Inspector Colin Price v BHP Limited t/as The Broken Hill Proprietary Company Ltd

Prosecutor: Mr W.G. Roser Solicitors: WorkCover Authority of NSW LEGAL REPRESENTATIVES: Defendant: Mr P. Hall QC Solicitors: Blake Dawson Waldron

JUDGMENT: - 10 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date: Friday 16 August 2002 IRC2755 of 2001 INSPECTOR COLIN PRICE v BHP LIMITED t/as THE BROKEN HILL PROPRIETARY COMPANY LTD Prosecution under s15(1) of the Occupational Health and Safety Act 1983

JUDGMENT [2002] NSWIRComm196 1 This Prosecution is brought by Inspector Colin Price of the WorkCover Authority under the provisions of s15(1) of the Occupational Health and Safety Act 1983. The charge as pleaded was amended to read the defendant failed to: Ensure the health, safety and welfare at work of all its employees, and in particular Donald Heggs and Rodney Fitzclarence, contrary to Section 15(1) of the Occupational Health and Safety Act 1983.

The particular of the charge is that the Defendant failed to provide or maintain plant and systems of work that were safe and without risks to health, in that it: (b) Failed to properly or adequately maintain the safety interlock on the GAKO value to the No. 3 Boiler to ensure that it operated in a safe manner and without risk to health. (c) Failed to provide or maintain a system of work that was safe and without risk to health in permitting the purging of Coke Oven gas main to the No. 3 Boiler whilst the forced draft fan and one induced draft fan were not operating. (d) Failed to provide or maintain a system of work that was safe and without risk to health in that the main Coke Oven gas isolation valve to the No. 3 Boiler failed to properly seal.

2 The defendant pleads guilty to the charge under the Act.

3 A comprehensive Agreed Statement of Facts was tendered: 2. At all material times, particularly on 20 April 1999 , the defendant, amongst other things, carried on the business of fabrication of steel at its Newcastle Steel Plant in the state of New South Wales . 3. The Steel Works Power Plant formed part of the said Steel Plant of the defendant's business. 4. Located in the said Power Plant was the No. 3 boiler. 5. The said No. 3 boiler was a conventional gas-fired water tube boiler of 50 tonnes per hour steam capacity. 6. The said No. 3 boiler formed part of a bank of four similar boilers which generated high pressure steam for use in a series of steam turbines in the defendant's business. 7. The said No. 3 boiler featured seven gas burners. Five of these burners were supplied with Blast Furnace Gas - a low calorific value waste gas. The other two burners were fired with Coke Oven Gas - which gas was used to supply a number of flare lances for start up purposes. 8. Blast Furnace Gas was supplied to the said No. 3 boiler through a large diameter main, through a butterfly valve, a U type water seal, a control valve and a burner valve. 9. Coke Oven Gas was supplied to the said No. 3 boiler through a valve number PCOG 3.130 (" Valve A "), a water seal type valve (known as a GAKO valve), a control valve and a burner valve. 10. A single forced draft fan supplied combustion air to the said No. 3 boiler. 11. The heated combustion air was supplied to each Blast Furnace Gas and Coke Oven Gas burner through individual shut-off valves. 12. In addition, flow control valves were used to control the gas-air ratio on the Blast Furnace Gas burners. 13. Flue gases from the boilers were extracted by one or two induced fans which directed the cooled flue gases towards the stack. 14. On or about 17 December 1998 the defendant issued a Standard Operating Procedure ( SOP ) in respect of the emergency shutdown of the boiler gas systems at boilers 1 to 4 (SOP 05.01E.08). 15. The purpose of this SOP was to provide instructions to operational staff for the emergency shutdown of boiler gas systems where there was, amongst other things, a loss of flame and/or loss of the forced draft fan. 16. The SOP mandated the particular procedure to be followed in the case of such loss. 17. On 20 April 1999 the said No. 3 boiler tripped due to an electrical fault with the forced draft fan. This was caused by a blown fuse. 18. An investigation conducted by the defendant, at that time, disclosed that the forced draft fan was not running. Further, no spare fuses were able to be found. 19. As a result of the forced draft fan tripping, all the burners to the said No. 3 boiler also tripped. 20. Mr Neville Forster and Mr Darren Cannon, two employees of the defendant who were working day shift, attempted to restart the boiler. 21. Following this Mr Cannon started to run water into the Blast Furnace Gas U seal. 22. A decision was made by Mr Robin Pickles, an employee of the defendant and shift Foreman of the Power Department of the defendant, to leave the said No. 3 boiler off until the next day shift. 23. At about 6.30pm there was a changeover of shifts between the day and night shift. 24. Mr Rodney Fitzclarence and Mr Donald Heggs, employees of the defendant, commenced duties on the night shift. Mr Gary Cooper, an employee of the defendant, commenced duty as night Shift Foreman. 25. Mr Cooper discussed the issue of what was happening with the said No. 3 boiler with Mr Pickles at changeover. Mr Cooper was told by Mr Pickles that the forced draft fan on the said No. 3 boiler was not operational and that the said boiler had been fully closed down. 26. Following commencement of his duties, Mr Heggs watched the operation of boilers numbered 1, 2, 4 and 6. 27. Mr Heggs also ensured that the said No. 3 boiler was safe whilst Mr Fitzclarence was preparing to purge the gas lines on the said boiler. 28. At approximately 7.00pm Mr Fitzclarence changed the purging system from steam to nitrogen and commenced purging the Blast Furnace Gas line. 29. It took Mr Fitzclarence approximately one hour to carry out this function. 30. Mr Fitzclarence then closed the Coke Oven Gas isolating valve number PCOG 3.130 on the said No. 3 boiler. 31. At approximately 8.45pm Mr Fitzclarence commenced purging the Coke Oven Gas line. In doing so he lit two hand flares. 32. The SOP used by Mr Fitzclarence to purge the Coke Oven Gas line was SOP 05.OIC.17 which related to the purging of Coke Oven Gas from the isolating valve to the boiler burner valves. This was not the appropriate SOP to be implemented as it was a precondition for the use of this SOP that the boiler fans be in operation. 33. After Valve A there are 3 additional valves or components which would if closed prevent the Coke Oven Gas from going to the boiler. There was in place throughout the main line a series of devices which had the aim of preventing the uncontrolled flow of Coke Oven Gas to the boiler. At the time of the incident Valve A was not sealing properly. 34. The defendant was aware that Valve A to the said No. 3 boiler was not sealing properly and had been leaking for some time. 35. The GAKO valve was fitted with a safety interlock device that should have prevented the opening of the GAKO valve in circumstances where the FD fan was not operating. There is evidence that the GAKO valve was partially opened manually by the day shift operators on 20 April 1999. This had not been identified as a fault by these operators. 36. Also, the forced draft fan was not operating. This fan provided combustion air to each of the Blast Furnace Gas and Coke Oven Gas burners. 37. The mixture of fuel gas and air can and, upon reaching a combustible level, will ignite. 38. At approximately 9.20pm the said No. 3 boiler exploded because of the build up of gases in the boiler. 39. The source of ignition of the gases in the said No. 3 boiler was either the heat from the boiler or the hand flares or some other source of ignition. 40. The explosion damaged the switch room which in turn shut down the other boilers. All steam generation is lost in this circumstance. An absence of steam causes the shutdown of the generators, the blowers to the blast furnaces, the works air system and the coke oven exhausts which has a flow on effect. The entire steelworks were shutdown as crucial plant had been affected. 41. At the time that the said No. 3 boiler exploded both Mr Fitzclarence and Mr Heggs were in the boiler building in the vicinity of the said boiler. 42. From the explosion neither Mr Fitzclarence or Mr Heggs suffered any injury. However, they were placed at risk of being seriously injured.

4 Mr W.G. Roser, of counsel, appeared for the prosecutor and Mr P. Hall QC, appeared for the defendant. The prosecution relied upon the Agreed Statement of Facts, Factual Inspection Report dated 14 May 1999, Photographs taken on 21 and 23 April and 13 May 1999 and a document revealing the industrial record of the company.

5 The Court was assisted by a number of photographs and a significant amount of material assessing the causes of the explosion as provided by a safety manager on behalf of the defendant, namely, Mr Jeffrey Francis Biddlecombe, of OneSteel Limited. This company acquired the rod and bar mills operation from the Broken Hill Proprietary Company Limited. At the time of the incident Mr Biddlecombe had been employed by BHP as the Primary Operations Safety Superintendent in the Newcastle Steelworks where the incident occurred.

6 In consideration of penalty, the Commission, sitting in Court Session, must first assess the nature and quality of the offence, that is, the objective seriousness of the offence (see Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 at 474).

7 The No 3 Boiler at the Newcastle steelworks exploded. BHP knew for over a year that Valve A of the No. 3 boiler was leaking gas into the boiler. As it would have taken a week to repair and would require the full closure of the steelworks, the company allowed the leak to continue, in consideration of the fact it had in place three isolation valves. If there was any mishap in the operation of the boiler, the company was comfortable in the view the isolation steps which it had in place and which involved the closure of valves at a number of points of entry into the boiler - the Gako valve, the control valve and the burner valve, would ensure safety.

8 The No. 3 Boiler was a conventional gas-fired, water tube boiler generating 50 tonnes per hour steam capacity. It formed part of a bank of four similar boilers which generated high pressure steam for use in a series of steam turbines used in the defendant's business to make steel. While Valve A was leaking gas, the No 3 boiler tripped due to an electrical fault with the forced draft fan. That led to all of the burners in the No. 3 boiler also tripping.

9 It was determined to leave the No 3 boiler turned off until the next Day Shift. Mr Rodney Fitzclarence and Mr Donald Heggs began the Night Shift. They were boiler operators. The Night Shift foreman was Mr Gary Cooper. Mr Fitzclarence, an experienced boiler operator, and as the review revealed more experienced than the foreman, determined to purge one of the boiler's lines. He had to change input into the line from steam to nitrogen for the purging. He opened the Gako valve by hand. It should not have been able to be opened but had a latch fault. The fans were not operating in the boiler due to the electrical fault. Mr Fitzclarence was aware the fan was not operating and turned on another fan to induce a draft. It did not compensate. The nitrogen put into the lines leaked through the boiler. Mr Fitzclarence, for the purging operation, had lit two hand flares. The nitrogen ignited. Boiler No. 3 exploded.

10 The explosion caused the back of the boiler to be blown out and there was damage to the switch room. This shut down all the other boilers on site. As steam generation was lost, the blowers to the blast furnace, the works air system and the coke oven exhausts were affected and the entire steelworks was shut down. A building 60 metres away had its windows blown out. Two workers were working directly at the site of the explosion.

12 The offence as pleaded is that to which the court must give its attention in its consideration as to the nature and quality of the offence. The court is not considering the liability of BHP for a negligent act nor the hierarchical causes of the incident nor the actual incident itself but rather the offence as pleaded which gives rise to a risk to safety. It is in assessment of the culpability of the defendant for the offence as charged to which the Court's attention is drawn (see Inspector Louise May v McDonald's Australia Limited [2002] NSWIRComm 179 published 5 August 2002; WorkCover Authority of New South Wales (Inspector Carmody) v Consolidated Constructions Pty Ltd (2001) 109 IR 316 [at 42-43]; WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284). 13 I find a number of events had the cumulative effect of causing this risk to safety. Valve A was leaking. The Forced Draft had shut down due to the electrical trip. The Gako valve, after the fan shut down, was manually opened and should not have been. Mr Fitzclarence, for the purging, operated under a safe operating procedure (an SOP) which, in a pre-check, required all boiler fans to be operating. With valve A leaking and the Gako valve being partially open and the fans not operating, once he began the purging operation, the gas ignited.

14 The defendant submits the breach involved the inexplicable decision of an experienced and trained employee, Mr Fitzclarence, through an error of judgment to determine to undertake a purging operation in contravention of the SOP. The defendant concedes, the fact valve A was leaking, may have been a contributing factor to the breach of the Act but submits valve A would normally have been in the open position. However, with the other factors, that is, the fans not working and the opening of the Gako valve, the environment for a risk to safety was established. The defendant submitted as no injury or harm to any person occurred this must be considered by the court in its assessment of the gravity of the offence. It was conceded by the defendant the offence caused a detriment to the safety of persons and to property.

15 The defendant cannot rely upon a defence the incident occurred due to the actions of a careless worker who in purging coke ovens did not perform a pre-check to ensure the fans were working. While there was a system of work in place to perform the task of purging coke ovens, no system of work could have safely protected workers in the performance of this task from the cumulative effect of the leaking A valve, the fans being disconnected, the Gako valve being partially opened and the lack of a check before gas was pumped through the boiler for purging. The act of the employee can be taken into account in an assessment of the culpability of the defendant as to the gravity of the risk to safety created by the employer (see Riley v Australian Grader Hire Pty Limited (2001) 103 IR 143 [at 15]). I find the employer's culpability only marginally diminished because of the error of this trained employee. Further, the facts reveal Mr Fitzclarence was working under the supervision of a foreman. He may have been an experienced boiler operator but the employer had an obligation to ensure what work an employee was to perform and that the work could be performed safely. 16 A risk to safety actually foreseen must affect the Court's consideration of the level of culpability of the defendant (see Axer Pty Ltd v Environmental Protection Authority (1993) 113 LGERA 357). Valve A was left leaking for one year. There is no evidence however as to who had knowledge of valve A leaking. There was only vague evidence as to Mr Fitzclarence's activities in the opening of the Gako valve. While the operator took the decision to purge and began the task without the required checks, and while there can be an element of expectation from an employer that a well-trained employee, as this employee was, would follow the pre-check system there was no evidence the employee had full knowledge of the state of the No 3 boiler at the time he began the purging operation.

17 In the circumstances I find the risk to safety, while not actually foreseen, contains an element of foreseeability through the company's knowledge of the failures of the valve and the fans. The fact a purging operation was being performed when the boiler was in such condition was in itself a risk to safety.

18 I find the gravity of this offence most serious.

19 A number of subjective features to the offence are relevant in consideration as to penalty although they are to be viewed in the context of being secondary to the consideration of the objective seriousness of the offence (see Lawrenson Diecasting at 474).

20 The defendant corporation's detailed technical review conducted by the Primary Operations Safety Superintendent, Mr Jeffrey Biddlecombe, soon after the incident, revealed the circumstances of this incident. The defendant responded in a concerned and competent fashion assisting the WorkCover Authority in its investigation as to the circumstances of the incident.

21 BHP operated a number of boilers across the State. It ensured the safety procedures it had in place, which failed, were modified. It conducted a safety audit on all boilers located in its Newcastle, Sydney and Brisbane steelworks.

22 Evidence was placed before me to persuade me the remedial measures that were taken further strengthen the existing safety procedures and ensure such a risk to safety could not reoccur. These procedures were put in place notwithstanding the defendant had a plan to close down its steel operation a few months after the incident.

23 I am persuaded BHP remains committed to ensuring the health, safety and welfare of its employees and this was so up until the last day of operation at the Newcastle steelworks. I am persuaded the new operator of this plant has adopted the revised procedures put in place by BHP to ensure the risk to safety which this breach revealed has been eliminated.

24 A cage has been placed around the Gako valve to ensure it cannot be manually opened when, in circumstances, it automatically shuts down. A slip plate has been inserted behind the Gako valve at the boiler end of the main line to act as a positive isolation. Workers are now trained in an emergency shut-down procedure. The relevant safe operation procedure has been modified and the procedures now in place have been developed in consultation with the operators and the maintenance department.

25 I am further persuaded that as to specific deterrence and given the post examination by the company of the circumstances surrounding the incident, there is little post-accident propensity for re-offending in the circumstances. It has been submitted the risk of re-offending is non-existent (see Capral Aluminium Pty Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsey) (2000) 49 NSWLR 610; (1999-2000) 99 IR 29 [at 74]) and this is one of the cases which falls within the limited range of cases where that principle has application. While the element of specific deterrence is limited in my consideration I find it was not non-existent. In consideration of penalty in the circumstances, the court still takes into account the deterrent element of the penalty and such penalty as the court imposes must be proportionate to the level of culpability of the defendant. Nonetheless, the specific adjustments made to the equipment and the design and adoption of the new work method are relevant factors in the consideration.

26 While the company presents as a significant corporate citizen which makes a major contribution to the industrial reputation of this State, I have had placed before me the industrial record of the company. It reveals a number of breaches under the Occupational Health and Safety Act and since 1999 a number of serious breaches, two of which appear from the penalties imposed, to be very serious breaches. It is true this company works in a high risk industry amongst heavy machinery but it is with great good fortune that no person was injured in this incident. I take into account the industrial record of the company along with its reputation as a fine corporate citizen. I accept the defendant co-operated with the WorkCover Authority.

27 In the circumstances before me, I find the defendant entered an early plea of guilty. Such a plea should attract a discount for its utilitarian value (see R v Thomson; R v Houlton (1999-2000) 49 NSWLR 383; and R v Sharma [2002] NSWCCA 142). There was some negotiation with the WorkCover Authority but I am persuaded the plea was entered at the earliest opportunity such as to attract a 25 per cent discount.

28 The maximum penalty under the Act for the breach is however affected by s51A of the Occupational Health and Safety Act 1983 which comes into effect as the defendant has prior convictions. Accordingly the maximum penalty for the breach is $825,000.

30 I take into account the gravity of the offence and the above relevant subjective features I allow a discount of 25 per cent for the utilitarian value of the plea.

31 The defendant is fined in the sum of $145,000 with a moiety to the WorkCover Authority.

32 There has been agreement between the parties as to the quantification of the costs in the sum of $13,500. I order the defendant to pay the prosecution's costs as agreed at $13,500.

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