Some time ago a penalty concept circulated in Australia where OHS penalties were implemented as a percentage of as company’s revenue or profit.  The concept gained renewed topicality in mid-July 2010 as BHP Billiton was penalised $A75,000 after the death of a worker, Scott Rigg. (Video report available)

The fine seems paltry for a fatality and more so when the company’s OHS record is taken into account.  As the video report states, BHP Billiton could have been penalised $A200,000 but even this is a relatively small fine for such a company.

The Australian Government has been willing to apply a 40% tax on the mining industry’s profits but is unlikely to apply a percentage penalty in relation to OHS.  It could be argued that well-funded corporations have the financial resources to establish safety prevention units and strategies, have existed for decades and should know better on workplace safety issues, so why should they be subjected to an arbitrary set of financial penalty units?  If judges take into account the context of the offence when applying a penalty why not look at the incident in the historical OHS context of the company?

It is understood that criminal prosecutions of individuals occur after specific incidents and that previous criminal activity is not allowed to be considered.  In most cases this approach should be supported but should the process of penalising an individual criminal be similarly applied to a corporation?  Corporations are a legal entity in themselves but in terms of workplace safety previous incidents and, more importantly, the way a corporation has responded to those workplace incidents, is relevant to the establishment a level of negligence.

It is also sad that in OHS legal terms, prosecuted companies overwhelmingly enter a guilty plea.  They do so not because they believe they are guilty but because the penalty will be reduced as the judge considers that the plea, to various degrees, indicates remorse.  The major motivation for pleading guilty by corporations is financial not moral.

If one of the reasons for increased penalties, as politicians are wont to remind us, is to prevent similar incidents occurring in other companies and industries, and that safety is achieved through improving the “system of work”, should not the courts consider the repeated failures of the system of work of corporations?  Why should a repeat offender, like the BHP Billiton case above, receive only two-thirds of a maximum penalty?

As Industrial Magistrate Michael Ardlie said:

“This is not a case where a defendant simply did not have in place systems…. In fact it did have in place a system and the system was such that if it had been adhered to the incident would not have happened.”

BHP Billiton has reportedly stated:

“…. its determination to ensure that the type of accident which took Scott’s life is never able to reoccur and extends its sympathies and continued support to Scott’s family, friends and colleagues.”

In 2009, BHP Chairman Don Argus and CEO Marius Kloppers reportedly:

“… expressed their deep regret at the death of seven BHP workers during the year, and reassured shareholders that safety procedures had been tightened up.”

It is necessary for us to reconsider our approach to OHS prosecutions and penalties as they relate to repeat corporate offenders.  The frustration felt by small businessman, Peter Angelico, over his treatment through the courts is understandable, regardless of the political element.

Kevin Jones