Inspector Peter Beacham v BOC Ltd

Alcatel Australia Limited v WorkCover Authority (Inspector Clyant) (1996) 70 IR 99 Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Inspector Colin Price v BHP Limited t/as Broken Hill Proprietary Ltd (2002) NSWIRComm 196 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Markarian v R (2005) 215 ALR 213 CASES CITED: R v Thomson; R v Houlton (2000) 49 NSWLR 383 Tyler v Sydney Electricity (1993) 47 IR 1 Veen v The Queen (1987) 164 CLR 465 Winchester v Regina (1992) 58 A Crim R 345 Workcover Authority of NSW (Inspector Piggott) v Capral Aluminium Ltd (1998) 83 IR 211 WorkCover Authority of NSW v Denson and Ors (2007) NSWIRComm 69 WorkCover Authority of New South Wales (Insp Page) v Walco Hoist Rentals Pty Limited & Anor (No 2) (2000) 99 IR 163

Prosecutor: Mr R. Reitano of counsel Solicitors: Ms F. Miller LEGAL REPRESENTATIVES: WorkCover Authority

Defendant: Mr M. Tooma Solicitor Deacons, Lawyers

Prosecution under s8(1) of the Occupational Health and Safety Act 2000

1 This prosecution is brought by Inspector Peter Beacham of the WorkCover Authority of New South Wales against BOC Limited (the defendant) under s8(1) of the Occupational Health and Safety Act 2000 (the Act), by way of an amended Application for Order. 2 It is alleged the defendant, on 14 August 2004, contravened s8(1) of the Act in that it failed to: ensure the health, safety and welfare at work of all its employees and in particular, Frank Blazejko, Shaun Murphy, Dion Bailey, Joe Exereb, Gary Golledge, Jimmy Chaghouri and any other employees working at the premises on 14 August 2004, contrary to s8(1) of the Occupational Health and Safety Act 2000.

It is alleged the defendant, in particular: a) Failed to provide and maintain a safe system of work in relation to the shutting down of the acetylene generator at the dissolved acetylene plant and in particular failed to ensure there was a system of checking that all valves including the isolation valve for the ammonia scrubber to the town water supply were closed; b) Failed to ensure that employees were adequately trained, instructed, informed in and about safe procedures to be followed when alarms sounded for the acetylene generator plant for those times after it had been shut down and unattended; c) Failed to have in place or maintain any procedures to be followed when alarms sounded in the acetylene generator plant for those times after it had been shut down and unattended; d) Failed to ensure that there was an automatic cut off to the town water supply to the ammonia scrubber when the acetylene generator was shut down and to ensure that the acetylene generator flashback arrestor check valves were properly maintained; e) Failed to have systems to restrict the access of employees from entering the acetylene generating room in the event of an uncontrolled explosion, ignition and fire of acetylene gas; f) As a result of the defendant's failures all of its employees working at the premises were placed at risk of injury. 3 The defendant pleads guilty to the charge. 4 Mr R. Reitano, of counsel, appeared for the prosecution and Mr M. Tooma, solicitor, appeared for the defendant. The prosecution relied upon an Agreed Statement of Facts with the following documents attached: · Seven factual Inspection reports of Inspector Beacham dated 19 August 2004, 30 August 2004, 21 February 2005, 23 May 2005, 12 July 2005, 28 July 2005, 24 October 2005 · 82 Photographs taken by Insp Beacham on 16 August 2004, 25 August 2004 and Mr Robert Edwards, professional photographer under the directions of Insp Beacham on 27 August 2005 · Video Capture Images dated 14 August 2004 · BOC Acetylene Generator Start Up and Shutdown Check Sheets dated 25 August 1997 and 7 May 1997 · BOC post incident investigation report received by WorkCover 16 September 2004 · Prior Convictions Certificate. 5 The defendant tendered an affidavit of David Hook, Group Manager - Operations Safety sworn 18 October 2006. He is a technical expert in acetylene generators (based in the UK). Relevant documents were attached to the affidavit including documents in relation to the investigation of the incident and the upgrading of the acetylene plant. Also relied upon was the affidavit of Michael Wilson sworn 22 March 2007 together with 17 volumes of annexures outlining the pre-existing policies and procedures for safe working and the corporation's amended, and where relevant, new procedures adopted after the incident to ensure safe working. 6 The Agreed Statement of Facts relevantly reads: 2. At all material times BOC Ltd [ABN 95 000 029 729] was a corporation with its registered office situated at Riverside Corporate Park, 10 Julius Avenue, North Ryde, in the State of New South Wales ("the defendant"). 3. The defendant was a corporation which undertook the business of manufacturing acetylene gas, nitrous oxide gas and various gas mixtures. The defendant was a member of the world wide BOC Group. 4. The defendant owned and operated an acetylene generation facility at BOC Limited Sydney Operations Centre at 428 Victoria Street, Wetherill Park, New South Wales ("the premises"). 5. The defendant was an employer. On 14 August 2004 there were approximately 50 employees and contractors working at the premises. The defendant employs approximately 1912 people throughout Australia. 6. On the morning of 14 August 2004 at approximately 5:00 am Mr Sakhany Nak, Dissolved Acetylene ("DA") Generator Operator, employed by the defendant, arrived at the premises to perform scheduled overtime until approximately 1.00 pm that day. Also doing overtime at the premises from 5.00 am to 1.00 pm that day were the defendant's employees Mr Jimmy Chaghouri (Process worker), Mr Gary Gollege (Process worker) and Mr Shaun Murphy (Production operator). These employees were to work in the Acetylene Works Building, in various areas of the defendant's DA plant known as the acetylene generating room, the acetylene cylinder maintenance area/ test shop area and the acetylene cylinder filling racks area. and the test shop area. 7. No team leaders or supervisors to supervise the operation of the DA plant at the premises were rostered to work on the day. Mr Joe Xuereb and Mr Dion Bailey were on 24 hour callout for unexpected technical difficulties. Mr Sakhany Nak, who worked in the DA plant that day was unsupervised but was trained as competent in the operational activities of shutting down the DA plant and had operated and shut down the DA Plant for seventeen years. 8. Mr Nak was feeling unwell at the start of the shift . He commenced work and started the acetylene generator. He then loaded calcium carbide into the carbide skip in order to charge an acetylene generator feed hopper. Before raising the carbide skip to the acetylene generator feed hopper, he felt worse and decided he could not continue working. He left the carbide skip parked adjacent to the acetylene generator standing at ground level. He turned the acetylene generator hopper selector switches to off around 5:55 am. 9. Mr Nak allowed the compressors to run reducing the suction pressure until they tripped on low suction pressure. He later stated that the pressure in the acetylene generator, indicated on PI 2109 was reading 0 kPa. He then shut valve V1821 which isolated the automatic drain valve on the acetylene generator and shut V1679 which isolated the acetylene generator and ammonia scrubber from the suction of the compressors. No shutdown checklist was completed on this occasion. 10. The town water supply isolation valve V1950 to the ammonia scrubber which is on the shutdown checklist was left open. This should have been closed as part of a normal acetylene generator plant shutdown. 11. The defendant had a documented "Acetylene Generator Shut Down Check Sheet" dated 7 May 1997 ("the Check Sheet") that required, as part of the daily shut down procedure to the DA Generator plant, for the water inlet valve to the Ammonia Scrubber to be closed and that action to be marked as completed. Relevantly, the Check Sheet stated: "This check sheet is to be completed DAILY at the end of the operation of the Acetylene Plant by the Generator attendant". 12. Further, the Check Sheet, once completed, was required to be signed by both the Generator operator and the relevant team leader. 13. Mr Nak was trained to fill in the Check Sheet when starting up and shutting down the DA Generator. 14. Mr Nak left the plant around 6:15am. Before leaving he told Jimmy Chaghouri he was leaving as he was feeling unwell. 15. During the acetylene production process, ammonia impurities in the acetylene gas generated are removed by passing the gas through water. For this purpose, town water is supplied to the ammonia scrubber. When the DA Generator is operating at a process pressure of 70 kPa, the automatic water level control valve for the ammonia scrubber will regulate the water level at the bottom of the ammonia scrubber at a constant height. However, when the DA Generator is shut down, the supply of water to the ammonia scrubber is isolated by closing valve V1950. Mr Nak did not close valve V1950 and as a result, the water level in the ammonia scrubber started to increase abnormally. 16. At an unknown time the water level in the ammonia scrubber rose sufficiently to flood the dry leg section of the pneumatic controller connected to the side of the ammonia scrubber. The flooding of the dry leg had the effect of confusing the pneumatic controller causing the automatic water level control valve to shut, whereas it should have remained fully open as the water level increased. 17. Sometime later that morning Mr Murphy, production operator heard an acetylene generator plant alarm sound off. The acetylene generator plant alarm would have triggered, due to the abnormally high water level flooding the ammonia scrubber or an abnormally high level of water flooding the acetylene generator. Mr Murphy observed a fellow employee Mr Golledge pushing an alarm acknowledgement button in the acetylene cylinder filling racks area which silenced the alarm. (Once silenced an acetylene generator plant alarm would not resound but would have a fault light on the enunciator panel located in the generator room which flashes with rapid frequency until the fault causing the alarm has been cleared (fixed) and reset). 18. Mr Chaghouri, Mr Gollege and Mr Murphy finished work and left the premises at the following times: a) Mr Chaghouri 1.43 pm; b) Mr Gollege, 1.46 pm; c) Mr Murphy, 12.43 pm. 19. Over several hours, after the ammonia scrubber had flooded, water gradually filled the acetylene gas process pipe work (abnormal condition) located between the ammonia scrubber and the acetylene generator, passing into the DA Generator and eventually flooding the acetylene generator. 20. Water reached feed hoppers no.1 and no.2 screw feeders (located on top of the acetylene generator) which contained unspent calcium carbide and an uncontrolled exothermic reaction commenced producing acetylene gas which resulted in an increase of acetylene gas pressure in feed hopper no.2 and an increase in the feed hoppers screw feeder temperatures due to the exothermic reaction. 21. At approximately 7:05 pm the hopper lid on hopper no.2 blew off as a result of the increasing internal pressure in the hopper. The vapour cloud of acetylene that emanated from the DA Generator ignited and exploded. The word "explode" or "explosion" is used throughout this agreed Statement of Facts as referring to its every day usage. 22. There was no-one in the DA plant Acetylene Generating Room at the time of the ignition and explosion of acetylene gas released. Group 4 contractor security guard, Mr Bill Skeen was in the gatehouse. Mr Frank Blazejko (Nitrous Plant Operator) and approximately six (6) other employees were in the P & L Plant that was located approximately twenty (20) metres away from the western side of the acetylene works building. The Acetylene Generating Room was located on the opposite side of the Acetylene Works Building from the P & L Plant. 23. Immediately after hearing the sound generated by the ignition and explosion of acetylene gas released Mr Skeen ran to the opened door of the gatehouse and, observing smoke rising from the Acetylene Generating Room, ran to the alleyway entrance to the Acetylene Generating Room and put his head around the corner so as to view the hopper approximately 10 metres away. Mr Skeen, observing flames coming out of the feed hopper no. 2, immediately returned to the gatehouse. 24. Shortly after hearing the ignition and explosion a break glass fire alarm was activated by Mr Blazejko, at the P&L building opposite the Acetylene Works Building. The break glass fire alarm was automatically received by the Fire Brigade at approximately 7.07pm. On return to the gatehouse from the Acetylene Generating Room, Mr Skeen phoned the fire brigade to ensure the call was registered. Mr Jim Davies, Acting Production Manager, was notified by Mr Skeen of the incident. 25. The fire brigade attended the premises with 6 units. A further acetylene ignition occurred at approximately 7.26 pm in the Acetylene Generator Room. At an unspecified time but soon after the fire brigade arrived Frank Blazejko with the permission of the fire brigade entered the DA plant building via the acetylene compressor room and observed through the fire door window at the eastern end of the compressor room what was happening. Mr Blazejko observed flames coming out of feed hopper no.2 and water coming out of two safety relief valves. At some time probably between 7.30 pm to 8.00 pm Mr Xuereb and Mr Bailey, Maintenance Team Leaders, employed by the defendant arrived on site. Shortly afterwards Mr Davies arrived. 26. In order to stop the reaction in the acetylene generator it was agreed to place a nitrogen purge on the no.2 hopper and then commence draining water from the acetylene generator via the opening valve V1822. At about 9:00 pm Mr Bailey and Mr Xuereb entered Acetylene Generating Room to manually connect a nitrogen purge hose, to fill the feed hoppers and feed screws and DA generator with nitrogen to exclude oxygen from the system to prevent a further explosion or ignition. They then left the Acetylene Generating Room. At about 9:30 pm they returned to the Acetylene Generating Room and opened drain valve V1822 at the end of the acetylene generator vessel to drain the water (to stop the reaction). The connection point for the nitrogen purge and drain valves were beneath feed hopper no.2 which had previously ignited and exploded. Thermal imaging by the fire brigade revealed that the screw conveyor housing temperature went up to 190C during the incident. Water was also applied using a BOC Limited portable fire hose to the feed hopper screw housings to cool the feed hopper screw housings. This was done by Mr Bailey and Mr Xuereb entering the acetylene generating room setting up the portable fire hose and then leaving the Acetylene Generating Room. 27. The area was evacuated for 30 minutes to enable the cooling effect to take place. At 10.00 pm to 10.30 pm the hopper housing temperatures were ambient and the situation deemed safe. 28. Upon inspection of the acetylene generating room after the incident by the defendant it was found that no.2 feed hopper lid had blown off. The hopper lid was found in the acetylene generating room after the incident. After the incident it was reported by the defendant that the feed hopper lid weighed approximately 5.2 kgs. 29. The system of work used by the defendant at the time of the incident was for their operators to start up and shut down the acetylene generator plant without supervision and provide shut down check sheets to team leaders after the shutdown. Typically there were no team leaders on the weekends to supervise DA plant operators. On the day of the incident there were no production supervisors or managers on site with a responsibility for DA plant operations. 30. Prior to the incident the defendant did not include in its acetylene generator plant shut down check sheets the shutting of valve V1729 between the acetylene generator and the ammonia scrubber. Also there was no isolation procedure to secure critical valves V1950 and/or V1959 to prevent the flooding of the ammonia scrubber outside of production hours after the acetylene generator plant had been shut down. 31. Prior to the incident there were no documented procedures in place for employees to deal with acetylene generator plant alarms that occur after the acetylene generator plant has been shutdown when DA generator operators or DA plant supervising staff were not present. 32. Prior to the incident Mr Nak was trained and assessed as competent by the defendant to start up, operate and shutdown the DA Generator. Mr Nak had worked as a generator operator for approximately seventeen (17) years at the time of the incident. One of his team leaders Dave Warters had received computer based training ("Traccess") in the operation of the acetylene generator plant but had not been deemed competent in the operation or shut down of the acetylene generator plant. Mr Golledge was provided with no information or training by the defendant in what to do in the event of an out of production hours acetylene generator plant alarm after the acetylene generator plant had been shut down. 33. At the time of the Incident, the Defendant's operational processes included the following: ACE-01: The Dissolved Acetylene Process; ACE-02: Supplying Calcium Carbide to the Generator; ACE-03: Generating Acetylene; ACE-04: Carbide Lime Treatment; ACE-05: Purifying, Compressing and Drying; ACE-06: Filling Cylinders with Acetylene; ACE-07: Acetylene Cylinders; ACE-08: Solvents use in Dissolved Acetylene; and ACE-09: Engineering Guidelines. 34. The above procedures deal with acetylene generation and are comprised of a number of BOC Group wide and site specific procedures, including: (1) ACE-03-03-BOC - About Rexarc Generators, is a BOC Group procedure which provides an overview of the principles of operation of a Rexarc ATX Acetylene Generator and describes the components for this generator model. (2) ACE-03-06-SYD - Operating the Acetylene Generator (ACE-03-06-SYD) and ACE-03-08-SYD - Maintaining the Acetylene Generator (ACE-03-08-SYD) are procedures specific to the Premises. (3) ACE-03-06-SYD describes the DA Generator procedures for: (a) starting the generator after normal shut-down, after an end of week shut-down or end of shift shut-down; (b) shutting down the generator for a normal end of week shut-down or end of shift shut-down, including a checklist to be completed by the operator; (c) routine checks; and (d) trouble shooting procedures. (4) ACE-03-08-SYD - Maintaining the Acetylene Generator, sets out detailed work instructions in relation to the work processes required to be undertaken to perform regular maintenance on the Acetylene Generator. This procedure includes a work instruction regarding the replacement of the flashback arrestor check valve if the rubber ball in the check valve is swollen to a point where it restricts the flow of acetylene. (5) ACE-01-09-SYD - About this Site, relates to the Premises and provides details of: (a) the layout of the DA area; (b) emergency equipment to be found in the DA area; and (c) PPE requirements for the area. 35. Prior to the incident the defendant had performed no maintenance on the acetylene generator flash back arrestor check valves. The acetylene generator flash back arrestor check valves were not on a preventative maintenance schedule. The manufacturer of the acetylene generator had not mentioned a requirement to maintain the generator flash back arrestor check valves in its operating manual nor had they indicated that this was an important safety control from the water backflow perspective. Prior to the incident the defendant's procedure "Maintaining the Acetylene Generator ACE-03-08-SYD" documented the check valve assemblies in the acetylene generator flash back arrestors. The defendant had replacement acetylene generator flash back arrestor check valve assemblies in the BOC SOC engineering store available for use prior to the incident. The defendant has now implemented a yearly maintenance schedule for the Acetylene Generator flash back arrestors. 36. The acetylene generator plant involved in the incident was a Rexarc Model ATX Stationary Acetylene Generator Model No: 10000ATX manufactured by Rexarc Incorporated West Alexandria, Ohio, U.S.A. and had been in operation at BOC SOC for approximately 19 years. 37. Prior to the incident the two pressure safety relief valves attached to the acetylene generator flash back arrestors were adjusted by the defendant to cold set relief pressures of 150 kPa gauge. BOC procedure ACE 03-03-BOC states pressure over 105kPag is excessively high and Australian Standard AS 1210 -1997 Pressure vessels limits this pressure to 109 kPag. 38. Prior to the incident the two safety relief valves attached directly to the acetylene generator were set to cold set relief pressures of 117 kPa. BOC procedure ACE 03-03-BOC states pressure over 105kPag is excessively high and Australian Standard AS 1210-1997 Pressure Vessels limits this pressure to 109kPag. 39. Prior to the incident there was no automatic cut off valve to the town water supply to the ammonia scrubber when the Acetylene Generator was shut down. 40. Prior to the incident there was no restriction of entry by persons to the area of the Acetylene Generating Room where the incident occurred at any time. Employees could enter the Acetylene Generating Room at will. On site security guards could access the Acetylene Generating Room at any time. After the incident controls were introduced such that only persons authorized by the defendant's management were permitted to enter the Acetylene Generating Room. The defendant has now installed signage restricting entry to the Acetylene Generating Room to BOC management, maintenance and trained personnel. All employees of the defendant are provided with formal induction in site functions and operations on the premises including formal training and awareness of emergency procedures. There was no way anyone could have known at the time of the incident whether or not any employees were in the DA plant generator room. 41. Prior to the incident there was no item registration of the Acetylene Generator plant pressure vessels in contravention of the Occupational Health and Safety Regulation 2001. Improvement notices were issued by WorkCover subsequent to the incident in relation to this issue and complied with. Prior to the incident, the Acetylene Generator plant pressure vessels were registered with the Boiler Inspection Authority and received visual inspection every two years by a certified pressure vessel inspector. 42. Prior to the incident the acetylene generator plant alarm system was maintained in good working order and remained turned on after the acetylene generator plant was shut down. 43. Prior to the incident there were no safety relief valves directly attached to the acetylene generator plant feed hoppers no.1 and no.2. The purpose of such safety relief valves being to relieve acetylene gas pressure build up in the feed hoppers preventing hopper lid or hopper pressure vessel failure. The manufacturer (Rexarc) did not provide a requirement to fit such relief valves to their generators, however Australian Standard 1210 of 1997 at 8.1.1 states when any such device or fitting is not provided by the manufacturer the purchaser shall be responsible for ensuring that it is supplied and fitted prior to placing the vessel into service. 44. At some time before the incident the water supply system to the ammonia scrubber was changed from an overhead gravity supply tank to a direct connection to mains pressure town water supply. The effect of this is that pressure in the town water system is capable of suppling more water to the scrubber than the level control valve can remove (particularly under shutdown conditions) and the scrubber can flood. This contributed to the incident. Prior to the incident there was no risk assessment done in relation to replacing the ammonia scrubber overhead tank with a mains pressure supply system. 45. Prior to the incident the Acetylene Generator was fitted with a number of operational safety controls including the following: (1) actuated vent valves interconnected with the automated hopper purging system to vent the carbide hopper; (2) an actuated drain valve, controlled by signals from water level inside the acetylene generator; (3) equalising valve to equalise pressure in the hoppers after carbide charging; (4) a gauge fitted to the hydraulic system which registers the hydraulic pressure, and a safety valve which protects the hydraulic cylinder from over pressure; (5) a temperature safety instrument that measures the temperature of the generator tank and closes the alarm circuit when the temperature reaches a set point; (6) a water inlet control instrument, that measures the temperature of the acetylene in the generator tank and opens the inlet water control valve when the temperature reaches a set point; (7) a inlet water control instrument air gauge which measures the air pressure applied to the inlet water valve; (8) an inlet water control valve which opens to allow water to enter the generator through spray nozzles when the generator tank temperature rises to the set point on the water control instrument; (9) a high water level air gauge which measures air pressure to the high water level pressure switch. When the air pressure drops below 48 kPag, a pressure switch will close causing an alarm, and below 27 kPag, the screw feeder will not operate; (10) a low water level air gauge, which measures air pressure to the high water level pressure switch. When the air pressure drops below 48 kPag, a pressure switch will close causing an alarm, and below 27 kPag, the screw feeder will not operate; (11) a temperature safety instrument air gauge, which measures air pressure to the safety instrument panel. When the air pressure to the safety instrument panel drops below 42 kPag, a pressure switch will close causing the alarm to sound; (12) a high water pilot valve which vents air pressure to the inlet water valve allowing it to close and stop the water flow in the event of a high water level in the generator tank; (13) a water level alarm which is activated when the water level varies from the normal operating level (higher or lower) and a flapper valve opens allowing air to exhaust; (14) a water pressure gauge which indicates the water pressure when water enters the generator tank; (15) three manual water level valves situated at the end of the generator tank for checking water level (high, medium and low) when filling the tank and during routine operation; (16) two flashback arrestors, fitted to the generator tank outlet lines to prevent an accidental flame from entering the generator tank; and (17) four safety relief valves fitted to the generator, two on the tank riser and one on each of the two flashback arrestors. If the generator tank pressure should become excessively high, one or all of these safety valves will open to relieve pressure. An interference mechanism connects four valves to a handle, allowing the operator to open four valves manually, if necessary, to vent the tank for any reason. 46. Prior to the incident the defendant's procedures provided: a) That water in the calcium carbide feed chute of the acetylene generator plant could cause uncontrolled generation of acetylene. b) That a hot hopper incident can occur if the acetylene gas within the generator undergoes a deflagration caused by water level rising too high and coming in contact with carbide. c) That Acetylene is a highly flammable unstable compound and could ignite and explode under any number of conditions and that acetylene plants are not operated in any way that could result in a fire and that only a small amount of energy is required to ignite an air and acetylene mixture that could result in an explosion. When combined with oxygen acetylene burns with a very high temperature flame of 3160 C (5720F). d) That the typical hazards of a calcium carbide fire are: Fire and explosion, flammable acetylene produced if water is used on calcium carbide fire and a secondary explosion of generated acetylene. e) That in the event of a calcium carbide fire that personnel are to be evacuated from the area to a location 20 metres upwind. 47. BOC procedures prepared after the incident, to be followed if a hot hopper or hot screwfeed is detected, state: · A hot hopper or screwfeed can be caused by water or moisture entering the screwfeed and/or hopper. Do not open any part of the generator to atmosphere until it is completely cool and made inert. There is a risk of mixing air and acetylene and ignition from a hot spot, causing an explosion. 48. After the incident the defendant amended their procedures to include requirements that: i Supervision is to be present to double check that acetylene generator operators start up and shut down the acetylene generator plant as per procedures. If there is no team leader or supervisor available the acetylene generator plant will not be allowed to run. If overtime is required in the DA plant on weekends there must always be a team leader or supervisor to oversee the operation of the acetylene generator. A DA plant team leader or a supervisor must be present during a shutdown to physically check that the acetylene generator shutdown as per the acetylene generator check sheet. ii The shut down check sheet include the shutting of V 1729 located between the acetylene generator and ammonia scrubber as part of a shutdown plus the check sheet has been significantly modified to include valve numbers. iii A yearly maintenance schedule for the acetylene generator flash back arrestors. iv Signage be installed restricting the entry to the Acetylene Generator Room to BOC management, maintenance and trained personnel. 49. After the incident the DA plant team leaders received additional training in the operation of the acetylene generator plant. The safety relief valves for the acetylene generator and acetylene generator flash back arrestors have been reset to 105 kPa gauge, a safety relief valve has been installed on each hopper and an automatic valve has been installed to the water supply of the ammonia scrubber to prevent the ammonia scrubber from flooding. The defendant also applied to WorkCover for item registration of the relevant pressure vessels in the acetylene generator plant including the acetylene generator and feed hoppers. The dry leg of the ammonia scrubber water level control system was modified to prevent the control system from unnecessarily shutting the ammonia scrubber water outlet valve. 50. Subsequent to the incident a Hazard and Operability Study (Hazop) was undertaken by the defendant to consider possible causes, consequences, existing safeguards, actions recommended and provided the following information: · That direct connection of the ammonia scrubber to the town water system contributed to the incident; · That check valves in the acetylene generator flashback arrestors and operating procedures to close town water to the ammonia scrubber will safeguard against water level rising in the acetylene generator causing acetylene generation overpressure and heating in the feed hoppers; · That perished rubber in the flashback arrestor check valves allows acetylene gas or water to return to the acetylene generator; · That the generator when operating at too high a temperature will cause decomposition · That water flowing into the feed hoppers causes acetylene generation/hot spots in the feed hoppers overpressure/fire; · That generation of acetylene in the feed hoppers will over pressurize the feed hopper with lid separation and possible fire and consideration should be given to installing safety relief valves to the feed hoppers and venting to high level vent.

51. The entire SOC DA Plant is classified electrically as a Zone 1 Group IIC T3 hazardous area. This means a flammable atmosphere is possible under normal working conditions but unlikely to be present for long periods. All sources of ignition in such areas are strictly controlled and all fixed electrical equipment is rated to suit such an environment to prevent potential ignition of any release of acetylene gas to atmosphere. 52. The following supporting documentation is annexed: A) 7 factual Inspection reports of Inspector Beacham dated 19 August 2004, 30 August 2004, 21 February 2005, 23 May 2005, 12 July 2005, 28 July 2005, 24 October 2005 B) 82 Photographs taken by Insp Beacham on 16 August 2004, 25 August 2004 and Mr Robert Edwards, professional photographer under the directions of Insp Beacham on 27 August 2005 C) Video Capture Images dated 14 August 2004 D) Boc Acetylene Generator Start Up and Shutdown Check Sheets dated 25 August 1997 and 7 May 1997 E) Boc post incident investigation report received by WorkCover 16 September 2004 F) Prior Convictions Certificate. Relevant Principles 7 In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R (2005) 215 ALR 213. In that case their Honours viewed that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s8(1) of the Occupational Health and Safety Act 2000 with ss21A, 22, 23, 34 of the Crimes (Sentencing Procedure) Act 1999). The court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor, and could (but not should) give a degree of deduction in penalty to some element in the consideration, in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 8 Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 9 Spigelman CJ in R v Thomson; R v Houlton (2000) 49 NSWLR 383, correctly, given the consideration in Markarian, recognised this "instinctive synthesis" approach to sentencing saying at [57]: The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole. 10 Proper regard is to be had to express legislative provisions and to the relevant statutory regime (Markarian at [27]). The object of the Act, to compel attention to occupational health and safety issues so that persons are not exposed to risks to their health, safety and welfare at the workplace, is a relevant consideration. Of particular relevance is the effect of s21A of the Crimes (Sentencing Procedure) Act 1999. Section 21A sets out factors that the court is to take into account in any sentencing hearing and states, inter alia: . . . (2) Aggravating factors . . . (d) the offender has a record of previous convictions, … (g) the injury, emotional harm, loss or damage caused by the offence was substantial, . . . (3) Mitigating factors . . . (e) the offender does not have any record (or an significant record) of previous convictions, ... (g) the offender is unlikely to re-offend, … (k) a plea of guilty by the offender (as provided by section 22) (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23) . . .

Consideration 11 In a consideration as to penalty, the court assesses the objective seriousness of the offence or, as has been said, "the nature and quality of the offence". The Full Bench commented in Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 ad idem with the view expressed in Markarian (at 474): . . in our view, it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" . . . 12 The defendant company operates an acetylene generator plant at its Wetherill Park New South Wales premises. Acetylene is an industrial gas which burns in oxygen and produces a bright white light. Acetylene industrial gas is used in acetylene torches and is present in industrial gases used in welding and lighting. It is also used as a fuel in buoys and lighthouses. It is produced using a chemical reaction between calcium carbide and water with lime being a by-product of that process. Calcium carbide is fed through water to produce an acetylene gas. On 14 August 2004, Mr Sakhany Nak, an operator with 17 years experience started up the plant on his arrival around 6am. It was a Saturday morning. Within an hour he became ill and he determined to shutdown the plant. 13 There was no supervisor on site. In shutting down the plant, Mr Nak neglected to close down the water supply valve (as required by the company in its shutdown check list). As a result, over a period of 13 hours, water backfilled into the generator causing pressure inside the feed hopper. There was an explosion given the gas build up and the lid of the hopper was dislodged. It weighed 5.2 kilograms and it fell hundreds of feet from the top of the hopper to the ground. Acetylene gas escaped and its vapour ignited. There was a second ignition 20 minutes later at 7.26pm. Video images within the company's premises captured these ignitions. 14 In a submission related to the objective seriousness of this offence, the defendant company draws the court's attention to its reliance upon a consideration of the potential consequences of the offence as well as its likelihood. The defendant submits to the court the reasoning in Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [94]-[95] as appropriate to its circumstances: 94 . . . The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Inspector Hannah v Wonar Pty Limited (unreported, Fisher CJ, CT90/1214, 30 June 1992) at 9; Watson v Southern Asphalters Pty Limited (1996) 83 IR 446 at 456; Wong v Melinda Group Pty Limited (1998) 82 IR 118 at 131; WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409; Lawrenson Diecasting Pty Limited at 476; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited at 90 - 91; and Page v Walco Hoist Rentals Pty Limited (No. 2) at 22.

95 It must however be recognised that the principle does not lead to the proposition which, at least implicitly, was relied upon by the appellant. That is, relatively minor injuries of themselves demonstrate that the offence was not a serious one. We do not consider that is or represents a correct statement of principle or correctly portrays the situation here. We consider the relevant risk was not exemplified by the limited nature of the injuries suffered, and thus those injuries do not give an accurate insight into the seriousness of the breach of the Act. Rather, we consider that the breach of the Act, although limited to the failure to provide adequate protective clothing, was a very serious one indeed. 15 The defendant submitted it had an extensive system in place for ensuring safety in relation to the acetylene generation process. This system ensured there was little likelihood of serious injury to a person or property. The defendant submitted therefore the offence should be viewed in light of the fact there was no prospect of serious consequences arising from the breach and the court would not be persuaded to the view this was a most serious offence. 16 However, evidence revealed on the day of the accident a number of features of the defendant's safety system failed. Under the system in place, Mr Nak had a shutdown checklist to check off and sign. He failed to do so on the day. Further, the checklist on the shutdown procedures needed to be counter-signed by a supervisor and there was no supervisor rostered on that particular day to ensure either production continued or the shut down was validated. Mr Nak also failed to turn off the valve isolating the water supply to the ammonia from the scrubber, contrary to procedures. Further, an alarm on the acetylene generation plant went off indicating abnormally high water, but was silenced by another employee. Finally, a flashback re-starter failed which allowed the water to flow into the generator. 17 When the acetylene generator plant alarm went off, an employee, who was not properly trained, felt able to simply turn it off without conducting any follow-up. There were flashing warning lights on a warning board but apparently no one walked past nor saw them. There was no proper reaction to the in-built warning systems in place. Such a failure exposes systematic failures in the simple implementation of the corporation's worksafe procedures. There must be the most rigorous implementation of the systems in place. Once again this offence shows that even where there are careful and considered safe procedures in place the rigorous training of employees in the implementation of that devised system on site is a key element to a commitment to a safe workplace. Maintenance, employee training and the procedures for safe working must be respected and adhered to. 18 The defendant admits there were failures in the implementation of systems for safe working in place but submits it was the cumulative effect of all these events which caused the risk to safety. It submits that while some of these events may have been foreseeable, if occurring in isolation, no individual failure would have constituted the identified risk. Rather, it was the combination of events which caused the risk and that combination of events was not reasonably foreseeable. Reliance is placed by the defendant upon the view expressed in Inspector Colin Price v BHP Limited t/as Broken Hill Proprietary Ltd [2002] NSWIRComm 196 at [13]: I find a number of events had the cumulative effect of causing this risk to safety. . . [15] While there was a system of work in place to perform the task of purging coke ovens, no system of work could have safely protected workers in the performance of this task from the cumulative effect of the leaking A valve, the fans being disconnected, the Gako valve being partially opened and the lack of a check before gas was pumped through the boiler for purging. 19 I reject this submission. In an examination of the defendant's system of work and the company documentation which explains the aim of its safety procedures, each one of these failures could have caused a serious risk to safety. The company failed to ensure its own detailed safe work practices were implemented. An analysis of the failures identified reveals the company failed: to supervise, to ensure warnings were acted upon and to ensure the maintenance of its equipment was carried out. While it may not have been foreseeable that there would be such a cumulative failure, in circumstances where any such individual failure could have caused the risk to safety, the cumulative neglect only endorses that there was a foreseeable element to the offence. 20 Further, the defendant submits in the circumstances the likelihood of any injury was low. The words of Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 (at 5), I find apposite: The gravity of the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty.

And as Wright J, President said in WorkCover Authority of New South Wales (Insp Page) v Walco Hoist Rentals Pty Limited & Anor (No 2) (2000) 99 IR 163 at [22]: ... The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. . . Tyler v Sydney Electricity (1993) 47 IR 1 at 5; WorkCover Authority (NSW) (Inspector Hannah) v Wonar Pty Ltd (at 9); Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456; Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131; Albury City Council (at 408-409); Lawrenson Diecasting Pty Ltd (at 476); WorkCover Authority (NSW) (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383. 21 On the morning in question evidence showed one operator walked through the acetylene generator building (the employee who turned off the alarm) and while there were no employees in the DA plant acetylene generating room at the time of the explosion and ignition, there was a security guard in the gatehouse and approximately six other employees were in a plant 20 metres away. Acetylene is a highly explosive gas. The damage caused by the explosion in this instance was to the northern facia of the building which showed burnt and damaged panelling. However, the defendant warns of the dangers of acetylene gas in documents tendered in evidence. Relevantly they read: Acetylene is a highly flammable compound and could ignite or explode under any number of conditions. It is essential that acetylene plants are not operated in any way that could result in fire. Acetylene has a flammable range of 2.5% to 85% air. This means if an ignition source is present (such as a spark of static electricity or a match) acetylene will burn. If there is less than 2.5% acetylene in the air, there is not enough to burn. If there is more than 85% in the air in the air, there is not enough oxygen to support the burning (although at filling pressures, acetylene can decompose if ignited, even without oxygen).

Only a very small amount of energy is required to ignite an air-acetylene mixture which could result in an explosion. There are several sources of ignition including: · matches or cigarette lighters · mobile/cell phones, two-way radios, pagers · petrol (gas) driven engines · sparks from static electricity · non-flameproof (non-explosion proof) electrical equipment · friction · any item containing batteries apart from quartz watches Ignition sources are only allowed in an acetylene site under strictly controlled permit conditions. 22 The defendant in submissions suggested the incident was best described as two "ignitions" of gas, not two "explosions" of gas. Evidence reveals the Fire Brigade had arrived by the time of the second ignition. With the permission of the Fire Brigade, an employee entered the Dissolved Acetylene (DA) plant building after the second ignition and observed the flames coming out of the feeder hopper No. 2 and water coming out of two safety relief valves. In order to stop the reaction in the acetylene generator, it was agreed to place a nitrogen purge on the No. 2 hopper and then to open a valve to train water from the generator. A short time later imaging by the Fire Brigade revealed the temperature of the housing beneath hopper feeder No. 2 went to 190 degrees Celsius. It was not until 10.30pm the hopper housing temperatures were considered safe. 23 Mr Tooma submitted for the defendant that as the incident caused only minimal property damage and the flames travelled vertically not horizontally, there was a limited risk from the breach. I reject this submission. I accept acetylene is a highly explosive gas considered dangerous by the defendant. The hopper exploded under pressure and the gas ignited in the form of two separate fires. The defendant, its employees and the community should be very relieved these explosions were contained as was the fire. Further it was fortunate there was no exposure to the heat generated by the explosion and fires. I find there was every prospect of serious consequences from this breach. 24 However, one particular failure, to have systems to restrict the access of employees from entering the acetylene generating room in the event of an uncontrolled explosion did not contribute to the said risk. I do not find this asserted failure established any causal connection to the said risk to safety and while I accept that it is now part of the new procedures, and sensibly so, there was no contribution by this failure to the said risk. This incident created a serious risk to safety and the offence must be viewed accordingly. 25 A level of deterrence must be factored into the consideration as to penalty. Such principles were cited by the Full Bench of the Commission in Court Session with approval in Capral Aluminium Limited v WorkCover Authority of NSW (Insp Mayo-Ramsay) (2000) 49 NSWLR 610 where it was said at [74]: . . . the . . . Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Limited (No. 2) [2000] NSWIRComm 39 at 40-43) we would expect such cases to be very rare . . . 26 In the particular circumstance, I find both specific and general deterrence are to be factored into the assessment. The defendant continues to operate in gas production so specific deterrence is relevant. As to general deterrence while the employer had in place procedures for safe working, it works in an inherently dangerous industry and by failing to implement its own safe working model, it failed to comply with its statutory requirements to ensure a safe working environment. The careful and costly production procedures it had in place were not given the utmost respect by it as an employer. Training and maintenance are basic elements of a safe work system and each of these were neglected. Once more employers generally must be reminded a proper safe working system on paper does not provide safe working. Safe working procedures must be rigorously adhered to. 27 The defendant is entitled to the benefit of subjective factors that mitigate the objective seriousness of the offence. In Alcatel Australia Limited v WorkCover Authority (Inspector Clyant) (1996) 70 IR 99, the Full Bench (Hungerford, Marks and Schmidt JJ) observed (at 106): We accept that there are good policy reasons for the encouragement of early pleas of guilty and the giving of assistance to the WorkCover Authority in its investigation of suspected breaches of the OH&S Act . ... 28 A plea of guilty may attract a greater degree of leniency in penalty. In Winchester v Regina (1992) 58 A Crim R 345, Hunt CJ at CL held (at 350): A plea of guilty is always a matter which must be taken into account when imposing sentence. The degree of leniency to be afforded will be determined upon many different factors. The plea may in some cases be an indication of contrition or of some other quality or attribute, which is regarded as relevant for sentencing purposes independently of the mere fact that the person has pleaded guilty. 29 I accept the defendant entered an early plea to the charge. It co-operated with WorkCover Authority and expressed contrition for the breach. I accept it has further expressed, through its officers, remorse. The defendant presents with a record of good industrial citizenship. 30 In accordance with the principles of R v Thomson; R v Houlton, I accept there is a utilitarian value to the defendant's early plea. I allow in the circumstances a 25 per cent discount for the utilitarian value of the plea. 31 The defendant company operates 40 production facilities, 90 retail outlets, has more than 1000 agents and employees and more than 1900 employees in Australia. The defendant in one corporate form or another has been operating since 1935 and I accept it operates in a highly hazardous industry. It does not, however, have an unblemished health and safety record. 32 In an incident subsequent to this offence, the defendant was charged with a further breach of the Occupational Health and Safety Act 2000 and fined the maximum penalty that could be awarded by the Chief Industrial Magistrate (see unreported Reasons for Decision of CIM Hart, No. 20095342-06-02, 20 December 2006). This was a breach involving an unguarded machine and inadequate training on the machine. Again, there was revealed maintenance and training problems within the operations of the defendant.

33 In his decision, the learned Chief Industrial Magistrate Hart determined the maximum penalty for the subsequent offence to be $80,000 reduced to $60,000 for the discount, and in circumstances where the jurisdiction allowed him only to impose a maximum penalty of $55,000, he imposed a penalty of $55,000. 34 The circumstances in which the court is considering penalty for this breach is that there was a subsequent offence, the penalty for which had already been imposed by Chief Industrial Magistrate Hart. This requires a proper interpretation of s4 and s12 of the Occupational Health and Safety Act 2000. Relevantly, the sections state: [s4] "previous offender", in relation to the maximum penalty for an offence, means a person who has, at any time before being sentenced for that offence, been convicted of any other offence of any kind against this Act or the Occupational Health and Safety Act 1983 . and: [s12] A person who contravenes, whether by act or omission, a provision of this Division is guilty of an offence against that provision and is liable to the following maximum penalty: (a) in the case of a corporation (being a previous offender) - $825,000, or (b) in the case of a corporation (not being a previous offender) - $550,000, or (c) in the case of an individual (being a previous offender) - $82,500 or imprisonment for 2 years, or both, or (d) in the case of an individual (not being a previous offender) - $55,000. 35 In WorkCover Authority of NSW v Denson and Ors (2007) NSWIRComm 69 (recently published on 30 April 2007), the Full Bench considered a Reference to it confined to the legal issue as to what was the proper interpretation of "previous offender" in s4 of the Act, in the context of s12 thereof. The same issue arises in this matter. 36 The Full Bench in Denson at [17] considered and adopted the reasoning in Morrison v Powercoal (No.3) (2005) 147 IR 117. Of particular relevance to this case are the findings in Morrison v Powercoal (No.3) at [59]-[61] which state the effect of that reasoning and its interpretation of the similar prior section in the 1983 Act, s51A, and relevantly read: 59 It was submitted that the changes made to s 51A by the 1995 amendment did not affect the opening words of the section, intending that the record, if a person had previously been convicted of an offence, does not operate at the time of the conviction, but at the time the offence has been committed. We agree with this submission.

60 We, therefore, find that in circumstances such as these, the defendant, who has committed a first offence, the hearing of which before the Court is delayed until after a later offence is dealt with to the point of conviction, on the proper construction of s 51A, would not attract the section's operation in relation to that offence.

61 The corporate respondent would, therefore, have no prior convictions under the Act. The personal respondent has no prior convictions under the Act. 37 In Denson, after analysing the changes in the wording between ss51A of the 1983 Act, and the difference in the wording of s4 and s12 of the 2000 Act, and again canvassing the relevant authorities as to a reading of the words of the 2000 Act, the Full Bench determined the wording was such that there was not warranted any departure from the reasoning in Morrison v Powercoal (No 3). In Denson, it was then held at [36]: We, therefore, find that the reference in the definition of previous offender in s4 to 'being convicted of any other offence of any kind against this act' should be interpreted as referring to convictions for offences of the requisite kind occurring prior to the offence then before the court. 38 The definition of "previous offender" in s4 refers, therefore, to any offender with a conviction for a previous or prior offence and it is only that offender who carries the burden of an increased maximum penalty under section 12 of the Act. I find the maximum penalty under the Act for this offence is $550,000.

39 The antecedent criminal history is relevant and its application has been considered in Veen v The Queen (1987) 164 CLR 465 where the majority held (at 477): There are two subsidiary principles which should be mentioned. The first is that the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v Ottewell [1970] AC 642 at 650. The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalties. 40 This principle was adopted by Hill J in Workcover Authority of NSW (Inspector Piggott) v Capral Aluminium Ltd (1998) 83 IR 211 who reasoned (at 222-223): In Hutchins and in Boney , the Court of Criminal Appeal dealt with the relevance to sentencing of the commission by the defendant of subsequent offences. In Boney, Grove J (with whom Mahoney JA and Newman J agreed) said (at pp4-5): "The approach to be taken to such interim conduct between an offence for which a person stands for punishment and its time of commission has been the subject of authoritative approach from long ago. In R v Withers (1789) 3 TR 428 Kenyon LCJ said: 'It is well settled that the conduct of a defendant subsequent to the time when he is found guilty, may be taken into consideration, either by way of aggravating or mitigating the punishment. In general it is done for his benefit, in order to extenuate the offence; but it is also done, if required, to aggravate. Though in such case the court will always take care not to inflict a greater punishment than the principle offence shall warrant.' The same approach was manifested in this court in R v Hutchins where Street CJ said: 'I think it is clear that in sentencing the applicant in June, 1957, for a crime committed in September, 1954, his honour was entitled to take into account as matters for his consideration the convictions which the applicant incurred between those two dates, and he was entitled to take them into account for the purpose of considering whether he would reduce what he would otherwise have regarded as the proper sentence because some leniency should be extended to the applicant in the light of his youth.' His Honour went on to describe the circumstances in which the claim to leniency may be forfeited by reason of interim offences It is clear, however, as I understand the authorities, that the existence of such offences cannot be used in order to increase the punishment for the principle offence." 41 I have regard to the foregoing principles in the context that it is the duty of an employer under the Act to take all such steps as are practicable to ensure the safety of employees and other persons at its places of work, and in the application of those principles, it is relevant that on another occasion since this offence, the defendant again failed in maintenance of its machinery and in training its employees. 42 In the circumstances, I adopt the words of the Chief Industrial Magistrate Hart in his 20 December 2006 decision, where he said of the defendant corporation and its reputation at [23]: This defendant is not only a good industrial citizen but is in fact an excellent one with world leading systems in place that have been developed to maximise the safety of the defendant's employees at the workplace. In addition the defendant is a good corporate citizen in the more general sense in that it provides substantial and generous assistance to a number of important charities in Australia and has provided leadership and assistance to industry generally in the field of occupational health and safety. 43 I accept the defendant had a well-established safe working system in place before this incident. I accept it was a safety conscious employer who gave safety a priority. However, in a reading of the offence, a number of elements to the breach are exposed. The risk assessment of tasks was not definitive; maintenance of essential safety features in their operation were neglected (in this case a flashback arrester) and employees needed rigorous retraining. The failure to have no supervisors present to oversee weekend work is also a matter of concern especially where the company's own checking system required such a person to approve procedures. While it is not relevant to the consideration, it is curious that the corporate defendant would allow an employee, even a fine and reliable one with 17 years experience, to have the authority to determine whether or not production of the corporation's product should cease. 44 I accept the defendant took significant steps to avoid any future incident of the same nature by way of amendment to its production procedures. The prosecution agrees the defendant corporation made 14 changes to its procedures. These changes were (i) A Hazard and Operability Study (HAZOP Study) was undertaken by the Defendant of the Acetylene Generator, condenser and ammonia scrubber to identify design and operational changes required to ensure the safe operation of this part of the Acetylene operations; (ii) The Acetylene Generator was not restarted until the 27 August 2004 when suitable key operational controls arising from the HAZOP Study of the acetylene Generator were implemented; (iii) A HAZOP Study and Risk Assessment was undertaken by the Defendant of the Compressor, Drier and cylinder filling operations; (iv) The Defendant amended its procedures to ensure that acetylene Generator operators were supervised during the start up and shut down of the acetylene generator so as to double check that the acetylene Generator was started up and shut down in accordance with the relevant procedures. If there is no team leader or supervisor available, the acetylene generator will not be allowed to run. If overtime is required in the acetylene generator on weekends there must always be a team leader or supervisor to oversee the operation of the acetylene generator. A DA Plant team leader must be present during a shutdown to physically check that the Acetylene Generator is shutdown in accordance with the Acetylene Generator check sheet; (v) The Defendant amended the Acetylene Generator shutdown check sheet to include the shutting of valve 1729 located between the Acetylene Generator and ammonia scrubber as part of the shutdown and significantly modifies the check sheet so as to refer to the relevant valve numbers; (vi) The Defendant arranged inspection of the flashback arrestors and check valves at both the Premises and other Premises which operated Rexarc Acetylene Generators and replaced the check valve assemblies where required; (vii) The Defendant introduced a yearly maintenance schedule for the Acetylene Generator flash back arrestors; (viii) The Defendant installed signage to restrict the entry to the Acetylene Generator room to BOC management, maintenance and trained personnel; (ix) A log book for DA operations was established in or around 2 September 2004, that records day to day operational matters, particularly matters relating to the Acetylene Generator; (x) Acetylene generator team leaders received additional training in the operation of the Acetylene Generator; (xi) A role Profile for the Team Leaders at the Premises was developed outlining safety as the first key accountability of the role and outlining the safety expectations for team leaders; (xii) The safety relief valves for the Acetylene Generator and the flash back arrestors were reset to 105 kPa gauge and an automatic valve was installed to the water supply of the ammonia scrubber to prevent the ammonia scrubber from flooding; (xiii) The dry leg of the ammonia scrubber water level control system was modified to prevent the control system from unnecessarily shutting the ammonia scrubber water outlet valve; and (xiv) The Defendant launched a program entitled 'The Global DA Audit and Training Program' which is a three-day program being conducted at each facility where the Defendant operates acetylene plant, globally. This program has auditing, reviewing, and training aspects. 45 I accept the defendant has shown contrition and remorse and that was well demonstrated by the representation before me from five senior management officers. The defendant tendered in its defence 17 volumes of material as to its production procedures and the associated safety features. I accept there has been a revised corporate awareness of safe working arising from this serious breach of the Act. 46 The defendant presents no financial evidence to persuade that it should be given any financial relief. However, the defendant makes a considerable contribution through its enterprises to employment in New South Wales. 47 Taking into account the subjective features of the offence but giving weight to the objective seriousness of the offence, I find the defendant guilty. 48 The defendant is to be fined in the sum of $140,000.00 49 The defendant shall pay the prosecutor's costs as agreed or assessed with leave to approach.

Orders 50 The court makes the following orders: 1. I find the defendant guilty of the offence as charged. 2. The defendant is fined in the sum of $140,000.00 with a moiety to WorkCover Authority of New South Wales. 3. There has been no agreement between the parties as to the quantification of the costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice.

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