Whitall is about to face several health

An order of compensation for the families and survivors of the Pike River mining disaster may be sentiment only, as the company does not have enough money in the kitty, Pike River’s receiver says.
Clapping broke out in the public gallery of the Greymouth District Court today, packed with Pike family members, when Judge Farish announced the fine would be $760,000 and ordered the company to pay $3.41 million in reparation.
This amounted to $110,000 for each victim and the two survivors.
But receiver John Fisk of PwC says Pike River Coal Ltd has only $500,000 in available funds and $156,000 in leftover insurance money.
He said that in cases where companies in receivership do not have enough money to pay compensation, the liability may have to be written off. Any fines would not be even considered claimable under the creditor process.
”Any reparations become an unsecured claim against the company so if there isn’t sufficient assets to pay the creditors, which is the case here, then unfortunately, there isn’t money available distribute.”
Unsecured creditors are currently owed $31m, with another $20.5m owed to Pike’s major shareholder, New Zealand Oil and Gas.
Questions are now being asked as to whether the Government might step in to provide compensation for the victims of the 2010 mining disaster, now that the legal avenues are almost exhausted.
Fisk said in some situations, compensation can be sought against company directors. Chief executive Peter Whitall is about to face several health and safety charges laid by the Ministry of Business, Innovation and Employment. But other directors remain uncharged.
However, in court today, Judge Farish suggested the company’s directors and parent company might be expected to come to the party.
Usually, even when companies were in ”fragile” financial situation, they would still offer some reparation, she said. Pike had not done so.
Judge Farish said she could rule not to impose reparation if she thought the company was unable to pay but she believed it could be paid by existing shareholders or directors.
The directors had insurance worth a considerable amount and its largest shareholder, New Zealand Oil and Gas, had gained benefit from keeping the company in receivership rather than liquidating it.
Pike River was a shell company and the directors had resigned. The remaining proceeds of $25 million were contingent on the mine being reopened.
PwC says Pike River has had two insurance payouts. The $156,000 referred to is left over from a public liability policy taken by the directors.
A second insurance claim, made by the receivers for material damage and loss of profit, paid out $80m but that has been put into the company’s account to pay creditors. NZOG had allowed a partial payment to unsecured creditors, Fisk said.
Meanwhile, the Green Party said the Pike River families had been cheated out of their compensation.
Spokesman Kevin Hague called on the Government to ensure the full legal compensation was paid to each family.
“These families should be at the front of the queue for compensation and payment, but because the legal system puts them at the back, they could walk away with very little,” he said.
“It is wrong that the families only get the leftover insurance money once everyone else gets in first.
“Presumably the rest of the $2 million has been eaten up in lawyers’ fees, so again the families are at the back of the queue.”
Judge Farish found the company had a high level of culpability for both its methane management and ventilation management, which were four charges.
Ventilation was an essential part of the safety of a mine, insuring gas in the mine did not reach explosive levels.
”There were many indicators that the mine was in a potential explosive position but the warning signs were not noted or heeded.”
She said those warning signs went unnoticed by Pike management and by the men working in the mine.
She criticised Pike River Coal Ltd for its poor communication in the immediate aftermath of the blast, with many families finding out via media that their loved ones.
”The victim impact statements were harrowing. They all feel deep sorrow.”
She said in reading the statements, it was clear they desperately wanted to have their men’s bodies retrieved from the mine.
Milton Osborne’s widow, Anna Osborrne, Home energy monitor wept openly as the judge spoke of how important it was for families to bury their loved ones. Judge Farish also struggled to maintain her composure.
Judge Farish said it seemed cruel that Daniel Rockhouse had to continue working in a mine when it obviously was so hard for him.
She agreed it was ”the health and safety event of the generation” and she hoped there would be no repeat.
The former Labour Department, now part of the Ministry of Business, Innovation and Employment, had charged the company over its methane, strata and ventilation management, mitigating explosion risk and impact, plus health and safety management for contractors, subcontractors and their employees.
Yesterday, the ministry’s lawyer, Mark Zarifeh, told the court that reparation of between $60,000 to $125,000 for each of the 29 victims and two survivors was recommended, with the amount to be at the far end of the scale.
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