In late 2022, Kerry Tong, a director of KR Tong Engineering Ltd (KTEL) was sentenced for breaching duties under the Health and Safety at Work Act 2015 (HSWA). Maritime New Zealand (MNZ) alleged that Mr Tong failed to exercise due diligence to ensure that the health and safety of KTEL workers and others were not put at risk when carrying out works on a vessel.
The charge arose from a fire on the MV Kota Bahagia, a cargo ship berthed in Napier in December 2020. Components for wind turbines had been loaded onto the vessel’s decks in China. The components rested on planks of wood which had been cut to size on the vessel, causing sawdust, filings and wood scraps to fall into the vessel’s holds.
KTEL was contracted to carry out gas cutting to remove D-Rings on the vessel’s deck. The D-Rings had been used to secure the wind turbine components to the deck.
While the works were carried out it appears that sparks ignited material in the decks below. The resulting fire caused significant damage to the vessel and cargo, and claims were made against KTEL. KTEL was subsequently put into liquidation.
There were no injuries. However, a KTEL worker claimed emotional harm as he had to make his way out of the hold in thick smoke with reduced visibility.
MNZ alleged a number of failings on the part of KTEL under HSWA, all of which essentially related to planning and allocation of resource. These included:
- Cargo continued to be unloaded, even after the hot work started.
- When the KTEL workers arrived, the ship was not ready for the work to commence. A toolbox meeting was held next to a KTEL truck. None of the ship’s crew or the stevedores attended and KTEL workers did not engage with the ship’s crew about the hot works before commencing work.
- While workers had fire extinguishers, they did not have fire blankets that could be used to prevent the escape of hot metal particulars from the immediate worksite. KTEL workers undertook an inspection of the immediate area but there was no inspection by KTEL of the hold areas below the decks where the hot works was to take place and there was no fire watcher stationed below decks.
Mr Tong was prosecuted in his capacity as a director of KTEL for failing to ensure that KTEL met its health and safety obligations. In particular, it was alleged that Mr Tong failed to exercise due diligence to ensure that the health and safety or both workers of KTEL and other persons, was not put at risk from work carried out as part of the conduct of the business.
Mr Tong entered a guilty plea. At sentencing, the Court fined Mr Tong $48,000 (out of a maximum of $300,000) and ordered him to pay reparation of $4,000 to the worker who had had to make his way out of the hold. Mr Tong was also directed to pay costs of $2,500.
The Court accepted that this was not a case where no steps had been taken in terms of health and safety. However, it held that while KTEL and Mr Tong had considered risks of the work, “such consideration was limited and the circumstances required more care than they were given”.
Following sentencing, MNZ’s Manager, Regulatory Operations said “He needed to ensure his company acquired and kept up to date with the standard and guidance required relating to safety procedures with hot works.”
The incident was also investigated by the Transport Accident Investigation Commission (TAIC). TAIC issued its final report in August 2022 (several months before Mr Tong was sentenced).
The TAIC report observed that there were failures on the part of the ship’s crew and did not criticise KTEL. For example, the KTEL workers were given a short briefing by the cargo superintendent, but there was little interaction between the crew and the KTEL workers, who were not given any safety instructions by the crew and were not supervised by the crew. The crew did not fully implement the requirements set out in the shipping company’s safety management system and the Harbourmaster’s hot-work permit.
TAIC’s findings included that Fire and Emergency responders did not initially give due regard to the Master’s command status and knowledge of the ship and systems. While a ship’s Master may not be the incident controller, they do retain the overriding authority and responsibility for decisions regarding the safety and security of the vessel, and this needs to be taken into account by fire and emergency responders.
Interestingly, had the Master’s original plan been followed, TAIC found that it was very likely that the fire would have been suppressed earlier.
This is an interesting decision as it involves the prosecution of a director, rather than the company. Prosecutions are occasionally brought against both the director and the company, although more often the regulator’s (in this case MNZ) focus is on the company’s failures.
Prosecutions of directors are increasing, and this decision is a timely reminder that directors need to be aware of their responsibilities under HSWA and take appropriate measures to ensure that they and the company are complying with those responsibilities.
The findings in the TAIC Report also highlight how even in cases where multiple parties may have contributed to the circumstances which lead to an incident, this may not alleviate the responsibility of a director; organisations need to work together to ensure that all reasonable practicable steps are taken to ensure the health and safety of those around them.
For a summary of officers’ healthy and safety duties see: Health and Safety Changes – Directors Need to Act Now!
If you have any questions about the prosecutions by Maritime New Zealand , please get in touch with our Trade and Transport team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.