When and how we audit, inspect and investigate

Scope of this Policy

This policy sets out how we select and use audit, inspection or investigation processes, to assess the extent to which a person or person conducting a business or undertaking (PCBU) is complying with their legal obligations under the MTA or HSWA:

This policy does not:

• detail the procedures for how we will perform specific audits, inspections or investigations, or
• confirm what corrective or enforcement actions, if any, we will take when an audit, inspection or investigation is concluded.

Further information on the way we will perform specific audits, inspections or investigations and what further actions we may take, if any, can be found in a range of other operational policies available on our website.

How we define our audit, inspection or investigation functions

Audit

We perform an audit when we want to take a broad systematic review of processes, procedures and actions required by a set of pre-determined standards and/or criteria. We use audits to evaluate the extent to which the standards and/or criteria have been followed, and whether the processes, procedures and other actions are appropriate and effective to manage the risk of harm.

Mostly our audits are part of a planned programme of work (that is, used proactively). We may also use them to respond to a notification we have received or after an event, if an audit will be an effective way to test whether a person or PCBU is complying with their legal obligations.

Inspection

Inspections can be undertaken in response to an event or notification, or targeted to where a risk has been identified. They can be a proactive tool for understanding compliance generally and, more broadly, the sector’s knowledge of risks controls and their legal requirements.

Inspections are focused, point in time, examinations of a particular process, activity, or set of activities. An inspection is undertaken to determine whether the process, activity, or set of activities:

• are being performed safely, and
• comply with a required set of standards, such as under HSWA, the MTA or their rules and regulations.

The scope of matters considered during an inspection, will be specific to the type of inspection. Some inspections will have a relatively narrow focus on an unsafe or non- compliant circumstance, while others may consider multiple duties and include an extensive review of underlying risk management systems.

Investigation

We investigate to build a clear picture of the action or inaction, and/or systemic failure that led to the serious harm or risk of serious harm occurring.

When investigating, we gather evidence of statutory non-compliance to a standard that enables us to take enforcement action where it is proportionate to do so.

Investigations differ from inspections in that they examine the sequence of events or decisions that led to or contributed to the unsafe situation or non-compliance. They can cover a specific event or systemic matters, and one or many parties.

Why and when we perform audits, inspections and investigations

Audit

Under our broad statutory powers, we may audit:

• a port (including designated ports)
• an oil or gas installation
• a vessel or operator, or
• a person or PCBU,

as part of our role to administer the maritime transport regulatory system, including maritime security, and as the HSWA regulator of designated ports and vessels as workplaces.

We audit:

• as part of our role to administer the maritime transport regulatory system, including maritime security
• as the HSWA regulator of major ports and vessels as workplaces.

Mostly our audits are part of a programme of work and include those we undertake to:

• administer the Maritime Operator Safety System (MOSS)
• fulfil our responsibility to regulate under the:
• International Safety Management (ISM) Code, and
• International Ship and Port Facility Security (ISPS) Code
• test port and ship security plans
• oversee the quality of third parties who perform regulatory tasks on our behalf
• ensure ports are fulfilling any required maritime safety and marine pollution functions.

We may also undertake a targeted audit to consider an unsafe or non-complaint situation we have triaged as medium harm, if the harm suggests:

• there is a wider system failure in the areas we audit, and
• it can be considered in a timely manner.

For example, a targeted audit may be undertaken if the triaged harm suggests there could be system wide issue relating to a:

• Maritime Transport Operator Plan (MTOP)
• Document of Compliance and Safety Management Certificates (to comply with the ISM Code)
• port or ship security plans, and
• maritime document or maritime product.

We may also undertake a targeted audit or a series of audits:

• if insights gathered through one of our harm prevention programmes suggests there are critical risks or issues present that relates to the areas we audit, or
• insight from an inspection or investigation signals a need for a broader review of safety systems. For example, issues associated with preventative maintenance activities.

Inspection

Under our broad statutory powers, we may inspect any incident:

• at a port (including designated ports)
• at an oil or gas installation
• on a vessel or related to an operator, or
• related to a person or PCBU

as part of our role to administer the maritime transport regulatory system, including maritime security, and as the HSWA regulator of designated ports and vessels as workplaces.

We undertake inspections in response to a notification we have triaged as a medium harm and as part of our ongoing planned monitoring work.

Our planned inspection programme, includes:

• proactive inspections that support the delivery of harm prevention programmes. These
• focus on a critical risk and cover a range of operations and operators within a sector.
• Port State Control inspections we undertake as a signatory to the Asia Pacific
• Memorandum of Understanding on Port State Control (Tokyo MOU)
• Flag State Control inspections we perform under the Maritime Labour Convention 2006
• ship security plan inspections
• port inspection related to maritime safety and marine pollution activities.

We may also undertake a targeted inspection or a series of inspections if insights gathered through one of our harm prevention programmes suggests there are critical risks or issues that should be inspected.

Investigation

Under our broad statutory powers, we may investigate any incident:

• at a port (including designated ports)
• on an oil or gas installation
• on a vessel or related to an operator, or
• related to a person or PCBU

as part of our role to administer the maritime transport regulatory system including maritime security, and as the HSWA regulator of designated ports and vessels as workplaces.

We will likely investigate notifications we have triaged as high harm which include events that have caused, or under different circumstances were highly likely to have caused:

• death
• serious injury or serious illness that is life threating injury or illness where the person is likely to have a serious permanent disability or health effect
• serious damage to a vessel or port including equipment used for port operations, or
• serious harm to the environment through a pollution event (excluding spills) that is widespread, or in a protected area, or where the event results in the closure of fisheries/aquaculture or significant fatalities to marine animals. that caused serious harm to the environment.

We may also investigate notifications we have triaged as medium if the notification indicates a pattern of recent non-compliant activity and multiple harm-related incidents, and we have a reasonable belief there is:

• worker exploitation, or
• negligent, wilful or reckless behaviour.

Audit or Inspection relating to the Port and Harbour Marine Safety Code

While monitoring the Port and Harbour Marine Safety Code, there may be a situation where a Code partner is not managing risks appropriately. When this happens, if it is possible and appropriate, all Code partners will work together to support the Code partner to manage the risks.

We may also carry out monitoring or enforcement activity related to unsafe situations or non-compliance we become aware of. For example, when we have significant safety concerns about the operation of a port or maritime operator. In these situations we may, using our powers under the MTA or HSWA, initiate an audit or inspection that could lead us to use our corrective and/or enforcement tools.

When we will stop or refer between our audit, inspect and investigate functions

There may be situations where we have started the process to audit, inspect or investigate,
but as we gather information about the unsafe situation or non-compliance, we may stop or
change our approach. In these situations, we will stop the initial process and, if there is value
in doing so, begin a different process (inspection, investigation or audit) as outlined below.

Stopping an audit, inspection or investigation

Stopping an audit

We will not stop an audit part way through the process, except when:

• the audit raises a concern that there may be serious non-compliance across a range of
  vessels or locations that could more effectively be addressed through a series of targeted
  inspections, or
• there is, or has been, serious non-compliance that requires us to investigate.
  In these circumstances a decision will be made as to whether the audit should continue, be paused or stopped.

Stopping an inspection

We will stop an inspection when we have gathered enough information to confirm the level of
compliance with legal obligations in the circumstances being inspected.

Stopping an investigation

We may stop an Investigation when we have gathered sufficient information to reasonably
believe that one or more of the following situations applies:

• the party or parties are complying and will likely continue to comply with requirements
• any non-compliance was minor and has been resolved
• corrective action (required in the early stages of the investigation) to manage the ongoing
  risk is substantively underway, and we don’t believe it is proportionate and in the public
  interest to take enforcement action
• there is insufficient evidence to support a prosecution
• an enforcement tool such as an infringement notice is proportionate to the situation, and
• we have learnt what we need to about the unsafe situation or non-compliance to take
  proportionate action to address it.

Referring between audits, inspections or investigations

In general, we will refer between an audit, inspection and investigation where it is clear the original process is not the best way to get the information we need to address the harm or risk of harm.

Moving from an investigation to an inspection or audit

We may stop an investigation into an unsafe situation or non-compliance and refer it to be inspected or audited when information gathered at the beginning of an investigation indicates:

• the harm was, or risk of harm is, less serious than indicated in the notification we received. For instance, with more specific information about the unsafe situation or non-compliance, we would have triaged the notification as a medium harm.
• the harm that has occurred over-represents the underlying risk of the situation. For instance, based on the underlying risk factors we would expect the harm that occurred to be less severe.

The initial findings from an investigation may identity potential risks that trigger the need for an audit or inspection. When this happens, the inspection or audit will be managed in coordination with the investigation.

In general:

• the inspection will look at specific risk areas the investigation has found need to be examined in more detail, and the audit would review how effective the person or PCBU’s broader systems or processes are.

Information gathered as part of the inspection or audit will inform action focussed on addressing any risks. However, it may also be used in relation to the investigation.

Moving from an inspection to an investigation

After gathering further information through inspecting the unsafe situation or non-compliance we may refer it to be investigated because:

• the harm or underlying risk was more serious than indicated in the notification to Maritime NZ. For instance, with more specific information about the unsafe situation or non-compliance, we would have triaged the notification as a high harm.
• the harm that occurred under-represents the underlying risk of the situation. For instance, based on the underlying risk factors we would expect the harm that occurred to be more severe.
• there is a pattern of recent non-compliant behaviour and multiple harm-related incidents
• there is a clear indication of repeated or wilful conduct that has put people at risk of high harm.

Moving from an audit to an investigation

While performing an audit, we may become aware of an unsafe situation or non-compliance that requires us to investigate. In these situations, we will start an investigation to determine who has legal obligations and whether they have been met.

We may continue with the audit if there is a need for us to:

• finish evaluating the extent to which the relevant standards and/or criteria have been followed, and confirm whether there has been appropriate corrective action taken to manage the risk of harm.

Legislative basis for this policy

Maritime NZ relies on broad legislative powers to gather information by auditing, inspecting or investigating.

The following sections of the MTA support this policy:

• section 33T – inspections and audits of port operations
• section 54 – inspections and audits of any person who:
• holds a maritime document, or
• operates, maintains, or services, or does any other act in respect of any ship or maritime product. 
• sections 57, 58, and 59 – accidents, incidents, and mishaps and the Director’s powers of investigation related to these
• section 235 – powers of investigation of Director
• section 246E – Director’s powers.

The following section of HSWA support this policy:

• section 168 – powers of entry and inspection.

The following section of the Maritime Security Act 2004 supports this policy: 

• section 18 – the power for the Director to test the effectiveness of Port and Ship Security plans through audits.

Key terms