Inspector Wolf v Australian Steel Mill Services Pty Limited

Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Occupational Health and Safety Act 2000

Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610, 99 IR 29 Department of Mineral Resources of New South Wales (Inspector McKensey) v Kembla Coal and Coke Pty Limited (1999) 92 IR 8 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 R v Thompson, R v Houlton (2000) 49 NSWLR 383 Regina v Way [2004] NSWCCA 131 Rodney Morrison v Powercoal Pty Ltd (2003) 130 IR 364 CASES CITED: State Rail Authority of NSW v The Honourable Justice Bauer and Others (1994) 55 IR 263 Veen v The Queen (1979) 143 CLR 458 Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 Winchester v R (1992) 58 A Crim R 345 WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 WorkCover Authority of New South Wales (Inspector Riley) v Broken Hill Company Limited (1998) 83 IR 427

PROSECUTOR Ms K Nomchong of counsel Solicitor: Mr N A Correy Moray & Agnew LEGAL REPRESENTATIVES:

DEFENDANT Mr M Cahill of counsel Solicitor: Mr C Zoppo Sparke Helmore

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

INSPECTOR ROSS WOLF v AUSTRALIAN STEEL MILL SERVICES PTY LIMITED

Prosecution under s 8(1) of the Occupational Health and Safety Act 2000

1 Australian Steel Mills Services Pty Limited ("the defendant") conducts operations at BlueScope Steel Limited at Port Kembla in the State of New South Wales. The operations involve the removal and processing of slag from the slag pits that are situated on Bluescope's property. 2 The defendant employed Darren Sinclair, a plant operator. On 23 June 2002 Mr Sinclair, while operating a CAT 992 front-end loader, was about to dig out Slag Pit No. 1 when an explosion occurred in the slag pit. The explosion resulted in molten slag piercing the cabin of the loader. As a consequence, Mr Sinclair sustained serious burns. 3 Inspector Ross Wolf of the WorkCover Authority of New South Wales charged the defendant with an offence under s 8(1) of the Occupational Health and Safety Act 2000. Section 8(1) provides: (1) Employees

An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. 4 In the amended application for order it was alleged that the defendant failed: To ensure the health, safety and welfare at work of its employees including Darren Sinclair ('the worker') contrary to s8(1) of the Occupational Health & Safety Act 2000 in that the said worker, while operating a CAT 992 front end loader ('the loader') in preparing to dig out the No. 1 slag pit at the premises, suffered serious burn injuries when an explosion occurred in the slag pit resulting in molten slag being blown into the front end loader cabin and elsewhere, by reason that: 1 The defendant failed to ensure that systems of work and the working environment in relation to the work involving the digging of slag with the use of the loader were safe and without risk to health in that: 1 there was a risk of explosion occurring within the slag pit in the event that excess quantities of moisture came into contact with the molten slag; 2 there was risk of excess moisture coming into contact with the molten slag because: 1 the loader operator used a pond of water adjacent to the slag pit to cool the loader tyres at regular intervals during such work involving the digging in the slag pit; 2 there was a risk of inadvertent capture of water by the loader during the process of driving through the pond in cooling the loader; 3 there was a risk that water inadvertently captured by the loader during its cooling in the pond would be carried to the slag pit and come into contact with the slag; 4 there was no documented procedure for the proper operation of the loaders during the process of cooling them using the pond such as would prevent inadvertent capture of water during such cooling process; 3 there has been no proper risk assessment of the work which identified the risk of transference of water from the pond having regard to the pond being used by the loaders incidental to the digging and loading out. 2 The defendant failed to provide such instruction and supervision in relation to the use of the pond for the purpose of cooling tyres of the loaders digging in the slag pit, such as was necessary to ensure the health and safety of its employees at the place of work. 5 The further particulars provided in the charge were as follows: 1 The defendant was at all material times an employer. 2 At all material times the defendant employed the worker as a loader operator.

3 At all material times the worker was operating the loader at the premises during the course of his employment for the defendant.

4 On 23 June 2002 the worker sustained serious burn injuries when an explosion occurred in the slag pit causing molten slag to be blown into the cabin of the loader and a resulting fire.

The defendant pleaded guilty to the charge in the amended application for order. Evidence

6 The evidence for the prosecutor consisted of: (a) An agreed statement of facts;

(b) A factual report into the incident by the prosecutor;

(c) Fourteen colour photographs of the incident site;

(f) A report and analysis of the incident by the defendant from a safety perspective;

(g) A certificate of prior convictions revealing two such convictions, one in 1993 and another in 1994 arising from breaches of s 15(1) of the Occupational Health and Safety Act 1983. 7 The evidence of the defendant consisted of an affidavit of Andrew Troughton, manager of furnaces for the defendant and Kenneth Andrew Wilson, the defendant's chief executive officer. Neither Mr Troughton nor Mr Wilson were required for cross-examination. 8 The agreed facts included the following: 7 The slag pits were situated within the Basic Oxygen Steelmaking ('BOS') area on the premises owned by BlueScope Steel Limited. The operation involving the manufacture of steel which is processed in the BOS furnaces creates a by-product which is known as slag.

8 The slag resulting from the steel manufacturing process, when cooled, is a rock type substance comprised of impurities that float to the top of the molten steel in the steel making furnace. The molten slag is poured off the molten steel into what is known as a 'slag pot'. The slag pot is then transferred by a rail transfer car to an external area away from the BOS furnaces known as the 'slag pits' . Then the slag pot is transported by a pot carrier vehicle to the edge of a slag pit where the molten slag is poured from the slag pot into the slag pit.

9 Once the slag is tipped from the pot into the slag pit it is allowed to cool before it is removed from the slag pit by front end loaders.

10 As at the date of the incident there was a work instruction which required at the beginning of each shift and prior to slag being tipped into the slag pit, a visual examination is undertaken by the Pot Carrier Operator ... If excess water is detected, the Pot Carrier Operators will instruct the loader operator to place warm slag onto the wet areas and molten slag is not poured into that slag pit until the excess water has evaporated.

11 If moisture sufficient to cause an explosion was present on the floor of the slag pit when molten slag is being poured, then an explosion would occur when the molten slag contacts the moisture.

12 On 23 June 2002 at approximately 4.30 a.m. the worker was operating the Caterpillar D992 loader in the slag pits. The worker was using the loader to dig and remove cooling slag that had been previously poured into various slag pits, including the No1 slag pit. At the time of the subject incident. The worker was about to start digging and removing cooling slag from the no. 1 slag pit. As the worker was about to dig the slag with the bucket of the loader, an explosion occurred.

13 The explosion blew molten slag over the loader, blew out the loader's windows and caused a fire.

14 An examination of the slag pit was undertaken by ASMS staff who dug the pit out shortly after the accident. This examination revealed no evidence to suggest that there was excess water present on the floor of slag pit. No other reason could be determined as to the cause of the explosion

15 The worker, as a consequence of the explosion, sustained burn injuries to his body.

16 On 23 June 2002 an inspection of the premises by Inspector Gjaltema of WorkCover Authority occurred and the following observations were noted: (a) two pits which were identified to Inspector Gjaltema as slag pits 1 and 2; (b) between the two slag pits was a pond of water; (c) each slag pit covered an area approximately 25 metres by 20 metres and was bordered by steel ingots and a rubble wall across its front. The purpose of the rubble wall is to ensure that molten slag is contained in the slag pit by creating a physical barrier ; (d) observation of slag pit no. 1 revealed a disturbed amount of slag material inside the pit approximately six metres from the rubble wall; (e) in front of the rubble wall were tracks in the dirt and a dark colouration line running alongside the track marks; (f) approximately five metres from the rubble wall there was a front end loader parked; the front end loader had rubber tyres with chains around the tyres; at the time of observation the loader was partly parked in water; the load was identified as a Caterpillar 992, plant identification number L117; (g) the driver's cabin on top of the loader was burnt out, the front window of the cabin was broken and the front lights on the loader were burnt out; (h) on the driver access platform and on one of the handrails around the back of the access platform, a quantify of black material and also lying on the access platform, was part of a broken window of the loader; (i) observation was also made of a pot carrier, plant no. T301, which had broken windows.

17 Consequent upon investigations the prosecution has formed the conclusion that the only logical explanation for the explosion is that water became trapped under the molten slag resulting in the creation of superheated steam. The superheated steam then caused the explosion.

18 The risks associated with moisture and its potential for causing explosive reactions when mixed with molten slag or steel, were documented and addressed by the defendant prior to 23 June 2002 and well known to it and its staff.

19 At all material times on and prior to 23 June 2002, the pond situated adjacent to the slag pits at the premises was used for the purpose of cooling down the tyres of the loaders. While the loaders are digging the slag pits the tyres on the loaders heat up and it was usual practice for the loader drivers to drive through the pond many times during a shift for the purpose of cooling the tyres of the loaders.

20 At the time of the incident water was not used to cool the molten slag in slag pit one. The previously adopted practice of sprinkling water on the cooling slag had been stopped following discussions between management and staff.

21 Following the subject incident the defendant installed a dish drain in order to remove the pond of water. The defendant has installed an overhead sprinkler system, which is operated by the loader drivers by remote control, in order to allow the loader drivers to cool the tyres of the loaders. 22 As a result of the said failures, Darren Sinclair sustained serious burn injuries. Darren Sinclair received treatment at Wollongong Hospital for a period of two weeks and was later transferred to the intensive care unit of Figtree Hospital in which he remained for a period of two days. Consideration

9 As the prosecutor submitted, it was held in Regina v Way [2004] NSWCCA 131 at [121] that the Court should exercise its sentencing discretion in accordance with established sentencing practice and by reference to the matters identified in ss3A (purposes of sentencing), 21A (Aggravating, mitigating and other factors in sentencing), 22 (Guilty plea to be taken into account), 22A (Power to reduce penalties for pre-trial disclosure) and 23 (Power to reduce penalties for assistance provided to law enforcement authorities) of the Crimes (Sentencing Procedure) Act 1999. 10 The sentencing practice established in this Court under the Occupational Health and Safety Act involves a consideration of both the objective and subjective factors relevant to the offence and the offender. The primary factor is the objective seriousness of the offence, which involves an objective assessment of the nature and quality of the offence: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474. Subjective factors play a subsidiary role in the determination of penalty. 11 I turn firstly to a consideration of the objective seriousness of the offence. There was no direct evidence as to how the explosion in the slag pit occurred but the prosecutor conceded that the only explanation was that water from the loader came to be mixed with the molten slag. It then became trapped, creating superheated steam, which then caused the blast. The prosecutor submitted the proximity of the loader to the explosion indicated the possibility of water having been in the bucket of the loader and somehow falling from the bucket on to the slag. 12 The risk in this case, therefore, was a risk of an explosion involving molten slag and superheated steam. The consequences of such an explosion were manifested in the serious injuries suffered by Mr Sinclair and the significant damage to the loader cabin. The evidence shows the risk was known and recognised by the defendant. In pleading guilty to the offence the defendant has acknowledged that it failed to ensure that systems of work and the working environment in relation to the work involving the digging of slag with the use of the loader were safe and without risk to health and, further, that it failed to provide such instruction and supervision in relation to the use of the pond for the purpose of cooling tyres of the loaders digging in the slag pit, such as was necessary to ensure the health and safety of its employees at the place of work. 13 Ms K Nomchong of counsel for the prosecutor submitted that notwithstanding the defendant's level of knowledge and understanding about the risk, which she said stretched back to 1991, the defendant had in place a system of work in which slag pits were adjacent to a large pond of water and loader drivers were directed to drive the loaders through the water in that pond. Ms Nomchong submitted: The mere proximity of the pond to the slag pits meant that the risk of injury was present. The fact that driving the loaders through the pond where there was always the possibility of the bucket of the loader capturing water - either through inattention, carelessness or by deliberate conduct - meant that the risk was a material one. In the absence of specific Work Instructions and the fact that training in relation to the dangers associated with water and molten slag mixing seems to have been less than it should have been, the system of work utilized by the Defendant carried with it an inherent, identifiable and serious risk of injury. 14 It was further submitted for the prosecutor that the risk of water and slag mixing was "absolutely foreseeable" given the proximity of the pond to the slag pit No. 1 and the fact that loader operators were directed to use the pond to cool the tyres of the loaders whilst undertaking the tasks associated with removal of slag which was still warm.

15 The defendant conceded that it did not recognise the risk associated with the existence of the pond of water adjacent to the slag pits and its use for the cooling of the loaders tyres. However, Mr M Cahill of counsel for the defendant submitted there were a number of factors that mitigated the seriousness of the offence. These included: (a) All of the loader operators employed by the defendant, including the injured worker (Darren Sinclair) are the holders of Certificates of Competency for the operation of front end loaders issued by the WorkCover Authority of New South Wales. (b) The defendant has in place a system of ongoing training and reaccreditation of its employees designed to ensure ongoing awareness of and adherence to safe work methods and practices in all aspects of the company's operation. (c) Each employee is required to undergo reaccreditation every 12 months. (d) ASMS undertakes regular training programs in workplace safety for all its employees, including joint initiatives with Bluescope, such as the "Stop for Safety" program. (e) Prior to the subject incident, the defendant had in place documented work procedures that addressed the risk of moisture building up on the floor of the slag pits. The work procedures in place prior to the incident required an inspection, by the "pot carrier" operator at the commencement of each shift and the build up of any moisture, for example from rainfall, on the floor of the pits was addressed by the loader drivers placing "warm" slag on any wet patches to dry up the moisture before any pots of molten slag were poured into the pits.

16 Mr Cahill submitted that: With the benefit of hindsight, it is apparent that the pool of water used to cool the tyres of the loaders gave rise to a "risk" of a loader operator, either intentionally or inadvertently, capturing water from the pond in the bucket of a loader prior to, or in the course of, digging a pit. Capture of a significant quantity of water in the bucket of a loader gave rise to a potential source of an explosion, as water from the bucket being tipped on the surface of cooling slag could penetrate the surface of the slag and then become trapped beneath the surface of the slag where it would become superheated steam and thus, capable of driving an explosion. The preconditions for an explosion would not arise unless the quantity of water captured in the bucket was sufficient to penetrate the surface of the cooling slag, as smaller quantities of water would evaporate on contact with the surface of the slag. But, as ASMS employs only certified, experienced operators and required its operators to drive front-end loaders in accordance with good "operating practices", the risk of inadvertent capture of water was remote. Prior to the incident, in accordance with proper operating procedure, it was established practice for loader operators to driver loaders with the buckets "crowded back" towards the cabin and the lip of the bucket over 1.5 metres from the ground. A loader being driven in this manner created little risk of inadvertent capture of water from the pond. 17 Mr Cahill further submitted that the risk must be placed in context. That context included: · the company's detailed occupational health and safety system; · the company's commitment to competency based training; · the company's commitment to occupational health and safety training; · the company's history in the context of an extremely high risk industrial operation; and · the fact that the incident takes place against a background of in excess of 20,000 pot pours per annum for in excess of 10 years. 18 The mitigating factors identified by Mr Cahill are relevant in the consideration of penalty. This was not a case of a defendant having no safety systems in place, or lacking regard for the importance of safety in the workplace or completely ignoring known dangers. The existence of safety procedures and instructions is a factor that should mitigate against the seriousness of the subject offence: see Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 at 342; WorkCover Authority of New South Wales (Inspector Riley) v Broken Hill Company Limited (1998) 83 IR 427 at 429; and Department of Mineral Resources of New South Wales (Inspector McKensey) v Kembla Coal and Coke Pty Limited (1999) 92 IR 8 at 25). 19 There was, however, a failure on the part of the defendant to recognise the highly dangerous prospect of water coming into contact with the molten slag - an eventuality that was foreseeable given the proximity of the water pond to the molten slag in the slag pit, the practice of frequently cooling the loader's tyres in the pond and the fact that the bucket on the loader was capable of carrying water. In addition, the defendant failed to provide proper instruction and supervision in relation to the use of the pond for the purpose of cooling tyres of the loaders. Unlike the work instructions for pot carrier operators, which specifically required checking for moisture, no such instructions existed for loader operators.

20 The observation by Hill J in WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 at 85 is apposite: This case is yet another illustration of the need for employers to exercise abundant caution, maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. It is essential that the approach should be a pro-active and not a re-active one; employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time in the workplace. 21 Had the defendant comprehended the presence of the risk, as it should have, it could have taken relatively simple steps to avoid the risk. This is demonstrated by the measures taken following the incident. The pond no longer exists and the area has been excavated and a dish drain created so that no water can accumulate in the area. A pump has also been installed. The method of cooling the tyres is now done by means of cone sprays operated by remote control. The defendant now provides instruction and training in relation to the risks of water on hot slag and a new procedure has been implemented requiring buckets to be checked for water prior to digging. 22 In Rodney Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416 the Full Bench held: [32] In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected: Hannah v Wonar Pty Ltd (unreported), Fisher CJ, Glynn and Cullen JJ, CT 90/1214, 30 June 1992 at 9); Tyler v Sydney Electricity (1993) 47 IR at 5; Independent Cargo and Wool Services Pty Ltd v Mingare (unreported, New South Wales Industrial Court, CT92/1041, 10 March 1994 at 4); Watson v Southern Asphalters Pty. Ltd (1996) 83 IR 446 at 456; Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464. [33] Thus it may be the case that an employer prosecuted under s.15 of the Act was aware of a serious risk to the health and safety of its employees but took no action to eliminate the risk, notwithstanding that simple and straightforward remedial steps were available. The gravity of such an offence, despite the fact no one was injured and having regard to relevant subjective factors, might be assessed at the high end of the range of penalty available to be imposed on the offender. On the other hand, another employer may have had a good safety record, a safe system of work in place, provided a high level of training, instruction and supervision but through a combination of inadvertence on the part of an employee and a momentary lapse in supervision, a fatality occurs. The assessment of the objective seriousness of the offence could conceivably be at a level lower than that applied to the first employer and, having regard also to subjective considerations, might attract a lower penalty. Importantly, however, in the latter example, the occurrence of death may indicate that the risk to which the deceased employee was exposed despite the employer's demonstrable commitment to providing a safe workplace, represented a serious detriment to safety deserving of a higher penalty than otherwise might be the case. 23 In this case I am satisfied that the defendant had a "demonstrable commitment to providing a safe workplace". However, there was a very serious risk present as manifested by the injuries to Mr Sinclair and the damage to the loader that demanded the utmost care and attention in the form of a safe system of work and adequate instruction and supervision for those employees within the danger zone. This is where there was a significant lapse on the part of the defendant. 24 In relation to specific deterrence, I accept the defendant's submission that this is not a case which calls for the imposition of some additional specific punishment aimed at deterring the defendant from further offending against the Act and/or for the purpose of compelling the company's attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety. The defendant has a relatively good record in a dangerous business and has taken appropriate steps to avoid a re-occurrence of the offence. It follows that specific deterrence is not a factor that should play a significant role in determination of the penalty to be imposed. 25 In Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; 99 IR 29 the Full Bench recognised that in the industrial context, it would be rare that a sentencing court need not impose a sentence that includes an element of general deterrence. I consider it is appropriate to include an element in the penalty to deter others from committing a similar offence. 26 The circumstances of the offender, or the subjective factors, must be taken into account in determining an appropriate penalty. In this regard, the defendant entered its plea of guilty at the earliest possible time and is entitled to a discount on sentence for the utilitarian value of that early plea: R v Thompson; R v Houlton (2000) 49 NSWLR 383. 27 Further, a plea of guilty may attract a greater degree of leniency where the court is satisfied that the plea of guilty reflects contrition on the part of a defendant: Winchester (1992) 50 A Crim R 345 at 350 per Hunt CJ at CL. Whilst there is an obligation on employers to assist and co-operate in rehabilitation (see State Rail Authority of NSW v The Honourable Justice Bauer and Others (1994) 55 IR 263), it was the case here that the defendant provided an extensive rehabilitation and retraining program for Mr. Sinclair with the defendant bearing the cost of training and licences. Mr Sinclair has returned to full time work with the defendant as a truck driver. 28 The defendant has also involved the making of an ex gratia payment of $2,570 (net of tax) to Mr. Sinclair and has expressed contrition. The defendant has co-operated with the WorkCover Authority throughout its investigations of the subject incident. 29 Following the incident the defendant carried out a detailed investigation and review of its occupational health and safety systems, operating procedures and work methods. In particular, the following steps have been undertaken: (a) the pond has been removed by grading the slag pit area and creating a dish drain which allows water to drain away rather than pond in the area adjacent to the pits; (b) the dish drain is the subject of periodic maintenance to ensure that there is no risk of a pond re-forming; (c) an extra pump has been installed to ensure that water flowing into the dish drain is pumped away; (d) overhead cone sprays have been installed in the slag pit area to enable operators to cool the tyres of the front end loaders; (e) work procedures have been amended to include "critical procedure" management - the critical procedures identified as specifically relevant to the subject incident are: (i) compulsory inspection of the slag pits for the presence of water at the commencement for each shift; and (ii) compulsory inspection of loader buckets prior to the commencement of digging to ensure that there has been no inadvertent capture or build up of water that could give rise to an explosion when digging commences. (f) the company's audit system has been upgraded to include regular auditing of the "critical procedures" management system. 30 The defendant has two prior OHS Act convictions. Accordingly, the penalty to be imposed must be assessed against a maximum penalty of $825,000: s 51A; Rodney Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416. However, I do not consider the fact that the defendant has a previous conviction shows a need to impose condign punishment: Veen v The Queen (1979) 143 CLR 458 at 477. Notwithstanding the previous convictions I note the defendant has been in operation since 1989 in what is a dangerous industry. Further, the defendant has demonstrated a strong commitment to occupational health and safety and it is appropriate that I take these considerations into account. 31 I consider an appropriate penalty in this case is $150,000. That amount is discounted by 25 per cent for the early guilty plea and by a further 10 per cent for other subjective factors resulting in a fine of $97,500. The defendant will pay a moiety to the prosecutor. 32 The Court makes the following orders: 1) The offence is proven and a verdict of guilty is entered. 2) The defendant is convicted of the offence as charged. 3) The defendant is fined an amount of $97,500 with a moiety of one-third of that amount to the prosecutor. 4) The defendant shall pay the prosecutor's cost of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. _________________________

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