After an eight-week trial, Tony Gibson, former CEO of the Port of Auckland Ltd (POAL) was found to have failed to exercise due diligence to ensure that POAL complied with its duties and obligations under the Health and Safety at Work Act 2015 (HSWA) (Maritime New Zealand v Gibson [2024] NZDC 27975). The charges followed the tragic death in August 2020 of a stevedore who was struck by a shipping container that fell from a crane.
This prosecution was the first brought against an officer of a large company under the HWSA. As such, it provides useful lessons for all officers, even though each of these cases will turn on their own facts.
Background
Mr Kalati was working the nightshift at POAL as a lasher, securing containers on board a ship. Nearby, a crane operator was removing containers from the ship. Mr Kalati and his co-worker were within an exclusion zone around the crane, but the crane operator was not aware that they were there, and could not see them. The crane operator attempted to lift a container which was still attached to the one below. The locking mechanism between the containers failed, and one fell, striking and killing Mr Kalati.
Mr Gibson was the CEO of POAL for a decade, and was charged with failing to exercise the care, diligence, and skill that a reasonable officer would exercise in the same circumstances, and particularly with:
- failing to take reasonable steps to ensure that POAL had available, and used, resources and processes to minimise risks, including by having:
- documented and implemented exclusion zones around cranes; and
- documented and implemented processes for coordinating between lashers and crane operators; and
- failing to take reasonable steps to verify the provision and use of those resources and processes.
The District Court’s decision
The District Court confirmed that “a failure by the PCBU does not, of itself, demonstrate a failure by its officer to exercise due diligence.” However, in this case, “a reasonable CEO would have recognised the shortfalls in POAL’s management of exclusion zones and would have ensured POAL utilised appropriate resources and processes to address those shortfalls. Mr Gibson did not do so.”
As a result, Mr Gibson was found guilty of failing to exercise his due diligence obligations under the HSWA. At sentencing, he was fined $130,000 and ordered to pay costs of $60,000.
Lessons from the judgment
The judgment sets out a number of general principles relating to an officer’s duty of due diligence. These principles should be kept in mind by anyone in that role. They are:
- An assessment of whether an officer has exercised due diligence will depend on the facts and circumstances.
- The duty applies to all officers across all PCBUs, large and small, with both flat and hierarchical structures.
- In the case of large, hierarchical organisations, the duty to exercise due diligence is not limited to governance or directorial oversight functions.
- The officer’s duty is distinct from the duties imposed upon the PCBU. A failure by a PCBU to comply with its duties does not, of itself, mean that its officers have not complied with their duties to exercise due diligence.
- An officer in a large PCBU does not need to be involved in day-to-day operations in a hands-on way but cannot simply rely upon others. The officer must personally acquire and maintain sufficient knowledge to reasonably satisfy him or herself that the PCBU is complying with its duties under the Act.
- An officer must ensure that persons with assigned health and safety obligations or roles have the necessary skills and experience to properly execute their roles, and must adequately and regularly monitor their performance.
- The officer must acquire and maintain sufficient knowledge of the operations of the PCBU and the work actually carried out “on the shop floor” to adequately identify and address actual workplace hazards and risks.
- The due diligence duty cannot be satisfied by merely putting in place policies or procedures as to how work is to be carried out. The officer must ensure that entrenched and adequate systemic processes are put in place to ensure that the PCBU complies with its duties.
- Due diligence also requires the officer to have an effective process of monitoring, reviewing and/or auditing of the PCBU’s systems, processes and work practices to ensure that they are achieving their purposes and that relevant safety standards and policies are, in fact, being adhered to.
- An officer must ensure that there are effective reporting lines and systems in place within a PCBU to ensure that necessary information flows to the officer and others with governance and supervisory functions. The existence of appropriate systems to monitor, record and direct the flow of relevant information is key, especially in larger organisations.
- An officer cannot assume that the PCBU is compliant with its duties under the HSWA in the absence of being told otherwise, or assume that the information they receive is accurate. An officer must be proactive in relation to health and safety issues and in a position to properly monitor, verify and interrogate the information they receive.
- The state of knowledge of health and safety matters in the relevant industry at the time, the availability of industry standards or guidelines, and the practices of comparable officers and businesses will be relevant to any prosecution, but will not be determinative of the reasonableness of the officer’s actions or omissions in the relevant circumstances. If the officer’s actions objectively fall below the standard required by the statute it does not assist the officer that others in the industry may also have routinely been falling below that standard.
Mr Gibson has appealed the decision. We will provide further updates as they occur.
If you have any questions about the judgment, or about fulfilling your health and safety duties as an officer, please contact a member of our health and safety team.
