SafeWork NSW v ABC Tissue Products Pty Ltd

District Court of NSW|2021-10-07

Solicitors: Ms Elenka Haigh, Department of Customer Service (for the Prosecutor) Ms L Pike, Holman Webb (for the Defendant) File Number(s): 2021/00007919

JUDGMENT

On 2 August 2021, ABC Tissue Products Pty Ltd ('the defendant') entered a plea of guilty in respect of an offence under s 32 of the Work Health and Safety Act 2011 (NSW) ('the Act') that it failed to comply with its health and safety duty under s 19(1) and thereby exposed Van Ty Quach ('Mr Quach') to a risk of death or serious injury.
The maximum penalty for an offence under s 32 of the Act for a corporate entity is $1,500,000.00.
The prosecutor tendered a Prosecution Tender Bundle which became Exhibit A.
The defendant read an affidavit of Sunny Siu Kei Ngai ('Mr Ngai'), managing director of the defendant, affirmed 6 October 2021 which became Exhibit B, and an affidavit of Paul David Johnson ('Mr Johnson'), Group WHS Manager for the defendant, affirmed 6 October 2021, which became Exhibit C.

SYSTEMS OF WORK PRIOR TO THE INCIDENT

The defendant had a Safe Work Method Statement ('SWMS') in place entitled 'PPM Container Yard Pulp Bale Handling and Storage'. The SWMS was developed by the defendant's health and safety manager, in consultation with Mr Ly and Mr Quach. Mr Ly and Mr Quach were both trained in the SWMS.
The SWMS indicated that the task was to be conducted by workers from the top of the stack of pulp bales. The training for this task, which Mr Quach was trained in, included an instruction not to stand near the edge of the pulp bales and to access the top of a stack of pulp bales using a suitable platform ladder.
The SWMS identified the risk of falls from height for the procedural step of 'bales stored outside are covered with tarpaulins'. The safety control measures for this step were:

Ascending/Descend suitable platform steps to access bale stack;
Use FLT to place tarps on top of stacks;
Keep minimum of 1.8M from edge while laying out tarps;
Implement correct lifting technique to pick up edge of tarp; and
Set up a hazard zone using barriers and signage.

The defendant had an industrial platform ladder at the Paper Mill which enabled workers to access the top of the bale stacks. The platform ladder was mobile and could be manoeuvred to access the top of the bale stacks. The platform ladder was available to use on the date of the incident, however, it was not located in the area of the incident, but rather it was under the awning of the main building at the Paper Mill.
The SWMS required workers to remain 1.8m from the edge of the stack of pulp bales, however, Mr Quach found this very hard to do because in his experience, he needed to stand next to, or close to, the edge of the stack to effectively spread the tarpaulins.
Mr Leng Tran ('Mr Tran'), the warehouse supervisor of Mr Quach and Mr Ly, had not seen how Mr Ly or Mr Quach performed the task of installing or removing tarpaulins on pulp bales. Mr Tran worked at the site located at 5 Redfern St.

SYSTEMS OF WORK AFTER THE INCIDENT

SafeWork NSW issued an Improvement Notice to the defendant requiring it to review, update and maintain the SWMS for the placement and removal of tarpaulins.
In response to the Notice, the defendant developed a new SWMS entitled 'Stack and Store Wood Pulp Bales: Including Removal of Covers'. The revised SWMS outlined the procedural steps for the tasks of installing, securing and removing tarpaulins on pulp bales.
A workbox fitted to a forklift is used to access the side of the stack of pulp bales to secure the tarpaulins in place. The task of installing tarpaulins on top of the pulp bales is now conducted from the ground with the use of forklift tarp spreaders connected to two forklifts. Similarly, the task of removing tarpaulins is now conducted from the ground and within the workbox.
The revised SWMS states:

'climbing onto or walking on the top of a stack is prohibited at all times'; and
'DO NOT CLIMB ONTO THE TOP OF THE STACK!'

On 11 February 2019, the defendant purchased two forklift workbox platforms which cost $1,780.00. The defendant also made a pair of tarp spreaders in its engineering shop, the approximate cost was $1,975.00. The tarp spreaders have been re-engineered twice so far to enable them to be operated safely and effectively.
On 22 February 2019, the defendant trained workers in the revised SWMS.

SENTENCING

The penalty to be imposed must be one which will give overall effect to the policy of the Act, in particular, ensuring the safety, health and welfare of workers and others on workplace premises. I have had regard to the principle contained within the Act that workers should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work: s 3 of the Act.
The Court is to be guided by the provisions of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('the Sentencing Act') which include: 1. Section 3A which sets out the purpose of sentencing; 2. Section 21A which sets out the aggravating, mitigating and other factors in sentencing; and 3. Section 22 which provides that a guilty plea is to be taken into account on sentence, as is the time when the plea was effectively indicated or entered.
The Court is to approach a sentencing exercise on the basis of it being one of 'instinctive synthesis': Markarian v The Queen (2005) 228 CLR 357.
The approach to sentencing has been identified by Russell SC DCJ in SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 at [109] in this way: 'The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; [2011] 244 CLR 120. This approach to sentencing, known as the "instinctive synthesis" approach, involves the making of a global judgement without any attempt to state precisely how any given factor has influenced the judgement.'

OBJECTIVE SERIOUSNESS OF THE OFFENCE

The duties of the defendant require that it ensure the health and safety of workers as far as reasonably practicable. This duty is not delegable, and the defendant had control and influence over the workers at the site. The duty requires the identification of risks in the workplace and an assessment of measures to address such risks.
The primary factor to be assessed is the objective seriousness of the offence. Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464, 474-5.
The gravity of the offence is determined by the extent of the duty holder's failure to ensure, so far as was reasonably practicable, that its workers were not exposed to risks to their safety: Orbit Drilling v The Queen (2012) 35 VR 399 at [62] (Maxwell P, Bongiorno JA and Kyrou AJA); Veen v R (No. 2) (1988) 164 CLR 465.
Although the gravity of the risk, degree of foreseeability of the risk and the ease of implementation of remedial measures are relevant to the assessment of objective seriousness, I am not limited to taking into account such factors.
The objective degree of foreseeability is a matter for the Court to have regard to when considering the gravity of the offence: Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610 at [81] ('Capral Aluminium').
An offence will be serious where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible: Morrison v Powercoal Pty Ltd (No. 3) (2005) 147 IR 117.
Subjective factors should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence: WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at [31].
The Court of Criminal Appeal examined the sentencing process with regard to the Act in the matter of Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 ('Nash v Silver City'). Justice Basten at [34], under the heading 'Assessment of Risk' said: 'The sentencing judge commenced his consideration with the proposition that '[g]reater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely.' However, the truth of that proposition depends upon other considerations, including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends upon an assessment of all those factors.'
His Honour further observed at [42]: 'The culpability of the respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step-by-step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and a little, if any, cost. That assessment will involve both objective considerations and a consideration of what the respondent's responsible officers knew or ought to have known.'
I accept that s 3A of the Sentencing Act is generally regarded as a codification of the common law principles of sentencing: R v MA [2004] NSWCCA 92. The purposes of punishment in the section are constrained by the sentencing principles that exist under the common law such as the principles of proportionality and totality: R v MMK [2006] NSWCCA 272.
The Court is obliged to make an assessment of where on the scale of criminality the offence lies referable to the maximum penalty prescribed by the legislature: R v Cage [2006] NSWCCA 304 at [17]-[18] (Latham J).
The defendant's duty required it to identify risks at the site and to adopt measures to eliminate or minimise them: s 17 of the Act; Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at [34] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
The risk of a person being injured when falling from the top of a stack of paper bales whilst attempting to put a tarpaulin over the top of the bales was both obvious and serious.
The omissions of the defendant causative of the risk are failures to take the following measures: 1. Require that the task of installing, securing and/or removing a tarpaulin on a stack of pulp bales be undertaken from the ground, with the assistance of a mechanical tarp spreader, such as a forklift tarp spreader; and/or 2. Develop, implement and enforce (including by providing adequate supervision) a safe work procedure or SWMS for the task of installing, securing and/or removing tarpaulins on pulp bales which: 1. described the control measures to be implemented to eliminate or minimise the risks, such as performing the task from the ground with the use of a forklift tarp spreader and/or from a workbox; and/or 2. specified that workers were not permitted to climb onto the top of a stack of pulp bales whilst installing, securing or removing a tarpaulin.
The previous SWMS indicated that the task of placing the tarpaulins on the pulp bales was to be performed by workers from the top of the stack of pulp bales. Thus, Mr Quach was trained to perform the task on top of the pulp bales. That training included an instruction not to stand near the edge. Consistent with this, the SWMS stated 'Keep minimum 1.8m from the edge whilst laying out the tarps'.
According to Mr Quach, it was very hard to remain 1.8m from the edge of a stack; in his experience, he needed to stand next to, or close to, the edge of the stack to effectively spread the tarpaulins: Agreed Statement of Facts [43].
The SWMS stated that workers were required to access the top of the bale stack using a suitable platform ladder. Such a ladder was available, but at the relevant time it was not located in the area of the incident, but was under the awning of the main building of the Paper Mill.
The foreseeability of the risk was high, such risk being a risk that was created by the necessity of the workers to install, remove or secure a tarpaulin on a stack of pulp bales from above ground level.
The risk of falling from height in workplaces is notorious: SafeWork NSW v Orbit Formwork Pty Ltd [2019] NSWDC 685; SafeWork NSW v Sapform Pty Ltd [2020] NSWDC 86. The risk of falling from an unguarded stack of paper bales more than three metres high should have been glaringly obvious to the defendant.
The significant amount of guidance material available to the defendant underscored the foreseeability of the risk. Aspects of this guidance material is summarised at [26]-[32] of the Agreed Statement of Facts.
The available control measures were straightforward: 1. Since the incident, the defendant has fabricated a pair of tarp spreaders in its own engineering shop at an approximate cost of $1,975.00; 2. The defendant has also purchased two forklift workbox platforms at a cost of $1,780.00; 3. Revisions to the SWMS to make it clear that climbing onto the top of the stack was not permitted could readily have been made; and 4. It would not have been onerous to ensure that workers were trained and supervised in a way that would ensure such a system of work was adhered to.
The use of a mechanical tarp spreader has been identified as a way of eliminating the risk of falls in the context of tasks such as that being taken by Mr Quach. Alternatively, the task may have been able to be performed via the use of a workbox.
Employers must take steps to protect workers against risks created by inadvertent conduct of workers in the course of their work, if it is reasonably practicable to so: SafeWork NSW v Poletti Corporation [2019] NSWDC 491 at [88].
A breach may be regarded as more serious where there was a strong prospect of serious consequences as compared to a breach which was unlikely to have such consequences. The occurrence of death or serious injury may be a manifestation of the degree of seriousness of the relevant risk.
The injuries sustained by Mr Quach were extremely serious. Having regard to the height of the pulp bales, the concrete floor below, the lack of edge protection and the fact that it was very difficult to perform the task of spreading the tarpaulins without manoeuvring close to the edge of the stack, there was a significant prospect that serious consequences would flow from the defendant's breach.
However, I accept that it is the risk that I am assessing the seriousness of, and not the manifestation of it. At [53] in Nash v Silver City, Basten JA dealt with the proper approach to considering the objective seriousness of offences under the Act, saying: 'It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of the injury occurring is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialise. The objective seriousness of the conduct will also be affected by the ease with which mitigation steps could have been taken.'
Where there was an obvious or foreseeable risk to safety against which appropriate measures were not taken, in circumstances where such measures were available and feasible, it will be a serious offence: WorkCover Authority (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 at [37] (Kearns DCJ).
The objective seriousness of an offence under s 32 of the Act is considered in the context of the graduation of offences contained in ss 31-32 of the Act: Nash v Silver City at [54]-[56]. The matters relevant to objective seriousness for a s 32 offence include:

The potential consequences of the risk. Consequences may range from mild to catastrophic. Offending will be more serious where the potential injuries are severe, regardless of whether they are likely to materialize: Ibid [34];
The availability of steps to eliminate or minimise the risk: Ibid [53];
Whether those steps are complex, burdensome or mildly inconvenient if mitigating steps could easily have been taken, the offending will be more serious: Ibid [53];
Whether the risk was known or ought reasonably have been known to or identified by the offender;
Whether the risk was an obvious or clear one; and
The vulnerability of the workers exposed to the risk: SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 at [55] (Russell SC DCJ).

The circumstances of the incident demonstrated that the safety controls developed in the SWMS, involving the use of an industrial platform ladder to access the bale stack, and workers keeping a minimum of 1.8m from the edge while laying out the tarps, were inadequate safety controls, and that workers were still exposed to the risk when undertaking the task. The defendant acknowledges that its failure to develop an adequate safe work procedure contributed to the risk.
Following the incident the defendant undertook an extensive review of its systems for installing, securing and removing tarps from stacks of pulp bales at its sites. It introduced a series of controls to eliminate the risk, and prevent a re-occurrence of the incident. It prohibited workers from accessing the top of pulp bales to undertake the tasks of installing, securing and/or removing tarpaulins. It also developed, manufactured and implemented an engineering control - namely a mechanical tarp spreader to undertake the task. Further, it developed, implemented and enforced a new SWMS for the task, which eliminated the risk.
As a consequence of the investigations made by the defendant after the incident, it was identified that there was not a way of spreading the tarp over the top of bale stacks that did not involve a worker accessing the top of the bales. After the incident the defendant implemented a companywide ban upon any employees accessing or working on top of any bale stacks.
The defendant then undertook extensive research and consultation with its workforce to identify if there were any commercially available plant or equipment used in the industry to undertake the task of spreading tarps over the top of the bale stacks.
The defendant undertook the task of designing, developing, testing, fabricating and implementing a new system of work using tarpaulin spreaders that were used to cover the loads on large trucks, to be available for use over the pulp bales - I accept that this was not a simple or straightforward measure. The evidence of Mr Johnson in Exhibit C discloses that it involved the investment of considerable time, resources and money by the defendant to develop and implement safe and effective control measures, and took over two years to finalise.
The total re-engineering and development by the defendant cost approximately $30,000.00, including fabrication of equipment, purchase and certification of other equipment, consultation with workers on the development of the new system and training in relation to the new system of work.
The system that has been implemented eliminates the requirement for workers to access the top of the pulp bale stacks, and therefore eliminates the risk that arose on the date of the incident. The defendant's safety management system contains numerous procedures, handbooks, risk assessment protocols and safety inductions for all workers when they commence employment. It also contains systems for monitoring and auditing of compliance with safety systems, with formal internal and external audits of the work health and safety management system.

DETERRENCE

In fixing a penalty in relation to these offences, an important objective feature is the need for specific and general deterrence. This is enshrined in s 3A(b) of the Sentencing Act.
General deterrence is a significant factor when safety obligations are breached. The fundamental duty of the Court to ensure a level of penalty for a breach will compel attention to work health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 (Hungerford J).
When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68.
The Court of Criminal Appeal in Bulga Underground Operations v Nash (2016) 93 NSWLR 338 at [177]-[180] reaffirmed the principle that both aspects of deterrence are matters which should be normally given weight of some substance in the sentencing process, unless there are exceptional circumstances which would allow a Court to depart from this rule, citing with approval the decision of the Full Bench of the Industrial Court of NSW in Capral Aluminium at [74]-[75] which said: '[74] … It follows that both aspects of deterrence [specific and general] are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]), we would expect such cases to be very rare and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. … '[75] … Even where an offender demonstrates good character or a commitment to rehabilitation, the court may be obliged to have regard to the need for general deterrence: see R v Thompson (1975) 11 SASR 217 at 222. This is particularly so where the offence in question is prevalent in society and represents a serious threat to the community. The need for general deterrence in relation to serious offences under the Act is undeniable.'
General deterrence must be a significant feature of the sentence imposed upon the defendant. It can be appropriately used to direct the industry's attention to the consequences of inattention and the need for greater concentration on the potential risks associated with working in an environment where some of the tasks required of the workers involve them working at height over a concrete floor.
The requirement to comply with the expectation of the community, that both large and small employers will comply with safety requirements, means that employers must take the obligations imposed by the Act very seriously. However, whilst general deterrence is a matter that I must consider in the sentencing process, it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all other factors.
General deterrence must be approached, in my view, in the context of the industry in which the defendant operates. The types of activities, as well as the broader hazards and risks associated with the manufacture and distribution of paper products, such as tissues, toilet paper and hand towels from pulp, when such pulp is stacked in bales that are about 3 metres high to my mind suggests that the defendant operates in an industry that has aspects of its processes which are dangerous.
In relation to specific deterrence, the attitude of the defendant to questions of workplace safety and any steps taken to improve the safety of its worksites following a breach of a duty are relevant, as is the propensity for the defendant to reoffend.
The defendant continues to operate a significant business, employing around 375 people and operating over 11 sites. Whilst the defendant has taken significant steps to substantially reduce the prospect of a similar incident occurring in the future, I must have some concern, given the defendant's history of offending, to which I will refer later, and its continued operation, that there remains a need for specific deterrence.

AGGRAVATING FACTORS

The defendant has a number of previous work and safety offences, including breaches of the duty to ensure health and safety of employees under prior iterations of the Act in 1998, 2002 and 2004: s 21A(2)(d) of the Sentencing Act. Prior convictions are pertinent to deciding where, within the boundaries set by the objective circumstances, a sentence should lie: R v McNaughton (2006) 66 NSWLR 566 at [26]. I accept however, that prior convictions should not be taken into account in such a way to punish the offender again for those earlier matters, but they do not assist the offender in affording it any particular leniency.
In 2017, the defendant committed an offence under s 32 of the Act, when an employee was very seriously injured after being hit by a large industrial 'jumbo roll' of tissue paper. On 23 October 2020, his Honour Judge Scotting DCJ sentenced the defendant for that offence after a plea of guilty: SafeWork NSW v ABC Tissue Products Pty Ltd [2020] NSWDC 640. At [75] his Honour stated as follows: 'It should be noted that the offender had in place significant safety systems overseen by dedicated WHS staff. However, the system did not identify or control the glaring risk of serious personal injury or death presented by the forklifts unloading jumbo rolls in the loading bay area. Only so much credit can be given for extensive and well-documented safety systems when it is demonstrated by a tragic incident like this one that they have significant and undeniable flaws in them. The offender presented no explanation for how this could have occurred.'
This sentence was handed down by his Honour some 15 months prior to this offence. It causes me some concern that despite the significant fine imposed by his Honour, it appears to not have had any great impact to the offender's attitude to providing a safe workplace for employees. However, I do accept that prior to the conviction in October 2020, the defendant had not breached its duties for 17 years, and prior breaches were at a lower level of seriousness.
The injury, harm and loss caused by this offence was substantial: s 21A(2)(g) of the Sentencing Act. For an aggravating factor to be established, I must be satisfied beyond a reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26]. It is not necessary that an injury occurred for the offence to be established, the creation of a risk is sufficient. In this circumstance, Mr Quach was tragically, very seriously, injured. Mr Quach suffered a traumatic brain injury, spinal fractures resulting in leg paralysis. He spent 13 weeks in hospital and has lost the ability to walk. He has been left with significant impairments that will no doubt persist for the rest of his life. He may never return to the workforce.

MITIGATING FACTORS

The defendant co-operated with the SafeWork investigation: s 21A(3)(m) of the Sentencing Act.
I accept that the defendant has a strong sense of social responsibility for the broader community, and since commencing operations in 1986, it has donated more than $42 million to hospitals, charities and other organisations in Australia and in funding programs to assist disadvantaged persons overseas: s 21A(3)(f) of the Sentencing Act.
In recent years the defendant has increased the size of its Safety Department in order to improve the development of its safety systems, as well as up-skilling its Safety Officers. The defendant has also increased the level of supervision and auditing of compliance by its workers with those systems.
The defendant has made a number of significant changes to its safe systems of work since the incident, and I accept is committed to do so. I accept that the defendant has reasonable prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act.
Section 21A(3)(i) of the Sentencing Act provides that remorse may be taken into account as a mitigating factor in recognition of the remorse shown by the defendant, and this has been demonstrated by Mr Ngai's affidavit (Exhibit B) and Mr Johnson's affidavit (Exhibit C). I accept that the defendant has shown remorse and contrition and as such is entitled to leniency on that basis. I also accept that the defendant has supported Mr Quach since the incident, and is entitled to some leniency on that basis.
The defendant entered a plea of guilty early, and the prosecutor submits it is open to me to find that the defendant is entitled to the maximum discount on that basis, thus I will allow the deduction of 25% for the utilitarian value of the pleas in accordance with the principles set out in R v Thomson & Houlton (2000) 49 NSWLR 383: s 21A(3)(k) of the Sentencing Act.
The appropriate fine for the defendant is $600,000.00. The defendant is entitled to a discount of 25% for the early plea.

PENALTY

I make the following orders: 1. The defendant is convicted. 2. The appropriate fine is $600,000.00 and that will be reduced by 25% to reflect the early plea. 3. Accordingly, I order the defendant pay a fine of $450,000.00. 4. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor. 5. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW) the defendant is to pay the prosecutor's costs agreed in the sum of $25,000.00.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 October 2021

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