District Court New South Wales Medium Neutral Citation: Stephen James Orr v Newcrest Mining Limited [2018] NSWDC 370 Hearing dates: 1 November 2018 Date of orders: 03 December 2018 Decision date: 03 December 2018 Jurisdiction: Criminal Before: Scotting DCJ Decision: 1 The offender is convicted. 2 The appropriate fine is $600,000 that will be reduced by 25% to reflect the plea of guilty. 3 I impose a fine of $450,000. 4 I order that pursuant to section 122(2) Fines Act 1996, 50% of the fine is to be paid to the prosecutor. 5 The offender is to pay the prosecutor's costs as agreed or assessed. Catchwords: CRIME – prosecution – work health and safety – duty of persons undertaking business – duty of employers – risk of death or serious injury – death of employee SENTENCING – aggravating factors – mitigating factors – objective seriousness – general deterrence – specific deterrence – substantial harm, injury, loss or damage – victim impact statement – good prospects of rehabilitation – plea of guilty – assistance to law enforcement – remorse WORK HEALTH AND SAFETY – documented safe work procedure exposed workers to risk COSTS – prosecution costs OTHER – mobile water cannons used to clear blockages in underground mine – water cannon procedure required workers to walk between plant and mine wall – falling rocks impacting with plant created crush hazard – worker crushed between plant and mine wall Legislation Cited: Crimes (Sentencing Procedure) Act 1999 Fines Act 1996 Work Health and Safety Act 2011 Cases Cited: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [180] R v Borkowski (2009) 195 A Crim R 1 at [32] R v Thomson & Houlton (2000) 49 NSWLR 383 R v Tuala [2015] NSWCCA 8 R v Youkhana [2004] NSWCCA 412 at [26] Category: Sentence Parties: Stephen James Orr (Plaintiff) Newcrest Mining Limited (Defendant) Representation: Counsel: Ms K Nomchong SC with Mr C Magee (Plaintiff) Mr B Hodgkinson SC (Defendant) Solicitors: McCullough Robertson (Prosecution) Ashurst (Defendant) File Number(s): 2017/257658 Publication restriction: None Judgment 1. Newcrest Mining Limited (the offender) has pleaded guilty to an offence that being a person who a health and safety duty pursuant to section 19(1) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Lee William Peters to a risk of death or serious injury contrary to section 32 of the Act. The maximum penalty for the offence is a fine of $1.5 million. Facts 1. The parties presented a statement of agreed facts that can be summarised as follows. 2. The offender is a registered corporation conducting an ore mining business. Cadia Holdings Pty Limited (Cadia) is a wholly owned subsidiary of the offender, and holds the mining leases for the Cadia Valley Operations (CVO), a mine located at 1460 Cadia Road, Orange NSW. The incident occurred in an area of CVO known as the Ridgeway Gold Mine (the mine). 3. On or about 30 May 2008, Cadia nominated the offender as the CVO mine operator. At all material times, the offender conducted mining operations at the CVO, including the mining and processing of ore, and the production of gold alloy bars and a copper-gold concentrate. 4. Pybar Mining Services Pty Ltd (Pybar) is an underground hard rock mining contractor, engaged by Cadia from about 1 March 2011 to provide services to the offender in respect of its operations at CVO. Pybar provided labour for maintenance, shut down, shift coverage and minor capital works, as well as ancillary tools and equipment. 5. Mr Peters was employed by Pybar from about 4 April 2011, working as a Mine Services Operator at CVO. The offender provided Mr Peters with safety inductions, training and supervision. Mine Service Operators who were employed by Pybar to work at the mine were subject to the day to day direction, management and control of the offender, and worked under the offender's safety management system. 6. Construction of the mine began in 1997, using a particular technique known as the sublevel caving method. From 2010, the block caving method of mining was adopted as part of the Ridgeway Deeps Block Cave project, the purpose of which was to extend the mine life by 8 years at a cost of $545m. The block caving method was used to extract a section of orebody known as "Ridgeway Deeps", located between the 5040mRL (metres reduced level) and 4790mRL. The block caving method involves undercutting the base of a section of orebody, causing the rock to detach from the under surface of the cave back and cave downward, under its own weight and with the assistance of drilling and blasting. The fractured rock is gathered in a series of funnels (draw bells), with the base of each draw bell being accessed from two diametrically opposed extraction points on the extraction level (draw points). A muck pile is the caved material within the block. 7. Draw points may either be open (allowing caved material to flow through into the draw point), or closed (filled with material extending from the upper edge of the cave opening (the brow) to the floor across the entire width of the draw point). The rill is the exposed surface of a muck pile of caved material that has flowed from the draw point. 8. The draw points in the mine were accessed from tunnels (extraction drives) on the 4786 extraction level. Each extraction drive ran roughly north to south, and had a series of draw points on both its eastern and western sides. Material from the draw points was loaded onto load-haul-dump vehicles (loaders), and delivered to an underground crusher. 9. As of 6 September 2015, the mine was a mature block cave. Over the years, mining production had caused fracturing and grinding of the rocks, resulting in smaller, rounder particles, and increased production of finer particles (fines) and clay. Material flowing from draw points had to be checked for fines, requiring measures such as bunds to be put in place to ensure the safety of personnel working on foot to carry out inspections and sampling. A bund is a pile of material placed across a draw point by a loader to contain or restrict the material that may be discharged from a draw point. Bunds are removed at the commencement of loading operations and replaced after they have concluded. Bunds were the primary control measure used at the mine to manage the risk associated with caved material discharging from a draw point. 10. Hang-ups occur in open draw points, where a large rock or group of rocks becomes suspended in the draw bell above the draw point, blocking the flow of caved material. A hang-up may give rise to an inrush (a sudden release of material) into an underground working environment. The offender's safety management documents identified inrush as a potential hazard during secondary blasting or loading. For example, as part of the offender's safety management system, the Inrush Ridgeway Trigger Action Response Plan identified the hazard of rock inrush arising from temporary hang-ups in open draw points. 11. A memorandum dated 16 October 2008 predicted an average of seven hang-ups per day at Ridgeway Deeps, and a "worst year" scenario of 27 hang-ups per day. 12. Secondary break operations are activities directed towards bringing down hang-ups within draw bells, and reducing particles to less than 2m3 in size to facilitate transportation via loader. As of September 2015, Secondary break operations for removing hang-ups at the mine involved several processes, including: 1. using a high pressure water cannon to water down a draw point to loosen the material in and around a hang-up; 2. using explosives to dislodge the material; and 3. drilling the hang-up. 1. In early 2011, the offender engaged Whittaker Contracting Diesel Plant Repair to convert a Jacon Maxijet (known as mine asset XT001) into a mobile water cannon, for the purpose of bringing down hang-ups. The Jacon Maxijet was a vehicle with a line-of-sight remote controlled placement boom designed for the application of concrete for ground support systems. The cabin of the Jacon Maxijet was fitted with a falling object protection system (FOPS) compliant with Australian Standard 2294. In accordance with the modification process, the Jacon Maxijet was fitted with a water pump, a water tank reservoir, a hose to connect the water tank to a water supply in the extraction drive, and a water nozzle on the end of the front-mounted boom. XT001 was trialled for the water cannon process at the mine. The boom could be operated using the remote from inside the cabin of the Jacon, however the cabin was small, hot and uncomfortable, and provided poor visibility. As a result, operators were required to stand on the north side of the Jacon in the line of sight of the draw point, so they could see the boom and direct the water to clear the hang-up. 2. Secondary break operations were identified as a major production bottleneck, and in response the offender approved conversion of a further two Jacon Maxijets (mine assets XT008 and XT009), at a cost of $2,101,000. 3. The offender developed a written safe work procedure for Secondary break operations (the Hang-up SWP), which prescribed the manner in which a hang-up was to be cleared using a water cannon. It provided: 8.3 Clear Hangup Using Water Cannon ... 8.3.3 The water cannon operator must physically inspect the bund wall. If the bund wall is not satisfactory then the bund must be rebuilt. 8.3.4 Drive the water cannon to a position as close to the bund wall as possible. A mark can be painted on the side wall to assist this process. 8.3.5 No person is to be positioned between the bund and the water cannon at any time. 8.3.6 The water cannon operator will activate the water cannon. 8.3.7 The water cannon will be directed so that water will be sprayed just under the brow and so as to undercut the rill (working from bottom to top). 8.3.8 Water the hangup until the hangup releases or the supervisor/Leading hand makes the decision to stop the watering down. 8.3.9 The water cannon operator must remain behind the pillar when the water cannon is in use. 8.3.10 All personnel within the direct vicinity of the water cannon at the open draw point will fit a dust mask to ensure that personnel are not breathing dust should the hangup release suddenly. 8.3.11 If the hangup releases then the water cannon operator is to turn off the water and wait for the dust to clear such that visibility returns to at least 40 m before going back into the draw bell. 8.3.12 At all times personnel are to remain behind the bund and bullnose pillar. 1. The bullnose is the sharpest angled pillar at the access to a draw point from an extraction drive. 2. The offender also developed a documented safe work procedure for operating Jacons at the mine (the Jacon SWP). This provided: 6.6.16 The operator should position themselves on the Northern side of the Jacon standing in the middle of the drive or close to the bull nose, but not past the front jacks for the Draw point being hosed, this gives the operator a chance to move behind the Bull nose to avoid any dust or rock that may come over the bund, if the hang up comes down, once the hang-up is down, the operator is to make their way to the Southern end of the drive to fresh air. 6.6.17 The operator must remain upwind of the draw point, if the rill comes down the operator is to: • Retract the boom while walking away from the machine; • Fit a dust mask; • Turn off the Jacon engine via remotes; • Wait for the dust to settle 1. The Jacon SWP also required operators to wait 10 minutes after watering down to inspect the draw point, and to notify the shift supervisor whether the hang-up had been released or was still in place. If the hang-up had not come down, a supervisor was required to inspect the draw point and decide whether or not to continue the operation. 2. The offender identified that standing behind the Jacon would create a potential crush hazard if material discharged from the draw point. As a result, the Jacon SWP stipulated that operators were to wait at the northern end of the drive until the material stopped moving and then go to the southern end of the drive to get fresh air, rather than standing behind the Jacon while the hang-up was being discharged. 3. If the hang-up collapsed during water cannon operations, the operator was required to wait for the dust to settle and for the sound of moving rock to subside before moving behind the Jacon to the south side of the drive to get fresh air. If the hang-up did not come down, the operator was required to walk behind the Jacon to the south side in order to turn the water off and disconnect the hose. Both procedures required operators to walk between the Jacon and the back wall of the extraction drive, placing them in a position identified by the offender as a potential pinch point. 4. It was the practice of some Jacon operators, including Mr Peters, to walk behind the Jacon to the southern end of the drive while a hang-up was coming down, in order to be closer to the ventilation source. 5. Between 1 June 2013 and 6 September 2015, a number of incidents occurred at the mine in which material discharged from draw bells into draw points with force, impacted with one of the Jacons or flowed into the extraction drives. Notably: 1. On 1 June 2013, a hang-up came down during the water cannon process and a large rock hit the front of the Jacon. A bund had been in place. The incident was reported by Scott Drinkwater, Mining Supervisor U/G Operations, Ridgeway. 2. On 9 November 2014, an unplanned flow of material out of the draw point pushed a loader backwards 5m. 3. On 23 July 2015, there was an unplanned flow of material out of a draw point during loader operations, over the bund to approximately 1.5m past the bull nose. 4. On 2 September 2015, an unexpectedly large volume of material discharged from a draw point during loader operations and flowed across the extraction drive, piling up to a height of approximately 2m at the bull nose and 0.5m on the opposite wall. 1. On 3 December 2014, Mr Drinkwater reviewed the Jacon SWP with three Jacon operators. They discussed the possibility that a Jacon could be pushed backwards if a draw point slumped or pushed out when watering down, and agreed that operators should stand on the northern side of the Jacon so that if this were to occur the vehicle would be pushed away from the operator. Mr Drinkwater subsequently informed the Mine's General Manager, Tony McPaul, of this discussion. 2. At 4.52pm on 6 September 2015, the draw point at 10E6 was reported to be hung-up. Mr Peters was rostered to perform the water cannon process using XT008. He had been trained to operate the Jacons on 15 July 2014. 3. At 8:49pm, Mr Peters broadcast over the underground radio that he was in extraction drive 10. 4. At approximately 9:17pm, Mr Peters confirmed over the radio that he would take the Jacon to unblock a pipe "on the east side near the sump". 5. Shortly before 10:19pm, Mr Peters was found by another worker. Mr Peters had been crushed between the rear of XT008 and the western wall of extraction drive 10, and had suffered fatal injuries. XT008 was turned on. The water cannon was not operating but water was flowing into the water tank via the hose. XT008 was surrounded by a substantial volume of material (calculated to be approximately 95m3 and weighing 260 tonnes) that had discharged from the draw point and had pushed XT008 backwards into the wall of the drive. Senior Mining Inspector Robert Mallinson was notified of the incident at approximately 10:59pm. 6. Following the incident, workers were banned from working on foot in extraction drives at the mine during secondary break activities. The water cannon process continued to be undertaken to clear hang-ups, using modified or alternative equipment that did not require operators to leave the cabin to operate the water cannon. 7. In October 2015, the offender installed remote vision packages in the Jacons, at a cost of $46,386.32 per unit. A remote vision package allowed an operator to manipulate the boom from behind a bullnose, without needing to be in the line of site of the draw point. 8. Atlas Copco Scaletec MC Scaling Rigs (Scaletec Rigs) were fitted with air conditioned operator cabins that provided improved visibility compared to the Jacon cabins, enabling operation of the water cannons from within the vehicles. Unmodified Scaletec Rigs were available for purchase in Australia from 2005 until June 2015, at a cost of $1,250,600 per unit in January 2015. Atlas Copco quoted $90,958.50 per unit for the installation of water cannon attachments to the Scaletec Rigs. Modified Scaletec Rigs were used at CVO to conduct the water cannon process from November 2015. 9. In 2016, the offender acquired two MacLean WC3 Water Cannon Rigs (MacLean Rigs) at a cost of $715,800 per unit. The MacLean Rig could be filled with water before entry into an extraction drive, and was designed with the water cannon boom extending from the rear of the vehicle, allowing it to be reversed into a draw point so that the cabin of the vehicle was positioned furthest from the draw point. A rear-mounted camera, viewable from a screen inside of the cabin, enabled operation of the water cannon from inside the vehicle. The two MacLean Rigs were used by the offender at the Cadia East Mine from 1 November 2016 and 15 February 2017, respectively. The Jacons have not been used as water cannons since acquisition of the MacLean Rigs. The offender's case on sentence 1. The offender relied on an affidavit of Peter Cowley, General Manager, Health, Safety, Environment and Security at Newcrest, affirmed on 15 October 2018. The contents can be summarised as follows. 2. Mr Cowley was appointed to his position with the offender on 1 November 2015. He has approximately 32 years of experience in the areas of mining, mechanical engineering and health, safety, environment, security and risk. 3. The offender produces gold and copper, and has operations in Australia, Papua New Guinea, Indonesia and Fiji. It was listed on the ASX in 1987. As of October 2018, it engages approximately 3340 employees and contractors across Australia. 4. Cadia Valley Operations (CVO) is one of the offender's operating sites, located near Orange, NSW. The Ridgeway underground mine at which the incident occurred is now in care and maintenance and is no longer operational. The Cadia East Development constitutes Australia's largest underground mine, and is projected to support continued operations at CVO for at least 30 years. As of 1 October 2018, there were 708 full time equivalent employees and 580 contractor personnel engaged at CVO. 5. The offender fully cooperated with the mining regulator throughout the incident investigation process. 6. Mr Cowley expressed regret on behalf of the offender for the incident, its impact on Mr Peters' family, and impacts on workers who attended the scene of the incident. The CEO of the offender and its board of directors have also publicly expressed their regret. 7. Since the incident, a CVO employee has been appointed as the Cadia family support officer to maintain contact with Mr Peters' wife and children, via face-to-face meetings, phone calls and messages. The Cadia family support officer has provided Mrs Peters with information regarding safety initiatives and improvements at CVO, and notifies her of announcements or speeches that will mention the incident or Mr Peters. 8. The offender has offered financial support to the Peters family, providing $16,392.50 for psychological services. On the first anniversary of the incident, a memorial was held and CVO opened a memorial garden in memory of Mr Peters. 9. In the days following the incident, counsellors were made available to the offender's employees and contractors. The offender has facilitated several fundraisers to support Mr Peters' family. 10. The offender's health and safety strategy is built on three key pillars, which are: 1. NewSafe, a program that is aimed at maintaining a strong safety culture and includes safety leadership workshops, training for frontline supervisors, and safety behavioural training for employees and contractors. Approximately 95% of Newcrest's employees and contractors have completed the NewSafe program; 2. Critical Control Management (CCM), which focuses on verifying that controls identified as being critical for preventing fatalities and life-altering injuries are operating effectively. Measures include task checklists and reviews of individual critical controls; and 3. Process safety management, which is concerned with preventing high-consequence catastrophic events. This entails the offender undertaking reviews of risks and controls from a technical perspective. 1. The offender has established a Safety and Sustainability committee, which meets at least four times per year and discusses progress in relation to implementation of the safety strategy. In addition, the Executive Health and Safety Leadership Team meets monthly, and assists in developing the offender's health and safety strategy. 2. At site level, the offender has implemented a system of production and pre-start meetings, hazard reporting, near miss reporting, incident reporting and investigations. In addition, there are scheduled forums at which safety is discussed, including toolbox meetings, communication days and town hall meetings. The offender releases regular publications including safety bulletins, fact sheets and safety reports. 3. The offender's safety statistics are communicated to the Executive Committee and site based senior leadership teams, the Safety and Sustainability Committee, and the general public. Newcrest's total recordable injury frequency rate is currently the lowest in the company's history. 4. The CVO Safety Management Plan (SMP) is reviewed on a regular basis. Details regarding the SMP are included in general inductions, and a hardcopy is available on site. Employees and permanent contractors have access to an electronic copy of the SMP, and non-permanent contractors have access via their Newcrest supervisors. 5. The offender is an active participant in a number of industry bodies, including the Metalliferous Industry Safety Advisory Committee, the NSW Minerals Council Health and Safety Committee, and the International Council on Mining and Metals. 6. The offender is a major employer in Orange, NSW and surrounding areas. At CVO, it has in place a range of community support programs, and provides funding to health, education and community organisations and scholarship programs. Consideration 1. I have had regard to the objects of the Act set out in section 3 and the purposes of sentencing set out in section 3A Crimes (Sentencing Procedure) Act 1999. Objective Seriousness 1. The offence is one of significant objective gravity. 2. The risk of death or serious injury to a worker in the process of clearing a hang-up was obvious and had been identified by the offender. The offender had identified the hazard of rocks or caved material flowing out from a draw bell as part of the secondary break operations. The workers were required to operate the Jacon from outside the cabin and were thereby exposed to risk in performing a number of the necessary tasks. This included being behind the Jacon at different times exposing the worker to the risk of a crush injury .The bund was on occasions insufficient to prevent the flow of material coming over it. 3. The means of eliminating or minimising the risk were identifiable and available. The worker could have been prevented from being on foot in the area of operation. The offender could have installed cameras but then decided to replace the Jacon with alternative plant with operator protection. That plant was fitted with cameras to assist the worker to operate it from within the cabin. 4. The risk was one of death or serious injury to the worker operating the Jacon. 5. The death of Mr Peters is an aggravating factor. The loss suffered by his family and the community is significant and I will return to this when dealing with the Victim Impact Statements. 6. I have taken into account the maximum penalty for the offence. Deterrence 1. The penalty imposed in relation to the offences must provide for general deterrence. PCBUs must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large businesses will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [180]. 2. There is a need for specific deterrence. The offender operates in an industry that is dangerous to its workers. Whilst I accept that the offender had a demonstrated commitment to safety and an extensive safety system, this offence was still committed. The offender should understand by reason of the penalty imposed for this offence that it needs to be vigilant and constantly reviewing its systems to avoid future offences. Aggravating factors 1. The injury, harm and loss caused by the offence was substantial: section 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. In order for the aggravating factor to be established, I must be satisfied beyond reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26]. The offence does not require an injury to be sustained but only the creation of a risk. The Victim Impact Statements (VIS) were not objected to or called into question, and in my view it is proper to take them into account in consideration of the establishment of the aggravating factor: R v Tuala [2015] NSWCCA 8. I am satisfied beyond reasonable doubt that the injury, harm and loss caused by the offence was substantial. Mitigating factors 1. The offender has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has undertaken a major review of its Mine Safety Management Plan and associated safety system. The plan is comprehensive and multi-faceted. I am satisfied on the balance of probabilities that the offender has good prospects of rehabilitation. 2. The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender expressed remorse through the affidavit of Mr Cowley, as well as through its actions in implementing changes. I am satisfied on the balance of probabilities that the offender has accepted responsibility for its actions and has demonstrated genuine remorse and contrition. 3. The offender entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. It is entitled to a discount on penalty that reflects the utilitarian value of that plea: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. The appropriate discount is 25%. 4. The offender co-operated with the mining regulator's investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. Penalty 1. The offender is convicted. 2. I have taken into account the Victim Impact Statements (VIS). Ms Emily Peters, the deceased's wife, read her moving VIS to the Court during the sentence proceedings. I really appreciated her genuine account of her husband. I was left with the impression that he was a wonderful husband and son, a loving father and a captivating character. It is clear that the tragic loss of Mr Peters is still a painful daily reality for his wife and children. 3. Mr Brett Peters, the deceased's father, also prepared a VIS. Brett Peters described his son as his best friend and a great father to his daughters. Mr Peters has suffered emotional and psychological trauma as a result of his son's death, which I expect will continue. Mr Peters' death has left a hole in his father's life. 4. I would like to extent my condolences to Mr Peters' family. Their dignified and thoughtful participation in the sentence proceedings honour him. I have taken into account the harm caused to the deceased's family by the offender as an aspect of the harm done to the community: section 28(4) Crimes (Sentencing Procedure) Act 1999. 5. The appropriate fine is $600,000 that will be reduced by 25% to reflect the plea of guilty. 6. I impose a fine of $450,000. 7. I order that pursuant to section 122(2) Fines Act 1996, 50% of the fine is to be paid to the prosecutor. 8. The offender is to pay the prosecutor's costs as agreed or assessed. ********** 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 December 2018