Mine safety: could your company be criminally liable?

Mining companies must aim for zero tolerance on worker health and safety violations or face criminal consequences, including corporate probation and jail time for management
By Poonam Puri

In November 2009, three miners descended nearly half a kilometre below ground to refurbish a mine shaft at Bachelor Lake gold mine in northwestern Quebec. What the miners didn’t know was that water had been filling the recesses of the shaft for at least 10 days. The flood alarm had been disabled and the water pumping system had failed. All three men drowned.

Following an investigation, Quebec’s work and safety regulatory body, known as the CSST, concluded that Metanor Resources “acted in a way that jeopardized the workers’ safety”—an allegation that Metanor continues to deny. The CSST found that critical hazard controls were not used to manage the danger of underground water. It imposed a $15,000 fine on Metanor. Three civil actions were brought by the families of the deceased miners and Menator settled them in 2013 through its insurers.

Then in 2014, Metanor was charged by the municipal police in Senneterre, Que., with three counts of criminal negligence causing death. The relevant section of the Canadian Criminal Code reads: “Any person 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 any person arising from that work or task.”

Though a company cannot think or act on its own, it can be held criminally responsible. Historically, judges attributed the actions of the company’s “directing minds” to the company itself. This dealt with the guilty act (actus reus) requirement, but it was a relatively small group of people—senior officers and directors—who could attract criminal liability to the corporation. In an effort to impose greater accountability on corporations, the Criminal Code now goes a step further. Even the misconduct of lower level employees, as well as agents and contractors, can now result in criminal liability for a company.

To prove criminal negligence, a senior officer, who markedly departs from the standard of care expected of a reasonable person, must also be involved. This takes care of the guilty mind (mens rea) requirement. A senior officer includes any person with policymaking authority or responsibility for managing an important aspect of the corporation’s activities. CEOs and CFOs are always considered senior officers, but mid-level employees could fall into this definition, too.

Metanor was charged under Bill C-45, legislation passed in 2004 to make it easier to criminally charge and convict companies. Bill C-45 arose out of the Westray Mining disaster when 26 miners were killed in 1992 after methane gas erupted and exploded in a Nova Scotia mine. Even though evidence showed a lack of safety training at the mine, known safety violations with poor working conditions and insufficient monitoring systems, no individual or company was ever convicted. Criminal charges against two former managers were set aside by the judge due to a procedural error by the prosecution.

Metanor has pleaded not guilty to its criminal charges. The company maintains that they are groundless and it was not negligent. This is the first time a company is going to trial on these charges. In the past, companies have either pleaded guilty or settled with the prosecution by pleading guilty to lesser regulatory offences in exchange for the criminal charges being dropped (see sidebar at bottom for criteria judges use to set company penalties). If Metanor is convicted, this case will send a message to employers—Bill C-45 is not just a handy tool to pressure companies and management into pleading guilty to lesser regulatory offences, it has some teeth. Companies will be held criminally accountable for worker fatalities even without one specific egregious act by a single person; the collective missteps of a number of employees can amount to criminal negligence.

In an earlier notable case prosecuted in Ontario under Bill C-45, construction company Metron opted not to go to trial and instead pleaded guilty to four counts of criminal negligence causing death and one count of criminal negligence causing bodily harm. Four of its workers, including a site supervisor, plunged to their death in 2009 after a swing stage collapsed. Despite the normal safety practice to attach fall harnesses to a lifeline and have only two workers on a swing stage at a time, six workers, including the site supervisor, were on the swing stage when it collapsed. It was also later discovered that the swing stage was improperly constructed.

The Court of Appeal in Ontario increased the $200,000 fine imposed on Metron by the trial judge to $750,000. The appeal court found that a larger fine was necessary to fit the level of moral blameworthiness of the conduct. The project manager for Metron was also sentenced to three and a half years in prison for criminal negligence causing death.

While a prison sentence for a negligent supervisor may satisfy some, the United Steel Workers is pushing for greater personal accountability of corporate directors and executives—including jail time—under Bill C-45. It’s an important—but open—policy issue: Does imposing personal liability on key decision-makers improve corporate behaviour? Or does the risk of heavy fines on companies—fines large enough to bankrupt—lead to better workplace safety outcomes?

METANOR’S CRIMINAL TRIAL commenced in late 2016, and closing statements will be heard later in 2017. But the case is already a reminder to companies to ensure that they have in place adequate policies and practices to protect workers and minimize workplace hazards. While Bill C-45 does not specifically articulate what would suffice as “reasonable steps” to prevent bodily harm in the workplace, mining companies should review and consider industry best practices and voluntary association rules and protocols in establishing their own internal health and safety policies and systems. Here are eight points to stay onside:

• Identify and assess risks of workplace hazards and implement controls to minimize exposure to hazards.

• Communicate hazards and risks to workers, supervisors and management.

• Train workers, supervisors and management to ensure understanding of all health and safety policies and procedures.

• Frequently monitor and inspect mine sites and provide reports to senior management.

• Promptly correct any safety deficiencies and unsafe work practices.

• Discipline individuals, teams and departments in non-compliance with the company’s policies and procedures.

• Ensure clear accountability for health and safety performance. Report performance externally and internally. Target for continuous improvement. Incorporate health and safety compliance into performance reviews and compensation structures.

• Maintain detailed documentation of all policies, practices and procedures.

Fatal accidents in the mining industry are not anomalous. Data from the Association of Workers’ Compensation Boards of Canada shows that the mining industry had a total of 176 worker deaths in 2013-2015. While mining comes with a multitude of inherent risks and dangers, companies and their management simply cannot slack on safety. Zero tolerance on worker fatalities has to be the goal.

Sidebar: Sentencing: the other shoe

When sentencing, judges aim to deter future misconduct and denunciate. In setting a fine, a court will ask the following questions:

• Did the company gain an advantage from the offence?

• Was the offence planned?

• How long did the misconduct go on?

• Did the company conceal or convert assets to try to avoid paying fines or restitution?

• Will the sentence result in bankruptcy?

• What impact will it have on the employees?

• What did the investigation/prosecution cost?

• Were any regulatory penalties imposed?

• Are there previous criminal convictions or sanctions by regulatory body for similar conduct?

• Did the company pay any restitution?

• Did the company impose a penalty on individuals involved in the offence?

• Has the company taken measures to reduce the chances of a subsequent offence?

The closest a court can get to throwing a company in jail is placing it on corporate probation. The court can require the company to establish or update its policies, standards and procedures so as to avoid future mishaps. It can also order payment of restitution to families of victims and can shame the company by requiring it to publicly disclose details of the offence. —P.P.

Poonam Puri is an experienced corporate director, governance expert and law professor at Osgoode Hall Law School. E-mail: ppuri@osgoode.yorku.ca.

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