due diligence and legal risk in the mining industry … keith due... · due diligence and legal...

Due Diligence and Legal Risk

in the Mining Industry (2013)

By: Norm Keith, LLM

OHS Facts, Accident Costs &

Course Overview

© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 3

• In Canada in 2011:

• 249,511 accepted lost time claims

• Slight decrease from 2010

• 919 fatalities

• Decrease in fatalities from 2010

(Source: Association of Workers Compensation Boards of Canada)

National Statistics


• In Ontario in 2011:

• 304 fatalities registered; that’s approximately 6

workers per week

• 56,672 accepted lost time claims (Schedule 1 & 2)

• 123,675 accepted no lost time claims

(Schedule 1 & 2)

• WSIB Costs directly impact the “bottom line”

(Source: WSIB Statistical Supplement - 2011)

Provincial Statistics


Risks and Costs

• Human: personal injury, pain &

suffering, diminished lifestyle, disability

• Economic: lost production, accident investigation

time, re-training costs, overtime payments, workers’

compensation premiums and penalties

• Legal: investigations, stop work/compliance orders,

quasi-criminal prosecution, director & officer

liability, high fines & jail terms


Presentation Overview

Due Diligence

• What does it mean?

• How does an employer demonstrate it?

• How does it relate to employers & supervisors?

• How it protects against all kinds of EHS legal risk

Introduction to Due

Diligence


Due Diligence

• Concepts

• Ensuring reasonable care was exercised regarding

worker health and safety (hazards are identified,

assessed and controlled)

• Proving there was no negligence with respect to

circumstances that caused accident

• Not ignoring workers’ concerns about health and

safety

• Due diligence requires a standard of reasonableness

NOT of perfection


Due Diligence

• Legal defence to OHSA charges

• An effective occupational health and safety

management system


Due Diligence

• Legal definition - Two Branches:

• R. v. City of Sault Ste. Marie (1978): “The defence will

be available if the accused [1] reasonably believed in a

mistaken set of facts which, if true, would render the

act or omission innocent, or [2] if he took all

reasonable steps to avoid the particular event.”


Due Diligence

• Application of the Second Branch:

• R. v. City of Sault Ste. Marie (1978): “…[T]he question

will be…whether the accused establishes all

reasonable care by [1] establishing a proper system to

prevent commission of the offence and [2] by taking

reasonable steps to ensure the effective operation of

the system.

Legal Duties and Liability


Employer: Definition

• Definition of employer - s.1 of the OHSA…

• “means a person who employs one or more workers or

contracts for the services of one or more workers and

includes a contractor or subcontractor who performs

work or supplies services and a contractor or

subcontractor who undertakes with an owner,

constructor, contractor or subcontractor to perform work

or supply services.”


Employer: Definition

• R. v. Wyssen [1992]

• “The definition of ‘employer’ in the Act covers two

relationships: firstly, that of a person who employs

workers and secondly, that of one who contracts for

the services of workers. The difference between the

two relationships is well established by authority.”


Employer: Responsibilities

• Sections 25 & 26, OHSA:

• Establish a health/safety policy and program; review annually

• Provide “competent persons” as supervisors

• Provide information, instruction, and supervision to workers

• Provide, maintain, and ensure use of protective equipment

• Monitor levels of biological, chemical and physical agents in

workplace

• Cooperate with/assist the joint health and safety committee (JHSC)

• Provide JHSC with health & safety reports

• Ensure measures and procedures are carried out as “prescribed” in

regulations

• Post copy of policy, OHSA and other health and safety information


Employer: Responsibilities

• Sections 25 & 26, OHSA:

• “Take every precaution reasonable in the

circumstances for the protection of the worker”

a.k.a. – General Duty Clause


Supervisor: Definition

• Definition of supervisor - s.1 of the OHSA…

• “means a person who has charge of

a workplace or authority over a worker.”


Who is a Competent Supervisor?

• Definition of competent person - s.1 of the OHSA…

• “means a person who,

• (a) is qualified because of knowledge, training and

experience to organize the work and its performance,

• (b) is familiar with this Act and the regulations that apply to

the work, and

• (c) has knowledge of any potential or actual danger to health

or safety in the workplace.”


Supervisor: Responsibilities

• Section 27, OHSA:

• (1) A supervisor shall ensure that a worker,

• (a) works in the manner and with the protective devices,

measures and procedures required by this Act and

regulations; and

• (b) uses or wears the equipment, protective devices or

clothing that the worker’s employer requires to be used

or worn.


Supervisor: Responsibilities


• (2) Without limiting the duty imposed by subsection (1),

a supervisor shall,

• (a) advise a worker of the existence of any potential or actual

danger to the health or safety of the worker of which the

supervisor is aware;

• (b) where so prescribed, provide a worker with written

instructions as to the measures and procedures to be taken for

protection of the worker; and

• (c) take every precaution reasonable in the circumstances of the

protection of a worker.


• Sections 32, OHSA:

• Board of Directors and Senior Management

• Take reasonable care to ensure corporation complies

with…

• OHSA and regulations

• Orders of Inspectors, Directors, and the Minister

Director & Officer: Responsibilities

Occupational Health &

Safety Management System


OHS Management System

• An OHSMS typically includes:

Hazard Identification, Assessment & Control Current and specific to the workplace

Programs, Systems & Procedures To safely carry out the work and correct any issues

Competent Workers Established duties and responsibilities to work safely

Equipment & Materials Provided and maintained in good working condition and

appropriate for the work

OHSMS


Managerial/Supervisory Functions

Organize/

Schedule/

Coordinate

Instruct/Communicate Monitor/Supervise

Management

Review

PLAN the WORK


How to Assess Risk:

• Quantitative Assessment (i.e. indoor air quality,

noise, temperature)

If you cannot measure the risk….. how can you

assess it?

• Qualitative Assessment (i.e. Risk Matrix model)

Plan


Plan

Slightly Harmful Harmful Extremely

Harmful

Unlikely Trivial Risk Tolerable Risk Moderate Risk

Likely Tolerable Risk Moderate Risk Substantial

Risk

Very

Likely Moderate Risk

Substantial

Risk

Intolerable

Risk

Risk Matrix

Probability

Consequence


• Factors to consider in assigning priority for

analysis of jobs include:

• Accident frequency and severity

• Potential for severe injuries, illnesses or property damage

• “Novelty”: newly established or modified jobs

• Infrequently performed jobs (e.g. – annual maintenance

shutdown)

• Jobs where complacency has set in

Plan

Ministry of Labour

Enforcement and Legal Risk


OHSA: External Responsibility System

• Ministry of Labour’s (MOL) role in health and

safety is to set, communicate, and enforce health

and safety laws (OHSA and regulations)

• Enforcement of the OHSA and regulations

occurs when workplace parties fail to

comply with legal responsibilities

• External responsibility system invoked where

the Internal Responsibility System fails


Workplace Parties: Legal Liability

• Workplace parties with duties in the OHSA may

be subject to charges and legal liability

• PART III: Duties of Employers and Other Parties -

sections 23 to 32: constructors, owners, employers,

supervisors, workers, directors, officers, etc.


Workplace Parties: Legal Liability

• 1 year limitation period on charges being sworn

• MOL will likely commence prosecution of a

workplace party because of:

• fatal or critical injuries

• failing to report critical injuries

• non-compliance with Orders

• obstruction of MOL inspector

• poor health and safety record


Legal Liability: Penalties


• Individuals:

• $25,000, and/or

• 12 months imprisonment

• Corporations:

• $500,000

Plus 25% victim surcharge

Bill C-45: OHS Criminal

Negligence Legal Risk


• OHS legal duty – s. 217.1:

• “Every one who undertakes, or has the authority, to

direct how another person does work or performs a

task is under a legal duty to take reasonable steps to

prevent bodily harm to that person, or any other

person, arising from that work or task”.

OHS Duty in Criminal Code


OHS Criminal Negligence for Individuals

• Penalties for criminal negligence:

•

• Injury - 10 years in prison

• Death - life imprisonment


OHS Criminal Negligence for Organizations

Penalties for criminal negligence:

• $ UNLIMITED fine

• Non-tax deductible


Implications of Bill C-45

• Increased legal risk for individuals and organizations

(from senior management to lead hand)

• No insurance for OHS criminal negligence penalties

• Increased importance of accident prevention

• Increased importance of OHS law compliance

• Implied duty to develop OHS management system

Due Diligence Checklist


STEPS to OHSLAWTM Due Diligence

1. PRIORITY by senior management to worker safety

2. RISK identification and assessment

3. ELIMINATE or control workplace hazards

4. VERIFY OHS programs and safe work procedures

5. ENGAGE managers and workers in OHS training

6. NOTE and document OHS program compliance

7. TOTAL OHS management system auditing

7

Due Diligence


How Can Gowlings Help? Training. Consulting. Legal.

Or visit our website at www.gowlings.com/ohslaw

Contact Name 1-866-862-5787 Email

Norm Keith, B.A. J.D., LL.M.,

CRSP

Partner

ext. 85699 [email protected]

mailto:[email protected]

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