Skip to Content, Skip to Navigation
Advertisement

Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

Worksafe NZ v NZEC Waihapa Ltd (DC, 05/05/15)

OSH Tracker

Defendant:
NZEC Waihapa Ltd
NZEC Wiahapa Ltd was fined $30,000 and ordered to pay reparation of $10,000, and Vause Wireline Ltd was fined $30,000, after a contractor hired by Vause fell 3.2m into a cellar at a mothballed Taranaki oil and gas facility when a grating gave way (Hawera DC, 5 May 2015). 
Industry:
Mining
Sub-Industry:
Oil and Gas Extraction
Risk:
Fall from height
Harm:
Injury
Penalty Amount:
$40000.00
Reparation Amount:
$10000.00
Appeared in Safeguard issue 151
Defendant:
Vause Wireline Ltd
NZEC Wiahapa Ltd was fined $30,000 and ordered to pay reparation of $10,000, and Vause Wireline Ltd was fined $30,000, after a contractor hired by Vause fell 3.2m into a cellar at a mothballed Taranaki oil and gas facility when a grating gave way (Hawera DC, 5 May 2015). 
Industry:
Mining
Sub-Industry:
Services to Mining
Risk:
Fall from height
Harm:
Injury
Penalty Amount:
$30000.00
Reparation Amount:
$0.00
Appeared in Safeguard issue 151

Judgment Text

NOTES OF JUDGE A C ROBERTS ON SENTENCING 
Judge A C Roberts
[1]
This is a health and safety prosecution. The defendants have both pleaded guilty to a charge pursuant to s 18(l)(b) and 51(a) of the Health and Safety Employment Act. A charge of being a principle and failing to take all practicable steps to ensure a contractor or subcontractor, in this case Green, was not harmed doing work he was engaged to perform. Prescribed penalty is one of $250,000. 
[2]
I have read the summary of facts. The incident in question occurred on 6 March 2014 at the Waihapa 1B Wellsite at Bird Road. NZEC Waihapa operates the Waihapa assets in a joint venture with another. Vause offers services including wire line, well testing and production. A Mr Gillespie was the person in charge of the work party and Mr Green was working under his direction. The site in question had not been in production for approximately 19 years. There were interventions on the well to determine whether or not it would be productive in future. Both defendants are part of a group of companies in the Taranaki region that have put together a common permit to work system. This was developed for the purpose of improving the quality of permit to work safety management in the area. Permit to work system will involve a contract as between the person in control of the place of work and the person carrying out the work. The permit is prepared by an applicant in this case Vause who had the responsibility of identifying the hazards associated with the task and listing the precautions to ensure that work can be safely carried out. The permit user, NZEC, is responsible for the co-ordination and control of the issue and return of permits. A risk assessment is carried out on the permit by the permit applicant and is confirmed by the permit issuer. In this case the risk was assessed as 15. It is noted in the summary as I quote that this is the highest possible score under the risk assessment although I note the assessment was attributed to hazards other than the one on which we focus. 
[3]
The permit in this case was written for the task by a representative of Vause and was applied for in November 2013, approximately four months prior to the task taking place. The permit was not activated at the time of the application. It sat at the Waihapa production station until it was issued on 6 March 2014 the day of the incident. The work permit did not identify the well cellar as a hazard. Vause received the work scope for the tasks by phone and a subsequent follow up email on 5 March 2014. It assembled a team and sent them to the Waihapa production station the following day without a permit. They received the permit that was drawn up in November 2013 from the permit issuer at Waihapa production station. 
[4]
As I have indicated both defendants failed to identify the fall into the cellar as a hazard. They had not identified the grate moving or the crocodile clips failing as hazards either. Mr Green was working at the site assisting with a wire line operation. NZEC had engaged Vause to carry out that operation. Earlier that morning Gillespie and Green had been to the Waihapa production office where Mr Gillespie was re-inducted and Mr Green inducted by NZEC. The Vause team reviewed their permit and the job safety analyst forms. The permit was then signed by the issuer. Mr Gillespie conducted a gas test and checked the surrounding area to work out the best place to set up the crane and other equipment. A tool box meeting and the accompanying permit checklists were completed. The well cellar was enclosed by a gated area. There was a grating platform over the cellar which was made up of approximately nine to 10 sections that were connected together by crocodile clips. The Vause team checked the work platform and carried out a brief visual inspection of the grating on the left-hand side where the work was going to occur. The stairs and the raised platform were also checked. The grating on the right-hand side and at the rear of the platform was not assessed. Mr Gillespie acknowledged the cellar was deep and said to be careful to those on site. The Vause team started their tasks. They had to change the tool string in order to conduct a static gradient survey. Tool string was lowered. The task occurred the undoing of the tool string and the new one set in place on the right-hand side, the side on which the grating had not been checked. At around 11.20 Mr Green bent down to pick up a tool when the grating beneath him gave way. He fell approximately 3.2 metres to the bottom of the well cellar. He was able to escape. The ladder however had missing and broken foot rungs. It was coming away from the top of the cellar wall. Once however adjacent to the top of the ladder Mr Green was able to make his way from the cellar with the assistance of others. First aid was applied immediately. Mr Green received a seven centimetre laceration to his right shin. I have seen the photographs that have been provided me. That necessitated medical treatment. 
[5]
NZEC's internal investigation following the incident identified that clips appeared to be missing from the section of the grating that collapsed and there was no secondary securing mechanism in place. Since the incident NZEC have backfilled the well cellar. 
[6]
It is contended by the informant that NZEC failed to take all practicable steps to ensure that no hazard harm Mr Green and that the following steps should have been taken to ensure he was not harmed. I list; 
Complete a hazard assessment on the Waihapa well site. 
Eliminate the hazard by way of back filling. 
Ensuring the work platform was of a safe working standard by ensuring the crocodile clips were in place and maintained and that a secondary securement was in place. 
[7]
Vause, it is submitted again failed to take all practicable steps to ensure Mr Green's safety in that it should have similarly identified all the hazards on the work site prior to starting the task, ensured a work platform was in a safe working condition by way of effective controls to prevent the grate falling or the crocodile clips failing and ensuring a secondary locking system and a safety escape route should a fall eventuate. 
[8]
I have read too Mr Green's victim impact statement. He talks of his laceration. He talks too of the two operations he was required to undergo over a three week period. His concerns were the risk of infection and internal infection in his right leg. He was in hospital for eight days. He was off work and absent from the work place for two months. At the point of the stage when this was completed, the 2 April, he was still undergoing medical testing. The pain and discomfort in his leg is something that he is dealing with and living with on a daily basis. Results of an MRI scan have indicated though chronic compression fractures of one vertebrae with a compression injury to several others. He has been referred to an orthopaedic surgeon. He speaks of the support that have been provided him by Vause, paying his full salary on an unconditional basis for the initial month. The offer was made he says to extend it into a second. He considered it appropriate though to turn that offer down and applied for ACC, albeit involving a reduced payment. Offers were also made by Vause he says to take care of family household maintenance during his recuperation period. He talks of no major long-term emotional harm. There was some impact on his attitude to work but his focus was on the impact his injury had with his family, particularly his children. He expresses his frustration with the attitude of NZEC. He refers to a short meeting of 10 minute duration at the point where he was in hospital. An inquiry for updated regular progress he was satisfied that this was a face saving exercise. He was disappointed to learn that because of the holiday or vacation of one individual that he seemed to have fallen off the radar. He is grateful for the assistance that was given him by Vause. He records his reasons for failing to engage in a restorative justice process with NZEC. I have looked too at the appended medical documentation. 
[9]
I have mentioned restorative justice. The opportunity was extended but of course without involvement it really amounts to nothing. 
[10]
On behalf of NZEC counsel has advised the Court of company involvement in Taranaki, particularly in the written material in the oil and gas arena. This I am told is a small specialising company that works and enjoys a good relationship with the other defendant Vause. The infrastructure, particularly that under focus, has I am told existed since 1987. The company relied to a degree on the previous association of the co-defendant Vause in its interactions and dealing on that site. Many well sites of that vintage have similar grate platforms. No concerns had previously been identified. 
[11]
Within the two month lead in other work was there undertaking, including heavy work on the well head and grating. The co-defendant Vause was there engaged intensively. Notwithstanding specific grating checks occurring on six occasions as between 20 January and 24 February, nothing of alarm or concern was identified. As to the day of the accident I am told an NZEC employee carried out a detailed induction for the complainant and the Vause team. The contention is that the Vause team were responsible for the completion of a hazard identification and risk assessment. The permit did not identify the insecure grating clips as a potential hazard. 
[12]
In relation to the summary of facts I am asked by counsel to note the permit to work did not identify the hazard, there was no testing of the water within the well, that while afterwards some clips could not be located, marks indicate they had previously been present. Counsel today has speculated that they may have been present recently. 
[13]
After the accident the company operated fully and undertook corrective action, filling in the cellar with sand, systematically checking gratings of all wells, introducing a specific hazard in the register, focusing on job specific risk assessments for the future, ensuring all contractors knew of site hazards and regular and thorough grate examinations. 
[14]
Addressing Mr Green's perception of company disinterest, I heard counsel today acknowledge his presence and express in his terms the genuine concerns the company had. It is contended however in the written material that there were communications and the hospital visit, these ceased given Mr Green's indication he did not wish contact. The company, however, he contend was always willing and able to engage in restorative justice. 
[15]
On behalf of the defendant company Vause it was submitted both employees Gillespie and Green were experienced with hazard identification. Its own investigation focused on preventing re-occurrence and included the need to check prior to commencement of work, the site to be worked thoroughly, to maintain the sites, to inspect them periodically and to include an initial step in its job assessment. The changes instigated following the accident, the JSA has been amended to include a requirement to complete a pre-job hazard identification list. The summary of facts has been amended to reflect pre-job safety meetings, hazard identification checklist that must be carried out prior to work commencement. It now records too its tool box talks. It is health and safety manager conducts regular visits. It has met with its employees and contractors. It engaged New Zealand Safety to hold accredited courses applying to hazard identification and all employees who have not previously taken part. They have now completed it. I am asked to note also Mr Green continues to be employed by Vause now as an operational manager. He has held that position since May 2014 when he returned to work. I have already noted the full pay for the first month and the offer of the second. He too received family maintenance and was visited regularly by company representatives. 
[15]
Turning to the approach to sentence. This of course is well established. The relevant case is that of the full High Court in Department of Labour v Hanham & Philp Contractors Ltd & Ors HC Christchurch (2008) 9 NZELC 93,095. There have been a multitude of decisions flowing there from, many of them vary from case to case but all involve the establishment and the working through of a three step process. I deal with the first an assessment of reparation payable to the victim. I have referred to the salient points of the victim impact statement. While he remains aggrieved given his taken on the response or reactions of NZEC Mr Green does appear to be a resilient individual. Infections resulted in ongoing operations. He was off work for two months. Whilst in receipt of accident compensation there would have been some financial shortfall as between what was received and what he might ordinarily be expect to be received by way of wage. There is pain that is ongoing and issues attaching to a compression fracture. The informant has sought reparation in a sum between $10,000 and $15,000. Quantification is inherently difficult. 
[16]
Counsel for NZEC submits having regard to the authorities an award of $10,000 would be appropriate. On behalf of Vause I accept and recognise the unqualified payment of one month wages. There were of course additional payments. 
[17]
I do not find that those cases that involve digital removal or amputation akin to this in hand. The Ballard v Department of Labour (2010) 7 NZELR 301Has Litigation History which is not known to be negative[Blue]  decision however does appear to have some broad relevance. Green has future employment secured. Nonetheless there were issues for him emotionally and financially. I consider having listened to counsel, considered too the written material provided me that an emotional harm/reparation figure of $10,000 is appropriate. Vause has paid an increased sum already. I make no order for reparation against that defendant. The emotional issues are undoubtedly compounded by Mr Green's take on the reaction of NZEC. Against that company I confirm the $10,000 award quantified as to $5000 emotional harm and $5000 reparation. 
[18]
The second consideration is the fine assessment. The informant submits the appropriate banding is within the mid to upper end of the middle culpability band and that the sentence start for each defendant should properly rest as between $75,000 and $100,000. Counsel for NZEC contends the start lies between $55,000 and $60,000. Counsel for Vause has argued for a low band placement contending that is appropriate with a start in the region of $40,000. There is thus divergence. 
[10]
Working then through the culpability factors. 
1.
The identification of the acts or omissions. The informant argues that NZEC should have completed a hazard assessment, eliminated this one by back filling, ensured that the work platform was safe with the inspection of clips and another securement in place and ensuring that there was an escape route. Thereafter that Vause should have identified the hazard and ensured the work platform was safe and ensured that a secondary system was in a place and that an escape system or route was available. 
2.
Counsel for NZEC had contended I should see this situation as akin to a lost footing as opposed to a falling from a great height. Counsel has referred me to the Department of Labour v Middlemoore Carparking Ltd (DC Manukau CRI-2011-092-000863 16 August 2011) which involved a ramp slip 39 centimetres above the ground. The plywood there was covered in moss. The victim fractured an ankle and was hospitalised. A start of $40,000 was adopted. Briscoe Group v Ministry of Business Innovation and Employment (2014) 11 NZELR 743 involved the victim tripping over a display stand of goods. The victim there injured her hip and fractured a femur. A start of $60,000 was taken. Counsel then refers to other falling cases involving starts of around the same general area that involved falling from scaffolding or machinery. This is a hazard that I would have seen as obvious. The plant had not been in production for some time and all about it I suppose was somewhat dated. There was a grill placed over a pit. The clips would have been all important. The nature and seriousness of the risk of harm. Had Green hit his head of course it might have been fatal. However, here I can concur with the complainant, the risk of harm was in a moderate to high level. 
3.
Departure from standards. I am told by Mr Isac, particularly within the written material that this sort of accident is not a regular occurrence but this risk should have been identified. 
4.
Was it obvious? There is here dispute. The defence point to the reality it had never been an issue before but of course that line of rationalisation does not exclude it from the future. Perhaps for that very reason it should have been identified at the time. 
5.
The means to avoid and the availability of remedial, the availability of that. Remedial action occurred. It was not an onerous and nor was it costly it occurred immediately. 
6.
The current state of knowledge of risk and means to avoid in the future. The defendants point to the fact that this has not previously been identified within the last three decades but now alert to the issues. It will of course be a focus in future. 
[20]
I intend to treat both defendants similarly. I have considered the Ballard decision but that man as I say slipped on a rung of a ladder in an area in which he had previously worked. He had some prior knowledge. I see that case as being of limited comparative value. With the Department of Labour v Alloy Yachts International Ltd (District Court, Waitakere CRI-2012-090-003749 25 July 2012) case there safety protection had been removed. A physical barrier had been put in place. There were no regular inspections or risk assessments. A start point there of $75,000 is in my judgement here at an elevated level to the facts here in hand. Weighing all matters I have determined that a proper placement culpability wise is within the medium culpability range. I intend to fix a fine for both defendants at the figure of $60,000. There are as the informant notes no aggravating factors that would justify elevation. As to concessions incapacity to pay has not been raised by either. I thus accommodate the following adjustment factors as detailed within the Ballard decision, not individually but collectively. The Ballard decision is of course a decision of the High Court a decision of Justice Stevens. On the basis of the offer to make amends and the expression of remorse 15 percent. Co-operation and a safety record 10 percent. Thereafter there is a full concession to reflect an early plea. In relation thus to both defendants I fix fines of $30,000. In relation to the defendant NZEC I repeat the $10,000 reparation emotional harm figure. There will be Court costs of $130. 

From OSH Tracker

Table of Contents