(v) affidavit of Mr Ly dated 5 November 2007;
(v) a letter from the corporate defendant to WorkCover enclosing application for safety awards for 2008;
(vi) a diagram of the management structure of the corporate defendant before August 2005.
17 Mr Ngai, in his affidavit, described himself as the governing director of the corporate defendant. He set out his personal background, stating that when he was a baby, his family left China and relocated in Cambodia because life was very difficult in China. Mr Ngai was educated to grade six primary school standard in Cambodia. He left Cambodia in 1970 due to the civil war and travelled to Hong Kong, where he worked until he left for Australia in 1985.
18 Mr Ngai then set out the background of the corporate defendant, which he established in 1986 stating that the company, shortly thereafter, commenced to operate with two machines and six employees, one of whom was his brother in law, Mr Ming Ly. Mr Ngai stated that Mr Ly was in charge of production including the safety aspects of production and said that he left the occupational health and safety responsibilities in his hands. As he had received no occupational health and safety training, he said that he was confident that Mr Ly had the ability to look after safety matters. He said all employees are trained when they commence with the corporation to ensure that they know how to use the machines safely.
19 Mr Ly, as well as Mr Siva, who was in charge of safety between 1999 and 2006, trained employees on a regular basis. Arrangements were also made for the company to bring in persons from outside the company to train its employees. Mr Ngai was not aware of the details of when and how employees were trained, as he was not involved in these arrangements or the training of staff. He stated that Mr Ly was authorised to spend whatever amount he needed to spend on safety. His relationship with Mr Ly was such that he understood that if he thought there were any problems with safety, he would bring it to his attention. They met and spoke regularly about the business. He said that at no time did Mr Ly report to him concerns about safety.
20 Mr Ngai said he was overseas when the accident involving Mr Yang occurred, and that he deeply regretted that Mr Yang was injured in the accident. He stated that it was not unusual for him to be overseas. In 2002 he was overseas for 106 days, in 2003 for 135 days, and in 2004, for 185 days. It was against this background that he relied totally on Mr Ly to keep him informed of occupational health and safety problems if they arose.
21 Mr Ngai stated that he had no reason to believe that safety matters were not being attended to properly in the corporation. He said Mr Ly had an unlimited budget in respect of any safety matters. He was not aware of any accidents at the workplace until Inspector James began investigating the accident involving Mr Yang, nor was he aware of any prohibition notices prior to meeting Inspector James. It was at this time that he became aware that there had been previous accidents in the company, which had resulted in court proceedings and a fine being imposed on the company. He said that he thought that it was appropriate to put Mr Ly in charge of safety. However, he now understands that as a director he must play a role to ensure that systems are being followed. He has informed all directors, except Ms Ly (his wife who resigned as a director), that they must play a role in understanding safety and making sure that all areas of the workplace are safe.
22 Mr Ngai now receives information regarding safety at regular meetings that he attends with the safety committee and if any incident occurs, he is told about it straight away. He said that he has been reminding frontline staff of the importance of occupational health and safety whenever he meets them. He has committed all possible support for the occupational health and safety team to best educate and remind their employees of safety requirements.
23 Mr Ngai stated that the corporate defendant provides assistance and financial support for refugees looking for employment in Australia. About 60 per cent of the corporate defendant's workforce is made up of refugees. His company provides advice as to how refugees can "establish" a life in Australia. In the 2006/2007 financial year, the corporate defendant donated $261,762 to charities. These included donations to Fairfield Hospital, Liverpool Hospital, Cambodia Vision Incorporated, Australian Chinese Charity Foundation and Indo-Chinese Elderly Hostel. A similar amount has been donated to charity since 2001. Since July 1999, total donations to charities amounts to $1,446,312.
24 In June 2006, Mr Ngai was diagnosed as suffering from prostate cancer. He commenced radiotherapy in November 2006. He has hormone injections every three months. He has a stent in his kidney as a result of the cancer and has appointments with his specialist every two months. Mr Ngai has also experienced back problems for over 30 years and is treated by a physiotherapist and a chiropractor two to three times a week. Although he has been advised that his cancer is under control, he says he now feels much weaker.
25 In light of the responsibilities that he has as a director, chiefly in respect of occupational health and safety, he stated that he proposes to remove himself from his current role by the end of 2008, when his son will be appointed managing director. During the next 12 months, it is his intention to ensure that his son is able to perform the financial role that he undertakes at the present time. If it is necessary for him to provide further guidance to the company after 2008, it will be in the role of a consultant. He said that he has already commenced talking to the company's bankers to assist his son in taking over the running of the company. He stated that the present court proceedings have been extremely hard and stressful for himself, his wife and his immediate family, but he now has a greater awareness of the significant steps needed in respect of occupational health and safety.
26 Mr Ngai expressed his deep regret that any worker in the company was ever injured. He said he has done everything in his power to ensure that the company is not prosecuted again.
27 Mr Henry Ngai was required for cross-examination, during which he stated that at no time before the incident did he receive any written budget from Mr Ly in respect of safety matters. Mr Ly was given the power to do whatever he thought was right in respect of safety. Mr Ngai trusted him. He could write cheques and purchase whatever he thought was required. Mr Ngai confirmed that before the accident there were no regular board meetings of directors because the board trusted Mr Ly.
28 Mr Ngai's evidence was that he was not involved in the production area, but confined himself to dealing with the finances and the bank. Mr Ngai stated that during family discussions that occurred before the accident, safety was not raised, as he left occupational health and safety matters to Mr Ly. Mr Ngai's evidence was that when he came to Australia and established his company, he wanted to ensure that nothing would happen to it and he asked his accountant to protect him. He did not understand what the term "governing director" involved, but he understood it was to protect himself. He wanted total control over his company. He agreed that he had described himself as managing director in his interview with Inspector James and that that is what appeared on his business card.
29 Mr Ngai stated that when the company purchased new machines, training was provided to Mr Ly from the company who sold the machines. Mr Ngai could not remember whether Mr Ly received any training in respect of the Rewinder No 1 Machine because it was a very old machine purchased a long time ago. Mr Ngai was not aware who signed cheques to pay for previous fines imposed on the company. His evidence was that if he was at the company at the relevant time, he may have signed the cheque, or Mr Ly may have signed it. His evidence was he could not recall.
30 Mr Chek Ming Ly set out his personal history in his affidavit. He was born in Cambodia in 1956. He was captured by the Khmer Rouge in 1975, separated from his family and forced to work in the rice fields for long periods without rest and food. Following Vietnam's invasion of Cambodia in 1977, he was arrested and sent to a concentration camp where he remained for approximately six months before escaping and fleeing by boat to Indonesia. Mr Ly's sister is married to Mr Ngai and he established contact with Mr Ngai shortly before he left Vietnam and whilst he was in Indonesia. With the assistance of the World Vision Program, Mr Ly migrated to New Zealand in 1980 and commenced work in a plastics company working as a machine operator. He was promoted to the position of supervisor. Whilst there, Mr Ngai contacted Mr Ly and asked him to come to Australia to work in his company. Mr Ngai was responsible for the financial side of the corporation and Mr Ly, the operations side. In 1987 the corporation had three machines and only a few employees, but by 1989 it had 20 to 30 employees with a turnover of $2,000,000 per annum.
31 Mr Ly stated that he is responsible for the safety of employees and from the very beginning of the company's operations, there was no limitation on the safety budget. If something needed to be spent on safety, he had the authority to spend it. Although Mr Ly stated that he had significant personal experience with working with machines, he now accepts that the company's approach to safety was insufficiently detailed and insufficiently systematic. The lack of detail and system occurred because of the extremely rapid growth of the company, despite the company engaging a number of people with experience and expertise to assist in safety matters. He stated that in 1992, Mr Daryl de Vries was employed by the company. Mr de Vries' role included designing, building and maintaining machines to operate safely. In 1997, Mr de Vries was promoted to the position of production manager. He was a qualified mechanical engineer. As production manager, he, together with Mr Ly had responsibility for safety.
32 In or about 1997, the company retained Mr Albert Wells to regularly speak to employees about working safely, the risks of injury and general training on the machines. Although Mr Wells' work was not documented, Mr Ly said he was extremely well qualified in relation to occupational health and safety.
33 Following an incident in 1998 involving Mr Camilleri, which resulted in a prosecution under the Act, the company employed Mr Siva Siva, who had a masters degree in manufacturing engineering and a number of certificates relevant to occupational health and safety and workplace matters. Mr Siva worked under Mr Ly, specifically in relation to safety issues. He put together a manual and assisted Mr Ly in checking that all machines were safe. Mr Siva arranged for the training of employees in occupational health and safety and all employees were re-inducted. A safety committee was established and first met in December 1998.
34 Mr Ly stated that in 2002, risk assessments were performed on all new machines which were purchased from Taiwan or Italy. As the new machines did not comply with the Australian Standards, assessments were undertaken by Mr Ly, Mr Siva and engineers employed by the company. Mr Ly's brother, Mr Houy Ly, who is the assistant general manager in relation to production, on night shift also assisted. Modifications were carried out and safety guards installed to prevent employees going too close to the machines when they were operating. The cost of guarding the machines was approximately $150,000. In 2002, Mr Ly said the company spent almost $200,000 on safety, including approximately $146,000 on staff training. In that same year, Mr Siva commenced working solely on occupational health and safety and reported to Mr Ly.
35 In early 2003, Mr Siva recommended that the company employ Mr Colin Wood to also look after safety and to assist in training employees. In or around June or July 2003, Mr Wood printed the first occupational health and safety employee induction handbook. A copy of this handbook was annexed to Mr Ly's affidavit. In June 2003 Mr Wood also assisted in placing safety signs around the factory, helped with the guarding of the machines and published a document titled "General Working Procedures for All Machines". It was also attached to each rewinder machine. A copy of this document was also annexed to Mr Ly's affidavit. All employees were made aware of the procedure through meetings, where they were shown the content of the procedures. During this time, the company continued to ensure its employees were trained. Mr Yang completed certificate II and certificate III in transport and distribution warehousing in or around this time.
36 As a result of a further accident on 19 November 2002, alterations were made to the Rewinder Machine No 10. Thereafter, a perimeter guard was installed around the machine to prevent access to the hazardous parts of the machine. It was also fitted with a new safety switch according to Australian Standards. The switch does not allow the staff to open the door of the machine unless the machine has completely stopped. Since that accident, staff training has been documented. Warning signs were also put in place advising staff not to clean to rollers whilst the machine is in operation. The signs also contain checklists to remind operators what is required to be done to safely operate the machine.
37 Mr Ly said that since Mr Yang's accident, there has been even more effort put into occupational health and safety. Mr Ly described the circumstances surrounding Mr Yang's accident, observing that he commenced employment with the corporation on 11 November 1998 as a machine operator. He received induction and training on the Rewinder No 3 machine. For the first 10 days of his employment, Mr Yang worked with a trainer on the machine. The trainer then observed him working on the machine for approximately six months. Rewinder No 3 was very similar to Rewinder No 1. There was no written instructions given to new employees of the corporation at that time. The training was all verbal and on the job. Mr Ly said that regular cleaning needs to be performed on the rewinder machines because paper gets stuck in the machines which requires the machines to be stopped and the jam cleared. This may happen a couple of times in one week and then on other occasions, may not occur for many weeks. Mr Yang, along with other employees, was taught how to clear a jam, turn the machine off and use the manual control to inch or jog the machine.
38 Mr Ly stated that all employees, including Mr Yang, had been trained to turn off the machine before proceeding to clear any paper jams. Employees were also warned against touching any moving parts of the machines. Signs had been placed around the factory floor confirming these instructions. In addition, the rewinder machine has a touch sensitive emergency stop cord, which stops it from running in case of an emergency.
39 Subsequent to the incident, Mr Yang was fully trained in relation to the relevant machine. He was also re-inducted and also taken through forklift operator training. This training occurred on 3 March 2004. Copies of the induction and forklift training documentation were annexed to the affidavit. Mr Siva was responsible for implementing safety audits at the time of Mr Yang's accident and was required to report any safety issues to Mr Ly. Mr Houy Ly, the designated night shift manager, would walk around the factory approximately every one and half to two hours during night shift, observing the machines.
40 In respect of the general guarding breach, Mr Ly stated at the time of the incident involving Mr Yang, blue metal doors, which provided full guarding, were not on the machine. The doors had been installed in November 2002. Over a period of time, it became apparent that the doors trapped dust which interfered with the functioning of the machine and caused it to stop. In addition, because of the size of the doors, they did not open and shut properly. Mr Ly was not able to establish when the doors were removed from the machine. Mr Ly noted that a prohibition notice had been issued on 26 February 2004 in respect of the machine. Rectification work was carried out immediately and on 27 February 2004, Inspector James from WorkCover was invited to inspect the machines.
41 Mr Ly detailed the steps taken by the corporation after Mr Yang's accident. He stated that perimeter guards were set up and interlocks installed so that employees could not get near the machine while it was running. The company decided to retain a lawyer with specific expertise in relation to industrial and safety issues and in 2005 retained the services of Andrew Douglas, a specialist in occupational health and safety. Mr Gary Rowe, an occupational health and safety consultant engineer was also retained to provide advice on a range of issues relating to safety, policies and procedures and to develop documentation. In the latter part of 2006, Mr Steve Johnson was appointed as a further occupational health and safety officer with the company. Mr Johnson has an extensive history with occupational health and safety in the construction and manufacturing industries and lectures in occupational health and safety. With the departure of Mr Siva from the company in late 2006, Mr Seng Ly was employed to manage occupational health and safety and assist the company to grow in its understanding of occupational health and safety. There are currently six employees in the occupational health and safety department of the company.
42 Since Mr Yang's accident, the occupational health and safety committee meets with management at least once every second month and sometimes once every month. The directors sit in on meetings. A management meeting is now convened within 24 hours of any incident.
43 The company continually assesses the machinery at the factory to ensure its safety. Examples of this assessment which were completed in August, September and October 2005 were attached to the affidavit. Daily and weekly checks are also undertaken to ensure the machines are safe and that employees are working safely. Examples of such checks which were undertaken in April and August 2007 were also attached to the affidavit.
44 Mr Ly described the policies instructions handbook and other documentation that the company now has implemented. Copies of instruction booklets for Rewinder No 1 and Rewinder No 4 machines were attached to the affidavit. Apart from instruction handbooks and safety documentation in respect of the rewinder machines, there are now policies covering many areas of the workplace including:
1. Communication & Consultation Policy & Procedure
2. Confined Spaces Policy & Procedure
3. Contracts Purchasing & Design Policy & Procedure
4. Drug & Alcohol Policy & Procedure
5. First Aid Policy & Procedure
6. Injury Management Policy & Procedure
7. OHS Policy & Procedure
8. Records Management Policy & Procedure
9. Risk Management Policy & Procedure
10. Substances (Chemicals) Policy & Procedure
11. Surveillance Policy & Procedure
12. Training Policy & Procedure
13. Vehicle Safety Policy & Procedure
45 All of these policies have been improved at managerial and consultation level as at 28 May 2007 and have been implemented. Copies of the OHS Policy & Procedure and the OHS Risk Management Policy & Procedure were annexed to the affidavit. A safety training manual was also prepared by Mr Rowe and the company has created a register for near misses and accidents that occur on the factory floor. Employees regularly attend internal and external training courses to update their skills in relation to occupational health and safety. Mr Ly stated that he believed, as a result of the involvement of Mr Douglas, the company has greatly improved its occupational health and safety. He said the company's progress has been so substantial and so significant that it has been asked by WorkCover to apply for an award which is given to the most improved workplace for safety. The company intends to apply for this award.
46 Mr Ly detailed safety related expenses incurred by the company, stating that in the years 2006 - 2007, the company spent $486,589 on occupational health and safety. This was made up of $389,819 for the salary costs of the OH&S Department employees, training courses for employees and printing and induction books with $100,000 being spent on guarding and fittings. The budget allowance for 2007 - 2008 is $634,098.
47 Mr Ly detailed his personal contribution to the community. He is the chairman of an organisation called "Cambodia Vision". This body provides charitable assistance to Dr Peter Wong, who provides eye care to people in Cambodia and Vietnam. To date, over 100 people have been treated by Dr Wong through funding by Cambodia Vision. In 2006, Mr Ly personally donated 100 tonnes of rice to villages in Cambodia. This was the fourth or fifth occasion he has provided such a donation directly to villages. He also provides financial support to various villages in Cambodia.
48 Mr Ly also set out the company's community work, stating that it is a significant supporter of refugees, with approximately 60 per cent of the company's workforce being refugees from Cambodia or Vietnam. When refugees are employed by the company, great care is taken to make sure the families are introduced into the local Asian community so that they can set up their own social networks. Mr Ly gave an example of a car he donated to a refugee family who had no means of purchasing one. In 2006 - 2007, he stated the company donated $261,762 to charities. Similar amounts have been donated since 2001. The donations since July 1999 to June 2006 total $1,446,312.
49 Mr Ly stated following Mr Yang's accident, the company assisted him in every way that it could. Mr Yang returned to work after four days and was put on light duties so that he did not have to work night shift. All his medical expenses were met by the company. Mr Ly said that he deeply regretted, both personally and on behalf of the company, that Mr Yang was injured. He said the entire court process had been extremely serious for him. At times it had been quite traumatic and stressful. He said that he was confident that the company and all its employees fully comprehend the importance of occupational health and safety and that the company is now well and truly on the road to doing everything possible towards ensuring safety at all times for its workforce.
50 During cross-examination, Mr Ly could not recall who wrote the cheques to pay the fines that had previously been imposed for breaches of the Act. Mr Ly said that he did not regard himself as an expert in respect of the safe operation of the Rewinder No 1 Machine, or in respect of its guarding, although he had knowledge in respect of what was required to guard the machine. He had not spoken to Mr Ngai prior to the accident because he was responsible for the day to day operations of the company, nor had he talked to him about occupational health and safety. He agreed that there was no limit on what could be spent on occupational health and safety. During re-examination Mr Ly said that he spoke to Mr Siva, the safety officer, almost on a daily basis in respect of guarding issues, when provided him with advice in respect of safety. He also spoke to Mr de Vries, the production manager, in respect of guarding issues, including changing the design of the guards on the machines.
The Principles
51 The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the Act. Their Honours stated:
[8] The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing.