Maritime New Zealand v Gibson [2024] NZDC 27975

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Overview

On 30 August 2020 Pala’amo Kalati was killed while working as a lasher at the Ports of Auckland.  Mr Kalati was crushed by a falling shipping container while working within an exclusion zone near an operating crane - a practice prohibited under Ports of Auckland Limited’s (POAL) safety policies.  Anthony Michael Gibson was the CEO of POAL from 2011 to 2021.  Maritime New Zealand (MNZ) brought charges against Mr Gibson for failing to fulfil his duties under the Health and Safety at Work Act 2015 (HSWA).  MNZ successfully argued that Mr Gibson did not exercise due diligence to ensure POAL complied with its health and safety obligations.

Duties of a Director or Officer Under the HSWA

Section 44 of the HSWA places a proactive duty on officers of PCBUs (Persons Conducting a Business or Undertaking) to exercise due diligence in ensuring that their organisation meets its health and safety obligations.  This duty includes:

  • Acquiring and maintaining an understanding of workplace health and safety matters;

  • Gaining familiarity with the organisation’s operations and associated risks;

  • Ensuring the organisation has adequate resources and processes to eliminate or minimise risks; and

  • Verifying that these systems are effectively implemented and maintained.

The HSWA intends for directors and officers to take an active role in governance to prevent harm and ensure compliance with workplace safety standards.

Key Facts Demonstrating a Breach of Duty

On the night of the incident, Mr Kalati was working near an operating crane in violation of POAL's three-container-width rule, which requires workers to maintain a 7.3-metre distance from operating cranes.  This policy was designed to prevent accidents caused by falling containers or other equipment but was inconsistently enforced.  The incident occurred because a twist-lock mechanism on a container failed during a crane operation, causing the container to fall and fatally strike Mr Kalati.

The subsequent accident investigation revealed several systemic failures within POAL's safety practices that directly contributed to the fatality.  These included:

  1. Inadequate Implementation of Safety Policies: The exclusion zone policy, while documented, was poorly communicated to workers.  Many employees, including Mr. Kalati, lacked clear instructions on safe working practices near cranes;

  2. Removal of the Lash Leading Hand Role: In response to the COVID-19 pandemic, POAL had removed the lash leading hand position, which was critical for overseeing lashing operations and coordinating safety.  This decision was made without conducting a proper risk assessment or providing adequate training to workers who assumed those responsibilities; and

  3. Inadequate Supervision and Monitoring: There was limited oversight of nightshift operations, allowing unsafe work practices to persist.  Workers often ignored exclusion zones, and managers failed to enforce safety protocols effectively.

Mr Gibson’s Role and the Prosecution’s Case

Mr Gibson, as CEO of POAL, held ultimate responsibility for ensuring that health and safety systems were in place and functioning effectively.  The prosecution argued that Mr Gibson breached his duties by failing:

  1. To ensure that the POAL had appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking, including by having:

    1. Clearly documented, effectively implemented, and appropriate exclusion zones around operating cranes; and

    2. Clearly documented, effectively implemented, and appropriate processes for ensuring coordination between lashers and crane operators.

  2. To take reasonable steps to verify the provision and use of those resources and processes.

The prosecution emphasised that these failures were foreseeable, as POAL had a history of safety incidents and previous convictions, which should have put Mr. Gibson on notice of the need for significant improvements. Despite this, it was alleged that Mr Gibson did not take sufficient steps to address the risks.

Breach of Duty

The Court found that Mr Gibson failed to exercise the care, diligence, and skill that a reasonable officer would in similar circumstances.  The Court considered that Mr Gibson relied too heavily on subordinate managers without personally verifying the adequacy of safety measures or ensuring proper oversight.  Mr Gibson’s failure to act on known risks, particularly those highlighted by previous incidents and convictions, demonstrated a lack of due diligence.

The Court commented that the statutory duty imposed on directors and officers requires more than just relying on those with specific health and safety responsibilities in the management chain below them.  Where there are persons within an organisation with assigned health and safety obligations or roles, or who may have specialised skills or experience in the work carried out, the Court said CEOs such as Mr Gibson retained responsibilities for monitoring and reviewing the performance of those persons.  Further, Judge Bonnar said directors and officers cannot assume, without proper inquiry, that the organisation’s systems are adequately addressing health and safety risks.

The Court found that there were shortfalls in POAL’s management of exclusion zones and that "POAL had demonstrated ongoing difficulties in adequately monitoring work as done.”  As CEO “Mr Gibson should have been aware that appropriate systems and processes needed to be put in place to address POAL's previous failures in that respect." Mr Gibson should have ensured that these issues were properly addressed.  His failure to do so was a breach of his primary duty of care.

Comment (Bradley Alcorn)

This is a significant decision for officers and directors.  The duties and obligations of PCBU’s have been well canvased since the introduction of the Health and Safety at Work Act.  However, this decision now provides a foundation for officers’ and directors’ health and safety compliance.

An officer must ensure (by undertaking appropriate due diligence) that they retain appropriate oversight over the PCBU’s health and safety policies and procedures, as well as those persons with health and safety roles, so as to personally ensure that they remain compliant with their duties.  At its core, this means officers must proactively understand the health and safety issues and ensure that appropriate policies and procedures are drafted, implemented, enforced and maintained (including regularly updating, revising and appropriately resourcing those systems).  A reasonable understanding of existing and new health and safety matters is also essential and, in this regard, officers should ensure that they receive relevant, timely and regular information to assist them with supporting those policies and procedures.

Ultimately officers are not required to be aware of an organisation’s every health and safety detail, but they cannot ignore issues and rely on others in the organisation (no matter how large or complex that organisation may be) to comply with their duties.  Officers, like all other duty holders must remain positively engaged and responsive to the health and safety needs of the organisation.

bradley alcorn is a special counsel at fee langstone