SafeWork NSW v Norske Skog Paper Mills - [2020] NSWDC 559 - NSWDC 2020 case summary — Zoe

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SafeWork NSW v Norske Skog Paper Mills

[2020] NSWDC 559

District Court of NSW|2020-09-15

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At a glance

Source facts

Court

District Court of NSW

Decision date

2020-09-15

Catchwords

(1988) 166 CLR 51 Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37
(2016) 93 NSWLR 338 BW v R [2011] NSWCCA 176 Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71
(2000) 49 NSWLR 610 Mahdi Jahandideh v The Queen [2014] NSWCCA 178 Muldrock v The Queen [2011] HCA 39
(2011) 244 CLR 120 Nash v Silver City Drilling (NSW) Pty Limited

Source

Original judgment source is linked above.

Catchwords

(1988) 166 CLR 51 Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37(2016) 93 NSWLR 338 BW v R [2011] NSWCCA 176 Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71(2000) 49 NSWLR 610 Mahdi Jahandideh v The Queen [2014] NSWCCA 178 Muldrock v The Queen [2011] HCA 39(2011) 244 CLR 120 Nash v Silver City Drilling (NSW) Pty LimitedAttorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96 R v McNaughton [2006] NSWCCA 242

Judgment (51 paragraphs)

[1]

Background

The parties presented an Agreed Statement of Facts and this material is summarised below.
Norske Skog was a person conducting a business or undertaking (PCBU), which owned and operated a paper mill (the Mill) at Ettamogah near Albury in NSW (the Site).
Norske Skog was part of Norske Skog Group, a large global network of companies based in Oslo, Norway which produces and supplies newspaper and magazine paper.
Mr Pascall had been employed by Norske Skog for 4 years as a Stock Proportioning Operator.
Mr Quinlivan had been employed by Norske Skog for 15 years as a Machine Tender and a Stock Proportioning Operator.
Mr Johnson was employed by Nicoll Engineering. Norske Skog had engaged Nicoll Engineering to provide labour hire services at the Mill.

[4]

Warm White Water Tank

The tank involved in the incident was known as the "Warm White Water Tank" (the Tank). The Tank was located in the basement area under the Paper Machine, and formed part of the Mill's water recirculation system. During Mill production, the Tank received and temporarily stored excess filtrate from the Paper Machine.
The Tank was about 5 metres in height. It included a fixed ladder allowing access to the top. The top of the Tank was conical. Above the top of the Tank was the underside of an overhead concrete floor, above which was the Paper Machine. There was also an overhead concrete beam located above the top of the Tank.
The height from the lip of the Tank top to the underside of an overhead concrete beam was 0.93 metres. The height from the lip of the Tank top to the underside of an overhead concrete floor varied from 1.3 to 1.5 metres.
The top of the Tank included an open-air vent and two access holes. The access hole on the north side was open.
There was a complex piping system, associated with the Tank's role as a collection point for white water, above and around the top. The open access hole on the north side of the top of the Tank was fitted with fixed piping. There were also modifications to surrounding equipment around the top. The combination of these factors resulted in the headspace above the Tank being restricted.
There were also two splits along either side of the top seam of the Tank where the side wall of the Tank joined the top of the Tank. It is not known when the splits occurred. There was hardened built-up pulp residue around the edges of the splits. This indicated the damage at the splits was not new. The Tank was also equipped with an overflow pipe.
The Tank had undergone several modifications since being first commissioned.
In 1993 the Tank was split into two parts with the installation of an internal dividing wall. This served to create a "rich side" and a "lean side". During Mill production, the two parts held different types of filtrate.
In 2002/2003, water used in TMP processes was introduced directly into the rich side of the Tank.
In 2006, a project was undertaken to increase the Paper Machine's capacity. As part of this process, changes were made including the installation of a high velocity pump on the clear/cloudy tank. This pump increased the flow rate of filtrate into the Tank at start-up from 100 litres/second to 227 litres/second. Control valves were also relocated to the top of the Tank at this time.
The poor state of the Tank at the time of the incident can best be seen by viewing the photographs at PX1, Tab 4. A pipe installed to the top of the Tank has been inserted into an existing access hole. The cover for that access hole had been removed and was left askew on the top of the Tank. This left a significant space around the pipe which has not been sealed, through which gas could escape (Photo 5). The split between the top of the cylindrical wall of the Tank and the top of the Tank was extensive and appeared to be long standing (Photos 7 and 8).
It is apparent from the evidence that no-one had inspected or assessed the Tank for a very long time. During the immediate aftermath of the incident, two workers attempted to release the pressure in the Tank by opening a drain valve at the base of the tank. They had to kick the valve to clear it.

[7]

Knowledge of the presence of Hydrogen Sulphide at the Mill prior to the Incident

Hydrogen Sulphide is a gas commonly found during the production of pulp and paper. The gas is produced as a result of the microbial breakdown of organic materials in the absence of oxygen. It is colourless, flammable, poisonous and corrosive. Hydrogen Sulphide is noticeable by its rotten egg smell. It has a toxicity similar to carbon monoxide, which prevents cellular respiration. Monitoring and early detection of Hydrogen Sulphide could mean the difference between life and death (PX 1, Tab 8, p 21).
Workers at the Mill had been aware prior to the incident that a gas they believed was Hydrogen Sulphide was present in some areas of the Mill. Workers experienced a rotten egg smell at the Mill both during previous extended shutdowns and, at times, outside shutdown periods.
The Water Treatment Plant (WTP) was identified as the area where the rotten egg smell associated with Hydrogen Sulphide was most pronounced. Monitoring for sulphites occurred in the WTP area. The presence of the odour had not resulted in any atmospheric testing being undertaken at the Mill.
Mr Kobus Theunissen, a Production Engineer at the Mill, knew that Hydrogen Sulphide could be formed inside stagnant tanks in anaerobic conditions (where there is an absence of oxygen) and also knew that formation of Hydrogen Sulphide could be avoided by keeping the liquid in motion.
In or about mid 2015 the Line Manager for the WTP at the Mill made a request for an investigation to be undertaken into the potential causes of odour in the WTP incoming effluent stream. The odours had led to community complaints.
The WTP operators had been measuring the dissolved sulphides in the incoming effluent stream. High levels of sulphides in the WTP incoming effluent stream correlated with high levels of sulphides in the WTP primary clarifier and was a known cause of odour generation from the Mill.
Nuplex was engaged in or about October 2015 to undertake testing and undertook the sampling at the Mill on 24 November 2015. The Mill was operating under normal conditions at the time of the sampling.
Mr Darrel Mills of Nuplex provided a report dated 21 December 2015 (PX 1, Tab 7) in relation to the testing. The report indicated that the level of SRB bacteria was high to moderate in different parts of the Mill (including the RCF plant and Paper Machine). The report stated: "Sulphide generation is, amongst other mechanisms, the end result of sulphate reducing bacteria activity in the process. Areas that receive little/no biocide, have stagnant areas with no oxygenation, or are not physically cleaned will tend to have higher SRB and higher sulphide measurements."
Buckman Asia Pacific was engaged to provide biocide and to test the hygiene of the water used in the processes at the Mill.
As part of its testing regime Buckman monitored sulphides at a number of locations within the Mill including the Paper Mill filtrate. Sulphides were detected. When sulphides were significantly high in the Paper Mill filtrate, the dose of biocide was increased to compensate.

[9]

The Incident

Mr Pascall, Mr Quinlivan and Mr Davern Neall were rostered to work on the day of the incident. Mr Quinlivan and Mr Pascall's duties related to "Pre Start Checks" and "Start Up" tasks. Mr Neall was working as a Machine Tender but was on light duties, having recently returned to work after surgery.
Mr Johnson attended the Mill on the day of the incident with Mr Glen Nicoll and was working on the Paper Machine.
As part of the shutdown Mr Troy Watkins, WTP Line Manager in the RCF plant, had assisted Mr Matthew O'Connor, Technical Co-ordinator and Lab Manager at the Mill, in opening and closing the valves on top of the Tank.
Mr Neall was performing pre-start checks on the morning of the incident.
Before the incident occurred, Mr Neall came into the control room of the Paper Machine and had a conversation with Mr O'Connor about the valve positions on the Tank.
Mr O'Connor had closed the valves earlier in the shutdown and was not certain if both had been re-opened for the start-up. On the morning of the day of the incident, Mr O'Connor had been trying to troubleshoot the source of leaking filtrates from the clear/cloudy tank. Mr O'Connor accompanied Mr Neall to the Tank, climbed to the top, opened one of the valves and confirmed that the other valve was also in the open position. Before he went back to the control room, he also assisted Mr Neall in closing the drain valves at the bottom of the Tank.
Mr Watkins assisted Mr O'Connor in opening the valves on the start-up on the day of the incident, to enable the Tank to be filled. Mr Watkins told Mr O'Connor that one of the valves had previously been faulty.
At some stage on the day of the incident, Mr Neall returned to the control room. Mr Hannes Steyn, a Senior Support Engineer at the Mill, saw Mr Neall in the control room very shortly before the incident occurred. He observed that Mr Neall was with Mr Pascall and Mr Quinlivan at the time. Mr Steyn stated that Mr Neall raised concerns that the valves may have been in the wrong position and that the Tank was leaking. Mr Neall then went to investigate the issue with Mr Pascall.
When Mr Neall attended the Tank he saw water running down the side of the Tank and he asked Mr Pascall to climb up the ladder to have a look.
While at the top of the Tank, Mr Pascall was exposed to an unknown quantity of Hydrogen Sulphide gas which had vented from the top of the Tank. Mr Pascall was rendered unconscious by the Hydrogen Sulphide gas.
After several minutes Mr Neall became concerned that Mr Pascall had not returned and yelled out to him. Mr Neall then made his way to an elevated platform in the basement area and saw that Mr Pascall was lying motionless on top of the Tank. Mr Neall telephoned the control room and spoke with Mr Quinlivan.
Mr Steyn was in the control room when Mr Quinlivan received the telephone call and then ran out of the room. Shortly after Mr Quinlivan left the control room Mr Steyn heard the words "man down" over the emergency radio.
Mr Quinlivan and Mr Johnson went to the Tank and climbed up the external ladder to the top of the Tank to rescue Mr Pascall. While they were at the top of the Tank attempting to render assistance to Mr Pascall, Mr Quinlivan and Mr Johnson were also exposed to an unknown quantity of Hydrogen Sulphide gas and were also rendered unconscious.
Mr Pithers, a WHS Manager at the Mill, made a radio call for the whole Emergency Response Team to attend at the Tank. Mr Pithers climbed up the external ladder of the Tank to the top of the Tank. He could hear Mr Johnson breathing but could not tell whether the other two men were breathing.
Mr Pithers then climbed down and obtained a portable radial fan. He again climbed the ladder and directed the fan across the three men to purge the gas. After about a minute, he placed the fan on top of the Tank and came down.
Mr Darren McKimmie, part of the Emergency Response Team, put Breathing Apparatus (BA) gear on and climbed up the external ladder of the Tank to the top. At that point he observed that Mr Quinlivan's legs were hanging over the side of the Tank, Mr Pascall was towards the middle of the Tank and Mr Johnson was on the left side. Mr McKimmie checked Mr Johnson and Mr Quinlivan and thought that they both had a pulse.
Due to the lack of headspace above the Tank, Mr McKimmie came back down to discuss with others in attendance how they were going to get the men down. Mr Pithers then directed that an Elevated Work Platform (EWP) be lined up with the base of the Tank.
Mr Pithers, Mr Paul Hayes (who now also had BA gear on) and Mr McKimmie then entered the work platform of the EWP. Mr Pithers was not wearing BA gear. The EWP was lifted to the location of the top of the Tank.
Mr Hayes checked Mr Quinlivan and Mr Pascall when he got up to the top of the Tank. He could find no pulse for Mr Quinlivan or Mr Pascall.
Mr Pithers, Mr Hayes and Mr McKimmie then used the EWP to bring Mr Pascall, Mr Quinlivan and Mr Johnson from the top of the Tank to the ground. Mr Hayes assisted in the resuscitation efforts on Mr Pascall, while other workers assisted in the resuscitation efforts on Mr Quinlivan and Mr Johnson.
Mr O'Connor also attended the Tank area and opened the roller doors located on the north and south sides of the building to provide ventilation. Mr O'Connor also undertook steps to obtain some gas monitors.
Mr John Juranic, a Lab Technician at the Mill, used two gas monitors to take atmospheric readings at the base of the Tank. Hydrogen Sulphide was detected.
Ambulance Service records indicate the first crew attended at 1.35pm. NSW Fire & Rescue arrived on the scene at 1.44pm and conducted atmospheric monitoring. At 2.19pm, after completing a "search and rescue" of the building, NSW Fire & Rescue took a gas reading from the ground level around the Tank and recorded a reading of 163 parts per million (ppm) of Hydrogen Sulphide. The Tank area was checked at 2.45pm which returned a reading of 200 ppm of Hydrogen Sulphide. Between 7.45pm and 8.26pm NSW Fire & Rescue conducted systematic gas monitoring via the grid system to achieve an atmospheric "all clear" of the Site.

[13]

Interim investigation

Following the incident, an interim investigation was undertaken by a Norske Skog investigation team. An Interim Investigation Report dated 7 June 2018 (PX1, Tab 8) was prepared and provided to the Norske Skog Board of Directors.
This Report concluded that during the start-up process, water from the clear/cloudy tank that was used to fill the Tank had been stored in an environment where Hydrogen Sulphide gas had been generated in sufficient quantity to pose a risk to the health and safety of workers. The Tank was equipped with a top ventilation pipe, but Hydrogen Sulphide gas is heavier than air and will not be naturally vented into the atmosphere unless forced by air movement, updraft or other means. When the clear/cloudy process water was pumped into the Tank, Hydrogen Sulphide was released from the liquid, forced to the top of the Tank and vented out through the openings of the Tank because of the rising liquid level. The gas then pooled in the restricted area above the Tank. The top of the Tank was not recognised as a potential confined space and no Confined Space Entry Permit or Job Safety Analysis was carried out prior to the workers entering this area. A combination of poor ventilation in the area at the top of the Tank, a high concentration of Hydrogen Sulphide, and several openings on the top of the Tank were contributing factors for the accumulation of Hydrogen Sulphide in the area where the workers were found (PX 1, Tab 8, p 27).
The Report assumed that the concentration of Hydrogen Sulphide on top of the Tank must have been above 500 ppm for a short time. A Table in the report (PX 1, Tab 8, p 26) set out the effects of various concentrations of Hydrogen Sulphide. The Table includes the following: 500 ppm Asphyxia! Needs prompt artificial resuscitation. Will become unconscious in 3-5 minutes. Immediate artificial resuscitation is required. 700 ppm Breathing will stop and death will result if not rescued promptly, immediate unconsciousness. Permanent brain damage may result unless rescued promptly.

[21]

Systems of Work Following the Incident

Following the incident in May 2018, a number of improvements were made at the Mill to manage both the incident-specific and general risks associated with Hydrogen Sulphide exposure at the Mill.
Key improvements included: 1. the Tank and the clear/cloudy tank were both emptied, opened, inspected and cleaned; 2. the open access hole on the top of the Tank was closed and the piping which entered the Tank via the access hole was removed; 3. the space above the Tank, and other similar constrained areas, were treated as confined spaces, were subject to access restrictions until risk assessments were undertaken and were identified as "red" zones as part of a new zoning system at the Mill; 4. the splits in the Tank were repaired; 5. the fixed ladder at the side of the Tank was removed and the control valves at the top of the Tank were repositioned; 6. a hazardous risk assessment was subsequently conducted by an industrial hygienist; 7. a system of zoning was thereafter implemented at the Mill, with accompanying control measures (including restricted access permits for entry into red zones); 8. a register of "restricted access areas" was compiled; 9. workers were equipped with personal gas monitors for entry into specified areas (red and yellow zones); 10. training in Hydrogen Sulphide awareness was developed and implemented; 11. Hazard and operability (HAZOP) refresher training was booked to ensure that "all process (process/chemicals) equipment changes" were properly assessed for potential risks; 12. the Standard Operating Procedure for Start-Up was modified; 13. a review of emergency procedures was also conducted and the siren in the Steam Plant was repaired.
Norske Skog also had discussions with: 1. Visy Industries, Tumut, on the use of gas monitoring; 2. Parenco Mill regarding the use of gas monitoring, water management and biocide programs; and 3. Crofton, Catalyst Paper regarding the use of gas monitoring.
The installation of CCTV cameras was upgraded in identified high-risk areas.
Norske Skog reintroduced the use of a Dissolved Air Flotation tank to manage the risks associated with Hydrogen Sulphide formation, to prevent the anaerobic formation of Hydrogen Sulphide.
The Dissolved Air Flotation tank had previously formed part of the water circulation system, to clean process water from the TMP plant, but was decommissioned in November 2017 as a cost-cutting measure.
Norske Skog also commenced work on a ventilation and extraction system to exhaust gases from identified sources of release.

[28]

Hazard Identification and Risk Management

Mr Foster detailed the various processes that were in place at the time of the incident for hazard identification and risk management: 1. Workplace inspections and audits (e.g. Weekly Housekeeping Audits, WHS Committee "Fresh Eyes" Audits, Management Inspection Audits, Serious Incident Committee Audits, Insurance Company Audits, Norske Skog Global Health & Safety Audits, board meetings, etc); 2. Daily PASS ("positive attitude safety system") meetings, toolbox talks, weekly team meetings, and regional leadership team meetings; 3. Incident reports, investigations and Safety Work Orders; 4. Publication of monthly newsletters on a specific safety topic or team; 5. Safety Alerts; 6. WHS Committee consultation and direct communication with employees and contractors; 7. Review and application of Codes of Practice; 8. Membership in a local Safety, Health and Environment group involving external representatives from other local businesses to share knowledge on safety risks at a quarterly meeting; 9. Conduct of regular risk assessments on known hazards via the Synergi system, SOP preparation, job plans for maintenance tasks, confined space risk assessments, and job safety analysis cards for smaller jobs; 10. Provision of training in the form of a detailed employee induction program including WHS, annual refresher training on key WHS competencies, additional confined space training to relevant employees, provision of High Risk Work training, role specific training related to SOPs and externally assessed competencies, WHS training for managerial staff and contractor induction training covering relevant rules; 11. Provision of "shut/start-up" plans for each shutdown to employees, including SOPs for all tasks and specific risk assessments; 12. Managerial and supervisory personnel had oversight of safe systems of work at the Mill and were responsible for ensuring compliance with Safe Systems of Work among staff, making sure hazards were identified and addressed in each of their areas of control, ensuring tasks were carried out in accordance with risk assessments and JSAs, ensuring PPE was supplied and worn, conducting audits and adequate follow up on injuries, near misses and unsafe condition reports; 13. Having an Emergency Planning Committee and Emergency Response Team at the Mill.
Mr Foster said that as a General Manager he was involved in continual review and verification of safety systems at the Mill, as well as regular safety meetings. Each Line Manager for each area - maintenance, paper & finishing, energy & environment, commercial, WHS - would report to him on WHS. The Mill leadership team would review safety matters. The review process included approving expenditure on safety improvements, reviewing of Safe Work Order Reports, WHS reports and approval of recommendations, and development of action items to address risks and improve safety. He stated that the WHS Manager had the day to day responsibility for WHS and was responsible for specialist WHS advice and support, strategic guidance on health and safety policies, procedures and results, ensuring appropriate systems and tools were in place in each department, as well as being a leadership team member.

[31]

Shutdown planning and the shutdown process

The incident occurred during the pre-start checks being undertaken following completion of shutdown works. Mr Foster explained that the planning process leading up to a shutdown of the Mill was extensive and planning for a three-day shutdown - such as the one that occurred between 22 to 24 May 2018 - began four months ahead involving weekly "shut meetings". These meetings included the Shut Manager, Paper Machine Line Manager, Paper & Finishing Mechanical Leader, Paper & Finishing Electrical Leader, Maintenance Manager and Paper & Finishing Mechanical Team Leader. The result of the planning process was the preparation of shutdown plan schedules, job packs, briefing sessions, prioritisation of maintenance tasks and consideration of the associated risks (i.e. confined space entry, working at heights, high voltage maintenance, heat stress and fatigue, hot works, slips and falls). A "Shut Summary and Safety Focus" was prepared.
Mr Foster said that at the time the incident occurred, the area above the Tank was not identified as a confined space. He said that if it had been identified, the confined safety system which applied to other spaces (including a specialist confined space risk assessment, entry procedures, and emergency procedures) would have been applied to it.
Mr Foster stated that shut/start-up management review meetings were held twice daily during shutdown to assess progress and safety matters. Shift crew briefings were also conducted during the shut/start to confirm responsibilities for work. According to Mr Foster, the risk of Hydrogen Sulphide gas being anaerobically generated in the filtrate held in the clear/cloudy tank during shutdown, and which when used to prime the Tank was released, was not identified. Mr Foster asserted that if this risk had been identified, the measures concerning the management of filtrate and confined spaces including gas monitoring would have been applied. He said that there was no previous experience at the Mill of a build-up of Hydrogen Sulphide gas at the levels experienced during the incident.

[32]

Immediate and Long-term Responses to the Incident

In his affidavit, Mr Foster summarised the actions taken immediately in response to the incident, including: increasing ventilation in the area above the Tank through the use of fans and roller doors; rescuing the three individuals using the EWP; utilising first aid; immediately activating the emergency response system; evacuating the Mill; briefing of all employees and contractors; mobilising the Employee Assistance Program to offer all employees counselling; and sending an alert to all the other mills within the Norske Skog Group worldwide.
Mr Foster said that Norske Skog fully co-operated with the investigation conducted by SafeWork NSW and complied with all prohibition and improvement notices.
The following assistance was offered by Norske Skog to the affected families: 1. Financial assistance to the spouses and/or families of Mr Quinlivan, Mr Pascall and Mr Johnson up until 29 August 2018 when payments from workers compensation commenced; 2. Liaising to ensure that the families of Mr Quinlivan and Mr Pascall received their workers compensation payments as soon as possible; 3. Paying out all outstanding employee entitlements; 4. Providing a $20,000 death benefit payment and an additional $5,000 payment for funeral expenses to each of the families of Mr Quinlivan and Mr Pascall; 5. Organising and funding the provision of counselling to the families; 6. Engaging in meeting with family representatives; 7. Facilitating the collection of $200,000 of donations by workers, which was distributed in equal parts to Mr Quinlivan's children, Mr Quinlivan's partner, Mr Pascall's family and Mr Johnson and his family; 8. Creating a "Gardening Fund" whereby Mill employees could donate a certain amount of their fortnightly pay to support the families of Mr Quinlivan and Mr Pascall with home maintenance needs; 9. Assisting Mr Pascall's mother by paying for her gym membership; 10. Donating a trophy and prize money in memory of Mr Pascall at Mr Pascall's swimming club; 11. Funding a park bench and plaque at the request of the Pascall family; 12. Erecting a memorial plaque in memory of Mr Quinlivan and Mr Pascall; 13. Giving an additional $2,000 to each family when Norske Skog ceased production at the Mill (the Mill was sold by Norske Skog to Visy for $85,000,000 with nett proceeds of $55,000,000).
Prior to restarting the Mill on 13 June 2018, the following measures were undertaken to protect employees: 1. Providing regular updates to employees; 2. Increasing employee access to health and well-being programs; 3. Paying employees regular wages while the Mill paused its operations; 4. Addressing any safety concerns before employees returned to work; 5. Implementing all the immediate recommendations from the Interim Investigation Report revealing the build-up of Hydrogen Sulphide as the cause of the accident. These included: 1. emptying, opening, inspecting, cleaning, levelling, calibrating and making any necessary repairs to the tanks; 2. identifying and restricting access to other constrained areas in the Mill until full risk assessments were undertaken; 3. repairing the Mill evacuation alarm button in the Steam Plant; 1. Engaging specialist engineering consultants, a biological chemistry expert and an expert in anaerobic gas generation to prepare the Root Cause Investigation Report; 2. Engaging an occupational hygienist expert to conduct a Toxic Gas Risk Assessment; 3. Creating a "Hydrogen Sulphide steering committee" to lead Mill updates; 4. Organising several training sessions for workers on toxic gas risk assessment and Hydrogen Sulphide generation & management; 5. Introducing a new zoning system with all areas remaining red zones until the risk of Hydrogen Sulphide exposure had been eliminated; 6. Hiring experts to review ventilation around the Tank and Paper Machine building; 7. Installing an extraction fan and fixed Hydrogen Sulphide gas monitors; 8. Implementing a requirement for workers to wear personal gas monitors; 9. Updating and expanding the warehouse camera system; 10. Reviewing the Mill's emergency response procedures and engaging a rescue consultant to plan for more complex rescue procedures; 11. Converting vertical ladders to staircases where possible; 12. Purchasing new safety equipment including stretchers and establishing a rescue equipment register; 13. Improving confined space signage; 14. Introducing a dissolved air flotation unit; 15. Documenting data from tank inspections in a Tank Master Spreadsheet; 16. Consulting with other paper making businesses to improve safety; 17. Reviewing WHS Regulations and the SafeWork NSW Code of Practice on Confined Spaces; 18. Incorporating the goal of achieving ISO 45001 certification in Mill KPIs; 19. Updating the Mill's Safe Systems of Work to include two new policies on hazardous gas management and high risk jobs register procedure.

[35]

Consideration

I have had regard to the objects in s 3 of the Act and the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW).
In many sentencing hearings under the Act the parties refer the court to previous decisions, either at trial or appellate level, which provide some guidance as to the range of penalties which have been previously imposed for similar offences.
Neither party could refer me to a case similar to this one. To my understanding there has not been a sentence imposed in a case such as this, where the offence has caused two deaths and a third worker was put in mortal peril. Of course each case must be decided on its own facts.
The decision which has provided me with some guidance is that of the Court of Criminal Appeal in Attorney General for the State of New South Wales v Ceerose Pty Limited [2019] NSWCCA 35. A judge of this court had found that a Category 2 offence fell into the mid range of objective seriousness. The penalty imposed at trial was $300,000. This figure was reached by finding that the appropriate fine for the offence was $400,000, less a 25% discount for an early plea of guilty.
The Court of Criminal Appeal, by majority, allowed the appeal. The key finding on objective seriousness was expressed in par [78] as follows: "In my view, in light of the extreme seriousness of the foreseeable resultant harm to workers working within a steel structure and beneath an operating crane, and the minor inconvenience to the respondent as the entity responsible for the supervision and safety of the contracted labour force occasioned by taking the steps to avoid that risk materialising, it was not open to the sentencing judge to appoint the respondent's culpability in the mid-range. Given the factual findings made by the sentencing judge, in my view no conclusion was open other than that there was a demonstrated level of disregard for proper procedures on the construction site which so exacerbated the respondent's culpability as the principal contractor, that the offending was elevated, and significantly, above the mid-range. It was a sentencing error for the sentencing judge to conclude otherwise."
The majority in the Court of Criminal Appeal also found in par [80] that even if a finding of mid range offending was open to the sentencing judge, the Court was of the view that the penalty imposed was manifestly inadequate for a Category 2 offence: 1. Where the sentencing judge assessed the foreseeability of the risk of serious injury or death as "plain"; 2. Where the foreseeability of the consequences of the risk of serious injury or death materialising was "obvious"; and 3. Where the measures available to eliminate the risk were simple to implement.
By majority the Court of Criminal Appeal found that the appropriate penalty was a fine of $600,000. This means that the majority in the Court of Criminal Appeal thought that the appropriate sentence, before any discount for an early guilty plea, was a fine of $800,000.

[36]

Objective seriousness of the offence

The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v The Queen (No. 2) [1988] HCA 14; (1988) 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] NSWCCA 242; (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 [1988] HCA 67; (1988) 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 limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].
In Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [27] the High Court said: "The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of the offending."
The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] NSWSC 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] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.
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. This approach to sentencing, known as the "instinctive synthesis" approach, involves the making of a global judgment without any attempt to state precisely how any given factor has influenced the judgment.
The Court of Criminal Appeal has examined the sentencing process with regard to the Act 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. Justice Basten at par 34, under the heading "Assessment of Risk" said: "The sentencing judge commenced his consideration with the proposition that 'greater 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 on assessment of all those factors."
Further at par 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 an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the [event] 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 little, if any, costs."
At par 53 his Honour 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 the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting 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 materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken."
My findings about the offender's level of culpability are based upon the following: 1. Norske Skog knew of the risk that its workers could suffer death or serious injury as a result of direct exposure to even low quantities of extremely hazardous Hydrogen Sulphide gas. Norske Skog knew that Hydrogen Sulphide gas would be generated in anaerobic conditions and that dosing with biocide to guard against the risk had not taken place during the shutdown. Further, there was Guidance Material concerning the risks associated with confined spaces, hazardous chemicals and exposure to airborne contaminants. 2. The likelihood of the risk occurring was quite high. Norske Skog failed to: 1. designate the space above the top of the Tank as a confined space or restricted area, even though there was a ladder affixed to the Tank that gave workers ready access to the void above the Tank; 2. inhibit the formation of Hydrogen Sulphide in storage tanks containing filtrate, despite knowledge of the potential generation of gas in stagnant filtrate in tanks and associated odours during shutdown periods; 3. be aware of or repair the two splits along either side of the top seam of the Tank, or be aware of and close the open venting at the top of the Tank; 4. implement a system involving the provision of personal hazardous gas monitors to workers to detect gas and minimise the risk of exposure to workers required to access confined areas; 5. ensure the provision of adequate ventilation or exhaust systems; 6. provide training to all workers in relation to confined spaces and hazardous gas risks, even though such training was provided to some of the workforce; 7. introduce an adequate filtrate monitoring system to determine if the addition of biocides and the aeration or agitation of storage tanks containing filtrate was effective to ensure that Hydrogen Sulphide did not build up to risky levels. 1. The necessary steps to eliminate or minimise the risk were well-known and readily available. Norske Skog was able to identify and implement these measures straight away after the incident. 2. There was no evidence that the burden or inconvenience of the steps to be implemented was great. 3. The injuries to Mr Pascall and Mr Quinlivan were fatal and Mr Johnson suffered serious injuries at the time of the incident. 4. The maximum penalty for the offence is a fine of $1,500,000, which reflects the legislature's view of the seriousness of the offence. 5. Senior counsel for the defendant submitted that a relevant factor was that Norske Skog did have a detailed written safety system before the incident and had attempted to meet its work, health and safety obligations. That is so, but such a submission cuts both ways. When workers die or are seriously injured, either the written safety system is inadequate (as it was in this case) or it was not followed. 6. Senior counsel for the defendant submitted that Norske Skog had no knowledge or prior experience of a build-up of Hydrogen Sulphide in the area of the Mill where the incident occurred. That is so, but an employer is required under the Act to take a proactive approach to assessing risks and guarding against them. The question is not did the employer envisage a particular danger, but rather should it have: WorkCover Authority of New South Wales v Kellogg (Aust) Pty Ltd [1999] NSWIRComm 453. By its plea of guilty, Norske Skog acknowledged that it failed to carry out its safety obligations.
I find that Norske Skog's level of culpability is in the high range.

[37]

Deterrence

The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 at [180].
The penalty must reflect the need for specific deterrence. The submission was made (MFI 2 pars 6.2-6.4) by senior counsel for Norske Skog that the defendant "will not have the opportunity to commit a similar offence in the future" as its operations in New South Wales are closed. I reject this part of senior counsel's submission.
One of the objects of sentencing is "to prevent crime by deterring the offender and other persons from committing similar offences" - s 3A(b) Crimes (Sentencing Procedure) Act 1999 (NSW). The need for specific deterrence attaches to an offender, not to a geographical area. Norske Skog operates a similar paper mill, with similar risks, elsewhere in Australia. Australia is one country. Further, the main object of the Work Health and Safety Act 2011 (NSW) is "to provide for a balanced and nationally consistent framework to secure the health and safety of workers and workplaces" - s 3(1). I can find no authority for the proposition that specific deterrence should ignore operations outside the State where the offence is committed. I therefore take into account, when considering the need to prevent Norske Skog committing similar offences (i.e. specific deterrence) that Norske Skog is still in the paper milling business in this country. Its operations involve the Boyer Paper Mill in Tasmania where it has over 200 workers.
I do accept that part of the submission of senior counsel (MFI 2 pars 6.5-6.7) that the demonstrated attitude of Norske Skog to questions of workplace safety and the steps taken to improve safety after the incident are relevant to both specific and general deterrence.

[41]

Victim Impact Statements

Part 3 Division 2 of the Crimes (Sentencing Procedure) Act 1999 (NSW) deals with Victim Impact Statements. The provisions apply to an offence being dealt with by the District Court where the offence results in the death of, or actual physical bodily harm to, any person - s 27(2)(a). By s 28(2) a family victim in relation to an offence may prepare a Victim Impact Statement that contains particulars of the impact of the primary victim's death on the family victim or other members of the primary victim's immediate family. Members of a primary victim's immediate family include children and grandchildren of the deceased - s 26.
A Victim Impact Statement may be tendered to the court only by a prosecutor - s 30A(2). A court must accept a Victim Impact Statement tendered by a prosecutor if the statement complies with the requirements of the Division - s 30B. A victim to whom a Victim Impact Statement relates may read out the whole or part of their Victim Impact Statement - s 30D(1). In the present case five of the family victims read out their statements. One other family victim supplied a Victim Impact Statement but did not read it aloud.
A court to which a Victim Impact Statement has been tendered must consider the statement at any time after it convicts but before it sentences, and may make any comment on the statement that the court considers appropriate - s 30E(1). In the present case the offender was convicted by formal order on 15 September 2020 and after conviction the Victim Impact Statements were received and considered.
A Victim Impact Statement of a family victim may also be taken into account by the court in connection with the determination of punishment for the offence, on the basis that the harmful impact of a primary victim's death on family victims is an aspect of harm done to the community - s 30E(3). One of the purposes of sentencing is to recognise the harm done to the victim of the crime and the community - s 3A (g) Crimes Sentencing Procedure Act 1999 (NSW).
Such statements can only be taken into account on punishment if the prosecutor applies for this to occur, and the court considers it to be appropriate. In the present instance the prosecutor applied for this to occur and I determine that it is appropriate to take the statements into account.
The court received Victim Impact Statements from: 1. Jacqueline Quinlivan - the wife of Lyndon Quinlivan (PX 4); 2. Julie Quinlivan - the mother of Lyndon Quinlivan (PX 5); 3. Georgia Webb - the de facto wife of Benjamin Pascall (PX 6); 4. Debra Pascall - the mother of Benjamin Pascall (PX 7); 5. Samantha Pascall - the sister of Benjamin Pascall (PX 8); 6. Eliza Pascall - the sister of Benjamin Pascall (PX 9).
Five of those six Victim Impact Statements were read out in court by the family victims. The makers of these statements, and indeed all members of the families of Mr Pascall and Mr Quinlivan, have suffered a loss beyond imagination. Each statement conveyed that the man who died was a loving, caring and selfless individual who will be missed forever. In summarising these Victim Impact Statements I cannot possibly convey the searing pain and loss experienced by each family member, which was expressed in court as the statements were read out.
As I remarked to the family victims at the end of the two hours it took them to read their statements, it is one thing for a judge to sit in chambers and read the written statements, but it was another experience altogether to observe these broken individuals deliver their tributes to the husband, son or brother who was lost.

[50]

Penalty

My orders are: 1. The defendant Norske Skog Paper Mills (Australia) Limited was convicted on 15 September 2020. 2. The appropriate fine is $1,350,000 but that will be reduced by 25% to reflect the early plea of guilty. 3. Order the defendant Norske Skog Paper Mills (Australia) Limited to pay a fine of $1,012,500. 4. Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor. 5. Order the defendant Norske Skog Paper Mills (Australia) Limited to pay the prosecutor's costs. 6. Make the following orders pursuant to s 238 of the Work Health and Safety Act 2011 (NSW): 1. Within six months of the date of these Orders, the defendant is to undertake and fund the development and production of a de-identified educative animated video (the project) by a suitable external provider (the provider) that documents, illustrates and highlights: 1. the incident in which Benjamin Pascall, Lyndon Quinlivan and Thomas Johnson were exposed to a risk of death or serious injury on 24 May 2018 (the material date); 2. the risks to which to which the workers were exposed on the material date; 3. the content, nature and operation of a suitable safe system of work that would have reduced the risk to which Benjamin Pascall, Lyndon Quinlivan and Thomas Johnson were exposed on the material date as far as is reasonably practicable; 4. other guidance material applicable to safe work in on or around confined spaces as deemed appropriate by SafeWork NSW; 5. other guidance material applicable to the management of risks associated with the biological generation of Hydrogen Sulphide; 6. distribution plan for the video. 1. The content of the project and the provider of the project are to be approved by SafeWork NSW; 2. Within two months of the date of these Orders, the defendant is to attend a meeting with SafeWork NSW, to submit for review and approval a written plan for completion of the project, including the content of the project, the provider of the project and a distribution plan for the final product. 3. The defendant is to agree that the copyright and all exhibiting and distribution rights in relation to the project, including in relation to the educative animated video, are to be held exclusively by SafeWork NSW, subject to the defendant holding an unrestricted and fee-free licence to: 1. use the educative animated video within the operations and mills of the Norske Skog Group internationally for its own purposes; and 2. share the educative animated video with industry associations which the Norske Skog Group is a part of (including the Australian Forest Products Association) for distribution to members. 1. The defendant is to notify the prosecutor, and the Registrar of the NSW District Court at the Downing Centre Sydney of any change of address for service. 2. Liberty to restore the matter before the Court if the defendant does not comply with this order.

Parties

Applicant/Plaintiff:

SafeWork NSW

Respondent/Defendant:

Norske Skog Paper Mills

Legislation Cited (5)

Work Health and Safety Regulation 2017(NSW)

Crimes Sentencing Procedure Act 1999(NSW)

Fines Act 1996(NSW)

Work Health and Safety Act 2011(NSW)

Crimes (Sentencing Procedure) Act 1999(NSW)

Cases Cited (19)

ness - mitigating factors - aggravating factors - plea of guilty - general deterrence - specific deterrence not limited to activities in one State in Australia - capacity to pay -appropriate penalty COSTS - prosecution costs OTHER - paper mill workers were performing routine maintenance during scheduled shutdown period - hydrogen sulphide gas venting from the top of a storage tank - absence of specialist confined space risk assessment - failure to identify the area above the tank as a confined space - failure to eliminate or minimise the risk of the formation of hydrogen sulphide in storage tanks - failure to provide personal hazardous gas monitors - failure to provide sufficient information, instruction and training in respect of potential gas exposure - absence of adequate ventilation exhaust system and stored filtrate monitoring system Legislation Cited: Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22, 26, 27, 28, 30A, 30B, 30D, 30E Fines Act 1996 (NSW), ss 6, 122 Work Health and Safety Act 2011 (NSW), ss 3, 19, 32, 235, 238 Work Health and Safety Regulation 2017 (NSW), 5, 49, 50, 351 Cases Cited: Attorney General for the State of New South Wales v Ceerose Pty Limited [2019] NSWCCA 35 Baumer v R [1988] HCA 67; (1988) 166 CLR 51 Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 BW v R [2011] NSWCCA 176 Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Mahdi Jahandideh v The Queen [2014] NSWCCA 178 Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96 R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566 R v Wilkinson (No. 5) [2009] NSWSC 432 Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465 WorkCover Authority of New South Wales v Kellogg (Aust) Pty Ltd [1999] NSWIRComm 453 Texts Cited: Australian Standard 2895-2009, Confined Spaces SafeWork NSW Code of Practice, Confined Spaces, December 2011 SafeWork NSW Code of Practice, Managing Hazardous Chemicals, July 2014 Workplace exposure standards for airborne contaminants, SafeWork Australia, 27 April 2018 Category: Sentence Parties: SafeWork NSW (Prosecutor) Norske Skog Paper Mills (Australia) Limited (Defendant) Representation: Counsel: C Magee (Prosecutor) B Hodgkinson SC (Defendant)

[1999] NSWIRComm 453

(1988) 166 CLR 51

(2016) 93 NSWLR 338

(2000) 49 NSWLR 610

(2011) 244 CLR 120

(2006) 66 NSWLR 566

(1988) 164 CLR 465