Wheelwright, Karen --- "Corporate Liability For Workplace Deaths And Injuries -- Reflecting On Victoria's Laws In The Light Of The Esso Longford Explosion" [2002] DeakinLawRw 16; (2002) 7(2) Deakin Law Review 323

Corporate Liability For Workplace Deaths And Injuries – Reflecting On Victoria’s Laws In The Light Of The Esso Longford Explosion

Karen Wheelwright[*]

I INTRODUCTION

The purpose of this article is to consider some different legal models for the liability of corporations for the deaths and serious injuries of their employees, with particular emphasis on the law in Victoria.

Two recent developments in Victoria prompt this consideration. First, on 30 July 2001, the Victorian Supreme Court handed down its sentencing decision in the case arising from the explosion on 25 September 1998 at the Longford gas plant operated by Esso Australia Pty Ltd. The decision marked the end of the formal public consideration of a devastating event in Victorian industrial history, which began with the Royal Commission set up on 20 October 1998 to investigate the causes of an explosion in which two workers died and eight others were injured. Second, in early 2002, the Victorian Government failed in its attempt to introduce new criminal offences for corporate employers whose employees are killed or seriously injured at work. In spite of their failure to be passed by the Legislative Council in Victoria, these proposals warrant consideration. They represent a growing trend by policy makers in attempting to address more effectively the question of the liability for deaths and serious injuries of workers to employers who operate through the corporate form.[1]

A The Longford explosion

As this article reflects on the Esso case at a number of points, it is useful to set out briefly the main findings of the Longford Royal Commission[2] It is important to note that the Commission’s brief was not to inquire into and report generally on the causes of the explosion. Instead, it was required to report on whether a specified range of factors caused or contributed to the accident. The terms of reference did not include whether either the regulatory environment or the administration of occupational health and safety laws by government agencies were causes.[3] The Commission also recommended the steps that needed to be taken to prevent or lessen a repetition of the incidents which occurred at the Longford facilities and the consequent disruption of gas supplies from those facilities.

1 Immediate causes

Esso Australia Pty Ltd, a subsidiary of the US Exxon Mobil Corporation, operates three gas plants at Longford in south-eastern Victoria to process gas from wells in Bass Strait. Gas Plant 1 (GP 1), the site of the explosion and fire, is a refrigerated lean oil absorption plant that commenced operation in 1969. By using low temperatures and high pressures, GP1 employed lean oil to absorb hydrocarbon components from gas from Bass Strait, to produce domestic gas and LPG. The process involved heat exchangers, whose role in the production process was to heat rich oil at the bottom of a piece of equipment called a Rich Oil Demethaniser. Early on 25 September 1998, there was a pump failure that meant that lean hot oil had ceased flowing into heat exchanger GP905. However, cold rich oil and cold condensate continued to flow through the exchanger, causing its temperature to drop to as low as minus 48 degrees C (the usual operating temperature was around 100 degrees C). When the pumps were restarted, the hot oil flowing into the cold heat exchanger caused stress in the vessel. Just after 1pm on the 25 September, the heat exchanger vessel ruptured, releasing hydrocarbon vapours and liquid into the air. The vapours ignited, causing a series of massive explosions and a fire that killed two workers and injured eight others. Gas supplies in Victoria ceased and were not fully restored until 14 October 1998.

2 ‘Real’ causes

The Commission was required to determine whether a number of specified factors caused or contributed to the explosion and fire. Analysts of major disasters acknowledge the difficulties inherent in determining ‘cause’, and in weighing up the relative importance of the numerous factors that contribute to an accident like a gas plant explosion.[4] This was clearly a difficulty for the Commission, although it did make some useful distinctions between the relative contribution of the various factors that caused the explosion.

The Commission was critical of four aspects of the design of the Longford facilities and found that they contributed to the explosion. However, it identified as the ‘real causes’ of the explosion the failure of Esso’s management systems to ensure there was proper assessment of the hazards at GP1, and appropriate training and supervision of employees in operating procedures to deal with the circumstances occurring on 25 September.

Esso had failed to conduct proper hazard identification and risk assessments at GP1, and to develop operational procedures to deal with identified risks. Esso’s Operations Integrity Management System aimed to identify, assess, mitigate and control risks, but it was so complex and poorly explained that the system was difficult to comprehend by management and by operations personnel.[5] In line with its corporate risk management strategy, Esso had planned a hazard and operability (HAZOP) study on GP1 for 1995. The study was designed to identify any significant route to a process upset, operating problem, or hazardous incident. Although Esso included the cost of such a study in successive budgets between 1995 and 1998, the study was never undertaken. No satisfactory reason was given for the deferral or abandonment of the HAZOP study.[6] This failure to conduct a HAZOP study reduced the effectiveness of other risk management activities, which the Commission also criticised as inadequate.[7] The Commission recommended that the government introduce a compulsory system of safety reporting procedures to government for major hazard facilities such as the Longford plant, without identifying the absence of such a requirement, or the self-regulatory environment, as a cause of the explosion.[8]

On the crucial issues of training and supervision of operational employees, the Commission summarised its findings in this way:

Whilst criticism can otherwise be made of certain aspects of the plant, its design and operation, the ultimate cause of the accident on 25 September was the failure of Esso to equip its employees properly with appropriate knowledge to deal with the events which occurred. Not only did Esso fail to impart that knowledge to its employees, but also it failed to make the necessary information available in the form of appropriate operating procedures. The lack of operating procedures ...combined with the inadequate training of personnel meant that the response to the situation which arose on 25 September 1998 was inappropriate and lead to the occurrence of the explosion and fire ...

Appropriate supervision of operators to ensure adherence to basic operating practices was also a responsibility of Esso management. The investigation of the events leading up to the accident revealed a number of occasions when operators failed to adhere to rudimentary operating practices...Had operating practices been more closely monitored and supervised by Esso management, these departures from appropriate operating practices would have been detected and remedied.

Esso formally admitted at its trial that its operators and supervisors were not trained to deal with the hazards that could arise in GP 1 and that there were no written procedures dealing with any such hazards caused by cold temperatures in the processing equipment.[9]

The Commission concluded that these ‘real causes’ amounted to a failure by Esso to provide and maintain so far as is practicable a working environment that was safe and without risks to health.[10] Esso was found guilty subsequently of 11 breaches of the Occupational Health and Safety Act 1985 (Vic) after a 4-month trial in the Supreme Court of Victoria.

II LEGAL LIABILITIES OF CORPORATE EMPLOYERS IN VICTORIA FOR INJURIES AND DEATHS OF THEIR WORKERS

A The extent of workplace deaths and injuries and the role of the law

There is little doubt that workplace deaths and injuries are a major problem in Australia. In 1995, the Industry Commission estimated that there were between 1150 and 2700 work-related deaths and 650,000 injuries in Australia each year, with an estimated cost to businesses, employees and the community of $20 billion.[11] In Victoria, there were 172 workplace deaths in the five years to 2000.[12] There were more than 35,000 workplace injuries in Victoria in the 2000/2001 financial year alone.[13]

Both legal and non-legal strategies are needed to successfully address the problem of workplace health and safety. The Victorian Attorney-General acknowledged this in introducing the Crimes (Workplace Deaths and Serious Injuries) Bill 2001, when he stated that ‘[r]educing the incidence of workplace deaths, injuries and disease requires dedication and coordination by organizations and individuals across government, employers and employees’.[14] Government, industry bodies and professionals play a vital role in providing advice and information and conducting independent risk audits. Most importantly, organisations need proper safety management and risk auditing systems that involve all staff, as well a genuine commitment by those at the most senior levels of the organisation to good occupational health and safety practice.[15]

The law has three interrelated functions in the area of workplace health and safety - to prevent workplace deaths, injuries and ill-health, to compensate injured workers, and to rehabilitate injured workers and reintegrate them into their workplace and the community.[16] Prevention is addressed primarily through the Occupational Health and Safety Act 1985 (Vic) (‘the OHS Act’). The Act places on employers and a range of other persons, such as manufacturers of plant and suppliers of substances, extensive duties to prevent workplace injuries and ill health.[17] Breaches of these statutory duties are indictable offences. Employers may also be prosecuted under the general criminal law where their criminal negligence has resulted in the death or serious injury of a worker. Criminal prosecutions pose particular problems where the employer is a corporation.

Given these available legal approaches, the next question is how they should be used to maximise prevention. In what circumstances, if any, ought employers to be prosecuted for manslaughter or negligently causing serious injury under the general criminal law, given the availability of OHS-specific laws? When should employers be prosecuted under the OHS Act, rather than be subject to one of the other non-prosecutorial options available, such as the issue of improvement or prohibition notices?[18] When is it appropriate to counsel and advise a defaulting employer rather than take any form of legal action at all? The answers to such questions depend on a range of legal and practical matters, including government commitment to regulation of business and to legal reform, the resources and policies of the government agencies charged with the prevention function, and current legal doctrine. All of these factors are important in the discussion of the liability of corporate employers for the deaths and serious injuries caused to their workers.

B The liability of companies under the OHS Act

The OHS Act and supporting regulations deal specifically with the prevention of workplace accidents and ill-health in Victoria by establishing a system based heavily on self-regulation.[19] Like all the principal Australian occupational health and safety statutes, the central provision of the Victorian Act imposes on all employers an overriding general duty of prevention.[20] As Cummins J said in the Esso sentencing decision, ‘the fundamental consideration is prevention. That is the purpose of the legislation’.[21] The Act also places duties on manufacturers and suppliers of plant, equipment and substances used at work, on occupiers of workplaces and on employees. As the vast majority of prosecutions for breach of the Act are of employers, this paper will focus on the employer duties.

1 The general duty

Section 21 of the OHS Act provides that:

(1) An employer shall provide and maintain so far as is practicable for employees a working environment that is safe and without risks to health.

The duty is owed to employees at common law and to ‘deemed employees’ (independent contractors over whom the employer has control, and the contractor’s employees).[22] ‘Employer’ is defined in s 4 of the Act to mean ‘a person who employs one or more other persons under contracts of employment or contracts of training’. The term ‘person’ clearly contemplates artificial legal persons.[23]

Under s 21(2), an employer contravenes s 21(1) if the employer fails (amongst other things):

a) to provide and maintain plant and systems of work that are so far as is practicable safe and without risks to health,

b) to ensure the absence of risk to health in connexion with the use, handling and storage and transport of plant and substances, and

c) to provide such information, instruction, training and supervision to employees as are necessary to enable the employees to perform their work in a manner that is safe and without risks to health.

Each of the sub-sections in s 21(2) creates a separate offence constituting a failure to comply with the general duty in s 21(1).[24]

The employer is required to do only what is ‘practicable’. ‘Practicable’ is defined in s 4 to mean practicable having regard to:

• the severity of the hazard or risk in question;
• the state of knowledge about that hazard or risk and any ways of removing or mitigating that hazard or risk;
• the availability and suitability of ways to remove or mitigate the hazard or risk; and
• the cost of removing or mitigating that hazard or risk.

The duty expressed in ss 21(1) and (2) extends beyond preventing accidents that are reasonably foreseeable. The question is ‘whether accidents of some class or other might conceivably happen, and whether there is a practicable means of avoiding injury as a result’. The employer’s responsibility can, in the main, ‘only be discharged by taking an active, imaginative and flexible approach to potential dangers in the knowledge that human frailty is an ever-present reality’.[25]

2 Criminal offence of strict liability

These offences are strict liability offences, qualified only by practicability. There is no defence of due diligence in the Act. An employer can be convicted without the need to prove the employer’s intention, recklessness or negligence, thus avoiding some of the difficulties arising from the application of these concepts when the charged person is a company rather than a natural person.[26] The employer is vicariously liable for the acts and omissions of any employees and agents that constitute a breach of the duties in the Act. Section 52(2) provides that when it is necessary in any proceedings under the Act to establish the intention of a body corporate, it is sufficient to show that a servant or agent of that body corporate had that intention. It is not necessary, as it is for a criminal offence at common law, to show that the particular servant or agent was the alter ego of the company. It is sufficient to show that he or she was involved in an operation apparently authorised by the company whereby the system, plant or substances employed were unsafe.[27]

3 Penalties

Breach of the Act is an indictable offence for which a fine is the penalty: s 47. Fines are higher for corporate employers than for individuals. For breaches of the Act, the maximum fine for a body corporate is currently 2,500 penalty units ($250,000). Section 53 sets out additional penalties that may be imposed for subsequent offences by companies, which range from not less than 50 penalty units to not more than 2500 penalty units. In the case of corporations with large resources, these penalties may not have a sufficient deterrent effect.

The usual sentencing principles apply to decisions about penalties under the OHS Act. The penalties represent the sentencing judge’s instinctive synthesis of all the various aspects involved in the punitive process.[28] With respect to penalties for subsequent offences, s 53 does not authorize ‘a second penalty for the prior conviction. Rather, it is a further penalty for the present conviction ...[to mark] the seriousness of present offences in the context of an offender who has previously offended’.[29]

C Esso’s conviction under the OHS Act

Esso was found guilty after a jury trial[30] on ten breaches of s 21 arising from the gas explosion at Longford, plus one offence under s 22, which imposes a duty not to expose non-employees to risks to their health and safety. Esso was fined a total of $2 million. The court imposed the maximum fine on two of the eleven counts – count 1, a breach of 21(2)(b), being the failure to conduct any hazard identification at GP1, and count 7, a breach of s 21(2)(e), being a failure to adequately train employees about risks (specifically of the risks associated with failure of plant at cold temperatures).

In sentencing Esso, Cummins J held that the company clearly failed to take the proper approach required by s 21 to the potential dangers posed by a major industrial facility. The company failed to provide safe plant and a safe system of work under s 21(2)(a) and failed to ensure the absence of risks in connexion with the use of plant: s 21(2)(b). The standard of compliance and of knowledge are objective.[31] In the Esso case, the company was measured not against what it actually knew about the hazards associated with loss of lean oil flow and consequent low temperatures in Gas Plant 1, but what it ought to have known about such hazards, particularly given the age of the plant, the modifications made to its initial design and the changes to design standards since the plant was built.[32]

Esso failed to undertake the assessment of the plant, in spite of the direction by Exxon that a retrospective HAZOP should be conducted on all facilities more than 20 years old. The Royal Commission considered it inconceivable that a HAZOP study of GP1 would not have revealed factors that contributed to the accident.[33] In the judgment of the Supreme Court, the identification of hazards in a major hazards installation is obvious and fundamental, and a failure to do so was a breach of the company’s duty to provide and maintain so far as is practicable a working environment that was safe and without risks to health.[34]

Cummins J pointed particularly to the failure of the company to train in safety, in contravention of s 21(2)(e). Employees were not trained regarding the risks associated with the operation of plant below safe temperatures, including the dangers associated with and the potential of, catastrophic failure. Cummins J remarked:

It was evident from the evidence ...that the loyal employees, including supervisors, of Esso were entirely unaware of the deadly danger lurking at GP905 on the Friday morning, 25 September 1998, particularly around 12 noon. They were loyally attending to a leak in GP 922 and evident cold on GP 905 and related areas...Only one man [Mr Vandersteen, a fitter in the maintenance section] knew the dangers ....Mr Vandersteen was not trained by Esso, but was trained by the Navy. It was the Navy, not Esso, who taught him to be aware of such danger. This failure to train in safety is a most serious dereliction.[35]

Cummins J commented also that the company ‘failed to have any adequate procedures to enable employees to safely respond to loss of lean oil circulation – being written procedures to ensure that employees knew what to do in a situation of uncertainty or crisis’.[36]

1 The factors affecting Esso’s sentence

In exercising his discretion in sentencing Esso, Cummins J considered Esso’s previous conduct, the question of remorse and, ‘of major significance’ in the Esso case, punishment and general deterrence.

In Esso’s favour were the safety awards it had received and the extended periods of plant operation without a lost time injury. Weighed against these factors were three previous OHS convictions. Although few in number and not recent, these previous convictions related to matters which were the essence of the counts arising from the Longford explosion, namely the provision of a safe workplace, the knowledge of hazards and the importance of training as a means of prevention. Cummins J considered it necessary and appropriate to impose additional penalties under s 53, but in view of the other factors these were only moderate and were imposed only in respect of three of the eleven counts.

Cummins J also took into account the litigious conduct of the company and its apparent lack of remorse for the explosion and its tragic consequences: ‘It is necessary both of itself and an incident of sentencing – remorse and rehabilitation being relevant to that end’.[37] Whilst acknowledging the genuine personal remorse of the chairman and managing director, Cummins J asserted that ‘personal expressions of remorse need to be translated into reality’. There were in his view three matters that militated against corporate remorse. These were, first, Esso’s litigious treatment of its employees, in particular assertions before the Royal Commission that certain employees had the information necessary to initiate appropriate action to avert the explosion but failed to act on it for reasons peculiar to themselves. Cummins J remarked on the loyalty and bravery of Esso’s employees at Longford before saying: ‘The truth is there was only one entity responsible for lack of knowledge on that day: Esso. It, and it alone, should have properly trained the operators and supervisors not only in production, which it did, but also in safety. It, and it alone, failed to do so’.[38]

He also took into account the conduct of the defence. Cummins J affirmed the company’s right to defend itself vigorously against the charges, but bemoaned Esso’s obfuscatory approach and its efforts to make it appear that the identification of hazard, risk and cause was impossibly difficult. There are suggestions of this obfuscatory approach before the Commission as well. Hopkins points out that Esso chose to place its own accident investigation in the hands of outside lawyers and then claimed legal professional privilege to keep its findings confidential.[39] Esso did not produce a list of relevant documents enabling the Commission to identify precisely the material it sought for its investigation. This meant that the Commission had to seek a mass of documentation by summons in order to determine what was relevant. It often took some weeks for documents to be produced in response to summonses and when the material was produced it often did not contain the information sought.[40] The third factor, and for Cummins J a most significant one, was ‘the lamentable failure of Esso to accept its responsibility for these tragic events’, which Cummins J described as a serious deficiency.

The conviction was an important and high profile one. The judgment of Cummins J is noteworthy in a number of respects. First, he reiterated the importance the OHS Act places on prevention and bemoaned the tragic loss of life and wellbeing that can follow from a failure by an employer to take the duty of prevention seriously. Second, Cummins J spoke out against the still-prevalent notion that industrial ‘accidents’ are somehow inevitable and criticised Esso for its attempts to suggest that identifying the causes of the explosion (and by implication the capacity to prevent it) were impossibly complex and difficult. Finally, Cummins J stressed the organisational responsibility of Esso for the Longford tragedy - safe systems of work and their implementation in large corporations like Esso are both legally and practically organisational, and not individual, responsibilities.

Given Esso’s resources, the fines were regarded as an inadequate punishment and deterrent by the unions representing the workers and by others. Cummins J himself remarked on the limited scope of the penalties. This raises the broader question (touched on below) about other, more meaningful punishments for corporations who break the law.

D Prosecuting corporations under Victoria’s criminal law

The criminal offences that are most relevant to the workplace are manslaughter by criminal negligence and negligently causing serious injury.

Manslaughter is a common law offence in Victoria, being defined as the unjustifiable killing of another in circumstances that do not constitute murder. Where there is the death of a worker, the death must be by criminal negligence to constitute manslaughter.[41] The prosecution must show that the act which caused the death:

was done by the accused consciously and voluntarily, without any intention of causing death or grievous bodily harm but in circumstances which involved a great falling short of the standard of care which a reasonable man would have exercised and which involved such a high risk that death or grievous bodily harm would follow that the doing of the act merited criminal punishment.[42]

In the case of serious injuries to workers, section 24 of the Crimes Act 1958 provides that a ‘person who by negligently doing or omitting to do an act causes serious injury to another person is guilty of an indictable offence’. Other possible offences include recklessly causing serious injury (s 17) and reckless conduct endangering a person (s 23). As with manslaughter, to found criminal liability the employer corporation’s negligence must be more than the failure to reach the standard of care that a reasonable person would consider appropriate in the circumstances. There must be culpability in the sense of a great falling short of the expected standard - ‘the negligence must be of such a kind that it shocks the conscience and requires some punishment at the hands of the criminal law’.[43]

1 The attribution rule

For crimes of strict liability like s 21 of the OHS Act, the fact that the perpetrator is an artificial legal entity does not complicate the determination of liability. This is not the case for the manslaughter and negligently causing serious injury. These offences have developed in the context of individual human offenders who can form the necessary intent that is the key to criminal liability. In the case of an artificial legal entity there is a conceptual difficulty in establishing ‘intent’ or ‘fault’. To overcome the difficulty, this model of individual responsibility has been adapted by the common law to corporations by ‘breaking them down, metaphorically, into their underlying human components to see if there was an individual within the company who had committed the actus reus of a crime with the appropriate mens rea’.[44] This individual must be in a sufficiently senior and responsible position that he or she can be said to represent the company’s ‘directing mind and will’.[45] This is referred to the attribution, identification or ‘alter-ego’ doctrine or rule.

2 Two Victorian prosecutions

There have been only three prosecutions of employer corporations in Victoria for manslaughter of their workers, and one prosecution for negligently causing serious injury.[46]

The only successful prosecution was the 1994 case The Queen v Denbo Pty Ltd and Another.[47] The case illustrates the (fairly narrow) situation in which the attribution doctrine can lead to a conviction of a company for manslaughter. Denbo pleaded guilty to a charge of manslaughter, when an employee was killed when, due to brake failure, he lost control of the truck he was driving and it overturned. The company was owned by a father and son who between them effectively ran the company. The court found criminal negligence on the part of the company in failing to establish an adequate system of maintenance for its plant and vehicles, failing to properly train its employees and permitting the truck to be used when it was known to have faulty brakes. Tim Nadenbousch, one of the two owners and managers, was directly responsible for maintenance and training, was aware of the faulty brakes and directed the employee to drive the truck. There was no difficulty in holding him to be the directing mind and will of the company, so as to attribute his gross negligence to Denbo. The fine imposed on Denbo was never collected, however, due to the company’s insolvency.

There was a different result in the 1995 case R v A C Hatrick Chemicals.[48] The company was acquitted of charges of manslaughter and negligently causing serious injury after a large vessel used to store gum resin exploded at its Springvale plant, causing one death and one injury. Applying the attribution doctrine as stated in Tesco, Hampel J held that the company could not be liable unless there was criminal negligence on the part of an individual who could be identified as the directing mind and will of the company. There were two individuals (the plant manager and safety co-ordinator, and the plant engineer) who bore some responsibility for the ‘accident’, but the actions of neither amounted to criminal negligence. Hampel J considered that common law principles did not permit the aggregation of the fault of several individuals so as to render the company criminally liable, where the fault of each individual was insufficient to constitute the offence in question.[49] If the doctrine for determining corporate criminal liability for manslaughter and negligently causing serious injury was to change, he said, it was the responsibility of parliament, and not the courts, to change it.

III THE LIMITATIONS OF CURRENT LAW AND PRACTICE IN ADDRESSING CORPORATE LIABILITY FOR DEATHS AND SERIOUS INJURIES IN THE WORKPLACE

Statistics indicate that our current system to prevent workplace deaths and injuries is not working. Some researchers and those with practical experience of the system identify a range of reasons for this, including a lack of government resources to support the system of self-regulation under the OHS Act and to foster and enforce compliance. It is also argued that the separate legal structure that has been put in place to deal with workplace deaths and injuries promotes the perception that these deaths and injuries are less serious than those that occur outside the workplace and are dealt with under the general criminal law. It is argued that OHS statutory offences must be bolstered by the general criminal law, which provides a greater deterrent effect in those cases where deaths and serious injuries are the result of an employer’s criminal negligence. As we have seen, current principles of corporate criminal liability stand in the way of successful criminal prosecutions.[50] These arguments are canvassed briefly below.

A OHS law and practice

1 Are offences against the OHS Act perceived as serious crimes?[51]

Numerous researchers consider that the perception that workplace deaths and injuries are less heinous than deaths and serious injuries occurring outside the workplace is reinforced by the fact that the offences, although strictly criminal in nature, are set out in statutes far removed from the mainstream criminal law. Offences that relate to deaths and injuries at work are seen as ‘quasi-criminal’, or even only as ‘welfare offences’. The crime is the failure to maintain a healthy and safe working environment and the offence makes no reference to the seriousness of the harm caused (although whether a worker is injured or killed may be reflected in sentencing). This ‘stands in strong contrast to the available offences when persons are killed or injured outside their workplaces, which are structured in terms of the seriousness of the harm caused.’[52] This contributes to the higher degree of community tolerance of OHS offences compared to criminal offences, even where death results.

There is also a strong perception that workplace deaths and injuries are ‘accidents’ for which the employer is not usually to blame, despite much research linking industrial accidents with poor systems of work.[53] At worst, they are the result of worker carelessness or operator error (an argument Esso ran unsuccessfully before the Royal Commission and the Supreme Court); at best, they are to a large extent an inevitable and uncontrollable consequence of a productive industrial society.[54] The attitude was criticised by Cummins J in the Esso case. He endorsed the following comment of a former state government minister:

Too often one hears the response, ‘But that was an industrial accident’. This carries a connotation of inevitability, which denies the possibility of prevention. Even worse, it implies that an offence that results in a work-related fatality is not as serious as other criminal offences involving fatalities.[55]

In sentencing Esso, Cummins J remarked that what occurred at Longford on 25 September 1998 ‘was no mere accident. To use the term “accident” denotes a lack of understanding of responsibility and a lack of understanding of cause.’[56] These are important judicial observations that can go some way to changing public perception. The rarity of high-profile prosecutions such as Esso, however, means that such observations may not get the public exposure they deserve.

2 Enforcement and prosecutions

Consistent with the separate laws for OHS offences, deaths and injuries at work are prosecuted, not by police, but by public servants working in state agencies (in Victoria, field officers working in the Worksafe arm of the Victorian WorkCover Authority). This reinforces the so-called discontinuity between OHS crime and “real” crime and therefore affects the public’s perception of the criminality of the offence.[57] Studies of prosecution rates in the 1980s and early 1990s in Australia have shown that the proportion of employers actually prosecuted represent only a tiny proportion of offending employers. The dominant enforcement strategy of many OHS agencies, including Victoria, has been to encourage voluntary compliance by employers and to prosecute as a strategy of last resort. [58]

In Victoria, however, there has been a trend to increasing the number of prosecutions. The VWA asserts that the prosecution of employers whose negligence has resulted in or contributed to a workplace injury, illness or death is an ‘important component’ of the VWA’s overall prevention approach. In 2000/01, the number of prosecutions launched under the OHS Act was 210, a 100% increase on the number of defendants charged in previous years.[59] This is still a relatively small number of prosecutions in the light of the number of deaths and injuries in Victorian workplaces. Clearly compliance strategies retain a strong emphasis on legal options other than prosecutions[60] and on information, education and financial incentives for compliance. The availability of resources to investigate and prosecute offences also affects the number and types of prosecutions.

3 Penalties

Another difficulty with the current Act is the size of the penalties available. It was only in 1998 that the penalties for companies were increased to the current maximum of $250,000 (up from $40,000). Even with a guilty finding on eleven counts, additional penalties under s 52 and the imposition of the maximum penalty in respect of two breaches, the total fine for Esso was only $2 million. Given the huge resources of Esso’s parent company Exxon Mobil, it is hard to believe that the fine would have any specific deterrent effect at all.[61] Also, most OHS offences are tried summarily, thereby limiting further the maximum fines that can currently be imposed to $100,000 for a body corporate.[62] This also lessens the deterrent effect of penalties on well-resourced companies. [63]

B Criminal law and practice

The reluctance of authorities to prosecute corporate employers for the deaths or serious injuries of their employees is only partly explained by the ‘discontinuity’ between OHS crime and real crime. It is also explained by the difficulties in obtaining convictions of corporations for manslaughter and negligently causing serious injury posed by the common law attribution doctrine, and the absence of legislation to overcome these difficulties. The Commonwealth has taken the lead however, as the Criminal Code Act 1995 (effective 15th December 2001) provides new principles of corporate criminal liability for Commonwealth offences.

1 What are the shortcomings of the attribution doctrine?

Academics and practising lawyers alike have critically analysed the common law attribution (or identification or ‘alter ego’) doctrine and found it wanting.[64] The main criticisms (which are themselves subject to debate) can be summarised as follows:

a) it is only in very small companies that a single individual can be identified as representing the company’s ‘directing mind and will’. This is illustrated well by the Denbo case, above. In all but the smallest companies, decision-making is diffused throughout the organisation and is not confined to a single individual;

b) the doctrine does not reflect modern corporate decision-making, which is often the product of corporate policies and procedures rather than individual decisions;

c) the doctrine fails to reflect the separate concepts of individual and corporate blameworthiness. The fact that an individual may be blameworthy does not necessarily mean that the corporation is blameworthy. Conversely, there is an increasing recognition that a corporation may be blameworthy without criminal fault attaching to any individuals within it.

d) the dividing line between ‘directing minds’ and other representatives of a corporation is ill-defined, especially in larger companies with different organisational arms headed by managers at the same level in the organisation. The attribution doctrine does not generally permit the aggregation of the acts, omissions and intentions of a number of individuals, each of whom may play a key role in management. In the Hatrick case,[65] Hampel J refused, in the absence of a single individual with the necessary criminal intent, to ‘aggregate’ the intentions and actions of several managers in order to find liability on the part of the corporation itself;[66]

e) it is too easy for well-advised corporations to structure their management to insulate themselves from liability, by reserving to the board as a whole the power to direct operations;

f) where one individual in a larger corporation may be responsible for a key action or decision that would found liability of the corporation, it may be difficult for a court to determine who that individual is. By way of illustration, it is interesting to note the observation of the Longford Royal Commission on its investigation into Esso’s failure to undertake a planned HAZOP study of the Longford plant. The Commission stated that ‘despite the efforts of the Commission to ascertain whose decision resulted in the deferral or abandonment of a HAZOP study for GP1, no one would accept responsibility for the decision’.[67]

There have been some developments in which courts have rejected the ‘directing mind and will’ approach to attributing liability to a corporation in favour of an approach to corporate liability designed to fulfil the policy objectives of the legislation creating the particular corporate offence.[68] At this stage, this approach has not found favour, at least under Victorian criminal law. In the Hatrick case, Hampel J was not impressed by arguments that developments in English case law justified a policy approach to the question of corporate liability in OHS crimes and opened the way to determining corporate fault on a much broader basis. He rejected the argument that the company could be liable either directly (for failing to provide a safe system of work and ensuring compliance with the system), or vicariously (for the acts or omissions of those to whom the company had delegated the establishment of, and compliance with, safe systems of work).

IV THE VICTORIAN MODEL FOR CORPORATE OFFENCES FOR WORKPLACE DEATHS AND INJURIES

There have been calls for more than a decade for a more effective and realistic approach to corporate liability for deaths and serious injuries to workers and the public. These calls have been prompted by the proliferation of corporations and their involvement in almost all facets of life, and heightened by the apparent lack of corporate accountability for disasters like the Bhopal chemical spill in India, the Exxon Valdez oil spill, the Mount Erebus airline crash, the Zeebrugge ferry sinking and the Clapham rail crash. Inquiries by law reformers in Australia and in the United Kingdom have resulted in recommendations for new forms of liability based on organisational rather than individual blameworthiness. Some academics have been calling for such reforms for many years.[69]

Both Australian and United Kingdom law reform bodies have explored new concepts such as examining ‘corporate culture’ or ‘corporate ethos’ to assess whether a corporation has acted reasonably. They have variously proposed that companies and individual senior officers be held liable for shortcomings in the policies and practices adopted as the corporate method of operation.[70]

A Criminal Code Act 1995

The Criminal Code Act 1995 (Cth), effective 15 December 2001, was Australia’s first attempt at a new legislative paradigm for corporate criminal liability. Under Part 2.5 of the Code, the physical element of an offence is attributed to a corporation if that element was committed by an employee, agent or officer of the body corporate, acting within the actual or apparent scope of his or her employment, or within his or her actual or apparent authority (s 12.2).

The fault element of the offence makes the corporation liable if it has expressly, tacitly or impliedly authorised or permitted the offence (s 12.3(1)). The corporation’s intent is found in a corporate culture that fails to promote the compliance of its officers and employees with the criminal law, or encourages or tolerates non-compliance (s 12.3). Corporate culture is ‘an attitude, policy, rule, course of conduct or practice existing within the body corporate generally’ or in the relevant part of the body corporate (s 12.3(6)). In the words of one commentator, the Code takes a ‘realist’ rather than a ‘nominalist’ view of corporations. It conceptualises the corporation as a discrete and unique entity which can have a ‘moral personhood’ independent of its individual members and which can be criminally culpable in its own right. The concept of corporate culture ‘takes cognisance of the complex nature of the corporate decision-making process and the diffusion of responsibility within corporations’.[71]

The Commonwealth approach is echoed to some extent in the recently-defeated Victorian proposals, which deal specifically with workplace deaths and injuries. Although not presently under active consideration, the proposals are worth considering for the alternative approach they present to this difficult problem.

B The Victorian model

On 22 November 2001, the Victorian government introduced the Crimes (Workplace Deaths and Injuries) Bill 2001 into the Victorian parliament. The bill passed the Legislative Assembly with amendments on 14 May 2002 but failed to pass the Legislative Council on 29 May 2002. The bill proposed to amend the Crimes Act 1958 (Vic) to create new offences of corporate manslaughter and negligently causing serious injury by a body corporate, and to impose criminal liability on senior officers of a body corporate in certain circumstances. The bill’s introduction was the culmination of a long period of policy development and consultation, beginning in October 2000, on proposals to strengthen the role of the criminal law in preventing deaths and serious injuries in the workplace.

The bill introduced new offences of negligently killing by a body corporate (corporate manslaughter) and negligently causing serious injury by a body corporate. The injury or death had to be in respect of an employee in the course of his or her employment by the body corporate, or of a worker in providing services to, or relating to the body corporate.[72]

1 What is Negligence?

The bill did not propose a different test of liability from the current test in Victoria, although the means of determining liability for a corporation differed from the common law. For corporate manslaughter, the conduct of a body corporate was negligent if it involved such a great falling short of the standard of care that a reasonable body corporate would exercise in the circumstances; and

such a high risk of death or really serious injury –

that the conduct merits criminal punishment for the offence.

This test is consistent with the current common law test for gross or criminal negligence in Nydam v R,[73] with the concept of a ‘reasonable body corporate’ substituting for the reasonable person. The test requires a comparison between the body corporate’s conduct and the conduct of a reasonable body corporate in the circumstances. ‘Conduct’ was defined in s 11 to include an omission to act. The standard required the treatment of the corporation as a ‘collectivity’ - the question of what is reasonable in the circumstances cannot be answered by pointing only to the negligence of individual actors within the corporation.[74] This represents a clear departure from the attribution doctrine, as do the provisions for determining corporate conduct (see next section).

2 Evidence of negligence

Under s 14B(6), negligence could also be evidenced by the failure of the body corporate –

• to adequately manage, control or supervise the conduct of one or more of its employees, agents or senior officers; or
• to engage as an agent a person reasonably capable of providing the contracted services; or
• to provide adequate systems for conveying relevant information to relevant persons in the body corporate; or
• to take reasonable action to remedy a dangerous situation of which a senior officer has actual knowledge; or
• to take reasonable action to remedy a dangerous situation identified in a written notice served on the body corporate by or under an Act.

Sections 14B(6)(a) and (c) were drawn directly from the Criminal Code Act, ss 12.4(3)(a) and (c). Clearly, it was intended that a court could consider corporate management systems and corporate behaviour without the need to identify negligent acts or omissions of individuals. However, the focus in s 14B(6)(d) on the actual knowledge of a senior individual seems an unduly narrow approach to evidence of corporate negligence. It is certainly much narrower than the duty on corporations in the OHS Act to provide a working environment that is so far as is practicable, safe and without risks to health. Directors of larger, diffusely managed companies are unlikely to be aware of many dangerous situations, as they will have delegated day-to-day management of safety to line managers or supervisors. If the dangerous situation nevertheless results in a death or serious injury, the court ought to consider whether the body corporate had appropriate risk management systems in place that might have reasonably avoided those consequences, whether or not a government field officer had issued a notice or a senior officer actually knew of the danger.

3 Determining corporate conduct – individual conduct and ‘corporate’ conduct

The bill had two approaches to establishing corporate liability. First, conduct of an employee, agent or senior officer acting within the actual scope of their employment, or within their actual authority, was to be attributed to the body corporate. This is clearly a much wider range of persons then those who are said to ‘embody’ the corporation for the purposes of the attribution doctrine, and reflects a vicarious liability approach.[75] Criticisms that corporations would be (unfairly) attributed with the negligent conduct of rogue employees acting without the company’s knowledge and in defiance of corporate policy or in blatant disregard of corporate decision-making rules, were addressed by attributing only conduct within the employee’s or agent’s actual (and not apparent) authority. [76]

However, there may be grey areas where employees are acting outside their actual authority, but in accordance with unwritten corporate policies or practices that tolerate behaviour that is quite different to the written policies or rules. In the Esso case, for example, the company criticised its employees for not attending to the many warning alarms that were sounding on the morning of the explosion, indicating some problem with the system. It appears however, that alarms were often faulty, and management tolerated the longstanding and widespread practice of ignoring alarms.[77] Corporate practices that are not part of written policy, or even contrary to it, need to be examined as part of corporate conduct.

Under the Victorian bill, such unwritten policies may have fallen within the conduct of the body corporate ‘as a whole’, the second aspect of determining liability. The bill provided that ‘in determining whether a body corporate is negligent, the conduct of the body corporate as a whole must be considered’. The conduct of any number of employees, agents or senior officers of a body corporate may be aggregated for this purpose: s 14B(5).[78] This provision is similar to s 12.4(2) in the Criminal Code Act 1995. It overcomes an important limitation of the attribution doctrine, which does not generally permit aggregation. By aggregating the careless behaviour of a number of staff, this approach to determining corporate conduct appears to allow a finding of gross negligence against the company, although there may be no gross negligence on the part of any particular individual. It recognises that, through its policies and practices, a corporation is ‘more than the sum total of its human components’.[79]

4 Penalties

The penalties in the Victorian Bill were noteworthy in providing a more creative approach to punishing corporations. There were fines (a maximum of 50 000 penalty units for corporate manslaughter and 20 000 penalty units for negligently causing serious injury). These penalties represented a vast increase over those available under OHS Act and may have contributed to the deterrent effect. However, many have criticised the deterrent effect of fines for well-resourced companies.[80] This is why the additional orders the bill proposed were a welcome innovation.

The bill gave the court the discretion to order a convicted body corporate to do one or more of a range of things, in addition to or instead of any other penalty. These included

There was a limit to the funds a body corporate must expend to satisfy the order and the court was to take into account the financial circumstances and the nature of the burden the order would have imposed on the body corporate when it made an order. Enforcement mechanisms through the Victorian WorkCover Authority were proposed to ensure compliance and non-complying bodies corporate risked contempt proceedings.

These provisions reflect approaches that we have already seen under statutes such as the Trade Practices Act 1974 (Cth), but which have rarely seen in the criminal sphere. The penalties reflect an attitude that crimes involving loss of life or serious injury cannot just be ‘paid for’. Being required to publicise their crime may suitably shame some corporations. The community benefit orders may promote the idea that blameworthy corporations must put something back into the community and be better corporate citizens. The higher fines and the other orders available may persuade the public that manslaughter and related crimes are serious crimes to be regarded as the same opprobrium as other similar crimes that occur outside work.

What was arguably missing from the proposed penalties was some mechanism whereby corporate defendants could be ‘sentenced in a manner directly geared to achieving internal accountability’.[81] It has been argued that such orders would unreasonably interfere with the internal management of businesses, but they may assure employees and the community that a corporation has learned something from the guilty finding and will be less likely to re-offend.[82]

5 Individual officer liability

This article is concerned with corporate liability, but it would be incomplete without at least a mention of the proposed offences for individual officers.[83]

Section 52 of the OHS Act provides circumstances in which an officer of a corporation may be found guilty of an offence. Where an offence against the Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to have been attributable to any wilful neglect on the part of an officer of the body corporate, that officer is also guilty of the offence and liable to a penalty.[84] The bill proposed a new offence for senior officers, if it was proved that a body corporate had committed an offence against s 13 (corporate manslaughter) or s 14 (negligently causing serious injury by a body corporate). The body corporate need not be prosecuted, but it was still necessary to establish beyond reasonable doubt that it had committed an offence under ss 13 or 14.

Additional elements were required to be proved to convict a senior officer. These included that the officer was ‘organizationally responsible’ for the conduct of the body corporate in relation to the offence; and the officer materially contributed to its commission by performing or failing to perform his or her organizational responsibilities; and he or she knew that, as a consequence of his or her conduct, that the body corporate would engage in high risk conduct: s 14C(1). Section 14C(3) defined when a senior officer will be ‘organisationally responsible’ for the body corporate’s conduct.

These sections created indictable offences with penalties (for corporate manslaughter) of imprisonment for up to 5 years, or a fine of 1800 penalty units, or both. For negligently causing a serious injury, the penalties proposed were a maximum of 2 years imprisonment, or up to 1200 penalty units, or both. The bar was set very high for these offences, but they may have been useful for proceeding against the most serious individual offenders and would have been particularly important if the company became insolvent or went into voluntary liquidation without being able to pay a monetary penalty.

V CONCLUSION

The problem of corporate liability for workplace deaths and serious injuries is an important aspect of the larger problem of the effective prevention of accidents and ill-health at work. The Esso Royal Commission and Esso’s prosecution under the OHS Act provided essential information that further emphasised what we know already – that almost all accidents are preventable, and that proper management systems for identifying risk, and proper staff training and supervision, are absolutely vital to prevention. The Commission also suggested that more stringent external regulation of safety systems by the government might prevent the recurrence of such a serious incident. These things are important to all workplaces, not just major hazard facilities.

The deterrence and punishment of corporate employers plays an important role in prevention overall, although it may be difficult, if not impossible, to measure the relative importance of the many interdependent legal and non-legal factors in prevention. The common law has moved too slowly in developing a doctrine for ascertaining corporate liability that is not interlocked with and dependent on individual liability. The Victorian government’s Crimes (Workplace Deaths and Serious Injuries) Bill retained the test of gross negligence to found liability for workplace deaths and serious injuries, but represented a serious attempt to introduce concepts of corporate conduct that represent a ‘realist’ rather than a ‘nominalist’ view of corporations.[85]

With the failure of the Victorian bill to receive upper house support, we look to other initiatives to build the momentum for change. The Criminal Code Act 1995 has new concepts of liability for corporations, to be determined through corporate rather than just individual conduct, and through consideration of ‘corporate culture’. The concept of corporate culture is diffuse,[86] and not well-known in legislation and case law. It will become more so with judicial consideration of the Criminal Code Act 1995, but this will take time. The Queensland government is also considering the problem of ‘dangerous industrial conduct’ and is taking submissions on proposals to amend the Criminal Code to create an offence of industrial manslaughter where gross negligence is identified. If these proposals are translated into proposed laws, they may be more likely to pass Queensland’s single legislature.

The Victorian government envisaged its proposed laws would not often be used – they were ‘designed to catch those rogue operators who think they can get away with, or do not care whether, they are running an unsafe workplace’.[87] If the statistics are to be believed, there are too many ‘rogue operators’ amongst our corporate citizens. Attempts to address the shortcomings of the common law when dealing with corporations who fail to provide a safe working environment must continue, in the interests of all employees.

[*] Lecturer, School of Law, Deakin University.

[1] The Queensland Government has called for submissions on a proposal to amend the Queensland Criminal Code to create a new offence of corporate manslaughter.

[2] Report of the Longford Royal Commission, The Esso Longford Gas Plant Accident (1999).

[3] The Commission did comment briefly on these matters in the context of another term of reference.

[4] Andrew Hopkins, Lessons from Longford (2001) 3-6. Hopkins is also critical of the relatively superficial consideration given by the Commission to organisational causes, compared to technical causes.

[5] Longford Royal Commission, above n 2, 200.

[6] Ibid 202-203.

[7] DPP v Esso (Australia) Pty Ltd [2001] VSC 263, [4].

[8] Longford Royal Commission, above n 2, ch 14.

[9] DPP v Esso [2001] VSC 263, [3].

[10] Longford Royal Commission, above n 2, 238.

[11] Industry Commission Work, Health and Safety, Vols 1 and 2 (1995).

[12] Victorian WorkCover Authority, Press Release, 3rd January 2001. These did not include deaths caused by industrial disease.

[13] Victorian Workcover Authority, Annual Report 2000-2001, Available at: <http:// www.workcover.vic.au/public/au> , October 2001, 13. These were the injuries requiring medical attention.

[14] The Hon Robert Hulls MP, Second Reading Speech, Crimes (Workplace Deaths and Serious Injuries) Bill 2001, 21 November 2001, Available at: <http:// www.dms.dpc.vic.gov.au>

[15] See, for example, Michael Quinlan and Philip Bohle, Managing Occupational Health and Safety in Australia A Multidisciplinary Approach (1991).

[16] Breen Creighton, William Ford and Richard Mitchell, Labour Law Text and Materials (1994) 1341.

[17] See Occupational Health and Safety Act 1985 (Vic) ss 21- 25.

[18] Occupational Health and Safety Act 1985 (Vic) Part VI. Government inspectors may issue notices requiring an employer to remedy a contravention or likely contravention of the Act, or stopping work where there is an imminent danger to health and safety.

[19] Also Dangerous Goods Act 1985 (Vic), Equipment (Public Safety) Act 1994 (Vic).

[20] The legislation is modelled on UK legislation developed in the 1970s in response to recommendations by Lord Robens in his Report of the Committee on Safety and Health at Work 1970 – 72. For a discussion of those recommendations, see Richard Johnstone, Occupational Health and Safety Law and Policy (1997) chapter 2.

[21] DPP v Esso [2001] VSC 263, [3].

[22] Occupational Health and Safety Act 1985 (Vic), s 4, s 21(3).

[23] See Occupational Health and Safety Act 1985 (Vic) s 52 and Acts Interpretation Act 1984 (Vic) s 38.

[24] Chugg v Pacific Dunlop Ltd [1988] VicRp 49; [1988] VR 411, 411.

[25] Holmes v Spence (1992) 5 VIR 119, 126.

[26] Johnstone, above n 20, 5.7, [5.40].

[27] TTS Pty Ltd v Griffiths (1991) 105 FLR 225.

[28] R v Williscroft and Ors [1975] VicRp 27; (1975) VR 292, 300.

[29] DPP v Esso [2001] VSC 263, [7].

[30] It was the first time since the introduction of the Act that an employer was tried before a judge and jury: Victorian WorkCover Authority 2000/2001 Annual Report, above n 13.

[31] DPP v Esso [2001] VSC 263, [3].

[32] Longford Royal Commission, above n 2, 203.

[33] Longford Royal Commission, above n 2, 204.

[34] DPP v Esso [2001] VSC 263, [4].

[35] DPP v Esso [2001] VSC 263, [3].

[36] DPP v Esso [2001] VSC 263, [4] –[5].

[37] Ibid.

[38] DPP v Esso [2001] VSC 263, [7]- [8].

[39] Hopkins, above n 4. The Commission noted also that report was compiled by overseas people who were no longer in Australia and therefore unavailable to the Commission for questioning.

[40] Longford Royal Commission, above n 2, 249.

[41] Gerry Nash QC, Annotated Criminal Legislation in Victoria (2001) 153.

[42] Nydam v R [1977] VicRp 50; [1977] VR 430, cited in Nash, ibid, 156.

[43] R v Newman [1947] VicLawRp 44; [1948] VLR 61; R v Shields [1981] VicRp 68; [1981] VR 717, cited in Nash, above n 41, 184.

[44] C MV Clarkson ‘Kicking Corporate Bodies and Damning their Souls’ (196) Modern Law Review 557, 560.

[45] Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1; [1972] AC 153.

[46] R v Dynamic Demolitions Pty Ltd (unreported, Supreme Court of Victoria, Hampel J, 8 December 1997); The Queen v Denbo Pty Ltd and Another (unreported, Supreme Court of Victoria, Teague J, 14 June 1994); R v A C Hatrick Chemicals Pty Ltd (unreported, Supreme Court of Victoria, Hampel J, 29 November 1995).

[47] This was the first successful prosecution of a corporate employer for manslaughter in Australia: see S Bronnitt and Bernadette McSherry Principles of Criminal Law (2001) 155.

[48] For a more detailed discussion, see Johnstone, above n 20, 427-428; Breen Creighton and Peter Rozen, Occupational Health and Safety Law in Victoria, (2nd ,1997) 121-3.

[49] R v A C Hatrick Chemicals Pty Ltd (unreported, Supreme Court of Victoria, Hampel J, 29 November 1995) 10.

[50] There are of course strong advocates of the notion that criminal offences can be committed only by individuals and that there is little or no place for corporate criminal liability: see eg Lim Wen TS, ‘Corporations and the Devil’s Dictionary: The Problem of Individual Responsibility for Corporate Crimes’ [1990] SydLawRw 2; (1990) 12 Sydney Law Review 311.

[51] The literature on this issue is extensive. For a useful bibliography, see Johnstone, above n 20.

[52] Clarkson, above n 44, 559.

[53] This view still holds sway, in spite of much research to the contrary, eg Neil Gunningham, Safeguarding the Worker: Job Hazards and the Role of the Law (1984).

[54] For a critique of this argument see Harry Glasbeek, ‘Occupational Health and Safety Law: Criminal Law as a Political Tool’ (1998) 11 Australian Journal of Labour Law 95.

[55] DPP v Esso [2001] VSC 263, [3].

[56] Ibid.

[57] Some of the more serious cases, such as the Esso prosecution, are prosecuted by the Director of Public Prosecutions. These are a tiny proportion of the total prosecutions.

[58] Richard Johnstone (ed), Occupational Health and Safety Prosecutions in Australia:Overview and Issues (1994).

[59] Victorian Workcover Authority, Annual Report 2000-2001, above n 13, 17.

[60] By contrast with the number of prosecutions, 6867 improvement notices (likely contravention of the Act) and 2752 prohibition notices (immediate danger to health and safety where further work prohibited until the danger is removed ) were issued in 2000/2001: Annual Report 2000-2001, above n 13, 17.

[61] The Exxon Mobil Corporation reported third quarter earnings in 2000 of $US4,290 million: http://money.cnn.com/2000/10/24/companies/oil_earnings/exxonmobil.htm).

[62] Magistrates Court Act 1989 (Vic) s 53.

[63] The failed Crimes (Workplace Deaths and Serious Injuries) Bill 2001 proposed increased fines for breaches of the OHS Act significantly, up to 6000 penalty units for a breach of s 21(1) by a corporation. It also raised the penalties that may be imposed when indictable offences are tried summarily in the Magistrates Court to $200,000.

[64] See eg Brent Fisse, ‘Individual and Corporate Criminal Responsibility and Sanctions Against Corporations’ in Richard Johnstone, above n 58; Clarkson, above n 44. The summary is based on the summary of Fisse’s paper in Johnstone, above n 20, 425-426.

[65] R v Hatrick Chemicals Pty Ltd, unreported, above n 46.

[66] It has been noted, however, that companies could find it very difficult to protect themselves from liability if it was possible to aggregate the acts and intentions of individuals acting quite independently from each other: see Robin Edwards, ‘Corporate Killers’ (2001) 13 Australian Journal of Corporate Law 231, 242.

[67] Longford Royal Commission, above n 2, 205. It is not suggested by this illustration that criminal prosecution of Esso was appropriate.

[68] Meridian Global Funds Management Asia Ltd v Securities Commission [1995] UKPC 5; [1995] 3 WLR 413; Director General of Fair Trading v Pioneer Concrete (UK) Ltd [1995] 1 AC 456.

[69] Brent Fisse and John Braithwaite, ‘The Allocation of Responsibility for Corporate Crime: Individualism, Collectivism and Accountability’ [1988] SydLawRw 3; (1988) 11 Sydney Law Review 468.

[70] See Criminal Law Officers Committee, Model Criminal Code Final Report Chapter 2 General Principles of Criminal Responsibility (1993); UK Law Commission, Working Paper No. 4, General Principles: Criminal Liability of Corporations (1993).

[71] Tahnee Woolf, ‘The Criminal Code Act 1995 (Cth) – Towards a Realist Vision of Corporate Criminal Liability’ (1997) 21 Criminal Law Journal 257, 258 -9.

[72] The term ‘worker’ was widely defined to include directors, contractors and sub-contractors, outworkers, apprentices and trainees. ‘Employee’ is defined so as to fall back on the common law multiple factor test: see Stevens v Brodribb Sawmilling Co [1986] HCA 1; (1986) 160 CLR 16.

[73] [1977] VicRp 50; [1977] VR 430.

[74] Woolf, above n 71, 270.

[75] Edwards, above n 66, 247.

[76] Fisse and Braithwaite, above n 69, 484.

[77] Hopkins, above n 4, 52-53.

[78] ‘Agent’ was defined in s 11 to encompass persons (including independent contractors and sub-contractors) engaged by the body corporate to provide services to it, in relation to matters over which the body corporate has control, or would have had control but for any agreement between the body corporate and the agent to the contrary. This mirrors s 21(3) of the OHS Act.

[79] Clarkson, above n 44, 569; Woolf, above n 71, 269.

[80] D Miester Jr, ‘Criminal Liability for Corporations That Kill’ (1990) 64 Tulane Law Review 919.

[81] Fisse and Braithwaite, above n 69, 472.

[82] Ibid.

[83] As has been noted, any comprehensive study of corporate liability must take account of the interrelationship between corporate and individual liability.

[84] Officer is widely defined to include directors, executive officers, persons concerned in management, and persons purporting to act in such positions: see s 52(3) of the OHS Act.

[85] Woolf, above n 71, 258.

[86] Criminal Law Officers Committee, Model Criminal Code Final Report, above n 70, 107.

[87] Hon Robert Hulls MP, Second Reading Speech, above n 14, 1.