Central Coast Metal Protectives Pty Limited (CCMP) has pleaded guilty to an offence that being a person conducting a business or undertaking that had a health and safety duty under section 19 of the Work Health and Safety Act 2011 (the Act) it failed to comply with that duty and thereby exposed Jack Marshall (Marshall) and Mitchell Hines (Hines) to a risk of death or serious injury or illness contrary to section 32 of the Act.
The maximum penalty for the offence is a fine of $ 1,500,000.
The prosecutor tendered an Agreed Statement of Facts and an Agreed Tender Bundle which forms the basis of the background set out below.
The defendant conducted a business involving the abrasive blasting and painting of metal components.
Miway Solutions Pty Ltd (Miway) conducted a business or undertaking involving the provision of labour to CCMP. Miway was a subsidiary of CCMP.
The defendant conducted the business or undertaking in conjunction with Miway at premises located at 21 Arizona Road, Charmhaven, NSW (the premises). Those premises included an office and several workshops.
CCMP were engaged by KHR Services Pty Ltd (KHR) to blast and paint 21 off port side 'Mexeflote' pontoons from the ship HMAS Choules. The work was to be undertaken at the premises. KHR provided to CCMP a comprehensive specification document detailing how the work was to be done. This was the first occasion that CCMP had undertaken work of this nature.
The document provided by KHR to CCMP included specific guidance for how the cleaning of the confined space inside a pontoon was to be done and the requisite training of the workers. Relevantly, the document stated:
Prior to any work commencing in the confined space, a risk assessment must be conducted;
only suitably trained confined space entry personnel are to enter the confined space;
high pressure water blasting or abrasive blasting are the stated methods of cleaning the inside surfaces.
Neither Marshall nor Hines were trained or assessed as competent to enter or work in confined spaces. Their induction training was conducted by the Production Manager Brad Wenzel (Wenzel) and involved them being issued with safety glasses and gloves, shown the first aid kit and an induction booklet (containing a drug and alcohol procedure), which took place in the lunchroom, they then walked through the workshops. They were assigned to a team of three painters for their daily on the job instruction. The Operations Manager Michael Bell (Bell) and Wenzel were responsible for the supervision of Hines, Marshall, and the painters.
The work involved using hand tools to scrape the surfaces to remove a tar-like substance.
In circumstances where the substance could not be removed by scraping, Marshall and Hines were instructed by Wenzel to use PPG 314 Thinners (thinners) to break down the material. The Material Safety Data Sheet (MSDS) for the thinners required that the product be used only with adequate ventilation. The thinners were decanted into an open container and placed inside the confined space where it was applied by soaking a rag and rubbing it onto the substance. The removed material was then vacuumed from the floor.
The use of thinners in the cleaning process was directed by Production Manager Brad Wenzel who was employed by CCMP. Wenzel provided Marshall with a half-face respirator to be used inside a pontoon while cleaning with the thinners.
Marshall was unaware of the MSDS for the thinners and its contents. A copy of the MSDS was kept at the premises.
The MSDS relevantly included the following hazards associated with the thinners:
Highly flammable.
Harmful: danger of serious damage to health by prolonged exposure through inhalation.
Vapours may cause drowsiness and dizziness.
The MSDS identified measures for the handling of the thinners which included:
Put on appropriate personal protective equipment.
Avoid breathing vapour or mist.
Use only with adequate ventilation.
Wear appropriate respirator when ventilation is inadequate.
Do not enter storage areas or confined spaces unless adequately ventilated.
The MSDS also included engineering measures such as exhaust ventilation, 'to keep worker exposure to airborne contaminants below any recommended or statutory limits'. In addition, the MSDS provided:
Use a properly fitted, air-purifying or air-fed respirator complying with an approved standard if a risk assessment indicates this is necessary.
[3]
The incident
On the morning of 24 September 2015, Marshall and Hines attended a toolbox meeting with the painters. It was understood that Marshall and Hines would continue to clean inside a pontoon with thinners as they had been doing this work over previous days. Mitchell Hall (Hall), one of the painters, was directly in control of the work to be done.
During the morning, Marshall and Hines were working inside a pontoon being an area of approximately 12 cubic metres. Access to the pontoon was through an open hatch on the top that had approximate dimensions 300mm x 450mm.
Marshall and Hines were cleaning and preparing the surface for painting using the thinners. There was no standby person/spotter outside the pontoon. There was no direct supervision. The painters were carrying out their own activities elsewhere on the premises.
Sometime after entering the confined space, Marshall and Hines were found wandering around outside the pontoon suffering the effects of being overcome with fumes. They were vomiting and appeared to be disoriented. They were taken to and treated at hospital.
Hines returned to work on 28 September 2015 whilst Marshall returned on 30 September. Both workers left their employment with Miway shortly after their return.
[4]
SYSTEM OF WORK PRIOR TO THE INCIDENT
Prior to the incident, there was no risk assessment or safe work method statement (SWMS) for the cleaning of the surfaces inside a pontoon.
The SWMS made no reference to cleaning, or the use of thinners in the cleaning process.
Marshall and Hines were not instructed or trained in painting in accordance with the SWMS.
Marshall and Hines were not provided with a SWMS relating to the cleaning work nor emergency rescue procedures. They were not provided any information relating to the safe handling, use and storage of the thinners, including any of the information set out in the data sheet for the thinners.
They were not required to sign a confined space entry permit on each occasion of entering and leaving a confined space. A permit was completed by a supervisor or manager, which was written up for several days at a time and was across an area within the premises that housed the pontoons rather than being job specific. Whilst the permit identified that all person have been trained, Marshall and Hines had not been trained, nor had experience, working in confined spaces.
The permit was not based on any risk assessment taking in to account concentrations of oxygen levels in the confined space. There was no requirement under the system to do so.
No testing of the oxygen deficiency or the concentration of airborne contaminants within the confined space was done prior to Marshall and Hines entering it, despite such equipment being available at the premises.
No spotter or standby persons were in the vicinity of the pontoon at the time of the incident, and it seems there was no one aware of the specific job that Marshall and Hines were doing, including the area in which they were doing the work.
There was no means used to continuously monitor the air inside the environment in which Marshall and Hines were working, despite this being identified in the permit as a requirement.
The permit referred to personal protective equipment (PPE) to be worn, and from the list the following were ticked:
Respiratory protection;
Eye protection;
Head protection;
Footwear and;
Protective clothing.
Marshall and Hines were not using any protective respiratory devices whilst working in the confined space. Marshall in fact reported during his SafeWork interview the half-face respirator that had been provided, was malfunctioning as it was cracked and was later taped up. With the respirator still being ineffective, Marshall sourced and wore an alternate paper face mask.
There was no ventilation of the confined space that Hines and Marshall were occupying at the time of the accident, despite there being mechanical ventilation equipment available for use at the premises.
[5]
SYSTEM OF WORK AFTER THE INCIDENT
CCMP and Miway undertook an investigation of the incident and identified the need for improved and stricter supervision of the confined spaces work. The following measures were implemented to prevent a recurrence:
1. The use of thinners in the cleaning process was discontinued. Internal surfaces were cleaned exclusively by abrasive blasting.
2. Workers were required to obtain and sign a confined space entry permit on each occasion of entering and leaving the confined space. To this end, each pontoon had a large folder with a permit form and a sign-in sheet.
3. All staff were trained and certificated in the procedures for entering confined spaces and conducting tasks associated with confined spaces.
4. When confined space work was being undertaken there were dedicated spotters/standby persons for workers entering a confined space.
5. Confined space signage was produced and placed on the confined spaces to identify their existence.
6. Fixed hatch covers were fitted to the entry points of the confined spaces on the pontoons to prevent unauthorised or unsupervised access.
7. All inductions were formalised and inductees signed onto them.
8. Regular toolbox talks were held.
9. The provision of PPE including air fed respirators was updated. The faulty respirator identified by Marshall was replaced.
10. Air monitoring devices were provided for use prior to and during each and every entry into a confined space.
11. An amended SWMS was issued on 21 October 2015 to reflect the above measures, and workers signed on to the amended SWMS. The amended SWMS included emergency procedures.
These steps were all implemented within two to three weeks after the incident, at an approximate cost of $20,000.
Whilst Miway's responsibility was the provision of labour to CCMP, CCMP acknowledges that the responsibility for the control and organisation of workers and their safety, was part of its ongoing health and safety obligation. CCMP acknowledges that it was the entity with ultimate responsibility for the safety of the workers, including Hines and Marshall, at the workplace.
[6]
Prior History
CCMP has not previously appeared before the courts on health and safety matters.
[7]
Considerations
I have had regard to the objects set out in section 3A of the Crimes (Sentencing Procedure) Act 1999 for the purpose of sentencing.
[8]
Objective Seriousness of the Offence
The proportionality principle requires that sentence should neither exceed nor be less than the gravity of the crime having regard to objective circumstances: Veen v R (No. 2) (1088) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term "objective circumstances" was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton (2006) 66 NSWLR 566 at [15].
The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R (1998) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed, and set the time limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].
The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] MSWSC 432 at [61].
The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [89]. The question of foreseeability of the risk is to be determined objectively.
The Court of Criminal Appeal has recently examined the sentencing process with regard to the Work Health and Safety Act 2011 in the matter of Nash v Silver City Drilling (NSW) Pty Limited ; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96;93 NSWLR 338. His Honour Justice Basten at paragraph 34, under the heading 'Assessment of Risk' said:
"The sentencing judge commenced his consideration with the proposition that 'greater culpability attached to the failure to guard against 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 on assessment of all those factors."
Further at paragraph 42 his Honour continued:
"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 and overall evaluation of various factors, which may pull in different directions".
My findings about the defendant's level of culpability are based on the following:
1. Employees of the defendant's were placed at risk of serious injury or illness as a result of inhaling fumes from the thinners that the workers were using to clean the interior of the pontoon.
2. The chemical properties and the risk of illness and/or injury associated with the use of thinners were set out in the MSDS, which identified the danger of causing serious health damage by inhalation and that vapours may cause drowsiness and dizziness.
3. The potential consequences of the risk were identified in the WorkCover Confined Spaces Code of Practice December 2011 (Code of Practice), which relevantly states at [41]:
"The risks of working in confined spaces include:
* Loss of consciousness, impairment, injury or death due to the immediate effects of airborne contaminants……
* Difficulty rescuing and treating an injured or unconscious person
* Asphyxiation resulting from oxygen deficiency…."
1. Risks arising from the use of hazardous chemicals in confined spaces are obvious and foreseeable.
2. The gravamen of the offences was that the defendant failed to realize that Mr Hines and Mr Marshall were undertaking would necessitate the use of using thinners in a confined space. The defendant failed to anticipate the scope of the work in the planning of the job.
3. The defendant's management/supervisory structure was that the works were controlled by Mr Michael Bell who was the operations manager, and Mr Brad Wenzel who was the production manager. There was a clear failure to supervise and either Mr Hall or Mr Wenzel should have prevented Mr Hines and Mr Marshall from entering the confined space without a spotter in the vicinity of the pontoon, nor a safe atmosphere in the confined space.
4. Mr Hines and Mr Marshall were not using any protective respiratory devices, and in fact the respirator that had been provided to Mr Marshall was defective and he was using a paper face mask.
5. The lack of testing of the atmosphere created the possibility of persons being overcome with fumes inside the confined space, however atmosphere monitoring and ventilation equipment were available at the premises.
6. Shortly after the incident the use of thinners was discontinued, and the internal surfaces of the pontoons were cleaned only by abrasive blasting.
7. The existence of the risk was known or should have been known, and the likelihood of the risk coming home was quite high. The symptoms experienced by Mr Hines and Mr Marshall were a manifestation of the risk.
8. The defendant has expressed remorse for what happened to Mr Hines and Mr Marshall, and pleaded guilty at the first available opportunity.
9. There was no deliberate conduct on the part of the defendant to avoid or ignore its obligations under the Act. The defendant had not previously undertaken this type of work and was unfamiliar with the steps required to perform this task and remain compliant with the legal obligations under the Act.
10. It was at the direction of Mr Wenzel that changed the way in which the work was to be performed, and it was not originally anticipated that the use of thinner would be required to clean the pontoons. It is the change in the direction provided by Mr Wenzel, given to Mr Hines and Mr Marshall that caused the incident to occur, and it is from here that the breach stems.
In the circumstances, I find that the defendant's level of culpability is mid-range.
[9]
DETERRENCE
There is no need for specific deterrence as the defendant has ceased the use of thinners, and has upgraded its systems following from the incident.
In imposing a penalty in relation to this offence, general deterrence must be provided for. 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, however it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all factors. I am satisfied that the changes in management practices and there is evidence before me of those changes. It is conceded by the Prosecution that I can take this into account on sentencing.
[10]
MITIGATING FACTORS
The defendant has no prior convictions having operated the business for over 44 years.
The defendant indicated it's intention to enter a plea of guilty at the earliest possible opportunity, thus accepting full responsibility for it's actions. The defendant is therefore entitled to the full allowance with respect to the utilitarian value of the plea being 25%.
The defendant has demonstrated remorse for the offence, and has taken significant steps in updating the WHS systems, and equipped workers to ensure that similar incidents do not arise.
The defendant co-operated with the SafeWork NSW investigation.
The defendant makes contributions and donations to charities and supports local social enterprises.
[11]
COSTS
The defendant has agreed to pay the defendant's costs and disbursements agreed in the sum of $26,500.
[12]
PENALTY
My orders are:
1. The defendant is convicted.
2. I have had regard to a victim impact statement made by Marshall dated 12 May 2018, and I note that he continues to suffer consequent on the incident.
3. The appropriate fine is $60,000 but that will be reduced by 25% to reflect a plea of guilty.
4. I impose a fine of $45,000.
5. I order pursuant to s 122(2) of the Fines Act 1996 that 50% of that fine is to be paid to the prosecutor.
6. I order the defendant to pay the prosecutors costs agreed in the amount of $26,500.
[13]
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: 26 June 2018