A recent safety case in New Zealand involving the conviction of former Port of Auckland (POA) CEO has set a significant legal precedent for workplace safety and corporate accountability in New Zealand.

This case, the first of its kind against an officer of a large company, underscores the extent of due diligence obligations required under work health and safety legislation and has far-reaching implications for corporate officers even across Australia. This is due to the near-identical provisions between New Zealand’s Health and Safety at Work Act 2015 (HSW Act) and Australian work health and safety legislation.

Background
The former POA CEO, Tony Gibson, was charged by Maritime New Zealand following a fatal workplace accident in which a stevedore was killed at the Port of Auckland. On 30 August 2020, the stevedore was crushed when a shipping container fell due to a twist-lock mechanism failure. He had been working within an exclusion zone in direct violation of POA’s safety policies after being directed to do so by the ship leading hand. The incident highlighted systemic safety failings and led to charges against both POA and Mr Gibson.

POA faced two charges relating to the conduct of the ship leading hand and underlying systemic failures to protect the health and safety of its workers. POA pled guilty to both charges and was convicted accordingly. The case against Mr Gibson focused on whether he had exercised due diligence in ensuring POA’s compliance with its safety obligations as required under section 44 of the HSW Act.

Mr Gibson was charged with a;

1. failure to take reasonable steps to ensure that POA had available for use, and used, 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
   2. clearly documented, effectively implemented, and appropriate processes for ensuring coordination between lashers and crane operators; and
2. failure to take reasonable steps to verify the provision and use of the resources and processes described above.

Mr Gibson successfully defended himself against charge (a)(ii) above, however was found guilty of the remaining charges.

Mr Gibson’s failings as CEO
The prosecution alleged the following failures regarding Mr Gibson’s requirement to exercise due diligence;

1. Failure to oversee safety strategy implementation: Despite POA having a health and safety strategy, Mr Gibson did not ensure its effective implementation across all levels of the organisation. Mr Gibson also failed to take sufficient steps to ensure existing safety protocols were properly implemented.
2. Inadequate verification processes: Mr Gibson relied on subordinates without ensuring that safety protocols were being effectively executed. There was inadequate auditing, monitoring and reviewing of health and safety systems to verify their effectiveness and address risks.
3. Passive rather than proactive engagement: The court emphasised that due diligence requires an officer to be proactive and systematic in ensuring compliance. Mr Gibson was required to systematically ensure safety compliance through ongoing monitoring, verification and review, rather than simply delegating responsibility with no active oversight.

Legal reasoning and key takeaways
The court set out several key principles regarding an officer’s due diligence duties;

• assessment of due diligence is fact and circumstance-dependent and applies to officers of all levels, regardless of the size of the organisation;
• in the case of large, hierarchical organisations, the duty to exercise due diligence is not limited to governance or directorial oversight functions;
• an officer in a large organisation does not need to be involved in hands-on, day-to-day operations, but cannot simply rely upon others within the organisation either;
• an officer cannot simply delegate health and safety responsibilities without oversight;
• officers must personally acquire and maintain sufficient knowledge to satisfy themselves that the organisation is complying with its work health and safety duties. This includes maintaining sufficient knowledge of the operations of the organisation;
• officers must ensure that, where there exists in the organisation a work health and safety specific role, that person has the necessary skills and experience to properly execute that role. They must also adequately and regularly monitor their performance to ensure that they are properly discharging their functions in ensuring the organisation’s compliance with its duties;
• the officer must ensure that entrenched and adequate systemic processes are put in place to ensure that the organisation complies with its duties. In any large organisation, the existence and adequacy of such systems are key, there cannot simply be a reliance on a paper system;
• effective reporting systems must be in place to ensure health and safety risks are communicated across all levels of the organisation;
• due diligence requires the engagement or arrangement of an effective process of monitoring and review of the organisation’s systems and processes to ensure they are achieving their purpose and relevant safety standards are adhered to;
• a mere reliance on industry standards is not a sufficient defence if the officer’s actions fall below the statutory standard.

Implications for Australia
Given the legislative similarities between the HSW Act and Australian work health and safety legislation, this case may influence how Australian regulators enforce safety obligations for corporate officers, particularly those in larger organisations. Key takeaways include;

1. Increased personal accountability: Officers cannot rely solely on the existence of safety policies; they must ensure that these are actively implemented and effective in practice.
2. Stronger enforcement by regulators: Australian safety regulators may adopt the approach taken in this case when considering charging officers of large corporations, increasing scrutiny on corporate leaders to verify that due diligence requirements are met.
3. Need for proactive compliance: CEOs and senior executives must engage in regular audits, oversight, and verification processes to ensure workplace safety obligations are upheld.
4. Precedent for future prosecutions: This case sets a strong precedent that Australian courts could use to assess due diligence obligations of officers in similar circumstances. Australian regulators may now focus on officers of larger corporations.

Conclusion
The conviction of Mr Gibson serves as a stark reminder that corporate officers have a personal duty to exercise due diligence in workplace safety. This could mark a shift towards holding executives of large companies accountable for systemic failures, reinforcing the need for proactive engagement in health and safety compliance.

For Australian businesses, the decision highlights the necessity of robust governance frameworks and rigorous oversight to prevent similar liability under work health and safety legislation. As safety regulators continue to monitor developments, corporate leaders should satisfy themselves that safety is not just a policy on paper but a fully embedded operational priority.

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The views expressed in this article are general in nature only and do not constitute legal advice.

Please do not hesitate to contact us if you require specific advice tailored to the needs of your organisation in relation to the implications of these changes for your organisation.

John Makris Partner +61 2 9169 8407 [email protected]

Salim Daoura Lawyer +61 2 9169 8415 [email protected]