Category: business

Asbestos is an example of immoral economic growth

The financial newspapers often refere to a BRIC group of countries or, rather, economies.  This stands for Brazil, Russia, India and China and is used to describe the forecasted economic powerhouses for this century.  But there is also the risk of economic growth without morality.  India is a case in point and asbestos can be an example.

Pages from india_asb_time_bombThe health hazards of asbestos have been established for decades but only officially acknowledged more recently.  One would expect that when some countries ban the import, export and manufacture of a product that other countries may suspect that something may be amiss.

In the introduction to the September 2008 book “India’s Asbestos Time Bomb” Laurie Kazan-Allen writes

“Historically the burden of industrial pollution has reached the developing world much faster than the fruits of industrial growth” writes Dr. Sanjay Chaturvedi.  This statement is well illustrated by the evolution of the asbestos industry in India.  In the frantic rush for economic development, there has been a pervasive lack of concern for the health of workers and the contamination of the environment.  Sacrificing the lives of the few for the “good” of the many, the Indian Government has knowingly colluded in this sad state of affairs.”

Kazan-Allen is a longtime campaigner on asbestos.  In 2001 she put this question to the Canadian Medical  Association Journal.

“Chrysotile has caused and is continuing to cause disease and death worldwide. It is hypocritical for Canada to continue to produce chrysotile when it is not prepared to use it domestically. If chrysotile is unsuitable for Canadian lungs, how does it become suitable for Korean, Indian and Japanese lungs?”

A foundation of public health and workplace safety management is that bad practices, immoral practices, are corrected, not accommodated.  At some point the exploitation of others for the financial betterment of a few must end. Could that lead to a “compassionate capitalism” or is that just another term for “socialism”?  These semantics are being argued at the moment in the United States over health care but the question needs to be asked globally, just as it is on climate change and on the financial markets.

The global implications of poor OHS management and practices needs to be placed on the policy agenda not only of the ILO, United Nations and trade union movement, but the business groups, and professional associations who need to develop their social charters.  If those voices are not added to the debate, safety will also be a fringe issue and it is too important for that.

Kevin Jones

Good corporate advice tainted by poisonous product

In Matt Peacock’s book, “Killer Company“, an entire chapter is devoted to the legacy of the James Hardie chairman, John B Reid.  In Peacock’s talk at Trades Hall in October 2009, he mentioned that Reid had once published a book called “Commonsense Corporate Governance”.  The apparent hypocrisy of an executive of a company that knowingly sells toxic material while advising others on how to manage their corporation responsibly generated chuckles of disbelief in the Trade Hall audience.

Reid book cover 001SafetyAtWorkBlog obtained a copy of John Reid’s book to see first-hand that someone could do such a thing.  A sad part of all this is that the advice in the book is sensible but Reid’s “legacy” now taints all he does and all he says.

One random example of the advice he provides concerns dealing with consultants:

“Where, as with solicitors and auditors, it is imperative for the company to retain them, company staff need to be reminded that the professional advisers are paid for on the basis of the time that they spend on the company’s business. This is not predetermined by the nature of the task. In large measure it is affected by the decisions made and by the homework done within the company. What does this mean?

First, the imposition of new and more demanding, and frequently less precise, legislation on all manner of subjects has made management and, as a result, directors, nervous about things that directors 50 years ago would have dealt with very quickly-and inexpensively. Further, the increasing number of specialists necessary within a company’s own payroll is a result of this legislative epidemic, and has produced a reinforcement of this culture of caution and, occasionally, of fear.”

Safety professionals may want to take particular note of this corporate imperative.

Peacock points to the strict confidentiality clauses that Hardie included in any settlements in the 1970s.  Peacock writes (p 156)

“Secrecy indeed was Hardie’s byword, one endorsed by the chairman, who would later advise aspiring directors to ‘remain silent where there is criticism’.”

Reid recommended this in a bulleted list of ways to handle the media.

John B Reid, whose personal wealth was estimated at $A181 million in 2004, is not unique in advising companies while also having a tarnished corporate reputation.  Some argue that the adjective “good businessman” is a tautology.

There is no doubt that Reid was an active philanthropist and corporate citizen.  He was awarded an Order of Australia for “service to industry” – no citation is available to explain the decision.  In 2006, he received the Goldman Sachs JBWere Philanthropy Leadership Award.

Greek tragedies were full of hubris and examples of the single flaw that made good men do bad things.  If the plays of Euripides, Aeschylus and Sophocles have yet to be analysed for their advice to corporate executives, they should be, for not only do they show human flaws but human corporate flaws.

John B Reid’s book on corporate governance is an easy read and has valuable lessons but it is now a book that makes the reader feel dirty.

Kevin Jones

Management – the importance of what comes before

A special guest for the Safe Work Australia events in Queensland was Matthew Gill, former Beaconsfield Gold mine manager.  According to a media statement from the Government

“Matthew Gill who was the public face of the Beaconsfield mine rescue will speak about how he immediately took control of the emergency and then implemented rescue operations for the three missing miners,” [Workplace Health and Safety Queensland Executive Director, Dr Simon Blackwood] said.  “Mr Gill maintained an unwavering commitment to the safety of the people conducting the rescue and to the trapped miners.

“He oversaw the rescue teams which battled 24 hours a day for 14 days to release the two miners trapped almost 1km underground. Mr Gill will relive the emotional story of finding Larry Knight’s body and having to talk to his family afterwards.

“Previously he has been involved with mine rescue at rock falls at Mt Lyell in Tasmania and in Papua New Guinea, but Beaconsfield was the first time that he had such ‘hands on’ involvement.”

Matthew Gill has a lot of skills to share on disaster management and media handling but a lot of that skill seems to come about after the rockfall in 2006 that killed Larry Knight.

Cover KNIGHT,_Larry_Paul_-_2009_TASCD_25Prior to that time, in 1995 to 1997, Matthew Gill was the Responsible Officer for the mine.  From 1997, Gill appointed other people to undertake the role that is required by legislation.  Sometimes there were three people in the role at the same time.  Professor Michael Quinlan was quoted in the Coroner’s report saying that

“……….the very notion of appointing a Responsible Officer would have little meaning unless that person so appointed exercised overall control of the workplace and could therefore make critical decisions in relation to OHS not simply recommend them, be part of them, or make decisions but not others than might affect safety. For example, as Responsible Officer Mr Ball was a participant in decisions on mine design and mining methods – decisions that have a critical effect on the safety of underground workings – but he was not the only or final decision maker.”

The Tasmanian coroner Rod Chandler,agreed that there should be only one Responsible Officer and that the legislation be amended to reflect this.

Media reports of the inquest into Larry Knight’s death reported that after rockfalls in October 2005 and various risk consultants’ reports Matthew Gill undertook some remedial work on the mine and in February 2006, Gill declared the mine safe to restart mining.  The decisions made on the basis of those consultants’ reports came under close scrutiny in the coronial inquest.

On 10 November 2008, AAP’s Paul Carter reported the following:

Lawyer Kamal Faroque [representing the Knight family and the Australian Workers’ Union] told Coroner Rod Chandler in Launceston that Allstate’s management failures contributed to Mr Knight’s death…. Mr Faroque said mine manager Matthew Gill was ultimately responsible for deficiencies in the mine’s ground supports.  “It is submitted that deficiencies in ground support contributed to the Anzac Day rockfall which killed Mr Knight,” he said.

He also said there was no reasonable basis for Allstate to conclude that it was safe for workers to return to the area after two earlier rockfalls.

“Mr Gill accepted responsibility for the decision to recommence stoping in the western zone following the October (2005) rockfalls,” Mr Faroque said.  Stoping is a mining method in which underground chambers are opened up deep beneath the surface.

Mr Faroque said the risk management process conducted following the October 2005 rockfalls was inadequate.  “It is submitted that these failures are a sound foundation for a finding that Allstate contributed to the death of Larry Knight,” Mr Faroque told the court.

There is no doubt that Matthew Gill was integral to the successful rescue of Brant Webb and Todd Russell but Gill had been employed at the mine for over a decade before the fatal rockfall and therefore was also involved with the decision-making leading up to the rockfall.  The decisions made by the company over many years should be analysed to see the combination of bad, poor, or short-term decisions that ultimately led to Larry Knight’s death and the entrapment of his colleagues.

The rescue of Webb and Russell is an exciting tale with a happy ending and at least one book and several long articles (even a school lesson plan) have been written about this.  The most lasting lessons for safety professionals, mine managers and business operators would be what contributed to the bad decisions leading to Larry Knight, Brant Webb and Todd Russell being in an unsafe working environment during a rockfall.

This is a more complex story that requires knowledge of geology, the stock markets, corporate accountability, OHS and mine safety regulations.  If this story had been Matthew Gill’s presentation during Safe Work Australia Week, it would have been worth travelling to Queensland to hear.

Kevin Jones

Amputations, shocks and burns – court cases

In late October 2009, there were several OHS court cases in Australia that raise issues that need to be kept at the forefront of the thoughts of safety managers, safety professionals, workers and business owners.

Amputation

One case in South Australia identified the need to have sufficient detail in policies and procedures for workers to be safe.  The comment of Industrial Magistrate Michael Ardlie is particularly important.

Beerenberg Pty Ltd was fined $A9,000 dollars for breaching OHS law

“The incident happened in May 2007 at the company’s Hahndorf premises. A female employee was operating a mincer as part of the process of producing green tomato chutney.

The court was told that at the conclusion of the task, the employee switched off the machine but noticed a piece of tomato hanging from the mincer plate. She went to flick the piece off, but in doing so lost the tip of her index finger.

SafeWork SA’s investigation concluded that the woman’s finger had gone through one of the holes in the mincer plate and come into contact with the cutting blade behind, which was still winding down after the machine was switched off.

The fingertip could not be reattached, but the woman returned to work with the business after five weeks. Aside from the cosmetic appearance, there remains some numbness in the finger.

In his penalty decision today, Industrial Magistrate Michael Ardlie acknowledged that while there was a safe operating procedure written and a warning sign in place, these measures alone were insufficient.

“(The measures) did not specifically warn employees of the dangers presented by the moving parts of the mincer after the mincer had been turned off… the procedures in place did not go far enough.”

Since the incident, the company has fitted a purpose-built distance guard as well as an interlock that shuts the machine down once the guard is removed.”

Magistrate Ardlie fined the defendant $9,000 this being its first offence.

Crushed Fingers and Guarding

The same Industrial Magistrate as above, McArdlie, had to deal with a very different case.  Whereas Beerenberg was facing its first offence, OE & DR Pope are on their fifth.

“SafeWork SA prosecuted OE & DR Pope Pty Ltd after investigating an incident at its Wingfield printing plant in March 2007.

A 34-year-old male employed as a machine operator, suffered crush injuries to three fingers of his right hand, which were caught between moving rollers.  While he returned to work after three weeks, he suffered residual sensitivity problems, and left the business in December 2007 for unrelated reasons.

The court was told that the operator had attempted to clean dry spots from a roller without stopping the machine, and was able to gain access to the moving parts through a 70mm gap in the guarding.  Furthermore, the employee’s usual assistant was not available leaving him to perform two roles on the machine.  The supervisor who also should have been present was elsewhere on the premises at the time.

In his decision on penalty handed down today, Industrial Magistrate Michael Ardlie noted that the machine involved had replaced another involved in a previous injury, but that a risk assessment failed to identify the problem which ultimately occurred:

“Whilst the defendant prior to the incident did assess the machine, installed a guard and introduced a Standard Operating Procedure, the steps it took were inadequate.”

The court was told that this was the company’s fifth offence dating back to 1998, and all previous incidents resulted in similar injuries from similar circumstances.

Therefore, being a subsequent offence under the Occupational Health Safety and Welfare Act 1986, the defendant faced a maximum fine of $A200,000. Magistrate Ardlie fined the company $A40,000.”

Fifth incident in just over ten years – “similar injuries from similar circumstances”.  The reduced fine of $A40,000 seems a little odd in this context.

There are several elements that are disturbing in this case – ineffective guarding, excessive or conflicting workload and absent work supervisor.

Overhead Hazards

Just as falling in some workplaces is as “easy as falling of a log”, so it is that many people forget to look up.  A court case in Western Australia has fined Shrigley Drilling Contractors $A40,000 after one worker was shocked and another burnt when their drilling rig tilted into high-voltage overhead powerlines in 2006.

“Laurence Victor Shrigley – trading as Shrigley Drilling Contractors – pleaded guilty to failing to ensure that the workplace was safe and, by that failure, causing serious harm to another person and was fined in the Perth Magistrates Court this week.

In May 2006, Western Power had contracted Outback Power Services to perform works and construct a voltage regulator at Eneabba. Outback Power had contracted Mr Shrigley to perform drilling works.

On May 17, Mr Shrigley and an electrical contractor were engaged in drilling holes with a drilling rig underneath power lines. The position in which the drilling contractor chose to place the rig required him to raise the mast very close to the power lines.

In repositioning the rig, the left-hand outrigger was raised and the mast tilted towards the power lines. The mast touched the power lines and Mr Shrigley received an electric shock and was thrown backwards from the drilling rig.

Another man, who was driving the truck that carried the drilling rig and was working with Mr Shrigley on a voluntary basis, also received an electric shock serious enough to set his clothing on fire. He sustained burns to around 60 per cent of his body.

The court heard that no formal pre-start meeting had been held before the work commenced, and no directions were given for the work, with the exception of where the holes were required to be placed.

Mr Shrigley had not checked whether the power lines were live, or attempted to make any arrangements for the power in the area to be isolated.”

The features in this case include contractor management, using a volunteer,  inadequate preparation, and inadequate number of workers (apparently, no spotter).

It is understandable that cynicism is rampant in the safety profession when the same work practices lead to injuries in the 21st century just as they did in the 20th and sometimes in the 19th.

Kevin Jones

Revealing podcast on asbestos in Australia

On 15 October 2009, Matt Peacock, a journalist with the Australian Broadcasting Corporation and author of a new book on asbestos and the James Hardie company, “Killer Company: James Hardie Exposed” spoke publicly at Trades Hall in Victoria.

Killer Company cover 001Peacock has allowed an edited version of his presentation to be used as a SafetyAtWork podcast which can be downloaded.  In the podcast he discusses the conduct of the James Hardie boss of several decades, John B Reid; the pervasive nature of asbestos throughout the Australian community; the surveillance of opponents by the company; the immoral public relations campaigns and, generally, the conduct of a corporation that knowingly sold a product that was toxic and harmful.

One blogger reviewed the book and said

“Killer Company” clearly shows that JH directors were criminally negligent and showed no humanity or compassion for their victims and no remorse for their crimes.

Peacock produced several reports on asbestos recently.  Video and transcripts of his reports can be accessed HERE.

Peacock has also been interviewed extensively about his book.  A video interview is available HERE

Kevin Jones

New approaches on OHS fines and penalties

At the moment Australian OHS professionals, lawyers and businesses are preparing submissions to the Government on the harmonisation of OHS laws.  One of the areas that the Government is seeking advice on is penalties.  The Discussion Paper asks the following

Q17. Are the range and levels of penalties proposed above appropriate, taking account of the levels set for breaches of duties of care by the WRMC?

Q18. What should the maximum penalty be for a contravention of the model regulations?

Q19. The intention is that all contraventions of the model Act be criminal offences. Is this appropriate or should some non-duty of care offences be subject to civil sanctions e.g. failure to display a list of HSRs at the workplace, offences relating to right of entry?

The amount of  any fixed financial penalty is not a big issue in my opinion.  There is an assumption that the threat of a large financial penalty imposed on one company will encourage other companies to improve safety.  Is anyone seriously saying that all of the financial penalties imposed over the decades are in some way responsible for an improving level of safety in workplaces?  The motivation to improve safety comes from elsewhere.

The threat of large financial penalties send companies to seek ways of insuring against having to pay a fine.  Often it is cheaper to pay an insurance premium on the slim chance of being prosecuted and fined.  I acknowledge that this has been a corporate and risk management approach primarily but there are cases where such options are being offered to small business.

Large financial penalties, such as the then record fine to Esso over its Longford gas explosion, are easily paid with little OHS improvement resulting from the fine.  It can be argued that the negative corporate exposure from the resulting Royal Commission, a reulting class action and the media coverage resulting from its unforgivable treatment of Jim Ward were stronger motivators for improvement.

In most Australian States, there is not a crime of industrial manslaughter.  This issue has faded from the political agenda but it remains very much alive in England.  On 27 October 2009, the Sentencing Guidelines Council wrote the following:

“Companies and organisations that cause death through gross breaches of care should face punitive and significant fines, a consultation guideline published by the Sentencing Guidelines Council proposes today.

Fines for organisations found guilty of the new offence of corporate manslaughter may be measured in millions of pounds and should seldom be below £500,000.

The new sanction of Publicity Orders forcing companies and organisations to make a statement about their conviction and fine introduced under the Corporate Manslaughter and Corporate Homicide Act should be imposed in virtually all cases.

The consultation guideline proposes that the publicity should be designed to ensure that the conviction becomes known to shareholders and customers in the case of companies and to local people in the case of public bodies, such as local authorities, hospital trusts and police forces.  Organisations may be made to put a statement on their websites.”

The Council recommends a minimum financial penalty and a publicity order that has teeth. More on the publicity order is below.

Council member Lord Justice Anthony Hughes clearly states the purpose of financial penalties and it is not preventative.  He said in a media statement

“Fines cannot and do not attempt to value a human life – compensation will be payable separately in these cases.  The fine is designed to punish and these are serious offences so the fines imposed should be punitive and significant to reflect that.”

Penalties as a Percentage of Turnover

Hughes says that the Council rejected a Sentencing Advisory Panel proposal that I believe should be floated in the current debate on penalties in Australia, even though it is likely to be similarly rejected.

The Panel recommended the following

“In order to achieve an equal economic impact on offending organisations of different sizes, the proposed starting points and ranges for offences of corporate manslaughter are expressed as percentages of the offending organisation’s average annual turnover during the three years prior to sentencing.  The relevant turnover is that of the company convicted of the offence or, where the offending organisation is a holding company, the consolidated turnover of the group of companies of which it is the holding company.”

Here is the penalty table

Manslaughter table

Lawyers argue extensively about the use of manslaughter in relation to deaths in workplace but the public jumps across the legalese by repeatedly asking how the death of their loved one is not manslaughter when the actions of a director or company led directly to the death?  No level of legal explanation is going to counter this need for accountability, some would say revenge.

Similarly the penalty rate listed in the table above is easier for the public to understand conceptually compared to a judge’s or lawyer’s explanation of why a financial penalty for a workplace death was less than the maximum.

Sentencing options are complex and SafetyAtWorkBlog has no legal contributors but on 30 October 2009 within a public discussion period on national OHS laws and at the end of Safe Work Australia Week, it seem thats penalties imposed from a percentage of turnover may be an attractive concept to many safety advocates and one that needs to be considered in the Australian context.

Publicity Orders

On the issue of publicity orders, many Australian jurisdictions have had this option for a while.  Indeed, the issue of enforceable undertakings is getting a broader hearing after some of the recent actions by Comcare against John  Holland Group and others.

It is always important to look at the most recent actions and decisions in OHS law and regulation from outside one’s own jurisdiction so that innovations are not overlooked.  It seems that the Sentencing Advisory Panel has looked at lots of  jurisdictions in making the following requirements.

The Sentencing Advisory Panel listed specific requirements of a publicity order to be applied within a specified timeframe:

  • a quarter-page advertisement in a local or regional newspaper, in the case of an organisation operating in one area; or
  • an eighth-page advertisement in three specified national daily newspapers, in the case of an organisation operating nationally; and
  • an eighth-page notice in a relevant trade publication; and
  • a prominent notice in the organisation’s annual report (also in electronic format where applicable); and
  • where applicable, a notice on the homepage of the organisation’s website for a minimum period of three months.

The panel also closed a possible (out) for offending companies.

” The making of a publicity order does not justify a reduction in the level of fine imposed on an organisation for an offence of corporate manslaughter.”

The ads on home pages, local newspapers and trade publications (if there are any) seems very reasonable but the media option that may be most influential is the inclusion in the company’s annual report.  Acknowledging a workplace death and expressing regret in an annual report is admirable but “a prominent notice in the organisation’s annual report” goes straight to the shareholders who often have the ear of the corporation.  Just look at the influence being applied by them at the moment on executive salaries.

Now is the right time for Australia to consider alternative OHS penalty options.

Kevin Jones

Senator calls for Senate hearing on the safety of posties

Senator Steve Fielding is the head of the Family First Party, the smallest political party in Australia’s Parliament at the moment.  Fielding is one of the handful of senators who hold the balance of power in the parliament and therefore has more political influence than a party of the size of Family First usually has.

On 19 October 2009, as a result of evidence given at a Senate inquiry by a representative of Australia Post, Senator Fielding said, in a media statement:

“There are serious allegations staff have been forced back to work simply to sit in a room to watch television so managers can get their bonus for having lower lost injury time figures,” Senator Fielding said.  “This is outrageous and puts the health of workers at risk because of some greedy managers.

“No wonder Australia Post won an award last month for its rehabilitation of injured workers if it’s fudging the numbers.  There’s an obvious conflict of interest between InjuryNET, which looks after the doctors that Australia Post sends its workers too, and Australia Post itself.

“Dr David Milecki, who is a consultant to Australia Post’s return-to-work program, also runs InjuryNET.

“Australia Post even admitted that this contract did not go through an independent process – there was not even a tender process.

“We need a senate inquiry urgently to make sure Australia Post employees are being looked after and that they’re aren’t being taken advantage of by dodgy managers who are more interested in their bonuses.”

SafetyAtWorkBlog contacted Australia Post to gauge some reaction.  A spokesperson says that Australia Post will be cooperating fully with any Senate inquiry.

Every country has its fair share of eccentric politicians.  The current feeling is that Steve Fielding is Australia’s.  But regardless of character or competence, the Senator has authority and a responsibility to investigate the concerns listed above.

This is a developing story but one that may relate a little to issues raised in the recent SafetyAtWorkBlog about awards nights.

Kevin Jones

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