Officers: implications of Maritime New Zealand v Gibson

 

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Who is an officer?

Officers of a PCBU have due diligence obligations under section 44 of the Health and Safety at Work Act 2015 (HSW Act). Under section 18 of the HSW Act, a person is an officer if they are a:

  • director of a PCBU that is a company;
  • partner in a partnership;
  • general partner in a limited partnership;
  • director in a body corporate or an unincorporated body; or
  • person whose position allows them to exercise significant influence over management of the PCBU (e.g. the chief executive).

Certain types of officers carry the duty but are not liable for any failure to discharge it. This includes members of the governing body of local authorities, school board trustees and volunteer officers (a person acting on a voluntary basis – as defined in section 16). Advisers such as health and safety practitioners who merely advise or make recommendations to an officer are not themselves officers, but can be liable as a PCBU.

It has in the past been suggested that officers do not include individuals other than the chief executive or board members – and that even senior executives cannot be officers. Certainly it is true that merely having the term ‘officer’ in a job title does not make someone an officer, just as advisers are not officers.

However, the legislation does not limit the concept of ‘officer’ to Chief Executives and board members (and the other categories expressly listed). The definition of ‘officer’ includes anyone who, by virtue of their role, exercises significant influence over the management of the PCBU. In some circumstances, this might include members of the leadership team reporting to the Chief Executive, particularly where they have significant budgets, headcount, and spans of control (as is often the case with a Chief Operating Officer, or a Chief Financial Officer or their equivalents).  

This is particularly the case in core public service agencies, where there are no boards. In our view, the reality will often be that the Chief Executive will not be the only senior employee who is an officer in those agencies.

 

Prosecution of former Port of Auckland CEO

The District Court case of Maritime New Zealand v Anthony Michael Gibson is the first time that an officer of a large company has been prosecuted for breaches of their due diligence duties under the HSW Act.[1]

In 2020 there was fatal accident in which a container fell from a crane at the Fergusson Container Wharf and killed the victim whilst he was working a nightshift as a stevedore lasher. Following the sentencing of Port of Auckland (POAL) in relation to this incident, Mr Gibson, the Chief Executive Officer (CEO) at the time, faced two charges for breaching his due diligence duties as an ‘officer’ under sections 48(1) and 49(1) of the HSW Act.

The Judge observed that Mr Gibson was a “hands on” CEO. He made many positive health and safety contributions during his tenure, such as expanding the health and safety team and introducing PortSafe (an online health and safety monitoring system). However, Mr Gibson was also aware of many risks for POAL but did not resolve them. There was a culture of ‘cutting corners’, a lack of timely response to recommended improvements to health and safety, on-going difficulties in monitoring work as done and a lack of monitoring of the night shift. Mr Gibson was aware of the importance of exploring hard controls (i.e., signage, barriers, adequate lighting), however no additional controls were put in place prior to the incident. The Judge found Mr Gibson guilty of breaching the due diligence duty. Mr Gibson was fined $130,000 and ordered to pay $60,000 in costs to Maritime New Zealand.

[1] NZDC 27975.

Implications of the decision

This decision has sparked a great deal of concern for officers when considering the extent of their due diligence duties. However, the circumstances of the case should be kept in mind. Ports are dangerous operations, and that applies particularly to stevedoring. By international standards, New Zealand ports have high rates of fatalities. While no industry (however safe or dangerous) is excused from its health and safety obligations, the high risk nature of this business meant it was inevitable that Mr Gibson would in practice have more stringent health and safety obligations than officers in many other businesses.

The relevance of this decision to leaders in the core public service is limited by the fact that it involved the chief executive of a port company that had a board. It is more directly relevant to Crown entities, state owned enterprises and other agencies with boards.

Nevertheless, the decision does set a clear precedent that officers (including chief executives) at large complex organisations may be held liable for breaches of their due diligence obligations, notwithstanding the fact that they are typically more removed from “work as done” than officers at smaller, closely-held organisations.

The decision sets out a number of helpful general principles on the due diligence duty that all those involved in health and safety should be alert to. In short, officers must:

  • be proactive in relation to health and safety issues and not just rely on others;
  • ensure the person who they have assigned health and safety obligations to has the necessary skills and experience to properly execute their roles;
  • monitor the performance of those who they have assigned health and safety obligations to; personally acquire knowledge of actual hazards and risks;
  • engage upon, or arrange, an effective process of monitoring, review and/or auditing of the PCBU’s systems, processes and work practices; and
  • properly interrogate the information they receive and ask hard questions.

The decision is a timely reminder that simply attending board meetings and doing site visits will not necessarily be enough to discharge the due diligence duty. Officers need to be proactive, and understand and address health and safety risks. If an officer is aware of shortfalls in the PCBU’s health and safety management, then the officer should ensure management is taking steps to address those shortfalls. As stated by the Judge: “A good leader and a conscientious officer may have the best intentions in the world but may still breach that duty”.

This article was supplied on 2 April 2025 by Greg Cain, Partner, Dentons. (external link)