CEO Convicted After Fatality

CEO Found Guilty of Not Demonstrating the “Care, Diligence, and Skill” of a Reasonable Corporate Officer

This is another example of blame after an accident, but this time the CEO, Tony Gibson, was blamed and found guilty in a court of law in New Zealand. He was fined $190,000 (including court costs) as a result of the verdict.

An article about the conviction said that:

“Mr Gibson, who served as Port Authority of Aukland’s (POAL’s) CEO from February 2011 to June 2021, was charged as an officer, with failing to exercise the care, diligence, and skill that a reasonable officer would exercise in the same circumstances to ensure that POAL protected the health and safety of stevedores at the container terminal (in circumstances where this exposed workers to a serious risk of death or injury). Maritime NZ alleged Mr Gibson’s omissions manifested in three specific failures:

The Accident

According to the article, here are the key facts about the accident:

1. At 2 AM on August 20, 2020, a pair of stevedores found that a group of containers had been mistakenly unlashed by the dayshift (CAUSAL FACTOR #1).
2. The stevedores contacted the ship’s leading hand and asked whether they should relash the containers. The leading hand told them to go ahead and relash the containers.
3. The stevedores went to the containers to relash them even though they were within 3 containers of an operating crane (CAUSAL FACTOR #2).
4. Relashing the containers was a violation of the Port Authority of Aukland’s policy which stated that workers should not be in an area within three container-widths of an operating crane (the exclusion zone).
5. The locking mechanism on one corner of a container to be lifted was not properly unlocked (CAUSAl FACTOR #3) resulting in that container being connected by one corner to the container below it.
6. The crane operator couldn’t see the stevedores from the crane and started lifting the container while it was still attached to the container below it (potential CAUSAL FACTOR #4 – should have a spotter seen the stevedores and the connected container and notified the crane operator before the lift became dangerous?).
7. The crane operator realized that something was wrong with the lift and stopped lifting. However, the single locking mechanism broke (was not designed to carry a full container’s weight by itself) and the bottom container fell on one of the stevedores, killing him.

TapRooT® RCA Users can see how this information could easily be developed into an understandable SnapCharT® Diagram to make the sequence of events, conditions, and Causal Factors clearly understood.

Management Accountability

What is management’s accountability under this court decision? The court said that an officer of a “PCBU” (Person Conducting a Business or Undertaking) must:

• Ensure that people with assigned health and safety obligations or roles have the necessary skills and experience to properly execute their roles.
• Acquire and maintain sufficient knowledge of the PCBU’s operations and the work actually carried out “on the shop floor” (also described as “work as done” in the judgment, and contrasted with “work as planned, intended, or imagined”) to adequately identify and address actual hazards and risks.
• Ensure entrenched and adequate systemic processes are put in place to ensure the PCBU complies with its duties (which is described as key in large organizations).
• Ensure there are effective reporting lines and systems for the flow of necessary health and safety information to the officer and others with governance and supervisory functions (again, described as key in large organizations).
• Engage in, or arrange, an effective process of monitoring, reviewing, and/or auditing the PCBU’s systems, processes, and work practices to ensure they are achieving their purposes and being adhered to (as applicable).

In addition, the court found that industry standards and guidelines are relevant to the court’s assessment, but not determinative. An officer relying on such guidance might be found to be in breach if the guidance falls short of the requirements of the Health and Safety at Work Act.

The CEO was found guilty of the first and third specific failures because he was:

1. Aware of the risks of the stevedores.
2. Aware that policies were being violated in the field by:
   • a 2018 KPMG report and recommendations which he has received as part of the monthly health and safety statistics,
   • near-misses were being under-reported per a 2019 Critical Risk Report,
   • “work as done” was not being monitored by the port of Aukland as evidenced by previous health and safety convictions from January 2014 to August 2018.

The article stated that:

“The Court’s overall conclusion in that respect was that a reasonable CEO would have recognized the shortfalls in POAL’s management of exclusion zones and would have ensured POAL utilized appropriate resources and processes to address those shortfalls. These failures were found to have exposed workers to serious risk of death or injury because they decreased the likelihood of POAL taking the necessary steps to eliminate that risk.”

The decision is being appealed.

Your Thoughts?

I’m sure there is more to this story. However, with only the information provided above, what are your conclusions?

Should senior management, including the CEO, be liable for “work as done?” Should they be aware of the details of what is going on in the field?

In this case, was adequate action taken after previous audits, assessments, and near-misses? Should more effective corrective actions have been implemented and should the CEO be held responsible for ineffective responses?

Although this was a local matter in New Zealand, would your management pass the accountability tests that this court placed on the Port of Aukland? Does your CEO know that “work as planned” does (or does not) match “work as done?” Does your senior management know about the effectiveness of previous root cause analysis and corrective actions? And what about their awareness of peer and third-party audits? Do they ensure strong, adequate actions to avoid future problems?

Certainly, something to consider.