Alcoa of Australia Limited (ACN 004 879 298) v The Australian Workers' Union (No 2)
[2010] FCA 610
FEDERAL COURT OF AUSTRALIA
Alcoa of Australia Limited (ACN 004 879 298) v The Australian Workers’ Union (No 2) [2010] FCA 610
Citation: Alcoa of Australia Limited (ACN 004 879 298) v The Australian Workers’ Union (No 2) [2010] FCA 610 Parties: ALCOA OF AUSTRALIA LIMITED (ACN 004 879 298) v THE AUSTRALIAN WORKERS' UNION File number: WAD 60 of 2010 Judge: BARKER J Date of judgment: 29 March 2010 Catchwords: INDUSTRIAL LAW – application for interlocutory injunction – application refused Legislation: Fair Work Act 2009 (Cth) s 172(1), s 408, s 443, s 606(3)
Federal Court of Australia Act 1976 (Cth) s 21, s 23
Judiciary Act 1903 (Cth) s 39B(1A)(c)Cases cited: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and others Re Schefenacker Vision Systems Australia Pty Ltd, AWU, AMWU Certified Agreement 2004 and others (18 March 2005) [PR956575]
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Bitzer Australia Pty Ltd t/as Buffalo Trident [2009] FWA 962Date of hearing: 23 and 29 March 2010 Place: Perth Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 65 Counsel for the Applicant: Mr AJ Power Solicitor for the Applicant: Blake Dawson Counsel for the Respondent: Mr MD Cox Solicitor for the Respondent: MDC Legal
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
FAIR WORK DIVISION
WAD 60 of 2010
BETWEEN: ALCOA OF AUSTRALIA LIMITED (ACN 004 879 298)
ApplicantAND: THE AUSTRALIAN WORKERS' UNION
Respondent
JUDGE:
BARKER J
DATE OF ORDER:
29 MARCH 2010
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The applicant’s amended notice of motion, filed 23 March 2010, be dismissed.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
FAIR WORK DIVISION
WAD 60 of 2010
BETWEEN: ALCOA OF AUSTRALIA LIMITED (ACN 004 879 298)
ApplicantAND: THE AUSTRALIAN WORKERS' UNION
Respondent
JUDGE:
BARKER J
DATE:
29 MARCH 2010
PLACE:
PERTH
REASONS FOR JUDGMENT
ORDER MADE 29 MARCH 2010
On 29 March 2010, I dismissed the notice of motion filed 23 March 2010 of the applicant (Alcoa) for an interlocutory injunction to prevent industrial action by the respondent (AWU). I gave short oral reasons for decision at the time. These are the formal reasons for decision.
ISSUE
The issue the subject of this judgment is whether the AWU should be restrained on an interlocutory basis from taking industrial action against Alcoa.
If an interlocutory injunction should go there is a related question whether there should be a mandatory injunction requiring the AWU to withdraw a number of notices of intention to take industrial action between 24 March and 7 April 2010 and the giving of corresponding advice to members.
FACTS
On 22 March 2010, Alcoa lodged an urgent application in the Court for a declaration under s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA) to the effect:
·That cl 20.3 of the proposed Alcoa World Alumina Australia – AWU Pinjarra Refinery Agreement 2010 (proposed agreement) is not concerned with matters which are permitted matters within the meaning of s 172(1) of the Fair Work Act 2009 (Cth) (FW Act).
·That industrial action the AWU and its members propose to engage in, pursuant to eight notices of intention to take industrial action, is not protected industrial action within the meaning of s 408 of the FW Act.
·For injunctive relief (including interim relief) under s 23 of the FCA and s 39B(1A)(c) of the Judiciary Act 1903 (Cth) to restrain AWU from organising or engaging in industrial action that is not protected industrial action within the meaning of s 408 of the FW Act.
The proposed agreement by cl 20.3 provides that:
In the interest of maintaining and improving job security of employees covered by this agreement, where the Company engages contractors or labour hire, it will ensure the wages and conditions of the contractors’ and labour hire companies’ employees engaged to do work covered by this Agreement are no less favourable than the wages and conditions provided for in this Agreement for equivalent or similar work, including, but not limited to penalty rates and allowances.
By order made by a Commissioner of Fair Work Australia on 18 February 2010, the Commissioner ordered, pursuant to s 443 of the FW Act (in substance) that:
1.The AWU – West Australian Branch is to hold a protected action ballot of employees of Alcoa described in cl 3 of the order.
2.The ballot is to be conducted by the Australian Electoral Commission.
3.The employees to be balloted are those employees of Alcoa employed in or in connection with the Pinjarra refinery site who are currently covered by the Alcoa World Alumina Australia, Pinjarra Alumina Refinery Agreement 2005 and who are represented by the AWU as bargaining representatives.
4.The date by which voting is to close is 5pm on 16 March 2010.
5.In support of advancing the claims of the AWU in the negotiation of a new enterprise agreement with Alcoa, the vote of members be taken with a view to endorsing the taking of protected industrial action against Alcoa either separately or concurrently and/or consecutively in respect of a number of enumerated actions.
By notice of appeal filed and dated 24 February 2010 by Alcoa under the FW Act, Alcoa appealed to the Full Bench of Fair Work Australia against the order of the Commissioner on the grounds that:
1.The learned Commissioner erred in law in finding he was satisfied the applicant met the applicant under s 443(1)(b) of the Fair Work Act 2009 (Cth), that it had been, and was genuinely trying to reach agreement with the respondent;
(a)in that he wrongly relied on the stated intention of the application but that the proposed agreement did not and was not intended to contain non‑committed matters to satisfy himself of the requirement that the proposed agreement contained only claims about, or reasonably believed to be only about permitted matters (requirement);
(b)when what was required by law was to consider whether the proposed agreement met the requirement, having regard to all of the circumstances of the case and the person proposing the agreement and the proper construction and effect of cl 20.3 of the proposed agreement.
The appeal has been set down for hearing in Fair Work Australia on 8 April 2010, some two weeks away from the present time.
In these circumstances, Alcoa has commenced the proceeding in this Court and seeks interlocutory relief in the terms generally described above in order to prevent any industrial action occurring pursuant to notices of intention in the period up to the hearing of the appeal in Fair Work Australia.
Counsel for Alcoa made it plain at the hearing of the notice of motion that the applicant accepted that any interlocutory relief may be limited to that period of time.
ALCOA’S CONTENTIONS
Alcoa contends that notwithstanding the order of the Commissioner made 18 February 2010, this Court has jurisdiction to entertain the application for declaration and injunctive relief.
Alcoa contends that there is a serious issue to be tried, in the terms expressed in the ground of appeal in Fair Work Australia, in that the proposed action should not be properly characterised as protected action.
Alcoa says that interlocutory relief should be granted as the balance of convenience lies in its favour as the failure to grant injunctive relief at this point will lead to industrial action that carries with it serious safety, health, environmental and productivity risks so far as Alcoa’s conduct of its refinery at Pinjarra is concerned.
Alcoa generally submits that it is just and equitable that an injunction go on an interlocutory basis.
AWU’S CONTENTIONS
The AWU first contends that by reason of the Commissioner’s order of 18 February 2010 the industrial action of which the AWU has given notice is protected action and there is no basis for the Court to intervene.
Accepting, however, that the Court may in an appropriate case have jurisdiction or power to grant declaratory and injunctive relief in such circumstances, the AWU argues there is no serious issue to be tried in this case. Put simply, the union contends on the basis of settled authority, that cl 20.3 of the proposed agreement concerns permitted matters and does not involve a provision that deals in any respect with a non‑permitted matter.
Further, the AWU contends that if it is necessary for the Court to consider the balance of convenience on an interlocutory application such as this, then it is not demonstrated that issues concerning the safe operation of the refinery, environmental risks and productivity risks should be assessed in favour of Alcoa.
In affidavit evidence put on with the leave of the Court following oral hearing of the application for injunctive relief, Michael Zoetbrood, organiser of the AWU says that the draft agreement relating to all of Alcoa’s other alumina producing sites in Western Australia (about six), contain substantially the same terms as to the engagement of contractors as that which is presently objected to in the proposed agreement. Yet despite this fact:
·The AWU obtained orders from a Commissioner of Fair Work Australia for a ballot for protected industrial action in relation to the WA Operations Draft Agreement on 6 January 2010.
·Alcoa informed Fair Work Australia at the hearing of the application for ballot orders that it did not object to that application.
·There was discussion between the parties on the terms of those provisions as to contractors leading up to the applicant informing Fair Work Australia that it did not object to the orders.
·Notices to the applicant have been issued advising of the intention of the applicant’s members to engage in protected action at WA operation, pursuant to the Fair Work Australia orders which notices elicited no objection from the applicant.
·Industrial action has occurred in February and March 2010 without challenge from the applicant.
The AWU says that operation and arrangements of Alcoa are very substantially the same, particularly at Kwinana and Wagerup refineries, in respect of all of it aluminium sites in WA and yet none of the very lengthy objections were raised to the same provisions as to contractors and the bulk of the operations of Alcoa in Western Australia.
On that basis, the AWU submit that the applicant’s purported evidence of adverse effect said to result from the same industrial action in relation to the same provisions as to contractors ought to be given no or very little weight.
In essence, the AWU submit that the procedures provided for by the FW Act for an appeal to be heard in respect of the order of the Commissioner of 18 February 2010 should be allowed to be completed without the grant of injunctive relief by this Court at this time.
The AWU say that by virtue of s 606(3) of the FW Act, a stay of that order pending appeal is not possible. As the Parliament has provided that there should be no stay, the Court should take this policy factor into account in not permitting Alcoa to frustrate the appeal processes available under the FW Act and the rights of the union to initiate industrial action in the interim period by the grant of interlocutory relief in this proceeding.
CONSIDERATION
To the extent that the AWU contends that the Court does not have jurisdiction or power to make declarations or grant injunctive relief in the proceeding in this Court in light of the order made by the Commission on 18 February 2010, I do not accept that submission. There is nothing in the FW Act that was brought to the attention of the Court to suggest that the general jurisdiction of the Court in this regard has been curtailed by the provisions of the FW Act.
The question then is whether, according to usual principles, interlocutory relief should be granted in the circumstances of this particular case.
Each of the parties rely on familiar precedent decisions of the High Court, Federal Court and Fair Work Australia as to whether or not a provision such as cl 20.3 of the proposed agreement results in an agreement being characterised as one involving non‑permitted matters for the purposes of the FW Act. Due to the urgency of this matter, it is not necessary to rehearse those decisions. It is sufficient, in my view, to say that the argument put on behalf of the AWU, at this point, that cl 20.3 is unarguably with respect to permitted matters should not be accepted. Rather, it seems to me to be open to Alcoa to argue that having regard to the overall context of the proposed agreement in which cl 20.3 exists, and to the contended for effect that cl 20.3 will have on the operation of Alcoa’s refinery at Pinjarra, that cl 20.3 might impermissibly restrict or qualify Alcoa’s use of contractors, regulate the manner in which contractors can perform work for the applicant and penalise the applicant for using affected contractors, all being matters going beyond permitted matters.
The operational effect of cl 20.3 that Alcoa contends for is set out in some detail in the affidavits of Andrew Robert Harrison and relied on by Alcoa in connection with this application.
In stating that these propositions are arguable, the Court is not to be taken, however, as finding, even on a preliminary basis, that this is the effect of cl 20.3. There is indeed authority which would suggest that it is arguable that a provision such as cl 20.3 is properly relevant only to permitted matters. In this regard, for example, counsel for the AWU refers to Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and others Re Schefenacker Vision Systems Australia Pty Ltd, AWU, AMWU Certified Agreement 2004 and others (18 March 2005) [PR956575] and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Bitzer Australia Pty Ltd t/as Buffalo Trident [2009] FWA 962.
The point is, I do not consider, on the materials currently before me, that the Court can definitively rule that the grounds of the appeal in Fair Work Australia have no merit. In other words, there is an arguable issue in the proceeding in this Court raised by Alcoa.
The second issue that must then be considered is the balance of convenience in a case such as this. The appeal in Fair Work Australia is to be heard on 8 April 2010. Between now and then the AWU has given notice of eight industrial actions.
Alcoa, by reference to the affidavit and supplementary affidavit of Simon Matthew Pascoe, relied upon by Alcoa, state that Alcoa will be detrimentally affected if the industrial action goes ahead and there will be:
·An increased risk of environmental health and safety incidents.
·Reduction in production with consequential loss of revenue and profit.
·Increased safety risks from delays and overtaxed resources caused by the deployment of staff.
·Risks associated with inadequate or no handovers.
In broad terms, the AWU submit that the reduction in production should not be considered particularly relevant as that is a necessary by‑product of any lawful industrial action. As to the matters of environmental, health and safety incident risks, the AWU point to the fact that Alcoa operates other refineries and these same concerns are apparently not in issue in relation to those sites where industrial action has recently been taken.
The affidavit of Mr Pascoe, the production manager at the Pinjarra refinery for Alcoa, states that Alcoa currently directly employs approximately 1146 employees at the refinery. There are approximately 280 wages employees who focus on the process operations, working a combination of a 10.3 hour day shifts and continuous 12 hour shifts.
The refinery is manned by production, maintenance and support focussed workers. There are a total of seven control rooms situated across the refinery and 11 control room attendants are on shift at any one time.
Detailed accounts of the processes and work done by these employees is set out in Mr Pascoe’s affidavit.
Mr Pascoe says that the industrial action proposed in the notices given by AWU poses a number of potentially serious consequences for Alcoa’s production, the safety of persons on site and to the environment if Alcoa does not have adequate notice to plan for and manage these risks. The precise nature and extent of the impacts on Alcoa will depend on the timing and frequency of the stoppages, which is currently not known.
In relation to staff coverage, Mr Pascoe, acknowledges that the management of risks might be possible because staff employee coverage (for example, as control room attendants) in the event of a stoppage is likely to be competent and to have some experience in that role. However, that experience would not be based on recent day-to-day exposure to the practical requirements of the role. As a result, it is likely that, when in the control room, it will take the staff control room attendant a little longer to become familiar with what is going on and he or she may not able to respond as quickly as an experienced and more familiar AWU control room attendant. Due to his or her limited experience in that particular role, the staff employee may miss things that a more experienced employee would pick up. While any actual risk to safety or the environment would immediately be managed by taking appropriate steps to mitigate the risk (including, if required, cessation of operations), there would be an increased risk of an environmental or safety issue occurring.
Mr Pascoe says that if maintenance is delayed, this will lead to an increased risk of equipment or plant malfunction. If resources are stretched, it may limit the ability of Alcoa to adequately respond to equipment or plant malfunction. In addition to safety and environmental concerns, it may also affect productivity.
As to environmental or health and safety incidents, Mr Pascoe says that various problems can arise during the chemical process at the refinery which, if not picked up for whatever reason (such as inadequate or no handovers, or replacement staff working in a role that is not his or her usual role), can cause major environmental and safety issues, including:
·Power failures.
·Unit trips.
·Relief systems being activated.
·Tank overflows.
Mr Pascoe says that any discharges could lead to a breach of Alcoa's regulatory obligations. For example, unplanned stoppages can lead to spills of process liquids outside bunds or bund overflows can occur through tank overfilling. Some process liquids are caustic and reach high temperatures. Spillages could lead to significant environmental harm and may result in Alcoa failing to comply with relevant regulatory requirements.
Mr Pascoe says that spills or process liquids can also present an increased risk to the safety and wellbeing of all employees and contractors working at the refinery.
The effect on productivity is also dealt with in detail by Mr Pascoe, assuming certain shutdowns following industrial action occur.
The AWU rely on the affidavit of Michael Johannes Zoetbrood, filed following the making of oral submissions on 23 March 2010, with the leave of the Court. Mr Zoetbrood is an industrial organiser with the AWU, responsible for members at all of Alcoa’s Western Australia operations.
He draws attention to the fact that there are other negotiations for enterprise agreements that apply to other operations of Alcoa (collectively called the “WA Operations”, apart from Pinjarra). He says that protected industrial action covering the WA Operations was approved by Fair Work Australia on 6 January 2010. The applicant did not object to the application.
He says that employees at the WA Operations have engaged in industrial action pursuant to the orders made on 6 January 2010 in the recent past in February and March 2010, and it is anticipated they will engage in further protected industrial action in the near future.
He says the WA Operations draft agreement the subject of the order made by the Commissioner on 6 January 2010 has substantially similar terms at cl 19 to cl 20 to the proposed agreement in respect of the Pinjarra refinery. Those provisions have not been challenged by the applicant to date in the way cl 20 of the proposed agreement here has been. On the contrary, Alcoa expressly stated before the Commissioner on 6 January 2010 that it did not object to the ballot order application in relation to WA Operations. On that day there was express and lengthy discussion between the parties about the terms of cl 19 and, in particular, on provisions of the nature objected to as non-permitted in relation to cl 20 of the proposed agreement for Pinjarra.
Mr Zoetbrood says that he is aware that the other sites collectively referred to as WA Operations are all involved in the same production of alumina, the same production processes and with the same or substantially similar arrangements for staffing, shifts, wages conditions, safety, environmental issues and the engagement of contractors.
He also says that the AWU has had short notice of the proceeding, the notice of motion and the affidavits in support of this case. He says that the AWU was therefore not able to contradict the evidence put on at hearing, but does so now by reference to the industrial action taking place, pursuant to the orders of Fair Work Australia in relation to the draft WA Operations agreement with terms essentially the same as the applicant objects to in this application.
By supplementary affidavit of Mr Harrison, sworn 24 March 2010 and filed with leave of the Court, Mr Harrison responds to this evidence.
As to risk management at all three Alcoa refineries, Mr Harrison says they use elements of the Australian Standard Risk Management Model in AS ISO 31000.2009. Where a risk level for an event is higher than the acceptable level of risk the risk is mitigated through risk reduction measures which involves taking action to reduce the likelihood of the event occurring or the consequences if the event happens, or sometimes both until the risk is reduced to an acceptable level. He states that the risk profile for the WA Operations is very different to the risk profile of the Pinjarra refinery and that overall they are different businesses.
In relation to financial, safety and environmental impacts of industrial action, Mr Harrison says that, in effect, industrial action for the combined sites can be targeted at different areas of Alcoa’s business, such as mining, ports and the Marinup Nursery, so that the industrial action results in an operation impact on Alcoa’s business, without safety or environmental consequences. He says this is what has occurred at the combined sites during the industrial action recently taken in February and March. He says this is not possible for the Pinjarra refinery, because all industrial action will occur at the Pinjarra refinery itself, where the financial, safety and environmental consequences will be intertwined.
He says there has been no high impact industrial action taken at the Kwinana and Wagerup refineries.
Mr Harrison says that the Pinjarra refinery is practically a very different operation to the Combined Sites. It is the second largest alumina refinery in the world. It produces 11,800 tonnes of finished product per day, which equates to 48% of the total of the finished product produced by Alcoa in Western Australia per day. By contrast, the Wagerup refinery produces approximately 7,600 tonnes per day and the Kwinana refinery 5,400 tonnes per day. He says that the Pinjarra is the lowest production cost per tonne, it therefore has the highest profit margin out of the three refineries.
In relation to the flow volume of caustic soda, Mr Harrison says the basic nature and components of this circuit are very similar in all three refineries. However, being a very large refinery, the Pinjarra refinery circulates a much larger quantity of caustic soda. This increases the level of risk of an escape of caustic soda during any incident (by which he means something which does not normally occur in the process). Without appropriate management, the likelihood of an incident at the Pinjarra refinery would be increased. This is due to the reduced margin for error with increased plant complexity. The consequence would be greater, due to the size of any escape with the higher flow volume. He says applying the risk management process of the business, the level of risk is much higher at the Pinjarra refinery due to the increased likelihood and consequences and so different and more extreme actions will be justified in order to manage that higher risk. One example of such an action he provides is that the increased number of control attendants at the Pinjarra refinery. Another is the more intensive legal challenge to industrial action currently underway.
Mr Harrison says the risks presented by caustic soda in the refineries that need to be managed are three fold:
·Safety of personnel: the caustic soda in the refinery process is both hot and corrosive. On contact with skin and other tissue, it will burn thermally and chemically and is hazardous.
·Safety of environment: a refinery contains large quantities and large flows of caustic soda. An escape could potentially be very large and very rapid and the resultant quantity could be extremely damaging to the surrounding environment.
·Financial: as the productive flow of the refinery, any stoppage or slowing of caustic flow is immediately equivalent to a reduction in production and profitability.
In my view, the circumstances set out in Mr Pascoe’s and Mr Harrison’s affidavits as to the possibility or likelihood of operational, health, safety and environmental risks in particular arising through industrial action, are admittedly speculative. Mr Pascoe says he does not know what interruptions might actually occur by reason of the industrial action notified by the AWU.
I consider it is not appropriate for the Court to speculate that there is any real risk of the nature identified by Mr Pascoe. Mr Pascoe qualifies his expressions of opinion by acknowledging that a range of competent staff would be able to deal with most circumstances. It is the uncertain situations that lead to his speculation.
When one takes those factors into account, and also regards the evidence given by Mr Zoetbrood – notwithstanding Mr Harrisons’s response to it at this point – that similar protected action has or is taking place at other WA Operations of Alcoa pursuant to the order made by the Commissioner in Fair Work Australia on 6 January 2010, without Alcoa having apparently expressed concerns similar to those now being expressed in respect of the Pinjarra refinery, I am not satisfied that what might be projected as possible calamitous outcomes, if the industrial action at Pinjarra is to proceed, are well founded.
At this point, it seems to me that while it might be said that there is a serious issue to be tried, and while it might be said that inconvenience might flow to Alcoa in terms of productive capacity if industrial action ensues, the risks to the workforce at the Pinjarra refinery in terms of safety, health and environmental concerns have not been substantiated to any sufficient degree to support the grant of an interlocutory injunction. They are built on speculation as to the nature and timing of the stoppages.
None of the information put on by Alcoa directly suggests that the general public is likely to be put at risk by the intended industrial action of the AWU. While Mr Pascoe and Mr Harrison speak about environmental consequences more generally, as well as possible spillages escaping into the environment and breaching the statutory requirements under which Alcoa operates, there is no evidence to suggest that there is any likely real risk to the public.
Additionally, the situation under the FW Act is that once an order such as that granted by the Commissioner on 18 February 2010 has been given, the AWU is entitled to take the protected industrial action. On the face of it, the steps being taken are available under the FW Act. The applicant has commenced an appeal which is to be heard on 8 April 2010 in respect of that order.
In my view, it is reasonable and proper to expect the appeal processes provided for under the FW Act should in the current circumstances proceed. The FW Act by s 606(3) has the effect that the order appealed from cannot be stayed. This evidences some intention by the Commonwealth Parliament that such orders should be respected pending the determination of any appeal against them. The application for interlocutory relief to this Court in this proceeding is obviously designed to frustrate that process laid out in the FW Act.
Without suggesting that it is not open to this Court in an appropriate case to grant interlocutory relief in the nature of that sought in this case by Alcoa, I am not satisfied that in all the circumstances of this case, that relief should be granted.
In summary, while I accept that there is an issue to be tried in this case and that it may be considered serious, I do not consider that the balance of convenience necessarily favours the applicant over the AWU. General assertions of risk in operations have been raised, but I consider them to be speculative, especially in light of the conduct of Alcoa in apparently not raising similar objections in relation to WA Operations generally following the making of the order by a Commissioner in Fair Work Australia on 6 January 2010. Further, when one takes into account the intended operation of the FW Act, that there should be no stay on an order pending an appeal, the Court in my view should be slow to interfere with the process provided for by the FW Act.
In all those circumstances, I am not satisfied that it is just and fair that the Court should exercise its jurisdiction to grant interlocutory relief of the type applied for by Alcoa in this case.
For these reasons, I would dismiss the application.
ORDERS
1.The applicant’s amended notice of motion, filed 23 March 2010, be dismissed.
I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate:
Dated: 29 March 2010
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