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SH&E INTERNAL AUDIT Pilot Programme – Intital Review

NYLEX WATER SOLUTIONS Nylex Water Solutions – Ingleburn NSW

3B Williamson Road, Ingleburn 2565

GREG LAZZARO 31th March 2005

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Activity No SE-001 Date 31/3/05

Surveillance Audit

Site: Nylex Water Solutions, Ingleburn Site Address: 3B Williamson Rd, Ingleburn

New South Wales, Australia

Standards: Safety, Health & Environment Initial Review

Scope of Audit: Occupational Health and Safety Management System & Environment Management system “initial compliance review” for the manufacturing site and processes employed in the manufacture of a range of moulded tanks and accessories. The audit will also focus on functional compliance areas requiring improvement.

Prepared By: Greg Lazzaro

COMMERCIAL- IN – CONFIDENCE

The contents of this report must not be disclosed to a third party without the agreement of Nylex Limited

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Introduction

Nylex Head Office conducted an audit of Nylex Water Solutions, 31th March 2005. The purpose of this audit report is to summarise the degree of compliance with relevant criteria, as defined on the cover page of this report, based on the evidence obtained during the review of Nylex Water Solutions. Audits are carried out within the requirements of Occupational Health and Safety Management Systems requirements appropriate to a business and also observations related to site inspections.

Executive Overview The Ingleburn Water Solutions Facility is located in a well established light industrial area about 44km SW of Sydney. The factory was established in late 2004 and the site was previously tenanted by a company that recycled copper from the electrical industry (Resource Recycling Technologies). The site at Ingleburn is made up of two factory areas which has been spilt into production and fit out areas. The site has currently 5 employees and all employees have a can do attitude and very conscious of safe working practices. It is however, a site that requires a systematic approach towards complying with occupational, Health & Safety requirements from a basic perspective at least for the short term. Areas of improvement are with site induction protocols, emergency management and evacuation systems, compliance with Nylex Limited standards and a general blending in towards the way in which we expect to eventually run. It must be said that the site leadership has taken the initial safety issues as a priority and whilst much work can be done, the ingredients exist for quite a practical and safety focused operation. The site has a number of machines that will require a more focused risk assessment process and the ability for the site to improve its machine and operator interface. Task based duties will also be required to be examined to ensure that there is a consistency in good practices within all the Water Solutions business. The involvement with Pakenham site is also a very beneficial in the initial setup of systems but again there needs to be more attention focused in this area before the standard operating practices are set. The machine guarding issue will be rolled out across the business with Pakenham being the lead as its focus is more prominent on these areas of Safety. It has been discussed that these methods will then be passed over to the other water businesses. The site has scope for improvements but, at this early stage, the site manager has a can do focus and demonstrates that the requirements for implementing the safe and practical and complaint operation whilst extracting information from the other Nylex Water Solutions businesses.

The Audit Team Comprised: • Leader: Greg Lazzaro Nylex Water Solutions Site Representative : Barry Lewis

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Many aspects of the original lease requirements have not been done. The concrete pad to the rear of the premises is one of these and requires to be done as the uneven ground will cause difficulty in the stability of the forklifts on site. The tank storage areas are organised so that there is minimal isle ways and also obscured vision. It would be recommended that all persons including truck and delivery drivers, wear fluorescent jackets whilst on site. Although this is done there are no visible indicators or signage to reflect this. Some of the machines are in various stages of serviceability with the rotational rock & roll open flame machine located in the annexure of the main building. This was found to have faulty bearing arrangement and other units will be retrofitted in order to ensure that the coupling is suitable for ongoing operation.

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Access platform for the “Rotoline” oven has no fall protection gate or chain making the platform vulnerable to persons falling if they were to lose footing. This platform should be retrofitted to ensure that a gate or restraint chain is present. Utilities pipe rack should be painted or taped yellow to ensure that there is no striking the rack with a ladder or other equipment. It ensure that the walkway has this more highlighted

Machine segregation is most effective around the enclosed oven at the site. This was seen to be a very good safety initiative and should be duplicated around other machinery. Gas trains should have appropriate certification and ongoing maintenance checks as per the requirements of the appropriate codes. Systems should be in place to ensure that the PM program is established and put into practice. Plant lighting is adequate in most areas. Improvements in housekeeping would be an opportunity for improvement within the business. The way in which the site deals with this will roll out once there is more of a system based approach introduced. At the moment, this will be controlled by site leadership. Segregation could also be done with an extensive line marking system. This will ensure a traffic management program exists.

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Protection of gas pipelines should be considered where the risk of striking or impact is likely. In areas where forklift or pallets will be used, the gas trains should be protected from mechanical damage. The forklift gas bottle storage is currently not compliant. Bottles should be stored in an appropriate area, which is segregated form trafficable areas and chained. This will ensure that the minor storage requirements for DG regulations are met. Warehouse area where product fit out is done has dusty environment. Housekeeping could be more effective in this area.

The installed pallet racking has no foot protection, which could lead to striking, and potentially racking could become unstable. It is recommended that the racking have footing protection installed. There is a rather large mould stored alongside the racking limiting the access to the restrooms located behind where the mould is stored. It seems that this is not the appropriate place for this mould given that the congestion in the area.

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The general gardening around the site is not satisfactory and will impinge on various aspects of the site systems. Air conditioning systems currently run the risk of becoming in effective unless garden growth is controlled. Natural Gas supply installed by Nylex Limited. Awareness of gas isolation and emergency scenario’s should be made aware to all personnel in the gas of a major gas leak or fire. Inclusion in the site induction programs is required. The systems are lacking, as the operation is fairly new. Emergency planning and evacuation programs should be set up and also management systems for the operation including what is expected from employees in terms of PPE, SH&E reporting, process of managing Occupational Health issues and a variety of systemic programs that would need to be rolled out. Operational based systems such as work order and permits for various types of work and contractor induction process would also be required. An overall transition to the Safety Framework would also be recommended so that there is consistency with the Nylex Limited business standards and systems. Environmental bunding is used well but as inventory increases, a focus on proper storage of DG should be implemented. DG cupboard should be used if storing flammable liquids. The site would need to follow the Environmental Minimum standards to get an appreciation of would be required as the site expands its workload.

SUMMARY OF AUDIT

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ACTION NUMBER ACTION Person Responsible Due Date

1 NWI-1/S 001 The concrete pad to the rear of the premises has uneven ground will cause difficulty in the stability of the forklifts on site. This should be addressed by the landlord.

2 NWI-1/S 002 All persons including truck and delivery drivers should wear fluorescent jackets whilst on site. There are no visible indicators or signage to reflect this.

3 NWI-1/S 003 Examine the serviceability with the rotational rock & roll open flame machine as one was found to have faulty bearing arrangement and other units to be retrofitted in order to ensure that the coupling is suitable for ongoing operation.

4 NWI-1/S 004 Access platform for the “Rotoline” oven has no fall protection gate or chain making the platform vulnerable to persons falling if they were to lose footing. This platform should be retrofitted to ensure that a gate or restraint chain is present.

5 NWI-1/S 005 Utilities pipe rack should be painted or taped yellow to ensure that there is no striking the rack with a ladder or other equipment.

7 NWI-1/S 006 Gas trains should have appropriate certification and ongoing maintenance checks as per the requirements of the appropriate codes. Systems should be in place to ensure that the PM program is established and put into practice.

8 NWI-1/S 007 Protection of gas pipelines should be considered where the risk of striking or impact is likely. In areas where forklift or pallets will be used, the gas trains should be protected from mechanical damage.

9 NWI-1/S 008 The forklift gas bottle storage is currently not compliant. Bottles should be stored in an appropriate area, which is segregated form trafficable areas and chained. This will ensure that the minor storage requirements for DG regulations are met.

10 NWI-1/S 009 Warehouse area where product fit out is done has dusty environment. Housekeeping could be more effective in this area.

11 NWI-1/S 010 The installed pallet racking has no footing protection, which could lead to striking, and potentially racking could become unstable. It is recommended that the racking have footing protection installed.

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12 NWI-1/S 011 There is a rather large mould stored alongside the racking limiting the access

to the restrooms located behind where the mould is stored. It seems that this is not the appropriate place for this mould given that the congestion in the area.

13 NWI-1/S 012 The general gardening around the site is not satisfactory and will impinge on various aspects of the site systems. This should be addressed in a timely fashion.

14 NWI-1/S 013 Personnel should be made aware of Natural Gas supply control valve set at the front of the premises in the event of a major gas leak or fire. Inclusion in the site induction programs is required for gas isolation and emergency scenario’s.

15 NWI-1/S 014 Suggested implementation of a site safety manual which has key criteria for dealing with SH&E basics, eg induction, PPE, scope of work safety and contractor management. This should be followed by more formal systems of SOP‘s.

16 NWI-1/S 015 An overall transition to the Safety Framework would also be recommended so that there is consistency with the Nylex Limited business standards and systems.

NWI Nylex Water Ingleburn 001 Rec./ Obs. Number 1 Audit Number S Safety Item E Environmental Item