Successful Prosecution of Former Chief Executive

Lessons to be learned

Stevedore, Pala’amo Kalati, was struck and killed by a falling container at the Auckland port on 30 August 2020.

Mr Kalati’s death led to Maritime New Zealand’s successful prosecution under the Health and Safety at Work Act 2015 (HSWA) of both Port of Auckland Ltd (POAL), the company that runs Auckland’s port, and its former chief executive.

This is the first time that the chief executive of a New Zealand company has been prosecuted over a workplace death.

The accident

The circumstances leading to Mr Kalati’s death were complex. However, the principal cause of his death was that he had been instructed to work on the deck of a ship contrary to the port company’s policy of remaining more than three container lengths away from an operating crane. Consequently, Mr Kalati was in the path of a falling container when the mechanical locking mechanism securing it to the crane failed while it was being lifted.

Prosecutions

Maritime New Zealand brought prosecutions against both POAL and its chief executive under section 48 of the HSWA. This section makes it an offence to fail to comply with a duty under the legislation that exposes a person to a risk of serious injury or death.

POAL pleaded guilty; it was fined $561,000 in 2023. The port’s chief executive defended the charges.

Due diligence requirement

Section 44 of the HSWA imposes a duty on the officers of a company, which includes directors and senior managers such as a chief executive, to exercise due diligence to ensure that their company complies with its legal duties under the legislation.

This is defined as exercising the skill and care that a reasonable person would use, taking account of their position, their responsibilities and the nature of the company’s business.

This section of the HSWA specifically states that to exercise due diligence, an officer must:

•         Keep up to date on health and safety issues

•         Understand their business and its health and safety risks

•         Ensure their business has, and uses, appropriate measures to eliminate or minimise health and safety risks

•         Ensure their business has processes for assessing new information about health and safety risks, such as incident reports, and acting on it promptly, and

•         Confirm that the measures and processes referred to above are being used and are working.

The court had to consider the duty imposed by section 44 on an officer in a large organisation when they were not involved in the day-to-day operations of that organisation. The chief executive’s lawyers argued that the chief executive could not be expected to know about everything that was going on at the port. The court accepted this but it found that the chief executive had a personal duty to ensure that the port company had measures in place to counter health and safety risks, and that they were implemented. He also had a duty to verify from time-to-time that these measures were effective.

The former chief executive was found guilty of two of the three charges brought against him. He is yet to be sentenced.

Lessons for company officers

This is the first case in New Zealand in which a senior officer of a company has been convicted following a workplace death. The outcome of any similar future prosecution will depend heavily on the facts of the individual case. For example, the extent of the duty in section 44 depends on the exact role the officer has in the company and the type of business it operates. The court’s decision, however, makes it clear that officers need to ensure that:

•         Their company has systems to ensure accurate information about health and safety matters flows to them from those carrying out the company’s work

•         They know how the company’s staff actually carry out their work as opposed to how they are supposed to do it (work as done v work as planned), and

•         New health and safety measures are implemented promptly once they know they are needed.

If you have any concerns about whether your company is fulfilling its duties under the HSWA, or the extent of your personal duties as an officer of a company or other organisation, please do not hesitate to contact us.

DISCLAIMER: All the information published is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in this newsletter may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: adrienne@adroite.co.nz. Ph: 029 286 3650 or 04 496 5513.