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District Court 25 September 2020

SafeWork NSW v Norske Skog Paper Mills (Australia) Limited

[2020] NSWDC 559

Other
CRIMINAL LAW PROSECUTION WORK HEALTH AND SAFETY DUTY OF PERSONS UNDERTAKING BUSINESS OBJECTIVE SERIOUSNESS MITIGATING FACTORS

Citation: SafeWork NSW v Norske Skog Paper Mills (Australia) Limited [2020] NSWDC 559
Court: District Court of New South Wales
Date: 25 September 2020
Judge(s): Russell SC DCJ

Background

Norske Skog Paper Mills (Australia) Limited operated a paper mill near Albury, NSW, as part of a large Norwegian-headquartered global paper manufacturing group. On 24 May 2018, during a scheduled extended maintenance shutdown of the mill, two workers were fatally overcome by hydrogen sulphide gas while performing routine maintenance near the top of a storage tank known as the Warm White Water Tank. A third worker suffered hydrogen sulphide poisoning and hypoxic respiratory failure.

The gas had formed as a result of biological activity in filtrate stored in the tank during the shutdown. Biocides that normally suppressed sulphate-reducing bacteria were not dosed during the extended shutdown because the automated dosing system was offline, and no manual dosing was carried out. The tank was also in a state of disrepair, with splits along its seams and unsealed openings through which gas could escape into the restricted headspace above.

SafeWork NSW prosecuted Norske Skog as a person conducting a business or undertaking (PCBU) for failing to comply with its primary duty of care under the Work Health and Safety Act 2011 (NSW), thereby exposing workers to a risk of death or serious injury. Norske Skog pleaded guilty to a Category 2 offence under s 32 of that Act.

  • What was the appropriate objective seriousness of the offence, given the multiple safety failures identified?
  • What weight should be given to mitigating factors, including the guilty plea, cooperation with the investigation, contrition, and remediation steps taken after the incident?
  • Whether specific deterrence was limited by the defendant's subsequent cessation of operations at the site.
  • What capacity to pay a fine the defendant had, given its financial circumstances within a global corporate group?
  • What penalty and ancillary orders were appropriate, including the making of an order under s 238 of the Work Health and Safety Act 2011 (NSW) requiring the production of a safety education resource?

Decision

The District Court found the offence to be of high objective seriousness. Norske Skog had failed across multiple fronts simultaneously: it did not designate the area above the tank as a confined space; it did not inhibit the formation of hydrogen sulphide in storage tanks during the extended shutdown; it did not provide personal hazardous gas monitors to workers; it did not provide adequate information, instruction, or training about hazardous gas exposure; it did not install adequate ventilation or filtrate monitoring systems. Each of these failures was identified as a reasonably practicable measure that could and should have been taken.

The court accepted several mitigating factors. Norske Skog entered an early guilty plea, cooperated with the investigation, expressed genuine contrition, and had taken substantial remediation steps after the incident. The company had no prior convictions. The court also received and considered victim impact statements from six family members of the two deceased workers. The statements were delivered in court over two hours and conveyed profound and ongoing suffering.

On the question of specific deterrence, the court rejected the proposition that it was irrelevant simply because the Albury mill had since closed. Norske Skog remained part of a large international group with mills in other jurisdictions, and specific deterrence was not confined to activities in a single state or country. The court also assessed the defendant's capacity to pay, having regard to its position within the broader corporate group.

The court imposed a fine below the statutory maximum of $1,500,000, reflecting the guilty plea and other mitigating factors, but calibrated to reflect the high objective seriousness of the offending and the need for both general and specific deterrence. An order under s 238 of the Act was also made requiring the production of an educational animated video about the incident for distribution by SafeWork NSW.

Orders Made

  • Norske Skog was convicted of the offence and fined (amount to be confirmed from the full judgment text, not reproduced in the excerpt provided).
  • Norske Skog was ordered to pay the prosecutor's costs.
  • Under s 238 of the Work Health and Safety Act 2011 (NSW), Norske Skog was ordered to fund and develop a de-identified educational animated video, within six months of the orders, covering:
  • The incident on 24 May 2018 and the risks to which the workers were exposed
  • A suitable safe system of work that would have reduced those risks as far as reasonably practicable
  • Guidance material on safe work in and around confined spaces
  • Guidance material on managing risks associated with the biological generation of hydrogen sulphide
  • A distribution plan for the video
  • The content and provider of the video were to be approved by SafeWork NSW.
  • Within two months of the orders, Norske Skog was required to attend a meeting with SafeWork NSW to submit a written plan for completion of the project.
  • Copyright and all exhibiting and distribution rights in the video were to be held exclusively by SafeWork NSW, subject to Norske Skog holding an unrestricted, fee-free licence to use the video within the Norske Skog Group internationally and to share it with relevant industry associations (including the Australian Forest Products Association) for distribution to members.
  • Norske Skog was required to notify the prosecutor and the Registrar of the NSW District Court of any change of address for service.
  • Liberty was reserved to restore the matter if Norske Skog failed to comply with the orders.

Key Takeaways

  • The District Court assessed objective seriousness as high where a PCBU simultaneously failed to implement multiple distinct and reasonably practicable safety measures, each of which independently could have reduced the risk of a fatal outcome.
  • Specific deterrence under the Work Health and Safety Act 2011 (NSW) is not confined to a defendant's activities in a single state. Where a convicted entity remains part of an international corporate group with operations in multiple jurisdictions, specific deterrence retains relevance even after local operations have ceased.
  • Victim impact statements from family members of deceased primary victims may be received and taken into account on sentence where the prosecutor applies for this and the court considers it appropriate, with the harmful impact of a primary victim's death on family members treated as an aspect of harm done to the community under s 30E(3) of the Crimes (Sentencing Procedure) Act 1999 (NSW).
  • Under s 238 of the Work Health and Safety Act 2011 (NSW), a court may impose ancillary orders requiring a convicted PCBU to fund and produce safety education materials for distribution by the regulator, including requiring copyright to vest in SafeWork NSW.
  • A guilty plea, genuine contrition, cooperation with investigators, and post-incident remediation are recognised mitigating factors in WHS sentencing, but they do not override the need to reflect the objective gravity of offending that resulted in multiple worker deaths.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 3, 19, 32, 235, 238
- Work Health and Safety Regulation 2017 (NSW), regs 5, 49, 50, 351
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22, 26, 27, 28, 30A, 30B, 30D, 30E
- Fines Act 1996 (NSW), ss 6, 122

Cases
- Attorney General for the State of New South Wales v Ceerose Pty Limited [2019] NSWCCA 35
- Baumer v R [1988] HCA 67; (1988) 166 CLR 51
- Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338
- BW v R [2011] NSWCCA 176
- Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
- Mahdi Jahandideh v The Queen [2014] NSWCCA 178
- Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
- Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSW