DISCUSSION AND CONCLUSIONS

COMPLIANCE WITH THE REQUIREMENTS OF THE MINE LICENSING REGIME

On the evidence before the Board, GDF Suez is currently compliant with its obligations under the Mineral Resources Act and related regulations, as well as the conditions specified in its current mining licence, approved work plan and approved rehabilitation plan.

The Board was unable to establish that the approval of a work plan variation was required before pipework forming part of the fire service network in the northern batters of the Hazelwood mine was removed. However, the failure to replace this pipework is worthy of criticism for a number of other reasons, which are discussed in further detail below.

GDF Suez is generally compliant with its fire management policies and other policies and standards referred to in its approved work plan, subject to some qualifications.

The minimum requirement for fire protection in the worked out batters set out in the Mine Fire Service Policy and Code of Practice is to provide tanker filling points or hydrant manifolds within five minutes travel. This measure is much more directed to suppression rather than prevention of a fire.

The Board is concerned that GDF Suez considered it sufficient to implement fire protection measures that only met the minimum requirement. There is conflicting evidence whether GDF Suez met this minimum requirement.

Compliance with the work plan

A condition of the mining licence for the Hazelwood mine is that work is carried out in accordance with the approved work plan (incorporating a rehabilitation plan) as amended from time to time under the Mineral Resources Act.322 In the Mining Regulator’s view, GDF Suez has not breached any provision of the Mineral Resources Act,323 and by extension has carried out work in accordance with the approved work plan and rehabilitation plan. On the evidence before it, the Board cannot conclude otherwise.

However, the Board notes that one of the requirements of the 1996 work plan was that the mine licensee adhere to the 1994 Policy and Code.324 It is also a requirement of the 2009 work plan variation that GDF Suez conduct its operations in general compliance with the 1994 Policy and Code.325 GDF Suez did not provide evidence of its compliance with the policy. This is explored in detail below under the heading ‘Compliance with Mine Fire Service Policy and Code of Practice.’

Section 9.1 of the 2009 work plan variation also states that as part of its health and safety management plan GDF Suez is compliant with AS4801.326 There is evidence before the Board that GDF Suez had not conducted a risk assessment in respect of the worked out areas of the Hazelwood mine as would be expected of an organisation that had fully implemented the standard (see below ‘Compliance with the requirements of the OHS regime’).

The work plan also referred to there being an extensive network of water reticulation pipework and sprays for fire protection, which was illustrated in Figure 13A to the 1996 work plan (see Figure 3.5). Based on the submissions made by GDF Suez327 and the view expressed by Ms White during the public hearings,328 the Board is satisfied that the removal of pipework from the northern batters between 1994 and 2007 did not constitute a breach of the approved work plan. However, the Board expresses a number of other concerns arising out of the removal of pipework, which are discussed in further detail below.

Compliance with the Mine Fire Service Policy and Code of Practice

GDF Suez submits that it was compliant with the Mine Fire Service Policy and Code of Practice in relation to fire protection in the northern batters of the Hazelwood mine.329 In respect of worked out areas of the Hazelwood mine, the minimum requirements under both the 1994 Policy and Code and the current Mine Fire Service Policy and Code of Practice are:

  • tanker filling points or hydrant manifolds are to be provided within five minutes travel of any part of the worked out areas
  • fixed sprays should be used in conjunction with droppers for the tanker filling points in order to provide wetted breaks
  • the use of fire-break zones in the form of access ramps or clay covering is provided as an alternative, rather than the primary means of prevention.330

The use of fire-break zones was not practicable in many parts of the worked out areas due to the steep batter profile331 and was not implemented throughout the northern batters.332 Fixed spray coverage did not extend to large sections of the northern batters where pipework was removed in the period 1994 to 2007.333 So, for many parts of the worked out areas of the Hazelwood mine, the only preventive measure under the Mine Fire Service Policy and Code of Practice adopted by GDF Suez was to have tanker filling points or hydrant manifolds within five minutes travel of any part of the worked out areas.

Counsel Assisting submitted that on the evidence before the Board it was unclear whether even this minimum requirement had been met.334 The Victorian Government also made this submission.335

Mr Polmear believed that GDF Suez was compliant with the policy and assumed some testing had been conducted to ensure tanker filler points were located within five minutes of otherwise unprotected worked out batters.336 However, both Mr Polmear and Mr Dugan were unable to say whether any such testing had actually taken place337 and GDF Suez provided no other evidence that it had. This was despite a request from the Board on 9 May 2014 that a witness give evidence relating to GDF Suez’s state of compliance with its fire mitigation and response plans and policies as at 9 February 2014.338

The Board notes that the Mine Fire Service Policy and Code of Practice also requires that the design and location of tanker filling points should involve consideration of ‘ease of access, location and reliability of the water supply.’339

According to Mr Faithful, during the Hazelwood mine fire, tankers were able to refill from tanker filling points throughout the site and there was a mains fresh water refill point on the northern batters.340 However, Mr Anthony Lalor, CFA Volunteer, described difficulties associated with locating tanker filling points, hydrants having threads incompatible with CFA hoses, and very long refill times.341 Furthermore, Mr Dugan conceded that it would require some degree of familiarity with the mine to know where the tanker filling points are.342

On the information before it, the Board is unable to determine whether GDF Suez was compliant with the Mine Fire Service Policy and Code of Practice.

The adequacy of existing fire management policies are discussed in further detail under the heading ‘Adequacy of fire prevention measures at the Hazelwood mine’.

Compliance with rehabilitation plan

The Board accepts the position of the Mining Regulator and GDF Suez that rehabilitation obligations under the current approved work plan and rehabilitation plan are being met.343

In reality, this is not difficult to achieve because under the 2009 work plan, the first progressive rehabilitation milestone will not be triggered until 2019.344 For the purposes of this Inquiry, the difference in interpretation regarding whether this first stage must be commenced or completed by 2019 is immaterial. On either view, the requirement to commence or complete the first stage of progressive rehabilitation has not yet been triggered and suitable overburden will not become available under the present progressive rehabilitation plan until 2016 at the earliest. There is still time for GDF Suez to meet this requirement.

COMPLIANCE WITH THE REQUIREMENTS OF THE OHS REGIME

Safety Management System (r. 5.3.21 of the OHS Regulations)

As a consequence of GDF Suez’s late provision of its SMS to the Board, no witness was able to give evidence as to whether or not it satisfied the requirements under r. 5.3.21 of the OHS Regulations. Accordingly, the Board is not in a position to conclude whether there has been any breach of this regulation.

However, the Board notes that r. 5.3.21 is not limited to ‘major mining hazards’. Regulation 5.3.21(3)(f) specifically requires that a SMS set out ‘the systems, procedures and other risk control measures by means of which risks to health or safety associated with mining hazards are to be controlled’ (emphasis added). Mr Neist confirmed that while Safety Assessments under r. 5.3.23 address ‘major mining hazards’, a SMS must address all mining hazards.345 Professor Cliff also identified this distinction.

The GDF Suez SMS also refers to its compliance with AS4801, which requires that all hazards and associated risks are identified and assessed.

As noted above, the GDF Suez SMS only appears to provide a system for the identification, risk assessment and risk control measures of major mining hazards.346

Mr Neist considered that the SMS demonstrated GDF Suez had engaged in a risk assessment in relation to fire in the worked out areas of the Hazelwood mine.347 Mr Neist said:

In looking at their Safety Management System in understanding what they consider to be a mining hazard, fire in the mine no matter where it is in the mine is a mining hazard and they’re required to address all mining hazards in their safety management system… If a fire is a mining hazard and is then considered in the safety management system, the controls in relation to fire, not as a major mining hazard but just as a mining hazard, is covered in the safety management system, so therefore they’ve put their mind to that risk assessment.348

In the Board’s opinion, this observation is not supported by the GDF Suez SMS or other documents provided to the Board. As identified above, there is no requirement under s. 3 of the SMS to engage in any risk assessment of hazards other than major mining hazards identified. Document 4 of the GDF Suez SMS is a hazard and risk register, which purports to address all mining hazards, not just major mining hazards. It makes reference to major and minor fires but only in the operational parts of the Hazelwood mine. It makes no reference to the hazard of fires in the worked out areas of the mine, nor does it refer  in any part to the possible consequence of harm to people outside the mine.

Safety Assessment (r. 5.3.23 of the OHS Regulations)

In light of the evidence of Mr Neist, Mr Hayes and Professor Cliff, GDF Suez appears to have conducted a Safety Assessment in accordance with r. 5.3.23 of the OHS Regulations.

While a number of concerns were raised about the scope of the Safety Assessment, r. 5.3.23 only requires an assessment in respect of major mining hazards, which the Safety Assessment carried out by GDF Suez satisfied.

However, the Board’s understanding of the adequacy of the Safety Assessment was made difficult by the fact that it was not embodied in a single document, or a coherent suite of documents that could be readily referred to. Further, GDF Suez did not provide a witness who gave a cogent explanation of how the Safety Assessment fit within GDF Suez’s OHS compliance policies.

Further, as conceded by Mr Neist,349 the requirements of r. 5.3.23 are procedural and the substantive obligation under ss. 21 and 23 of the OHS Act is still to eliminate or reduce risks to health and safety so far as is reasonably practicable (see Chapter 3.2 Regulation of fire risk at the Hazelwood mine).

For the purposes of fulfilling those statutory obligations, GDF Suez is also required to:

  • so far as is reasonably practicable, identify all mining hazards at the Hazelwood mine and assess the associated risks to health and safety (r. 5.3.7 of the OHS Regulations)
  • adopt risk control measures that eliminate or reduce those risks so far as is reasonably practicable (r. 5.3.8)
  • review and, if necessary, revise these matters after any incident involving a mining hazard occurs, or at least once every three years (r. 5.3.9).

Failure to identify ALL mining hazards and assess risks to health and safety (r. 5.3.7 of the OHS Regulations)

Based on the evidence before it, the Board considers that GDF Suez did not adequately recognise a fire caused by ember attack on the worked out areas of the Hazelwood mine as a mining hazard. GDF Suez failed to identify potential risks to the health and safety of firefighters and the residents of neighbouring communities as a consequence of such a fire.350 All of these factors were foreseeable, if not foreseen.351

The Board is not satisfied that GDF Suez has complied with r. 5.3.7 of the OHS Regulations. GDF Suez sought to categorise the Hazelwood mine fire as a ‘perfect storm of events’:

What was also not readily foreseeable is the prospect of two fires approaching the mine simultaneously, one or more possibly the work of arsonists, and in combination the power supply failing. It is this perfect storm of events, which we submit were not readily foreseeable.352

The Victorian Government submitted that ‘[t]he risk of offsite impacts of the kind experienced by the Morwell community from a large, sustained fire in worked out batters was not foreseeable and accordingly not anticipated or prepared for.’353 However, the Board notes that:

  • There had been numerous fires in the worked out areas of the Hazelwood mine, including two recent significant fires in December 2005 and September 2008.
  • The risk of bushfire entering the Hazelwood mine was well recognised,354 and had occurred before in the 1944 Yallourn mine fire.
  • It is well known that exposed brown coal is highly combustible, that is why it is mined.355
  • It is well known that brown coal mine fires are extremely difficult to extinguish once they spread, particularly where there are access issues or lack of water.356
  • A 1992 risk analysis and report warned that departure from the requirements of the 1984 Policy and Code (something which subsequently occurred) would increase fire risk in the worked out areas of the Hazelwood mine.357
  • Prior to the Hazelwood mine fire, the ‘nuisance’ of smoke and ash and ‘other community effects’ had both been publicly and formally recognised as potential consequences of a brown coal mine fire at the Hazelwood mine.358
  • The northern batters of the Hazelwood mine are within a few hundred metres of the Morwell community, and any fire in this location could have environmental and health impacts.
  • GDF Suez recognised the threat of ember attacks,359 but did not connect ember attack with the potential hazard it created in worked out areas of the Hazelwood mine that were otherwise unprotected.
  • GDF Suez was previously aware of the risks associated with fire spotting from timber plantations in close proximity to the Hazelwood mine.360
  • A proper risk assessment, particularly one conducted in accordance with the standards set by AS4801, would take into account adverse conditions such as loss of power, water supply, extreme weather conditions or CFA resources being diverted to other emergencies.361

These factors, and GDF Suez’s awareness of a number of them, only heightened the need to identify the hazard of fire in the worked out areas of the Hazelwood mine.

The failure to identify risks associated with a fire in the worked out areas of the Hazelwood mine is brought into sharper focus by the fact that a specific recommendation was made to GDF Suez to undertake such a risk assessment following the September 2008 fire (discussed in further detail below).

The Board accepts Counsel Assisting’s submission that the Hazelwood mine fire was an entirely foreseeable event and one that should have been planned for.362

Moreover, the conditions leading up to the Hazelwood mine fire did not represent the worst-case scenario. The consequences of the fire could have been much more severe. Mr Incoll told the Board that there were two circumstances that meant a worst-case scenario was avoided:

  • The weather conditions on the day could have been much more extreme with lower humidity levels. The relative humidity at the time of the wind change was 11 per cent. When the wind change came through, the humidity rose to 32 per cent. This meant that the moisture content of potential fire fuel was relatively high and therefore the risk of extreme fire behaviour was lower than it might have otherwise been. By contrast, below five per cent humidity was encountered during the Black Saturday fires.
  • Had the wind not tended to change direction at the time when it did on 9 February 2014, then the Hernes Oak fire may have been propelled directly into the mine and ‘there’s nothing that anyone could have done to have stopped it because of the fire intensity levels.’363

According to Mr Incoll, low humidity and wind propelling fire in to the mine is the worst-case scenario that must be prepared for.364

The only evidence relied upon by GDF Suez in support of the contention that it had in fact undertaken a risk assessment in respect of fire in the worked out areas of the Hazelwood mine was the evidence of Mr Neist.365 While the views of the regulatory agency actually responsible for enforcement of the OHS Regulations must not be disregarded, Mr Neist’s opinion was not supported by the documentation upon which he expressed his opinion to be based, nor did it have any other factual basis.

During oral submissions, GDF Suez also referred the Board to the fact that Mr Hayes had never formed a view that he had the need to issue an improvement notice in respect of a breach of r. 5.3.7 of the OHS Regulations.366 Mr Hayes’ evidence must be understood in the context of VWA’s regulatory focus on major mining hazards.367 Regulation 5.3.7 is not limited to major mining hazards. It is also relevant that the principle underlying the regulatory framework is that the primary obligation to manage risk at a site rests with the duty holder, not the regulator.368

FAILURE TO ADOPT Risk control measures (r. 5.3.8 of the OHS Regulations)

Under r. 5.3.8(1) of the OHS Regulations, the operator of a mine must also adopt risk control measures that reduce or eliminate risks to health or safety so far as is reasonably practicable.

As a preliminary matter, GDF Suez submitted that it was not put to any witness of GDF Suez that it had contravened r. 5.3.8 either by reason of its approach to rehabilitation or on any other basis.369 However, a considerable focus of the Inquiry, and the evidence of Mr Faithful and Mr Polmear in particular, was the adequacy of fire management policies at the Hazelwood mine, and matters relating to the reasonable practicability of various fire prevention measures that were aimed at controlling and reducing risks to health or safety.

The risk controls adopted by GDF Suez in respect of the worked out areas of the Hazelwood mine were ineffective at preventing the Hazelwood mine fire or mitigating its severity. The adequacy of these measures is explored in detail below under the heading ‘Adequacy of fire prevention measures at the Hazelwood mine’. The adequacy of risk control measures directed to preparedness to respond to a fire is examined in Chapter 2.2 Preparing for fire.

The critical issue in terms of r. 5.3.8 is whether risk control measures potentially available to GDF Suez to eliminate or reduce the health and safety risks associated with a fire in the worked out areas of the Hazelwood mine were ‘reasonably practicable.’

As noted in Chapter 3.2 Regulation of fire risk at the Hazelwood mine, determining whether particular preventive measures are reasonably practicable involves an assessment of a number of factors:

  • the likelihood of the hazard or risk concerned eventuating
  • the degree of harm that would result if the hazard or risk eventuated
  • what the person concerned knows, or ought reasonably to know, about the hazard or risk and any ways of eliminating or reducing the hazard or risk
  • the availability and suitability of ways to eliminate or reduce the hazard or risk
  • the cost of eliminating or reducing the hazard or risk.370

Assessing the cost of a control measure involves a consideration of both the cost of implementing a particular control to eliminate or reduce the risk and the cost of not implementing it. In the context of the Hazelwood mine fire, this means that one must have regard not only to the cost of implementing measures that might have eliminated or reduced the risk of fire in the worked out areas of the Hazelwood mine, but also to the cost of not implementing those measures, such as loss of production, and other costs incurred by GDF Suez in fighting the fire.371

There was evidence before the Board that these costs were substantial.

Mr Graham estimated the total cost incurred by GDF Suez as a result of the Hazelwood mine fire as in the ‘tens of millions.’ The cost of installing pipework in the northern batters during the Hazelwood mine fire alone was $2.5 million.372

In addition, the cost borne by the Victorian Government for fire suppression activities alone was approximately $32.5 million, not taking into account the value of volunteer labour and costs incurred directly by the community.373 This sum does not take into account costs incurred by the Environment Protection Authority, Department of Health, Department of Human Services, Department of Education and Early Childhood Department or Latrobe City Council. The CFA may seek to recover some of its firefighting costs from GDF Suez.374 The Board estimates the total cost borne by the Victorian Government, local community and GDF Suez exceeds $100 million.

The adequacy of measures adopted by GDF Suez must be considered against this background.

There was evidence before the Board of a number of potentially effective methods for preventing fire in the worked out areas of the Hazelwood mine, in particular wetting down exposed coal on days of high fire danger, rehabilitating the land, and capping exposed coal with clay or some other fire retardant substance. Some of these measures have been utilised to varying degree in parts of the Hazelwood mine. However, each option has advantages and disadvantages, including cost, suitability, complexity and difficulties with timely implementation. Without the benefit of a proper risk assessment, it is not open for the Board to say conclusively whether any of these options was a reasonably practicable control measure available to GDF Suez prior to the Hazelwood mine fire, subject to three exceptions.

First, unlike operational areas of the Hazelwood mine, there was no requirement to institute wetting down of exposed coal in worked out areas of the mine on high fire alert days. Mr Graham’s evidence was that this requirement could be implemented immediately and the cost was not anticipated to be significant.375

Second, GDF Suez failed to replace degraded and leaking pipework that was removed between 1994 and 2007. The only reason provided for failing to do so was that ‘they didn’t need to be, in accordance with the policy.’376 As observed by Professor Cliff, ‘there’s no science behind that, there’s no risk evaluation analysis behind that. To say we don’t do it because we don’t have to is not a management technique.’377 While the $2.5 million cost of installing such pipework was substantial, it is obvious that undertaking this project would have been far less costly and risky if it had been done prior to and not during a major fire.

GDF Suez suggested that the effectiveness of fixed sprays in the worked out areas was necessarily constrained by water supply limitations. However, in the past when fixed sprays were used for prevention, rather than suppression, water supply was managed by sequential wetting down of coal faces area by area.378

Third, unlike the fire-break zone outside the perimeter of the Hazelwood mine, there is no existing requirement concerning vegetation management in the worked out areas within the mine.379 According to Mr Graham, the cost of removing vegetation was unknown but vegetation could be cleared from the north-eastern batters before November 2014.380

Review and revision following previous incidents involving mining hazards (r. 5.3.9 of the OHS Regulations)

Regulation 5.3.9 of the OHS Regulations requires the operator of a mine to review and, if necessary, revise (at least every three years, as well as after any incident involving a mining hazard that occurs at the mine):

  • the identification of mining hazards
  • the assessment of risks to health or safety associated with mining hazards
  • the risk control measures adopted.

The evidence shows that GDF Suez was engaged in a process of ongoing review of risks associated with mine fires and continual improvement of its policies and procedures. Following the September 2008 fire, it is also clear that GDF Suez:

  • engaged independent consultants to conduct an investigation into the incident381
  • introduced a number of measures to improve identification and management of hot spots in worked out areas of the Hazelwood mine382
  • conducted an audit in June 2012 to determine whether recommendations arising from this incident had been implemented.383

As discussed under the heading ‘Implementation of recommendations from previous incidents’ below, GDF Suez did not undertake an assessment of the risk of fire in the worked out areas of the Hazelwood mine, as recommended following the September 2008 fire.

However, r. 5.3.9 does not require the implementation of every recommendation arising out of an incident. It only requires a revision of existing risk management ‘if necessary’. While the decision not to undertake a risk assessment can be criticised on other grounds, it does not give rise to a breach of r. 5.3.9.

Implementation of recommendations from previous incidents

The Board accepts that GDF Suez’s implementation of recommendations arising from previous incidents has led to improvements in its fire management procedures.384

However, it is clear that it failed to conduct a risk assessment into the risk of fire in the worked out areas of the Hazelwood mine in accordance with recommendation 6 of the report into the September 2008 fire.

The Board considers Mr Prezioso’s interpretation of the scope of recommendation 6 to be unduly narrow. Based on his 29 June 2012 report, Mr Kemsley did not understand recommendation 6 to be limited to risks associated with hot spots and he found that the recommendation had not been complied with.385 In light of the unambiguous wording of recommendation 6 and Mr Kemsley’s 2012 report, the Board concludes that GDF Suez understood this recommendation to be broader than that contended by Mr Prezioso.

GDF Suez submitted that:

[t]he various fire reports have been internal reports prepared for the benefit of [GDF Suez] and its predecessor entities. There is no regulatory or statutory requirement to implement all of the recommendations within such reports. There have also been no separate recommendations or directions from any regulator, body or agency arising out of any of the fires referred to above.386

The Board accepts that GDF Suez has complied with all directions and recommendations from regulatory agencies regarding previous fires at the Hazelwood mine. However, it remains the case that the primary obligation to manage risk at a site rests with the duty holder, not the regulator.387

Although there is no regulatory or statutory requirement to implement all of the recommendations arising from prior incidents, in reality recommendation 6 of the GHD report into the September 2008 fire only urged GDF Suez to do what it was already required to do under the OHS Regulations. Specifically, GDF Suez was required to:

  • identify all mining hazards at the mine and assess the risks to health or safety associated with all mining hazards at the mine—a task GDF Suez had not undertaken explicitly in respect of the worked out areas of the Hazelwood mine (r. 5.3.7 of the OHS Regulations).
  • adopt risk control measures to eliminate or reduce risks to health and safety so far as is reasonably practicable (r. 5.3.8). A proper risk assessment into the ‘non-operational areas’ would have involved testing existing controls directed to the worked out batters, identifying further preventive measures and evaluating the extent to which those measures were reasonably practicable.
  • after any incident involving a mining hazard occurring at the Hazelwood mine, review and, if necessary, revise the identification of mining hazards, the assessment of risks to health or safety and the risk control measures adopted (r. 5.3.9).

The Board must also specifically address, as part of its Terms of Reference, whether GDF Suez implemented the recommendations arising from reviews of previous events. In respect of recommendation 6 of the GHD report into the September 2008 fire, it is clear that it had not.

According to GDF Suez:

[w]hilst no formal risk assessment report was produced in relation to Recommendation 6, no evidence has been adduced to the Inquiry (including by the experts retained by the Board) as to what the result of any such risk assessment may have been, and whether it would have resulted in steps being taken by the Mine which went beyond the steps described by Mr Prezioso. This is particularly the case given that Recommendation 6 made it plain that any risk assessment should include a cost/benefit analysis. As the evidence of Leonard Neist makes plain, the cost of possible steps might significantly outweigh the benefit, which in the context of the 2008 report, was fire from the flare up of a pre-existing hot-spot388

The Board considers this answer unsatisfactory. It is precisely through the risk assessment process that one is forced to test existing control measures, consider further potential control measures and evaluate their reasonable practicability or otherwise. That GDF Suez failed to undertake the recommended risk assessment meant that an opportunity was lost to implement measures that might have prevented or mitigated the severity of the Hazelwood mine fire. It is salient that GDF Suez is now committed (after the mine fire) to undertaking an assessment of the risk of fires in the worked out areas of the Hazelwood mine.389

Based on the outcomes of the 1992 risk analysis and the range of preventive measures canvassed during the Inquiry, the Board considers that a thorough risk assessment was likely to have concluded that existing control measures were inadequate and could be improved in a number of ways.

Sections 21 and 23 of the OHS Act

If there has been a failure to identify hazards, assess risks and implement risk control measures under rr. 5.3.7 and 5.3.8 of the OHS Regulations, it necessarily follows that there might also be a breach of ss. 21 or 23 of the OHS Act.390

VWA is conducting an investigation into the Hazelwood mine fire, the scope of which is unclear.391 While the Victorian Government has not confirmed if these investigations include enquiries into whether there has been a breach of s. 23 of the OHS Act,392 this is a matter that VWA would be entitled to look into.

Corporate culture

Mr Graham gave valuable evidence to the Board regarding the lessons GDF Suez had learnt from the Hazelwood mine fire and the steps it had already committed to undertaking in response.

 

Mr Graham assured the Board that GDF Suez had embraced a solid enterprise risk management framework throughout various levels of the organisation and was committed to continual improvement through the regular use of risk assessments. The corporate culture of GDF Suez was described as one of ‘safety first’:

The pillars, I guess, of a successful organisation are the staff, so protection of the staff is the most important, so one of the main pillars is the health and safety, and actually that’s one of the things that we’re very proud of.

In terms of the incident, for an incident of this length of time, spanning the 45 days with an enormous amount of staff involved in the process, for us to have sustained one medical treatment injury which was actually in the first day of it with a sprinkler hitting one of our employees in the face, and I think four or five first aid treatments, I think it’s testimony to the processes and procedures that we have in place there. I think we’ve actually demonstrated that we have a strong safety culture there, and whilst we are not actually discussing it now, if you were to actually look at statistically the performance in terms of all injury frequency rate for Hazelwood over the last 10 years, there’s been a continual downward trend in terms of injuries to our employees, so we do take that very seriously.393

The Board does not dispute this observation and recognises GDF Suez’s commitment to the health and safety of its employees. However, prior to the Hazelwood mine fire, this attitude did not extend to risks and hazards beyond the narrower range of risks in the ‘operational areas’ of the mine that were likely to affect employees or coal production.

In the Board’s opinion, where risks concerned fire in the worked out batters and the associated risks to the health and safety of the neighbouring Morwell community, the risk management culture adopted by GDF Suez has been one of ‘minimum compliance’ rather than one of ‘best practice continuous improvement’.394 This ‘minimum compliance’ attitude was exemplified by GDF Suez’s justification for failing to replace pipework in the northern batters and failing to conduct a risk assessment for the worked out areas of the Hazelwood mine following the September 2008 fire. It was also evident in the response to the various fire prevention measures proposed during the public hearings of the Inquiry.

The Board is of the opinion that this conduct fell short of the approach to be expected from an AS4801 compliant multinational organisation and GDF Suez’s aspiration expressed in its own SMS to take ‘a proactive approach to Health and Safety requirements at all levels of the business and in all decision-making processes.’395

Mr Graham acknowledged these failings. When asked whether the risk of fire in the worked out batters of the mine was adequately recognised by GDF Suez, Mr Graham said:

You know, hindsight’s a great thing. In terms of when you actually look at the major mining hazards, which is the area that that would have been covered by, because the major mining hazard is associated with the loss of one life or more, and the fact that our enterprise risk management system looks at costs to the business in terms of fire, what we have in that area identified as a risk from fire to do with call systems, if you like, is not indeed the operating faces on the mine even; I realise your question was on the worked out places, it’s not even the operating faces of the mine, it’s actually what we call the slot bunker which is the central point from the coil [sic] delivery from the mine into the power plant; the reason being, a fire there will put us out of business.

So, in terms of our hierarchy of risk in terms of impact on the business, then a fire in the worked out batters does not fit in that category, and in terms of business risk, obviously we’ve had a huge event which is deeply regrettable and we will ensure we won’t have another event like that again.

We lost production for – well, we didn’t lose total production, we came down to probably 10 per cent production for probably 24 hours. So, in terms of how our business would look at that risk in the hierarchy that was there, an event of fire in the worked out batters of the mine doesn’t fit in a high profile. Following the events we’ve had now, the question is, should it? And the answer is, yes, it should, and it will, and that’s part of the reason why we’re making these suggestions.396

Mr Graham appeared to embrace a future best practice continuous improvement approach for the whole mine, including worked out areas, rather than taking a minimum compliance approach.397 The Board encourages GDF Suez to continue to strive for a sophisticated corporate culture in respect  of the management of all risks.

ADEQUACY OF FIRE PREVENTION MEASURES AT THE HAZELWOOD MINE

Adequacy of Mine Fire Service Policy and Code of Practice

The Board accepts Mr Incoll’s evidence that the maintenance of fire-breaks around the perimeter of the Hazelwood mine is not effective to protect exposed coal against a mass ember attack. What was needed was either covering exposed coal with soil or some form of fire retardant or water to wet down the worked out areas on days of high fire danger.

The removal of part of the fire service network from the northern batters meant that large areas of coal were not covered by either earth or water and were completely exposed. So long as these areas were within five minutes travel from a tanker filling point or hydrant manifold, GDF Suez continued to meet the minimum requirements under the Mine Fire Service Policy and Code of Practice. However, as submitted by Counsel Assisting, tanker filling points and hydrant manifolds are much more relevant to fire suppression, not its prevention.398

In effect, reliance on the minimum requirements under the Mine Fire Service Policy and Code of Practice meant that there was no preventive measure in place to protect the worked out areas of the mine from ember attack. That the areas of exposed coal unprotected by fixed sprays were the most heavily impacted by the Hazelwood mine fire confirms this conclusion.

The Board considers the Mine Fire Service Policy and Code of Practice and related policies are deficient in a number of other respects:

  • The vegetation management requirements applying outside the perimeter of the mine do not apply to the worked out areas and mine floor, heightening the risk of fire and hindering access.
  • There is no fixed requirement to ensure that all exposed coal is either able to be wetted down or covered by clay or some other fire retardant substance or otherwise rehabilitated at the earliest possible opportunity.
  • In worked out areas of the mine where fixed sprays do exist, there is no procedural requirement to wet down coal faces on high fire risk days.

Opportunities for enhancing fire prevention measures

The value of rehabilitation as a fire prevention measure is well recognised and was known both to GDF Suez399 and the Mining Regulator.400 GDF Suez has undertaken progressive rehabilitation of parcels of land throughout the mine, including the north-eastern corner of the mine. It is salient that this area of the mine was not burnt during the Hazelwood mine fire.

The Board is satisfied that while progressive rehabilitation is an extremely effective fire prevention measure, the practical obstacles raised by Mr Faithful are a real impediment to relying on rehabilitation as the primary strategy for fire prevention throughout the worked out areas of the Hazelwood mine. Nevertheless, it should be considered one of the suite of preventive measures available.

Each of the fire prevention measures canvassed as being potentially suitable for the worked out areas of the Hazelwood mine has advantages and disadvantages. It is not appropriate for the Board to advocate for any one of the particular methods without the benefit of a proper technical assessment of the feasibility of the measures and a thorough risk assessment that includes a cost benefit analysis. In reality, the most reasonably practicable control adopted by GDF Suez will probably involve a combination of methods depending on the particular area of the mine.

The Board recommends GDF Suez engage reputable external consultants to assist it to conduct a thorough risk assessment of the likelihood and consequences of the risk of fires in the worked out areas of the Hazelwood mine. The assessment must consider the most effective fire protection for the exposed coal surfaces in the worked out areas of the mine including:

  • rehabilitation
  • water coverage
  • coverage by earth or some other substance
  • treatment with a fire retardant, or
  • a combination of these approaches.

GDF Suez should implement, as a matter of urgency, the most effective controls and treatments to eliminate or reduce the risk of fires as far as reasonably practicable.

Environment Victoria endorsed this recommendation.401

The Victorian Government also agreed with this recommendation, but noted that whether the risk assessment ‘impacts on progressive rehabilitation would depend on the result of the risk assessment.’402 The Board agrees with this observation. The list of potential control measures in this recommendation is not intended to be exhaustive, definitive or prescriptive. Rather, it is designed to ensure that, through the risk assessment process, the reasonable practicability of each of the potential control measures listed (or any combination of them) is genuinely explored. The most effective controls then need to be implemented to the extent that is reasonable practicable. The risk assessment may identify additional control measures that were not explored during the Inquiry.

In closing submissions, Counsel for GDF Suez maintained the position that a risk assessment had already been undertaken in accordance with the organisation’s obligations under the OHS Regulations.403 For the reasons identified above, the Board disagrees.

Mr Graham was more forthright and indicated that GDF Suez was committed to undertaking a review of fire risk in the worked out areas of the mine.404

In closing submissions, counsel for GDF Suez also took issue with being subject to an obligation to implement control measures recommended as part of a risk assessment, noting that ‘insofar as the work of external consultants identifies reasonably practicable control measures, that will be the touchstone from there on. The touchstone is not a blanket requirement to implement what others say is a good idea.’405 The Board agrees but suggests that if the most effective controls and treatments to eliminate or reduce the risk of fires identified out of the risk assessment are reasonably practicable, then GDF Suez is under an obligation to adopt them under r. 5.3.8(1) of the OHS Regulations.

For this reason, the Board considers it appropriate that GDF Suez should implement any such controls to the extent that they are effective and reasonably practicable.

Opportunities for enhancing the Mine Fire Service Policy and Code of Practice

GDF Suez should thoroughly review its Mine Fire Service Policy and Code of Practice to ensure that, taking a risk assessment approach, it is suitable for prevention, preparedness to respond, mitigation and suppression of fires in all parts of the Hazelwood mine. The reviewed policy should reflect industry best practice as well as respond to the special features of the Hazelwood mine. The reviewed policy should be incorporated into the approved work plan for the mine.

The reviewed Policy should, as a minimum, address the:

  • regular removal of excess vegetation from all surfaces within the mine (including worked out batters) to reduce fire risk and improve access
  • ability to prevent and suppress any fires that commence or burn into the worked out parts of the mine
  • use of thermal detection and other imaging technologies by which fires can be spotted as soon as they commence
  • ready availability of Compressed Air Foam System that are capable of operating in an open cut mine environment supported by camera technologies.

GDF Suez has already committed to:

  • initiating ‘a programme for reducing vegetation in the worked out areas of the northern batters to reduce fire risk (insofar as is consistent with OH&S requirements and the stability properties of the vegetation) commencing in the areas closest to Morwell’406
  • clearing vegetation from the north-eastern batters by November 2014407
  • maintaining and continuing to use the additional pipework located in the northern batters, which was installed during the 2014 fires408
  • installing additional pipework and hydrants in the areas marked on the northern batters shown by the broken aqua coloured line in Figure 3.22 below (referred to by Mr Graham as the ‘eastern section of the northern batters’)409
  • undertaking rehabilitation of approximately 20 hectares of land in the eastern section of the northern batters shown in hashed dark blue in Figure 3.22 below, by December 2014410
  • conducting a review (to be undertaken by external consultants working with GDF Suez personnel) of the current pipework and condition in the areas of the mine other than the eastern section of the northern batters, with the outcome of the review to be communicated to the Mining Regulator and VWA411
  • instigating wetting down of non-operational areas of the mine on Extreme Fire Danger Days.412

The Board affirms these commitments.

Figure 3.22 Proposed additional fire prevention measures by GDF Suez for 2014413

8101_Figure_3.22 Propo_opt   According to Mr Graham, these measures will have the effect that the shaded areas shown in Figure 3.22 are covered by:

  • rehabilitation that has occurred prior to 2014
  • rehabilitation proposed to be undertaken during 2014
  • undisturbed land (ie grassed areas that do not contain exposed coal)
  • sprinklers which are currently installed on the northern batters, or
  • additional sprinklers to be installed on the northern batters.414

The Board commends GDF Suez for committing to swiftly implement these measures.

Recommendation 15

GDF Suez:

  • conduct, assisted by an independent consultant, a risk assessment of the likelihood and consequences of fire in the worked out areas of the Hazelwood mine, and an assessment of the most effective fire protection for the exposed coal surfaces;
  • prepare an implementation plan that ensures the most effective and reasonably practicable controls are in place to eliminate or reduce the risk of fire; and
  • implement the plan.

Recommendation 16

GDF Suez:

  • review its ‘Mine Fire Service Policy and Code of Practice’ so that it reflects industry best practice and ensures that, by taking a risk management approach, it is suitable for fire prevention, mitigation and suppression in all parts of the Hazelwood mine; and
  • incorporate the revised ‘Mine Fire Service Policy and Code of Practice’ into the approved work plan for the Hazelwood mine.