Industrial Court of New South Wales CITATION: Robert William Regan v Anglo Coal (Kayuga Management) Pty Ltd [2007] NSWIRComm 12 This decision has been amended. Please see the end of the judgment for a list of the amendments. PROSECUTOR: Robert William Regan PARTIES: DEFENDANT: Anglo Coal (Kayuga Management) Pty Ltd FILE NUMBER(S): IRC 5852 of 2005 CORAM: Haylen J CATCHWORDS: Occupational Health and Safety Act 2000 - s 8(2) - extensive engagement of contractors in development of mine - use of specialist crane operator - failure to ensure compliance with good rigging practice and standards - considerable control of safety exercised by mine operator over contractors - system of contractor control not fully implemented - mine operator not required to become expert in crane operation/heavy lifting but was required to ensure safe system of work in existence and risk assessment undertaken - serious breach of the Act established - defendant incorporated for limited purpose and no longer operating - general deterrence considered - special circumstances result in no element of penalty to reflect specific deterrence - while defects found in defendant's system of safety, extensive system in operation - safety system more than paper system - numerous actions taken after fatal accident to address risk to safety no prior record - early plea - substantial subjective factors considered - penalty imposed CASES CITED: Robert William Regan v Muswellbrook Crane Services Pty Ltd [2007] NSWIRComm 13 R v Thompson (2000) 49 NSWLR 3 HEARING DATES: 11/12/2006 DATE OF JUDGMENT: 6 February 2007 PROSECUTOR: Mr M Cahill of counsel SOLICITORS: Crown Solicitor LEGAL REPRESENTATIVES: DEFENDANT: Mr L Robberds QC with Mr S Meehan of counsel SOLICITORS: Blake Dawson Waldron JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Haylen J 6 February 2007 Matter No IRC 5852 of 2005 ROBERT WILLIAM REGAN v ANGLO COAL (KAYUGA MANAGEMENT) PTY LTD Prosecution under s 8(2) of the Occupational Health and Safety Act 2000 JUDGMENT [2007] NSWIRComm 12 1 Anglo Coal (Kayuga Management) Pty Ltd ("Kayuga Management") is a wholly owned subsidiary of Anglo Coal Holdings Australia Ltd ("ACHA"). The company was incorporated for the purpose of designing, developing and establishing long wall mining operations in the Kayuga seam in preparation for long wall mining. The defendant managed the Kayuga Mine under a Deed of Delegation from Anglo Coal (Dartbrook Management) Pty Ltd ("AC(DM)") another wholly owned subsidiary which had been appointed to manage a Joint Venture including the Dartbrook Mine and the Kayuga Mine. 2 In November 2003, arrangements were made to transport two heavy underground mining trailers to the Kayuga Mine that were to be unloaded by crane. A mobile crane was provided by Muswellbrook Crane Services Pty Ltd ("MCS") for this purpose together with a crew. During the course of unloading the trailers, a trailer slipped from the chains holding it and fatally injured one of the work crew. Following this accident, Robert William Regan a person appointed as an Inspector under s 46A of the Occupational Health and Safety Act 2000, commenced proceedings against Kayuga Management for a breach of s 8(2) of the Occupational Health and Safety Act 2000 and also commenced proceedings against MCS alleging a breach of s 8(1) of the Act. Mr Regan was the Director, Mine Safety Operations, Chief Inspector of Mines and Chief Inspector of Coal Mines of the New South Department of Primary Industries. Kayuga Management (the defendant) entered a plea of guilty to that charge. This judgment deals with the evidence and submissions in relation to the sentencing of the defendant and should be read in conjunction with the related proceedings against MCS, reported as Robert William Regan v Muswellbrook Crane Services Pty Ltd [2007] NSWIRComm 13. 3 The relevant Particulars of the charge under s 8(2) against the defendant were: ... (e) the defendant failed to ensure that employees of MCS working at the site were provided with and/or maintained a safe system of work with respect to the conduct of lifts to be performed at the site using mobile Franna cranes, including, but not limited to the 18 tonne Franna Crane Model No AT-18 bearing registration number 039-FNK; (f) the defendant failed to ensure that employees of MCS working at the site were provided with and/or maintained any proper system with respect to the assessment of risks associated with the conduct of lifts to be performed at the site with mobile Franna cranes, including, but not limited to the 18 tonne Franna Crane Model No AT-18 bearing registration number 039-FNK. 4 At the hearing on sentencing, the prosecutor tendered an Agreed Statement of Facts, a number of photographs, a plan of the site showing the positioning of the crane and surrounding items as at 21 November 2003, extracts from a handbook on rigging, extracts from a website regarding the Crosby Hoist Book, the Australian Standards for Crane Hoists and Winches and two guides for dogging. The defendant's evidence comprised of two affidavits of Timothy Charles Hobson, the General Manager of the defendant together with a copy of the Application for Order concerning the charge against MCS. 5 To assist in a better understanding of the nature of the case involving the defendant, it is appropriate to set out the substance of the Agreed Statement of Facts. That document contained the following: 1. A Joint Venture comprising Marubeni Thermal Coal Pty Ltd, Anglo Coal (Dartbrook) Pty Ltd and SsangYong Resources Pty Ltd ("the Joint Venture") held Coal Mining and Exploration Leases comprising the collieries known as the "Dartbrook Mine" and the "Kayuga Mine" near Muswellbrook in the state of New South Wales ("the Joint Venture area"). 2. At all material times Anglo Coal (Kayuga Management) Pty Limited (ABN 84 076 106 986) ("the Defendant") and Anglo Coal (Dartbrook Management) Pty Limited ("AC(DM)") were wholly owned subsidiaries of Anglo Coal Holdings Australia Ltd (ABN 52 079 017 940) ("ACHA"). 3. At all material times AC(DM) was contracted by the Joint Venturers to manage, control and operate coal exploration, coal mining and related activities within the Joint Venture area, including the control, management and operation of the Dartbrook Mine and the Kayuga Mine. 4. At all material times Kayuga Mine was a coal mine for the purposes of the Coal Mines Regulation Act 1982 ("CMRA"). 5. At all material times, the Defendant controlled and operated the Kayuga Mine under a Deed of Delegation from AC(DM). 6. At all material times, David Clark ("Clark") was employed by TeroTechnology Services Pty Limited (ABN 30 064 132 449) ("TeroTechnology"). 7. At all material times, TeroTechnology was contracted by the Defendant as the Defendant's Mechanical Engineer in Charge for the "Kayuga Mine Project" and on or about 20 November 2003, Clark was the Acting Project Manager for the Kayuga Mine Project. 8. At all material times, the Defendant was an employer. 9. At all material times, the Kayuga Mine was the Defendant's place of work. 10. At all material times, Muswellbrook Crane Services Pty Ltd (ABN 99 001 037 387) ("MCS") provided cranes, crane crews and related services to companies in the Hunter Valley region of the State of New South Wales. 11. From time-to-time, MCS was contracted by the Defendant to provide cranes, crane crews and related services at the Kayuga Mine and, in particular, MCS was contracted by, or on behalf of, the Defendant to provide lifting services at the Kayuga Mine on 20 November 2003. 12. At all material times, MCS employed Richard Matthews ("Matthews") as a crane driver. Matthews held a certificate of competency as a crane driver and was authorised to operate the mobile Franna crane ("the Franna crane") to which he was assigned by MCS on 20 November 2003. 13. At all material times, MCS employed Jamie Sullivan ("Sullivan") as a dogman. Sullivan held a certificate of competency and was authorised to "dog" with Matthews in the operation of the Franna crane to which they were assigned by MCS on 20 November 2003. 14. At all material times, MCS also employed David Atwood ("Atwood") as a truck driver. On 20 November 2003, Atwood was also assigned to the task of delivering to and removing plant and equipment from the Dartbrook Mine. 15. Matthews, Sullivan and Atwood were all inducted to work at the Dartbrook Mine pursuant to the AC(DM) Safety Health and Environment ("SHE") management system and at the Kayuga Mine pursuant to Kayuga's SHE management system. The induction involved Matthews, Sullivan and Atwood attending both a generic induction training program for NSW coal mining, and a specific induction training program for Dartbrook and Kayuga Mines (and successfully completing an assessment of competency with respect to these training programs). The Defendant's training program provided instruction on safety policies, procedures and mine rules for Kayuga and Dartbrook specifically including site entry requirements, transport rules (including for cranes), emergency procedures and accident reporting. Background to the Subject Incident 16. Some time prior to 20 November 2003, Roche Mining Pty Ltd (ABN 49 004 142 223) ("Roche") was loaned two (2) trailers for its use in underground development work at the Kayuga Mine. 17. The two trailers had been constructed for the Joint Venturers to transport fans underground at the Dartbrook Mine. The trailers weighed approximately 1.5 tonnes and were approximately 6310mm long, 1500mm wide (2000mm wide including the wheels) and 1000mm high. Arrangements were made between the Defendant and AC(DM) for the loan of the trailers to Roche. 18. The two trailers were stored at MCS's yard in Muswellbrook. On or about 20 November 2003, MCS was contracted to deliver the two trailers to the Kayuga Mine. MCS was also retained to supply a crane and crew, consisting of a crane driver and a dogman, to unload the two trailers on their delivery to the Kayuga Mine. 19. At the same time MCS had been retained to provide lifting and transportation services at the Dartbrook Mine by AC(DM). 20. At about lam on 20 November 2003, after passing a compulsory pre-work breath test, Matthews, Sullivan and Atwood, together with another crane and crew, were assigned to work at the Dartbrook Mine to lift and transport mining plant and equipment. Matthews and Sullivan were to use the Franna crane to which they were assigned by MCS to assist MCS's other crane crew. 21. After having been assigned to work at the Dartbrook Mine on 20 November 2003, Matthews and Sullivan drove the Franna crane out to the Dartbrook Mine. 22. On arriving at the Dartbrook Mine, Matthews and Sullivan met up with MCS's other crane crew who they were to assist in the loading of equipment for removal from the Dartbrook Mine and in the unloading of equipment that was being delivered to that mine. 23. Prior to commencing work at the Dartbrook Mine on 20 November 2003, Matthews conducted a risk assessment jointly with Sullivan and another crane crew, and completed a two page risk assessment Worksheet. Once Matthews had completed the risk assessment worksheet, Matthews, Sullivan and the other crane crew all signed off on the document. 24. The risk assessment worksheet completed by Matthews was a general pro-forma risk assessment document. Matthews stated when interviewed after the event, that this risk assessment worksheet did not form part of MCS's safety management system, or MCS's risk assessment system, and it had not been developed, assessed or approved for use by MCS. 25. According to Matthews, the two page risk assessment document was a copy of a document that he and other MCS employees had developed over time in the course of their employment. 26. Further, when interviewed after the incident, Matthews asserted that the two page risk assessment, completed prior to commencing work at the Dartbrook Mine on the subject morning, also applied to lifts to be conducted at Kayuga Mine, including the lift being conducted at the time of the subject incident. 27. Further, prior to commencing work at the Dartbrook Mine on 20 November 2003, Matthews was also required to perform an inspection of the Franna crane and to complete an inspection logbook in accordance with the "Section 103 scheme" in operation at the Kayuga Mine. The inspection logbook for the Franna crane inspected during the course of the investigation into the subject incident had not been completed prior to work commencing at the Dartbrook Mine and/or the Kayuga Mine on that day, but had been completed two day's prior. The Subject Incident 28. During the course of the morning of 20 November 2003, Atwood was allocated to deliver the two trailers from MCS's yard in Muswellbrook to the Kayuga Mine. 29. Similarly, in the course of that morning, Matthews was directed to drive the Franna crane accompanied by Sullivan (the dogman), to the Kayuga Mine for the purpose of unloading the two trailers. 30. On their arrival at the Kayuga Mine, Matthews, Sullivan and Atwood all attended the Defendant's office where, in accordance with the Defendant's SHE management plan, they completed the Visitor's Contractors Sign In book. 31. While at the Defendant's office Matthews spoke with Clark and David Clarence of Roche. Clark and Clarence instructed Matthews to place the two trailers on the Kayuga Mine hardstand. 32. At the hardstand, Atwood parked the semi trailer, while Matthews positioned the Franna crane adjacent to the semi trailer. The chains were then placed on the crane hook and the crane was moved into position so that the trailer closest to the cabin of the semi trailer could be "slung". 33. Matthews did not undertake a risk assessment prior to the subject lift at Kayuga Mine. When interviewed after the event, Matthews stated that, in his opinion, the risk assessment undertaken at Dartbrook Mine also applied to the work he was to carry out at the Kayuga Mine such that he and Sullivan did not need to complete a further risk assessment before commencing to lift the trailers off Atwood's semi-trailer onto the hardstand at the Kayuga Mine. 34. The crane Matthews was operating in the course of the subject incident was an 18 tonne Franna model AT-18 bearing registration number 039-FNK. This Franna crane was fitted with a Crosby "swivel type" crane hook with a bow fitting. The casting of the Crosby crane hook bore two marks at 45 degrees from the vertical indicating the area within which the slings or links should remain. 35. The lifting chains selected by Matthews and Sullivan for use in unloading the two trailers consisted of two sets of two-leg chains. Each set of chains consisted of an oblong link to which was attached two lengths (or legs) of chain. The overall length of each of the chain sets was approximately 4.6 metres. The end of each leg was fitted with a Clevis type safety hook and each leg of each chain was also fitted with shortening hooks. 36. The rating of the Crosby hook and bow combination and the chains were all appropriate for the proposed lift. 37. Sullivan connected the oblong link in each of the two sets of lifting chains directly to the Crosby hook by placing the oblong links directly onto the hook. 38. The lifting chains had been shortened for a previous lift and had been returned to the Franna crane's equipment box without the shorteners being released. Sullivan did not release the shorteners before proceeding to sling the subject load. When interviewed after the event, Matthews stated that the chains were "a bit wide on the legs" because the chains had been "shortened" by about 700 to 800mms. Matthews confirmed that this involved shortening the legs by double that amount of chain [ie 1,400 to 1,600mms of chain]. 39. Once the boom arm of the Franna crane had been placed into position over the trailer closest to the cabin of the semi trailer, Sullivan climbed up onto the semi trailer and connected each of the four legs of the lifting chains to the trailer. 40. Each of the trailers was fitted with four lugs that had been welded to the top rail at either end of each trailer. These lugs had been used to fit fans to the underground trailers when they were in use at the Dartbrook Mine. One of the lugs at the drawbar end of each trailer was offset. 41. One of the lugs at the drawbar end of each trailer was offset and there was no working load limit marked on the lugs. Sullivan used the lugs as "lifting lugs". Sullivan proceeded to sling the first trailer by connecting the self-locking Clevis hooks at the end of each of the four legs of the lifting chains to one of the lugs. 42. Once Sullivan had completed slinging the first trailer, Matthews raised that load. 43. As soon as the trailer had been lifted clear of the deck of the semi trailer, both Matthews and Atwood saw that the load was hanging at an angle, drawbar down and that one of the legs of the chains was slack. 44. Also, Matthews could see the chains were widely separated. 45. Matthews and Sullivan proceeded with the lift without re-slinging the "underground trailer" to address the wide separation of the chains and the uneven distribution of the load. 46. Matthews reversed the Franna crane until the trailer was clear of the semi trailer. Then, while still reversing, Matthews began to lower the load towards the ground. 47. At some point during the course of the lift, Matthews saw Sullivan approach the trailer. Matthews also saw Sullivan start to move the trailer. The load was not fitted with a tagline which Sullivan could otherwise have used to control the load whilst remaining at a distance from the load. 48. When interviewed after the event, Matthews asserted the load "looked quite safe where it was". 49. At about 1.00pm, whilst Matthews was continuing to operate the crane, he heard a loud noise. He stopped the crane and then saw the trailer on the ground. 50. Matthews got out of the cabin of the Franna crane. Matthews then saw that Sullivan was on the ground underneath the trailer. Matthews also stated, when interviewed after the event, that he saw "chains" on the ground at this time although he was uncertain whether more than one set was off. 51. Atwood, who had been preparing the second trailer for unloading from the semi trailer, also saw Sullivan underneath the first trailer. 52. Atwood jumped down off the back of the semi trailer and approached the trailer. Atwood saw that the trailer was over Sullivan's chest, pinning Sullivan down. 53. When Atwood approached the trailer, Atwood saw that one of the sets of chains had become dislodged from the crane hook. Atwood then rearranged the set of lifting chains still connected to the trailer so that Matthews could use the Franna crane to lift the trailer away from Sullivan. 54. After Atwood had rearranged the chains on the load, Matthews llifted the trailer clear of Sullivan by raising and then retracting the boom arm of the Franna crane. 55. Once the load was clear of Sullivan, Matthews lowered the trailer to the ground. 56. Matthews then alighted from the Franna crane and disconnected the remaining chains from the crane hook. 57. Matthews then drove the crane up to the Kayuga Mine offices to get help. 58. Once Matthews had reported the incident at the Kayuga Mine offices, he drove the Franna crane back down to the Kayuga Mine hardstand. After he returned to the hardstand, Matthews disconnected all of the Clevis hooks from the "underground trailer". 59. Further, when the chains were inspected late that afternoon by Paul Drain, Mine Safety Officer, the shortening hooks on each leg of the lifting chains had also been released. 60. Sullivan died at the scene. An autopsy found that Sullivan had suffered injuries consistent with a single, very heavy impact to the left side of the body. 61. Immediately following the incident, Atwood observed that one of the sets of lifting chains was on the ground. 62. Further, after the event, the safety latch on the Crosby hook [ie the lifting hook] attached to the Franna Crane was found to have broken off and was located on the ground in the vicinity of the incident. 63. After the incident, the Franna crane, the Crosby hook, the lifting chains and the trailer were examined for any mechanical failure that may have contributed to the subject incident. This post-accident examination of the lifting equipment did not disclose the existence of any faults in the lifting equipment that may have contributed to or caused the subject load to collapse in the manner described. 64. However, investigations conducted after the event established that the safety latch from the Crosby hook had suffered from significant metal fatigue prior to the subject incident. But, consistent with significant impact damage to the inside rails of the safety latch, expert examination of the safety latch indicated that the safety latch actually failed on the day "....as a result of overloading on the inner sides of the safety latch due to contact with the lifting device engaged in the hook". 65. At the time of the subject incident the Defendant had taken steps to duplicate the SHE plan that had been developed for the Dartbrook Mine. The Defendant's SHE plan was designed to encompass occupational health and safety and environmental risk management in the development of the Kayuga Mine and relevantly included a SHE Contractor Management system that was to be applied to all contractors. 66. The Defendant's contractor management system provided for the management of risks associated with the operations of contractors at the Kayuga Mine by requiring contractors to submit themselves for assessment under the Kayuga contractor management system prior to the contractor being permitted to commence work on the Kayuga Mine. The nature and extent of the assessment to be conducted under the system was to vary in accordance with a risk rating. This system, if fully implemented, would have required MCS to have supplied a detailed MCS SHE Management Plan and approval of that plan by the Defendant's Contract Holder and Contract Co-Ordinator prior to MCS commencing work at the site. 67. The Defendant's contractor management system also made provision for "on the spot" walk and talk type contractor audits, as well as annual check list style audits designed to identify areas for improvement and rectification of contractor risk management at the Kayuga Mine. 68. The Defendant's contractor management system was designed to include assessment of the safe work methods (including documentation), risk assessments and actual work practices on site, including but not limited to the safe work methods, risk assessments and "lifting safety" of its crane contractors, including MCS. 69. But, as implemented, the Defendant's contractor management system did not ensure safety in that it did not ensure: · MCS had in place a safe system of work with respect to the conduct of lifts to be performed at the Kayuga Mine, including a proper work method statement with respect to the safe operation of its Franna cranes; · MCS had in place proper risk assessment systems, including that ensured MCS employees actually conducted a safe risk assessment prior to commencing work at the Kayuga Mine. 70. After the event, in compliance with a prohibition notice issued under section 63 of the CMRA, the Defendant banned cranes from the site until such time as Kayuga and AC(DM) had conducted an investigation of the subject incident. The investigation included a review of the SHE systems in place at the Kayuga and Dartbrook mines and recommended changes, which were implemented, to the SHE system which were designed to avoid the recurrence of such an incident. 71. Following its investigation and review, the Defendant introduced a new procedure for crane operations that require the lifting company to carry out a detailed review of proposed crane operations prior to any work being performed at the Kayuga Mine. Under the new work procedure, an officer of the Defendant reviews: · Each lifting task to be undertaken; · The type of plant to be used; and · The technical documents used to determine the lift method. 72. The relevant officer of the Defendant reviews the Mobile Crane pre-use check list to ensure that: · The task to be undertaken has been the subject of an onsite evaluation by appropriately qualified staff of MCS (or any other contractor providing lifting services); · An appropriate work method is adopted and where appropriate, that additional expert review and advice has been obtained. 73. The relevant officer of the Defendant reviews the form that records the details of the following documentation: · the operational and inspection papers associated with the cranes to be used in the subject operation (including Section 103 log books and contractor risk assessment documents); · the paperwork associated with certification of the lifting chains, slings and lifting attachments to be used in the subject operation; and · certificates of competency of both crane drivers and dogman assigned to the lifting. 6 For the defendant two affidavits were read, both sworn by Timothy Charles Hobson who was the General Manager, Long Wall Improvement Project of Kayuga Management, a position held since late August 2006. His previous position was General Manager of AC(DM) Ltd a position held between July 2003 and August 2006. While General Manager of AC(DM), Mr Hobson was also appointed as General Manger of the defendant, Kayuga Management. That position was held from November 2003 until June 2004. As the General Manager of Kayuga Management and AC(DM) he was responsible for the overall management, supervision and administration of Kayuga Management and AC(DM) mining operations including strategic planning and policy establishment. As General Manager for Kayuga Management and AC(DM), Mr Hobson reported directly to the General Manager, Underground Operations of Kayuga Management and eight AC(DM) and Kyuga Management personnel reported to Mr Hobson. Prior to his employment with Kayuga Management, Mr Hobson had many years experience in the coal mining industry. 7 Up until he was appointed General Manger of Kayuga Management, the Kayuga and Dartrook Mines were "operationally and statutorily separate". Mr Hobson said that, to ensure a consistent approach at the two mines, the policies and procedures in place at AC(DM) were reviewed and tailored to the Kayuga project with separate plans and procedures implemented for the Kayuga project. Employees and contractors seconded to the Kayuga project were inducted in the Kayuga procedures. Where it was appropriate, resources between the Kayuga and Dartbook Mines were shared, including human resources, training, commercial and technical services. As part of the transition leading up to the time when the long wall mining of the Kayuga seam was to be conducted by AC(DM) the two mines became more closely related in an operational sense and this increased after Mr Hobson's appointment as General Manager. 8 After the incident in December 2003, AC(DM) assumed statutory responsibility for the Kayuga mine: thereafter the Kayuga mine ceased to exist as a separate coal mine and the Kayuga seam became part of Dartbrook Mine. 9 Mr Hobson stated that the defendant was responsible for all operations and activities in connection with the Kayuga project and Kayuga mine. That work and those activities continued until the commencement of the long wall installation in the Kayuga seam that took place around early May 2004. Since that time, the defendant had not operated and there were no plans for the defendant to exist as an operating entity in the future. The defendant was a shell company with no plans to recommence business operations and the purpose of the defendant was to carry out and complete the Kayuga project which had been achieved. 10 At the time of the accident, AC(DM) employed approximately 210 people and Kayuga Mangement employed two people, one of whom was employed in a clerical position. Approximately 19 AC(DM) employees were seconded to work at or in relation to the Kayuga mine and the defendant engaged a number of contractors for different tasks at the Kayuga Mine. The contractors provided specialist services that neither Kayuga nor AC(DM) had the capacity or resources to provide. The number of contractor employees at Kayuga Mine varied but there were approximately 250 such employees. That number gradually dropped over a 12 month period leading up to the time that AC(DM) commenced long wall production of the Kayuga seam in June 2004. 11 The Kayuga Mine was principally developed by contractors performing amongst other things civil construction work, electrical installation work and crane lifting and associated services. To manage the contractors and their employees, the Kayuga project team was created within the organisational structure and consisted of management and technical staff seconded by AC(DM) as well as specific personnel engaged directly by Kayuga Management to provide particular expertise including in relation to safety. A designated project manager reported directly to Mr Hobson. There was a project steering committee of which Mr Hobson was a member. The steering committee reviewed work performed at the Kayuga mine and reported monthly to Kayuga Management. Kayuga Management appointed the statutory personnel in compliance with obligations under the Coal Mines Regulation Act 1982, all holding relevant certificates from the Department of Mineral Resources and all being otherwise appropriately qualified. Those personnel were mine manager, under manager in charge, shift under manager, deputies, mechanical engineer, electrical engineer, ventilation office and mining surveyor. 12 Geoffrey Miller, a consultant trading as Specialist Safety Services Australia, was engaged by Kayuga Management to provide services ensuring safety of the Kayuga project. Under the consultancy agreement, occupational health safety and environment services were provided for the project as well as contract supervision. TeroTechnology Services Pty Ltd ("TeroTechnology") was also engaged by Kayuga to provide services including mechanical engineer in charge of functions for the project and mechanical engineering project works as directed by Kayuga Management. TeroTechnology nominated a particular representative, David Clark, to provide these services: Mr Clarke was the mechanical engineer appointed in accordance with the requirements of the Coal Mines Regulation Act and was acting project manager. 13 Mr Hobson stated that Kayuga Management had a range of systems to manage contractors including pre-assessment of contractors, involvement of contractors in induction, training and toolbox talks, reporting and auditing of contractors' safety performance and the involvement of contractors in the development of safety initiatives. Roche Mining Pty Ltd ("Roche") was appointed as the principal contractor for the development of the project. Kayuga Management and AC(DM) also frequently engaged as a specialist crane contracting company MCS to provide cranes and crane crews for lifting services as required. Neither Kayuga Management or AC(DM) had, nor wished to have, specialist equipment skills and knowledge as possessed by MCS. MCS was a Hunter Valley-based company providing crane and heavy haulage services to industries in and around the Hunter Valley. It was a long term supplier to Anglo Coal mines in the Hunter Valley and had provided services to Drayton Mine (owned by Anglo Coal) since the 1980s and had been the supplier of crane services to Dartbrook Mine since 1994 and also to the predecessor owner and operator of Dartbrook mine, Shell Coal and the engineering company engaged to construct the mine. 14 MCS was said to be a significant supplier to AC(DM) and Kayuga Management because crane lifting services were frequently required at the mines, including for tasks requiring the loading and unloading of heavy mining equipment from trucks, high lifts at the coal wash plant or general assistance in construction activities. MCS was therefore frequently engaged by Kayuga Management or AC(DM) or collectively for services costing approximately $500,000 per annum. During the ongoing provision of services, MCS received instruction from and was at times supervised by AC(DM) and Kayuga Management personnel, including the mine mechanical engineer, contract co-ordinators or the supply co-ordinators. Through this instruction and supervision, MCS was aware of both the AC(DM) and Kayuga Management safe system of work, induction and contractor management systems. 15 In late October 2003 and prior to the accident, Mr Hobson met the General Manager of MCS Gary Myer and visited the Muswellbrook depot of that company. He had inspected the facilities and introduced himself to a number of staff members to satisfy himself about the suitability of MCS to perform the work at Kayuga and Dartbrook Mines. Mr Hobson was aware that Mr Clark, Mr Miller and other employees and persons engaged by AC(DM) and Kayuga Management had also visited the depot to discuss upcoming work and to satisfy themselves as to the company's competence and safety practices during the course of the Kayuga project. During the time MCS had been engaged to perform work at Dartbrook and Kayuga Mines and up to the date of the accident there had been no significant incidents and there were no lost time injuries recorded involving the defendant at any Anglo Coal mine. Mr Hobson stated that MCS was used by Kayuga Management because of its proven safety performance at Anglo Coal mines and because the company had demonstrated that it was skilled and competent to perform lifting work safely. 16 At the time of the incident, contractors at the Kayuga Mine (including MCS) were required, as a minimum, to comply with the defendant's safety health and environment standards and requirements and were subject to the defendant's safe systems of work. Although these systems were intended to apply to MCS employees at the defendant's mine at the time of the accident they were not fully implemented: they included safety, health and environment management plans applying to contractors, standards for the control of contractors and their equipment, including lifting equipment ,systems for identifying registering, managing and auditing risk, a system of job observation to ensure contractors carried out their work safely, a system for auditing contractors' systems of work, a system for accessing the mine site for contractors and their equipment, induction and training for contractors including registration of such training, a visitor and contract registration sign-in book and a system for communication in the event of an emergency. There was a system to ensure the contractors were appropriately skilled and competent to perform the work for which they were engaged and whereby the contractors were able to demonstrate to Kayuga their safety compliance. The defendant awarded work on the basis of a contractor's suitability for the work which was determined by reference to the contractor's health and safety record and its demonstrated capacity to perform work safely. 17 The defendant also had a contractor evaluation team consisting of Mr Hobson, a technical services manager, contract holders and operations managers. A matrix was used by the team to determine the preferred contractor based upon a particular evaluation and ranking system. The considerations included the contractor's health and safety record within Anglo Coal and outside Anglo Coal, safety statistics, maintenance systems, technical expertise, personnel and recruitment and overall quality of systems. Because of its safety record and demonstrated capacity to perform lifts safely, MCS was not required to participate in the tender process or the evaluation process. 18 Mr Hobson's evidence as to the safety system adopted by the defendant were conveniently summarised by senior counsel for the defendant in the following way: (a) the defendant had a commitment to safety with a goal of zero harm; (b) the defendant's safety policy was regularly reinforced to employees and sub-contractors and there was an extensive safety health and environment management system for the Kayuga project; (c) contractors were required to comply with that system. The system included: the engagement of a safety consultant to provide services especially directed at ensuring safety at the projects; systems to manage contractors; a requirement that contractors complied with the defendant's safe system of work; a system to ensure that sub-contractors were appropriately skilled; a contractor evaluation team; safety checks on proposed sub-contractors and extensive safety health and environment management system that was accredited and was audited by an external body; the principal risk control hazard register used to identify and deal with principal hazards; a systematic risk management of identified hazards; conducting operational risk assessments and the development of a standard job instruction arising out of the risk assessment; implementation of the safety policy and procedures which included consultation with the workforce regularly reinforcing safety to employees and contractors; toolbox talks and pre-shift meetings for safety discussions regarding critical issues for the shifts; the establishment of a Safety Health and Environment ("SHE") committee for the mine meeting monthly; the holding of rolling stopwork safety fora involving all employees and contractors across a shift and emphasising safety as a number one priority; monthly presentations to all crew on safety issues and bi-monthly safety barbecues during which safety information was shared and discussed; positive recognition of safety performance by rewarding individuals demonstrating safety consciousness over an extended period; monitoring compliance with SHE standards, including pro-active monitoring and a safety observation system where unsafe acts were identified together with reactive monitoring, including encouragement of accurate reporting of incidents and near-misses and thorough investigation of those incidents; regular auditing of contractors to ensure they complied with their obligations; recruitment of employees aimed at identifying for interview only those persons who demonstrated an appropriate attitude to safety; induction of employers and contractors with emphasis on safety and a comprehensive training scheme designed to promote safe behavior in the attitude and actions of employees including training in risk identification, regular updates from the training department and reviewing the system and the training of all assessors and trainers to national competency based standards and to the national standard for workplace assessors. 19 In relation to the accident on 20 November 2003, Mr Hobson noted that the three employees of MCS were all trained and competent to perform the work associated with the transportation and lifting of loads. Mr Sullivan held a WorkCover dogging certificate from October 1999 and had worked at Dartbrook and Kayuga Mines since October 1999 when he was inducted; David Atwood held an RTA heavy vehicle driver's licence and had worked at Dartbrook and Kayuga Mines on occasions since December 1999 when he was inducted and Richard Matthews had held a WorkCover certificate for crane driving and dogging since May 1992 and had worked at Dartbrook and Kayuga Mines on occasions since March 1993 when he was inducted. When the crew arrived at the mine they received instructions from the mechanical engineer and acting project manager, Mr. Clark and from Mr Clarence the mechanical engineer on behalf of Roche about where the trailers were to be unloaded on the site. The crane lifts of the two trailers were to be carried out in the middle of the day in dry and stable conditions and in an area that was described as a flat, compacted earth surface. 20 A number of steps were identified by Mr Hobson as being taken immediately following the incident. They included: (a) external emergency services were contacted including ambulance and police and the DPI and the union district check inspector were notified; (b) Mr Geoff Miller the safety health and environment manager for the Kayuga project attended the scene and administered first aid to Mr Sullivan; (c) The Kayuga/Dartbrook emergency response plan was initiated and additional trained personnel with advanced life support equipment arrived at the scene; (d) Other Kayuga and Dartbrook personnel arrived at the scene to assist and ensure the safety and security of the area pending the arrival of an ambulance; (e) The DPI and the union district check inspector attended the site as did Mr Meyer and other MCS officers later in the day; (f) The incident was immediately brought to the attention of senior management of Anglo Coal, including directors of Kayuga; (g) All employees and contractors working at Kayuga and Dartbrook mines were offered counselling services. 21 The defendant fully cooperated with the investigation conducted by both the Police and the Department and made available to the Department the assistance of Mr Olsen, a mechanical engineer with approximately 40 years' mechanical engineering experience, as the defendant's nominated representative on the Department's investigation team. 22 A number of actions were implemented by the defendant after the accident and included the following: (a) a system was implemented requiring different levels of involvement and sign-off, depending on the complexity of the lift. Every lifting task requested of MCS was assessed by one of its representatives to determine the level of complexity of the task and the level of supervision required. The systems also required that a risk assessment was completed prior to any lift on site and that the risk assessment was undertaken at the location of the lift involving persons who would be conducting and/or supervising the work. An Anglo Coal representative, Mr Clark, reviewed documentation provided by MCS, being the equipment logbooks, risk assessment documents, certification of lifting chains, slings and lifting attachments to be used for each lift and certificates of competency for personnel performing lifting tasks; (b ) A prestart checklist was prepared to ensure that an evaluation of a lift at Kayuga mine occurred and that all elements of the system were implemented; (c) all employees were retrained in slinging/lifting activities and, in particular, on the hazards of poor slinging practices, using toolbox discussions. The importance of lifting equipment inspections was highlighted; (d) An internal safety accident notification was circulated to all employees; (e) the use of cranes on site was suspended for approximately one month; (f) Kayuga's system to manage contractors was reviewed as to the effectiveness of controls in place to manage them. No substantive issues were identified. However, a greater emphasis was placed on auditing to ensure ongoing monitoring and improvement of contractor safety; (g) Kayuga Mine's mine manager conducted a review of all contractors engaged on site in relation to induction, authorisation/training/competency, supervision, risk assessment and safe job instructions, equipment introduction and inspections and safety observation reports. No issues concerning contractors were identified as part of this review; (h) discussions were held with Muswellbrook Crane Services to review its system of work. As part of this review, the safe work procedure manual, risk assessment process and documentation, equipment inspection systems, training and qualifications of MCS employees were all reviewed. In association with this view, the mobile crane pre-use checklist was implemented and has been reviewed on an ongoing basis; (i) a review of underground lifting equipment used by maintenance personnel was undertaken against the relevant Australian Standard. The outcome of the review was to confirm the adequacy of the existing system by which, every three months, there was an inspection of lifting equipment by external consultants and work orders were issued to maintenance employees requiring inspection of lifting equipment used by maintenance personnel; and (j) all employees, including contractors' employees, were retrained in emergency procedures and the frequency of retraining was increased. Arrangements were also made for employees and permanent contractors to undertaken behavioural-based safety training to heighten their awareness of safety and entrench safety as part of their personal work practices. 23 The defendant provided immediate and ongoing assistance to the family of Mr Sullivan including financial assistance by way of an ex gratia payment of $25,000; meetings with family representatives generally occurring every few months; and the establishment of a commemorative site and plaque in memory of Mr Sullivan. The defendant expressed its deep regret that the accident occurred. Anglo Coal remained concerned to ensure that a similar accident did not occur at any of the mines within the Anglo Coal group. DELIBERATION 24 The defendant accepted that there were significant defects in its system of safety in dealing with contractors, so widely used on this project. A major focus of the submissions was that the defendant had relied on the expertise of MCS, an expertise which the defendant did not possess and that, properly viewed, the accident was not readily foreseeable by the defendant. The precise cause of the disconnection of the load was unknown and the absence of adherence to good lifting and rigging practices was peculiarly within the knowledge and expertise of MCS. In short, it could not be concluded that the falling of the trailer during the lift was foreseeable by this defendant. If the falling of the trailer was not foreseeable by the defendant then its culpability was reduced. Further, the knowledge and the work systems were those of MCS and its culpability was at a higher level than that of the defendant. It was submitted that the charges against the defendant, when compared with the particulars of the charge brought against MCS, indicated that the prosecutor proceeded on the basis that the system of work was that of MCS. That fact had to be reflected in the level of culpability attributed to MCS. 25 It is important to recognise that, in terms, the defendant has not been charged with a failure to prevent the trailer from falling during the course of being lifted. The particulars of the charge have been set out earlier, but the essence of the charge against the defendant was that it had failed to ensure that persons other than its employees were not exposed to risk to their health and safety arising from the conduct of the defendant's undertaking while those persons were at the defendant's place of work: the defendant had failed to ensure that employees of MCS were provided with or maintained a safe system of work in relation to the conduct of lifts to be performed using a Franna crane and that there was a failure to ensure that employees of MCS were provided with and/or maintained any proper system with respect to the assessment of risk associated with the conduct of lifts to be performed at the site using mobile Franna cranes. The accident that took place on 20 November 2003 and the surrounding facts presented the evidentiary basis for the charge as particularised. Full Benches exercising this aspect of the Court's jurisdiction have frequently warned against a focus on the incident rather than attention being paid to the alleged risks to safety. 26 What is significant in these proceedings is the fact that the defendant decided to conduct the project with only two employees and engaged the rest of the workforce by using contractors. It was quite entitled to take that course in operating its business but that approach required a heightened attention to the systems of safety adopted by contractors. The defendant had a general duty under the Coal Mines Regulations to regularly assess and identify risks in order to eliminate, control or manage the risks. Mr Miller was engaged as a consultant to provide services specially directed at ensuring safety at the project and contract supervision. TeroTechnology provided services under a consultancy agreement, including mechanical engineering in charge functions and mechanical engineering project works through a mechanical engineer - Mr David Clark - who was also acting as project manager. Mr Hobson went into great detail as to the range of systems adopted by the defendant to manager contractors, but conceded that not all of those systems were in operation at the time of the accident. The system of work adopted by the defendant required all contractors to observe requirements laid down by the defendant, including its safety, health and environmental management plan. Having directly involved itself with its contractors in this way, it is not open to the defendant, in this sentencing exercise, to simply state that it was in the hands of a specialist crane and lifting company when those types of services were required for the project. The thrust of the charge was not to require the defendant to become an expert in crane and lifting operations but required the defendant to ensure that employees of MCS were provided with or had maintained a safe system of work in respect of the conduct of the lifts and that they would be provided with or had maintained a proper system in relation to the assessment of risk associated with the conduct of lifts to be performed on the site. The array of other expert consultants engaged by the defendant were available to discharge that duty - that did not occur. It is likely that MCS had proved not only reliable but competent in this specialised field and had done so over a lengthy period of time which may have lulled the defendant into a false sense of security and a view that it was unnecessary to apply to this contractor the same standards that were imposed on other contractors. 27 The failure to conduct a risk assessment of the work to be performed at this site was in breach of well-known and identified safety standards. A requirement of the defendant that MCS provided its risk assessment and work method statement for this lift would have immediately exposed the fact that the risk assessment laid down by the company's system was not the risk assessment in the possession of the works crew on this day but had been adapted from another mining company. It would also have exposed the fact that the risk assessment, such as it was, was one adopted for work performed earlier at Dartbrook and was not specifically focused upon the work to be conducted at the defendant's project site. The shortening of the chains, the fact that the chains were "a bit wide", the use of oblong hooks, the attachment of more than one sling to a cranehook, the attachment of the hooks to non-lifting lugs on the trailer, the unevenness of the load and the failure to use a tagline in the circumstances were all contrary to documented proper lifting and rigging practice. 28 The foreseeability was not of this particular accident, but the foreseeability that, when performing crane lifts of heavy equipment used in the mining industry, a failure to adopt accepted safety practices would result in the risk that the lifted load will drop and be a danger to those working within the vicinity. 29 I accept the defendant's submission that the evidence does not demonstrate that Mr Sullivan actually engaged in what is described as "walking the load", that is, walking beside the load and guiding it with his hands. From the material before the Court, it seems clear that Mr Sullivan was moving to walk the load and, while he may have momentarily commenced to do so, the evidence does not go so far as to establish that this occurred over a sustained period of time. 30 Viewed from the charge as particularised and the numerous departures from good and safe rigging practice that occurred under the proposed close scrutiny of the defendant, the risk of a load falling was real, foreseeable and easily addressed by adherence to well-known standards. The breach is properly considered to be a serious breach of the defendant's obligations under the Occupational Health and Safety Act. That finding does not flow from an absence of attention to safe systems by the defendant - indeed, there is considerable evidence of the defendant's safety system but this incident highlighted certain defects in that system and the fact that the system had not been fully implemented. The steps taken by the defendant to create that significant system cannot be dismissed as amounting to no more than a paper system that was not enforced and the seriousness of its offence is to be judged in that light. 31 For reasons articulated by the prosecutor, I am unable to accept the defendant's submission that its culpability was less, and significantly less, than that of MCS. The defendant and MCS have been charged with different offences arising from their different status at this site. They were both charged with a breach of the Act raising the same issue of safety standards required to be in operation while unloading heavy equipment for use in the mining industry. There is a need for consistency at least in sentencing defendants in what might be broadly described as related proceedings. While the differing roles of the defendant and MCS in performing lifts in the mining industry at this project are to be kept in mind, on an overall assessment there is little discernible difference in the culpability of the two companies. Section 8(1) and (2) imposes significant duties in relation to an employer's own employees or the employees of others. They are interlocking duties in an overall system framed to ensure safety in the workplace. 32 It is accepted that general deterrence is a significant factor in setting an appropriate penalty. The present case represents another example of employers feeling a lesser sense of obligation in relation to workplace safety because a well-respected and competent expert is engaged by way of contract to perform certain tasks. This case serves to reinforce the obligations set out in the Act. The position with specific deterrence is different in this case. The evidence shows that the defendant was incorporated for the purposes of a limited task in developing the Kayuga seam. Once that task had been completed there was no further purpose for the company to exist. This approach is perhaps highlighted by the fact that the workforce was overwhelmingly provided by consultants and contractors. I accept the evidence that there was no intention for this company to continue in operation, that it has since been treated as a shelf company and remains in existence while these proceedings are on foot. Having regard to those matters, this is one of those special cases where specific deterrence will not play a role in the setting of the penalty. 33 In relation to subjective factors, the defendant has no prior record, although it seems to have come into existence in about 2001 when Dartbrook was granted consent by the Department to develop the Kayuga seam. The defendant has operated over this relatively short period with a contractor workforce involving some 250-odd persons at its height. Allowing for this history, its safety record in an inherently dangerous industry is, nevertheless, to be regarded as a good record. 34 I am satisfied that the defendant entered its plea of guilty to an amended Application for Order at the earliest opportunity. The defendant urged that something more than the usual 25 per cent discount for an early plea should be allowed in circumstances where, if the matter had gone to trial, the prosecutor had approximately 40 statements from likely witnesses, together with reports from four experts. It was estimated that a contested hearing would have occupied two to three weeks and, perhaps longer. In those circumstances, the Court was urged to exercise its discretion at the top, or even to extend the range mentioned in R v Thompson (2000) 49 NSWLR 383. In my view, the utilitarian value of the plea in this case is considerable but that benefit is properly met by a discount of the penalty by 25 per cent. 35 The evidence demonstrates considerable steps taken by the defendant prior to the accident to create a safe system of work and also demonstrates the further steps taken to address the risks thrown up by the accident involving Mr Sullivan. The defendant also co-operated with the Department of Primary Industries especially in relation to a re-creation of the events of the day using the same crane and trailers. There was co-operation in the compilation of an extensive Agreed Statement of Facts for the purposes of the sentencing hearing. In addition, the defendant has shown contrition in relation to the treatment of Mr Sullivan's family, the arrangements made in relation to the remainder of the workforce as well as the contrition shown by the entering of the early plea. Together with its good safety record, a further significant discount in penalty is justified. ORDERS 36 (1) The defendant is found guilty of a breach of s 8(2) of the Occupational Health and Safety Act 2000 as particularised in the amended Application for Order in Matter No. IRC 5852 of 2005, to which the defendant pleaded guilty. (2) The defendant is fined the sum of $125,000 with half that sum to be paid to the prosecutor by way of moiety. (3) The defendant is to pay the costs of the prosecutor in a sum as agreed or, in the absence of agreement, as ordered by the Court. AMENDMENTS HISTORY: 15/02/2007 - Words "Workcover Authority" replaced with "Department of Primary Industries" - Paragraph(s) 35 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.