1. FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE AND COMMODITIES TRANSPORT TECHNOLOGY Harmonised Safety Laws and Obligation on “officers” re due diligence Maria Saraceni Partner Norton Rose 19 May 2011 Maria Saraceni Partner Norton Rose 19 May 2011

2. Core Principle The primary responsibility for ensuring health and safety lies with those who create the risks and those who work with them

3. Model Work Health and Safety Act Model Act will come into force effective 1 January 2012 WA will implement the Model Act subject to reservations about 4 “non-core” areas WA will implement 2 acts based on the Model Act WA will implement 2 regulations based on the Model Regulations

4. Duty of Persons Conducting a Business or Undertaking A person conducting a business or undertaking must ensure, so far as is reasonably practicable, the health and safety of workers: engaged or caused to be engaged by the person whose activities in carrying out work are influenced or directed by the person, while the workers are at work in the business or undertaking (s19(1) Model Act)

5. Duty of Persons Conducting a Business or Undertaking (cont.) A person conducting a business or undertaking must ensure, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking. (s19(2) Model Act)

6. Person Conducting a Business or Undertaking? either alone or with others irrespective of any profit or gain applies to partnership (each partner separately) applies to unincorporated associations excludes volunteer associations and elected members of a local authority (s5 Model Act)

7. Reasonably practicable defined Similar to the Western Australian definition, but improved Clearer reference to –that which is, or was.. reasonably able to be done… –taking into account and weighing up all relevant matters Likelihood of hazard or risk Degree of harm What you know or ought to know about hazard, risks, controls Availability and suitability of ways of eliminating or minimising risk Cost – after assessing the extent of the risk and the available ways (of control), the cost of the available ways.. including whether the cost is grossly disproportionate to the risk… ‘…highest level of protection.. as is reasonably practicable..’ –Simply makes clear that you start with what can be done and only do less where it is reasonable to do so

8. Duty of persons conducting a business or undertaking in other situations Person who manages or controls a workplace manages or controls fixtures / fittings / plant at a workplace designs plant / substances / structures used or which could reasonably be expected to be used at a workplace manufactures plant / substances / structures used or which could reasonably be expected to be used at a workplace

9. Duty of persons conducting a business or undertaking in other situations(cont.) imports plant / substances / structures used or which could reasonably be expected to be used at a workplace supplies plant / substances / structures used or which could reasonably be expected to be used at a workplace installs / constructs / commissions plant or structures used which could reasonably be expected to be used at a workplace

10. Consultation Requirements – Duty Holders If more than one person has the same duty concurrently, each person must, insofar as is reasonably practicable, consult, co-operate and co- ordinate activities with the other person. Maximum Penalty for body corporate - $100,000.00 (s46 Model Act)

11. Consultation with Workers The PCBU must, so far as is reasonably practicable, consult with workers who carry out work for the business or undertaking or Who are, or are likely to be directly affected by a matter relating to work health or safety. Maximum Penalty for body corporate - $100,000.00 (s47 Model Act)

12. Consultation Share relevant information with workers Give workers a reasonable opportunity to express their views/raise work health or safety issues/contribute to the decision-making process Views of workers are taken into account by PCBU Report outcomes to workers consulted Where HSR represents workers, consultation must involve that representative Where consultation procedures have been agreed between PCBU and workers (provided not inconsistent with the above), those procedures must be used (s48 Model Act)

13. Consultation (cont.) Must consult about following health & safety matters: identifying hazards & assessing risks making decisions about how to eliminate/minimise risks making decision about adequacy of facilities for the welfare of workers proposing changes that may affect health or safety of workers

14. Consultation (cont.) making decisions regarding procedures to consult with workers/resolving ohs issues/monitoring conditions at work/providing information and training for workers when carrying out prescribed activities as per regulations (s49 Model Act)

15. The questions you should be asking yourself What is the relevant activity or issue? What duty or obligation do I have? What do I need to know to ensure I meet the duty? Who else is involved in the activity? How may each of us affect OHS in relation to the activity? How do our activities intersect and support or compromise OHS activities of each other? What should we do to communicate and work together effectively for health and safety?

16. Duty of Workers While at work, a worker must: take reasonable care, for his/her own health and safety take reasonable care that his/her acts or omissions do not adversely affect the health and safety of other persons comply, so far as the worker is reasonably able, with any reasonable instruction that is given by the person conducting the business or undertaking to allow that person to comply with the Act

17. Duty of Workers (cont.) co-operate with any reasonable policy or procedure of the person conducting the business or undertaking relating to health or safety at the workplace that has been notified to workers (s28 Model Act)

18. Duty of Care - General A duty cannot be transferred to another person (s14 Model Act) A person can have more than 1 duty by virtue of being in more than 1 class of duty holder (s15 Model Act) More than 1 person can concurrently have the same duty (s16(1) Model Act) Each duty holder must comply with that duty to the standard required by this Act even if another duty holder has the same duty (s16(2) Model Act)

19. Duty of Care – General (cont.) If more than 1 person has a duty for the same matter, each person: –retains responsibility for the person’s duty regarding that matter –must discharge the person’s duty to the extent to which the person has the capacity to influence and control the matter or would have had that capacity but for an agreement or arrangement purporting to limit or remove that capacity (s16(3) Model Act)

20. Duty of Care - Interdependence Primary Duty of Care Person conducting business or undertaking Specific classes of duty holders Relevant StandardDuties associated with the activity Nature of the activity Operation of the business or undertaking Organisational decision making and governance Work activities(including supervision) Circumstantial attendance at the workplace(i.e.visitors) Officers’ Duty of Care Workers’ Duty of Care Duty of Care of Others (i.e.at a workplace) Reasonably practicable Due diligence Reasonable care

21. Maximum Penalties Category 1 Category 2 Category 3 Categories based on degree of ‘culpability’ and risk/degree of harm Category 1 – recklessness (knew and made or let it happen) Corporations: $3m Officers: $600k / 5 years jail Workers: $300k / 5 years jail Corporations: $1.5m Officers: $300k Workers: $150k Corporations: $500k Officers: $100k Workers: $50k

22. Duty of Officers - New An officer of the person conducting a business or undertaking who has a duty or obligation under this Act must exercise due diligence to ensure that the person complies with that duty or obligation (s27(1) Model Act)

23. Duty of Officers (cont.) An officer may be convicted or found guilty of an offence under this Act irrespective of whether the person conducting the business or undertaking has been convicted or found guilty of an offence relating to the duty or obligation (s27(4) Model Act)

24. Duty of Officers (cont.) Expert Panel Review into Australian OHS Laws (Stewart-Crompton, Mayman and Sherriff Reports) “The provision creates a positive duty which is seen to apply immediately, rather than accountability only applying after a contravention by the company… By making the officer liable only for his or her own acts or omissions would provide a sense of control by the officer over their personal liability and a sense of fairness…

25. Duty of Officers (cont.) [The positive duty of officers option] is more likely than the other options to ensure appropriate, proactive, steps are taken by an officer for compliance by the company with the duties of care placed on the company”.

26. Officer definition officer of a corporation means: (a) a director or secretary of the corporation; or (b) a person: (i)who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; (ii)who has the capacity to affect significantly the corporation’s financial standing; or

27. Officer definition (cont.) (iii) in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation); or (c)a receiver, or receiver and manager, of the property of the corporation; or (d)an administrator of the corporation; or

28. Officer definition (cont.) (e)an administrator of a deed of company arrangement executed by the corporation; or (f)a liquidator of the corporation; or (g)a trustee or other person administering a compromise or arrangement made between the corporation and someone else. (Section 9 definition – Corporations Act 2001)

29. Due Diligence Due Diligence means taking reasonable steps to: acquire and keep up-to-date knowledge of work health and safety matters gain an understanding of the nature of the operations of the business or undertaking and generally of the hazards and risks associated with those operations ensure that persons conducting the business or undertaking has available and uses appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out

30. Due Diligence (cont.) Ensure that person conducting the business or undertaking has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way Ensure that the person conducting the business or undertaking has, and implements, processes for complying with any duty or obligation under the Act Verify the provision and use of the resources and processes referred to (c) to (e) above (s27(5) Model Act)

31. Due Diligence (cont.) Due diligence: what to do? Resources and processes (appropriate levels)

32. Keys to Due Diligence The Right Structure The right people in the right place Consistency with other aspects of corporate governance, as far as is this will provide for WHS governance Proactive as well as responsive Clear designation of responsibilities (charters, PDs etc) Chain of communication and accountability

33. Keys to Due Diligence (cont.) Accountabilities and credible verification Be actively engaged in safety and lead from the top

34. Keys to Due Diligence (cont.) The Right Process Effective means for information flow – information and advice The right information for the organisation, at the right time Annual and quarterly and ‘trigger’ reporting Credible information – independence from the relevant business unit or responsible person Auditing and other verification processes

35. Keys to Due Diligence (cont.) The Right Information Proactive as well as responsive Details of changes to operations, hazards, risks, the law Lag indicators – may identify performance and allows benchmarking Lead indicators – relevant to the organisation, its operations, hazards and risks Provided at the right time

36. Tips Check your: contract of employment responsibilities listed in PD KPIs and basis for STI record of safety training last visit to workplace(s) review of OHS matters (SOPs; contractor management; etc) forward planning for safety matters

37. Tips (cont.) record of consultations re safety matters review of learnings / actions from previous safety incident knowledge of current legislative requirements in your business company’s commercial contracts (re liability / warranty / indemnity /etc) D & O Insurance policy and extent of cover

38. The top 10 “to do” list 1.Undertake a legal risk analysis 2.Undertake a gap analysis 3.Review, revise and supplement policies and procedures (remember current consultation obligations) 4.Implement – including training and ongoing review 5.Review contracts – many will operate under the new laws

39. The top 10 “to do” list (cont.) 6.Design and implement interface co-ordination processes and plans 7.Develop effective representation and consultation processes 8.Develop robust issue resolution processes 9.Ensure effective processes for union right of entry 10.Review and revise all aspects of corporate governance re safety to ensure effective management and “due diligence” compliance

40. Questions? Maria Saraceni Norton Rose Australia maria.saraceni@nortonrose.com 0412 500 583