Director of Public Prosecutions v Hazelwood Power Corporation Pty Ltd (Sentence)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

CRIMINAL DIVISION

S CR 2017 0214

DIRECTOR OF PUBLIC PROSECUTIONS	Crown
v
HAZELWOOD POWER CORPORATION PTY LTD	Offender

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JUDGE:	Keogh J
WHERE HELD:	Latrobe Valley (Morwell)
DATE OF HEARING:	19 and 20 December 2019
DATE OF SENTENCE:	19 May 2020 (Melbourne)
CASE MAY BE CITED AS:	Director of Public Prosecutions v Hazelwood Power Corporation Pty Ltd (Sentence)
MEDIUM NEUTRAL CITATION:	[2020] VSC 278

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CRIMINAL LAW – Sentence – Occupational health and safety offences – Risk to the health and safety of employees and non-employees – Risk arising from mine fire – Whether risk materialised in 2014 Hazelwood mine fire – Occupational Health and Safety Act 2004 (Vic) ss 21 and 23 – DPP v Amcor Packaging Australia Pty Ltd (2005) 11 VR 557; Dotmar EPP Pty Ltd v The Queen [2015] VSCA 241; DPP v Frewstal Pty Ltd (2015) 47 VR 660; DPP v Vibro-Pile (Aust) Pty Ltd (2016) 49 VR 676.

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APPEARANCES:	Counsel	Solicitors
For the Crown	S Flynn QC with D Porceddu and A Roodenburg	John Cain, Solicitor for Public Prosecutions
For the Offenders	I Hill QC and R O’Neill	King & Wood Mallesons

HIS HONOUR:

Overview

The Hazelwood open-cut brown coal mine is situated in the Latrobe Valley, West Gippsland, close to the town of Morwell. Fires ignited in the mine on 9 February 2014 and burned for 45 days.

Hazelwood Power Corporation Pty Ltd (‘HPC’) held mining licence 5004, and operated the mine, together with four related corporations which comprised the Hazelwood Power Partnership (‘HPP’). HPC employed most of the staff who worked at the mine.

Following the fires, and investigation by the Victorian WorkCover Authority, HPC was charged with 14 offences under ss 21 and 23 of the Occupational Health and Safety Act 2004 (Vic) (‘OHS Act’) alleging that it failed, so far as was reasonably practicable, to eliminate or reduce the risk to employees and other persons of inhaling smoke, fine particles and carbon monoxide emitted by fire in an area of the mine known as the northern batters which could be ignited by external bushfire. The trial commenced on 23 September 2019, and on 20 November a jury found HPC guilty of 10 offences. HPC is now to be sentenced for those offences.

The method of mining at Hazelwood left exposed large tracts of coal. Brown coal which has been exposed to the atmosphere and is dried and weathered is extremely combustible and burns rapidly once ignited.

The risk of coal fire in the mine was ever present. There were many small fires each year, most of which were caused by mining related activity. During summer months, particularly in conditions of high temperatures, strong winds and low humidity, bushfires became a potential source of ignition of fires within the mine, and there was an increased risk of a fire becoming a major event.

From mid-January 2014 Victoria experienced an extended period of hot, dry weather. Total fire bans were in place for West Gippsland on 8 and 9 February 2014. Sunday 9 February was forecast to be a day of extreme fire danger, with high temperatures, low humidity, strong north-westerly winds, and a gusting south-westerly change in the early afternoon.

On the afternoon of 7 February 2014 a fire ignited at Hernes Oak, approximately 10 km north-west of the mine. On 8 February and the morning of 9 February Country Fire Authority (‘CFA’) firefighters were attending the fire, and it remained contained, though material was still burning within the fire ground.

In the early afternoon of 9 February the Hernes Oak fire broke containment lines and a fire was lit at Driffield a short distance south-west of the mine. Both bushfires burnt up to the mine boundary, and embers entered the open cut pit igniting spot fires at various locations, including the northern batters. Despite the efforts of those present, fires on the northern batters, southern batters and floor of the mine took hold and, in the extreme conditions of the day, rapidly became uncontrollable. During the following weeks smoke from the fires often blanketed the mine and Morwell.

The legislation and the charges

The objects of the OHS Act are set out in s 2(1), and include:

(a)to secure the health, safety and welfare of employees and other persons at work; and
(b)to eliminate, at the source, risks to the health, safety or welfare of employees and other persons at work; and
(c)to ensure that the health and safety of members of the public is not placed at risk by the conduct of undertakings by employers and self-employed persons;
…

having regard to the principles of health and safety protection set out in section 4.

The principles of health and safety protection set out in s 4 include:

(1)The importance of health and safety requires that employees, other persons at work and members of the public be given the highest level of protection against risks to their health and safety that is reasonably practicable in the circumstances.
(2)Persons who control or manage matters that give rise or may give rise to risks to health or safety are responsible for eliminating or reducing those risks so far as is reasonably practicable.
(3)Employers and self-employed persons should be proactive, and take all reasonably practicable measures, to ensure health and safety at workplaces and in the conduct of undertakings.

To achieve the objects of the OHS Act certain duties are imposed on employers. The content of those duties is informed by the principles of health and safety protection. The duty of employers to employees is governed by s 21, sub-s (1) of which reads:

An employer must, so far as is reasonably practicable, provide and maintain for employees of the employer a working environment that is safe and without risks to health.
Penalty:1800 penalty units for a natural person;
9000 penalty units for a body corporate.

An employer’s duty to other persons is governed by s 23, sub-s (1) of which reads:
An employer must ensure, so far as is reasonably practicable, that persons other than employees of the employer are not exposed to risks to their health or safety arising from the conduct of the undertaking of the employer.
Penalty:1800 penalty units for a natural person;
9000 penalty units for a body corporate.

The risk to health or safety on which each offence was based had the following features. First, there was a large amount of exposed coal in the worked-out northern batters of the mine, which was dried, weathered and very combustible. Second, given its geographic setting, the presence in the landscape of the Hernes Oak fire, and the extreme weather conditions forecast for 9 February 2014 there was a foreseeable risk of coal in the northern batters being ignited by bushfire. Third, there was a risk to the health or safety of HPC employees, and other persons such as Morwell residents and firefighters, from inhaling smoke emitted by a coal fire on the northern batters ignited by bushfire.

HPC has been found guilty of five offences under each of ss 21 and 23 of the OHS Act. Each charge under s 21 identified a different step or measure which HPC failed to take to eliminate or reduce the risk. The same step or measure was the basis of a corresponding charge under s 23, with the result that there were five pairs of charges of which HPC was found guilty. The five steps on which the offences are based are:

(a) failing to perform an adequate risk assessment as to the possibility of fire from an external source such as a bushfire igniting coal in the northern batters (Offences 1 and 2);

(b) failing to have an adequate reticulated fire water pipe system to supply water to the northern batters (Offences 3 and 4);

(c) failing to slash vegetation on the face of the northern batters (Offences 7 and 8);

(d) failing to begin wetting down the northern batters with water from about 11:45am on 9 February 2014 (Offences 9 and 10); and

(e) failing to maintain staffing at the mine of sufficient numbers and expertise to suppress and fight fires which might take hold in and around the mine on 8 and 9 February 2014 (Offences 13 and 14).

The principles which apply to sentencing for breaches of the OHS Act have been authoritatively considered. In DPP v Amcor Packaging Australia Pty Ltd,[1] the Court observed:
[1](2005) 11 VR 557.

When determining the appropriate penalty in a case of the breach of a statutory duty imposed for the purpose of protecting the lives and well being of those who may be affected by the breach, the foreseeable potential consequences must be taken into account as it is the avoidance of those consequences which, when considering the objective seriousness of the offence, constitutes the raison d’être for the establishment of the legislated regime in the first place. To a substantial extent the seriousness of a breach must be assessed by reference to those potential consequences and the measure of evidenced disregard concerning the safety of employees in the circumstances.[2]
[2]Ibid 565 [35].

In Dotmar EPP Pty Ltd v The Queen,[3] Priest JA, with whom the other members of the Court agreed, set out matters relevant to the determination of the seriousness of offences against the OHS Act:
[3][2015] VSCA 241.

Hence, in determining the gravity or seriousness of the offence, the sentencing court must assess, first, the extent of the departure from the duty owed; secondly, the extent of the risk to health and safety thereby created; and, thirdly, the likelihood or risk of particular harm resulting. Put another way, in a case such as the present, the gravity or seriousness of a breach is to be measured by reference to the potential consequences of the breach; the extent of the evidenced disregard for the safety of employees; and the risk of the potential consequences of the breach materialising.[4]
[4]Ibid 7 [23] (citations omitted).

In DPP v Frewstal Pty Ltd,[5] Priest and Kaye JJA, considering the relevance of harm which resulted from a breach, said:
[5](2015) 47 VR 660.

•    First, unlike cases of unlawful homicide, the occurrence of death or serious injury is not an element of the offences charged. An accused is punished according to the gravity of the breach of duty owed under the OHSA, not according to the result or consequences of the breach.
•    Secondly, the gravity of the breach is measured by two factors — the seriousness of the breach itself (that is, the extent to which the defendant has departed from its statutory duty); and, the extent of the risk of death or serious injury which might result from the breach.
•    Thirdly, an assessment of the extent of the risk itself involves consideration of two factors — the likelihood of the occurrence of an event as a result of the breach (such as the event that occurred in the particular case) endangering the safety of employees or others; and, the potential gravity of the consequence of such an event (in particular, whether there is a risk of death or serious injury).
•    Fourthly, the fact that the breach in the particular case resulted in death is relevant only in the sense that it might manifest or demonstrate the degree of seriousness of the relevant threat to health or safety resulting from the breach.[6]
[6]Ibid 686 [127] (citations omitted).

Finally, in DPP v Vibro-Pile (Aust) Pty Ltd[7] the Court made the following observations as to the seriousness of breaches of the OHS Act, and the importance of general deterrence:
[7](2016) 49 VR 676.

As counsel for Frankipile correctly pointed out, this was not a case of ‘blatant disregard’ of worker safety or ‘reckless indifference’ to risk. At the same time, we reject Vibro-Pile’s submission that its departure from its statutory duty was ‘minor’. These were very serious breaches. A grave risk to worker safety existed not just for any worker on the rig but also for any worker working on the ground in its vicinity. This was a foreseeable consequence of Vibro-Pile and Frankipile breaching s 21 of the OHSA. If the risk eventuated, the consequences were potentially very grave.
The seriousness with which breaches of s 21 of the OHSA are to be treated is, as the sentencing judge observed, reflected in the maximum penalty of 9000 penalty units, or $1 075 050.93. The sentencing judge also rightly observed that general deterrence is of particular importance in offending of this kind. The sentences imposed need to draw attention to the importance of workplace safety, and to send a message to employers that failure to eliminate or mitigate safety risks will attract significant punishment.[8]
[8]Ibid 731 [232]-[233] (citations omitted).

Consistent with the authorities, HPC is to be punished according to the gravity of the breaches of duties which it owed under the OHS Act. The gravity of a breach depends first, on the seriousness of the breach, or the extent to which HPC departed from its statutory duty, and second, the extent of the risk to the health or safety of employees (s 21) and of persons other than employees (s 23). The extent of the risk to health or safety is measured by the likelihood of the risk materialising as a result of the breach, and the potential gravity of the consequences if it did.

It was not an element of an offence that the fire which took hold on the northern batters on 9 February resulted from the failure by HPC to take the step on which that offence is based, and the jury verdict did not determine that issue. However, it is relevant for me to decide whether the northern batters fire resulted from any of the breaches because it may demonstrate the degree of seriousness of the relevant risk to health or safety.

General deterrence will be of particular importance in sentencing HPC.

The circumstances of the offences

I am satisfied that the offences occurred in the following circumstances. Any fact or matter adverse to HPC has been found beyond reasonable doubt.

The mine

The State Electricity Commission of Victoria (‘SECV’) developed three open-cut brown coal mines in the Latrobe Valley, the Hazelwood, Yallourn and Loy Yang mines. The Hazelwood mine, which was originally called the Morwell Open Cut, opened in 1955 to supply coal to Morwell Briquette and Power, now called EnergyBrix, and was later expanded to supply the Hazelwood Power Station.

Mining commenced in the south-east corner of the mine in the area now known as the southern batters, and progressed westerly, creating the northern batters. In about 1992 the direction of mining swung to the south to eventually form what are now the south-west batters, and later moved into the west field that was operating at the time of the fires in February 2014. The size of the mine increased dramatically over the years. By February 2014 the open-cut pit had a perimeter of approximately 18 km, an average depth of about 120 m, and covered an area of over 1,100 hectares. The broader Hazelwood land holding covered by the mining licence was about 3,500 hectares.

To prepare an area for mining the overburden layer of topsoil and clay was removed to expose the coal seam. Coal was then extracted by dredgers moving across the operating face of the coal seam at different levels to a depth of about 100 m. Features of the operating face included the horizontal benches along which the dredgers moved, and the steep coalfaces, called batters, created as coal was extracted. The effect was to create a series of steps down from the external surface to the floor of the mine, which in the northern batters were called levels 1, 3, 5 and 7.

There had been little rehabilitation of worked-out areas of the mine by February 2014. The coal seam extended beyond the point at which mining stopped, so that the worked-out batters consisted of walls of exposed coal. Benches in the worked-out areas were clay capped. The mining operation left exposed coal on the floor of the mine. Originally overburden removed in preparation for mining was dumped outside the open cut. In the 1990s the practice commenced of spreading overburden across the floor of the mine to cover the exposed coal. An area at the east end of the floor of the mine called the HARA (Hazelwood Ash Retention Area) was developed for retention of ash residue from the power station. In 2007 and 2008 an area at the very east end of the northern batters above the HARA was rehabilitated by laying back the batters to create a more gentle slope which was then capped with clay. Approximately 3 km of the northern batters had not been rehabilitated by February 2014.

There was a network of roads on the external surface around the perimeter of the open cut, and across the pit. Vehicles could be driven along most of the benches. Access to the pit was gained via ramps which descended diagonally down the batters from the external surface to the mine floor. Given the size of the mine, and the industrial environment, travel around and especially across the open cut pit was relatively time consuming.

Privatisation of the mine and Hazelwood Power Station completed in September 1996. The mine has since been operated by HPC, HPP and associated corporations.

Risk of fire in the mine

The risk of fire in open cut brown coal mines in the Latrobe Valley was recognised before mining began at Hazelwood. The Royal Commission report into a fire at the Yallourn mine in 1944 found that fire was an almost unavoidable concomitant of open-cut brown coal mining.

Dr Gaulton, a mine geologist who worked at Hazelwood between 1972 and 1996, explained that brown coal is a relatively unique substance which is like a sponge. Before it is uncovered, coal in the Latrobe Valley has a moisture content in the range 50% to 70%, but when exposed to desiccation in the atmosphere this will fall to 20% after six months, and can fall as low as 16%. Drying out is a natural process in the mine and coal may be dry for up to half a metre below the surface. As the coal dries it shrinks and fragments. The porosity of brown coal means that it is liable to penetration by oxygen and once ignited combustion takes over a huge surface area, making it very hard to extinguish with a modest quantity of water. Professor Cliff, an expert in risk assessment and the prevention and mitigation of fires in coal mines, said that as the coal dries out it crumbles and powders, and the surface area and access to air, and therefore combustibility, increases enormously. The key to preventing fires is to keep the coal separate from the air by capping it with clay or rehydrating it. If the pores in the coal are full of water then air cannot get it. As coal dries out there is not just the external surface, but also all the little holes where air can get it and dramatically increase the reactivity of the coal.

Coal fires occurred frequently at the mine. Most were small and quickly extinguished. Before privatisation in 1996 there were on average over 250 or more coal fires at the mine each year. By 2014 the frequency of fires at the mine had reduced to an average of about 100 per year, most of which were in the operating area of the mine and were caused by mechanical failures, electrical faults or vehicle exhausts.

Response to the risk of mine fire

After a major fire occurred at the mine in 1977, the SECV reviewed fire protection systems at the three Latrobe Valley mines, and developed the Latrobe Valley Open Cuts Fire Protection Policy (‘the Policy’), which states in part:

Due to the methods employed for the extraction and use of Brown Coal in the SECV Latrobe Valley operations, large areas of brown coal are generally exposed in the operating faces, permanent batters and floor of the open cuts. Whilst the coal in its raw state is a high moisture fuel and difficult to burn, it weathers and readily degrades to a fine dust which ignites easily.

Potential sources of ignition are frequently present in the Latrobe Valley open cuts in the form of electrical faults, faulty mechanical equipment, vehicle exhausts, train operations, metal cutting and welding activities, etc.
…
Brown coal fires are best suppressed by the application of water. Wetting of the coal lays the coal dust, and helps to extinguish the fire and prevent it spreading. Large quantities of water are required to extinguish deep seated burning, and often when burning coal is wetted, sufficient heat remains to dry out the surface again and to allow the fire to re-establish. In general, there are special techniques required to deal successfully with brown coal fires.
…
The necessarily large area of exposed coal requires an extensive reticulation and spray network and water supply system. The water supply and fire protection measures laid down in the body of this document are those considered to provide the necessary level of protection with due regard to cost and operational requirements. Fire protection in the open cuts is based on the following principles.
…
·The provision of water supplies, reticulated water and spray systems together with the trained personnel necessary for the operation of these systems to prevent or suppress fires.

…
·The effective limitation and management of forested, wooded or grassed areas external to the open cut to inhibit the progress and effect of an external fire.

…

…
In order to properly protect all parts of the open cut, pipework and sprays are to be installed as laid down by this policy. However, it must be understood that a larger water supply system would be required to run all the sprays and protection systems simultaneously. This policy provides for a diversity in the simultaneous application of the fire protection water supplies and distribution.
The maximum demand as defined in this policy is an allowance of water usage upon which the design of the water supply system is based. The maximum demand rate of water use is considered to be sufficient to meet any likely contingency within the open cut. The distribution of this allowance of water usage is reasonably flexible for any situation but the use of more water than allowed for in one area may cause a reduction in the performance of the system.

Paragraph 1.1.4 of the Policy required as a minimum the following level of protection of worked-out batters:
•All benches are to be clay covered.
…
•Fire break zones extending down to full depth of batter should be established such that the length of exposed coal in any one batter is not greater than 500 m. These zones can be in the form of metalled vehicle access ramps, a minimum of 8 m wide or in the form of a 20 m width clay covering.
•Alternatively, fixed spray breaks may be used, but it should be noted that water for these sprays has not been included under the maximum demand conditions, and this protection should not be considered as reliable as clay fire breaks or vehicle access ramps.

The northern batters were particularly steep, and it was not possible to establish firebreak zones in accordance with the Policy. Accordingly, protection in the northern batters was required to be by fixed spray breaks.

The Policy was revised in 1994, and became the Latrobe Valley Open Cut Mines Fire Services Policy and Code of Practice (‘the Code’). After privatisation of the mine in September 1996, revised versions of the Code, which related solely to Hazelwood, remained the principal policy document governing the response to fire risk at the mine.

Extensive documented fire preparedness and mitigation policies and procedures were in place at the mine, including:

(a) the Code;

(b) Emergency Response Plan – Hazelwood Mine;

(c) Hazelwood Mine Fire Instructions;

(d) Guidelines for Season and Period-Specific Fire Preparedness and Mitigation and Planning (‘the Guidelines’);

(e) Checklist for Firefighting Equipment Annual Inspection (‘the Checklist Audit’);

(f) Electricity Safety – Bushfire Mitigation Plan.

The Code and all other fire preparedness documents were regularly reviewed and revised, and were available to all mine staff.

Every employee and contractor at the mine was required to undertake firefighting training each year. In addition the mine regularly ran firefighting exercises which included CFA members.

Infrastructure and mobile plant at the mine directed to fire risk included:

(a) a reticulated water system consisting of a pipe network of more than 100 km in length, which I will describe in more detail later in these sentencing reasons;

(b) two ex-CFA tankers, each with a capacity of approximately 3,000 litres;

(c) two 30,000-litre water carts;

(d) Furphy water carts capable of being towed by mine vehicles;

(e) booster pump trailers, used in conjunction with crane monitors;

(f) mobile monitors; and

(g) all mine vehicles were equipped with fire hoses, nozzles and extinguishers.

Security and emergency services contractor Diamond Protection manned the Hazelwood gatehouse on a 24/7 basis. Diamond Protection had access to radios and cameras, including infrared cameras designed to detect heat sources, and were responsible for manning one of the two ex-CFA tankers in the event of an emergency on site.

Safety systems directed to the risk of fire were a key feature of the day-to-day activities of the mine’s workforce, and included:

(a) regular equipment checks;

(b) a hot work permit system;

(c) a process known as Take Five, which involved a situational mini risk assessment;

(d) live risk assessments; and

(e) pre-start crew meetings.

The water reticulation system

A water reticulation system was installed after operations began at the mine. As mining progressed the reticulation system was moved and extended so that it covered areas of exposed coal. Newer pipework, which began to be introduced in the early 1980s, was treated internally and externally with corrosion protection and was mounted on concrete blocks. However, older pipework toward the east end of the northern batters was unprotected, and became increasingly rust affected due to the acidity of coal. As pipework deteriorated, leaks developed which caused instability in some areas of the northern batters. Some pipes became so degraded they were unable to carry water. Welding pipes to repair leaks increased the risk of coal fire.

In 1992 Mr Polmear, who was at the time the engineer responsible for the mine’s fire services, commissioned a fire risk analysis of the worked-out areas of the mine from engineering consultancy firm Richard Oliver International (‘the Oliver Report’). Mr Polmear was concerned that continued deterioration and the need to isolate pipework at the east end of the northern batters meant that it was difficult to comply with the requirements of paragraph 1.1.4 of the Policy. The Oliver Report found that there were on average 255 fires in the mine each year, 11 of which occurred in the worked-out areas. Most fires in the worked-out areas were caused by motor vehicles or welding associated with repair work to leaking reticulation pipes. The Oliver Report:

(a) said exemption from the requirements of paragraph 1.1.4 of the Policy would increase the risk of fire in the worked-out areas of the mine, was not justifiable, and should not be adopted until there was evidence of a reduction in fire risk having been achieved;

(b) recommended the mine undertake a detailed engineering survey of the fire water system, including in the north-east corner of the mine; and

(c) said the mine was correct in thinking that the appropriate strategy was to restrict vehicle access to worked-out areas, remove assets, increase the number of tanker filling points and make necessary modifications to the Policy.

Despite the findings of the Oliver Report the iteration of the Code introduced in 1994 removed the requirement in paragraph 1.1.4 for protection of the worked-out batters by fixed spray breaks, and replaced it with the following:

•Tanker filling points are to be provided such that a tanker on any part of the worked out batters is within 5 minutes travel of a tanker filling point. …

The requirements in paragraph 1.1.4 were unchanged in each subsequent revision of the Code up to February 2014.

During the 1990s some degraded pipes were removed from the eastern end of the northern batters, and were not replaced. The northern batters are divided by the 1-to-7 ramp, which allows vehicle access from the external surface to the floor of the open-cut pit, and to each level of the batters. By 9 February 2014, there was little reticulation pipework east of the 1-to-7 ramp on level 5, pipes extending partway along levels 1 and 7 and most of the way along level 3. There were tanker filling points on level 1 close to the 1-to-7 ramp, on level 3 at the eastern end of the pipework and external to the open cut above that section of the northern batters.

The reticulation system was gravity fed from C and D tanks, which were located outside the open-cut pit. Water in the open-cut pit drained into the dirty water ponds on the floor of the mine. The dirty water pump station pumped water from the ponds to D tank. Water from aquifers beneath the floor of the mine was pumped by the clean water pump station to C tank. Both tanks could also be filled from the external cooling ponds using pump houses 50 and 53. If necessary a limited amount of water could be supplied by pipeline from the Loy Yang mine.

As at 9 February 2014 there was an extensive network of water reticulation pipes covering the benches, batters and floor of the mine in the operating west field, the worked-out batters and infrastructure such as conveyers. Reticulation pipes in the network had sprays and hydrants alternately affixed at regular intervals. Sprays were operated either by being left on and the section of pipe to which they were attached being charged with water, or by manually turning on each individual spray. Hoses could be attached to hydrants to supply water tankers as they were being operated, to operate monitors or to spray water as was necessary. Water tankers could also be filled from tanker filling points.

Water management was essential to the operation and stability of the mine. It was necessary to pump water from aquifers beneath the mine to prevent the floor of the mine heaving, which might cause damage to infrastructure and collapse of the batters. Water in the dirty water ponds helped to keep the floor of the mine stable. However, too much water risked breaching the groynes which formed embankments around the dirty water ponds, causing flooding of the mine floor and damage to critical infrastructure such as artesian pump bores and the dirty and clean water pump stations. Applying too much water to the steep coal batters risked batter instability and vertical movement. For these reasons it was necessary to carefully manage water coming into and taken out of the mine to maintain stability and allow for the proper operation of the mine.

The reticulation system did not have the capacity for all sprays on pipework across the mine to be operated at the same time because the enormous quantity of water that would have been required, and the inability to deal with that much water going into the mine at the same time.

Bushfire and arson

Bushfire was recognised as a known potential source of fire ignition within the mine.

The 1944 Yallourn mine fire was caused by airborne embers from a bushfire in nearby native forest entering the mine and igniting coal.

In 1986 a grassfire which started in the Haunted Hills area, near the Princes Highway, threatened the Hazelwood and Yallourn mines. Fire crews at Hazelwood mine were on maximum alert, but a wind change turned the fire toward Yallourn, which came under ember attack, resulting in numerous points of combustion in the mine causing fires that burnt for one to two days.

On Black Saturday in 2009 a fire ignited at Churchill about 5 km south-east of the mine. The Churchill fire approached close to, but did not enter, the Loy Yang mine.

During the 1990s Mr Brown was manager of the support services group in charge of fire services at the mine, reporting to Mr Polmear. He gave evidence at trial about a bushfire at Driffield in the early 1990s which he said threatened the mine, including by ember attack into the open cut. For three reasons I do not accept this evidence. First, despite having previously made statements and submissions, and given evidence about the mine fire in which it would have been expected he would have made mention of the earlier Driffield fire, Mr Brown first mentioned this matter in 2019. Second, Mr Polmear said had a fire from Driffield threatened the mine during those years he would have known of it, yet he had no recall of the matter. Mr Polmear was a reliable witness. Third, there is no other corroborative evidence.

Mr Incoll, a fire risk management consultant who gave evidence at the trial, said the mine sits at the foot of the Haunted Hills area, where there was a mixture of native forest, farmland and plantations, and was situated so as to be directly exposed to any bushfires in the area. It was a significant planning issue that plantations were developed to the west of the mine, because fire that sweeps through can ignite the long strands of bark hanging from eucalypts, which can be carried by wind to throw embers forward of the fire. Mr Incoll said ember throw is the main fire spread mechanism in eucalypt fires, and the proximity of native forest and plantations resulted in a foreseeable risk of embers being cast into the mine. Mr Polmear acknowledged the plantations in close proximity to the mine were of concern for this reason.

The risk of bushfire was recognised in the mine’s policy and procedure documents. The Code reads in part:

Hazelwood mine has suffered a number of fires over the years. Many of these have emanated from external ‘Bush Fires’. Following a major fire in 1944 the Stretton Royal Commission made a number of significant recommendations relating to external forests and to internal water supply and sprays which are still a major part of the Hazelwood Mine Fire Prevention Policy.

This paragraph of the Code was carried forward from the pre-privatisation revisions of the Code which applied to all the three Latrobe Valley coal mines. While it does not accurately reflect the history of fires at Hazelwood mine up to 2014, it does draw attention to the risk from bushfire and the relevance of external forests. The Hazelwood Mine Fire Instructions recorded that flammable material which exists all around the mine may be ignited in many ways, including by airborne burning embers from bushfires.

The mine was aware of the risk of bushfires being lit by arsonists. Fire Preparedness and Mitigation Plans, which were completed and circulated on days of high fire danger, had an optional entry for firebugs. Plans prepared for Saturday 8 and Sunday 9 February 2014 listed firebugs as a possibility. Mr Harkins, a director at the mine, said the Latrobe Valley had a problem with firebugs, and mine staff were directed to keep their eyes open for suspicious activity. He said occasionally the mine was notified by Victoria Police of potential firebugs in the area, and CCTV cameras would be used to monitor activities. A number of witnesses gave evidence of the prevalence of arsonists in the Latrobe Valley.

Response to the risk of bushfire

The mine’s policies and procedures responded to the increased fire danger during the summer period and the associated bushfire risk. The Guidelines read in part:

Both dust suppression and fire alertness and preparedness activities are in direct response to varying climate conditions. Minimising Mine dust and forecasting weather conditions by measuring temperature, wind speed, relative humidity and by knowing forecast changes, will enable the management and preparedness for the threat from fires and for dust suppression.
Wise use of personnel and plant resources can minimise the impact on normal work activities. The advancement of external bushfires also needs to be monitored as falling embers can be the initiation of fire spotting many kilometres ahead of the fire front.

The Guidelines emphasise, amongst other things, the need to monitor weather conditions, to respond on high fire danger days by spraying to dampen exposed coal, and to appoint dedicated fire spotters for coal benches to reduce the response time to spot fires. In addition to the Guidelines the Bushfire Mitigation Plan and the Checklist Audit both responded to increased fire danger at the mine during summer months. Other relevant activities included annual fire refresher training to all mine staff and contractors, grass slashing and vegetation control in the broader Hazelwood landholding, weekly fire preparedness reports prepared for senior management summarising the status of relevant preparedness measures, and preparedness plans issued for high risk fire danger days, including 9 February 2014.
Major fires at the mine

Major fires, each of which burned for a number of days, occurred on the southern batters in December 2005 and September 2008, and in the operating west field in October 2006. The conditions prevailing at the time of the fires in 2005 and 2006 were high temperatures, low humidity and strong winds. A strong north westerly wind was blowing at the time of the 2008 fire.

The mine commissioned reports to investigate the response to each major fire and to recommend improvements. The report into the 2005 fire, which was caused by a geological hot spot, reads in part:

Water supply was reliable and ample within the designated fire area, although further consideration should be given to ease of access, location and reliability of water supply in other worked out sections of the mine, specifically the northeastern batters of the mine.

On 12 October 2006, anticipating a hot windy day, staff operated sprays throughout the mine from early in the morning to suppress coal dust and reduce fire danger. After a fire alert was declared at 9:50am all spray systems were operated in the west field. Mobile conveyor attendants were on all levels of the mine undertaking fire spotting duties. The fire, which was caused by a faulty conveyer bearing idler, or possibly a vehicle exhaust, ignited in the north-west corner of the operating west field. Staff and contractors attended the spot fire but it took hold, and within 20 minutes had spread a considerable distance along a coal bench and destroyed a conveyor. CFA personnel arrived to assist with firefighting less than 90 minutes after the spot fire ignited. Within the next few hours the fire jumped down to the other levels of the operating west field. Approximately five hours after the spot fire was first noticed loss of power supply to two pump houses caused a drop in water pressure and severe reduction of water supply, hampering firefighting efforts. However, by that stage the fire was already out of control.

The 2008 major fire report noted it was essential that the mine be able to mount a decisive initial response to prevent small fires escalating into large fires, and that this was particularly important out of normal work hours when manning levels at the mine were very low. The report found a significant factor in escalation into an uncontrolled fire within a short time was the inability to mount an effective initial response given difficultly with access and insufficient firefighting facilities available. Two recommendations of the report were:[9]
[9]International Power Hazelwood September 2008 Mine Fire Incident Investigation Repot Dec 2008, page 15.

Recommendation 5
• The annual audit of the fire system must include the fire system and access in non-operational areas
A critical element of the initial response and the ongoing emergency response was the lack of fire water supply to the non-operational areas and the restrictions in access due to the condition of the roads, the accumulation of debris and that some batters did not have road access. The annual audit should include fire water supply to non-operational areas, access and housekeeping.

Recommendation 6
• A risk assessment should be undertaken on the non-operational areas to determine if further prevention work is required. The risk assessment should include a Cost/ Benefit Analysis.
A range of options have been identified in terms of prevention of hot spots from reigniting and detection of hotspots.

Mr Prezioso, who at the time was a fire service officer at the mine, said the access difficulties in the southern batters in the area of the 2008 fire related to decommissioned and disused conveyors and roads that were in a poor state of repair, and because the response to recommendation 6 was to eliminate the risk by removing the disused infrastructure, reinstating roads and repairing small sections of pipe, the risk assessment had not been conducted. However, a review of major incident recommendations conducted by the mine in June 2012 recorded that recommendation 6 had not been addressed. Further, recommendations 5 and 6 were not limited to the southern batters, but applied to all non-operational areas of the mine. The 2005 report and recommendations 5 and 6 in the 2008 report clearly directed attention to the need to consider fire water supply to the worked-out areas of the mine, which included the northern batters.
Risk assessment and risk management at the mine

In 2004 QEST Consulting were commissioned to assist complete a safety assessment of the major mining hazards associated with operations of the mine. A major mining hazard is defined in the Occupational Health and Safety (Mines) Regulations 2002 (Vic) as:

a mining hazard that has the potential to cause an incident that causes, or poses a significant risk of causing, more than one death.

The safety assessment documentation prepared by QEST reads in part:
The process followed was developed by [QEST] Consulting in collaboration with [mine] personnel and mirrors that used in several successful Victorian WorkCover Authority submissions for the licensing of Major Hazard Facilities. The process provides a detailed risk assessment of the MMHs and a method of identifying their Critical Controls. It also provides a framework through which such controls can be tested to confirm that they are ‘fit for purpose’.

QEST described the process as comprehensive and systematic, and as involving identification of major mining hazards, use of a semi-quantitative risk assessment process to assess risk, and review of the adequacy of critical and major controls. The major mining hazards which were identified and assessed in this process did not include major coal fire.

In 2009 the mine commissioned consultants, GHD, to facilitate further safety assessments of major mining hazards. GHD used a team-based assessment approach involving mine staff in four workshops in December 2009 to identify risks associated with selected hazards, consider existing control measures and identify potential additional controls. Two inspectors appointed under the OHS Act (‘WorkSafe inspectors’) attended some of the workshops. One method used, often visualised as a bowtie diagram, involved identification of causes of a particular risk, control measures to prevent materialisation of a risk, adverse outcomes of the risk materialising, and control measures to prevent those adverse outcomes. Mine fire was one of the three major mining hazard considered in a one day workshop on 8 December 2009.

In 2012 WorkSafe inspectors conducted a detailed review of the response of the mine to fire as a major mining hazard, which involved discussions with mine management and staff, consideration of mine fire safety system documentation and some physical inspections at the mine. The inspectors found the risk assessment documentation and processes in relation to mine fire were incomplete, and issued an improvement notice which required that the mine conduct a comprehensive and systemic Safety Assessment[10] in order to assess the risks associated with the Major Mining Hazard – ‘Mine fires’. A three-year review of mine fire as a major mining hazard was undertaken by mine staff for a number of hours over two days in October 2012, and the WorkSafe inspectors considered there had been compliance with the improvement notice.
[10]Occupational Health and Safety Regulations 2007 (Vic) r 5.3.23.

In addition to policy and procedure documents directed to fire risk already set out, the mine had in place the following documented procedures related to the process of risk assessment:

(a) a safety management system manual to provide an integrated management tool for implementing a commitment to continually improving health and safety performance;

(b) a hazard and risk register to identify hazards and risks, classify them into consequences and identify mitigation and control measures that could be put in place and provide a residual risk ranking;

(c) safety management system risk ranking setting out the methodology for assessing the ranking of risk and residual risk; and

(d) safety management system evaluation of risk control measures to document and describe how the mine reviewed its occupational health and safety risk control measures.

Professor Cliff described risk assessment as a process whereby a potential harm due to a cause or series of causes is identified, the likelihood and consequence of that harm is assessed in order to rank the risk, and controls are introduced to reduce the risk to an acceptable level. He criticised the approach taken at the mine to fire risk assessment for reasons including:

(a) The 2004 QEST risk assessment materials were overarching documents which describe the risk assessment process rather than giving content.

(b) The confidence in semi-qualitative risk assessment is very low because it is difficult to put numbers to rare events, and to controls which may be effective, and there had been no uncertainty analysis undertaken.

(c) Insufficient time was taken for the risk assessments. The 2009 GHD process involved a two-day workshop to perform a risk assessment in relation to 14 hazards. Mine fire is extremely complex. It is improbable it could be adequately covered in the time allocated, particularly with so many different causes and different types of mine fire.

(d) External experts were necessary to adequate risk assessment, to bring knowledge of risks, adverse outcomes and controls, and to challenge complacency. QEST and GHD did not fill this role, but were simply facilitators.

(e) There was insufficient attention given to reports into the 2005, 2006 and 2008 mine fires, which provide real information about potential scenarios, how fast a fire can spread in the abandoned areas of the mine, and the issues experienced with the effectiveness of controls.

(f) The risk assessments did not identify critical controls in relation to mine fire where bushfire is the cause, were too generic and high-level, did not specify the type or location of mine fire.

(g) Many things listed as controls in the risk assessments were not controls, but documents which may have controls in them. Controls are things which are actually done or implemented. Unless you properly identify and analyse the effectiveness of controls, you lull yourself into a false sense of security that the risk has been addressed simply by reference to a policy or procedure document.

(h) The whole focus of the risk assessment process was major mining hazards, which does not consider other mining hazards.

(i) There was no evidence of an adequate risk assessment of fire in the non-operating areas of the mine, particularly the northern batters, which merited attention because there were fewer controls and the condition of the coal was more susceptible because it was weathered and degraded quite badly.

Professor Cliff said here had been very little change to the Code from SECV times up to 2014, despite the mine having increased substantially in size and the coal in the northern batters having continued to degrade. It was necessary to update policies and procedures bearing these changes in mind, but this had not been done.

Consistent with the jury verdict, criticisms made by Professor Cliff of the risk assessment process at the mine were warranted.

Regulatory oversight of the mine

The mine was heavily regulated.

There was no evidence of any breach or material non-compliance by the mine operators with the mining licence or the Approved Work Plan attached to the licence in respect of the fire infrastructure available to worked-out batters, or the condition of the northern batters. The Code, and by reference the procedures and practices directed to addressing the risk of fire at Hazelwood mine, were embedded within the Work Plan approved by the regulator.

WorkSafe inspectors monitored and enforced compliance with the OHS Act. One method of doing so was to issue an improvement notice requiring the mine to remedy an identified contravention. In the period from 2012 to 2014 WorkSafe inspectors attended the mine about 25 times per year and issued 15 to 20 improvement notices, none of which related to the water reticulation system, vegetation on the northern batters, spraying practices to wet down exposed coal, or staffing and management levels necessary to respond in high fire danger periods.

Inspector Hayes, whose major responsibility since appointment as an inspector in 2008 was to monitor and assess compliance with the OHS Act and Regulations in the three Latrobe Valley coal mines, said that he attended the mine and the northern batters area regularly in 2012 and 2013, and had he noticed an issue or risk in relation to mine fire he would have raised it with the mine or issued an improvement notice. Department of Primary Industries inspectors also attended the mine 12 times per year, and had regular interactions with HPC relating to the Work Plan. It was expected that had those inspectors identified a fire risk at the mine they would have passed that information on to the WorkSafe inspectors, who by then had primary responsibility for regulating occupational health and safety in the mining industry. I infer that no other issues or concerns in relation to the risk of mine fire were observed by inspectors or taken up with HPC.

HPC had a respectful and co-operative relationship with regulators, and responded promptly and appropriately to issues as required.

Vegetation

The northern batters were heavily vegetated with self-seeded grass, scrub, blackberries and large pine trees. The Checklist Audit completed in late 2013 recommended as remedial action that vegetation across all levels of the northern batters needed clearing. No action was taken in respect of that recommendation before 9 February.

7, 8 and 9 February 2014

In mid-January 2014 there was a significant heatwave event across Victoria which dried the last of the moisture out of the environment and available fuels. The hot dry weather continued through to early February. On Friday 7 February 2014 total fire bans were declared for West Gippsland for the weekend of 8 and 9 February. The West Gippsland fire weather rating for 9 February was extreme, with forecast high temperatures, low humidity and strong north-westerly winds gusting to 75 km per hour, with a gusting south-westerly change in the early afternoon.

Fire preparedness and mitigation plans were issued at the Hazelwood mine for total fire ban days or days forecast to be of severe or extreme fire danger. The preparedness plans were made available to all staff and contractors at the mine, and included instructions for preparedness for fire, and manning and available resources. Mr Shanahan, the mine services superintendent, circulated fire preparedness plans for 8 and 9 February shortly after midday on 7 February. He was aware that 9 February had the potential to be the worst fire risk day since Black Saturday.

The usual weekend roster at the mine was a 2 x 12 crew with a minimum manning level of around 16 to 18 people principally engaged in coal winning activities and manning conveyors, a 1 x 7 crew with a minimum of around 7 to 8 people whose tasks were operational support and fire services activities, and contractors engaging in activities such as security, earth moving and emergency services. The preparedness plan allocated two contractors to operate the 30,000-litre water cart as additional resources for the weekend of 8 and 9 February, which brought to 34 the total number of staff and contractors at the mine.

The Hernes Oak fire ignited shortly after 3:00pm on 7 February. No additional staff resources were allocated at the mine for 9 February in response to the Hernes Oak fire.

On 8 February and the morning of 9 February CFA personnel were present on the Hernes Oak fire ground engaged in firefighting activity. The fire remained contained, though there was still some material burning inside the fire area. Mine managers, staff and contractors continued to monitor the Hernes Oak fire by various means, including visual checks, use of infrared cameras, the CFA app, and liaison with the Central Gippsland Essential Services Group.

The morning of 9 February was hot but relatively calm. Two members of the 1 x 7 crew were allocated to operate sprays to wet down exposed coal in the operating area of the west field. No sprays were operated that morning to wet down coal in the worked-out areas of the mine, including the northern batters.

When the 1 x 7 crew went to lunch at 12:30pm there had been no change to the Hernes Oak fire. Mr Roach, who was the rostered on call Emergency Services Liaison Officer, recorded in a log of events he kept for the day that he arrived at the mine at 12:27pm, and at 12:29pm observed some smoke from the Hernes Oak fire, but nothing of any significance.

At about 1:00pm the 2 x 12 shift manager told the 1 x 7 crew that the Hernes Oak fire had flared up. Mr Mauger, who was a member of the 1 x 7 crew that day, said the Hernes Oak fire had changed dramatically, with two rapid moving spot fires getting into nearby grasslands and a plantation. He travelled to the north-west corner of the mine where he observed fire rapidly approaching and threatening the mine, and at about 1:45pm saw embers from the fire flying overhead into the mine.

Mr Shanahan arrived at the mine at around 1:50pm. As he drove into the mine the wind was changing from north-westerly to south-westerly, and was extremely strong.

Shortly before 2:00pm Mr Shanahan and Mr Mauger separately observed a small amount of smoke on the southern batters. Mr Mauger travelled across the mine with two other members of the 1 x 7 crew to attend the fire. When they arrived there was a small fire, about 1 m², in exposed coal. They hooked their tanker up to the water main, which gave them pressure to fight the fire. Shortly after they arrived they were joined by two members of the 2 x 12 crew, two workers called ‘road runners’ and contractors manning an ex-CFA tanker. Despite the efforts of those present the fire was quickly skipping across the coal and spreading. Mr Mauger said those fighting the fire were forced to move further east, and after about 20 minutes it became unsafe for them to remain in the area. At that stage Mr Mauger saw smoke on the northern batters, and he and other members of the 1 x 7 crew travelled back across the mine to fight that fire.

At around 2:00pm Mr Shanahan saw three fires along the Strzelecki Highway at Driffield, which he concluded were likely to have been lit by an arsonist. The Driffield fires quickly merged into one front which Mr Shanahan said was about 1.5 km wide, and about 2 to 4 km away with the wind directly behind it pushing the fire to go straight towards the mine. Mr Shanahan described the Driffield fire as unstoppable, and said he believed it was likely it would run into the mine at the operating west field, igniting the whole of the mine. He and others redirected personnel and resources to the west field, and to the west perimeter of the mine outside the cut, in an effort to prevent this occurring.

Mr Mauger said when he and other crew members arrived at the northern batters there was scrub, including pine trees, on fire between levels 3 and 5. They made every attempt they possibly could to put the fire out by attaching the tanker to the fire services main and using hoses and a spray monitor. Prior to their arrival there had been no water suppression in that area, but after they arrived he said there was every available water suppression. He said despite their efforts the fire took hold of the whole batter between levels 5 and 3, then skipped up to higher levels. The fire was rapidly out of control, and it became unsafe for them to remain in the area. Photographs and videos taken by Mr Mauger and Mr Shanahan demonstrate the very rapid growth of the northern batters fire. By 3:00pm nothing could be done to arrest the development of the fires in the southern batters and northern batters which were out of control, and there were spot fires on the floor of the mine.

Shortly after 3:00pm Mr Prezioso took up the role of Emergency Commander. After arriving at the Emergency Control Centre at 3:35pm he reviewed the situation and began arranging additional staff for that day and following days. Staff and contractors were coming into the mine voluntarily to help fight the fires.

The situation at Hazelwood remained extremely challenging during the afternoon and into the evening of 9 February 2014. The wind was gusting at speeds of 70 to 80 km per hour. Burning embers were falling across the mine, and more spot fires were igniting. The fires burning out of control on the northern batters, southern batters and floor of the mine were growing. There remained the significant threat of the Driffield fire entering and engulfing the mine. In the late afternoon power to the mine was lost, water supply and pressure remained very limited until power was restored in the early hours of 10 February.

At about 8:00pm CFA officer Mr Male became Incident Controller at the mine for the fires. However, because of other fires raging across Gippsland resulting in serious threats to life and property, few CFA resources were available to help with the fire fight at the mine that day. In any event I am satisfied that by mid-afternoon the mine fires were uncontrollable and were going to take weeks to extinguish.

By the early hours of 10 February there were uncontrolled fires approximately 2 km in length on the northern batters, 1 km in length on the southern batters, and 500 m by 500 m on the floor of the mine. The task of controlling and extinguishing the fires was complex and difficult, and progress was initially slow. In the weeks following 9 February smoke emitted by the fires at times blanketed the mine and Morwell.

Did breach by HPC result in materialisation of the risk?

For the following reasons I am not satisfied beyond reasonable doubt that the northern batters fire resulted from any of the breaches of which HPC has been found guilty.

Extreme and extraordinary circumstances

First, the weather conditions in West Gippsland on the afternoon of 9 February 2014 were extreme. Mr Lapsley said the weekend of 8 and 9 February 2014 was the first time multiple extreme fire danger days had been declared in Victoria, and was the most serious fire weather experienced since Black Saturday in 2009, that in such extreme conditions fires will start, move, develop and become uncontrollable very quickly, and precautions against the risk of fire may be ineffective.

Second, the speed and ferocity of the multidimensional attack on the mine by the Hernes Oak and Driffield bushfires was extraordinary. Until shortly before 1:00pm the Hernes Oak fire was contained and being attended by CFA firefighters. When the north-westerly wind sprang up, despite the significant CFA resources on the fire ground, the Hernes Oak fire flared and broke containment lines, becoming what was later called the Hernes Oak extension fire. Nothing could be done to prevent the fire racing towards the mine and Morwell, threating life and property. By 1:30pm the mine was under sustained attack from the Hernes Oak fire, followed very quickly by the Driffield fire. Embers from those bushfires rained down across the vast open-cut pit of the mine. Both fire fronts threatened to directly enter and run through the mine, igniting all exposed coal. Mr Lapsley said the two fires, and the prevailing conditions, made for somewhat of a perfect storm, and with the fires developing so quickly there was significant potential for threat to lives, critical infrastructure and property. The number of burning embers from the fires which landed in the mine would have been in the hundreds or possibly the thousands.

Third, the Driffield fire was deliberately lit. Mr Lapsley said arson activity is difficult to predict and plan for, arsonists are motivated to light fires in order to cause harm, and can be very calculated as to where they would start a fire in order to have maximum impact. In the conditions of the day you really could not think of strategically better places to light fires if you wanted to cause maximum damage and harm than the location of the Hernes Oak extension and Driffield fires.

Fourth, the weather conditions and the speed and breadth of attack on the mine by two bushfires, one of which was deliberately lit, if not with the intention, then certainly with the effect that it would directly attack the mine and threaten to run through it, combined to create conditions at the mine which were extreme and exceptional. Professor Cliff said what occurred at the mine on 9 February 2014 was a combination of events that were very rare, and unprecedented. In February 2014 he said:

[T]he current fires are caused by exceptional circumstances. They’ve mined brown coal in Victoria for over a hundred years and it is generally done very safely. It is only under these extreme conditions, when huge bushfires are raging close to the coal that the usual safety controls won’t work.

Professor Cliff qualified this statement in evidence, saying he had since reviewed documents from the mine and become aware of other major fires that had occurred at the mine in the recent past, so the circumstances were not as exceptional as he thought in 2014. However, the conditions faced at the mine on 9 February 2014 were, in critical respects, far more extreme than on the occasions of major fires in 2005, 2006 and 2008. The qualification by Professor Cliff is more relevant to consideration of the response of HPC to the risk of fire on the northern batters than to the question of whether the 9 February 2014 northern batters fire actually resulted from the breaches of duty by it.

Fifth, the evidence does not allow for the conclusion that fires on the southern and northern batters each originated from a single spot fire ignited by a burning ember. There were multiple spot fires on the floor of the mine. Embers from the bushfires were raining down across the mine. The spread and intensity of the mine fires may have been aided by there being multiple points of ignition. The fact that there may have been multiple points of ignition on the northern batters adds to the uncertainty that the fires would have been extinguished or controlled by one or more of the measures particularised in the charges.

Risk assessment

Sixth, there is inconsistency between evidence which Professor Cliff gave that with due diligence to the process of risk assessment the size of the northern batters fire could at least have been vastly mitigated, if not completely prevented with reasonable measures of control, and the above statement that the usual safety controls do not work in the extreme conditions experienced on the afternoon of 9 February 2014.

Seventh, the evidence of Professor Cliff and others falls short of identifying the specific additional controls which would have been implemented as part of an adequate risk assessment, and demonstrating that in the conditions which prevailed on 9 February those controls would have been effective in preventing the occurrence of the major northern batters fire.

Reticulated fire water pipe system and wetting down

Eighth, there is no evidence of any inadequacy in the reticulation system servicing the southern batters. There were reticulation pipes present on each level, with alternate sprays and hydrants. The spot fire on the southern batters was attended by multiple crews with tankers and other firefighting equipment very soon after it ignited. The workers in attendance were all well trained in fighting coal fires. They were able to use the reticulation system, and there was no lack of water supply or pressure. However, despite the efforts to control and extinguish the fire, within a very short time it was uncontrollable, and by the early hours of 10 February had engulfed approximately 1 km of the southern batters.

Ninth, the major fire in the operating west field of the mine in October 2006 demonstrates that in extreme weather conditions a coal fire might ignite and very quickly become uncontrollable in an area where all sprays had been operating from early in the morning, the mine was on high alert and spotters were stationed at every level, workers quickly attended the spot fire which ignited, and CFA officers were on site in under 90 minutes to assist with the firefight. The conditions at the mine on 9 February were significantly worse than those which prevailed at the time of the October 2006 fire in that the weather conditions were more extreme, and the attack of fire on the mine was multidimensional and across the entire mine.

Tenth, it was not possible to operate all sprays on the reticulation system across the whole of the mine at the same time because there was insufficient water, and because of the water balance and geotechnical issues relating to mine stability. The most that could be done was to operate sprays to wet down different areas of the mine in sequence. Mr Incoll was not able to say to what degree coal had to be wetted in the conditions which prevailed on 9 February 2014 to prevent it from being combustible, and at what rate the coal would dry after sprays were turned off. Dr Gaulton said that in a dry coal area, such as the worked-out batters, the effective life of any pre-wetting on a hot dry day would be very short because the coal would dry out very quickly. The steepness of the northern batters may make it more difficult to wet the coal, and result in it drying more quickly.

Eleventh, the evidence did not allow a conclusion to be reached as to how often, and for how long, it was practicable to operate sprays across different areas of the mine on 9 February in a way that was consistent with protecting all areas of the mine from the risk of fire. There were good reasons for prioritising the operating areas in the wetting down process, because that was where there was the greatest risk of fire, most mine workers and critical infrastructure were located in the operating areas, there was far more exposed coal there, and the west field could be expected to come under attack from any bushfire which approached the mine on 9 February. For the above reasons it is not possible to conclude that the degree to which it was practicable to operate sprays from 11:45am on 9 February would have been effective in preventing the northern batters fire.

Vegetation on the northern batters

Twelfth, there was little vegetation on the southern batters, yet the spot fire ignited by burning embers took hold and became out of control in very much the same way as occurred with the fire in the northern batters. Mr Mauger, who fought both fires, said the presence of vegetation made no difference to the fire taking hold on the northern batters on 9 February 2014. There was no evidence that vegetation was more likely than exposed coal to be ignited by burning embers from the approaching bushfires, or that it would burn more readily. The converse may be true, that exposed brown coal would ignite more readily and burn more quickly. Further, Mr Shanahan said coal is friable, and once it catches fire the coal powder or dust becomes burning airborne embers. A video of the northern batters taken by Mr Shanahan on the night of 9 February graphically shows this effect. The reasonable possibility that fire would be spread as quickly by burning coal embers as from embers from vegetation has not been excluded. This conclusion is supported by the manner and speed of the spread of fire on the southern batters, where there was little vegetation, and of the major fire in the operating area in 2006, where there was no vegetation.

Thirteenth, the charges alleged HPC failed to take the reasonably practicable measure of reducing the amount of vegetation on the northern batters, rather than removing the vegetation altogether, and allowed for the following level of vegetation to remain:

[S]cattered, tall, clean boled trees that had firm bark and an overall crown cover of less than 35% (over any given treed area) with a minimum of 3 metres of open space between crowns of individual trees; and grass and herbaceous understoreys that were kept short by grazing or mechanical means during those periods of high rural fire risk...

There was no evidence to support a finding that had vegetation been reduced to the level specified in the charges the fire on the northern batters on 9 February 2014 would not have ignited and taken hold, or would have been more effectively contained.
Staffing levels

Fourteenth, despite mine staff responding to the spot fire on the southern batters quickly and in significant numbers with tankers and sprays connected to water reticulation pipes supplying water at adequate pressure, the fire grew rapidly and within 20 minutes was out of control. Given that the spot fire on the southern batters was not extinguished or controlled by a quick and decisive response, it cannot be concluded that an equivalent response to spot fires on the northern batters would have been successful in extinguishing or controlling the northern batters fire. This conclusion is further borne out by the experience of the 2006 major fire.

Fifteenth, while having more staff and managers at the mine on high fire risk days improves capacity to suppress fire risk and respond to fires which ignite, the evidence does not establish that the additional numbers proposed by the prosecution as practicable would have resulted in the northern batters fire being prevented, extinguished or controlled on 9 February 2014. The prosecution relied on the increased 1 x 7 crew manning levels on days of extreme fire danger set out in the amended mine fire instructions issued in January 2016, with two additional spray crews of two workers each rostered in the worked-out areas of the mine, a lookout in the old fire service office, and some additional staff in the operating areas. The situation at the mine on the afternoon of 9 February was rapidly evolving and extremely challenging. Burning embers were raining down igniting spot fires across the 1,100 hectares of the open cut and the broader Hazelwood landholding. Major fires burning on the southern batters and floor of the mine, and two bushfire fronts threatening to burn into the mine. There was a need for managers such as Mr Shanahan and Mr Prezioso to quickly redeploy staff resources where they perceived the greatest threat. It cannot be concluded that in those circumstances the additional staff resources proposed as adequate by the prosecution would have resulted in the fire on the northern batters being prevented or controlled.

The gravity of the breaches by HPC

The gravity of each breach must be assessed in the context of all the circumstances.

Risk assessment

The Occupational Health and Safety Regulations 2007 (Vic) impose duties on mine operators to control risks in mines,[11] by identifying and assessing risks to health and safety associated with all mining hazards, adopting control measures to eliminate, or if that is not reasonably possible, reduce risks to health or safety associated with any mining hazard, and to review and revise the process at least every three years. Mine operators were required by the Regulations to conduct a documented comprehensive and systemic Safety Assessment to assess the risks associated with all major mining hazards, hazards cumulatively as well as individually, and describe the method of investigation and analysis, the basis for decisions as to the level of risk, and control measures and reasons for adopting or rejecting a measure. The duties imposed by the regulations give particular content to the duties under ss 21 and 23 of the OHS Act which HPC has breached. It is inherent in the guilty findings that HPC failed to perform an adequate risk assessment in accordance with the regulations.
[11]Occupational Health and Safety Regulations 2007 (Vic) regs 5.3.7, 5.3.8, 5.3.9 and 5.3.23.

Mine fire was a large and complex topic which should have been broken into elements or causes, with a number of days being allocated to complete the risk assessment for each cause, resulting in the topic taking weeks to complete rather than part of a day or two as it did Hazelwood.

It was necessary to separately assess bushfire as a hazard or cause of risk. Associated with bushfire was the possibility of multiple points of ignition across the open-cut pit caused by burning embers. The history of fires in the Yallourn mine in 1944 and 1986, the Churchill fire on Black Saturday, and the location of the mine close to areas of native forest and plantations meant the risk of burning embers from a bushfire spotting into the mine was readily foreseeable. It was necessary to consider how the risk from bushfire and ember attack could be reduced, and if it materialised how that might impact the mine and what response might then be required.

Because embers could land anywhere within the mine, it was necessary to take account of peculiarities of different areas, and break the mine into different zones for assessment of the risk. The northern batters required separate consideration as part of the risk assessment process because of the vulnerability of the dried, weathered and degraded coal to ember attack; the steepness of the batters which meant fire break zones were not possible; limits to the water reticulation pipework which meant sprays could not be used to wet down or fight fire in all areas of coal; the size of the batters and location in the mine which had implications for the time and resources necessary to respond to fire risks; the impact of vegetation growing on the batters; and the proximity to the southern residential areas of Morwell.

The open-cut pit, and the area of exposed coal, had grown significantly over the years, increasing travel time around the mine, and the risk posed by multiple points of ignition. It was necessary that risk assessments, and the mine policies and procedures, be reviewed and revised to ensure that appropriate risk control measures were in place to respond to changes that occurred.

HPC was put on notice of the need to conduct a detailed assessment of the water reticulation system in the northern batters by recommendations in the Oliver Report and the 2005 and 2008 major fire reports. While the Oliver Report predates privatisation, it was commissioned by Mr Polmear who remained at the mine in senior managerial positions until 2014, was clearly within the knowledge of HPC, and remained relevant after privatisation to fire risk in the worked-out areas of the mine.

The assessments conducted at the mine, and the fire policies and procedures, did not respond adequately to risks associated with bushfire and ignition of coal on the northern batters.

The following matters also need to be taken into account in assessing the seriousness of the risk assessment breach. First, the mine did engage in a formal risk assessment process on a number of occasions with the assistance of external consultants QEST and GHD, and implemented the recommendations made by those consultants. From 2009 mine fire was one of the assessed risks, and bushfire was considered as a possible cause of fire.

Second, HPC complied to the satisfaction of WorkSafe inspectors with an improvement notice issued following a detailed review in 2012 of the assessment of mine fire as a Major Mining Hazard. Inspectors who attended regularly at the mine did not identify any deficiencies in the response by HPC to the risk of fire.

Third, it is evident from high level policy documents, such as the Code, through to daily practices, such as Take Five, the preparedness plan, and pre-start crew meetings that at every level of its operation HPC considered and responded to the risk of mine fire, and to the heightened risk during summer months. By improvements which it implemented to its policies, procedures and systems, HPC was able to reduce the number of coal fires each year from over 250 in SECV times, to about 100 by 2014.

Fourth, HPC commissioned reports into each major fire at the mine, and implemented most of the recommendations of those reports.

Reticulated fire water pipe system

The large areas of exposed coal in the northern batters had weathered and degraded over decades, were extremely combustible and vulnerable to ignition from an external source such as bushfire, and therefore warranted protection. In contrast to other areas of the mine where there was exposed coal, the reticulation pipework on the northern batters east of the 1-to-7 ramp was incomplete and not in a state of readiness to prevent or suppress fire. Degraded pipes removed during the 1990s were not replaced by HPC. Fire risk in this area was increased by the lack of a comprehensive pipe network with sprays and hydrants.

The following further matters must be taken into account. First, there were reticulation pipes covering most of the northern batters. At the east end of the batters there were tanker filling points on levels 1 and 3, and on the crest of the northern batters. HPC maintained mobile firefighting equipment to use in conjunction with the reticulation system, and Mr Mauger and others who fought the northern batters fire were able to connect tankers to the reticulation pipes for that purpose.

Second, actions taken at the mine were to a degree consistent with the Oliver Report, which recommended restricting vehicle access, removing assets and increasing the number of tanker filling points as an appropriate response to the risk of fire in the northern batters.

Third, that response, and the removal from the Code of the requirement for fixed spray breaks, was implemented by the SECV, and adopted by HPC after privatisation.

Vegetation on the northern batters

In February 2014 prolific and often dense vegetation covered much of the northern batters. No effort was made to control the vegetation, even after the Checklist Audit required that it be cleared.

The vegetation was an additional source of dry, combustible fuel which could be ignited by bushfire embers and aid the spread of fire.

The seriousness of the breach by HPC, and the extent of risk to health or safety, is measured against the standard set in the charges, and must take into account that as vegetation was cleared the coal beneath it became exposed. While vegetation on the northern batters significantly exceeded the standard, the likelihood that the risk would materialise did not increase in proportion.

Wetting down

Wetting down exposed coal on high fire danger days was the primary means of controlling the risk of ignition and spread of fire. HPC was aware of the extreme conditions forecast for 9 February 2014, that the Hernes Oak fire was contained but still burning in the landscape a short distance to the north-west of the mine, and of other matters relevant to risk in the northern batters to which I have referred.

The inability to operate all sprays on the reticulation system simultaneously, and the need, for reasons explained, to prioritise the operating areas of the mine must be taken into account. However there should have been some rotational wetting down of the northern batters from the late morning.

Any wetting down of coal that was undertaken from 11:45am on 9 February 2014 would have reduced the risk of fire igniting and taking hold on the northern batters. For reasons already stated it is difficult to determine the degree to which it was practicable to reduce the risk given the limitations of the reticulation system, the need to prioritise the operating west field, and the lack of evidence as to the moisture level required to reduce the combustibility of the coal on the steep northern batters in the conditions of the day.

Additional staffing

Staff numbers were critical in three ways to reducing fire risk on high fire danger days. First, it was important to have staff available to undertake preventative actions, such as turning sprays on in sequence across the mine to wet down exposed coal and to perform lookout or spotting duties around the mine. Second, as was stated in the 2006 and 2008 major fire reports, a rapid and decisive response with sufficient resources was critical to preventing small spot fires from escalating into major fires. Third, the presence of senior managers experienced in incident control assists co-ordination, allocation of resources and a speedy response to developing risks.

On a typical weekday there were over 100 staff and contractors at the mine, all of whom were trained in fighting coal fires. On the morning of 9 February 2014 there were only 34 staff and contractors present at the mine, 18 of whom were part of the 1 x 12 crew engaged in coal winning duties. Mr Roach arrived at 12:27pm. The number of staff rostered on duty was not sufficient to respond to the risk of fire given the size of the mine, forecast weather conditions, presence of the Hernes Oak fire, and vulnerability to ignition of the large areas of exposed coal.

Management, staff and contractor numbers increased quickly during the afternoon, after it became known the Hernes Oak fire had broken containment lines. Mr Shanahan and mine director Mr Harkins arrived before 2:00pm. By 3:30pm there were 58 personnel at the mine, and by 7:00pm the number had increased to 103. Many attended voluntarily, and all of those present did their utmost in the exceptionally challenging and dangerous conditions to control the fires and protect the mine. However, it was not an adequate response to the risk to wait until a bushfire was bearing down on the mine to increase staff numbers, or to rely on goodwill of staff who attended voluntarily.

Response to fire risk

HPC’s response to the risk of fire at the mine was heavily weighted in favour of the operating west field at the expense of the worked-out areas of the mine, in particular the northern batters. Resources available to combat fire risk were not unlimited. Perhaps the best example was the inability to operate all sprays across the mine at the same time. To a degree, for reasons already stated, prioritising protection of the operating areas was justified. However the wrong balance was achieved. In other respects, such as the risk assessment process and the water reticulation pipework, insufficient attention was given to the risk of bushfire impacting the northern batters.

This was not because of any conscious disregard by HPC, which was clearly attentive to the risk of coal fire at the mine. It was in HPC’s interest to reduce the frequency and size of coal fires, and it had achieved real success in doing so. The imbalance in resource allocation and inattention to risk which the breaches by HPC reflect, shows a degree of complacency and subconscious acceptance of risk born from success in reducing the number of mine fires, what was thought to be a comprehensive suite of policies and procedures directed to the risk of fire, the experience and expertise of mine managers and staff in relation to coal fires, and the fact the mine had not come under attack from bushfire or burning embers in almost 60 years of operation. A comprehensive risk assessment process involving external experts as participants rather than just facilitators was important to challenge that complacency and redirect attention to foreseeable hazards associated with bushfire, and the controls which were necessary.

The risk to the health and safety of HPC employees and other persons on which the offences are based was significant. Hazelwood mine is positioned in a high bushfire danger location, east of the Haunted Hills and areas of natural forest and plantations which were a potential source of embers. While the mine had not previously been threatened by bushfire, given the history of fires at the nearby Yallourn in 1944 and 1986 and the direct threat to the Loy Yang mine by the Churchill fire in 2009, it was foreseeable this could occur. There was a real risk of burning embers from a bushfire landing in the northern batters, and igniting the dry, weathered coal which was susceptible to ignition. The risk was more likely to materialise in weather conditions conducive to the rapid spread of coal fire, as had occurred with the major fires in 1977, 2005, 2006 and 2008. It was foreseeable in such circumstances that employees and other persons might be exposed to harm from inhaling smoke, fine particles and carbon monoxide.

The potential gravity of the consequences

Professor Campbell, a specialist in respiratory and general medicine, and epidemiology, gave the following evidence, which I accept.

The products of a brown coal fire include carbon monoxide, ozone, and particulate matter.

The adverse health effects associated with inhaling carbon monoxide, ozone and particulate matter vary depending on the length and intensity of exposure.

Carbon monoxide is poisonous because it combines with haemoglobin and binds irreversibly, preventing the supply of oxygen to the organs. Common symptoms of inhalation include headache, lethargy and nausea. More serious consequences can include short-term loss of consciousness, long-term delayed brain damage and impairment of higher functions, movement and coordination, and cardiac sequelae. Carbon monoxide is concentrated close to fire and is a greater risk to firefighters. The usual treatment is withdrawal from exposure and administration of oxygen. It is relevant to note that before the mine fires HPC had implemented policies and procedures to protect personnel from the risk of inhaling carbon monoxide.

Inhalation of ozone may cause irritation of the eyes, nose and airways, respiratory symptoms such as coughing and wheezing, new asthma, worsening of asthma, and cardiorespiratory morbidity and mortality associated with conditions such as ischaemic heart disease, emphysema and chronic bronchitis.

Inhaling PM2.5, which is particulate matter less than 2.5 microns in diameter, can affect unborn children, resulting in reduced size, weight, premature birth, and lung growth retardation. In children, effects include respiratory symptoms, new asthma and worsening of asthma. In adults, effects include cardiorespiratory morbidity and mortality, lung cancer, and an increased risk of developing diabetes. PM2.5 will be blown downwind and constitutes a greater risk to the broader community. A fire which burned for a protracted period with variable peaks in intensity would cause significant cumulative exposure.

There are also a variety of psychological and mental health effects of exposure to inhalation of carbon monoxide, ozone and particulate matter.

For the following reasons seriousness of the potential consequences of the breaches by HPC cannot be measured by the outcome of the mine fires. First, for reasons already stated, it is not established that the northern batters fire resulted from the breaches by HPC, and was a materialisation of the risk on which offences are based. Second, the charges relate only to the risk of fire on the northern batters. On 9 February major fires also ignited on the southern batters and floor of the mine, and in the nearby Yallourn mine, and there were bushfires burning in the area. Over the following days and weeks emissions from those fires contributed to the smoke, particulate matter and gases to which mine employees, firefighters and Morwell residents were exposed.

It must be kept in mind that there is a dose response to inhaling particulate matter, carbon monoxide and ozone. Professor Campbell said most studies into the adverse health effects of PM2.5 are conducted to determine the adverse impacts of exposure to ambient levels of pollution in cities. There are limited studies into the effects of one-off exposure to particulate matter emitted by fire. He said it would be difficult to measure the effects of exposure caused by a fire which burned for a protracted period with variable peaks in intensity. The evidence did not quantify the period or intensity of exposure necessary to cause the more serious longer term effects of inhaling PM2.5, or say whether exposure which might result from fire on the northern batters would be sufficient to cause those effects.

A number of community witnesses gave evidence as to harmful effects of inhaling smoke from the mine fires. Over 50 victim impact statements were tendered for identification. However, given that it is not established that breaches by HPC resulted in the mine fires, evidence as to actual harm suffered from exposure to smoke from the mine fires is not relevant to the determination of harm, and the victim impact statements are not tendered absolutely.

Given the number of employees and firefighters likely to be called upon to combat a major fire, and the proximity to residential areas of Morwell, a large number of people were exposed to the risk of inhaling smoke from fire on the northern batters.

Sentencing principles and purposes

As has already been stated the primary consideration in relation to penalty is the objective gravity of breaches by HPC. The sentence imposed must reflect punishment that is just and proportionate in all the circumstances.

The maximum fine for each offence against ss 21 and 23 of the OHS Act is 9,000 penalty units, or $1,229,240 at the relevant time. The maximum penalty for an offence defines the absolute limit for the worst type of offending of that kind.

Double punishment and totality

Sentencing principles of totality and double punishment must be considered. The penalties imposed must reflect the total criminality involved in the ten offences, and HPC must not be punished twice for an act or element which is common to different offences.[12]
[12]Interpretation of Legislation Act 1984 (Vic) s 51(1); Pearce v The Queen (1998) 194 CLR 610; Lecornu v The Queen (2012) 36 VR 382.

The corresponding offences under ss 21 and 23 of the OHS Act contain common elements and are based on the failure to take the same reasonably practicable steps to eliminate or reduce the same risk. The only distinction between the offences is only that ss 21 and 23 are directed to protecting different classes of persons against the same conduct. That difference warrants imposing a separate sentence on each charge. Double punishment will be avoided by imposing an appropriate penalty on each offence against s 21, and a reduced penalty on the offence against s 23.

There is overlap between the risk assessment offences and each other offence. Control measures which would have been implemented as part of an adequate risk assessment include the reasonably practicable steps on which each other offence is based. In fact, no other control measures were identified in evidence. The overlap is not total. The OHS Act requires employers to be proactive in identifying and responding to risk to health or safety in a workplace or by conduct of an undertaking. The Occupational Health and Safety Regulations 2007 (Vic) impose a duty on mine operators to identify mining hazards, and assess and control associated risks. Engaging in the process of risk assessment is integral to identifying, quantifying and eliminating or reducing risks, and failure to conduct an adequate risk assessment does add to the criminality involved in the offences. However the overlap between the risk assessment offences and all other offences is substantial and the penalties imposed on the risk assessment offences must be significantly moderated to avoid double punishment.

Offences 9 and 10 (wetting down the northern batters) and 13 and 14 (additional staffing) relate, wholly or in part, to the failure to eliminate or reduce the risk by operating sprays to apply water to exposed coal. I will impose the appropriate penalties for the staffing offences, and moderate the penalties imposed for the wetting down offences to avoid double punishment.

At the end of the process I will carefully consider the total penalty to ensure that the sentence reflects the total criminality involved in the offences.

During the sentencing hearing submissions were made as to the possibility of overlap between the offences by HPC, and offences against s 41 of the Environment Protection Act 1970 (Vic) (‘EP Act’) of polluting the atmosphere on which I will sentence the HPP corporations today, and the need to consider just punishment in that context. In discussion it was conceded for the offenders in both matters, correctly in my view, that if the submissions they made as to manifestation of risk in this matter and causation and relevance to criminality of the causation particulars in the EP Act prosecution were accepted, the question of overlap would fall away. As already stated, offences against ss 21 and 23 of the OHS Act are risk based, and the breaches by HPC did not result in the northern batters fire and were not a manifestation of the risk. The HPP corporations have been found guilty of polluting the atmosphere on the basis of smoke emitted by the mine fires. In other words, the pollution offences are outcome based. I have concluded that the HPP corporations did not cause the pollution, but that they are deemed to have polluted the environment because they occupied the premises from which it was emitted. Differences in the legislative schemes, elements of the offences and identity of offenders, combined with the effect of findings in relation to manifestation of risk and causation mean there is no overlap between the OHS Act offences committed by HPC and the EP Act offences committed by the HPP corporations, and no question of just punishment which requires consideration in that context.

Deterrence

No criticism was made of the response by the mine operators after the fires took hold at the mine on 9 February 2014. After Mr Male was appointed Incident Controller on the evening of 9 February, mine managers, staff and contractors continued to work side by side with CFA and other agencies throughout the 45-day firefight and it is evident that they played a significant role in controlling and extinguishing the fires.

After the mine fires were extinguished the mine operators quickly prepared a proposal to improve the response to the risk of fire at the mine. During the first public inquiry into the mine fires in 2014 Mine Manager Mr Graham tabled a document outlining initiatives which the mine operators were committed to implementing. The proposals for improvement by the mine operators were ultimately adopted by the inquiry board as its own recommendations. The initiatives dealt with a number of matters including:

(a) risk assessments (re: the specific risk of fire in the worked-out batters of the Hazelwood mine);

(b) manning arrangements in high fire risk periods;

(c) vegetation management on worked-out batters;

(d) reticulated fire service pipework (maintaining the additional pipework installed during the mine fire incident, subject to operational requirements);

(e) further enhancements to back-up electricity arrangements;

(f) pre-positioning of AIIMS qualified Emergency Commanders on total fire ban days;

(g) emergency liaison with the CFA and other relevant state agencies (including having a Hazelwood representative directly attend any Incident Control Centre); and

(h) rotational wetting down of worked-out areas (having regard to water constraints, and any specific priorities from the perspective of known external fire risk).

The mine operators cooperated with both mine fire inquiries, and with other steps by regulators taken since the mine fires directed to addressing the risk of fire at the mine.

The mine ceased operating in 2017. The mine operators have since worked to rehabilitate the mine site.

It was submitted for HPC that in a specific industry sense general deterrence is not required because of significant changes to fire risk management within the three Latrobe Valley coal mines since the mine fires occurred. First, the Latrobe Valley coal mines have conducted a joint risk assessment, with the assistance of external consultants GHD, as to the risk of fire and suitable risk mitigation controls.

Second, regulatory reform has resulted in significant changes to fire risk mitigation within the coal mines, which includes imposition of a new mining licence condition requiring that a risk assessment be conducted with the assistance of qualified consultants which specifically considers public safety, and review of relevant policies and procedures including the Code; development by the three mines of a Risk Management Plan in response to the mine licence condition; introduction of regulations requiring the development of Fire Risk Management Plans and development of such a plan by Hazelwood and the other mine operators in response to the regulations; and introduction of regular audits of fire preparedness by the mine regulator.

Further, it was submitted, the importance of general deterrence was mitigated to a large extent because the circumstances of the offending reflected reduced moral culpability, and by the requirement to impose just punishment.

In the above circumstances specific deterrence is not a relevant sentencing considerations.

However, whilst I take these matters into account, general deterrence remains of particular importance to breaches of duties imposed on employers under the OHS Act. The general deterrent effect of sentences imposed on HPC is not limited to employers in the particular industry of coal mining in which it was engaged. There remains a need for the sentence imposed to draw to the attention of employers generally the importance of workplace safety and that the failure to eliminate or mitigate safety risks will attract significant punishment. The sentence imposed must reflect denunciation of the breaches.

Good character

HPC has no prior convictions, which is of some significance given the role it has played operating and employing staff at the Hazelwood mine since privatisation in 1996.

As I have already said, the mine was a heavily regulated environment. HPC complied with the conditions of licences it held in relation to the conduct of the mine, and worked cooperatively with relevant regulators. The safety record of the mine in relation to fire improved in the period since privatisation.

Remorse

It was submitted for HPC that the following matters demonstrate remorse. First, within the limits imposed by the need for public communications in relation to the mine fire to have one official source coordinated through the CFA, the mine operators published a community notice on 31 March 2014 acknowledging the significant efforts of the CFA, Melbourne Fire Brigade and a range of other agencies in extinguishing the mine fires, and directly acknowledging the impacts of the fires on the community in the following terms:

We know only too well that the smoke from this fire has had an enormous impact on the Morwell and surrounding communities. As a significant member of this community — with many of our employees and contractors living locally — GDF SUEZ Hazelwood understands the inconvenience and concern the fire has caused. We sincerely appreciate the community’s patience while the essential fire suppression activity proceeded and we are now working with local representatives to determine how we can best contribute to recovery and revival programs.

Second, in May 2014 the mine operators implemented a program known as ‘Revive Morwell’, which involved distribution of $100 gift cards to each of the 6,700 households in Morwell, to be spent in local businesses. The approximate cost of the initiative was $650,000. Further community initiatives implemented by the mine operators included:

(a) a $100,000 contribution to the Latrobe City Council’s community clean up initiative;

(b) a $50,000 donation to the Gippsland Emergency Relief Fund; and

(c) making $500,000 available to the Community Social Capital Committee (comprising local organisations Advance Morwell, Rotary Club of Morwell, Lions Club of Morwell, Enjoy Church, Salvation Army and Morwell Neighbourhood House).

In addition to these measures HPC’s parent company GDF Suez continued extensive sponsorship of local community organisations estimated at approximately $500,000 per year.

Third, in evidence at the first mine fire inquiry Mr Graham expressed regret that the public communications process through the CFA led to the perception GDF Suez did not care about the community, which he said was far from the truth. Mr Graham said it was absolutely regrettable that the mine operators did not acknowledge earlier the impact the mine fires were having on the community.

Fourth, following release of the inquiry’s final report a spokesperson for the mine operators acknowledged the impact of the mine fires, said ‘sorry’ to the local community, and acknowledged that the mine operators had to do better to reduce the risk of fires.

I take into account that the mine operators were genuine in their expressions of regret, and in attempts to ameliorate the adverse impacts of the mine fire on the local community, and acted responsibly by developing and implementing improvements to the response to fire risk at the mine, in a cooperative manner in conjunction with the first public inquiry, regulatory authorities and the other Latrobe Valley mines.

However, running a lengthy contested trial must be taken into account in assessing the degree of remorse shown by HPC.

Current sentencing practice

The prosecution submitted DPP v Esso Australia Pty Ltd (‘Esso Australia’)[13] was a ‘somewhat comparable case’, as it involved a long-running trial of many charges relating to the safety of employees and non-employees against a company with a good safety record. In Esso Australia the total fine imposed for 11 offences was $2 million.
[13][2001] VSC 263; 124 A Crim R 200.

For the following reasons the suggested comparison is of very limited assistance. First, the gravity of the offences in Esso Australia, both in terms of the degree of departure from duties owed and the extent of the risk to health and safety, was significantly greater than in this case. The maximum penalty was imposed for two of the 11 offences. In sentencing the offender Cummins J found:

The events of 25 September 1998 were the responsibility of Esso; no one else. Their cause was grievous, foreseeable and avoidable. Their consequence was grievous, tragic and avoidable.[14]
[14]Ibid 3 [10]; 202 [10].

Esso Australia is not a useful comparator.

Second, there is a difficulty establishing current sentencing practice by reference to only one other case.

Third, in any event, current sentencing practice is only one of a number of factors to be taken into account.

Conclusion

HPC is convicted of the 10 offences and sentenced to the following fines.

Risk assessment
Charge 1$150,000
Charge 2$ 40,000

Reticulation system
Charge 3$450,000
Charge 4$110,000

Vegetation
Charge 7$ 40,000
Charge 8$ 10,000

Wetting down
Charge 9$160,000
Charge 10$ 40,000

Staff numbers
Charge 13$450,000
Charge 14$110,000

In total for the 10 offences I fine HPC the sum of $1,560,000.

I grant a stay of 90 days for payment of the fines imposed.

[2020] VSC 278

19 May 2020 (Melbourne)