NZOG chairman backs director liability over health and safety failures

New Zealand Oil & Gas chairman Peter Griffiths has thrown his support behind legislative moves to make directors liable if the companies they govern fail to meet health and safety obligations.

The Ministry of Business, Innovation and Employment and the Institute of Directors yesterday released health and safety governance guidelines for directors outlining best practice and advice for company boards.

Mr Griffiths, a veteran employee, manager and director in the high-risk energy sector, told a business audience in Wellington yesterday that company boards should not wait until a health and safety failure before making changes and needed to take workplace safety seriously at a governance level.

"That's an enormous price to pay for a bit of learning."

Mr Griffiths said he supports "legislative change that brings criminal liability to people who don't follow safety guidelines".

Health and safety issues came to the fore after several explosions at the Pike River Coal mine on the West Coast in late 2010 killed 29 men. In April, the company was convicted of nine charges for breaching the Health and Safety Employment Act, with sentencing set down for early July in the Greymouth District Court.

NZOG held a 29.4 percent stake in Pike River Coal and had provided it with funding in the lead-up to the explosions. Mr Griffiths has been a director of NZOG since December 2009 and was appointed chairman last year.

Corporate manslaughter

Labour Minister Simon Bridges told Radio New Zealand's Morning Report today he is "seriously considering" an extension to include companies in corporate manslaughter as part of the government's response to the Independent Taskforce on Workplace Health and Safety report.

He said the report indicated that holding individual directors culpable for murder or manslaughter charges was more problematic and international evidence showed it was difficult to get successful prosecutions.

The taskforce report recommended directors and senior executives hold a due diligence duty equivalent to their fiduciary duties to shareholders. Corporate liability rules need to change to allow an extension of manslaughter to corporations, it said.

The MoBIE/IoD guidelines provides advice on how directors can influence health and safety performance, gives a framework for boards to play a role in health and safety, aid them in identifying risks and maintaining good monitoring of health and safety, and encourages directors to have open communication on the issue.

(BusinessDesk)