FEDERAL COURT OF AUSTRALIA

Comcare v Transpacific Industries Pty Ltd [2014] FCA 1420

the court declares that:

1.    On 7 December 2011, the Respondent contravened subcl 2(1) of Sch 2 of the Occupational Health and Safety Act 1991 (Cth) by reason of it having breached s 16(1) of the Occupational Health and Safety Act 1991 (Cth) by having failed to take all reasonably practicable steps to protect the health and safety of Graeme Shore and Robert Collins by:

   (a) failing to take all reasonably practicable steps to provide and maintain a working environment, including plant and systems of work, that was safe for Mr Shore and Mr Collins and without risk to their health;

   (b)  failing to take all reasonably practicable steps to ensure the safety at work of, and the absence of risks at work to the health of Mr Shore and Mr Collins in connection with the handling and storage of hazardous substances;

   (c) failing to take all reasonably practicable steps to provide Mr Shore and Mr Collins with the information, instruction, training and supervision necessary to enable them to perform the task of emptying sodium sulphite into the Centrate Tank in the Liquid Treatment Plant at Wingfield in South Australia in a matter/manner that was safe and without risk to their health.

THE COURT ORDERS THAT:

2.    The Respondent pay the Commonwealth a pecuniary penalty of $110,000 because of its contravention of subcl 2(1) of the Occupational Health and Safety Act 1991 (Cth).

3.    The Respondent pay the Applicant costs of the application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

INTRODUCTION

1    This judgment principally concerns the penalty which should be imposed on Transpacific Industries Limited (the Respondent) for admitted breach of s 16 of the Occupational Health and Safety Act 1991 (Cth) (the OHS Act). The OHS Act has been repealed by the Work Health and Safety (Transitional and Consequential Provisions) Act 2011 (Cth), commencing on 1 January 2012, but remains in force in relation to conduct prior to that date: see Sch 2 cl 1(1) of that Act. The events giving rise to this proceeding occurred on 7 December 2011. The parties agreed that appropriate declarations should also be made and have filed an Agreed Statement of Facts (the ASF).

2    Comcare (the Applicant) is a statutory body established pursuant to s 68 of the Safety Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act). It is authorised pursuant to s 77 and subcl 5(1) of Sch 2 Pt 1 of the OHS Act to apply for relief in the circumstances of this proceeding. The Applicant relies on the ASF and affidavits of Ljiljana Straga sworn 22 October 2014 and Dr John William Edwards sworn 20 October 2014.

3    The Respondent is and was an employer within the meaning of s 5 of the OHS Act. At all material times, the Respondent is a body corporate holding a licence granted pursuant to ss 103 and 104 of the SRC Act and a non-Commonwealth licensee within the meaning of s 5 of the OHS Act. The Respondent is a subsidiary of a publicly listed company engaged in the business of recycling, waste management and industrial services. It operates 256 sites in Australia and New Zealand, and has in excess of 4000 employees.

4    The Respondent has operated the chemical recycling plant in Wingfield, South Australia (the Workplace) since 2005.

5    The Workplace’s responsibilities include the treatment of hazardous waste material generated by mining operations. The hazardous waste material was a result of using cyanide solutions to separate precious metals from ore deposits. Once received at the Workplace, the spent solution underwent a two-stage treatment process. The first stage of the process was to decant the spent cyanide solution into a shoulder-height open tank (the Centrate Tank) and then separate chemicals and metals from the solution. This stage of the process was heavily documented and subjected to Safe Work Instruction and Risk Assessment. The second stage of the process was to introduce sodium sulphide (SS) into the Centrate Tank to further treat the solution whereupon it was fixated as a solid so that it may be reasonably disposed at a landfill facility. This task would usually be done once every five to six weeks.

6    SS is defined as a hazardous substance in accordance with reg 6.03 and a dangerous good pursuant to reg 8.04(3) of the Occupational Health and Safety (Safety Standards) Regulations 1994 (the Regulations). The Respondent sourced SS from Redox Pty Ltd. Accompanied with the SS was a Dangerous Material Shipping Document containing information of its properties, how it affects health, and safety precautions to take when using or storing it.

THE INCIDENT

7    The accident relevant to these proceedings occurred in the context of the second stage of the process when the SS is added to the Centrate Tank (the Work) which was located in the Liquid Treatment Plant at the Workplace. Annexed to the ASF are photographs of the site in which the accident occurred. It is convenient to refer to them briefly. The Centrate Tank is located at the back of the site. There was no road or pathway behind it; it was not an area with traffic moving through it.

8    On 7 December 2011, Graeme Shore, who was employed by the Respondent, carried out the Work by manually lifting 25 kg bags of SS to the top of the shoulder-height Centrate Tank. There was no elevated access to the top of the Centrate Tank. In order to get sufficient height to pour the SS into the Centrate Tank, Mr Shore stood on unsecured pipes which were present at the base of the Centrate Tank.

9    At the time of the accident, Mr Shore had already emptied two 25 kg bags of SS. He then started to empty a third 25 kg bag of SS. Mr Shore placed the 25 kg of SS on the top edge of the Centrate Tank and cut an opening in the bag with a Stanley knife. Mr Shore then received a “whiff of something”. He took two steps back and shook his head. He then took one step towards the Centrate Tank again for the purpose of removing the third bag of SS that was on the top of the tank. At this time, he experienced another “whiff” of the odour. Mr Shore took several steps back, turned around, and collapsed to the ground.

10    At around this time, Robert Collins was washing out the vacuum loader truck nearby. He was located to the right side of the Centrate Tank. It is not clear how far away Mr Collins was from Mr Shore, but Mr Shore was out of his sight when both people were performing their work duties at the time. When Mr Collins next saw Mr Shore, believed by Mr Collins to be about ten minutes after he last saw Mr Shore, he noticed Mr Shore had something on his chin. Mr Collins enquired as to whether Mr Shore was alright, and when he did not get a verbal response he called for a colleague to come to the area. Mr Collins got down from the vacuum truck and went over to Mr Shore, who was sitting on a pallet.

11    Mr Shore was assisted to the lunchroom of the Workplace and sat down in a chair. Mr Shore was observed to have been experiencing difficulty breathing. He was placed in a recovery position and administered oxygen. Before Mr Shore could be treated by paramedics, the paramedics required him to be decontaminated by the Metropolitan Fire Service. That process involved Mr Shore being washed by the Metropolitan Fire Service using a hose. Mr Shore was further treated by paramedics at the Workplace. He was then transferred by ambulance to the Royal Adelaide Hospital after the accident, where he was examined but not admitted. Mr Shore left the hospital approximately five hours after his arrival there on the day of the accident. On the following day, Mr Shore was examined by the Respondent’s approved work health clinic and was certified as fit to return to work on modified duties. He took pre-planned annual leave between 9 December 2011 and 20 December 2011. He returned to work at the Workplace on 21 December 2011.

THE AFTERMATH

12    The Respondent notified the Applicant of the accident immediately after it occurred. The Applicant first attended the Workplace at or around 2 pm on the day of the accident. The Respondent co-operated with the investigation. Immediately afterwards, the Respondent ceased to use the procedure of precipitating heavy metals from treated cyanide using SS.

13    On 8 December 2011, the Respondent prepared a Standard Operating Procedure for the Work entitled “Treated Cyanide Disposal”. SS was no longer utilised as part of that Standard Operating Procedure. It is not necessary to refer in detail to the revised procedure.

14    On 9 December 2011, an investigator of the Applicant appointed pursuant to s 40 of the OHS Act, Tom Dawson, issued the Respondent with a Prohibition Notice. The Prohibition Notice prohibited the Respondent from manually loading or using SS or any other flammable chemicals in the treatment process until such time as the threat or risks had been removed. It sets out reasons for the prohibition, outlined the progress of the investigation thus far, and provided suggestions on how to remove the risks. As noted, by that time, the Respondent had ceased to use SS in the procedure in any event.

15    After the accident but prior to 22 December 2011, the Respondent prepared Risk Assessment Forms for each of:

(1)    the “Disposal of treated cyanide from the cyanide tanks”; and

(2)    the “Disposal of treated cyanide from the small centrifuge tanks”.

16    From the period March 2012 to July 2012, there was correspondence between the Applicant and the Respondent in relation to the Prohibition Notice.

17    On 23 July 2012, a Hazardous Substance and Dangerous Goods Risk Assessment prepared by the Respondent for the use of SS to drop precipitated heavy metals from liquid waste streams was accepted by the Applicant. The Prohibition Notice ceased to have effect from the following day.

THE CONTRAVENTION

18    Section 16(1) of the OHS Act provides that:

An employer must take all reasonably practicable steps to protect the health and safety at work of the employer’s employees.

19    It is accepted that the Respondent in the circumstances contravened that provision. For the reasons that follow, I accept the Applicant’s contention that the Respondent’s contravention of s 16(1) of the OHS Act has three elements; namely that it failed to take all reasonably practicable steps to:

(1)    provide and maintain a working environment, including plant and systems of work, that was safe for Mr Shore and Mr Collins and without risk to their health;

(2)    ensure the safety at work and absence of risks to the health of Mr Shore and Mr Collins in connection with the handling of hazardous substances, relevantly SS; and

(3)    provide Mr Shore and Mr Collins with information, instruction, training and supervision necessary to enable them to work in a manner that was safe and without risk.

Those aspects are specifically referred to in subs (2)(a)(i), (2)(b)(i), (2)(c), 2(e) and (3)(d) of s 16.

RELIEF

20    Relevantly, cl 2 of Sch 2 to the OHS Act provides:

Declarations of contravention

(1)    If a court considers that a person has breached one of the following provisions, or was involved in such a breach, it must make a declaration that the person has contravened in this subclause:

(a)    Subsection 16(1) (duties of employers in relation to their employees etc.);

…

21    The contravention of s 16(1) is admitted, and as the Respondent consents to them, I will make the declaratory orders as proposed by the parties.

22    Where a declaration is made under subcl 2(1) of the OHS Act, the Court may also order the person to pay to the Commonwealth a pecuniary penalty which must not exceed the amount stated in the table to be the maximum penalty in relation to the provisions concerned.

23    As provided for in cl 2 of Sch 2 of the OHS Act, the maximum penalty prescribed for a contravention of s 16(1) is 2,200 penalty units. At the relevant time, a penalty unit was defined by s 4AA of the Crimes Act 1914 (Cth) as being $110. Thus, the maximum penalty for breach of s 16(1) of the OHS Act in this matter is $242,000.

24    The Court has wide discretion to impose a pecuniary penalty for contravention of s 16(1) of the OHS Act. The legislation does not list factors to be taken into account in determining the appropriate pecuniary penalty: cl 4 of Sch 2 of the OHS Act: see Comcare v Commonwealth [2012] FCA 1419 at [95].

25    However, the Court’s discretion is exercised within the relevant statutory context, and of central importance are the objects and purposes of the OHS Act: Comcare v Post Logistics Australasia Pty Ltd (2012) 207 FCR 178 at [59-[60] (Post Logistics).

26    Relevantly, the objects contained in s 3 of the OHS Act are:

(1)    to secure the health, safety and welfare at work of employees of the Commonwealth, of Commonwealth authorities and of non-Commonwealth licensees;

(2)    to promote an occupational environment for such employees at work that is adapted to their needs relating to health and safety;

(3)    to encourage and assist employers, employees and other persons on whom obligations are imposed under the Act to observe those obligations; and

(4)    to provide effective remedies if obligations are not met, through the use of civil remedies and, in serious cases, criminal sanctions.

27    General principles which inform the exercise of discretion as to penalty were outlined by Madgwick J in Comcare v Commonwealth of Australia (2007) 163 FCR 207 (Trooper Lawrence) at [120]:

(i)    the penalty must be such as to compel attention to occupational health and safety generally, to ensure that workers whilst at work will not be exposed to risks to their health and safety;

(ii)    it is a significant aggravating factor that the risk of injury was foreseeable even if the precise cause or circumstances of exposure to the risk were not foreseeable;

(iii)    the offence may be further aggravated if the risk of injury is not only foreseeable but actually foreseen and an adequate response to that risk is not taken by the employer;

(iv)    the gravity of the consequence of an accident does not itself dictate the seriousness of the offence or the amount of penalty. However the occurrence of death or serious injury may manifest the degree of the seriousness of the relevant detriment to safety;

(v)    a systemic failure by an employer to appropriately address a known or foreseeable risk is likely to be viewed more seriously than a risk to which an employee was exposed because of a combination of inadvertence on the part of an employee and a momentary lapse of supervision;

(vi)    general deterrence and specific deterrence are particularly relevant factors in light of the objections and terms of the Act;

(vii)    employers are required to take all practicable precautions to ensure safety in the workplace. This implies constant vigilance. Employers must adopt an approach to safety which is proactive and not merely reactive. In view of the scope of those obligations, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the employer in the future. This is particularly so where the employer conducts a large enterprise which involves inherent risks to safety;

(viii)    regard should be had to the levels of maximum penalty set by the legislature as indicative of the seriousness of the breach under consideration;

(ix)    the neglect of simple, well-known precautions to deal with an evidence and great risk of injury, take a matter towards the worst case category;

(x)    the objective seriousness of the offence, without more may call for the imposition of a very substantial penalty to vindicate the social and industrial policies of the legislation and its regime of penalties.

28    These principles are uncontroversial and in some sense self-evident. They were subsequently adopted by the Full Federal Court as a useful foundation or starting point for an assessment of a civil pecuniary penalty in Post Logistics at [60]. Although it is prudent to refer to those factors, they are not to be applied dogmatically: Post Logistics at [68].

29    I adopt that approach, and will consider the relevant factors applicable to this matter in the light of the submissions of the parties. In my view, the main considerations in these matters are the seriousness of the contravention and the need for specific and general deterrence.

CONSIDERATION

Seriousness of the Contravention

30    A contravention of s 16 of the OHS Act occurs when an employer exposes its employees to risk. This is clear in the text of s 16(1)-(2) of the OHS Act. It is not an element of the offence that the exposure to risk results in any injury. Thus, the gravity of the consequence does not itself inform the seriousness of the offence or the amount of the penalty: Trooper Lawrence at [120]. The seriousness of the contravention ought to be considered objectively: Trooper Lawrence at [120]; Workcover Authority of New South Wales v Profab Industries Pty Ltd (2000) 49 NSWLR 700 (Profab Industries) at 714.

31    Similarly, it was observed in DPP v Amcor Packaging Pty Ltd (2005) 11 VR 557 at 565:

[I]t is the avoidance of those consequences which, when considering the objective seriousness of the offence, constitutes the raison d’Être for the establishment of the legislated regime in the first place. To a substantial extent the seriousness of a breach must be assessed by reference to those potential consequences and the measure of evidenced disregard concerning the safety of employees in the circumstances.

32    In this matter, I consider the factors relevant to the determination of the seriousness of the contravention are:

(1)    the level of training provided to Mr Shore and Mr Collins;

(2)    the foreseeability of the risk;

(3)    the potential harm; and

(4)    the Respondent’s management of those risks.

33    At the time of the accident, Mr Shore and Mr Collins had been full-time employees of the Respondent for three years. At the time of their commencement, they worked in the Solvent Distillation Plant at the Workplace and were provided with an “on the job” induction that included safety training and instruction regarding the need to use, fit and wear protective personal equipment when working.

34    From February 2009 and June 2011, Mr Shore attended and passed six training modules which appear to have been delivered through one or two day sessions by or on behalf of the Respondent:

(1)    “Manual Handling” in 2 February 2009;

(2)    “Safety leadership” in 20 October 2010;

(3)    “Chemical management, hazardous goods and MSDS” on 9 February 2011;

(4)    “Job safety and environmental analysis” on 11 February 2011;

(5)    “Emergency awareness” on 11 February 2011; and

(6)    “Risk management” on 3 June 2011.

35    Similarly, Mr Collins attended and passed the following training modules which appear to have been delivered through one or two day sessions by or on behalf of the Respondent:

(1)    “Reporting injuries” on 9 February 2011;

(2)    “Spills management” on 9 February 2011;

(3)    “Chemical management, hazardous goods and MSDS” on 11 February 2011;

(4)    “Emergency awareness” on 11 February 2011; and

(5)    “Risk management” on 3 June 2011.

36    In or about July 2010, Mr Shore commenced working in the area known as the Liquid Treatment Plant at the Workplace. In the period July 2010 and December 2010, Mr Shore received “on the job” training in respect of the Work and the handling of SS. That training and instruction:

(1)    was conducted by the Leading Hand of the Liquid Treatment Plant at the Workplace, Mr Peter Williams, on the first occasion when SS was added to the Centrate Tank;

(2)    involved Mr Williams:

(i)    explaining to Mr Shore why SS was added to the Centrate Tank, namely to precipitate heavy metals from treated cyanide;

(ii)    explaining to Mr Shore that the amount of SS to be added was indicated by metal scan results provided by the laboratory at the Workplace;

(iii)    showing Mr Shore how to perform the Work by opening and pouring a bag of SS into the Centrate Tank (in the same manner that Mr Shore did on the day of the accident); and

(iv)    supervising Mr Shore adding the bags of SS to the Centrate Tank on a number of occasions in the period July to December 2010.

37    Further, Mr Williams also instructed Mr Shore to consider the wind conditions when pouring the SS into the Centrate Tank. If it was too windy, then either the job would not be completed that day or Mr Shore would go to the other side of the Centrate Tank so that the wind would be coming from the back over the shoulder. The amount of dust generated when the bags of SS were emptied depended on the wind direction and how full the Centrate Tank was at that time.

38    In relation to the Work, Mr Williams also conducted the “on the job” training to Mr Collins.

39    Whenever the Work was performed in the period July to December 2010, it was Mr Shore’s job to add the SS bags to the Centrate Tank as part of his normal duties. The Work was not the subject of a documented safe work instruction or the subject of any specific documented training, instructions or safety assessment. It does not appear that the training modules that Mr Shore and Mr Collins attended covered the safe handling of SS, or the full extent of the issues of inhaling it, the Work, or acknowledged risks from inhaling hazardous substances.

40    It is clear through the instruction provided by Mr Williams there were obvious risks in the method of carrying out the Work. However, Mr Shore had not received any instructions about wearing personal protective equipment while performing the Work beyond wearing thick rubber gloves over the latex gloves and high-vis chemical resistant coveralls over his long sleeved shirt and long sleeved pants. Each time Mr Shore did the work, he would make a decision as to whether to wear his full face mask. At all times, both a full face mask and a Self-Contained Breathing Apparatus were available for Mr Shore at the Workplace. In my view, it was inappropriate to leave decisions about personal protective equipment to employees doing the Work, without adequate training on the substance they were working with or the risk of harm that arose from that substance.

41    On the day of the accident, Mr Shore was not wearing a full face mask when carrying out the Work and there was a soft breeze coming from his back over his shoulder. The consideration of and adjustment in accordance with the wind conditions illustrates awareness of the risk of exposure to SS but such knowledge only came from the “on the job” training provided by Mr Williams.

42    In my view, the risk of being exposed to SS while it was being poured into the Centrate Tank was foreseeable. It was clear from the instructions of Mr Williams that such risks were obvious, such as the consideration of wind conditions when carrying out the Work.

43    Further, the Material Safety Data Sheet (MSDS) for SS held by the Respondent warned of significant risks to health including that it may be fatal if it was swallowed, inhaled or absorbed through skin. It stated that a self-contained breathing apparatus and acid resistant chemical splash suit should be worn.

44    The Respondent relies on a report annexed to the affidavit of Dr George Crank sworn 16 October 2014. There is no dispute about Dr Crank’s expertise. He completed a PhD in Organic Chemistry from the Monash University in 1964 and had worked in the field of toxicology and organic chemistry since 1961. He is currently an Independent Consultant in Chemistry & Toxicology at the University of New South Wales. He has industry, teaching, research and consulting experience in those fields. Insofar as his opinion is wholly or substantially based on his specialised knowledge acquired during the course of his training, study or experience, I consider it to be admissible pursuant to s 79 of the Evidence Act 1995 (Cth) (the Evidence Act). His expert report covered his opinion on the toxicological properties of SS and the health risks to Mr Shore and Mr Collins due to their exposure to it on the day of the incident.

45    Dr Crank put forward the following views:

(1)    Mr Shore was likely to have inhaled some of the SS when he was pouring it into the tank;

(2)    the effects of relatively limited outdoor exposure to SS dust are respiratory irritation, sore throat, coughing and temporary dizziness;

(3)    the type of exposure suffered only lasted a short time;

(4)    the degree of exposure would not have caused severe damage to Mr Shore’s health or cause him to develop long-term symptoms;

(5)    in relation to Mr Collins, he was likely to be too far away to be affected by the dust; and

(6)    by the time Mr Collins came to the aid of Mr Shore, the SS dust would have settled or dispersed.

46    The Applicant relied on the report annexed to the affidavit of Dr John William Edwards sworn 20 October 2014. There is no dispute about Dr Edward’s expertise. He completed a PhD in Toxicology from the University of Adelaide in 1990 and had worked in that field since 1984. He is currently Associate Professor of Environmental Health at Flinders University of South Australia and the principal of Edwards Toxicology Consulting. He conducted and supervised research investigating exposures and health effects associated with occupational and environmental chemicals. Insofar as his opinion is wholly or substantially based on his specialised knowledge acquired during the course of his training, study or experience, I consider it to be admissible pursuant to s 79 of the Evidence Act.

47    From his expert report annexed to his affidavit of 20 October 2014, Dr Edward put forward the following views:

(1)    SS dusts are very strong irritants through skin and eye contact;

(2)    the extent of inflammatory tissue damage depends on duration of contact;

(3)    inhalation of SS dusts will produce irritation to respiratory tracts;

(4)    the symptoms suffered by Mr Shore were highly likely to be a result of inhalation of SS dust;

(5)    during the actions of opening and adding the contents of bags of SS, Mr Shore was overcome by a combination of SS dust and hydrogen sulphide gas, causing acute chemical irritation, shortness of breath and difficulty breathing;

(6)    the Work required the use of a full face respirator with appropriate filters;

(7)    workplace training appears to have been scant and there is very little oversight of the work performed and safety procedures required;

(8)    any unconscious collapse associated with chemical exposures is highly significant.

48    On 27 October 2014, the Respondent filed a Notice of Objection to certain aspects of the affidavit evidence of Dr Edwards. There were also objections to some parts of the affidavit evidence of Ms Straga, but I will deal with that later. Several of the objections were resolved prior to hearing and were not relied on by the Applicant. On 31 October 2014, the Respondent also made an interlocutory application seeking to be heard on the admissibility of the evidence filed by the Applicant and to adjourn the penalty hearing to another date.

49    By the time of the hearing on 31 October 2014, the main objections to his evidence were:

(1)    the fact that his report made reference to a purported exposure to dangerous substances, hydrogen sulphide and hydrogen cyanide, which were not particularised in the pleadings or the ASF; and

(2)    critical comments of work practices purportedly carried out at the Respondent’s site at Wingfield, South Australia.

50    As to the former, I do not think it is necessary to specifically accept his views about the chemical composition of the dangerous substances to which Mr Shore was exposed. There was some debate in the experts’ reports about that. There was no specific agreement about that in the ASF and it was not appropriate, on the basis of the tendered documents only, to resolve that issue. There was no dispute that Mr Shore was exposed to some chemical dust from the Work, associated with SS, and that he collapsed. There was some dispute about the potential gravity of the consequences to which he might have been exposed. In fact, in this instance, he was fortunate that he had no longer term consequences of his exposure. As I indicated at the time, I do not intend to assess penalty on the worse of the scenarios discussed by the two experts, namely that in the particular circumstances the chemical exposure extended to exposure to hydrogen sulphide.

51    As to the latter, in the course of submissions, the Applicant ultimately did not press reliance on that part of his report. It was not appropriate, in my view, that I should rely on it with the then statement of his qualifications which may not have extended to an assessment of the Respondent’s general work safety practices. As to that matter, I have not relied on his report.

52    Following those rulings, and in the light of the comments made, the Respondent had the option to, but did not pursue any application to have the penalty hearing adjourned to another date.

53    Both Dr Crank and Dr Edwards recognise that SS is a hazardous substance which is fatal in large doses. The Respondent accepts that the risk of the type of injury that Mr Shore suffered, that is, a “relatively limited outdoor exposure to SS dust” which resulted in respiratory irritation, sore throat, coughing and temporary dizziness, was foreseeable. However, the Respondent contends that the foreseeable risk did not extent to serious harm or death. It was submitted that whilst the Dangerous Material Shipping Document accompanying the SS warned of significant risks to health, this warning was aimed at transport operators who were generally inexperienced and untrained at handling significant quantities of dangerous goods. That would have required a significant amount of SS. I accept that in this case, at least Mr Shore and Mr Collins undertook training modules that appeared to cover the risks of handling hazardous substances.

54    The handling of 25 kg bags of SS is significant. Mr Shore had to cut the bags open while they were resting on his shoulder, intending to pour the contents into the Centrate Tank. The risk of exposure to SS is a significant one. It appears to me that the possibility of SS dust exposure was only one of the risks. That is what occurred. There may also have been the risk of the SS bag, or part of its contents dislodging and falling away from the tank towards the person loading it onto the tank.

55    The Respondent pointed out that the training provided to Mr Shore and Mr Collins included safety training and the need to use, fit and wear personal protective equipment. They both attended and passed training modules associated with their duties. However, the Respondent also acknowledged the point that the “on the job” training involved did not specifically require the usage of a full face mask when performing the Work.

56    I also consider it significant that there was no Safe Work Instruction or Risk Assessment specific to the Work. There is a general consensus between Dr Crank and Dr Edwards that the seriousness of the harm is directly proportionate to the level of exposure to SS dust. Dr Crank took the view that because the exposure only lasted a short time, Mr Shore could not have inhaled a very hazardous amount of dust there was unlikely to be long term adverse effects. This was further reinforced by the swiftness of Mr Shore’s recovery. However, in my view, it is significant that Mr Shore collapsed. As he was performing the Work alone and out of sight of other colleagues, it was some ten minutes after he collapsed that he was noticed by Mr Collins. Not only was Mr Shore handling SS without mandatory protective equipment, but it was also an obvious risk to not have a supervisory system when the Work, which had obvious risk associated with it, was performed to ensure any incident would be attended to promptly.

57    The Applicant advanced the submission that the manual handling risk from lifting and holding at shoulder height 25 kg bags of SS whilst on an unsecured base was also foreseeable. The Respondent’s training in manual handling awareness notes that hazards including lifting and holding, and identifies potential injuries including back injuries, hernias, muscle strain, crush injuries and cuts. The Applicant also relies on the National Code of Practice for Manual Handling, published in 2005 and annexed to Ms Straga’s affidavit which identified risks of back injury increasing with objects above the 16-20 kg range. The Hazardous Manual Tasks Code of Practice, annexed to the affidavit of Michael John Cole sworn 25 October, a solicitor of the Respondent’s legal representative in these proceedings, also noted that musculoskeletal disorders from manual handling hazards are the most common workplace injuries in Australia.

58    The Applicant contends that the precautions available to the Respondent in managing these manual handling risks were not onerous. The most obvious risk was the unsecured base, which could be rectified by providing an elevated work platform or conveyor/floveyor to move the SS into the Centrate Tank. The Respondent was aware of the existence of these mechanical aids, as evident in the Respondent’s materials for its own manual handling training module.

59    As I have indicated, in my view, exposure to SS dust while emptying the bags was not the only foreseeable risk. There was also a risk of the worker falling along with an opened bag of SS. Such a circumstance might result in a significant exposure of SS directly on or around the worker who had fallen or anyone who attends upon that person.

60    For those reasons, the Respondent’s contravention falls on the serious end of the spectrum, even though in this instance the adverse consequences ultimately were not long lasting.

61    The Respondent was well aware of the risks associated with SS but did not take steps to obviate that risk in relation to the Work task beyond the “on the job” training provided by Mr Williams. In my view, it is not sufficient to have personal protective equipment available in such circumstances.

62    As the Applicant said, there were precautions that could have been employed to reduce or remove the risks associated with SS handling. They were straightforward. They include providing specific training and instruction when handling SS when performing the Work, or, requiring the use of appropriate personal protective equipment, especially the use of a full face respirator, using a buddy system, and adopting an alternative means of emptying the SS bags into the Centrate Tank.

63    It is relevant that the Respondent ceased to undertake the Work in the same manner immediately after the accident. In the day following the accident, a new Standard Operating Procedure for the second stage of the treatment was introduced which removed the risks to which Mr Shore and Mr Collins were exposed to by removing the usage of SS. There was no indication that there were significant costs or business disruption from the change in procedure. That conduct, which is laudatory also highlights the ease with which the risks could have been addressed.

64    The Respondent relied on the affidavit of Luke Chapman, National Health Safety and Environment Manager of the Industrials Division for the Respondent, affirmed 17 October 2014. The affidavit highlights the Respondent’s strong commitment to safety and safety governance, evident by the implementation of the Health and Safety Policy requiring employees to cease work where there is a safety threat. I give that material some weight, as it shows the commitment of the Respondent to the safety of its employees. It unfortunately did not lead to specific appropriate training for Mr Shore and Mr Collins, and not making the use of protective equipment mandatory when handling hazardous substances in performing the Work.

65    The Respondent pointed out that it regarded the first stage of the treatment process as having significant risk to health and safety, thus requiring Safe Work Instructions. It had introduced them. When the treatment process progresses to its second stage, it said the risks to health and safety was much lower with respect to exposure to SS dust. It is not clear that the Respondent did not consider that there was no foreseeable risk of injury in performing the Work (as the second stage has been defined for this judgment), or that in the context of the much more significant and dangerous risks in other parts of the process at the Workplace, it did not appreciate the risks associated with the Work. The fact that other significant risks were managed properly does not detract from the fact that the particular risk in this matter was not adequately addressed. It does not affect the foreseeability of the risk with respect to exposure to SS dust. I do not find that the Respondent deliberately failed to address the risk, but clearly (as now acknowledged by the Respondent) it was a risk that the Respondent ought to have identified and addressed.

66    The Respondent should be credited with promptly ceasing the usage of SS in the treatment process, thereby eliminating the risk altogether. It is obviously a conscientious employer in relation to safety issues. The corrective action taken by the Respondent afterwards, such as preparing a Standard Operating Procedure and Risk Assessment forms specific to the risk involved in the accident and issuing a “Zero Harm Alert” to all other sites reminding employees and contractors of the risks associated with chemical inhalation also evidences that. However, it accepts by its plea that it ought to have been aware of and managed those obvious risks, either by considering alternative methods or implement a process to protect the employee from the risks, such as wearing protective equipment covering the face. It should not require an accident to occur for the Respondent to respond.

67    As noted previously in these reasons, the Respondent is a large operator with 256 sites and over 4000 employees. Work carried out at the Workplace includes the treatment of hazardous waste. Dealing with hazardous substances is not an unusual aspect of the Respondent’s commercial activities. The health and safety risks of the Work were clear and obvious. The first stage of the treatment process was heavily documented and Mr Shore was required to wear appropriate personal protective equipment, including a full face mask and an appropriate suit. This is to be contrasted with the second stage of the treatment process, the Work, where there was no documentation. There was only “on the job” training provided by Mr Williams. That is indicative of the Respondent’s poor risk assessment practices in relation to the Work. It exposed Mr Shore and potentially others to a significant risk of harm.

General Deterrence

68    General deterrence is always relevant in matters concerning contraventions of occupational health and safety provisions. The concept of deterrence forms a part of the assessment of a civil pecuniary penalty under the OHS Act. As the Full Federal Court in Post Logistics observed at [75]:

[T]he imposition of a penalty shifts of the economic calculus in favour of taking the necessary steps to ameliorate the risk of OH&S incidents generally…

69    The Full Federal Court went on to endorse the statement of Barker J in Comcare v Transpacific Industries Ltd [2012] FCA 90 (Comcare v TPI) at [76]:

[N]o doubt the concept of “deterrence” can be expressed in different ways; but so long as the penalty is assessed with the importance of meeting the occupational health and safety obligations under the OHS Act are steadfastly borne in mind – not mere punishment or retribution against a contravener – then, in my view, the penalty assessment process will be properly undertaken.

70    In this matter, given the relevant history of the Respondent (discussed under the subheading “Specific Deterrence”), the need for a weighting for general deterrence of some substance is appropriate. That is because others must apprehend the importance of meeting the requirements of provisions such as s 16(1) of the OHS Act, and in this case the importance of doing so where there is particular reason for an employer to be aware that its existing safety procedures and programs may not be adequate.

71    Of course, I am mindful of not “weighting” this factor in such a way as to unfairly duplicate its weight adversely to the Respondent when considering the element of Specific Deterrence, or to give adequate weight to the mitigating elements put forward by the Respondent (some of which have been discussed above).

Specific Deterrence

72    History of compliance may be relevant when assessing the need for specific deterrence.

73    On 2 September 2009, an accident resulting in a worker’s death occurred in one of the Respondent’s refineries in Western Australia. It was the subject of proceedings before this Court: Comcare v TPI. In Comcare v TPI, the Respondent admitted that s 16(1) of the OHS Act was contravened following a fatal accident. In that case, Barker J imposed a pecuniary penalty of $170,500. His Honour found that no risk hazard assessment had been undertaken for that particular hazard, and that protective steps were quite feasible: [25] and [41]. The circumstances were clearly, in specific terms, quite different but that accident shows that the Respondent was aware that at least some of its risk management systems or assessment were deficient and that it needed to introduce more comprehensive safety training to its employees.

74    The Applicant relies on the affidavit of Ljiljana Straga sworn 22 October 2014. Ms Straga is employed by the Applicant as an inspector. From March 2012, she has been the Lead Inspector in relation to this particular incident. Annexed to the affidavit is:

(1)    handwritten statement of Mr Shore on the date of the incident – the substantive parts of the statement were incorporated into the ASF;

(2)    an Enforceable Undertaking entered into by the Respondent in lieu of the Applicant pursuing court proceedings that had been commenced by the Applicant concerning three further separate incidents that had occurred at three separate workplaces of the Respondent – the undertaking was given as a consequence of and in mitigation of the alleged contraventions as evidence of corrective action;

(3)    the Prohibition Notice;

(4)    the National Code of Practice for Manual Handling – acknowledging that evidence shows that the risk of back injury increases significantly with objects above the range of 16-20 kg.

75    The Respondent’s Notice of Objection of 27 October 2014 also objected to several aspects of her affidavit. By the hearing, the main objections were of matters covered in the Prohibition Notice relating to a fire hazard, namely an electrical ignition source; poor access and egress arrangement in place; and access ways featuring both protected and non-protected electrical cables and pipes containing waste products at foot level creating a trip hazard and potential for electrocution to exposure, or exposure to hazardous waste. At the hearing, I indicated that I would receive Ms Straga’s affidavit, except for the part in the Prohibition Notice annexed to her affidavit that referred to threats to health and safety because of the electrical ignition source. The Respondent also objected to the handwritten statement of Mr Shore where there was a reference to the “egg-fart” smelling gas. To the extent that the statement is inconsistent with the ASF, I indicate I would rely on the ASF. Consequently, I do not proceed on the basis that hydrogen sulphide was the cause of Mr Shore’s collapse.

76    The Respondent also objected to the Enforceable Undertaking being admitted as “tendency evidence”. It contains allegations which were part of defended proceedings and the result of the negotiation relating to those defended proceedings was the undertaking. It does not acknowledge breach. I proposed to receive the Undertaking and note its date (only very shortly before the subject Incident). I accept the submission by the Applicant that the Undertaking reflects the awareness of the Respondent as at that date, namely November 2011, that, at least arguably, that it needed to undertake a risk assessment gap analysis on its activities and for improved education regarding those risks. It does not demonstrate any other relevant contraventions by the Respondent.

77    Specific deterrence is more relevant in this matter than others because Mr Shore’s incident occurred more than two years after the events of Comcare v TPI (but before the judgment of Barker J) and after (but only very soon after) the Enforceable Undertaking was entered into. In my view, at the time of Shore’s accident, the Respondent had reason to be concerned that it had issues across its workplaces relating to the documenting of procedures, undertaking risk assessments and providing adequate training. It ought to have been clear to the Respondent that the “on the job” training provided to Mr Shore and Mr Collins in relation to the handling of the hazardous substance SS when doing the Work included obvious risks of potential injury.

Other Mitigating Factors

78    While initially it denied all liability, the Respondent in September 2014 admitted contravening the OHS Act, approximately four months after commencement of the proceedings. However, it is relevant that admissions were made after the Applicant had filed its list of evidence to be adduced at trial and the matter was listed for trial.

79    The Respondent should be given credit for admitting the contravention. It is also given credit for the fact that Mr Shore did not suffer from long-term health effects, that it took remedial measures immediately after the incident, for reporting the incident promptly, for its co-operation throughout the investigation, and for its expression of contrition and regret it demonstrated through its authorised officer, Mr Chapman. The brief recital of those matters does not diminish their significance.

80    The Applicant submits that the Respondent’s admissions, co-operation with the investigation and its corrective action are relevant but are of secondary importance to the objective seriousness of the contravention.

81    Barker J observed in Comcare v TPI at [38]:

In the present case, the fundamental need to impose a penalty that highlights the importance of compliance with occupational health and safety law in order to ensure the safety of employees at work must always be kept at the forefront of the penalty assessment process. That is not to say that notions of “deterrents”, either specific or general, are irrelevant, for, in my view, they plainly are closely allied to this primary objective of ensuring the objects of the OHS Act are met. It is important that a particular respondent who admits contravention of the OHS Act or is found guilty of contravening the OHS Act should suffer a sufficient penalty, having regard to the seriousness of the contravention, so as to remind them of the significance of their responsibilities under the OHS Act. It is also important to remind employers more generally of the significance of their responsibilities under the OHS Act. No doubt the concept of “deterrence” can be expressed in different ways; but so long as the penalty is assessed with the importance of meeting the occupational health and safety obligations under the OHS Act are steadfastly borne in mind – not mere punishment or retribution against a contravener – then, in my view, the penalty assessment process will be properly undertaken.

82    In this, and like matters, once the factors relevant to the assessment of the appropriate pecuniary penalty are identified, particularly those the subject of the submissions, and taken into account, the determination of an appropriate penalty is a matter of judicial discretion.

83    I have discussed those factors above. Notwithstanding Dr Crank’s evidence, and putting aside the suggestion that Mr Shore’s collapse was due to hydrogen sulphide inhalation, I have found the potential risk of harm from doing the Work was a very significant one because of the risk of exposure to SS where the bag of SS might not go into the Centrate Tank but fall outside it. I accept that, in conditions such as those prevailing on the day, and where the SS did get poured into the Tank, the risk to Mr Shore was only of the character he suffered, that is from relatively limited outdoor exposure to SS dust. As the Respondent acknowledges, its “on the job training” was not adequate and its written instructions did not extend clearly to the Work, because its risk assessment in relation to the work was not specific enough.

84    As its submission claims, I accept that the Respondent is and endeavours to be a “good corporate citizen”. In addition to the mitigating factors referred to, I also take into account the Respondent’s commitment to safety and safety governance. That is especially necessary, having regard to the nature of the Respondent’s business. It now has a new Health Safety and Environment Manager for its Industrial Division, with a team of HSE professionals working under his direction, and its evidence indicates that its internal management lines of accountability and its external safety audits are aimed to be comprehensive and effective. He has expressed the Respondent’s regret and contrition for the incident. That is affirmed by the action it has taken to improve the safety of its sites. Apart from the immediate response to the incident, by eliminating the task involving the manual handling of SS, the Respondent took steps to assess whether there were similar systemic problems at its other work sites and has a task-related Training Needs Analysis practice throughout its work sites. It has also increased the focus on safe handling of dangerous materials.

85    Notwithstanding those considerations, and the fact that the prior contravention of s 16(1) by the Respondent occurred in quite different circumstances (a fall from height resulting in the death of an employee), the objective seriousness of the present contravention and the considerations of general and specific deterrence discussed above, requires a substantial penalty.

86    Previous judicial decisions may provide some guidance as to the appropriate range of the pecuniary penalty with respect to the contraventions.

87    In Comcare v John Holland Pty Ltd [2009] FCA 771, there were procedures in place which were not followed. It was found that there was inadequate training in those procedures. Consequently, a workplace accident occurred resulting in an employee suffering serious burn injuries to 20% of his body and another suffered minor injuries. In that case, there was a potential for serious harm to others by flame moving to flammable materials. The training in occupational health and safety procedures was found to be insufficient and adequate supervision was lacking. The penalty was determined to be in the mid-range.

88    In Comcare v Linfox Australia Pty Ltd [2010] FCA 793, the employer was operating a fork truck when it overturned and pinned him inside. As a result, he suffered serious crush injuries to his left arm and both of his legs. There was no risk assessment but there was a general knowledge of the risks associated with the operation of fork trucks in the industry: [20]. Penalty was fixed at $150,000.

89    In Comcare v Australian Postal Corporation [2011] FCA 1533, an employee was struck by a forklift while in the loading dock at the site and suffered injuries resulting in amputation of his right leg from below the knee. There were policies in place which foresaw the risk but there was a failure to rigorously enforce those procedures. Penalty was fixed at $160,000.

90    In Comcare v Commonwealth [2011] FCA 1043 (Cadet Huestis), a cadet of the defence force, Cadet Huestis, was hospitalised but not killed, due to exposure to a peanut protein despite having a peanut allergy. The circumstances were similar to a previous case, Comcare v Commonwealth (2009) 184 IR 441, where a cadet with a severe peanut allergy died due to a provision of a meal containing a peanut-based product. This prompted the introduction of the policy to address the particular health challenge. However, in the circumstances of Cadet Huestis, the implementation of that policy was deficient. There was a failure to translate into the record keeping system the declaration made by the cadet’s parents as to his allergy. The particular officer of cadets failed to fully translate that knowledge through the chain of commence to ensure that the cadet was not issued with the harmful meal. A penalty of $150,000 was imposed.

Conclusion

91    It is clear that the primary consideration is the seriousness of the contravention. In my view, the contravention is serious, notwithstanding that Mr Shore did not suffer from any long-term injury. The risks of handling a hazardous substance such as SS in the manner that Mr Shore did was obvious. As I have noted, there is also a need for specific and general deterrence, to remind employers of their obligations to workplace health safety. In this case, I find the lack of risk assessment with respect to the Work to be serious. After considering all the circumstances, I impose a penalty in the mid-range to be appropriate. I fix a pecuniary penalty in the sum of $110,000. That penalty has been reduced by a substantial amount from the figure I would otherwise have imposed because of the particular considerations relevant to the Respondent which I have discussed above.

92    There will be a declaration and orders as follows:

the court declares that:

(1)    On 7 December 2011, the Respondent contravened subcl 2(1) of Sch 2 of the Occupational Health and Safety Act 1991 (Cth) by reason of it having breached s 16(1) of the Occupational Health and Safety Act 1991 (Cth) by having failed to take all reasonably practicable steps to protect the health and safety of Mr Shore and Mr Collins by:

(a)    failing to take all reasonably practicable steps to provide and maintain a working environment, including plant and systems of work, that was safe for Mr Shore and Mr Collins and without risk to their health;

(b)    failing to take all reasonably practicable steps to ensure the safety at work of, and the absence of risks at work to the health of Mr Shore and Mr Collins in connection with the handling and storage of hazardous substances;

(c)    failing to take all reasonably practicable steps to provide Mr Shore and Mr Collins with the information, instruction, training and supervision necessary to enable them to perform the Work in a matter/manner that was safe and without risk to their health.

THE COURT ORDERS THAT:

(2)    The Respondent pay the Commonwealth a pecuniary penalty of $110,000 because of its contravention of subcl 2(1) of the Occupational Health and Safety Act 1991 (Cth).

(3)    The Respondent pay the Applicant costs of the application.

Associate:

Dated:    23 December 2014