Balancing risks

Safety first: port operators have a number of basic legal duties to ensure health and safety at ports. Credit: APMT
Safety first: port operators have a number of basic legal duties to ensure health and safety at ports. Credit: APMT
"If you’re not planning or managing or supervising your subcontractors, you can still be liable if you haven’t selected them correctly," Maria Pittordis, Hill Dickinson
Top down: companies must have a good safety culture. Credit: Port of Gothenburg
Top down: companies must have a good safety culture. Credit: Port of Gothenburg
Chain: liabilities can be extended to contractors and sub-contractors in a port. Credit: US Army Alaska (USARAK)
Chain: liabilities can be extended to contractors and sub-contractors in a port. Credit: US Army Alaska (USARAK)

Privatised or not, port operators are exposed to a complex and changing range of risks, finds Lara Shingles

Beware, port operators. You might have privatised or concessioned terminals within your ports, but that doesn’t mean you’ve absolved yourselves of responsibilities or liabilities. In fact, there is still a bevy of legal risks at play, says Maria Pittordis, head of marine trade and energy at Hill Dickinson.

With regard to civil risks, port operators have a number of basic legal duties to ensure health and safety at ports. These duties extend to everybody at the port, including trespassers – and particularly in relation to young children.

The primary duty is to have safe premises and equipment not only in the part of the port that you operate but in shared or common use areas and tenant areas as well, where there may be liabilities under the lease.

Legal liabilities

Another duty in the context of civil claims is the public policy principle, or vicarious liability, where you are liable for the acts of others. This includes employees if they are acting during the course of their employment.

Similarly, port operators are expected to have competent employees, and reputable and competent independent contractors, to which principle liability also extends.

“Principle liability has been extended to contractors and sub-contractors, and that liability does depend on the extent to which you train them, you plan their work and how you supervise them,” says Ms Pittordis. “And it’s not just to the contractors themselves, it’s to third parties who are affected by the actions of those suppliers.”

There have also been cases on the civil side where the company has been vicariously liable for the criminal acts of their employees, adds Ms Pittordis. When theft of goods or acts of terrorism have occurred, for instance, companies have been held liable because they either failed to have sufficient security at the port or conduct due diligence on the employee or employees who committed the criminal act. 

“If you’re not planning or managing or supervising your subcontractors, you can still be liable if you haven’t selected them correctly. So you’re not liable for what they’ve done, you’re liable because you made the wrong choice in your selection,” she says.

Condoning the things that have been done by tenants or employees can again lead to liability even though it’s a criminal action.

And, in relation to cyber security, while companies won’t be liable for the hacker they may be liable for failing to install sufficiently secure IT, or sufficiently secure systems to prevent hacking.

Criminal risks

Operators can also face three types of criminal risks even when they have privatised or concessioned terminals within the port.

The first is strict liability, where port operators will be liable if they do something that is directly against an act of law. In relation to Section 85 of the UK Water Resources Act 1991, for example, it’s an offence to cause or knowingly permit poisonous, noxious or polluting matter into any controlled waters.

“The lesson is to have systems in place to stop the thing that shouldn’t be being done, be done,” says Ms Pittordis. “Where you have a criminal offence, you normally have to have a guilty act and a guilty mind. Here, you don’t need a guilty mind, the intent and so on. It’s just a strict liability act.”

The second is the Health and Safety at Work Act 1974, which is perhaps the most relevant act to the UK port industry. Here, there can be a conviction even if there hasn’t been an accident. There can be a charge brought forward in relation to a new lease, or even when the event that took place didn’t actually cause injury or death.

There is no need for cause or connection, and the burden of proof is on the defendant to show that whatever happened, they had taken all reasonable practical steps to prevent that from happening, or at least reasonable steps to ensure the health and safety of their employees and/or third parties.

The third act is the UK Corporate Manslaughter and Corporate Homicide Act 2007, which applies in circumstances where harm has resulted in death.

Once again, this final act is a conviction against the company not individuals. The company is found guilty if the way activities are managed or organised by senior management substantially contributes to the death, amounting to gross breach duty of care.

“This means that while something like the UK Port Marine Safety Code is not legislation you have to comply with, failing to comply with it will be evidence that you have failed to follow proper systems of safety,” says Ms Pittordis.

In these events, the jury is allowed to consider the seriousness of the breach, how much of a risk of death it imposed and, unusually, the company’s safety culture; it’s near misses; and, whether or not it investigated previous accidents.

Finally, senior management - anybody who has a position of authority - can commit this offence on behalf of the company, adds Ms Pittordis.

“Unlike the common law of corporate manslaughter where you couldn’t add up all the faults of individuals within the company, here you can.

“If you’ve got 10 people who have all done something which has contributed to the death and it meets the standard of gross breach, then there will be a conviction.”


Actions and consequences

Both civil and criminal offences can result in a heavy penalty or conviction. In relation to the Health and Safety at Work Act, not only are there potential fines but there also the risk of enforcement action through improvement and prohibition notices to stop the guilty party operating until they demonstrate that they have a safer system in place.

Corporate manslaughter, meanwhile, can lead to hefty fines as well as a publicity order. This is when to guilty party is forced to take out an advert to publicise the fact that they have been convicted and to set out the details of that conviction.

As an example, in 2015, Linley Developments were forced to take out a publicity order after being convicted of corporate manslaughter arising out of the death of Gareth Jones, a subcontracted employee.

In addition, Linley Developments were fined £200,000 plus £25,000 costs, a huge fine when the company’s net book value was just £14,643 at the time.

Ms Pittordis also notes that there could be difficulties with insurance if you have a conviction under the corporate manslaughter act. “Most policies exclude payment in relation to reckless or criminal action of a certain level. “And, although individuals can’t be convicted under that act, they can of course be convicted of other acts with relation to criminal liabilities, possible liabilities and directives.”

In March of this year, Aldi Supermarkets faced a similar situation to this in the UK, whereby a contractor had removed the smoking shelter from its secured position to install a new emergency exit. The unsecured smoking shelter then struck an employee of the supermarket chain while they were taking a smoking break outside and the company was found guilty of breaches under the Health and Safety at Work Act.

Aldi, however, argued that this was simply a case of breakdown in communication and understanding between them and the contractor, and was able to demonstrate an otherwise unblemished health and safety record. As a result, it received a relatively low fine.

Ms Pittordis concludes: “The common themes that come out of all of this is the importance of continuous risk assessment; having and implementing safe systems at work; emergency planning; and, training employees at every level so that they know roughly what they should and should not be doing in the event of an incident.”

LATEST PRESS RELEASES

Jade Logistics leads Indonesian ports into a digital future

Christchurch, 06 July 2018 – PT Pelabuhan Indonesia I (Pelindo I) has chosen the terminal operating ... Read more

Gantrex has recently announced the launch of a whole new product category to its portfolio, the TrenchLok™ Cable Trench Cover.

Gantrex’ TrenchLok™ cable trench cover, efficiently and economically protects cranes’ power cables f... Read more

TGI Maritime Software launches «Hazardous» and «Yard Management» modules

TGI Maritime Software launches two complementary modules allowing yard optimization and hazardous co... Read more

Asia’s future energy needs on the agenda at Tank Storage Asia 2018:

Asia’s future energy needs on the agenda at Tank Storage Asia 2018: Read more

Portunus assumes dealership of Dana Spicer in Egypt

Portunus Naem, the Egyptian branch of Portunus Port Spares & services is appointed as official Dana ... Read more

Very first installations by new SFT Spanish office

Our new office in Spain is not even a year old and we already celebrate two successfully completed i... Read more

View all