19 Prior to the vessel's arrival, the Ship's Agent and/or Cargo Superintendent develops the cargo stow plan and presents this to the vessel's Master for approval. Once this plan has been approved by the vessel's Master, the Agent or Cargo Superintendent provide this plan to the Stevedore indicating the stowage requirements. The stow plan identifies by Hold the number of bundles and size of pipes to be loaded. This plan is based on the known dimensions of the cargo and the dimensions of the Hold as per the ship's drawings. A member of the Ship's Crews witnesses the actual loading operation to ensure that the cargo is loaded to the vessel's requirements. For this particular operation, the Crane Gang were operating in three distinct areas of operation: yard, "under the hook" and vessel.
20 The yard operation consisted of a forklift collecting the bundled pipes from the yard position, as directed by the Team Leader, and delivering them "under the hook" on the wharf apron. At the wharf apron, the cargo was landed under the crane and slung and attached to the quay crane for delivery to the vessel.
21 To sling the load, Stevedores position cargo slings as directed by the Team Leader to lift the cargo onto the vessel.
22 In the Hold of the vessel, Stevedores supervise the positioning of the cargo as well as unslinging the load. Additionally the team operating in the Hold are required to place chocks and plywood.
23 The act of transferring the load "under the hook" to the vessel was under the direction of the Down Crane Driver, who was responsible for "dogging" the crane. "Dogging" refers to the process of controlling the movement of the crane to ensure the load is transferred in a safe manner. Once the load was transferred into the Hold, the Down Driver would ensure the gang in the Hold correctly positioned the cargo, properly secured it with the use of chocks and unslung the load.
24 At all times gang members are required to wear approved Personal Protective Equipment ("PPE"), that being high visibility clothing, steel capped boots, hard hats and gloves where appropriate.
25 The pipes were manufactured by Tyco Water Pty Ltd ("Tyco Water") who engaged a shipping agent, B R International Pty Ltd ("BRI"), who then approached Southern Cross Maritime Services (Australia) Pty Limited ("SCM"), to advise them on the stow plan and to supervise the loading process.
26 The defendant was engaged to load the bundles of pipes onto MV Achilles by SCM.
27 SCM provided a stow plan to the defendant and the Master of the vessel. SCM emphasised that the maximum number of pipes must be stowed under the deck of the vessel. Copies of the stow plan and instructions received from SCM dated 9 September 2003 were annexed to Mr Needham's affidavit. Variations to the stow plan were provided by the defendant to the vessel's Master.
28 Mr Needham stated that the defendant has since been made aware that Tyco Water prepared a document entitled "Check List to Discharge Tyco Water Pipes" at wharf and stow on vessel that included the following instructions:
(a) Lift Packs on bottom only.
(b) Packs are handled in horizontal position only.
(c) During Stow on Vessel use Plywood between Packs.
29 These instructions were not provided to the defendant.
30 Mr Needham stated that Mr Lovell was in charge of several employees in the Hold of the vessel whilst loading bundles of pipes. Some of the bundles of pipes consisted of six pipes (3 x 2) and others consisted of three pipes (3 x 1). A number of voids (spaces) were identified within the Hold during the loading process and the defendant discussed with the vessel's Master to insert bundles of pipes into that area. Mr Needham stated the practice would normally involve breaking the bundle of pipes and stacking the pipes one at a time with appropriately placed chocks being inserted after each lift. The stowage plan which was supplied by the vessel's Master to the defendant provided no information regarding the bundles of pipes being loaded vertically. The defendant's supervisor consulted with the vessel's Chief Officer in relation to the loading of the bundles of pipes on the vertical in the number 1 "tween deck" and was referred to the vessel's Master who indicated that the bundles of pipes were to be stowed. Plywood was placed against the bundles of pipes packed on the vertical for the next bundle of pipes to be placed against it to prevent damage in transit. The placement of the plywood was inserted from a position outside the void.
31 Mr Needham deposed that the plywood fell into the void to be filled. Mr Lovell entered the void to correct the plywood and whilst doing so, the vertically stowed bundle of pipes collapsed trapping Mr Lovell against the cargo on the port side which resulted in him being injured. Mr Needham stated that the system of work identifies the void areas as a hazardous area. In the normal course of work, no-one would enter this area.
32 Mr Needham set out the experience of Mr Lovell and relevant persons employed during the loading. Mr Lovell was a grade 5 stevedore and commenced employment with the defendant in 1977. He has been working in the industry for 29 years. Mr Lovell's certifications and qualifications are:
· Forklift Safety Certificate dated 28 June 1994
· Security Industry Licence
· WorkCover NSW Occupational, Health and Safety ("OH&S") Accredited Course - Induction training dated 28 February 1996.
· Certificate of Attainment for Managing Change: A Team Prospective dated 26 May 2000.
· P&O General Stevedoring Team Leader/Deck Foreman course.
33 Mr Duggan is a Grade 6 Team Leader Stevedore who also commenced employment with the defendant in 1977 and holds a range of qualifications. Mr Bannatyne commenced work with the defendant in 1999 as a casual stevedore and Mr Burrows, the Crane Driver Stevedore, commenced employment with the defendant on 8 January 1996. Mr Burrows also held an extensive number of qualifications.
34 Following the subject incident, Mr Needham stated that refresher training was provided to all personnel in relation to work for break bulk cargo. The standard operating procedures for break bulk cargo were reviewed and reinforced to the workforce through toolbox talks and refresher training.
35 The defendant's safety and environment management strategy requires it to have in place an occupational health and safety committee. The members of the committee are trained according to the requirements of the Act, regulations and legislative guidelines by the WorkCover Authority of New South Wales Accredited Training organisations. Safety committee meetings are conducted at intervals having regard to the size and complexity of the operation and conform to the requirements of a structured committee operating in accordance with the Act and relevant regulations and legislative guidelines. There was an OH&S Committee at the defendant's White Bay site which was scheduled to meet monthly. This committee consisted of a chairman, five Maritime Union of Australia representatives and three persons from management.
36 Mr Needham deposed that the defendant currently spends approximately $12.4 million directly on safety which includes employment of 15 safety officers, dedicated training, and purchasing of safety equipment. The lost time injury frequency rate for the defendant has decreased by 69 per cent since 2002. A copy of the Safety Journey Chart, together with a copy of the 30 month incident frequency trends, were attached to Mr Needham's affidavit.
37 After the incident, Mr Lovell was assisted with his rehabilitation by the defendant. He returned to suitable duties in March 2004 on a part-time basis and increased his hours during 2004. Mr Lovell resigned in February 2005. Mr Needham deposed that the defendant deeply regretted that the incident occurred and the resulting breaches of the Act, stating that the defendant strives to ensure an accident-free workplace. The defendant assisted WorkCover during the conduct of their operations.
Prosecutor's Submissions
38 Counsel for the prosecutor, Mr RJ Bromwich, submitted that the principal and particular purpose of the Act was:
(a) The protection of workers from breaches of safety, health and welfare; and
(b) To compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: WorkCover Authority of NSW (Inspector Peter Ankucic) v McDonald's Australia Limited (2000) 95 IR 383 at 427.
39 Counsel submitted that careful attention needs to be paid to the maximum penalties generally and, therefore necessarily to the increased maximum penalty for a second offence, which is the case here, because as the High Court observed in Makarian v The Queen (2005) 215 ALR 213 at 222:
(a) the legislature has legislated for them;
(b) they invite comparison between the worst possible case and the case before the court at the time;
(c) taken and balanced with all of the other relevant factors, they provide a yardstick.
40 Counsel acknowledged that the maximum penalty was $825,000 for a second offence and that the relevant maximum is available to be utilised in a "worst case scenario".
41 Counsel submitted that the primary factor to be considered in determining the sentence to be imposed is the objective seriousness of the offence charged, with each crime having its own objective gravity. The proper approach to sentencing involves an initial consideration of the gravity of the subject offence viewed objectively: R v Dodd (1991) 57 A Crim R 349 at 354. Counsel observed that on occasions there is a risk that attention to persuasive subjective considerations may cause inadequate weight to be given to the objective circumstances of the case: R v Rushby [1977] 1 NSWLR 594 at 597 - 598.
42 Counsel submitted that the situation of the defendant cannot be better than that of a labour hire company that does not even have an on-site presence. Labour hire companies have been held responsible for matters that were less within their immediate control than the circumstances of this case: Drake Personnel Limited t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 455 - 456.
43 Counsel submitted the availability of simple and straightforward steps to remedy the defects in the system is also relevant to the objective seriousness of the offence: WorkCover Authority of New South Wales (Inspector Glass) v ACI Operations Pty Ltd (unreported, Schmidt J, CT93/1025, 25 February 1994) at 12.
44 Counsel observed that it is rare that a sentencing court would not impose a sentence that includes an element of general deterrence: Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at 643 - 644 and that specific deterrence is also a relevant consideration, but all the more so when there has been a relevant prior offence.
45 Mr Bromwich, applying the above principles to this matter, submitted that the defendant failed to maintain a safe system of work in relation to the stowing of pipes on board the MV Achilles and also failed to provide adequate instructions in relation to the task of stowing pipes in the void area on board the MV Achilles. It was submitted that what should have happened was the pipes used to fill the gaps should have been loaded individually, rather than as bundles of three. This had been the system adopted in the past when loading pipes for Tyco Water. However, it was necessarily slower and more time consuming. The bundles of pipes, given their weight and inherent instability when stowed on their side created an obvious and serious risk to health, safety and welfare.
46 Counsel submitted that the risk was obvious, foreseeable, and able to be avoided by simple and straightforward steps.
47 Furthermore, counsel submitted that the court should impose a significant monetary penalty on the defendant.
48 Counsel acknowledged that the defendant had entered a guilty plea and co-operated with the WorkCover Authority.
49 The prosecutor sought costs and a moiety of the fine.
Defendant's Submissions
50 Mr M Shume of counsel, who appeared for the defendant, submitted that the defendant recognised that entrance to the gap or void area could create a risk. Counsel referred to the agreed statement of facts that described an employee (Jeffrey Burrows) "(f)rom a safe position on top of stowed cargo... attempt(ing) to place a sheet of plywood against the vertical bundle" in the void. It was a piece of plywood that fell away which resulted in Mr Lovell entering the void. It was submitted it was part of the company's system of work to put plywood between the pipes from the safe position of being above the pipes. Mr Shume submitted that Mr Lovell, the person involved in the incident, was a senior employee and one of the supervisors involved in the loading of the ship.
51 Counsel submitted that an inference could be drawn that Mr Lovell was aware that the void area was an area that he should not enter.
52 Mr Shume submitted that I should be reluctant to draw the inference urged by the prosecutor that expediency considerations overruled safety considerations.
53 It was submitted that this was not the only inference available to be be drawn and that I would not find that such an inference existed beyond reasonable doubt.
54 Counsel submitted that there were two issues that were required to be dealt with for the purposes of determining the nature and quality of the offence. The first was the failure to break the packs and load the pipes singularly. The second was Mr Lovell entering the void area.
55 Counsel submitted that it could not be contended that no system existed and that the underlying problem was a lack of information provided to the defendant. It was common ground that the documentation dealing with how to load the pipes was not provided to the defendant. It was submitted that had this information been available to the particular defendant then this incident would not have occurred.
56 Mr Shume submitted that the risk only existed for a short period of time and it was not an ongoing risk that occurred over many days or weeks. Counsel noted the evidence is indicative, that in previous loadings to fill the void, pipes were loaded singularly.
57 Counsel submitted that the only reason for Mr Lovell to be in the void was that a piece of plywood had moved from its position. This caused Mr Lovell to enter the void. It was submitted that in considering the nature and quality of the offence, considered in this context, the offence was not as serious as contended by the prosecutor.
58 Counsel submitted that the defendant had co-operated with WorkCover and entered a plea to the amended application at the earliest opportunity entitling it to the maximum discount.
59 Counsel observed that the defendant is a large employer who has been working to achieve safety, and with the exception of one previous offence, its record is exemplary. In respect of specific performance, Mr Shume pointed to the large amounts of money expended by the defendant in relation to occupational health and safety and submitted that this removed any basis to impose a large component in the fine for specific deterrence. Mr Shume submitted that this is not a case where there was no system at all and therefore any penalty should be in the mid range or lower.
Consideration
60 The sentencing principles to be applied in matters such as this were recently restated by the Full Bench in U-RECT-IT Pty Ltd v WorkCover Authority of New South Wales (Inspector de Silva) [2004] NSWIRComm 266, where the Full Bench stated at [11]:
The sentencing principles to be applied in the assessment of appropriate penalties under the Act have been considered on many occasions by this Court, including Full Bench level, and are well known. We refer by way of example to Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464 at 474-475 and Fletcher Construction Australia Limited v WorkCover Authority of New South Wales (1999) 91 IR 66 at 77. The starting point is the objective seriousness of the offence and the need to accommodate both general and specific deterrence. The maximum penalty that may be imposed is to be reserved for the most serious offence, that is, the worst possible case. Only after an appropriate penalty has then been formulated are subjective matters to be taken into account, which include factors such as cooperation with the investigation and inquiries of the WorkCover Authority, expressions of remorse and contrition, steps taken to remedy the matters giving rise to the breach and the general approach to occupational health and safety matters and attention to safe working practices by a defendant. This list is not intended to be exhaustive but is indicative of the matters which should be taken into account. Furthermore, a defendant will be entitled to a discount of up to 25 per cent for entering a plea of guilty at the earliest possible opportunity. These subjective factors are then aggregated so that a discount is applied to the penalty assessed by reference to the objective factors, resulting in the penalty to be properly imposed.
61 In this matter, in my view, the risks to the health and safety of employees, and in particular, Mr Lovell, was the risk of stowing groups of three concrete pipes, with each pipe weighing approximately one tonne, vertically to fill a void and the risk of an employee entering the void or gap area on the vessel when pipes had been stowed in this manner.
62 The risk to health and safety was, in my view, reasonably foreseeable, as on a prior occasion, similar pipes had been stowed individually. Although the letter from Beron International Pty Ltd, which set out a checklist for the stowing of pipes was not provided to the defendant, this letter provided that packs of pipes are handled in a horizontal position only. The system adopted by the defendant on this occasion created the risk. The defendant's failure was that it had no policy in place in respect of loading the pipes vertically.
63 If the defendant proposed to depart from the standard procedure of stowing pipes horizontally, in order to ensure the safety of its employees through a safe work procedure for the specific task of stowing pipes in the voids, it was necessary to ensure consultation with all persons performing this work. The decision of the Team Leader and the Operation's Supervisor to stow the pipes vertically without providing any instructions to Mr Lovell or the other employees was a significant error in judgment. Whatever the potential for pipes to break free in the void, the risk increased dramatically for those working in or around that area of the void once the decision was taken to load the pipes vertically in groups of three. The risk was both obvious and ever present. The obligation on the defendant was and is to ensure safe working procedures are adopted.
64 The defendant had adopted procedures in the past of loading pipes individually, rather than in bundles of three to fill the void. Clearly, this procedure avoided having an unstable bundle of pipes on its side, which was always a risk of toppling over and/or breaking free of its holding strap which was there to restrain the bundle of pipes in the horizontal, not the vertical position. Mr Lovell suffered serious injuries as a result of the breach and, on one view, may be fortunate to be alive. Although the damage or injury caused by the breach does not, of itself, dictate the seriousness of the offence or the penalty, a breach where there was every prospect of serious consequences may be assessed on a different basis to a breach unlikely to have such consequences. In such a case, the occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk.
65 This principle was recently restated by the Full Bench in Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17] - [18]:
[17] The relevance to the gravity of an offence of injuries suffered as a result of a breach of the Occupational Health and Safety Act and the relevance of potential serious consequences or serious injuries of that breach, are well settled: see, for example, Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) at paras [94] and [95] where it was held:
[94] We consider that the limited injuries suffered by Mr Stafford must be seen in the context of that evidence and also in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries suffered, or which may have been suffered, and the gravity of the offence. We consider that the relevant principle can be stated in this way. 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.