Inspector Malone v Delta Electricity

PROSECUTOR Mr G M Galluzzo of counsel

SOLICITOR WorkCover Authority of New South Wales SYDNEY. LEGAL REPRESENTATIVES: DEFENDANT Mr G J Hatcher SC with Mr J V Murphy of counsel

SOLICITOR Acuiti Legal SYDNEY.

JUDGMENT: - 15 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Prosecution under s16(1) of the Occupational Health and Safety Act 1983

1 The defendant, Delta Electricity, is a state-owned corporation, which is a supplier of electricity and operates from the Mt Piper Power Station at Portland, New South Wales. It is charged with a breach of s16(1) of the Occupational Health and Safety Act 1983 ('the Act') arising from an inspection by the prosecutor, Inspector Barry Malone, an Inspector with the WorkCover Authority of New South Wales, of equipment at the station following the death of an employee of a contractor to the defendant, Shaw Aiton Australia Pty Limited ('Shaw Aiton'). The charge, in respect of which the defendant has pleaded guilty at an early stage, is as follows: ". . . that Delta Electricity a corporation whose registered office is situated at Level 12, Darling Park, Sussex Street, Sydney NSW in the State of NSW (the defendant) being an employer on 17 October 2000 at Portland in the State of New South Wales, did fail to ensure the health, safety and welfare at work of persons not in its employment in particular, Clive Thomas Beynon, contrary to section 16(1) of the Occupational Health and Safety Act, 1983.

(a) Failed to provide or maintain a safe system of work for the performance of maintenance in relation to the air heater unit situated at the Mount Piper Power Station.

(b) Exposed persons to risk of injury due to unsafe scaffolding in and around gas heater 1A and 1B gas heater at Mount Piper Power Station.

(c) Failed to ensure the safety of persons not in its employment who may enter an area with unsafe egress/access methods to gas heaters 1A and 1B at Mount Piper Power Station.

(d) Failed to ensure that walkway and scaffolding was undertaken in accordance with the relevant Australian Standards AS576-1995 and AS1657-1992.

(e) Failed to ensure the provision of an adequate work method statement for journeying to and from the air heater unit whilst performing maintenance on the air heater unit was provided for persons not employed by the defendant.

(f) Failed to ensure an adequate risk assessment for the journeying to and from the air heater unit for the purposes of performing maintenance of the said heater unit.

(g) Failed to ensure adequate instructions, training and supervision for persons not employed by the defendant performing maintenance to the air heater unit including safe journeying to and from the air heater unit."

2 The prosecution proceeded upon the basis of an agreed statement of facts; a written record made by Inspector Malone of his inspection following the accident and a series of photographs. In the defence case evidence was adduced from Stephen Kenneth Saladine, the General Manager, Western, of the defendant. Mr Saladine also provided a video of the relevant equipment and gave an oral description in association with the video.

3 Mr Saladine's affidavit shows that the defendant is the owner-operator of Mt Piper, Wallerawang, Vales Point and Munmorah Power Stations. It has employed 755 employees since its establishment in 1996. The power stations operate 24 hours each day. As General Manager, Western, Mr Saladine has general management responsibility for the operation and maintenance of Wallerawang and Mt Piper and the associated regional infrastructure. He has held engineering and management positions in all aspects of power plant operations and maintenance since 1979. He has been directly involved in the management of safe work practices since mid-1984.

4 Mr Saladine, during the mid-1980s, developed new maintenance procedures and was involved in the facilitation of changed work practices for maintenance staff at Vales Point Power Station aimed at improving safety at the site.

5 At Bayswater Power Station he was responsible for managing maintenance work on gas/air heaters identical to the units installed at Mt Piper. While he was employed there, Bayswater Power Station lifted its safety performance to achieve a National Safety Council of Australia (NSCA) 5-Star rating, the highest rating available under the NSCA Safety Management Audit system and achieved by only a small number of organisations.

6 Mr Saladine was responsible for the introduction of a 12-hour shift arrangement at Bayswater, which substantially reduced the impact of rotating shift work on the health of employees and is understood to provide a safer work environment.

7 More recently he has been involved, with the Lithgow Business Enterprise Centre, in conducting courses to raise safety awareness amongst businesses in the local region.

8 Following his appointment to Delta in May 2000, Mr Saladine undertook, in particular, a review of the detail of how workplace safety was managed at Mt Piper. At around this time the NSCA undertook a detailed audit of Mt Piper's Safety Management System. He was advised by the audit leader from the NSCA that Mt Piper would be awarded a score of 99%, a record score for compliance with the Safety Management System for a power station. Mr Saladine was also advised that Mt Piper was "a benchmark organisation for Risk Assessment" in the NSCA Programme. Subsequently, Mt Piper was ranked in the final four of all organisations in the NSCA programme.

9 It is pertinent to mention, in concert with the last point, that in October 2002, WorkCover arranged a "Safety Summit" on behalf of the Hon. J.J. Della Bosca, NSW Special Minister of State. The Safety Summit involved union, employer, government and community delegates. As part of the Safety Summit, WorkCover arranged a site visit of delegates to Mt Piper Power Station and sought a presentation on how Delta manages the safety of contractors on its sites. Mr Saladine deposed that the presentation was well received by delegates "who all remarked that the approaches used at Mt Piper were advanced well beyond their own industry experiences".

The Gas/Air Heaters 10 There are two such heaters at Mt Piper. They form part of columns approximately 38 storeys high. Mr Saladine described them this way:

As part of the generation equipment installed at Mr Piper, there are two boilers and associated twin flow gas/air heaters manufactured by Davidson Fans to a design by a German company, Routhmuhle. The gas/air heaters are numbered 1A and 1B. The purpose of the gas/air heaters is to increase the thermal efficiency of the power generation process by using some exhaust heat to raise the temperature of incoming air used for the combustion of coal. The gas/air heaters are fully contained inside a circular section of boiler exhaust gas ductwork and are completely sealed to prevent hot air, dust and exhaust gas escaping to atmosphere. The gas/air heater consists of a core of tightly packed fine corrugated sheet metal plates, stacked into baskets, and then a frame approximately 3 metres in height, which spans the widened boiler gas duct. Situated above and below this core are conically shaped internal ducts which carry the air. These internal air ducts rotate together around a central hub through the core and progressively distribute air over the baskets as they have been heated by the boiler exhaust gas. The gas/air heater is fitted with an internal grid deck ("grid") around the inner perimeter of the gas duct, under the core area, to assist in maintenance access and inspection. The grid resembles a catwalk and at manufacture was fitted with a 50mm toe rail. The mechanism which rotates the air ducts was also originally fitted by the manufacturer with some bracing which in effect created one handrail to prevent falling from the grid through the area not bounded by the rotating air duct. This toe rail and bracing rail was not constructed to an Australian standard for walkways.

11 The only additional fact to assist in the description of the heaters is that the basket area is of approximately 10 metres in diameter thereby taking up most of the width of the column.

12 The 1B gas/air heater, the subject of these proceedings, was constructed during the 1980's. Mr Saladine deposed that it: ". . . is identical in design to the other gas/air heaters designed and manufactured to the Routhmuhle design which are installed at Bayswater Power Station in New South Wales, Tarong, Callide, and Stanwell Power Stations in Queensland, and Collie Power Station in Western Australia. Routhmuhle is a major international company which also supplies this equipment to many other power stations elsewhere around the world."

13 It was also stated that WorkCover had inspected the Mt Piper equipment during construction and, while Mr Saladine worked at Bayswater, also inspected this type of equipment during maintenance operations.

14 Mr Saladine was also aware in his experience that State-based safety regulators had also inspected these items in Queensland and at Collie in Western Australia. He deposed: In around 1998 a fatality occurred at Collie Power Station due to a fall in the duct area above the gas/air heaters. The circumstances of this accident and the design of this area of the boiler were thoroughly investigated by the Western Australian Coroner, Police and the relevant health and safety regulator. I am unaware of any report circulated in the industry regarding that incident.

Prior to October 2000, none of these inspections had previously raised any safety problem with the design of the grid inside the gas/air heater gas duct which was communicated to the power industry either by relevant authorities or other power generators.

15 Mr Saladine's affidavit also dealt extensively with the tender process under which Shaw Aiton was selected as the preferred tenderer. One significant aspect of Shaw Aiton's tender for the maintenance contract was that it intended to engage a specialist rigging sub-contractor, "Rebel Scaffolding (or equal)" to attend to scaffolding required for the work. Rebel Scaffolding is well known to Delta as a competent rigging/scaffolding provider. It appears that Shaw Aiton did not engage Rebel Scaffolding, or any other external scaffolder, to do the work of erecting the relevant scaffolding, but rather utilised its own employees.

16 I do not intend to detail the process undertaken between Shaw Aiton and the defendant concerning the approach to the task of ensuring safety, both as the defendant and also as the contractor. It does appear, in general, to have been intended to operate in a fashion which would ensure compliance with OHS requirements. The failure particularly in the matter of scaffolding erection caused the Chief Executive of the defendant to form a work group, chaired by Mr Saladine to review OHS requirements placed by the defendant upon contractors and the processes and procedures used for the OHS management of contracts. As a result, a revised corporate standards entitled "Management of Contract Occupational Health and Safety version 1.0" was produced and is now in place. The OHS standard prescribes, in detail, the steps that Delta's contract administrators are to take to ensure that contractors are compliant with both Delta's and legislated safety requirements.

17 Management of contract works in Delta's western power stations has also been restructured by removing the segregation of responsibility for commercial and technical direction, and ensuring that one person is responsible to issue technical and commercial directions.

18 Another feature of the arrangements as between Delta and Shaw Aiton was the conduct of safety walk-downs, which involve Shaw Aiton's Safety Manager and Delta's Contract Supervisor inspecting the work and noting any issues which detract from safety of the work areas or methods. These were conducted on a weekly basis. Such an inspection on 12 October 2000 demonstrated that: 1. The internal rotating duct of the 1B gas/air heater was in a different position to that in which it was on 17 October 2000 and other activities were occurring;

2. The scaffolding found in place at the time of the accident on 17 October 2000 was not in place during the inspection on 12 October 2000.

19 At about 1.15pm on 17 October 2000 the deceased person, Mr Beynon, and other employees of Shaw Aiton recommenced work on the 1B gas/air heater. They gained access to the inside of the heater through an access way in the air heater body by removing a bolted cover. They were to position steel shoes, 900mm x 900mm x 30mm, into position on top of a bulkhead, which rotates under the basket area when the air heater is in service.

20 It appears that as two other employees were pushing the shoes into position, Mr Beynon moved along the access deck so that he could work on the opposite side of some adjustment gear, which was hindering the positioning of the shoes. Nobody knows precisely what happened thereafter. It is thought that Mr Beynon may have struck his head upon the adjustment gear and fallen to the deck and over its edge, falling between the deck edge and the bottom of the rotating duct.

21 Since the accident, steps have been taken by the defendant to improve protection of persons using the walkways in the air heater unit. These have involved additional railing material to attempt to close the gap through which it is believed Mr Beynon fell.

22 The defendant has, since the accident, ensured that advice was given to other users in Australia, and the German manufacturer, of the design problem revealed by the accident.

23 The prosecutor's submissions on sentencing were as follows:

There are a range of matters that are relevant to the exercising of the sentencing discretion. These include the fact that the purpose of the Act is to protect workers and to ensure that whilst at work they should not be exposed to risks to their health, safety and welfare. The Act seeks to compel attention to workplace safety.

The penalty to be imposed must generally be such as to compel attention to occupational health and safety so as to ensure that workers whilst at work, will not be exposed to risk to their health and safety (see Capral Aluminium Limited v WorkCover Authority [2000] 49 NSWLR 610).

The primary factor to be considered in determining an appropriate penalty to be imposed is the objective seriousness of the offence. (See Lawrenson Diecasting Pty Ltd v WorkCover Authority [1999] 91 IR 464 at 474).

The objective seriousness of the offence can be determined by reference to a number of factors - the maximum penalty prescribed for the offence, the nature and seriousness of the offence having regard to considerations of foreseeability and the availability of remedial steps as well as practical consequences flowing from the commission of the offence.

The maximum penalty under the Act for a breach of s16(1) is $550,000.00 for a corporation with no previous convictions. The size of the penalty prescribed obviously reflects the legislative and community expectation that offences under the Act will be treated seriously. ( See R v Howland [1998] 104 A Crim R 273 ; R v Slattery [1996 ] 90 A Crim R 519 at 524).

The Court should have regard to the foreseeability of the risk which is the subject of the charge. It will be a serious offence where there is an obvious risk or foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and foreseeable. ( See Lawrenson Diecasting Pty Ltd at 26).

It is submitted that the risk in this matter was readily foreseeable. Although it is submitted by the defendant that the walkway was a manufacturer's design it is clear that the scaffold and walkway failed to comply with Australian Standards.

The risk associated with the work in question was one that could be readily removed by simple and straightforward remedial steps. By ensuring that the walkway and scaffolding complied with Australian Standards.

The obvious risk and the simple steps that were available to avert it, make the instant offence a serious one.

The Commission would have regard to the practical consequences of the offence - here it was a fatality. The seriousness of the injury does not dictate the size of any penalty but it does demonstrate the seriousness of the detriment to the safety occasioned by the offence. (See Inspector Tyler v Sydney Electricity [1993] 47 IR 185).

24 Reference was made to the need to take into account general deterrence and also subjective features. They include its early plea of guilty and cooperation with WorkCover. The defendant has no prior convictions. The submissions on behalf of the defendant disputed the foreseeability of the risks involved in this matter, particularly so far as they affected Mr Beynon. The existence of this machinery on a world-wide basis and in a number of Australian power stations where WorkCover inspections had been undertaken, without anticipation or recognition of the risk was stressed. As to the matter of the railing, emphasis was placed upon the remediation which has been effected to the machinery; the advice which has been provided to other users of it in Australia and the contact which has been had with the German manufacturer and the new OHS standard which has been introduced into the defendant's operations. Senior counsel also referred to the assistance which had been afforded to the deceased employee's family, with whom the defendant has had a continuing association as the employer of a number of members of that family, within a relatively small rural community.

25 I am satisfied on the evidence that the defendant has had, and has now sought to improve, what really is a commendable approach to workplace safety. While Delta Electricity has been in existence for only some seven years, the size of its workforce and the nature of its operations show that a clean record, with respect to OHS prosecutions over that period, is no small thing.

26 The particulars of the offence charged here raise essentially two differing features. They arise, obviously, from the matters discovered by the prosecuting inspector upon his attendance after the accident. They involve on the one hand, faulty and inadequate scaffolding, but also a quite separate matter, namely inadequate walkway or access grid protection in the form of fencing.

27 It was accepted in the proceedings that the faulty scaffolding work was not connected with the risk to safety attendant upon Mr Beynon at the point of his accident. To the extent that he was exposed to risk, that flowed from the absence of a protective structure which might have ensured he would not have been able to fall from the walkway.

28 Whether the summons involves duplicity or not, the defendant has chosen not to take any such point. However, it is relevant to my assessment of overall culpability of the defendant and the seriousness of the charge with its attendant impact upon sentence, that it be acknowledged that these matters are separated.

29 Such an approach seems to me to have the effect that the failures with respect to the erection of scaffolding with its inadequate features are not lent any weight, such as to increase the seriousness of the detriment to safety occasioned by those circumstances on Mr Beynon.

30 The tragic consequences in that respect seem to me, so far as the evidence suggests, to have arisen from what is essentially a design defect in the equipment which left it providing a space between the walkway and the rotating duct through which a person, caused to fall by whatever means, was able to fall through. The existence of such a design defect does not absolve the defendant in any way, as its plea of guilty properly accepts. Nevertheless, the objective seriousness, the nature and quality, of the offence involved in the failure to anticipate the possibility of a latent design defect coming to bear in circumstances such as these, seems to me to be not of a high order. I do not consider, on the evidence, it correct to say this risk to safety was readily foreseeable. The confusion between hindsight and foreseeability is a matter to which due care must also be given. In this respect I attribute some, but little, weight to Mr Saladine's evidence of WorkCover inspections of these installations at Mt Piper while under construction, and of direct recollection of such an inspection during maintenance at Bayswater.

31 Mr Saladine's evidence about the absence of effect in the industry of the Western Australian incident (referred to earlier herein at paragraph [14]) is also suggestive that the risk experienced here was not readily foreseeable.

32 It is also inappropriate, I consider, to conclude that the non-compliance of the walkway with the relevant Australian standard, referred to in the agreed facts, is demonstrative of foreseeability or that the risk associated could be removed by the simple step of ensuring compliance with that standard, as the prosecutor submitted. The simple fact is that the configuration of the gas air/heater makes it impossible for the walkway to be constructed and protected in a way which would conform with the standard. For example, the standard provides for a 600mm wide walkway; the walkway is 480mm wide and cannot be widened. The height above the walkway for the construction of fencing or railing is inadequate to permit that aspect of the standard to be precisely complied with. It is, in my opinion, not the Australian standard which identifies the circumstances which must be satisfied to achieve workplace safety. There is, in my view, no reason to conclude that non-compliance with an Australian Standard will lead necessarily to a detriment to safety. That quality must be determined by the facts and circumstances found to exist in a particular case.

33 Mr Hatcher SC referred me to a number of cases in which the Court has considered prosecutions in relation to accidents involving falls. In Inspector RJ Egan v Caltex Refining Co Pty Limited (IRC91/989 - 18 March 1993 unreported), a plea of guilty was entered in a prosecution under s15 of the Act. The circumstances involved an employee entering a large cylindrical metal vessel used for treatment of distillate oil. Descent into the vessel was by means of a rope ladder with wooden rungs. The employee who had inspected the vessel was found lying at the foot of the rope ladder, having sustained fatal head injuries from an apparent fall. Cullen J found that the allowance of a deal of latitude to inspecting staff permitted an unsafe system of work to occur. His Honour observed that: . . . the concept of a single employee entering a vessel of this kind without any back-up support in my opinion is a potentially dangerous procedure and should not have been allowed to occur. It is surprising to me that it was never envisaged that this kind of accident could occur.

34 Cullen J imposed a penalty of $25,000 within a range of $250,000. The defendant had two prior convictions with fines of $1,500 and $1,750 in 1987 and 1991 respectively.

35 In Inspector David Lyons v Duffy Bros Country Fresh (Darlinghurst) Pty Limited [2002] NSWIRComm 95 Marks J dealt with a plea of guilty in relation to s15 proceedings where an employee fell backwards approximately 2.7 metres down a hoist shaft from the loading dock level to the cool room level below, sustaining spinal injuries. The employer in that case had previously engaged an apparent expert to undertake repairs to the hoist; reed switches were installed which precluded the hoist from being operated unless the doors were closed. They did not prevent the upper level hoist door from opening whilst the hoist was stationary at the lower level. Marks J found the defendant had failed to anticipate this outcome and, also taking into account language difficulties affecting communication between the injured worker and the manager, the objective nature of the offences was serious. Marks J allowed a discount of 10% for guilty pleas at an early date and imposed a penalty of $65,000, reduced to $58,500. The maximum penalty applicable to that offence was $550,000.

Inspector Larobina v Fastform NS Pty Limited, Kavanagh J, [2002] NSWIRComm 343, 20 December 2002. Maximum penalty $550,000. Discount for plea 20%. Penalty imposed $130,000.

Employee fell 4 metres from scaffolding after stepping on a piece of formwork ply that was not supported, suffering a ruptured bladder, a fractured pelvis and injuries to the scrotum, penis and back. Kavanagh J found the case to involve a most serious breach of the Act. Inspector Howard v Multiplex Constructions (NSW) Pty Limited, Kavanagh J [2002] NSWIRComm 229, 6 September 2002. Maximum penalty $550,000. Increased by s51A to $825,000. Discount for plea 25%. Penalty imposed $175,000. The matter involved the employee of a contract plumber falling 7 metres into an unfenced void. The employee was in intensive care for six weeks. The circumstances involved an element of foreseeability. The matter was found to be a serious breach of the Act. Inspector Howard v Boone & Willard Plumbing Pty Ltd (the employer of the plumber in Inspector Howard v Multiplex Constructions (NSW) Pty Ltd), Kavanagh J [2002] NSWIRComm 228, 6 September 2002. Maximum penalty $550,000. Discount for plea of 25%. Fine $135,000. Inspector Lacey v George Weston Foods Ltd, Maidment J [2000] NSWIRComm 19, 9 March 2000. Maximum penalty $750,000. (s51A). Penalty assessed at $70,000 in two matters and $90,000 in another. Overall penalty based on totality of $120,000. The defendant had employees of a contractor pumping water from a silo which had been cleaned. The employee of the contractor removed the cover of a pit from which the water was being pumped and left the situation thus at the end of the day shift. An employee was required to enter the shed in which the pit was situated twice during the night to take reading. The power had been disconnected from the shed and he fell into the open pit receiving fatal injuries. The contractors did not inform the defendant that the pit had been left in this condition. The matter was found to be serious, the defendant placing too much faith upon the safety procedures of others. Inspector Mulder v Roads and Traffic Authority of New South Wales, Marks J [2001] NSWIRComm 23, 23 February 2001. Section 17. Maximum penalty of $750,000. Penalty of $100,000 imposed, reduced for early plea to $75,000. The facts involved a carpenter employed by a contractor falling to his death from a bridge construction. He was walking upon plywood not nailed to bearers. Inspector Tyler v Workforce Link Pty Ltd, Marks J [2001] NSWIRComm 24, 8 March 2001. Penalty is a maximum of $750,000. Penalty imposed $70,000 reduced for early plea to $52,500. Section 15(1). The injured worker was employed by the defendant to carry out work on behalf of another in a liftwell. While working there, he was struck by a piece of timber which fell from the lift car above him. He fell 8 metres and suffered serious injuries.

37 It will be seen from these cases and the range of penalties imposed that any one case is unlikely to supply the precise answer to another. The range of circumstances met and the principal guide to penalty now long accepted in this court, namely "the nature and quality" of the offence, otherwise referred to as its "objective seriousness", can give rise only to a variation in responses on the question of penalty. Nevertheless, the defendant's right to receive a penalty that is no more or less than proportionate in the context of cases of relevance means that the fixation of penalty ought be made having an awareness of the penalties in those cases.

38 The defendant is entitled to a reduction in penalty where a plea of guilty is entered in the range of 10 to 25 percent (R v Thompson; R v Houlton per Spigelman CJ, Woods CJ at CL, Foster A-JA, Grove and James JJ. agreeing (2000) 49 NSWLR 383). That case is also authority for the proposition that other mitigating features, including prior record and cooperation with authorities, may entitle the sentencing judge to afford a reduction of penalty up to a maximum of 35 percent. Here, I consider the early plea entitles the defendant to the maximum discount of 25 percent. I would also afford a further 10 percent to reflect the absence of prior convictions, the cooperation with authorities, the contrition demonstrated by the remedial steps taken, the advice given to the remainder of the industry and the assistance to Mr Beynon's family.

39 In assessing penalty in this matter, I stress that the court's duty is not to assess a penalty which reflects the tragic death of Mr Beynon, but one which pays regard to the risk to safety occasioned by the circumstances which permitted the provision of a work environment which exposed workers to the risk of injury. As I have said, I do not consider the defendant's failure, assessed in the light of it constituting a not easily foreseen risk from a uniformly-available form of equipment, as high The defendant's culpability is more towards the lower end of the scale. The maximum penalty in relation to the offence is $550,000.

40 I would assess penalty in this matter at $125,000, which, after a reduction in penalty of 35 percent leaves a penalty of $81,500. The defendant is convicted of the offence charged and fined the sum of $81,500 with a moiety of penalty to the WorkCover Authority of New South Wales. The defendant shall pay the prosecutor's costs as agreed or, if necessary, as assessed by the court.

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