Du Preez (Commissioner for Mine Safety and Health) v Parhusip [2017] ICQ 7

INDUSTRIAL COURT OF QUEENSLAND CITATION: Du Preez (Commissioner for Mine Safety and Health) v Parhusip [2017] ICQ 007 PARTIES: KATHERINE EVELYN DU PREEZ (COMMISSIONER FOR MINE SAFETY AND HEALTH) (appellant) v ROY PARHUSIP (respondent) FILE NO/S: C/2017/9 PROCEEDING: Appeal DELIVERED ON: 27 October 2017 HEARING DATE: 9 August 2017 MEMBER: Martin J, President ORDER/S: 1. The appeal is allowed. 2. The respondent be fined the sum of $6,600. That fine is to be paid within 60 days. No conviction is recorded. CATCHWORDS: INDUSTRIAL LAW – WORK HEALTH AND SAFETY – DUTIES AND LIABILITIES – PENALTIES – where the respondent was the operator of an operating plant – where the respondent was obliged under s 674 of the Petroleum and Gas (Production and Safety) Act 2004 to produce a safety management plan – where the respondent failed to undertake that duty – where the respondent pleaded guilty to breaching s 674 – where the learned sentencing magistrate imposed a penalty of a $500 recognisance – where the appellant appeals on a number of grounds – where the appellant alleges the sentence was manifestly inadequate – where the appellant alleges the learned magistrate misconstrued the Act – where the appellant alleges the learned magistrate failed to have proper regard to the maximum penalty – whether the learned magistrate improperly exercised his discretion Penalties and Sentences Act 1992, s 9 Petroleum and Gas (Production and Safety) Act 2004, ss 674, 675 CASES: Markarian v the Queen (2005) 228 CLR 357, cited APPEARANCES: B J Power instructed by Gilshenan & Luton Solicitors for the appellant A J Glynn QC instructed by Norton Rose Fullbright Australia for the respondent -- 1 of 10 -- 2 [1] In 13 February 2017, the respondent pleaded guilty to having failed to make, for each stage of a coal seam gas operating plan, a safety management plan (“SMP”) that complied with s 675(1)(i) of the Petroleum and Gas (Production and Safety) Act 2004 (“the P&G Act”) contrary to s 674(1)(a)(i) of the P&G Act. [2] The sentencing magistrate applied s 19 of the Penalties and Sentences Act 1992 (“PSA”) and the respondent was released upon entering into a recognisance in the sum of $500 for two years. No conviction was recorded. The appellant appeals on a number of grounds: (a) The sentence was manifestly inadequate. (b) The sentencing magistrate erred in the construction of s 674 of the P&G Act. (c) The sentencing magistrate failed to have proper regard to the maximum penalty, as required by s 9(2)(b) of the PSA. (d) The sentencing magistrate failed to have proper regard to the need for general deterrence, as required by s 9(1)(c) of the PSA. (e) The sentencing magistrate erred in finding that the requirements of s 17 and s 18 of the PSA were met. The P&G Act [3] Section 674(1)(a)(i) of the P&G Act imposes the following duty on the operator of a plant: “(1) The operator of an operating plant must - (a) for each stage of the plant, make a safety management plan that complies with - (i) section 675 …” [4] Section 675(1)(i) relevantly provides: “(1) A safety management plan for an operating plant must include details of each of the following to the extent they are appropriate for the plant - (i) safety standards and standard operating and maintenance procedures applied, or to be applied, in each stage of the plant.” [5] The respondent was the “operator” for the purposes of s 674 of the P&G Act. [6] The maximum penalty for a breach of the section is 1,500 penalty units. At the time of the offence a penalty unit was $110; thus, the maximum fine was $165,000. -- 2 of 10 -- 3 The Penalties and Sentences Act 1992 [7] The grounds of appeal refer to a number of sections in the PSA. So far as they are relevant, they provide: “9 Sentencing guidelines (1) The only purposes for which sentences may be imposed on an offender are— (a) to punish the offender to an extent or in a way that is just in all the circumstances; or (b) to provide conditions in the court’s order that the court considers will help the offender to be rehabilitated; or (c) to deter the offender or other persons from committing the same or a similar offence; or (d) to make it clear that the community, acting through the court, denounces the sort of conduct in which the offender was involved; or (e) to protect the Queensland community from the offender; or (f) a combination of 2 or more of the purposes mentioned in paragraphs (a) to (e). (2) In sentencing an offender, a court must have regard to— (a) principles that— (i) a sentence of imprisonment should only be imposed as a last resort; and (ii) a sentence that allows the offender to stay in the community is preferable; and (b) the maximum and any minimum penalty prescribed for the offence; … 17 Making of order (1) If a court considers that it is appropriate that no punishment or only a nominal punishment should be imposed on an offender, the court may make an order under section 19. (2) … 18 Matters to which court must have regard Before making an order under section 19, the court must have regard to— (a) the offender’s character, age, health and mental condition; and (b) the nature of the offence; and -- 3 of 10 -- 4 (c) circumstances (if any) under which the offence was committed that make the offence less serious than what it would be if it had been committed under other circumstances; and (d) anything else to which the court considers it proper to have regard.” The agreed facts [8] On 19 April 2013, a drilling rig was moved and the crew of the rig were required to perform a task called “raising the dog house”. The dog house is a room that houses all of the controls to operate the drilling rig, and once it is raised, it is approximately four metres off the ground. One of the tasks associated with raising the dog house is to install a set of stairs which lead to the dog house and which have hand rails attached. On 19 April 2013, the stairs were installed but the hand rails were not. [9] The crew were required, when they raised the dog house, to follow a specific work instruction which contained a series of requirements. While it made reference to the stairs and the hand rails, it failed to identify when the hand rails and the stairs should have been installed during the process of raising the dog house. In other words, the work instructions should have identified at what stage during the task the stairs and hand rails should have been installed. [10] Mr Parhusip was required by the P&G Act to make a SMP that complied with s 675 of the P&G Act. It failed to comply with the mandatory requirements of the Act because it did not identify at what stage the crew were to install the stairs and hand rails and, therefore, did not achieve an acceptable level of risk. [11] While it was accepted that a worker had fallen and been injured whilst the safety railings were not in place, the offence charged was the non-aggravated form and the injury to the worker was irrelevant to these proceedings. The respondent [12] Mr Parhusip was a 37-year-old man who had come from Indonesia to work in Australia. He was the “operator” of the plant for the purposes of the P&G Act. The operator is the person responsible for the management and safe operation of the plant. [13] Mr Parhusip no longer lives or works in Australia. He has no criminal record in Australia. [14] He currently commutes to Bahrain for work and his family lives in Indonesia. The sentencing magistrate was informed that he has no intention of returning to Australia. -- 4 of 10 -- 5 Was the sentence manifestly inadequate? [15] The appellant’s primary contention is that the magistrate was mistaken in describing the offending as a “technical offence”. The appellant argues that the “inherent dangerousness of the work” contradicts this. [16] The sentencing magistrate said: “The only thing that you [Mr Parhusip] are alleged not to have done was to have included in instruction within the work instruction about the installation of handrails on the stairs leading up to a dog house before it’s raised. That seems to me to be the classic description of a technical offence … particularly when regard is had to the very extensive instructions that govern … what has to be done in the smallest detail with respect to the procedures that were being undertaken.” (emphasis added) [17] The appellant referred to a number of sentences in matters which had some aspects in common with this and noted that harsher penalties were imposed in those cases. Additionally, the appellant points to the nature of the offence and its statutory context, drawing attention to the purpose of the Act, namely to create a safe environment for the extraction of petroleum and gas. [18] In reply, the respondent submits that the appellant’s argument amounts to nothing more than that all breaches of s 674 are more than technical. This does not take into account the fact that there is a range of behaviour that may contravene s 674. Simply because offending may be serious does not render all breaches so. The respondent contends the comparable cases provided by the appellant are of no use; they are merely examples of the exercise of judicial discretion. [19] The respondent ultimately submits that, having regard to the seriousness of the offending and the circumstances in mitigation, there is no manifest inadequacy. For the reasons I give below, I do not accept that. Incorrect construction of s 674 of the P&G Act? [20] The appellant contends that the magistrate erred in holding that Mr Parhusip was not “directly responsible” and could only have “some degree of responsibility” attributed to him. [21] Section 674(1) provides, “the operator of an operating plant must … make a safety management system that complies with section 675 …” (emphasis added). [22] In sentencing, the learned magistrate said: “It is quite obvious that … you are not directly or even indirectly responsible for anything that remotely involves a workplace incident. The best that can be said is that you had some degree of responsibility for ensuring that -- 5 of 10 -- 6 the work instruction contained everything necessary to allow the operation of this rig to have been carried out safely … you were not directly responsible for drafting the work instruction; the most that can be said is that had the omission come to your attention, you had the ability to do something about correcting it.” (emphasis added) [23] With respect, this is a misconstruction of the section. The section places an obligation on the operator to ensure that the system is compliant. There is no power to delegate or avoid statutory responsibility. It cannot be said that Mr Parhusip had merely “some responsibility”; the burden of the system’s compliance with the P&G Act fell entirely upon him. [24] The respondent submits that it was the employer’s policy to exclude him from the development of the system. He says that this reduces his culpability. This submission also misconstrues s 674, but appears to have been accepted by the magistrate. It was the clear intention of Parliament that the operator be responsible for the safety of an operating plant. This responsibility cannot be avoided by implementing workplace policies that bypass the operator. Indeed, for the operator to have had no input into the system could amount to a breach of s 674 in any event. [25] The approach taken by the magistrate was inconsistent with the agreed basis upon which the sentence was heard – “As the operator of the rig, Mr Parhusip was required by s 674 of the Act to make a safety management plan”. Whatever the arrangements might have been within Saxon, the P&G Act imposed a duty on the respondent and he did not comply with it. [26] The magistrate’s approach to the application of the P&G Act was in error. Failure to have regard to the maximum penalty [27] The appellant submits that the learned magistrate failed to have due regard to the maximum penalty prescribed by the s 674, being 1,500 penalty units. This, the appellant submits, indicates the Parliament’s intention to convey that a breach of the section is serious. It also may be used as context for comparable sentencing decisions. [28] In his decision, the sentencing magistrate stated: “I am told that … because the … maximum fine is up to $165,000, the offending is objectively serious … I do not agree with the submission. Seriousness or otherwise of an offence is to be determined with regard to its objective seriousness, not subjective seriousness, having regard to a maximum penalty that Parliament has imposed for a particular contravention of the law. As is perfectly obvious, it is not a sentencing principle that one immediately goes to the maximum penalty and determines on that basis the objective seriousness or otherwise of an offence; it must, obviously, be determined on the basis of what actually happened in the instant case, and the degree of culpability or otherwise of the person who has been convicted or pleaded guilty to the offence. -- 6 of 10 -- 7 … So, quite clearly, there is a range of levels of seriousness that attach to any particular offence, and the penalty that is imposed must have regard to the objective seriousness of the matter.” [29] Section 9(2)(b) provides that the court must have regard to the maximum penalty prescribed for an offence. The correct approach was described in Markarian v the Queen:1 “[30] Legislatures do not enact maximum available sentences as mere formalities. Judges need sentencing yardsticks. It is well accepted that the maximum sentence available may in some cases be a matter of great relevance. In their book Sentencing, Stockdale and Devlin. observe that: A maximum sentence fixed by Parliament may have little relevance in a given case, either because it was fixed at a very high level in the last century … or because it has more recently been set at a high catch-all level … At other times the maximum may be highly relevant and sometimes may create real difficulties … A change in a maximum sentence by Parliament will sometimes be helpful [where it is thought that the Parliament regarded the previous penalties as inadequate]. [31] It follows that careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick. That having been said, in our opinion, it will rarely be, and was not appropriate for Hulme J here to look first to a maximum penalty, and to proceed by making a proportional deduction from it. That was to use a prescribed maximum erroneously, as neither a yardstick, nor as a basis for comparison of this case with the worst possible case. That he used the maximum penalty impermissibly appears from his Honour’s particular deference to it in this passage.: Parliament cannot have intended that, other things being equal, the penalty for supplying more than 250 g should be less than for supplying that quantity. The form of the statement is explained by the fact that his Honour did not start with the maximum penalty for an offence involving the quantity in question, but used another maximum penalty as his starting point, that is, the maximum for an offence in the category of seriousness immediately below that of the principal offence.” 1 (2005) 228 CLR 357 at 372. -- 7 of 10 -- 8 [30] The respondent submits that the magistrate did not err. He says that the magistrate did have regard to the maximum penalty, but imposed a sentence towards the lower end of the range after assessing the context of the offending. This submission should be accepted. As extracted above, the magistrate said, “Seriousness … is to be determined with regard to its objective seriousness, not subjective seriousness, having regard to a maximum penalty that Parliament has imposed …”. This reveals no error; it was appropriate for the magistrate to consider the global context of the offending. Failure to have regard to general deterrence – s 9(1)(c) PSA [31] The appellant contends that the magistrate failed to have due regard to the need for general deterrence. General deterrence comes within s 9(1)(c) of the PSA. [32] In his sentencing remarks, the magistrate said: “General deterrence may or may not have particular relevance; in your case, I guess, there is a moderate degree to which general deterrence must have some degree of priority, insofar as merely to reinforce to others who are operating drill rigs that they ought to comply with work instructions and make sure they are as comprehensive as possible. However, I would have thought that the mere fact that people are being prosecuted for this sort of thing would have got around the industry, and, of itself, amounted to some sort of deterrence.” [33] The appellant argues that the magistrate fell into error by relying on the fact of prosecution of the breach as answering the requirement for general deterrence. [34] The respondent contends that the appellant’s argument should not be accepted, on the basis that “it assumes that considerations of general deterrence operate uniformly regardless of individual circumstances of the case”. The respondent also cites his good character, remorse and previously untarnished record. With respect, the respondent appears to have confused individual and general deterrence. The respondent’s character and record are irrelevant to the issue of general deterrence. That principle is concerned with deterring other people from committing similar offences. [35] It is suggested that the learned magistrate failed to give adequate weight to general deterrence. There may be some level of deterrence achieved by the prosecution of the matter, as an operator’s professional reputation may be damaged. However, the mere prosecution of a matter without an adequate penalty may suggest that the matter is not taken seriously, thereby encouraging further breaches where, for example, it may be in the interests, financial or practical, of an operator to dedicate limited efforts in developing a SMP and simply accept a minor penalty. The fact that the respondent, as an operator, had no input into the development of the system is also a practice that ought to be discouraged. [36] It should be remembered that one of the main purposes of the P&G Act is to promote the safety of operating plants. Section 3(1)(k) of the P&G Act states: -- 8 of 10 -- 9 “Main purpose of Act (1) The main purpose of this Act is to facilitate and regulate the carrying out of responsible petroleum activities and the development of a safe, efficient and viable petroleum and fuel gas industry, in a way that— … (k) regulates and promotes the safety of persons in relation to operating plant.” (emphasis added) [37] To promote the safety of operating plants, it is necessary to ensure compliance with the safety requirements of the Act. In the case of operators, the purpose of the Act is achieved through compliance with ss 674 and 675. The failure to give appropriate importance to general deterrence was an error. Sections 17 and 18 of the PSA [38] Because of the decision I have reached it is unnecessary to deal with this ground. Consideration [39] The magistrate erred in his construction of the P&G Act, in his failure to have regard to the purpose of general deterrence, and in his imposition of a sentence that was manifestly inadequate. These failures mean the sentencing discretion miscarried and must be exercised afresh. [40] The safety of workers, particularly at plants such as the one the subject of this breach, has been given a very high priority by the P&G Act. Indeed, it is one of the main purposes of the Act. In order to achieve that level of safety the Act imposes on specified people some very detailed obligations, obligations which may not be delegated or ignored. If there is a breach, then a heavy penalty may be imposed. And it is not enough to disregard these matters and proceed on the basis that mere prosecution will be sufficient punishment or warning to others. [41] It is true that the respondent was “sidelined” with respect to the SMP. But the obligation remained. It is an invidious position to be in, but he must be taken to have known that he was bound by the Act to create the SMP and the purposes of the Act should not be allowed to be evaded in this way. [42] The matters in mitigation are substantial. He has no previous convictions. He is an otherwise upstanding citizen. There is little likelihood that he will offend again. A conviction may well impede him in his ordinary occupation beyond that of the person who does not engage in his line of work. All these matters can be accommodated by accepting the plea of guilty and not recording a conviction. [43] But, the scheme of the P&G Act and the obligation imposed requires that a sentence greater than a recognisance be imposed. This is not a case at the higher end of the -- 9 of 10 -- 10 spectrum of seriousness, but it is one in which an important safety section has been breached. A fine is the appropriate punishment. Orders [44] The appeal is allowed. The sentence is set aside and in its place the following sentence is imposed: (a) I order that the respondent be fined the sum of $6,600. That fine is to be paid within 60 days. No conviction is recorded. -- 10 of 10 --