The FINANCIAL -- New
Zealand companies found guilty of corporate manslaughter of employees
should face heavier fines and the potential to be sued as an incentive
to “grow a conscience” and take responsibility for workplace safety, a
corporate governance expert says.
Professor Susan Watson of The University of Auckland Business School’s Department of Commercial Law says New Zealand’s Accident Compensation Corporation regime and the resulting inability to sue companies has led to a corporate environment where no one individual is ever deemed culpable and penalties are weak.
As The University of Auckland reported, in a major departmental study on the topic, Professor Watson’s preliminary research has found that New Zealand has about twice the rate of workplace fatalities as Australia, with serious injury statistics very high and worrying.
And she says corporates caught up within organisational cultures that point the blame at no one in particular are getting away with low fines that do not offer real incentives to up workplace safety requirements and responsibility.
“Individuals are careful because for most of us, hurting or killing someone is not something we want to carry around for the rest of our lives,” Professor Watson says.
“However, the corporate entity itself has no conscience, no matter what individuals within the corporation think. When workplace tragedies happen and organisational fault is apportioned, there’s no reason for corporations to improve safety levels because they can’t be sued under New Zealand law for personal injury, and the monetary penalties for health and safety breaches are small.”
In other countries, companies can be sued for personal injury and it might be time for New Zealand to look at the model, Professor Watson says. “New Zealand’s ACC is unique – it’s what differentiates us from the rest of the world. But perhaps it also doesn’t incentivise companies to work hard enough to ensure workplace safety is strictly adhered to.
“Heavier fines and the chance of being sued might just be the economic incentive they need to get our statistics trending downwards,” Professor Watson says.