Project orders – not an easy way out

Maritime New Zealand v Fullers Group Ltd [2020] NZDC 10157

The lesser known alternative to a traditional fine given under the Health and Safety at Work Act 2015 (HSWA) is the use of health and safety project orders.

In June 2020, in what is only the sixth case since the HSWA came into force, Judge Mathers ordered ferry operator Fullers Group to undertake a two-year project that will develop and deliver a safety team training programme across the maritime sector to improve health and safety. In recognition of the project’s estimated $300,750 cost, she also reduced Fullers’ fine by $200,000 to $86,159.

Background

In November 2017, Fullers’ ferry, Kea, collided with the Devonport ferry terminal wharf.  The Kea was carrying 52 passengers at the time and was under the command of an experienced master who was supervising a trainee to become the Kea’s new master.

Several passengers were injured because of the collision and Fullers was prosecuted by Maritime New Zealand (MNZ) following the incident.

The Sentence

Fullers entered an early guilty plea.  It admitted that it did not take practicable steps to ensure the public’s safety, in breach of the HSWA, by not providing the trainee master sufficient training, and “more prominent safety warnings and advice to passengers aboard the Kea about the need to remain seated while berthing”.

Judge Mathers ordered Fullers to pay a fine of $86,159 (discounted from $286,159) and to pay reparations totalling $68,336 to the injured passengers and $19,765 award of costs to MNZ. 

In addition, Fullers’ request for a project order, pursuant to section 155 of the HSWA, was granted and Fullers was ordered to undertake the project order and meet the total cost of the same, which was estimated at $300,750.

The Project Order

Fullers’ project order detailed a proposal to train around 200 people across the sector to become learning team facilitators.  Those facilitators would assist workplace groups to develop work processes.  A competency framework for learning teams and resources would also be developed.  The project order was supported by MNZ.

Judge Mathers granted the project order, after considering the additional factors which MNZ suggested were relevant:

(1)    that the project order is to go beyond compliance with HSWA;

(2)    that the project order is to have a meaningful connection to the conduct for which the defendant is to be sentenced;

(3)    that the project order does not propose things which already exist;

(4)    that the project order requires engagement from workers; and

(5)    that the project order requires something above and beyond existing health and safety obligations.

Her Honour noted that although these factors follow logically from s 155 requirements, they "must remain guidelines not necessarily requirements".

The Purpose of a Project Order

Project orders are not a lesser form of penalty, to be considered only where a defendant’s culpability falls at the lower range of the scale.  Instead, for a project to be accepted by the Court, there needs to be a well-founded set of proposals which necessarily involve significant costs from considerable work, consultation, and a commitment to address health and safety issues.  This contrasts with a fine, where a defendant pays and simply moves on.

The intention is, therefore, that project orders not only serve as a genuine alternative to a traditional fine but, as Judge Mathers stated, also bring with it significant health and safety benefits outside the defendant itself. 

Her Honour’s view was that project orders should be encouraged by prosecutorial authorities.  The Court said that any reduction in a fine in recognition for the cost of a project order should not eliminate the fine, since there should remain a fine to meet the usual objectives of denunciation, deterrence and accountability.  But it noted that there may be cases where a full dollar-for-dollar reduction is appropriate.  Further, the fact that a project order provides overall benefit to workplace safety should be given considerable weight in the balancing exercise involved in considering proportionality.

Comment (Bradley Alcorn)

Brad says that it is reassuring to the see the Court’s continued adoption of the sentencing tools available to it under the HSWA beyond the standard fine and it makes sense that project orders should be encouraged by prosecutorial authorities.  The benefits to the relevant sectors/industries and community through improved health and safety initiatives have a far greater utility compared with fines, which simply disappear into the Government’s coffers.  Whether the increasing adoption of project orders by the Court is an indication of a wider acceptance of such alternatives remains to be seen, but it certainly is an encouraging sign.

Bradley Alcorn is a Senior Associate at Fee Langstone