Industrial Court of New South Wales CITATION: Morrison v Centennial Coal Company Ltd [2010] NSWIRComm 4 Rodney Dale Morrison (Prosecutor) PARTIES: Centennial Coal Company Ltd (Defendant in IRC2008/1190) Centennial Angus Place Pty Ltd (Defendant in IRC2008/1191) FILE NUMBER(S): IRC 1190 and 1191 of 2008 CORAM: Boland J President CATCHWORDS: OCCUPATIONAL HEALTH AND SAFETY - Prosecutions under s 8(2) of Occupational Health and Safety Act 2000 - Guilty pleas - Mining industry - Death of contractor's employee - Unplanned release of hydraulic fluid under high pressure - Nature and quality of offence - Foreseeability - Steps available to avoid risk - Nature of injury - Deterrence - Subjective considerations - Relative culpability - Penalty imposed. LEGISLATION CITED: Occupational Health and Safety Act 2000 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Department of Mineral Resources of NSW (McKensey) v Kembla Coal & Coke Pty Ltd (1999) 92 IR 8 at 25 Environment Protection Authority v Barnes [2006] NSWCCA 246 Environment Protection Authority v Hardt [2007] NSWLEC 284 Howard v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92; (2009) 186 IR 125 Inspector Kent v Duct Master Pty Ltd [2009] NSWIRComm 143 CASES CITED: Inspector Legge v Intercast & Forge Pty Limited [2006] NSWIRComm 182 Inspector Mayo-Ramsay (WorkCover Authority of NSW) v The Crown in the Right of the State of New South Wales (NSW Fire Brigades) (No 2) [2007] NSWIRComm 168 Inspector Patton v Western Freight Management Pty Ltd (No 2) [2009] NSWIRComm 124 Markarian v R [2005] HCA 25; (2005) 228 CLR 357 Morrison v Clarence Coal Pty Ltd and Centennial Coal Company Limited [2007] NSWIRComm 270 Newcastle Wallsend Coal Company Pty Ltd v McMartin [2006] NSWIRComm 339; (2006) 159 IR 121 Warman International Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326 HEARING DATES: 17 December 2009 DATE OF JUDGMENT: 2 February 2010 Mr J V Agius SC with Mr I Taylor of counsel (Prosecutor) Crown Solicitor's Office LEGAL REPRESENTATIVES: Mr D A Buchanan SC with Mr D Jordan of counsel (Defendants) Sparke Helmore Solicitors JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: BOLAND J, President Tuesday 2 February 2010 Matter No IRC 1190 of 2008 RODNEY DALE MORRISON v CENTENNIAL COAL COMPANY LTD Prosecution under s 8(2) of the Occupational Health and Safety Act 2000 Matter No IRC 1191 of 2008 RODNEY DALE MORRISON v CENTENNIAL ANGUS PLACE PTY LTD Prosecution under s 8(2) of the Occupational Health and Safety Act 2000 JUDGMENT [2010] NSWIRComm 4 1 Centennial Angus Place Pty Limited ('Centennial Angus Place') owned and operated an underground coal mine near Lithgow in the State. The mine was known as the Angus Place Colliery. Centennial Angus Place was, in turn, wholly owned by Centennial Coal Company Limited ('Centennial Coal'). 2 Centennial Coal held a contract with Fuchs Lubricants (Australasia) Pty Limited ('Fuchs') pursuant to which Fuchs supplied oil products and services to various mines within the Centennial Coal group, including the Angus Place Colliery. The services included taking and analysing samples of solcenic emulsion contained within machinery at the mine including a pump station that provided hydraulic power. On 26 July 2006, an employee of Fuchs, Mr Kevin Trier Hansen, entered the Angus Place mine for the purpose of taking samples of the emulsion from the pump station. About an hour and a half after Mr Hansen entered the mine the pump station, which was running, suffered a sudden loss of pressure consistent with a fitting being opened releasing pressurised fluid. Fifteen minutes later Mr Hansen was found lying on the ground adjacent to the delivery end of the pump station. Mr Hansen had severe facial injuries, no pulse and there was no sign of breathing. 3 There were no eye witnesses to what happened to Mr Hansen, but it appears that Mr Hansen's death occurred after he removed a metal staple from a hydraulic fitting whilst the pump station was operating. Upon the staple being removed, it was believed the fitting separated under high pressure causing the hydraulic fluid to eject straight up, striking Mr Hansen in the face and killing him. 4 Arising out of the death of Mr Hansen, both Centennial Angus Place and Centennial Coal were prosecuted for contravening s 8(2) of the Occupational Health and Safety Act 2000 ('the Act'). Section 8(2) provides: An employer must ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work. 5 Both defendants pleaded guilty to, inter alia: B. On 26 July 2006 the defendant failed to ensure that the system of work used by a person who was not its employee, namely Kevin Trier Hansen, when taking samples of solcenic emulsion from the Re-Power Mining International Pty Ltd longwall pump station located underground at the Angus Place Colliery ("the pump-station") was safe and without risk to health. Further particulars include: i. The defendant failed to have a system of work that would prevent Kevin Trier Hansen from attempting to take a sample by opening a hydraulic fitting at a point where the hydraulic fluid was pressurised, and in particular failed to have a system that would prevent him attempting to take a sample by opening the hydraulic fitting between the high pressure delivery manifold and the system pressure drain hydraulic line where a straight swivel female to BSPP male PS115-10-06 joined to an 'Elbow Adapter' PS76-10 ('the Incident Fitting'); ii. The defendant failed to ensure that it had a system of work that only permitted samples of solcenic emulsion to be taken from identified safe sample points; and iii. The defendant did not have a system of work that ensured that contractors working at the Angus Place Colliery always had and used an adequate written safe work method for the work they did there; and further, or in particular, the defendant failed to ensure that an adequate written safe work method for the said work was used by Kevin Trier Hansen when undertaking the said work; including a failure to ensure Kevin Trier Hansen had been given and/or used a safe work method document that identified the safe sample points to use. C. On 26 July 2006 the defendant failed to ensure the pump station was safe and without risk to health when a person who was not its employee, namely Kevin Trier Hansen, was taking samples of solcenic emulsion. Further particulars include: i. The pump station was not fitted with a device in order to obtain a sample from the bulk tank that: a. was labeled and dedicated; and b. ensured that when opened fluid would only be released gradually. D. On 26 July 2006 the defendant failed to provide such information, instruction, training and supervision as was necessary to ensure the health and safety of a person at its place of work who was not its employee, namely Kevin Trier Hansen. Further particulars include: i. Kevin Trier Hansen was not adequately informed or instructed in respect of the pump station as to the appropriate sample points and the safe method for taking samples from those sample points; ii. Kevin Trier Hansen was not provided with training specific to that pump-station and in particular received no or no adequate training as to how to locate appropriate sample points and the safe method for taking samples from those sample points; and iii. The defendant failed to have a system of work that ensured that Kevin Trier Hansen was adequately supervised. 6 Centennial Angus Place's plea of guilty encompassed an additional particular, namely, permitting the work to be done on 26 July 2006 without having conducted any adequate job safety analysis in respect of that work. 7 In separate proceedings, Fuchs also pleaded guilty to a charge of contravening s 8(1) of the Act. That section imposes a duty on an employer to ensure the health, safety and welfare at work of all the employees of the employer. Agreed facts 8 The prosecutor tendered an Agreed Statement of Facts. The Agreed Facts explained that the pump station mixes solcenic oil and water, stores the resultant solcenic emulsion and pressurises it to 305bar (4,424 psi). The solcenic emulsion is then transferred at high pressure via high pressure hoses to the Longwall face line, where the coal is cut, and is returned. The purpose for pressurising the emulsion is to provide an energy source to power the Longwall hydraulic roof supports (chocks) which, placed side by side along the face line, support the roof immediately above the area in which the mechanical shearer is cutting coal. It was noted that solcenic emulsion pressurised to 305bar is potentially highly dangerous. Fluid released at that pressure has a high probability of causing serious or fatal injuries to any person within close proximity that it strikes. 9 Centennial Angus Place owned the Pump Station which was commissioned underground in late November 2005 as part of a new Longwall solcenic emulsion supply system. Repower Mining International Pty Ltd ('RMI') designed, manufactured and installed the pump station to the performance based specifications provided by Centennial Angus Place. 10 The Agreed Facts provided information about Mr Hansen. He had been employed by Fuchs as a Technical Sales & Service Engineer since January 1997 conducting, amongst other things, sampling in relation to various hydraulic systems, including from some date after 1997, at the Angus Place mine. Mr Hansen's sampling records indicated that as at July 2006 his job required him regularly to take up to 400 samples per month including solcenic emulsion, gear box and motor oils, from approximately eight mines and a coal preparation plant. He was obviously experienced in the work he was required to undertake. In this respect, it is noted that Mr Hansen worked as a fitter and then a machine operator at mines in New South Wales from 1985 to 1997. 11 The Agreed Facts indicated that Centennial Angus Place had a procedure to take a high pressure sample, titled 'Sampling Solcenic Fluid from Hydraulic Control Panel'. However, it was observed that this procedure: 1. Did not identify a specific sampling point. 2. Referred to the "hydraulic control panel" in relation to a sampling point. 3. Was developed for the previous Pump Station prior to the installation of the monorail which was in place at the time of Mr Hansen's death. Moreover, there is no evidence Mr Hansen was ever given the procedure. 12 The Agreed Facts further explained that the: [P]rocedure was developed for the previous Pump Station which was located on a skid mounted pantechnicon. At that time there was mounted on the pantechnicon a board, known as the 'hydraulic control panel', which held the following equipment: · high pressure filters, which included a minimess sampling point as part of the housing for each filter; · pressure gauges; · pilot pressure reduction valve; and · hydraulic isolation valves. The hydraulic control panel was located approximately 40 metres outbye from the longwall face. When the pantechnicon was replaced by a monorail system all of the above equipment which had previously formed the hydraulic control panel, was mounted on a frame and hung from the monorail. This frame also had the dump valve mounted on it. It was in the same approximate position as the pantechnicon hydraulic control panel had been, approximately 40 metres outbye from the longwall face. The procedure was not updated to reflect these changes. There was no point on the Pump Station from which a post high pressure filter sample could be taken. As described above there was a high pressure sample point at high pressure filters which were located 40 metres out-bye the face line on the monorail in the conveyor road and located in-bye the crib room in the 12 cut-through. Mr Hansen walked past this point twice, first on his way into the face-line then on his way out from the face-line. He was standing at the high pressure delivery manifold about 440 metres from that sampling point when he removed the staple from the Incident Fitting. The high pressure filter sample could only be taken at the high pressure filters sample point with a particular (minimess) fitting. 13 It was an agreed fact that whilst at the pump station Mr Hansen was working alone without direct supervision. That is, while there were employees of Centennial Angus Place who had statutory responsibility for work done by Mr Hansen they were not physically supervising him when he was working. 14 The Agreed Facts described the scene at the time of Mr Hansen's death: A 375mm shifter was located in Mr Hansen's left hand. Placed on the Pump Station adjacent to where Mr Hansen lay were three empty sample bottles labelled "Post HP Filter", "Bulk Tank", and "Mixing Unit". Also on the Pump Station was a bottle labelled diluent water containing already sampled water. Mr Hansen's bag contained inter alia three labelled bottles containing fluid taken from the Longwall chocks; namely the maingate support, mid face support and tailgate support samples. Mr Hansen's bag also contained a bottle labelled "return line", which also contained fluid. Directly adjacent to where Mr Hansen lay was an open fitting on the Pump Station between the high pressure delivery manifold and the system pressure drain line, where a straight swivel female to BSPP male (Part No PS115-10-06) had been connected to a swivel male female 90 elbow (Part No Ps76-10) ("the Incident Fitting"). The Incident Fitting was of a type that was opened by the removal of a 10mm staple. When the Pump Station was operational and at full pressure, as it was at 4.14pm on 26 July 2006, upon that fitting being opened by removing the staple, solcenic emulsion fluid pressurised to 305bar would have been ejected at approximately 200 metres per second or 720km per hour, reducing to about 160 metres per second after approximately 60 seconds. Mr Hansen suffered a serious injury to his face consistent with being struck in the face by solcenic fluid at high pressure while his face was in the trajectory of the ejecting fluid. Immediately above the Incident Fitting there was found a 50mm deep hole in the coal roof 2.6m above the Incident Fitting consistent with high pressure solcenic fluid being released and hitting the roof. There were no eye witnesses to the event. Mr Hansen's minimess tool was not found on his person, or in his bag after the incident; however, minimess fittings were found in his car. It appears that Mr Hansen's death occurred as a result of Mr Hansen being struck by high pressure solcenic emulsion released after using the shifter to remove the staple from the Incident Fitting whilst the Pump Station was operating. Upon the staple being removed, the Incident Fitting would have separated under high pressure causing the emulsion fluid to eject straight up striking Mr Hansen in the face and killing him. The force necessary to remove the staple from the Incident Fitting whilst the Pump Station was under full operational pressure was found to be within the forces a person could exert upon the shifter. 15 It was speculated that Mr Hansen removed the staple from the Incident Fitting in order to obtain the bulk tank and/or the post HP filter samples. On an earlier occasion the Afternoon Shift Maintenance Crew Leader, John Sheehan, employed by Centennial Angus Place, had observed Mr Hansen removing a staple from another similar fitting attached to the same hydraulic line very close by to obtain a bulk tank sample. That similar fitting was not under pressure. The Agreed Facts stated: It would appear that on 26 July 2006 Mr Hansen removed from the Incident Fitting the staple, which was under high pressure, by mistake. Prior to 26 July 2006 Mr Hansen had taken the monthly samples from the Pump Station on six occasions, commencing on 9 January 2006. Prior to the Pump Station being commissioned, Mr Hansen had taken samples regularly from the predecessor, pantechnicon-mounted Pump Station. 16 Referring to the pump station, the Agreed Facts stated that it: [D]id not have all sample points clearly indicated. In particular the sample point to obtain a sample from the bulk emulsion tank was not labelled. Pursuant to the Contract between Fuchs and Centennial Coal appropriate conforming warning and caution signs were to be provided and used by Fuchs and its employees at the site. The Pump Station was not fitted with a device in order to obtain a sample from the bulk tank that: a. was labelled and dedicated; and b. ensured that when opened fluid would only be released gradually. Instead, the point at which the bulk tank could be sampled was the sight glass for the tank fluid level, located at the front of the Pump Station. That point was not labelled as a dedicated sample point. Sampling from the sight glass required a screwdriver to loosen a screw holding the top of the glass in place. The bulk tank sample was a low pressure sample. 17 Under the heading 'Information and Instruction' the Agreed Facts revealed that: Mr Hansen was not informed or instructed by Centennial Angus Place as to each point on the Pump Station that he should obtain the samples to be taken from the Pump Station. Mr Neil Moore was employed by Centennial Angus Place as Longwall Superintendent. Before the Pump Station had been commissioned underground, Mr Hansen and Mr Moore together inspected the Pump Station above ground. Mr Moore pointed out the valve on the hydraulic hose leading off from the mixer from which the mixer sample could be obtained. In January 2006, after the Pump Station was commissioned, Mr Hansen and Mr Moore examined a schematic diagram of the new Pump Station and discussed sampling points for the bulk tank, mixing unit and diluent water samples. No document was created recording the sample points. The location of other sampling points was not discussed with Mr Hansen. 18 Under the heading 'Mr Hansen's training in respect of the Pump Station' it was stated: Mr Hansen completed a number of Angus Place Colliery Contractor's Induction Assessments. Mr Hansen was not provided with training specific to the Pump Station and in particular received no or no adequate training as to how to locate appropriate sample points and the safe method for taking samples from those sample points. RMI provided training to employees of Centennial Angus Place but Mr Hansen did not attend that training. The absence of training meant Mr Hansen was not trained by the manufacturer as to the appropriate sample points and the safe method for obtaining samples from those sample points. Fuchs did not send any other person to view the Pump Station and train and/or supervise Mr Hansen in determining the appropriate sample points and the best method for obtaining samples from those sample points. 19 Under the heading 'Supervision' the Agreed Facts stated: Mr Hansen was inducted by Centennial Angus Place at level 3 to work at the Angus Place Colliery. A level 3 inductee was considered able to work "unaccompanied". The usual procedure at Angus Place Colliery was for an oil sampler to be accompanied by the fitter of the relevant crew. Because he had been working at the mine for so long, Mr Hansen was inducted to work underground unsupervised. While he was accompanied to the underground work area, he was then permitted to work unaccompanied. The afternoon shift maintenance crew leader, Mr John Sheehan, accompanied Mr Hansen once to the Pump Station to take samples. On that occasion, in about January 2006, Mr Sheehan saw Mr Hansen remove staples to obtain samples, including a staple from the low pressure side of a valve on the system pressure drain hydraulic line leading to the Incident Fitting. Mr Sheehan did not report that Mr Hansen's actions were inappropriate. Nor had he seen documents or safe work procedures relating to obtaining samples from the Pump Station. Mr Sheehan had attended training on the basic layout of the machine and the location of the isolation taps, but he could not recall if the training had included sample points from the Pump Station. Mr Sheehan's training records do not record any training as to the process for taking samples from the Pump Station nor as to the location of sample points. 20 Under the heading 'Centennial Coal' it was agreed, inter alia, that: As the Principal to the Contract, Centennial Coal required Fuchs to complete their contractual tasks in accordance with the policies and procedures determined by Centennial Coal. Centennial Coal had the capacity under the Contract to enforce the contractual obligations placed on Fuchs. Fuchs was required by the Contract to keep a copy of the outcome of the risk review process required by Centennial Coal's Standard Contractor's Site Regulations at the Angus Place Colliery, but failed to do so. Fuchs did not provide a risk review to Centennial Coal. Fuchs was also required by the Contract to hold regular meetings with its employees to review safety aspects of the work conducted at the Angus Place Colliery, and provide minutes of those meetings to Centennial Coal's Group Purchasing Manager. There is no evidence that Fuchs provided any such minutes to Centennial Coal. Fuchs has not been able to produce any document recording the risks and risk controls for the work that Mr Hansen was doing at Angus Place Colliery. Minutes of a meeting held on 5 May 2006 at Lithgow between Mr Hansen and Mr Roberts, recorded that Mr Hansen reported on various matters relating to the work he was doing. Matters that Mr Hansen reported in respect of various collieries, including Angus Place Colliery, appear under headings which are the names of each of the collieries. At the end of the document under the heading "Other Matters" it records: "Kevin advised that he has completed a "Task Analysis" (sic) for all sampling so to ensure a safe working environment and compliance to mine site regulations". Mr Hansen did not provide Mr Roberts with any copy of such a task analysis. The records do not identify if this 'task analysis' was generic or one specific to the Pump Station. Mr Roberts did not ask to see the 'task analysis' and never saw it. Fuchs has not been able to find the task analysis. Fuchs did not have a system to check that risk assessments were being completed and were appropriate. Centennial Coal failed to ensure that the site regulations, which it drafted, were complied with to ensure that a contractor was not permitted to work without a risk assessment. Centennial Coal had a Senior Executive Team which comprised, amongst others, four senior managers of Centennial Coal who were also directors of Centennial Angus Place. This Senior Executive Team met weekly. During the Senior Executive Team meeting all aspects of Centennial Coal's business were discussed. The first agenda item for this meeting was health and safety. Whilst the Centennial Coal Board was ultimately responsible for occupational health and safety at the Angus Place Colliery, the Senior Executive Team, together with regional and mine management, were also accountable for occupational health and safety at the Angus Place Colliery. For all Centennial Coal mines, including Angus Place Colliery, a quarterly review meeting was held with mine management to review all aspects of performance for the relevant mine. These reviews included health and safety, operational and financial performance. Centennial Coal employed a Chief Risk Officer, John Hempenstall who provided reports regarding health and safety across the various subsidiaries of Centennial Coal. Mr Hempenstall reported to the Audit and Risk Committee of the Board of Centennial Coal. Mr Hempenstall commissioned a contract with Audit Services International to conduct for Centennial Coal audits across the various subsidiaries of Centennial Coal. Audit Services International conducted the audit of the Angus Place Colliery in August 2005 ("the Carvolth report"). The Carvolth report was commissioned to assess compliance with AS 4801, in relation to occupational health and safety management systems, on the understanding that this standard would be the basis for new mine safety legislation to be enacted in 2006…. The Longwall Superintendent, Neil Moore, was not sure whether it was the responsibility of contractors to provide safe work procedures under the contractor management system at Angus Place Colliery. The Carvolth Report concluded in relation to 'Planning Identification of Hazards, Assessment and Control of Risks' a non-conformance in these terms: The system does not ensure that hazards and risks for activities, products and services over which the site has control or influence are being identified, assessed and controlled. The Carvolth report identified a weakness in relation to Management Review in these terms: Unable to sight evidence that the OHS management system ensures that Site Safety Plans for contractors and consultants performing at-risk activities, is subjected to a process of evaluation, monitoring, audit or review. Centennial Coal did not have a system of work that ensured that contractors working at the Angus Place Colliery always had and used an adequate written safe work method for the work they did there; and further, or in particular, that Centennial Coal failed to ensure that an adequate written safe work method for the said work was used by Mr Hansen when undertaking the said work; including a failure to ensure Mr Hansen had been given and/or used a safe work method document that identified the safe sample points to use. 21 Under the heading 'Centennial Angus Place' it was agreed, inter alia, that: When contractors such as Fuchs were engaged to work at Angus Place Colliery, the Centennial Angus Place Standard Work Procedures dictated that the Contractor was to conduct a risk assessment to determine the hazards and risk controls for the work to be done. Using that risk assessment, standard work procedures were to be drafted. The risk assessment, standard work procedures and supporting documents were to be provided to the Centennial Angus Place Contract Manager. When the Longwall Superintendent of Centennial Angus Place, Mr Moore, discussed sampling points with Mr Hansen on the Pump Station before it was commissioned underground, no arrangements were made for either Fuchs or Centennial Angus Place to provide safe work procedures for the sampling. At no time prior to the incident had Mr Moore seen, or been provided with, any safe work method documents from Fuchs for sampling. Centennial Angus Place had standard work procedures entitled; "Oil Sample from Face Chocks", "Sampling Solcenic Fluid from Hydraulic Control Panel" and "Sampling Solcenic Fluid from Storage Tanks". There is no evidence that these standard work procedures were provided to Mr Hansen. The standard work procedures did not apply to each point from which Mr Hansen was obtaining a sample; specifically there was no standard work procedure applicable to the return line, diluent water, and mixer samples. The procedure for taking a sample from the storage tanks was written in approximately 1996 for the previous Pump Station. The procedure to sample from the face chocks was not applicable to taking samples from the Pump Station. The potential risks of working with hydraulic fluid under pressure were known to Centennial Angus Place…. RMI had supplied a Pump Station for another mine of Centennial Coal, the Mandalong Colliery. Unlike at the Angus Place Colliery, Mandalong Colliery conducted a risk analysis in September 2004 for that RMI Pump Station. Centennial Angus Place did not conduct an operational or maintenance risk assessment for the Pump Station, nor did it conduct an audit to verify the Pump Station met its design. Centennial Angus Place was provided with a risk assessment document from the Mandalong Pump Station by RMI, which it considered and adopted. It appears this was because a view was taken that the new Pump Station was, other than the crawler tracks, sufficiently similar to the previously used Pump Station to not require a fresh risk assessment. This view failed to recognise that it was a different Pump Station with inter alia different sample points. The Mandalong Pump Station was not identical to the Pump Station at Angus Place. Centennial Angus Place commissioned the Pump Station to be built to a specific design to suit conditions at the Angus Place Colliery. The hydraulic layout of the two machines was different. Relevantly, the staple connection at the Incident Fitting (comprised of the straight swivel female to BSPP male hydraulic fitting located between the high pressure delivery manifold and the system pressure drain line) was located underneath the Mandalong Pump Station and not as physically easily accessible as the equivalent connection on the Pump Station. The only risk assessment conducted by Centennial Angus Place in relation to the installation of the Pump Station was the risk assessment for the crawler tracks of the electrical sub-station installed adjacent to the Pump Station. However this did not apply to the new hydraulic system, which included the Pump Station, hose and monorail delivery system and the refurbished old high pressure filter pod. Consequently no risk assessment was conducted for the introduction of the Pump Station. The crawler tracks for the sub-station and the Pump Station are practically identical and as such Centennial Angus Place intended the one risk assessment to cover both units. Centennial Angus Place's practices regarding risk assessments and contractor management had been previously examined. In 2003 the then Department of Mineral Resources conducted an assessment of the Centennial Angus Place contractor management system…. The Jim Knowles Group was commissioned by Centennial Coal to conduct an audit across various Centennial Coal mines. In February 2003 the final report on Centennial Angus Place's Safety Management System was provided. Overall, it concluded that Centennial Angus Place appeared to manage OHS risks well but there were minor areas that required some attention or change and some opportunities for improvement. The report noted, inter alia , the following recommendations for improvement: a. The monitoring of contractors' occupational health and safety performance was an area which needed to be more systematic. b. Although risk assessments existed, there were deficiencies in disseminating them. Centennial Angus Place was advised that the risk assessments needed to be reviewed to ensure they were current. It was also considered necessary to ensure they were circulated to all those who may need them. c. It highlighted a need to focus on hard barriers. d. It recommended Centennial Angus Place review its plans and risk assessments to ensure the controls set out in the risk assessments were effective. Risk assessment needs and hazard identification were recommended for review. e. A review and update of standard work procedures for hazardous processes and equipment was recommended. In March 2004 the need to improve contractor management and standard work procedures was again identified by an internal audit…. A risk assessment completed by Centennial Angus Place after the incident shows a high risk of fatality from an uncontrolled release of pressurised fluid where staple lock fittings are released by human error. It identified the importance of having a safe work procedure and appropriate training and a check sheet. 22 The Agreed Facts recorded that there had been cooperation by the two defendants with the investigating authority. Prosecutor's evidence 23 In addition to the Agreed Facts the prosecutor's evidence consisted of: a. a diagram showing the location of the colliery; b. a map of the workings underground showing the No 9 cut-through about 480m from the face of the longwall where the pump station was located; c. a diagram in three parts showing the location of the transformer and pump station in the cut-through both from above and side-on, and a more detailed drawing of the pump station, including the location of the deceased and the incident fitting; d. a further technical diagram of the pump station, side on and from above; e. a diagram of the incident fitting, showing the incident fitting at the end of the hose where it joined to the bulk tank which Mr Hansen had previously released safely, and the incident fitting at the other end of that hose; f. photographs and a DVD showing: the rear of the pump station; what was seen that night; the incident fitting; the sample bottles; and the fitting at the low pressure end that Mr Hansen had been observed to have removed on a previous occasion. Two of the photos were reconstructions of what it appeared Mr Hansen did, being photos taken after the incident fitting had been changed to include a red lock; and g. a replica of the incident fitting. Defendants' evidence 24 The defendants' evidence consisted of the following: a. a colour photograph showing a 'HP sample point test'; b. a colour photograph showing the bulk tank level tube and the solcenic mixture level in the tank at 2.00 am to 3.15 am on 27 July 2006 taken on 15 November 2006; c. a colour photograph of the decal to discharge hydraulic pressure found on the side of the emulsion tank of the RMI pump sled 9 cut through in 930 panel taken on 27 July 2006; d. a list of 11 Centennial Coal and Centennial Angus Place Board members and senior executives who attended the sentencing proceedings on 17 December 2009 including the Chairman and Non-Executive Director of Centennial Coal, Dr Kenneth Moss; e. an affidavit of Andrew John Myors, General Manager, Business Support for Centennial Coal. The affidavit was extensive and included 25 exhibits. The affidavit described: the structure of Centennial Coal; occupational health and safety systems in place at the time of the incident; the extensive steps taken post incident to upgrade Centennial Coal's occupational health and safety systems and procedures and to prevent a recurrence of the incident; Centennial Coal's involvement in mining industry organisations, programs and initiatives; the support provided to Mr Hansen's family; Centennial Coal's involvement in community projects; and included an expression of most sincere regret and sorrow for Mr Hansen's passing and the impact this has had on his wife and children. Commendably, exhibited to the affidavit was a letter from the chairman of Centennial Coal accepting responsibility for the failures to ensure Mr Hansen's safety; and f. an affidavit of Gregory John Shields, Mine Manager of Angus Place Colliery from 22 March 2006 until 25 October 2009. Mr Shields was required for cross-examination. Included as an exhibit to Mr Shields' affidavit was a DVD which demonstrated the current sampling process. There were 34 other exhibits to the affidavit. Mr Shields' affidavit dealt with: the operations of Centennial Angus Place; occupational health and safety systems in place at the time of the incident; Centennial Angus Place's post incident response including the immediate response to the Incident, the new sampling process, other changes made to the pump station, a new health and safety training program in relation to hydraulic systems, a new Contractor Management System, a comprehensive revision of the risk management system, re-training of employees and contractors in relation to the management and health and safety systems, the installation of new longwall roof supports and an armoured face conveyor; improvements to the Intranet; support provided to Mr Hansen's family; Centennial Angus Place's community involvement; and an expression of contrition. CONSIDERATION Proper approach to sentencing 25 As the defendants submitted, there is a substantial body of jurisprudence as to the proper approach to sentencing in this jurisdiction. Walton J recently discussed the principles in detail in Howard v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92; (2009) 186 IR 125 at [184]-[193]. The Court as presently constituted canvassed the approach to sentencing required by the legislation and the authorities in Inspector Mayo-Ramsay (WorkCover Authority of NSW) v The Crown in the Right of the State of New South Wales (NSW Fire Brigades) (No 2) [2007] NSWIRComm 168 at [29]-[36] and identified what were referred to as the 'core' matters in Inspector Legge v Intercast & Forge Pty Limited [2006] NSWIRComm 182 at [26]. 26 It is worth stating again those matters that are to be considered in determining an appropriate sentence. These were correctly summarised by the prosecutor as follows: a. The maximum penalty for the offence . Careful attention should be given to the maximum penalty provided; first because the legislature has legislated for it; second, because it invites comparison between the worst possible case and the case before the court; and third, because taken and balanced with all of the other relevant factors, it provides a yardstick: see Markarian v R [2005] HCA 25; (2005) 228 CLR 357 at [31]; Inspector Mayo-Ramsay (WorkCover Authority of NSW) v The Crown in the Right of the State of New South Wales (NSW Fire Brigades) (No 2) [2007] NSWIRComm 168 at [34]; Inspector Legge v Intercast & Forge Pty Ltd [2006] NSWIRComm 182; Inspector Short v The Crown in the Right of the State of NSW (NSW Police) [2007] NSWIRComm 138. b. The nature and quality of the offence. (See Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 475; Inspector Seneviratne v Caltex Petroleum Distributors Pty Ltd [2005] NSWIRComm 192 at [10]). This requires an assessment of the seriousness of the breach: see Fire Brigades) (No 2) at [34]; Inspector Legge v Intercast & Forge Pty ; Inspector Short v The Crown in the Right of the State of New South Wales. c. The nature of any injury. Although the damage or injury caused by the breach does not of itself dictate the seriousness of the offence or the penalty, a breach where there was every prospect of serious consequences may be assessed on a different basis from a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk: see section 21A(g) of the Crimes (Sentencing Procedure) Act 1999 which states that an aggravating factor in sentencing is that the 'injury, emotional harm, loss or damage caused by the offence was substantial'. Section 21A(ib) states a further aggravating factor is that 'the offence involved a grave risk of death to another person or persons'. See also Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17] - [18]; Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [94] and [95]; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Anor (2000) 95 IR 383 at 428; Morrison v Powercoal Pty Ltd (2003) 130 IR 364 at [32]; Fire Brigades) (No 2) at [34]; Inspector Legge v Intercast & Forge Pty ; and Inspector Short v The Crown in the Right of the State of New South Wales. d. The degree of foreseeability of the risk . This is a significant factor to be taken into account when assessing the level of culpability of the defendant: see Capral Aluminium Limited at [81], confirming the approach taken by Walton J, Vice President, in Department of Mineral Resources of New South Wales (McKensey) v Kembla Coal and Coke Pty Limited (1999) 92 IR 8 at 27; Fire Brigades (No 2) at 182; Inspector Short v The Crown in the Right of the State of NSW (NSW Police ) . It will be a serious offence where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken, in circumstances where such measures were available and feasible: Lawrenson Diecasting . In Capral Aluminium at [82] the Full Bench held: The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President in Ferguson v Nelmac in these terms: … reliance on hindsight must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. e. Whether there were simple and straightforward remedial steps that were available that could have avoided the accident . The existence of simple and straightforward remedial steps which could have been taken by the defendant to avoid the risk to safety are relevant to assessing the seriousness of the offence: see Department of Mineral Resources of NSW (McKensey) v Kembla Coal & Coke Pty Limited at 27; WorkCover Authority of NSW (Inspector Glass) v ACI Operations Pty Limited [1994] NSWIRComm 11; Inspector Elizabeth Benbow v Planada Holdings Pty Limited [2001] NSWIRComm 275; Fire Brigades) (No 2) at [34]; Inspector Legge v Intercast & Forge Pty Ltd ; Inspector Short v The Crown in the Right of the State of NSW (NSW Police). f. The need for general and specific deterrence . See Capral Aluminium at [71] to [80]. g. Subjective considerations. These include the entry of a plea of guilty by the defendant, remorse, contrition, prior offences, cooperation with the investigating authority, measures taken by the defendant to prevent a re-occurrence of the breach, and assistance provided to any worker injured as a consequence of the breach are properly to be taken into account: see Lawrenson Diecasting at 475. 27 Following the decision in Markarian v R [2005] HCA 25; (2005) 228 CLR 357, the approach to be taken to fixing penalty is to consider and weigh all relevant objective and subjective factors to determine an appropriate penalty and then, in appropriate circumstances, to make a deduction for the utilitarian value of any plea: Inspector Patton v Western Freight Management Pty Ltd (No 2) [2009] NSWIRComm 124 at [23]. Maximum penalty 28 In this case the maximum penalty for Centennial Angus Place is $550,000, it being a first offence. The maximum penalty for Centennial Coal is $825,000, as it has one prior conviction. Nature and quality of the offence 29 Mr Hansen was, of course, an employee of Fuchs. However, the defendants had an obligation to ensure that Mr Hansen was not exposed to risks to his health or safety arising from the conduct of their undertaking while he was at the Angus Place mine. The risk in this case was that in the absence of: · adequate instruction, training and supervision, · sufficiently rigorous safe systems of work, and · a dedicated, labelled point for sampling emulsion from the bulk tank, a sampler in the position of Mr Hansen, having to make a decision for themselves as to how to take a sample, would choose to remove a staple from a fitting they thought was at low pressure and make a mistake, removing instead a staple under high pressure. 30 The risk was serious. Pressurised hydraulic fluid, if released, had a high probability of causing serious or fatal injuries. 31 The defendants conceded, and properly so, that the offences were objectively serious, although it was submitted there were matters, when properly considered, that reduced the seriousness of the offences. I will consider these matters shortly. However, when one considers the nature and quality of the breaches of the Act they point to offences that are objectively serious. Factors identified by the prosecutor confirm this to be so and include the following: a. Mr Hansen was not instructed or informed by Centennial Angus Place as to each point on the pump station he should obtain the samples; b. the pump station did not have all sample points clearly indicated. In particular, the sample point to obtain a sample from the bulk tank was not labelled; c. Centennial Angus Place permitted the work Mr Hansen did on 26 July 2006 to be done without having conducted any adequate job safety analysis in respect of the work. In that regard it is relevant that: i. no risk assessment was conducted in respect of the operation of the pump station by Centennial Angus Place; ii. according to Centennial Coal's site regulations a contractor was not permitted to work without a risk assessment; iii. Centennial Angus Place had a standard work procedure that required a contractor to conduct a risk assessment to determine the hazards and risk controls for the work to be done before doing the work and provide such a document to Centennial Angus Place. There was no evidence such a document was sought by Centennial Angus Place. If Fuchs conducted any risk analysis, it had not been able to find it; iv. the earlier Carvolth Report had concluded, amongst other matters, that the author had been unable to sight evidence that the OHS management system ensured that site safety plans for contractors and consultants performing at-risk activities was subjected to a process of evaluation, monitoring, audit or review; v. there does not appear to have been any practical impediment to taking action to address the issues identified by the Carvolth Report immediately upon its receipt; vi. the pump station was changed and no fresh risk assessment was conducted; vii. reliance, instead, was placed on a risk analysis done for a similar pump station at another Centennial colliery, namely, Mandalong Colliery, but that pump station was different, in that, inter alia , it had different sampling points; viii. Centennial Angus Place completed a risk assessment after the incident. That risk assessment showed that there was a high risk of fatality from an uncontrolled release of pressurised fluid where staple lock fittings are released by human error. It identified the importance of having a safe work procedure and appropriate training and a check sheet; d. both defendants failed to ensure that an adequate written safe work method for the work Mr Hansen was doing was being used by Mr Hansen. This included a failure to ensure Mr Hansen was using a document that identified the safe sample points to use. Centennial Angus Place made no arrangements for Fuchs to provide a safe work procedure for sampling, nor did Centennial Angus Place itself make an arrangement to provide a safe work procedure; e. in March 2004, the need to improve contractor management and standard work procedures was identified by an internal audit. That report identified that safety management plans that contractors provided prior to commencing work at the Colliery needed to be reviewed. The audit examined a particular example and identified that although in that case a standard work procedure existed there was no evidence that the document had actually been issued to the contractor; f. whilst Centennial Angus Place had standard work procedures for taking samples from some locations: i. there was not a procedure for each location; ii. the only procedure relevant to taking a sample from the pump station itself was developed for the previous pump station; iii. in any event, there was no evidence that the standard work procedures had been provided to Mr Hansen; g. the failure to undertake a risk assessment, to develop clear instructions and to check they were being followed occurred in circumstances where the pump station did not have a device to permit a sample to be taken from the bulk tank that was labelled and dedicated, and, which ensured that when open, fluid would only be released gradually. Given that Mr Hansen was, to the knowledge of Centennial Angus Place, taking bulk tank samples, and that Centennial Angus Place had failed to sight a risk assessment or provide a safe work method in writing, the failure to provide such a device was a significant failure given, amongst other matters, the existence of high pressure fluid at the incident fitting which was adjacent to the bulk tank; h. the failures by Centennial Angus Place to ensure that Mr Hansen, a contractor, was doing work that had been the subject of a risk assessment and pursuant to a written safe work procedure occurred in circumstances where Centennial Angus Place had its risk assessments and contractor management examined in 2003 by the Department of Mineral Resources. The Department's assessment commented that: A reasonable percentage of the total workforce is contractual labour. There could be more adequate control of contractors on site. i. a report commissioned by Centennial Coal, written by the Jim Knowles Group in February 2003, made recommendations for improvement including the monitoring of contractors occupational health and safety performance as an area which needed to be more systematic; j. Mr Hansen was not provided with specific training in respect of the pump station. In particular, Mr Hansen received no adequate training as to how to locate appropriate sample points and the safe method for taking samples from those sample points; k. the following facts are relevant to the issue of failure to adequately supervise Mr Hansen: i. Mr Hansen, after being escorted into the mine, worked unaccompanied; ii. Centennial Angus Place did once have an employee, the afternoon shift maintenance crew leader, accompany Mr Hansen while he took samples. That employee, Mr Sheehan, saw Mr Hansen remove staples to obtain samples, including a staple from the other end of the same hose on to which the incident fitting was attached, being a fitting that was under low pressure. Mr Sheehan had some training, but the training records do not record any training as to the process for taking samples from the pump station nor as to the location of sample points. Mr Sheehan did not report that Mr Hansen's actions, in removing a staple from a fitting (rather than, for example, using the sight glass to obtain a bulk tank sample), were inappropriate; l. the pump station from where Mr Hansen was attempting to take a sample had been commissioned approximately six months earlier. The lack of any risk assessment in respect of the operation of the pump station upon the change to a new piece of equipment occurred in circumstances where change management procedures within Centennial Angus Place had previously been identified as an area which could be improved by a report commissioned by Centennial Coal in 2005 known as the Hawcroft Report; and m. it appears Mr Hansen died as a result of removing a staple from the incident fitting in order to obtain the bulk tank and/or the post HP filter samples. In that regard it is relevant that: i. as both defendants have accepted by the plea, the pump station was not safe in that it did not have a device in order to obtain a bulk tank sample that was labelled and dedicated and that ensured that when opened fluid would only be released gradually; ii. whilst there was a procedure for taking a high pressure sample, that procedure: a. was developed for the previous pump station; b. and did not identify a specific sampling point; iii. whilst there was a high pressure filter sampling point located at the hydraulic control panel, approximately 40 metres outbye from the longwall face, there is no evidence Mr Hansen was aware of the existence of that sample point. 32 It may be seen from the foregoing that there was a failure to adequately instruct, inform, train and supervise; a failure to conduct a risk assessment; a failure to adequately label machinery; a failure in the system of managing contractors coming onto site to ensure the defendants knew what the contractor or its employee was doing and how it was being done (for example, the failure to ensure Mr Hansen was using a document that identified the safe sample points to use); and a failure of change management in that the defendants failed to adequately address the need to appropriately change the safety procedures upon the installation of a new pump station. 33 The defendants submitted that although the offences were objectively serious, there were mitigating factors. One of those related to the degree of foreseeability of the risk, which is dealt with later in this judgment. A further mitigating factor was said to be that at the time of their offences, both defendants took safety seriously and had in place occupational health and safety systems which – although they did not prevent the event causing Mr Hansen's death – were comprehensive and systematic. It was submitted the existence of settled safety procedures and instructions is a factor which may mitigate the seriousness of the offences (see for example, Department of Mineral Resources of NSW (McKensey) v Kembla Coal & Coke Pty Ltd (1999) 92 IR 8 at 25; Warman International Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326 at 342). 34 Accordingly, it was contended, the Court should conclude that the offences were not symptomatic of any neglect of occupational health and safety by either defendant. Rather, they were an isolated instance of a lack of attention to detail – lapses for which there were not justifications or excuses, but understandable explanations. 35 It may be accepted that the defendants were safety conscious and that there were safety systems and procedures in place at the time of the incident. The defendants should receive the benefit of this in assessing their culpability. However, it was also the case that there were flaws in their approach to contractor management and change management. For example, whilst Centennial Angus Place allowed Mr Hansen to work unsupervised only after first checking he knew to take precautions when approaching risks to safety by working on a powered machine, Centennial Angus Place was not checking that contractors had and were using a Safe Work Method Statement or were, in fact, conducting risk assessments. Centennial Angus Place allowed Mr Hansen to work unaccompanied without checking that he was using a safe system of work. In relation to change management there was a failure to ensure that Mr Hansen was fully instructed about the features of the new machine and, in particular, the location of sample points. Mr Hansen's exposure to the new pump station before it was commissioned was limited to an inspection of it with the Centennial Angus Place Longwall Superintendent, an examination of a schematic diagram and a discussion of the sampling points for the bulk tank, mixing unit and water samples. It is to be noted to the defendant's detriment that the Longwall Superintendent was not sure whether it was the responsibility of contractors to provide safe work procedures under the contractor management system at Angus Place Colliery. 36 Flaws in the contractor management system were identified in the 2005 Carvolth Report and in the Jim Knowles Group Report in 2003. The latter report also recommended that it was necessary to ensure risk assessments were circulated to all those who may need them. In March 2004 the need to improve contractor management and standard work procedures was again identified by an internal audit within Centennial Angus Place. Accordingly, both defendants were made aware of relevant deficiencies in their safety management systems prior to 26 July 2006. Nature of the injury 37 It is not disputed that Mr Hansen died as a consequence of being struck by solcenic emulsion under very high pressure. His death was a manifestation of the risk that existed in this case. That is to say, in the absence of the safeguards and measures previously mentioned, there was an increased likelihood of a mistake or misunderstanding being made on the sampler's part that a fitting was under low pressure when in fact it was under high pressure. If the mistake or misunderstanding occurred, there was every possibility the sampler would suffer serious injury or death as a consequence of the release of hydraulic fluid under high pressure. The risk that Mr Hansen was subjected to was, therefore, very high. The degree of foreseeability of the risk 38 The prosecution submitted that risk of injury from the unplanned release of hydraulic fluid under high pressure was obvious and foreseeable. The defendants, on the other hand, contended that there were facts that reduced foreseeability to such a degree as to render the present offences non-serious. The defendants identified three impediments to foreseeability: 1. that Mr Hansen adopted an obviously unsafe mode of work; 2. that Mr Hansen was highly experienced; and 3. that it was reasonable to expect Mr Hansen's employer would provide a safe system of work. 39 In relation to the unsafe mode of work, it was submitted that the risk to Mr Hansen's health and safety arose as a result of him doing something which an experienced oil sampler like Mr Hansen would know was very unsafe; that it ought to have been obvious to a sampler of Mr Hansen's experience that the staple he mistakenly removed, between the incident fitting and the high pressure delivery manifold, was under high pressure. The defendants submitted that: Although it must be qualified by the fact that a maintenance crew leader had seen Mr Hansen do something similar before, it is reasonable to conclude that the mode of taking emulsions samples by removing a staple from a fitting from the high pressure delivery manifold on a pump station while under high pressure was so far removed from any orthodox method of obtaining samples and so obviously a risk to personal safety as to mean that the risk was not readily foreseeable to the Defendants. The fact that Mr Hansen would try to take the sample from this location while the system was under pressure is a matter which, had this tragic event not happened, would be regarded by many who might conduct a risk assessment of the task as inconceivable…. This considerably mitigates the seriousness of the Defendants' offences. 40 In relation to Mr Hansen's experience, it was submitted it was not readily foreseeable that a person with Mr Hansen's experience and knowledge of longwalls, of pump stations as part of longwalls and of sampling fluid from longwall hydraulic systems, would so far depart from orthodox sampling methods as to remove a fitting from the high pressure delivery manifold on the pump station while it was under high pressure. It was noted that in his 2005 induction assessment, Mr Hansen showed he knew that precautions were required before performing tasks on machines with the power on. 41 It was acknowledged that Centennial Angus Place allowed Mr Hansen to work unsupervised because of his long experience and his expertise. However, it was submitted that Centennial Angus Place's conduct in this regard was entirely consistent with the contemporaneous regulatory framework which, generally speaking, prevented an employee performing maintenance or working around the face of a mine unless they had at least one year's experience in that kind of work (Coal Mines Regulation (General – Underground Mines) Regulation 1984, cl 12; Coal Mines (Underground) Regulation 1999, cl 8(1)(a)). In its assessment of the role played by absence of supervision in this case, it was submitted the Court should give weight to the fact that, rather than being tightened, the temporal restriction in that regard has been removed (Coal Mine Health and Safety Regulation 2006, cll 84-85). 42 In putting forward the unsafe mode of work employed by Mr Hansen and his high level of experience as mitigating factors reducing the foreseeability of the risk, the defendants theorised as to what Mr Hansen was attempting to do. At the time of the incident the incident fitting (an elbow fitting) on the pump station was located between the high pressure delivery manifold and the system pressure drain valve (a ball valve) which, in turn, led to the system pressure drain line and thence to the bulk emulsion tank. At the point where the incident fitting connected to the high pressure delivery manifold, the solcenic emulsion was under high pressure. This, it was said, was indicated in a label at this location which stated "Main System and Accumulator Pressure Discharge Valve". On the other side of the incident fitting, immediately before the connection to the system pressure drain line, there was a ball valve which could be opened to reduce pressure within the hydraulic system by releasing high pressure fluid through the system pressure drain line and into the bulk tank. 43 It was explained that when the ball valve was closed, as was usually the case, the point at which it connected to the system pressure drain line was at low pressure. That point was secured with a staple lock. Similarly, when the ball valve was closed, at its other end the system pressure drain line connected to the bulk emulsion tank and was likewise at low pressure. The line at that point was again secured by a staple lock. 44 The defendants submitted that in theory, therefore, it was possible to obtain a bulk tank sample by removing a staple lock: a. on the low pressure side of the ball valve, where it connected to the system pressure drain line, or b. where the system pressure drain line connected to the bulk emulsion tank. 45 It was speculated that Mr Hansen intended to remove a staple at the low pressure side of the ball valve in order to obtain a bulk tank sample from the system pressure drain line or directly from the tank. Reliance for this speculation was placed on the fact that previously Mr Hansen had been observed by Mr Sheehan taking a sample from another, similar fitting attached to the same hydraulic line very close by to obtain a bulk tank sample. On that occasion, the similar fitting would not have been under pressure. The defendants suggested that most likely that fitting had been on one or other end of the system pressure drain line: the ball valve end or the emulsion tank end. The line was secured at both ends with a staple lock. It was submitted that: As the system pressure drain line was connected to the bulk tank, accessing the system pressure drain line would have allowed Mr Hansen to obtain a bulk tank sample from the back of the pump station, where the sample points for the diluent water, mixing unit and post return line filter were also located. This would have been convenient because Mr Hansen would not have been required to move to the differently located sample point for the bulk tank. 46 The defendants contended that it was difficult to understand how Mr Hansen would have been led to do what their theory suggested may have occurred. As it has been said, Mr Hansen was a very experienced fitter and sampler of solcenic emulsion from longwalls and longwall pump stations. The staple which was mistakenly removed, was at the connection between the incident fitting and the high pressure delivery manifold. The defendants contended that to a sampler of Mr Hansen's experience and expertise, this ought to have been an obviously different and more dangerous location to the low pressure side of the ball valve because: a. the male end of the Incident Fitting connected, via a female fitting, directly into to a steel manifold, rather than to a hose such as the system pressure drain line; b. the high pressure side of the Incident Fitting combined with the ball valve ( the Incident Fitting & Valve Assembly) was separated from its low pressure side by the valve; c. the exertion required to remove the staple lock fitting from the Incident Fitting at the point where it was connected to the high pressure delivery manifold should have alerted Mr Hansen to the fact that he was working on a fitting that was under high pressure rather than the low pressure end of the Incident Fitting & Valve Assembly; d. immediately above the Incident Fitting & Valve Assembly was a notice setting out in legible form four steps for "Discharging Hydraulic Pressure From The Complete Pump Station" before conducting maintenance tasks; e. next to the Incident Fitting was a sign that said "Main System and Accumulator Pressure Discharge Valve", and f. it would have been obvious from the noise of the pump station that it was operating and thus that the high pressure delivery manifold and the Incident Fitting were under high pressure. 47 Moreover, it was submitted, Mr Hansen would have known that to take a sample from the system pressure drain line, even with the ball valve closed, was unsafe. This was because to do so would leave only a closed valve between himself and hydraulic fluid under very high pressure. 48 Given these considerations and Mr Hansen's experience and expertise, the defendants submitted his mistaken removal of the staple lock between the incident fitting and the high pressure delivery manifold occurred in circumstances which were not readily foreseeable. 49 It is, indeed, difficult to understand how Mr Hansen came to remove the incident fitting. In the circumstances, one would not have expected an experienced person such as Mr Hansen to make such a tragic mistake. Protective measures against harm to persons in the workplace, however, cannot be based solely on an assessment of the likelihood or otherwise of whether a person will make a mistake or misjudgement. The question the Court must ask itself is that where there is a risk to health and safety present, was it reasonably foreseeable that a person might be exposed to that risk and, if so, did the employer do all that was reasonably practicable to avoid exposure to the risk? The test is to be applied having regard to the normal human frailties people may exhibit at work: that individuals, even highly skilled and experienced personnel, might become careless, they might be pre-occupied, they may act inadvertently, they may seek shortcuts to escape the routine or mundaneness of a job. 50 In the present case, it was not obvious that Mr Hansen might remove a staple holding in place a fitting under high pressure and thereby expose himself to the risk of being killed. It follows that the defendants may be regarded as less culpable than if the risk was obvious. However, I am of the view it was reasonably foreseeable that in the absence of adequate instruction, training and supervision, a sufficiently rigorous safe system of work (including a safe work method statement being provided to Mr Hansen), a dedicated, labelled point for sampling emulsion from the bulk tank and auditing to ensure the correct sampling point was being used, a person in the position of Mr Hansen who, unaccompanied, was regularly taking samples of hydraulic fluid from machinery that contained the fluid, which was under such pressure that its unplanned release could cause death, might become exposed to a risk to his health and safety. 51 As to the defendant's expectation that Fuchs would have provided a safe system of work for its employee, it was submitted for the defendants that starting in October 2004, Centennial Coal arranged for external providers to present a series of contractor workshops, on its behalf, to Centennial Coal Group contractors. The workshops were designed to cover the NSW Minerals Council's initiatives in relation to contractor management, and to provide awareness to contractors of, amongst other things, their OHS responsibilities while working at Centennial Coal Group sites. It was compulsory for any contractor who wished to perform work at any Centennial Coal Group site to attend these workshops. The Fuchs representative who attended one such workshop, held on 17 November 2005, was Mr Ken Swinburn, Service Engineer for Fuchs. 52 It was a reasonable expectation that Fuchs would have provided a safe working environment for its employee, Mr Hansen. However, it did not. Whilst the defendants might have held an expectation that Fuchs would have met its obligations regarding the safety of its employee, the defendants were not entitled to rely on that expectation. They had an independent duty to ensure Mr Hansen was not exposed to any risk whilst he was working at the Angus Place mine. In other words, it was not open to the defendants to adopt an attitude that it was reasonable to expect that Fuchs would act appropriately and, therefore, that relieved them, in whole or in part, from having to actively search out and, where it was at all possible, eliminate any risk to health and safety. Simple and straightforward remedial steps 53 I agree with the prosecutor that a system that ensured there was a written safe work method that provided clear instruction as to the location of sample points and provided a clearly labelled and dedicated sampling point for taking a sample from the bulk tank, would have 'gone a long way to removing the risk of a mistake.' In any event, the defendants have now attended to the shortcomings in their safety system that will prevent a recurrence of what occurred on 26 July 2006, including the provision of clear instructions, labelling and a dedicated sampling point. None of these steps could be regarded as complex, prohibitively expensive or impracticable. General deterrence 54 The prosecutor submitted that general deterrence had significance in this case for five reasons, namely, it: 1. highlights the dangers associated with working with hydraulic equipment under pressure; 2. highlights the importance of providing a safe system that does not rely on an experienced contractor to use their experience to avoid risk, nor rely on the safety systems adopted by service providers; 3. highlights the importance of ensuring work done by contractors has been properly assessed for risk and is being done pursuant to a written safe work method provided to the worker; 4. highlights important issues that arise whenever there is a change in the method of work arising from the use of new equipment; and 5. highlights the need for the industry to be more responsive to audit findings that highlight the need for remedial action. 55 For their part, the defendants acknowledged that, other than in an exceptional case (which these were not), a sentence passed for an offence must reflect the need for general deterrence. Further, it was acknowledged that there was a need for general deterrence against the failings for which the respective defendants were responsible (that is, the failings identified in the particulars to the charges) which resulted in the detriment to Mr Hansen's safety. 56 However, it was submitted that because of the experience of Mr Hansen and the factors showing he must have been aware his actions were unorthodox and that what he was doing was extremely unsafe, the risk to safety was not as obvious as it might be in other cases. It was contended that where these and the other factors mitigating the seriousness of the offence are present, the need for deterrence of others is not as great as it would be in cases where the disregard of the risk to safety is unexplained or casual or, worse, where it is flagrant. In the case of these defendants, it was submitted, the element of general deterrence in the penalty should be confined accordingly. 57 For the reasons submitted by the prosecutor general deterrence should constitute a significant element of the penalty. Insofar as the defendant's contention is concerned regarding Mr Hansen's unorthodox actions, it was a method he had previously adopted and Centennial Angus Place may be taken to have known that was the case because its employee, Mr Sheehan, observed it. That Mr Hansen did it again on the occasion of his death would seem to suggest it may have been the method he usually employed, except on earlier occasions the fitting would not have been under high pressure. Specific deterrence 58 The prosecutor submitted specific deterrence was significant in this case, notwithstanding the substantial evidence given by both Messrs Myors and Shields of the changes to systems and procedures that this incident had engendered. Centennial Angus Place continues to operate a pump station. Its evidence was that its own staff now take samples from hydraulic equipment underground. 59 On the other hand, the defendants submitted the Court can be satisfied that there is little need for specific deterrence because the risk of re-offending was low: see Baulderstone Hornibrook at [193]. The risk was low, it was submitted, because: a. of the changes which the Defendants have made to their systems and, in the case of Centennial Angus Place, the changes it also has made to its plant, to ensure that this type of offence will not happen again; b. the Defendants' evidence shows that they understand what the underlying causes were of their offences; and c. the Defendants are genuinely remorseful. 60 It was further submitted these considerations and the steps taken by the Defendants to understand the causes of the offences, together with the practical steps taken to improve systems and plant generally, demonstrate insight into the offences and a real and effective commitment to the prevention of any further offences. 61 The Court has a very real sense that the death of Mr Hansen has erased whatever element there may have been within the defendants of complacency regarding occupational health and safety and there is a revitalised awareness of the necessity to implement and maintain safety systems and procedures that insofar as it is reasonably practicable, eliminate any risk to health and safety. The steps taken by the defendants after the incident to improve their occupational health and safety arrangements support this view. The changes are described in the affidavits of Mr Myors and Mr Shields and are addressed in the defendants' written submissions. What follows is a summary from the submissions of the more significant changes. 62 The changes include changes to systems of work and risk management systems including fundamental changes to the sampling process so that sampling is no longer conducted by a contractor sampling is conducted only at specifically engineered and labelled sampling points, there are Standard Work Procedures for each of the five sampling tasks, and Job Safety Environment Analyses are to be conducted of tasks involving risk. Additionally, Centennial Angus Place has put in place a new health and safety training program in relation to hydraulic systems. 63 Minimum standards have been developed and implemented for Energy Control, Contractor OHS Management, Change Management, Risk Management and High Pressure Hydraulic Management. 64 In July 2007 a new Contractor Management System commenced operation at Centennial Angus Place. The new Contractor Management System differs from the system which existed at the time of the incident in that: a. it is far more comprehensive, b. it consists of a framework and set of principles and then a series of detailed Task documents, and c. it includes a contractor risk assessment tool. 65 In January 2009, a new Contractor OHS Management Standard was introduced across Centennial Coal Group sites. In particular, the Contractor OHS Management Standard requires: a. each site to have a documented Contractor Management Plan, which includes a process for determining the risk profile of any contract and a scope of work on which individual contracts would be based; b. the first step in selecting a contractor is to assess the contractor's OHS capability relevant to the risk profile of the work to be performed; c. contractor work to be supervised, monitored and audited in accordance with an agreed supervision and monitoring program (consistent with the risk profile for the work to be performed), which involves site audits and inspections including planned task observations, scheduled reviews and response by the contract supervisor to incidents and investigations; and d. a review of contractor performance and contractor management, involving all relevant parties, to be conducted at the end of each project. 66 The Contractor OHS Management Standard includes audits of each site's operations of its Contractor Management Plan at intervals of not less than three years. Likewise, the Chief Operating Officer is to initiate a review of the Contractor OHS Management Standard every three years or earlier if required. 67 Centennial Angus Place's Risk Management System includes a risk management flow chart as part of the standard called 'Standard – Determination of Risk Management'. Where there is any permanent modification, alteration or change to a documented procedure or process, or any plant or equipment, the flow chart requires completion of the Task entitled 'Standards – Change Management Completion' by the relevant Process Superintendent or Engineer. In the case of a change being required to plant or a process, managing risk by reference to the risk management flow chart will ensure that the Process Superintendent and Engineer when considering the change review both maintenance and training. In the event the proposed change introduces new equipment or alters existing equipment, the Change Management Check List and the flow chart require the completion of a formal risk assessment. 68 In 2009, a new Centennial Coal Change Management Standard became effective. The Standard specifies a process for the management of risks that may result from a change to a process, equipment, material, substance or environment design. The process which is prescribed in the Change Management Standard includes the following steps: a. identify change; b. describe and assess change; c. approve change; d. records of documentation; e. monitor/evaluate change; and f. communicate and implement change. 69 Since the incident, changes have been made to the longwall pump station at Angus Place Colliery which address the features of the pump station implicated in the Incident. The changes include the following: a. The Incident Fitting & Valve Assembly ("pressure decay point") has been moved: · from its position attached to and immediately above the high pressure delivery manifold ("blanked off former pressure decay point") · to a position at about eye level and slightly to the right. b. A pressure gauge has been installed on the high pressure side of the Assembly; c. Bucyrus staple retaining devices have been fitted over the staples on the Assembly; d. The Assembly has been labelled: "Pump Station Hydraulic System Pressure Decay Valve and Pressure Gauge" and an additional label added warning as to "High Pressure Hydraulic Fluid" and setting out the steps for isolation; and e. The bulk tank sample point has a yellow lever which is used to release the tank sample at low pressure. Other extensive changes have also been made at the pump station to improve safety. Further, Centennial Angus place plans to make a number of other, significant improvements to safety on the pump station at the next longwall relocation, due in February 2010. 70 Both defendants have changed their systems of work in a number of other respects and, in the case of Centennial Angus Place, also made substantial other changes to plant, to enhance safety at the Angus Place Colliery longwall. One of these changes involves the installation of a new state-of-the-art high pressure filter and dump valve station at the Angus Place Colliery. As a result of this change of plant, samples of emulsion which is circulating in the hydraulic system at high pressure: · can be taken at low pressure, · can be taken either or both before and/or after the filters and, importantly, · can be taken without the need for a tool such as a minimess fitting which were required to take a sample at the high pressure filters as they then existed in 2006. 71 In the process of making these changes, several safety initiatives and improvements were designed and implemented. The main safety related initiatives were aimed at reducing the incidence and consequence of uncontrolled releases of high pressure fluids. To this end several philosophies were adopted for the protection of operators: a. hard barriers where possible; b. staple and hose retention devices in close proximity to operators; c. extensive use of hose sleeving; d. whip checks on interchock hoses; e. interlocking of hydraulic systems electronically; and f. strategic placement of hoses to reduce the risk of direct contact with operators. 72 After investigation as to OHS programs in best practice companies, in 2008 Centennial Coal brought in a program of actions to improve OHS across the organisation. The program is called "the Centennial Coal Step Change Safety Initiative" ('Step Change'). Step Change involves six basic elements. These are: a. a new Safety Vision, symbol and slogan – "Think Safe, Work Safe, Home Safe"; b. personal safety plans. These are developed by every Centennial Coal Group employee detailing why OHS is important to them, to others that work for them and how each employee will achieve their safety plan; c. safety leadership programs. These comprise – i. safety leadership courses – a three day course for all persons in supervisory positions and a one day course for all remaining employees, run by external consultants. Consideration is being given to getting contractors' supervisors also to attend the three day course; ii. leadership protocols – plans for site inspection and engagement for site leaders and supervisors; iii. production of two corporate videos. The first film is a personal OHS commitment and message from Centennial Coal's MD/CEO. The second film is a personal message from Ben Houlison, who was seriously injured whilst at work at the Clarence Colliery in 2004 (see Morrison v Clarence Coal Pty Ltd & Centennial Coal Company Ltd [2007] NSWIRComm 270), about the impact this has had on his life. These films are shown to every employee and contractor at their induction as well as during the one day safety leadership courses referred to above; d. employee engagement plans at all sites – a series of protocols for communication and engagement with the workforce at each mine; e. behavioural based safety systems at all sites. These comprise three elements: i. the START Program, whereby all employees and contractors are required to participate in a start of shift refresher to reflect on the previous day's OHS performance (using a traffic light coding system) and to refocus on the need for OHS in the upcoming shift. At Angus Place Colliery this is know as the PASS meeting; ii. STOP meetings, whereby employees and contractors are required to pause before undertaking a new job and to assess the risks and OHS aspects of that job before proceeding. Contained within the new Risk Management Standard is a requirement for employees and contractors to complete a risk review of this type when performing regular tasks; iii. planned task observations ('PTO'). This is a program whereby persons undertaking a job are observed to ascertain whether they are following the appropriate application of SWPs or to highlight potential OHS hazards. The PTO may be performed by a co-worker or a supervisor. A system of scheduling is implemented at each site to ensure a cross-section of tasks, and employees and contractors are subject to a PTO each month. PTOs are undertaken in relation to contractors, as part of the Contractor Management Standard. For Centennial Angus Place's Standard – Workplace Task Observation System; f. new incident investigation techniques, protocols and training at all sites. This protocol focuses on root cause analysis to determine the factors that led to an incident and recommendations to prevent a recurrence. 73 Early in 2007, Centennial Coal established the position of General Manager, Health and Safety. This position reports to the Chief Operating Officer. 74 In July 2008, the Centennial Coal Board formed a Health, Safety Environment and Community. The Centennial Coal HSEC Committee currently meets four times a year. It comprises three Board Members (including the Chairman of Centennial Coal) as well as Centennial Coal's Senior Legal Counsel as the Committee secretary. 75 Centennial Coal's General Manager, Engineering and Procurement now convenes the Centennial Coal Engineers' Network. Each month a teleconference occurs involving senior engineering personnel from each site together with the General Manager, Engineering and Procurement. Discussed at the teleconference are engineering issues of common interest, including issues affecting OHS, across the Centennial Coal Group. On an annual basis, the Engineers' Network meets at a one day conference at which ideas are exchanged and papers are presented by both Centennial Coal Group personnel and others. 76 In 2008, critical equipment audits were introduced. This initiative involves a detailed audit for a specific piece of critical infrastructure across all relevant sites. Once an item is selected, an audit team is assembled, comprising the General Manager, Engineering and Procurement, together with a cross section of experienced personnel from across the Centennial Coal Group. The audit reviews everything in relation to the piece of equipment selected, including design, procurement, safe operation, maintenance and critical spares. 77 Centennial Coal has enhanced its contract auditing system in place at the time of the Incident by adding a check that each mine has a copy of each contractor's safe work method statements. In addition, since October 2008, the number of contract audits has been increased to four Centennial Coal Group sites per month. 78 In 2007, Centennial Coal introduced an annual test for Centennial Coal's Executive Management. The 'General Manager HSEC Corporate Emergency Simulation' is a simulated emergency which assesses the Executive Management's response against the Centennial Coal Emergency Manual. 79 Over the last 18 months, Centennial Coal has progressively introduced the Arrow Logic PC Log-in Program for contractors and visitors to all Centennial Coal Group sites. This Program requires particular data to be entered by contractors and visitors and for the data to be communicated to the contractor's site contact or supervising official data entered. The consequence is improved knowledge about contractors and visitors and awareness of their presence on and departure from the Centennial Coal site. 80 At the time of the incident, a major tool for communication within the Centennial Coal Group was the company's Intranet. Since the incident, the Intranet has been significantly upgraded. The upgrade includes the installation of Lotus Notes software in July 2006, so that a much wider range of information is available and information specific to a given site is now available to other Centennial Coal Group sites. 81 The foregoing summary provides some idea of the extensive changes made by the defendants to improve their occupational health and safety systems and procedures. The steps taken are highly commendable and lead the Court to the view that not only do the defendants take their responsibilities for safety very seriously, but also that the chance of the defendants re-offending is slight. Nonetheless, the defendants continue to carry on business and it is appropriate to include a small element for specific deterrence in the penalty: Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610. Subjective considerations 82 It is clear from the evidence that both defendants are remorseful for the failure to ensure the safety of Mr Hansen. Both defendants have expressed contrition and accepted responsibility. The changes made to improve safety and the cost of doing so are manifestations of the defendants' contrition. Additionally, appropriate steps were taken by the defendants in trying to mitigate the sorrow and loss suffered by Mr Hansen's family. 83 Centennial Angus Place has been operating the Angus Place Colliery since 2002. It has no prior convictions under the Act. In addition, the company has significant connections with its local community and makes financial contributions to that community. The Court accepts the prior good character of Centennial Angus Place. 84 Centennial Coal has been operating since 1989. The evidence of Mr Myors was that: At the time of its establishment in 1989, Centennial Coal operated a single mine. By 2002 the number of mines within the Centennial Coal Group had increased to 12 underground coal mines 11 of which were in NSW. Currently, the Centennial Coal Group comprises eight underground coal mines (including two associated open cut operations) and one small open cut mine, all of which are in NSW, with a total managed production of approximately 20 million tonnes per annum. At present there are approximately 1,700 people employed within the Centennial Coal Group. In addition, the Centennial Coal Group engages a significant number of full time contractors or full time equivalents for specialist work across our operations, in the order of about 200 individuals. 85 Centennial Coal has a prior conviction, recorded in 2007, as the result of an industrial accident at its Clarence Colliery (Morrison v Clarence Coal Pty Ltd and Centennial Coal Company Limited [2007] NSWIRComm 270). 86 Centennial Coal makes financial donations to a number of community causes. It plays an active role in the mining industry and particularly in fostering improved OHS in the industry. 87 The Court accepts the defendant's submission that although its record is not unblemished, Centennial Coal is a large organisation. It operates across a significant number of sites in a dangerous industry. It has been doing so now for about a decade. In these circumstances, notwithstanding its prior conviction, the company should receive credit in assessing sentence for: · its otherwise good character, both in terms of its record and because of the active role it plays in working to achieve a safe mining industry, and · because of the positive role it plays as a member of the broader community. 88 The proceedings were commenced on 23 July 2008. The defendants entered their pleas of guilty on 12 June 2009 to an amended charge. Thereafter the matters were programmed for sentencing, proceeding largely on the basis of agreed facts. 89 Whilst there were amendments to the charge, the Court accepts the prosecutor's submission they were not of themselves so significant as to warrant a view that the plea was entered at the first available opportunity: see Inspector Kent v Duct Master Pty Ltd [2009] NSWIRComm 143. Nevertheless, the pleas were entered early and reflect the defendants' contrition and has a substantial benefit to the administration of justice. An appropriate discount should apply. 90 It is accepted that there was co-operation with the prosecutor, and the Court will take that into account in determining penalty. Relative culpability 91 The Court accepts the defendants' submissions regarding their relative culpability, namely: Through its board and senior management, Centennial Coal had overall involvement in the establishment of policy and protocols dealing with OHS matters throughout the Centennial Coal Group, including, specifically, the Angus Place Colliery. Furthermore, it had ongoing involvement in monitoring OHS matters. As between these two Defendants, however, Centennial Angus Place had the greater degree of responsibility for ensuring safe systems of work, safe plant and adequate supervision and instruction at the Angus Place Colliery. Centennial Coal had an overarching responsibility. As the party more remote from the workplace, Centennial Coal is less culpable than is Centennial Angus Place. 92 It is also necessary to consider the relative culpability of Mr Hansen's employer and in that respect it is accepted that both defendants are less culpable than Fuchs: · Fuchs undertook the sampling pursuant to the contract with Centennial Coal and, to that end, provided an expert sampler, Mr Hansen, and the laboratory facilities to analyse the samples; · Fuchs identified the various samples which it required be taken by Mr Hansen; · by the Contractors' Site Regulations and Policies which were part of its contract with Centennial Coal, Fuchs accepted an obligation to conduct and retain risk assessments of the tasks it performed at Centennial Coal's sites where it supplied oil sampling services; · Fuchs had a responsibility to ensure that its employee received training and instruction on how to perform sampling tasks on the new pump station and to ensure he was adequately supervised in the performance of his duties; · Centennial Coal arranged for compulsory workshops to be presented to contractors on its sites, the subject-matter of which included OHS obligations. Fuchs attended one such workshop; and · as Mr Hansen's employer, Fuchs bore primary responsibility for ensuring the health and safety at work of its employee. Fuchs' primary responsibility in relation to Mr Hansen's safety, as his employer, was reinforced by the terms of the contract between Centennial Coal and Fuchs and, in particular, by the Contractors' Site Regulations and Policies which formed part of that contract. 93 The defendants' contended that there was an uncharged fourth party who bore responsibility in this matter. That was the designer and manufacturer of the pump station, RMI. The defendants referred to Newcastle Wallsend Coal Company Pty Ltd v McMartin [2006] NSWIRComm 339; (2006) 159 IR 121 at [625], where it was stated: In Nesmat Pty Ltd v WorkCover Authority (NSW) (1998) 87 IR 312, a Full Bench of the Court considered that the absence of prosecution against the other parties upon whom a defendant had reasonably relied meant that the sentence imposed upon the defendant may give rise to a justifiable sense of injustice. We adopt the analysis of Nesmat and Wong v Melinda Group Pty Ltd (1998) 82 IR 118 in WorkCover Authority v McDonalds at 437 which was affirmed by the President in Walco (No 2) [ WorkCover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163] who stated at [33]: The significance of the failure to prosecute, or to continue the prosecution of the other potential defendants, is not that fact but rather the fact that any assessment of the role of the present defendants must be considered in the light of the consideration that the criminality for the breach of occupational health and safety was one which did not fall solely on the shoulders of these defendants. That fact, of itself, involves consideration of matters which may mitigate the conclusion as to the objective seriousness of the offences committed and thus the penalty which should be imposed in relation to them. 94 The defendants submitted: RMI designed and manufactured a specialist machine. It included a dedicated and labelled sampling point for emulsion leaving the mixer. Although it provided a tap for sampling from the return lines and the make-up water, it did not label those points. Significantly to this case, however, RMI did not include in the design of the pump station a dedicated and labelled sampling point for the bulk emulsion tank. A particular of each Defendant's offence is that the pump station was not fitted with a device to obtain a sample from the bulk tank that was labelled and dedicated and ensured that when opened fluid would only be released gradually. The responsibility borne by RMI to design and fit the machine with a dedicated and labelled low pressure sampling point for the bulk emulsion tank mitigates the culpability of Centennial Coal and Centennial Angus Place in this respect. 95 However, as the defendants themselves acknowledged, the pump station was built by RMI to the design specifications provided by Centennial Angus Place. In this respect, I do not see there is any scope to mitigate the culpability of the defendants. Costs 96 The defendants did not oppose an order that they pay the prosecutor's costs as agreed or assessed. However, it was submitted that in considering the appropriate penalties the Court should take into account the fact that a defendants will have to pay the prosecutor's costs. It was submitted, and it would appear to be right, that costs are to be regarded as part of the defendant's punishment: Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78], [88]; Environment Protection Authority v Hardt [2007] NSWLEC 284 at [66]. 97 I have not been apprised of the amount of legal costs the defendants will be liable to pay but it is a reasonable expectation they will be substantial. In arriving at the penalties I have taken this into account. Penalties 98 Having regard to the objective and subjective considerations in these matters I have decided that the appropriate level of penalty to be applied to Centennial Coal is $360,000. This amount is to be discounted by 20 per cent for the utilitarian value of the guilty plea. The appropriate level of penalty to be applied to Centennial Angus Place is $300,000. This amount is to be discounted by 20 per cent for the utilitarian value of the guilty plea. Orders 99 The Court makes the following orders: (1) The defendants are found guilty and convicted of each offence. (2) In Matter No IRC 1190 of 2008 the defendant is fined an amount of $288,000. (3) In Matter No IRC 1191 of 2008 the defendant is fined an amount of $240,000. (4) In each case, one half of the fine is to be paid as a moiety to the prosecutor. (5) The defendants shall pay the prosecutor's costs as agreed or 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.