Fishing operators will now need to review whether husband and wife teams should both be directors. If one is not going to be involved in the operation on a day to day basis then serious consideration should be given to that party not being a director.
Directors should review where their assets are held so they are protected from the costs of failure to comply with legislation. Insurance should also be reviewed to ensure that there is sufficient cover to protect the director in case
of investigations and financial loss.
Considerable sympathy has been expressed for Ms Davis’s plight but it is clear that both the prosecution and the guilty verdicts herald a tougher approach to the enforcement of responsibilities of those operating in the maritime sector, particularly the health and safety obligations of company directors and managers.
While Ms Davis had no involvement in the day to day running of the vessel the court rejected the argument that she was merely an administrator and that the real responsibility was that of the person in charge of the boat.
SSM* was set up to assist boat owners to comply with legislative safety
requirements in New Zealand. Commercial boat owners engaged SSM companies to conduct audits for them so they could obtain Safe Ship Management Certificates (SSMC) from Maritime New Zealand – effectively a passport to lawfully operate as a commercial fishing operation in New Zealand waters.
While Ms Davis and Mr Karetai had engaged an SSM company and had obtained the initial SSMC, they failed to continue to adhere to the ongoing requirements of the process.
Three things are clear from the decision in this case.
- Maintenance of safety at sea is an ongoing and heavy obligation which, under the MTA, means taking all reasonable care to avoid unnecessary danger or risks and under the HSEA taking all practicable steps to avoid harm.
- Managers and directors of maritime operations will be held accountable for failure to meet such obligations whether they are directly involved in operations or not so it is vital that these people fully understand and engage in Maritime New Zealand and health and safety in employment safety systems.
- The consequences of failing to do so can be tragic and result in significant penalties.
So what does this all mean for the fishing industry? For large fishing operations the decision is not likely to have a significant impact as compliance with safety regulations is treated by those companies as an inevitable cost of doing business.
Larger companies have the volume and scale to sustain the cost of specialist advice and support with compliance and are used to being scrutinised closely by authorities.
It is a different story for smaller businesses who have the same compliance obligations as their larger counterparts
but who operate within tighter margins.
Family busineses, such as the Davis-Karetais need to realise that they will be held to the same compliance standards as larger players in the industry and that the cost of meeting those standards is an unavoidable part of doing business. This will in most cases require more time being spent both on ongoing education and training for owners and managers and on constant monitoring of the business’s compliance with those obligations.
The Easy Rider case is not about a wife being held liable for the actions of her husband. Gloria Davis’s liability was based on her assumption of responsibility by becoming a director of the boat owning company. It is important to note though that the outcome is likely to have been exactly the same if Ms Davis and her husband had owned the business personally rather than through a company.
There will be the inevitable comparisons between this case and the Pike River mine disaster where there were no convictions of directors or managers despite the huge loss of life involved.
However, it would be wrong to see this as some kind of double standard. The viability of prosecutions depends largely on the availability of the necessary evidence. Put simply, while the necessary evidence to convict Gloria Davis was readily accessible to the prosecution, the opposite was the case with Pike River where difficulties with obtaining the adequate evidence meant that what would have been a 20-week trial was extremely unlikely to result in a successful prosecution.
New health and safety legislation, which is expected to come into force in April 2015, is set to impose a new regime on managers and company directors to manage risks and keep their workplace safe.
Stronger penalties, enforcement tools, and court powers are likely but have yet to be finalised. However, one of the main objectives of this new legislation is to improve health and safety outcomes by making it clearer to those targeted what their legal duties are. That is, it seeks to promote compliance with the duties by clarifying the requirements and the consequences of non-compliance.
* Martime New Zealand’s new Maritime Operator Safety System (MOSS) replaces SSM. All maritime operators must comply with MOSS by 14 July 2014.
Tim Jeffcott, B.A. LL.B AAMINZ, works in the Fisheries and Maritime Law Team at Hamish Fletcher Lawyers in Nelson.