Inspector Cooper v Allied Industrial Engineering Limited

AIE's Systems of work prior to the incident 18At the time of the incident, AIE had its own OHS management system. Broadly, that system consisted of an OHS manual which outlined AIE's policies and procedures for health and safety. AIE was, and is, ISO accredited and had its procedures audited every nine months, as well as an ACC audit every second year. AIE also had a dedicated safety officer representing employees and a dedicated safety officer representing management. AIE conducted weekly toolbox meetings where safety issues were discussed. It also had an OHS committee in place. 19AIE's safety systems were outlined in greater detail in an affidavit of Stephen Hayes employed by AIE as general manager. He explained that the majority of employees of the company are engineers engaged as professional engineers, engineering tradespeople, supervisors or trade assistants. Mr Hayes' detailed outline of AIE'S systems in place prior to the incident reveal a very comprehensive and well-structured system. His affidavit also outlines comprehensive systems of safety to be utilised where AIE employees were required to perform work away from its workshop premises. When work was to be performed off-site, AIE's system involved customer planning and a pre-start checking process which generally involved face-to-face meetings, telephone discussions and written communications between it and the customer and contractors regarding the scope of work and other matters. With regard to its work in 2008 for Visy, the customer planning process, according to Mr Hayes, took some 18 months during which time the scope of the work, specific work requirements and appropriate health and safety systems were discussed and planned. Those matters were discussed in more precise detail in the last six months leading to the commencement of the Visy shutdown in July 2008. During the shutdown at the Visy site, AIE had a team of six supervisors and 33 casuals and contractors. The team was led by Mr Hughes who worked on the digester with employees and five other supervisors. Mr Hughes had been involved in three digester shutdown projects at the mill prior to the incident in 2005, 2006 and 2007. According to Mr Hayes, each of those projects had involved changing the digester screen there with similar scaffolding. 20According to the Agreed Facts, AIE was required to work within Visy's safety requirements while undertaking the work at the mill. All AIE staff at the mill had undertaken Visy site induction and confined spaces training as required by Visy, and all AIE staff working at the mill had also completed an on-line construction induction course and obtained a Construction Induction Certificate. AIE was responsible for the development of specific JSEAs for the work in the digester, which were developed in consultation with AIE employees and contractors. The completed JSEAs were provided to a Visy representative before the Visy work permits could be issued. AIE relied on Bell to provide a safe scaffold and did not take any additional steps to ensure that the scaffolding was safe to use or to ensure that scaftags were affixed to the scaffold. Mr Hughes of AIE was the confined spaces supervisor at the premises, however, he held no recognised accreditation for confined spaces work. 21The acts or omissions to which AIE has entered its plea of guilty concern that aspect of Visy's systems involving the use (or non-use) of scaftags. It is clear from material canvassed earlier in these sentencing reasons that that system was neither properly utilised nor properly implemented at the site. Notwithstanding Mr Bellden's verbal assurance to Visy that the scaffolding in the digester was complete on the afternoon of 4 July 2008, Mr Wragg, a foreman from Bell, said (on 5 July 2008) that the mid-level lower/hanging scaffold platform in the digester was unfinished. He stated that he was awaiting clarification on that day of the work requirements of the sub-contractors prior to providing access, and making adjustments to Work Deck 5. Neither Mr Wragg, nor anyone else from Bell, had affixed a scaftag on the mid-level lower/hanging scaffold to indicate it was safe to use, or a red "Scaffold incomplete - do not use" tag, or red-and-white barricading tape which would have indicated that access to the scaffolding was not permitted. Mr Hughes entered the interior of the digester at about 2.15pm on 5 July 2008 and proceeded down to Work Deck 5. He said there was no scaftag attached to the mid-level lower/hanging section. 22There was clearly an obligation on AIE to determine that Work Deck 5, and the surrounding area, was complete and safe for use prior to permitting or directing persons, including employees of other contractors, to undertake work from that area of the scaffold. In the absence of a "scaftag" being in place at the time, AIE could not be certain that the scaffold was safe to use and that it was not exposing persons to the risk of serious injury from falls from, or through, the scaffold inside the digester. Under Visy's system, to which AIE representatives had been inducted, the presence of a "scaftag" signalled that the scaffolding in that area was complete and safe to use. According to the prosecutor, the work being undertaken was high risk work with the potential for falls from a great distance and the risk of significant injury from striking the internal structure of the digester or scaffolding components. Rather than ensuring that there was compliance with the system of scaftags, Mr Hughes said that he relied upon the verbal assurances he had received from Mr Bellden that the scaffolding was complete and safe for use. Mr Hughes took no other steps to verify that the information provided to him by Mr Bellden was correct and that the mid-level lower/hanging scaffold, including Work Deck 5, was safe to use before work commenced in that area. From these matters it may be concluded that AIE, through Mr Hughes, failed to make further enquiries about the reasons for the missing scaftags and should not have relied on verbal assurances. There were also other indications which should, or could, have alerted AIE that Visy's system with regard to scaftags was not fully implemented at the time of the incident. One such indication was that at the time Mr Hughes permitted or directed Mr Nugent and Peter Nugent to undertake the work on the scaffold at Work Deck 5, the work permit which was issued by Visy (Work Permit A22970) in relation to the work for the erection of scaffold in the digester vessel, had not been returned by the holder of the permit, namely, Bell's safety manager, to Visy. The purpose of the return and signing off on the permit cancellation was for the permit holder to declare that the "work is completed, all personnel and materials have been removed and the plant and equipment are safe to return to service". It was not until after the incident on 5 July 2008 that that work permit was returned by Bell's safety manager to a production manager employed by Visy. AIE was aware of this process. Part of Visy's site specific induction training programme in which AIE personnel had participated included information in relation to work permits. 23It will be recalled that Mr Hughes knew that no scaftag had been attached to the mid-level lower/hanging section of the scaffolding shortly prior to the incident. He had relied instead upon the verbal assurances received from Mr Bellden that the scaffolding was complete and safe for use. It was, in those circumstances, incumbent upon AIE to undertake an inspection of the Work Deck to determine whether the scaffold was complete and safe for use prior to permitting persons to perform work from the deck. On the day of the incident, Mr Hughes had inspected the hanging platform scaffolding inside the digester, which included Work Deck 5, to make sure that there was adequate overhead clearance for the work to be carried out. He did not, however, inspect the whole of Work Deck 5. He failed to identify the void between the edge of the working deck and the internal wall of the digester. He took no other steps to inspect the mid-level lower/hanging scaffold to ensure that it was safe to use before work commenced in that area. No other person acting on behalf of AIE undertook an inspection of the hanging platform scaffolding erected inside the digester prior to the incident. These failures of AIE exposed persons working on the scaffold in the area of Work Deck 5 to serious risk to their health and safety.

Other objective factors 24The risk was also obvious and reasonably foreseeable when regard is had to the sizable gap of 430 millimetres, the absence of a scaftag which might have otherwise alerted workers in the area that the scaffolding was not complete, and the lack of a proper inspection of the area by AIE. There were also simple and readily available steps which could have been taken by AIE at any time prior to the offence which would have avoided the risk. Rather than rely on verbal assurances from Bell, AIE could have performed a proper inspection of Work Deck 5. In the absence of the scaftag, one initiative would have been to ensure that no one was permitted to work in that area. Had the area been properly inspected the gap of 430 millimetres would have come to the attention of AIE personnel and appropriate measures could have been implemented to avert the risk presented by the gap. 25The risk of falling through the gap had the potential for very serious consequences. Mr Nugent fell 12 to 14 metres onto other scaffolding, colliding with other scaffold components on the descent. He was seriously injured as a result of the fall. 26These factors in combination necessitate a conclusion that the offence to which AIE has pleaded guilty was serious, mitigated to some extent by evidence of the detailed and comprehensive system of safety which AIE had devised and implemented at its work sites, prior to the offence. 27Both specific and general deterrence will also be taken into account on sentence. In relation to specific deterrence, AIE continues to operate in the heavy engineering industry in New Zealand and on occasions in Australia. Following the incident, AIE implemented a number of significant steps with a view to minimising or eliminating the recurrence of any risk of the type encountered by Mr Nugent. These steps have been set out in the affidavit of Mr Hayes. According to Mr Hayes' account, AIE has taken steps to improve its safety management system, in particular in relation to work around scaffolding on project sites. Though AIE relies on the expertise and licensed qualifications of scaffolding companies to design and erect scaffolding it nevertheless understands and takes seriously the requirements to ensure that its own employees and others are safe while working on or around scaffolding. This includes ensuring that scaftags are attached to scaffolding on which AIE workers are working to signify that the scaffolding is safe and complete before the commencement of work. Since the incident, AIE has performed further work for Visy on its digester shutdown. In performing the work, AIE now makes specific enquiries and clarifies with the relevant contractors, including DME, about their safety plans and procedures. AIE's quality assurance manager cross-references the AIE Site Specific Safety Plan with the Visy plan to ensure that the more stringent and appropriate system is applied to the work being performed. In performing digester shutdown work, Mr Hughes now personally checks, or where is unable to, instructs a designated supervisor to check, for scaftags on internal scaffolding prior to the commencement of work. This occurs even when employees have been verbally advised by the scaffolders that the scaffolding is complete and safe to use. According to Mr Hayes, the message, that "No scaftag means no work can commence", is now enforced and reiterated at daily and nightshift tool box meetings. The present system at AIE is that both employees and supervisors are required to check the external and internal scaffolding when they are about to commence work on or near the scaffolding. 28AIE also has an excellent safety record. Despite its operations in the heavy engineering industry for 15 years it has no prior convictions under the OHS Act 2000 and no prior convictions under the equivalent safety legislation in New Zealand. These matters are all relevant to the application of specific deterrence in determining penalty. A small component of penalty reflecting the need to apply specific deterrence will nevertheless be taken into account on the basis that AIE continues to operate in the same industry with a relatively large workforce which, according to Mr Hayes, has expanded since the offence occurred. 29General deterrence also falls for application. Falls from and through scaffolding continue to occur on a regular basis. This is despite well documented and widely publicised information concerning the serious hazards of working on or around scaffolding, and equally well documented and widely publicised information with regard to the implementation of systems designed to avert those hazards. There can be no doubt that AIE was aware of these hazards within the industry in which it operated. This jurisdiction has repeatedly sought to emphasise the need to take appropriate measures to avoid serious accidents at worksites involving workers falling from and through scaffolding. It is up to employers to ensure that the appropriate systems are in place so that workers are not being placed at risk of serious injuries caused by falls from height involving scaffolding. The fact that this is not being done by all employers calls for the imposition of a penalty sufficiently high to act as a deterrent. 30AIE is not adversely recorded and faces a maximum penalty of $550,000.

Subjective factors 31There was no contest between the parties that AIE entered a plea of guilty at an early stage. A short chronology of court proceedings provided by AIE to the Court confirms this to be the case. Accordingly, I assess the utilitarian value of the plea at 25 per cent. 32AIE is not adversely recorded (either in New South Wales or in New Zealand) which entitles it to leniency. The absence of prior convictions also attests to AIE's good industrial record, particularly when regard is had to the nature of the industry in which AIE is engaged, namely heavy engineering and maintenance, often requiring its employees to work offsite in unfamiliar surroundings, and, the fact that it has been engaged in the industry for a lengthy period of time, some 17 years. 33AIE, through Mr Hayes, has also expressed its contrition and remorse for the events surrounding Mr Nugent's accident. In his affidavit, Mr Hayes said: AIE expresses its deep regret and contrition to the injured worker, Xavier Nugent, and others who were put at risk as a consequence of failing to check the attachment of a scaff tag on the internal scaffolding. AIE believes it has taken the appropriate steps to avoid such an incident and accident occurring again. 34The "appropriate steps" to which Mr Hayes was referring have been set out in his affidavit. In summary, they include the following: (i) when working around scaffolding AIE ensures that scaftags are attached to signify the scaffolding is safe and complete; (ii) the systems and procedures in relation to site work and work involving scaffolding have been formulated; (iii) safety requirements are discussed with the principal contractor and other contractors during the planning period prior to the project commencing and AIE's quality assurance manager obtains a copy of the site health and safety requirements in order to compare it with its own site specific safety plan (SSSP) with a view to adopting the more stringent requirements; (iv) AIE's SSSPs require that scaffolding over 1.5 metres may only be constructed and dismantled by licensed scaffolders or persons working directly under the supervision or instruction; (v) AIE's SSSPs make reference to the attaching of scaftags to scaffolding over 1.5 metres; (vi) the importance of attaching scaftags is emphasised at AIE's daily tool box meetings; (vii) AIE developed a Job Safety Analysis (JSA) sheet and/or on-site safety and environment compliance audit sheet to be used prior to work commencing on site; (viii) AIE formalised a confined space hazard plan, induction checklists and tool box meeting forms; (ix) revision of AIE's safety manual and regular reviews of its safety management procedures; (x) AIE employee attendance at various accredited training courses, including "working at heights/unit standard 17600". 35As a result of these initiatives, Mr Hayes reports that although employee numbers and working hours have increased over the last three years, lost time injury hours continue to fall. 36These post-offence improvements (which include those improvements referred to during consideration of the application of specific deterrence), together with AIE's expression of contrition and remorse meet with the requirements of s 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 as evidence of contrition which the Court will take into account in mitigation of penalty. 37In addition to these factors, AIE co-operated with WorkCover during its investigation. Mr Hughes travelled to Australia from New Zealand and attended separate interviews with the prosecutor for the purpose of assisting the investigation. AIE has also been an active participant in local community activities and charitable activities. 38All of these subjective factors will be taken into account by the Court in mitigation of penalty.

Respective roles and contributions to the circumstances of the offence 39The prosecutor submitted that in assessing the culpability of AIE, the Court should have regard to the respective culpabilities of other defendants who have been charged with offences arising out of the same incident. According to AIE the Court should also have regard to the respective culpabilities of those contractors involved in the incident at the mill who have not been prosecuted, namely, Delter, its director, Peter Nugent, and DME. 40The Court was informed that Visy, Bell and Mr Bellden have been charged with offences arising out of the incident which resulted in serious injuries to Mr Nugent. Neither Delter, nor Peter Nugent, nor DME, have been charged with an offence. Visy has entered a plea to the charge. The prosecutor provided to the Court, with AIE's concurrence, a copy of the amended charge to which Visy entered its plea of guilty. The proceedings against Bell and Mr Bellden, the Court was informed, are at an early stage and neither defendant has entered a plea. 41The prosecutor submitted that on the material before the Court, it would be open to conclude that AIE's culpability in relation to the commission of the offence was less than that of Visy, Bell and Mr Bellden. Not surprisingly, AIE made a similar submission. 42According to the prosecution, this course was open to the Court because, "the particulars of the acts and omissions alleged against each of the defendants are considerably different". The difficulty with this contention is that, apart from Visy, the Court does not know what are the acts and omissions alleged against either Bell or Mr Bellden. What the Court does know is that Bell erected the scaffolding, and, like AIE, was required to operate within Visy's work permit system, relevantly in relation to that aspect of the system involving scaftags and other tags and measures signalling whether the scaffolding was complete and safe for use or incomplete and not safe for use. The Court also knows, on the facts relied upon in these sentence proceedings, that Bell, like AIE, failed to follow that system, and, that Mr Bellden, notwithstanding the failure of Bell to return Work Permit A22970 to Visy, verbally assured Visy that it was completed. In addition, the JSEA prepared by Bell in relation to the erection of the digester's internal scaffolding was deficient in a number of respects, significantly because of its failure to specify that on completion of the erection of the scaffolding a scaftag was to be affixed. 43On the other hand, Mr Hughes, a director of AIE and its senior site representative at Visy's mill, was both aware of the work permit system (and that aspect of the system relating to the use of scaftags) and he knew, notwithstanding Mr Bellden's verbal assurance to him that the internal scaffold was complete, that no scaftag had been attached to the mid-level lower/hanging section of the scaffolding. In spite of this apparent contradiction, Mr Hughes took no steps to verify that the information from Mr Bellden was correct or that the scaffolding was in fact complete and safe to use. 44Based on this material, it is open to conclude that the respective culpabilities of Bell and Mr Bellden are greater than that of AIE. It is of particular significance to this finding that Bell constructed the scaffolding and left it in an incomplete and unsafe condition without affixing a scaftag (or ensuring that one was affixed) to signal that the scaffolding was not safe to use. 45AIE's culpability by reference to that of Visy's culpability is capable of being assessed because of the material available. A combination of that material in the Agreed Facts and the material in the amended charge against Visy, discloses that of the two parties Visy was the more culpable party in the circumstances of the incident which gave rise to AIE's offence. Visy was the principal contractor. AIE and Bell were required to operate within Visy's safety systems. Visy's systems of work permits was deficient. With regard to Work Permit A22970, Visy did not ensure that it was returned by Bell in accordance with its system which should have been before Mr Nugent was permitted to work inside the digester on Work Deck 5. The work permit was not returned by Bell until after Mr Nugent's accident. Despite this, Visy issued another Work Permit A22984 to AIE on 5 July 2008 which permitted work to be undertaken inside the digester. Peter Nugent and Mr Nugent, and other workers signed the "Work Party Sign On Sheet" attached to that Work Permit before they entered the digester to commence work on that day. Visy did not require Bell to provide a documented system of inspection certifying that the scaffold was complete and safe to use. Visy did not inspect the digester or the internal scaffolding to ensure a scaftag had been affixed or otherwise inspect the scaffolding to determine that the scaffold was complete and safe to use and it did not prevent non-employees such as Mr Nugent from commencing work inside the digester and utilising the scaffolding which was not safe. 46Little is known of the role played by Delter and Peter Nugent in relation to the circumstances of the incident. Delter did not arrive at the mill until the morning of 5 July 2008. Delter, Peter Nugent and Mr Nugent operated within Visy's systems, as they were required to do. They were permitted access to Work Deck 5. Delter was engaged by DME to provide labour for work at the site during the shutdown. The Nugents met with Mr Hughes and another AIE employee soon after their arrival and were issued specific instructions for the day's work by the AIE representatives. It would appear from the Agreed Facts that Mr Hughes entered the digester in the area of Work Deck 5 at the same time as Mr Nugent. Peter Nugent had entered beforehand. According to the Agreed Facts, Peter Nugent did not check to see if a scaftag was affixed to the scaffolding on Work Deck 5. The Agreed Facts are silent (and no other material has been made available) as to whether the Nugents were inducted to Visy's system with regard to the use and significance of scaftags (or their absence). According to the Agreed Facts, all non-employees of Visy were required to undertake site specific induction training which included training in relation to work permits, but there is no information provided in the Agreed Facts which might indicate that the Delter workers were actually inducted to the system or received training in relation to work permits. Peter Nugent, according to the Agreed Facts, observed the gap between the lapping board and the inner surface of the digester (the 430 millimetre gap) but took no action because he formed the view that the gap was not sufficiently wide for someone to fall through. As it happened, Peter Nugent was mistaken, but this of itself does not constitute evidence sufficient to sustain a finding that Peter Nugent was culpable in some way, or to some degree, in the circumstances which gave rise to the offence against AIE. There is no other evidence with regard to Delter's and Peter Nugent's activities at the mill at the time of the accident. Accordingly, the Court is unable to make a definitive finding in relation to what role, if any, Delter and Peter Nugent played in the circumstances of Mr Nugent's accident. 47DME was contracted by Visy to undertake maintenance and engineering work on an ongoing basis. DME sub-contracted both AIE and Delter to work at the mill during the 2008 shutdown. DME performed its role in relation to the maintenance and upgrading of the digester in consultation with Visy, Bell and AIE. According to the Agreed Facts, Bell, as part of its contract with Visy, was to provide scaffolders during the shutdown who were made available to either DME or AIE to modify or adjust any scaffolding in the digester. According to AIE, DME has not been prosecuted in relation to the incident on 5 July 2008. 48The Court is unable, on the basis of the paucity of the material available with regard to DME's functions and operations at the mill during the shutdown, to make any proper assessment, or any finding as to whether DME had any culpable role in the circumstances of the offence.

Orders 49The Court makes the following orders in IRC 456 of 2010: (1) Allied Industrial Engineering Ltd (AIE) is convicted of the offence and fined $90,000 with a moiety to the prosecutor. (2) AIE is to pay the reasonable costs of the prosecutor 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: 29 September 2011