Crown Organisations (Criminal Liability) Bill – second reading

(NB – delivered late evening October 10th – Bill is still in second reading stage with the House to resume under urgency this morning at 9am)

I would like to thank the Law and Order Select Committee for the work they have done on the Crown Organisations (Criminal Liability) Bill.

The purpose of the Bill is to remove the Crown’s exemption from prosecution for offences under the Building Act 1991 and the Health and Safety in Employment Act 1992. This was a key recommendation of Judge Graeme Noble in his report into the Cave Creek tragedy.

Departments have always had to comply with these Acts, but because they are exempt from prosecution, it is more difficult to enforce departmental compliance.

The removal of the exemption will provide incentives for the Crown to avoid instances of systemic failure and will provide for greater accountability if a breach does occur.

The Government believes that there is no justification for allowing its departments to be exempt from health and safety and building laws that we require every other New Zealand business to abide by.

This legislation will ensure greater accountability of Crown organisations and will promote compliance with the Acts. There have been some amendments to the Bill through the Select Committee process. One of the main changes relates to the imposition of fines against Crown organisations.

The Bill as introduced made Crown organisations liable, on conviction for an offence, to the same penalties that could be imposed on any body corporate convicted of the same offence.

These penalties included the imposition of fines, an award of reparation to a victim and remedial orders.

However, after considering submissions questioning the appropriateness of fining government departments, the Committee recommended amending the penalty provisions as far as fines are concerned.

As noted by one submission, a Crown organisation may have to discontinue or curtail its activities in order to pay the fine.

This may be contrary to the public interest.

Further, any fine, less any amount ordered to be paid to the victim, is normally paid to the Crown.

To the extent that the funds of a particular Crown organisation may need to be topped up to pay a fine, then effectively public money will be going around in a circle.

Accordingly, the Committee recommended that a fine could still be imposed on a Crown organisation, but only the proportion of the fine that would be payable to a victim under criminal justice legislation.

The recently passed Sentencing Act 2002 abolished the power of the courts to award all or part of the fine to a victim and extended the power of the Court to award reparation to victims.

The Bill will, therefore, need to be amended in light of the new sentencing law to consequentially remove the provision allowing for the award of part of the fine to a victim.

The reparation provisions will continue to be available under the Bill, as extended by the Sentencing Act.

The result will be that a Crown organisation will not be able to be fined if convicted of an offence under the bill, but will still be able to be ordered to pay reparation to a victim in line with body corporates convicted of the same offence.

A change recommended by the Committee relates to those provisions in the Building and Health and Safety legislation that make senior management within a body corporate that has breached the Acts personally liable in certain circumstances.

The Committee considered that there is no reason why the same rules should not also be extended to apply to senior management in Crown organisations.

This will provide consistency with private sector organisations.

This legislation will ensure greater accountability of Crown organisations under health and safety and building legislation.

I am confident that it will assist towards helping prevent a similar tragedy to Cave Creek from happening again.

I commend the Bill to the House.

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