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If your site stores, handles, or processes large quantities of hazardous chemicals, there is a real chance you are operating a Major Hazard Facility (MHF). The regulatory obligations that come with that classification are among the most demanding in Australian work health and safety law. Get them wrong and you are looking at penalties of up to 364 penalty units per contravention for a body corporate, licence suspension, and in the worst case, a catastrophic incident that makes national news.
This guide breaks down what a Major Hazard Facility is, what the law requires, and what operators actually need to have in place to stay compliant and keep people safe. If you need hands-on help after reading this, contact HSE Direct.
1. What Is a Major Hazard Facility?
A Major Hazard Facility is any industrial site where Schedule 15 chemicals are present, or likely to be present, in quantities that meet or exceed their threshold quantity under the model Work Health and Safety Act 2011 (Cth) and the corresponding WHS Regulations in each state and territory.
Common examples include:
- Chemical manufacturing and storage plants
- LPG storage and distribution facilities exceeding threshold quantities (e.g., LPG threshold is 200 tonnes)
- Oil refineries and fuel terminals where flammable liquids exceed 50,000 tonnes
- Ammonia refrigeration facilities exceeding 100 tonne thresholds
- Explosive storage depots
- Large pesticide and industrial chemical warehouses
If your site holds chemicals between 10% and 100% of the relevant threshold quantity, the regulator can still determine your site to be an MHF if there is a potential for a major incident, taking into account your chemical combinations, site activities, and surrounding land use. Do not assume that sitting under the threshold automatically keeps you out of the regime. A facility storing multiple Schedule 15 chemicals must also apply an aggregation calculation where chemicals of the same hazard category are summed as a proportion of their individual thresholds, and if that sum exceeds 1.0, the facility meets the threshold criteria regardless of individual quantities.
Exclusions apply to facilities regulated by NOPSEMA under Commonwealth offshore petroleum legislation, pipelines under applicable state gas supply legislation, mine sites, and petroleum sites under state-specific mines legislation.
2. What Is a Major Incident?
Understanding the definition of a major incident is critical because it drives every other obligation in the MHF framework.
A major incident is an uncontrolled event at an MHF involving Schedule 15 chemicals that exposes a person to a serious risk to their health or safety from an immediate or imminent hazard. This includes:
- Fire and explosion, including vapour cloud explosions (VCE) with overpressure effects modelled against the 7 kPa threshold at facility boundaries
- Boiling Liquid Expanding Vapour Explosions (BLEVEs) involving pressurised liquefied gas vessels
- Toxic gas releases modelled against ERPG-2 or SLOD concentration contours
- Loss of containment leading to pool fires with thermal radiation flux exceeding 4.7 kW/m² at sensitive land uses
- Structural failure involving hazardous chemical release
The key point is consequence, not probability. A low-likelihood, high-consequence event is still a major incident. Quantitative risk criteria used in NSW land use safety planning set an individual risk threshold of 10⁻⁶ per year at sensitive receptors as a maximum tolerable level. Your safety case must address worst-case scenarios, not just the most likely ones.
3. The MHF Determination and Licensing Process
Once your site is identified as potentially meeting MHF thresholds, a structured regulatory process begins. Most operators are surprised at how quickly the timelines bite.
Step 1: Notification
Notify the regulator as soon as practicable, and no later than 3 months after becoming aware that your Schedule 15 chemical quantities exceed 10% of the threshold.
Step 2: Determination
The regulator reviews your notification and determines whether your facility is an MHF. For sites exceeding threshold quantities, determination is mandatory. For sub-threshold sites, the regulator exercises discretion.
Step 3: Safety Case Outline
Within 3 months of determination, submit a safety case outline. This is your project plan for developing the full safety case, including methodology, resources, timelines, and a draft emergency plan.
Step 4: Safety Case Submission
The full safety case must be submitted within 24 months of determination. This is the most significant document your facility will ever produce. For context, a complex processing facility safety case can run to several thousand pages of technical documentation, hazard identification records, consequence modelling outputs, and SMS procedure sets.
Step 5: Licence Application
You apply for an MHF licence after submitting your safety case and testing your emergency plan. You cannot legally operate as an unlicensed MHF beyond the exemption period.
For a WorkSafe Victoria overview of the process, this guide provides a solid starting point for operators in that jurisdiction.
4. The Safety Case: What It Actually Is
The safety case is not a safety plan. It is a comprehensive, evidence-based argument that your facility can be operated safely. The regulator must be satisfied with it before issuing a licence. A full guide to demonstrating safety case adequacy is published by Safe Work Australia and is essential reading before you begin.
Your safety case must contain:
- A complete list of all identified major incidents and major incident hazards
- A safety assessment covering consequence estimation, likelihood estimation, risk evaluation, and justification for selected control measures
- A summary of your Safety Management System addressing all Schedule 17 elements
- A summary of your emergency plan
- Security arrangements and evidence of Police Commissioner consultation
- Worker consultation evidence throughout preparation
- A signed statement from the most senior executive certifying the accuracy of all content
The two core demonstrations required are that your SMS will control major incident risks once implemented, and that your control measures have been reduced so far as is reasonably practicable (SFAIRP). Demonstrating SFAIRP requires more than a risk matrix and a list of controls.
Operationally, this means your safety case must apply Layers of Protection Analysis (LOPA) or equivalent methodology for high-consequence scenarios, calculate Probability of Failure on Demand (PFD) values for Safety Instrumented Functions, and demonstrate that independent protection layers achieve the necessary Safety Integrity Level (SIL) rating. A SIL 2 rated function, for example, requires a PFD of between 10⁻³ and 10⁻², meaning the system must fail on demand no more than once in every 100 to 1,000 demands. Achieving and maintaining that reliability target is an ongoing engineering commitment, not a one-time design decision. Need help navigating this? Talk to HSE Direct.
5. Safety Management System Requirements
The SMS is the backbone of MHF compliance. The Safe Work Australia SMS Guide and the NT WorkSafe SMS Guide both outline what a functional SMS looks like in practice. It must be a comprehensive and integrated system for managing all aspects of risk control, not a folder of procedures that nobody reads.
Your SMS must address, at minimum:
- Safety policy and objectives
- Hazard identification and risk assessment processes
- Control measures and Safety Critical Elements (SCEs)
- Performance standards for all SCEs
- Procedures and instructions for safe plant operation, maintenance, and inspection
- Competency management and training systems
- Management of change processes
- Emergency planning and response
- Incident reporting and investigation
- Internal audit and performance monitoring
- Worker consultation and participation mechanisms
- Continuous improvement processes
Every element must be documented, implemented in practice, and verifiable through records. The gap between your documented SMS and what actually happens on the ground is exactly what regulators and auditors look for. HSE Direct offers SMS development and gap assessment services for operators at every stage of the licensing process.
6. Safety Critical Elements and Performance Standards
Safety Critical Elements (SCEs) are the plant, equipment, systems, and procedures whose failure could directly cause or substantially contribute to a major incident. Identifying them correctly is one of the most technically demanding parts of MHF compliance.
Examples of typical SCEs include:
- Emergency shutdown systems (ESD) with SIL-rated instrumented functions
- Pressure relief valves and rupture discs certified per AS 1271
- Fire and gas detection systems with defined response time windows
- Bunding and containment systems designed to hold 110% of the largest vessel
- Emergency isolation valves with defined closure time performance standards
- Fixed fire suppression systems with defined flow rate and duration requirements
For each SCE you must define a performance standard specifying what it must do, under what conditions, how reliably, and how you will verify it is performing. A pressure relief valve with a set pressure of 1,500 kPa and a required reseat pressure of 95% of set pressure must be tested at defined intervals, with test results documented and any deviation from the performance standard triggering an engineering assessment before the SCE is returned to service.
An SCE that has not been tested to its performance standard within the required interval is an SCE that cannot be relied upon. Regulators take a very dim view of overdue SCE verifications on a facility safety case audit.
7. Emergency Planning for MHFs
MHF emergency plans go well beyond a standard emergency response procedure. The Safe Work Australia Emergency Plans Guide sets out the full scope of what is required. Plans must address every credible major incident scenario and be tested before you can apply for a licence.
Your emergency plan must include:
- A full site and hazard description including maps, chemical inventories, and consequence zone overlays
- Defined levels of emergency (local, site, external) with escalation triggers and decision authority
- Emergency command structure with 24-hour contact details and succession arrangements
- Procedures for evacuation, shelter-in-place, and accounting for all persons on site using a Personnel on Board (POB) system
- Utility isolation procedures for gas, water, electricity, and process systems
- On-site and off-site resource inventories with mutual aid agreements
- Notification procedures for emergency services and the regulator including mandatory notification timeframes
- Community warning systems and information provision requirements
Testing is not optional. Desktop tabletop exercises and live drills must be conducted, and emergency services must be involved in determining frequency and methodology. A facility that has never run a live drill involving external emergency services will not satisfy the regulator at licence application.
8. Human Factors: The Piece Most Operators Miss
Human factors is a mandatory consideration in any MHF safety case, and it is the element most commonly undercooked. The WorkSafe WA Human Factors Guide is essential reading for any operator preparing a safety case.
Your safety case must demonstrate human factors consideration across major incident prevention, detection, control, escalation, mitigation, and emergency response, including:
- Task design: Cognitive load analysis, information availability, alarm rationalisation (facilities with more than 150 standing alarms per operator are considered to have a high alarm burden under EEMUA 191)
- Fatigue risk management: Shift length, rotation patterns, and cumulative fatigue scoring against the Fatigue Risk Index or equivalent validated tool
- Error-tolerant design: Poka-yoke mechanisms, interlock dependency mapping, and procedural step criticality analysis
- Psychosocial hazards: Stress, workload, shift work impacts, and organisational culture factors that increase human error probability
Ignoring human factors is not just a compliance gap. It is one of the most significant contributors to major incidents globally, including Buncefield (2005), Texas City (2005), and Longford (1998).
9. Ongoing Compliance: What Licensed Operators Must Maintain
Obtaining your licence is not the finish line. Licensed MHF operators must maintain compliance continuously, with mandatory reviews triggered by specific events and a comprehensive five-year cycle review regardless of other triggers.
Key performance benchmarks to maintain include:
- SCE availability targets typically set at greater than 99% for SIL 2 and above rated functions
- Corrective action close-out rates with no more than 5% of actions exceeding their due date without documented extension justification
- Audit completion with all SMS elements audited within a 3-year maximum cycle
- Incident investigation close-out within 30 days for Tier 1 and Tier 2 events
You must also keep the local community informed, maintaining current plain-language information about your facility’s operations, major incident notification procedures, and community actions in the event of an emergency, distributed to public libraries serving the local area.
10. Penalties for Non-Compliance
The WHS Act carries serious penalties for MHF non-compliance:
| Offence | Individual | Body Corporate |
| Failure to notify | 43 penalty units | 217 penalty units |
| Failure to prepare safety case | 43 penalty units | 217 penalty units |
| Failure to implement SMS | 73 penalty units | 364 penalty units |
| Failure to prepare emergency plan | 73 penalty units | 364 penalty units |
| Operating unlicensed MHF | Licence refused or suspended | Licence refused or suspended |
These penalties are per contravention. A facility with multiple non-compliances across SMS elements, inspection records, and emergency plan testing can accumulate significant liability across a single inspection. The SafeWork NSW MHF page outlines regulator expectations and inspection priorities.
11. Do You Need Help With MHF Compliance?
Major Hazard Facility compliance is not a checkbox exercise. It requires deep expertise in process safety engineering, quantitative risk assessment, SIL verification, SMS development, and WHS legislation across multiple jurisdictions. Most construction managers and WHS managers have the right intentions but lack the specialised technical knowledge to build and maintain a compliant MHF safety case from scratch.
HSE Direct provides specialist MHF consulting services including safety case preparation and review, SMS development, SCE identification and performance standard development, safety assessment support, and emergency plan preparation across all Australian jurisdictions.
If your facility is approaching MHF thresholds, has recently been determined, or is preparing for licence renewal, contact HSE Direct before the timelines close in.
This article provides general guidance only. Operators must ensure compliance with the applicable WHS legislation in their state or territory. Regulation numbers may vary across jurisdictions.
