Industrial Court of New South Wales CITATION: Inspector Raj Garg v Consolidated Extrusions Management Pty Ltd [2006] NSWIRComm 231 PROSECUTOR: Inspector Raj Garg PARTIES: DEFENDANT: Consolidated Extrusions Management Pty Ltd. FILE NUMBER(S): IRC 1137 of 2005 CORAM: Haylen J CATCHWORDS: Occupational Health and Safety Act 2000 - s 8(1) - plea of not guilty entered and ten hearing days set - one month before hearing defendant changes plea to guilty to an Amended Application for Order - defendant engaged in manufacture and distribution of alloy extrusions - hot metal spill followed by explosion and fire - heavy metal plate hits roof of factory - emergency procedures followed - no injuries result - existing system deals with usual hot metal spills but latest incident involves unusual spill not able to be contained by existing methods - modified guard introduced after spill - procedures enforced to ensure temperature of metal tested before pour begins - serious breach established - defendant closes operation with no intention to recommence manufacturing - general deterrence considered - no appropriate role for specific deterrence - detailed existing system of safety - discount for utilitarian value of plea - numerous subjective factors - prior conviction concerning different aspect of operation - penalty imposed CASES CITED: Veen v Queen (No 2) (1988) 164 CLR 465 Weineger v Queen (2003) 212 CLR 629 HEARING DATES: 10/07/2006 EXTEMPORE JUDGMENT DATE: 07/10/2006 PROSECUTOR: Mr R Reitano of counsel SOLICITORS: Criminal Law Practice WorkCover Authority LEGAL REPRESENTATIVES: Legal Group DEFENDANT: Mr D Jordan of counsel SOLICITORS: Sparke Helmore JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Haylen J 10 July 2006 Matter No IRC 1137 of 2005 INSPECTOR RAJ GARG v CONSOLIDATED EXTRUSIONS MANAGEMENT PTY LTD. Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 EX TEMPORE JUDGMENT [2006] NSWIRComm 231 1 On 13 June 2003 Consolidated Extrusions Management Pty Limited experienced an incident at its Ingleburn operation. On that day, there was a hot metal spill that was ultimately the subject of an investigation by the WorkCover Authority. In March 2005 an Inspector of the authority commenced proceedings alleging a breach of s 8(1) of the Occupational Health and Safety Act 2000 by the company. The matter was listed to receive a plea on approximately four occasions before a plea of not guilty was entered in early October 2005. Ten days were set aside for the hearing of the matter, commencing on 10 July 2006. On 14 June 2006 the Court was informed by the defendant that a change of plea would be entered. A plea of guilty would now be recorded and only one of the ten hearing days would be required for evidence and submissions on sentence. 2 At the hearing in relation to sentence the prosecutor tendered an Amended Application for Order which in short alleged that on 13 June 2003 at 10 Williamson Road, Ingleburn, the defendant had failed to ensure the health, safety and welfare of work of all its employees and in particular Nigel Turner, Ray Dengate, Utupo Solia, Bruce Cheong and Boon Tang, contrary to 8 (1) of the Occupational Health and Safety Act 2000. 3 The Particulars of that offence were that the defendant had failed to properly and securely guard the horizontal continuous caster so as to prevent run outs from going outside the run out pit in the event a run out occurred, and secondly, that the defendant had failed to maintain a safe system of work in relation to the operation of furnaces for the making of alloy, in that it failed to ensure that furnace operators took the temperature of the pour before the pour was commenced, so as to ensure that the metal was not hotter than expected upon the pour being undertaken. 4 In relation to that Amended Application for Order the defendant confirmed what had already been notified to the Court, namely, that it entered a plea of guilty to that Amended Application for Order. It was common ground that the defendant accepted that the risks included a risk of personal injury or death. 5 The Amended Application for Order primarily deleted two further Particulars that had appeared in the original Application for Order, and there was some debate about the significance of that, to which I shall return. The case for the prosecutor consisted of an Agreed Statement of Facts, which is annexed to this judgment. There were a number of photographs of the plant that was involved in this incident and a certificate of prior convictions indicating that the defendant in May 1992 had been found guilty of a breach of s 27 of the Factory Shops and Industries Act and fined $2,500 by the Chief Industrial Magistrate, but more recently in January 2005 had been fined $16,250 by the Chief Industrial Magistrate for a breach of s 8(1) of the Occupational Health and Safety Act 2000. The Court had before it the reasons for the decision of the Chief Industrial Magistrate in the January 2005 matter. That was a plea of guilty in relation to an incident that occurred in May 2002, and it was accepted by the prosecutor that the incident involved in that particular failure was quite different to the incident now being dealt with by the Court. It does, however, give the defendant a prior record, resulting in the maximum penalty for the current offence being $825,000. 6 The Agreed Statement of Facts gave an outline of the nature of the operation conducted by the defendant with particular attention to the task being undertaken on 13 June 2003. There was, on that day, the casting of metal logs and an incident arose where it became clear to the two employees who were in a control room, that a stream of metal was coming out of the south strand of the Horizontal Continuous Caster Line 1. Emergency procedures were then adopted to stop the run out but they were unsuccessful. It was noticed that there was a flow of molten metal that was progressively getting worse and was covering the area in front of the doorway to the control room and that smoke was entering the control room. Employees then decided to evacuate the cast house and followed emergency and evacuation procedures in which they were trained. A siren was sounded and every one in the cast house was evacuated outside the premises. A short time after there was an explosion and flames were seen leaving the cast house in the area of the run out. The run out resulted in approximately eight tonnes of brass overflowing from the horizontal continuous caster in to the pit, over the floor and in to trenches. 7 It is suspected that the cause of the explosion from the run out was due to the molten metal coming into contact with water or moisture in the trenches and an air line in the trench. The explosion resulted in a steel plate approximately 500 millimetres wide, 1.2 metres long and 12 millimetres in thickness, which had been placed over the trench, lifting and hitting the roof and causing approximately eight metres of roof sheeting to be lifted. No person was injured as a result of this incident. The defendant's employees immediately isolated the electricity and the gas lines. Steps were taken to contain the fire. The fire brigade was called and other steps were taken which I do not need to deal with at this time. It was agreed that the line had been stopped prior to the casting and that the temperature was higher than usual. There was an increased chance of run outs when the caster was stopped and restarted, as the temperature is increased in that operation. The temperature of the metal was not taken prior to the transfer of the metal from the melting furnace to the holding furnace. 8 It was also common ground that prior to 13 June 2003 run outs had occurred on approximately eight previous occasions over several years. No one had been injured on any of these occasions and following the run out that had occurred in November of 1999 the defendant had revised its procedures so that furnace operators must take the temperature of the pour before they perform that task. That procedure was not adequately enforced or maintained and on 13 June 2003 was not being followed. It was common ground that at all material times there was no adequate guarding system to contain run outs of molten metal. After this incident the defendant took a number of steps to address the risk demonstrated by this particular accident and did so in cooperation with the WorkCover Authority. 9 Amongst the numerous steps taken was the installation of further guarding on the horizontal continuous caster; retraining of the cast house employees in the procedure of taking the temperature of molten metal prior to pours; and the removal of pipes from within the trenches and covering the trenches with cement rather than steel plates. There was also installed an additional emergency evacuation alarm. That represented the evidence for the prosecutor. 10 For the defendant the affidavit of Mr Tim Cowdery was read. He had been the general manager of the defendant and had held that position between September 2004 and December 2005. He outlined his 22 years of experience with continuous horizontal casting of copper alloys and set out his tertiary qualifications and courses that he had attended in relation to, particularly, occupational health and safety. He had familiarised himself with the circumstances of the 13 June 2003 incident. He was able to say that the defendant was formed in October 1986 as a joint venture. The manufacturing facility was located at Ingleburn and the defendant was a manufacturer and distributor of copper and brass alloy extrusions servicing primarily the domestic market. At the time of the incident the defendant had approximately 265 employees at the Ingleburn facility. The defendant had now closed the manufacturing and sales side of its business for reasons that were set out in the affidavit. All the employees of the defendant had been made redundant in December 2005 and all entitlements had been paid out. The defendant no longer had any employees although it continued to exist and had assets that were available to meet any liability arising out of these proceedings. It was clarified by its counsel that the instructions of the defendant were that there was no intention to resume this manufacturing process. 11 The nature of the process was briefly described by Mr Cowdery, including the way in which the cast house operated. In that regard he noted that there were separate run out pits for each holding furnace and each run out pit had the capacity to hold any run outs from a furnace. A furnace in that area had a ten tonne capacity and behind the run out pits there was a service trench which contained compressed air pipelines. The remelt unit contained a fully enclosed control room positioned on the deck of the remelt unit. The control room contained controls and emergency stop buttons for the melting furnace. A furnace man operated the melting furnaces from the control room and in relation to the caster room there was also a control room: it was located near the holding furnace and approximately three metres from the run out pit. The caster operator controlled the holding furnaces and the casters from the caster control room. Mr Cowdery gave evidence as to the positions held by the five employees particularised in the offence and dealt with the nature of the operation that was being undertaken in June of 2003. 12 In relation to metal run outs Mr Cowdery said that the cast house and its manufacturing equipment were designed specifically to minimise metal run outs and to mechanise and automate the casting procedures where possible. He noted, however, that in spite of those measures run outs nevertheless occurred and to counteract the controller problem, run out pits were located under and in front of the holding furnace to contain any molten metal spilled from the furnace as a result of accident, run out or dumping of the furnace in an emergency. He referred to the eight previous run outs that had occurred in the cast house and noted that the run out pits had contained all of the metal run out. On this occasion the nature of the run out was such that the metal came out at what he described as an odd angle and this had not been experienced before. 13 In relation to the system of work, there were a number of annexures detailing the safe system of work that had been adopted by the defendant. I have had regard to that material. Mr Cowdery also pointed out that in 1996 the defendant had significantly expanded its safety system by implementing the Dupont system at a cost of $1.5 million and had subsequently installed a ORICA safety health and environment system. The basic cost of that system was in the order of $290,000 per annum and how that figure was made up was described. There was further expenditure in implementing and maintaining that system. Evidence was also given about the training of employees with the defendant having a safety training coordinator to monitor, test and facilitate the training of its employees. Training was also provided, in particular, to cast house employees and the training that had been given to the five particularised employees was referred to. 14 In relation to the defendant's attitude to safety, Mr Cowdery said that the defendant had always held the safety of its workers as a priority. Safety was a regular agenda item at monthly management meetings, daily team leader meetings and was reinforced through tool box talks and safety notices placed on the notice board. The safety management systems were under continual improvement and some evidence was given of that. The defendant had also fostered an environment that encouraged managers, supervisors and employees to maintain safety competency and further their education by attending seminars and obtaining additional qualifications. There was further evidence in relation to those matters. It was said that the defendant regarded itself as a good community citizen. It had been involved in a program with a number of schools, universities and major businesses with a mission of developing the best vocational and self development programs involving students, teachers, business people and the community, and the defendant had provided business mentors for that program. The defendant had also awarded scholarships to employee's children to attend universities and had made a number of contributions to charities and other worthwhile causes: there were a number of aspects to that part of the defendant's operation. Again, the steps taken immediately after the incident were dealt with and reflect what is set out in the Agreed Statement of Facts. 15 There was an occupational health and safety committee that met monthly at the Ingleburn facility to discuss occupational health and safety issues and the members of that committee received training and there was further evidence about the operation of that committee. In relation to the occupational health and safety budget, that had increased over the years. Mr Cowdery noted that for the period 2002 to 2005 there had been an expenditure of over two and a half million dollars and that was in addition to the $290,000 per annum referred to earlier. Mr Cowdery gave evidence of the assistance given to WorkCover during its investigation of this incident and also expressed the company's regret that this incident had occurred and stated again its commitment to a safe work place. That constituted the evidence for the defendant. 16 I first give consideration to the objective seriousness of the offence. There was no suggestion by the defendant that this was other than a serious breach but it was submitted that it had to be looked at in its own context. Here the operation involved transfer of hot metal in a system that had a number of risks, although I accept that there were a number of steps taken by the defendant in its existing safety system to address those risks. Significantly the defendant accepted that the risk here was of personal injury or death, although fortunately there was no injury to anybody as a result of this particular incident. 17 There was some debate addressed to the foreseeability of this incident occurring. There is some force in the defendant's submission that the risk was not entirely unforeseeable and how the spill could occur in an unexpected way, but this had never been experienced by the defendant before, and there were a number of measures taken by the defendant to address the risk, and those approaches had been found in the past to be effective. I accept the thrust of that submission in the context that this was, nevertheless, a serious offence. 18 In relation to deterrence there is no issue that the penalty should reflect an amount for general deterrence. Industry, in all of its facets, whether in this particular specialty or not, can regard the regular flow of cases through this Court as a reminder of the need to be vigilant in ensuring work place safety. The issue of specific deterrence is somewhat different. Although I expressed some doubt early in the proceedings, ultimately I am satisfied, on the evidence and what has been said on instructions for the defendant, that there is no intention to again have this defendant engage in this particular form of manufacturing. It does not appear that there is any intention to engage in manufacturing at all. I think in those particular circumstances there is no role here for specific deterrence to form part of the penalty. All of the employees have been terminated and retrenched and I accept the evidence that the only purpose of the defendant continuing, is to address a number of liability issues, including the liability arising out of this case. There is no issue in this case as to the defendant's capacity to pay, nor were any particular aspects of the financial position of the company put forward to justify any mitigation of penalty. 19 In relation to subjective factors I firstly deal with the plea entered. I have already stated that the matter had been before the Court on approximately four occasions before a plea of not guilty had been entered and ten days of hearing set down. However, the Court was notified approximately one month before the hearing that there would be a change of plea based on an Amended Application for Order. In all of those circumstances I regard the plea as having a significant utilitarian value and I would allow a discount of 20 per cent for the changed plea in the circumstances of an Amended Application for Order that was immediately pleaded to by the defendant and an Amended Application for Order that had important changes in relation to the objective seriousness of the offence. 20 In relation to other subjective factors the defendant has a prior record and that is why the higher maximum penalty of $825,000 applies. A prior record does not warrant the Court increasing the objective seriousness of the offence by its penalty, but rather focuses the Court's attention on retribution, deterrence and in the usual criminal courts, what is referred to as the protection of society, and what might be required by way of a more severe sentence. I approach the matter in terms of the statements of principle set out in Veen v Queen (No 2) (1988) 164 CLR 465 and what is said in Weineger v Queen (2003) 212 CLR 629. 21 I note that the Chief Industrial Magistrate in dealing with the very different circumstances of the previous offence that had occurred in 2002 was, nevertheless, complementary of the system of work and the safety of that system introduced by the defendant, and his Honour refers to a number of matters dealt with in Mr Cowdery's affidavit. Those remarks are as pertinent to this matter as they were to the matter when dealt with by the Chief Industrial Magistrate. I regard the defendant as having a good record especially in view of the nature of the industry and the number of employees. 22 I accept the submissions about the steps taken to address the risk that was exposed by this particular incident. They speak well of the defendant's attitude to safety. They also reflect, as does the plea of guilty, to its contrition. The Court also has the statement, through Mr Cowdery, of the defendant's regret that this incident took place. The defendant, in my view, had a significant existing system of safety and this particular incident showed perhaps what might have been somewhat unexpected, although there was a history and an expectation that there would be spills of the molten metal. Nevertheless, there were significant existing safety systems and the defendant is entitled to have those taken into consideration in mitigating the penalty as well as the steps taken to address this particular risk. I accept also that there was cooperation with the WorkCover Authority and that is a significant matter to be dealt with in the Court's consideration of fixing a penalty. The defendant is also entitled to be regarded as a good corporate citizen that has shown contrition in relation to this offence. 23 Having regard to those conclusions the Court makes the following orders: 1. The defendant is convicted of the breach of s 8(1) of the Occupational Health and Safety Act 2000 as particularised in matter IRC 1137 of 2005 to which it has pleaded guilty. 2. The defendant is fined the sum of $85,000, half of such sum to be paid to the prosecutor by way of moiety. 3. The defendant is to pay the costs of the prosecutor in the sum agreed, or in the absence of agreement as ordered by the Court. AGREED STATEMENT OF FACTS 1. At all material times Inspector Raj Garg, 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 and empowered under Section 106(1)(c) of the said Act to institute proceedings in this matter. 2. At all material times the defendant, CONSOLIDATED EXTRUSIONS MANAGEMENT PTY LIMITED [ABN 24 003 123 573] was a corporation with its registered office is situated at Crane Group Limited, Level 14, 15 Blue Street, North Sydney, in the State of New South Wales ("the defendant"). 3. At all material times the defendant, was an employer and undertook the business of manufacturer and distributor of brass products at 10 Williamson Road Ingleburn, in the State of New South Wales ("the premises"). 4. On 13 June 2003 the defendant employed Nigel Turner in the position of cast operator. At that time he had been employed by the defendant for approximately 15 years. 5. On 13 June 2003 the defendant employed Ray Dengate, in the position of Engineering Manager. At the time he had been employed by the defendant for approximately 15 years. 6. On 13 June 2003 the defendant also employed Bruce Cheong in the position of casthouse maintenance fitter, Boon Tang in the position of caster operator, and Utupo Solia. 7. On 13 June 2003 a cast house unit was located on the south side of the defendant's premises. Inside the cast house was a remelt unit approximately 18 metres x 10 metres x 6 metres high. The remelt unit consisted of three electrically operated melting furnaces, two holding furnaces, which each had attached two horizontal continuous castors, and a moving log saw. The melting furnaces had a capacity of 10 to 14 tonnes and were located on the top deck of the remelt unit approximately 3.5 metres from ground level. The holding furnaces were located on ground level and had a 10 tonne capacity. The remelt unit contained a 10 tonne runout pit under the outlet of the holding furnace. Next to the runout pit was a service trench which contained natural gas and compressed air pipe lines. The remelt unit contained a fully enclosed control room/hut positioned on the deck of the remelt unit which contained controls and emergency stop buttons for the melting furnace. The furnace man operated the melting furnaces from the hut. A control room/hut was also located near the holding furnace approximately 3m from the runout pit. The castor operator operated the caster from the hut. 8. On 13 June 2003 the defendant was carrying out brass casting in the cast house area of the premises. 9. On 13 June 2003 the defendant was making 352 alloy. Melting Furnace No.2 and Holding Furnace No.1 were used in the process. Turner, Dengate, Cheong, Solia and Tang were all in the vicinity of the casting house on 13 June 2003. Turner was carrying out duties as the castor operator for Holding Furnace No 1. Solia was carrying out duties as the furnace man for Melting Furnace No 2. Tang was carrying out duties as the castor operator for Holding Furnace No. 2. 10. Holding Furnace No 1 and the attached Horizontal Continuous Caster Line 1 ("HCC Line 1") had been stopped for approximately half an hour by Turner whilst he waited for a transfer of metal from Melting Furnace No 2 to Holding Furnace No 1. Once the metal was ready to be transferred from the melting furnace to the holding furnace the castor was turned back on. 11. Following the transfer of the metal, Turner, commenced casting metal logs in HCC Line 1. At this time, Dengate, who was performing his usual practice of inspecting the factory twice a day, attended the area where Turner was working. Dengate accompanied Turner to the control hut where Turner proceeded to check the caster and furnace controls to ensure the cast was okay. Whilst they were in the control room, at approximately 10am, Dengate noticed a stream of metal coming out of the south strand of the HCC Line 1. He told Turner about this. Turner then proceeded with emergency procedures and tried to stop the runout but was unsuccessful. Dengate noticed that the flow of molten metal was getting worse and molten metal was covering the area in front of the doorway to the control room and smoke was entering the control room. Turner and Dengate decided to evacuate the cast house and followed the emergency and evacuation procedures they were trained in. A siren was sounded and everyone in the cast house evacuated outside. A short time afterwards they heard an explosion. After leaving the cast house, flames were seen by Dengate and Turner in the area of the run out. 12. The runout resulted in approximately 8 tonnes of brass overflowing from the Horizontal Continuous Caster into the pit, over the floor and into trenches. 13. An explosion resulted from the runout. It is suspected that this was due to molten metal coming into contact with water/ moisture in the trenches and an airline in the trench. The explosion resulted in a steel plate approximately 500mm wide, 1.2m long and 12mm thick, which had been placed over the trench, lifting and hitting the roof and then causing approximately 8 metres of roof sheeting to be lifted. No person was injured from this. 14. Immediately following the incident the defendant's employees isolated the electricity and gas lines. Flames were still seen in the area of the run out. The continuing flames were seen to be coming from an oxy acetylene cylinder which had been left on the casting deck adjacent to the water control panel of the cast house and was venting as per its design. The fire brigade was called. The defendant's employees hosed the area to reduce the temperature of the molten metal until the fire brigade arrived. 15. The oxy-acetylene tank which vented during the incident had been placed in the caster area the day prior to the incident. During the run out the oxy-acetylene cylinder had been vented due to the heat and caught alight. The cylinder has been left approximately 5 metres from the working furnace by Cheong who had been carrying out maintenance work using the oxy torch shortly before the incident. Cheong had used oxy acetylene equipment in the area several times prior to the incident and was not aware of any policy excluding such equipment being in the vicinity of a working furnace. 16. The defendant did not have in place an exclusion zone for flammable gas cylinders near any source of molten metal in the casthouse. 17. As the HCC Line 1 had been stopped prior to the casting, the set point of the furnace was increased and was higher then the usual set point temperature in production. There is an increased chance of runouts when the castor is stopped and restarted as the temperature is increased. The temperature of the metal was not taken prior to the transfer of the metal from the melting furnace to the holding furnace occurring. 18. Prior to the events of 13 June 2003 run outs had occurred on approximately 8 previous occasions over several years. No one was injured on each of these occasions. Following a run out that occurred in November 1999 the defendant revised its procedures to include a requirement that furnace operators must take the temperature of the pour before they do the pour. The procedure was not adequately enforced or maintained. On 13 June 2003 it was not being followed. 19. At all material times there was no adequate guarding system around the HHC No 1 to contain runouts of molten metal. 20. After 13 June 2003 the defendant took the following action: (a) Installed further guarding on the Horizontal Continuous Castor. (b) Re-trained the cast house employees in the procedure for taking temperature of molten metal prior to pours. (c) Implemented a procedure whereby oxy acetylene equipment was not to be placed in the vicinity of molten metal. (d) Introduced automatic water spray system on the logs which is controlled by optical pyrometers. (e) Removed the pipes from within the trenches and covered the trenches with cement rather then steel plates (f) Moved the temperature controller to inside the caster house (g) Issued cast house personnel with thermal bluey jackets. (h) Installed an additional emergency evacuation alarm. 21. The following supporting documentation is annexed: Photographs taken by Inspector Garg on 26 June and 2 July 2003 Factual report of Inspector Garg dated 26 June 2003 Prior Convictions Certificate 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.