[2015] FWC 7239 [Note: An appeal pursuant to s.604 (C2015/7336) was lodged against this decision - refer to Full Bench decision dated 4 April 2016 [[2016] FWCFB 2066] for result of appeal.]
FAIR WORK COMMISSION

DECISION


OH&S Review Authority

Sedco Forex International Inc
v
National Offshore Petroleum Safety and Environmental Management Authority T/A NOPSEMA
(C2014/3066)

COMMISSIONER CLOGHAN

PERTH, 26 OCTOBER 2015

Appeal pursuant to OPGGS.

[1] This is an application by Sedco Forex International Incorporated (Sedco or Applicant) seeking revocation of a decision by the National Offshore Petroleum Safety and Environmental Management Authority T/A NOPSEMA (NOPSEMA or Respondent) to issue Improvement Notice 539 (IN 539).

[2] The application is made pursuant to Clause 81 of Schedule 3, Part 4, Division 5 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) (OPGGS Act) and Rule 53 of the Fair Work Commission Rules 2013.

[3] Conciliation failed to resolve the application and the parties were requested by the Commission to confer and agree upon the question(s) for determination at a hearing.

[4] Notwithstanding this appeal, it is important to note that Sedco has undertaken the work required under IN 539.

[5] The OPGGS Act has been amended on a number of occasions since IN 539 was issued. However, transitional provisions enable the appeal to be preserved and reviewed by the Commission.

[6] For the purposes of this Decision, I have referred to the legislation as it existed at the time IN 539 was issued.

[7] Both parties agree that the hearing into the application is a hearing de novo.

[8] The parties do not agree as to the approach to be adopted by the Commission in hearing the application, and consequently, the appropriate questions to be determined.

IMPROVEMENT NOTICE

[9] Improvement Notice 539 issued on 24 January 2014 relevantly reads:

RELEVANT LEGISLATIVE FRAMEWORK

[10] Mr Coppen was appointed pursuant to s.680 of the OPGGS Act.

[11] The relevant powers, functions and duties of an OHS inspector are as follows:

[12] OHS inspectors carry out inspections consistent with s.49 of the OPGGS Act. The relevant provisions are as follows:

[13] Section 78 of OPGGS Act empowers an OHS inspector to issue improvement notices. Section 78 relevantly reads as follows:

[14] Should an OHS inspector issue an improvement notice, the operator may appeal against such a decision pursuant to s.81 of the OPGGS Act. Section 81 relevantly reads:

[15] The reviewing authority pursuant to paragraph 81(1)(f) of the OPGGS Act is the Fair Work Commission.

[16] The improvement notice specifically cited that the Applicant “is contravening, or has contravened and is likely to contravene a specific duty of an operator”. To assist in my consideration of this matter, I consider it appropriate to set out the general duties and specific duty alleged to have been contravened in the improvement notice. These provisions are set out in Clause 9 as follows:

[17] To assist in my determination I have also considered the provisions in s.47 of the OPGGS Act which outline, in a simplified form, that an OHS Inspector is required to “ascertain whether a listed OHS law is being complied with or whether a contravention or possible contravention of an OHS law has occurred”.

SEDCO’S SUGGESTED QUESTIONS FOR DETERMINATION

[18] The Applicant submits that the questions for determination are as follows:

NOPSEMA’S SUGGESTED QUESTIONS FOR DETERMINATION

[19] The Respondent submits that the questions for determination are as follows:

CONSIDERATION

[20] I consider it useful, in the first instance to set out, in simple terms, what is in dispute between the parties and what I am required to determine.

[21] The Applicant submits that the Commission is required, in the appeal, to consider OHS Inspector’s decision and exercise of discretion, to issue IN 539, as at the date of the hearing. The Applicant describes this approach as a “current assessment”. The Applicant’s questions for determination follow from adopting this approach.

[22] In response, NOPSEMA submit that the Commission is required, when considering OHS Inspector’s exercise of discretion and decision to issue IN 539, to adopt a “historical assessment”. Put shortly, Mr Coppen’s decision and exercise of discretion should be examined in the context of the facts, circumstances and law which existed as at 23 January 2014. NOPSEMA’s questions for determination follow from its “historical assessment”.

[23] Having determined which of the competing approaches is the proper approach, the questions for determination follow in the substantive appeal.

[24] Both parties addressed numerous legal authorities in support of their submissions.

[25] While I am grateful for the shorthand expressions of “current” versus “historical” approach, in my view, the focus should not be on labels but upon the legislation itself.

[26] In Re Coldham and Ors; ex parte Brideson (No 2) (1990) 170 CLR 267 (Coldham), the High Court made a point which deserves setting out:

[27] Two points are worth making in relation to Coldham. Firstly, the High Court came to the conclusion that s.88F of the Conciliation and Arbitration Act 1904 (Cth) enabled the Commission, in reviewing a decision of a Registrar, to take further evidence. Further, there was nothing in that power which prohibited evidence of events which had occurred after the Registrar’s decision.

[28] Secondly, the High Court cited, with approval, the words of McHugh JA in Strange-Muir v Corrective Services Commission (1986) 5 NSWLR 234 that it should be taken as established that, “there is a presumptive rule that in an administrative appeal to administrative body, the issue is whether the decision was correct when it was made”.

[29] This “presumptive rule” was considered in Shi v Migration Agents Registration Authority (2008) 235 CLR 286 (Shi).

[30] In Shi, it was held that the Administrative Appeals Tribunal, when exercising its powers pursuant to s.43(1) of the Administrative Appeals Tribunal Act 1975 (Cth), “required attention to the state of affairs existing at the time the Tribunal makes its decision”.

[31] Kirby J stated in Shi:

[32] Kirby J also stated at paragraphs 43, 44, 46 and 47 as follows:

[33] Hayne and Hayden JJ in Shi, observed that the proper approach for the reviewing authority to adopt in any appeal, is the content of the statute, in this case, the OPGGS Act.

[34] Keifel J also in a separate decision in Shi, determined that the answer to the question of whether a reviewing authority is restricted to a consideration of facts and events which had occurred at the time of the originating decision, “lies in the identification of the powers which are to be exercised by the Tribunal and the specific decision to which they are addressed”. 2

[35] Crennan J agreed with the reasons of Keifel J in Shi3

[36] What then are the provisions of the OPGGS Act?

[37] The commencing observation is that the OPGGS Act does not explicitly set out the approach to be adopted by the Commission. The OPGGS Act narrowly states that various persons can, by written notice, make application to the Commission to review a decision of an OHS Inspector.

[38] At the outset, I note that the Commission is described as a “reviewing authority”. The Australian Concise Oxford Dictionary defines “review”, as a noun, in the following terms: “retrospect, survey of the past; general survey or reconsideration of subject or thing” or “second view”. “Review” as a verb, is defined as: “view again” and “look back on”.

[39] In the absence of an explicit statutory approach, I consider it appropriate, in the first instance, to consider the nature of decisions which can be made by OHS inspectors and the powers of the Commission as a reviewing authority.

[40] What is the nature of an OHS inspector’s decision?

[41] An operator of a facility, pursuant to the OPGGS Act is required to take all reasonable practical steps to ensure that the facility is safe, and work is carried out in a safe manner. As part of this general duty, an operator is to take practical steps to “implement and maintain appropriate procedures and equipment for the control of, and response to, emergencies at the facility”.

[42] To ensure that operators meet this requirement, the OPGGS Act provides for OHS inspectors, among other matters, to enter and inspect a facility for the purpose of ascertaining whether OHS laws are being complied with by the operator. Putting aside an OHS inspector’s inspection for the purpose of compliance with safety laws, an OHS Inspector can enter a facility in relation to, a contravention or possible contravention, of OHS laws.

[43] “Inspection” means an inspection conducted under Part 4 of Schedule 3 of the OPGGS Act. An “inspection” may include an investigation or inquiry but need not include a physical inspection of any facility, premises or other thing.

[44] However, for an OHS Inspector to issue an improvement notice, he or she must do so in the course of “conducting” an inspection.

[45] The verb “conduct” means that an OHS Inspector must be carrying out an inspection, as a necessary pre-requisite to forming a reasonable belief that a person is, or has, contravened an OHS law. And if a person has contravened an OHS law, that person is likely to contravene that OHS law again.

[46] In summary, the “tests” for the issuance of an Improvement Notice is that the OSH Inspector:

[47] It is notable that even if the above “tests” have been met, the issuance of an improvement notice is not automatic or mandatory – the inspector is required to exercise a discretion.

[48] There is no dispute between the parties that Mr Coppen conducted an inspection before issuing IN 539.

[49] However, Sedco submit that:

[50] Mr Coppen, on 23 January 2014, was satisfied that the responsible person had, or is, contravening Clause 9(2)(e) of Schedule 3 of the OPGGS Act. Mr Coppen describes his statement as an opinion and positively declares that Sedco, as at 23 January 2014 had, and is, contravening Clause 9(2)(e) of the OPGGS Act, and that contravention, is likely to continue.

[51] Having declared that Sedco had, is and likely to continue contravention of Clause 9(2)(e) of Schedule 3 of the OPGGS Act, Mr Coppen sets out the reasons for reaching such a declaration.

[52] In order for the Commission to revoke such a declaration, Sedco submit that Mr Coppen did not have the “requisite reasonable belief”.

[53] The truth of Mr Coppen’s declaration, or Sedco’s submission in response, lies in its verification.

[54] Mr Coppen had, presumably, at 23 January 2014, certain facts arising from his inspection. Mr Coppen applied to those facts, a process of reasoning, which led him to declare that Sedco had contravened a specific duty under the OPGGS Act relating to safety. The decision Mr Coppen made was a combination of facts and reasoning. It was not a declaration of facts alone.

[55] The OPGGS Act does not contain a definition of what circumstances will lead to a contravention of Clause 9(2)(e) of Schedule 3. While there exists a certain set of facts, the Respondent submits that the reasoning which Mr Coppen applied to those facts, was not of the requisite reasonable belief, to reach the conclusion which he did.

[56] When dealing with a conclusion or reasonable belief following a set of facts, there is always the possibility of other conclusions being reached and doubt regarding the conclusion which was reached. In geometry, three sides joined together is a triangle. There is no doubt. However, in this case, we are dealing with a set of circumstances in which there are multiple, if not, inexhaustible conclusions, which could be reached. In this application, Sedco submit, that when both facts and reasoning are combined, there is doubt as to the belief held by Mr Coppen.

[57] Sedco’s approach to its application is to say, that Mr Coppen’s conclusion reached on the facts and circumstances is wrong – he did not have the “requisite reasonable belief”. However, Sedco’s approach to the hearing of its application is not whether Mr Coppen had the “requisite reasonable belief”, but whether the Commission, at the time of the hearing, is satisfied on reasonable grounds, that Sedco is contravening Clause 9(2)(e) of the OPGGS Act.

[58] In my view, Sedco’s application is not an appeal against Mr Coppen’s declaration on 24 January 2014, but requesting the Commission to provide a “first instance” determination, as if the IN 539 has not been issued.

[59] Put shortly, the appeal by Sedco is not a review in the ordinary sense, but a fresh application for the Commission to determine a matter at the time of the hearing.

[60] In January 2014, Mr Coppen made a statement of observation that he was satisfied that Sedco had contravened the OPGGS Act. That observation, in my view, can only be verified or refuted, by what was known to Mr Coppen at the time he made his decision.

[61] If I adopt the approach suggested by Sedco, I am being asked to not consider Mr Coppen’s declaration at the time he made it in January 2014 (as set out in the grounds of appeal) but to affirm or revoke the declaration on matters, including events which have transpired since he made his decision, and obviously, he did not know or contemplate at the time.

[62] At first blush, the Applicant’s approach appears to be inappropriate, and somewhat artificial.

[63] Put shortly, the Commission is being asked to make a determination on Mr Coppen’s decision on the basis of circumstances which he could not possibly be aware of at the time he made the declaration. The criterion when considering revocation of Mr Coppen’s decision , would not be the circumstances of the “present”, as at January 2014, but the “present and the future”.

[64] Mr Coppen could only have known the conditions which existed at the time when he made his decision. If he attempted to give the future (which would be a “fog” of doubt) the same status and weight of what was certain of, his decision would be mere guesswork rather than a conclusion reached on the facts and circumstances.

[65] It appears to me that Mr Coppen would be open to criticism if he made his decision based on the present and the future. His reasoning would be open to more doubt. The relationship between a decision based on the present should be fairly “tight”, whereas a decision based on the “present and future” may not be as cohesive.

[66] In paragraph 81(1)(f) of Schedule 3 of Division 5 - Appeals, an appeal lies against “the decision” – in this case Mr Coppen’s decision.

[67] The issue of the improvement notice is conditional on an inspection occurring or having occurred. If this condition is satisfied, the further condition is that the OHS inspector “believes on reasonable grounds” that a contravention is or has occurred. Finally, if an improvement notice is issued, the notice issued must be in the present tense – see in particular subclauses 78(4), (6), (7) and (8).

[68] It is useful to set out what powers the reviewing authority has in relation to an appeal. The reviewing authority can:

[69] Simply put, the Commission has wide powers of determination of the matter.

[70] Having wide powers when reviewing the decision of the OHS inspector, is not the same as the reviewing authority having freedom to do anything. In my view, to avoid any unnecessary confusion, there should be some relationship, or compatibility, between the manner in which OHS inspectors reach their decision, and how the reviewing authority addresses the matter. If that were not the case, it may lead to the reviewing authority substituting its view on different “tests” to that of an OHS inspector. That is not, in my view, the appropriate approach to an appeal or what the statute intended.

[71] The “tests” for the issuing of an improvement notice must be in accordance with the statute. In this case, the OHS inspector, in the course of an inspection, must form a belief on “reasonable grounds” that a person is contravening an OHS law. Both the carrying out of the inspection and the forming of a belief are in the present tense. Put differently, the word “if” in Clause 78(1) of Part 4, is essentially saying that if these circumstances are present, then an OHS inspector has the discretion to issue an improvement notice.

[72] Put negatively, the word “if” in Clause 78(1) could be substituted with the words “unless” or “until”. Clause 78(1) would then read “unless” or “until” these circumstances exist, the OSH Inspector does not have the discretion to issue an improvement notice.

[73] Consistent with Kirby J guidance to identify the precise nature of the decision subject to review, I am satisfied that the decision is “time specific” to an inspection being carried out. Mr Coppen’s decision was confined to an inspection, and at that time, a belief based on reasonable grounds. “Reasonable grounds” which existed at the time he made the inspection.

[74] The legislation is drafted in such a way that even if Mr Coppen, in the course of an inspection, came to the belief on reasonable grounds that an OHS law had been contravened, he still had a discretion not to issue an improvement notice. One of the reasons an OHS inspector may not issue an improvement notice, could be because he had sufficient belief, that although a contravention of an OHS law is currently occurring, it would cease shortly thereafter. Alternatively, that although the occupier had contravened an OHS law, the likelihood of it occurring again, was remote. However, all these factors apply to a particular time.

[75] The purpose of the statutory provisions is to ensure that the operator of the facility takes all reasonable steps to ensure that the facility is safe, and work is carried out in a safe manner. In view of this purpose, there is much force to NOPSEMA’s argument that there would be questionable utility to an OHS inspector’s powers to issue improvement notices if, after having done so, the operator complied and subsequently sought to have the improvement notice revoked on the grounds of actions which it had taken post the notice.

[76] Consistent with the statutory purpose, improvement notices can be described as “prosecutorial” instruments. Such characterisation is consistent with the importance of safety of such facilities and Clause 89 of the OPGGS Act. However, if I adopt the Applicant’s current approach to review an OHS Inspector’s decision to issue an improvement notice, it would be tantamount to improvement notices becoming “persuasive” instruments. As I read the powers of OHS inspectors, it is to ensure employees work and carry out work in a safe environment. For this reason, OHS inspectors are equipped with powers to enable the purpose of the OPGGS Act to be achieved. Importantly, the occupier of the facility commits an offence, if it does not comply with the improvement notice issued by an OHS inspector.

[77] From a time perspective, it is also notable that the OPGGS Act requires the OHS Inspector to specify the period of time in which compliance must occur (which may be extended on reasonable grounds).

[78] In summary, it appears to me that the statute directs itself to ensuring a safe working environment in the present. In my view, the OHS Inspector’s decision is in the present and this is reinforced by the requirement, in the case of improvement notices, that the alleged contravention is remedied within a timeframe immediately attached to the decision made.

[79] In my view, the matter of work safety can be distinguished from Shi, which dealt with whether an individual is a “fit and proper person”.

[80] The Applicant submits that “clause 78 of the OPGGSA is not concerned with punishment. The primary aim of an improvement notice is to address risk. If the risk is alleviated, there is no purpose in issuing an improvement notice”. 4 I am unable to agree. The primary aim to the issuing of an improvement notice is to advise the operator of the facility that an OHS inspector has come to an opinion that it has contravened an OSH law and specifying a time for the operator to remedy that alleged breach. Even if I accept the argument that the primary aim of an improvement notice is to address risk, I am unable to understand why compliance with an improvement notice supports a conclusion that it was not necessary to issue the notice in the first instance. The proposition denies a relationship between the improvement notice and the remedial action. It is as if the remedial action has no causation.

[81] The reviewing authority, in reviewing a decision of an OHS inspector, can affirm or revoke that decision. The statutory focus is upon the decision. The decision is about safety and if I accept the Applicant’s contention that the purpose of improvement notices is to address risk – it is risk at a particular time. On appeal, the Commission will be asked to determine on the facts, evidence and the law, whether Mr Coppen should have served IN 539 on the operator.

[82] Should the Commission consider revoking IN 539 on matters, including post issuing of the improvement notice, Mr Coppen would fairly say, “but I didn’t know that would happen” and “was I supposed to ignore the risk, and my statutory duty, on the presumption that something may happen in the future to alleviate that risk?”

CONCLUSION

[83] Having considered the objects of Schedule 3 of the OPGGS Act which is to promote, secure and manage a safe working environment and the overall scheme of the Schedule, I am satisfied that the Commission, as the reviewing authority, is required to consider an OHS Inspector’s decision at the time it was made.

[84] For the above reasons, the questions for determination will be those set out by NOPSEMA in paragraph [19] of this Decision.

COMMISSIONER

Appearances:

G Archer SC with T Martin of counsel for the Applicant.

M Ritter SC with T Ling of counsel for the Respondent.

Hearing details:

2015:

Perth,

31 March.

 1   Paragraph 25

 2   Paragraph 119

 3   Paragraph 117

 4   Applicant’s outline of submission-in-reply para 52

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