REGULATORY OVERSIGHT OF THE HAZELWOOD MINE
OVERSIGHT BY THE MINING REGULATOR
More than one half of the Mining Regulator’s staff is devoted to regulating the mining industry. Each year the Mining Regulator has approximately 1,700 contacts with licensees and applicants concerning licences and approvals under the Mineral Resources Act.74
The Mining Regulator has an inspectorate headed by the Chief Inspector of Mines, Mr John Mitas.75 There is a local mining inspector located in the Latrobe Valley, Ms Anne Bignall, who reports to the Chief Inspector of Mines. The local mining inspector visits the Hazelwood mine on average once a month and undertakes a range of activities, including monitoring progress of the work plan and verifying whether work has been performed in accordance with the work plan.76
Prior to 1 January 2008, when the Mining Regulator considered that fire risk fell within its area of responsibility, the agency maintained close supervision of fire prevention and mitigation practices at the Hazelwood mine.
Records held by the Mining Regulator indicate that from 2001 through to 2008, five significant fire events were notified to the Mining Regulator.77 Prior fires at the Hazelwood mine are discussed in further detail in Chapter 3.3 Fire prevention and mitigation measures taken by GDF Suez.
The Mining Regulator took a range of actions in response to these incidents, including:
- conducting inspections
- assisting with CFA investigations into an incident
- issuing directions for the licensee to conduct risk assessments, review policies and procedures and formulate action plans.78
In relation to a fire that occurred on 15 November 2003, the Mining Regulator was prepared to direct the licensee to undertake very specific measures in response to the incident and to provide an action plan within 14 days.79
The Mining Regulator closely scrutinised GDF Suez’s response to another fire that occurred in October 2006. On that occasion, the Mining Regulator assisted the County Fire Authority (CFA) in conducting an investigation into the cause of the incident. The Mining Regulator also issued an improvement notice to GDF Suez to comply with recommendations from an independent consultant’s report into the incident, which involved a wholesale review of the mine’s Mine Fire Service Policy and Code of Practice and emergency management plan.80 The Mining Regulator also obtained copies of the updated Mine Fire Service Policy and Code of Practice and other fire management policies before deeming that GDF Suez had complied with the improvement notice.81
Ms White made clear the Mining Regulator’s position as a consequence of changes on 1 January 2008: ‘we don’t regulate fire.’82
In relation to the Mining Regulator’s current role with respect to the prevention and mitigation of fire at the Hazelwood mine, Ms White explained that:
- The Mining Regulator presently does not participate in the Integrated Fire Management Planning at state level, at regional level in the Gippsland region, or at municipal level in the City of Latrobe.
- The Mining Regulator presently has a support role in responding to a fire emergency at Hazelwood mine under the Emergency Management Manual Victoria.83
- A mine licensee must notify the Chief Inspector of Mines in the event of a fire.84
Ms White noted public concern about whether rehabilitation of exposed batters could have prevented the ignition or the spread of fire in the mine and acknowledged that the concern was legitimate and warranted further consideration.85 Ms White also welcomed the potential enhancement of the Mining Regulator’s powers to include rehabilitation specifically for the purposes of fire risk86 and the possibility of collaborating with other agencies, such as VWA, to strengthen the regulation of mines.87
Ms White identified two shortcomings in the mine licensing framework which she submitted prevented the Mining Regulator from fulfilling the public safety objectives of the Mineral Resources Act in relation to the likelihood of a fire igniting in the Hazelwood mine:
- The prescriptive approach currently taken in the Mineral Resources Act and the Mineral Industries Regulations is not apt at identifying and therefore addressing all risks that might arise from mining.
- It is doubtful that the Department Head of the Mining Regulator has the power to regulate fire risk mitigation at the Hazelwood mine.88
Work plan approvals are one of the only mechanisms available to the Mining Regulator to influence the conduct of a mine licensee. Ms White submitted to the Board that Schedule 15 to the Mineral Industries Regulations, which lists the prescribed information a work plan must contain, exemplifies the limits of the Mining Regulator’s oversight. In Ms White’s opinion, the list in Schedule 15 ‘limits rather than clarifies, setting boundaries for the matters to be provided for in a work plan and a rehabilitation plan that may not always be appropriate for every mine given the purpose and objectives of the [Mineral Resources Act].’89
In its written submission to the Board, the Victorian Government stated that the ‘purposes of rehabilitation set out in ss. 78, 79 and 81(1) of the Mineral Resources Act do not include the mitigation of the risk of fire.’90
In contrast, Environment Victoria stated in its written submission to the Board that the Mining Regulator’s analysis of Schedule 15 of the Mineral Industries Regulations was overly strict and unjustifiably limited. In Environment Victoria’s submission, the requirements of Schedule 15 would permit a rehabilitation plan that had as one of its objects the mitigation of fire risk.91
While Ms White did not consider that the Mining Regulator is currently able to require work plans to address fire risk, this may change when s. 16 of the Mineral Resources Amendment Act and the new outcome-based s. 40(3) comes into operation.92 Ms White noted that this change will ‘flag a very strong intention to change the approach to work plans and, given that this is already in the public domain, I would consider that a mine operator would consider this in light of what they are doing today.’93
Ms White further suggested that while the terms of the new s. 40(3) of the Mineral Resources Act ‘would assist the Department Head to require a work plan to address fire risk, in my view further reform would be required in order to ensure that a work plan and/or rehabilitation plan could, if appropriate, address bushfire risk.’94
Other submissions received by the Board debated whether it was appropriate for the Mining Regulator to have any role in overseeing public safety and environmental issues such as fire risk and rehabilitation.
For example, Mr David Langmore of Morwell, retired town planner and planning author, suggested rehabilitation of brown coal open cut mines is such a substantial, specialised and important task that a purpose-specific organisation should be established in the Latrobe Valley to oversee rehabilitation of the Latrobe Valley open cut mines.95
Environmental Justice Australia submitted to the Board that the Hazelwood mine fire was not the first serious mining incident in the Latrobe Valley to impact upon the environment and the community. In 2007, the mine batters at the Yallourn mine collapsed. In 2011, a section of the Princes Freeway at Morwell collapsed as a result of instability at the Hazelwood mine. In 2012 and 2013 the wall between the Morwell River and the Yallourn mine collapsed and the river flooded into the mine.
Environmental Justice Australia submitted that the fact there has been a series of incidents may be indicative of a more systemic failure of regulation of coal mining in the Latrobe Valley and warrants a more general investigation into the effectiveness of coal mining regulation and the role of the Mining Regulator. In particular, Environmental Justice Australia was concerned that the Mining Regulator’s dual role to promote investment opportunities in the mining sector and to regulate the mining industry is potentially contradictory.96
While these submissions helped inform the Board’s understanding of the issues surrounding regulation of Victorian coal mines, a broader examination into the role of the Mining Regulator is beyond the Terms of Reference of this Inquiry.
OVERSIGHT BY THE VICTORIAN WORKCOVER AUTHORITY
VWA’s principal responsibilities include facilitating the avoidance or prevention of work place injuries and enforcing compliance with Victoria’s OHS laws.97
VWA has a team of more than 450 field officers, investigators, work-site technical experts and support staff, spread throughout a network of city, suburban and regional offices. This team is responsible for improving workplace safety through implementing VWA’s comprehensive constructive compliance strategy, which focuses on information and education, incentives, enforcement, investigations, prosecutions and penalties.98
Since 1 January 2008, VWA has had a specialised unit dedicated to regulation of mines and quarries, known as the Earth Resources Unit.99
Mr Neist explained how VWA prioritises its attention and resources as follows:
The VWA has regulatory oversight over approximately 250,000 worksites throughout Victoria. Through a risk-based approach, VWA seeks to achieve the best impact by allocating its resources to focus on workplace hazards identified as having the greatest potential for harm. As a regulator that employs a risk-based approach to compliance and enforcement, VWA utilises a risk prioritisation that balances historical and emerging risk and the consequences of risk to direct attention and resources to health and safety risks that have the greatest potential for injury and harm.
To ensure that VWA allocates and utilises its resources in the most effective and efficient way, VWA prioritises its interventions in areas where they have the greatest impact on controlling and reducing risk and hence on improving workplace safety.100
Mr Robert Kelly, the Manager of the Earth Resources Unit of VWA, explained to the Board that VWA does not have the resources to make effective interventions in relation to every risk in every Victorian workplace; therefore a targeted approach is adopted.101
Mr Kelly stated that:
VWA monitors the duty holder’s compliance with their statutory obligations to assess the potential exposure to major mining hazards and provide control measures to prevent or mitigate against such incidents, through the following means:
a. risk ranking prioritisation of mine sites
b. an annual verification process of the highest 12 risk ranked sites
c. oversight inspections
d. incident response and service requests
e. accessible guidance materials concerning what constitutes compliance
f. stakeholder engagement.
In addition to the matters listed above, VWA monitors specific compliance with the OHS Act and Regulations via incident notifications, statutory notices, reviewing aspects of Safety Management Systems and Safety Assessments and confirming the mine’s Emergency Plan has been developed in conjunction with the Emergency Services and the local municipal council.102
Since late 2010, VWA has also conducted annual verification inspections for the 12 mines ranked as having the highest risk (including the Hazelwood mine). The purpose of the annual verification is ‘to monitor the duty holders’ compliance with their statutory obligations to assess the potential for major mining incidents and to provide control measures to prevent or mitigate against such incidents.’103
The Latrobe Valley mines are visited by VWA inspectors on average once or twice per month. This includes pre-planned ‘priority visits’, four to five oversight inspections per year (which deal with particular topics such as batter stability, maintenance or vehicle interaction), and occasional follow-up visits arising from specific incidents or statutory notices issued on mine operators.104
VWA identifies a particular focus for the verification process each year. For example, in 2012, the focus of verification inspections was mine fires (arising from operational plant).105 This focus was chosen following a fire on a dredger at the Hazelwood mine on 21 January 2012.106
VWA classifies mining incidents as being serious, significant or minor (see Figure 3.4 below).
Figure 3.4 Victorian WorkCover Authority classification of mining hazard incidents107
VWA monitoring activities are centred on ‘major mining hazards’, that is, hazards that carry a significant risk of causing more than one death. Mr Kelly explained how this approach determines the focus of inspections at the Hazelwood mine:
In selecting the particular focus for inspections at Hazelwood, the VWA has identified those major mining hazards that pose the greatest risk of more than one fatality. This in turn leads to decisions as to what activities and areas of the mine are observed or inspected. Inevitably this will be the operational areas of the mines where employees have the greatest exposure to harm from known hazards. While the previously worked areas of the mine (batters and mine floor) are entered by employees/contractors to undertake periodic activities including inspection or maintenance work, the risk of one-off catastrophic incidents is significantly reduced compared to active areas of coal extraction. For that reason, directing resources away from the operational areas of the mine to the previously worked areas could not be justified from an occupational health and safety risk oversight perspective.108
Mr Kelly gave evidence to the Board that from 1 January 2008 (when VWA assumed responsibility for the oversight of OHS compliance in the mining sector) to 9 February 2014 (when the Hazelwood mine fire commenced), there were four fires at the Hazelwood mine that VWA classified as ‘significant’, but none that were classified as ‘serious’.109
Of the four significant fires, ‘the first occurred when fire broke out in disused batters in a non-operational part of the mine; the second, involved a flash fire in an item of plant; the third involved a fire on a dredger; and the fourth involved burns to an employee who was refuelling a compressor.’110 Each of these incidents was notified to VWA in accordance with s. 38 of the OHS Act and follow up action was taken by VWA.111
The Inquiry focussed primarily on the first of these four fires on 14 September 2008, as this involved a fire that broke out in the worked out areas in the south-east corner of the mine. VWA inspectors attended the site on 15 September 2008 to inspect, observe and make enquiries into arrangements for workers in buildings affected by the fire smoke, and the use of carbon monoxide monitors. VWA also received notification from the CFA that two firefighters were overcome by smoke and carbon monoxide.112
A VWA inspector attended the Hazelwood mine again on 16 September 2008 to follow up the reported incident and discuss the monitoring and testing of carbon monoxide. The inspector noted that the monitoring and testing appeared to be working well, and was advised that the firefighters had both been released from hospital and were in good health.113
On 22 September 2008, a VWA inspector, a senior mining engineer, and a principal safety analyst, conducted a further follow-up visit at the Hazelwood mine. During this visit, VWA was informed that, except for a few hot spots, the fire had been extinguished and that an environmental and engineering consultancy firm, GHD Consulting Pty Ltd, had been contracted to investigate the fire incident.114
The report ultimately produced by GHD Consulting Pty Ltd is discussed in further detail in Chapter 3.3 Fire prevention and mitigation measures taken by GDF Suez. The report recommended, among other things, that: ‘[a] risk assessment should be undertaken on the non-operational areas to determine if further prevention work is required. The risk assessment should include a Cost/Benefit Analysis.’115
VWA did not request a copy of the GHD report and as a result was not in a position to monitor whether any of the recommendations made in that report were implemented at the Hazelwood mine.116
The Board heard from Mr Hayes, a VWA Inspector based in Traralgon whose work primarily involves supervision of the three open cut mines in the Latrobe Valley.117
Mr Hayes was the lead inspector for the annual verification inspection of the Hazelwood mine in 2012, when the subject of that year’s investigations was mine fire (operational plant). The inspection was conducted on 20 and 21 June 2012.118
Mr Hayes issued two improvement notices arising out of the verification inspection. The first required the duty holder to conduct a comprehensive and systematic Safety Assessment in order to assess the risks associated with the major mining hazard ‘mine fires’. The second required the duty holder to provide and maintain a safe system of work associated with the use of firefighting equipment on a dredger.119
The first improvement notice is relevant to the question of whether GDF Suez was compliant with r. 5.3.23 of the OHS Regulations and is discussed in further detail in Chapter 3.3 Fire prevention and mitigation measures taken by GDF Suez.
In the Safety Assessment improvement notice, Mr Hayes noted that:
- A report titled ‘International Power Hazelwood – Report for Major Mining Hazards Assessment, Interim Submission’ dated December 2009 recommended that ‘risk assessments are to be carried out for each of the scenarios for the MMHs [major mining hazards] illustrating that risk has been reduced to as low as reasonably practicable.’
- The operator of the Hazelwood mine informed him that the risk assessments contemplated
by the 2009 report had not been finished.
- The Safety Assessment documentation relating to ‘mine fires’ he observed was incomplete
- ‘If a mine fire was to occur whilst employees are performing duties within the mine, the fire has the potential to cause an incident that would pose a significant risk of causing more than one death due to asphyxiation or burns.’
- ‘A failure to assess the risks associated with the Major Mining Hazard Mine Fires and to conduct a comprehensive and systematic Safety Assessment in accordance with regulation 5.3.23, may lead to hazards and failure scenarios not being identified and risk control measures not being implemented, thus exposing employees to a mine fire. A mine fire has the potential to result in multiple fatalities.’120
On 8 October 2012, Mr Hayes conducted a follow-up visit in relation to the Safety Assessment improvement notice and found that:
- The Safety Assessment had been reviewed and risk assessments for each scenario had
- It was management’s belief that the risk associated with each scenario as documented within the ‘bow-tie diagram’121 for the Safety Assessment for mine fires was as low as reasonably practicable.
- Management had identified ‘new causes’ that had also been added to the assessment.
- Information relating to control measures as documented in the Safety Assessment appeared to have been completed.122
Mr Hayes told the Board that he considered that GDF Suez had complied with the improvement notice.123
Counsel Assisting questioned whether the Safety Assessment relating to mine fires conducted by GDF Suez had addressed the matters in rr. 5.3.23(4)(c)-(e) of the OHS Regulations.124 Mr Hayes told the Board that during the verification inspection of the Hazelwood mine in June 2012, he had not tested GDF Suez’s Safety Assessment documentation against every requirement contained in r. 5.3.23, but rather was focused on the actual issues raised in the improvement notice.125 According to the VWA entry report completed by Mr Hayes on 8 October 2012, the VWA considered it sufficient that GDF Suez management believed the risks were as low as reasonably practicable.126