Latest / Safe As Podcast / E45: Unpacking Officer Due Diligence based on a Maritime NZ prosecution

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E45: Unpacking Officer Due Diligence based on a Maritime NZ prosecution · Safe As Podcast

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  Is being a well intentioned, conscientious leader enough to
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  make legal due diligence obligations?
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  Good day everyone. I'm Ben Hutchinson and This is
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  Safe as a podcast dedicated to the thrifty analysis of safety,
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  risk and performance research. Visit safetyinsights.org for
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  more research. Today we're diving deep into a
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  New Zealand prosecution where the CEO, Mr Gibson of Ports of
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  Auckland, was charged for failing to adequately exercise
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  due diligence following a tragic work related fatality.
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  This case provides A fascinated look into the realities of
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  safety leadership, the critical concept of work is done and the
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  limitations of traditional compliance approaches.
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  I'm not a lawyer, so I'm relying more on direct quotes.
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  So let's jump into the core of due diligence.
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  So very simply, due diligence is a personal obligation on offices
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  of a business, meaning they have to take reasonable steps to
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  ensure the business is managing work, health and safety risks
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  effectively. The first crucial take away from
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  this case is the nature of an office's due diligence
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  obligations. It's not enough to have good
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  intentions, as it's highlighted in the case.
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  A good leader and a conscientious officer may have
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  the best intentions in the world, but may still breach that
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  duty. This isn't a passive role.
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  Officers, including the CEOs, cannot comply with their due
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  diligence obligations by simply relying upon those with specific
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  responsibilities for health and safety.
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  So they can't just delegate it away.
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  Nor can they assume, without proper enquiry, that the
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  organisation systems are adequately addressing risks.
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  It's a personal responsibility that extends throughout the
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  entire organisation, regardless of its size or structure.
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  Even at the head of a large hierarchical organisation, an
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  officer's obligations are not diminished.
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  This means that the officer must personally acquire and maintain
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  sufficient knowledge to reasonably satisfy him or
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  herself that the organisation is complying with its duties.
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  Simply putting policies and procedures in place isn't
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  enough. The officer must ensure that
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  entrenched and adequate systemic processes are in place.
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  A key element of this is ensuring that effective
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  reporting lines and systems exist, allowing information
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  about safety issues and hazards and other concerns flow to the
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  officer and others in the organisation with governance and
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  supervisory functions. And critically, an officer
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  cannot assume that their organisation is compliant with
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  its duties or simply assume that the information they receive
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  from their subordinates is accurate and sufficient.
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  Even a board approval of an approach to health and safety is
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  not determinative as to whether the CEO failed in his or her
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  specific duties. So the board managing safety and
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  risks and endorsing particular safety approaches doesn't
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  necessarily help the CEO as an officer specifically meet their
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  duties. Another core insight is
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  understanding work is done. So this leads directly to
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  perhaps the most emphasised concept, in this case around
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  understanding daily work. This was defined as the reality
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  of work as it is actually carried out by workers on the
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  shop floor, contrasting it sharply with work as planned or
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  or work as intended, or work as imagined by management.
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  So really this is the difference between how management believes
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  work is being done and how risks are being managed, how controls
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  are being used. It's the difference with how the
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  system prescribes these things versus the reality of how those
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  things actually function every day in practise.
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  The prosecution explicitly stated that the central
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  importance for any organisation to manage risk is to gain an
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  understanding of work is done. Experts like Professor Sidney
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  Decker and Mr Kayla underscore the efforts required to close
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  gaps between work is designed versus work is done, with Kayla
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  asserting you've got to understand work is done because
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  the ultimate test of your system is what is happening.
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  Another expert in the case, Mr Marriott, further equated
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  understanding of work is done to learning from normal operations.
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  So the Ports of Auckland experienced a significant
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  disconnect following one serious injury.
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  A revised work process requiring new safety rails was approved
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  and signed off on. However, as the report notes,
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  the institution of the policy did not manifest itself in a
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  change of practise at the point of work, so the changes in
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  process didn't actually drip down and change things in
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  practise. The CEO himself accepted in the
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  cross examination that this incident was an example of how
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  the Ports of Auckland's health and safety systems didn't
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  operate as intended and involved a disconnect between work is
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  done and work is imagined. A specific example was cited
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  called the Three container with rule.
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  I won't go into all the details of that, but it was seen as an
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  informal behavioural control. Despite its common acceptance as
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  a minimum control, the Ports of Auckland's training materials
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  and documentation were confusing and often inconsistent and that
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  workers had different understandings of this three
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  container with rule in practise. Furthermore, there was
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  significant non compliance with the rule, particularly on the
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  night shift. We'll cover that later.
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  The lack of insight into actual practises highlighted in
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  inadequate monitoring of work is done by structured observations
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  and other means, Therefore demonstrating the absence of any
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  systematic efforts by senior management to obtain insight
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  into work is done. Another insight comes from the
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  pitfalls of inadequate audits and systems.
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  For health and safety system to be truly effective, it must
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  incorporate regular review and audit processes.
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  However, Ports of Auckland case revealed that critical
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  limitations of certain audit types and the overall immaturity
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  of the strategic oversight really blunted the effectiveness
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  of their risk control systems. The company had a health and
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  safety steering committee, but it was found to be failing to
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  discharge its obligations because it didn't operate as a
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  strategic oversight committee as required.
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  Further, Ports of Auckland seem to have relied on some insurance
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  audits, but they were described more as compliance.
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  Audits focus on the existence of documentation and the paper
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  trail of activities rather than on outcomes or the effectiveness
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  of systems. These audits were said to be
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  expressly limited in their scope and could only provide Ports of
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  Auckland and its offices with limited assurance.
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  Further, these systems weren't designed to drill down to the
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  organisation to determine how the systems and the standards
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  and the procedures were actually translating in terms of worker
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  behaviours and engineering controls directed at managing
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  risk. Expert evidence confirmed that
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  these audits would have only conveyed that on paper, the
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  safety system and the management system looked solid.
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  They weren't configured to actually unearth the bad news.
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  Furthermore, a 2018 KPMG report recommended improvements to
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  monthly health and safety performance reports, noting an
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  absence of commentary on achievement of health and safety
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  strategy or the effectiveness of critical controls for critical
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  tasks. So indeed, Ports of Auckland and
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  its executive team failed to advance these recommendations in
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  a timely manner, with reports routinely referring to the need
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  to develop lead indicators for board reporting without apparent
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  progress. And when the lead indicators did
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  eventually appear, they were described as immature.
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  Ultimately, any comfort the CEO took from these annual insurance
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  audits or that KPMG report was misplaced because the audits
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  were expressly limited in scope. And also the Health and Safety
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  Steering committee were not found to reflect discussion of
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  high level or strategic health and safety issues.
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  They also weren't monitoring performance against company
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  processes. Concluding this section.
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  For a system to be effective, there must be an ability to
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  monitor and measure the performance of the system.
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  And in this case, these types of indicators and measures just
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  didn't exist as expected. Another insights around managing
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  critical risks or critical controls.
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  So organisations really need to focus on critical risks.
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  As one expert put it, gravity is generally the most common killer
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  of people and suspended loads precedes all legislation.
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  It's been with us for over 100 years of data recording, the
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  relevance there being that the fatality involved dropped load.
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  Now, Ports of Auckland relied heavily on behavioural controls
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  like gangway briefings and toolbox meetings to manage risk
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  of handling overhead loads or at least one step within that
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  overarching system. However, there was a significant
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  absence of evidence of any hard or technical controls, for
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  example, the placement of physical barriers or or even
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  signage, something simple like that, preventing access to areas
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  where a crane was working on a ship.
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  Such additional controls were only put in place very quickly
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  after the vitality. While the introduction of a lash
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  platform was a significant positive development and a hard
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  or technological control, it was concerning that this improvement
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  only occurred after the CEO personally observed the work,
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  rather than through some sort of systematic way or process of
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  identifying and addressing risks sort of baked into the
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  organisational approach. Also, monthly deep dives into
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  critical risks by the executive team and the CEO were meant to
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  produce critical risk reports for the board.
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  However, these reports were criticised for not reflecting
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  current actual behaviours of lashing crews or any other
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  crews. They like to lead indicators and
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  didn't really allow a senior leader such as the CEO to gain
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  insights as to what actual compliances was associated with
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  the controls. Experts refer to these documents
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  as reflecting health and safety and maturity.
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  As a reflection from the report, it's the CE OS responsibility to
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  ensure if the critical risk programme and the controls are
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  developed into a robust system of sustainable critical controls
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  that focus on reducing fatality risk.
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  Ultimately, the report demonstrates that senior
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  management of the board, we're not gaining insight into work as
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  done in relation to the critical risk of handling loads.
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  Alarmingly, this critical risk was not addressed again in board
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  minutes until after the fatality And a final insight came from a
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  disconnect with shift work or the night shift work.
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  It's highlighted in the report that there seems to have been
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  some sort of significant cultural issues, particularly
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  during the night shifts. Prior to the fatality, there was
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  a culture, particularly on the night shift, of the Steven Dawes
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  engaging in unsafe practises or cutting corners.
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  Uncompliance was said to be a regular feature on the night
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  shift. In the transcripts, it's noted
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  that while rules were technically the same, the
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  culture was different. Where workers wouldn't really
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  follow the rules because they wanted to get the work done
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  faster. This created a peer pressure
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  environment where everybody was doing it, so if you didn't do
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  it, you'd sort of be the odd one out.
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  This pervasive noncompliance underscored the critical need
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  for hordes of Auckland to have adequate systems in place to
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  understand work is done on the night shift, and it was the
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  responsibility of Ports of Auckland's offices to ensure
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  that such systems were in place and effective.
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  And despite monthly health and safety reports listing
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  observation numbers, they lacked crucial details like the time
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  and dates of observations, making it impossible to
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  ascertain how many observations were conducted during night
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  shifts. They didn't know what they
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  didn't know. Field observation coaches
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  intended to capture work is done were found to be insufficient,
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  particularly on the night shift, as again they were predominantly
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  a day shift team with limited ability to observe night shifts.
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  Estimates suggested only 5 to 10% of these coaches worked
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  night shifts. This fundamental gap in
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  observation meant that the reality of work on the night
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  shift remained largely unseen and unmanaged by senior
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  leadership. So I covered a lot of ground.
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  So what can we make of the findings?
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  The Ports of Auckland case serves as a powerful reminder
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  that due diligence is an active, pervasive and undeligible duty
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  for officers. It extends far beyond
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  superficial compliance requires personal engagement and
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  continuous effort to understand the actual reality of work on
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  the ground. The prosecution revealed
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  systemic failures from relying on limited compliance audits and
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  the lack of strategic oversight to an ability to effectively
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  manage critical controls. And crucially, A profound
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  disconnect between work is planned and work is done, which
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  was particularly evident in the unchallenged approaches of non
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  compliance on the night shift. For any organisation striving
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  for effective risk management, this case underscores the
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  imperative to constantly seek insights into how work is
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  actually performed and help bridge or align the gaps between
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  intention and reality. That's it on Safe As I'm Ben
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  Hutchinson, please help share, rate and review and
• 13:45
  checkoutsafetyinsights.org for more research.
• 13:48
  Finally, feel free to support Safe As by shouting a coffee
• 13:52
  link in the show notes.