35 The defendant maintained a standard hazard register that was kept on the computer server. In 2000, the Race site occupational health and safety officer undertook hazard identification and, during Ms Woods' reviews and audits in July and November 2002, she examined those records and instructed both Mr Howie and Mr Sylva to update the hazard identification records being kept at Race.
36 The defendant provided written instructions on safe working methods to its employees and these were in operation prior to the accident. Work Instructions for tank cleaning had been developed at the Hyde Park site and were sent to the Race site. The instructions at the Race site dealt with cleaning tanks from a number of specific clients, working in the survey area, working in the wash bay area, fork hoist procedures and the use of cones when working in particular areas. The Hyde Park site had developed some wash procedures prior to the accident that were supplied to other depots in Australia, including the Race site. Those procedures arose out of discussions during a conference of Depot Managers' in July 2002 and was further discussed at a occupational health and safety conference for Depot Managers in August 2002. Ms Woods also dealt with written procedures for working in confined spaces that had been developed at Hyde Park and were present at the Race site prior to the accident. There were also instructional videos dealing with working in confined spaces and that had been shown to Depot Managers during 2002, including Mr Howie. Depot Managers' conferences were a critical part of the safety management system and safety was always a part of the agenda. Such conferences were held two or three times a year and were of two or three days' duration: the occupational health and safety discussions could range from two hours to a whole day. Apart from Depot Managers' conferences there were also occupational health and safety conferences and training sessions which Mr Howie and other Depot Managers attended. These conferences were held on average twice a year and usually lasted two days. Ms Woods would deliver presentations to those conferences on occupational health and safety issues and aspects of improvement to the safety management system of the defendant.
37 The defendant had a senior occupational health and safety committee comprising of Mr Rose with one or other of the Australian or New Zealand country managers, either two Australian Depot Managers or two New Zealand Depot Managers, other senior officers (such as Operations Managers) and Ms Woods. This committee met during the course of Depot Managers' conferences and occupational health and safety conferences attended by Depot Managers. Each Depot also had an occupational health and safety officer as part of the safety management system. The duties of that person were to assist the Depot Manager in implementing the occupational health and safety management system, organising and chairing regular safety committee meetings and attending occupational health and safety training. At the time of the incident the occupational health and safety officer at the Race site was Mr Sylva. Ms Woods had discussed occupational health and safety matters with Mr Sylva and had enquired whether safety meetings were being held at the site and how Mr Sylva was progressing with the list of safety issues at the Depot that Ms Woods had identified in November 2002 as requiring action. Ms Woods understood after Mr Sylva's appointment while the occupational health and safety committee meetings were being held the previous occupational health and safety officer was not keeping Minutes. That had become clear to Ms Woods in her November audit of the Race site.
38 In the July 2002 occupational health and safety conference, Mr Rose told Depot Managers that the Australian depots had to achieve the same safety accreditation that the New Zealand depots had achieved under the regulation of the workers compensation system. How this was to be achieved was discussed at the conference. Those discussions included staff training and depot auditing. It was Mr Rose's direction that the initial level be achieved by March 2003. Ms Woods understood this requirement to be part of the wider push from senior managers of the Group to improve the standard of occupational health and safety throughout the companies within the Group. Ms Woods had organised the Depot Managers' conference for mid-January 2003 where the progress of the Australian Depots in achieving accreditation was to be discussed. Because of the death of Mr Howie, that conference did not proceed.
39 Prior to the accident, Mr Rose gave Ms Woods the responsibility of improving the occupational health and safety management system for the Australian Depots by March 2003 and she had developed a programme to that end in 2002. Depot Managers were required to directly supervise the implementation of the safety management system so that procedures were kept up to date and followed and safety meetings were being regularly held. The defendant had paid for Ms Woods to attend professional development courses prior to the accident such as a May 2001 two day safety conference held in Australia which included a session on Australian safety legal issues.
40 The defendant used audits to identify ways to improve its safety management system and ensure compliance with that system. In 1999 the occupational health and safety officer at Race had carried out a safety audit and had produced an audit report. In 2000, a safety audit was conducted and a report produced and in 2001 Ms Woods conducted two audits of the Race site. In July 2002, at the request of Mr Rose, Ms Woods conducted a review of the tank cleaning operations at Race.
41 In August 2002, Ms Woods assisted in organising an occupational health and safety conference in Christchurch, New Zealand during which Depot Managers were taken to a container park to receive training in safety auditing. All Depot Managers were required to attend and Mr Howie attended. The training was hands-on and involved Depot Managers conducting an audit of the Park and then convening to discuss the results of their audits so that they could gain knowledge and insight from seeing the results of each others audit. In November 2002, Ms Woods conducted training in Melbourne for the Australian safety officers including training in the completion of workplace inspection check sheets. After completing this training, safety officers were required to complete monthly audits at their depots. In late 2002, Ms Woods conducted another audit of the Race site that involved walking through each area of the depot and discussing relevant issues but as she did not have specialist knowledge of the tank wash operations, she was unable to audit this aspect of the site.
42 In late November 2002, at the request of Mr Howie, Ms Woods trained Mr Sylva and Mr Mataiti in the use of the Owens workplace inspection sheets, used for monthly audits. After that training Ms Woods prepared a report for Mr Sylva and Mr Howie identifying matters requiring a follow-up. Ms Woods was due to return to the Race site in March 2003 to verify that the check sheets were being used. She had discussed with Mr Crandles the use of either Mr Nicholson from Melbourne or Mr Greatrex from Brisbane to conduct the final audit because they were Depot Managers having expertise in relation to tank washing.
43 From time to time the defendant also arranged for independent safety reviews to be conducted at the Race site. Such reviews were conducted in October 1999 and March 2001 and involved other sites including the Race site. After these external audits, Mr Rose directed the conduct of a full risk management audit by the then Health and Safety officer for Owens transport. In March 2001, a full report of the health and safety management review was provided to the defendant.
44 Prior to the accident the defendant used a number of strategies to communicate safety issues to their employees, including the issuing of statements that were required to be acknowledged in writing concerning particular safety obligations, the proper display at depots of critical safety procedures, the provision of safety signage and posters at depots and the provision of access to a library of safety videos. In the course of her visits to the Race site, Ms Woods had a number of meetings with Mr Howie and she was able to monitor the adherence to and implementation of changes to the safety management system of that site. She regularly discussed with Mr Howie his progress in implementing the safety management system at Race and during 2002, on average, spent two hours every week assisting Race with safety issues. A number of matters were discussed including safety gear, working at heights, the use of harnesses, personal protection equipment, attendance at training, confined spaces training and induction. Ms Woods referred Mr Howie to the Hyde Park personnel and the computer programme dealing with chemicals in relation to the use and storage of chemicals and the content of work procedures and took this course because those matters involved specialist knowledge which the people at Hyde Park possessed or through which Mr Howie could inform himself by using the computer programme. The computer system allowed each site to access and print off material safety data sheets. After the accident, a ban was reinforced on the use of MEK as a cleaning agent. This was achieved by way of written notice from a senior Manager to all depots within a fortnight of the accident. In 2003, there was a specific health and safety conference for Depot Managers and health and safety officers from Australia and New Zealand where the incident was discussed as well as how it could be prevented from occurring in the future.
SUBMISSIONS
45 The prosecutor drew attention to the number of defects in the safety system to which the company and Mr Rose had pleaded guilty. The use of volatile and flammable substances in confined spaces was not limited to MEK. In this case there was a lack of appropriate earthing, there was a failure in relation to the provision of information, instruction and training, there was a failure of supervision and there was a failure to provide appropriate personal protective equipment. The Agreed Statement of Facts referred to specialist reports identifying how the explosion could have been avoided. Three matters were identified as appearing to directly contribute to Mr Howie's death, namely:
i. That a flammable solvent (MEK) was used within the confined space of the ISO tank at a temperature above its flashpoint.
ii. That potential sources of ignition were brought into the vicinity of the open hatch on the ISO tank, and
iii. That Mr Howie was physically located above the hatch at the moment of the explosion. An expert report noted that excluding any one of these three contributing causes would have averted this tragedy. It was considered that a safe operating procedure for the routine cleaning of ISO tanks would be expected to address at least two of these three contributing factors. Examples of safe procedures were provided as follows:
(1) If a flammable solvent was to be used at a temperature above its flashpoint, then all potential sources of ignition would need to be excluded, and these cleaning operations would need to be conducted remotely.
(2) If the operator was to be present during the cleaning process, then all sources of ignition would need to be excluded and the flashpoint temperature of the solvent should not be exceeded.
(3) If the operator was to be present during the cleaning process, and a solvent was to be used at a temperature above its flashpoint, then all sources of ignition should be excluded and the tank should be sufficiently purged of oxygen with an inert gas prior to the introduction of the solvent. This purge would need to be maintained while ever there was a flammable solvent within the tank. It was concluded that the most likely fuel involved in the explosion was the MEK.
46 It was noted that Ms Woods had concerns about safety at the Race site and that there had been no auditing of the wash facility at that site. No risk assessment had been conducted and for a long period of time there were real concerns about the site: there was lots of talk but nothing much was done to address the issues that had been identified. The nature of the risk was extreme - the clear possibility was that employees could be fatally injured and that was the potential risk that the defendant had to address.
47 The risk of using the substance MEK appeared to be well know to Mr Nicholson and Mr Nguyen at the Hyde Park facility and they had discussed its dangers with Mr Howie. Despite this level of knowledge, nothing was put in place to guard against or prohibit the use of MEK or similar products and MEK was stored at the Race site. The material safety data sheet showed that the substance was obviously extremely dangerous and volatile - therefore the risk was reasonably clear and obvious.
48 The remedial steps taken were to earth the facility, to engage in retraining, to ban the use of MEK as a solvent and to enforce the safety policies. None of these steps were difficult to take and were readily available. The breach constituted a serious offence that was at the higher end of the scale.
49 In relation to Mr Rose, it was accepted that the absence of prior convictions meant that the maximum penalty that could be imposed was $55,000. Here, there were some subjective factors including the fact that Mr Rose had entered a guilty plea, but at a time when there was little utilitarian value flowing from that changed plea. As to specific deterrence, it was to be noted that Mr Rose had retired.
50 Mr Rose submitted that the offence had to be considered against a factual background that showed that the company had an extensive safety system and training but unfortunately the Race operation had become somewhat out of kilter with the other wash bay facilities. In particular, the methods used at the Hyde Park facility were safe - the containers were earthed, MEK was not used as a cleaning agent and pressurised steam was used in combination with the cleaning agent. These steps had not been followed at Race although Mr Howie was a very experienced operator who had been warned of the dangers of using MEK. The Hyde Park procedures were available on the company's computer server and had been downloaded at the Race site. After the accident the company wound down operations at the site and by the end of September 2003 had ceased all operations at the site. Since November 2004, Owens had not operated a business including a tank cleaning operation.
51 It was emphasised that this was not a situation where the company had failed to perceive an obvious risk - the risk was perceived and responses were prepared but those responses, regrettably, were not followed on 15 January 2003. The Hyde Park procedures were known and available and while MEK was not prohibited, its dangers were known and were known to Mr Howie.
52 Emphasis was laid on the company's existing system, prior to the accident where the safety management system was administered by a health and safety manager, where there was a group and company occupational health and safety policy, where there was an occupational health and safety toolbox designed to assist in managing risks at each site, where there were employee inductions and re-inductions and an induction manual in operation, where there was an awareness plan for identifying occupational health and training needs and the preparation envisaged of a hazard register. In addition, there was the preparation of work instruction and wash procedures for the cleaning of tanks, the provision of practical safety training at Depot Manager conferences and occupational health and safety officer conferences and general safety conferences, an established senior occupational health and safety committee, the appointment of safety officers at its site, the requirement for there to be regular safety committee meetings at each site, the use of internal, external audits on a periodic basis and the plan to achieve occupational health and safety accreditation levels specified within New Zealand. This system was not static and was regularly reviewed.
53 After the accident, senior and experienced officers of the company were sent to Sydney and took control of the Race site. The company banned the use of MEK as a cleaning agent and revised its work procedures for tank cleaning. In February 2003 the safe work method statement was introduced requiring wash bay operators to wear proper safety boots and cotton clothing rather than wool to minimise static. Under the terms of this document there was to be no smoking in the wash tank area. The operators were not to take mobile telephones or other items capable of creating an ignition source into the wash tank area, the wash bay supervisor was to observe adherence to the procedure by approving and closing out each ISO tank work permit form, the bay operator and supervisor were to inspect the earthing of the tanks, where the operator and the supervisor were to ensure that appropriate personal and protective equipment was worn, where the wash bay supervisor was to approve the opening of the tank and where the wash tank operator was not to proceed unless a safe work platform was in place. It was submitted that these steps addressed some of the concerns arising from the accident. In addition, the company installed earthing leads in the wash tank area of the site and provided training in the revised procedures at the site and working in confined spaces.
54 Apart from the facts relevant to the operation of the company, Mr Rose pointed to a number of facts that were relevant to his position: at January 2003 he was the Divisional General Manager for Owens Container Services; he was then responsible for 16 container parks and 33 sites located in three countries and employing about 400 people; at that time Mr Rose did not have a day-to-day role at any of the parks or sites; he was a director of 13 or 14 other companies within the Owens Group; he was responsible for other businesses within the Owens Group of companies, including a refrigerated freight business; he had a number of direct reports, including reports from Mr Crandles (the Australian Country Manager of Owen Container Services); Mr Swain (the New Zealand Country Manager of Owen Container Services) and Ms Woods (the Human Resources Health and Safety Manager of Owen Container Services); he lived and principally worked from Melbourne; at the time of the incident he was not at the site and was not in New South Wales; he had visited the site on two occasions, with one visit being part of a familiarisation tour for directors; he had no actual knowledge of the detail of tank washing such as cleaning methods or cleaning agents; he had no knowledge of the earthing of tanks; he was aware that persons employed at the Hyde Park facility, including Mr Nguyen and Mr Nicholson, had knowledge concerning the detail of tank washing; he was aware that risks associated with cleaning methods for tank washing were identified by persons employed at the Hyde Park facility; he was aware that Owens Container Services had prescribed methods of cleaning for tank washing and prescribed cleaning agents; he was aware that training of employees in tank washing, including the prescribed method of cleaning, was conducted by the Hyde Park facility; he had not heard of MEK and had no knowledge of its features; he had not undertaken any formal training in occupational health and safety but had attended a number of seminars and workshops over a number of years; he was aware of the features of the Owen Container Services occupational health and safety system, including the use of an occupational health and safety policy, the creation of an induction manual, the presence of an auditing system, the conferral of occupational health and safety responsibilities on management, the discussion of occupational health and safety issues at management meetings, the reporting by management on occupational health and safety issues, the establishment of occupational health and safety committees at each site, the appointment of occupational health and safety officers at each site, the conduct of occupational health and safety conferences for management and occupational health and safety officers and the plan to achieve tertiary level occupational health and safety accreditation; he had received direct reports on occupational health and safety, including a section where as particular issue could be identified that was not being addressed. Further, from January 2003 to September 2003, Owens Container Services wound down the operations at the site and in September 2003, ceased all operations at the site and closed that site although the tank washing ceased at the site prior to that time.
55 In relation to specific deterrence, it was submitted that Mr Rose was no longer a director or employee of the company: he had retired and had no intention of returning to work. In those circumstances, it was submitted, that here there was no need for specific deterrence to form any part of the penalty to be imposed.
56 It was further submitted on behalf of Mr Rose that he had a lower level of culpability than Owens Container Services because here he was deemed, by his position as a Director of Owens Container Services, to have contravened the same provision of the Act. In addition, he was not at the site at the time of the accident and he did not work at the site and was not directly responsible for establishing the system of work, or determining the cleaning agents or providing the instruction, training or supervision or ensuring that appropriate footwear was worn at the site. Mr Rose had no knowledge of or experience in cleaning procedures for an ISO tank, for cleaning agents stored in an ISO tank, or MEK or the risks associated with MEK and the earthing of an ISO tank.
57 As to subjective factors, although Mr Rose had entered a plea of guilty after giving evidence in contested proceedings, a plea is nevertheless a factor to be taken into account in mitigation because of the terms of s 21A(3)(k) of the Crimes (Sentencing Procedures) Act 1999. The plea was also an indication of contrition by Mr Rose.