Editorial: Pike owners should heed judge and do decent thing

Pike River mine. Photo / Mark Mitchell

One way or another the families of the men killed in the Pike River mine must be given the compensation that has been awarded to them by the Greymouth District Court. The sum of $110,000 for each of the 29 victims and two survivors seems modest beside the blame the company deserves for their deaths. They were sent into a mine without adequate ventilation, lacking a second exit shaft, and where safety recommendations were not carried out and warnings ignored.

If the company, now in receivership, cannot pay the $3.41 million awarded to them, its shareholders and directors can.

Pike River Coal's largest shareholder, NZ Oil and Gas, posted a profit of $19.9 million last year. The directors at the time of the tragedy were John Dow, Stuart Nattrass, Raymond Meyer, Roy Radford, Arun Jagatrampka, Dipak Agarwalla, Surendra Sinha and Sanjay Loyalka.

The Weekend Herald revealed that Mr Dow owns four properties in Nelson and Whangaparaoa totalling in value $3.5 million. Mr Nattrass owns at least five South Island properties worth a total of nearly $9 million. Other directors have comparable wealth in Australia. None of them has faced charges over Pike River and legally they may not be personally liable for anything that happened there, but they should do the decent thing.

The families of the 29 have not only lost sons, husbands, fathers, they have been waiting more than 30 months to recover the bodies and will probably have to accept that the risks and costs of entering the mine mean a recovery is still years away, if ever. How hard it must be to accept that safety counts for so much now and counted for so little before the explosion.

Awarding their compensation, Judge Jane Farish could not imagine a worse industrial accident.

"The hazards were well known and the dangers apparent, but the health and safety issues were not given priority," she said. She did not believe the company and its shareholder or directors were incapable of paying reparations, noting the directors had "significant insurance".

It takes a chapter of errors to create a disaster on the scale of Pike River, and the state must share the blame, too. Last year's commission of inquiry found a company with no underground mining experience had been given a permit with no check on its health and safety precautions. The Department of Labour's mining inspectorate had been reduced to two officers with no training.

When inspectors ordered Pike River's ventilation to be improved, the order was not enforced. Inspectors failed to ensure a second egress was formed before the company started risky hydro-mining in September 2010, two months before the explosion.

Pike River was a difficult and marginal mining venture that might not have proceeded but for the deregulatory philosophy that standards of safety could be left largely to commercial self-interest.

No company, it was believed, would risk the kind of damage that has been done to Pike River Coal and its investors. But Pike River did take those risks. It habitually ignored precautions, such as 21 reports of methane at danger levels in 48 days before the explosion.

Successive Governments allowed the mine to proceed with minimal oversight and for that, the families should receive additional compensation. But the state's failing does not excuse the company and its directors and it does not relieve them of their duty to the victims' families. A mine disaster does not quickly fade from memory.

Those who bear responsibility and value their reputations should heed Judge Farish's words and see what they can do.