Responsibility in the rural sector

August 15 2014

One of the issues that the rural sector faces is clarity as to whose responsibility health and safety might be given the way that many rural businesses are structured and the number of activities carried on by different entities on the same farm. Two examples of this would be:

  1. Ownership structures. It’s very common for farming operation ownership to be split between different entities. For example a common structure for a pastoral or dairy farm might be that land and buildings are owned by a trust but the farming activity is carried out by a company. The company would own the stock and machinery and pay rent to the trust who is a passive landowner.
  2. Leasing. It’s quite common for the farm or orchard to be leased by the landowner to an unrelated entity such as one of the large fruit growing or cropping companies. This can be an attractive lifestyle option for those who want to live in rural areas on the edge of town. In these situations, the landowner may know little if anything about the orchard or cropping businesses.

Because one of the aims of the Bill is to drive home responsibility to where it should rest, it becomes critical when structuring your farming business or dealing with the contractual arrangements that everyone is absolutely clear as to who is responsible for what. For example, in the lease situation, most leases will have a clause in them requiring the tenant to comply with “all relevant statutory of regulatory rules and regulations” and will often list particular statutes – Health and Safety in Employment Act 1992, Employment Relations Act 2000, Biosecurity Act 1993, Forest and Rural Fires Act 1977 and so on. To what extent does it actually protect you as the landowner if there is an accident on your property? Can you simply say, “The property is leased, the lease confers exclusive possession on the tenant, the tenant contracted to me that they would comply with all health and safety legislation therefore, I am not responsible in any way for what happens on my land?”

  • The Bill makes it clear:
  • At clause 26, that more than one person can have the same duty, and
  • The definition of ‘PCBU’ in clause 13, makes it clear that a ‘person conducting a business or undertaking’ includes a person conducting a business or undertaking alone or with others.

This means that each entity involved in the farming business, the landowner, the farmer and the contractors can have concurrent responsibilities which cannot simply be passed off from one to the other.

This level of responsibility can be particularly difficult where the landowner is passive and doesn’t have any knowledge or experience in the particular farming activity or, the independent trustee of a landowning farming trust who meets his other trustees once a year in the accountant’s office. From a legal (and moral) point of view, it will now be critical for any entity involved in a farming operation to:

  • Be very clear about who is in control in the work place and who is responsible for what, and
  • Make sure that your insurance follows where the risk lies. Where you are operating different entities, it does require you to sit down with your broker to ensure that the appropriate entity is properly insured for the appropriate risk.

If you’re not directly in control of the workplace, such as in the landlord or trustee examples above, you’ll need to show you have been involved in the process of identifying risk and ensuring that the workplace that you own or have some control over, is safe.

This proposed legislation makes some significant changes from the current situation. Health and safety on your farm is not something to be trifled with. If you’re unsure about the new proposed provisions, please get in touch.

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