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Barry Lane
22 November, 2004  
Longford's legal maze

The Longford class action brought by businesses in Victoria has just been settled. But what about the workers? Those who lost wages as a result of the disaster at Esso’s gas plant didn’t get a look in. The tortured history of the Longford litigation.

There was a touch of irony in the recent announcement earlier this month by law shop, Slater & Gordon, that the class action commenced after the disastrous explosion and fire at Esso’s Longford plant on September 25, 1998 had been settled for $32 million.

Slater & Gordon partner, Ms Lisa Nichols, is reported in The Age of November 9 as saying: “Today’s result is a win for Victorian companies which had the courage to take on one of the biggest companies in the world.”

The settlement brings to a close, at least from a litigious point of view, a turbulent chapter in Victoria’s legal history and followed a lengthy trial before Justice Gillard in the Supreme Court.

Gillard delivered judgment on February 20, 2003 in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2002) VSC 27.

Two men died and eight others were seriously injured in the Longford blast. The economy of the state was disrupted for months while the plant was restored and normal production resumed.

Businesses that relied on gas for their daily operations, workers who were stood down because there was no work, and many others in the community all lost substantial amounts of money.

Now that settlement has been reached some business operators and a number of insurers who had paid out on policies will have an opportunity to feast on the extravaganza. Alas, workers who collectively lost millions in wages will not get a look in.

As it should be, much work for lawyers followed the disaster. There was a Royal Commission, a coronial inquest, a prosecution and the class action. Esso was found to be at fault by every court or tribunal that was called upon to adjudicate various aspects of the disaster.

Perhaps the juiciest summary of Esso’s misconduct in the whole sorry saga was provided by Justice (“Fabulous Phil”) Cummins when he had to sentence Esso on 11 counts under the Occupational Health and Safety Act, 1985. A jury had found Esso guilty on all counts after a four-month trial. On July 30, 2001, Cummins said:

“What occurred at Gas Plant One at Longford on 25 September 1998 was no mere accident. To use the term ‘accident’ denotes a lack of understanding of responsibility and a lack of understanding of cause. (para 7)

The events of 25 September 1998 were the responsibility of Esso; no one else. Their cause was grievous, foreseeable and avoidable. Their consequence was grievous, tragic and avoidable. (para 10)

It was evident from the evidence given by witness after witness before me that the loyal employees, including supervisors, of Esso were entirely unaware of the deadly danger lurking at GP 905 on the Friday morning, 25 September 1998, particularly around 12 noon. They were loyally attending to a leak in GP 922 and evident cold on GP 905 and related areas. Only one man knew the dangers. Mr Vandersteen, a fitter in the maintenance section, saw what was evident to be seen and in evidence said this: ‘I just said, “Fuck this, I’m out of here.” We jumped on our bikes and we left the area.’ The explosion occurred immediately thereafter. Mr Vandersteen was not trained by Esso, but was trained by the Navy. It was the Navy, not Esso, who taught him to be aware of such danger. This failure to train in safety is a most serious dereliction. Tragically, two loyal employees, Mr John Lowery and Mr Peter Wilson, were killed in the rupture which occurred on 25 September. Eight persons were seriously injured. Those deaths and injuries are tragic in themselves. They are also a tragic measure of the hazard and risk in a gas processing facility. Longford is a major hazard installation. The potential for injury is great and obvious. (para 12)

As presently the Crimes (Industrial Manslaughter) Bill is to be considered by parliament, I consider it is inappropriate for me to say anything here about the limited penalties under the Occupational Health and Safety Act, 1985, and the limited scope of the Act, other than this: this tragic case once again demonstrates, if it needs further demonstration, the vital importance of workplace safety. (para 13)

However, before imposing sentence on Esso it is unfortunately necessary to examine the litigious conduct of Esso in these proceedings. It is necessary both of itself and as an incident of sentencing – remorse and rehabilitation being relevant to that end. (para 40)

Esso and its senior officers have expressed remorse for the tragic loss of life and injury which occurred as a consequence of the rupture on 25 September 1998. I have no doubt that that personal remorse is genuine, from and including the chairman and managing director, Mr R.C. Olsen, down. I acknowledge that genuine remorse. (para 42)

However, personal expressions of remorse need to be translated into reality. In the present case, they have not been. There are three matters which militate against corporate remorse. (para 43)

First, Esso’s litigious treatment of its employees. I found that the Esso employees and personnel who were called before me were most impressive. Although I do not like mentioning some individuals rather than all, the young technical operator, Mr Heath Brew, who was injured in the rupture, before me had a quiet dignity and courage. The plant supervisor, Mr Bill Visser, I found particularly decent and impressive. There were numerous other brave, decent and impressive men from Longford who gave evidence before me. One was the first witness called in the trial, Mr Jim Ward, the control room operator. I was most impressed by the integrity of Mr Ward. He was not asked one question in cross-examination before the jury. How unfortunate it was that, on Esso’s instructions, its solicitors submitted to the Royal Commission:

‘Mr Ward was in possession of the necessary information to initiate appropriate action to address the loss of lean oil circulation … Mr Ward’s failure in this respect was due to reasons peculiar to himself.’

(Submissions on behalf of Esso Australia by its solicitors to the Longford Royal Commission, 26 April 1999, p. 83, para 269.) The truth is there was only one entity responsible for lack of knowledge on that day: Esso. It, and it alone, should have properly trained the operators and supervisors not only in production, which it did, but also in safety. It, and it alone, failed to do so. Mr Ward and the employees did not fail. Esso failed. These tragic events will always live with these decent, impressive and brave men, a number of whom have received bravery awards, including Mr Visser and Mr Ward, but these events occurred through no fault of theirs.” (para 44)

Justice Cummins was also critical of the way in which Esso conducted its defence during the trial, which he characterized as “obfuscation”, and its failure to formally accept responsibility for its misconduct.

On the 11 counts, Cummins fined Esso $2 million see DPP v Esso Australia Pty Ltd (2001) VSC 263.

The eight workers seriously injured in the disaster had been, courtesy of the Great Helmsman, Jeffrey (“governments should steer not row”) Kennett and his regime, locked out of claiming common law damages against Esso, even though a more egregious example of negligence by an employer would be hard to find.

As sometimes happens with those possessed of reforming zeal, in their haste to keep workers away from the common law system they had, possibly inadvertently, opened up another window of opportunity via amendments to the Sentencing Act, 1986.

Those amendments were intended to shut claimants out of the victims of crime compensation scheme which had hitherto provided compensation for pain and suffering from the public purse. Under the amendments liability for victims of crime was shifted to the criminals who caused the damage. Of course, except for well-heeled offenders like Esso, victims were not likely to recover much by way of damages from your average drug dependent burglar or armed robber.

Happily for the workers and their dependants who pursued Esso under the Sentencing Act, liability for pain and suffering was unlimited and could be obtained in a relatively simple, summary application.

In December 2001, Justice Cummins made a number of awards pursuant to the Sentencing Act in favor of relatives of the two men killed in the disaster, one of Esso’s employees and a contractor who was on site at the time. In total, they were awarded $1,025,000 for pain and suffering see DPP v Esso Australia Pty Ltd (2001) VSC 513.

Following Kennett’s “reforms” to the workplace accident compensation scheme in 1997, a trickle of claims under the Sentencing Act became a torrent following successful prosecutions against employers under the Occupational Health and Safety Act, 1985. Workers injured as a result of the misconduct which gave rise to the relevant charges were able to access, in a summary and relatively inexpensive way, a source of unlimited compensation which they could not have obtained through traditional sources.

As you might expect, the forces of darkness were not going to tolerate this for long. And so it was that when common law rights were restored to workers with effect from October 20, 1999 by the Accident Compensation (Common Law and Benefits) Act, 2000, access to the Sentencing Act was closed off.

Although injured workers can once again claim common law compensation, claims are subject to a complex scheme of administrative procedures, thresholds, limits and caps prescribed by the Accident Compensation Act, 1985.

The restoration of common law rights occurred fortuitously for Mr Bernard Stark who, on October 25, 2000 while performing duties as a chef on one of Esso’s Bass Strait oil rigs, found himself locked in a food freezer. Initially, Mr Stark thought someone was playing one of those cruel workplace jokes on him but that was not the case. He could not activate the corroded latch on the door from inside the freezer. He was not dressed for minus 18 conditions clad, as he was, in a T-shirt and a light pair of pants. Hypothermia soon set in and Mr Stark thought that he was going to die.

Fortunately, before he froze to death, his compatriots on the rig were wondering what was on the menu for lunch so they went looking for him. He was unconscious when removed from the freezer and taken to hospital.

On the March 17, 2003 at the Sale Magistrates Court, Esso pleaded guilty to failing to provide a safe workplace and was fined $75,000. Outside the court after the case, Mr Stark, aged 51, is reported to have said that his whole life had been “stuffed” by the incident. He can take some comfort in the knowledge that, unlike his fellow workers at Longford, he can sue Esso for damages provided that he complies with all the prescribed procedures and time limits and can establish that he has a “serious injury” in accordance with the current legislation.

By way of postscript, it might be noted that the Crimes (Industrial Manslaughter) Bill seems to have quietly slipped off the Victorian parliament’s legislative agenda. In the UK, a proposal to enact similar legislation following numerous deaths in the building industry, train crashes and other disasters has failed to progress beyond the expected huffing and puffing following such events.

Elsewhere, the Australian Capital Territory introduced an industrial manslaughter law in December 2003 and in April this year a Bill was introduced into the Federal Parliament to exempt Commonwealth workplaces from the effects of the ACT law. The Bill will also apply to any similar law enacted by a state.

In introducing the Commonwealth’s legislation the minister, Kevin Andrews, is reported to have said that industrial manslaughter laws were “regressive” and did not ensure safer workplaces. Further, the minister is reported to have said that the ACT law “wrongly presumes employers are solely responsible for all workplace injuries and deaths”.

Nevertheless, it occurs to your correspondent that if directors and senior execs of companies are sent to jail for fraud, which seems to be happening with increased frequency, why shouldn’t they be banged up for killing people?

One wonders whether, if NSW had an industrial manslaughter law 20 years ago, the directors and senior execs of James Hardie might have given a second thought to the conduct of their business over that time.