Inspector Piggott v CSR Emoleum Services Pty Ltd.

LEGAL REPRESENTATIVES: DEFENDANT Mr J N Gleeson QC with Mr Shume of counsel SOLICITORS Moray & Agnew

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

25 May 2004 Matter No. IRC 1711 of 2001 Inspector Alwyn Piggott v CSR Emoleum Services Pty Ltd. Prosecution under s 16(1) of Occupational Health and Safety Act 1983 JUDGMENT [2004] NSWIRComm 129

1 On 4 September 2003, the defendant was found to be in breach of s 16(1) of the Occupational Health and Safety Act 1983 in relation to an accident which took place at a batching plant in Unwin Street Rosehill. The facts and circumstances are set out in detail in that judgment (Inspector Piggott v CSR Emoleum Services Pty Ltd [2003] NSWIRComm 282). This judgment deals with the evidence and submissions on penalty.

2 The charge under s 16(1) of the Act was particularised as follows: (a) the defendant at all material times provided its employees for the operation of the CSR Emoleum Services plant at Rosehill; (b) the defendant failed to provide or maintain systems of work, to wit, systems in the operation of conveyors to ensure the health and safety of persons not in its employment at its place of work; (c) the defendant failed to ensure the health and safety of persons not in its employment at its place of work; (d) the defendant failed to ensure that the dangerous moving parts of the conveyors were securely guarded; (e) the defendant failed to provide such supervision as may be necessary of persons not in its employment to ensure the health and safety of persons working upon the conveyor system; (f) the defendant failed to ensure that the conveyors of the said plant were isolated when covers had been removed from the conveyors; (g) as a result of the said failures, Mr Glen Nolan was placed at risk of injury and sustained fatal injuries.

3 A significant debate arose in the proceedings on liability which concerned the entities who had formed a bituminous road surfacing partnership and how that partnership was able to work through CSR Emoleum Services Pty Ltd, the defendant in these proceedings. It is not necessary to revisit that debate for present purposes. However, it is important to record that a location at which the partnership operated in March 1999 was a batching plant at Unwin Street Rosehill. The partnership had agreed to carry on the business under the registered business names of CSR Emoleum or CSR Emoleum Road Services, and in 1999 CSR Emoleum Road Services (the partnership business) contracted with JCS Engineering Fabrications Pty Ltd (JCS) for the upgrade of the batching plant at Rosehill.

4 The upgrade of the batching plant involved the construction of conveyors by which bituminous material or "product" could be moved and transferred to delivery trucks. The conveyor system had on occasions become blocked by hot asphalt requiring the conveyors to be cleared, initially using shovels until sufficient product had been removed, then having the conveyor started and moved backwards and forwards to assist in clearing the conveyor. Access to the area blocked by the product in the conveyor was obtained by removing a large metal cover.

5 A company related to the defendant, CSR Emoleum Road Services Pty Ltd, had contracted with JCS to install and commission the asphalt production plant including the conveyor. To perform this work, JCS employed a number of persons including Mr Larry How, a director; Mr Geoff Hillier, a project manager; Mr Gareth Davy as a site manager, and Mr Rowan Clarke and Mr Alex Jedra as boilermakers. JCS also used the services of a labour hire company, Advantage Personnel Pty Ltd, to supply employees, including Mr Nolan a trades assistant, as well as two electricians. Mr Nolan was required by JCS to undertake work associated with the installation and commissioning of the asphalt production plant.

6 The defendant employed a number of people at the batching plant including Mr Kevin Johnson as a project manager. Mr Johnson was responsible for managing the contract between CSR Emoleum Road Services and JCS in relation to the installation and commissioning of the asphalt production plant. Mr Johnson was authorised to control the works undertaken by JCS and ensure its compliance with occupational health and safety requirements at the plant. The defendant also employed Mr Morrison as the environmental health and safety manager.

7 On the day of the accident Mr Nolan was assisting Mr Clarke and Mr Jedra in clearing a blockage on the conveyor. Mr Davy was assisting with the electrical works. Mr Johnson was also present and was communicating with the control room using a mobile phone to indicate when it was desired to have the conveyor activated in order to finally clear the blockage. The work procedure was that Mr Clarke would inform Mr Johnson when the time had arrived for the conveyor to be operated to see if the blockage could be cleared. Mr Johnson would use a mobile phone to inform Mr How in or near the control room that the conveyor was to be put into operation; Mr How would inform Mr DeBoick to activate the conveyor and Mr How would also tell Mr Johnson by way of mobile phone when the conveyor was ready to operate. When Mr Johnson was told that the conveyor was ready to operate, he would call all persons at the conveyor to stand clear; the isolation switch on the conveyor would then be turned on; Mr Johnson would confirm that the position was all clear on the conveyor and inform Mr How that this was so. Mr How would then relay that position to Mr Day who was operating the computer console which governed the functioning of the conveyor.

8 At the site of the blockage, the work procedure involved the turning of an isolation switch to the "off" position; the removal of the appropriate cover on the conveyor in order to gain access to the internal works and to clear the blockage; to then manually clear the blockage so far as possible by shovel and, when sufficient material had been moved, to have the control room activate the conveyor backwards and forwards to finally clear the blockage. Power would be returned through the isolation switch for this purpose.

9 There were in fact two blockages of the conveyors to be cleared, occurring at or near a junction in the conveyor system. The conveyor referred to as "H1" was cleared first by having the power source isolated, removing a cover measuring 730 mm in length and 630 mm in width, thus exposing the internal parts of the conveyor. Mr Nolan, together with Mr Clarke and Mr Jedra then shovelled asphalt from the exposed portion of H1 and the conveyor was activated from time to time until it was finally cleared. Work then commenced on the conveyor referred to as "T1", but on this occasion the manual clearing was performed by Mr Clarke and Mr Jedra as there was insufficient room for Mr Nolan to assist. Mr Nolan stayed in the area. During the activation of conveyor T1 as part of the clearing process, Mr Nolan was apparently sitting on top of the conveyor H1 observing the work. Conveyor H1 was unexpectedly activated in circumstances where, although the blockage of H1 had been cleared, the large cover had not been replaced. Mr Nolan was drawn into the conveyor and fatally injured.

10 As noted earlier, Mr Johnson was employed by the defendant and was responsible for managing the contract between CSR Emoleum Road Services and JCS in relation to the installation and commissioning of the asphalt production plant. He was authorised to control works undertaken by JCS and its workers including Mr Nolan, and ensure compliance with occupational health and safety requirements at the plant. Indeed, the requirements for contractors at the batching plant site were contractually binding: those requirements were written by Mr Johnson and Mr Morrison, both employees of the defendant. A document entitled "The requirements for contractors and contract labour working on the premises of CSR Emoleum Road Services" provided, amongst other things, as follows: CSRE has the responsibility for the safety of all who enter CSRE premises … … CSRE undertakes to provide all contractors with a site induction programme and additional site safety and environmental information, prior to a contract commencing work on CSR premises … There was also a document known as the Site Rules for contractors and contract labour working on the site. This document referred to Mr Johnson as the CSRE nominated representative and appointed contact on all safety and environmental matters.

11 Mr Johnson gave evidence as to the nature of his duties as the defendant's project manager. He said that the contract with JCS referred to CSR Emoleum contractual requirements and cited specific rules: there was a CSR Emoleum health, safety and environment system which included the environmental health and safety workbook and occupational health and safety management training. The defendant monitored contractor compliance with these provisions by observing what was done through informal audits. It was part of the requirements of the contractor to identify and notify any incidents or potential incidents. The system was to be reviewed and amended as appropriate. Contractor personnel were encouraged as part of the induction process to notify Mr Johnson of any concern they might have in relation to occupational health and safety.

12 Mr Johnson's attention was drawn to the document entitled "The requirements for contractors and contracting labour working on the premises CSR Emoleum Road Services", which was in the following terms: CSRE has the responsibility for the safety of all who enter CSRE premises. CSRE also has the responsibility for the environmental peace of all site activity. Therefore contractors are required to allow authorised CSRE employees to inspect, intervene or provide instructions regarding contractor site activities where necessary, where occupational health and safety or environmental issues are involved. These employees may also conduct random inspections to ensure contractor compliance with all relevant occupational health and safety and environment legislation, codes of practice and standards (both for CSRE and external standards). On all such occasions, the contractor will agree to comply with the authorised CSRE employee directive. Failure to do so could result in the direction to stop work or the termination of the contract. In relation to this requirement, Mr Johnson said the responsibility for the safety of those entering CSR Emoleum premises extended to Mr Nolan. He also accepted that his occupational health and safety responsibilities extended to ensure that contractors complied with the document entitled "WI-037A isolation of equipment (lock out/danger tag)". Mr Johnson said that during the contract he had exercised the rights to inspect, intervene or provide instructions regarding contractor activities in the course of the asphalt plant installation. Prior to the accident in early March 1999, he had done so in relation to incidents that were reported to him and he accepted that at the time of the accident he had the authority to intervene with regard to occupational health and safety issues. Under the Site Rules, Mr Johnson was the CSRE nominated representative and he said that in this role he managed the contract and he had responsibility to ensure that contractors met their obligations. He confirmed that the Site Rules for contractors and contract labour working on the site had been developed by himself and Mr Morrison. That document was also used by Mr Johnson as part of the induction of employees at the site. Mr Johnson conducted the majority of induction training, although Mr Morrison did some of that training. During induction, Mr Johnson took employees through the safety booklet and referred to the policy document dealing with the lock out system and danger/out of service tag system. The isolation of equipment document (WI-037A) was contained in an instruction sheet. The document entitled "Requirements for contractors and contract labour working on the premises at CSR Emoleum Road Services" was developed by Mr Johnson and Mr Morrison with the assistance of others. It had been produced for sub-contractors working at the Rosehill site and the document was given to people working on the project including civil contractors.

13 Mr Morrison confirmed that there were systems in place at the time of the accident to ensure contractors conformed to occupational health and safety requirements. There were a number of systems or controlling factors in operation: there was the contract for the works; CSR Emoleum contractor documents, being a requirement for contractors and contract labour working on the premises of CSR Emoleum Road Services; safety and quality plans; and, the acknowledgement by contractors to follow these requirements. In this case, that acknowledgement was contained in a facsimile signed by Mr Hillier and sent to CSR Emoleum Services before the accident. Mr Morrison said that the defendant monitored how contractors complied with these documents by the use of the management system which incorporated a CSRE nominated representative who liaised with the contractor. Mr Morrison also accepted that the defendant had exercised the right to inspect, intervene and provide instructions regarding contractor activities in the course of the installation of the plant prior to the accident in early March 1999. Mr Morrison had been involved in a number of inspections of the plant accompanying Mr Johnson and on these occasions he would act as an adviser on issues and was requested sometimes to give advice on specific issues. During such inspections, he identified occupational health and safety issues which required corrective action, and he gave examples of dealing with the isolation, guarding and fencing of the recycled asphalt conveyor, signage and consultation over environmental issues. Employees were instructed and counselled on the requirements for wearing the right personal protective equipment and people were instructed to clean up and maintain work areas in a manner which reduced trip hazards. 14 Mr Morrison also stated that Mr Johnson reported to the company on outstanding works, which included reports on continuing occupational health and safety compliance by the contractors and issues involving the safe operation of the plant. Mr Johnson had received reports from Mr Davy and Mr How of JCS on issues of occupational health and safety continuing compliance. In written responses to questions raised by the WorkCover inspector, Mr Morrison said that part of the defendant's ongoing assessment of the capacity of contractors led to the defendant providing, after induction, instruction in relation to safe working practices, particularly dealing with tagging and lock out procedures.

15 Mr Morrison said that the JCS site supervisor, Mr Davy, was responsible for day to day management and supervised the reporting and implementation of work safety on the site. Mr Davy's role as site supervisor was consistent with representations made by JCS during the tendering negotiations that he would supervise, delegate and be responsible for qualified personnel and the work safety inspectors in the JCS project team. Mr Davy had received safety induction training and reported to Mr Johnson if there were accidents involving an assessed occupational health and safety risk.

16 As a result of the previous hearing the following findings were made: (a) on 5 March 1999, at the Rosehill plant, the defendant's undertaking included the provision of the service of managing the contract between CSR Emoleum Road Services and JCS, the control of the works performed by JCS and overall conduct and responsibility for occupational health and safety at the site. (b) the Site Rules and rules for contractors working at the Rosehill plant, as well as induction training for contractors, were produced by Mr Johnson and Mr Morrison: they also conducted induction training for contractors and their employees; (c) the contract with JCS required it to comply with "CSR Emoleum Rosehill occupational health and safety rules", being substantially the rules and practices drawn up by Mr Johnson and Mr Morrison; (d) Mr Davy and Mr How of JCS reported to Mr Johnson, as the nominated representative of the partnership on the site, on issues of occupational health and safety and continuing safety compliance; (e) Mr Johnson managed the contract on behalf of CSRE at the Rosehill upgrade and in that position co-ordinated the contract programme of all people on the project: he monitored contractor compliance with the occupational health and safety rules and reviewed and amended those rules as appropriate. Further, he exercised the right under the Site Rules to inspect, intervene and provide instructions regarding contractor activity. (f) The system of isolation of the conveyor being worked on, the direction for people to stand back and the giving of an all clear before returning power to the conveyor was part of the system, but the method of work on the day in question also involved leaving the cover off conveyor H1 into which Mr Nolan was drawn. It was not to the point that the top of the conveyor had to be opened to clear the blockage, what was relevant to this system of work was that when conveyor H1 was cleared and put back into operation, it was not safe and obviously not safe to continue work with the cover left off that conveyor. Once conveyor H1 was cleared, it was operational. (g) Mr Nolan was sitting on top of conveyor H1 near the opening while work was undertaken on conveyor T1 and had apparently been in that position for a significant period of time. Mr Johnson appeared to have been unaware of Mr Nolan's presence although Mr Nolan had been directly involved in the clearance of conveyor H1. A system of clearance where, in a confined work area, a person intimately involved in the clearance process, such as Mr Johnson, was not aware of the presence of other persons in the work area nor their proximity to open and operational conveyors, was clearly an inadequate and unsafe system; (h) the system was even more unsafe if Mr Johnson had observed Mr Nolan sitting on top of conveyor H1 just in front of the opening of that conveyor. The failure of any other person present to recognise and draw attention to Mr Nolan's position as being potentially dangerous was indicative of the fundamental flaw in the system of work in operation; (i) there was no written method for clearing the conveyor, although this was not an infrequent difficulty and there were otherwise written instructions to the workforce directing their attention to appropriate and safe methods of work. Mr Johnson gave no consideration to replacing the cover on conveyor H1 and took no steps to ensure that the cover was replaced before work commenced on conveyor T1; (j) the system also failed to include an effective head count of those involved in the clearance work and rendered useless the step of shouting "all clear" before a conveyor was returned to operation; (k) the failure of the system was emphasised by the evidence of Mr Jedra, who had "no idea" where Mr Nolan was placed and had no idea who was isolating the conveyors; (l) the procedure used on the day was not in accordance with the isolation and tagging requirements which applied to all employees and contractors on the site. It was part of Mr Johnson's responsibility to ensure compliance with these instructions; (m) Mr Johnson was able to observe, even in the absence of tagging, whether the conveyor was in the "on" or "off" isolation position while working on the conveyors. The system did not appear to require him, especially in the absence of tagging, to check that the isolators were in the "off" position when people were working in and around the conveyor; (n) Mr How and Mr Johnson agreed that there should be an electrician present to isolate the conveyor. The system did not include checking with the electrician or nominating a person who would ensure the conveyors were isolated. If the task was shared, as the evidence suggested, then tagging was a means of ensuring that the isolation was performed and that the people involved could see the tags and so be satisfied the isolation task had been performed; (o) there was confusion as to whether the electrician, Mr Nolan or Mr Clarke was operating the isolator and, in fact, Mr Clarke thought that Mr Jedra had been involved in this task but Mr Jedra denied being so involved; (p) Mr Jedra said that the last thing done was to turn on conveyor H1 to see if it had been cleared and it was likely that when the conveyor was cleared it was not isolated again at the conveyor motor; (q) the evidence demonstrated that the so called system of isolation "was in a shambles". The written system laid down for isolation and tagging was replaced by ad hoc arrangements; (r) when Mr Johnson involved himself in assisting in the task of unblocking the conveyors he was, by his very position, supervising an operation and it was quite natural for those working at the conveyors to look to him for advice and directions. Mr Johnson, on his own evidence, had become involved in the clearing work because of what he regarded as an inadequate system of communication between the conveyor and the control room in what was obviously a dangerous task; (s) a number of those working on this blockage task, including Mr Jedra and Mr How, formed the view that Mr Johnson was in charge of the clearing operation. Mr Johnson did not provide appropriate or effective supervision although that was his role.

17 For the prosecutor, it was pointed out that the maximum penalty applicable in this case was $550,000 with the defendant having no previous record. In fixing an appropriate penalty, it was submitted that an objective feature in this case was the need for general deterrence, as this was one of the main purposes of punishment. Specific deterrence also assumed significance in this case. This was not a case where the Court would not consider specific deterrence a factor: the defendant conducted a large enterprise as part of a partnership agreement, where the joint venture was established to carry on the business of bituminous road surfacing in all Australian states and territories. At the Rosehill site, the defendant functioned as the employer for the joint venture and at the relevant time employed in excess of 150 employees.

18 The causative factors which resulted in the risk or detriment to safety included a failure to ensure the cover was replaced and secured; a failure to check Mr Nolan's whereabouts at the time of the incident; and a failure to ensure that the H1 conveyor was isolated from its power source while the T1 conveyor was being cleared. The risk of injury was both obvious and reasonably foreseeable. Attention was drawn to the judgment of the President Wright J in dealing with the co-offenders JCS and Advantage Personnel Pty Ltd ( Piggott v Advantage Personnel Pty Ltd and JCS Engineering Fabrications Pty Ltd (Administrator appointed) (unreported, 31 December 2003), especially at paragraph [74]: I accept the submissions of the prosecutor that the risk to safety posed by having persons in close proximity to unguarded and inadequately supervised machinery, without having first isolated that machinery from its power supply, was clearly foreseeable. This will necessarily result in the offence being viewed as more serious: Capral Aluminium at [82] and Ferguson v Nelmac Pty Ltd (1999) IR 188 at 209-210. I am satisfied that these were serious offences committed by both defendants.

19 The prosecutor further submitted that another factor demonstrating the seriousness of the defendant's offence were the simple and straightforward steps which could have been implemented thereby avoiding the risk of injury. Here, the simple step of replacing the conveyor cover was all that was necessary. The system of isolation and tagging although documented was found in practice to be a "shambles". The written instructions had been replaced by ad hoc arrangements.

20 The fatality in this case manifested the seriousness of the breach. It was pointed out that the Full Court re-affirmed this principle in overturning the sentence imposed at first instance in Inspector Buggy v Weathertex Pty Ltd [2003] NSWIRComm 273 (paragraph [62]): His Honour erred by attaching no significance to the fatality arising from the accident. This was relevant to considering the seriousness of the risk occasioned by the respondent. See for example Wong v Melinda Ltd (1998) 82 IR 118 at 131, WorkCover Authority (NSW) (Inspector Kelsey) v University of Sydney (unreported) Matter CT 1280 of 1995, 2 April 1997 at 10), Capral at 650 and WorkCover Authority of New South Wales (Inspector Peter Ankucic v McDonalds Australia Ltd and anor (2000) 95 IR 383 at 428-429. We consider that the fatality in this case was indicative of risk to safety relevant to the assessment of the gravity of the offence.

21 It was pointed out that, in dealing with the two co-offenders, JCS and Advantage, where pleas of guilty had been entered by both co-offenders, the President had emphasised that each offence in relation to each offender must be separately assessed. On his Honour's assessment, the respective culpabilities of JCS and Advantage were seen as "approximately or broadly equal" and that should be the starting point for the assessment of penalty. The President had imposed a penalty of $100,000 against JCS and a penalty of $140,000 against Advantage. These amounts had been imposed after the his Honour had taken into account subjective features relevant to each co-offender leading his Honour to apply a discount of 25 per cent for JCS and 33.3 per cent for Advantage. This differential in penalty was explained as a reflection of the minimal effect of specific deterrence and the impecuniosity of JCS as well as recognising the potential effect that any penalty may have on the remaining members of the JCS workforce. The prosecutor submitted that the reasoning of Wright J that the respective culpabilities of the co-offenders was broadly equal, applied to the present defendant. His Honour's comment, that each could be seen as entirely responsible for the offence, had each complied with the obligations imposed upon it by the Act in the factual circumstances that gave rise to the risk then the accident may never have occurred, applied to the present defendant.

22 It was also pointed out by the prosecutor that the subjective features that led to a substantial discount in the case of JCS and Advantage were not present to the same extent in relation to the present defendant.

23 For the defendant, two affidavits were read in relation to issues relevant to an appropriate penalty. Mr Borden was the company secretary of the defendant and held the position of Chief Financial Officer with the Emoleum partnership. He was secretary to the Emoleum partnership management committee in relation to the Emoleum business. In March 2003, CSR Limited underwent a demerger and as part of this process the business then known as CSR Emoleum Road Services (which had previously been a partnership between CSR Limited and Vacuum Oil Limited) became a partnership between Vacuum Road Services Pty Ltd and Readymix Roads Group Pty Ltd. The ultimate shareholder of the defendant changed from CSR Limited to Rinker Group Limited.

24 Mr Borden stated that the management committee of the Emoleum partnership actively reviewed safety and safety policies of the Emoleum business: it then took appropriate action in respect of those proposed policies, including acceptance, rejection or referral for further investigation. There was a safety sub-committee which reported to the Emoleum management committee. The Emoleum management committee generally considered safety as the first issue on its agenda. Mr Borden referred to co-operation with the WorkCover investigation and stated that the defendant deeply regretted the incident that had occurred.

25 Mr Greene provided evidence by way of affidavit in which he deposed to being employed by the defendant, which was now known as Readymix Emoleum Services Pty Ltd. He held the position of National Manager - Safety for the Emoleum Partnership previously known as CSR Emoleum Road Services or "CSR Emoleum".

26 Mr Greene, in his capacity as National Safety Manager for Emoleum was responsible for creating policies and procedures and coaching individual safety managers at each site. Each individual business unit had a safety co-ordinator who reported to the business unit manager for that area. He reported directly to the CEO of Emoleum, Mr Frost. He was a member of the Safety Committee Health and Environment Sub-Committee of the Emoleum partnership committee.

27 Mr Greene stated that safety was a particularly prominent issue within the Emoleum business: it was the first issue in the partnership committee meetings and was the first item in business unit management meetings. Part of his role as national safety manager was to drive a cultural change within the Emoleum business, to make safety the number one issue at an operations level for all business units. The Emoleum Health and Environment Sub-Committee Meeting was held the day before the Emoleum partnership committee meeting. These meetings were held approximately every six weeks and the sub-committee reported to the partnership committee.

28 In mid-November 2003, Mr Greene commenced an extensive review of the safety management systems used by Emoleum. This review was completed around 5 July 2004 and resulted in the complete re-drafting of the occupational health and safety management system. The system had now been designed to incorporate 13 elements to assist in clarity and understanding of safety management systems. This new system was being rolled out across Emoleum sites Australia wide and was expected to be completed within the following two to three weeks. The system was available in three separate formats: an electronic version accessible on the Emoleum internet; on CD; or in hard copy.

29 The development process in relation to this safety management system involved a four day seminar convened by Mr Greene and attended by Emoleum safety co-ordinators to introduce them to the new system and also to facilitate feed back in developing the system. At this meeting, almost every document in the safety management system received some comment and amendment. The transition to the new safety management system was being managed by individually training all persons who would need to have access to the system so that they could fully understand how the system operated and how to obtain information from that system. It was envisaged that some of the road crews operated by Emoleum would be provided with either a laptop or a CD version of the safety management system or they could be provided with a hard copy depending upon their requirements and remoteness. Further, the system had been designed to be a comprehensive safety management system which could be utilised on a number of levels involving front line operational employees, acting as a check list to supervisors, an aid to managers in providing an explanation to staff and supervisors and being in a mode that was auditable both internally and externally.

30 Because Emoleum operated across Australia, the safety management system incorporated reference to every statutory instrument or guideline affecting health, safety and welfare in every Australian jurisdiction. As a consequence, Emoleum systems had been designed to comply, at a minimum, with the higher statutory obligations existing in Australia. Mr Greene noted that his role involved the creation and maintenance of the safety management system: therefore, ultimate responsibility for safety of individual workers was given to the operations manager at each individual site. Mr Greene expressed the view that the key to ultimately reducing workplace injuries and illnesses lay within a combination of three areas: (a) plant, engineering out hazards such as guarding; (b) procedures, such as the new safety management system; (c) people, improving employees' perception with respect to both hazard awareness and the consequences of under estimating hazards, regardless of employees' levels within the organisation.

31 Emoleum was making exceptional progress with the plant and procedural aspects of the safety process. The current area of focus was to improve employees' safety perceptions, and to this end the company was currently implementing the Zero Incident Process which focused entirely on cultural aspects of safety. The projected budget for this was $1.5m over the next three years, with more than $250,000 having been spent in the preceding years.

32 To ensure compliance with the safety management system at all Emoleum sites, it was proposed that audits would occur regularly. The programme called for one plant audit per year per depot, one system audit per year per depot and each road crew in Australia to be subjected to two audits per year.

33 In relation to safety systems concerning blockages in conveyors, the electrical boards at the Rosehill Emoleum plant had been redesigned to ensure that they could be locked out and isolated at the power source. This was being progressively carried out at all Emoleum plants nationally. Should a blockage occur in a conveyor today it would be dealt with by use of the standard written procedure, the R 099 Emoleum lock out compliance kit. Under this procedure, every person required to access the machinery placed their own personal lock out tag on the power source. This lock out tag could not be removed by any person except the person who attached it. The compliance kit, which was in evidence, was a comprehensive document.

34 In submissions for the defendant, the evidence in relation to the manner in which the partnership operated and the role of the defendant was re-visited by references to evidence and findings recorded in the earlier judgment. It was accepted on behalf of the defendant that the corporate entity came into being in 1996 as a result of the creation of the joint venture and that the defendant was the vehicle for the partnership which entered into the agreement with JCS regarding the batching plant at Rosehill.

35 It was submitted that, although the system of safety was found to be defective nevertheless, there was prior to the accident on 5 March 1999, a significant system. There was a CSRE Health, Safety and Environment system which included the environmental health and safety workbook and the occupational health and safety management training. The defendant monitored contractor compliance with these provisions by observing what was done through informal audits. Mr Johnson as project manager, was the defendant's person responsible for ensuring contractor compliance with occupational health and safety requirements. Mr Johnson and Mr Morrison had developed the Site Rules for contractors and contract labour. The Site Rules were used as part of the induction of employees, and employers were also given a personal safety handbook. It was of significance that the personal safety handbook laid down a number of rules and practices for safe working and dealt with conveyors, stating that "all conveyors must be stopped, isolated and locked out …". The requirements for contractors and contract labour had been developed by Mr Johnson and others and had been produced for sub-contractors working at the site. There was a contractor induction check list operative from at least December 1996 and a safety management programme, confirmed by Mr Morrison who was the environmental health and safety manager.

36 In the present case, there were also important roles performed by others. Mr Hillier was the proposals engineer for JCS and had organised the crew to unblock the conveyor. He had satisfied himself of the method of operation and accepted that he was in charge of the crew and therefore responsible for their safety. Mr Johnson's role was regarded as a site wide role. Mr Davidson was employed by Advantage Personnel and had been given instructions and induction training to the site. Everyone on the site had been issued with safety instructions and had been taken through them by Mr Johnson. Mr DeBoick was employed by Advantage Personnel as an electrician and Mr Johnson had conducted his site training. On 5 March 1999, there was a conversation in relation to the blockage to be cleared and a work method adopted.

37 As was clear from the evidence, Mr Johnson acted as the superintendent's representative on site and he was an employee of the defendant. On the evening of the accident, Mr Johnson was in the process of leaving the premises when he noticed activity being carried out by JCS which he viewed as being inadequate, namely, the communication process between the conveyors and the control room. He took steps to correct the problem which led him to be situated on top of the silo at the conveyors when the accident occurred.

38 In assessing the nature and quality of the risk which was exposed by this accident, it was submitted that the Court was required to look at the actual offence committed by the defendant. This offence fell into the lower end of the medium range category of seriousness of offences for the following reasons: (a) the basic cause of the tragedy was the failure to replace the cover on H1 conveyor prior to attempting to clear the next conveyor; (b) had this been done, it was obvious that other failures alleged, such as isolation, supervision and lack of tagging would have had no effect; (c) Mr Hillier of JCS had organised the crew to go onto the silo and clear the conveyors and put the plant back into production; (d) Mr Hillier accepted that he was in charge of the crew and that Mr Johnson's role was site wide; (e) the defendant, through Mr Johnson, was involved at the relevant time in the communication of instructions, not in the actual clearing of the blockage. Whilst he had the power to stop the works his training and experience in the absence of the instruction manual for the plant limited his ability to make any decision as to the proper method for clearing the blockage. He became involved because of what he regarded as an inadequate system of communication being used at the time; (f) Mr Johnson did not identify the actual risk; (g) there was no intention to start conveyor H1; (h) Mr Johnson did not know of the presence or position of Mr Nolan; (i) there were written instructions to the workforce directing their attention to appropriate and safe methods of work, but none for clearing conveyors no doubt because the blockages were matters for JCS who was to commission the plant and needed to make it blockage free; (j) it was obvious that, if Mr Johnson had identified the risk, he would have done something to obviate it. JCS was in the best position to identify and obviate that risk; (k) the system being used involving the "all clear" call was safe if used on a single conveyor - it was the failure to cover conveyor H1 after it was cleared that made it unsafe; (l) the evidence disclosed the defendant was pro-active insofar as workplace safety was concerned.

39 It was submitted that the evidence before the Court demonstrated that the defendant had comprehensive safety systems in operation. Since the accident, all employees and contractors were provided with re-training in isolation and procedures. More recently, as demonstrated by the evidence of Mr Greene, the systems developed since the accident to ensure safety were more comprehensive and showed a continuing pro-active approach from the defendant.

40 It was then submitted that each defendant was to be sentenced according to the objective nature and seriousness of the offence committed by it - it was only then that parity would be considered. As a result of this incident a number of different defendants were charged: while each defendant must be considered in its own right, the penalty imposed upon this defendant should not be disproportionate between defendants. It was submitted that this defendant's degree of culpability was less than JCS or Advantage. JCS was the specialist contractor with a specialist knowledge of this plant and its design function. The labour hire company (Advantage) seemed to have delegated its obligation to JCS or the defendant: there was little evidence of any pro-active steps taken by it.

DELIBERATION 41 The first and primary consideration is the objective seriousness of the offence. Both the prosecutor and the defendant have drawn attention to the approach and conclusions of the President Wright J in relation to the labour hire company Advantage and the contractor JCS; both were found to have broadly the same culpability for the occurrence of the accident and the risk to safety exposed by it. It was the difference in a number of factors, particularly subjective factors, which led to a different penalty being imposed. It appeared to be common ground that the labour hire defendant Advantage was fined approximately $210,000 before a variety of subjective considerations were taken into account.

42 The prosecutor submits that there is at least the same level of culpability attaching to this defendant CSR Emoleum Services. The defendant submits that its culpability is well below that of the labour hire company Advantage. Advantage appeared to have done nothing but acquiesce in the systems imposed by CSR Emoleum Services and those adopted by JCS. Here, the defendant points to the fact that it had a detailed system under which all contractors and their employees were inducted before commencing work on the project. There was a specific lock out protocol which was not followed on this occasion by JCS and it was JCS that was in primary control of the activities on the day of the accident, having regard to the fact that the conveyor system had not yet been commissioned and handed over to the defendant. In those circumstances, it was submitted that it was difficult to attach any foreseeability to the defendant, rather than JCS. The defendant through Mr Johnson was there supervising the whole of the site but he, on behalf of the defendant, was not building the plant including the conveyors. That was the task for which JCS was contracted. Mr Johnson became involved because he observed an inadequate system of communication and took steps to rectify it, but the control of the un-blocking operation was in the hands of JCS.

43 In his judgment, the President at [63] stated that the nature and quality of an offence may often be reflected significantly in the steps taken by the defendant to meet the obligations imposed upon it by the Act and it was for that reason that the degree of foreseeability of a risk (the risk being the subject of the offence) is a factor of considerable significance in determining the appropriate penalty. At [74] his Honour said that it was clear from the procedure for performing the relevant maintenance work that steps had been taken to ensure safety at the workplace, although those steps proved to be inadequate. Insofar as the head contractor was concerned, it was not a case in which there was no step taken to provide a safe system of work but that the system was inadequate. His Honour accepted the prosecutor's submission that the risk to safety posed by having persons in close proximity to unguarded and inadequately supervised machinery without having first isolated the machine from its power supply was clearly foreseeable. That finding necessarily resulted in the offence being viewed as more serious. At [80] his Honour said that each of the defendants could be seen as entirely responsible for the offence: had each complied with the obligations imposed upon it by the Act the factual circumstances that gave rise to the risk may never have occurred.

44 The observations and findings of the President appear to be consistent with the findings made in relation to the contested proceedings involving the defendant CSR Emoleum Services. I am, however, unable to accept the earnest submission urged by senior counsel for the defendant as to the extent of the defendant's culpability. I am unable to see how this defendant is any less culpable than the labour hire firm, Advantage or the contractor JSC. It is clear from the findings made on liability that I regard as an important factor the degree of control reserved by the defendant to itself through contractual obligations on contractors and the degree of control actually exercised by the defendant. The defendant in these proceedings was not a "bit player" nor was it an inexperienced company in the operation of this plant relying upon the significant expertise of others who themselves had an apparently effective safe method of work. The rules and practices regarding occupational health and safety, and in particular the isolation procedures, were those laid down by the defendant through the joint activities of Mr Johnson and Mr Morrison. They were enforced by the defendant as contractual obligations on contractors who came on site. The defendant conducted induction training in those safety methods and the defendant through the superintendent's representative on site, retained the capacity to not only inspect work methods but to give directions to perform the work in another way and in ways which complied with the defendant's view of what were safe operating methods.

45 In my view, the defendant has a degree of culpability over and above that of JCS and Advantage. I am in no doubt that when Mr Johnson became directly involved in the unblocking process, having observed an ineffective method of communication between the people at the conveyor and those in the control room, those personally involved in this clearing task understood that Mr Johnson was exercising the defendant's contractual right to give such directions as necessary in relation to work methods. It does not advance the defendant's case that JCS was the expert builder of the conveyor and plant: the task being undertaken on this day was a simple unblocking of the conveyor by the manual removal of hot product until sufficient product was dislodged to permit the conveyor to be operated backwards and forwards and thus finally clear the blockage. This was a very simple task and one in which Mr Johnson had become intimately involved. Despite his involvement, the defendant's own requirements in relation to the isolation of the plant were not observed and, despite the system of standing back and calling "all clear" and sounding an alarm before the conveyor was operated, there was no system involving a head count to ensure that all workers were clear of the machinery nor was there even an awareness, if the evidence is to be believed, that Mr Nolan was sitting on the H1 conveyor near the opening from which the product was removed.

46 I agree with the observations made by the President that the risk to safety posed by having persons in close proximity to unguarded and inadequately supervised machinery without having first isolated that machinery from its power supply was clearly foreseeable. It may be added that, having completed the task of clearing the H1 conveyor so that it was now operational, it is quite inexplicable that the cover was not returned to that conveyor before work commenced on conveyor T1. Either of these two simple steps, that is, isolating the power or replacing the cover on the conveyor, would have been effective in preventing this accident. The failure to replace the cover on the conveyor in circumstances where the isolation method on the day was properly described as being "in a shambles" clearly identifies this risk as being foreseeable. The existence of this risk resulted in the death of Mr Nolan. That fact is a matter which indicates the seriousness of the offence. The foreseeability of the risk and its consequences confirms the seriousness of this breach.

47 Unlike the defendants before the President Wright J, the subjective factors which may be taken into account in relation to the defendant CSR Emoleum Services are more limited. I accept the submission of senior counsel that the defendant was entitled to test the prosecution case by pleading not guilty: it is not to be punished for having chosen that course.

48 The concepts of general deterrence and specific deterrence have a role to play in this matter. As has been pointed out in a number of cases, although general deterrence and specific deterrence have differing purposes or aims, the varying aims of deterrence are particularly relevant in occupational health and safety prosecutions in light of the objects and terms of the Act. In the present case, the defendant has a significant workforce in New South Wales as well as throughout Australia. It had a detailed system of safety at the time of the accident involving Mr Nolan but a system that was defective in the ways which have been already indicated. Evidence on sentence has emphasised the complete overhaul of the defendant's occupational health and safety rules and practices but, surprisingly, in relation to blockages caused by hot product there is still no specific direction as to the replacement of covers on conveyors after a clearing exercise has been completed. There is no direct instruction in relation to isolation of equipment when a blockage occurs. There is now a detailed isolation policy which has general application upon which the defendant places some emphasis. There was, of course, a system of isolation which was required to be observed at the time of the accident: if it had been observed, this accident involving Mr Nolan would not have occurred. In these circumstances, there is a significant role for specific deterrence in the assessment of an appropriate penalty.

49 In relation to subjective features, the defendant again stressed the fact that it had an extensive safety system in place and has since taken steps to totally review, on an ongoing basis, the safety rules applying at its places of work. It was pointed out that, immediately after this accident, the entire workforce was provided with retraining in isolation procedures, which involved not only employees but contractors and their employees. The defendant, which had been in existence since 1996, had no prior convictions. It was accepted by the prosecutor that there had been co-operation with the WorkCover Authority during the investigation of this accident. The defendant's contrition was evidenced by the affidavit material before the Court on sentencing. I accept that these matters are appropriate to be taken into account in reaching a final penalty and that has occurred in this matter.

50 The defendant then urged that the Court apply the principle of parity in light of the fact that a number of different defendants had been charged as a result of this incident. It was accepted that, while each defendant had to be considered in its own right, the penalty imposed upon this defendant should not be disproportionate between the defendants. Although the principle of parity may not be strictly applicable, similar considerations apply through considerations of proportionality and/or comparability. In these proceedings, I have found the defendant has a degree of culpability more than the defendants dealt with by Wright J but, nevertheless, that conclusion does not warrant a large margin in the penalty imposed. There will, however, be significant differences in the final penalty between the various defendants primarily because of the types of factors identified by his Honour. The largest and most obvious discount granted to the other defendants arose from their early plea, a consideration which the defendant accepted was not available to it. In all the circumstances, I impose a penalty of $220,000 on the defendant.

1. The defendant is found guilty of the offence particularised in Matter IRC No 1711 of 2001. 2. The defendant shall pay a penalty of $220,000 with moiety thereof to the prosecutor.

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