Police bring first forfeiture action against health and safety offender

WorkSafe NZ v Salter [2017] NZDC 26277

Introduction

In 2017, Auckland business owner, Ron Salter, and his waste fuel collection business, Salters Cartage Ltd (Salters), were convicted for a series of breaches of the Health and Safety in Employment Act 1992 and the Hazardous Substances and New Organisms Act 1996.  

The Police have commenced proceedings against Mr Salter under the Criminal Proceeds (Recovery) Act 2009 (the CPA).  This is the first time a proceeding has been brought under the CPA in relation to a health and safety offending.

The 2017 proceedings

On 15 September 2015, a welding contractor, Jamey Bowring, was undertaking welding work on a Salters waste oil storage tank.  Despite the tank being located in a hazardous area, Salters carried out welding work on the site without any authorisation or safety oversight.  Further, Salters failed to implement its health and safety management system.  The contractors were never inducted on to the site, required to obtain a hot work permit, or complete the health and safety declaration.  The contractors were not given a gas detector and were not informed of the contents of the tank.  Tragically an explosion occurred, killing Mr Bowring. 

Knowing the dangers associated with the worksite, Mr Salter and his business were found to have failed to take all practicable steps to avoid the explosion, and consequently breached the Health and Safety in Employment Act 1992.  Salters was fined $258,750 and ordered to pay reparation of $128,074.21.  Mr Salter was personally fined $25,000 and sentenced to four and a half months’ home detention.

The CPA

The primary purpose of the CPA is the forfeiture of property and assets where someone has benefitted from “significant criminal activity”, and to deter others from doing the same.

While Mr Slater was certainly criminally convicted, a proceeding under the CPA for a health and safety offence is a novel situation.

The NZ Police proceedings against Salter

The NZ Police have sought restraints against Mr Salter with respect to more than $8 million worth of personal and business assets.  For the Police to succeed, they must prove that there are reasonable grounds to believe it is more likely than not that property or assets were knowingly acquired or derived by Mr Salter from significant criminal activity.  That is to say, that Mr Slater knowingly acquired property or assets by way of his offending against the Health and Safety in Employment Act 1992 and/or the Hazardous Substances and New Organisms Act 1996.

Comment - Bradley Alcorn

Brad Alcorn comments that, while the standard of proof for the NZ Police is high,  it is not difficult to imagine a situation where a company has benefitted by cutting back on health and safety spending, and that those cuts have resulted in the criminal activity, being the health and safety breaches. 

However, it is questionable whether it was ever envisaged that the CPA would be used in this context.  While technically it may fall within the ambit of the CPA, convictions under the health and safety legislation are generally regarded as regulatory rather than criminal.  Further, it will be difficult for the NZ Police to establish a link between a company’s assets and its health and safety offending, so that the usual process of tracking proceeds of crime may be hard to apply.

We will keep you updated as this proceeding progresses.

Bradley Alcorn is a Senior Associate at Fee Langstone