SafeWork NSW v Orica Australia Pty Ltd - [2024] NSWDC 140

District Court

New South Wales

Medium Neutral Citation: SafeWork NSW v Orica Australia Pty Ltd [2024] NSWDC 140
Hearing dates: 19 April 2024
Date of orders: 1 May 2024
Decision date: 01 May 2024
Jurisdiction: Criminal
Before: Russell SC DCJ
Decision:
(1)   Orica Australia Pty Ltd is convicted.
(2)   The appropriate fine is $1,500,000 but that will be reduced by 20% to reflect the early plea of guilty.
(3)   Order Orica Australia Pty Ltd to pay a fine of $1,200,000.
(4) Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.
(5)   Order that each party pay its own costs of the Notice of Motion filed by Orica Australia Pty Ltd on 28 July 2022.
(6)   Order Orica Australia Pty Ltd to pay the prosecutor’s costs.

Catchwords:
CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – risk of death or serious injury
SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – general deterrence – specific deterrence
COSTS – prosecution costs
OTHER – industrial chemical manufacturing – cobalt dust – occupational asthma – insufficient personal protective equipment – insufficient ventilation – no decontamination facility or process – failure to take corrective action

Legislation Cited:
Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22
Fines Act 1996 (NSW), ss 6, 122
Work Health and Safety Act 2011 (NSW), ss 3, 19, 31

Cases Cited:
Aubrey v R [2017] HCA 18; (2017) 260 CLR 305
Baumer v R [1988] HCA 67; (1988) 166 CLR 51
Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338
BW v R [2011] NSWCCA 176
Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
Mahdi Jahandideh v The Queen [2014] NSWCCA 178
Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96
R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566
R v Wilkinson (No. 5) [2009] NSWSC 432
SafeWork NSW v Synergy Scaffolding Services Pty Ltd [2022] NSWDC 584
Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465

Texts Cited:
Australian and New Zealand Standard AS/NZS 1715:2009, Selection, Use and Maintenance of Respiratory Protective Equipment, 2009
Australian and New Zealand Standard AS/NZS1716:2012, Respiratory Protective Devices, January 2012
Australian and New Zealand Standard AS/NZS4501.1:2008, Occupational Protective Clothing Part 1: Guidelines on the Selection, Use and Maintenance of Protective Clothing, 30 June 2008
Australian National Industrial Chemicals Notification and Assessment Scheme, Cobalt Oxide: Human Health Tier II Assessment, 27 November 2014
Australian Standard AS3544-1988 Industrial Vacuum Cleaners for Particulates Hazardous to Health, 15 July 1988
Safe Work Australia Code of Practice, Managing Risks of Hazardous Chemicals in the Workplace, July 2012
SafeWork NSW Code of Practice, Managing the Work Environment and Facilities, August 2019
Safe Work Australia, Workplace Exposure Standards for Airborne Contaminants, April 2013
WorkCover NSW, Chemical Analysis Branch Handbook: Workplace and Biological Monitoring Exposure Analysis (9th ed, n.d)

Category: Sentence
Parties: SafeWork NSW (Prosecutor)
Orica Australia Pty Ltd (Defendant)
Representation:
Counsel:
J Agius SC and M Moir (Prosecutor)
P McDonald SC and N Read (Defendant)
Solicitors:
Department of Customer Service (Prosecutor)
Sparke Helmore (Defendant)

File Number(s): 2021/342865

Judgment

Orica Australia Pty Ltd (Orica) conducts activities at an industrial chemical manufacturing facility at Kooragang Island (KI) which include producing cobalt catalyst pellets in the Cobalt Catalyst Manufacturing Shed (Cobalt Shed). Two workers who worked in the Cobalt Shed were exposed to cobalt dust released during the manufacturing process. One worker, Mr David Calvert, developed occupational asthma.
Orica has pleaded guilty to an offence that as a person who had a work health and safety duty pursuant to s 19 of the Work Health and Safety Act 2011 (NSW) (the WHS Act) it failed to comply with that duty and thereby exposed Mr Calvert and Mr Andrew Linstrom to a risk of death or serious injury contrary to s 31 of the WHS Act.
Section 31 of the WHS Act creates a “Category 1” offence and provides that:

“(1) A person commits a Category 1 offence if –
(a) the person has a health and safety duty, and
(b) that person, without reasonable excuse, engages in conduct that –
(i) exposes an individual, to whom the duty is owed, to a risk of death or serious injury or illness, or
(ii) if the person is an officer of a person conducting a business or undertaking – exposes an individual, to whom the person conducting a business or undertaking owes a health and safety duty, to a risk of death or serious injury or illness, and

(c) the person –
(i) engages in the conduct with gross negligence, or
(ii) is reckless as to the risk to an individual of death or serious injury or illness.”

The prosecutor SafeWork NSW (SafeWork) relies upon recklessness under s 31(1)(c)(ii) of the WHS Act. Senior Counsel for SafeWork referred in written submission (MFI 1, par 93) to the decision of Judge Scotting in SafeWork NSW v Synergy Scaffolding Services Pty Ltd [2022] NSWDC 584 at [101] where his Honour said that the recklessness element in a s 31 charge means that an offender “foresaw the possibility of the risk to an individual of death or serious injury through its conduct but continued on regardless”. This formulation is derived from the decision of the High Court of Australia in Aubrey v R [2017] HCA 18; (2017) 260 CLR 305.
The maximum penalty for the offence is a fine of $3,000,000.

The Risk

The risk described in par 11 of Annexure A in the second Amended Summons, received 12 January 2024 (second Amended Summons) is as follows:

“The risk was of workers, in particular David Calvert and Andrew Linstrom, suffering serious illness or death as a result of exposure to cobalt dust, through inhalation and/or skin irritation and/or dermatitis through direct contact through the eyes, nose, mouth and skin (the risk).”

Reasonably Practicable Measures

Paragraph 13 of Annexure A of the second Amended Summons pleads particulars of the defendant’s failure to comply with the duty under s 19(1) of the WHS Act as follows:

“a.   Failing to ensure that the Local Extraction Ventilation (LEV) in the Cobalt Catalyst Manufacturing Shed was working properly at all times and was adequate for the tasks. This resulted in a failure to meet the recommended flow rates and adequate capture velocities for handling, weighing, sifting and transferring cobalt materials and powders.
b.   Failing to take corrective action to address the findings of the risk assessment report RA-55697 dated 8 July 2014 that part of the LEV system in the Cobalt Catalyst Manufacturing Shed was not working properly and did not meet the 0.5 m/s recommended flow rate for the task of adding cobalt nitrate to the precipitation tank;
c.   Failing to take immediate corrective action to address the following findings and recommendations in the occupational hygiene report ‘Occupational Exposure to Cobalt’ dated 22 August 2019:
(i)   The LEV was not operating adequately;
(ii)   The flow rate of the LEV was not adequate to control cobalt dust emissions;
(iii)   The LEV system was not operating during the task of adding cobalt nitrate to the ammonia solution;
(iv)   The rate of addition of catalyst was too fast for the LEV to adequately capture the cobalt dust for the task of adding catalyst to the mulling machine;
(v)   LEV was not present in the area where the task of weighing cobalt catalyst into pails was performed;
(vi)   LEV was not present when workers undertook the task of cleaning gloves with a rag;
(vii)   installing a fume cupboard at the precipitation station;
(viii)   installing a dedicated weigh station for weighing cobalt catalyst within a hood with extraction ventilation;
(ix)   installing further enclosures for the cerium station, sieving station and mulling station;
(x)   removing excess flexible ducting at the waste sieving station to increase capture velocities; and/or
(xi)   Failing to ensure that the LEV was working adequately and fit for purpose including failing to regularly test and adequately clean the LEV and undertake maintenance of the LEV system by a competent person to ensure that it was working adequately and consistently with recommended flow rates and adequate capture velocities.

d.   Failing to provide for the safe use, handling, and storage of cobalt in the Cobalt Catalyst Manufacturing Shed by failing to take one or more of the following measures:
(i)   between 2014 – 2017, implementing and enforcing requirements that Powered Air Purifying Respirators (PAPR) were worn at all times while work was performed inside the Cobalt Catalyst Manufacturing Shed and from 2017, that PAPR was cleaned prior to storage in an area outside the Cobalt Catalyst Manufacturing Shed where contamination with cobalt was not possible;
(ii)   Implementing and enforcing a requirement that PAPR was stored in a manner that prevented contamination of PAPR with cobalt dust when not in use, such as storing the PAPR in clean air-tight sealed containers outside the Cobalt Catalyst Manufacturing Shed;
(iii)   between 2014 and 2016, implementing and enforcing a requirement that disposable P2 tight fitting masks were subject to routine testing in order that the masks were properly fitted to the wearer in accordance with Australian Standard AS/NZS 1715:2009 Selection, use and maintenance of respiratory protective equipment;
(iv)   implementing and enforcing a requirement that Cobalt Catalyst Operators (Operators) were clean shaven at all times when wearing disposable P2 tight fitting respirators inside the Cobalt Catalyst Manufacturing Shed.

e.   Failing to provide adequate facilities for the welfare of workers in carrying out work in the Cobalt Catalyst Manufacturing Shed by failing to take one or more of the following measures:
(i)   Removing access to the wash-up area inside the Cobalt Catalyst Manufacturing Shed and providing a separate shed or facility for Operators to use outside of the Cobalt Catalyst Manufacturing Shed including a wash-up area. This would allow workers to remove and decontaminate their PPE after exiting the Cobalt Catalyst Manufacturing Shed;
(ii)   Providing separate toilet facilities outside the Cobalt Catalyst Manufacturing Shed for Operators to use for going to the toilet;

f.   Failing to provide and maintain an adequate system of work for the cleaning of the Cobalt Catalyst Manufacturing Shed and the decontamination of Operators exiting the Shed by failing to:
(i)   Provide and use a vacuum cleaner rated for use with hazardous dust and fitted with a high efficiency particulate air (HEPA) filter to collect cobalt catalyst size particulate in the Cobalt Catalyst Manufacturing Shed;
(ii)   Implement and enforce a requirement for at least a weekly clean of the Cobalt Catalyst Manufacturing Shed and the lunchroom used by the Operators to remove dust, involving the use of a vacuum cleaner rated for use with hazardous dust and fitted with a HEPA filter;
(iii)    Implement and enforce additional cleaning if cobalt was observed to be building up on work surfaces;
(iv)   Implement and enforce a requirement that, before entering the lunchroom, Operators removed cobalt contaminated clothing and PPE, including boots, washed hands and face, and then went to a clean area and placed on clean footwear;
(v)   Implement and enforce a requirement that Operators enter into a separate decontamination shed or facility to remove their PPE after exiting the Cobalt Catalyst Manufacturing Shed and prior to entering clean areas of the site; and
(vi)   Develop and implement an adequate work procedure for PPE removal which sets out the steps to be followed by workers in removing their PAPR, coveralls, boot covers, nitrile gloves and boots, then washing and changing into their personal clothing/footwear, in order to minimise the risk of dermal contact to any contaminants deposited on the worker’s PPE.

g.   Failing to provide adequate information, training and instruction necessary to protect all Operators from risks to their health and safety arising from work in the Cobalt Catalyst Manufacturing Shed by failing to provide them with information, training and instruction on the measures identified in paragraphs (d) – (f) above for:
(i)   Correctly putting on, wearing and removing PPE, including wearing PAPR and Tyvek suits at all times inside the Cobalt Catalyst Manufacturing Shed;
(ii)   Cleaning and decontaminating PPE and clothing, including footwear, following their use inside the Cobalt Catalyst Manufacturing Shed;
(iii)   Correctly storing PPE after cleaning;
(iv)   Operators to remain clean shaven at all times when wearing disposable P2 tight fitting masks inside the Cobalt Catalyst Manufacturing Shed; and
(v)   Carrying out at least weekly cleaning of the Cobalt Catalyst Manufacturing Shed and the lunchroom to remove dust using a vacuum cleaner rated for use with hazardous dust and fitted with a HEPA filter.

h.   For the following periods, failing to establish that the health of each worker carrying out work in the Cobalt Catalyst Manufacturing Shed was monitored on a regular and systematic basis for the purpose of preventing illness, in that:
(i)   biological monitoring was not undertaken in 2015 – 2016; and
(ii)   personal air monitoring was not undertaken in 2016.

i. Failing to review and revise the measures or systems in place to control risks in relation to cobalt in the workplace when biological monitoring results for David Calvert showed that he exceeded the workplace exposure standard for airborne cobalt contamination of 0.05 mg/m3 on multiple occasions between 2014 and 2015;
f. Failing to review and revise the measures or systems in place to control risks in relation to cobalt in the workplace when biological monitoring results for David Calvert showed that he exceeded the biological occupational exposure limit for cobalt three times between 2017 and 2018.”

Background

SafeWork tendered three volumes of its Prosecution Sentencing Tender Bundle (PX 1, PX 2 and PX 3). The parties presented an Agreed Statement of Facts (PX 1, Tab 2). This material is summarised below.

The Defendant

Orica is part of a multinational organisation with over 140 years of experience in manufacturing explosives and chemicals.
Orica owned and operated the industrial chemicals manufacturing facility at 75 Greenleaf Road, Kooragang Island (the site). The site included an ammonia plant, three nitric acid plants and the Cobalt Shed. Orica took ownership of the site in 2003. The site was, and is, a major hazard facility and had extensive safety management systems in place.
Orica had a team of safety experts managing work health and safety (WHS) at the site, in-house occupational hygienists to oversee hygiene monitoring, an occupational nurse to oversee biological and health monitoring and a consultant doctor.
Orica employs approximately 160 full-time workers at the site.
The Cobalt Shed manufactures cobalt oxide catalyst and cerium doped cobalt catalyst. Within the Cobalt Shed there are two cobalt catalyst operators and one supervisor. The supervisor primarily works outside of the Cobalt Shed and is not directly involved in the manufacturing process. Operators work eight-hour shifts, five days a week in the Cobalt Shed.

David Calvert

Mr Calvert commenced employment with Orica as a plant operator in the Cobalt Shed on 1 December 2011.
Mr Calvert was a permanent full-time worker for Orica, working Monday to Friday, starting at 4.00am and finishing at 12.00pm. Mr Calvert was promoted to the position of “senior coordinator catalyst shed” on or around 1 June 2018.
Mr Calvert was working on a permanent full-time basis in the Cobalt Shed until 17 June 2019. From 17 June 2019 Mr Calvert was reassigned to tasks where he would not be exposed to cobalt containing materials.
On 16 October 2019 Mr Calvert commenced work in the ammonia bottling facility, performing mechanical fitting and filling anhydrous ammonia bottles. On 6 November 2019 Mr Calvert was removed from the ammonia bottling facility. Since then, he has not performed any duties despite being assessed as fit to perform office duties, but continues to be an employee of Orica as at 15 April 2024.
The work that Mr Calvert carried out in the Cobalt Shed was to produce cobalt catalyst pellets for use in Orica’s Nitric Acid Plant 1 for oxidation of ammonia to produce nitric acid. Mr Calvert conducted all tasks involved in the manufacture of cobalt catalyst, including:

Addition of cobalt nitrate flake to ammonia solution.

Filtering of cobalt nitrate flake/ammonia solution.

Shovelling of cobalt catalyst filter cake.

Drying of cobalt catalyst.

Weighing of cobalt catalyst.

Sifting of cobalt catalyst.

Addition of cerium solution.

Pressing of cobalt catalyst into pills.

Cleaning of pill press.

Cobalt dust and powders were generated during the performance of these tasks and were visible, although the amount of dust and powders generated varied and depended on the stage of the above manufacturing process and the state of the cobalt catalyst. In Mr Calvert’s Record of Interview with SafeWork conducted on 29 July 2020, Mr Calvert observed that the amount of dust and powders did not change during the entire time he worked in the Cobalt Shed.
At all times the manufacturing process involved direct handling and exposure to cobalt dry powders and dust.

Andrew Linstrom

Mr Linstrom commenced employment as a full-time plant operator in the Cobalt Shed in 2017. Mr Linstrom performed similar duties in the Cobalt Shed to those carried out by Mr Calvert.

Mr Calvert’s Diagnosis with Occupational Asthma

Orica conducted biennial health surveillance of all workers undertaking work in manufacturing plants at the site. The health surveillance was performed by Orica’s occupational medical consultant and in-house doctor, Dr Deon Viljoen.
During the period of 1 July 2014 to 6 December 2019 Orica conducted health assessments of Mr Calvert on 11 August 2015, 16 August 2017 and 14 August 2019.
On 12 June 2019 Mr Calvert attended his biennial health surveillance appointment (as part of his 14 August 2019 health assessment) and reported a dry cough to Dr Viljoen. Dr Viljoen was concerned that Mr Calvert may be reacting to ambient exposures in the workplace and advised that Mr Calvert be restricted from areas where he may be affected by respiratory exposures.
In an email dated 12 June 2019 to Orica’s supply chain manager, Mr Jonathan Regan, and Mr Calvert’s supervisor, Mr Scott Andrews, Dr Viljoen noted that Mr Calvert had a history of chest problems over the previous two years and that his chest condition was worsening significantly. Mr Calvert’s history of chest problems included two instances of Haemophilus Influenza on 11 April 2018 and 24 January 2019. On 17 July 2019, Dr Viljoen referred Mr Calvert to respiratory physician Professor Peter Gibson for further investigation.
On 21 October 2019 Mr Calvert attended the respiratory clinic at John Hunter Hospital and had a consultation with Professor Gibson and Dr Alexander Gordon to identify the cause of the respiratory symptoms reported during work activities.
Mr Calvert told Professor Gibson that his work environment was “a dirty dusty environment” with significant exposure to mined cobalt in bags, with further exposure to cobalt hexahydrate dust, cobalt oxide dust, as well as fumes related to super-heated cobalt and cobalt oxide. In a report dated 22 October 2019 Dr Gordon recorded that Mr Calvert’s blood tests confirmed a supranormal level of cobalt in his blood stream.

At this time, Professor Gibson and Dr Gordon conducted spirometry testing and diagnosed Mr Calvert with occupational asthma. Professor Gibson and Dr Gordon recommended that Mr Calvert avoid any further exposure to cobalt within his occupational environment.
On 19 November 2019 Dr Viljoen received a written report dated 22 October 2019 from Professor Gibson and Dr Gordon, confirming Mr Calvert’s diagnosis of occupational asthma, which was likely related to cobalt exposure. Following receipt of Professor Gibson’s report, Mr Calvert was permanently restricted to office duties.
As part of SafeWork’s investigation, Professor Gibson expressed an opinion that Mr Calvert’s diagnosis of occupational asthma was “mild”, and that once Mr Calvert was removed from exposure to cobalt there was a high chance of full recovery.
Occupational asthma can lead to asthma attacks when exposure to the sensitising agent occurs. Such attacks can be severe and possibly fatal. Once sensitisation and occupational asthma has developed it may reoccur for some people, even at low levels well below the workplace exposure standard. Cobalt can be a respiratory sensitising agent with studies showing that it is possibly carcinogenic to humans.
Management of occupational asthma requires, in addition to ongoing medical intervention, that the worker be removed from sources of exposure to the sensitising agent, and in some cases other respiratory agents including ammonia and nitric acid, which were present at Orica’s site.
When occupational asthma from cobalt exposure was considered a possibility, Orica removed Mr Calvert from the Cobalt Shed and altered his duties to a different location in the site where he was not directly exposed to cobalt dust. Mr Calvert’s symptoms improved when direct exposure reduced.
Since Mr Calvert’s diagnosis in October 2019, Dr Viljoen permanently restricted Mr Calvert’s work at Orica to office duties. Dr Viljoen also recommended permanent restriction from working in any job with cobalt, ammonia, or nitric acid facilities at the site.
Mr Calvert was 57 years of age at the time of his occupational asthma diagnosis.
On 30 April 2020 Dr Viljoen reported that in his opinion, Mr Calvert’s asthma was “well improved”.
Professor Gibson has stated that in his opinion, Mr Calvert’s occupational asthma was caused by his exposure to cobalt dust while working at the Cobalt Shed.
The serious illness of occupational asthma that Mr Calvert was diagnosed with in October 2019 was a manifestation of the risk, namely the risk of workers in the Cobalt Shed suffering serious illness or death arising from occupational asthma as a result of exposure to cobalt dust through inhalation.

The Occupational Exposure to Cobalt Report dated 22 August 2019

In a report entitled “Occupational Exposure to Cobalt” dated 22 August 2019 (OEC Report) (PX 1, Tab 17), prepared after an inspection by Orica’s occupational hygienist Mr Jaemie Wilson in June 2019, the Cobalt Shed’s ventilation system was found to be inadequate as it did not have adequate capture velocities.
The OEC Report had been triggered by Mr Calvert’s elevated biological monitoring result for cobalt in November 2018 that exceeded the biological occupational exposure limit (BOEL). Mr Calvert’s blood cobalt results in November 2018 and early 2019 showed the levels were above the BOEL level.
There was no evidence to explain why, since the excessive blood cobalt levels were ascertained in November 2018 and early 2019, it took until August 2019 to produce the OEC Report.
Cobalt in blood analysis was introduced at the site in late 2018 and was conducted concurrently with urine tests. Before this date, biological monitoring was undertaken at the site by urine tests. Blood cobalt is one reliable indicator of exposure to cobalt nitrate. In certain circumstances urine samples can be contaminated by failing to shower and change before supplying urine samples.
The OEC Report identified, at the time of the report, faults in the local extraction ventilation (LEV) system. The LEV system had been originally installed in 2007 by a local engineering company, Donaldson Australasia Pty Ltd (Donaldson Australasia).
The OEC Report found that the LEV system was either not present or had inadequate capture velocities for the following tasks:

The addition of cobalt nitrate to the ammonia solution.

The addition of cobalt catalyst to the mulling machine.

The weighing of catalyst into pails.

Cleaning gloves with a rag.

The OEC Report included photographs of cobalt dust on surfaces of the sink, taps, toilets, concrete floor, lunchroom floor, windowsill, and blinds. Mr Wilson, the occupational hygienist, recommended improvements be made to both the LEV and the procedures for removing cobalt contamination of surfaces.

Notification to SafeWork and Site Inspection

On 6 December 2019 Orica notified SafeWork of an adverse health monitoring report from exposure to cobalt dust for Mr Calvert. SafeWork was notified that Mr Calvert had been working in the Cobalt Shed where there was potential airborne exposure to cobalt dust, and that on 13 November 2019 a report was received indicating that Mr Calvert may have developed occupational asthma. SafeWork was also notified that Mr Calvert had commenced asthma treatment with an Asthma Management Plan.
On 15 January 2020 SafeWork Inspector Kreitals attended the site and inspected the Cobalt Shed. Black dust was observed on all surfaces, including the wash basin used by workers to clean up after cobalt activities. No other washing up facilities or decontamination areas in the Cobalt Shed were provided.
During the inspection, Inspector Kreitals was informed about the OEC Report. The recommendations in the August 2019 OEC Report had not been implemented by the time of Inspector Kreitals’ visit on 15 January 2020. There was no evidence to explain why the recommendations had not been implemented by this time. The continuation of the dangerous dusty conditions in the period between the OEC Report in August 2019 and the visit of the SafeWork Inspector in January 2020 necessarily means that Mr Linstrom, and whoever had the misfortune to replace Mr Calvert in the Cobalt Shed, were exposed to a risk known chapter and verse by Orica for five months.
During Inspector Kreitals’ inspection on 15 January 2020, the cobalt catalyst operator was observed during cobalt activities to be using personal protective equipment (PPE), namely a powered air purifying respirator (Respirator), Tyvek suit and nitrile gloves. The worker demonstrated cleaning of the Respirator with a rag found on the wash basin within the Cobalt Shed and storing it in the electrical switchboard cupboard in the same area. There was no dedicated storage area for the PPE outside the Cobalt Shed and the PPE was not kept in sealed containers.

System of Work During Charge Period

There was, at times, a risk to the health of two workers from exposure to cobalt dust in the Cobalt Shed through inhalation during work activities to produce cobalt catalyst pellets in the Cobalt Shed.
Orica had in place a Cobalt Oxide Catalyst Manufacture Standard Operating Procedure (2007) which included a Process Description and a Work Instruction (2007) that outlined the following:

“Cobalt exposure poses a risk to health and ‘a high standard of hygiene is essential for the protection of the manufacturing personnel’.”

However, at the time of the SafeWork inspection in January 2020, no decontamination facilities had been provided. Workers were using a wash basin inside the cobalt processing area that was visibly covered with black cobalt dust.

Ventilation

Orica’s 2007 Cobalt Oxide Catalyst Manufacture Standard Operating Procedure, Process Description and Work Instruction also outlined the following:

“Controls required to manage the risk to health included an appropriate ventilation system and dust masks.”

However, as described further below, part of the LEV system was not working properly, as reported in a risk assessment in July 2014, and the LEV system was reported as not working properly in the August 2019 OEC Report. Review of the entire LEV system was instigated once Mr Calvert was removed from work in the Cobalt Shed in the second half of 2019. No rectification work on the LEV system had commenced by the time of the SafeWork inspection in January 2020.
In 2007 the LEV system was installed in the Cobalt Shed to extract dust away from the workers during cobalt catalyst manufacturing activities. In July 2014, a documented task risk assessment identified that part of the LEV system was not working properly and did not meet the 0.5m/s recommended flow rate for the cobalt nitrate precipitation tank. There were no steps taken by Orica to address this problem with the LEV system.
The OEC Report also identified that, at the time of Mr Wilson’s inspection, the LEV system was not operating as designed and the flow rate was not adequate to control cobalt dust emissions.
Because the LEV system was identified by Mr Wilson as not working at all or not working adequately, it was not effective in extracting the cobalt dust during the manufacturing process. PPE was provided to keep Orica’s workers safe from exposure to cobalt dust. However, PPE should not be solely relied upon to control the risk from oral, dermal, ocular and inhalation exposure to cobalt.
An annual inspection was scheduled in Orica’s safety management system. During SafeWork’s investigation, Orica asserted that this inspection and maintenance of the LEV system was conducted in-house. A maintenance service schedule was provided by Orica however, Orica could not provide service records describing the maintenance provided and outcomes of the checks in the years 2014 to 2019. September 2020 is the first service record identified for the LEV system from Donaldson Australasia.

Respiratory Protection

Safety data sheets developed by Orica in 2009 specified the following:

There was a risk to respiratory health from dust exposure (including asthmas).

It is necessary to consider respiratory protection that meets the requirements of Australian and New Zealand Standard AS/NZS 1715:2009 Selection, use and maintenance of respiratory protective equipment (AS/NZS1715:2009) dated 2009. The AS/NZS1715:2009 stipulates requirements for respiratory protection fit testing to ensure tight masks are properly fitted to the operator.

Orica had a safety team of specialists, including an occupational hygienist and occupational nurse who were familiar with the safety data sheets. Despite this, Orica failed to provide workers with fit testing of the tight-fitting respiratory protection in accordance with AS/NZS1715:2009.
During SafeWork’s investigation, no fit testing records were available from Orica for disposable P2 tight-fitting masks provided to Mr Calvert between 2014 and 2016 to demonstrate that the masks were a correct fit and shape to protect him from exposure to cobalt dust.
It was reported by workers that fit testing was conducted in approximately 2015 to 2016. Mr Calvert reported to SafeWork that his fit testing had not worked and that in 2017 he commenced wearing a Respirator.
There was respiratory protection in place at the time of Mr Calvert’s diagnosis. The type of respiratory protection provided to Mr Calvert changed during his employment in the Cobalt Shed as follows:

2014 – 2016: Disposable P2 tight fitting masks. There was no fit testing provided to ensure a correct size and shape. There was no policy or requirement that operators need to be clean shaven at all times when wearing disposable P2 tight fitting masks. Mr Calvert had a goatee beard in these years.

2017: A new worker (Mr Linstrom) commenced in the Cobalt Shed. He brought with him a Respirator provided to him by Orica in a different area of the site. Mr Calvert requested if Mr Linstrom could get him an Orica-issued Respirator as he was still relying on disposable masks. Mr Linstrom provided a Respirator for Mr Calvert to use. Orica workers in other areas of the site which manufactured different products were provided with Respirators.

Decontamination

Orica’s 2009 safety data sheets also specified that:

“Contaminated clothing, PPE and hands should be washed after working in cobalt contaminated areas and prior to storage of any PPE.”

The workers performed some cleaning in the Cobalt Shed to remove cobalt contamination. This involved vacuuming the floors and wiping the benches down every day and mopping the floors twice a week. The workers also cleaned plant and equipment after every use. There was an industrial vacuum cleaner in the Cobalt Shed, however its label was illegible at the time of the inspection by Inspector Kreitals on 15 January 2020. While Orica’s records indicate the vacuum was fitted with a high efficiency particulate air (HEPA) filter, Orica could not verify with Inspector Kreitals at the time of the Inspector’s visit that the vacuum was rated for use on hazardous dusts in accordance with Australian Standard AS3544-1988 Industrial Vacuum Cleaners for Particulates Hazardous to Health, 15 July 1988.
There was no requirement for operators to remove cobalt contaminated clothing, including shoes, before entering the lunchroom. There was no delineated cobalt contaminated and cleaning area with access to decontamination facilities in which the operators could remove and decontaminate their clothing and PPE after finishing work and leaving the Cobalt Shed.
At the time of SafeWork’s inspection in January 2020, no cleaning facilities were available to workers to clean their hands or PPE outside the Cobalt Shed. For example, there was no wash basin outside the Cobalt Shed.
Respiratory protection equipment was being stored in the cobalt contaminated shed up until the OEC Report. At the request of Mr Wilson, the respiratory protection equipment was moved.
The respiratory protection equipment was relocated to the electrical switchboard cupboard in the same Cobalt Shed. Some cobalt dust was visible on the interior and exterior of the door of the electrical switchboard cupboard at the time of SafeWork’s inspection. At the time of SafeWork’s inspection the respiratory protection equipment was observed to be cleaned using a dirty rag kept inside the cobalt processing area.

Personal Air Monitoring

Personal air monitoring was conducted on at least an annual basis within the Cobalt Shed but was not conducted in 2016.
Personal air monitoring results for Mr Calvert exceeded the workplace exposure standard for airborne cobalt contamination of 0.05mg/m3 on seven occasions between 2014 and 2015. On four of the seven occasions the result was above the workplace exposure standard but within the level of protection afforded by the disposable P2 tight-fitting masks, provided the masks were fit tested and used in accordance with AS/NZS1715:2009. On the remaining three occasions, the result was above the workplace exposure standard and above the level of protection afforded by the P2 tight-fitting masks.
Workers and safety staff interviewed by SafeWork could not identify any evidence that Orica reviewed controls or had systems in place to minimise risks related to cobalt dust when Mr Calvert’s personal air monitoring results exceeded the workplace exposure standard.
There was no evidence to explain why nothing was done to protect the workers, even when air monitoring conducted by Orica disclosed alarmingly high levels of cobalt dust. For example, air monitoring of the cobalt dust to which Mr Calvert was exposed on 26 May 2014 showed dust levels 12 times the Occupational Exposure Standard (PX 1, Tab 14, p 1). Air monitoring of the cobalt dust to which Mr Calvert was exposed on 11 March 2015 showed cobalt dust levels 28 times the Occupational Exposure Standard (PX 1, Tab 14, p 3). Further, as acknowledged by Orica’s witness Mr Taylor (whose affidavit is discussed below), the Occupational Exposure Standard is not a bright line between a safe level of cobalt dust and an unsafe level. As Mr Taylor said in his oral evidence, good safety practice is to take steps to supress or protect against cobalt dust when the reading is 50% of the Occupational Exposure Standard. Thus, the two readings set out above meant that Orica should have taken steps to protect Mr Calvert when his readings were 24 times and then 56 times the 50% level which should have rung alarm bells.

Biological Monitoring

A biological monitoring program was implemented on an ad-hoc basis for workers within the Cobalt Shed. Biological monitoring initially involved urine testing. Cobalt in blood monitoring commenced in late 2018. There is no evidence that biological monitoring was conducted in any form during 2015 and 2016.
Biological monitoring results for Mr Calvert exceeded the BOEL three times. Two of the urine samples in 2017 and 2018 greatly exceeded the BOEL. A urine sample taken on 24 November 2017 showed a reading of 756 umol/mol cr against a BOEL of 29 umol/mol cr. A urine sample taken on 27 September 2018 showed a reading of 126.6 umol/mol cr against a BOEL of 29 umol/mol cr.
Orica attributed these readings to contamination of the sample by the worker from dirty hands during the provision of the urine sample or from failing to shower before providing the urine sample. But these alarmingly high readings should have alerted Orica to a worker being highly contaminated with cobalt dust before washing his hands or showering.
Follow up biological monitoring by blood sampling was undertaken in 2018, with results under the BOEL, except for one 2018 blood sample in which the BOEL was exceeded.
On each occasion that the BOEL was exceeded in 2018 Orica reviewed the control measures by undertaking follow up biological testing to confirm the control measures remained effective. Workers and safety staff interviewed by SafeWork could not recall any follow up or review of the existing control measures conducted by Orica following the adverse biological monitoring results.

Hygiene Monitoring

At the time of SafeWork’s investigation, Orica’s documented policies and procedures set out a clear line of command for developing occupational health and hygiene monitoring at the site. However, the supervisor (Mr Scott Andrews) and the manager (Mr Jonathan Regan) responsible for overseeing the Cobalt Shed, did not know who was responsible for these matters. The policies and procedures stated that it was their responsibility.
Orica’s safety specialist was unclear on the procedures for developing a hygiene monitoring plan, or when and how reviews of controls would be undertaken as a result of an exceedance of a workplace exposure standard, or BOEL, for cobalt. While the documented procedures indicated a clear line of command and the actions which should have been taken, the people involved were unaware of these matters.

Training and Supervision

Training was provided on the job by experienced workers. The responsibility to train Mr Calvert when he commenced employment with Orica fell to the remaining worker in the Cobalt Shed. Knowledge was passed down from one worker to the next. No more than two workers worked in the Cobalt Shed at any one time.
Mr Calvert was not given any formal or systematic training in the use, cleaning or storage of PPE, including Respirators. Mr Calvert was informed of the PPE requirements for the job, namely rubber gloves and a P2 disposable mask, and was shown the Safety Data Sheets. Mr Calvert worked as a trainee under direct supervision of two operators for the first 12 months. Mr Calvert was directed to wear respiratory protection for all tasks. Full body coveralls or Tyvek suits were provided but the OEC Report said that these were not always worn by the operators in the Cobalt Shed and that Respirators were not properly cleaned or stored after use.
Supervisors and managers were concerned with product orders being met but they did not have technical knowledge in the manufacturing of cobalt catalyst, nor did they provide instruction or supervision in the manufacturing aspects of cobalt catalyst. Mr Andrews and Mr Regan stated in their interviews with SafeWork that the workers in the Cobalt Shed were self-directed in how they performed their tasks in the Cobalt Shed.

The Orica Safety System

Many of the practices in place for the rest of the KI facility and in standard operating procedures were not followed for the Cobalt Shed. Specifically, SafeWork’s investigation identified the following:

Orica had a safety management system that required investigation and action to be taken when risks were identified. However, when the LEV system was reported as broken in the Cobalt Shed, no evidence that an investigation had occurred could be found. No-one at Orica could inform the SafeWork inspectors if action had been taken to fix the LEV system or where this might have been recorded.

Orica’s safety management system also provided for the storage of reports, yet the fit testing of PPE conducted was not logged and the results were lost.

When Orica received the OEC Report from Mr Wilson with the recommendations of required remedial actions, there is no evidence that Orica took action, except for cleaning the office/lunchroom. The action steps identified in the OEC Report were not loaded into Orica’s safety management system for follow-up and implementation.

Hygiene reports identified potential and actual instances where the workplace exposure standards for cobalt was exceeded. However, other than evidence of Orica repeating the tests a number of weeks later, there was no evidence that Orica formally actioned a review of controls prior to August 2019.
When SafeWork first inspected the site in January 2020 Orica had not completed any of the OEC Report’s recommendations from August 2019. SafeWork issued Improvement Notices setting out many of the same issues that were identified in the OEC Report.
Records on the maintenance of the LEV system and the processes for LEV system maintenance were not logged in Orica’s safety management system or were lost. While the safety management system set implementation benchmarks (such as a pre-commissioning test of the LEV system after any modifications), these reports could not be located, and the actioning of the benchmarks could not be verified.
The Cobalt Oxide Catalyst Manufacturing Safe Operating Procedure required workers to test run equipment before using it. This included undertaking a “test run [of the] dust extraction system [ie the LEV] ensuring sufficient air flow through all nozzles.”
Before starting work, Mr Calvert and Mr Linstrom tested the air flow of the LEV system with their hands or paper cups. No records of any further air flow testing were produced to SafeWork during their investigation. The workers were not aware of any requirement for further air testing.

Guidance Material

Safe Work Australia Code of Practice – Managing Risks of Hazardous Chemicals in the Workplace, July 2012 (Safe Work Australia Code)

The Safe Work Australia Code provides practical guidance to persons conducting a business or undertaking (PCBU) on how to manage health and safety risks associated with hazardous chemicals in the workplace.
Section 1.5 of the Safe Work Australia Code refers to exposure standards, including workplace exposure standards for airborne contaminants. Section 3.3 states:

“Where results of monitoring show concentrations of airborne contaminants approaching the exposure standard, you should review your control measures.”

Section 5.2 of the Safe Work Australia Code provides specific guidance on reviewing control measures if there is an adverse monitoring result.
Sections 4.1 and 4.2 of the Safe Work Australia Code set out control measures to control the risks associated with hazardous chemicals in accordance with the hierarchy of control. These sections say that air monitoring, biological monitoring, adequate ventilation, PPE, and administrative controls “may be necessary” and that LEV is used to:

“…remove airborne contaminants before they reach the breathing zone of workers in the area. It is used for effective control of more highly toxic contaminants created in large quantities and is applied close to the source of generation. It is more effective than increasing general ventilation to try to dilute toxic contaminants.”

Safe Work Australia – Workplace Exposure Standards for Airborne Contaminants, April 2013 (Exposure Standard)

The Exposure Standard states that cobalt has an exposure standard of 0.05mg/m3 and is labelled “Sen” in column 6 of Appendix A, meaning that cobalt is a respiratory and/or skin sensitiser and is known to create greater risks to sensitised workers.

Australian and New Zealand Standard AS/NZS1715:2009 Selection, use and maintenance of respiratory protective equipment, 2009 (AS/NZS1715:2009)

AS/NZS1715:2009 provides information on the different types of respiratory protective equipment, how to select the right type for the job, and how to correctly maintain it.
AS/NZS1715:2009 also sets out the requirements and recommendations for respiratory protection, discussing identifying airborne hazards/contaminants, risk assessments of airborne contaminants, and methods of control, including the use of respiratory protective equipment.
Section 8 of the AS/NZS1715:2009 addresses respiratory protective equipment fit tests and checks, including:

Section 8.3: “individuals who have stubble/beard should not wear a respirator which requires a facial seal”.

Section 8.5.5: “negative fit pressure checks and positive fit pressure checks should be used only as a very gross determination of fit”.

Australian and New Zealand Standard AS/NZS1716:2012 Respiratory Protective Devices, January 2012 (AS/NZS1716:2012)

AS/NZS1716:2012 specifies the requirements, performance, and testing criteria for respiratory protective equipment intended to provide protection against atmospheres containing substances that may be harmful or deficient in oxygen.

Australian and New Zealand Standard AS/NZS4501.1:2008 Occupational Protective Clothing Part 1: Guidelines on the Selection, Use and Maintenance of Protective Clothing, 30 June 2008 (AS/NZS4501.1:2008)

AS/NZS4501.1:2008 provides guidance for the selection, use, care and maintenance of clothing designed to provide protection to workers.

Australian National Industrial Chemicals Notification and Assessment Scheme – Cobalt: Human Health Tier II Assessment, 27 November 2014 (NICNAS Assessment)

The NICNAS Assessment provides information on the potential human health impacts of cobalt.
The NICNAS Assessment states that inhalation exposure tests on rats reveal that cobalt has a high degree of acute toxicity. The exposure standard is 0.05mg/m3.
The NICNAS Assessment provides that repeated exposure to cobalt may produce “harmful effects” and described the occupational risk as:

“During product formulation, dermal and inhalation exposure of workers to the chemical may occur, particularly where manual or open processes are used. These may include transfer and blending activities, metallurgy, quality control analysis, and cleaning and maintenance of equipment.”

Under the heading “Advice for Industry”, the NICNAS Assessment states:

“Control measures to minimise the risk from oral, dermal, ocular and inhalation exposure to the chemical should be implemented in accordance with the hierarchy of controls. Approaches to minimise risk include substitution, isolation and engineering controls. Measures required to eliminate or minimise risk arising from storing, handling and using a hazardous chemical depend on the physical form and the manner in which the chemical is used. Examples of control measures which may minimise the risk include, but are not limited to:
i) using closed systems or isolating operations;
ii) using local exhaust ventilation to prevent the chemical from entering the breathing zone of any worker;
iii) health monitoring for any worker who is at risk of exposure to the chemical if valid techniques are available to monitor the effect on the worker’s health;
iv) minimising manual processes and work tasks through automating processes;
v) work procedures that minimise splashes and spills;
vi) regularly cleaning equipment and work areas; and
vii) using protective equipment that is designed, constructed, and operated to ensure that the worker does not come into contact with the chemical.

Guidance on managing risks from hazardous chemicals are provided in the Managing risks of hazardous chemicals in the workplace – Code of practice available on the Safe Work Australia website.
Personal protective equipment should not solely be relied upon to control risk and should only be used when all other reasonably practicable control measures do not eliminate or sufficiently minimise risk. Guidance in selecting personal protective equipment can be obtained from Australian, Australian/New Zealand or other approved standards.”

SafeWork NSW Code of Practice – Managing the Work Environment and Facilities, August 2019 (SafeWork NSW Code)

The SafeWork NSW Code includes the following about managing risks from airborne contaminants:

“You must ensure that no one at the workplace is exposed to a substance or mixture in an airborne concentration that exceeds the exposure standard for the substance or mixture. This may require air monitoring to be carried out.
Work processes that release harmful levels of airborne contaminants, such as lead fumes, acid mist and solvent vapour, will require specific control measures to reduce or remove the potential for exposure, so far as is reasonably practicable.”

WorkCover NSW – Chemical Analysis Branch Handbook: Workplace and Biological Monitoring Exposure Analysis (9^th ed, n.d) (Chemical Analysis Handbook)

The Chemical Analysis Handbook provides guidance for workplace monitoring on the biological testing requirements and relevant exposure limits to hazardous substances.
Table 2 in the Chemical Analysis Handbook identifies the relevant BOEL limit for cobalt dust as being 29 umol/mol cr for urine tests and 17 nmol/L for blood tests.

New Systems of Work

On 16 and 17 January 2020 SafeWork issued three Improvement Notices directly related to the risk of workers suffering serious illness or death as a result of exposure to cobalt dust.
The Improvement Notices concerned the maintenance of PPE, training in the use of PPE, and the provision of decontamination facilities.
The Improvement Notices also restated some recommendations of the OEC Report, some of which Orica had begun implementing.
After Mr Calvert was diagnosed with occupational asthma, Orica undertook the following actions:

Commissioned an occupational hygiene report from Mr Wilson in response to Mr Calvert developing respiratory symptoms.

The Orica in-house doctor, Dr Viljoen, referred Mr Calvert to Professor Gibson, a respiratory physician, for further assessment.

From 17 June 2019 Orica permanently removed Mr Calvert from working in areas where Mr Calvert may be affected by respiratory exposures to cobalt and cobalt dust and vapours.

Commissioned a review of the LEV system by Donaldson Australasia in response to the recommendations in the OEC Report. The rectification works were yet to commence at the time of SafeWork’s inspection on 15 January 2020.

As recommended in the OEC Report, obtained a quote for a decontamination facility. A decontamination facility was yet to be implemented at the time of SafeWork’s inspection on 15 January 2020.

Provided a clean area for workers to wash their hands after working in the cobalt processing area in response to SafeWork Improvement Notice 7-368678. Orica was also preparing to install a purpose-built decontamination facility for workers.

Provided training to workers on the correct use, maintenance and storage of PPE, including supplied Respirators, in response to SafeWork Improvement Notice 7-368657.

Provided cleaning facilities and storage for respiratory protective equipment after use, in response to SafeWork Improvement Notice 7-368655.

Following the OEC Report, Orica conducted a full clean of the office/lunchroom facilities that were identified as being visually contaminated with cobalt dust. Orica then implemented a “no shoes” policy in this area to prevent contamination from the processing area.

On 24 November 2021 SafeWork inspectors attended the site to inspect the changes related to the Cobalt Shed. The inspectors reported that in addition to the actions in par 110:

Workers were given new Respirators, with P2 filters at the end of December 2020.

Orica installed in the Cobalt Shed new signage on hazards and PPE requirements.

In the third quarter of 2020 the LEV system manufacturers attended the site to overhaul the previous LEV system. However, the COVID-19 pandemic and lockdowns hampered the upgrade’s progress. Since the travel restrictions lifted in October 2021, the manufactures had returned to the site and finished the LEV system upgrades in July 2022. The upgrades had a guaranteed minimum capture velocity of 1.0m/s at the workstations in the Cobalt Shed.

A new decontamination shed and restroom (Decontamination Shed) was installed in February 2021. The Decontamination Shed is a demountable unit adjacent to the Cobalt Shed.

Respirators were stored in clean, closed containers and kept in the Decontamination Shed.

Orica purchased a new Class H HEPA wet/dry industrial vacuum. “Class H” means that the vacuum is rated for use with hazardous and health endangering dusts.

Biological monitoring for workers is now conducted annually. Urine analysis biological monitoring conducted in May 2021 returned with non-detects for both Cobalt Shed workers.

Results from an exposure assessment conducted in May 2021 indicated that there were no adverse exposure levels.

Orica has also upgraded the Cobalt Shed’s entry process, with workers now applying PPE before entering the Cobalt Shed. The new entry process requires the following steps:

Before entering the Decontamination Shed workers remove their personal boots and put on “slip-ons”.

In the “back room” workers remove the slip-ons and put on “slip on boots”.

Workers then put on their Respirator, coveralls, boot covers and nitrile gloves.

Workers enter the Cobalt Shed once dressed in their full PPE.

At the Cobalt Shed’s entrance Orica installed signage indicating it was a “hazardous materials area” and that access was for authorised personnel only.
Within the Cobalt Shed, SafeWork inspectors observed:

Negligible amounts of dust on horizontal surfaces and minor amounts of dust on the floor.

A Kerrick wet/dry industrial vacuum. Orica’s representatives told the SafeWork inspectors that the vacuum was used weekly or as needed to clean up dust.

The original wash-up area and changerooms in the Cobalt Shed were no longer being used. The changerooms were padlocked and used as a storage area.

The decontamination process after workers leave the Cobalt Shed was also upgraded. The decontamination process now involves the following steps:

Workers enter the Decontamination Shed and remove their Respirator. Workers then roll off their coveralls before removing their boot covers and nitrile gloves.

Workers remove their boots and put on slip-ons.

Workers wash their hands and then change into their personal boots.

Evidence for the Defendant

Mr Antony Taylor affirmed an affidavit on 17 April 2024 (DX 1).
From February 2012 to February 2019 Mr Taylor performed various roles for Orica, including Major Projects Statutory Manager, Environment Specialist, and Environment and Community Manager.
Between April 2019 and June 2020 Mr Taylor was the Senior Manager – Safety, Health, Environment and Security at the site.
Since June 2020 Mr Taylor has been Orica’s Senior Manager – Safety, Health, Environment and Security for Continuous Manufacturing Operations. Mr Taylor’s role involves overseeing, maintaining and standardising safety, health, environment and security procedures and programs, and contributing to the development of such programs globally and regionally.
For the site, Mr Taylor coordinates the implementation and verification of Orica’s safety, health, environment and security group standards, policies, safety procedures, risk management processes and associated site-specific management plans.

Regret and Contrition

Mr Taylor stated that “Orica expresses its deepest regret for its offending and that Mr Calvert and Mr Linstrom were exposed to the risk” and “Orica acknowledges its conduct fell below what was acceptable in managing the risk of serious injury or death to Mr Calvert and Mr Linstrom”.
Orica “sincerely apologises” to Mr Calvert and his family for the impact of his illness. Orica recognises that Mr Calvert has worked at the site since 2005 and is “saddened” that its conduct has resulted in Mr Calvert being “unlikely to undertake manufacturing work” at the site in the future.
Mr Calvert remains employed by Orica and “Orica is committed to assisting Mr Calvert to secure alternative employment within his work restrictions with Orica” or elsewhere.
Mr Taylor affirmed that “Orica takes the safety of its workers and community very seriously” and that safety, health, environment and security are “essential to Orica’s business and are foundational to its charter”. A copy of Orica’s current safety, health, environment and security policy is annexed to Mr Taylor’s affidavit.
Orica’s directors are aware of this prosecution and have been kept informed about the improvement works at the site.
Mr Taylor acknowledged that the offence involves an admission by Orica that it was reckless to the risk and describes the “deep impact on Orica’s organisation as a whole, and the management personnel” at the site. The offence caused Orica “to reflect” on its safety practices and to “invest significant resources to enhance systems”.

Corporate Overview

Mr Taylor gave a brief history of Orica’s holding company - Orica Limited – dating back to 1874.
Today, Orica Limited is a global organisation that operates across more than 100 countries and employs over 12,000 people globally. Orica Limited manufactures specialty products and provides specialised services for activities involving mines, quarries, construction, oil and gas operations.
Orica owns and operates six major hazard facilities in NSW, with two facilities (including the site) being continuous manufacturing facilities, operating 24 hours per day, 365 days per year.
As at 30 March 2024, Orica’s Australian operations employed 2,926 employees.

The Site

Mr Taylor detailed the site’s history as a fertiliser manufacturer and a manufacturer of ammonium nitrate for the mining industry. A map of the site is annexed to Mr Taylor’s affidavit.
The site is licenced and classified as a “Major Hazard Facility” (MHF) by SafeWork. As a MHF Orica must develop and provide a safety case to the regulator, detailing how Orica manages risks to people, the environment and property. Mr Taylor stated that SafeWork regularly verifies Orica’s systems to manage the MHF.
The Cobalt Shed would not be classified as a MHF if it was a standalone plant and not part of the site.
Mr Taylor described the site as “a significant employer in the Newcastle region, with approximately 210 permanent employees and around 40 regular contractors”. Mr Taylor said that “during plant shutdowns, there can be up to an additional 300-400 specialist workers on site to undertake maintenance, statutory inspections and complete capital improvement projects”.

The Cobalt Shed

The Cobalt Shed is a brick building of approximately 148 square metres. Mr Taylor said that an office/crib area was in a separate building approximately 10 metres from the Cobalt Shed.
Unlike the other plants at the site which operate on a continuous basis every day of the year, the Cobalt Shed is a “batch production facility” that operates approximately 40 hours per week. Further, the Cobalt Shed does not operate when crystal pellets are not required or when raw materials are not available to manufacture the cobalt catalyst.
Orica employed up to two operators in the Cobalt Shed. These operators performed manufacturing activities and were responsible for performing housekeeping tasks and general administration duties.

Mr Calvert was one of these two Cobalt Shed operators. A copy of Mr Calvert’s position description for the role of the Cobalt Shed “Senior Coordinator” is annexed to Mr Taylor’s affidavit.
In the period before and during the offending period, the Cobalt Shed workers reported directly to the “Supply Chain Manager and Superintendent – Product Warehouse”.

Systems of Work Before and During the Offence Period

Mr Taylor’s affidavit addressed Orica’s systems of work before and during the offence period, including:

“Safety Health Environment Security Management System”.

Safety management in the Cobalt Shed.

The LEV system.

Respiratory protection and PPE.

Occupational hygiene monitoring.

Biological monitoring.

Health monitoring.

Monitoring work/reviews.

Mr Calvert’s Adverse Health Monitoring Report

Mr Taylor stated that before 12 June 2019 Orica never received a report from Dr Viljoen about Mr Calvert potentially suffering an illness due to airborne contaminants. Of course, by that time, Mr Calvert had developed occupational asthma as a result of five years of preventable exposure to cobalt dust.
In relation to Mr Calvert, the steps Orica took after being informed of Mr Calvert’s adverse health monitoring report included:

Removing Mr Calvert from work in the Cobalt Shed.

Providing Mr Calvert with support from his superintendent, line manager, and the Safety, Health, Environment and Security Specialist.

Encouraging Mr Calvert to seek support from Orica’s Employee Assistance Program and the onsite psychologist.

Orica’s Steps after Mr Calvert’s Adverse Health Monitoring Report

Mr Taylor’s affidavit listed the steps Orica took after receiving Mr Calvert’s adverse health monitoring report. These steps included:

Reviewing occupational exposure to cobalt in the Cobalt Shed.

Commissioning Mr Wilson to conduct a hygiene assessment of the Cobalt Shed.

Notifying SafeWork of the adverse health monitoring report.

Changing the reporting lines for Cobalt Shed workers to increase operational oversight.

Reviewing and upgrading the LEV system, at a cost of $277,000. The commissioning report and upgrades are annexed to Mr Taylor’s affidavit.

Upgrading PPE, including the Respirators, and how PPE is cleaned and stored.

Increasing the frequency of cleaning the Cobalt Shed, purchasing a new industrial vacuum, and developing a new decontamination and changeroom facility.

Revising and implementing a new procedure for reviewing and inputting hygiene monitoring results into Orica’s management software. A copy of this new procedure is annexed to Mr Taylor’s affidavit.

Revising the “Biological Monitoring Program for Cobalt”. The current “Biological Monitoring Program for Cobalt” is annexed to Mr Taylor’s affidavit.

Increasing the frequency of periodic health monitoring for workers in the Cobalt Shed from biannually to annually.

No biological testing has exceeded the BOEL since Mr Calvert’s elevated blood sample on 1 November 2018. Mr Taylor said that “this has given Orica comfort that the risk associated with airborne dust during the cobalt catalyst manufacturing process is now adequately controlled”.

Investigations into Elimination or Further Minimisation of Exposure to Cobalt Dust

Orica has commenced investigations to completely remove cobalt catalyst from its nitric acid manufacturing operations at the site and replace it with a platinum catalyst. Achieving this would remove the requirement for workers to work in proximity to the hazard of cobalt dust.
However, removing cobalt catalyst from the production process requires significant engineering investigations and evaluation. The preliminary cost for the potential conversion is estimated to be between $30-$50 million.
If Orica cannot remove cobalt catalyst from its operations, it will “investigate the feasibility” of closing the Cobalt Shed and instead import cobalt catalyst from external suppliers.
Orica is also investigating ways to automate the cobalt catalyst manufacturing process to further reduce exposure to cobalt dust. Initial trials have been successful and further trials and air monitoring is being undertaken to confirm the effectiveness of automated methods.

Safety Initiatives

Mr Taylor’s affidavit set out examples of Orica’s safety initiatives undertaken over the past decade, including:

Human health risk assessment.

Major Hazard Management Program.

Safety Leadership Interaction Program.

Improvement of ammonia manufacturing and end storage systems.

Psychosocial risk assessment.

Corporate Citizenship

Mr Taylor’s affidavit addressed Orica’s corporate citizenship, giving examples of donations Orica has made to various charities and initiatives in the Newcastle region over the past four financial years, totalling approximately $1,200,000.

Cooperation with SafeWork and Guilty Plea

Orica notified SafeWork of Mr Calvert’s adverse health assessment “shortly after” receiving the report confirming Mr Calvert’s occupational asthma diagnosis.
Orica then facilitated SafeWork’s visit to the site on 15 January 2020, provided information and documents to SafeWork, and made its workers and managers available for interviews with SafeWork.
Orica entered a plea of guilty on 27 November 2023 which was as soon as possible after the Amended Summons was filed.

WHS Record

Under the legislation preceding the WHS Act Orica has 12 prior convictions spanning a period of 29 years in NSW.
In the past 10 years Orica has not been the subject of a prosecution for a breach of WHS laws in NSW.
Mr Taylor stated that “Orica is committed to complying with its obligations to ensure health and safety of its workers and others”.

Consideration

I have had regard to the objects in s 3 of the WHS Act and the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) (CSP Act).

Objective Seriousness of the Offence

The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term “objective circumstances” was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566 at [15].
The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R [1988] HCA 67; (1988) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed and set the limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].
In Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [27] the High Court said:

“The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of the offending.”

The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson(No. 5) [2009] NSWSC 432 at [61].
The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.
The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock. This approach to sentencing, known as the “instinctive synthesis” approach, involves the making of a global judgment without any attempt to state precisely how any given factor has influenced the judgment.
The Court of Criminal Appeal has examined the sentencing process with regard to the WHS Act in the matter of Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96. Justice Basten at [34], under the heading “Assessment of Risk” said:

“The sentencing judge commenced his consideration with the proposition that ‘greater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely’. However the truth of that proposition depends upon other considerations including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk, and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends on assessment of all those factors.”

Further at [42] his Honour continued:

“The culpability of the Respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step‑by‑step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the [event] which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs.”

At [53] his Honour dealt with the proper approach to considering the objective seriousness of offences under the WHS Act, saying:

“It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken.”

My findings about the defendant’s level of culpability are based upon the following:

The risk to a worker posed by cobalt dust was both foreseen and foreseeable by Orica. Orica was testing Mr Calvert to ascertain whether he had dangerous levels of exposure to cobalt. The tests told Orica that he did, yet nothing was done. Further, there was ample guidance material available to Orica concerning the risk and the steps which should be taken to guard against the risk.

The likelihood of the risk occurring was certain, given that Orica took few steps to guard against the risk, and those steps which it did take were poorly implemented and inadequate.

The potential consequences of the risk were death or serious injury. These consequences were known to Orica and were the subject of Orica documentation.

Steps were available to minimise the risk. After it was discovered that Mr Calvert had contracted occupational asthma, steps were taken which have satisfied SafeWork that the risk has been minimised. It should be noted that the steps were not taken straight away and had not been taken by the time a SafeWork inspector attended the site many months after Orica became aware of Mr Calvert’s disease.

There would have been inevitable cost in taking suitable steps to minimise the risk. There was no submission that there was a particular burden placed upon Orica by the taking of those steps. They were things which should have been in place from the start.

While Mr Calvert contracted the serious disease of occupational asthma, since he has been removed from the cobalt dust he has made a reasonable recovery. However, the sensitising of his respiratory system means that he can no longer work in his previous occupation. Senior Counsel for Orica submitted that in assessing objective seriousness, the Court could not take into account the fact that the risk came home and that Mr Calvert contracted occupational asthma. I reject that submission. In assessing the objective seriousness of any offence, including an offence under the WHS Act, it is always relevant to take into account the result of an offender’s conduct. While injury is not an element of the offence, it is most certainly a relevant matter to take into account in assessing objective seriousness.

Two workers were exposed to the risk. Fortunately, Mr Linstrom did not contract a disease.

The maximum penalty for the offence is a fine of $3,000,000, which reflects the legislature’s view of the seriousness of the offence.

This was not a one-off event. Senior Counsel for Orica submitted that Orica should be sentenced on the basis that it had only exposed Mr Calvert to cobalt dust on the dates proved by the evidence, ie the dates on which air monitoring and biological testing showed increased levels of cobalt, as well as the dates covered by the OEC Report. I reject this submission. It was an agreed fact that Mr Calvert said that the dusty conditions in the Cobalt Shed were the same from start to finish. When the OEC Report was prepared, the conditions in the Cobalt Shed, and in its associated facilities were, to be blunt, filthy. It was the same when the SafeWork Inspector attended the site many months after the OEC Report. It would be deserting reality to think that the only dangerous dusty days in the Cobalt Shed were those proved by direct evidence. This dangerous dust was something to which Mr Calvert and Mr Linstrom were exposed on a regular basis, many times a week, for many years, when they were engaged in the various dusty processes within the Cobalt Shed.

There were so many red flags available to Orica, including the 2014 risk assessment, air monitoring, urine tests and blood tests, and yet nothing was done. Even a cursory inspection of the Dickensian state of the Cobalt Shed, with dust visible on most surfaces, would have alerted Orica to the risk which it had created, basically through ignorance and neglect. In its written submissions (MFI 2, par 20) Orica accepted that there were “multiple failures in its systems over a period of time”. Even after the OEC Report was provided, very little was done. It took the visit from a SafeWork Inspector to stir Orica into action. Orica could provide no explanation why nothing was done when time after time objective material was available to warn Orica of the risk posed to Mr Calvert.

Orica certainly foresaw the possibility of the risk to an individual of death or serious injury through its lack of precautions taken in the Cobalt Shed. Not only did it foresee the risk of injury, but it had evidence in its hands that there was not just the possibility of a risk, but that the risk was actually present day after day, year after year. This is a serious instance of an offender being reckless as to the risk to an individual of death or serious injury. It is a sorry chapter in Orica’s history.
I find that the level of culpability of Orica is in the upper half of the mid range.

Deterrence

The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the WHS Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 at [180].
The penalty must reflect the need for specific deterrence. Orica is still conducting a business. Its operations involve manufacturing operations using cobalt and other hazardous chemicals, and the continuing engagement of workers.

Aggravating Factors

The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) CSP Act.
Orica has a significant record of previous convictions: s 21A(2)(d) CSP Act. These are set out in PX 1, Tab 4.

Mitigating Factors

Orica is otherwise of good character: s 21A(3)(f) CSP Act. The steps which it took after the incident demonstrate this. Orica has been in business for many decades.
Orica has good prospects of rehabilitation: s 21A(3)(h) CSP Act. It has taken positive steps to guard against the risk of an incident such as this ever happening again. It has brought its documentation and its procedures into line with those which, on all the evidence, should have been in place before this incident occurred.
Orica has shown remorse for the offence: s 21A(3)(i) CSP. It has provided evidence that it has accepted responsibility for its actions and has acknowledged that the injury to Mr Calvert was caused by its actions.
Orica entered a plea of guilty: s 21A(3)(k) CSP Act. The court must take into account the fact that the offender has pleaded guilty, when the offender pleaded guilty, and the circumstances in which the offender indicated an intention to plead guilty: s 22(1) CSP Act.
The procedural history of this matter is set out in an attachment to the SafeWork written submissions (MFI 1). The Summons was filed in December 2021 and first came before the court for directions in February 2022. Much of 2022 was taken up with requests for particulars, a dispute about a subpoena issued by SafeWork to Orica and the service of expert reports. In November 2022 Orica offered to plead guilty to a Category 2 charge if the Category 1 charge was withdrawn. This was rejected by SafeWork in January 2023. On 2 March 2023 Orica pleaded not guilty to the Category 1 charge. By August 2023 Orica was negotiating in relation to the Category 1 charge and on 27 November 2023 it entered a plea of guilty to that charge.
The case against Orica based on an allegation of recklessness was strong and was established through Orica’s own documents. In my view it should have pleaded guilty much earlier than it did. That having been said, the plea had significant utilitarian value, saving much public expenditure (both by SafeWork and by the court). It is appropriate to give Orica a 20% discount for its plea of guilty.
Orica gave assistance to law enforcement authorities: s 21A(3)(m) CSP Act. It cooperated at all times with the prosecutor and provided all documents requested in a prompt fashion.

Capacity to Pay a Fine

I am required to have regard to s 6 of the Fines Act 1996 (NSW) before imposing a fine. Where an offender seeks to have a fine reduced on the basis of a limited capacity to pay, it bears the evidentiary onus of convincing the court that it should exercise its discretion to limit the amount of the fine. The offender’s capacity to pay is relevant but not decisive: Mahdi Jahandideh v The Queen [2014] NSWCCA 178 at [16]. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence.
In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 at [79] the Court of Criminal Appeal said:

“First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to ‘the means’ of the defendant, pursuant to s 6 of the Fines Act 1996.”

There was no submission about capacity to pay, so this issue does not arise.

Costs

Subject to what appears below in relation to an interlocutory matter, there will be an order that the defendant is to pay the prosecutor’s costs.
Orica filed a Notice of Motion on 28 July 2022, seeking to set aside a subpoena served by SafeWork upon Orica. The Motion came before Judge Scotting for hearing on 5 September 2022. SafeWork decided to attempt to obtain the information which it sought from sources other than the documents listed in the subpoena. Thus, the motion was never determined. On 10 October 2022 the motion was dismissed and costs were reserved. I do not propose to embark on a “trial within a trial” to determine where the merits lie in relation to the motion. The only fair way to deal with reserved costs is to order each party to pay their own costs of Orica’s motion.

Penalty

My orders are:

Orica Australia Pty Ltd is convicted.

The appropriate fine is $1,500,000 but that will be reduced by 20% to reflect the plea of guilty.

Order Orica Australia Pty Ltd to pay a fine of $1,200,000.

Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.

Order that each party pay its own costs of the Notice of Motion filed by Orica Australia Pty Ltd on 28 July 2022.

Subject to order (5) above, order Orica Australia Pty Ltd to pay the prosecutor’s costs.

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Decision last updated: 01 May 2024

Medium Neutral Citation:	SafeWork NSW v Orica Australia Pty Ltd [2024] NSWDC 140
Hearing dates:	19 April 2024
Date of orders:	1 May 2024
Decision date:	01 May 2024
Jurisdiction:	Criminal
Before:	Russell SC DCJ
Decision:	(1) Orica Australia Pty Ltd is convicted. (2) The appropriate fine is $1,500,000 but that will be reduced by 20% to reflect the early plea of guilty. (3) Order Orica Australia Pty Ltd to pay a fine of $1,200,000. (4) Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor. (5) Order that each party pay its own costs of the Notice of Motion filed by Orica Australia Pty Ltd on 28 July 2022. (6) Order Orica Australia Pty Ltd to pay the prosecutor’s costs.
Catchwords:	CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – risk of death or serious injury SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – general deterrence – specific deterrence COSTS – prosecution costs OTHER – industrial chemical manufacturing – cobalt dust – occupational asthma – insufficient personal protective equipment – insufficient ventilation – no decontamination facility or process – failure to take corrective action
Legislation Cited:	Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22 Fines Act 1996 (NSW), ss 6, 122 Work Health and Safety Act 2011 (NSW), ss 3, 19, 31
Cases Cited:	Aubrey v R [2017] HCA 18; (2017) 260 CLR 305 Baumer v R [1988] HCA 67; (1988) 166 CLR 51 Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 BW v R [2011] NSWCCA 176 Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Mahdi Jahandideh v The Queen [2014] NSWCCA 178 Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96 R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566 R v Wilkinson (No. 5) [2009] NSWSC 432 SafeWork NSW v Synergy Scaffolding Services Pty Ltd [2022] NSWDC 584 Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465
Texts Cited:	Australian and New Zealand Standard AS/NZS 1715:2009, Selection, Use and Maintenance of Respiratory Protective Equipment, 2009 Australian and New Zealand Standard AS/NZS1716:2012, Respiratory Protective Devices, January 2012 Australian and New Zealand Standard AS/NZS4501.1:2008, Occupational Protective Clothing Part 1: Guidelines on the Selection, Use and Maintenance of Protective Clothing, 30 June 2008 Australian National Industrial Chemicals Notification and Assessment Scheme, Cobalt Oxide: Human Health Tier II Assessment, 27 November 2014 Australian Standard AS3544-1988 Industrial Vacuum Cleaners for Particulates Hazardous to Health, 15 July 1988 Safe Work Australia Code of Practice, Managing Risks of Hazardous Chemicals in the Workplace, July 2012 SafeWork NSW Code of Practice, Managing the Work Environment and Facilities, August 2019 Safe Work Australia, Workplace Exposure Standards for Airborne Contaminants, April 2013 WorkCover NSW, Chemical Analysis Branch Handbook: Workplace and Biological Monitoring Exposure Analysis (9th ed, n.d)
Category:	Sentence
Parties:	SafeWork NSW (Prosecutor) Orica Australia Pty Ltd (Defendant)
Representation:	Counsel: J Agius SC and M Moir (Prosecutor) P McDonald SC and N Read (Defendant) Solicitors: Department of Customer Service (Prosecutor) Sparke Helmore (Defendant)
File Number(s):	2021/342865