Inspector Morgenthal v Visy Paper Pty Ltd

Inspector Morgenthal v Visy Paper Pty Ltd - [2008] NSWIRComm 211 - NSWIRComm 1992 case summary — Zoe

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1 The defendant, Visy Paper Pty Limited, operated a materials recovery facility at Taren Point. Inside the facility was stored recyclable material consisting of paper, plastic, cardboard, metal cans and glass. On 20 January 2006, the recyclable material was stacked some seven metres high along a length of a besser block wall. Part of the wall collapsed and fell outwards into an adjacent parking area. Julia Ross and her son Benjamin were in the parking area at the time of the collapse. The collapsing section of the wall narrowly missed the two persons but it damaged some eight parked vehicles. Ms Ross received a graze to her arm. 2 The defendant was prosecuted by Inspector Mark Morgenthal of the WorkCover Authority of New South Wales for contravention of s 8(2) of the Occupational Health and Safety Act 2000 or, in the alternative, s 10(1) of that Act. On 21 July 2008, the defendant entered a plea of guilty to the alternative count under s 10(1) of the Act, subject to a dispute about one matter that will be explained shortly. 3 Section 10 is in the following terms: (1) A person who has control of premises used by people as a place of work must ensure that the premises are safe and without risks to health. (2) A person who has control of any plant or substance used by people at work must ensure that the plant or substance is safe and without risks to health when properly used. (3) The duties of a person under this section: (a) do not apply to premises, plant or substances used only by employees of the person, and (b) do not apply to premises occupied only as a private dwelling or to plant or substances used in any such premises, and (c) extend to the means of access to or exit from a place of work, and (d) apply only if the premises, plant or substances are controlled in the course of a trade, business or other undertaking (whether for profit or not) of the person. (4) In this section, a person who has control of premises, plant or substances includes: (a) a person who has only limited control of the premises, plant or substances (in which case any duty under this section applies only to the matters over which the person has control), and (b) a person who has, under any contract or lease, an obligation to maintain or repair the premises, plant or substances (in which case any duty under this section applies only to the matters covered by the contract or lease). 4 The Amended Application for Order alleged a breach of s 8(2) and, in the alternative, that: [O]n 20 January 2006 the Defendant… being a person who as at 20 January 2006 had control or only limited control of the area of land and buildings (the premises) known as Unit 1, 43 Bay Road, Taren Point, New South Wales and the adjoining area of 66 Alexander Avenue, Taren Point, New South Wales insofar as it was affected by work done at Unit 1, 43 Bay Road, Taren Point, New South Wales, used by people as a place of work (which premises were not used only by employees of the defendant, not occupied only as a private dwelling, and were controlled or subject to only limited control by the Defendant in the course of an undertaking of the Defendant) did fail to ensure that the premises were safe and without risk to health of persons, and in particular Julia Ross and Benjamin Ross, contrary to section 10(1) of the Act. 5 The particulars of the s 10(1) charge were as follows: 1. The Defendant, at all material times, had control or limited control of the premises in the course of its undertaking; 2. The Defendant's undertaking at the premises was the conduct of a waste recycling facility; 3. On 20 January 2006, the premises was the Defendant's place of work;

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9 The phrase "place of work" has been given a broad construction: see Clarke v W L Meinhardt and Partners Pty Ltd (Industrial Court of New South Wales, Fisher CJ, 30 June 1992, unreported); Inspector Page v Woolworths Ltd (Industrial Court of New South Wales, Peterson J, 9 September 1994, unreported); Mainbrace Constructions Pty Ltd v WorkCover Authority of New South Wales (Inspector Charles) [2000] NSWIRComm 239; (2000) 102 IR 84; Inspector McColl v Combined Crane Rigging & Arthur Didovich [2004] NSWIRComm 48; WorkCover Authority of New South Wales (Inspector Jorgenson) v Christopher John O'Keeffe and C J & S J O'Keeffe Building Pty Ltd (2004) NSWIRComm 397; and WorkCover Authority of New South Wales (Inspector Wilson) v Chubb Security Australia Pty Limited [2005] NSWIRComm 263. In my view, the place of work extends to the immediate environs which may be affected by the conduct of work at the premises: Meinhardt. 10 Whilst the authorities referred to did not concern offences under s 10 or its predecessor, s 17 of the Occupational Health and Safety Act 1983, I am satisfied that the broad construction given to "place of work" in those cases applies equally to s 10. "Place of work" under the 1983 Act was defined as meaning "premises, or any other place, where persons work". "Premises" under that Act was defined as including: (a) any land, building or part of any building, … 11 It would be an oddly inconsistent result to hold, for example, that a public footpath and roadway onto which the facade of a building collapsed was a place of work for the purpose of s 16(1) of the 1983 Act (see Meinhardt), but a parking area immediately adjacent to a premises used as a place of work onto which a wall of the building on the premises collapsed, was not. 12 It follows that the defendant had a duty to ensure that persons located in the adjacent car park were not put at risk by the collapse of a wall of the premises it controlled. Statement of agreed facts 13 The agreed facts reveal that on the day of the incident, Inspector Desmond Lai of the WorkCover Authority visited the premises and the car park adjacent thereto, where he observed, amongst other things, the following: s the north facing Besser Block wall of the building at the site (the Wall) was approximately 25 metres long x 10 metres high;

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s a roller door located at the western wall provided an exit for the delivery trucks. 15 It is noted that the building had a protective concrete reinforcement barrier approximately two metres high that protected the building from the impact of material and moving plant (such as front end loaders or waste delivery trucks). As earlier stated, the height of the mound of material was approximately seven metres when the wall collapsed. 16 Inspector Lai issued improvement notices to the defendant. On 10 April 2006, Inspector Morgenthal issued a further improvement notice to the defendant. 17 The agreed facts explained the circumstances leading to the incident: In approximately April 2004 new JCB front-end loaders were introduced to replace Komatsu front-end loaders. Whereas the Komatsu loaders could elevate the material about two metres high, the JCB front-end loaders could elevate the material up to about six metres in height. The mobile plant operators would push the material up to about six metres and move it laterally against the Besser Block walls with the JCB front-end loader. The material stacked higher than the concrete reinforcement walls would fall down and pile against the Besser Block walls. In the period of two to three days leading up to the incident the plastic bailer had been working sporadically leading to an accumulation of material that had to be stacked to make room for new deliveries. The material was stacked in the north-western area of the building that was used frequently during breakdowns and busy holiday periods. Prior to the collapse, under instruction from her immediate supervisor, Colin Kamo, mobile plant operator Jacqueline Mahanga had been moving material in the north-western area of the building. Mahanga was pushing up the material from the area in which it had been dumped by the delivery trucks and then patting it down. Material was already against the Wall and Mahanga was trying to push it higher to provide room for waiting deliveries. 18 As to the cause of the incident, WorkCover engineer Mr Dan Leavy expressed the opinion that the poor construction of the wall and the weight of the material stacked against it was sufficient to cause the section of the wall to fall. The defendant obtained an independent engineer's report dated 20 January 2006 which found that the wall had been built poorly, under-reinforced and inadequately tied to the steel structure. The report concluded that the wall was not built in accordance with Australian Standards and observed "we question how the wall has managed to stay vertical as in our opinion, even when subjected to the most moderate of lateral loads it would have collapsed". A report dated 15 February 2006 for insurance purposes found that: (i) the refuse mound overloaded the wall by a factor of at least 6 times its allowable capacity; (ii) the effect of the front-end loader on the mound would be to increase this factor to at least 7 or 8; (iii) the refuse should not have been mounded above the top of the bund wall.

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23 In about early 2005, the Landlord of the premises identified a bow in the western wall of the area used to store baled material. The western wall of the area used to store baled material was constructed from the same type of Besser Blocks as the wall that partially collapsed in the subject incident. The Landlord asserted that the western wall of the area in which the baled materials were stored had been pushed outwards due to baled product being stored against the wall. The defendant implemented control measures to prevent bales of recycled material being pushed up against the western wall of that area by painting a yellow line one metre from the western wall beyond which bales were not permitted to be stored. 24 Following the incident, the agreed facts indicated the defendant: (i) Carried out an internal investigation. (ii) Carried out and documented the risk management process for the identification, assessment and control of risks associated with material placed against the Wall and the load bearing capability of the Wall. (iii) Prepared, documented and implemented a Standard Working Practice dated 3 February 2006 for the task of operating the JCB front-end loaders and stockpiling material, which was reviewed and amended on 24 April 2006. (iv) Prevented persons being placed at risk while the rectification work for the Wall was carried out. (v) Had an independent engineering consultant carry out an evaluation of the remaining Besser Block walls at the site. (vi) In consultation with the Landlord requested that the Besser Block wall adjacent to the Wall be reinforced in accordance with the structural engineers report. 25 The agreed statement of facts indicated that the defendant cooperated with the prosecutor. Other evidence 26 In addition to the statement of agreed facts the prosecutor tendered 12 colour photographs of the premises and its contents as well as various aspects of the collapsed wall and the adjacent car park. Also tendered were: a risk assessment form dated 1 February 2006 used by the defendant to make a risk assessment relating to the collapsed wall; standard working practice forms relating to the safe working of mobile equipment by employees of the defendant; and an extract from WorkCover's Prior Convictions Database showing that the defendant had two prior convictions under the 1983 Act in 2001 and 2002 and two prior convictions under the 2000 Act in 2004 and 2005. Three of the convictions were in the Chief Industrial Magistrate's Court and one under s 8(2) of the 2000 Act in the Industrial Court, which attracted a penalty of $135,000. The last conviction related to an incident where a person fell down a chute at the defendant's East Botany plant: Inspector Stephen Gill v J D Thompson Personnel Pty Limited; Inspector Stephen Gill v Visy Paper Pty Limited [2005] NSWIRComm 73. 27 The defendant relied upon an affidavit of Lawrence Clare, its Occupational Health, Safety and Environmental Manager for New South Wales. The affidavit and the documents annexed to it consisted of two lever arch volumes and contained extensive and detailed information regarding: (i) the defendant's recycling operations. The defendant operates seven recycling sites in NSW and employs 147 personnel; (ii) the Taren Point recycling facility. In this respect, it was stated: In the three days leading up to the Incident there had been problems with the baling machine which meant that the material could not be processed as quickly as usual. This caused a build up of material waiting to be processed in the receiving area which in turn resulted in the need to use the western end of Unit 1 to store material for the three days prior to the Incident; (iii) the personnel and management structure at Taren Point at the time of the incident (a manager, supervisor and two plant operators) including details of the employees' duties and training; (iv) the defendant's safety systems prior to the incident; (v) the steps taken after the incident to improve the defendant's safety policies and systems. These were very extensive and involved the introduction of a new all encompassing management system known as "STEPS". To date 62 per cent of the elements in the STEPS Management System are in place in NSW. It was anticipated that the STEPS Management System would be fully implemented by June 2009. STEPS included an interactive computer based system available to each and every person working at all Visy Group sites including the defendant. Mr Clare provided a demonstration of the system to the Court. In particular, the system provides in relation to walls of buildings that: (a) A qualified and registered engineer will be consulted regarding installation of protective barriers for all the walls that are exposed to mobile equipment and traffic movement;

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(f) Walls on all new constructions should consist of at least 20% of translucent materials to allow natural light into the building; (vi) the various levels of meetings and committees that had been established relating to safety, which included the Safety Steering Committee, Visy Recycling Occupational, Safety, Health and Environment Team Meeting, Monthly Divisional Meeting, Visy Recycling NSW OHS&E Executive Committee Meeting, Visy Recycling State Weekly Management Meetings, and Safety and Environment Network Meeting Safety Environment and Quality Committees; (vii) the system of incident notification and the procedure for the reporting and investigation of hazards, accidents and incidents; (viii) onsite and in-house safety training. Visy Recycling nationally spent from 2006 to 2008, approximately $897,834.07 on safety related training, provided by external trainers. Visy Recycling in NSW has spent from 2006 to 2008 approximately $245,434.53 on safety related training, provided by external trainers; (ix) the defendant's system of site inspections and audits; (x) examination, inspection and assessment of walls and structures; (xi) Plant Safety; (xii) occupational health and safety expenditure. The annual amount spent on safety by Visy Recycling nationally was $904,727.97 during 2006/07, $959,085.95 during 2007/08 and year to date in 2008, $1,176,652.40; (xiii) community support. During 2006 - 2007, in conjunction with the Pratt Foundation, Visy Group donated over $12 million to charitable causes including education, medical and health, conservation and preservation, and local community. 28 In relation to contrition, Mr Clare stated: Visy Recycling accepts its responsibility in relation to this incident and, for this reason, has entered a plea of guilty to the charge. Visy Recycling deeply regrets that the Incident occurred and has taken considerable steps to avoid a similar incident reoccurring as part of a broader review and reconstruction of its occupational health and safety management system. 29 As to cooperation with the prosecuting authority, Mr Clare said that at all times the defendant cooperated with WorkCover. It made its employees available for interviews and provided documentation when requested by WorkCover. CONSIDERATION

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31 The charge to which the defendant pleaded guilty involved a failure to maintain a safe system of work, a failure to carry out a risk assessment and a failure to provide such instruction, training and supervision to workers engaged in its undertaking to ensure that product was stacked in a manner that was safe and without risk of injury. These failures caused a risk to arise, namely, the risk of injury to persons who may be located in the adjacent parking area from a collapsing wall of the premises controlled by the defendant. 32 Despite implementing a system in 2004 to avoid having material piled against the wall the defendant failed to maintain its system. Despite knowing that material placed against the wall might cause it to be at risk of collapsing, the defendant failed to carry out a risk assessment in relation to the potential for collapse. Despite being aware of the risk of placing materials against the wall the defendant failed to provide the necessary training, instruction and supervision to ensure that did not occur. 33 The two persons in the adjacent car park at the time of the collapse escaped serious injury. Consequently, "substantial injury" cannot be taken into account as an aggravating factor: see s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999. However, despite the absence of serious injury in this case, it is obvious that a collapsing brick wall may have serious, if not deadly, consequences for any person hit by the wall. The failures by the defendant that created the risk of the wall collapsing may, therefore, be regarded as failures with grave consequences for safety. 34 Furthermore, it will be a serious offence where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and feasible. The defendant knew of the risk. It was advised by the WorkCover inspector in February 2004 that there might be a potential for the wall to collapse if it had not been built to sustain such a force. Steps were taken at the time by the defendant to implement a new procedure for stock piling recycling material so that it would not be piled any higher than the concrete reinforcement barrier. So that, by its actions, the defendant accepted the existence of the risk. However, there was a failure by the defendant to ensure the procedure was maintained, thus contributing to the wall collapse in January 2006. 35 The measures available to avoid the risk were simple and straightforward: avoid stock piling the material any higher than the concrete reinforcement barrier or ensure the wall was capable of sustaining the weight of the material placed above and beyond the concrete reinforcement barrier. 36 In the defendant's favour it must be acknowledged that this is not a case in which the defendant paid no attention to matters of occupational health and safety prior to the incident. Prior to the incident, the defendant had in place, both nationally and at the subject site, a detailed, integrated occupational health and safety system. It is evident that the defendant is very conscious of its responsibilities in relation to workplace safety and takes those responsibilities seriously. 37 In 2004 and 2005 when the problem of the wall came to its attention, I note that the defendant took steps to remedy the problem. Where the defendant failed, however, was to ensure the remedial steps were maintained, which tends to negative the value of the remedial steps. 38 Specific responses to the subject incident included: · a detailed risk assessment with respect to the stockpiling of materials at the site;

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In addition, the minutes of all the SEQ meetings are logged onto the Defendant's intranet computer system and once logged, those are accessible to all levels of management. This system also provides an audit trail for the purpose of ensuring that safety issues raised at SEQ committee meetings are followed up, brought to completion and closed out upon completion. 40 It was conceded for the defendant that weight should be given to the need for general deterrence in the sentencing. However, it was contended that specific deterrence need not play a significant role in sentencing the defendant. In this latter respect, reference was made to the evidence of Mr Clare regarding the broad changes that the defendant had introduced with respect to its management of occupational health and safety, generally, its strong commitment to training and the specific changes it introduced in the aftermath of the subject incident. It was submitted that the defendant's actions reflected a clear commitment to occupational health and safety, including innovation and improvement of its systems on an ongoing basis and that imposing a penalty which contained both substantial elements of general and specific deterrence may well have the effect of discouraging, rather than encouraging, a positive commitment to occupational health and safety in industry: see Inspector Melissa Chaston v Vaughan Constructions Pty Limited [2005] NSWIRComm 254 at [16]. 41 General and specific deterrence are matters to be taken into account in sentencing under the Occupational Health and Safety Act: Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [71] to [80]. At [77] the Full Bench stated: In sentencing, a Court may disregard the element of specific deterrence if satisfied that the risk of re-offending is low or non-existent. The Court may form such a view as a result of the rehabilitation of the offender … or because the offender will not have the opportunity to commit a similar offence in the future… However, we think it unlikely that the weight to be attached to specific deterrence could be reduced to zero in the case of offences under the Act. At least where the offender continues to be an employer, risk to safety or its employees or contractors may exist or be possible. Breaches of the duties imposed by the Act may incur both by omission and omission. Employers are required to maintain constant diligence and take all practical precautions to ensure safety in the work place. 42 Given the commendable overhaul of the defendant's policies and practices relating to occupational health and safety and its obvious commitment to workplace safety I consider the risk of re-offending is not great. I note, however, the defendant operates multiple sites and that despite its commitment to health and safety in 2004 and 2005, it failed to maintain a safe system of work at its Taren Point facility. I also note the defendant was convicted of four offences between 2001 and 2005. I consider there is a need to remind the defendant of the need to maintain constant vigilance and, therefore, I have given some weight to the need for specific deterrence in the penalty. 43 There are a number of relevant subjective factors. First, I accept in the circumstances there was an early plea of guilty and I have discounted the penalty by 20 per cent for the early plea's utilitarian value. Secondly, I accept that the expression of remorse by the defendant should be given some weight: see s 21A(3)(i) of the Crimes (Sentencing Procedure) Act. The defendant has accepted responsibility for its failure to ensure safety and I was advised the defendant is in negotiations regarding the property damage to the motor vehicles that were struck by the wall. 44 Thirdly, It is common ground that the defendant cooperated in WorkCover's investigation of the subject incident. Fourthly, the evidence plainly establishes the defendant is a good corporate citizen. 45 Having regard to all of the objective and subjective matters that are addressed in this judgment I have concluded that an appropriate penalty in this case is $140,000. Orders

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