Industrial Relations Commission of New South Wales in Court Session CITATION: Inspector Patton v Australian Steel Mill Services Pty [2006] NSWIRComm 372 PROSECUTOR: Inspector John Patton (WorkCover Authority of NSW) PARTIES: DEFENDANT: Australian Steel Mill Services Pty (ACN 003 705 673) FILE NUMBER(S): IRC 5338 of 2005 CORAM: Schmidt J CATCHWORDS: Occupational Health and Safety - prosecution under section 8(1) of the Occupational Health and Safety Act 2000 - steelworks industry - plea of guilty - contract with BlueScope Steel (AIS) Pty Ltd - work involving removal and processing of slag - exposure to carbon monoxide gas - employee collapsed into unconsciousness during uncontrolled gas leak - failure of safety system - specific and general deterrence - parity considerations - mitigation - penalty imposed LEGISLATION CITED: Crimes (Sentencing and Procedure) Act 1999 Occupational Health and Safety Act 2000 Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsey) (2000) 49 NSWLR 610 Inspector Brett Martin v Encore Tissue Pty Limited [2005} NSWIRComm 271 Inspector David Waterhouse v Innovative Property Developments Pty Ltd and Others [2006] NSWIRComm 97 CASES CITED: Inspector Patton v Bluescope Steel (AIS) Pty Limited [2006] NSWIRComm 283 Inspector Patton v Serco Australia Pty Limited [2006] NSWIRComm 284 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Tyler v Sydney Electricity (1993) 47 IR 1 HEARING DATES: 24/11/06 DATE OF JUDGMENT: 12/06/2006 PROSECUTOR: Mr P Skinner, counsel SOLICITORS: Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANT: Mr B Hodgkinson SC with Mr D Jordan SOLICITORS: Sparke Helmore JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Schmidt J 6 December 2006 Matter No IRC 5338 of 2005 INSPECTOR JOHN PATTON v AUSTRALIAN STEEL MILL SERVICES PTY Prosecution under section 8(1) of the Occupational Health and Safety Act 2000 JUDGMENT [2006] NSWIRComm 372 1 On 11 April 2004, there was an uncontrolled release of blast furnace gas from the steelworks at Port Kembla owned by BlueScope Steel Pty Limited ('BlueScope'), where some of the defendant's employees worked under an arrangement with BlueScope. As a result, a number of people at the site were exposed to carbon monoxide gas, including employees of the defendant. The defendant was charged with an offence under s 8(1) of the Occupational Health and Safety Act 2000 ('the Act'). A plea of guilty was later entered to an amended charge. This judgment deals with the question of penalty. 2 The amended charge to which the plea was entered provided: DID FAIL To ensure the health, safety and welfare at work of its employees including Robert Russoniello ('the injured worker') contrary to s8(1) of the Occupational Health & Safety Act 2000. PARTICULARS OF THE DEFENDANT'S FAILURES ARE AS FOLLOWS: 1. At all material times the defendant was under a contract to BlueScope to conduct the removal and processing of slag at the plant. Slag being a by-product from the steelmaking process. 2. BFG is a clear, colourless and odourless gas comprised of a number of gases, including carbon monoxide. High concentrations of BFG can be toxic if inhaled. 3. At approximately 2.00am on 11 April 2004, a gas leak was detected in No. 5A precipitator ('the precipitator'). Between 2.00am and 3.00am BlueScope employees decided to repair the precipitator. These repairs required the goggle valves on the precipitator to be closed. During the repairs, the inlet goggle valve failed to close properly due to a faulty solenoid, resulting in an uncontrolled release of gas into the atmosphere at the blast furnace. 4. Due to calm atmospheric conditions, the gas which had escaped from the precipitator and the fault goggle valve, did not disperse and Robert Russoniello was exposed to a risk of injury arising from inhalation of high concentrations of gas which had escaped from the goggle valve. 5. Two other employees of the defendant, Michael Maksovic and Darren McCauley, were also exposed to risk of injury during the period of the emissions from the escaping BFG gas but were not overcome to the same extent as the worker. 6. Between approximately 2.00am and 3.00am on 11 April 2004 there was a risk to the safety of the defendant's employees working on the cast house floor at the blast furnace due to possible exposure to BFG. None of the workers, however, suffered permanent injuries as a consequence of the exposure. Robert Russoniello, however, was rendered unconscious by his exposure and was taken to Wollongong Hospital for treatment. He returned to work at the start of his next roster. 7. The defendant failed to ensure that its systems of work and the environment of its employees at the blast furnace was safe and without risk to health in that: (a) It had not conducted an appropriate risk assessment in relation to the possible exposure of its employees at the blast furnace to high levels of BFG. (b) That the safe work procedure for responding to emergency situations did not specifically identify the need for immediate evacuation when the levels of BFG were dangerously high. (c) It did not ensure safe work procedures in place were followed when there was an uncontrolled gas leak in calm atmospheric conditions. (d) Working on the cast house floor was unsafe in the event of a major gas leak at the blast furnace due to a lack of indicators which indicated the concentrations of carbon monoxide present in the atmosphere. 8. The defendant failed to provide sufficient information, instruction, training and supervision in relation to a safe work procedure to be followed in the event of an uncontrolled gas leak, such as that which occurred. 3 An agreed statement of facts was tendered. It provided: 1. At all material times the prosecutor was an inspector duly appointed under division 1 of Pt 5 of the Occupational Health & Safety Act 2000 and empowered under s106(1)(c) of the said Act to institute proceedings in the within matter. 2. At all material times AUSTRALIAN STEEL MILL SERVICES PTY ACN NO. 003 705 673 (' the Defendant' ) was a company duly incorporated in New South Wales and having its registered office at "Recycling Area" Springhill Road, Port Kembla in the state of New South Wales. 3. At all material times the Defendant was under contract to Bluescope Steel (AIS) Pty Limited [ACN 000 019 625] (' Bluescope' ) to carry out work involving the removal and processing of slag from its steel works at Five Islands Road, Port Kembla in the state of New South Wales. 4. Within the steel works was an area in which a blast furnace known as the No. 5 blast furnace (" the blast furnace ") and its associated plant and equipment and access ways were situated (hereinafter referred to as ' the plant '). 5. At all material times the Defendant was an employer. 6. At all material times the Defendant employed Robert Russoniello (' the injured worker ') Michael Maksovic and Darren McCauley to work at the blast furnace. 7. At all material times the blast furnace produced molten iron for processing into steel. 8. At an inspection of the plant on 11 April 2004 by the prosecutor and WorkCover Inspector Grant Vosu, observations were made including the following: (a) The blast furnace building was a large structure of steel beams, columns, angles and metal sheeting over several levels. Some of this blast furnace building was exposed to the outside environment, particularly on the southeast side on the lower levels. (b) Access to the various levels of the blast furnace was mainly over steel grated walkways and stairs. (c) On level 2 of the northeast, southwest and northwest sides of the building were three cast house floors constructed of metal. These were referred to as numbers 1, 2 and 3 cast house floors. The furnace itself was central to these three floors. (d) To the north side of the blast furnace on the No. 3 cast house floor was a small room referred to as the Defendant's No. 1 workstation. This workstation was a room constructed of steel plate and had an air conditioning unit set on a recycle setting within it. The room also contained a telephone and a two way radio for communication. (e) Adjacent to the Defendant's No. 1 workstation was a doorway exiting from the number 3 cast house floor to the outside of the building. The door was fixed in the open position. (f) On the eastern side of level 4 of the blast furnace was situated a room referred to as the gas furnace RFW (reticulating fresh water) distribution room. (g) There was a large steel pipe approximately 2.4 metres in diameter leading from the blast furnace which joined several large plant structures and led to a large steel tank. This tank was situated some 70 metres southeast of the blast furnace and was known as the 'precipitator tank'. (h) There were two precipitators within the precipitator tank, the 5A precipitator and the 5B precipitator. On both ends of 5A precipitator were large valves consisting of a circular metal plate and estimated at approximately 2.4 metres diameter each. (i) These were known as goggle valves. The valve on the northeast side of the precipitator was referred to as the 5A inlet goggle valve. Movement of the inlet goggle valve was by hydraulic pressure. (j) The valve on the southwest side of the 5A precipitator was referred to as the outlet goggle valve. Movement of this valve was by use of a gypsy chain 9. During the manufacturing process when the iron is produced the furnace is 'tapped' and molten iron flows through channels known as 'troughs' to torpedo ladles on railway tracks which are located under the blast furnace floors. The process is a continuous one. Each 'tap' of the blast furnace takes about 2.5 hours. While one cast house floor is "running" with molten iron the other two cast house floors are being cleaned and the troughs readied for the next set of "taps". 10. At all material times the manufacturing process was controlled by a Bluescope operator in a control room which was located on level 3 of the blast furnace. 11. One of the by-products of the iron making process in the blast furnace is called blast furnace gas ('BFG'). BFG comprises the following: (a) Nitrogen - 45-55%; (b) Carbon monoxide - 20-30%; (c) Carbon dioxide - 20-30%; (d) Hydrogen - 0-10%. 12. Carbon monoxide is a colourless, odourless gas that produces toxic effects by inhalation that increase with the concentration of the gas present in the air 13. The material safety data sheet in respect of BFG indicates that: 'It is toxic by inhalation and the symptoms of acute poisoning may include: headache, dizziness, disorientation, abnormal reflexes, difficulty in concentration, fainting, cerebral oedema, coma, seizures and death.' 14. The purpose of these precipitators was to clean the BFG in order to remove a number of impurities from it. 15. The goggle valves can be moved across the pipe from the open (ring) position to the closed (metal plate) position. This process is known as swinging or traversing the goggle valves. 16. The process of swinging or traversing the goggle valves normally takes approximately 14 seconds. The swinging or traversing of the goggle valves occurs only 20 times per year and is a part of the procedure for isolating the precipitator. 17. During the process there is an unavoidable but controlled release of BFG whilst the seals are released and the goggle valves mooves (sic) from the open to the closed position. 18. This release does not present a risk to the safety of persons other than those in the immediate vicinity of the goggle valves. This risk is controlled by person in the immediate vicinity being equipped with appropriate personal protective equipment namely a self contained breathing apparatus. 19. When the goggle valves are traversed a gas alarm at the No.5 Blast furnace is sounded 10 minutes before and after the goggle valves are traversed. The purpose of the alarm is to notify persons at the blast furnace of the possible presence of gas. 20. When the gas alarm is sounded only persons properly trained in gas hazards should be present on the cast house floor. Defendant's Operations 21. Another by-product from the blast furnace is known as slag. The slag is a brittle substance which is separated from the molten iron following the tapping process when it is channelled away from the molten iron and treated in order to produce what is known as granulated slag. 22. At all material times the Defendant had a contract with Bluescope to remove the slag by-product from the plant. 23. At all material times the Defendant had a number of employees stationed within the cast house floor which is adjacent to the the (sic) blast furnace itself to conduct the process of slag removal and processing including those employees referred to in paragraph 6 above. However, no more than 2 to 3 employees of the Defendant worked on the cast house floor on any one shift. 24. At all material times two 12 hour shifts were involved in the operation of the plant. The blast furnace process operated continuously, 24 hours a day, with a shutdown for maintenance occurring approximately once every 18 weeks. 25. At all material times during each shift Bluescope had about 13 employees and Serco Australia Pty Limited ACN: 003 677 352, the company contracted to Bluescope to provide first aid, security and fire fighting services at the plant, also had a number of employees working at the plant. 26. At no time was the Defendant involved in or responsible for the operation, or maintenance of the blast furnace or the 5A precipitator. Incident on 11 April 2004 27. At approximately 2.00am on 11 April 2004 a gas leak was discovered by Bluescope employees on the 5A precipitator. 28. Following detection of the gas leak, the team leader employed by Bluescope, Franco Gomboso, who was in charge of the shift, organised a crew to carry out the work of isolating the gas leak. 29. Prior to attempting to stop the gas leak, the Bluescope crew conducted a Job Safety Analysis ('JSA'). The results of the JSA were not communicated to the employees of the Defendant who worked on the cast house floor, nor were they involved in or permitted to participate in the JSA. 30. Mr Gomboso organised two of the workers employed by Serco, Dean Edwards and Zeliko Zegovic, to take up positions on the adjacent road in order to keep unnecessary persons away from the area in accordance with the terms of the Bluescope job safety analysis on the basis that a gas hazard was expected in shutting off the leak. 31. At all material times there was a documented risk to safety relating to the operation of the goggle valves from the precipitator, as disclosed in Bluescope's Standard Gas Procedure issued on 18 June 2002 as indicated in paragraph 5.1.1 'SAFETY' which reads as follows: 'The main safety consideration when swinging any goggle valve is the potential release of large amounts of gas. In the case of the gas system this will mean the presence of gas clouds at or near ground level. To minimise the likelihood of injury, all non-essential persons should be removed from the immediate area.' 32. Both Mr Edwards and Mr Zegovic were provided with carbon monoxide gas monitors by Mr Gamboso for their task. 33. Prior to commencing isolation of the precipitator valves, Mr Gomboso radioed the blast furnace control room and spoke to Michael Gunthorpe, the control room operator, to advise: (a) That the site gas alarm, a very loud intermittent horn, was being activated; (b) That Mr Gunthorpe was to contact workers on the cast house floors to indicate that isolation of the precipitator was to commence. 34. At this time, Bluescope staff at the blast furnace control room failed to inform the Defendant or its employees working on the cast house floor that a gas leak had been detected and that Bluescope employees were undertaking work on the 5A precipitator to isolate the gas leak by shutting off the inlet and outlet goggle valves nor that gas could or would be released at this time. 35. For the purpose of isolating the gas leak, three of the crew to perform the task were wearing self-contained breathing apparatus. 36. The job to isolate the leak involved firstly, closing the outlet goggle valve on the precipitator. This job was performed successfully by hydraulically unclamping the goggle valve and using a gypsy chain to turn a gypsy wheel that physically slid the valve shut, then hydraulically clamping it. This process of closing the outlet goggle valve involved the release of BFG. 37. The inlet goggle valve then had to be closed .. Mr Gomboso unclamped the inlet goggle valve in order to traverse it and this involved large volumes of BFG being released. However, the goggle valve would not traverse. A second attempt to close it also failed, with further BFG being released. 38. An attempt was then made to use a directional control valve in the electrical switch room to traverse the valve. It did traverse but became stuck about halfway across. The process took about three minutes before it could be re-clamped and during this time more BFG was released into the surrounding atmosphere. 39. Bluescope did not inform the Defendant's employees on the cast house floor of the difficulties it was experiencing in closing the inlet goggle valve or that significant volumes of BFG had been released. 40. After these unsuccessful attempts to close the inlet goggle valve, Mr Gomboso checked his personal CO gas monitor to determine the levels of CO gas within the atmosphere in the immediate vicinity of the 5A precipitator. The reading on Mr Gomboso's personal CO gas monitor was 2000p.p.m. 41. At the time that the goggle valves were swinging, atmospheric conditions were unusually still and the BFG released did not disperse as quickly as expected. Due to the amount of BFG released following the unsuccessful closing of the inlet goggle valve and the unusually still conditions it appears that the BFG moved towards the No. 1 Cast house floor. 42. .At approximately 3.10am Mr Gomboso aborted further attempts to isolate the precipitator until the cause of the problem was determined. 43. Subsequent to the incident it was determined that there had been a failure of an unclamp limit switch due to a burnt out solenoid that had prevented the operation of the inlet goggle valve. 44. At all material times on and prior to 11 April 2004, there was inadequate communication between the operational/production crew of Bluescope and the Bluescope maintenance crew in relation to the operation of the goggle valves. The lack of communication between the Bluescope maintenance crew and the Bluescope operational/production crew resulted in the operational/production crew not being immediately aware of the possible nature of the problem when it arose during the attempted traversing of the inlet goggle valve. 45. Since the gas reading was in excess of safe levels, Mr Gomboso instructed Steve Johnston to advise Serco's employees, Mr Edwards and Mr Zegovic, to leave the area where they had been stationed. 46. No direction to leave was issued to the Defendant's employees working on the Cast House floor. The Injured Workers 47. During the period whilst the work was being done to isolate the gas leak, some of Bluescope's employees were working on the No.1 cast house floor completing the cast and plugging the tap hole of the furnace, a process known as 'gunning'. 48. At all material times the gunning process involved the use of a machine known as a mud gun that swings into the tap hole and forces clay into it to plug it shut. 49. At all material times whilst the Bluescope employees were performing this work, the mud gun alarm was sounding as well as the gas alarm. 50. The gas alarms were not situated on the cast house floor level but were on the tuyere floor, which was a type of mezzanine level above the cast house floor. 51. At around the same time, Bluescope employee Sid Graham, who worked on the gunning process on No. 1 cast house floor, reported feeling dizzy. Mr Graham was directed by the control room to make his way to their room on level three. Mr Graham was later found unconscious in the RFW distribution room after being overcome by CO gas effects. 52. At around the same time the Defendant's employee, Mr Russoniello, was working on the No. 1 cast house floor. After the gunning process had been completed by Bluescope employees he opened the roller door above the slag runoff area. Upon doing so Mr Russoniello started to feel dizzy and returned to his workstation located on the No. 3 cast house floor, only approximately 10 metres away from the taphole where Mr Graham had been working. Mr Russoniello lost consciousness and was later found unconscious by another of the Defendant's employees Mick Maksovic at the work station. 53. The BFG also passed outside of the blast furnace area towards the area where Mr Edwards and Mr Segovic were standing, In accordance with the instructions of Mr Gomboso, Mr Segovic left the area once his gas monitor reading was in excess of safe levels. 54. Shortly after, Mr Edwards and Mr Segovic received a request for first aid assistance for persons affected by exposure to gas. Mr Edwards went to the blast furnace in order to assist the workers who were overcome by the gas and Mr Segovic assisted a person away from the blast furnace. 55. At approximately 4.20am, after medical attention had been provided on the scene by both the Serco workers and the New South Wales Ambulance Service, Mr Russoniello and Mr Graham were transported to Wollongong Hospital for further treatment. Gas Monitors and Alarms 56. At all material times on and prior to 11 April 2004 there were fixed gas monitors and alarms situated in and around the plant. They were on all levels inside and outside of the blast furnace including the cast house floors on the which the Defendant's employees were working. 57. At all material times the fixed gas monitors/alarms had an audible alarm and flashing light to warn workers throughout the plant that carbon monoxide levels in an area were at or above 30ppm. However, the gas monitors did not have a visual display showing the actual concentration (in ppm) of CO in the air. 58. At all material times on and prior to 11 April 2004 when one of the gas monitor alarms sounded, it was up to the operator in the area of the alarm to contact the control room and advise the Bluescope controller that an alarm had sounded. The controller would then send an inspector with a personal gas monitor to obtain a reading of the gas level in the area where the alarm had sounded. If the gas reading when taken by the inspector was in excess of 100ppm of carbon monoxide then workers in that area would be instructed to leave. 59. On and prior to 11 April 2004 there was also a display on the fixed gas monitor/alarm readings located in the Bluescope control room of the plant. The displays in the control room provided concentration levels of carbon monoxide present at certain locations which recorded in excess of safe levels. 60. At all material times on and prior to 11 April 2004 the work environment within the blast furnace area was a particularly noisy one and it was common for alarms of different kinds to be sounding on a regular basis. 61. At all material times some Bluescope workers in the blast furnace would tolerate the alarms that were sounding and would continue at their task in spite of such alarms sounding. 62. On 11 April 2004, fixed CO monitors sounded as a result of the escape of BFG from the 5A precipitator. Shortly before Mr Russoniello was overcome by BFG, the Defendant's staff contacted the Bluescope control room regarding the gas alarms. They were advised that they were swinging a goggle valve and not to worry about the alarm. 63. Since the incident on 11 April 2004 Bluescope and the Defendant have put out a directive to all workers at the plant that if a fixed CO monitor alarm is activated it is necessary for all persons to leave the area until an inspector has attended to check the level of the gas. 64. Since 11 April 2004 Bluescope has also provided additional oxygen and breathing apparatus appliances which it has installed throughout the blast furnace area. 65. At all material times Bluescope in conducting its steel manufacturing operations, had more than one blast furnace. The other blast furnace operated by Bluescope within its steelworks known as the No 6 blast furnace which was of more recent construction than blast furnace No 5, that is, the blast furnace involved in this incident. The No 6 blast furnace from its inception has enclosed valves on its precipitator and hence gas leaks are contained within the enclosure and are not emitted into the surrounding area with that number 6 blast furnace. The same technology would have been available to Bluescope in respect of the No 5 blast furnace prior to 11 April 2004. 66. The Defendant is not in a position to compel Bluescope to refit the No 5 blast furnace with enclosed goggle valves. 67. At all material times on and prior to the 11 April 2004, the Defendant had available to it from Bluescope documentation relating to the risks associated with airborne gas levels of a toxic nature that could exist from time to time within the plant. 68. At all material times on and prior to 11 April 2004, the Defendant's staff undertook the Bluescope induction and training process for its employees at the plant including the injured worker, in respect of gas awareness, gas monitoring procedures, procedures to be followed in relation to gas alarms and safety procedures to be followed in the event of gas leaks. 69. The Defendant's employees were provided with general induction training by Bluescope on commencement and this induction training included gas awareness training. However, there had been no regular follow up training in relation to gas awareness, monitoring or safety procedures for the Defendant's employees since their induction. 70. Subsequent to 11 April 2004, the Defendant has in addition to the measures in place prior to the incident implemented the following measures of its own, independent of the Bluescope procedures, including:- (a) Provided a gas awareness course to its employees (b) Provided its employees with appropriate respirator training and gas monitor usage training (c) Issued all its employees who work at the Blast Furnace with personal gas monitors (d) Instructed its employees in reporting and evacuation procedures to be followed in the event that they have an unsafe gas level reading on their personal monitors. 71. The Defendant has co-operated with the Prosecutor during the investigation of the incident and during preparation of this hearing. 4 Evidence was called by the defendant from Mr Troughton, its Manager, Furnaces. A number of documents were also tendered. 5 Mr Troughton gave evidence as to the defendant's general approach to safety matters, as well as the significant steps taken by the defendant after this incident to address the deficiencies which the incident had revealed. He explained that the defendant had been operating at the steelworks since 1989. Its operations there focus on the retrieval and processing for sale of furnace slag, a by-product of the iron and steel making process which BlueScope undertakes there. 6 The process is a continuous 24 hour, 7 day a week operation. While the defendant employs about 190 staff, only 2 - 3 of its employees work in the blast furnace on any shift. Under its contractual arrangements with BlueScope, the defendant may determine the manner of performing the works it undertakes at the site, but it must always comply with rules promulgated by BlueScope for the safe, orderly and efficient conduct of the steelworks. 7 Mr Troughton explained the work undertaken by the defendant's employees in the blast furnace and how, on the night of the incident, BlueScope failed to notify it, or its employees in the blast furnace, of the problems which had arisen in the precipitator, or during the attempts made to repair the gas leak. BlueScope failed to advise of the gas leak; the risk assessment undertaken as to how the repair should be attempted; the problems encountered during the repair; or that there had been a 3 - 4 minute release of blast furnace gas (which includes carbon monoxide as one of its substantial components). When the gas alarms in the blast furnace sounded, the defendant's employees contacted the BlueScope employees in the control room, as the safety system required, but they were advised that they should continue working. The employees were not evacuated and shortly afterwards, Mr Russionello was overcome by carbon monoxide gas and collapsed. 8 Mr Troughton outlined the treatment Mr Russionello received and his complete recovery from his exposure. He also expressed the defendant's sincere regret for what had occurred and the steps taken afterwards, not only to deal with the unusual risks present on the day here in question, but generally in relation to any exposure to blast furnace gas at the steelworks. 9 The parties agreed that the maximum penalty for this offence was $825,000, the defendant having a number of other convictions under the Act. The parties were generally agreed as to the applicable sentencing principles and that BlueScope, the owner of the steelworks, was more culpable than the defendant for the risks to which its employees were exposed. They disagreed however as to whether another contractor on site, Serco Australia Pty Limited ('Serco'), which has also been convicted of an offence in relation to this incident, was as culpable as this defendant. This controversy is relevant to a consideration of the penalty to be imposed for this offence, having regard to considerations of parity. Consideration 10 Consistently with the Crimes (Sentencing Procedure) Act 1999, the sentence to be imposed in this case must be approached from a consideration of the nature and seriousness of the offence in question, together with aggravating and mitigating factors. I am satisfied that the evidence demonstrated, to the requisite degree, that the offence charged was proven. 11 The risk to which the defendant's employees were exposed was a serious one, as the agreed statement of facts revealed, no doubt explaining the entry of the plea. The evidence showed that the circumstances in which the risk came to materialise were unusual and not the result of processes which the defendant had itself undertaken, a matter which I accept is relevant to be taken into account in assessing the nature and seriousness of this offence. Nevertheless, also to be taken into account in making that assessment, is that the risk in question was a risk of death from exposure to carbon monoxide gas. (See Tyler v Sydney Electricity (1993) 47 IR 1 at 6; Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474-6) . 12 Fortunately for Mr Russionello, he suffered no long lasting consequences from his exposure. That was not, however, because the defendant's systems ensured the safety of its employees while working in the blast furnace, or because Mr Russionello was not exposed to a risk of the most serious kind. 13 Carbon monoxide gas is a known risk at the steelworks. The evidence showed that before this incident, the defendant was aware of that risk. Given that it had taken the decision to send its employees to work at this site, it had obligations under the Act to ensure their safety while performing that work. In order to meet those obligations, it had in place procedures which required that its employees wear personal gas monitors while undertaking certain work under the cast house floor. That was not a requirement which it imposed, however, when other work was being undertaken in the blast furnace, during the slag extraction operation. 14 In that situation, the defendant relied entirely upon the safety system which BlueScope had in place. That system involved fixed gas alarms sounding and flashing lights, when carbon monoxide levels reached 30 ppm and the blast furnace being evacuated if levels rose to 100 ppm. The system involved the control room being notified if the alarm sounded and then steps being taken to measure the level of carbon monoxide in the blast furnace and if necessary, an evacuation ordered. 15 In this case, given the unanticipated, prolonged and uncontrolled release of gas when the gas leak repair failed, the BlueScope system failed to ensure the safety of those working in the blast furnace. Undoubtedly, BlueScope itself had obligations under the Act to ensure the safety of the defendant's employees. So, too, however, did the defendant. The scheme of the Act is a layered one, imposing safety obligations in such a way, that even if one person or entity upon whom such obligations fall, fails to meet its obligations when a risk arises, safety will, nevertheless, be ensured by the others upon whom the same obligation is imposed. 16 It is in this way that it can be seen that while BlueScope undoubtedly had the greater culpability for the risk which here materialised, this defendant's failure was also a most serious one. 17 The Australian Government's National Occupational Health and Safety Commission Exposure Standard for Carbon Monoxide, indicates that high levels of carbon monoxide 'are likely to lead to unconsciousness and convulsions. Collapse may occur very quickly, before the victim is aware of impending danger'. The Standard also warns that individuals' responses to carbon dioxide may vary and that a response may be exacerbated, in those with cardiovascular conditions. 18 The evidence showed that the BlueScope system had obvious deficiencies, in circumstances where the level of carbon monoxide within the blast furnace rose rapidly. The gas alarms in the blast furnace sounded when a level of 30 ppm was reached. At the precipitator, where the gas leak repair was being undertaken, a level of 2000 ppm was measured. The evidence suggested the blast furnace should have been evacuated, if a level of 100 ppm was reached. There should have been no exposure at all, beyond 400 ppm. What level was reached within the blast furnace is not known, but the evidence shows that it must have been very high indeed. 19 The response of the defendant's employees to the sounding of the alarms in the blast furnace once 30 ppm was reached, was to contact the control room. The BlueScope employees stationed there told them to ignore the alarms and they continued working. No steps were taken to ensure that levels had not reached 100 ppm. It follows that there can have been no foundation for such an instruction being given and shortly afterwards, Mr Russionello collapsed into unconsciousness. On the evidence, at a concentration of 5000 ppm, collapse occurs in minutes and at 10,000 ppm, death in minutes. 20 The defendant's system for ensuring the safety of its employees in an environment where there was a known risk of exposure to carbon monoxide gas, must be seen in that context, even though the risk here materialised in unusual or unforeseen circumstances, to which the defendant had not itself contributed by its actions, or failures, other than in relying solely on the deficient safety system. 21 The defendant relied entirely upon the BlueScope system protecting its employees from exposure to carbon monoxide, while working in the blast furnace. The evidence demonstrated that the BlueScope system was not capable of measuring a rapid increase in carbon monoxide inside the blast furnace, in a sufficiently timely way to ensure that exposure to carbon monoxide remained within safe levels. This was because the system depended on those in the control room responding to the gas alarms by despatching someone to measure the levels the gas had reached. The evidence was that the blast furnace was known to be a noisy place, with differing alarms ringing on a regular basis and with some BlueScope workers known to be continuing to perform their tasks, despite alarms ringing. 22 Whether or not such tolerance to alarms led to the defendant's employees being told by those in the control room to continue working, without the gas levels being measured, cannot be established. The evidence shows however, that the BlueScope employees had no basis for giving that direction. Those in the control room could not gauge gas levels in the blast furnace without despatching someone to measure the level. That did not occur. That there was sufficient time for such an approach to have been effective, also seems unlikely on all of the evidence, even if an attempt had been made to measure the levels. 23 All of this highlights the deficiency in the approach adopted by this defendant, to its obligation to ensure the safety of its employees while working in the blast furnace. The steps taken by the defendant afterwards, also revealed how simply the risk which materialised could have been avoided by steps always available to it. 24 One of the changes which the defendant introduced was to require its employees to wear personal gas monitors while working in the blast furnace and to evacuate, in circumstances where either gas levels climbed to specified levels, or where exposure at lower levels, for specified periods of time over the course of a shift, occurred. The defendant already required that such monitors be worn when other work was undertaken. It could plainly have provided them to the employees performing this work. While this and other steps taken afterwards were laudable and relevant to be taken into account in mitigation, as is so often the case in prosecutions such as this, they also throw light on the relatively simple steps available to the defendant before the incident, which would have precluded this serious risk from materialising, if they had been taken earlier. 25 I turn then to questions of relative culpability. I am satisfied that the submission made by both the prosecutor and the defendant, that on all of the evidence it was demonstrated that it was BlueScope which had the greater culpability for the risk here in question, was made out on the evidence. (See Inspector Patton v Bluescope Steel (AIS) Pty Limited [2006] NSWIRComm 283). 26 I am unable to accept however, the defendant's submission that its culpability ought to be assessed in the same way as that of Serco. A consideration of the offence with which that company was charged and the evidence led in that case, shows that such a comparison cannot be readily made. Serco's employees were not working in the blast furnace, but were taken there when BlueScope sought Serco's assistance in responding to provide first aid assistance with those who had collapsed there. Rescue work was not work usually performed by Serco at the steelworks. (See Inspector Patton v Serco Australia Pty Limited [2006] NSWIRComm 284.) 27 Undoubtedly, there were similarities in aspects of the evidence upon which all of the charges moved against the three defendants. Nevertheless, in my assessment there were also relevant differences in the case of Serco, which make comparison between it and this defendant, for the purpose of the application of the principle of parity, much less appropriate than the comparison which should be drawn between this defendant and BlueScope. 28 At the end of the day both BlueScope and this defendant had employees working in the blast furnace and had safety obligations to those same people arising under the Act, in relation to the work which they performed there. They each relied upon the BlueScope system to protect those working in the blast furnace from exposure to carbon monoxide gas, when the gas levels in the blast furnace rose quickly and unexpectedly. It was that system which failed, in the various ways which I have described. This defendant paid no independent attention to the safety of its employees in relation to exposure to carbon monoxide while working in the blast furnace. 29 While the failures in the BlueScope system were also relevant in the Serco prosecution, it did not have employees performing their normal work in the blast furnace, as the other two defendants did. Serco employees came to be there, when they were later taken to the blast furnace after the collapse of the employees of the defendant and BlueScope, to respond to the emergency which had arisen. Consequently, there were other issues which arose for consideration in the Serco prosecution, not present here. All three defendants also had quite differing safety records, another relevant consideration. It follows that while I take the view that the penalty imposed on Serco is a relevant consideration in determining the penalty here to be imposed, I am unable to approach the parity consideration in quite the way in which this defendant invited. 30 That brings me to considerations of general and specific deterrence. I am satisfied that they each have a role to play here and have so approached the assessment of the penalty. (See Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 at [71] - [79].) As for specific deterrence, I am satisfied that this defendant's approach to its obligations, both before and after this incident is a relevant consideration. But for the evidence as to that approach, specific deterrence would have had a greater role to play in determining penalty. 31 I turn then to the subjective factors relied upon. I accept that account should be taken of the entry of the early plea, following the prosecutor's filing of the amended charge; the defendant's obvious contrition and remorse for what here occurred; and the evidence given by Mr Troughton, as to its approach to safety before this incident, as well as its response to what this incident revealed. All of these matters must be taken into account and must result in a reduction of the penalty which would otherwise be imposed. 32 The steps taken by the defendant in response to the incident were of a significant kind and directed to its safety obligations generally, not just to the incident here in question. 33 The defendant's annual expenditure in safety exceeds $1 million. Before the incident, it had an accredited, integrated quality management system in place, which comprised relevant policies and procedures, as well as work instructions. In conjunction with BlueScope, it produced task specific job safety analyses and standard operating procedures. Risk assessments were conducted, involving operators, supervisors, managers and engineers. Employees received relevant training in these safety requirements, as well as in relation to competence in activities undertaken in particular roles. Competencies were assessed annually. Training manuals were provided and instructions given by supervisors and management. New employees received induction from both the defendant and BlueScope. In the defendant's case, this included being teamed with experienced operators and supervisors, who provided on the job training and instruction. Specific training in safety issues such as work in confined spaces and complacency in the workplace, was also given. Risk assessments, tool box talks, participation in Safety Committees, safety audits and inspection and involvement in the BlueScope 'Stop for safety' programme, were all part of the defendant's approach to safety. 34 On the evidence it is undoubted that the defendant's employees were obliged to rely on BlueScope employees and to act in accordance with their instructions, in relation to certain safety considerations. The defendant could not itself control how BlueScope conducted its business, or met its own safety obligations. I accept that the defendant also itself, however, paid attention to its obligation to ensure safety, inadequate as that attention proved to be on this occasion. 35 After the incident, the defendant had its employees attend a gas awareness training course conducted by the National Safety Council of Australia, which supplemented additional training then provided by BlueScope. The defendant also developed its own gas safety training package. Additional personal gas and multihead monitors were purchased and provided to each employee working at the blast furnace, during their shift. The monitor alarms sound when levels of 30 ppm (low) and 70 ppm(high) are recorded and also measure exposure limits over the course of a shift. Information as to each employees' exposure is now recorded each shift. Employees were trained in the use of the monitors and the procedures developed for their use, with ongoing refresher training provided. 36 BlueScope installed additional breathing apparatus in the blast furnace and the defendant's employees have been trained in its use. Safety equipment is also being further reviewed. New procedures for gas alarms have been developed and the defendant has generally reviewed its training documentation. Other safety procedures have been revisited and greater formalisation introduced. Risk assessment and audit procedures have also been reviewed, in consultation with the workforce. 37 The defendant also sought to improve and update communications between the BlueScope control room and its employees in the blast furnace. The defendant's employees are now formally notified when jobs being undertaken could give rise to an escape of gas. The defendant has its own Safety Committee, as well as participating in the BlueScope committee. Steps have been taken to align its safety systems, standards and procedures with those of BlueScope and formal auditing of compliance has been introduced. 38 The defendant is also pursuing a proposal to install a new work cabin in the blast furnace, to cater for the eventuality of a major uncontrolled gas leak, at a cost of between $200,000 to $250,000. The cabins will be sealed and will be provided with their own independent air supply and gas monitors. 39 These are all matters relevant to be taken into account in assessing penalty, by way of mitigation. In determining the amount of the penalty, I have also adopted the approach discussed in Inspector Brett Martin v Encore Tissue Pty Limited [2005] NSWIRComm 271 at [29] to [31] and Inspector David Waterhouse v Innovative Property Developments Pty Ltd and Others [2006] NSWIRComm 97 at [64] to [67]. I here concluded that a discount of 25% for utilitarian savings achieved by the entry of the plea, at the earliest opportunity after the charges were amended by the prosecutor, was an appropriate discount on the penalty which I had otherwise determined to be appropriate in all the circumstances of this case. The other matters I have mentioned, have resulted in a further discount. 40 Having weighed all of the matters I have referred to, I have concluded that the appropriate penalty in this case is $160,000. Orders 41 For the reasons given, I find the defendant guilty of the charge to which the plea was entered and order it to pay a penalty of $160,000, with a moiety to the prosecutor. The prosecutor also sought an order for costs which was not opposed. Accordingly, I order the defendant to pay the prosecutor's costs as agreed, or in the absence of agreement, as assessed by the Court. The parties have liberty to approach in that respect. ------------------------ 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. 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