The decision of the High Court in Tony Gibson’s appeal against his conviction and sentence in his personal capacity as an executive of Ports of Auckland Ltd (POAL) has important lessons for directors and senior managers who are in significant positions of influence in business.
In the past decade, New Zealand has had 18 deaths and 397 reported injuries in its ports. Stevedoring has the second highest rate of fatalities of any industry in New Zealand. Pala'amo Kalati tragically became one of those fatalities when a container fell and crushed him while he was working at POAL in 2020.
POAL was convicted and fined over $500,000 over Mr Kalati’s death. Tony Gibson was the Chief Executive of POAL at the time. He was also charged over Mr Kalati's death under the Health and Safety at Work Act (HSWA). After a seven week trial he was found guilty and was fined $130,000 and ordered to pay $60,000 in costs. This was the first conviction of a director or executive of a large New Zealand company under section 44 of the HSWA which imposes personal accountability on directors and executives for workplace safety.
Mr Gibson appealed his conviction and sentence.
By many measures POAL is large and complex organisation. It provides a range of services; marine (pilotage and tugs); cruise ships (berthage, exchange and security); multi-cargo (transmission shipment to the Pacific Islands of cargo, bulk commodities and vehicles); container terminal services (handling 700,000-900,000 containers each year); and engineering and trucking logistics support. In 2020 it had five primary business units and employed approximately 650 people and contracted various third parties.
Befitting its size and complexity, POAL had a developed management structure. The business was supported by a specialist health and safety team (of 10 full-time employees led by a senior manager who reported directly to POAL’s Deputy CEO/Chief Financial Officer). It had committees, document management and electronic data systems, external auditors and advisers and collaboration with other ports. While these had been developed over years it was also subject to continuous improvement.
The trial Judge made it clear in his decision that the fact that POAL had breached its primary duty of care under the HSWA (to ensure, so far as reasonably practicable, the health of safety of its workers) did not lead to a conclusion that Mr Gibson failed in his duty. They are separate duties. A business can breach its duties despite proper efforts by its officers/managers to do all that they can reasonably have been expected to do in the circumstances, having regard to what the officer/manager knew, what they ought to have known, and their ability to make or influence decisions in relation to the relevant matter.
Dealing with “systems leadership”, the trial Judge noted that in any large organisation effective systems are key to health and safety management. He said, as CEO, Mr Gibson was required to engage in effective systems leadership. He had a responsibility to ensure the resources and processes in place ensured compliance with POAL’s duties under the HSWA. That required him to ensure that the information he received reflected work as done or “what people are doing on the ground”.
Both the District Court and High Court judgments emphasised the remarkable leadership of Mr Gibson during his tenure. They are the stuff of a really good CV; by his actions and leadership a number of health and safety initiatives were introduced at POAL that “were positive and enhanced workplace health and safety”; he shouldered a “significant additional burden”, and went to “significant efforts” to look after his staff during the COVID-19 pandemic; the Board considered Mr Gibson’s response to those unprecedented times had been exceptional, showing leadership qualities of mental tenacity to keep calm, stay on track and ensure that everyone was informed and engaged, while demonstrating an outstanding level of commitment and dedication to staff.
The High Court accepted the evidence that frontline staff knew Mr Gibson. They volunteered that he was a “really good, good person”, who led positive change and made POAL less hierarchical. He was a respected boss. He also had the support of the Board and was “considered to be a good leader who was dedicated to the port and its staff”.
But the High Court decision emphasised points made in the District Court judgment. Although Mr Gibson did not have actual knowledge of stevedores engaging in unsafe practices or cutting corners on the night shift, he was on notice at least from late 2018 following an earlier fatality, 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. This was confirmed by a report to the Board in 2019 which included a table setting out numbers of incidents, near misses and non-compliance, but also stated “it is likely this table is not reflective of actual events occurring within POAL operational areas due to lack of overall reporting indicating a lack of monitoring of “work as done”.
The High Court decided to uphold Mr Gibson’s conviction and sentence.
Mr Gibson resigned from POAL in June 2021. Tragically, a further stevedore at POAL, aged 26, died in April 2022 after being crushed by a container.
Health and safety is not just about policies and systems, it is about ensuring that work is monitored “as done”, not just as set out in policies and systems.
It is all to easy to “pooh pooh” health and safety, but in New Zealand both workers and employers must do better. Read more....