Industrial Court of New South Wales CITATION: Inspector James v International Fireworks Pty Ltd and Anor [2006] NSWIRComm 184 Matter Number IRC 2990 of 2005 ___________________________________ INSPECTOR WAYNE JAMES Prosecutor INTERNATIONAL FIREWORKS PTY LTD ACN 000 710 547 PARTIES: Defendant Matter Number IRC 2991 of 2005 ___________________________________ INSPECTOR WAYNE JAMES Prosecutor FORTUNATO FOTI Defendant FILE NUMBER(S): IRC 2990 and 2991 of 2005 CORAM: Schmidt J Occupational Health and Safety - prosecution under sections 8(1) and 261(1) of the Occupational Health and Safety Act 2000 - fireworks business - explosion - plea of guilty - first offence - penalty imposed - costs CATCHWORDS: Evidence - victim impact statement - ss 27(2A)(b) and 28 of the Crimes (Sentencing Procedure) Act 1999 - whether medical reports were appropriate to be received - whether medical reports would distract the Court from true nature of enquiry - medical reports received - reports could not deflect from proper consideration of risk in question - receipt of statement public acknowledgement of public of offences LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 Occupational Health and Safety Act 2000 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Inspector Brett Martin v Encore Tissue Pty Limited [2005] NSWIRComm 271 Inspector David Waterhouse v Innovative Property Developments Pty Ltd and Others [2006] NSWIRComm 97 CASES CITED: R v Olbrich (1999) 199 CLR 270 R v Mansour (1999) 29 MVR 409 R v Palu (2002) 134 Crim R 174 WorkCover Authority of NSW (Inspector Sequeira) v Foti's International Fireworks (Displays) Pty Limited [2003] NSWIRComm 471 R v Previtera (1997) 94 A Crim R 76 HEARING DATES: 15/05/06 DATE OF JUDGMENT: 05/29/2005 PROSECUTOR: Mr CP Hoy of counsel SOLICITORS: Criminal Law Practice Legal Group LEGAL REPRESENTATIVES: WorkCover Authority of New South Wales DEFENDANTS: Mr BD Hodgkinson SC SOLICITORS: Mulally Mylott JUDGMENT: - 29 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Schmidt J 29 May 2006 Matter No IRC 2990 of 2005 INSPECTOR WAYNE JAMES v INTERNATIONAL FIREWORKS PTY LTD Prosecution under section 8(1) of the Occupational Health and Safety Act 2000 Matter No IRC 2991 of 2005 INSPECTOR WAYNE JAMES v FORTUNATO FOTI Prosecution under section 8(1) and section 26(1) of the Occupational Health and Safety Act 2000 JUDGMENT [2006] NSWIRComm 184 1 These prosecutions arose out of an explosion which occurred in June 2003 at a fireworks business conducted at Leppington by International Fireworks Pty Ltd. Mr Dusan Lovric and Mr Angelo Foti, both employed by that company in the business, were injured as a result of the explosion. Mr Fortunato Foti was a director of the company. Each defendant pleaded guilty to the charge laid against them. This judgment deals with the question of the penalties to be imposed in each case. 2 The two charges relevantly provided: Matter Number IRC 2990 of 2005 FAILED TO ensure the health, safety and welfare at work of all its employees, and in particular, Dusan Lovric and Angelo Foti, whilst engaged in the manufacture of fireworks, contrary to section 8(1) of the Occupational Health and Safety Act, 2000. The particulars of the charge are: a). At all material times the defendant operated a business which manufactured fireworks at 51 St Andrews Road, Leppington in the State of New South Wales ("the premises"). b) At all material times the defendant was an employer. c) At all material times Dusan Lovric ("Mr Lovric") was employed by the defendant as a labourer. d) At all material times Mr Lovric was working in or near Building 6 at the defendant's premises. e) At all material times Mr Lovric was engaged in the manufacture of fireworks in that he was operating an item of plant known as a Manesty Betapress tablet press ("Betapress") so as to press mixed powdered chemicals into red star pellets/tablets. f) At all material times Angelo Foti ("Mr Foti") was employed by the defendant as a supervisor/foreman. g) At all material times Mr Foti was working in or near Building 6 at the defendant's premises. h) At all material times Mr Foti was working in the near vicinity of Mr Lovric and the Betapress. i) At all material times Mr Foti was engaged in the manufacture of fireworks in that he was mixing powdered chemicals together with a liquid priming compound in a modified cement mixer so as to create and then dry blue star pellets/tablets. j) At all material times the defendant failed to ensure that the premises controlled by the defendant where its employees worked were safe and without risks to health. k) At all material times the defendant failed to ensure that any plant or substance provided for use by its employees at work, including the Betapress and related powdered chemicals, were safe and without risks to health when properly used. l) At all material times the defendant failed to ensure other plant or substances, including but not confined to, a Roman candle press and eight hoppers containing gunpowder in an adjacent room to the Betapress within Building 6, were safe and without risks to health when properly used. m) At all material times the defendant failed to ensure that its systems of work and the working environment of its employees were safe and without risks to health. n) At all material times the defendant failed to provide any, or any adequate information, instruction, training and supervision as may be necessary to ensure its employees health and safety at work. o) At all material times the defendant failed to provide its employees with adequate personal protective clothing and equipment. p) At all material times the defendant failed to provide any or any adequate insulation from and/or discharge of, electrostatic charges associated with the use of plant in or near Building 6. q) At all material times the defendant failed to provide any or any adequate earth facility in respect of the use of plant in or near Building 6. r) At all material times the defendant failed to provide any or any adequate guarding of the Betapress during its operation. s) At all material times the defendant failed to segregate and/or isolate its employees from each other in or near Building 6 whilst performing their respective work in the manufacture of fireworks. t) At all material times the defendant failed to implement an adequate risk assessment and management principles and/or procedures in relation to the manufacture of fireworks. u) At all material times the defendant failed to make available adequate information to its employees about the use of plant and/or substances in and near Building 6 and any conditions necessary to ensure when properly used, such plant and/or substances will be safe and without risks to health. v) As a result of the said failures Mr Lovric was placed at risk of injury and in fact suffered grievous injuries; and w) As a result of the said failures Mr Foti was placed at risk of injury and in fact suffered injuries. Matter Number IRC 2991 of 2005 FAILED TO ensure the health, safety and welfare at work of all its employees, and in particular Dusan Lovric and Angelo Foti contrary to section 8(1) of the Act. The particulars of the charge are: a) At all material times the defendant was a director of the corporation. b) At all material times the corporation was an employer. c) At all material times the corporation was manufacturing fireworks at 51 St Andrews Road, Leppington in the State of New (sic) a factory ("the premises"). d) At all material times Dusan Lovric ("Mr Lovric") was employed by the corporation as a labourer. e) At all material times Mr Lovric was working in or near Building 6 at the corporation's premises. f) At all material times Mr Lovric was engaged in the manufacture of fireworks in that he was operating an item of plant known as a Manesty Betapress tablet press ("Betapress") so as to press mixed powdered chemicals into red star pellets/tablets. g) At all material times Angelo Foti ("Mr Foti") was employed by the corporation as a supervisor/foreman. h) At all material times Mr Foti was working in or near Building 6 at the corporation's premises. i) At all material times Mr Foti was working in the near vicinity of Mr Lovric and the Betapress. j) At all material times Mr Foti was engaged in the manufacture of fireworks in that he was mixing powdered chemicals together with a liquid priming compound in a modified cement mixer so as to create and then dry blue star pellets/tablets. k) At all material times the corporation failed to ensure that the premises controlled by the corporation where its employees worked were safe and without risks to health. l) At all material times the corporation failed to ensure that any plant or substance provided for use by its employees at work, including the Betapress and related powdered chemicals, were safe and without risks to health when properly used. m) At all material times the corporation failed to ensure other plant or substances, including but not confined to, a Roman candle press and eight hoppers containing gunpowder in an adjacent room to the Betapress within Building 6, were safe and without risks to health when properly used. n) At all material times the corporation failed to ensure that its systems of work and the working environment of its employees were safe and without risks to health. o) At all material times the corporation failed to provide any, or any adequate information, instruction, training and supervision as may be necessary to ensure its employees health and safety at work. p) At all material times the corporation failed to provide its employees with adequate personal protective clothing and equipment. q) At all material times the corporation failed to provide any or any adequate insulation from and/or discharge of, electrostatic charges associated with the use of plant in or near Building 6. r) At all material times the corporation failed to provide any or any adequate earth facility in respect of the use of plant in or near Building 6. s) At all material times the corporation failed to provide any or any adequate guarding of the Betapress during its operation. t) At all material times the corporation failed to segregate and/or isolate its employees from each other in or near Building 6 whilst performing their respective work in the manufacture of fireworks. u) At all material times the corporation failed to implement an adequate risk assessment and management principles and/or procedures in relation to the manufacture of fireworks; v) At all material times the corporation failed to make available adequate information to its employees about the use of plant and/or substances in and near Building 6 and any conditions necessary to ensure when properly used, such plant and/or substances will be safe and without risks to health. w) As a result of the said failures Mr Lovric was placed at risk of injury and in fact suffered grievous injuries; and x) As a result of the said failures Mr Foti was placed at risk of injury and in fact suffered injuries. 3 Sections 8(1) and 26 of the Occupational Health and Safety Act 2000 provide: (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. 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. (2) A person may be proceeded against and convicted under a provision pursuant to subsection (1) whether or not the corporation has been proceeded against or been convicted under that provision. (3) Nothing in subsection (1) prejudices or affects any liability imposed by a provision of this Act or the regulations on any corporation by which an offence against the provision is actually committed. (4) In the case of a corporation that is a local council, a member of the council (in his or her capacity as such a member) is not to be regarded as a director or person concerned in the management of the council for the purposes of this section. The evidence 4 An agreed statement of facts was tendered. It provided relevantly: 1. At all material times the Prosecutor was an Inspector appointed pursuant to Division 1 of the Part 5 of the Occupational Health and Safety Act 2000 (" the Act ") and empowered under s 106(1)(c) of the Act to institute proceedings in the within matter. 2. International Fireworks Pty Ltd (ACN 000 710 547) (the First Defendant) is a body corporate duly incorporated and its registered office at Level 1, 147 Northumberland Street, Liverpool in the State of New South Wales. 3. Mr Fortunato Foti (the Second Defendant) of 4 Niland Place, Edensor Park, in the State of New South Wales is a director of the First Defendant. 4. At all material times the First Defendant owned and operated a fireworks business which manufactured and supplied fireworks on a commercial scale at 51 St Andrews Road Leppington in the State of New South Wales (the premises). 5. The First Defendant employed a number of personnel including Dusan Lovric (Mr Lovric) as a labourer and Angelo Foti (Mr Foti) as a labourer/supervisor. 6. At about 8.40am on 10 June 2003 Mr Lovric and Mr Foti were engaged in the preparation and manufacture of fireworks at the premises and whilst doing so, were injured in two fire explosions. Location 7. The premises consisted of an area of land within which there was located a residence, various buildings used as offices and a number of sheds. Some of the sheds were used for manufacturing and mixing, others were used to store fireworks and explosives in various stages of manufacture. 8. One of those sheds, known as Building 6, was erected on a concrete slab, and consisted of 4 adjacent rooms (A, B, C and D) and a verandah (E) adjacent to room D, all of which were under a pitched roof. 9. Rooms A, B and C each measured approximately 5.9m long x 3.5m wide. Room D which adjoined the verandah measured approximately 5.9m long x 6m wide. The verandah measured approximately 3.6m x 5.9m. 10. The floors of rooms A, B, C and D were fitted with a conductive mat laid over a 30cm x 30cm grid of brass strips which were earthed. These allowed for the leakage to the earth of any electrostatic that may build up on persons in the work area or on items left on the floor and capable of acquiring electrostatic discharge. The Verandah 11. The verandah floor was not covered with the conductive mat and was not earthed. Notably, portable conductive matting was available, but not installed in this area. 12. In the north-eastern corner of the verandah there was an item of plant known as a Manesty Betapress tablet press ("Betapress") standing on a wooden pallet which measured approximately 95cm long x 90cm wide x 11.5cm high. 13. The First Defendant purchased the Betapress on 26 May 1997. It was originally designed to press pharmaceutical tablets. It was used by the Defendants to manufacture pyrotechnic pellets/tablets. Mr Foti stated to Inspector James that they had used the Betapress for over 5 years. 14. There were also a variety of other electrically operated plant, equipment and chemical substances on the verandah and adjacent to or near the Betapress, all used in the manufacture of fireworks. These included an earthed twin drill press, an earthed heating oven and three cement mixers modified for the purpose of mixing other powdered chemicals and liquid compounds which were stored in open plastic and cardboard containers on the verandah when in use. 15. Adjacent to the electrical plant and behind the Betapress, there were 2 x 20 litre drums. These drums contained flammable liquids, classified as flammable 3 liquids under the Dangerous Goods Regulation with flashpoints of less than 23 degrees Celsius and an initial burning point greater than 35 degrees Celsius. One drum had a 'flammable 3' diamond shaped sign on the side and contained Acetone UN 1090. The other had the word "method" written on it in black marker pen. They were thinners and finisher respectively. Both were used in the manufacture of fireworks. 16. There was also a large "drying table" adjacent to and outside the verandah area, on which the newly manufactured wet powder pellets/tablets were laid out to dry. Operation of the Manesty Betapress tablet press ("Betapress") 17. The Betapress operated on 3 phase 440V electricity and the power lead was plugged into a power outlet approximately 1m from the Betapress. The motor is housed in the bottom part of the Betapress. A green earth wire linked the Betapress to the frame of the building. 18. The Betapress operated by pressing a powder mix of composites of dry chemicals potassium perchlorate, strontium carbonate, red gum, dextrin and magnesium aluminium ("the powder mix"), between two punches in a die which then formed the hardened tablet/pellet. These were constituent parts of fireworks known as red star pellets/mix. 19. The Betapress was approximately 1.75m high. Its base measured approximately 50cm long x 55cm wide x 85cm high and was sitting on a pallet which measured approximately 95cm x 90cm x 11.5cm high. 20. The press mechanism section was approximately 90cm above the base and above that was a hopper which was approximately 26cm in diameter and 11.5cm high. The hopper was shaped like a funnel and its diameter decreased from 26cm to 65mm at its base. Below the hopper was a discharge chute into which the pressed pellets were discharged. Underneath the chute was a stainless steel bowl which was balanced on a wooden block (17cm high) which was in turn balanced on a blue drum (94cm high). There was pale green residue in the bowl. 21. There was a small aluminium step ladder adjacent to the Betapress. It had 2 steps and a top plate. It was 70cm high. The stepladder had plastic anti slip caps on each leg. It was not earthed. The step ladder was used by the operator to climb above the hopper so as to pour in the powder mix. 22. The powder mix was kept in a 20L to 30L capacity white plastic container approximately 1.5m to 2m from the Betapress. 23. There was a transparent display slot to allow the operator to gauge the level of powder mix in the hopper so as to assess when to replenish it. Having scooped the powder mix from the nearby plastic container with a hand-held aluminium scoop, the operator would climb the aluminium stepladder to reach into the hopper and feed the powder mix into the chute. 24. The Betapress was set at a rate of 650 tablets per minute. This rate resulted in the die plate rotating approximately 40 revolutions per minute. It also necessitated re-filling of the chute approximately every 5 minutes. 25. The powder mix dropped down onto the die where two rotating blades scraped the powder mix into one of the holes within a rotating die plate. There were 16 holes in the die plate. Each had a punch on the top and bottom so as to compress the powder mix into tablets/pellets. When operating, the hole in the die plate receiving the powder mix is blocked at the bottom by the bottom punch. This effectively stops the powder mix from falling through. After the hole is filled with powder mix, the die plate rotates so as to allow the next hole to fill. The filled hole consequently rotates to the next operation wherein the top punch inserts into the filled hole and presses firmly so as to compress the powder mix into tablet/pellet form. 26. The die plate then continues to rotate and the top punch withdraws and the bottom punch moves upwards thereby forcing the compressed tablet/pellet onto a sliding ramp, down which the tablet/pellet would slide into the stainless steel bowl at the side. At this speed, the operator would empty the bowl at the end of the discharge chute approximately every 10 minutes. The bowl was balanced on top of a wooden block which was in turn balanced on top of a plastic drum. 27. The rotation of the die plate and operation of the punches are synchronized by mechanical gears located in the top part of the machine adjacent to the hopper. 28. There was no guard or protective plate on the rear of the Betapress and the rotating die plate, punches and moving parts of the plant were exposed. The Betapress was in such position that it was accessible from all sides. Other Items 29. There was a variety of other equipment scattered around the verandah area. These included 3 cements mixers, each of which had been modified to mix powdered chemicals and liquids for the manufacture of fireworks. There was also a tumbler mixer and twin drill press against the western wall and a Hurricane oven, at the open edge of the verandah. Each was electrically powered. There was a 100L drum containing chemicals and another 20L drum of thinners. There were also a large number of hand scoops, containers, buckets, sieves and boxes. The Roman Candle Bay 30. Immediately adjacent and to the south of the verandah was Room D. It was then used for the manufacture of "Roman Candle" fireworks and for finishing other fireworks. In Room D there were 8 hoppers which were used to press the Roman Candle fireworks. It is also described as a filling rig. There were also a number of delays, quick match fuses and other loose plant and items. Each of the 8 hoppers contained approximately 40gm of gunpowder. The manufacture of the Roman Candles had not been completed as the job had started some weeks prior and had not been finished. When interviewed Mr Foti stated he intended returning to the hoppers that or the next day. The Second Defendant stated that there was no requirement to take that amount of gunpowder back to the magazine for storage because it was "work in progress." The Explosions on 10 June 2003 First explosion Mr Foti 31. On the morning of 10 June 2003 Mr Foti set up the Betapress. He uncovered it, ran it and got the air hose and "blew the machine out". He then started working at one of the cement mixers making blue star pellets. To do this he was using an aluminium scoop to deposit powdered chemicals and a liquid priming compound from its cardboard container into one of the modified cement mixers on the verandah. This compound was mixed in the cement mixer and in turn produced "blue star pellets" which he then placed on tables to dry. 32. The powder mix of chemicals Mr Foti was using was stored in a cardboard container which measured 45cm diameter x 30cm high. It was balanced on a loose lid which in turn was placed upon a smaller diameter bucket. When each batch of blue star tablets/pellets finished in the mixer, Mr Foti turned off the machine and placed the pellets on a wire mesh tray (76cm x 62cm) which he carried out to the large "drying table". Mr Lovric 33. At all material times Mr Lovric was operating the Betapress to press out red star pellets. The main ingredient in the red star powder mix was potassium perchlorate, a strong oxidising agent used in explosives and fireworks. While by itself it is non-combustible, it is used to form the explosive mixture with combustible, organic or other oxidising material such as the remaining ingredients in the powder mix. The container of powder mix Mr Lovric was using will burn and possibly explode when involved in a fire. 34. Mr Lovric was dressed in a T-shirt and normal pants and the supplied cotton dustcoat and safety boots. He was not wearing his issued cotton cap. He was not wearing any gloves, safety goggles or a protective mask. 35. Mr Lovric scooped the powder mix from its 20L to 30L plastic storage container (standing on an upturned milk crate approximately 1.5m from the Betapress) with the aluminium hand scoop and poured it into the hopper by climbing the aluminium stepladder in front of the Betapress. 36. Mr Lovric performed this task for approximately 45 minutes. Mr Lovric was in the process of making up a 26.6 kg mixture of red star pellets. 37. At about 8.40am Mr Lovric was standing on the stepladder and reaching in to again fill the hopper using the aluminium hand scoop and there was a "flash" and explosion. Flames emanated from the hopper up to the roof and Mr Lovric was engulfed in the flames. Mr Lovric tried to pull away his clothes which were on fire with his hands. As he ran away from the Betapress in the direction of Building 5, the plastic container of 3kg to 4kg of powder mix next to the Betapress, also exploded. 38. Mr Foti was facing away from Mr Lovric and apparently at the nearby drying table when the first explosion occurred. He had about 6 kgs of blue star powder mix together with 1.5kg to 2 kg container of primer nearby. His trousers caught alight which he tried to extinguish with his hands. He ran from the area and later assisted Mr Lovric. 39. The roof sheeting was blown off the frame of the building directly above the plastic container near the Betapress. Pieces of the roof sheeting and the milk crate and debris were scattered to a radius of 30 metres. 40. The verandah area was engulfed in flames and the powder mix in the cardboard container that Mr Foti had been using also ignited. Second Explosion 41. Within approximately 4 seconds of the first explosion there was another explosion. It appears as though the mixture being used by Mr Foti ignited and flashed into Room D. The second explosion then occurred. 42. Room D contained plant, including the Roman Candle Press located near the adjoining wall to the verandah, for the manufacturing of candlesticks and completion of other pyrotechnic items. The Candle Press had a green earth wire to the frame of the building. There were approximately 2kg of explosives (gunpowder) in Room D. The gunpowder in the 8 candle press hoppers ignited and exploded. Each hopper was severed from the Candle Press and debris speared through the walls of Room D. 43. The explosion in Room D caused the pitched frame of the roof to come off its vertical mountings. It also caused the wall to move, buckle and come away from the frame of the building. The roof mounts were also dislodged. One of the candle press hoppers was found 30 metres from the Building 6. 44. The Second Defendant attended to Mr Lovric, placed him on a fire blanket and extinguished spot fires using a hose. The Injuries 45. As a result of the fire explosions Mr Lovric suffered burns to 80% of his body, 75% of which were 3rd degree burns. He lost his thumb and index finger to the first joint on his left hand and he lost four fingers to the second joint on his right hand. He was hospitalized in Intensive Care for 2 months. He was subsequently hospitalised in the Burns Unit of Concord Hospital where he underwent multiple skin graft operations. During this time he was also required to go onto kidney dialysis due to infections. He was required to wear a body suit for over 6 months and has severe scarring. He has had several operations to facilitate the use of his tendons in his right elbow and to repair the tendons in his left elbow. He has difficulty with mobility and movement in his hands, shoulders and knees. 46. Mr Foti also sustained injuries including burns to his left leg and hand. Causes of the explosions 47. Inspectors obtained 3 investigative reports so as to identify prospective cause of ignition. They revealed clear potential for build up of static electricity and the associated risk of ignition in proximity with explosive chemical compounds. 48. The 1st Test Safe Report identifies electrostatic charge as the ignition scenario. Relevantly, it identifies the following: a. The drill press and the 3 mixing machines ( cement mixers ) were not DIP (Dust – excluding ignition proof) protected. Also, other than the light fittings, the "switches junction boxes and the machine in which the explosion took place had no DIP protection markings" ; b. The floor of the verandah where the first explosion occurred 'is a concrete floor with no electrostatic protection' ; c. The powder supply in the plastic container maintains a gross electrostatic charge, generated by previous decanting, transport or separation (as a result of scooping of the powder from the bin). Charge leakage is prevented by the insulation of the container, and a discharge occurring when the powder or powder filled scoop comes in contact with the powder contained in the hopper or the metallic part of the hopper; d. The 25 litre white plastic container used to hold the powder that Mr Lovric was placing in the Betapress's hopper was the 'perfect insulator and therefore a major electrostatic hazard '. It was also further insulated from the concrete by being placed on top of a milk crate; e. ' Possible electrostatic charge held by the aluminium ladder prevented from leaking to earth by the insulating anti-slip boots, and the aluminium ladder accidentally coming in contact with the metallic part of the machine or the earthed colour bond post, igniting the content of the scoop then propagating to the hopper content '; f. 'Electrostatically charging the scoop while filling it from the explosive powder plastic container. Charge leakage is prevented by the dry concrete and / or some other insulation between the operator's body and the general earth. As the scoop is emptied into the hopper a discharge occurs between the scoop and the hopper body, which is earthed. Ignition of the hopper contents is initiated by this discharge. The nature of the pyrotechnic material allows detonation to occur' ; g. 'Possible electrostatic build up on the Perspex type covers of the machine and ignition occurring by a discharge when an explosive powder filled scoop held by the operator touches the cover '; and h. 'Possible electrostatic build up on the Lexan material at the base of the Feeder Gear train assembly. The discharge then occurring through the relatively conducting powder to the metallic parts of the press' . 49. The 2nd Test Safe Report provided a comprehensive list of possible ignitions sources and identified two most likely causes of the first ignition as being mechanical (frictional and impact) or electrical (electrostatic discharge). The 2nd Report also identified the possibility of an exothermic chemical reaction as a third possible cause, however it was merely identified as a source that could not be excluded rather than a probable cause and furthermore, depended on the generation of sufficient impact or friction. The risk to Mr Lovric and Mr Foti 50. The Defendants carried out a risk assessment of their processes to provide a safe system of work and working environment in respect of the manufacture of fireworks. 51. The Defendants prepared a Plant Risk Management Plan dated June 2002 (the Plan) which identified the hazard of fire due to static electricity when pressing pellets. The risk rating was ' moderate' and the control measure was to " earth the machine ". The Plan also identified the hazard of fire due to powder ignition. The risk rating was ' serious' and the control measure was to " work with small quantities of powder ". The Plan was inadequate. 52. There was no written procedure how to perform the tasks of pellet pressing on the Betapress; how to safely transport the powder mix from containers to the plant; how and where to safely store the containers of powder mixes when in use; how to prevent powder friction; what personal protection equipment was to be used; or how to safely clean or maintain the plant. 53. The Second Defendant and Mr Foti, (Mr Lovric's supervisor) showed Mr Lovric how to feed in the powder mix, where the tablets come out and generally how to operate the Betapress prior to the incident. In October 2002 the Second Defendant evaluated Mr Lovric as "successful" in performing the task of "star pressing". 54. Mr Foti stated that he normally used the milk crate on which to stand the container of powder mix. 55. The containers used to carry and store the chemicals and products both before and after the manufacturing processes at the site were unsuitable as they were not insulated or anti-static. 56. The modified cement mixers and the aluminium stepladder located in the verandah area were not earthed. 57. The only consideration of the dissipation of static in the verandah area was reflected in the issue of conductive boots for the use of workers. No anti-static floor coating or matting was installed. The Second Defendant stated that the reason this was not installed was because, "of all the washing in that area the water would get underneath the flooring and would eventually lift up and be useless." Notably, portable conductive matting was also available. 58. Mr Lovric was wearing the safety boots at the time of the incident however the ladder he was using was not earthed. Neither Mr Lovric nor Mr Foti was provided wrist or ankle straps that connected to the earth at the time of the incident. 59. There was insufficient cleaning and/or maintenance system insofar as the operation of the Betapress was concerned. This may have excluded the possibility of a mechanical (frictional and impact) ignition as posited by the 2nd Test Safe Report. 60. Identifiable areas for consideration by risk assessment include: a. acceptable range of humidity for manufacturing process to be conducted, how it is to be measured, recording of readings and possibly humidifying control methods; b. acceptable 'method of earthing floors, persons and conducting surfaces' . Consideration should be given to conducting surfaces coatings and conductive mats. Also to ankle straps and antistatic boots to be used with the floor coatings; c. acceptable method of checking floor coatings, mats and footwear 'checked at regular intervals to ensure its electrical continuity' . Consideration should be given to frequency of testing, method of testing and the recording of the tests, i.e. before each shift; d. types of clothing to wear and what not to wear. To provide checks of employees clothing and the recording of checks of employees clothing prior to the start of each working shift; e. specific guidance to include earthing of all plant (i.e. cement mixers) and equipment (i.e. ladder) and the manufacturing area while manufacture tasks are performed; f. where practical, the use of wrist straps on workers involved in the manufacturing process with considerations to the event of emergency situations (i.e. quick release system); g. use of appropriate static resistant containers to carry and store those items, before and after the manufacturing process; h. automatic feeding of the press and automatic removal by such means as conveyors of finished products; i. use of appropriate static resistant containers during the manufacturing process for powder and processed items used in the manufacturing process; j. remote turning on and off of the press, and interlocking systems (such as barrier rails) that stop the press every time operators are within a certain distance and directly exposed to the press; k. assessment of dissipation of static by the use of any anti-static or conducting footwear or anti-static floor coating or matting; l. assessment of cleaning and/or maintenance system of the Betapress; and m. provision of automated operation of Betapress and/or interlocking system of halting press when operators refilling and/or directly exposed to press. 62. The Prosecutor relies on the particulars of charge as outlined in the Application for Order. Previous History 63. Please see WorkCover Authority of NSW (Inspector Sequeira) v Foti's International Fireworks (Displays) Pty Limited [2003] NSWIRComm 471 Early Plea 64. The Defendants entered a plea of guilty at the earliest opportunity and are entitled to the benefit of an early plea. 5 Mr Fortunato Foti gave evidence, as did Mr Timothy John Gray, an employee of the Company. Victim Impact Statement 6 A victim impact statement was tendered by the prosecutor in accordance with ss 27(2A)(b) and 28 of the Crimes (Sentencing Procedure) Act 1999, this being a case where the offences resulted in death, or actual physical bodily harm. The defendants objected to the receipt of certain paragraphs of the statement, which described the injuries suffered by Mr Lovric, by reference to a number of medical reports attached to the statement. I received those paragraphs of the statement and the reports, indicating that I would give reasons for doing so in this judgment. 7 Sections 28 of the Crimes (Sentencing Procedure) Act provides: 28 When victim impact statements may be received and considered (1) If it considers it appropriate to do so, a court may receive and consider a victim impact statement at any time after it convicts, but before it sentences, an offender. (2) A victim impact statement may also be received and considered by the Supreme Court when it determines an application under Schedule 1 for the determination of a term and a non-parole period for an existing life sentence referred to in that Schedule. (3) If the primary victim has died as a direct result of the offence, a court must receive a victim impact statement given by a family victim and acknowledge its receipt, and may make any comment on it that the court considers appropriate. (4) Despite subsections (1), (2) and (3), a court: (a) must not consider a victim impact statement unless it has been given by or on behalf of the victim to whom it relates or by or on behalf of the prosecutor, and (b) must not consider a victim impact statement given by a family victim in connection with the determination of the punishment for the offence unless it considers that it is appropriate to do so. (5) A court may make a victim impact statement available to the prosecutor, to the offender or to any other person on such conditions (which must include conditions preventing the offender from retaining copies of the statement) as it considers appropriate. (6) (Repealed) 8 'Victim impact statement' and 'personal harm' are defined in s 26 of that Act as: victim impact statement means a statement containing particulars of: (a) in the case of a primary victim, any personal harm suffered by the victim as a direct result of the offence, or (b) in the case of a family victim, the impact of the primary victim's death on the members of the primary victim's immediate family. personal harm means actual physical bodily harm, mental illness or nervous shock 9 The objection pressed for the defendants went to the appropriateness of the receipt of medical reports in proceedings such as these, which were concerned with an assessment of penalty for offences under the Act, such offences being concerned with the gravity of the particular risks to safety in question, rather than the actual consequences which flowed for a particular individual from those risks. It was submitted that it was the objective seriousness of the offence with which the Court was concerned in determining sentence and accordingly, the particular injuries suffered by a victim such as Mr Lovric, ought not to distract the Court from the true nature of its enquiry. There was also submitted to be no purpose in investigating medical records and conditions, which would require expert assistance from medical practitioners. 10 In this case, I was satisfied that to receive the statement, in the form tendered, could not deflect from a proper consideration of the risk in question. The agreed statement of facts already detailed the serious injuries which had been suffered by Mr Lovric at [45]. The material sought to be put forward in the victim impact statement, by way of reference to various medical reports, was not inconsistent with what the parties had already agreed. Rather, it put into context in a way meaningful to Mr Lovric, the personal harm he had suffered as a direct result of the offences here in question. Receipt of the medical reports in the way put forward, necessitated no investigation of any medical records or conditions. 11 As Spigelman CJ explained in R v Mansour (1999) 29 MVR 409, when dealing with a victim impact statement which had led the trial judge to comment on the 'immeasurable grief' of the family of the deceased victim: It is entirely appropriate that trial judges acknowledge the impact of crime on victims and their families in this public way. The purposes of the criminal justice system are well served by such public recognition of the grief imposed on families of victims. 12 The Chief Justice concluded that the reference to 'immeasurable grief' did not show that the trial judge had taken into account an irrelevant consideration in arriving at a sentence, but rather reflected the 'recognition of impact', of the offence. 13 In this case, there was no issue between the parties, that the risk to which Mr Lovric had been exposed, was the risk of death. That being so, Mr Lovric was fortunate, in one sense, not to have suffered an even greater impact of these offences, than the horrific injuries which he, in fact, suffered. Understood in that way, it was clear that receipt of the paragraphs of the statement and the medical reports to which objection was taken, could not deflect the Court from a proper consideration of the risk which arose for consideration in this case. 14 In those circumstances, I took the view that a just exercise of the discretion given by s 28 involved the receipt of the victim impact statement in the form Mr Lovric had made it, by way of reference to a number of medical reports. I have considered the statement consistently with the legislative scheme, which includes the provision made in s 29(3), namely that absence of a victim impact statement does not give rise to an inference that an offence had little or no impact on a victim. 15 It follows that the receipt of the victim impact statement in this case, no matter the very serious injuries which Mr Lovric has most regrettably suffered, cannot lead to the imposition of a higher penalty than would have been imposed in its absence. Its receipt, nevertheless, is a proper recognition by the Court, in a public way, of Mr Lovric's explanation of what he has endured, as the direct consequence of these offences. As the Chief Justice explained, in this way the Court publicly acknowledges the awful impact which these offences have had on Mr Lovric. The parties' cases 16 The case advanced by Mr Hoy of counsel for the prosecutor was that the offences were serious; there were obvious and foreseeable risks and simple remedial steps which could have been taken to avoid them. The incident unfolded like a time bomb, once there had been an explosion on the veranda, leading to the explosion of the roman candles in the adjacent room. The victim impact statement was submitted to be a 'reflection of the harm that has been suffered by that victim'. 17 The case advanced by Mr Hodgkinson SC of counsel for the defendants was that while a plea had been entered at an early stage to both offences, not all of the particulars of each offence had been made out on the evidence. 18 It was submitted that as the cause of the initial ignition could not be established, it followed that in the charge laid against the company, particulars (j), (k), (l), (q) and (u) were not made out; that particular (n) was not made out, if it was properly understood to be framed in a wider way than (m); and that particulars (p), (s) and (t) were made out, only so far as they constituted a subset of (m). The same submission was made in relation to the other charge, in relation to the corresponding paragraphs. It was, however, also accepted that the Court would be satisfied that both offences had been made out to the criminal standard, on the evidence led. It was also accepted that both offences were serious, but it was argued that in terms of culpability, an assessment of the nature and quality of Mr Foti's offence would show that it was very different to that committed by the company. 19 In relation to the company, it was submitted to be relevant that it had taken steps to ensure safety, albeit they had proven to be inadequate in the circumstances. The question of foreseeability had to be approached in the context of those steps, which included measures taken to deal with electrostatic charges and the company's experience with this press, with which there had never been any difficulties, prior to this accident. 20 The company had a large, varied and long experience of conducting a manufacturing operation, dealing with explosives. Whether the steps taken in written form were adequate was but part of the picture to be considered. The steps taken over a long period to provide on the job training in this work, which involved dealing with dangerous and explosive materials, also had to be considered. 21 Also relevant were the steps taken after the accident, which involved significant improvement in the relevant systems, including recording the system and improving documentation. Importantly, the decision was made to give up using the press. This was a positive response, which had to be taken into account when considering the much improved health and safety circumstances now in operation at the premises. The expert reports also revealed the positive aspects of the pre-existing systems, of which account needed to be taken. 22 As for Mr Foti, it was submitted that as the sole director, he was entitled to the same consideration as the company and that in addition, regard would be paid to his personal presence on the site, his personal response on site when the accident occurred and his personal circumstances, which showed that the company was a small organisation and he was not a high flyer. The co-operation which the defendant afforded the investigating authority would also be taken into account. 23 It was accepted that the risk here in question was the risk of death. It followed that to put any weight on the victim impact statement, which could not properly follow if that risk had manifested, would be to fall into error. (See R v Previtera (1997) 94 A Crim R 76 and R v Palu (2002) 134 Crim R 174). Consideration 24 Consistently with the Crimes (Sentencing Procedure) Act 1999, the determination of sentence in cases such as this, must be approached from a consideration of the nature and seriousness of the offences in question, together with aggravating and mitigating factors. 25 Relevant to a consideration of that question, is the submission that not all of the particulars of the charges were made out to the criminal standard. As Mr Hoy submitted, despite expert investigation and a coronial inquiry, the direct cause of the explosion at the Betapress was not established - it could potentially have been caused by either a mechanical or frictional impact, or by electrical or electrostatic discharge. Any matters of doubt, must of course, be resolved in favour of the defendants - see R v Olbrich (1999) 199 CLR 270 at [24] - [28]; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698-9. It follows that it must be concluded that certain of the particulars of the charges were not made out, a matter relevant to the assessment of the nature and quality of the offence. 26 Nevertheless, as the defendants accepted, the evidence must lead to the conclusion that the offences charged were both proven to the requisite degree, the necessary safe system of work not having been implemented and maintained at this workplace and a safe working environment not having been provided. The risks to which Mr Lovric and Mr Foti were here exposed as a result, were of the most serious kind - the risk of death. It was entirely a matter of good luck, not good management, that Mr Lovric and Mr Foti did not suffer even more than they in fact did. That this was a real risk, was quite apparent from the explosions and fires which occurred and the way in which a hopper feeding the Roman candle press and the building in which it was housed, were damaged as a result, as the photographs in evidence graphically showed. 27 This must all be taken into account in fixing penalty, as must the fact that the risk of explosion in a business which manufactures fireworks using dangerous explosives and flammable chemicals, is plainly foreseeable, if a safe system of work is not implemented and maintained. 28 The immediate cause of the first explosion in the Betapress operation which had been conducted since 1997 without difficulty, was not established. The explosion in the Roman candle room, where fireworks were being manufactured, which followed about four seconds later, was caused by the ignition of gunpowder in the hoppers. In the meantime, other products had exploded and caught fire. On the evidence, that an explosion and fire in the Betapress operation would have such consequences was entirely foreseeable, given the nature of this operation, the place at which it was conducted and the systems which were in operation. So, too, was the risk that employees working in the vicinity, not wearing suitable protective clothing, would be seriously injured or even killed, if such fires and explosions occurred in this workplace. 29 The red pellets produced by the Betapress were made of ingredients which will burn and possibly explode, when involved in a fire. Drums containing flammable liquids with flashpoints of less than 23 degrees celsius and an initial burning point greater than 35 degrees, were nearby; Mr Foti was also working nearby, producing other, blue pellets; the drying pellets were laid out nearby, as were other drums of various chemicals and thinners. Roman candle fireworks were being manufactured in the adjacent room, using gunpowder, of which there was approximately 2kg in the room. 30 The first part of the incident involved a flash and explosion at the Betapress, engulfing Mr Lovric in flames. The powder next to the press then exploded; the mixture being used by Mr Foti also ignited, flashing into the adjacent room, causing the gunpowder in the Roman candle press hoppers to explode. 31 That there were available methods of avoiding the risk which materialised from this entirely foreseeable sequence of events, given the various work being undertaken, must also be accepted. Indeed, after the explosion, having engaged expert advice in considering the safety of the manufacturing process being undertaken, the defendants came to the conclusion that even though the Betapress had been operated without prior difficulty since 1997, safety could not be assured in its operation. As a result, the defendants determined not to resume that manufacturing operation. The product in question is now sourced from overseas. A consultant was retained to review and improve the company's safety processes and procedures. Employees are now provided with flame retardant clothing and other personal protective gear, which they are required to wear. 32 The steps taken were commendable and relevant to be taken into account in mitigation of the offence. Sadly, however, as is so often the case in prosecutions such as this, the expert assistance obtained after an accident throws light on the complete inadequacy of the defendants' prior approach to its safety obligations. 33 Beforehand, amongst other problems already referred to, the plant risk management plan was inadequate and, in any event, not adhered to. Unsuitable containers were used to store chemicals and products, before and after the manufacturing process; equipment in use was not earthed; inadequate attention was paid to controlling the risk of electrostatic charge; and employees were not supplied with adequate safety equipment and were not even wearing all that had been provided. 34 All of these matters must be considered in determining appropriate penalties, for what were undoubtedly very serious offences, notwithstanding that they were these two defendants' first offences. 35 I accept that it is relevant, by way of mitigation, that the defendants were not in the position of some defendants, where no attention at all has been paid to safety obligations before an accident. Positive account must also be taken of the expert advice taken after the accident, which resulted in the discontinuation of the particular manufacturing process and a more diligent approach being taken generally to the obligations imposed upon the defendants by the Act. A new computer based safety system was designed by a consultant and a qualified employee has been given responsibility to review and keep the procedures up to date. 36 Employees undertake a daily grounding test and clothing check; they are instructed in machine operation and checks of machinery operation is ongoing. On the job training is given, because there are no available, technical or tertiary courses for this industry. Training logs are maintained and safety training and monitoring is ongoing. 37 Also of relevance is Mr Foti's active involvement in the business and the fact that he himself attended to Mr Lovric and extinguished the fires. The defendants' real contrition for what occurred, particularly to Mr Lovric, who was described by Mr Foti as an experienced and valued employee, must be accepted. The defendants' acknowledged co-operation with the investigating authority and the entry of the plea at the earliest opportunity, must also be taken into account. I have also had regard to the defendants' record and accept that it is relevant that these were not defendants who had paid no attention to their safety obligations. Indeed, the expert's reports referred to aspects of the operation which demonstrated that attention had been paid to safety matters, as well as aspects of the operation where improvements were required. I accept that it is proper to take these matters into account in fixing penalty but in doing so, note that the evidence as to the deficiencies in the system in operation at the time of the accident, shows that it cannot be thought that the prior trouble free period of operation of the Betapress, was as the result of a safe system of work being in operation in that time. 38 Consideration must also be given to the element of deterrence. On the evidence, this business has been conducted by the corporate defendant since its incorporation in 1969, when it acquired the business of Vulcan fireworks, where Mr Foti's grandfather had been employed as head pyrotechnician. Up to 1984 it made and sold millions of fireworks to the public. Since 1984 the sale of such fireworks was banned and the company has manufactured large fireworks used in public displays at New Years Eve, Easter and during events such as the Sydney Olympics. The business has its foundations in a business run by the Foti family for generations and since 1793, in Italy. Other members of that family, apart from Mr Foti, remain involved in the business - indeed the other injured employee, Mr Angelo Foti, is Mr Foti's cousin. Family members are active in industry associations in Australia and internationally, where safety issues are considered. 39 It is a relatively small business, engaging about 11 permanent employees, supplemented by additional casual staff, when particular projects are being undertaken, when numbers swell up to 35. Such staff are engaged away from the manufacturing premises, in other activities. 40 I am satisfied on that evidence, that both specific and general deterrence have a role to play in the penalty to be imposed, although I take the view that it is appropriate, in this connection, to have regard to the evidence of the steps taken after the explosion to address safety concerns. Given both Mr Foti's evidence and that of Mr Gray, I am satisfied that specific deterrence has a lesser role to play in penalty than would have been the case, in the absence of those steps having been taken. 41 The industry is a small one in New South Wales and the defendants continue to operate in it. As I have noted, while it can be accepted that the defendants' records were good ones, prior to these serious offences, the fact that there is no Australian Standard regulating the manufacture of fireworks, confirms the necessity for attention to be paid to deterrence, in the imposition of penalty. This was also confirmed by the reference made in the agreed statement of facts to WorkCover Authority of NSW (Inspector Sequeira) v Foti's International Fireworks (Displays) Pty Limited [2003] NSWIRComm 471, where Staunton J imposed a notional penalty of $250,000, discounted to $162,500, in a case where an employee of that company, of which Mr Fortunato Foti was also a director, had been killed, while preparing a number of 75mm aerial shells for use in a fireworks display, at the same site at Leppington. 42 As to the submissions made in relation to the respective culpability of the two defendants for what occurred, I am unable to accept the submission that the corporate defendant should be held more culpable for what here transpired, than Mr Fortunato Foti. On the evidence, he was the sole working director of the corporate defendant and it follows, its managerial mind. On that evidence, I am unable to see any basis upon which it could properly be concluded that the two defendants' culpability was any different. 43 I have had regard to the evidence as to Mr Foti's means. There was no evidence led as to the financial position of the company, although I have noted the submissions made as to the size of its operation. 44 Having weighed all of the matters I have mentioned, I have concluded that the appropriate penalty to be imposed in these very serious first offences is $210,000 for the corporate defendant and $21,000 for Mr Foti. In coming to those figures, I note that I adopted the approach discussed in Inspector Brett Martin v Encore Tissue Pty Limited [2005] NSWIRComm 271 at [29] - [31] and Inspector David Waterhouse v Innovative Property Developments Pty Ltd and Others [2006] NSWIRComm 97 at [64] to [67]. I here concluded that a discount of 25% for utilitarian savings achieved by the acknowledged entry of early pleas, was an appropriate discount on the penalties which I had otherwise determined were appropriate in all the circumstances of each case. Orders 45 For the reasons given, I find the defendants guilty of the charges to which they each entered a plea and impose a penalty of $210,000 on International Fireworks Pty Ltd and $21,000 on Mr Foti, with a moiety to the prosecutor. The defendants are also ordered to pay the prosecutor's costs as agreed or as assessed by the Court, in the absence 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. 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