the ultimate injury. 25 In a very real way, Mr Stitt sought to reduce the culpability of the defendant by the failure of the two workers concerned in taking the break from work to turn off the gas at the regulator outlets and in not completely removing the cutting equipment from the ladle; senior counsel went so far as to submit that the defendant was entitled to assume that the procedure laid down would be followed. It is perhaps timely, therefore, to repeat the observation made by me in WorkCover Authority of New South Wales (Inspector Chadwick) v BHP Steel (AIS) Pty Ltd [2000] 98 IR 122 at p 135, as follows : 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. I consider that comment to be directly applicable in this case and as illustrating the real measure of culpability. 26 I conclude that the essential nature and quality of the subject offence, in all the circumstances, to be about one-third of what could be expected in the worst case. 27 However, in reduction of an otherwise appropriate penalty in light of the subjective factors for this defendant, as set out in the evidence, I accept that a significant reduction is called for. In this respect, I have taken into account the quite early plea of guilty and the full co-operation by the defendant with the investigating authorities; the prompt implementation of remedial action after the subject incident, I am satisfied, represented a responsible and contrite approach to workplace safety in a manner consistent with Mr Biddlecombe's evidence as to improvements in overall safety performance at the steelworks and for which some credit in further reduction of penalty should be allowed. It is relevant to repeat in connection with this balancing exercise what was observed by a Full Bench of the Court in Warman International Ltd v WorkCover Authority of New South Wales (Inspector Ankucic) (1998) 80 IR 326 at p 339, that is : The approach to the determination of penalty in cases such as these is now well settled. The penalty must reflect the nature and quality of the particular offence; the level of penalty must, on the one hand, compel attention to occupational health and safety risks in order to ensure that persons are not exposed to such risks at their workplaces but, on the other, must not be oppressively high. 28 On 17 August 2000, the Court of Criminal Appeal in R v Thomson; R v Houlton [2000] NSWCCA 309 gave the guideline judgment as to pleas of guilty in criminal proceedings and referred to other matters of a subjective nature in mitigation of penalty. That guideline judgment was first applied in this jurisdiction by Wright J, President in WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of New South Wales [2000] NSWIRComm 179 and has since been applied in other cases, such as WorkCover Authority of New South Wales (Inspector McKenzie) v Waste Recycling & Processing Services of New South Wales [2000] NSWIRComm 218, WorkCover Authority of New South Wales (Inspector James) v Australian Refined Alloys Pty Ltd [2000] NSWIRComm 224, WorkCover Authority of New South Wales (Inspector Plowright) v Forgacs Engineering Pty Ltd [2000] NSWIRComm 226 and WorkCover Authority of New South Wales (Inspector Wong) v Aluminium Contractors Sales (NSW) Pty Ltd [2000] NSWIRComm 233. I too will apply the guideline judgment. 29 In light of the maximum penalty available in the present case of $825,000, I assess the objective seriousness in an amount to the order of $275,000. Having regard to the early plea of guilty, I would allow a discount of 25 per cent and for the other subjective features mentioned I would allow a further reduction of 10 per cent. In the result, I consider an appropriate penalty in this case to be $175,000. 30 I find the defendant guilty of the offence charged and enter a verdict accordingly. I order that the defendant is convicted and is fined an amount of $175,000 with a moiety thereof to the prosecutor. The defendant is ordered to pay the prosecutor's costs in an amount as agreed or as assessed. ______________ 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.