Health and safety update: Whakaari Management Limited’s conviction overturned

The High Court has overturned Whakaari Management Limited’s (WML) conviction under section 37 of the Health and Safety at Work Act 2015 (HSWA). Section 37 imposes a duty on a PCBU (person conducting a business or undertaking) who manages or controls a workplace.

 Background

Whakaari / White Island is an active volcano off the coast of the Bay of Plenty. In December 2019, Whakaari erupted while 47 people were on the Island. This resulted in 22 people losing their lives and the remaining 25 people being severely injured.

WorkSafe charged 13 parties in relation to the eruption. Six defendants pleaded guilty and another six had their charges dismissed. The remaining defendant was WML, who leased the Island from Whakaari Trustee Limited and granted licences to commercial tour operators who conducted walking tours on the Island. WML did not conduct tours on the Island itself.

District Court decision

The District Court Judge found WML was a PCBU who managed or controlled a workplace (the workplace being Whakaari itself) and that WML was guilty of breaching its duty under section 37 of the HSWA as it failed to ensure, so far as was reasonably practicable, the workplace was without risks to the health and safety of any person.

WML was fined $1,045,000 and ordered to pay reparation of $4,880,000 to the victims.

High Court appeal

The High Court overturned WML’s conviction, finding WML did not actively manage or control the workplace and so did not owe a duty under section 37 of the HSWA. The Court emphasised:

• Although WML granted access to the workplace to walking tour operators, Whakaari is bare land and so there was nothing for WML to manage or control on the Island beyond the work itself.
• There was nothing in WML’s licence agreements with the tour operators which gave WML the ability to direct and control what was happening at the workplace day-to-day. WML imposed obligations on licensees to ensure their businesses were conducted safely but there was no practical mechanism for WML to ensure its licensees were adhering to their obligations, or to learn of a breach.
• WML’s actions after granting access (in attending user group meetings and in keeping in touch with GNS and other Government agencies) showed it was an interested and engaged landowner. However, that did not mean it had active management or control of the workplace.
• WML did not have management or control of the workplace simply because it made money from charging for access to its land or because the workplace was an active volcano in need of risk management.

The High Court found that even if WML did owe a duty under section 37, WML had done what was required of it anyway and so would not have breached the duty.

Key takeaways

While each case will depend on its own unique facts, the High Court decision provides the following general guidance:

1. “Active” management or control: In determining whether a PCBU owes a duty under section 37, the focus must be on whether a PCBU has “active” management and control, rather than a “mere ability” to control the workplace.
2. PCBUs cannot avoid duties: PCBUs cannot avoid duties simply by being inactive or passive. The inquiry must be whether the PCBU has the power or capacity to actively control or manage the workplace in a practical sense.
3. Ownership does not mean control: Ownership of land is not enough to create a duty under section 37. The correct inquiry is whether the landowner has the power to actively and practically manage or control what happens on their land following access being granted. A landowner does not have management and control of a workplace simply because it charges for access to its land.
4. Bare land vs. buildings: What it means to manage or control a workplace will depend on what the workplace actually is.While not deciding the point (as it was not an issue in this case), the Court noted the situation may be different where there is something on the land which a PCBU might realistically manage or control. For example, where a PCBU owns a building it leases, it might have a duty under section 37 to ensure the building is structurally sound for the workplaces of its tenants.
5. Inherent risks: A PCBU should not be rendered to have management or control of a workplace simply because the workplace poses a risk to the health and safety of others that needs to be managed. Further, the Court noted that when someone knowingly signs up to an activity involving inherent but foreseeable natural hazards, the risks should be seen as arising from the work activity rather than the workplace. PCBUs who provide the work activity are likely to be best qualified to make the required risk assessments and have the means to manage such risks.

A full copy of this decision can be found here.

If you would like to know more, or for a discussion of your own health and safety matters, get in touch with our Health and Safety Team at [email protected] or +64 (03) 441 2743.