The growing number of companies with overseas offices or business operations abroad and increasing numbers of personnel sent to work abroad by contractors highlights the importance of managing the risks associated with working abroad and corporate liability for overseas accidents.
As the United Kingdom Continental Shelf ("UKCS") has matured, those in the oil and gas industry increasingly have had to export their technical expertise and know-how all over the world in search of new business opportunities. Unfortunately, it is an inescapable fact that many of these opportunities are frequently to be found in countries, such as Iraq and Nigeria, where the risks associated with working are very much greater than in the UKCS.
Broadly speaking, the risks can be categorised into four groups:
- political risk - terrorism, civil war, insurgents' actions and kidnap;
- operational risk - quality and standard of equipment, mixed workforces and environmental factors;
- regulatory risk - dealing with work and legal cultures that are radically different to the UK.
- health risk - disease and personal injury risks associated with working in a particular location.
If employees work abroad it is vital that management systems and support services are in place to assess and minimise the risks associated with working abroad. The systems must address both UK law and local legal requirements to ensure that the risks have been properly managed. In assessing risk the level of exposure is clearly determined by the country of destination and the work activity - properly tailored risk assessments focusing on the particular workers, the work to be performed and the place of work are vital. These must be reviewed regularly, especially in cases where, as in Iraq, the situation appears to be deteriorating.
Failure to do so may give rise to both civil and criminal liability. A company may be prosecuted under the Health & Safety at Work Act 1974 ("the Act"), typically for breaches of the general duties imposed on employers under sections 2 and 3 of the Act. If convicted it could face a significant fine. The Act does not have extra-territorial application - thus the company could only face liability if the breach of relevant duty took place in Great Britain or the UKCS. However, the Company could still be liable for an overseas incident. The most obvious example is where there was a failure in Great Britain to properly assess the risks associated with the overseas work and a failure to take reasonably practicable steps to minimise the risk.
If the company has committed an offence under the Act, directors and senior managers may also be personally liable if they consented to or connived at or were negligent in relation to the offence.
Civil liability could also arise if there is an overseas accident. The English or Scots courts may take jurisdiction to hear the claim if one of the defendants is based in England or Scotland. The court may then have to consider which law to apply to determine the dispute and it may not necessarily be English or Scots law - the company may find itself dealing with foreign tort law.
So how does a company discharge its duties in relation to health and safety? In order to minimise the risk of criminal liability, the directors must take an active role in promoting health and safety in the organisation and demonstrate effective leadership in this matter. The board should, therefore, follow the Health and Safety Executive's guidance notes relating to directors' responsibilities. The directors must also take reasonable steps to ensure that the organisation discharges its duties under the Health & Safety at Work Act 1974.
The notion of risk assessment is particularly important in circumstances where the Company knows or ought to know that the safety regime in the overseas locality is less stringent than that in Great Britain. In short, if the risk cannot be properly managed then the Company must take steps to remove individuals from danger in the particular locality or it should not allow individuals to travel out to the locality and to work there.
For further information on this or any other aspect of health and safety law please contact Mark Tyler in the London office at mark.tyler@cms-cmck.com or Alex Green in the Aberdeen office at alex.green@cms-cmck.com .
