Until recently in New Zealand, no officer of a large, complex New Zealand company had been convicted of breaching their obligations under the Health and Safety at Work Act (HSW Act). In a recent case, however, former Ports of Auckland CEO, Tony Gibson, was found guilty of failing to carry out adequate health and safety ‘due diligence’ as an “officer” of the Port company.
This article summarises the factors which influenced the Court in convicting Mr Gibson and some key takeaways for officers from that.
Background
Tragically, Mr Kalati, a port worker, died at the port in 2020, when a container fell on him during a lifting operation. The Port company pleaded guilty to charges against it under the HSW Act.
Mr Gibson was also charged, on the basis that he was alleged to have failed to exercise due diligence to ensure that the Port company complied with its duty to ensure, so far as was reasonably practicable, the health and safety of workers at work in its business.
This ‘due diligence duty’ is owed by all “officers” of businesses or undertakings, being company directors, as well as others who exercise significant influence over the management of the business or undertaking.
In Mr Gibson’s case, he was alleged to have failed to:
- take reasonable steps to ensure that the Port company had appropriate resources and processes in place to eliminate or minimise key health and safety risks; and
- take appropriate steps to verify the actual provision and use of these resources and processes.
Further, that his failures exposed stevedores to a risk of death or serious injury.
Why did the Court convict Mr Gibson?
Key factors were:
- The nature and scope of Mr Gibson’s role
- Mr Gibson was tasked with leading the Port company and ensuring its systems and processes were adequate to ensure the safety of workers and compliance with the HSW and he was ultimately responsible for health and safety at the Port. This meant that Mr Gibson had the capacity and ability to influence the conduct of the Port Company, including ensuring reporting processes and policies were in place to address failures before they occurred.
- For example:
- A third of his role expectations/performance related to health and safety. He was the key person who the Board delegated authority to, to carry out its Health and Safety policy;
- He had direct responsibility for approving the Health and Safety manual, the Health and Safety plan, and ensuring attendance at the Health and Safety Committee meetings;
- He was the head of the Health and Safety committee, which had the responsibility of overseeing health and safety within the Port Company;
- While Mr Gibson assigned or delegated certain responsibilities to others to assist him (there were a number of roles at the Port Company with responsibility for health and safety), he remained responsible to monitor and review what those below him were doing.
- He had direct involvement in a variety of health and safety initiatives undertaken by the Port.
- Mr Gibson’s knowledge and awareness
- Mr Gibson was not a hands-off or remote CEO, operating at a significant distance from the Port Company’s day-to-day operations. He personally knew of the key risks and what controls were or were not in place. For example:
- Mr Gibson knew of the high risks involved in stevedoring, including the specific risk – handling suspended loads – which led to Mr Kalati’s death.
- While there was a Health and Safety Committee, it had not carried out its responsibilities in a variety of ways, which was something Mr Gibson, as its leader, was ultimately responsible for.
- The Port Company had not prepared its yearly health and safety strategy plans in the adjacent years (to the incident), which Mr Gibson was responsible for approving.
- There had been an external audit two years prior which had made certain relevant health and safety improvement recommendations, which had not been implemented. Mr Gibson knew of those recommendations and that they had not yet been actioned.
- Mr Gibson knew that the Port Company had prior convictions for breaches of health and safety and had been involved in those cases, including the decision to plead guilty. This put Mr Gibson on notice that the Port Company had not been adequately monitoring “work as done” (i.e. what was actually happening in practice, rather than what was intended or imagined) and changes were required.
- Mr Gibson also knew, or ought to have known, that there was widespread health and safety non-compliance by workers, including in relation to a specified exclusion zone rule in relation to cranes in operation.
- He was aware that there was likely under-reporting of incidents and near misses due to a lack of reporting.
- Mr Gibson’s failures
These included:
- He had not turned his mind to the introduction of hard controls (such as signage, barriers, and adequate lighting) around operating cranes. A reasonable CEO, with Mr Gibson’s knowledge and experience would have seen the shortfalls in the Port Company’s practices and ensured additional steps were taken to address those shortfalls.
- He had not taken steps to ensure the Port Company progressed the external auditor’s health and safety recommendations or to improve the company’s systems and processes for monitoring “work as done”.
- He had not ensured the Port Company appropriately focussed on ensuring that critical risk management, associated with handling overhead loads, was progressed in a meaningful and timely way.
- He had not ensured that effective reporting lines were in place and that appropriate recommendations were received from those ‘on the ground’.
- He had not taken active steps to obtain adequate information about the nature of the work being undertaken, the risks associated with that work, what controls were in place in relation to those risks, and what additional controls were necessary to remove or minimise those risks.
Some key takeaways:
- While each health and safety prosecution is always highly fact specific, if you are an officer, even in a large organisation, we recommend that, at a minimum, you ensure that you:
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- are well familiar with the operations of your business/undertaking and the work carried out so that hazards and risks can be properly identified and addressed.
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- don’t just rely on others, including those with specific health and safety responsibilities – check that the health and safety systems you believe are in place, actually are AND are being followed.
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- check too with those ‘on the ground’, who are often best placed to know what is actually happening versus what is intended/is set out in policies or procedures.
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- ensure that there are effective reporting lines so that you get all necessary and ongoing information.
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- ensure that those with assigned health and safety obligations or roles, or specialist skills, have the appropriate skills and experience to do their roles and regularly /monitor check that they are doing what they are tasked with doing.
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- if you become aware that intended health and safety processes and systems are not actually happening, act on that and ensure changes are made (and remain in place by following up).
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- if a health and safety initiative is recommended and agreed to, make sure it is implemented and completed. If something starts, follow up to make sure it is progressing and is then closed out.
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- look at ‘hard controls’ where relevant (in this case, this was signage, barriers and adequate lighting when lifting operations were in place), not just relying on worker compliance with other health and safety measures.
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This article is an overview of the case. It is not comprehensive or intended to provide legal advice. No person should act in reliance on any statement contained in these publications without first obtaining specific professional advice. If you have any questions or require any advice regarding the matters outlined in this article, please do not hesitate to contact Kris Morrison at krismorrison@parryfield.com
