Explosive impacts from the Quin Investments prosecution still to be felt

The Quin Investment prosecution in South Australia is a good indication of the importance of workplace safety and equipment maintenance.

On 24 June 2010, Quin Investments and one of its directors Nikolai Kuzub were found guilty of breaches of OHS law in South Australia by Industrial Magistrate Ardlie.  The incident involved an explosion at an explosives factory in May 2006 that killed three workers, injured two others and flattened the factory.  Pieces of equipment were located over 600 metres away, houses a kilometre away were damaged and the explosion was heard 40 kilometres away according to one media report.

Grant Germein, the lawyer representing Quin Investments, has asserted a conspiracy from, at least, the start of the court case:

“He said the company was being used as a scapegoat and SafeWork SA’s investigation into the incident was “not directed at the cause of the explosion”, but to “see if they could find a culprit”.

On 24 June 2010, media reported that the

“Lawyer for the defendants Grant Germein thinks the magistrate sided with the Government and SafeWork SA.

“The magistrate has simply accepted what we regard as nonsense theory put up by the Premier’s Department,” he said after the hearing.”

SafetyAtWorkBlog has been advised that Germein reasserted this opinion in the Industrial Court on 24 June 2010.  The court also heard mentions of emotional blackmail and  serious accusations on the propriety of the  governmental investigation.  One court attendee told SafetyAtWorkBlog that Germein’s conduct in the afternoon of the hearing was erratic and that Magistrate Ardlie had to speak to Germein a couple of times about this.

Licencing

Since the incident Quin Investments has been in discussions with the South Australian government over a licence at the Gladstone location but it is understood that the company has moved its explosives production across the border into the Northern Territory.  It is understood that a licence cannot be held by a company which has a criminal conviction and that the Northern Territory licence is likely to have been issued while Quin Investments was under investigation but not yet convicted.  Any impact the South Australian prosecution will have on the explosives licences of Quin Investments is not immediately obvious.

Community Impact

The personal significance of the explosion can be better understood by the transcript of a television program undertaken shortly after the incident.  Members of the local football club talk about the three workers who died, Damian Harris, Matt Keeley and Darren Millington.  The two survivors of the blast, Damian John and Cameron Edson, were working outside the factory at the time and at least one of them also played for the Southern Flinders Football Club.  A further program was recorded on the anniversary of the deaths.

Premier Mike Rann established a fundraising appeal shortly after the explosion and becoming aware of the significant social impact the incident had on the local community.

Investigation Complexity

In June 2008, another lawyer acting for Quin Investments, Sydney Maidment, also criticised the investigation:

“Two years seems a heck of a long time and for it to be inconclusive; if it takes two years and you still don’t know then there’s something wrong with the investigation….”

SafeWorkSA had a challenging investigation as it noted on the 2007 anniversary of the blast:

“The Gladstone explosion was unique not only in terms of Australian experience, but in an international context,” says SafeWork SA’s Director of Strategic Interventions, Bryan Russell. “There are no benchmarks or parallel case histories of this specific type with which to compare, so effectively we are trailblazing which is why we must ensure that the investigation is thoroughly and professionally completed.”

An October 2006 media report illustrated the complexity of the investigation early in the process.  In that same report, lawyer Maidment, was able to state that the manufacturing of bulk explosives on the site “had nothing to do with the explosion”.

The Annual Report of the Department of Premier & Cabinet for 2006/07 put the challenge this way:

“Throughout 2006-07 SafeWork SA has undertaken a major investigation of the explosion of the Quin’s Investment Explosives factory at Gladstone.  Three workers were killed when the factory was completely destroyed by a major explosion.  This event is classified as a significant incident and has involved a substantial number of the agency’s resources. More than 200,000 items of evidence were collected from the site and have been painstakingly reassembled in a warehouse in Adelaide.  In addition to the collection of physical evidence, the investigation team has co-ordinated detailed metallurgical and chemical analysis of the machinery and the compounds involved in the explosion.  The agency is continuing to work with the Crown Solicitor as the investigation moves to the next phase.”

Economic Considerations

The October 2006 report also indicated an issue that may underpin some of the frustration of the company with the investigation.  Australia’s mining resource sector has been performing exceptionally well even during the global financial crisis and Quin Investments supplied explosive products to the sector.  In October 2006, Sydney Maidment is reported as saying that

“The company recently had to turn down a $250,000 monthly order to supply bulk explosives to a mining company operating in the north of the state.”

In  a submission to the Productivity Commission Enquiry on Chemicals and Plastics Regulation prior to August 2008, an organisation that represented Quin Investments and others, The Australian Explosives Industry Safety Group, stated that

“The explosives industry is highly service oriented and is under continuous pressure from its mining industry customers to “make things happen” at short notice.  Where the customer requirement is not covered by existing regulations the supplier generally does not have the option of undertaking lengthy negotiations with the appropriate Regulator(s); An outcome negotiated “on the run” in this manner is often financially sub-optimal.”

Court Decision

The decision of Industrial Magistrate Ardlie is available for download. The decision is extensive and reflects the diligence that was applied to the investigation.  Several points worthy of note are

“Professor Alan Bailey ….Professor of Applied Chemistry [said regarding]  the two operations occurring in the factory on the date of the incident, namely the premix operation and the TNT operation, his position was that this was extremely bad practice.”
“The storage of TNT in such inappropriate containers so close to the factory is incredible.  He said a safe distance was 140 metres between such containers and the factory itself.  This was to mitigate the effects of an explosion so it would not start a sympathetic explosion in the factory as well as protect the workers in the factory from an explosion in the TNT store.  He stated that the whole tenet of explosives operations is to make risks as low as reasonably practicable (ALARP process).  All flammable and non-essential materials should be well removed from the factory. Two operations should not be taking place independently at the same time at the same factory.”
“The defendants did not dispute Bailey’s evidence relating to the TNT operation and storage, the presence of the methoxide and the methanol.”
The magistrate was satisfied that the first defendant did not “do all things reasonably practicable to ensure its employees were safe”.
Alan Bailey’s evidence illustrated the significance of the safe design of workplaces.  Although this is has gained considerable currency in the last decade, the explosives industry has known of this principle for centuries and buffer zones are calculated and applied in a range of industries for a range of hazards, not only explosive.
On the matter of maintenance the magistrate found that

“The defendant had a quality assurance manual and a site safety handbook in existence at the date of the incident.

No files were produced for items of plant, nor any information relating to specifications, the maintenance history and any alterations carried out to items of plant.  There was no maintenance schedule produced in relation to items of plant.

Negligible documentation was produced in relation to maintenance.”

If there was ever any argument that a safety management system can exist without begin written down or without being actively applied and enforced, this case shows the dire cost of such an argument.  In fact a detailed reading of the court decision could easily provide a checklist of what safety elements are expected of a modern manufacturing workplace by regulators, experts and the courts.

The need for documentation is reinforced by the opinion of expert witness, Andrew Begg, recorded in the decision:

“In reference to the defendants’ document dealing with safety he said that the document is the foundation for a safety system but there was no practical application of the document.”

As an interesting sideline to the case, the defendants invoked the recent High Court of Australia decision Kirk v Industrial Relations Commission, but this argument was quickly dispatched:
“The defendants say that it was for the complainant to particularise all matters in support of the case led by it, which it did not do. The defendants maintain that the lack of particularity relating to the cause and reasonable steps that the defendants failed to take, offends the principles arising from the recent High Court decision of Kirk v Industrial Relations Commission.”

The way this decision keeps getting invoked in a range of industrial safety contexts is phenomenal, and illustrates its psychological, if not legal, impacts.

The Decision ends succinctly:

“The business conducted by the first defendant on 9 May 2006 at Gladstone was the manufacture of explosives. The bad practices of allowing the premix operation and the TNT operation to occur at the same time, as well as the storage of methoxide, methanol and TNT in close proximity to the factory, clearly indicates that the defendants did not take any positive steps to make risks as low as reasonably practicable. The end result was that employees engaged in the factory on 9 May 2006 were put at risk. Tragically as a result of an explosion that occurred in the factory Damian Harris, Darren Millington and Matthew Keeley were killed and Cameron Edson and Damian John were injured.”

The significance of the decision should be noted and it is likely that more will be heard about issues raised by this decision particularly as the penalty has not yet been decided.  It is likely that the maximum penalty will be applied as the defendant’s lawyer is reported to have been continually combative, there are few indications of remorse or contrition and the defendant’s counsel entered a plea of not guilty.  SafetyAtWorkBlog has been told that the maximum penalty would be much higher if the incident  had occurred more recently.

Kevin Jones

3 thoughts on “Explosive impacts from the Quin Investments prosecution still to be felt”

  1. Until politicians are forced to apply appropriate punishment for this type of industrial murder it will continue to happen.

    Appropriate punishment means jail for company officials and the seizure of all corporate assets, just like they do with drug dealers and other assorted scumbags.

  2. There are no winners in this instance except for Revenue SA. Families have lost loved ones, the local area has lost a major employer.
    I doubt that there have been any lesson learnt though as even today it would be possible to walk into many manufacturing sites and find blatant breeches of OHSW codes.
    The only difference is that for the most part the manufacturing sites do not normally explode, however that does not mean that there are not just as many workplace fatals in a plastic moulding factory or a glass factory or even in a bakery.
    I wonder if any real thought goes into just how unsafe some of the workplace practices are in a bakery when opening bags of flour and dust goes into the lungs and eyes.
    I wonder if when working in a plant nursery does everyone understand that breathing in the particles from the potting mix can and does kill people.

    Three people died, Revenue SA gains $200,000 -that is unless there is a challenge- but the wider lessons of safe work places are not being taken on.
    The number of workplace injuries and the number of workplace fatals and the number of workplace illness and disease has remained static for the last decade, sadly I believe that if it were possible to track the only numbers that would have altered would be the numbers of attempted and completed suicides due to the workplace and sadly that number would be increasing not decreasing.

    I will leave the legal arguments to those who follow closely the legislation of the various States and Territories.
    My concern is the loss of life and the injuries and the illness as a result of poor workplace practices.

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