Jurisdiction - New Zealand
New Zealand – Pike River Royal Commission, Report Findings.

12 November, 2012


Legal News & Analysis – Asia Pacific – New Zealand – Dispute Resolution


On 19 November 2010, 29 men were killed when a large methane explosion occurred in the Pike River mine. On 5 November 2012, the Royal Commission appointed to investigate (among other things) the causes of the incident handed down its final report. 
The report of the Royal Commission on the Pike River Coal Mine Tragedy (Report) sets out 16 principal recommendations that call for significant change to health and safety legislation across all industries within New Zealand. 
The recommendations require immediate action in relation to (among other things): 
  • corporate safety governance arrangements; and 
  • worker consultation and involvement in safety issues. 
This article sets out the recommendations that are likely to have the greatest impact on businesses.
Implications for Directors 
The recommendations
The Report makes three recommendations which impact on director’s responsibilities. These are: 
  • the statutory responsibility of directors for health and safety in the workplace should be reviewed to better reflect their governance responsibilities; 
  • the health and safety regulator should issue an approved code of practice to guide directors on how good governance practices can be used to manage health and safety risks; and 
  • directors should rigorously review and monitor their organisation’s compliance with health and safety law and best practice. 
Why are these recommendations important?
The recommendations are likely to lead to legislative change in New Zealand with the inclusion of directors duties into the Health and Safety in Employment Act 1992 (NZ) (HSE Act). 
More importantly, the recommendations require immediate action from directors of New Zealand companies to review their health and safety legislative and best practice compliance. This is a high test that has been set. It requires more than legal compliance as it requires an assessment of performance against industry best practice. 
What are the wider implications of these recommendations?
The Report provides guidance as to the level of detail of health and safety issues that the directors of Pike River Coal should have received. This is important from a wider safety governance perspective as it gives guidance on the level of health and safety information that should make its way to a board.  
The key issues identified by the Report that should have made their way to Pike River’s directors include: 
  • critical design and health and safety issues, including the location of the main fan underground at pit bottom; 
  • the ongoing problems with ventilation and methane levels; and 
  • insurance risk reports that discussed the risks of hydro mining. 
These comments are important because Australian organisations are currently grappling with level of information required for officers to meet their duties under the Model Work Health and Safety legislation. The comments demonstrate that directors are required to: 
  • be actively involved in health and safety matters; 
  • turn an inquiring mind to health and safety information and not rely solely on information provided by management; and 
  • have robust mechanisms in place for receiving critical safety information. 
Implications for Directors
The recommendation
The Report recommends that worker participation in health and safety in underground coal mines should be improved through legislative and administrative changes. 
Why is this recommendation important?
The recommendation is important because the comments in the Report make it clear that a review of worker consultation requirements is required across all industries in New Zealand. In particular, the Report calls for legislative change to ensure that: 
  • worker participation (ie including contractors and sub-contractors in addition to employees) is strengthened so that workers receive key health and safety information; 
  • trained worker health and safety representatives have the power to carry out inspections; 
  • union check inspectors be re-appointed and have the ability to work on behalf of all workers (in the underground mining industry check inspectors must have specialist expertise); and 
  • worker representative and check inspectors have the power to stop operations if workers are in immediate danger. 
What are the wider implications of these recommendations?
A reframing of consultation duties with all workers and the strengthening of stop work rights is likely to lead to changes to the HSE Act, with implications for all New Zealand businesses. 
What comes next 
The New Zealand Government has already indicated that it will accept the vast majority of the recommendations. A separate review of the HSE Act is already underway with a report due on 30 April 2013. 
For businesses operating in New Zealand, the way in which health and safety is regulated is likely to change. In light of the criticisms that Pike River Coal placed production ahead of safety it is timely for all New Zealand companies to review their safety governance arrangements. 
The full Report can be found at the website of the Royal Commission by clicking here.
For further information, please contact:
Anthony Longland, Partner, Herbert Smith Freehills
Sam Witton, Herbert Smith Freehills

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