District Court New South Wales Medium Neutral Citation: NSW Department of Trade and Investment (Inspector Nash) v Newcrest Mining Ltd [2013] NSWDC 332 Hearing dates: 06/02/2013 Decision date: 06 February 2013 Before: Curtis, DCJ Decision: I impose a fine of $112,500. I order a moiety of the fine to be paid to the prosecutor. In matter number 2012/53511 I find that the breaches of duty contained in the charge and admitted by the defendant are precisely the same as those breaches for which it has now been punished. The appropriate order is that I convict the defendant and I impose no further penalty. Legislation Cited: Occupational Health and Safety Act 2000 Category: Sentence Parties: New South Wales Department of Trade and Investment (Inspector Nash) (Prosecutor) Newcrest Mining Ltd (Defendant) Representation: C Magee appeared for the Prosecutor R Ray, QC appeared for the Defendant I V Knight Crown Solicitor (Prosecutor) Ashurst Australia (Defendant) File Number(s): 2012/53434 2012/53511 Judgment 1In matter 53434 of 2012, the defendant pleads guilty to a charge that on 21 February 2010 at the Cadia mine near Orange in the State of New South Wales, contrary to s8(1) of the Occupational Health and Safety Act 2000 it failed to ensure the health, safety and welfare of eight named employees. 2The employees were all working underground when a violent inrush of mud and water from a partly completed ventilation shaft partially flooded the workings. By good fortune none of them was killed or injured. 3The ventilation shaft was formed by drawing a five metre diameter reaming head attached to a drill string from an underground heading to the surface. The spoil fell to the floor of the shaft and was removed by mechanical shovels called boggers. On the day in question at some time between 2.30am and 5am the spoil accumulated to such an extent that it choked the vertical shaft. At approximately 10.30 that night the sudden inrush occurred as an employee was removing the accumulated spoil. The force of the inrush was sufficient to push the fifty-seven tonne bogger thirty to forty metres down the access drive. The inrush of material flowed into the workings to a height of up to three metres before pooling at the end of a decline that was under development. THE CAUSE 4The inrush was caused by the entry of water and sediment into the void beneath the reaming head. At 2.30pm the preceding day the boring machine had ceased cutting. At that time the cutter was approximately twenty metres from the surface and close to completing the 271 metre height of a shaft. No bogging of the spoil took place from then until 4pm on the following day. 5At 2.30 on the morning of 21 February the pile of spoil was inspected by a Mr Tink. The shaft was not then choked. At 5am the spoil was again inspected by a Mr Robinson who reported to his superiors that the shaft was choked. It follows that the source of the material choking the shaft, and subsequently overpowering the choke so as to cause the inrush, was the entry into the shaft of water and sediment from the walls of the shaft itself, not further drilling. 6This circumstance was foreseeable, although not preventable. THE RELEVANT BREACHES OF DUTY 7No risk assessment was conducted by the defendant in relation to the drilling of the failed shaft. A risk assessment had been conducted in relation to a similar and nearby shaft in similar ground. That assessment identified the possibility of a "choke hole resulting in potential inrush" and noted the probability as "possible" and the consequence "major catastrophe". The assessment recorded that the possibility should be addressed by maintaining a material balance monitoring report sheet with the residual risk being categorised as "insignificant". I will come to that later. 8The standard work procedures instituted by the defendant for work on raised bore hole bogging noted that the operators should "always be prepared for potential inrush of cuttings if water is being retained within the excavated raise and cuttings have been allowed to build up above the brow of the excavated raise." The document also stated that: "Cuttings must not be allowed to build up to a point where there is less than two metres of vertical gap between the cuttings and the brow. The shift supervisor is accountable for managing this. The hazard presented by choking the brow of a raised bore hole is substantial. In the event that a gap of one metre or less is identified, it shall be treated as a serious incident and reported as such. In such an event the raised pullers must stop work and the area barricaded until a JSEA (Job Safety and Environment Analysis) has been completed." 9Mr Robinson's observation that the shaft was choked was conveyed to the mine's supervisor, Mr Kirk, at the handover of the night and day shift at 5.45 on 21 February. Mr Kirk reported it to the mine foreman, Mr Underwood. Mr Underwood inspected the site and, because of the presence of running water down the incline, formed the opinion that there was no significant risk of an inrush. He reported the situation by telephone to the mine superintendent, Mr Craig Day. Mr Day directed Mr Underwood to prepare a JSEA for the task of removing the spoil. Mr Underwood delegated this task to Mr Kirk. 10The JSEA prepared by Mr Kirk identified the potential of an inrush event. The measures suggested to avoid the peril were, "(1) Bogger to bog not closer than five metres to front of raise. (2) When closer to raise bog for higher up muck pile." 11Significantly, recognising the potential of an inrush event, the JSEA did not require evacuation from the mine of all persons who may thereby have been endangered. Explanation for this can only be that Mr Kirk, Mr Underwood and Mr Day all regarded the risk as inconsequential. 12This judgment was not made blithely but in the light of the considered opinion that the presence of water flowing from the shaft, despite the choke, indicated there was probably no build up of water behind the choke. 13The JSEA was approved by Mr Underwood and Mr Day and the work of removing the spoil commenced later that day. 14Although the defendant, through the authors of the standard work procedure and the risk assessment for the previous bore hole, and through Mr Kirk, Mr Underwood and Mr Day, recognised the dangers of inrush, they took no measures either to prevent its occurrence or to ensure the safety of the men in the mine should it occur. 15Although in accordance with the recommendations of the risk assessment for the earlier ventilation shaft the defendant monitored the amount of spoil removed as a precaution against sudden inrush, it did not separately monitor the influx of water into the shaft. Because the choke occurred suddenly and mining is inherently unpredictable, it is reasonable to suppose that the choke may have occurred notwithstanding such close monitoring. 16The fundamental failures on the part of the defendant were threefold. First, failure by the draftsman of the standard work procedures and the risk assessments to direct that all personnel endangered by a sudden onrush should leave the mine in the event of any choke associated with water flow. Secondly, failure to install the equipment necessary to carry out bogging remotely. Such equipment was available to the defendant, although it was not installed before the event. Thirdly, the failure by Mr Kirk, Mr Underwood and Mr Day to include in the JSEA a requirement that endangered personnel should leave the mine during the bogging of the choke. 17The defendant admits that it failed to adequately train or instruct Mr Kirk and Mr Underwood in the recognition of the hazard. OBJECTIVE SERIOUSNESS 18The objective seriousness of the offence is to be considered not only in the light of the gravity of the consequence attendant upon the breach of duty, but in the light of the probability of that consequence actually occurring. The possible consequences of the defendant's breaches of duty were extreme. On the other hand, the probability that such consequences may follow from the breaches were low. The risk assessment prepared in relation to the earlier bore hole noted that a choked hole may result in a potential inrush. However, in the light of prevailing preventative measures it rated that risk as "insignificant". That conclusion is consistent with a safe working practice adopted by the defendant of ensuring that the spoil encroached no closer than two metres from the entry to the shaft. In the event, the fact that the shaft became choked with such rapidity was improbable and was not foreseen. That all three men responsible for the JSEA did not regard the risk of inrush as high because of the presence of flowing water indicates that such a conclusion was not unreasonable. 19Balancing the gravity of the consequences against the remote probability of its occurrence, I regard the objective seriousness of the offence as mid range. GENERAL DETERRENCE 20I recognise that the defendant operates in what is clearly a dangerous and hazardous industry. It is appropriate that the penalty communicates some message to others in the industry. That message, however, should not be entirely one sided, it should also communicate the relevance of the defendant's having previously instituted proper systems and having proper regard to safety when its conduct is to be examined. SPECIFIC DETERRENCE AND SUBJECTIVE FACTORS 21Before the event the defendant had taken a number of safety measures to address the risk. An overarching risk assessment was conducted for raised boring operations at Cadia, which was the previous shaft of similar geological feature. There was a major hazard management plan in place which related to the hazard of inrush. The standard work procedure had been developed for the task of bogging which identified the risk of inrush and prudently provided that a gap of two metres was to be maintained between the cuttings and the brow. It specifically required that a separate safety assessment was to be undertaken if the height of the cuttings encroached within one metre of the brow. That procedure was followed. 22There was reconciliation of the bogging in relation to the volume of reamed cuttings. The employees charged with the task of preparing the JSEA had received relevant training from the defendant. The nature of the defendant's conduct did not reveal an absence of a system or any blatant disregard for safety. On the contrary, it indicates that the defendant had taken some pains to address risks and set up systems to avert those risks. 23Following the events the defendant immediately instituted comprehensive steps to address the failures identified by the event and by the charges. It reviewed and updated its standard work procedure, it reviewed and updated its training of personnel, it designed improvements in relation to the orientation of the base of the ventilation shaft to dissipate the energy of any inrush should one occur, introduced compliance checks to ensure that personnel were properly following required processes and, most importantly, it implemented infrastructure for tele remote bogging. 24The defendant has cooperated with the Department and with the industry generally in publicising the events of this day for the purpose of ensuring that industry wide the lessons will be learnt. In the light of that activity the need for general and specific deterrence is significantly reduced. 25The defendant entered a plea of guilty at the first available opportunity and has demonstrated remorse and appropriate concern. That circumstance is publicly demonstrated by the attendance in Court today of senior members of the defendant's management team. Most significantly, the defendant, operating in a highly dangerous industry, has had no prior convictions. The defendant has operated mines in Australia since 1987 and on this site since 1998. It is, I think, remarkable that in that time it has kept its record clean, demonstrating the high regard that it pays to safety. 26In all the circumstances the appropriate fine is $150,000. This is discounted by twenty-five per cent in consideration of the early plea of guilty and I impose a fine of $112,500. I order a moiety of the fine to be paid to the prosecutor. I order that the defendant pay the prosecution's costs as agreed or assessed. 27In matter number 2012/53511 I find that the breaches of duty contained in the charge and admitted by the defendant are precisely the same as those breaches for which it has now been punished. The appropriate order is that I convict the defendant and I impose no further penalty. 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: 24 October 2014