Conference Issue 2015

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New law upgrades NZ WHS


By Kate Tilley, Resolve Editor

New Zealand’s “atrocious” workplace health and safety (WHS) record has prompted a new law that starts on April 4, 2016, Heaney & Partners managing partner Susan Thodey told the NZILA conference.

In a panel session on the Health and Safety at Work (HSW) Act, Ms Thodey said an investigation into the 2010 Pike River mine explosions, in which 29 men were killed, found the incident was preventable and recommended new laws. She said ensuring workers were protected was challenging.

Ms Thodey is a director of NZ Government-owned run-off insurer Southern Response Earthquake Services Ltd. She said its staff had received physical threats from disgruntled policy holders and it controlled thousands of building sites across Canterbury.

NZ Worksafe’s chief legal adviser Michael Hargreaves said an independent HSW review had “pulled no punches”, finding NZ’s record was “appalling, unacceptable and unsustainable”.
The new Act was a more comprehensive approach and gave a duty of care to people who previously “fell through the cracks”.

It created the legal concept of a “person” conducting a business or undertaking (PCBU) that would be liable. A PCBU is required to look after the workers it employs or engages, and workers influenced or directed by the PCBU. The PCBU must also ensure others’ health and safety is not put at risk from the conduct of the business or undertaking.

A “reasonably practicable” test meant PCBUs must think about risks and whether the cost of mitigating them is disproportionate to the risk.

“It’s not just your duty, it’s the right thing to do,” Mr Hargreaves said.

Auckland City Council chief engineer Sarah Sinclair said she did not expect a lot more prosecutions after April 4, but there would be major changes in documenting design and manufacturing processes because the duty applied “upstream”.

She said NZ had had two successful private prosecutions in 2015, taken by unions.

To plan for the new regime, organisations needed to assess current systems and processes; assess the risk of activities conducted; and assess existing controls.

Godfreys Loss Adjusters’ John Bell said he was a PCBU and was regularly sending adjusters and contractors into potentially dangerous situations. He told the conference he was well aware of the risks because his father had been killed in a workplace incident in the UK 45 years ago.

Mr Bell said policy wordings would be largely unaffected when the new law came into effect, but there would be more emphasis on risk management.

Insurers would work actively with policyholders to reduce exposure and thus keep premiums down. He predicted an increase in D&O premiums and sub-limits being imposed on defence costs. There would be a greater requirement to disclose “near misses” and potential claims.

Mr Bell said adjusters’ roles could be expanded into auditing compliance during onsite inspections. Brokers and insurers would be required to provide more risk management advice.

 
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Resolve is the official publication of the Australian Insurance Law Association and
the New Zealand Insurance Law Association.