Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Hutchinson v Tankworld Australia Pty Ltd [2012] NSWIRComm 66 Hearing dates: 2 July 2012 Decision date: 05 July 2012 Jurisdiction: Industrial Court of NSW Before: Haylen J Decision: (a) in relation to the defendant, Tankworld Australia Pty Ltd: (i) the defendant, Tankworld Australia Pty Ltd, is found guilty of a breach of s 8(1) of the Occupational Health and Safety Act 2000 as particularised in the Amended Application for Order in Matter No IRC 60 of 2012 to which the defendant entered a plea of guilty; (ii) the defendant is fined the sum of $110,000 with half that amount to be paid to the prosecutor by way of moiety; (iii) the defendant is to pay the costs of the prosecutor in a sum as agreed or, in the absence of agreement, as assessed. (b) in relation to the defendant, John Andrew Rodgers Falk: (i) the defendant, John Andrew Rodgers Falk, is found guilty of a breach of s 8(1) of the Occupational Health and Safety Act 2000 by operation of s 26(1) of that Act as particularised in the Amended Application for Order in Matter No IRC 64 of 2010 to which the defendant entered a plea of guilty; (ii) the defendant is fined the sum of $11,000 with half that amount to be paid to the prosecutor by way of moiety; (iii) the defendant is to pay the costs of the prosecutor in a sum as agreed or, in the absence of agreement, as assessed. Catchwords: OCCUPATIONAL HEALTH AND SAFETY ACT 2000 - s 8(1), s 26(1) - use of highly inflammable substance in cleaning steel tanks - confined space - fumes ignited by electric buffer - pleas of guilty entered - substantial failure of safety system - serious breach established - general and specific deterrence considered - subjective factors - first offences - early pleas entered -penalties imposed Legislation Cited: Occupational Health and Safety Act 2000 Cases Cited: Kirk v Industrial Relations Commission of New South Wales; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) (2010) 239 CLR 531 Category: Principal judgment Parties: Inspector Michael Hutchinson (Prosecutor) Tankworld Australia Pty Ltd (Defendant in 10/60) John Andrew Rodgers Falk (Defendant in 10/64) Representation: Mr M Scott of counsel (Prosecutor) Mr G Boyce of counsel (Defendants in 10/60 and 10/64) Criminal Law Practice, Legal Group WorkCover Authority of NSW (Prosecutor) Cahills Solicitors (Defendants in 10/60 and 10/64) File Number(s): IRC 60 of 2010 IRC 64 of 2010 Judgment 1Inspector Michael Hutchinson, a WorkCover Inspector, has commenced proceedings against Tankworld Australia Pty Ltd ("Tankworld") alleging a breach of the provisions of s 8(1) the Occupational Health and Safety Act 2000 ("the Act") and has also commenced proceedings against a director of that corporation, namely, Mr John Andrew Rodgers Falk ("Mr Falk"), also alleging a breach of s 8(1) of the Act by operation of s 26(1) of the Act. After numerous mentions of the matter both defendants entered pleas of guilty to Amended Applications for Order. 2The defendant corporation, Tankworld, was engaged in the manufacturing of fibreglass and plastic rainwater tanks and at all material times Mr Falk was the sole director of the corporation. Mr Falk was also the sole director of Wet Technologies Pty Ltd ("Wet Technologies"), formerly known as Tankworld (Swan Hill Pty Ltd ). Wet Technologies was the parent company of Tankworld and operated a similar water tank manufacturing business from premises located at Swan Hill. At all material times for the purposes of these prosecutions Tankworld conducted its business at premises located in Yarrandale Road, Dubbo. At those premises Mr Grant O'Reilly was employed by the defendant corporation as the operations manager and he reported to Mr Shane Palmer who was the operations manager for Wet Technologies. In turn, Mr Palmer reported to Mr Falk. Mr Joseph Maziuk was employed by Tankworld as a supervisor/foreman. 3The defendant corporation also employed Mr Andrew Grant as a mould maintenance labourer. He performed mould maintenance work in a mould maintenance shed located at the Dubbo premises. 4Early on the morning of 8 February 2008 Mr Grant, at the direction of Mr Maziuk, was engaged in preparing two new steel tank moulds for use. Mr Grant had not previously worked with steel tank moulds but he was given instructions to wipe off the protective oil from the inside of the moulds with acetone. Mr Maziuk gave Mr Grant a list of procedures regarding the processes for preparing the mould but they did not cover the cleaning of the steel mould. The procedures provided to Mr Grant also described a sequence for polishing and buffing the steel. In carrying out this task Mr Grant removed his shoes and socks in order to protect the interior of the steel mould and otherwise was wearing tracksuit pants, a T-shirt, jumper and a baseball cap as well as a mask. Mr Grant poured a litre or so of acetone, a Dangerous Good Class 3 flammable liquid solvent, into a bucket and used a mop to wash down the steel mould with the acetone. Mr Grant then used rags to wipe down the interior surface and placed the used rags into a bucket and they were then placed outside the mould. Mr Grant removed his mask after finishing the cleaning task involving the use of the acetone. 5At approximately 7.00am Mr Grant was standing inside the steel mould when he started an electric buffer in order to buff the internal walls of the mould to ensure a smooth finish of the surface. The electric buffer acted as an ignition source and immediately ignited the acetone vapours resulting in a flash fire/explosion. Mr Raymond Brook, a mechanic with Tankworld, was standing beside the mould and was blown backwards across the shed by the explosion. Mr Grant jumped out of the mould with his clothes on fire. Mr Brook used a hose from outside the shed and hosed Mr Grant with water. Mr Grant suffered burns to 18 per cent of his body, including third degree burns to his hands, feet, face, neck and back and was placed in an induced coma. 6Following investigation of this workplace accident, Inspector Hutchinson commenced proceedings against both Tankworld and Mr Falk alleging breaches of s 8(1) of the Act. The particulars of the breach alleged against Tankworld, having regard to the nature of each defendant, were in substantially the same terms as particularised against Mr Falk. It is sufficient, therefore, to set out the particulars alleged against the defendant corporation, Tankworld. The prosecution against Tankworld alleged a failure to ensure the health, safety and welfare at work of all its employees and in particular, Andrew Grant and Raymond Brook contrary to s 8(1) of the Occupational Health and Safety Act and was particularised as follows: The particulars of the risk are: (a)A risk of injury or burns from exposure to explosions caused by the use of an ignition source following the use of acetone to clean a steel tank mould. The particulars of the acts or omissions in failing to eliminate the risk are that: (b)The defendant failed to provide a safe system of work for employees performing the task of cleaning steel tank moulds in that it failed to take the following measure: (i)Prevent employees from cleaning steel tank moulds with acetone in a closed environment without adequate ventilation whilst those employees were not wearing protective clothing and footwear and were using an electric buffer to buff the steel tank moulds. (c)The defendant failed to provide and maintain a safe workplace in that it failed to prevent the introduction of sources of ignition (such as those created by the presence of an electric buffer) into areas where there were explosive atmospheres and flammable substances (such as acetone) present, in that it failed to take the following measure: (i)Require employees to use an air buffer to buff the tank mould following the use of acetone to clean the tank mould. (d)The defendant failed to provide information, instruction, training and supervision to its employees for the task of cleaning steel tank moulds in circumstances where such tank moulds had not been used before, in that it failed to take the following measures: (i)Instruct employees not to use an electric buffer to buff the tank mould following the use of acetone to clean the tank mould; (ii)Instruct employees to clean the tank mould with a non-flammable substance; (iii)Instruct employees to wear protective clothing and footwear; (iv)Provide supervision to employees to ensure that those employees did not use acetone to wash the steel tank moulds and then apply an electric buffer to buff the steel tank mould. (e)The defendant failed to provide information, instruction and training to its employees in relation to the use, storage and handling of dangerous and/or hazardous substances in that it failed to take the following measures: (i)Instruct employees to not store dangerous goods in areas where there were ignition sources present; (ii)Instruct employees to maintain a separate storage area for dangerous and/or hazardous substances; (iii)Instruct employees to have regard to relevant material safety data sheets as to the use and handling of hazardous substances; (iv)Instruct employees to store dangerous goods and/or hazardous substances in correctly labelled containers. (f)The defendant failed to undertake a risk assessment in relation to the task of cleaning steel tank moulds which considered and identified the risk of using acetone in conjunction with an electric buffer. (g)The defendant failed to undertake a risk assessment which considered and identified the risk of the use, storage and handling of dangerous and/or hazardous substances, in particular: (i)The defendant failed to consider and identify the risk of storing dangerous goods in containers without correct labelling; (ii)The defendant failed to consider and identify the risk of storing dangerous goods in areas where there were ignition sources present; (iii)The defendant failed to consider and identify the risk of storing incompatible hazardous material in close proximity. (h)The defendant failed to ensure that the premises were safe and without risks to health in that it failed to ensure that access to the fire extinguisher at the premises was unobstructed. As a result of the defendant's failures employees and in particular, Andrew Grant and Raymond Brook, were placed at a risk of injury. The serious injuries sustained by Andrew Grant were a manifestation of the risk. 7The evidence for the prosecutor consisted of: an Agreed Statement of Facts; a number of photographs of the premises, the steel tank and the surrounding area, being the accident site; a factual inspection report prepared by Inspector Hutchinson; a prohibition notice and a number of improvement notices; a copy of the Tankworld Australia Trust dated 13 June 2006; a copy of a procedure for waxing steel moulds; a material safety data sheet dealing with acetone, laying down precautions for its use and appropriate personal protection equipment; an acknowledgement of notification of dangerous goods on premises for Tankworld, Dubbo, issued by WorkCover; a practical demonstration record for moulds concerning Mr Grant dated March 2007; a Tankworld, Dubbo, dangerous goods risk assessment report dated April 2008; and, WorkCover certificates indicating that both defendants had no relevant prior convictions. The Agreed Statement of Facts appears as an annexure to this judgment. 8The evidence for the defendants was provided through an affidavit of Mr Falk. Mr Falk said he was the sole director and managing director/chief executive officer of Tankworld and was a director of a number of other companies, namely, Wet Technologies Pty Ltd, First Stop Water Shop Pty Ltd, Nylex Plastics Pty Ltd, FRP Pools Pty Ltd, Wet Innovations Pty Ltd and Tank Trucking Pty Ltd. Those companies together employed approximately 150 people. 9Details were then provided of Mr Falk's education and early work history. He moved to Swan Hill in February 1989 and commenced a company known as Tankworld Swan Hill Pty Ltd and in 1991 started a company known as Tankworld Port Pirie. That was followed in 1992 by commencing Tankworld Tasmania and in 1995 Mr Falk started a company known as Polytanks Caboolture. In approximately 2003 he started Summertime Pools. In relation to the Dubbo operation of Tankworld, Mr Falk said that operation commenced around 1986 and that he purchased the business known as Tankworld Dubbo in approximately 2006 as a going concern. At that time the Dubbo operation employed approximately 10 people and at the time of the accident involving Mr Grant, there were approximately 15 persons employed at the Dubbo site. 10As to other personnel at Dubbo, Mr Grant O'Reilly was the manager and he reported to Mr Shane Palmer, Tankworld's operations manager. Mr O'Reilly's duties and responsibilities as manager at Dubbo included the management of the day-to-day business of Tankworld Dubbo and in particular, occupational health and safety requirements. 11Mr Palmer's duties and responsibilities as operations manager at Tankworld included overseeing and management of the occupational health and safety responsibilities of all the Tankworld businesses, including Tankworld at Dubbo. Resumes of Mr O'Reilly and Mr Palmer were included in Mr Falk's affidavit. 12The job description for the operations manager at Dubbo required that person to report to the managing director, quality manager and environmental health and safety manager. The job description set out the primary function and general responsibilities of the position and under the heading "Specific Responsibilities and Accountability" there was a requirement to report all incidents, potential hazards and near misses, to implement and control maintenance inspections and to maintain a safe and clean working environment for all Tankworld personnel, contractors and the community. One of the key criteria was knowledge of environmental health and safety issues, activities and materials. It was specified as advantageous for the holder of this position to have a hands-on knowledge of the fibreglass or rotational mould industry and to be aware of environmental health and safety procedures. 13Prior to the accident in February 2008 Tankworld produced a training manual designed to ensure the health and safety of its employees. There was an extensive job description for Mr Palmer in his position as environmental, health and safety manager of Tankworld, Swan Hill. This position was responsible for establishing, implementing and maintaining the company's environmental, health and safety management system, conducting internal audits, updating the quality manual and the operating procedures as required, initiating corrective action procedures, reporting to senior management on the performance of the safety system, verifying that safety records were maintained, co-ordinating and supervising safety training and records and initiating reports and investigations of accidents and incidents. 14Mr Falk spoke of the corporate defendant utilising a training manual to ensure safety of employees prior to the accident. The provisions of that documents were later modified. There was a monthly meeting where employees' safety was discussed and representatives of each of the Tankworld subsidiaries (including the Dubbo operation) met together with Mr Falk. Approximately seven or eight persons in total would attend, including Mr Shane Palmer, all plant managers and despatch and sales managers and together they would spend considerable time discussing safety and quality assurance issues introduced by Mr Palmer. Mr Palmer also regularly identified specific issues at various operations that required change to comply with safety requirements. Mr Palmer travelled to Dubbo at least once every three months to audit Mr O'Reilly and to ensure that the operations were compliant with the company's safety requirements. In fact, Mr Palmer was present at the Dubbo site on the day of the accident involving Mr Grant. Whenever Mr Palmer visited Dubbo he held a meeting of all staff to discuss safety requirements and quality assurance procedures. Mr Falk noted that training in occupational health and safety was conducted "on the job" through the foreman or leading hand and also by Mr Palmer and/or the plant manager, Mr O'Reilly. 15In compliance with either prohibition or improvements notices, after the accident the corporate defendant changed its operations in the following ways: it ceased the cleaning of steel moulds until a safe work method could be developed and all hazardous substances and dangerous goods removed from the mould maintenance shed; eliminated ignition sources from many hazardous areas; ensured hazardous substances and dangerous goods were stored correctly; implemented and maintained a register for all hazardous substances and dangerous goods used in the workplace; provided all employees with appropriate instruction, training and information in relation to the safe handling and storage of dangerous goods and retained the records of all induction and other training for at least five years; provision and use of personal protective equipment, for tasks involving the handling of hazardous substances/dangerous goods; established an occupational health and safety consultative process with employees and/or their representatives; and, undertook and documented risk assessments for the storage and handling of hazardous substances and dangerous goods at the factory. It was noted in the Agreed Statement of Facts that Tankworld had failed to comply with the improvement notice concerning the undertaking and documentation of risk assessments for the storage and handling of hazardous substances at the factory and a penalty notice was issued. In response to the re-issuing of the improvement notice the defendant corporation conducted a risk assessment in late April 2008 facilitated by a specialist company in risk management dealing with the storage, handling and use of dangerous goods at the premises. 16After the accident the corporate defendant reviewed the safe work method for cleaning steel tank moulds and specified that detergent and water were to be used instead of acetone to clean oil from the mould. A requirement was introduced for the use of gloves and shoes when working on the moulds, including moccasins to be worn when the mould was ready for waxing so that it would not be scratched. The respondent corporation eliminated the use of nearly all ignition sources from the mould maintenance area by requiring only air operated tools to be used. All electrical tools and appliances in the area were removed and power points were isolated. Power points were installed that had a special key lock requiring a key to be used in order to turn on the power. In addition all dangerous goods and hazardous substances were removed from the mould maintenance shed with the bulk of liquids kept in a separate shed. Only liquids being used for the current work day were kept inside the mould maintenance shed. Containers used for flammable liquids were now properly labelled and stored appropriately and a hazardous material register was created. The training system was re-developed in regard to the storage, use and disposal of dangerous goods and better identification and labelling of storage containers, including other improvements in site-induction. A system of workplace safety consultation with employers was established and there were certified safety representatives. Weekly safety meetings were now held. 17In Mr Falk's evidence he said that, apart from those changes, the corporate defendant consulted an electrician and a safety expert. Both experts went to the Dubbo factory and provided advice regarding the safe use of the electrical system and the better use and storage of chemicals on site. Mr Palmer re-wrote the work matrix for polishing, sanding and repairing moulds and under these arrangements employees were no longer allowed to use electric tools unless they obtained a key from the foreman or manager in order to turn on the power. Two additional employees were delegated safety responsibilities and directed to work with Mr O'Reilly and Mr Palmer in addressing safety issues at the Dubbo site. Those employees undertook specific occupational health and safety training. Since the accident the corporate defendant had spent in excess of $40,000 on further safety training and alterations to the workplace site, including re-wiring the site, training with staff, employing independent experts to attend the site and advise on safety matters. 18Mr Falk pointed out that, prior to the February 2008 accident involving Mr Grant, the corporate defendant and all the other entities with which he was associated over a number of years had never experienced "any safety incidents." Since the accident Tankworld, Dubbo has not had any other safety incident. 19Mr Falk expressed his extreme sorrow that Mr Grant was the victim of a workplace accident at his Dubbo site and he also expressed his sorrow for the pain and suffering caused to Mr Grant's family as a result of his injuries. In relation to his personal circumstances Mr Falk noted that he was not present at the factory on the day of the accident but he had been in New South Wales with his late father who, at that time, was dying with a serious disease. At that time his father was desperately ill and had only several months to live. Mr Palmer notified Mr Falk of the accident and spelt out the actions he had taken in relation to having Mr Grant attended to medically and the efforts made to contact ambulance, police and Mr Grant's wife. On that day Mr Falk and Mr Palmer were in hourly contact and Mr Falk was assured that Mr Palmer had everything under control and was taking immediate measures to ensure the safety of workers at the site. Following the accident the company shut down for approximately one week costing between $80,000 and $100,000, including wages paid to staff. Mr Falk was not required for cross-examination. DELIBERATION 20The Court commences with a consideration of the objective seriousness of the offence in each case. Although the pleas were entered to Amended Applications for Order, nevertheless, they represent a comprehensive failure to implement and maintain safety procedures that were vital to the tank-making operation conducted by the corporate defendant. The cleaning operation undertaken in a substantially enclosed area involved the use of acetone in circumstances where there was inadequate ventilation and the failure to provide appropriate protective clothing and footwear. The breach was compounded by the fact that, although air operated equipment had been available it had fallen into disrepair and had not been repaired: employees were then left to use electrically operated equipment with the attendant risk of igniting the acetone fumes. 21There had been a failure to provide information, instruction, training and supervision regarding the cleaning of the tank moulds where this was the first occasion that steel moulds had been worked on by the employees. Further, there was failure to provide information, instruction and training to employees regarding the use, storage and handling of dangerous and hazardous substances regarding the storage of dangerous goods, maintaining separate storage areas and instructing employees in relation to relevant material safety data sheets as to the use and handling of hazardous substances. There was a failure to undertake a risk assessment in relation to the task of cleaning the steel tank moulds as well as a failure to undertake a risk assessment that considered and identified the risks of the use, storage and handling of dangerous and/or hazardous substances. There was a failure to ensure that there was access to the fire extinguisher and it was obstructed on the day of the accident. The system of safety was shown to be seriously deficient despite the usual safety audits conducted by senior staff. 22There is force in the prosecutor's submission that the risks particularised were clearly foreseeable and should have been more thoroughly addressed by the defendants. Mr Grant received serious burn injuries and Mr Brook might well be regarded as fortunate to escape any injury. In both cases they were exposed to risk of serious injury well beyond the injuries actually received during the accident. While the prosector submitted, appropriately, that there were no matters of aggravation, this was a serious breach of the Act. As pointed out by the prosecutor, the lack of specific and particular instructions as to the risk and hazards of using particular chemicals such as acetone in this cleaning process led to the likelihood that, in fact, such hazardous chemicals would be used. 23In this case there is a role for both general and specific deterrence. This case brings to attention the serious dangers that accompany the use of hazardous materials, especially in a workplace where there might be a number of functions performed. The fact that this was the first time that steel tanks had been used as moulds highlighted the obvious need for a fresh risk assessment and the laying down of appropriate safety rules for employees in Mr Grant's position. As to specific deterrence, both defendants continue to operate in this industry with its potential for risk to safety. 24In relation to subjective factors, these cases were amongst a number that were significantly delayed following the decision of the High Court in Kirk v Industrial Relations Commission of New South Wales; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) (2010) 239 CLR 531 and subsequent Court of Appeal cases dealing with the pleading requirements for a valid prosecution under the Act. It was accepted by the prosecutor that, shortly after leave was granted to the prosecutor to amend the Applications for Order in each matter, an application consented to by each defendant, an Amended Application for Order was shortly thereafter filed and the defendants entered their pleas of guilty. In those circumstances, notwithstanding the fact that these matters had been in the Court's list since early 2010, it is appropriate to treat the pleas of guilty as being early pleas and on that account both defendants should receive a discount of 25 per cent. 25Both defendants are first offenders and are entitled to the leniency afforded to that status. Mr Falk has been involved in a number of similar enterprises over a number of years and has not come to notice for breaches of workplace safety regulations. The corporate defendant had instituted safety rules (although seriously flawed) and had employed qualified people to oversee the workplace safety system. Considering the nature of the undertaking both defendants are, nevertheless, entitled to be assessed as having a relatively good safety record. Notwithstanding the comprehensive failures that were exposed by the accident involving Mr Grant, the defendants had in operation safety systems and senior members of staff were allocated safety responsibilities. Importantly, significant remedial steps were taken after the accident to address the risks exposed and has involved the corporate defendant in considerable expenditure. The evidence discloses that the defendants have taken responsibility for the accident and have appropriately expressed their remorse and contrition. These matters will all be taken into account in mitigation of the final penalty. ORDERS 26The Court makes the following orders: (a) in relation to the defendant, Tankworld Australia Pty Ltd: (i)the defendant, Tankworld Australia Pty Ltd, is found guilty of a breach of s 8(1) of the Occupational Health and Safety Act 2000 as particularised in the Amended Application for Order in Matter No IRC 60 of 2012, to which the defendant entered a plea of guilty; (ii)the defendant is fined the sum of $110,000 with half that amount to be paid to the prosecutor by way of moiety; (iii)the defendant is to pay the costs of the prosecutor in a sum as agreed or, in the absence of agreement, as assessed. (b)in relation to the defendant, John Andrew Rodgers Falk: (i)the defendant, John Andrew Rodgers Falk, is found guilty of a breach of s 8(1) of the Occupational Health and Safety Act 2000 by operation of s 26(1) of that Act as particularised in the Amended Application for Order in Matter No IRC 64 of 2010, to which the defendant entered a plea of guilty; (ii)the defendant is fined the sum of $11,000 with half that amount to be paid to the prosecutor by way of moiety; (iii)the defendant is to pay the costs of the prosecutor in a sum as agreed or, in the absence of agreement, as assessed. ANNEXURE AGREED STATEMENT OF FACTS 1.At all material times the Prosecutor 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(1)(c) of the Act to institute proceedings in the within matter. 2.At all material times Tankworld Australia Pty Ltd (ACN 054 321 774) ("Tankworld") was a corporation whose registered office is situated at 348 Campbell Street, Swan Hill in the State of Victoria. 3.At all material times John Andrew Rodgers Falk was a director of Tankworld. BACKGROUND 4.At all material times, Tankworld was a corporation that undertook the business of manufacturing fibreglass and plastic rainwater tanks. Tankworld was registered with ASIC on 19 November 1991. 5.At all material times, Tankworld conducted its business at premises located at Lot 4, Yarrandale Road, Dubbo in the State of New South Wales and was an employer. 6.At all material times, John Andrew Rodgers Falk ("Mr Falk") was the sole director of Tankworld. Mr Falk was appointed on 9 June 2006. 7.Mr Falk is also the sole director of Wet Technologies Pty Ltd ("Wet Technologies") formerly known as Tankworld (Swan Hill) Pty Ltd. Wet Technologies is the parent company of Tankworld. Wet Technologies operates a similar water tank manufacturing business from premises located at Swan Hill. 8.Mr Grant O'Reilly ("Mr O'Reilly") was employed as the Operations Manager by Tankworld. Mr O'Reilly reported to Mr Shane Palmer ("Mr Palmer") who was the Operations Manager for Wet Technologies. Mr Palmer reported to Mr Falk. 9.Mr Joseph Maziuk ("Mr Maziuk") was employed by Tankworld as a supervisor/foreman. 10.Andrew Grant ("Mr Grant"), the injured person, had been employed as a mould maintenance labourer by Tankworld for over two years at the date of the incident. Mr Grant had prior experience working with fibreglass. Mr Grant was initially employed by Tankworld to do mould maintenance. Tankworld then provided training to Mr Grant in joining fibreglass tanks. 11.Mr Grant carried out his duties in the mould maintenance shed. That part of the premises consisted of a colorbond steel shed used for undertaking work on moulds. The shed has a partially enclosed bay approximately 8 metres wide by 15 metres deep, with a skillion roof approximately 5 metres high. The shed is divided into two areas, front and back. The front area of the shed was open at the western (the front) and southern sides. The rear area of the shed was enclosed by colourbond walls on 3 sides, and partially enclosed at the front with colourbond swing doors each approximately 3.5 metres wide by 2.5 metres high. INCIDENT 12.On 8 February 2008, Mr Grant commenced work between 6:00am and 6:30am. On 7 February 2008, Mr Grant had been directed by his supervisor, Mr Maziuk, to prepare two new steel tank moulds for use. This was the first time Mr Grant had worked with steel tank moulds. Instructions were given to Mr Grant to wipe off a rust preventative oil from the inside of the steel tank mould with acetone. 13.Mr Maziuk provided Mr Grant with a list of procedures on the processes for preparing the mould titled, "Procedure for Waxing Steel Moulds." It did not provide instructions for cleaning the steel mould. A procedures sheet had been supplied by Wet Technologies from the Swan Hill factory with the steel moulds. The procedure sheet described the sequence of polishing and buffing, however it did not address the issue of removing oily residue, nor did it contain information regarding the use of hazardous substances or equipment. 14.Mr Grant went to the mould maintenance shed at the premises and commenced working on the task. Mr Grant removed his shoes and socks to protect the interior of the steel mould and was wearing tracksuit pants, a t-shirt, jumper and baseball cap. Mr Grant was also wearing a mask. 15.Mr Grant poured 'a litre or so' of acetone (a Dangerous Good Class 3 flammable liquid solvent) into a bucket and used a mop to wash down the steel mould with the acetone. He then used rags to wipe down the interior surface and put the used rags into a bucket, which were then placed outside the mould. Mr Grant removed the mask once he was finished using the acetone. 16.At approximately 7:00am, Mr Grant was standing inside the steel mould when he started an electric buffer in order to buff the internal walls of the mould to ensure a smooth finish of the surface of the mould. The electric buffer acted as an ignition source and immediately ignited the acetone vapours, resulting in a flash fire/explosion. 17.Mr Raymond Brook ("Mr Brook"), a mechanic with Tankworld, was standing beside the mould and was blown backwards across the shed. Mr Grant jumped out of the mould. Mr Grant realised that his clothes were on fire and started to pat the flames out and tear off his clothes. Mr Brook grabbed a hose from outside the shed and hosed Mr Grant with water. 18.Mr Grant suffered burns to 18 percent of his body, including third degree burns to his hands, feet, face, neck and back and was placed in an induced coma. 19.Mr Grant required skin-grafts to his hands and feet, and was expected to require treatment for up to two years. He is likely to have permanent scarring on his neck, hands and feet. 20.Mr Grant also suffered psychological injuries and underwent counselling. SYSTEM OF WORK AT THE TIME OF THE INCIDENT Cleaning of tank moulds 21.The usual procedure for manufacturing fibreglass tanks is to apply layers of resin and fibreglass to a split mould made of fibreglass. Once the fibreglass resin has cured the two tank halves are removed from the moulds for polishing and then bolted together. The moulds are reusable, however they may require cleaning, waxing and polishing of the inner surface of the mould to ensure a clean finish on the outside of the completed tanks. Waxes are applied to the mould to prevent resin sticking to the mould. 22.Tankworld ordinarily used fibreglass tank moulds to create tanks. The pair of steel tank moulds involved in the incident had been transported from Wet Technologies in Swan Hill a few months prior to the incident. 23.The steel moulds were approximately 1.5 metres high and 4 metres in diameter. The steel moulds were constructed on frames of approximately 25mm steel RHS and lined on the inside with smooth bare-metal steel sheeting. The bottoms of the moulds were flat, and the sides appeared to slope outwards very slightly from the vertical. 24.The usual processes for preparing fibreglass and steel moulds are similar and both processes include cleaning, waxing and buffing or polishing of the mould. 25.The steel moulds had an application of rust preventative oil or WD40 as a rust inhibitor during transport from Swan Hill, which needed to be removed prior to using the steel moulds for the first time. 26.Prior to the incident, Tankworld had an air buffer in addition to an electric buffer to undertake the task of buffing the internal walls of tank moulds. The air buffer was originally used to buff the moulds as it does not create an electric spark. However, the air buffer had been broken between four and 12 months prior to the incident. At the time the air buffer broke, Mr Grant took it to Mr Brook to repair the air buffer. Mr Brook states that he reported the broken air buffer to Mr Mazuik. Tankworld did not replace the air buffer or obtain replacement parts to allow Mr Brook to repair the air buffer. 27.As part of Mr Grant's job, he was supplied with personal protective equipment ("PPE") consisting of a plastic dust suit, mask, goggles and gloves. 28.Prior to the incident, Tankworld did not provide adequate information, instruction, training or supervision to employees undertaking the task of cleaning steel tank moulds. 29.Tankworld kept training checklists although the records do not refer to safe work methods, or methods for identifying specific control measures for hazards, with the exception of wearing PPE equipment and overalls. However, it was common practice for employees to remove their shoes or boots in order to work inside the tanks so as not to scratch the surface of the moulds. 30.Mr Maziuk provided Mr Grant with a list of procedures on the processes for preparing the mould titled, "Procedure for Waxing Steel Moulds." It did not provide instructions for cleaning the steel mould. 31.This was the first time that anybody had performed this task on a steel mould. Tankworld did not undertake any risk assessment in relation to cleaning the steel tank mould. 32.There was a single fire extinguisher located in the corner of the mould maintenance shed. Dangerous goods and hazardous substances 33.Tankworld did not provide adequate training to its employees in the use, storage and handling of hazardous substances. Training was 'on the job' and no training records in relation to hazardous substances could be produced. 34.Tankworld did not store and handle dangerous goods in a safe manner. Containers in the mould maintenance shed included both Class 3 flammable liquids and Class 6 toxins, and were improperly stored with combustible materials nearby, such as rags and timber. There was no signage in or near the shed to indicate the presence of dangerous goods or to provide safety instructions. Acetone was dispensed from a container that was not adequately labelled. 35.Tankworld had no documented risk assessment for the storage and handling of dangerous goods at the premises. Improvement Notice 7-141253 was issued to Tankworld on 25 September 2007, prior to the incident, requiring such risk assessments be undertaken. Tankworld took no action in relation to that notice. SYSTEM OF WORK AFTER THE INCIDENT 36.Following the incident, the following Prohibition and Improvement Notices were issued: (i)Prohibition Notice 148062, issued to Tankworld by Inspector Hutchinson on 8 February 2008 to cease the cleaning of steel moulds until a safe work method could be developed and all hazardous substances and dangerous goods removed from the mould maintenance shed. (ii)Improvement Notice 7-151872, issued to Tankworld by Inspector Hutchinson on 11 February 2008 requiring the company to eliminate ignition sources from any hazardous area. (iii)Improvement Notice 7-151893, issued to Tankworld by Inspector Hutchinson on 11 February 2008 requiring the company to ensure that hazardous substances and Dangerous Goods are stored correctly. (iv)Improvement Notice 7-151895, issued to Tankworld by Inspector Hutchinson on 11 February 2008 requiring the company to keep and maintain a register for all hazardous substances and Dangerous Goods used in the workplace. (v)Improvement Notice 7-151902, issued to Tankworld by Inspector Hutchinson on 11 February 2008 requiring the company to provide employees with appropriate instruction, training and information in relation to the safe handling and storage of Dangerous Goods and to retain records of all induction or other training for at least five years. (vi)Improvement Notice 7-151906, issued to Tankworld by Inspector Hutchinson on 11 February 2008 requiring the company to ensure the provision and use of PPE at the workplace for tasks involving the handling of hazardous substances/Dangerous Goods. (vii)Improvement Notice 7-151907, issued to Tankworld by Inspector Hutchinson on 11 February 2008 requiring the company to establish an Occupational Health and Safety consultative process with employees and/or their representatives. (viii)Improvement Notice 7-151909, issued to Tankworld by Inspector Hutchinson on 11 February 2008 requiring the company to undertake and document risk assessments for the storage and handling of hazardous substances and Dangerous Goods at the factory. Tankworld failed to comply with this notice and a Penalty Notice was issued. In response to the re-issue of the Improvement Notice, Tankworld conducted a risk assessment on 28 April 2008 facilitated by Safe Production Solutions, a company which specialises in business risk management, for the storage, handling and use of dangerous goods at the premises. 37.Following the incident, Tankworld reviewed the safe work method for cleaning steel tank moulds, specifying that detergent and water are to be used instead of acetone to clean oil off the mould. There is a requirement that gloves and shoes are to be worn when working on the moulds with moccasins to be worn when the mould is ready for waxing so that it is not scratched. 38. Tankworld eliminated the use of nearly all ignition sources from the mould maintenance area by requiring that only air-operated tools are to be used. The company removed all electrical tools and appliances in the area and isolated power points. Powers points now have special key locks installed that require a key to turn the power on. 39.All Dangerous Goods and hazardous substances were removed from the mould maintenance shed with a bulk of the liquids kept in a separate shed. Only liquids that are used for that day are inside the mould maintenance shed. All containers used for flammable liquids are now properly labelled and stored appropriately. Tankworld also established a hazardous material register. 40.Tankworld redeveloped their training system for employees which included establishing a training schedule for the storage, use and disposal of dangerous goods, better identification and labelling of storage containers and improvements in site induction. 41.Tankworld established a system for workplace safety consultation with employees, by appointing a certified OHS representative. Safety meetings are held weekly where concerns can be raised and rectified. These safety meetings are documented. 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. Decision last updated: 06 July 2012