One person’s red tape is another’s due diligence

Australian business is soon to be required to apply the concept of “due diligence” to occupational health and safety.  One would have expected the agency that is coordinating the changes to provide detailed guidance on what is expected from “due diligence”.  That is not the case and so, inevitably, lawyers have stepped in (some stepped in some time ago).

Part of the due diligence obligation is that it is necessary to “verify… compliance with the business’ safety obligations” and this is unavoidably achieved by audits and subsequent paperwork.  In fact, paperwork is a vital element of support for “evidence-based decision-making”.  So it is with some concern that one sees the New South Wales WorkCover Authority is number three on the NSW Business Chamber’s list of “top 5 red tape offenders”(?), released on 9 March 2011 .

Whether this is part of compliance with safety obligations or the cost of workers’ compensation is not clear, even from the data within the report itself .  From the general tone of the survey report it is suspected that the rating comes from the duplication of data provided to other.  It is likely that much more analysis of the raw survey responses (if available) would be required for constructive suggestions to be sent through to NSW WorkCover.

There is a broader significance in WorkCover coming up number 3.  It is only a few weeks away from the New South Wales State election, 26 March 2011, and the survey results could reflect the business community’s general dissatisfaction with government regulators, perhaps even identify a reform target.  The top 5 “offenders” cover industrial relations, urban planning, local government and taxation – common political areas of frustration and reform.

New South Wales is a crucial State in the progress of the Federal Government’s OHS harmonisation strategy.  The federal Department of Education, Employment and Workplace Relations (DEEWR) is in NSW Business Chamber’s top 5 so it is reasonable to assume that the national industrial relations policies still rankle with NSW businesses.  It is doubtful that the inclusion of the DEEWR had anything to do with the OHS reforms as OHS is generally perceived by business as a subset of industrial relations. – “pay” always comes before “conditions”.

The “due diligence” vs “red tape” battle is one that the Australian Government and its OHS regulator, Safe Work Australia, must face eventually and soon.  How is compliance (due diligence) to be proven without a subsequent increase in paperwork (red tape)?  In New South Wales this question is far more than a simple academic exercise on administrative process, it is a real political challenge that, if not handled carefully, could result in outrage from many business and community sectors with very little upside.

Kevin Jones

5 thoughts on “One person’s red tape is another’s due diligence”

  1. It is not clear to me what is considered red tape and what is considered necessary Due Diligence, a point well made in the article. Having consulted in NSW I can assure people that a significant proportion of the business owners consider a risk assessment to be red tape and the need to train or inform workers as a terrible waste of company resources. In fact many consider any time spent on safety as unnecessary and have the robust opinion that people should just be careful.

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