WorkCover Authority v Sydney Water Corporation Limited;WorkCover Authority v Australian Water Technologies Pty Ltd

PROSECUTOR Mr J J Millar of counsel Solicitor: Mr T Morris WorkCover Authority of NSW LEGAL REPRESENTATIVES: DEFENDANTS Mr J J E Fernon of counsel Solicitor: Mr M Bastick Freehills

JUDGMENT: - 31 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: BOLAND J 5 October, 2001 Matter No IRC 3404 of 1998 WORKCOVER AUTHORITY OF NSW (inspector thomas clark) v SYDNEY WATER CORPORATION LIMITED Prosecution under s 16(1) of the Occupational Health & Safety Act 1983 Matter No IRC 3409 of 1998 WORKCOVER AUTHORITY OF NSW (inspector thomas clark) v AUSTRALIAN WATER TECHNOLOGIES PTY LTD Prosecution under s 15(1) of the Occupational Health & Safety Act 1983 Judgment

1 These are prosecutions by Thomas Clark, as an inspector of the WorkCover Authority of New South Wales, of Australian Water Technologies Pty Ltd and Sydney Water Corporation Limited for breaches of s 15(1) and s 16(1) respectively, of the Occupational Health and Safety Act 1983. The sub-sections state: 15. Employers to ensure health, safety and welfare of their employees (1) Every employer shall ensure the health, safety and welfare at work of all the employer's employees.

16. Employers and self-employed persons to ensure health and safety of persons other than employees at places of work (1) Every employer shall ensure that persons not in the employer's employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work.

2 At all material times Australian Water Technologies Pty Ltd ("AWT") was a wholly owned subsidiary of Sydney Water Corporation Limited ("SWC"). During the course of the proceedings I was informed that at some time between February 2001 and July 2001, as a result of organisational restructuring, AWT became a division of SWC and that the operating business of AWT was incorporated within SWC.

3 The prosecutions of the two defendants arose out of the same factual matrix and the matters were heard together. Both defendants pleaded guilty to the charges against them.

4 SWC was a state owned corporation within the meaning of the State Owned Corporations Act 1989. SWC carried on the principal activity of the provision of water, wastewater and stormwater drainage services. SWC owned and operated two large reservoirs at premises known as Mt Keira Reservoir, Mt Keira. On about 5 February 1996, SWC entered into a contract with Ledonne Constructions Pty Limited ("Ledonne") to construct a booster pumping station on the Mt Keira Reservoir inlet main, including associated pipe work, valves and control system. Ledonne was the principal contractor on the site and had engaged Raymond John Jabboury as project manager. Ledonne and Jabboury were charged with various offences under the Occupational Health and Safety Act 1983. Those charges are the subject of separate proceedings before this Court.

5 AWT, through its project management division, conducted the business of project management and was contracted by SWC to provide project management services in relation to the construction of the booster pumping station. AWT through its Integrated Asset Services Division, conducted the business of mechanical and electrical maintenance and installation services and was contracted by Ledonne to supply, install and test certain of the pipe work, valves and ventilation at the pumping station and at the reservoir site.

6 Waycon Services Pty Ltd was a labour hire company contracted by AWT to supply labour to the construction site. Waycon employed John Watson, a fitter.

7 On 25 June 1996 Malcolm Dewar, an employee of AWT, died inside a 500 mm diameter main pipe when he entered the pipe at the reservoir site, the pipe filled with water and he drowned. In this regard, the agreed statement of facts tendered in the proceedings stated: On the morning of 25 June 1996, Malcolm Dewar died by drowning inside a 500 mm watermain pipe. Mr Dewar had entered the valve chamber and climbed approximately 2.4 metres inside the 500 mm outlet pipe. When Dewar entered the pipe, the straub coupling and spigot valve connector had been removed in accordance with directions given by Ledonne. Whilst Dewar was inside the outlet pipe the socket valve connector dislodged from the inlet pipe, due to the force of the water inside the inlet pipe (coming from the reservoir) pushing against the gate valve. Both the valve chamber and the outlet pipe then filled with water within approximately 10 seconds. 8 The charge laid against SWC was in the following terms: The defendant, being an employer, on the 25 June 1996 at the Mount Keira Reservoir, Mount Keira, New South Wales, DID FAIL to ensure that persons not in its employment and in particular Malcolm Dewar, Geoffrey Rowling and John Watson were not exposed to risks to their health or safety arising from the conduct of its undertaking while they were at it's place of work contrary to Section 16(1) of the Occupational Health and Safety Act , 1983 in such case made and provided.

1. The defendant at all material times was an employer.

2. The defendant failed to provide or maintain systems of work to ensure the effective isolation of water at Inspection Pit No. 7 at the said site, whilst persons were carrying out work inside the inspection pit and outlet pipe, so that the work carried out at the said site was safe and without risks to health.

3. The defendant failed to provide or maintain systems of work to ensure that a risk assessment was undertaken of the Mount Keira Reservoir Contract Project No. 12239 to identify any confined spaces on the project and the hazards associated with working in those confined spaces

4. The defendant failed to adequately supervise or monitor work carried out by contractors at the said site so as to ensure that work in confined spaces was being carried out in accordance with the requirements and procedures set out in Australian Standard AS 2865-1986 ('Safe Working in a Confined Space') called up by Clause 5 of the Occupational Health and Safety (Confined Spaces) Regulation, 1990. 5. The defendant failed to ensure that persons entering confined spaces on its premises, had been provided with appropriate training and had the knowledge and skills necessary to enter confined spaces.

6. Part of the system of work devised by the defendant to be used when working in confined spaces is contained in a document known as 'Sydney Water Instruction 800', regarding 'Safe Entry and Working in Confined Spaces'. The said document detailed a system to be used for working in confined spaces and applied equally to contractors and it's employees. The defendant failed to ensure that all persons not in it's employment who were working at the said site in confined spaces, were made aware of Sydney Water Instruction 800 and that the requirements of the defendant contained within that document were to be applied to the work performed in confined spaces.

7. As a result of the defendant's failures, Malcolm Dewar drowned and Geoffrey Rowling and John Watson were placed at risk to their health and safety.

9 The charge laid against AWT was in the following terms: On the 25 June 1996 at Mount Keira Reservoir, Mount Keira, New South Wales, the defendant, being an employer, DID FAIL to ensure the health, safety and welfare at work of all of its employees and in particular Malcolm Dewar contrary to Section 15(1) of the Occupational Health and Safety Act, 1983, in such case made and provided in that the defendant failed to provide or maintain systems of work that were safe and without risks to health.

1. At all material times the defendant was an employer.

2. It is alleged that the defendant has breached Section 15(1) of the Occupational Health and Safety Act 1983 on 25 June 1996 at Mount Keira Reservoir, Mount Keira, New South Wales in that being an employer, it failed to ensure the health, safety and welfare at work of all its employees, and in particular Malcolm Dewar in that it failed to provide or maintain systems of work that were safe and without risks to health. In particular it failed: a. to ensure the effective isolation of water at Inspection Pit No. 7 at the said site, whilst persons were carrying out work inside the inspection pit and outlet pipe. b. to ensure that a risk assessment was undertaken of the Mount Keira Reservoir Contract Project No. 12239 to identify any confined spaces on the project and the hazards associated with working in those confined spaces. c. to ensure that work carried out in confined spaces was being carried out in accordance with the requirements and procedures set out in Australian Standard AS 2865-1986 ('Safe Working in Confined Space') called up by Clause 5 of the Occupational Health and Safety (Confined Spaces) Regulation 1990.

3. As a result of the defendant's failure, Malcolm Dewar drowned. 10 The circumstances surrounding the incident that led to these proceedings are described in the agreed statement of facts: Events of the day prior to the incident (24 June 1996)

28 On the afternoon of 24 June, 1996, an employee of Ledonne, Geoffrey Rowling, (a general hand) carried out pressure testing of the newly installed pipeline from the Pumping Station to the reservoir site. AWT was not involved in the pressure testing. The obligation to test was part of Ledonne's contractual obligations to Sydney Water. The pressure testing was a standard and necessary procedure. Prior to carrying out the pressure testing, Jabboury (of Ledonne) contracted Sydney Water to charge up the pipes with water. 29 As a result of the pressure testing, Rowling (of Ledonne) detected a leak. After Rowling found the leak, he informed Jabboury (of Ledonne) of the leak. 30 The leak came from somewhere in the outlet pipe, approximately 1.5-2 metres from the valve chamber in the location of a 45 degree bend in the watermain in pipe work that had been laid by Ledonne. 31 On the afternoon of 24 June 1996, the leak was inspected by Jabboury, Rowling and Mark McCarron (all of Ledonne). McCarron was a pipe layer machine operator employed by Ledonne. During that inspection, Michael Kenny, (a mechanical fitter employed by AWT as a leading hand) was also present. The only reason that Kenny had gone to the site that afternoon was to determine who would be responsible for the repair of the leak. During the inspection, it was agreed between AWT and Ledonne that the matter of the leak was a problem for Ledonne to rectify in accordance with Ledonne's contractual obligations to Sydney Water. Once it was agreed that the leak was a problem for Ledonne to rectify Kenny returned to the Pumping Station, leaving the leak to be fixed by the employees of Ledonne. No solutions for rectifying the leak were discussed with Kenny. 32 Jabboury, Rowling and McCarron (of Ledonne), dug up the soil to the concrete anchor block which supported the 45 degree bend ("concrete anchor block") and established that the concrete anchor block had moved. Rowling, McCarron and Jabboury discussed the method that they would use to inspect and stop the leak. Rowling suggested that they gain access into the pipe by removing the straub coupling and then the spigot valve connector. Rowling suggested to Jabboury that they could then gain access to the inside of the outlet pipe to establish the seriousness of the leak and if possible, push the join "back home". It was decided by Jabboury, Rowling and McCarron to commence the work the next day. Rowling took his instructions from Jabboury. This proposed work was not part of the work anticipated within the works for the project. 33 Late in the afternoon of 24 June 1996, Pathinather (of AWT) went to the Pumping Station to determine the results of the pressure testing carried out by Ledonne. Pathinather was informed of the leak by Jabboury (of Ledonne). Pathinather and Jabboury agreed to visit the reservoir site to attempt to observe the leak. Upon reaching the reservoir site, they observed a disturbance in the soi1, approximately 1.5-2 metres away from the valve chamber. The valve chamber was then still under construction. A concrete floor and walls had been installed. A concrete support block for the gate valve and ladder were yet to be installed. Provision had been made for these in the plans. 34 Jabboury (of Ledonne) informed Pathinather (of AWT) that the concrete anchor block on the 45-degree angle may not be strong enough and he would have to replace it with a bigger block. Pathinather requested that Jabboury provide him with a proposal regarding how the leak should be fixed and asked Jabboury to provide the next day more specific details of his action plan. At no time did Jabboury inform Pathinather of a proposal to remove a pipe section or of any proposal for Rowling (or anyone else) to enter the pipe. Pathinather was not informed of an action plan by Jabboury.

35 Dewar was not at work on 24 June, 1996, having called in sick. On the day of the accident (25 June, 1996) Dewar rang his employer to inform them that he would be coming to work late. 36 Early on the morning of 25 June 1996, Robert Cockburn, a truck driver/operator employed by Ledonne was instructed by Kevin McDonald (Ledonne's foreman or leading hand) to assist Rowling (of Ledonne) in opening the scour valve (which was necessary to let water out of the main pipe from the Pumping Station to the reservoir) and removing a section of pipe to allow an inspection. Jabboury was then not on the site. Rowling was aware that Sydney Water alone was responsible for water isolation. Neither Ledonne employee carried an access ladder for entry into the valve chamber which was approximately 3 metres below. Both men stepped on the top of the gate valve then onto the floor of the valve chamber. A ladder was a standard piece of equipment on AWT trucks. Cockburn (of Ledonne) described the action they took in a statement to Inspector Clark on 23 July 1996. He said: "At about 7am, I was told to go with Geoff Rowling to the Reservoir and help him prepare the line so a section can be removed in the pit. We checked the valves in the pit [valve chamber], they were still off, we opened the air valve between the two pits. The water came out, we then went down to the Carcoola Avenue, and opened the 'scour valve'. We ran that for about 10-15 minutes. Turned it back off and then went back up the Reservoir, we then checked the air valve between the two pits to see if air was going in. We saw that there was still water there. We presumed that the line between the two pits was an isolated line. I then went in to the pit and cracked the bolts on the down side of the bypass valve, allowing air into the line so that the section could be removed. I then went to smoko and that was the last I worked on that pit until the accident." 37 'Scour valves' as mentioned by Cockburn (of Ledonne) above, are located at the lowest points along a water main. They are used to drain the pipeline so work such as cleaning or repairs can be carried out. Scour valves are usually left open when repairing or replacing part of a watermain to allow drainage of the water into what is usually a water course. However, Cockburn and Rowling (both of Ledonne) closed the scour valve in Carcoola Avenue after they had opened it for about 10-15 minutes. This scour valve was not open at the time of the accident. 38 At about 7.30 am on 25 June 1996, Rowling (of Ledonne) requested Kenny (of AWT) to assist with the removal of the straub coupling and spigot valve connector. This request was consistent with the contractual relationship between Ledonne and AWT whereby Ledonne was in charge of the work performed by AWT in installing valves and pipework. In accordance with that request, at about 8.00am that day, Kenny and John Watson (a fitter employed by Waycon) attended the reservoir site. Kenny said to Rowling "Just make sure the valves are off". Both gained access to the inspection pit by placing a foot on the gate valve and jumping down to the floor of the valve chamber. This method of gaining access to the pit had been used by other workers during the project. Both Kenny and Watson realized they had the wrong size spanners to undertake any work and so returned to the Pumping Station (located approximately a 5 minute drive from the reservoir site) to obtain the correct equipment. Later, whilst at the Pumping Station, Kenny informed Watson that Ledonne employees were ready at the reservoir site and requested him to return to the valve chamber with the tools and remove the straub coupling and the spigot valve connector. 39 At about 9 am Dewar arrived for work at the Pumping Station. Watson (of Waycon) approached Dewar at the Pumping Station and requested a lift to the said site and asked Dewar to assist him in the valve chamber. 40 When they arrived at the reservoir site, both Dewar and Watson (of Waycon) entered the valve chamber by stepping on the top of the gate valve. The bypass valve assembly had been disconnected from the spigot valve connector. Watson removed the straub coupling and then, with the assistance of Dewar, both men removed the bolts which attached the spigot valve connector to the gate valve. They left two bolts in position at ten o'clock and two o'clock on the gate valve until an excavator could assist in pulling the spigot valve connector out of the valve chamber. 41 Approximately 5 metres from where they were working in the valve chamber, McCarron (of Ledonne) was operating an excavator with a hydraulic hammer attachment, hammering the top of the concrete anchor block in order to try and break it. Dewar climbed out of the valve chamber by climbing on the gate valve and asked McCarron (of Ledonne) to remove the spigot valve connector from the valve chamber. A sling was attached to the spigot valve connector inside the valve chamber and McCarron lifted the spigot valve connector out of the valve chamber using the excavator. Watson climbed out of the valve chamber by climbing on the gate valve and removed the sling off the spigot valve connector. Watson then left the valve chamber area for a short time. 42 After removal of the spigot valve connector, Rowling (of Ledonne) entered the outlet pipe and crawled through the outlet pipe a distance of about two metres. He was inside the outlet pipe for approximately 2 minutes inspecting the rubber ring joint to see if it was causing the leak. During this time, Dewar was standing on the floor of the valve chamber. Rowling exited the outlet pipe and Dewar then entered the outlet pipe to have a look himself. He was not asked to enter the pipe and it was not part of his duties to do so. Dewar had completed a refresher training course in working in confined spaces in February 1996 (see paragraph 47(a) below). Rowling remained on the floor of the valve chamber. Dewar had been inside the outlet pipe for about two minutes, when the water pressure caused the gate valve and socket valve connector (which weighed approximately 840 kgs) to dislodge from the inlet pipe. The valve chamber flooded with water in approximately 10 seconds and Ledonne's Rowling floated to the top of the valve chamber where upon he shouted for help. Throughout this time, both Sydney Water and AWT (except for Malcolm Dewar) was unaware of what was taking place at the incident site. No employees of Sydney Water or AWT (except for Malcolm Dewar) were present at the reservoir site at the time of the accident. 43 Prior to entry to the pipe, Dewar did not obtain a safety harness. 44 Immediately after the incident referred to in paragraph 42 above, Macdonald (Ledonne's leading hand) who was present at the reservoir site, contacted Kevin Brown (an isolation expert employed by Sydney Water in its Network Services Division) on Brown's mobile telephone to request his urgent assistance to stop the flow of water. The responsibilities of the Network Services Division of Sydney Water (in which Brown worked) included the monitoring of the operation of the water system which in turn involved responsibility for performing shut down and "charge up" being connection of the water) procedures. At approximately the same time as Macdonald informed Brown of the incidents, Keith Ross (also an employee of Sydney Water working in the Illawarra Region) became aware from the flowmeters in the control room (located in the regional office of Sydney Water at Coniston) that a large volume of water was escaping at the reservoir site. Ross contacted Brown on his mobile phone to notify him of this issue. Brown informed Ross that he was already aware of the problem and was on his way to the reservoir site. 45 Water continued to flow from of the valve chamber until Brown (of Sydney Water) arrived on site about 15 minutes after the accident and isolated the water. Brown effectively isolated all valves necessary for the isolation of the water and the water ceased flowing out of the valve chamber. Each of the valves had between 40 and 100 turns depending upon the size of the valve. It took Brown approximately thirty minutes to turn off the water. 46 No request was made of Sydney Water to isolate the mains water in respect of the reservoir site. Both Sydney Water and AWT were unaware of any plan to remove a section of pipe from the valve chamber. As Ledonne failed to advise either Sydney Water or AWT of any proposal to remove a pipe section or for Rowling (of Ledonne), or anyone else, to enter the outlet pipe, no means were utilised to safely isolate the water prior to commencing work in the valve chamber. The Verdict 11 After reviewing the agreed facts and in light of the charges and the particulars thereof, I am satisfied that the offences have been proven. The pleas of guilty by the two defendants were properly made and I enter verdicts accordingly.

Evidence for the prosecution 12 The evidence for the prosecutor included the statement of agreed facts, which included a schedule of convictions for SWC (AWT had no prior convictions), and a number of other relevant documents relating to confined space, a manual of practice, contract documents and colour photographs of the incident scene.

Evidence for the defendants 13 The defendant tendered two models. The first showed the general area in which the accident occurred and the second showed the inspection pit and pipe. These were particularly helpful in understanding how the accident occurred. Additionally, the defendant relied on affidavits of the following personnel: 1) Kerry Jan Stubbs. At the time of the incident Ms Stubbs was employed by AWT as General Manager, AWT Maintenance, a division of AWT. She was responsible for managing the mechanical, electrical and civil maintenance services for SWC's assets. 2) Dr Christopher Stephen Nieass, Group Occupational Health Safety and Rehabilitation Manager for SWC since June 1998. 3) Robert William Smith, Group Occupational Health Safety and Rehabilitation Manager, AWT since July 1999.

14 Ms Stubbs was required for cross-examination. Ms Stubbs' evidence was comprehensive. It covered the following main areas:

1. Structure of SWC and AWT. 2) Occupational health, safety and rehabilitation policies and procedures at the time of the incident. 3) Contractor safety at the time of the incident. 4) Action taken after the incident. 5) Imposition of blanket ban on entering conduits until further notice. 6) Major incident debrief. 7) Response of SWC's Executive. 8) Response of the Boards of SWC and AWT. 9) Establishment of an occupational health safety and rehabilitation project assurance team. 10) Review of occupational health and safety strategy within AWT. 11) Review of occupational health and safety strategy within SWC. 12) Review of standard contracts. 13) Reports on progress of debrief recommendations. 14) Examination of the issue of valve safety. 15) Introduction of the tagging of valves to warn personnel not to remove sections of the valve. 16) Further reports and action: a. Isolation procedures b. Confined space requirements c. Contractor management issues d. Valve design. 17) Audits. 15 Dr Nieass's evidence covered the following areas:

1. General approach to safety at SWC. 2) Revised occupational health, safety and rehabilitation systems at SWC and AWT. 3) Induction and training. 4) Contractor management safety system. 5) Implementation of occupational health, safety and rehabilitation systems.

16 Mr Smith's evidence covered the following areas:

1. AWT's approach to safety. 2) Recent history of approach to occupational health, safety and rehabilitation at AWT. 3) Revised AWT occupational health, safety and rehabilitation systems. 4) Increasing awareness and developing the safety culture at AWT. 5) Induction and training. 6) Contractor safety management system. 7) Compliance with AWT occupational health, safety and rehabilitation policies and practices. Submissions for the prosecution 17 Mr J J Millar of counsel appeared for the prosecutor. The thrust of Mr Millar's submission was that the failures by the defendants to variously: provide and maintain systems of work; adequately supervise or monitor work carried out by contractors; undertake a risk assessment; provide adequate training, and; to ensure that work carried out in confined spaces was carried out in accordance with certain requirements and procedures, amounted to significant failures and reflected the "very serious" nature of the offences. Mr Millar submitted that while comprehensive procedures may have been documented about safety and how contractors were to conduct themselves in this respect, there was no system in place to ensure that the procedures were actually carried out or adhered to and there was no system of auditing in place to ensure compliance and to ensure contractors and their employees had undertaken the necessary safety training.

18 In relation to the failure by AWT to ensure the effective isolation of water at the valve chamber at the incident site whilst persons were carrying out work inside the inspection pit and outlet pipe, Mr Millar referred specifically to the role of Mr Kenny, a mechanical fitter employed by AWT as a leading hand. Mr Kenny was fully aware of the leak although it appears that it was agreed between he and Ledonne that the responsibility for repairing the leak lay with Ledonne. On the day of the incident Mr Kenny said to Mr Rowling "Just make sure the valves are off". Mr Millar contended that by uttering these words shortly before the incident occurred Mr Kenny knew of the plans to remove a section of the pipe. Given that Mr Kenny had undertaken regular training in relation to working in confined spaces, Mr Millar submitted that Mr Kenny would have known of the requirements relating to isolation of water from the incident site yet he took no action other than to say to Mr Rowling, make sure the valves are off.

19 Mr Millar further submitted In considering the question of penalty, the question of deterrence must be taken into account. That is in two ways, one is in general and one is with respect to the particular defendants. Having regard to the nature of the business of each of the defendants, it must be a frequent occurrence that its employees or contractors are required to work in confined spaces. There must be hundreds, if not thousands, of these pits constructed and their contents maintained by the employees or contractors of the defendants. In my submission, in view of the nature of the defendants' businesses, it is important that a penalty be imposed that recognises the need to deter a particular defendant from these sorts of omissions in the future. It is also important to have a penalty which operates as a general deterrent of course in industries more widely with respect to matters such as this. 20 Mr Millar referred to the subjective factors relevant to the offences and, in particular, the steps that the defendants had taken following the incident to improve its safety systems and procedures. He acknowledged that these should be taken into account by the Court in arriving at an appropriate sentence. However, Mr Millar submitted that there were still problems with the defendant's procedures in identifying confined spaces and there was also the question of whether steps had been taken to ensure that all of the risk reduction measures had been undertaken either before a contract was entered into or after it was entered into but before any work was performed. Mr Millar was concerned that the defendants may not have addressed safety measures in respect of unplanned work.

21 Mr Millar referred to SWC's five prior convictions for offences under s 15(1) and s 16(1) of the Act since 1994. Consequently, Mr Millar submitted, the maximum penalty under the Act was $750,000 in respect of SWC. AWT had no prior convictions and so the maximum penalty was $500,000. Submissions for the defendants 22 Mr J Fernon of counsel for SWC and AWT referred to a number of the principles relevant to sentencing:

· The true measure of penalty lies in the nature and quality of the offence. Subjective factors which mitigate the seriousness of the offence or exculpate the accused must be secondary to consideration of the nature and quality of the offence: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474; · The level of penalty must, on the one hand, compel attention to occupational health and safety risks in order to ensure that persons are not exposed to such risks at their workplaces but, on the other, must not be oppressively high: Warman International Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326 at 339; Lawrenson Diecasting at 475. · The gravity of the consequences of an accident does not, of itself, dictate the seriousness of the offence. However, the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and the culpability of the defendant: Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Lawrenson Diecasting at 476 · An offence under s 16(1) will be a serious offence 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: Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, CT90/1214, 30 June 1992) at 9; Lawrenson Diecasting at 476. · A plea of guilty, contrition and cooperation with WorkCover are relevant matters to be taken into account in sentencing: Alcatel Australia Limited v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99 at 106. 23 Mr Fernon put extensive submissions on the nature and quality of the offence, which he contended could not be classed as serious. He canvassed both the objective and subjective factors that he submitted should be taken into account in sentencing. I trust I do not do any injustice to those submissions by summarising them in the following way: · SWC was a large organisation employing approximately 6,000 employees in numerous locations. AWT employed about 2,000 employees. The nature of the work performed within these large organisations was inherently dangerous and this should be taken into account in mitigation: WorkCover Authority of New South Wales v Civil and Civic Pty Ltd (unreported, Fisher CJ, 30 March 1994; [1994] NSWIRC 27). · SWC had engaged Ledonne under contract to undertake the project. Ledonne was required to provide all things and take all measures to protect people and property. Ledonne was required to comply with all occupational health and safety legislation and with procedures, instructions and standards relating to working in confined spaces. Given Ledonne's role, SWC was at least once removed from being culpably associated with the incident; the incident was not reasonably foreseeable by SWC or AWT. · The project manager and the person directly supervising the project was Mr Jabboury, who had been engaged by Ledonne. · Ledonne had a contractual responsibility to provide equipment, training, personnel and documentation necessary to satisfy the safety requirements of the contract with SWC. · AWT's role was one of having been contracted by Ledonne to perform part of the work required under the contract with SWC. · SWC was not informed, and was unaware, of any proposal to disconnect and remove the straub coupling and spigot valve connector in Inspection Pit No. 7 and to allow employees to enter the pipe. No employee of SWC was present at the time of the accident. · No request was made of SWC to isolate Inspection Pit No. 7 from the possibility of being inundated by water in accordance with the established procedure set out in the contract between Ledonne and SWC. · Ledonne, through its employee Mr Rowling, was aware that SWC alone was responsible for water isolation. · The work of repairing the leaking pipe was rectification work and was not anticipated when the original assessment of the work to be performed was done. · Ledonne was asked by AWT to provide a plan for rectifying the leaking pipe but no plan was provided. · The defendants had a strong commitment to occupational health, safety and rehabilitation. · The defendants provided extensive training to employees and contractors in relation to confined spaces and safe working procedures. · At the time of the incident the defendants had comprehensive systems in place to identify hazards and extensive procedures in place to avoid risks to health and safety. · Following the incident the defendants took immediate and appropriate action to avoid a repetition of the incident and comprehensively reviewed and overhauled their occupational health, safety and rehabilitation procedures and systems. · The defendants viewed the obligation on them to take remedial steps very seriously and involved their respective Boards in that process.

24 Notwithstanding that an employer might engage another firm to carry out work at that employer's place of work and, in doing so, might impose certain contractual obligations on the firm to ensure safety of persons and property, this does not relieve the employer from its duty under s 16(1) of the Occupational Health and Safety Act 1983 to ensure that persons not in its employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking.

25 In pleading guilty to the charge laid against it SWC has, of course, admitted that it breached its duty under s 16(1) of the Act. SWC submitted, however, that the offence was not serious and did not warrant a heavy penalty.

26 The maximum penalty in SWC's case is $750,000, a penalty reserved for the worst category of cases: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) NSWLR 683 at 698 per Kirby P. The offence committed by SWC does not fall into anything approaching the worst category, but it was in my opinion, nevertheless, serious. The fact that a person died and another was placed at serious risk of injury or even death is not, of course, a measure of the gravity of the offence but it is most certainly relevant in determining the gravity of the relevant detriment to safety: Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131; WorkCover Authority (NSW) (Inspector Kelsey) v University of Sydney (unreported, Hill J, Matter No CT 1280 of 1995, 2 April 1997 at 10); WorkCover Authority (NSW) v Waugh (1995) 59 IR 89 at 96-97; Lawrenson Diecasting at 476; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (1999) 95 IR 383 at 428-429.

27 The primary factor to be considered in assessing the penalty to be imposed is the objective seriousness of the offence. Subjective factors play a subsidiary role: Lawrenson Diecasting at 472-475. In SWC's case the seriousness of the offence is reflected in the failures described in the particulars of the charge.

28 SWC failed to provide or maintain systems of work to ensure the effective isolation of water at the valve chamber at the incident site. This was not to say that SWC had no system of work in this respect but it was a system of work that relied largely on contractors and their employees following directions conveyed to them that required the notification, approval and involvement of SWC to isolate the water whenever access to pipes was necessary. On 25 June 1996 these directions were not followed because, it would appear, those personnel involved in repairing the leaking pipe assumed that any water in the pipe above the point where the spigot valve connector was to be removed would be contained by the gate valve or that there was no water in the inlet pipe or both. This proved to be a fatal assumption because the socket valve connector that in turn was connected to the gate valve was not bolted to the inlet pipe and there was water in the inlet pipe. The socket valve connector was only connected to the inlet pipe with a rubber ring joint. When the seal formed by the rubber ring joint broke under the pressure of water in the inlet pipe, the valve chamber instantly flooded, trapping Mr Dewar in the outlet pipe and endangering Mr Rowling.

29 The actual incident may not have been foreseen by SWC. However, the fact that a leak might occur in a pipe and in order to fix it employees of contractors might disconnect a section of pipe in the belief that a gate valve would hold back any water above the point where the disconnection took place was, in my opinion, reasonably foreseeable and would have been obvious if a risk assessment had been carried out by SWC to identify any hazards associated with working in confined spaces on the project. SWC failed to do this in respect of Project No. 12239. Given the dangerous nature of the work involved in the project, SWC's failure to identify potential hazards by conducting a risk assessment was most serious.

30 SWC also failed to adequately supervise and monitor work carried out by contractors on the project so as to ensure that work in confined spaces was being carried out in accordance with relevant standards called up by cl 5 of the Occupational Health and Safety (Confined Spaces) Regulation 1990. Indeed, at the time of the incident there was no supervisor present either from SWC, AWT or Ledonne. Despite well-documented safety procedures that contractors were obligated to follow whilst working on SWC's sites, the procedures failed because, in large part, they were not adequately followed up by SWC in any practical way, such as through an auditing process or by appropriate supervision.

31 SWC was a large organisation operating at numerous sites. Some of the work done by SWC can be described as dangerous work akin to what is found in the civil construction industry. It would have been a difficult and complex task in providing and maintaining safe systems at work, especially when much of the work done on SWC sites was carried out by contractors of various descriptions and, I suspect, varying commitments to occupational health and safety. It is appropriate, in assessing the prior record of a defendant, to have regard to the large number of employees and the nature of the work carried out by the defendant: WorkCover Authority of New South Wales (Inspector Sheppard) v State Rail Authority of NSW [2000] NSWIRComm 179 at par 47. However, the nature of SWC's business and the circumstances under which it is performed - dispersed and difficult as it might have been - does not mean that the duty SWC had under s 16(1) was less onerous than any other employer subject to s 16(1). SWC was required to provide and maintain systems of work and a level of supervision that, given the nature of its business, ensured that persons not in its employment were not exposed to risks to their health or safety arising from the conduct of its undertaking while they were at SWC's place of work. In relation to what occurred on 25 June, 1996 at Inspection Pit No.7, SWC's systems and procedures to protect persons working on that site were obviously inadequate.

32 The fact that SWC did have extensive safety procedures and systems in place at the time of the incident in June 1996 is a factor that is relevant to an assessment of the seriousness of the offence: Department of Mineral Resources (NSW) (Chief Inspector Bruce Robert McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27; McDonald's at 449. However, given the obligations imposed on employers by s 16(1), the laying down of safety procedures and the giving of instructions may not, in many cases, be adequate. In Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 a Full Bench of the Commission in Court Session said: The magistrate appears to have reached her conclusion as to the objective seriousness of the offence, having regard to the lack of common sense of the injured worker. It is reasonably clear from her decision that it was concluded that the conduct of the injured worker effectively removed or minimised the liability of the respondent in relation to the lack of training or instruction afforded the employee. This was wrong in principle. Section 15 of the Occupational Health and Safety Act requires employers to be diligent and proactive to ensure the safety of employees. Those obligations are not diminished because of the error or negligence of an employee, although such matters may reflect on the degree of culpability of the employer for the purposes of sentencing. We note the following observations of Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 at 257:

"Much of what was urged by Mr King was directed to showing that the worker who was killed knew of, and therefore ought to have avoided the exposed electrical connections. In one sense such a submission militated against the position of the defendant; the very purpose of the Act was to introduce safe working practices so that accidents are prevented. The Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry."

16 Similarly, it is important for employers to actively ensure that instructions given are both sufficient for and complied with by employees. We refer to the judgment of Walton J, Vice President in WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Australia) Pty Limited (Unreported, 19 October 1999) as follows:

"In any event, the mere stipulation of procedures and instructions to carry out the work may not be enough to satisfy the requirements of s15 of the Act. The employer should ensure that procedures and instructions are actively and positively complied with by employees. In Dawson (at 121 and 125) the failure by a foreperson to supervise a qualified and experienced linesperson to the extent of instructing the employee as to the safest available method (where the employer had laid down a procedure for work and various methods of performing the work were available) would constitute a breach of s15 (although in that matter it was found the failure was that of the foreperson and not the employer). I note that in an English High Court case, Pope v Gould (HM Inspector of Health and Safety, 20 June 1996, unreported but cited at p44 of Redgrave's Health and Safety, 1998, Third Edition) it was held in England, under the equivalent of s15, that it is not a sufficient defence for an employer to demonstrate that he had instructed the employee to operate machinery in a particular way and the employee had not followed his instructions. There, it was held, that the legislative provision was not concerned solely with the giving of instructions; rather it imposes upon the employer positive duties in relation to ensuring safe systems of work and safe machinery. It was held not to have been sufficient for instructions of a health and safety nature merely to have been given to employees; an employer must also ensure that those instructions are carried out (see also Haynes at 181-182, Kirkby at 53 and McMartin at 8)."

33 Whilst it is appropriate, in my opinion, to allow some reduction in penalty for the reason that SWC did have occupational health and safety systems and procedures in place, demonstrably these were not "sufficiently comprehensive, vigilant and proactive": McDonald's at 449.

34 In addition to the failures relating to water isolation, risk assessment and supervision there was a failure in relation to the provision of training for persons entering a confined space and a failure to ensure that all persons not in SWC's employment who were working in confined spaces were made aware of the safety requirements for working in such confined spaces. John Watson, an employee of Waycon who entered the valve chamber to disconnect the spigot valve connector, had not had any confined space training. Geoffrey Rowling had "some confined space training" about two years prior to the incident but he did not complete the training because he left Ledonne's employment for a period of time. Mr Rowling was unaware of what constituted a confined space. Ray Jabboury had not had any confined space training. Mr Kenny and Mr Dewar had both undergone confined space training but either it was so inadequate or there was such a lax attitude to safety within the organisation they worked for that both were prepared to enter an Inspection Pit and remove a section of pipe without any resort to the necessary safety precautions relating to working in a confined space. Mr Dewar, of course, crawled inside the pipe without any apparent regard to safety. No audit was carried out by SWC to ensure that contractors and their employees had received relevant and adequate training to carry out work in confined spaces.

35 In relation to the failures described in the charge against SWC, I note the steps taken by SWC after the incident on 25 June. These included:

· A requirement on contractors to have specific occupational health safety and rehabilitation (OHS&R) management systems in place prior to the commencement of works. Specifically, contractors are required to prepare and submit Site Safety Management plans and Work Method Statements that comply with the NSW Government OHS&R Guidelines. · Effective from 1 July 1997 the use of flexible rubber joints in valve chambers was no longer permitted. New valve pipe arrangements requiring the use of flange joints in valve chambers were implemented to prevent a recurrence of an incident such as that at mount Keira. · Tags were installed on some 5,000 unanchored valves warning people not to remove sections of the valve. · New risk assessment and risk management procedures were implemented. · New safety training programs and audit procedures were implemented. · A communication strategy was introduced to raise the awareness of employees in relation to safety.

36 The actions taken by a defendant following an accident in respect of which the defendant had been charged under the occupational health and safety legislation to remedy any deficiency in safety and to further protect employees are factors to be taken into account in favour of the defendant in assessing penalty. However, such actions may also demonstrate the flaws in the pre-existing system. In Kembla Coal and Coke Pty Ltd, Walton J, Vice President said at 27: The existence of simple and straightforward remedial steps which could have been taken by the defendant to avoid the accident are relevant, in my view, to assessing the seriousness of the offence in this case: see WorkCover Authority of New South Wales v ACI Operations Pty Limited (unreported, Schmidt J, CT93/1025, 25 February 1994). Whilst the response by the defendants after the accidents was laudable, the actions taken were such as to reveal in clear terms the decisive steps which may have been taken by the defendants to actually prevent this accident and thereby demonstrate a flaw which existed in the previous system: WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (at 21-22).

37 The tagging of valves and the elimination of rubber ring joints, for example, were simple, straightforward remedial steps and had these measures been in place prior to the incident on 25 June 1996 it is reasonable to assume the accident would not have occurred.

38 The prosecutor submitted that general and specific deterrence should feature in the assessment of any penalty. The issue of deterrence was considered at length by a Full Bench of the Commission in Court Session in Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610; 99 IR 29. At pars 73-74 the Full Bench said: 73 Although general deterrence and specific deterrence have differing purposes or aims, the varying aims of deterrence are particularly relevant in occupational health and safety prosecutions in light of the objects and terms of the Act. As Hungerford J in Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 said: "the fundamental duty of the Court in this important area of public concern … [is] to ensure a level of penalty for a breach as will compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace."

74 We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industries Pty Limited accurately states the approach that members of this Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both aspects of deterrence 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 Limited (No. 2) [2000] NSWIRComm 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.

39 In WorkCover Authority of NSW (Inspector Lyons) v Warman International Ltd (2001) 105 IR 236, after quoting extensively from the judgment in Capral, Walton J, Vice President said at 256: 79 It follows, in my view, that notwithstanding the somewhat strident steps taken by the defendant to ensure the occupational health and safety of its employees, to which I will return in relation to the subjective features of this matter (and which are earlier described in the summary of the defendant's evidence and in the submissions made on behalf of the defendant), the question of specific deterrence may, as a matter of general principle, nevertheless be relevant. The fact that the industry in which the defendant operates is hazardous in nature does not eliminate the need for specific deterrence. Contrary to the submissions of the defendant in this respect, the need to encourage a sufficient level of diligence by an offender will be particularly relevant where the offender, such as the defendant, conducts a large enterprise which involves inherent risks to safety: Capral at [77]. 80 In my view, and having regard to the principles of sentencing in Capral , specific deterrence should feature in the assessment of penalty in this matter. The defendant has conceded that it was unaware of, and had taken no steps to, assess the risks to safety of employees engaged in the process giving rise to the incident. It is necessary, in these circumstances, to ensure a sufficient level of diligence in the defendant searching for, identifying and removing risks to safety (even where the work to be undertaken does not form part of the defendant's ordinary work practices). This will be so in a hazardous industry, although regard needs to be paid, as noted in Capral , to the particular circumstances of the offence and the offender. 81 It should be noted at this juncture that allowance should also be made for the nature of the industry in which the defendant operates (and the inherent risks to safety therein) in the assessment of the defendant's prior record and in relation to the assessment of subjective features. These matters are discussed later in the judgment. 82 It should also be observed that general deterrence will also be a factor to be considered in the assessment of penalty: Capral at [75]. 40 The approach taken by his Honour in Warman International is also relevant in the present case. Following the incident on 25 June 1996 SWC has taken what may be described as highly commendable steps to ensure the health and safety of persons working on its sites. Nevertheless, both general and specific deterrence should feature in the assessment of penalty in this matter. General deterrence should be a consideration in assessing penalty for the reasons expressed by the Full Bench in Capral at par 75. In relation to specific deterrence the Full Bench in Capral said at par 77: Employers are required to maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. They must adopt an approach to safety which pro-active and not merely re-active: WorkCover Authority of New South Wales v Atco Controls Pty Ltd (1998) 82 IR 80 at 85. In view of the scope of these obligations, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the offender in the future. This is particularly so where the offender conducts a large enterprise which involves inherent risks to safety: see WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Aust) Pty Ltd [2000] NSWIRComm 53 at 46.

41 SWC is a large enterprise and aspects of its business carry with them inherent risks to safety. SWC also has the additional challenge of managing and monitoring safety at a large number of sites. Despite the good work that has been undertaken by SWC to guard against future incidents of the type that occurred on 25 June 1996 - and this must be factored into any assessment of penalty - there is, in my opinion, a need for specific deterrence.

42 I turn to consider the relevant subjective factors. SWC entered a plea of guilty and based on utilitarian considerations is entitled to a discount on the sentence in the range of 10 to 25 per cent: R v Thomson; R v Houlton [2000] NSWCCA 309.

43 I note that on 17 July 1996 SWC's Board asked the managing director to ensure that Mr Dewar's family and work colleagues should continue to receive any support and assistance they required.

44 I have already referred to the creditable steps taken by SWC to improve safety and the process of review and revision undertaken by the defendant in relation to its occupational health safety and rehabilitation policies and procedures.

45 I consider an appropriate penalty to be $200,000.

46 As to the utilitarian value of the plea of guilty I allow 12.5 per cent discount upon the penalty and in respect of the measures taken after the incident to ensure the health and safety of persons working on SWC's sites, I allow a further 12.5 per cent.

47 In assessing penalty I have taken into account the objective features of the offence. I consider, after discounting for the subjective factors, that the appropriate penalty with regard to the offence as charged is $150,000. The prosecutor should have a moiety of the fine.

Consideration - AWT 48 As I noted early in this judgment, AWT was contracted by SWC to provide project management services on the Mount Keira project and was also contracted by Ledonne to supply, install and test certain pipe work, valves and ventilation at the pumping station and at the reservoir site. AWT employed Mr Dewar as a fitter. The particulars of the charge under s 15(1) of the Act against AWT were, briefly stated: that AWT failed to ensure the effective isolation of water at the inspection pit whilst persons were carrying out work inside the pit and outlet pipe; that AWT failed to ensure that a risk assessment was undertaken to identify any confined spaces on the project and the hazards associated with working in those confined spaces; that AWT failed to ensure that work carried out in confined spaces was being carried out in accordance with certain requirements and procedures.

49 As to the isolation of water issue, the day prior to the incident there was a discussion between Mr Jabboury and Mr Pathinather regarding the leaking pipe. Mr Pathinather requested that Mr Jabboury provide to him a plan as to how the leak should be fixed. No plan was provided and Mr Pathinather was not informed of any proposal to remove a section of the pipe. Given Mr Pathinather's position within AWT as the Superintendent's Representative's Assistant on site and the person through whom any request to SWC to isolate the water would be transmitted, it is reasonable to assume that had Mr Pathinather known about the proposal to remove a section of pipe he would have either said no, or arranged to isolate the water and perhaps the accident would have been averted. The fact that Mr Pathinather asked for a plan to fix the leak and was not provided with one, needs to be taken into account in assessing the gravity of the offence.

50 Mr Kenny was a leading hand mechanical fitter employed by AWT. He had been requested by Mr Rowling of AWT to assist with the removal of the straub coupling and spigot valve connector and had been engaged in that task with Mr Watson, a fitter employed by Waycon, on the morning of the incident when he realised the had the wrong spanners for the job. How it was that Mr Kenny a mechanical fitter employed by a company that installs and tests pipe work and valves did not realise the implications of removing a coupling and valve connector in circumstances where the inlet pipe was connected to another valve connector only by a rubber ring joint was never explained in the evidence. There was evidence that Mr Kenny had said to Mr Rowling "Just make sure the valves are off". What he meant by this was also not clear from the evidence. That Mr Kenny, as an employee of AWT, was either not aware of the need to isolate water from the valve chamber, or worse, that he was aware but did no more than say to Mr Rowling "make sure the valves are off" is a serious indictment of AWT's systems and procedures for managing occupational health and safety. It is even worse when one considers that Mr Kenny, who received regular training with respect to confined space requirements since 1991 with the most recent training occurring in February 1996, entered the valve chamber to disconnect the coupling and spigot valve connector without any apparent consideration being given to the extensive safety requirements associated with working in a confined space.

51 It was submitted that the Inspection Pit per se was not a confined space within the meaning of the Occupational Health and Safety (Confined Spaces) Regulation 1990 and Australian Standard AS 2865-1986 called up by the Regulation. That may be so, but if a person enters an Inspection Pit for the purpose of removing a section of the pipe so that someone can enter the pipe, then it is glaringly obvious that the necessary safety precautions relating to working in confined spaces would need to be observed.

52 Mr Dewar also received confined space training at regular intervals from 1991, the latest being February 1996. The fact that he would not only enter the Inspection Pit to disconnect the coupling and spigot valve connector but also crawl inside the pipe without taking the necessary precautions, reflects poorly on either the training he received regarding confined space or on the attitude to safety within AWT, or both. In the course of their employment Mr Kenny and Mr Dewar were engaged in dangerous work. For them to enter the Inspection Pit, be involved in removing a section of the pipe and for Mr Dewar and Mr Rowling to enter the outlet pipe cannot be dismissed as a spur of the moment action over which AWT had no control. No one present at the time of the incident so much as mentioned the issue of safety let alone followed safety procedures. What happened at Inspection Pit No. 7 on 25 June 1996 revealed serious failings in AWT's systems of work in relation to safety.

53 The fact that neither Mr Kenny nor Mr Dewar followed the necessary requirements and procedures for working in confined space was another failure on the part of AWT to ensure the health, safety and welfare of its employees. It cannot be said that because AWT's employees were working under the supervision of Ledonne at the time of the incident that AWT carried no responsibility for its employees' safety, although the fact that AWT were relying on Ledonne to properly supervise is a matter to be taken into account in assessing the gravity of the offence. However, insofar as s 15(1) of the Occupational Health and Safety Act is concerned, it was ultimately AWT's responsibility to ensure that, if its employees were working under another employer's supervision, the other employer had the necessary systems and procedures in place to ensure the safety of AWT's employees when the employees were working in confined spaces. As far as I can see, AWT did not take adequate steps to satisfy itself that Ledonne was adequately equipped to protect AWT's employees where they were working under Ledonne's supervision.

54 In relation to AWT's failure to carry out a risk assessment and the foreseeability of the incident, I refer to what I said earlier in connection with SWC. It was submitted by AWT that Mr Dewar had no business being in the outlet pipe - that it was not part of his duties. However, Mr Dewar was a fitter employed by an employer engaged in the business of installing valves and pipes. That he might enter a pipe in the course of his work was, in my opinion, reasonably foreseeable. That Mr Dewar's action in entering the pipe was in disregard for his own safety does not diminish AWT's responsibility under s 15(1) of the Act: Riley v Australian Grader Hire Pty Ltd.

55 The measures taken by AWT after the incident on 25 June 1996 to improve safety and avoid a repetition of the incident were similar to those taken by SWC and I make the same findings in respect of those measures, namely, they were highly commendable and should be taken into account in assessing penalty but that they also demonstrated the flaws in the pre-existing system.

56 In relation to deterrence, I take the same view in respect of AWT as that expressed in connection with SWC. Whilst steps have been taken to improve safety within AWT it is appropriate, in my opinion, to reinforce the future effectiveness of those steps by imposing a penalty that will continue to draw attention to the employer's obligations under s 15(1) of the Act and to that extent will operate as a deterrent.

57 I note that unlike SWC, AWT has no prior convictions and that the applicable maximum penalty at the time of the offence was $500,000.

58 I consider an appropriate penalty to be $150,000 in the case of AWT. As to the utilitarian value of the plea of guilty I allow 12.5 per cent discount upon the penalty and in respect of the measures taken after the incident to ensure the health and safety of persons working on AWT's sites, I allow a further 12.5 per cent.

59 In assessing penalty I have taken into account the objective features of the offence. I consider, after discounting for the subjective factors, that the appropriate penalty with regard to the offence as charged is $112,500. The prosecutor should have a moiety of the fine.

1. Sydney Water Corporation is fined an amount of $150,000 with a moiety thereof to the prosecutor. 2) Sydney Water Corporation shall pay the costs of the prosecutor as agreed or, failing agreement, as assessed. 3) Australian Water Technologies Pty Ltd is fined an amount of $112,500 with a moiety thereof to the prosecutor. 4) Australian Water Technologies Pty Ltd shall pay the costs of the prosecutor as agreed or, failing agreement, as assessed.

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