Industrial Court of New South Wales CITATION: Inspector Farid Katf v L.O.D. Co-Operative Haulage & Transport Ltd and Inspector Farid Katf v L.O.D. Co-Operative Haulage & Transport Ltd. [2006] NSWIRComm 150 PROSECUTOR: Inspector Farid Katf PARTIES: DEFENDANT: L.O.D. Co-Operative Haulage & Transport Ltd. FILE NUMBER(S): IRC 2405 & 2406 of 2005 CORAM: Haylen J CATCHWORDS: Occupational Health and Safety Act 2000 - s 8(1) - two offences within five weeks of each other - amended application for order in one matter followed by pleas of guilty being entered in both matters - transport co-operative becomes involved in manufacturing and packaging of sodium sulphate - use of conveyor system and hoppers to package product - conveyor system not adequately guarded for period of three years before accidents - in first accident employee's arm broken in conveyor system - in second accident senior employee's arm amputated in conveyor system not isolated during cleaning and maintenance contrary to defendant's unwritten system of safety - principle of totality applied - serious breach established in each case - general and specific deterrence considered - substantial subjective factors - defendant without blemish in 60 years of operation but only recently engaged in packaging sodium sulphate using conveyor system - existence of a safety system including guarding prior to accident but systems inadequate - offences proved - fines imposed CASES CITED: R v Thomson; R v Houlton (2000) 49 NSWLR 383 HEARING DATES: 19/04/06 DATE OF JUDGMENT: 05/04/2006 PROSECUTOR Mr D O'Neil Legal Group WorkCover Authority of NSW LEGAL REPRESENTATIVES: DEFENDANT: Ms L McManus of counsel SOLICITORS: Sparke Helmore JUDGMENT: - 8 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: HAYLEN J 4 May 2006 Matter No IRC 2405 of 2005 INSPECTOR FARID KATF v L.O.D. CO-OPERATIVE HAULAGE & TRANSPORT LTD. Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 Matter No IRC 2406 OF 2005 INSPECTOR FARID KATF v L.O.D. CO-OPERATIVE HAULAGE & TRANSPORT LTD. Prosecution under ss 8(1) and 86(1)(b) of the Occupational Health and Safety Act 2000 JUDGMENT [2006] NSWIRComm 150 1 In 2003, L.O.D. Co-Operative Haulage and Transport Ltd was operating a business of manufacturing and packaging sodium sulphate for supply to commercial manufacturers of cleaning agents. This was a new venture undertaken since 1999 with the company previously being engaged in the transport industry since 1945. The company was incorporated as a trading society with lorry owner drivers as its shareholders. 2 The company's premises for the receipt of bulk product and containing the facilities for bagging the product were located at Kemblawarra on the State's south-coast. This operation required the employment of approximately twelve people and the use of conveyors and hoppers for the purposes of the bagging operation. 3 In two separate incidents occurring in May and June 2003, an employee of the company was seriously injured while engaged in cleaning theconveyor system. The first injury resulted in a storeman, Mr Thompson, severely breaking his arm, while in the second incident the store's operations manager, Mr Webster, had his arm amputated above the elbow. It was the second accident involving Mr Webster that came to the attention of the WorkCover Authority and in the course of investigating that accident, the earlier injury to Mr Thompson was disclosed. 4 Following investigations by the WorkCover Authority, in May 2005 Inspector Katf commenced proceedings alleging a breach of s 8(1) and s 86(1)(b) of the Occupational Health and Safety Act 2000 in relation to the first incident and a further prosecution under 8(1) of the Act in relation to the second incident. On the fifth occasion that the matters were before the Court, a plea of guilty was entered in each matter, with the plea in relation to the first incident being entered in relation to an Amended Application for Order. In that matter the prosecutor did not proceed with the charge under s 86(1)(b) of the Act. 5 In each case the charges, as particularised, were in the following form: In Matter No IRC 2406 of 2005, as amended, it was alleged that the company, being an employer, on 17 May 2003 at Kemblawarra failed to ensure the health safety and welfare at work of all employees, and in particular Daniel Thompson, contrary to s 8(1) of the Occupational Health and Safety Act 2000. The particulars of the amended charge were: (a) the defendant failed to ensure that the conveyor system used to bulk bag sodium sulphate for transportation to external sites (the conveyor system) was adequately guarded so that it was safe and without risk to health when properly used; (b) the defendant failed to ensure that there were lockout procedures in place during the cleaning of the conveyor system; (c) the defendant failed to ensure that there were safe systems in place for cleaning the conveyor systems; (d) the defendant failed to provide such information, instruction and training as was necessary for employees to ensure their health and safety whilst cleaning the conveyor system. In Matter No IRC 2405 of 2005, the charge was that the company being an employer at Kemblawarra in the State of New South Wales on 26 June 2003 failed to ensure the health, safety and welfare at work of all its employees, and in particular Glen Webster contrary to s 8(1) of the Occupational Health and Safety Act 2000. The particulars of the charge were: (a) the defendant failed to ensure that the conveyor system used to bulk bag sodium sulphate for transportation to external sites ("the conveyor system") was adequately guarded so that it was safe and without risk to health when properly used; (b) the defendant failed to ensure that there were lockout procedures in place during any maintenance work on the conveyor system; (c) the defendant failed to ensure that there were safe systems of work in place for maintenance work on the conveyor system; and (d) the defendant failed to provide to employees such information, instruction and training as was necessary to ensure the health and safety whilst conducting maintenance work on the conveyor system. 6 While the pleas of guilty were entered in late November 2005, the parties were still in disagreement as to the relevant facts when the matters were listed for the purposes of receiving evidence and submissions on sentence in early April 2006. After considerable discussion between the parties on that day, the matter by consent, was adjourned to later in the month having regard to the progress said to have been made in the discussions. When the matter was called for hearing just less than two weeks later, there remained a difficulty with certain aspects of the charge relating to the incident involving Mr Thompson but, nevertheless, there was agreement on a number of other facts. 7 In view of the significance of the circumstances surrounding these incidents, it is appropriate to set out the substance of the facts agreed between the parties. In relation to Matter No IRC 2406 of 2005, concerning Mr Thompson, the relevant facts are as follows: ... 4. At all material times the defendant operated a business manufacturing and packaging sodium sulphate for supply. 5. At all material times the defendant employed Daniel Thompson as a storeperson. 6. At about 2.45 am on 17 May 2003 Mr Thompson was cleaning a conveyor in the warehouse at the site. The conveyor was part of a "conveyor system" made up of conveyors, hoppers and a "demag unit". The demag unit was used to demagnetise the produce then feed the product through a conveyor leading to a hopper. The conveyor system was used to bulk bag the sodium sulphate for transportation to external sites... . 7. Sodium sulphate is a white powder. It builds up on conveyor rollers and regular cleaning of the conveyors is required to control the build up of product. Staff at the warehouse carried out cleaning of the conveyor system. 8. On the night of the incident, Mr Thompson returned to perform the task of cleaning the conveyor system, although Mr Webster had previously told him to go home for the night. 9. At the relevant time, Mr Thompson was cleaning the conveyor whilst it was running. Mr Thompson was cleaning up the bottom of the conveyor identified as the blue conveyor. Mr Thompson indicated to Inspector Katf that when the incident occurred he was at a position indicated by grid reference L11 on photograph 1 of 4 taken 4 July 2003. A close up view of that area appears in photograph 3 ... . 10. Mr Thompson further stated to Inspector Katf: Because there had been a build up of product under the belt, it was jammed in at the tail drum, so I thought if I clean whilst it was running I could clear it away with an air hose. He further indicated in interview: I put my arm into a conveyor. I was cleaning off the product. I lost my balance and sort fell forward (sic). I put my arm up to and rested on the conveyor and I got my arm caught into the pulley. 11. Mr Thompson said, to go one better than the normal procedure, he unbolted and removed the guarding from the machine. 12. When the incident happened, another employee, Mr Geoffrey Willis, was present at the warehouse. Mr Willis saw Mr Thompson cleaning the conveyor system but did not witness Ms Thompson's arm being caught. 13. WorkCover became aware of this incident on 26 June 2003 after an incident involving Mr Glen Webster. Guarding 14. The conveyor system was not guarded pursuant to the Australian Standard for three years prior to the incident. 15. The defendant conducted a site safety audit on 27 September 2002 and identified a number of safety concerns, including as follows: The boot end of the conveyor does not sufficiently protect workers from moving parts. It needs a cage with a door, in order to keep people out when the belt is running. 16. Mr Karl Fort and Mr Glen Webster on behalf of the Defendant engaged Allfab Constructions on 5 June 2003 to construct and install fencing and guarding around the conveyor system to meet Australian Standards. Lockout procedures 17. Prior to the incident the Defendant did not have in place any written procedures relating to cleaning of the conveyor system. 18. There were verbal lockout and isolation procedures for cleaning the machinery. These involved hitting all the emergency stops and unplugging the main power source for the wall. Workers were directed not to clean the machines whilst they were running. The verbal lock out procedure in place included tagging the machinery. Following the incident involving Mr Glen Webster, tags were replaced with locks. 19. In November 2003 the Defendant formalised their lock out procedure and developed a safe working procedure entitled – "Maintenance Lockout Procedure", identified as SWPD013V1 Safe work system 20. Prior to the incident there was no written safe work system in place in relation to cleaning the conveyor system. Mr Thompson indicated (to Inspector Katf) that when he (Mr Thompson) commenced employment in December 2002 a senior staff person showed him (Mr Thompson) how to operate the machine and how to clean it safely. 21. In November 2003 the Defendant forwarded to WorkCover a safe working procedure which dealt specifically with cleaning the demag unit - SWPD001V1. At the same time the Defendant also developed SWPD013V1 which dealt with maintenance and lockout procedures and included a specific reference to maintenance and cleaning ... . Information, instruction and training 22. Prior to the incident there was nothing in writing in relation to information, instruction and training employees as to how to go about cleaning the conveyor system. 23. Mr Thompson was given verbal instructions when he started work with the Defendant. A senior staff person showed Mr Thompson how to operate the machine and how to clean the area safely when he commenced employment. 24. On the day of the incident, Mr Thompson was under the supervision and instruction of Mr Karl Fort. In an interview with Inspector Katf on 25 March 2004, Mr Thompson said: I would have been under the supervision of senior management staff there if I had worked in the time period I was supposed to. 25. Following the second incident, all employees were trained in relation to the safe working procedures and job safety analysis for all tasks associated with the plant and system. Injury 26. Mr Thompson fractured his right arm in the relevant incident when the arm became caught in the pulley of the conveyor system. He had both the radius and ulnar plated. 27. The treating medical practitioner indicated Mr Thompson was fit for suitable duties from 23 May 2003 and fit for pre-injury duties from 30 October 2003. 8 In rleation to Matter No IRC 2405 of 2005, the relevant facts agreed were as follows: ... 4. At all material times the defendant operated a business manufacturing and packaging sodium sulphate for supply. 5. At all material times the defendant employed Glen Webster as a Manager of Stores Operation. 6. At about 3.00am on 26 June 2003 Mr Webster was performing a repair to a conveyor belt at the defendant's warehouse on the site. 7. The conveyor was part of a "conveyor system" made up of conveyors, hoppers and a "demag unit". Staff at the warehouse carried out cleaning as well as minor repairs of the conveyor system. 8. Mr Webster indicated that he was working late on this occasion due to the need to have the conveyor operational by the morning. The belts on the conveyor had been tracking off to the right hand side of the main drive pulley. 9. Mr Webster undertook an inspection, performing the repair whilst the conveyor was running. He was moving up and down the side of the conveyor to see what was causing the tracking off to the right. He was holding an air wand in his hand. During this inspection Mr Webster was using the air wand to remove powder product from the main drive pulley. When standing in front of the head pulley the air wand was dragged into the pulley. Mr Webster's right arm, in which he was still holding the air wand, was also dragged into the pulley. The arm was severed above the elbow. In an interview with Inspector Katf on 8 August 2003 Mr Webster put it this way: During this inspection, I had to take a closer look to see why it was travelling to the right and I used the air gun to remove the powder product from the main drive pulley. I was moving up and down the side of the conveyor to see why it was causing the tracking to the right. I really don't know what happened but the next thing I knew my hand and arm were caught in the machine. 10. Mr Webster was taken by ambulance to hospital where an attempt to reattach his arm was unsuccessful. Mr Webster's right arm was amputated above the elbow. He returned to work performing light duties in December 2003. 11. The conveyor system had been in place for three years and the demag unit had been added to the system in August 2002. 12. The Defendant conducted a site safety audit on 27 September 2002 and identified a number of safety concerns, including as follows: The boot end of the conveyor does not sufficiently protect workers from moving parts. It needs a cage with a door, in order to keep people out when the belt is running. An electrical isolation procedure for the hopper/conveyor was not obvious. 13 An incident had occurred on 17 May 2003 in which an employee, Mr Thompson, suffered a broken arm when his arm became caught in the pulley while cleaning the conveyor. 14. Mr Karl Fort and Mr Glen Webster, on behalf of the Defendant, engaged Allfab Constructions on 5 June 2003 to construct and install fencing and guarding around the conveyor system to meet Australian Standards . At the time of the incident, the installation of guarding had already commenced as depicted in photo 8 of 14. 15. Following the incident involving Mr Webster, WorkCover inspectors attended the site on 26 June 2003 at about 5.10am. Photographs depict the state of the guarding as at 26 June ... 16. The WorkCover inspectors issued Prohibition Notice (7-31752). The Prohibition Notice required effective guarding of all areas and the elimination of the risk of entanglement with moving parts. Furthermore, unfixed guards on the plant were to be fixed, preventing persons from accessing the moving parts of the plant. 17. Inspector Charles prepared a factual inspection dated 14 July 2003. 18. Following the incident the Defendant made improvements. These are referred to in a further factual inspection report of Senior Inspector Fred Katf dated 29 July 2003 ... . Lockout procedures 19. Prior to the incident the Defendant did not have in place any written lockout procedures relating to maintenance of the conveyor system. Mr Webster indicated that it was common practice among workers to use the air wand to remove dust whilst the belt was in motion. 20. There were verbal lockout and isolation procedures for cleaning the machinery. These involved hitting all the emergency stops and unplugging the main power source for the wall. Workers were directed not to clean the machines whilst they were running. The verbal lock out procedure in place included tagging the machinery. Following the incident tags were replaced with locks. 21. In November 2003 the Defendant developed SWPD013V1- Safe Working Procedure – maintenance lockout procedure. Safe work system 22. Prior to the incident the Defendant did not have in place any written safe work system in relation to maintenance of the conveyor system. 23. The Lodehaul Job Safety Management Resources Manual was in existence at the time of the incident. 24. Apex Fenner Pty Limited repaired the system on occasions. Mr Webster told WorkCover that on the night of the incident he chose not to call Apex Fenner Pty Limited because it was too late at night and he believed that it was only a minor repair that he could undertake. 25. Mr Webster told WorkCover that, 'we had tankers coming in at 6.00am and everything had to be right'. 26. In November 2003 the Defendant forwarded to WorkCover SWPD001V1 which dealt specifically with cleaning the demag unit. Information, instruction and training 27. Prior to the incident the Defendant had nothing in writing in relation to informing, instructing and training its employees how to conduct maintenance of the conveyor system . 28. Mr Webster indicated that he had no trade and was self-taught in relation to conveyors. Mr Webster had been working in the position of Manager for three years at the time of the incident. 29. He further indicated that the Defendant provided him with no instruction or training in relation to the relevant repair work. 30. Following the incident, all employees were trained in relation to the safe working procedures and job safety analysis for all tasks associated with the plant and system. Replacement of conveyor 31. After this incident the Defendant replaced the conveyor system. 9 The Court was assisted in this sentencing task by the tender of a number of photographs showing the general work area and particular aspects of the conveyor and "demag" unit involved in these two incidents. A record of prior convictions confirmed that during its existence the defendant company had not been found in breach of occupational health and safety related legislation. 10 There were additional documents that helped flesh out the Agreed Statement of Facts. In late September 2002, the defendant participated in a site safety audit of both the Kemblawarra and Unanderra stores operated by the defendant. As the Agreed Statement of Facts shows, at Kemblawarra it was noted that there was no obvious procedure to protect workers from moving machinery during the movement of material and that the "boot" end of the conveyor did not sufficiently protect workers from moving parts and required a cage with a door in order to keep people out when the belt was running. It was also noted that an electrical isolation procedure for the hopper/conveyor was not obvious. In November 2003, a formal, written safe working procedure dealing with maintenance lockout was issued by the defendant. The procedure required that before carrying out any maintenance or cleaning work on any power plant or equipment that either the plant or equipment had to be locked out to ensure that it could not be started while maintenance or cleaning was in progress. Details of the work were to be given to the shift supervisor and specific direction given as to the use of lock out devices with a prohibition on removing personal locks that were not locks issued to that employee. On completion of the work the locks were to be removed and the position reported to the supervisor. At about the same time a safe working procedure was developed for cleaning the "demag unit". That document noted that the demag unit was used to catch and remove any metal before the product was loaded and that it required cleaning before each change of product. When cleaning the unit another person was required to be in attendance and that at no time was the cleaning operation to be attempted unless the entire screening plant was isolated by observing the safe lock out procedure. Reference was made to the wearing of eye protection and the use of breathing protection. In this cleaning exercise the supervisor was to be advised of the need to clean the unit and the entire screening plant was to be isolated with a description as to how the guards were to be opened or removed. After cleaning, the guards were to be replaced and the lock out removed before the conveyor system was put back into operation to ensure that the cleaning had been effective. The plant was then to be once again isolated and the front guard removed to check that the unit was clean: the steps for recommencing the unit were then to be followed. 11 The prosecutor also relied on the provisions of the Australian Standard AS 1755-2000 dealing with the safety requirements for conveyors. In relation to parts requiring guarding the Standard stated that "all shear and nip points shall be guarded. Shear and nip points are created where the gap between any moving part of the conveyor and any fixed equipment is greater than 4mm and less than 120mm". In relation to removal of guards, the Standard required that in such circumstances the conveyor was to be isolated, requiring energy isolation of the conveyor by operation of the main isolation device. Detailed provisions were made for the guarding of belt conveyor nip points by reference to a variety of pulleys and other usual parts of such machinery. The Standard required that competency based training was to be provided to, amongst others, maintenance personnel and other persons exposed to a hazard from a conveyor. Such training was to be relevant to the procedures associated with operating and maintaining the conveyor or the conveyor systems. The training was to include safety work practices including isolation procedures, emergency procedures, hazard identification, reporting control and management and document management and control. 12 The prosector also made reference certain aspects of Australian Standard 4024-1996 dealing in part with circumstances where a hazard or risk could not be eliminated or avoided by design and where the provisions of safe guards was to be considered. In relation to maintenance access it was stated that safeguarding for maintenance was generally selected from stationery guards and administrative controls. This document also referred to the level of guarding required in certain circumstances, the use of administrative controls for isolation of the plant during maintenance and the use of a interlocking device where guards were to be opened during the operation of a plant. It was accepted by the prosecutor that these provisions were of general significance only and did not necessarily have direct application to the plant operated by the defendant at Kemblawarra or the circumstances of its use. 13 For the defendant the affidavit of Ronald Seach was read together with a number of annexures. At the time of giving evidence Mr Seach was employed by the defendant as Risk Manager, a position he had occupied since March 2005. Between November 2001 to March 2005 he had been employed as the defendant's operations manager. As operations manager, Mr Seach said that his duty was to oversee the transport operations of the company but that did not include overseeing the loading of trucks or the operation of the conveyor system or hoppers in the warehouse in the Kemblawarra site. 14 The defendant company had been formed in October 1945 and in 1999 purchased the warehousing and packing operations including the Kemblawarra site and staff from STM Pacific Pty Ltd. This part of the business had been managed and was under the direct control of Mr Glen Webster whilst in the ownership of STM. Mr Seach said that lorry owner drivers were the shareholders in the defendant company with each shareholder owning their own truck but the company itself did not own any trucks. The company sub-contracted to other contractors as well and negotiated contracts on behalf of its shareholders and other non-shareholdings of sub-contractors. 15 In March 2000, the company moved from Balmain to Kemblawarra and at that time employed approximately 12 staff at the Kemblawarra site with seven employees working in the warehousing operations. 16 In relation to Mr Thompson, Mr Seach said that he had worked for the defendant company for approximately six months prior to the first accident and while he held the position of store supervisor. In that role Mr Thompson was to maintain the safe and efficient running of the stores. He held qualifications as a loader operator, forklift operator and crane operator. Following the accident involving Mr Thompson he had been appointed to the position of logistics co-ordinator but in approximately June 2005 he took a management position with another transport company. 17 From information given to him by Mr Thompson, Mr Seach said that on night of the accident involving Mr Thompson he had been firmly instructed by his manager, Mr Webster, to stop work and to go home for the weekend. This occurred about 7.00 pm. The facility had been locked for the weekend except for a door left open to allow another employee (Mr Willis), to return from town and to shower before leaving for the night. Mr Thompson had at no time been told by any other staff member to remain at work or to continue working. Mr Seach understood that there was no work that needed to be attended to that night or the following day, a Saturday. Despite these instructions, Mr Thompson told him that he returned to the warehouse that night and unbolted and removed all the guarding from the machine with the intention of cleaning and painting the conveyor by Monday morning. In statements to the WorkCover Authority, Mr Thompson said that he had taken this course in order to "impress management". Mr Thompson was aware that he was breaching procedure and direct instructions from his manager by returning to the warehouse and unbolting the guards. The accident involving Mr Thompson occurred at approximately 2.45 am. 18 Mr Thompson was absent from work for five days with a broken arm. It was clarified in cross-examination that he may have returned to restricted duties for a period of time before resuming full duties but at all times he was paid his full rate by the defendant. 19 Because of his experience in warehousing and the packing business, it was part of the purchase arrangements with STM Pacific Pty Ltd that Mr Webster take up employment with the defendant company after it purchased the business from STM. Mr Seach stated that the defendant company wished to utilise the extensive knowledge of the machinery and procedures already in operation and because of Mr Webster's understanding of the conveyor system and bagging hopper: he had come to the company "as part of its purchase". 20 From the time of his employment with the defendant Mr Webster held the position of manager of shipping, handling and transport, a position that included managing the warehouse operations. This was the position Mr Webster held at the time of both incidents. The defendant had introduced Mr Webster to Altair Human Resources Training and Consulting, a firm contracted by the defendant since early 1999 to provide safety consultancy services. It was the defendant's desire that through this meeting Mr Webster would be made familiar with the company's safety procedures and would ensure that the safe working procedures practised by Mr Webster were incorporated into the defendant's safety manuals. 21 Mr Webster's experience with the conveyor and bagging hopper system extended over a period of ten years and Mr Seach understood that he had been involved in the purchase of the conveyer and the hopper system prior to his engagement with the defendant. In his position, Mr Webster was in charge of the warehousing operations and was in control of the activities at the Kemblawarra site. In his role as manager, day to day supervision of Mr Webster was not required. Mr Webster remained employed by the defendant company in a senior managerial position. 22 Mr Seach understood that on the night of the accident involving Mr Webster, the chief executive officer of the company, Mr McIntyre, had agreed with Mr Webster that Mr Webster would not work beyond 9.00 pm that night. Mr Webster, however, remained on the premises until 3.00 am when the accident occurred. 23 At the time of the first accident the defendant had produced and made available a document entitled "Lodehaul Job Safety Management Resource Manual". Mr Seach said that this safety manual was constantly under review. That document was in general terms rather than giving specific directions in the performance of various tasks undertaken at the site. Mr Seach said that from his experience staff were familiar with the manual and the procedures and policies contained within in and they were supplemented by practical training. It was the responsibility of Mr Webster and his supervisors to train staff in aspects of the safety manual such as isolation and operational procedures. The safety manual provided safety procedures including the creation of work method statements before the commencement of each new job, induction procedures, isolation procedures and the completion of a job safety analysis. This document was under review with Mr Webster and Mr Seach working with the defendant's safety consultants in order to have a working safety management system consistent with the occupational health and safety regulations that required such a document to be in operation by 1 September 2003. 24 The safe working procedure dealing with the cleaning of the "demag unit" was not issued as a formal or written document at the time of Mr Thompson's accident although the procedures had been passed on to employees by oral presentation. Mr Seach said that Mr Webster and his supervisors had trained all staff in these procedures but that the written procedure had been issued at the time of the incident involving Mr Webster. The essence of the procedure was the requirement that at no time was the cleaning of the demag unit to be attempted unless the entire plant was isolated and the lockout procedure followed. 25 Following Mr Webster's accident the safe working procedure dealing with maintenance and lockout was updated in 2003. Again the procedure had been in operation by way of oral instruction prior to the accident and required that when maintenance or cleaning was being carried out on any power plant or equipment then the plant had to be locked out to ensure that it could not be started while the maintenance or cleaning was in progress. Prior to these accidents the defendant had conducted toolbox meetings on safety issues but no formal record had been kept. One of the supervisors also discussed safety issues on a regular basis with members of the staff. Toolbox meetings were now documented. 26 Mr Webster was responsible for organising the maintenance of the plant prior to 26 June 2003. Mr Seach understood that the normal practice for the repair of the conveyor belts was to call in one of two identified companies: if the fault was electrical another person was contacted to undertake the repairs. Mr Seach understood that Mr Webster decided not to call the usual service provider on the occasion he was injured because he regarded the fault as involving a "minor repair". 27 From early 1999, the defendant had engaged Altair to provide various services in relation to safety at the company premises. Altair had conducted a safety management workshop for the defendant's staff in April 1999 and had advised in relation to the company's safety and quality system in November 2001 and March 2001. There was also an audit of the premises conducted with all machinery and equipment being considered as well as discussions on safety and the presentation of on job safety management. Throughout 2002 Altair continued to provide various consulting services to the defendant company in relation to safety management, including site safety inspections, recommendations, conducting safety officer training on a number of occasions, providing presentations to warehouse employees on occupational health and safety, conducting a site safety audit and providing training in drafting and understanding occupational health and safety procedures. 28 Employees from time to time received training from Altair in relation to safety issues. All new warehouse employees on commencing work with the defendant were inducted and provided with training and instruction from Mr Webster or his supervisors. That training included safety matters such as lock out and isolation procedures. In addition, material safety data sheets were made available to all employees. Before being allowed to use each item of plant, employees were given training and instruction by more senior staff as to how to operate conveyors and plant in a safe manner. Mr Webster or his supervisor assessed new staff as competent before they were allowed to use the plant. In April 2002, Mr Seach had attended and completed the four day WorkCover Occupational Health and Safety Consultation course. 29 In relation to the guarding of plant at the premises, Mr Seach said that to the best of his knowledge prior to the first accident the load out conveyor was fully enclosed with sheet metal. This conveyor carried the product from the demag unit to the bagging hopper. Sheet metal guards were bolted in place and fully enclosed the conveyor including the rollers at the pinch points. Mr Thompson in his interview with WorkCover said that immediately prior to his injury he had removed these guards by unbolting them. 30 Mesh guards around the plant had been installed for a month prior to the second accident and it was Mr Seach's opinion that it would not be possible to reach the nip points by workers using their hands, standing at the guarding and reaching towards the conveyor. He understood that in Mr Webster's case he had inserted an extension air wand around the guards to blow the product away from the demag unit and in doing so departed from the existing isolation procedure required for carrying out this type of work. 31 Immediately following Mr Thompson's accident a written lock out procedure was issued for the conveyor system. In the week following that accident tags that had been used for lock out procedures were replaced with locks. The defendant company then conducted an investigation and review of the safety of the plant and its guarding. To that end the company contracted Allfab Constructions Pty Ltd to construct and install additional guarding around the plant. Mr Seach understood that Allfab were to follow the WorkCover principles of machine guarding contained in Australian Standards when completing this work. Allfab began work on the additional guarding on 5 June 2003. Mr Seach understood that extended hours were worked to install the guards with the large guards being installed first to enable measurements to be taken for the small pockets which would require more intricate guarding. A significant amount of guarding had been installed prior to the accident involving Mr Webster but Allfab were still in the process of completing the task especially in relation to smaller guarding at the time of this accident. Steps were taken by Mr McIntyre to have the new guarding completed as soon as possible. In addition, an informal risk assessment was conducted at the plant with the large guards installed. During this risk assessment it was found that if a person stood at the large guard and reached towards the moving parts of the conveyor they could not reach any nip points. 32 Immediately following the incident involving Mr Webster, a piece of sheet metal was placed on the framework in the area of the plant where Mr Webster inserted the air wand. That plant had since been replaced by the defendant. The replacement of the plant was part of a process commenced prior to June 2003 and was due to ongoing product contamination problems caused by the old plant. The new plant cost in excess of $100,00 and was developed using new technology that complied with all relevant Australian standards. 33 After both incidents the defendant company engaged an independent machinery safety specialist to complete a risk assessment and to report on the plant in the warehouse. The company engaged a specialist electrical engineer to conduct an electrical audit and electrical hazard assessment of plant at the warehouse. On 22 July 2003 the premises were inspected by a representative of WorkCover and the company's machine guarding expert after which WorkCover expressed their satisfaction with the work that had been completed. 34 Mr Seach stated that every effort had been made by the company to assist Mr Thompson and Mr Webster in relation to their injury management and rehabilitation following the accident. The company had engaged Sports Medicine Approach to Rehabilitation Treatment to assist in creating a return to work programme for Mr Webster. The programme was designed to have Mr Webster return to fulltime duties by 5 June 2004 and under its terms Mr Webster initially returned to work for two hours per day from 24 November 2003. Immediately after Mr Webster's accident the company arranged travel and accommodation for Mr Webster's extended family with all expenses paid. A company car was continuously available to his wife and the company continued to pay Mr Webster his full rate of pay throughout his rehabilitation and he continued to accrue full entitlements. Senior management visited Mr Webster in hospital and continued supporting him. Arrangements were made for warehouse staff to travel to visit Mr Webster in hospital during working hours at no cost to themselves. 35 Mr Seach spoke of the company's commitment to occupational health and safety and gave details of a number of safe working procedures that were reviewed in 2003. These procedures were formalised and improved. Following the accident involving Mr Webster all employees were required to be inducted again and as part of that exercise were trained on safe work practices. Employees were also trained in the use of job safety analysis for non-routine work. The company restructured the positions and duties in relation to warehouse operations and in particular the supervisory and management duties of the warehouse were divided amongst a team of experienced employees rather than being concentrated in one position. In consultation with the staff a number of occupational health and safety polices and procedures had been adopted and were dealt with in Mr Seach's evidence. In addition, following these incidents the company arranged for employees to undertake training in occupational health and safety. In August 2003, employees attended a four day WorkCover occupational health and safety consultation course. 36 In May 2003, even though employing 12 staff the company established an occupational health and safety committee. Three meetings were held between March 2003 and June 2003. The committee continued to meet following the second accident. 37 Through Mr Seach the defendant company expressed its deep regret and contrition at the injuries received by its two employees. Mr Seach explained that the company was a small operation with a very small work team at Kemblawarra involving a close working relationship with all staff. The incidents had deeply affected everyone at the workplace and professional counselling services were immediately provided on the day of the second accident and an open ended invitation was extended to all staff to avail themselves of this service at any time. The company was striving to ensure an accident free workplace and was committed to the process of continual improvement in safety. 38 In a second affidavit Mr Seach referred to the September 2002 site safety audit at Kemblawarra and the recommendation that the "boot end" of the conveyor be covered by a cage with a door in order to keep people out when the belt was running. At this time the conveyor was fully enclosed with sheet metal guards bolted in place but following the safety audit, a further steel mesh box guard was put over the bottom roller at the boot end of the roller. Mr Seach understood that this guarding was removed by Mr Thompson prior to his accident. After that accident the guarding was replaced by a more substantial and heavier guard fitted and installed by Allfab. 39 Mr Seach was cross examined on a number of matters including his understanding as to where in the system Mr Thompson had been working when his arm was broken. Mr Seach said that from discussions with Mr Thompson this had occurred under the loadout conveyor. It was put to Mr Seach that in fact the accident had occurred at another point on the conveyor and that Mr Seach could not be certain as where the accident occurred because he was not present at the time. Mr Seach stated that he could only relay what had been told to him by Mr Thompson. SUBMISSIONS 40 The prosecutor presented a written outline in relation to each of the offences although readily conceding that there was a significant degree of repetition given that the two accidents took place in relation to the same machinery at the same site and just five weeks apart. It was noted that in both cases the breaches alleged were in the same terms namely: inadequate guarding; a systems failure in relation to the cleaning or maintenance of the conveyor system; failure in relation to information, instruction and training; and, failure to ensure lockout procedures were in place during the cleaning or maintenance of the conveyor system. 41 Attention was drawn to the provisions of the Crimes (Sentencing Procedure) Act 1999 and the provisions dealing with aggravating and mitigating factors. It was confirmed that the maximum penalty for a corporate first offender was $550,000 and that limit applied in both these cases. 42 In analysing the offending conduct the prosecutor submitted that in each case the breach was "multi-faceted" embracing a guarding failure, a systems failure and a failure to provide training, information and instruction. Importantly, a guarding deficiency had previously been identified. In relation to Mr Webster's incident the additional factor was the accident involving Mr Thompson such a short time earlier and the fact that the defendant had commenced guarding the machine at the time of Mr Webster's injury. At the time of Mr Thompson's accident the systems in existence were not written but were simply verbal. This was only partly rectified at the time of Mr Webster's accident. 43 As to foreseeability, the prosecutor submitted that in Mr Thompson's case the risk was actually foreseen as demonstrated by the September 2002 audit that identified the need to completely encage the "boot end" of the conveyor. The need to ensure proper guarding and to ensure that work was not performed whilst the machine was operating was clearly laid out in Australian Standards applicable at that time. By the time of Mr Webster's injury the defendant was aware of the recent injury to Mr Thompson and had taken steps to have the conveyor more adequately guarded. The risk of injury while cleaning or maintaining the conveyor system while it was in operation was not only foreseeable but was actually foreseen during the course of the September 2002 safety audit. 44 In these two cases it was submitted there were simple and straightforward remedial steps that could have been taken by the defendant to avoid the risk to safety occurring when persons worked on the maintenance or cleaning of the conveyor system while it was in operation. It was significant that the defendant issued the safe working documents after these incidents containing steps that could easily have been taken, in a formal sense and otherwise, prior to those accidents. 45 The prosecutor readily accepted that the principle of totality applied in relation to these two breaches. It was conceded that the particulars for each matter were in similar terms, apart from identifying maintenance for the task in one matter and cleaning as the task in the other. It was accepted that the circumstances required consideration of the common elements for both offences across the period of time involved. 46 As to subjective features, the prosecutor accepted that the principles flowing from the decision of the Court of Appeal in R v Thomson; R v Houlton (2000) 49 NSWLR 383 were applicable in relation to these two matters. No submission was advanced that would disentitle the defendant to a discount up to the 25 per cent referred to in Thomson & Houlton although it was accepted that the Court was not obliged nor bound to allow a discount of 25 per cent. It was accepted that the defendant took substantial steps since the injury suffered by Mr Webster to improve workplace safety and that some of those steps had been taken following Mr Thompson's injury. The defendant was entitled to credit for taking those steps to improve the safety of the plant. 47 The defendant had an unblemished record for a period of 60 years - this was conceded by the prosecutor to be "an excellent record" even though it might be said the industry was "moderately dangerous" in terms of ongoing risks to health and safety. That record was to be considered in the light of the purchase of the Kemblawarra operation in 1999. It was also accepted that the defendant had met all of its statutory obligations in relation to the WorkCover investigation. 48 For the defendant it was submitted that it needed to be understood and recognised that the defendant operated only this plant, consisting of three conveyors and three hoppers. This was not a case where there was inactivity in relation to occupational health and safety issues: the defendant had engaged the consultant Altair to perform a number of tasks; there was an occupational health and safety manual in existence prior to the incidents; verbal instruction was given at all times and prior to these two accidents; there was training in the cleaning of the plant; and, there were isolation procedures which were orally communicated and in operation before both accidents. Most of the repairs and repairs of significance were undertaken by specialist service providers. 49 In relation to Mr Thompson, detailed submissions were made as to where the accident took place, namely under the end of the conveyor. It was said the significance of identifying where the accident took place was the fact that the defendant had accepted that the plant was inadequately guarded but that the defendant was unable to accept that the guarding was unsafe at the area where the accident to Mr Thompson took place. In Mr Thompson's case, he had removed all the guarding that was in place in performing the task he had taken up. 50 The defendant had not demonstrated any lack of diligence in relation to the proper guarding of the conveyor system. A safety audit had been conducted in September 2002 where it was identified that the boot end of the conveyor was required to be guarded by a cage. That work was completed as a result of that audit. The defendant had moved to install even heavier guarding but that did not involve a concession that the existing guarding did not meet Australian Standards: the heavier guarding was used to deter employees from routinely removing that guarding and to make it less convenient to do so. Nevertheless, the defendant accepted that its systems, in their entirety, did not comply with the requirements of the Occupational Health and Safety Act 2000. 51 The defendant conceded that the injury to Mr Thompson was potentially serious. It was not, however, readily perceivable. A conclusion as to foreseeability depended upon a finding as to the area where the accident took place and a consideration of the fact that the 2002 audit had resulted in a guard being fitted but that guard was removed and the machine was not isolated by Mr Thompson while he worked on it. In relation to the second breach it was noted that Mr Webster was Mr Thompson's manager and was aware of the accident involving Mr Thompson. Mr Wester was considered to be a valued employee and the defendant company was aware of his expertise. The defendant had sought his continued employment at the time of the takeover because of his knowledge of the plant and how it was to operate. The defendant, however, contested that the injury to Mr Webster was actually foreseen or was foreseeable. It was not witnessed by Mr Seach and took place in the early hours of the morning in circumstances where Mr Webster had been told that no further work was required. 52 In relation to the argument that there were no written instructions at the time of these accidents it was pointed out that written procedures were not required until September 2003 and, in fact, the defendant was in the course of reviewing its systems with the assistance of outside consultants in order to comply with that timetable. 53 The defendant agreed that the principle of totality applied to these two offences and that it was proper to consider the breaches as part of an ongoing course of conduct by the defendant. It was also to be noted that the charges were in almost identical terms, relating to the operation of the same machinery and had occurred within a short time frame. 54 The defendant rejected the notion that the system of safety, being orally transmitted, was thereby a system that was left up to the employees themselves. That was not the defendant's system and the evidence disclosed events such as the 2002 audit, the occupational health and safety manual, the engagement of experts and steps taken after the accidents to address additional areas of identifiable risks. There was at all material times significant guarding of this conveyor system. By July 2003, the WorkCover Authority was satisfied with the guarding that had been adopted but it was also necessary to take into account the fact that the entire conveyor system had now been replaced with a totally different and up to date system. DELIBERATION 55 Before dealing with an assessment of the objective seriousness of these two offences, it is necessary to resolve the issue of where Mr Thompson was working at the time of his accident. In the absence of agreement as to this fact and in circumstances where the prosecutor was unable to make Mr Thompson available to give evidence, the onus borne by the prosecutor to establish this fact beyond reasonable doubt became insurmountable. Although the prosecutor relied upon a number of inferences, the evidence does not establish precisely where Mr Thompson was at the time of his injury, nor does it disclose precisely which part of the exposed machinery caught his arm resulting in a serious break. In those circumstances I proceed on the basis that Mr Thompson was working on the conveyor system around the area of that system that was closest to the ground when the accident took place. In any event, there is substance in the defendant's submission that this accident has to be considered in the light of the fact that Mr Thompson had removed all guarding that had been installed regardless of the overall adequacy of that guarding. 56 There can be no doubt on the evidence produced that in both these cases there was a serious breach of the Occupational Health and Safety Act 2000. The defendant, in terms, did not suggest otherwise but concentrated upon circumstances that could be identified as mitigating the defendant's culpability. The danger of unguarded machinery has been well known to operators of an enormous variety of machinery and various pieces of legislation have addressed those dangers over a very long period of time. The Australian Standards referred by the prosecutor are longstanding and have their origin in a variety of similar provisions. It is the most basic requirement of the operation of machinery that its nip points and areas where persons might come into contact with operating parts of the equipment must be guarded to prevent that occurrence. 57 In the present matters, the defendant was aware of the requirement to properly guard the conveyor system and had identified a certain area of risk at the "boot end" of the conveyor as early as September 2002. To its credit there was a significant degree of guarding already in place, guarding that may well have been installed when the equipment was owned by another company. Nevertheless, by the time Mr Thompson suffered his injury there were still areas where access could be gained, putting a person at risk of becoming entangled in the machinery: that this had been so for three years is of real concern. The defendant accepts that general inadequacy of its system of guarding. It is possible that Mr Thompson's injuries may have been more severe. Mr Webster lost his arm and appears to have had a considerable time in rehabilitation before returning to fulltime work. Those two injuries represent cogent evidence of the degree of risk associated with the operation of this conveyor system and the seriousness of the breach of the Occupational Health and Safety Act 2000 in each case. 58 Having regard to the particulars of the offence to which pleas of guilty have been entered, it is further of concern that two persons in supervising and management positions, (including Mr Webster who was responsible for the safe operation of the plant), continued to perform cleaning and maintenance tasks on the plant in breach of the defendant's safety system that required the plant to be isolated when such tasks were undertaken. Indeed, Mr Webster had indicated that it was common practice amongst workers to use the air wand to remove dust while the conveyor belt was in motion. It flows from that agreed position that not only was the defendant's requirement for the isolation of plant during maintenance and cleaning ignored by those with supervisory or management roles but that it was known to Mr Webster (at least) that other employees routinely used the wand in and around the conveyor whilst it was in operation. The enforcement of the system therefore fell down at the highest level and did so amongst those who would bear primary responsibility for enforcement of the defendant's safety procedures. Nor was there any system in evidence that audited (either internally or externally) what was actually happening on the factory floor. The routine breaching of the defendant's policy in relation to isolation of the conveyor system is also demonstrated by the fact that in relation to both incidents, there were other employees present but no evidence of them raising with the injured workers the need to isolate the plant before commencing and continuing with the maintenance or cleaning operation. There was nothing in the system therefore that took into account the common human frailty of shortcutting safety procedures or of deliberate action contrary to the established system of safety. Such failures are quite common in industry and in numerous cases this Court has emphasised the requirement for employers to be untiringly vigilant, especially in enforcing existing safety rules. It was foreseeable that work performed on the conveyor system while it was in operation without its guarding posed a serious risk to the health of those working in the vicinity. The fact that employees, (including those at supervisory and managerial level in a small establishment with few employees), 59 routinely undertook this cleaning or maintenance task while the machine was in operation and unguarded leaves the defendant in the position where the risk to safety was foreseeable and should have been known to it. There were simple remedial steps that could be taken to address that risk including the steps taken by the defendant shortly after these incidents. 60 Many of the comments mentioned in paragraph [57] also have relevance to the issue of general deterrence. Throughout industry there are numerous machines requiring guarding despite technological advances and this case serves as a reminder of the need for continual vigilance in ensuring the safety of such machinery. In relation to specific deterrence, the defendant is entitled to have taken into account the system in operation and the degree of guarding already in place before these two accidents. Equally, the defendant is entitled to have take into account the substantial steps taken after each accident to redress the risk exposed. The replacement of the conveyor system was an entirely new system that was not really described in the evidence to suggest that this purchase was driven by the need for a safer system. Nevertheless, to the extent that consideration played some role it should be taken into account. The defendant continues to be engaged in the manufacture and packaging of sodium sulphate and it is appropriate that specific deterrence form part of the penalty to be imposed. In this regard the defendant's long history of operation without breaching the provisions of occupational health and safety legislation must be considered in the context that for the great majority of that time, the defendant was involved in the transport industry in the driving of trucks and the transporting of goods and only since 1999 had been involved in the manufacture and packing of sodium sulphate at the Kemblawarra site. It was only a little after three years of being involved in this operation that the defendant was in serious breach of the Act and breached the provisions of the Act twice in a period of a little over five weeks. 61 I accept the submissions of both the prosecutor and the defendant that the principle of totality has an important role to play in assessing an appropriate penalty in these cases. Both offences occurred in a period approximately five weeks apart - each offence involved the use of the same machinery, although not at identical places in the operation of that machinery. Each offence is particularised in almost identical terms and therefore there are common elements that must be taken into account: importantly, the Act has as its focus the risk to safety rather than individual incidents that are evidence of the nature of the risk. While the defendant urges that these two offences should be regarded as a continuing breach, they are in fact two separate and serious breaches occurring within a short period of time and in circumstances where the first breach clearly alerted the defendant and its workforce of the necessity to isolate the machinery while carrying out maintenance and/or cleaning work. This factor therefore needs to be taken into account in the application of the principle of totality. 62 In considering the objective seriousness of each offence and the elements of general and specific deterrence, the fine in each case should be $195,000. In the application of the principle of totality as considered in the preceding paragraph and bearing in mind that the fine imposed should not be oppressively high or crushing, I am of the view that a total penalty of $210,000 would reflect the criminal culpability of the defendant. While it might be thought that the fine for the second offence should be considered more serious, it remains a first offence and there was no submission by the prosecutor that such an approach was appropriate. In those circumstances it is convenient that the fine be divided equally between the two offences. 63 In relation to subjective factors, the prosecutor accepted that the defendant was entitled to the benefit of the full discount in relation to its pleas of guilty. The picture is a little complicated by the fact that there were a number of mentions prior to the pleas of guilty being entered and those pleas were entered after representations were made by the defendant to the prosecutor. The prosecutor ultimately determined not to proceed with the charge under s 86(1)(b). The charge in relation to the incidence involving Mr Webster, however, proceeded without amendment. Notwithstanding those circumstances, I believe that the defendant was entitled to withhold its pleas in both cases until its representations were able to be assessed by the prosecutor and then to consider its position once the prosecutor had communicated his decision in relation to the way in which the charges would proceed. In those circumstances the defendant should not lose the benefit of the full discount for its plea and in each case it shall be accorded a full discount. 64 In relation to other subjective factors, it is significant that the company had been in operation for some 60 years without breaching occupational health and safety legislation although, as observed earlier, this record has to be considered in the context of its quite recent participation in a very different operation, namely, the manufacturing, packing and supplying of sodium sulphate. Taking that matter into account I agree with the prosecutor that the defendant's record is still to be regarded as a good industrial record. I am satisfied on the evidence that the defendant proffered significant support to its injured employees and their families and in so doing demonstrated its contrition and concern at having come into breach of the Act. Credit should also be given to the defendant for its existing safety system in operation prior to the accidents although the prosecutor criticised that system for its lack of documentation. This Court has from time to time noted in other cases the existence of comprehensive written systems that were not enforced and the evidence here leaves the defendant's system in no different situation except that it was not reduced to writing but was in existence and had been promulgated by way of induction but had not been adequately enforced. The defendant has also taken extensive steps after the first accident and continued those steps after the second accident to improve its system to eliminate the risks of injury while maintaining and cleaning the conveyor system. Importantly, it was conceded that the defendant assisted the WorkCover Authority during its investigation. These matters are all of significance and shall be taken into account in mitigating the severity of the penalty. ORDERS 65 In relation to Matter No IRC 2406 of 2005: 1. The defendant is found guilty of a breach of s 8(1) of the Occupational Health and Safety Act 2000 as particularised in the amended Application for Order, in Matter No IRC 2406 of 2005 to which it has pleaded guilty. 2. The defendant is fined the sum of $68,250 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 as agreed, and in the absence of agreement, as ordered by the Court. In relation to Matter No IRC 2405 of 2005: 1. The defendant is found guilty of a breach of s 8(1) of the Occupational Health and Safety Act 2000 as particularised in the Application for Order in Matter No IRC 2405 of 2005, to which it has pleaded guilty. 2. The defendant is fined the sum of $68,250 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 as agreed and in the absence of agreement, as ordered by the Court. 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.