White Paper: The Gap That Convicts Directors

What the Ports of Auckland Case Changed Forever:

Executive Summary

In November 2024, a New Zealand Chief Executive was personally convicted under the Health and Safety at Work Act 2015 (HSWA) following a fatal workplace incident at the Port of Auckland. The conviction did not arise from a lack of policies, intent, or concern for safety. It arose from a failure to verify that work was being carried out safely in practice.

The Court’s focus was not on what the organisation believed was happening, but on what was actually happening on the ground. This distinction — commonly described as “work as imagined” versus “work as done” — is now central to how director and officer due diligence is judged in New Zealand.

This whitepaper explains how directors are now being convicted in the gap between assumption and reality, why traditional safety governance fails to protect boards, and what directors must do differently to meet their personal obligations.

 

1. A Director Was Convicted — Not for Intent, but for Assumptions

On 30 August 2020, a stevedore, Mr Pala’amo Kalati, was fatally crushed by a falling container while working a night shift at the Port of Auckland. The incident occurred when a third container, unintentionally attached by a twist-lock, fell during a lift.

Ports of Auckland Limited was prosecuted and fined. More significantly for directors across New Zealand, Maritime New Zealand also prosecuted the Chief Executive personally.

In Maritime New Zealand v Gibson [2024] NZDC 27975, the Court found the CEO guilty of breaching his due diligence duty under section 44 of HSWA, resulting in a conviction under section 48.

He was personally fined NZD $130,000 plus costs.

The Court did not find that the CEO lacked concern for safety, nor that policies were absent. The conviction turned on a different issue entirely: a failure to take active steps to verify how work was actually being performed and how risks were being managed in reality.

The message to directors was unmistakable. This case did not turn on intention. It turned on verification.

 

2. The Concept That Now Defines Due Diligence: Work as Imagined vs Work as Done

A central theme in the Court’s reasoning was the distinction between work as imagined and work as done.

“Work as imagined” describes how directors and senior leaders believe work is carried out — informed by policies, procedures, training records, and reports.

“Work as done” reflects how work actually occurs — under real pressures, time constraints, environmental conditions, and human behaviour.

Expert evidence before the Court emphasised that: - The ultimate test of any safety system is what is actually happening - Unreported practices and normalised deviations are powerful predictors of serious harm - Workers do not deliberately hide unsafe practices; they often become accepted ways of getting the job done.

The Court accepted that understanding work as done is essential to understanding whether safety systems are effective.

For directors, this marks a profound shift.

If your safety system reflects what you believe is happening — rather than what is actually happening — it may already be failing you.

 

3. The Director Myths the Court has Rejected

The Ports of Auckland case dismantles several assumptions directors commonly rely on.

Myth 1: “We had policies in place”

Policies did exist. They did not prevent the fatal risk from materialising. The Court was not persuaded by their existence alone.

Myth 2: “Workers were trained” 

Training records did not protect the CEO. The issue was whether training translated into safe work practices under real conditions.

Myth 3: “I’m not involved in day-to-day operations”

The Court explicitly stated that a CEO does not need to be across every task or every worker action. However, this did not absolve him of responsibility.

What was required was active governance-level verification that critical risks were being effectively managed.

Directors do not need to run operations. They do need to verify that operations are safe.

 

4. Why History Makes Director Liability Worse, Not Better

The prosecution relied on four previous serious incidents between 2014 and 2018, including falls, policy breaches, speed violations, and a fatal equipment rollover.

These incidents were used to demonstrate that the organisation had ongoing difficulty monitoring and controlling work as done.

The Court accepted that these events placed the CEO on notice. His failure to strengthen verification after repeated warning signs materially increased the likelihood of a serious breach.

For directors, the implication is stark:
Near misses and past incidents do not fade with time. They compound responsibility if not acted upon.

 

5. The New Director Test 

The Ports of Auckland decision clarifies the test directors are now judged against:

• Did the director actively seek to understand how critical work was actually being performed?
• Did the director verify that risk controls were operating effectively in practice?
• Did the director act when gaps between policy and reality were known or should have been known?

This test is evidence-based. Verbal assurances, dashboard summaries, and historical documentation are insufficient on their own.

Directors who can demonstrate active verification are rarely prosecuted. Directors who cannot are increasingly exposed.

 

6. Why this Is a Governance Issue, Not a Straightforward Safety Issue

Health and safety is no longer assessed solely as an operational function. It is now a governance and assurance problem.

Directors are judged on: - What they actively questioned - What they independently verified - What they did when reality diverged from expectation

The Ports of Auckland case confirms a new reality for boards.

Directors are no longer asked what they expected.

They are asked what they verified.

 

Closing Reflection

The gap between work as imagined and work as done is where serious harm occurs.  It is now also where directors are convicted.

For boards across New Zealand, the question is no longer whether safety systems exist, but whether directors can prove they understood and verified how work was actually being done — before someone was harmed.