Inspector Rolland v P&o Ports Limited [2006] NSWIRComm 199 (26 June 2006)

Last Updated: 26 June 2006

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Inspector Rolland v P&O Ports Limited [2006] NSWIRComm 199

FILE NUMBER(S): IRC 3045

HEARING DATE(S): 01/06/2006

DECISION DATE: 23/06/2006

PARTIES:

PROSECUTOR

Inspector Douglas Rolland

DEFENDANT

P&O Ports Limited

JUDGMENT OF: Staff J

LEGAL REPRESENTATIVES

PROSECUTOR

Mr RJ Bromwich of counsel

Solicitor: Ms J Healy

Phillips Fox

DEFENDANT

Mr M Shume of counsel

Solicitor: Mr G McCann

Sparke Helmore

CASES CITED: Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610

Drake Personnel Limited t/as Drake Industrial v WorkCover (Inspector Ch'ng) (1999) 90 IR 432

Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384

Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337

Makarian v The Queen (2005) 215 ALR 213

R v Dodd (1991) 57 A Crim R 349 at 354

R v Rushby [1977] 1 NSWLR 594

R v Thomson; R v Houlton (2000) 49 NSWLR 383

U-RECT-IT Pty Ltd v WorkCover Authority of New South Wales (Inspector de Silva) [2004] NSWIRComm 266

WorkCover Authority of New South Wales (Inspector Glass) v ACI Operations Pty Ltd (unreported, Schmidt J, CT93/1025, 25 February 1994)

WorkCover Authority (NSW) (Inspector Maddaford) v Coleman (2004) 138 IR 21

WorkCover Authority of NSW (Inspector Peter Ankucic) v McDonald's Australia Limited (2000) 95 IR 383

LEGISLATION CITED: Occupational Health & Safety Act 2000

JUDGMENT:

- 1 -

INDUSTRIAL COURT OF NEW SOUTH WALES

CORAM: STAFF J

23 June 2006

Matter No IRC 3045 of 2005

INSPECTOR DOUGLAS ROLLAND v P&O PORTS LIMITED

Prosecution under s 8(1) of the Occupational Health & Safety Act 2000

JUDGMENT

[2006] NSWIRComm 199

1 P&O Ports Limited ("the defendant"), has pleaded guilty to a charge brought by Douglas Rolland, an inspector of the WorkCover Authority of New South Wales under s 8(1) of the Occupational Health & Safety Act 2000 ("the Act").

2 The defendant was engaged in the business of stevedoring at White Bay, New South Wales, where it employed persons to perform work on vessels and wharves. It no longer performs this work at White Bay.

3 On 13 September 2003, at approximately 10.45 am, an employee of the defendant, Mr Lovell, whilst loading pipes onto the vessel, MV Achilles, was struck by falling pipes. Each pipe measured 600 metres by 5.5 metres and weighed 0.931 tonnes.

4 Mr Lovell sustained a broken pelvis, broken ribs, punctured lung, broken shoulder and nerve damage in his legs.

5 In an amended application for order, it was alleged that the defendant, being an employer:

Contravened

Section 8(1) of the Occupational Health & Safety Act 2000 in such case made and provided that:

It is alleged that on 13 September 2003, the Defendant, P&O Ports Limited (ACN 000 049 301), contravened Section 8(1) of the Occupational Health and Safety Act 2000 in that on 13 September 2003 on and around a vessel, being the MV Achilles, located at Wharf 5 – 6, White Bay, Robert Street, Balmain in the State of New South Wales, the Defendant, being an employer, failed to ensure the health, safety and welfare at work of all its employees, in particular Phillip Lovell. Particulars of the Defendant's contravention are as follows:

1 Failure to maintain a safe system of work in relation to the stowing of pipes on board the M V Achilles;

2 Failure to provide adequate instructions in relation to the task of stowing pipes in the void area on board the M V Achilles;

As a result of the said failures, Phillip Lovell was exposed to risk of serious injury.

6 The defendant entered a plea of guilty in respect of the charge.

Statement of Facts

7 An agreed statement of facts was tendered by the prosecutor, it provided (formal parts omitted):

3 At all material times the Defendant:

3.1 Was engaged in the business of stevedoring at the premises;

3.2 Employed persons to perform work on the vessels and wharves at the premises in the course of its undertaking including:

3.2.1 Phillip Lovell, stevedore, Grade 5 / holder (Mr Lovell);

3.2.2 Jeffrey Burrows, Grade 5 operational employee (Mr Jeffrey Burrows);

3.2.3 David Burrows, holder (Mr David Burrows);

3.2.4 Jaffer Hussien, holder (Mr Hussien);

3.2.5 Hassan Chalich, gangway employee (Mr Chalich);

3.2.6 Ronald Munoz, gangway employee (Mr Munoz);

3.2.7 Mr Duggan, Team Leader (Mr Duggan);

3.2.8 Mr Bannatyne, Operations Supervisor (Mr Bannatyne).

Incident involving Mr Lovell on 13 September 2003

4 On 13 September 2003, at approximately 10.45am, Mr Lovell, whilst performing work in the ordinary course of his duties, was struck by a bundle of falling pipes. Each pipe measured 600mm x 5.5 metres and weighed 0.931 tonnes.

5 Mr Lovell sustained a broken pelvis, broken ribs, punctured lung, broken shoulder and nerve damage in his legs.

6 Mr Lovell was assisted at the scene of the accident by the Defendant's employees. The NSW Police, ambulance and paramedics also attended the scene of the incident to free Mr Lovell.

Background

7 The Defendant operates a stevedoring business with operations in Sydney at Port Botany and at the time of the incident, White Bay.

8 On the day of the incident, Mr Lovell was in charge of part of a larger team of employees loading pipes onto MV Achilles, docked at Wharf 5.

9 The team consisted of 11 employees, namely, one Team Leader, Mr Duggan, two crane drivers, one grade 5 employee (Mr Lovell), two forklift drivers, one clerk and four general duties employees.

10 Mr Lovell was supervising Mr David Burrows and Mr Hussien in the hold. Mr Jeffery Burrows was also working inside the hold directing the crane operation.

11 Mr Bannatyne, Operations Supervisor, was supervising the team. Mr Bannatyne was also responsible for supervising another vessel, Kiribati Chief, on the day of the incident.

Configuration of pipe bundles

12 The pipes were delivered from the manufacturer in bundles of three and six.

12.1 The bundles consisted of pipes placed on two pieces of wood known as 'gluts'.

12.2 The gluts had semi circles cut into them to allow the pipes to sit securely.

12.3 One glut was provided for each end of the pipes.

12.4 A metal band secured the pipes at each end and in the middle of the pipe.

12.5 A bundle of three consisted of three pipes side by side on the gluts.

12.6 A bundle of six consisted of one bundle of three on top of another bundle of three with the wooden gluts on the ground and between the two layers of pipes.

Shipping arrangements

13 The pipes involved in the incident were manufactured by Tyco Water Pty Limited (Tyco Water).

14 Tyco Water Pty Limited engaged a shipping agent, BR International Shipping Pty Limited (BRI). Due to the personal circumstances of its principal, BRI approached Southern Cross Maritime Services (Australia) Pty Limited (Southern Cross) to advise on the stow plan and supervise the loading process.

15 The Defendant was engaged to load the pipes onto MV Achilles and invoiced its services to Southern Cross.

Loading instructions

16 Tyco Water prepared a document titled 'Checklist to Discharge Tyco Water Pipes at Wharf and Stow on Vessels', that included the following instructions:

16.1 Lift Packs on bottom only.

16.2 Packs are handled in horizontal position only.

16.3 During Stow on Vessel use Plywood between Packs.

17 Southern Cross provided a stow plan to the Defendant and the Master of the Vessel. Southern Cross emphasised that the maximum number of pipes must be stored under the deck of the vessel.

Loading process

18 The loading operation had been in progress for some time, including a night shift, and the team of which Mr Lovell was a member took over at shift change in the morning on the day of the incident.

19 The loading process generally consisted of one bundle of six pipes being lifted on board and a second bundle of six being placed on top. Each pipe weighed approximately 931 kilograms.

20 As each bundle was loaded using a portainer crane, dunnage was used and a sheet of plywood was placed between the bundles. This was in accordance with instructions from the ship's crew aimed at protecting the bundles against damage from rubbing together during the voyage.

21 Soon after the commencement of the day shift, the loading came to the point where the shape of the hold, at the bow of the ship, no longer accommodated whole bundles of three or six pipes stowed horizontally.

22 In order that the ship carried the maximum number of pipes below deck, all the spaces (voids) between the bundles were required to be filled. A decision was made to fill the voids with bundles of three pipes turned on their side, one on top of another, compared with the previous situation where the pipes were lifted horizontally or side by side.

23 The previous shift had used this method to fill gaps in the earlier stowed pipes. These spaces filled earlier had only required one bundle of three on its side to fill the gap.

24 The space to be filled required two bundles of three on their side. A first bundle of three pipes was loaded and placed on its side, that is, pipes lifted one on top of another, in the space between two bundles of six. The bundle of three pipes was slung using a single sling feed through the top pipe.

25 Mr Jeffrey Burrows, one of the employees working inside the ship, was not aware of the decision until the load appeared over the hold and the Team Leader instructed him by radio communication to place the pipes in a vertical position on top of dunnage laid out on the deck.

26 When loaded onto the ship, the first vertical bundle was not secured in the hold but inclined slightly towards the already stowed cargo and was leaning on that cargo.

27 From a safe position on top of stowed cargo, Jeffrey Burrows attempted to place a sheet of plywood against the vertical bundle. The plywood fell away.

28 Lovell moved in between the pipes to right the plywood. At that moment the vertical bundle tilted away from the stowed cargo it was resting against and began to fall. As it hit other cargo the pipes broke up, with the centre pipe pushing out and trapping Mr Lovell at about waist height. The other pipes also fell onto Mr Lovell.

Investigation

29 The Prosecutor, Inspector Douglas Rolland, subsequently assumed conduct of the investigation and these proceedings.

Circumstances surrounding incident

30 The Defendant's Team Leader and Operations Supervisor authorised the vertical stowing method. This was contrary to the manufacturer's instructions.

31 The Defendant had loaded pipes onto MV Achilles on previous occasions for Tyco Water without incident. On those occasions, when spaces in the hold would no longer accept intact bundles, the pipes were loaded into the remaining spaces one at a time.

32 The Defendant failed to maintain a safe system of work in relation to the stowing of pipes on board MV Achilles.

33 The Defendant failed to provide adequate instructions in relation to the task of stowing pipes in the void area on board the MV Achilles.

34 Mr Lovell had approximately 30 years of experience in the stevedoring industry. The Team Leader did not provide instructions to Mr Lovell or the other employees in the ship with regard to the specific task of stowing pipes in the vertical plane. The Team Leader trusted that Mr Lovell was sufficiently experienced and capable to perform the task.

35 Mr Jeffrey Burrows and Mr David Burrows were working alongside Mr Lovell in the hold and did not receive instruction in relation to the specific task of stowing pipes in the vertical plane.

36 Prior to this incident, where the surrounding cargo or vessel structure did not provide adequate structural support for the cargo, then specialists, such as shipwrights, were engaged by vessel to shore up that cargo.

37 The Defendant fully cooperated with WorkCover during its investigation into the incident.

8 In addition, the prosecutor relied upon a factual inspection report of Inspector Garg dated 16 September 2003; 13 colour photographs and a document entitled "Check List to Discharge Tyco Water Pipes at Wharf and Stow on Vessels" appearing on undated Beron International Pty Ltd letterhead, provided to the Prosecutor by the Export Manager, Tyco Water. It was common ground that the defendant did not have this document at the time of loading the pipes.

9 The prosecutor also relied upon: a document entitled "MV Achilles V2", which was provided by Southern Cross Maritime Services (Australia) Pty Limited under cover of letter dated 9 September 2003 addressed to Mr G Stewart and Mr M Desa. This document set out a plan for the stacking of the pipes; a document entitled "Attachment D Example Risk Assessment Worksheets" dated 14 September 2003; a facsimile from Southern Cross Maritime Services (Australia) to the Master of MV Achilles at White Bay dated 13 September 2003, a document not in the possession of the defendant and a prior convictions report disclosing that the defendant had one prior conviction recorded on 7 December 2000.

10 The defendant tendered an affidavit of Geoffrey Needham, National Manager, Safety and Environment, P&O Ports Australia and New Zealand, who was not required for cross-examination. Mr Needham gave evidence of his qualifications and experience and an overview of P&O's worldwide operations and the defendant's operations in Australia.

11 Mr Needham deposed that the defendant handles approximately 50 per cent of all containers loaded and discharged in Australia, providing multi-purpose stevedoring and related materials handling services at over 30 ports around Australia. The defendant employs approximately 3,500 personnel in Australia, 3,000 being operational employees and approximately 500 in support and strategic management roles including 15 with specific roles relating to safety. At the time of the subject incident, the defendant employed approximately 110 personnel at the White Bay site.

12 The type of work performed at White Bay involved the movement of goods between wharf and ship through the use of cranes. The goods were generally uncontainerised goods. The container work was generally performed at other P&O sites. The site operated a minimum of two shifts per day, seven days per week and performed approximately 10 to 12 crane loads per hour per crane. This equates to in excess of 60,000 lifts per year.

13 Mr Needham deposed that the defendant had ceased stevedoring operations at the White Bay site in December 2003 and left the site in April 2004 as a result of changes to the Government Foreshore Planning.

14 Mr Needham stated that the defendant had a strong commitment to its employees and a good corporate governance including the safety of its employees. A copy of the current safety and environment policy was annexed to Mr Needham's affidavit. In 2001, the defendant embarked on a strategic change to the way it managed safety. The approach was to document, through procedures, the required work protocols of the defendant. The process was started by setting up a structure and a system to support the procedures including the completion of risk assessments to review those procedures. The strategic change involved consultation with management, employee representatives, union delegates and external experts. The defendant introduced a safety and environment management system to support the strategic change. The system consists of guidelines, standards and instruction and is a computer intranet system.

15 Mr Needham gave 19 examples of initiatives introduced to improve safety management systems throughout the defendant's terminals. Many of the examples were supported by documentation.

16 Mr Needham stated that safety and environmental training is provided at each of the defendant's sites. This includes specific training on site critical procedures. Training at various sites of the defendant has been further enhanced with the provision of a DVD presentation called "Serious About Safety". The DVD was presented to 3,500 workers during 2½ hour sessions dealing with training and safety. Topics covered included risk assessment, safety procedures and safety initiatives.

17 The defendant also has a comprehensive induction programme known as the Automotive and General Stevedoring Induction Programme ("A&GS"). Documentation including the programme, the induction completion check list and the participation reference manual were annexed to Mr Needham's affidavit. Tool box talks were regularly conducted at the White Bay site where training and safety awareness was provided through discussion and consultation regarding the specific procedures to be used during the operation.

18 Mr Needham stated that a procedure was in place at the time of the incident for the stowing of bundles of pipes. This procedure was as follows:

· Bundles of pipes were transported to the gangway under the crane by forklift.

· The bundle of pipes is slung by an accredited Stevedore.

· The bundle of pipes is hoisted by the crane and stowed into the area allocated on the vessel.

· The bundle of pipes is then chocked as required to secure the bundle of pipes.

· The chocking occurs whilst the bundle of pipes are still secured by the crane.

· Once the bundle of pipes is chocked the crane disengages the bundle of pipes leaving the sling in position in case the bundle of pipes are required to be adjusted after the next bundle of pipes are stowed.

· When the bundle of pipes are stowed and properly secured the plywood is placed into position to protect adjacent cargo by a stevedore.

19 Prior to the vessel's arrival, the Ship's Agent and/or Cargo Superintendent develops the cargo stow plan and presents this to the vessel's Master for approval. Once this plan has been approved by the vessel's Master, the Agent or Cargo Superintendent provide this plan to the Stevedore indicating the stowage requirements. The stow plan identifies by Hold the number of bundles and size of pipes to be loaded. This plan is based on the known dimensions of the cargo and the dimensions of the Hold as per the ship's drawings. A member of the Ship's Crews witnesses the actual loading operation to ensure that the cargo is loaded to the vessel's requirements. For this particular operation, the Crane Gang were operating in three distinct areas of operation: yard, "under the hook" and vessel.

20 The yard operation consisted of a forklift collecting the bundled pipes from the yard position, as directed by the Team Leader, and delivering them "under the hook" on the wharf apron. At the wharf apron, the cargo was landed under the crane and slung and attached to the quay crane for delivery to the vessel.

21 To sling the load, Stevedores position cargo slings as directed by the Team Leader to lift the cargo onto the vessel.

22 In the Hold of the vessel, Stevedores supervise the positioning of the cargo as well as unslinging the load. Additionally the team operating in the Hold are required to place chocks and plywood.

23 The act of transferring the load "under the hook" to the vessel was under the direction of the Down Crane Driver, who was responsible for "dogging" the crane. "Dogging" refers to the process of controlling the movement of the crane to ensure the load is transferred in a safe manner. Once the load was transferred into the Hold, the Down Driver would ensure the gang in the Hold correctly positioned the cargo, properly secured it with the use of chocks and unslung the load.

24 At all times gang members are required to wear approved Personal Protective Equipment ("PPE"), that being high visibility clothing, steel capped boots, hard hats and gloves where appropriate.

25 The pipes were manufactured by Tyco Water Pty Ltd ("Tyco Water") who engaged a shipping agent, B R International Pty Ltd ("BRI"), who then approached Southern Cross Maritime Services (Australia) Pty Limited ("SCM"), to advise them on the stow plan and to supervise the loading process.

26 The defendant was engaged to load the bundles of pipes onto MV Achilles by SCM.

27 SCM provided a stow plan to the defendant and the Master of the vessel. SCM emphasised that the maximum number of pipes must be stowed under the deck of the vessel. Copies of the stow plan and instructions received from SCM dated 9 September 2003 were annexed to Mr Needham's affidavit. Variations to the stow plan were provided by the defendant to the vessel's Master.

28 Mr Needham stated that the defendant has since been made aware that Tyco Water prepared a document entitled "Check List to Discharge Tyco Water Pipes" at wharf and stow on vessel that included the following instructions:

(a) Lift Packs on bottom only.

(b) Packs are handled in horizontal position only.

(c) During Stow on Vessel use Plywood between Packs.

29 These instructions were not provided to the defendant.

30 Mr Needham stated that Mr Lovell was in charge of several employees in the Hold of the vessel whilst loading bundles of pipes. Some of the bundles of pipes consisted of six pipes (3 x 2) and others consisted of three pipes (3 x 1). A number of voids (spaces) were identified within the Hold during the loading process and the defendant discussed with the vessel's Master to insert bundles of pipes into that area. Mr Needham stated the practice would normally involve breaking the bundle of pipes and stacking the pipes one at a time with appropriately placed chocks being inserted after each lift. The stowage plan which was supplied by the vessel's Master to the defendant provided no information regarding the bundles of pipes being loaded vertically. The defendant's supervisor consulted with the vessel's Chief Officer in relation to the loading of the bundles of pipes on the vertical in the number 1 "tween deck" and was referred to the vessel's Master who indicated that the bundles of pipes were to be stowed. Plywood was placed against the bundles of pipes packed on the vertical for the next bundle of pipes to be placed against it to prevent damage in transit. The placement of the plywood was inserted from a position outside the void.

31 Mr Needham deposed that the plywood fell into the void to be filled. Mr Lovell entered the void to correct the plywood and whilst doing so, the vertically stowed bundle of pipes collapsed trapping Mr Lovell against the cargo on the port side which resulted in him being injured. Mr Needham stated that the system of work identifies the void areas as a hazardous area. In the normal course of work, no-one would enter this area.

32 Mr Needham set out the experience of Mr Lovell and relevant persons employed during the loading. Mr Lovell was a grade 5 stevedore and commenced employment with the defendant in 1977. He has been working in the industry for 29 years. Mr Lovell's certifications and qualifications are:

· Forklift Safety Certificate dated 28 June 1994

· Security Industry Licence

· WorkCover NSW Occupational, Health and Safety ("OH&S") Accredited Course - Induction training dated 28 February 1996.

· Certificate of Attainment for Managing Change: A Team Prospective dated 26 May 2000.

· P&O General Stevedoring Team Leader/Deck Foreman course.

33 Mr Duggan is a Grade 6 Team Leader Stevedore who also commenced employment with the defendant in 1977 and holds a range of qualifications. Mr Bannatyne commenced work with the defendant in 1999 as a casual stevedore and Mr Burrows, the Crane Driver Stevedore, commenced employment with the defendant on 8 January 1996. Mr Burrows also held an extensive number of qualifications.

34 Following the subject incident, Mr Needham stated that refresher training was provided to all personnel in relation to work for break bulk cargo. The standard operating procedures for break bulk cargo were reviewed and reinforced to the workforce through toolbox talks and refresher training.

35 The defendant's safety and environment management strategy requires it to have in place an occupational health and safety committee. The members of the committee are trained according to the requirements of the Act, regulations and legislative guidelines by the WorkCover Authority of New South Wales Accredited Training organisations. Safety committee meetings are conducted at intervals having regard to the size and complexity of the operation and conform to the requirements of a structured committee operating in accordance with the Act and relevant regulations and legislative guidelines. There was an OH&S Committee at the defendant's White Bay site which was scheduled to meet monthly. This committee consisted of a chairman, five Maritime Union of Australia representatives and three persons from management.

36 Mr Needham deposed that the defendant currently spends approximately $12.4 million directly on safety which includes employment of 15 safety officers, dedicated training, and purchasing of safety equipment. The lost time injury frequency rate for the defendant has decreased by 69 per cent since 2002. A copy of the Safety Journey Chart, together with a copy of the 30 month incident frequency trends, were attached to Mr Needham's affidavit.

37 After the incident, Mr Lovell was assisted with his rehabilitation by the defendant. He returned to suitable duties in March 2004 on a part-time basis and increased his hours during 2004. Mr Lovell resigned in February 2005. Mr Needham deposed that the defendant deeply regretted that the incident occurred and the resulting breaches of the Act, stating that the defendant strives to ensure an accident-free workplace. The defendant assisted WorkCover during the conduct of their operations.

Prosecutor's Submissions

38 Counsel for the prosecutor, Mr RJ Bromwich, submitted that the principal and particular purpose of the Act was:

(a) The protection of workers from breaches of safety, health and welfare; and

(b) To compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: WorkCover Authority of NSW (Inspector Peter Ankucic) v McDonald's Australia Limited (2000) 95 IR 383 at 427.

39 Counsel submitted that careful attention needs to be paid to the maximum penalties generally and, therefore necessarily to the increased maximum penalty for a second offence, which is the case here, because as the High Court observed in Makarian v The Queen (2005) 215 ALR 213 at 222:

(a) the legislature has legislated for them;

(b) they invite comparison between the worst possible case and the case before the court at the time;

(c) taken and balanced with all of the other relevant factors, they provide a yardstick.

40 Counsel acknowledged that the maximum penalty was $825,000 for a second offence and that the relevant maximum is available to be utilised in a "worst case scenario".

41 Counsel submitted that the primary factor to be considered in determining the sentence to be imposed is the objective seriousness of the offence charged, with each crime having its own objective gravity. The proper approach to sentencing involves an initial consideration of the gravity of the subject offence viewed objectively: R v Dodd (1991) 57 A Crim R 349 at 354. Counsel observed that on occasions there is a risk that attention to persuasive subjective considerations may cause inadequate weight to be given to the objective circumstances of the case: R v Rushby [1977] 1 NSWLR 594 at 597 - 598.

42 Counsel submitted that the situation of the defendant cannot be better than that of a labour hire company that does not even have an on-site presence. Labour hire companies have been held responsible for matters that were less within their immediate control than the circumstances of this case: Drake Personnel Limited t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 455 - 456.

43 Counsel submitted the availability of simple and straightforward steps to remedy the defects in the system is also relevant to the objective seriousness of the offence: WorkCover Authority of New South Wales (Inspector Glass) v ACI Operations Pty Ltd (unreported, Schmidt J, CT93/1025, 25 February 1994) at 12.

44 Counsel observed that it is rare that a sentencing court would not impose a sentence that includes an element of general deterrence: Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at 643 - 644 and that specific deterrence is also a relevant consideration, but all the more so when there has been a relevant prior offence.

45 Mr Bromwich, applying the above principles to this matter, submitted that the defendant failed to maintain a safe system of work in relation to the stowing of pipes on board the MV Achilles and also failed to provide adequate instructions in relation to the task of stowing pipes in the void area on board the MV Achilles. It was submitted that what should have happened was the pipes used to fill the gaps should have been loaded individually, rather than as bundles of three. This had been the system adopted in the past when loading pipes for Tyco Water. However, it was necessarily slower and more time consuming. The bundles of pipes, given their weight and inherent instability when stowed on their side created an obvious and serious risk to health, safety and welfare.

46 Counsel submitted that the risk was obvious, foreseeable, and able to be avoided by simple and straightforward steps.

47 Furthermore, counsel submitted that the court should impose a significant monetary penalty on the defendant.

48 Counsel acknowledged that the defendant had entered a guilty plea and co-operated with the WorkCover Authority.

49 The prosecutor sought costs and a moiety of the fine.

Defendant's Submissions

50 Mr M Shume of counsel, who appeared for the defendant, submitted that the defendant recognised that entrance to the gap or void area could create a risk. Counsel referred to the agreed statement of facts that described an employee (Jeffrey Burrows) "(f)rom a safe position on top of stowed cargo... attempt(ing) to place a sheet of plywood against the vertical bundle" in the void. It was a piece of plywood that fell away which resulted in Mr Lovell entering the void. It was submitted it was part of the company's system of work to put plywood between the pipes from the safe position of being above the pipes. Mr Shume submitted that Mr Lovell, the person involved in the incident, was a senior employee and one of the supervisors involved in the loading of the ship.

51 Counsel submitted that an inference could be drawn that Mr Lovell was aware that the void area was an area that he should not enter.

52 Mr Shume submitted that I should be reluctant to draw the inference urged by the prosecutor that expediency considerations overruled safety considerations.

53 It was submitted that this was not the only inference available to be be drawn and that I would not find that such an inference existed beyond reasonable doubt.

54 Counsel submitted that there were two issues that were required to be dealt with for the purposes of determining the nature and quality of the offence. The first was the failure to break the packs and load the pipes singularly. The second was Mr Lovell entering the void area.

55 Counsel submitted that it could not be contended that no system existed and that the underlying problem was a lack of information provided to the defendant. It was common ground that the documentation dealing with how to load the pipes was not provided to the defendant. It was submitted that had this information been available to the particular defendant then this incident would not have occurred.

56 Mr Shume submitted that the risk only existed for a short period of time and it was not an ongoing risk that occurred over many days or weeks. Counsel noted the evidence is indicative, that in previous loadings to fill the void, pipes were loaded singularly.

57 Counsel submitted that the only reason for Mr Lovell to be in the void was that a piece of plywood had moved from its position. This caused Mr Lovell to enter the void. It was submitted that in considering the nature and quality of the offence, considered in this context, the offence was not as serious as contended by the prosecutor.

58 Counsel submitted that the defendant had co-operated with WorkCover and entered a plea to the amended application at the earliest opportunity entitling it to the maximum discount.

59 Counsel observed that the defendant is a large employer who has been working to achieve safety, and with the exception of one previous offence, its record is exemplary. In respect of specific performance, Mr Shume pointed to the large amounts of money expended by the defendant in relation to occupational health and safety and submitted that this removed any basis to impose a large component in the fine for specific deterrence. Mr Shume submitted that this is not a case where there was no system at all and therefore any penalty should be in the mid range or lower.

Consideration

60 The sentencing principles to be applied in matters such as this were recently restated by the Full Bench in U-RECT-IT Pty Ltd v WorkCover Authority of New South Wales (Inspector de Silva) [2004] NSWIRComm 266, where the Full Bench stated at [11]:

The sentencing principles to be applied in the assessment of appropriate penalties under the Act have been considered on many occasions by this Court, including Full Bench level, and are well known. We refer by way of example to Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464 at 474-475 and Fletcher Construction Australia Limited v WorkCover Authority of New South Wales (1999) 91 IR 66 at 77. The starting point is the objective seriousness of the offence and the need to accommodate both general and specific deterrence. The maximum penalty that may be imposed is to be reserved for the most serious offence, that is, the worst possible case. Only after an appropriate penalty has then been formulated are subjective matters to be taken into account, which include factors such as cooperation with the investigation and inquiries of the WorkCover Authority, expressions of remorse and contrition, steps taken to remedy the matters giving rise to the breach and the general approach to occupational health and safety matters and attention to safe working practices by a defendant. This list is not intended to be exhaustive but is indicative of the matters which should be taken into account. Furthermore, a defendant will be entitled to a discount of up to 25 per cent for entering a plea of guilty at the earliest possible opportunity. These subjective factors are then aggregated so that a discount is applied to the penalty assessed by reference to the objective factors, resulting in the penalty to be properly imposed.

61 In this matter, in my view, the risks to the health and safety of employees, and in particular, Mr Lovell, was the risk of stowing groups of three concrete pipes, with each pipe weighing approximately one tonne, vertically to fill a void and the risk of an employee entering the void or gap area on the vessel when pipes had been stowed in this manner.

62 The risk to health and safety was, in my view, reasonably foreseeable, as on a prior occasion, similar pipes had been stowed individually. Although the letter from Beron International Pty Ltd, which set out a checklist for the stowing of pipes was not provided to the defendant, this letter provided that packs of pipes are handled in a horizontal position only. The system adopted by the defendant on this occasion created the risk. The defendant's failure was that it had no policy in place in respect of loading the pipes vertically.

63 If the defendant proposed to depart from the standard procedure of stowing pipes horizontally, in order to ensure the safety of its employees through a safe work procedure for the specific task of stowing pipes in the voids, it was necessary to ensure consultation with all persons performing this work. The decision of the Team Leader and the Operation's Supervisor to stow the pipes vertically without providing any instructions to Mr Lovell or the other employees was a significant error in judgment. Whatever the potential for pipes to break free in the void, the risk increased dramatically for those working in or around that area of the void once the decision was taken to load the pipes vertically in groups of three. The risk was both obvious and ever present. The obligation on the defendant was and is to ensure safe working procedures are adopted.

64 The defendant had adopted procedures in the past of loading pipes individually, rather than in bundles of three to fill the void. Clearly, this procedure avoided having an unstable bundle of pipes on its side, which was always a risk of toppling over and/or breaking free of its holding strap which was there to restrain the bundle of pipes in the horizontal, not the vertical position. Mr Lovell suffered serious injuries as a result of the breach and, on one view, may be fortunate to be alive. Although the damage or injury caused by the breach does not, of itself, dictate the seriousness of the offence or the penalty, a breach where there was every prospect of serious consequences may be assessed on a different basis to a breach unlikely to have such consequences. In such a case, the occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk.

65 This principle was recently restated by the Full Bench in Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17] - [18]:

[17] The relevance to the gravity of an offence of injuries suffered as a result of a breach of the Occupational Health and Safety Act and the relevance of potential serious consequences or serious injuries of that breach, are well settled: see, for example, Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) at paras [94] and [95] where it was held:

[94] We consider that the limited injuries suffered by Mr Stafford must be seen in the context of that evidence and also in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries suffered, or which may have been suffered, and the gravity of the offence. We consider that the relevant principle can be stated in this way. The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Inspector Hannah v Wonar Pty Limited (unreported, Fisher CJ, CT90/1214, 30 June 1992) at 9; Watson v Southern Asphalters Pty Limited (1996) 83 IR 446 at 456; Wong v Melinda Group Pty Limited (1998) 82 IR 118 at 131; WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409; Lawrenson Diecasting Pty Limited at 476; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald’s Australia Limited at 90 – 91; and Page v Walco Hoist Rentals Pty Limited (No. 2) at 22.

[95] It must however be recognised that the principle does not lead to the proposition which, at least implicitly, was relied upon by the appellant. That is, relatively minor injuries of themselves demonstrate that the offence was not a serious one. We do not consider that is or represents a correct statement of principle or correctly portrays the situation here. We consider the relevant risk was not exemplified by the limited nature of the injuries suffered, and thus those injuries do not give an accurate insight into the seriousness of the breach of the Act. Rather, we consider that the breach of the Act, although limited to the failure to provide adequate protective clothing, was a very serious one indeed.

[18] We do not consider that the proper application of the relevant principles requires the sentencing judge to expressly specify the type of injury that could have been suffered as a result of the particular breach of the legislation, although it is appropriate in most cases for there to be an indication of the kind of consequence that could have resulted from the breach. The second ground of appeal should therefore be rejected.

66 The risks to safety were obvious and foreseeable in circumstances where an employee entered the void or the gap. The defendant's system envisaged as much in that it required an employee to place a sheet of plywood from a safe position on top of the stowed cargo. It recognised the risk in entering the void. However, the risk was greater where there was no policy in place in respect of loading pipes vertically. The defendant omitted a significant area of policy in dealing with the loading of the pipes.

67 Mr Shume submitted that the risk only existed for a short period of time and that it was not an ongoing risk. This is not to the point and such a submissions is misconceived. The defendant is required to ensure the safety of its employees. It is required to ensure that all employees, the experienced and the inexperienced, are not exposed to risk. By loading the pipes vertically in groups of three without a policy, Mr Lovell was exposed to a risk to his health and safety.

68 In my view, the following reasons make plain that expediency in loading the pipes was allowed to override safety. First, the defendant had loaded pipes from Tyco on previous occasions and done so individually to fill a void. Second, it was clearly contrary to the design of the packaged pipes for them to be stowed vertically. The gluts (a piece of wood with a scalloped shape on which the pipe sits) and straps on the pipes were designed to maintain stability while the pipes were horizontal. Third, although the defendant did not receive the letter providing instructions in respect of the loading of the pipes, it seems to me that any assessment of the design and packaging of the pipes would have led to a conclusion that the pipes could not be stowed vertically. Each pipe weighed a little under a tonne and therefore should have been handled individually if a decision was taken to stack vertically.

69 In assessing penalty, it is necessary that the court have regard to the need for general and specific deterrence: Capral at [73] - [80].

70 General deterrence must be taken into account, because, as identified by Hungerford J in Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388, the offences are against a statute of public interest and public concern and it is important to compel attention to occupational health and safety issues.

71 The Full Bench recently referred to the principles relating to general deterrence in WorkCover Authority (NSW) (Inspector Maddaford) v Coleman (2004) 138 IR 21 at [80]:

[80] Firstly, the Chief Industrial Magistrate underrated the importance of general deterrence in determining the level of penalty. The Court in WorkCover Authority v Schrader held at [69] - [70]:

"The purpose of the Act is well known and often referred to in judgments of this Court. In my view, it is important, when considering notions of general deterrence, that the Court be cognisant of the fact that the Act is for the benefit of the public generally and particularly employees at work. The goal is the prevention, deterrence and punishment of breaches of health and safety requirements. The notion of general deterrence is well understood. However, in my view, and in accordance with what was stated by the Full Court in Capral Aluminium (at [72] - [74]), in cases such as this, it should be reiterated that "one of the main purposes of punishment, ... is to protect the public from the commission of such crimes by making it clear to the offender and to other persons with similar impulses that, if they yield to them, they will meet with severe punishment" (emphasis added): R v Rushby [1977] 1 NSWLR 594 at 597 per Street CJ citing R v Radich [1954] NZLR 86 at 87 (adopted by this Court in Capral Aluminium at [72]).

Further, I would note that it has been described as "the fundamental duty of this Court" to ensure that any penalty imposed is severe enough to "compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace": Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 adopted in Capral Aluminium (at [74]).

See also the Full Bench decision in Inspector Ian Lancaster v Burnshaw Constructions Pty Ltd (2002) 121 IR 119.

72 In my view, general deterrence should therefore be a primary consideration in the penalty that is imposed by the Court in this matter, particularly bearing in mind the nature of the industry (the loading of goods and materials onto a ship) and the risk of serious injury or death that may occur through a breach of the Act.

73 In relation to specific deterrence, as the Full Bench observed in Capral at [77], in view of the scope of the obligations on employers under the Act, in most case it will be necessary to have regard to the need to encourage a sufficient level of diligence by the offender in the future. The Court noted:

...This is particularly so where the offender conducts a large enterprise which involves inherent risks to safety ...

74 Another consideration on the question of specific deterrence is that the defendant is a large employer, employing approximately 3,500 personnel in Australia with approximately 110 of these being at the defendant's former White Bay site. I take into account that the White Bay site operated a minimum of two shifts per day, seven days per week and performed approximately 10 to 12 crane loads per hour per crane. This equates to in excess of 60,000 lifts per year.

75 Furthermore, in respect of the question of specific deterrence, the defendant has taken steps to avoid a future recurrence of this incident. The defendant, immediately following the subject incident, provided refresher training to all personnel in relation to work for break bulk cargo and reviewed the standard operating procedures for break bulk cargo. Standard operating procedures were reinforced to the workforce through toolbox talks and refresher training. I note that the defendant ceased stevedoring operations at the White Bay site in December 2003, although it continues to conduct stevedoring operations at other sites.

76 It is also appropriate that I take into account the defendant's strong commitment to occupational health and safety, the introduction of extensive occupational health and safety programmes which have resulted in the lost time injury frequency rate for the defendant decreasing by 69 per cent since 2002. Although the defendant submitted it is difficult to quantify the exact amount spent on occupational health and safety as it is such an intrinsic part of its operations and normal operational budget, Mr Needham's evidence was that the defendant currently spends approximately $12.4 million dollars directly on safety (which I assume to be in Australia and New Zealand). This includes the employment of 15 safety officers, dedicated training, and purchasing of safety equipment. I propose to include a small factor for specific deterrence in fixing penalty.

77 I propose to take into account the extent of the defendant's operations, the number of people involved, the length of time it has been in operation and its record which discloses only one prior conviction under the Act in assessing penalty. I am disposed to the view that the defendant has a fine industrial record for an organisation operating with a large number of employees over a long time.

78 The defendant has pleaded guilty and the prosecutor accepts the plea was an early plea, thereby having significant utilitarian value. I propose to reduce the penalty by 25 per cent applying the judgment of R v Thomson; R v Houlton (2000) 49 NSWLR 383 at 419, which I consider is still appropriate in light of the High Court's judgment in Markarian.

79 I have also had regard to the defendant's remorse; its commitment to occupational health and safety; the steps taken to improve its safety systems following the incident; its co-operation with WorkCover and the assistance provided to Mr Lovell after the accident.

80 The defendant has one previous conviction under the relevant legislation.

81 In my view, the offence falls at the lower end of the mid range of objective seriousness. In reaching this finding, I am mindful that the damage or injury does not, of itself, dictate the seriousness of the offence or penalty: Capral at [94] - [95] and Maddaford v CSR at [17].

82 Taking into account all of the relevant circumstances and noting that the earlier offence results in a maximum penalty of $825,000 in respect of the offence under consideration, I consider an appropriate penalty is $100,000.

ORDERS

The court accordingly makes the following orders:

1. The offence is proven and a verdict of guilty is entered.

2. The defendant is convicted of the offence alleged under s 8(1) of the Occupational Health & Safety Act 2000.

3. The defendant is fined an amount of $100,000 with a moiety to the prosecutor.

4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or, if agreement cannot be reached, as assessed, in accordance with the court rules.

LAST UPDATED: 23/06/2006