Health and safety risk management - from the boardroom to the front line

• Acquire, and keep up to date, knowledge of work health and safety matters.
• Gain an understanding of the nature of the operations of the PCBU and generally of the hazards and risks associated with those operations.
• Ensure that the PCBU has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from the work carried out.
• 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.
• Ensure that the PCBU has, and implements, processes for complying with any duty or obligation under the HSWA.
• Verify the provision and use of the resources and processes referred to above.

The purpose of this due diligence duty is not simply to hold officers legally accountable, but to encourage leaders to take an active and engaged role in health and safety matters, reinforcing a strong health and safety culture from the top to ground level.

Workplace fatality

The events leading to Gibson's prosecution were indisputably tragic. In the early morning of 30 August 2020, two employees were working as “lashers” – stevedores who connect containers together using lashing bars on ships that come into port. During their night shift, both workers noticed a container had mistakenly been unlashed by the prior shift. After informing their ship's Leading Hand, they were instructed to re-lash the container. This instruction was in breach of POAL's safety policy, which prohibits workers from being within three container-widths of an operating crane. 

While they were following this instruction, a crane operator began lifting two containers, unaware of the workers' presence or that a twist lock had mistakenly been left locked. This caused the crane inadvertently to lift two attached containers.  Noticing an irregularity in the lift, the operator ceased moving the crane but before he could lower the load, the locked mechanism snapped due to overbearing weight. This caused one container to fall and crush one of the workers, Pala'amo Kalati, leading to his death.

Following an investigation, Maritime NZ (MNZ) laid charges against POAL for two offences under s. 48(1) of the HSWA, for failing to comply with a duty that exposed an individual to risk of death or serious injury.  POAL pleaded guilty to those charges, one of which was based on systemic failures. This charge stipulated that POAL failed to ensure the safety of both workers as it related to providing effective training, conducting thorough risk assessments and carrying out effective supervision and monitoring.

Due diligence

MNZ also laid alternative charges against Gibson under ss. 48(1) and 49(1) of the HSWA on the basis that he had failed to comply with his due diligence duty under s. 44. 

When considering the threshold for due diligence, the court laid out the following general principles:

• A PCBU's breach does not mean an officer has failed to exercise due diligence, which is treated as a strict liability offence. The evaluation is largely dependent on facts and circumstances, including but not limited to the nature of the business and the officer's responsibilities. In considerable organisations, officers should maintain sufficient knowledge to ensure a PCBU’s compliance without entirely depending on others but without having to be involved in daily operations.
• Officers in particular must be proactive in monitoring the PCBU's health and safety systems, policies, procedures, and reporting lines, whilst also auditing and updating these measures regularly. While they may delegate some of their obligations down their line of hierarchy, officers cannot make assumptions about compliance as their actions are still subject to objective judicial scrutiny.
• If the officer's actions fall below the threshold set by s. 44, then it will not assist the officer if their conduct meets the standard of a reasonable officer in the relevant industry at the time.  Legislative purpose will supersede industry standard.

Gibson argued that there was no causal nexus between his actions as an officer and the systemic and documentation failures of POAL. However, the court found that although Gibson was initially involved in health and safety matters, despite recommendations made in a 2018 audit report, he failed to see through a planned risk and hazard management system. Further, that Gibson was aware of POAL's inadequate monitoring of wharf operations due to previous health and safety convictions from January 2014 to August 2018.  

The court considered that while officers do not need to be involved in the finer details of implementing health and safety initiatives, a responsible CEO should ensure the establishment and implementation of such systems to meet their health and safety obligations.  

Health and safety oversight

In the context of the above, the court found Gibson guilty of the more serious charge under s. 48(1) on the basis that, as CEO, he held overall responsibility at the executive level for health and safety across the PCBU. Further, his failure to act on shortfalls that were brought to his attention exposed Kalatai to risk of death or serious injury.

Specifically, the court concluded that Gibson was:

• Fully aware of the critical risk of handling suspended loads.
• Ultimately responsible for health and safety and was tasked with a number of key health and safety responsibilities.
• Responsible for monitoring and reviewing the performance of his subordinates and POAL’s systems.
• Required to exercise systems leadership.
• “Hands on” in relation to health and safety issues.
• Aware of the lack of timely response by POAL to recommended improvements to health and safety accountability, monitoring and reporting, including reporting of incidents, near misses and noncompliance.
• Aware, or ought to have been aware, of the lack of timely progression of bow-tie analysis of critical risks.
• On notice of POAL’s on-going difficulties in adequately monitoring work as done and of the need for improvement of the monitoring of the night shift.
• Conscious of the desirability of additional technological controls in relation to work carried out by lashers on ships, to address POAL’s reliance on behavioural controls, but failed to turn his mind to the need for additional hard, non-technological controls.

Gibson's guilty verdict represents a shift in the health and safety prosecution landscape as it shows a greater willingness by the court to hold officers accountable for failures, particularly in the context of a larger PCBU.

Historically, the indication in respect of due diligence has been that whilst officers cannot absolve themselves of their responsibilities, less accountability may be warranted when dealing with a larger organisation due to the necessity of delegation.  

Such tolerance is also reflected in cases like Safework NSW v. Doble [2024] NSWDC 5 (referenced in Gibson's defence), where the Australian New South Wales District Court asserted that officers playing an oversight role and delegating tasks should not be liable for all acts of the PCBU.  

The conviction of Gibson potentially sets a precedent for officers going forward. It appears to lower the threshold for health and safety liability historically applied to officers who may not have direct involvement in day-to-day operations, making it clear that they can be held responsible for health and safety risks if not exercising proper due diligence.

Compliance responsibility lies with officers

Businesses should anticipate a stauncher approach to due diligence in the future and officers must ensure they are not simply relying on other personnel to fulfil health and safety duties. While they can delegate certain health and safety responsibilities to deal with risks where resourcing requires it, officers must understand that final responsibility for the PCBU's health and safety compliance rests with them – notwithstanding the complexity and size of the PCBU concerned.

A particular takeaway from this case is the court's emphasis on the importance of understanding “work as done.”  This was contrasted this with “work as intended” or “work as imagined,” where it had been “designed, understood or expected by management and other staff who do not actually undertake the work.”

Put simply, officers have a responsibility to ensure the resources and processes in place result in actual compliance with a PCBU's duties under the HSWA. This means ensuring that the information received reflects “the reality of work as it is actually carried out by the workers on the shop floor,” rather than “work as planned” – no matter how well intentioned that initial commitment at a senior level may be.

Significantly, the court acknowledged Gibson’s dedication, general leadership and good intentions. Notwithstanding this, it then observed that the relevant issue was whether “Mr Gibson failed in his duty of due diligence under s. 44 HSWA in the ways particularised in the charges during the relevant time period. A good leader and a conscientious officer may have the best intentions in the world but may still breach that duty."

Helen Pryde is a Special Counsel at Buddle Findlay in Auckland specialising in health and safety, employment, and insurance.