Following the Whakaari/White Island tragedy, WorkSafe New Zealand (WorkSafe) charged 13 parties under the Health and Safety at Work Act 2015 (HSWA). Six pleaded guilty, and six had their charges dismissed, either prior to or at trial. This included the directors of Whakaari Management Limited (WML), who were personally charged under section 44 of the HSWA for failing to exercise the necessary due diligence to ensure WML complied with its health and safety duties. On 5 September 2023, the Court found these charges could not be progressed due to there being insufficient evidence (see our update 'Overview of recent health and safety rulings and legislative amendments').
By the time the trial concluded on 21 September 2023, WML was the one remaining defendant. Having considered the evidence, on 31 October 2023, the District Court found WML guilty under section 37(1) of the HSWA, but dismissed the charge under section 36(2) of the HSWA.
We explain the Court's reasoning in this update, together with the Court's decision in WorkSafe New Zealand v ID Tours New Zealand Limited [2023] NZDC 19521. Sentencing for guilty parties is set to begin on 26 February 2024.
WorkSafe New Zealand v Whakaari Management Ltd [2023] NZDC 23224
WML's responsibility was to manage Whakaari. It entered into licence agreements under which commercial tour operators were granted access to the island. The licence agreements set out various conditions of access, including some health and safety requirements. However, WML did not itself have a permanent presence on Whakaari.
Duty of PCBU who manages or controls workplace - section 37(1)
Section 37(1) of the HSWA requires a "person conducting a business or undertaking" (PCBU) who manages or controls a workplace to ensure, so far as is reasonably practicable, that the workplace, the means of entering and exiting the workplace, and anything arising from the workplace are without risks to the health and safety of any person.
The Court confirmed that, for a PCBU to be caught by this provision, the PCBU must "in fact be exercising active control or management of the workplace in a practical sense". Merely owning, or profiting from, the workplace is not sufficient. Nor is having the ability to manage or control the workplace (but not doing so in practice). While WML argued that its management and control of the workplace was insufficient to meet the threshold, the Court reached the opposite conclusion. It found that WML was "proactive in setting conditions around access to Whakaari … [and] remained proactively involved with tour operators and other relevant stakeholders once the licence agreements were signed". It generated income through these licence agreements and had termination rights in respect of any breaches. As such, the section 37(1) duty was engaged.
This meant that WML was obliged to minimise risk to the extent it was reasonably practicable for it to do so, and to the extent that it could influence or control the matter to which the risk related. The Court confirmed that all reasonably practicable steps do not have to be taken, so long as the duty is met: "If [WML] met that duty without taking some or all these steps, it still met its duty".
A key area of dispute was whether WML was obliged to take steps that, in its view, had already been taken by others. In particular, WML argued that:
- It engaged and relied upon information provided by GNS such that it did not itself need to undertake a further risk assessment
- It relied upon risk assessments undertaken by the tour operators
- The Whakaari Response Plan assigned responsibility for assessing and managing hazards associated with Whakaari to Emergency Management Bay of Plenty
- It could rely on WorkSafe approved audits that "would fairly have led WML and others to assume that the risk assessment and safety processes … were sound and appropriate".
While the Court reiterated that duties under the HSWA are non-transferable, it did acknowledge that "what steps [a PCBU] may be required to take … can be affected by those same steps already having been done by others". For example, if one PCBU had already provided personal protective equipment, it would not be "reasonably practicable" for another PCBU to then provide that same equipment.
However, in WML's case, it was not entitled to rely on steps performed by others. The Court found that the information GNS provided was "ad hoc, infrequent, unstructured, informal, and incomplete - when much more was required". The risk assessments performed by tour operators could not be relied upon where their risk was "fundamentally different" to that of WML's, and WML did not verify the adequacy of the risk assessments. Moreover, the Court found that WML could not take comfort in the steps being performed by others when a previous eruption on Whakaari had demonstrated these to be insufficient. The 2016 eruption was not predicted and, had it not occurred in the middle of the night, the processes in place would not have prevented serious injury or loss of life. At that stage, WML should have stopped and re-evaluated the risks and controls in place, but it did not. Accordingly, WML was found to have breached its duty under section 37.
Primary duty of care under section 36(2)
Section 36(2) of the HSWA requires that a PCBU must ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking. WorkSafe argued that, under this provision, WML owed a duty to tourists and workers on Whakaari.
The meaning of "other persons", and whether it extends the primary duty of care to visitors and members of the public, was explored in the earlier decision in WorkSafe v National Emergency Management Agency [2022] NZDC 8020 (NEMA). In short, the Court in NEMA held that section 36(2) of the HSWA is not a standalone provision - it must be read together with section 36(1). Section 36(1) requires a PCBU to ensure (so far as is reasonably practicable) the health and safety of:
- Workers who work for the PCBU, while the workers are at work in the business or undertaking
- Workers whose activities in carrying out work are influenced or directed by the PCBU, while the workers are carrying out the work.
The Court reasoned that a PCBU cannot owe a duty to other persons at a workplace under section 36(2), if no duty is owed to the PCBU's own workers, or to workers who are influenced or directed by the PCBU, under section 36(1). The Court also held that Parliament's intention in enacting section 36(2) was to create a duty in respect of a "work activity" (ie the process of carrying out work) as opposed to a "work product" (the result of that work).
Turning back to the WML decision, WML never had workers on Whakaari, so section 36(1)(a) did not apply. WorkSafe argued that "WML influenced and directed the workers of the tour operators through the contractual obligations contained in the licence agreements", such that section 36(1)(b) applied. The Court disagreed, holding these were "pre-cursors to access" but that otherwise, "[i]ndividual tour operators could determine all aspects of their operations on Whakaari once they met these pre-conditions". The Court considered contextual elements put forward by WorkSafe, but these did not change its view. As neither section 36(1)(a) nor (b) applied, it followed that WML could not owe a duty under section 36(2) to the tourists and workers who were present on Whakaari at the time the eruption occurred.
WorkSafe New Zealand v ID Tours New Zealand Limited [2023] NZDC 19521
The Court was also required to consider section 36(2) in deciding whether to dismiss charges against Tauranga Tourism Services Limited (Tauranga Tourism) and ID Tours New Zealand Limited (ID Tours). Both companies were part of the supply chain between the tour operator, White Island Tours Limited (WIT), and the Royal Caribbean passengers who bought tickets to tours on Whakaari. Neither company was involved in conducting any actual tours on the island.
WorkSafe alleged that both Tauranga Tourism and ID Tours breached their duty to tourists visiting Whakaari under section 36(2), by failing to properly consult, co-ordinate and co-operate with others in the supply chain to ensure safety information reached tour attendees. WorkSafe also alleged that ID Tours should have implemented a process for providing Royal Caribbean with safety information (given it had an exclusive agreement with Royal Caribbean).
Once again, applying the analysis in the NEMA case, the Court found that neither Tauranga Tourism nor ID Services owed a duty to tourists by virtue of their respective business operations as part of the supply chain. As was the case in the WML decision, under section 36(1)(a), neither Tauranga Tourism nor ID Tours had workers on Whakaari. Nor did they influence or direct workers of the tour operators in carrying out their work, under section 36(1)(b). The fact that the companies worked in a supply chain, and that the workers of WIT would have been unable to conduct the tours without Tauranga Tourism and ID Tours, did not change this position. There was no duty arising from the companies' respective work activities (managing bookings and making logistical arrangements), only the "work product" (passengers attending the tours on Whakaari). As such, neither company could owe a duty under section 36(2).
However, the Court did find that, had either Tauranga Tourism or ID Tours been "a single entity dealing directly with consumers and providing the tour" (ie not part of a supply chain), then the position would have been different: "that entity would owe duties including the provision of safety information to consumers at point of sale".
Key takeaways
The Whakaari decisions provide helpful guidance for other PCBUs considering the extent of their duties under sections 36(2) and 37(1) of the HSWA.
For a PCBU to be caught by the duty in section 37(1), the PCBU must be actively controlling or managing the workplace in a practical sense. If so, then the PCBU must ensure that the workplace is without risks to the health and safety of any person, so far is as reasonably practicable. A relevant consideration will be the extent to which other PCBUs with concurrent duties are taking steps to address the same risk. However, the duty is non-transferable and PCBUs should still be cautious in relying on steps taken by other parties. When relying on third party expertise, the PCBU should consider whether that information is provided specifically for the purposes of assessing the risks associated with the PCBU's own undertaking, whether it is reliable and verified, and whether it has been successful in mitigating risks in the past. Information must be continually re-evaluated and updated - it is not enough to rely on a risk assessment completed at one discrete point in time when risks are subject to change.
In terms of section 37(1), the Court has continued to apply the reasoning in its NEMA decision, confirming that PCBUs will not be held responsible for the health and safety of "other persons" in the workplace under section 36(2) unless the PCBU has workers present in that workplace to whom they owe a duty under section 36(1)(a), or workers whose activities are influenced or directed by them under section 36(1)(b). However, we would not encourage PCBUs who are more removed from the workplace to become complacent - context has been a key consideration in the decisions to date, and it may be that, under different circumstances, the Court is willing to extend the duty further. In addition, the District Court's approach in the three Whakaari cases might be departed from if it falls for consideration in the future by a higher court.
