Litigation, Disputes and Employment
Case Summary: Maritime New Zealand v Gibson [2024] NZDC 27975
The Court’s decision in Maritime New Zealand v Gibson [2024] NZDC 27975 is notable in that it provides practical guidance for officers (including directors and persons occupying a position that allows that person to exercise significant influence over the management of the business or undertaking, such as a chief executive) as to what may be required from an officer of a large company in order to comply with their due diligence obligations under the Health and Safety at Work Act 2015 (HSWA).
Background
On 30 August 2020, a pair of stevedores employed by Port of Auckland Limited (POAL), one of whom was Mr Pala’amo Kalati, were working the nightshift lashing and unlashing shipping containers on board a vessel at the Port. While working, both stevedores identified that a group of containers had been mistakenly unlashed by the dayshift. They approached the ship leading hand in their team and asked whether they should relash those containers. They were directed to do so, and Mr Kalati began working on the containers in a walkway positioned near another group of containers that were being unloaded from the ship by one of the port’s gantry cranes. This direction was in breach of POAL’s policy that workers should not be located within 3 container widths of an operating crane, meaning that Mr Kalati was working within the exclusion zone.
The crane operator, unaware that the stevedores were in the walkway and unable to see them from his position in the crane, commenced lifting two containers from the nearby group. The crane operator was also unaware that one of the twist lock mechanisms on the bottom of one of the containers had mistakenly been left locked, meaning that, as the crane lifted the two containers, one of the containers remained locked to the container below it at one corner, lifting that container as well. The crane operator recognised that something was wrong with the lift and stopped lifting.
However, before the crane operator was able to lower the containers, the twist lock mechanism failed under the bottom container’s weight. The container fell, crushing and killing Mr Kalati.
The Charges
Maritime New Zealand (Maritime) brought two charges against POAL under s 48(1) of the HSWA. POAL pleaded guilty to the charges; accepting that it failed to ensure, so far as reasonably practicable, the health and safety of workers, thereby exposing the stevedores, and Mr Kalati and his co-worker in particular, to the risk of death or serious injury.
With regard to the first charge, POAL accepted that it was reasonably practicable for it to have not directed or permitted the stevedores to work in close proximity to the crane while it was lifting shipping containers, and that it was liable for the conduct of its ship leading hand who had directed the stevedores to work in the exclusion zone. With regard to the second charge, POAL accepted that there were underlying systemic failures which meant that POAL failed to protect the health and safety of its stevedores, including failures to provide a safe system of work, effective training and instruction, effective supervision, and appropriate risk assessments.
Former POAL chief executive, Tony Gibson, was charged as an officer under ss 48(1) and 49(1) of the HSWA. The charges were laid in the alternative. Both charges alleged that Mr Gibson failed to comply with the duty imposed upon him, under s 44 of the HSWA, to exercise due diligence to ensure that POAL complied with its duties and obligations under the HSWA. Maritime alleged that Mr Gibson failed to exercise the care, diligence, and skill that a reasonable officer would exercise in the same circumstances, which manifested in three primary failures:
- Failure to take reasonable steps to ensure that POAL had available for use and used appropriate resources and processes to eliminate or minimise risk by having clearly documented, implemented, and appropriate exclusion zones around operating cranes;
- Failure to take reasonable steps to ensure that POAL had available for use and used appropriate resources and processes to eliminate or minimise risk by have clearly documented, implemented, and appropriate processes for ensuring coordination between lashers and crane operators;
- Failure to take reasonable steps to verify the provision and use of those resources and processes.
Mr Gibson was convicted under s 48(1) of the HSWA in respect of the first and third alleged failures, but the Court was not satisfied beyond a reasonable doubt of his guilt in relation to the second alleged failure.
The Court’s Reasoning
The Court found that Mr Gibson had overall responsibility for health and safety at POAL, and took on a number of responsibilities, including monitoring, reviewing and approving POAL’s systems, policies and procedures, and monitoring the performances of other workers with respect to health and safety. The Court also found Mr Gibson failed to ensure that POAL’s safety committee adequately performed its functions (the Court considered that it did not) and noted that, although other employees below Mr Gibson also played significant roles in managing health and safety, this did not derogate from Mr Gibson’s obligations as an officer under the HSWA.
Mr Gibson was a hands-on CEO, in that he drove various health and safety initiatives at POAL and had first-hand knowledge of its critical health and safety failures. The Court considered that Mr Gibson’s knowledge of POAL’s health and safety conviction history, POAL’s failure to monitor ‘work as done’ as opposed to planned work or designed work, the lack of reporting of incidents and near-misses relating to crane operations and load handling, the non-compliance by stevedores with the exclusion zone rule, and the series of health and safety recommendations made in a 2018 KPMG audit report, should have put him on notice that there were systemic failures in POAL’s health and safety and supervision systems.
In respect of POAL’s failure to adequately manage exclusion zones, the Court found that Mr Gibson had not exercised the care, diligence and skill of a reasonable officer in the circumstances in that he failed to consider or introduce hard controls such as barriers, signage and lighting, he had not taken steps to implement the recommendations from the KPMG audit report, he had not improved POAL’s processes for monitoring ‘work as done’, and he had not taken steps to improve POAL’s critical risk assessment and management systems.
The Court ultimately considered that Mr Gibson should have recognised the shortfalls in POAL’s management of exclusion zones and that he had the knowledge, capacity and ability to ensure that POAL utilised appropriate resources and processes to address those shortfalls, but he failed to do so. On that basis, it found Mr Gibson guilty on the charge laid under s 48(1) of the HSWA, which has a maximum fine of $300,000. He has not yet been sentenced.
With regard to Mr Gibson’s alleged failure to ensure coordination between lashers and crane operators, the Court considered the reasonableness of his actions in light of the change in the working roles of lashers, ship leading hands, and crane operators as a result of the dissolution of the role of lash leading hand during the Covid-19 pandemic. Although the Court found that it was Mr Gibson’s responsibility to manage that change process, and that POAL failed to undertake appropriate risk assessments or provide training as a result of the dissolution of that role, it was not satisfied beyond reasonable doubt that he failed to meet his obligations as it considered that the pandemic, associated lockdown, and social distancing rules bore on the reasonableness of his actions in respect of those failures.
Our View
In our view, and subject to any successful appeal, Maritime’s (mostly) successful prosecution of Mr Gibson provides a benchmark against which officers of other large companies should measure themselves to ensure they are meeting their obligations under the HSWA.
Of particular note, the Court’s decision confirms that officers of large companies cannot simply rely on other personnel with specific health and safety duties. Officers should instead ensure that they are also undertaking regular and appropriate enquiries into their company’s health and safety systems, they are acquiring sufficient knowledge to understand those systems and the company’s risks, and that they are providing adequate tools and resources to address those risks, especially critical risks. Officers should also ensure that, where personnel with specific health and safety duties are employed, there are clear and effective reporting channels to allow for the free flow of all relevant health and safety information.
Further, two key facts in the case which were used against Mr Gibson were that he was aware that there had been prior deaths and that some of POAL’s policies (such as the exclusion zones) were not always enforced. So, it is important for senior officers to ensure that lessons are learned from accidents and that key safety procedures and changes are properly implemented.
If you have any questions regarding the decision in Gibson, or officers’ health and safety obligations as a result of this decision, please do not hesitate to contact us.
