Industrial Relations Commission of New South Wales in Court Session CITATION: WorkCover Authority of NSW (Inspector Mark Stothard) v Manildra Park Pty Ltd; WorkCover Authority of NSW (Inspector Mark Stothard) v Leslie Ronald Fletcher [2007] NSWIRComm 35 PROSECUTOR WorkCover Authority of NSW (Inspector Mark Stothard) PARTIES: DEFENDANTS Manildra Park Pty Ltd Leslie Ronald Fletcher FILE NUMBER(S): IRC 6789 - 92 of 2005 CORAM: Marks J CATCHWORDS: OH&S - pleas of guilty - employee breached previous instruction - worker conducted himself inappropriately - plant equipment faulty - contractors failed to alert worker of risk - senior personnel at funeral - no risk assessment undertaken of task - defendant had pro active and comprehensive approach to OH&S obligations. HELD: Objectively serious - deficiencies in protocols & procedure and their implementation - inherent risk in type of work - general & specific deterrence - mitigating factors: - early plea - co-operation with investigators - expressions of contrition & remorse - unblemished record - commitment to OH&S - steps taken after incident - good corporate citizen. Principle of totality to apply - distinct obligations under ss 8(1) & 8(2) - penalty imposed. LEGISLATION CITED: Occupational Health and Safety Act 2000 HEARING DATES: 19 February 2007 DATE OF JUDGMENT: 28 February 2007 PROSECUTOR Mr R Reitano of counsel SOLICITOR: Ms F Miller WorkCover Authority of NSW LEGAL REPRESENTATIVES: DEFENDANTS Mr S Stanton of counsel SOLICITOR: Mr T Vernier Australian Business Lawyers JUDGMENT: - 4 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Marks J Wednesday 28 February 2007 Matter No IRC 6789, 6790, 6791, 6792 of 2005 Inspector Mark Stothard v Manildra Park Pty Ltd Inspector Mark Stothard v Leslie Ronald Fletcher Prosecution under ss 8(1) and 8(2) of the Occupational Health and Safety Act 2000 JUDGMENT [2007] NSWIRComm 35 1 The prosecutor, Inspector Mark Stothard of the WorkCover Authority of New South Wales, has brought proceedings against the defendants Manildra Park Pty Ltd ("Manildra") and Leslie Ronald Fletcher ("Mr Fletcher") alleging breaches by each of them of ss8(1) and 8(2) of the Occupational Health and Safety Act 2000 ("the Act"). The prosecutions arise out of an incident which occurred on 28 January 2004 at premises owned by the defendant Manildra situated in Port Kembla from which the defendant operated a fuel storage depot. Mr Fletcher was at all relevant times a director of Manildra and his breaches of ss8(1) and 8(2) of the Act arose as a result of the provisions of s26(1) of the Act. 2 Relevantly, ss8(1), 8(2) and 26(1) are in the following terms. 8 Duties of employers (1) Employees An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. (2) Others at workplace An employer must ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work. See section 12 for the penalty for an offence against this section and other provisions of this Division. Division 4 makes ancillary provision with respect to those offences, including: (a) section 26—liability of directors and managers of corporations, (b) section 28—defence that compliance not reasonably practicable etc. See also Division 2 for duty of employer to consult employees. 26 Offences by corporations—liability of directors and managers (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation. 3 The defendants have entered pleas of guilty to each of the two charges brought against them which, as I have said, arise out of the same incident. This judgment deals only with the question of penalty. 4 An agreed statement of facts was tendered into evidence which is in the following terms. "1. At all material times Inspector Mark Stothard of the WorkCover Authority of New South Wales, Level 3, 92 – 100 Donnison Street, Gosford in the State of New South Wales was an Inspector duly appointed under Division 1 of Part 5 of the Occupational Health and Safety Act 2000 ("the Act") and empowered under Section 106 of the Act to institute proceedings in the within matter. 2. At all material times Manildra Park Pty Limited (ABN 17 093 014 129) was a corporation whose registered office is situated at Cronin & Norris, 47 Manning Street, Kiama, in the State of New South Wales ("Manildra"). 3. At all material times Leslie Ronald Fletcher, whose address is 61 The Esplanade, Oak Flats in the State of New South Wales. 4. At all material times Manildra was a corporation which undertook the business of marine fuel bunkering and supply. 5. At all material times Mr Leslie Fletcher was a director of the corporation and was responsible for ensuring its occupational health and safety management system was implemented and maintained. 6. At all material times Manildra was an employer. 7. At all material times Manildra owned Lot 2, 5 Flinders Street, Port Kembla, in the State of New South Wales (the premises). The premises were leased from Manildra by Manildra Energy Australia Pty Ltd who operated a bond store/warehouse at the premises. Whilst the premises were leased to another entity Manildra operated a fuel storage depot at the premises and was responsible for the maintenance and improvement of the premises. Manildra Energy Australia Pty Ltd formed part of Manildra Group of Companies. 8. On 28 January 2004 Manildra employed Craig Merton ("Mr Merton") as a casual boilermaker. On 28 January 2004 Mr Merton had been employed by Manildra for approximately four months. Mr Merton had a trade certificate as a boilermaker and had approximately 25 years experience as a boilermaker. 9. On 28 January 2004 Manildra employed Wayne Anderson ("Mr Anderson") as a labourer. Mr Anderson also performed the role of a leading hand but was not officially employed as such by Manildra. His role included the upgrade of the foam and water sprinkler systems and maintenance works undertaken at the premises. His role included supervision of this aspect of work, in particular in the absence of Mr Leslie Fletcher or Mr Brett Fletcher at the premises. 10. On 28 January 2004 Manildra Energy Australia Pty Ltd employed Merv Goodworth ("Mr Goodworth") as a supervisor at the premises. His role primarily was setting up bunkering operations and control of customs documents. 11. On 28 January 2004 Mr Leslie Fletcher was the Director and General Manager of Manildra. 12. On 28 January 2004 Brett Fletcher was employed by Manildra as a leading hand/supervisor. On 28 January 2004 he had been employed in this role for approximately six months. 13. There were 9 above ground tanks at the premises which were used for the storage of dangerous goods, including tank 11 an above ground cylindrical steel, fixed roof vented storage tank, which measured approximately 14.450 metres high with an outside diameter of approximately 36.602 metres. The tanks were located in the bund area of the premises. 14. On 28 January 2004 tank 11 contained approximately 4,799,119 litres of ethanol (denatured with 1% petrol). It was approximately 1/3 full. Ethanol had commenced to be stored in tank 11 sometime in July 2003. On 28 January 2004 tank 11 was licensed for storage of petrol. 15. The storage tanks and associated equipment at the fuel storage depot was owned and controlled by Manildra. The ethanol contained in Tank 11 was supplied and owned by Shoalhaven Starches Pty Ltd. Shoalhaven Starches Pty Ltd formed part of what was known as the Manildra Group of Companies. 16. A few months prior to the incident Manildra commenced to upgrade tank 11 by installing a water sprinkler system and a foam protection system. Manildra had liaised with Solly Engineering and it was considered that the upgrades were required given the intention to store ethanol in the tank. Tank 6 at the premises was also being upgraded and as of 28 January 2004 was empty and a floating floor was being installed. Tank 6 was approximately 21 metres away from Tank 11. 17. As part of the upgrade of the tanks Q & A Engineering Pty Ltd (Q & A) had been contracted to fit fresh water sprinkler pipe work to the tanks at the premises. They commenced work in November 2003. On 28 January 2004 Jamie Hokin and William Donohue, employees of Q & A were undertaking duties at the premises. 18. On the morning of 28 January 2004 Mr Merton had been instructed by Mr Anderson to weld half-inch sockets onto five pipes located in the bund area, including a section of the foam delivery pipe work connected to tank 11 at the base area of the tank. This work was part of the upgrade to the tanks at the premises. This foam pipe work ran from the manifold at the truck wash bay/shed/laboratory building onto the tank base, than around the tank to supply the vertical pipe work connected to the foam box pourers, installed on tank 11. Mr Anderson had in situ marked on the pipe work to be welded the specific location for the installation of the half-inch threaded socket. Mr Anderson had also left the sockets to be installed in the vicinity of the pipe work. 19. At approximately 9.30am Mr Merton was in the bunded area of the premises undertaking the installation of the sockets. He did not remove the sections of the pipe to be welded but commenced to do the work in situ. He used a Bosch GWS 9-125 portable electrical angle grinder to grind the galvanized coating off the section of pipe work in order to perform the welding for the attachment of the half-inch socket. This socket was later to accommodate the installation of a valve. Once he had finished grinding he commenced to burn a hole in the pipe work using a welding rod connected to the hand piece of the Lincoln Electric Invertec V160 welder. Mr Merton completed the attachment of 4 sockets on 4 separate foam pipes without incident. These pipes were not connected to Tank 11. Then he commenced on the pipe which was part of the foam delivery pipe work connected to tank 11. He completed the grinding of this pipe and commenced welding. Shortly after he commenced welding there was a loud explosion from tank 11 which blew the lid off the tank and was followed by a fire. 20. Mr Merton in his statement of 14 April 2004 to WorkCover stated: "I first ground off the galve, then I blew a hole with the welder and as soon as that hole went through a noise something like a aero plane jet engine sounded in my ears as I looked up I could see the top edge of the tank splitting open and flames coming out so then I took off. The next thing I know I'm rolling next to two blending tanks it must have been the blast from the lid that knocked me to the ground, looking back at tank 11 thinking I've just killed a Q&A guy. The lid was in the air I didn't see it land cause I was caught up waiting to die from the next explosion if it was going to happen". 21. Just prior to the explosion of tank 11 at approximately 9:00am, Mr Hokin and Mr Donohue had been working on top of tank 11 installing a new water sprinkler system. They had alighted from tank 11 and had gone to an area at the rear of the main administration building which was a safe area designated for undertaking hot work. They had observed Mr Merton grinding on the pipe work as they descended the tank. They were to perform some welding work and return later to the top of tank 11 to progress the installation of the water sprinkler system. 22. At the time of the explosion Dragan Hristovski, a labourer employed by Manildra, was standing outside at the main access gate to the premises with fellow employee Zoran Dimeski having morning tea. Mr Hristovski heard the explosion, saw the tank lid blow into the air and the fire. He rang 000 at approximately 9:50 am and notified emergency services of the incident. Emergency services including NSW Fire Brigades, NSW Police Service and NSW Ambulance attended the premises in response to the incident within a short period of time. 23. At the time of the explosion Mr Anderson was approximately 8 metres from the eastern side of tank 11 aligning some pipe work. He was catapulted by the shockwave of the explosion, knocked unconscious, landing several metres away at the bund wall adjacent to Flinders Street. He sustained burns due to the radiant heat generated by the ethanol tank fire whilst he lay unconscious for approximately 15 minutes. He later attended Wollongong hospital where his injuries including burns to both shoulder regions and burns extending down both arms to the elbow region were treated. He remained at the hospital for 6 hours for medical observation until discharge. He returned to work the next day. 24. At the time of the explosion the lid of tank 11 was blown into the air, upturned and landed upside down onto the truck wash bay/shed/laboratory building demolishing these building structures in the process. The power supply for the area was also disabled as the electrical switchboard was in the vicinity of the demolished buildings and was severely damaged by the tank 11 lid. The lack of power disabled and prevented the operation of the newly installed foam protection systems supplying tank 11. 25. Resulting from the incident Mr Merton sustained and was diagnosed with severe stress, vomiting, fatigue insomnia and anorexia. He is no longer employed by Manildra. He has not worked since the incident. 26. The fire resulting from the explosion was not brought under control until the following morning, 29 January 2004. The premises were handed over by the NSW Fire Brigades on 29 January 2004 to the NSW Police Service forensic personnel (at approximately 4:00pm) and were declared a crime scene. WorkCover was granted access to the premises at approximately 2:15pm on 29 January 2004. 27. At the time of the incident Mr Leslie Fletcher and Mr Brett Fletcher were not on the premises as they were attending a family funeral. Supervision of employees and contractors at the premises that morning was the alleged responsibility of Mr Goodworth and Mr Anderson. At the time of the incident Mr Goodworth was the most senior person present at the premises. Mr Goodworth was at the crib room at the main administration building at the time of the explosion. Mr Goodworth was not aware of the work being performed by Mr Merton on the foam pipe work adjacent to tank 11. Mr Anderson had allocated Mr Merton the job which he was undertaking at the time of the incident. Mr Anderson was employed as a labourer, but had been given responsibility for overseeing the water cooling and foam and fire fighting pipe installation. 28. No formal arrangements were in place at the premises regarding supervisory responsibilities in the event that senior management were absent from the premises. No position descriptions were available or communicated to persons involved in the management and supervision of employees and contractors at the premises. The level of supervision should have taken into account the hazards associated with performing hot work in the bund area at the premises and the level of training and expertise of those being supervised. 29. The work being performed by Mr Merton at the time of the incident was hot work which required a hot work permit if performed in the bunded area. The work was undertaken without the authorization of a safe work permit (hot work) and contrary to the associated procedural requirements of its OHS Management system. Both Mr Merton and Mr Anderson were aware that tank 11 contained ethanol on that day. 30. Verbal arrangements at the premises at the time of the incident for performing hot work activities was that such things as welding and grinding should be undertaken at the rear of the administration building. This designated area was not identified in OHS procedures forming Manildra's OHS management system. The section of pipe work upon which Mr Merton was welding at the time of the incident could have been dismantled safely and removed to the area at the rear of the administration building. A hot work permit would not be required if the work was undertaken in this area. 31. Specific requirements for hot work is stated and forms part of Manildra's OHS management system and specifically in the system documentation titled 'Manildra Park Pty Ltd, Port Kembla Operations Manual, at page 13 under hot work conditions it states: 'Prior to commencement of hot work, a 'HOT WORK' permit and relevant JSA will be compiled in conjunction with the facility supervisor'. No Job Safety Analysis was prepared for the work performed by Mr Merton on the foam pipe work within the bund area adjacent to tank 11. 32. A Job Safety Analysis Worksheet dated 6 January 2004 was prepared for the installation of the Sprinkler/Cooling Water System on Tank 11. There is no reference within this Job Safety Analysis Worksheet to Safe Work Permits. 33. Mr Goodworth, Mr Nicolas Fletcher and Mr Brett Fletcher were persons authorised to issue Safe Work Permits for hot work at the premises. No person asked for a permit to be issued in relation to the work undertaken by Mr Merton prior to the explosion. 34. Mr Anderson had not been provided training in hot work procedures by Manildra. He said he was aware of general hot work procedure due to his previous work experience. He had not performed any hot work at the premises using the safe work permit system. Mr Merton had been informed of Manildra's hot work system as part of his induction at the premises. Mr Merton stated that no further information or specific training was provided to him with respect to safe work procedures including hot work. 35. Mr Merton said that he understood that the foam pipe work he was to work upon may or should have contained water. He stated that Mr Anderson had advised him of this. Mr Merton stated that he considered Mr Anderson had indicated to him that the job was to be done in situ. Mr Anderson stated that he told Mr Merton to remove the pipe work and conduct the welding in the designated hot work zone. Mr Merton denies he was given this instruction. 36. The foam pipe work could have been dismantled and removed to the designated safe work area for the sockets to be attached and then brought back to the bund area and to be reassembled. 37. The upgrade work on tank 11 by Manildra personnel and contactors could also have been by undertaken at a time when no ethanol or any other dangerous goods or flammable liquid was being stored within tank 11. 38. No assessment of the contents of any substance, or liquid that may be present in the foam pipe work that was to be worked on by Mr Merton was conducted prior to work being undertaken. 39. The foam pipe work from the manifold which continued around the base of tank 11 had been installed by Jim Freeman Plumbing during the middle of 2003. The vertical pipe work connecting to the pipe running around the base of tank 11 supplying and connected to the three foam box pourers was installed by Manildra employees from the middle of 2003. 40. Employees of Manildra installed the three foam box pourers fitted to tank 11. The 3 foam box pourers (foam boxes) were installed approximately equally spaced (approximately 38 metres) around the circumference exterior upper wall section of the tank. 41. The foam box pourers purpose is to assist in the discharge of foam over the fuel surface in this case over the surface of the ethanol within tank 11. In the event of fire a foam/water mixture would be pumped under pressure through the foam delivery pipe work to these foam box pourers where it is mixed with air to generate foam. The foam boxes were secured to the tank wall with nuts and bolts. The deflector plate section of the foam box pourer passes through an aperture in the tank wall. Foam is forced through the foam box pourer, firstly rupturing the frangible disc then is forced back from the deflector plate section onto the tank wall and surface of the tank contents, resulting in the foam moving centrally to the middle of the tank extinguishing the fire. 42. The foam box pourers should be fitted with a frangible disc (bursting disc). The purpose of the disc is to create a seal and prevent vapours entering the delivery system. It appears on inspection of the foam box pourers by WorkCover, that the foam box pourer identification number FB001 had not been fitted with this frangible disc. The omission of the frangible disc from foam box pourer FB001 would allow ethanol vapour to enter, travel and condensate along the adjoined foam pipe work. 43. In a statement provided by Mr Leslie Fletcher on 9 August 2004, he identifies the foam box pourer FB001 to be the last installed on tank 11. He also said that no check or inspection was conducted on this foam box pourer to ensure that this disc was fitted and installed correctly. 44. This foam box pourer was supplied by Kidde Australia Pty Ltd to Manildra Group/Shoalhaven Starches Pty Ltd and delivered to Manildra's premises on 16 June 2003. 45. Dangerous goods details taken from a stamped Dangerous Goods plan registered with WorkCover for Manildra's premises indicate the storage capacity of tank 11 as 13638 kilolitres or 13 638 000 litres. The Dangerous Goods license indicates that tank 11 (depot 11 on license) states goods stored in depot as above ground tank with goods stored as UN Petrol Class 3 with quantity 13 000 000 litres. There is no record to indicate that ethanol would be stored in tank 11. 46. A fire service diagram was affixed to the gate at the main entrance access, this specifies marine fuel oil for tank 11. This information is contrary to the contents actually contained in the tank which was ethanol. In the event of an emergency as in the case of the explosion and fire of tank 11, the NSW Fire Brigades personnel who attended the premises, in seeking information with respect to the tanks contents would/could have been misinformed. This also could have misled employees, contractors and other persons seeking advice as to the tank contents. Although, Mr Merton and Mr Anderson were aware the tank contained ethanol at the date of the incident. 47. Ethanol is a class 3 dangerous good as determined under the Australian Dangerous Goods Code. The Material Safety Data sheet for ethanol notes that it is "Flammable. May evolve toxic gases (hydrocarbons, carbon oxides) when heated to decomposition" it also notes 'Avoid heat and sources of ignition. Prevent build up of flammable vapours. Hoses should be electrically continuous and containers bonded to avoid static build up'. A Material Safety Data Sheet for ethanol was available at the premises. 48. On 28 January 2004 an elevating work platform and a diesel operated truck had been introduced within the bund area adjacent to tank 11. These plant items were allowed in this hazardous area and were a potential ignition source to any potential explosive atmosphere that may be present. The diesel truck and elevating work platform were not certified to comply with AS 2359 and were not authorised to enter this location under Manildra's safe work permit system. 49. No monitoring utilising the Industrial Scientific multi-gas monitor model ATX620 was performed on premises that morning prior to the explosion to test for flammable gases or vapours at the bunded area. Mr Anderson had not been specifically trained in the safe operation of this piece of equipment. Mr Goodworth was the only person trained and available that morning to use this test equipment. Mr Goodworth did not perform any gas testing that morning at the bund location. 50. Subsequent to the incident a full risk assessment and review of dangerous goods storage at the premises was conducted by Jim Green of Matrix Risk and Process Pty Ltd on behalf of Manildra. A review and redesign of the Safe work permit which is now called the hot work/safe work permit was implemented. No risk assessment of that kind had been conducted previously. 51. Following the incident training was conducted and provided to employees of the Manildra Park Pty Ltd premises relating to the:- a. Changes made to the existing safe work permit and the new hot work/safe work permit system, includes hand back procedures on completion of hot work activities; b. Changes to the existing safe work permit under the general section are included on the new hot work/safe work permit which includes details relating to gas tester requirements and which now as part of the new permit asks the question "Safe to proceed :Yes /No"; c. If testing is undertaken that meets these stipulated parameters then it is either safe or not safe to proceed; d. completing new hot work/safe work permit; e. Retraining in the use of the gas testing equipment; f. Training in the development and use of Job safety Analysis Sheets/procedures; g. On the job training; 52. Subsequent to the incident Manildra conducted a review and evaluation of existing OHS Management System and operational procedures at the premises, including review of procedures relating to fire fighting and confined space work. This included a review of available Material Safety Data Sheets for Hazardous substances and identified locations for access of use. 53. Subsequent to the incident modifications and improvements to the premises, plant and systems of work were undertaken progressed This included:- a) Fire boxes being checked, and fully equipped. Hoses replaced where necessary; b) Hydrant booster connection on Flinders Street entrance installed and non return valve fitted. Appropriately signed; c) Water sprinkler manifold off main water supply to all tanks. Valves clearly marked with signs showing operational procedures. Emergency exit with tactical fire plan; d) Pipes in bund wall 4 have been excavated and sealed with concrete; e) New pipe work from sprinkler manifold to storage tanks; f) Cooling sprinkler system fitted; g) New electrical cables and cable trays throughout tank farm. To specifications as per AS 1940; h) Eight (8) additional fire extinguishers fitted in appropriate locations; i) New emergency stop buttons fitted and appropriately signed; j) Emergency tactical fire plans fitted at assembly point, front gate and emergency exit gate; k) New switchboard and power installed with fire extinguisher and appropriate signage; l) New signage and fire extinguishers installed at truck loading bay; m) MSDS located at loading bay and registration sign-in point; n) Various 'NO SMOKING" signs and SAFE WORK SIGNS placed throughout terminal; o) Boom gate entrance to tank farm-"STOP-NO ENTRY" sign replaced; p) Tool box and safety meetings implemented and recorded. Fire drill being implemented; q) New security lighting in terminal; r) New earth straps and lightning rods completed; s) All appropriate "safety procedures" signs in and around workshop completed; t) New masonry block bund walls with reinforced concrete foundations under construction. Heat barriers being constructed in front of foam and cooling valves; u) New power pole and transformer installed on site; v) All ship bunker and discharge hoses replaced with new; w) Stormwater drains to separator pits replaced and upgraded where necessary; x) All excess pipe work and equipment/container removed from bunded area; y) New foam pump and equipment installed including a stainless steel storage tank. All appropriately signed with operational procedures; z) All fire damaged pipe work and bunker equipment replaced; aa) All fire damaged electrical motors/pumps replaced with new ones and tested; bb) All paints and hazardous materials securely stored in flame proof container; cc) Tank 11 was subsequently demolished after the explosion and fire and was reconstructed." 5 In addition, a number of documents including factual inspection reports, photographs and engineering reports were also tendered into evidence by the prosecutor. On behalf of the defendants, there was tendered into evidence affidavits by the defendant Mr Fletcher, Nicholas Fletcher, Mervyn Goodworth, Brett Fletcher and Cynthia Anderson. 6 As against each of the defendants, the contravention of s8(1) arose as a result of a failure to ensure the health, safety and welfare at work of employees, in particular Craig Merton and Wayne Anderson. The breaches to s8(2) against each defendant alleged a failure to ensure that persons not in the employment of Manildra were not exposed to risks to health or safety arising from the conduct of the undertaking of Manildra, being Jamie Hokin and William Donohue. Both of these persons were employees of Q & A Engineering Pty Ltd ("Q & A") which had been contracted to fit fresh water sprinkler pipe work to the tanks at the premises. 7 The aggregate of the evidence is to the effect that the incident was affected by the confluence of a number of factors. These were: 1) The fact that Craig Merton a casual welder, who appears to have been engaged by Manildra for a period of about four months only, had decided to undertake welding in the bunded area adjacent to the tank. In doing so, he breached instructions that had previously been given to him about the necessity to obtain a hot work permit after analysing the safest method for carrying out the work. It is not known whether Mr Merton decided to perform the welding work next to the tank rather than remove the piping out of laziness, stupidity or inattentiveness or, perhaps, a combination of some or all of these matters. He immediately confessed to the fact that he had conducted himself inappropriately after the incident. 2) The foam top pourer failed to contain a frangible glass-bursting disc that, if present, would have prevented vapours from escaping. Manildra had checked all of the other pourers for the presence of the disc, which is difficult to detect, except for this one that had been installed on tank 11. 3) The employees of Q & A had seen Mr Merton using an angle grinder on the pipe work adjacent to the tank before leaving the site to perform some welding work themselves, but do not appear to have attempted to alert Mr Merton or anyone else as to the inappropriate manner in which he was undertaking the work. 4) Senior personnel on the site, being a Mr Leslie Fletcher and his sons Nicholas and Brett, were absent from the site at the time of the incident attending a family funeral. 5) No risk assessment of the particular task being carried out be Mr Merton appears to have been undertaken, he did not seek a hot work permit, the person supervising him was inadequately or inappropriately trained and did not ensure that a risk assessment was carried out or that a hot work permit was applied for. 8 Although the absence of the frangible disc in the pourer obviously played some part in the chain of events that led to this unfortunate incident, this does not of itself lessen the seriousness of the offence or the culpability of the defendants. However, it should be noted that an invoice which became evidence in the proceedings clearly indicates that the supplier of the pourer set, Kidde Australia Pty Ltd, sold the set to the Manildra group on the basis that the frangible disc was installed within it. 9 The evidence, which was extensive, indicated that in general terms Manildra had a pro active and comprehensive approach to its occupational health and safety obligations, particularly as tank farms storing volatile materials create a unique and well known risk to health and safety not only of persons performing work on the tank farm premises, but also others in the neighbourhood. 10 The particulars alleged against the defendants related to particular failures on the part of Manildra, namely: a) to prevent the introduction of sources of ignition created by welding equipment, angle grinders and the like; b) failure to provide and maintain a safe system of work in relation to the use of such equipment; c) failure to provide adequate information, instruction, training and supervision to employees concerning the safe use of that equipment; d) failure to ensure that the foam box pourer was fitted with a frangible disc; e) failure to conduct an adequate risk assessment and job safety analysis in relation to the particular work being carried out. 11 It is obvious from the body of the evidence as reflected in the agreed statement of facts that the work undertaken by Mr Merton, under the supervision of Mr Anderson, was in breach of procedures and protocols created by Manildra. Nevertheless, there is sufficient indication in the agreed statement of facts that there were deficiencies in these protocols and procedures and certainly in their implementation on the day of the incident. The material contained in [34] and [35] of the agreed statement of facts in particular points to this. 12 It is a trite observation that the more dangerous the activity being undertaken, the greater should be the level of care and vigilance utilised to ensure that the obligation to provide a safe working environment is met. Given the concessions as to the deficiencies in the defendants' protocols and procedures and their implementation, as reflected in the agreed statement of facts and, generally, in the evidence, and given the undoubted risks inherent in carrying out this type of work on the premises of Manildra, the breaches of the Act must be characterised as serious. 13 In determining penalty, I shall not only take into account the objective seriousness of the offences as I have described them but also the need to take into account the general deterrent effect within the industrial community and the specific deterrent effect on these defendants. 14 However, there are a number of mitigating factors that it is appropriate to take into account in favour of the defendants. These include the pleas of guilty which I am satisfied were entered at the earliest appropriate opportunity, their co-operation with the investigations conducted by the WorkCover Authority of New South Wales, expressions of remorse and contrition which I accept, the otherwise unblemished record of the defendants for breaches of occupational health and safety legislation, the commitment generally of Manildra to its occupational health and safety obligations, the steps taken by Manildra after the incident to improve its occupational health and safety protocols and procedures and the fact that Manildra is a good corporate citizen. 15 The maximum penalty for each of the offences under ss8(1) and 8(2) is $550,000. The maximum penalty applicable to Mr Fletcher for each of the two offences is $55,000. Obviously, with respect to both defendants, the principle of totality must apply in that both offences arose out of the same factual circumstances. However, in applying the principle of totality I take into account that the legislature has created separate offences under ss8(1) and 8(2) so that there are separate and distinct obligations owed by employers and others with respect to persons who are employees and who are not employees in connection with the carrying out of their undertakings. This is well recognised in authorities established by this Court. 16 Having regard to the objective seriousness of the offences, which I have described, and the necessity to take into account the deterrent effect to which I have referred, but having regard also to the mitigating matters to which I have referred and the necessity to apply the principle of totality in the context of the two separate offences with which each of the defendants is charged, I intend fixing a penalty for Manildra for each of the offences in the sum of $80,000 and for Mr Fletcher in the sum of $8,000. 17 The prosecutor sought orders for the payment of costs and a moiety of the penalty, which were not opposed. Orders 18 I impose the following orders: 1) Each of the defendants is found guilty of the offences charged and convicted accordingly. 2) I impose a penalty on the defendant Manildra Park Pty Ltd of $80,000 for each of the offences and on the defendant Leslie Ronald Fletcher of $8,000 for each of the offences with a moiety to the prosecutor. 3) The defendants are to pay the costs of the prosecution assessed by the Court in default of agreement. 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.