An employer must ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work.
8 The charge was framed in the language of the statute. The particulars of the charge were that:
The Defendant, being an employer, on the said date at the said site, contrary to s 8(2) of the 2000 Act, DID FAIL to ensure that people other than employees of the defendant, in particular Lindsay Barry were not exposed to risks to their health or safety arising from the conduct of the Defendant employer's undertaking while they were at the Defendant employer's place of work. In particular, the Defendant failed to ensure the provision and maintenance of a safe system of work in relation to the transfer of fuel from underground tanks into road tank trucks at the site such that non-employees were not exposed to the risk of fuel explosion during the transfer process, in particular by failing to ensure that:
(i) the transfer of fuel was done by bottom loading.
(ii) the road tank trucks were properly purged of fuel prior to the transfer of fuel taking place.
(iii) the transfer of fuel complied with the Dangerous Goods (General) Regulations 1999 (NSW) in particular, clauses 196 and 136.
9 The defendant entered a plea of not guilty on 7 February 2005. The matter was later set down for trial for three weeks commencing 6 February 2006. Early in the proceedings the Court was advised that the defendant had raised a number of issues with the prosecutor regarding the provision of further and better particulars and, indeed, the question of particulars had been the subject of lengthy dialogue between the parties leading up to the trial. On the third day of the trial Mr H Dixon SC with Mr I Taylor of counsel for Qantas advised the Court that the charge remained inconsistent, vague and ambiguous and as a result was oppressive to a fair hearing. It was also submitted the particulars supplied gave rise to a new charge under the guise of providing new particulars of the charge. Mr P Kite SC with Mr D O'Neil for the prosecutor contended otherwise.
10 It is unnecessary to explore the submissions of the parties on this interlocutory issue because, in the result, the Court ruled that the further particulars provided by the prosecutor did not amount to a new charge. The parties considered their position in the light of the ruling and on 13 February 2006, after the prosecutor was granted leave to amend its application for order, the defendant pleaded guilty to the amended charge. The amendment was to the particulars of the charge, which were in the following amended terms:
The Defendant, being an employer, on the said date at the said site, contrary to s 8(2) of the 2000 Act, DID FAIL to ensure that people other than employees of the defendant, in particular Lindsay Barry were not exposed to risks to their health or safety arising from the conduct of the Defendant employer's undertaking while they were at the Defendant employer's place of work. The Defendant failed to ensure the provision and maintenance of a safe system of work in relation to the transfer of fuel from underground tanks into road tank trucks at the site such that Lindsay Barry was not exposed to the risk of fuel explosion during the transfer process in that it failed to require of Caltex Petroleum Distributors Pty Ltd trading as Metropolitan Fuel Distributors (MFD) that it supply in writing, prior to the commencement, the appropriate procedures for such transfer of fuel, which included a requirement that MFD:
(i) nominate a suitably trained supervisor to supervise the procedure; and
(ii) set out a method of work, which in the view of MFD, eliminated risks as far as possible, which in the circumstances required the process to be by bottom loading only.
11 On 23 February 2006, the Court heard submissions as to sentence. An agreed statement of facts was tendered. In addition to the factual matters that have already been referred to, the statement contained the following information relevant to sentence:
(1) Adam Machon, employed by Qantas at the time as a Senior Fuel Technical Officer, contacted MFD and sought from MFD certain assurances. MFD told Qantas that it had expertise in transfer of fuel operations of the type to be conducted and that it was a task carried out by MFD many times. MFD did in fact have that expertise. MFD subsequently wrote, representing to Qantas that it had the necessary expertise and experience to undertake the work.
(2) A standing contract existed between MFD and Kel dated 2 January 2002 which provided that MFD could at any time issue a delivery advice to Kel for the collection and delivery of fuel product. As part of that contract, Kel agreed to ensure that deliveries were carried out in accordance with Australian Standard 1940 "Storage and Handling of Flammable and Combustible Liquids" and the "Ampol Driver Instruction Manual", as well as the AIP-CP8-1991 "Precautions Against Electrostatic Ignition During Tank Vehicle Loading", the Australian code for the transport of dangerous goods by road and rail (ADG Code) and the AIP-CP14-1995 "The Transport of Petroleum Products by Road".
(3) On or about 31 May 2002, Greg Clay, an employee of MFD, attended the site for a visual assessment of access for vehicles and equipment required to do the job.
(4) On 2 August 2002, Mr Machon sent a fax to Mr Clay accepting the quote and confirming the transfer date of 11 August 2002 and nominated John Calfas, an employee of Qantas, as the Qantas representative who would be at the site while the transfer process occurred. He did so in reliance upon the representations and assurances referred to in subparagraph (1).
(5) Between 2 August and 11 August 2002, Mr Machon had four telephone conversations with Mr Clay regarding site access, timing of work and an overview of Qantas requirements for the fuel transfer. At all material times, Qantas did not have a written procedure for bulk removal of LRP or diesel fuel from underground tanks at the site.
(6) Qantas did not require MFD to provide to it in writing, prior to the commencement, the appropriate procedures for such transfer of fuel, which included a requirement that MFD:
(a) Nominate a suitably trained supervisor to supervise the procedure; and
(b) Set out the method of work, which in the view of MFD, eliminated the risks as far as possible, which in the circumstances required the process to be by bottom loading only.
(7) On 5 August 2002, Steve Fox, an Operations Manager employed by MFD, faxed a copy of Mr Machon's fax dated 2 August 2002 to Bevan Burns. Mr Burns, employed by Kel, made verbal arrangements with Mr Clay in accordance with the Contract to provide tanker vehicles for the fuel transfer. Mr Burns stated that two tanker vehicles would be provided.
(8) Mr Burns had, as at August 2002, an AIP passport, having undertaken the relevant training. Mr Burns was a Manager of Kel and held responsibility for the proper performance of the Contract. Mr Burns' responsibilities with Kel included responsibility for the occupational health and safety of employees undertaking duties under the Contract.
(9) Mr Fox instructed the MFD and Kel staff who were to conduct the fuel removal to use a rigid MFD pumper truck to fill Kel tankers by bottom-loading.
(10) On 11 August 2002, the following people were present at the site being:
(a) Mr Calfas, employee of Qantas, who was the Duty Operator of the site and had the role of escorting and liaising with the employees of Kel and MFD;
(b) Mr Clay;
(c) Mr Burns, employee of Kel, who was a fuel tanker driver;
(d) Sean Riordan, employee of Kel, who was a fuel tanker driver;
(e) Sean Gosper, employee of MFD, who was a fitter and whose role was to earth and bond the vehicles;
(f) The injured person, Mr Barry.
There was no nominated supervisor.
(11) Messrs Clay, Burns, Riordan and Barry had expertise and were trained in the proper methods to undertake such transfer of LRP and diesel fuel operations in a safe manner.
(12) On 11 August 2002, between 5.00 am and 6.00 am, Mr Barry arrived at the site and met Mr Gosper and Mr Clay. At approximately 5.30 am, Mr Riordan arrived, driving tanker vehicle TVK-400, with tanker barrel N16327 attached to it, and was later joined by Mr Burns.
(13) Messrs Barry, Clay, Gosper, Burns and Riordan met Mr Calfas outside Gate 27 of the airport at around 6.00 am.
(14) At around 7.00 am, Mr Barry and his colleagues began transferring LRP from the first underground tank at the site to tanker vehicle VBB-276. Mr Gosper installed the connections from the underground tank opening to the tanker, bottom filling the tanker by pumping through the MFD rigid truck, SDE-823. Discussion between Messrs Burns, Clay and Barry took place regarding the slow flow rate of the fuel pumping into the tanker. The second tanker, TVK-400, was positioned for pumping LRP into the first tanker. Following further discussions, it was decided by the MFD and Kel Campbell employees to bring two other tanker vehicles to the site in order to assist with the expedition of the fuel transfer process.
(15) Messrs Gosper, Burns and Riordan returned to the site at around 8.30 am with two road tanker vehicles. At around 9.00 am, the loading of petrol on the first tanker was completed and a new tanker was moved into its place to continue the transfer of petrol. Once the first underground petrol tank was empty, Mr Gosper reconnected the new tanker to the second underground petrol tank and continued loading petrol. The transfer of fuel into these tankers was by way of bottom filling.
(16) At this time a decision was made to pump diesel from the underground diesel tank into another tanker being tanker TVK-400, using the MFD rigid for pumping but to fill the tanker from the top and not the bottom. This decision was made as the pumping process was perceived to be too slow. This decision was a departure from the training and instructions and proper procedure known to the MFD and Kel staff. Qantas was not involved in that decision, and Mr Calfas was not told such a decision had been made and was not aware of its implementation.
(17) The MFD rigid was moved to the site alongside the tanker TVK-400. Another tanker being loaded with petrol at the time was approximately ten metres away from tanker TVK-400. Mr Gosper made the connections for diesel loading by spearing the underground diesel tank and connecting it to the pump on the MFD rigid.
(18) At around 11.00 am, Mr Barry then began top loading fuel from the underground tank containing diesel fuel to the tanker barrel attached to tanker TVK-400. He used the long hose on the reel of the MFD rigid to transfer diesel through an open hatch on top of compartment five in the barrel.
(19) Mr Barry climbed the tanker barrel while holding a hose, inserted the hose into an open hatch of number five compartment and began filling it with diesel. Mr Barry completed filling number five compartment with diesel. He then inserted the hose reel into an open hatch of number four compartment with a hose. Number four compartment had contained petrol on the previous load.
(20) At approximately 11.28 am, while Mr Barry was on top of the tanker barrel checking the progress of the pumping in number four compartment, an explosion occurred and a flame came out of number four compartment of the tanker barrel causing burn injuries to Mr Barry.
(21) At the time of the accident, MFD had a document entitled "Caltex Australia - Driver's Handbook". The Handbook contained directions regarding mixed loads and switch loading i.e., loading a high flashpoint product such as kerosene or distillate into a compartment that previously carried a low flashpoint product such as petrol. The Handbook stated:
[I]t is important to ensure the low flashpoint product is completely drained from the compartment to be re-loaded
It does not take a great deal of petrol residue in that compartment to contaminate the high flashpoint product carried next.
…
When switch loading, initial flow rates must be kept to a maximum of 1 metre per second, until the fill spear outlet or tank inlet is fully submerged. Excessive initial flow rates can cause turbulence in the incoming liquid and generate large charges of static electricity. These charges could be released as a spark with sufficient energy to ignite the vapour/air mixture inside the compartment if an object was introduced into the tank compartment or a fill spear was removed prior to the charges having enough time to dissipate.
Always wait TWO minutes before you dip the compartment or introduce any other object into the compartment that you have just finished loading. If in doubt about switch loading procedure or compartment draining, consult your Supervisor prior to loading.
…
You must also make sure any residue from the previous load is completely removed so the compartment to be loaded is completely drain dry.
The Handbook also referred to splash loading in the following terms:
SPLASH LOADING: Never splash load a vehicle through incorrectly positioning the vehicle at the loading rack. Reposition the vehicle before you start to load if the fuel spear is too far from the compartment entrance to afford vertical entry. Splash loading is a dangerous practice and could cause a loading rack fire. When loading by spear, make sure the bottom of the spear reaches and maintains metal contact with the bottom of the compartment being loaded and is also in contact with the rim of the tank hatch. If pre-set meters are not fitted on the loading arms, under no circumstances must you attempt to load with more than one arm at a time.
Under the heading "Discharging" the Handbook stated:
CUSTOMER ACCESS TO TOP OF TANKER: Accessing the top of tankers to verify compartment dips is a hazardous practice and should not be necessary in most circumstances.
In addition, the Handbook detailed the risks of static electricity.
(22) The circumstances applicable to this fuel transfer, in the view of MFD, required the process to be by bottom loading only.
(23) The circumstances for this fuel transfer were:
(i) There was diesel being loaded into a tanker compartment which previously contained petrol;
(ii) There was petrol vapour remaining within the compartment;
(iii) This situation constituted "switch loading".
(24) After the incident Sydney Airports Corporation Ltd (SACL), MFD, Kel and Qantas discussed the system to be used regarding the process to be undertaken for the removal of the remaining fuel in the underground tanks at the site. Meetings between SACL, Qantas, and MFD determined that the process to pump out the remaining fuel at the site would be undertaken on 11 and 12 December 2002. MFD was requested to prepare a written procedure detailing the process to be undertaken. Qantas and SACL required inductions for all contractors, the induction to be lead by Qantas at the offices of SACL starting at 10.00am on the day of the job. SACL required a Works Plan Application to be submitted to them by 27 November 2002 for their approval from Qantas.
(25) The procedure for product removal from underground tanks was prepared by MFD and reviewed by Qantas and provided to SACL for their review.
(26) On or about 9 December 2002 a completed "Approved Air Side Works Plan" issued by SACL set out the conditions for the removal of fuel from the site on Wednesday 11 December 2002.
(27) On 11 December 2002, the transfer of fuel process was undertaken by employees of MFD being Stephen Fox, Greg Clay, and Sean Gosper. John Turnbull, an employee of Kel attended as well as another Kel employee, Mr G Markham. In addition, representatives from Qantas were present during the process, being Hans Schurch and John Calfas. Representatives from SACL also attended the process, being Owen Jarvis and Mark Farrar (SACL Aviation Safety and OHS Manager). Mr Fox, the Operations Manger of MFD, supervised the process.
(28) On the occasion of removal of the remaining fuel, the process was done by bottom loading (by the discharge hose of the pump being connected to the bottom valve of the compartment on the road tanker to be filled), and no filling took place from the top of the tanker.
(29) After the incident, the prosecutor obtained expert evidence to the effect that it was likely there was petrol vapour in compartment 4 which, when mixed with air, was ignited by a spark caused by a build up of static electricity.
12 The principal evidence relied upon by the defendant on sentencing was an affidavit of Mr Machon who, at the time of swearing his affidavit, was the defendant's Manager Fuel Quality and Support. Mr Machon gave evidence about his personal background, which included the qualifications of Bachelor of Chemical Engineering from University of Sydney and Bachelor of Commerce/Finance from the same University. Mr Machon was in the position of Fuel Technical Officer in August 2002. In that position he was responsible for ensuring that fuel operational requirements were met, including:
(a) continuity of supply;
(b) standard of fuel quality;
(c) on-time performance and demand management; and
(d) the effective management of fuel related interruptions.
13 Further, Mr Machon was primarily responsible for selecting which contractor Qantas would engage to remove the fuel at the site and to transport it to the Banksmeadow Storage Facility. Any contractor that was selected had to be approved by the then Manager of Fuel Quality & Support, Paul Taylor.
14 Mr Machon described his conversations with Mr Clay and the fact he made various enquiries in order to determine whether MFD had the necessary expertise and experience to perform the work and perform it safely. Prior to 11 August 2002, Mr Machon had four conversations with Mr Clay during the first of which he outlined to Mr Clay what Qantas needed to do and arranged for Mr Clay to attend the Site on 31 May 2002 for a Site visit to discuss the matter further with a view to obtaining a quote from MFD for undertaking the job. Mr Machon deposed that during the Site visit with Mr Clay, they discussed a number of general issues about the proposed works, including:
(a) familiarising Mr Clay with the general physical environment in which the work would need to be performed - in doing so, I pointed out things to Mr Clay such as the appropriate access roads for equipment and vehicles around the Site, tarmac proximity and warned Mr Clay about the level of aircraft noise etc;
(b) the nature of the work to be performed - by reference to the location of the underground tanks which contained the fuel on the Site I explained that the fuel needed to be removed and transported to the Caltex Banksmeadow Storage Facility;
(c) I referred to general Qantas safe work practices - including the need for the use of personal protective equipment such as safety boots, high visibility vests, ear plugs etc;
(d) general timing issues - in relation to which I advised Mr Clay that Qantas could arrange for access and a Site escort for MFD at any time suitable to MFD, even during the evening if necessary and preferable to MFD. I gave an example of a job where Qantas had arranged access to a contractor between the hours of 2300 to 0500 for works associated with accessing an underground fuel supply hydrant at the SIT;
(e) I questioned Clay as to the suitability expertise and experience of MFD to do the work required safely. Clay assured me that MFD were capable of doing the job safely. He said he was experienced in bulk handling of such fuel;
(f) Mr Clay told me he would be present during the operation, supervising the work on the day and managing the process; and
(g) Mr Clay told me the approximate hourly rate that he would be using to calculate the quote that MFD would provide.
15 Mr Machon stated:
In response to my general enquiries about how MFD proposed to carry out the job, Mr Clay verbally ran through how he considered MFD would undertake the works while we were on the Site together. In doing so, Mr Clay:
(a) explained that MFD would require a pumper truck to be placed in a certain position on the Site and another truck into which the fuel would be pumped, to be placed in another position on the Site, together with the erection of various barricades and safe access points;
(b) talked through out loud the general method that MFD was proposing to use in carrying out the work, including coupling requirements and effective bonding points. In relation to the bonding points, I recall that Mr Clay indicated that there appeared to be no designated bonding points located on the Site, however, Mr Clay determined that the existing pump structures located on the Site for the supply of fuel to smaller equipment from the facility could be nevertheless used as a suitable bonding point.
...
Following the Site visit and in response to my request that MFD provide Qantas with a quote for the job, Mr Clay provided me with a facsimile dated 14 June 2002 confirming the terms of the quotation. A copy of the facsimile dated 14 June 2002 is attached ... The written quote contained assurances regarding the work to be done consistent with those Clay had given to me verbally before that date. I assessed MFD's quotation on the basis of what Clay had told me during the Site visit. Applying the approximate hourly rate that Mr Clay gave me, I worked out that the quote appeared to be calculated on the assumption that the work would take approximately two days to complete. I considered that a suitably generous amount of time.
After my various discussions with Mr Clay, including our discussions during the Site visit on 31 May 2002, and the receipt of the quote dated 14 June 2002, I made the assessment that MFD was the appropriate contractor for Qantas to engage to perform the work, on the basis that MFD was suitably qualified and had suitably experienced personnel to carry out the works. The key factors in my assessment included:
(a) MFD's familiarity with the fuel to be transferred. In this regard, I was aware that MFD had loaded the fuel into the underground tanks in the first place as Caltex's contractor;
(b) MFD's previous and frequent experience in transporting Caltex fuel generally and therefore their familiarity with the loading and unloading requirements of the Caltex Banksmeadow Storage Facility;
(c) the suitably trained personnel that MFD employed to perform the work based on MFD assurances - specifically, in Mr Clay's letter dated 14 June 2002, Mr Clay represented to me that MFD would provide Dangerous Goods licensed tankers and drivers and Dangerous Goods approved personnel to operate equipment and facilitate safe transfer procedures;
(d) Mr Clay's representation to me that this would be a routine job for MFD to perform;
(e) my dealings with Mr Clay, in particular the way he conducted himself when he was present at the Site, led me to believe he was experienced, that he knew what he was talking about, and that he appeared to be thinking ahead about how the job would be done, leading me to have confidence that the job, that he was to supervise, would be done properly and safely; and
(f) given the matters and assurances that we had discussed during the Site visit on 31 May 2002 and the assurances I received from MFD that appropriate and safe procedures were in place for the performance of the work, contained in Mr Clay's letter to me dated 14 June 2002 by its reference to 'safe transfer procedures', my understanding that MFD had, and would be using, appropriate and safe procedures to do the work.
The final approval to engage MFD was given by Paul Taylor, a contractor who was performing the role Manager Fuel Quality and Support at the time. Mr Taylor gave this approval verbally to me after I had explained the circumstances surrounding the proposed engagement of MFD to perform the works and my assessment of their suitability based on the factors outlined in the preceding paragraph.
16 Mr Machon described the role of Qantas on the day of the incident in the following terms:
On 11 August 2002, John Calfas, a Duty Officer employed by Qantas who reports to me, was present at the Site while MFD commenced the removal of fuel from the underground tanks at the Site. Prior to that day I had discussed with Mr Calfas the role that he was to perform on that day on two occasions - once during a meeting and again during a telephone conversation with Mr Calfas on 10 August 2002.
I told Mr Calfas that he was assigned by me to undertake an escorting role with the following tasks:
(a) to meet the MFD employees at the gate to the SIT;
(b) to take the MFD employees to the SACL offices to obtain their access passes;
(c) provide MFD employees with directions as to where various facilities were located (for example, the location of toilets etc).
Prior to the day of the Incident, I explained to Mr Clay that Mr Calfas would meet him and the other MFD employees at the gate to the SIT and would escort them onto the Site so that they could perform the job required.
As at August 2002, Mr Calfas had experience and training as an escort at the Airport. He was trained in general procedures and protocols to be followed in the event of an emergency or incident at the Airport. However, I did not consider that Mr Calfas had training or experience to allow him to supervise the actual works that MFD were to undertake on the Site, namely the transfer of diesel and lead replacement petrol.
17 Mr Machon described in his affidavit the steps taken prior to removal of the fuel on 11 December 2002, the defendant's occupational health and safety policy, the training conducted by Qantas of workers in occupational health and safety, the operation of the defendant's occupational health and safety committee, the defendant's occupational health and safety management system (known as 'S.A.F.E.' or 'Safe Airline for Everyone'), the defendant's rehabilitation policy, its first aid system and the defendant's occupational health and safety expenditure. Mr Machon also referred to a number of matters indicating the defendant's standing as a good corporate citizen.
18 As to contrition, Mr Machon stated:
I am authorised by Qantas to say, on its behalf, that Qantas was very concerned about the Incident involving Lindsay Barry on 11 August 2002 and strongly regrets any failure on its part that contributed to the risk of the Incident occurring. Qantas appreciates that despite the efforts to ensure that the job was done safely by an expert contractor, the events as they occurred demonstrated that more could have been done in respect of what Qantas required of the contractor to further minimise the risks associated with the task. Qantas regrets that that did not occur prior to August 2002.
Qantas was concerned for the well-being of Barry after the Incident. Qantas made regular contact with MFD to enquire as to the recovery and state of health of Mr Barry after the Incident and was very pleased to see that Mr Barry had recovered to return to work and participate in the briefing meeting in the lead up to MFD completing the removal of the remaining lead replacement and diesel fuel from the Site in December 2002.
Consideration