The prosecution by Maritime New Zealand of the former Ports of Auckland Limited (POAL) Chief Executive Office is underway in the Auckland District Court.
Reporting of the prosecutor’s opening submissions indicate Maritime New Zealand is alleging that, in breach of his due diligence duty as an officer of POAL, the former Chief Executive failed to take reasonable steps to ensure POAL had minimised or eliminated critical risks, with particular allegations relating to alleged inadequacies in:
- documentation and implementation of a safe distance rule for workers operating near cranes;
- processes for co-ordination between lashers and crane operators working on ships;
- risks assessment of merging front-line roles during the Covid-19 pandemic; and
- verifying health and safety processes were adequate and effective generally.
Our view
This is the first prosecution of an officer of a major company, with prior prosecutions against officers initiated by the Regulator tending to involve small closely held companies or similar organisations, where the officers in question were much closer to the day-to-day operation of the business or undertaking. The decision will be watched with interest.
In the meantime, it is a reminder of the importance of good health and safety governance, and of the potential consequences officers face if found to have failed to comply with their due diligence duty. This reminder comes not long after other case law emphasising the personal nature of the duty, and reinforcing that compliance needs to be assessed on an individual basis.
Officers should ensure they are in a position to demonstrate to the Regulator, if required, that they are meeting the six elements of the duty in the Health and Safety at Work Act 2015. These are taking reasonable steps to:
a) acquire, and keep up to date, knowledge of work health and safety matters; and
b) gain an understanding of the nature of the operations of the business or undertaking of the PCBU and generally of the hazards and risks associated with those operations (with a particular focus on critical risks);
c) ensure that the PCBU has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the business or undertaking; and
d) ensure that the PCBU has appropriate processes for receiving and considering information regarding incidents, hazards, and risks and for responding in a timely way to that information; and
e) ensure that the PCBU has, and implements, processes for complying with any duty or obligation of the PCBU under the Act; and
f) verify the provision and use of the resources and processes referred to in c) to e) above.
Whilst it is important that PCBU’s put in place policies and processes that promote good governance practices, and provide a framework for officers to meet their personal due diligence duty, it is critical that officers remember the duties are personal, and a failure by their PCBU to put such policies and processes in place will not provide them with a defence. Indeed, it may well simply verify a failure on their part to ensure that such things happen as required by the due diligence duty.
Please contact one of our experts if you would like advice regarding governance and due diligence obligations.
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