Inspector Patton v Serco Australia Pty Limited

Inspector Brett Martin v Encore Tissue Pty Limited [2005] NSWIRComm 271 CASES CITED: Inspector David Waterhouse v Innovative Property Developments Pty Ltd and Others [2006] NSWIRComm 97 Tyler v Sydney Electricity (1993) 47 IR 1

PROSECUTOR: Ms K Nomchong of counsel SOLICITORS: Moray & Agnew LEGAL REPRESENTATIVES:

DEFENDANT: Mr HJ Dixon QC SOLICITORS: Minter Ellison

INSPECTOR JOHN PATTON v SERCO AUSTRALIA PTY LIMITED Prosecution under section 8(1) of the Occupational Health and Safety Act 2000 JUDGMENT

1 On 11 April 2004, there was an uncontrolled release of blast furnace gas from the steelworks at Port Kembla owned by BlueScope Steel Pty Limited ('BlueScope'), where some of the defendant's employees worked under an arrangement between the defendant and BlueScope. The release of the gas resulted in a number of personnel at the site being exposed to carbon monoxide gas, including employees of the defendant. The defendant was later charged with an offence under s 8 of the Occupational Health and Safety Act 2000 ('the Act'). A plea of guilty was entered to an amended charge. This judgment deals with the question of penalty. 2 The amended charge to which the plea was entered provided:

To ensure the health, safety and welfare of its employees at work at the plant including Dean Edwards, Zeljko Segovic, Eddie Fermino, John McMahon and Miroslav Knezevic ("the workers") contrary to s8(1) of the Occupational Health and Safety Act, 2000.

PARTICULARS OF THE DEFENDANT'S FAILURE ARE AS FOLLOWS:

1. At all material times the defendant was under contract to Bluescope to provide security, first aid and fire fighting throughout Bluescope Steelworks generally and including at the plant.

2. Over a period around 3.00am - 4.00am on 11 April 2004 the workers were exposed to high levels of blast furnace gas ("BFG") in the atmosphere at the plant where they were working pursuant to the defendants contract with Bluescope.

4. for BFG indicates that it is a clear colourless gas with little odour containing nitrogen 45-55%, carbon monoxide 20-30%, carbon dioxide 20-30% and hydrogen 0%-10%. . It is described as being toxic by inhalation and symptoms of acute poisoning from it may include headache, dizziness, disorientation, abnormal reflexes, difficulty in concentration, fading, cerebral oedema, coma, seizures and death.

5. At approximately 2.00am on 11 April 2004 a BFG leak on the 5A precipitator at the plant was detected and reported. At some time between 2.00am and 3.00am on 11 April 2004 Bluescope engaged a crew to isolate the gas leak. To do so the Bluescope crew shut off the outlet goggle valve of the precipitator successful but attempts to shut off the inlet goggle valve failed because of a burnt out solenoid in the mechanism controlling the movement of the valve. Large amounts of BFG were released into the atmosphere while attempts to close the inlet goggle valve were made.

6. The BFG which escaped into the atmosphere from the leaking precipitator while attempts were being made to shut off the malfunctioning goggle valve, did not disperse quickly from the plant because of the calm atmospheric conditions which prevailed at the time and the fact that BFG is heavier than air. The workers were all exposed to risk of injury during the period of the emissions from the escaping BFG which contained dangerous levels of carbon monoxide, as a consequence of the incident.

7. The work of attempting to isolate the gas leak by Bluescope involving the emission of large amounts of BFG into the atmosphere which rendered the area of the plant where the defendant's employees were working unsafe by reason that excessive levels of BFG dispersed into the areas where they were working and where they were required to work in the course of the incident occurring in providing services throughout the plant and its various access roadways.

8. During the said period, there was a risk generally to the safety of all the workers consistent with the possible effects of exposure as described in the said MSDS. None of the workers, however, suffered permanent injuries as a consequence of the exposure. Two of them, Edwards and Segovic, had carbon monoxide levels which required them being administered oxygen for a period following the exposure.

9. The defendant failed to ensure that systems of work in relation to its provision of first aid and security work at the plant was safe and without risk to health in that: (a) it had no appropriate safe work procedures in place, in that it had a work procedure that was inadequate, for responding to emergency situations where excess levels of BFG may be present;

(b) it failed to provide three of the workers with appropriate gas monitoring equipment to enable them to monitor BFG levels in the areas where they were required to work prior to entering those areas;

(c) in the circumstances specified in (a) and (b) above, it did not ensure that the workers had personal protective equipment available to them when they were at risk of exposure to BFG.

10. The defendant failed to provide such instruction and training in relation to an appropriate safe operating procedure for an emergency response to provide security and first aid in an environment that had excess levels of BFG gas, such as may have been necessary to ensure the health and safety at work of the workers. 3 An agreed statement of facts was tendered, which provided:

At all material times the Prosecutor was an inspector duly appointed under Division 1 of Pt 5 of the Occupational Health & Safety Act 2000 and empowered under s106(1)(c) of the said Act to institute proceedings in this matter.

At all material times Serco Australia Pty Limited (ACN 003 677 352) (the Defendant) was a company duly incorporated in New South Wales and having its registered office at Level 10, 90 Arthur Street, North Sydney in the State of New South Wales.

At all material times the defendant was an employer.

At all material times the defendant employed Dean Edwards, Zeljko Segovic, John McMahon, Eddie Fermino and Miroslav Knezevic (the Workers).

At all material times the Defendant had been engaged by Bluescope Steel (AIS) Pty Limited (ACN 000 019 625) (Bluescope) to render certain first aid, and provide security control and fire response services, at the direction of Bluescope at Bluescope's steelworks at Five Islands Road, Port Kembla in the state of New South Wales (the Site).

The Defendant was engaged by Bluescope to provide first aid to persons on the Site in controlled circumstances and at areas designated by Bluescope. The areas so designated by Bluescope were nominated pick up points (PUP) and were designated by Bluescope as safe areas where these services could be rendered.

The standard procedure when the defendant was requested by Bluescope to render first aid to any persons, was that such activities were to be carried out at PUPs. However, if a person requiring such aid could not be transferred to a PUP, and Bluescope determined that it was safe to do so, the Defendant's employees were to render aid at an area directed by Bluescope. They would be escorted by Bluescope employees so that they could provide first aid services at that area. In these circumstances, the Defendant relied on Bluescope to provide information and instruction in relation to whether the Defendant's employees should enter a building or area to render the aid and, if so, the means by which the Defendant's employees should enter to do so safely. It was not intended by the Defendant that its employees would perform rescue operations or enter areas on the Site which were unsafe. The Defendants' employees had received instructions not to enter areas which were not safe.

Within the Site was an area in which a blast furnace known as the No. 5 blast furnace (the Blast Furnace) and its associated plant and equipment and access ways were situated (the Plant).

Access to the Plant was under the control of Bluescope. The Defendant's employees were not entitled to independently enter the Plant without the specific consent and under the direction of Bluescope as they had not undertaken (and were not required to undertake) the specific induction training provided by Bluescope for that area of the Site.

There was a designated PUP, namely, PUP 52 adjacent to the Blast Furnace, near the corner of Blast Furnace Road and COG Road.

The Blast Furnace was a large structure of steel beams, columns, angles and metal sheeting over several levels. Part of the Blast Furnace was exposed to the outside environment, particularly on the southeast side on the lower levels.

Access to the various levels of the Blast Furnace was mainly over steel grated walkways and stairs.

On level 2 of the northeast, southwest and northwest sides of the Blast Furnace were three cast house floors constructed of metal. These were referred to as numbers 1, 2 and 3 cast house floors. The furnace itself was central to these three floors.

To the north side of the Blast Furnace on the number 3 cast house floor was a small room referred to as the number 1 Australian Steel Mill Services workstation. This workstation was a room constructed of steel plate. The room also contained a telephone and a two way radio for communication. Adjacent to the Australian Steel Mill Services workstation was a doorway exiting from the number 3 cast house floor to the outside of the building.

On the eastern side of level 4 of the Blast Furnace was situated a room referred to as the gas furnace RFW (reticulating fresh water) distribution room.

There was a large steel pipe approximately 2.4 metres in diameter leading from the Blast Furnace which joined several large plant structures and led to a large steel tank. This tank was situated some 70 metres southeast of the blast furnace and was known as the precipitators tank. There were two precipitators within the precipitator tank, the 5A precipitator and the 5B precipitator. At each end of the 5A precipitator was a large valve consisting of a circular metal plate and estimated at approximately 2.4 metres diameter each. These were known as goggle valves. The valve on the northeast side of the 5A precipitator was referred to as the 5A inlet goggle valve. Movement of the inlet goggle valve was by hydraulic pressure. The valve on the southwest side of the 5A precipitator was referred to as the outlet goggle valve. Movement of this valve was by use of a gypsy chain.

The Blast Furnace produced molten iron for processing into steel (the Production Process).

During the Production Process when the iron is produced the blast furnace is 'tapped' and molten iron flows through channels known as 'troughs' to torpedo ladles on railway tracks which are located under the Blast Furnace floors. The process is a continuous one. Each 'tap' of the Blast Furnace takes about 2.5 hours.

Gases are a by-product of the production in the Blast Furnace. Those gases are referred to as Blast Furnace Gas (BFG). Bluescope assessed BFG as generally comprising the following: (a) Nitrogen - 45-55%; (b) Carbon monoxide - 20-30%; (c) Carbon dioxide - 20-30%; and (d) Hydrogen - 0-10%.

The purpose of the 5A and the 5B precipitators was to clean the BFG in order to remove a number of impurities from it.

In addition to BFG, slag is also a by-product from the production in the Blast Furnace.

At all material times Australian Steel Mill Services Pty (ASMS) had a contract with Bluescope to remove the slag by-product from the plant and process it. ASMS had a number of employees stationed within the Plant for the purpose of conducting the process of slag removal and processing under direction from Bluescope.

At all material times two 12 hour shifts were involved in the operation of the Plant. The Production Process was continuous with a shutdown for maintenance occurring only once every 18 weeks approximately.

During each shift there were about 13 employees of Bluescope and some employees of ASMS working in the Plant. A team leader or supervisor employed by Bluescope was in charge of the employees on shift, including ASMS employees.

The Production Process was controlled by a Bluescope operator in a control room which was located on level 3 of the blast furnace.

Between 1.00am and 2.00am on 11 April 2004 Bluescope employees discovered a gas leak on the 5A precipitator.

The team leader employed by Bluescope, Franco Gomboso, who was in charge of the shift on the day, then organised a crew to carry out the work of isolating the gas leak. The team comprised Gomboso as supervisor, Steve Johnston, systems controller, Peter Wagner, blast furnace operator, Max Gaetani, operator and Darren Jenison, electrician.

Prior to repairing the gas leak, the Bluescope crew conducted a job safety analysis as was required of them. As part of the job safety analysis, Bluescope recognised that a quantity of BFG would be released into the atmosphere as a result of the repair process which was required to be undertaken and, on this basis, they determined that it was necessary for road blocks to be put in place to keep unnecessary persons away from the area. Road blocks were usually manned by Bluescope employees, however, as Bluescope did not have sufficient personnel to man the road blocks, the defendant's employees were called on by BlueScope to man the road blocks.

As part of Bluescope's operating procedures it was recognised that in carrying out a procedure of the kind to be undertaken, there was a potential for the release of BFG and that this could mean the presence of BFG at or near ground level. To minimise the likelihood of injury from the BFG, the Bluescope operating procedures required all non essential persons to be removed from the immediate area.

At approximately 1.40am Gomboso called the Serco control room operator, Brian Hastie, and requested that two of the Defendant's employees be available to man two road blocks which were to be established at the corner of Allans Creek Road and Iron Ore Road (approximately 200 metres from the Blast Furnace) and the intersection of COG Road and Iron Ore Road (more adjacent to the Blast Furnace).

Following the request made by Gomboso, at approximately 2.30am, two of the Defendant's employees, Dean Edwards and Zeljko Segovic, were despatched to perform their duties and met Gomboso at the corner of Iron Ore Road and COG Road. Gomboso advised Edwards and Segovic that there was an operational problem with the Blast Furnace, that alarms would begin to sound when the operation to repair the problem commenced and that the alarms would stop when the operation was complete. As a safety measure, Segovic and Edwards were each provided with a carbon monoxide gas monitor by Gomboso.

The purpose of a gas monitor is to alert persons to the presence of carbon monoxide in the immediate atmosphere and so alert them to the need to depart the area. At the time that Segovic and Edwards were provided with a gas monitor, they were told by Gomboso that it was highly unlikely that they would need to use the gas monitors but if the gas monitors did register 200 particles per million (ppm) they were to move further down the road away from the Blast Furnace.

Bluescope did not advise the Defendant and/or its employees, either when Gomboso called the Defendant's control room operator, or when Segovic and Edwards were being briefed by Gomboso, that there was likely to be a major gas leak.

Bluescope had in place site gas alarms which, when activated, produced a loud, intermittent horn. The purpose of the alarms was to alert those working in the immediate area to the potential presence of dangerous gases.

Prior to commencing the procedure to isolate the 5A precipitator valves, Gomboso radioed the Blast Furnace control room and spoke to Michael Gunthorpe, the Bluescope control room operator on the day, to advise: (a) that the site gas alarm was being activated; and (b) that he contact workers on the cast house floors of the Blast Furnace to indicate that isolation of the 5A precipitator was to commence.

Bluescope did not instruct all its employees or those of ASMS in close proximity to leave the area.

Approximately 10 to 15 minutes after Segovic and Edwards had assumed their positions at the two road blocks, the gas alarms commenced and they began to stop vehicles from entering the area.

After these preliminary steps, the Bluescope crew commenced the task of repairing the gas leak. The Bluescope repair crew, however, experienced difficulties in isolating the gas leak and the process took longer than they planned or anticipated, resulting in larger than anticipated quantities of BFG being released into the atmosphere during a relatively short period.

During the process, Bluescope employees had gas monitors which they checked from time to time. After the unsuccessful attempts to close the inlet goggle valve, Gomboso, who was in the switch room below the 5A precipitator, checked the gas monitor to determine the levels of carbon monoxide gas within the atmosphere and observed a reading of approximately 2000ppm. As a result of this, Gomboso instructed Steve Johnston to advise the Defendant's employees, Edwards and Segovic to leave the road blocks they were manning. There is no evidence as to whether or not Mr. Johnston passed on this message to Mr. Segovic and Mr. Edwards.

Following this, at approximately 3.10am Gomboso aborted further attempts to isolate the 5A precipitator until the cause of the problem was determined and took the repair crew from the 5A precipitator back to the Blast Furnace.

After difficulties were experienced during the repair process, Bluescope did not instruct all employees to leave the Blast Furnace. As a result, two Bluescope employees and one ASMS employee were exposed to BFG for a period and became affected by it at the Plant. It occurred the following way: (a) during the period whilst the work was being done by Gomboso and his crew to isolate the gas leak, some of Bluescope's employees were working on the number 1 cast house floor in the Blast Furnace completing the cast and plugging the tap hole of the furnace, a process known as 'gunning'; (b) following completion of the gunning process, one of the Bluescope employees (Sidney Graham) reported that he was feeling dizzy and another Bluescope employee (Marcello Gianfrancesco) advised him to go to the work station and ring the Bluescope control room; (c) at this point both Graham and Gianfrancesco were aware that the gas alarms were sounding; (d) when Graham contacted the Bluescope control room he was advised by Gunthorpe that there was a BFG leak, and to make his way to the control room on level three (which is considered to be a safe environment); (e) following his conversation with the Bluescope control room operator, Graham proceeded in the direction of the Bluescope control room;

(f) however, he became disoriented and ended up in the RFW distribution room on a different level to the Bluescope control room, where he collapsed on the floor;

(g) a short time later, Gianfrancesco discovered that Graham had not reached the Bluescope control room and attempted to find him, in the process of which he fell in an area that was dark and sustained injuries including a broken right ring finger and some abrasions to his right shoulder, hip and head;

(h) after reporting his injury to the Bluescope control room, Gianfrancesco then made his way to PUP 52;

(i) at around the same time Robert Russoniello, an employee of ASMS, was on the number 1 cast house floor alongside other workers; (j) after the gunning process had been completed he opened the roller door above the slag runoff area;

(k) upon doing so he started to feel dizzy and returned to his workstation located on the number 3 cast house floor, approximately 10 metres away from the tap hole where Graham and Gianfrancesco had been working; and

(l) Russoniello lost consciousness and was later found by another ASMS employee, Mick Maksovic, at the work station.

At 3.17am, Segovic radioed the Defendant's control room operator and advised that his gas monitor was reading 2000ppm and that he was leaving his road block. He did so immediately. At this time Edwards' gas monitor was reading 0ppm. Edwards went to check on Segovic. Edwards and Segovic met approximately 300 metres further down Iron Ore Road from where Segovic's road block had been at the corner of COG Road and Iron Ore Road.

As a result of the events described in paragraphs 26 to 41 above, the Defendant's control room operator received emergency calls from Bluescope employees and an ASMS employee advising that persons had been gassed and were requiring assistance as follows.

At about 3.18am the Defendant's control room operator received an emergency call advising that two Bluescope workers (Gianfrancesco and Graham) had been overcome by gas at the Blast Furnace and required assistance.

At this time, Edwards and Segovic were radioed by the Defendant's control room operator and advised that he had received a call advising that: (a) two people had suffered from exposure to BFG; (b) one of the casualties was at PUP 52 (Gianfrancesco) and the other was on the third floor of the Blast Furnace (Graham); and (c) a Bluescope employee would escort either Edwards or Segovic to the third floor of the Blast Furnace to treat the second casualty.

The Defendant's control room operator asked Edwards and Segovic to attend PUP 52 and treat the two casualties. Prior to Edwards and Segovic attending PUP 52, Eddie Fermino, the Defendant's Acting Team Leader, told them that they were to leave the area if they did not feel safe.

When Edwards and Segovic arrived at PUP 52, Edwards directed Segovic to take Gianfrancesco to the BOS clean room (the ambulance station at the site) and get treatment for Gianfrancesco and himself. Fermino went to see Segovic at the BOS clean room to see if he was okay.

While Segovic was taking Gianfrancesco to the BOS clean room, Gomboso escorted Edwards to Graham on the third floor of the Blast Furnace. Gomboso asked Edwards whether he wanted to reach Graham by the lift or the stairs. At this time Edwards' gas monitor was reading 480ppm. Edwards told Gomboso that they should go the quickest way. Gomboso took Edwards in the lift to the third floor.

When they entered the lift Gomboso asked what Edwards' gas monitor was reading. Edwards' gas monitor was reading 530ppm. Gomboso stated that they would get to the third floor in time. As the lift doors closed Edwards' gas monitor had a reading in excess of 800ppm.

When Gomboso and Edwards reached the third floor of the Blast Furnace two Bluescope employees were already administering compressed air to Graham with a self contained breathing apparatus. Edwards asked Gomboso to return to PUP 52 and accompany other employees of the Defendant to the third floor of the Blast Furnace to assist him in his tasks. At this time Gomboso said that he could not find his gas monitor and so Edwards gave Gomboso his gas monitor. Edwards began to treat Graham with oxygen from the first aid oxygen resuscitation unit he was carrying.

Approximately 15 minutes later, a Bluescope employee escorted McMahon and Knezevic to where Edwards was treating Graham.

At about 3.30am a further emergency call to the Defendant's control room operator was made by an ASMS employee advising that another person (an employee of ASMS, Russoniello) was unconscious on the second floor of the Blast Furnace and required first aid. He was requested by the Defendant's control room operator to try and get Russoniello down to PUP 52 but was advised that could not be done. The Defendant's employees were then directed to assist with this further case.

Fermino was at PUP 52 by this time. Fermino and the Bluescope occupational health nurse, Geoff Marlan, were escorted to Russoniello by Bluescope employees. Fermino was told by the Bluescope employee that the route to Russoniello was safe.

Approximately 10 to 15 minutes after Edwards had started to treat Graham, Graham showed signs of improvement and it was decided that Edwards and McMahon would help Graham to leave the Blast Furnace by walking down the stairs. They did so and when they reached the bottom of the stairs, personnel from the New South Wales Ambulance service who had been called to the Site took over the treatment of Graham.

Edwards, McMahon and Knezevic were then advised that Russoniello was on the second floor of the Blast Furnace and was being treated by Marlan and Fermino. Gomboso accompanied Edwards, McMahon and Knezevic to where Russoniello was being treated and, with the assistance of the New South Wales Ambulance service, they moved him out of the Blast Furnace. The ambulance personnel then took over his treatment.

At approximately 4.20am after medical attention had been provided on the scene both by the Workers and by the New South Wales Ambulance Service, Graham and Gianfrancesco, employees of Bluescope, and Russoniello, an employee of ASMS, were transported to Wollongong Hospital for further treatment.

Shortly after Graham, Gianfrancesco and Russoniello were transported to Wollongong Hospital, four of the Defendant's employees, Edwards, Segovic, Knezevic and McMahon, were tested at the Flat Product Health Centre by Bluescope occupational health nurse by environmental monitoring (expired air). Edwards had a carbon monoxide reading of 10ppm and Segovic had a carbon monoxide reading of 60ppm and both of these workers were administered oxygen. After fifteen minutes Edwards had a reading of 7ppm and after one hour Segovic had a reading of 38ppm. McMahon was noted to have a reading of 6ppm and was not provided with oxygen. Knezevic had a reading of 7ppm and was not provided with oxygen. None of the workers reported any other symptoms.

All of the workers attended the next shift they were rostered to work. They suffered no injury or harm and there were no residual effects from the exposure to the BFG on them. This is consistent with the fact that the effects of exposure to carbon monoxide at the levels experienced by them during this incident are reversible.

Depending on the concentration of the BFG in the atmosphere and the length of time to which someone is exposed to BFG, inhalation may have an adverse affect because of the carbon monoxide in the BFG.

Since the incident on 11 April 2004 Bluescope has put out a directive to all persons at the site that if a fixed site gas alarm is activated it is necessary for all persons to leave the area until an inspector appointed by Bluescope has attended to check the level of the gas.

Since 11 April 2004 Bluescope has also provided additional oxygen and breathing apparatus appliances which it has installed throughout the Blast Furnace area for use during gas leaks if required.

4 A further agreed statement of facts provided: 1. Depending on the concentration of the blast furnace gas (BFG) in the atmosphere and the length of time to which someone is exposed to BFG, inhalation may have an adverse affect because of the carbon monoxide in the BFG. Exposure to carbon monoxide may cause symptoms including headache, nausea, dizziness, disorientation, fainting, and in some extreme cases, coma and possibly death.

2. A person will only be severely affected by exposure to carbon monoxide if he or she is exposed to high levels of carbon monoxide for an extensive period of time. A person may be exposed to a level of 1000 particles per million (ppm) for a short period without suffering any adverse effects. However, if a person was exposed to 1000ppm for half an hour, he or she may have a headache and following exposure to 1000ppm for several hours, the person may lose consciousness.

3. If Dean Edwards, Zeljko Segovic, John McMahon, Eddie Fermino and Miroslav Knezevic (the Workers) had been exposed to high levels of carbon monoxide for an extensive period of time their expired air readings for carbon monoxide would have been much higher. The low readings, and the absence of serious symptoms, indicate that the Workers were not exposed to high levels of carbon monoxide and were not exposed to carbon monoxide for an extensive period of time.

4. In order to accurately determine the extent of exposure to carbon monoxide, and its effects on a person, it is necessary to evaluate the actual concentration of carbon monoxide in the atmosphere, the length of exposure to that concentration and the level of carbon monoxide in the haemoglobin levels (carboxyhaemoglobin reading) of the person's blood. Blood tests for carboxyhaemoglobin levels were not carried out in this case but the absence of any serious symptoms, together with the expired air readings set out in paragraph 58 of the Agreed Statement of Facts filed on 16 August 2006, indicate that the Workers had not been exposed to carbon monoxide for an extensive period of time.

5. The rate at which BFG dissipates in the atmosphere is variable and depends on numerous factors including the atmospheric conditions, ventilation and the built environment in the vicinity of the BFG release. Many individuals will, upon testing, have a level of carbon monoxide in their haemoglobin without being exposed to a particular concentration of carbon monoxide as a result of, for example, high density city living and/or cigarette smoking.

6. Smokers usually record a higher carbon monoxide level than non smokers. Mr Segovic is a smoker. It is not possible to determine the level to which BFG or cigarette smoke contributed to his expired air reading. 5 Mr Bradley John Carpenter, the defendant's General Manager Defence and Technology gave evidence for the defendant. He was not required for cross examination. 6 This was the defendant's first offence and hence the maximum penalty for the offence was $550,000. The parties were generally agreed as to the applicable sentencing principles and that BlueScope, the owner of the steelworks, was more culpable than the defendant for the risks to which its employees were exposed. They disagreed as to two matters. The first, whether the evidence properly led to the conclusion that this offence was one which fell into the moderate category, as was argued for the prosecutor, or whether it ought not to be regarded as serious and should attract only a penalty at the lowest end of the scale for a first offence, as was the defendant's case. The second, what role general and specific deterrence had to play in the penalty imposed in this case. The parties' cases 7 The case for the prosecutor, advanced by Ms Nomchong of counsel, was that it would be concluded that the offence fell within the moderate range, because the risk involved was exposure to a potentially dangerous gas, which was colourless and odourless, with the type of injury which could materialise from such a risk having the potential to be serious, or significant. 8 That risk was known and recognised by the defendant, but the system of work in place did not properly address that risk. The obligations imposed by the Act required it to take into account hasty, careless, inadvertent, inattentive and unreasonable or disobedient employees when designing the system of work it put in place. The defendant ought also to have been alert to the fact that 'a level of tolerance to the alarm had built up.' 9 The result was that the defendant's system of work carried with it an inherent, identifiable and serious risk of injury, which was obvious as to foreseeability and serious as to consequences. Appropriate measures to deal with the risk were available, but not taken. There were simple and straightforward steps available to remedy the defects in the system, as the steps taken afterwards demonstrated. 10 Submissions were also advanced as to various mitigating matters, to which I will return. 11 It was the case advanced for the defendant by Mr Dixon of Queens Counsel that the offence had to be seen in the light of this defendant's particular involvement in the incident which occurred at the BlueScope steelworks. It should not be overlooked that none of the employees were, in fact, exposed to high levels of carbon monoxide, for an extensive period of time and that none of them suffered any injury or harm, or residual effects, from their exposure. The evidence showed that some exposure to the gas was not harmful, severe effects only resulted from exposure to high levels, for an extensive period. In this respect, the time at which various things had occurred, was a relevant consideration. 12 The evidence showed that the risk to which the defendant's employees were exposed was low, given the time at which they entered the blast furnace, after the source of the gas release had been closed off. It was relevant that none of the defendant's employees reported any symptoms while in the building, or outside it. The instruction that they were to leave the area if they did not feel safe, was also relevant. The result was that the risk to which the defendant's employees was exposed, was not a serious one. 13 Account also had to be taken of the circumstance that the offence was committed in circumstances where events occurred without warning to the defendant, which required it to provide the urgent assistance of its employees, to minimise harm caused to BlueScope employees and contractors. At that time the defendant had not undertaken to provide or conduct rescues, nor did BlueScope expect it to do so. 14 It was also relevant that the defendant had not been warned that there was to be a major gas leak; BlueScope had not instructed all of its employees to vacate the vicinity, when a major leak occurred; it was people who had ignored gas alarms, who then required assistance. Access to the blast furnace was under the complete control of BlueScope, which had peculiar knowledge of the works which gave rise to the leak; its length of time and other relevant factors. In those circumstances, the defendant could not have reasonably foreseen that its employees would be called upon to act contrary to its understanding with BlueScope, to render first aid in circumstances which were unsafe. 15 The situation was submitted not to involve careless or inadvertent behaviour by employees, against which the defendant should have guarded. That its system did not specifically cater for the events which arose, was explicable because they had not arisen before. The observations of the Full Bench in Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 at [79] that questions of deterrence were relevant in cases of serious breach, also had to be considered. It was also relevant that the steps taken after the incident, far exceeded what could be reasonably required, given the risk in question, as outlined in the agreed facts. 16 In those circumstances and having regard to the defendant's approach to its obligations before the incident and the steps taken after, it was submitted that it followed that there was but little role for general or specific deterrence to feature in the penalty imposed. Consideration

17 Consistently with the Crimes (Sentencing Procedure) Act 1999, a determination of the sentence to be imposed in this case must be approached from a consideration of the nature and seriousness of the offence in question, together with aggravating and mitigating factors. I am satisfied that the evidence demonstrated, to the requisite degree, that the offence charged was proven. 18 The evidence showed that the defendant had its employees at this site, in order to provide various services, including relevantly, as Mr Carpenter described it: First aid response: As part of this service, when requested, Serco provides Protective Service Officers ( PSOs ) to administer first aid to the persons on the Site. As many buildings at the Site require a specific induction by BlueScope before entry is permitted, and Serco employees do not generally undertake the specific building inductions, first aid is rendered at designated 'emergency pick up pints' ( PUPs ). The PUPs are designated by BlueScope as 'safe' areas near those buildings which Serco employees are not permitted to enter without being escorted by a BlueScope employee. In circumstances where a person requiring first aid cannot be moved to a PUP, Serco must rely on BlueScope employees, who have received the relevant induction training for a particular building, and are familiar with the processes undertaken in the building, to make the assessment of whether it is safe for Serco employees to enter a particular area to provide first aid to the person who cannot be moved to the designated PUP. If they determine that it is safe to enter, BlueScope employees must also provide sufficient information and instruction for Serco employees to safely enter the area. Serco does not undertake to provide or conduct 'rescues' at the Site and Bluescope does not expect it to provide rescue services at the Site.

19 The evidence suggested that the PUP to which the defendant's employees were despatched during this incident, PUP 52, was not a place at which they were exposed to the risk which here materialised. That occurred in two ways. 20 The first was in relation to two employees, Mr Segovic and Mr Edwards. They were provided by the defendant to man two roadblocks, to keep people out of the vicinity of the precipitators from which the gas was released. That type of work was usually undertaken by BlueScope employees, but the defendant agreed to provide the assistance sought on this occasion. Mr Segovic and Mr Edwards were despatched at about 2.30 am; they were provided with personal gas monitors and instructed by Mr Gomboso, the BlueScope team leader in charge of the repair operation, that it was highly unlikely that they would need to use the monitors, but if 200 ppm was registered by their monitor, they were to move away from the blast furnace. 21 After about 10 to 15 minutes, alarms commenced sounding and Mr Segovic and Mr Edwards began enforcing the road block. They had been informed that when the alarms sounded, the repair would commence and that they would stop when the repair ceased. Mr Gomboso aborted the repair effort at about 3.10 am, after a reading of 2,000 ppm had been recorded at the precipitator, where the repair was being undertaken. A Mr Johnson was directed to advise Mr Segovic and Mr Edwards to leave the roadblocks, but there was no evidence that the message was given. 22 Mr Segovic advised the defendant's control room at 3.17 am, that his gas monitor reading had climbed to 2,000 ppm and he left the roadblock. Mr Edwards' monitor had a 0 reading, but he too left and went to check on Mr Segovic. It was agreed by the parties that a risk of injury arose from a combination of exposure to high levels of carbon monoxide, for extended periods. How long a person could safely be exposed to a level of 2,000 ppm was not dealt with in the evidence. Given that exposure to a level beyond 400 ppm was not to occur, under the BHP guidelines, such a period must be extremely short, if it could occur safely at all. 23 While the parties agreed that exposure to a level of 1,000 ppm would lead to headaches after half an hour, a graph in evidence, charting the effect of carbon monoxide shows that at 10,000 ppm, death occurs in minutes; at 5,000 ppm collapse occurs in minutes and at 1,000 ppm, headache and nausea occurs in minutes. 24 In this case, exposure to 2,000 ppm resulted in Mr Segovic being affected to some degree, and he was later given oxygen after being tested. The evidence suggested that smokers are more susceptible to carbon monoxide gas and this perhaps explained why he was seemingly more affected by the gas to which he was exposed, than Mr Edwards was. Mr Edwards did not appear to have been exposed to any carbon monoxide while outside at the roadblock, but that situation changed shortly afterwards. 25 At 3.18 am, the defendant's control room received an emergency call from BlueScope, requesting assistance with two employees who had been overcome by gas at the blast furnace. Mr Segovic and Mr Edwards were sent to the PUP 52 to attend and treat the two casualties. They were instructed by the defendant 'to leave the area if they did not feel safe'. 26 In the circumstances, this was a rather unhelpful instruction. Carbon monoxide is a colourless and odourless gas which can affect victims before they become aware of their danger. Nevertheless, given Mr Gomboso's earlier instruction that if their gas monitor registered a reading of 200 ppm, they should leave the vicinity, Mr Segovic and Mr Edwards were not entirely unaware of what safe levels of carbon monoxide were, when they were despatched by the defendant. 27 At PUP 52, Mr Segovic was directed to perform work which did not place him into further contact with the gas. Mr Edwards, however, was taken by Mr Gomboso to the third floor of the blast furnace, where Mr Graham had collapsed. It was common ground that Mr Gomboso had breathing equipment, but that Mr Edwards did not. They discussed whether to take the lift or stairs to the third floor in the blast furnace, at a time when Mr Edwards' gas monitor read 480 ppm; inside the lift it read 530 ppm and when the doors closed, in excess of 800 ppm. Despite Mr Gomboso's earlier instruction, to leave if the levels reached 200 ppm and the defendant's instruction that he ought to leave if he felt unsafe, Mr Edwards proceeded to the third floor. Mr Gomboso then left Mr Edwards without breathing apparatus, to attend to Mr Graham, who had collapsed on the third floor, while Mr Gomboso returned to obtain further employees of the defendant to assist Mr Edwards. Mr Gomboso also took Mr Edwards' gas monitor away with him, because Mr Gomboso couldn't find his own monitor. 28 What the gas level on the third floor measured at the time, was not in evidence. That Mr Edwards ought not to have been placed in this situation was obvious and no doubt explained the defendant's plea to the charge. It also explained the prosecutor's submission, that the defendant's system failed to provide for employees who were hasty, inadvertent or inattentive to their own safety. Whether Mr Edwards entered and remained in the blast furnace treating Mr Graham because he was brave, or because he had overlooked Mr Gomboso's earlier instruction to leave, if the gas level reached 200 ppm and the defendant's later instruction to leave, if he felt unsafe, the inescapable conclusion on this evidence must be that Mr Edwards ought not to have remained in the blast furnace without breathing apparatus, when his gas monitor was recording such high levels of carbon monoxide. 29 As it happened, the levels of the gas must have been falling with sufficient speed for Mr Edwards not to have been seriously affected by the carbon monoxide to which he was exposed, despite having remained with Mr Graham for more than 15 minutes, where compressed air was being administered by two other BlueScope employees, before two other of the defendant's employees, Mr McMahon and Mr Knezevic, joined him. They then assisted Mr Graham to leave the blast furnace, when he showed signs of improvement. 30 Mr Edwards was later treated with oxygen. That he was not injured as the result of the risk to which he was exposed, was plainly a matter of good luck, not good management of the circumstances with which the defendant was confronted on 11 April. Relevant to this conclusion is the graph earlier mentioned and the BHP 2001 material safety data sheet, which records that blast furnace gas is hazardous; that it is toxic by inhalation and that 'symptoms of acute poisoning may include headache, dizziness, disorientation, abnormal reflexes, difficult concentration, fainting, oedema, coma, seizures and death'. 31 Mr Edwards entered the blast furnace to treat Mr Graham, who had already become unconscious as the result of his exposure to the gas. The data sheet contains guidelines which provide that the exposure limit for carbon monoxide is 30 ppm, and that in order 'to control short term excursions above this limit, based on the toxicokinetic properties of carbon monoxide' exposure should not exceed 400 ppm and otherwise at 200 ppm, exposure for 15 minutes, at 100 ppm, 30 minutes and at 60 ppm, 60 minutes. Inside the blast furnace, at one point Mr Edwards' gas monitor registered more than double the level beyond which there ought to have been no exposure at all. Still the attempt to provide assistance without breathing equipment being provided to Mr Edwards was not abandoned. 32 It is also relevant to consider that the new procedures introduced by the defendant after the incident provided even more stringent guidelines. They were: Parts per million of CO Exposure time per shift Actions SOP. < 30 ppm No limit Begin to regularly monitor gas levels. N/A 60 ppm 60 minutes Increase frequency of monitoring. N/A 100 ppm 30 minutes Prepare to donn ERD ERD 200 ppm 15 minutes Inform the CRO that the ERD is being utilized, then donn the unit and walk to nearest safe area in clear air. The gas monitor will confirm when the area is clear of CO gas. ERD Over 200 ppm Do not enter Do not proceed past nearest safe PUP ERD

33 An 'ERD' is an 'escape respiratory device'. These guidelines require preparation for evacuation when any unplanned, unexpected gas emission over 200 ppm occurs. 34 It follows, inescapably, from this evidence, that on 11 April, before Mr Edwards was sent into the blast furnace without breathing equipment, the level of carbon monoxide present was not established to be safe, either by BlueScope or by the defendant. In those circumstances, there could be no certainty that the time he remained in the blast furnace, would be limited to a period of time which would have ensured his safety. Any entry without breathing equipment was manifestly unsafe. 35 Given the evidence as to the little effect which the carbon monoxide to which Mr Edwards was exposed had upon him, there can be no doubt that the carbon monoxide levels in the blast furnace began falling, after the gas leak was stopped. Nevertheless, the level of concentration which had been reached at any particular place in the blast furnace and the rate at which that concentration of gas was falling, was not established either by BlueScope or by the defendant to be safe, before they sent Mr Edwards into the blast furnace, to provide assistance to those already affected by the gas. In the absence of those levels being established, safety necessitated Mr Edwards being given breathing apparatus to wear. That did not occur either. It also follows, that the safety of Mr Fermino, Mr McMahon and Mr Knezevic was therefore also not assured, by the steps taken when they were sent into the blast furnace. 36 Mr Fermino was sent to the assistance of Mr Russionello, who had also collapsed in the blast furnace when Mr Graham was taken out of the blast furnace, Mr Edwards, Mr McMahon and Mr Knezevic then returned into the blast furnace to assist Mr Fermino, who had been found unconscious on the second floor of the blast furnace. The defendant was first alerted to this second emergency, by a call to its control room at about 3.30 am. Because Mr Russionello could not be removed to PUP 52, the defendant's employees were directed to provide their assistance. Mr Edwards, Mr Fermino, Mr McMahon and Mr Knezevic did so, assisting ambulance officers move Mr Russionello out of the blast furnace. 37 The defendant's employees were tested shortly after 4.20 am, as to their expired air carbon monoxide levels. Mr Segovic and Mr Edwards were administered oxygen as a result, which the other employees did not require, given their expired air readings. None of the employees suffered residual effects because exposure to certain monoxide at certain levels is reversible. All the employees were able to attend their next rostered shift. Mr Segovic had the highest level recorded, on the evidence, most likely because he was a smoker. Luckily, none of these employees suffered other injury or harm and they had no residual effects from the carbon monoxide to which they were exposed. That was fortunate, but plainly did not result from the defendant's system protecting the employees from excessive exposure to carbon monoxide, which again, no doubt explained why a plea of guilty was entered to the charge. 38 In this respect, the potential effects of prolonged exposure to carbon monoxide must be considered. The Australian Government's Occupational Health and Safety Commission exposure standard indicates that carbon monoxide is readily absorbed into the lungs and binds about 200 -240 times more strongly with haemoglobin than does oxygen. It also has negative cardiac effects. The rate of excretion from the lungs is much slower, but the effects are reversible. High concentrations can, however, lead rapidly to unconsciousness and convulsions before a victim is aware of impending danger. Exposure is also dangerous because individual responses to carbon monoxide vary and it poses an acute hazard, because it is not detectable by human senses. There is a risk of death. 39 These matters must be taken into account, because it is well settled that the gravity of the consequences of an accident do not of themselves, dictate penalty. The gravity or otherwise of the risk to safety in question is relevant in determining the gravity of a defendant's breach and its culpabilities (see Tyler v Sydney Electricity (1993) 47 IR 1 at 6; Lawrence at 45). 40 I am satisfied that the submission made by both the prosecutor and the defendant, that on all of the evidence it was demonstrated that it was BlueScope which had the greater culpability for the risk here in question, was made out on the evidence. The defendant's employees were obliged to rely on BlueScope employees and to act in accordance with their instructions, when entering buildings such as the blast furnace at the steelworks, no doubt for good and sound reason, given the environment inside such buildings and the safety obligations imposed by the Act upon both the defendant and BlueScope. That being so, the defendant's employees being taken into the building in order to administer first aid to people who had collapsed and been rendered unconscious, as the result of exposure to carbon monoxide, without breathing apparatus being provided when a gas monitor showed levels of as high as 800 ppm, was entirely inconsistent with the requirements of safety. On the evidence, that failure was not that of BlueScope alone. The defendant also failed to take available steps which would have ensured its employees' safety. 41 In the light of the evidence, I am unable to accept the defendant's case that the offence ought not to be regarded as serious and should attract only a penalty at the lowest end of the scale. While it is relevant that this was the defendant's first offence, a matter to which I shall return, I am satisfied that this offence could not properly be characterised in the way advanced. On the evidence, while this was a first offence, it was plainly of a more serious kind than was submitted. 42 I accept that it is also pertinent to take into account, as the defendant argued, that it was confronted with an emergency, where aid was sought in ways which the defendant and BlueScope had not formerly agreed would be sought and provided. Despite this, when BlueScope sought assistance with an emergency, the necessary aid was given by the defendant and its employees. That response was entirely understandable, and indeed commendable, but could not, however, relieve the defendant of its obligation to ensure the safety of its employees. 43 What must also be taken into account in this respect, is the evidence of the steps taken after the accident, which showed that safety could have been ensured by the defendant, by its employees being given and retaining a gas monitor and using breathing apparatus, if gas levels climbed to 200 ppm. The only instruction given by the defendant to its employees when despatching them to render the aid sought, was to leave, if the employee felt unsafe. That was clearly an inadequate instruction in the circumstances. On the evidence, Mr Edwards ought to have felt unsafe when gas monitors recorded gas levels of over 400 and as high as 800 ppm, but still he did not leave, even though he had no breathing apparatus. 44 These observations lead me to the question of the role which general and specific deterrence have to play in the sentence to be imposed in this case. It is well settled that it is only in unusual circumstances that general deterrence will not feature. The approach discussed by the Full Court in Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 at [71] - [79], that deterrence should normally be a matter of significant weight in the sentencing process is binding and must be followed in this case. 45 Given that this risk to safety emerged in circumstances where assistance and first aid had to be rendered in an emergency, I am unable to conclude that general deterrence does not properly have a role to play in this case. Such situations will no doubt confront employers in many industries, where they will have an obligation to render aid and attend to an emergency, while also paying attention to the safety of their employees. Even these types of situations do not permit considerations of safety to be ignored, especially when employees are at risk of exposure to obvious and well known safety risks. 46 As to specific deterrence, I am satisfied that it has a lesser role to play in this case, than in many other cases, given the evidence of this employer's attention to safety, both before and after the incident. 47 Mr Carpenter's evidence demonstrated that this employer did not pay only lip service to its safety obligations and that it did not merely have a paper system in place. The defendant had general safety policies, procedures and manuals, as well as establishing a specific safety management plan for this site, when it first entered into its contract with BlueScope. That plan is reviewed regularly. It also had safe operating procedures for the site, as well as an accident and incident reporting and other safety systems, such as hazard identification procedures and rehabilitation policies. Each employee received safety training as part of an induction process, when commencing work at the site, receiving a 'passport' to permit work on the site. The training was directed to an extensive list of safety issues, including relevantly; gas awareness, control of hazardous substances, hazards and risks, security alarms, emergency response, breathing apparatus and first aid. There were site safety committees operated, as well as ongoing audits of safety systems, which involve individual employee participation, on a monthly basis. 48 The site safety committee has 10 members, including management representatives, as well as site employees and a fire officer. It meets monthly and communicates its activities to employees. Reports are made by the committee to weekly operational meetings, and to BlueScope. There is also a corporate Global Incident Reporting Policy, which pays regard to the severity of any incident. 49 The defendant expends considerable amounts annually on training its staff in safety matters. After the incident, the defendant engaged in extensive investigations and discussions with BlueScope, as to the incident and safety issues. This resulted in a new operations instruction, in which employees were trained. It required that if an employee was required to:

(i) respond to an incident on the Site, they were not to enter a potentially gaseous area unless accompanied by a gas watcher with a gas monitor, and the gas monitor reading indicated that it is safe to enter the area. However, if, at any time after responding to the incident, the gas monitor had a reading of 200ppm or more all Serco personnel were to evacuate to an area which, according to the gas monitor reading, was safe; and

(ii) form or man a physical barrier, including a road block, in an area where gas may be present, a gas watcher was required to attend. If the gas watcher's gas monitor had a reading of 200ppm or more, all Serco personnel were to evacuate to an area which, according to the gas monitor reading, was safe.

50 Retraining in various safety issues also followed, in relation to gas awareness and response to a gas leak. BlueScope and the defendant agreed that the defendant's employees were in future not to perform rescue duties of the kind sought in this incident. New gas emergency response procedures were developed, which were later reviewed again in April 2006. After the incident, employees were also issued with personal gas monitors and trained in their use. These monitors are issued each shift, when they are checked by the employee to ensure that the monitor is operational and calibrated. Monthly audits are conducted to ensure employees' ability to use the monitors. Control room procedures were also reviewed. The incident reporting system was revised and made more accessible to individual employees. 51 All of the steps taken after the incident were consistent with the defendant's general approach to its safety obligations, but demonstrated the availability of steps which would have protected employees from the risk to which they were exposed, if they had been in place before the incident here in question, namely the provision of personal gas monitors and breathing apparatus. 52 Various other matters were accepted by the prosecutor as being relevant to penalty. They included that the defendant has no prior convictions and its approach to its safety obligations. I accept that given its operations since 1988 in New South Wales, the size of its workforce, the industries in which it operates and the services it provides, this is plainly a commendable safety record, no doubt reflective of the defendant's general attitude to safety. 53 As to mitigating matters, I also accept that account should be taken of the entry of the early plea, following the prosecutor's filing of the amended charge; the defendant's obvious contrition and remorse for what here occurred; and its co-operation with the WorkCover Authority. All of these matters must be taken into account and must result in the penalty which would otherwise be imposed, being reduced. 54 Having weighed all of these matters I have concluded that the appropriate penalty in this case is $115,500. 55 In coming to that figure, I observe that I adopted the approach discussed in Inspector Brett Martin v Encore Tissue Pty Limited [2005] NSWIRComm 271 at [29] to [31] and Inspector David Waterhouse v Innovative Property Developments Pty Ltd and Others [2006] NSWIRComm 97 at [64] to [67]. I here concluded that a discount of 25% for utilitarian savings achieved by the acknowledged entry of the early plea, at the earliest opportunity, after the charges were amended by the prosecutor, was an appropriate discount on the penalty which I had otherwise determined to be appropriate in all the circumstances of this case. Orders

56 For the reasons given, I find the defendant guilty of the charge to which the plea was entered and enter a conviction accordingly. The defendant is ordered to pay a penalty of $115,500, with a moiety to the prosecutor. 57 The prosecutor sought an order for costs in terms which were not opposed. Accordingly, I order the defendant to pay the prosecutor's costs as agreed, or in the absence of agreement, as assessed by the Court. The parties have liberty to approach in that respect. ------------------------

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