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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



Safeguard Magazine

CORPORATE MANSLAUGHTER: the case

The Pike River Royal Commission has suggested New Zealand introduce an offence of corporate manslaughter, but how would it make workplaces safer? JACKIE BROWN-HAYSOM investigates.

No one will ever know what happened that spring day to trigger the explosion, but somehow a spark ignited a cloud of methane gas, causing a blast that tore through the coal mine, leaving 26 men dead.

The subsequent government enquiry revealed a workplace culture where health and safety had been pushed aside in a sometimes desperate attempt to meet the new mine’s production targets. Ventilation in the shaft had been poor, methane detectors had been tampered with, safety inspections had been woefully inadequate, and unsafe work practices had been allowed to become the norm.

It’s a story that sounds chillingly familiar, yet these events took place more than 20 years ago, in May 1992, at the Westray coal mine in the Canadian province of Nova Scotia. The parallels with the tragic events at Pike River are almost eerie – including the fact that both events provoked calls for corporate manslaughter legislation.

At Westray these calls became strident when charges against the mine company and its managers were thrown out due to problems with the prosecution case. The Canadian government responded by enacting an amendment to the country’s Criminal Code, introducing Bill C-45, popularly known as the Westray Act.

Under this law companies can be convicted of criminal negligence causing death or injury if a worker is harmed in circumstances where one or more company representative displays wanton or reckless disregard for lives or safety, and where there has been a significant failure by senior officers to prevent this behaviour occurring.

If convicted, companies face unlimited fines, while individuals can be fined up to $100,000 and/ or imprisoned for up to 10 years, in cases involving injury, or for life, in the event of a fatality.

When the amendments took effect in 2004, public indignation about the mine tragedy was somewhat assuaged. Eight years later, however, after only a handful of prosecutions, none of which has involved a large corporation, and a number of which have resulted in acquittals or dismissals (see page 14), concern is again being expressed from some quarters.

Targeted response

Nonetheless Canada’s legislative experiment has been repeated in other jurisdictions. In the wake of their own high profile workplace tragedies, both the United Kingdom and the Australian Capital Territory introduced laws intended to increase penalties and extend the accountability of corporations and their senior managers in regard to work-related deaths.

For ACT the catalyst was the 1998 explosion at the ESSO Longford natural gas plant in Gippsland, Victoria, which killed two and seriously injured eight. Victoria itself drafted a corporate manslaughter bill in 2000, but this was defeated in the Legislative Council in the face of sustained pressure from employer groups.

ACT, however, amended its Crimes Act in 2004, introducing the new offence of industrial manslaughter. This makes employers or senior company officials liable if a worker dies as the result of their reckless or negligent conduct, and can hold a company guilty of a similar offence by aggregating the conduct of individuals (employees, agents and officers) within the organisation. Corporate culture is seen as an expression of this aggregated conduct. The maximum penalties are a $1million fine for a company, or a $200,000 fine and/or up to 20 years imprisonment for an individual.

As yet there have been no prosecutions, probably because the majority of ACT employees work for government agencies which, under Commonwealth law, are specifically exempt from the act.

Prosecution failure

The UK’s law changes were prompted by the sinking of the channel ferry Herald of Free Enterprise in 1987 with the loss of 193 lives, and the Hatfield rail crash in 2000, which killed four and injured more than 100.

Manslaughter charges were laid in both cases, but were dismissed because it was not possible, under the law of the day, to establish a causal link between the actions of senior company officers and the fatalities. The Corporate Manslaughter and Corporate Homicide Act 2007, which became law in April 2008, was a calculated attempt to get around this problem.

Under this legislation a company can be prosecuted if someone dies as a result of the way its activities have been organised or managed by senior staff, in circumstances where a duty of care has been grossly breached. There is no provision for individuals to be prosecuted, but the pre-existing offence of gross negligence manslaughter can still be used in such situations.

Naturally prison sentences are not an option for corporations, but there is no upper limit to the fines they can receive, and a 2010 report from the Sentencing Guidelines Council recommended that these could be “millions of pounds and should seldom be below £500,000.”

Companies can also be ordered to undertake remedial works, and to publicise their wrong-doing, but these provisions have not yet been used.

Because actions under this law need the consent of the Director of Public Prosecutions, cases are typically taking up to four years to reach court. Since the first case, early last year, there has been a slow trickle of new prosecutions (see page 16), but, as in Canada, all so far involve companies where senior managers have been personally involved with day-to-day decision making. Successful prosecutions of this nature have always been possible under gross negligence manslaughter, so there is, as yet, no evidence that the new Act has achieved its stated goal of holding large corporations to account.

Why corporate manslaughter?

The fact that such legislation has, in every case, been a response to a workplace catastrophe suggests that current OHS laws do not go far enough to satisfy public opprobrium in such situations. This is likely to be a particular problem in New Zealand, where ACC law also prevents victim’s families from suing for personal injury.

In the public perception, it seems, the desire for greater accountability, and even for retribution, requires an offence of last resort. While existing manslaughter legislation provides penalties in keeping with this objective, it cannot be used for this purpose, except in the case of small businesses.

The problem is that in New Zealand, as in all common law jurisdictions, a manslaughter conviction under criminal law requires the prosecution to prove not only that a particular action caused the fatal injury, but also that there was an element of intent behind that action. This does not mean that the harm was intended, but that its cause can be attributed to an identifiable party.

While companies have legal status in some capacities, the links between frontline staff and senior managers in large corporations are not strong enough for the courts to interpret staff actions as a refection of the organisation’s intentions. For this reason companies can only be convicted of criminal (as opposed to corporate) manslaughter if a senior member of staff is directly involved in events leading up to the death.

Thus corporate manslaughter laws must establish a legally acceptable way to link a company’s health and safety failures to the organisation as a whole. Canada and ACT have opted for aggregation – using corporate OHS culture as a refection of the company’s controlling mind – while the UK has chosen to look for the personal involvement of senior staff in the decision-making that leads to a fatality.

Only time will tell whether either or both of these measures will satisfy the courts, but unless they do the legislation will be of little value. Manslaughter charges have always been a possibility when small companies or individuals are implicated in workplace deaths, and until some larger corporations are successfully prosecuted, the new laws will have added little to the enforcement framework.

Overseas issues

The low number of prosecutions, and the absence of legally significant cases, have led some OHS commentators in both jurisdictions to question the workability of the laws.

In August the managing editor of Health and Safety at Work, Louis Wustemann, speculated about the CPS’s failure to capture the “large scalp” that would prove the effectiveness of the UK legislation.

“Some big employers have contributed names – in some cases more than one – to the list of 700 killed in workplace accidents since the act came in, but their scalps remain firmly anchored to their corporate heads,” he said. “This may be because in all but three of the corporate manslaughter investigations since 2008 – and there have been many – the safety failings were localised and had no root in senior management action or inaction.

“Or it may be because the police, who lead corporate killing enquiries, aren’t often experienced enough … to ask the right questions.”

The inexperience of investigating police officers has also been seen as a problem in Canada, where the April 2012 edition of Safe Supervisor noted that “while the [C-45] legislation undoubtedly has teeth, very few companies and individuals have been bitten.”

The article went on to quote Toronto lawyer Ryan J. Conlin, who suggested that the dearth of prosecutions stemmed from police reluctance to work alongside OHS investigators, provincial regulators’ preference for local health and safety law over federal legislation, and the heavy burden of proving “wanton and reckless disregard.”

In another OHS publication, however, former Alberta Crown prosecutor David Myrol rejected the idea that the number of cases was a useful way to measure the law’s success. In the May edition of OHS Insider he said the law had captured the attention of corporate Canada and was having a profound impact on how companies were run. As a result safety had achieved a higher profile at executive management level, and more resources were being spent on keeping workers safe.

The deterrent effect

The idea that a threat of prosecution promotes compliance is supported by Australian OHS researcher Professor Andrew Hopkins.

In 2007 he questioned managers at 13 NSW coal mines to see how they had reacted to the prosecution of two fellow managers following an incident at Gretley Mine in which four men died. He found the managers had become more safety focused, more likely to discipline safety violators, and more likely to keep written records.

But in a paper presented to a 2010 sentencing conference another Australian academic, professor of law Rick Sarre, questioned whether Hopkins’ findings were in fact grounds for supporting corporate manslaughter, pointing out that any threat of prosecution would have a similar deterrent effect.

“The evidence in deterrence theory points to the threat of being caught as a far greater deterrent than the consequences of being caught,” he said.

For Auckland lawyer Grant Nicholson, corporate manslaughter has the potential to be a useful addition to the OHS enforcement regime “because it would help focus the minds of the corporates.”

He admits, however, to doubts about the practicalities of such legislation. “Can we have a level playing field for large and small companies when it comes to prosecutions? I think it’s difficult to find the balance.”

He is also unsure whether the legislation would be much used, given the conservative approach that is favoured by OHS prosecutors.

“There are already opportunities for stronger penalties under existing legislation. Action can be taken against senior people in high profile businesses who have got their hands dirty, and charges can also be brought under s49 [which is used if the party facing prosecution is aware that their action or inaction could cause serious harm] but they don’t use it, purely because it is hard [to prove].”

In the 20 years since the HSE Act came into force only 27 individuals or companies have been charged under s49. Of these, 22 charges against 14 defendants were withdrawn without being heard, four charges were dismissed, one defendant was discharged, and 11 defendants were convicted on 15 charges, only one of which related to a fatality. Since 2010 there have been no cases where s49 has been used.

The way forward?

In this environment, does corporate manslaughter offer anything useful, save the appearance of doing something in the wake of a shocking tragedy?

Certainly the penalties for any manslaughter law would be significantly more severe than those currently provided for OHS offences – even those under s49 – and this may be an incentive for extra vigilance. However penalties are only an effective deterrent when there is a realistic risk of prosecution. Until at least one of the overseas jurisdictions successfully prosecutes a large company, any deterrent effect will be limited.

For this reason it may not be the right time for a move to corporate manslaughter, but there are other alternatives available. In every case the incidents that prompted the introduction of corporate manslaughter – Westray Mine, Herald of Free Enterprise, and ESSO Longford – involved multiple, entrenched, and systemic safety failures. As such they represented not only a failure by the companies concerned, but also by the regulators – a situation paralleled at Pike River.

Might there not be a better return on investment if, rather than devoting considerable resources – both time and financial – to attempts to develop a workable manslaughter law, the government opted for a robust workplace inspection regime? If employers knew there was a good chance they would be inspected, and that they would be prosecuted, or at least served an infringement notice, if things weren’t up to scratch, we might well reap the benefits of an active deterrent policy without the uncertainties of a largely untried legislative regime.

JACKIE BROWN-HAYSOM

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