Category: business

This may not work for OHS but why not?

On 9 November 2009 public submissions close on Australia’s model OHS Act but the move for harmonisation and, hopefully, a simplification for business and government continues in other areas.

The Australian Transport Council (ATC) met on 6 November 2009 and agreed on many Council of Australian Governments (COAG) matters concerning unnecessary bureaucratic duplication:

“ATC agreed to recommend to COAG that South Australia would be the host jurisdiction for the national rail safety regulator.

ATC also agreed to recommend to COAG that a host jurisdiction for the national heavy vehicle regulator be agreed, noting that New South Wales, Victoria and Queensland have expressed interest.

It was agreed that the Australian Maritime Safety Authority will be the national regulator for maritime safety, responsible for regulating commercial vessels. This is a significant step towards national uniformity.”

There were several other initiatives mentioned – level crossing safety, a National Road Safety Council, minimum standard for taxi drivers.

But the recommendations above decentralise some of the bureaucracy.  At the HR Leaders Awards recently, the CEO of Carnival cruise liners, Anne Cherry, said that many public servants exist in a unique policy environment of the capital city, Canberra, and the policies reflect this.

SafetyAtWorkBlog would like to suggest a change that could occur within the enforcement parameters of the OHS model law review.

Let’s consider a national mine safety regulator with offices located in each of the mineral resources regions of Australia.  Could transport regulators have offices within, or just outside, major port facilities?  Major hazards regulators in major hazards zones?

There is much information bandied around about flexible working arrangements and the use of new technology to unite isolated workplaces.  How radical would it be to split the centralised OHS regulators’ offices into hazard-based offices in rural, regional and suburban locations?  The inspectors would be adjacent to the hazard locations for enforcement and the advisers are on hand for assistance to industry.  The locations could even be seasonal to deal with seasonal industries and labour forces.

OHS enforcement policies would remain the same, only the place of implementation and coordination would change.

Most OHS regulators already have a a couple of regional offices but mostly these remain in the outer suburbs of the capital cities.  Some entire departments have relocated to satellite towns for cost reasons but also to provide employment opportunities outside the major population centres.

Could OHS be regulated and enforced across a country the size of Australia and through the major industrial and resource structures, without the concentrations of policy-makers and inspectors in city offices?

Kevin Jones

OHS must raise its profile in the debate of directors’ liability and accountability

The global financial crisis has highlighted many business management issues.  Probably one of the most contentious is executive remuneration which is based on the question “should executives receive performance bonuses when the company is not performing well, ie. not returning profits to shareholders?”  But underpinning even this question is one of accountability.

Business leaders, commentators, lawyers and politicians are comfortable in discussing financial and corporate accountability but extend that discussion to other areas of business and they respond with a confused stare or outright dismissal of the proposal.

This week, the Australian Financial Review newspaper ran a page one story: “Revealed: directors face harsher liability penalties.”  [None of the AFR articles are freely accessible online] The article revolved around Australian Government plans to “break an impasse between state governments over proposals to harmonise conflicting commonwealth and state directors’ liability laws.”

As should not be surprising from a business paper, the discussion centred on financial and corporate governance issues but OHS obligations were floating behind all of the business-speak.  This was particularly obvious with this paragraph:

“Federal ministers have expressed concerns that onerous directors’ liability rules increase the cost of directors’ insurance and discourage them from taking board seats.”

This paragraph shows that the first response to any corporate trouble is insurance.  This cowardly response is short-sighted and contributes to the unnecessary growth in litigation which the directors regularly complain and which increases the cost of liability insurance premiums.

It is also an acknowledgement that the introduction of new rules does not address the behaviour intended, it leads to investigating ways of avoiding accountability for one’s actions.

The second point of that paragraph is that people are more likely to refuse to participate than to undertake sufficient education that would allow them to perform the job better and with less risk.  The response should not be “it’s too risky so I won’t do it” but “let’s get better informed so that my decisions are more valid and the risk is reduced”.

It is clear that lawyers are running the agenda when semantics enter the argument.  The AFR article goes one to say “there are fears about confusion over the distinction between executive and non-executive directors”.  This confusion comes from the main concern of directors being to cover one’s arse rather than focusing on the job at hand and the corporate purpose.

The AFR article makes no mention of OHS but the accompanying article “Duty weighs heavily” by reporters James Eyers and Annabel Hepworth does.  Eyers and Hepworth look back through several decades of law reform investigations and reviews to show the history of similar director concerns.

But it is a more recent statistic that is the nub of the article.  A Treasurysurvey of directors from top Australian listed companies, in conjunction with the Australian Institute of Company Directors, found that

“…71 per cent of those surveyed had declined taking board seats mainly because of their fears of personal liability, while 46 per cent had resigned from a board position because of the issue.”

These concerns largely deal with false market rumours, manipulating securities prices, criminal cartels, consumer protection laws and others.  It is this company that the importance of taking responsibility for OHS should be pushed by the safety advocates but it seems that the business and corporate contexts of OHS are only ever discussed by the corporate lawyers.  And yet, OHS professionals complain about not getting heard at Board level.  Perhaps what is needed is one of these OHS professionals to take a business degree so that OHS can be described in terms business understand.

Of course the risk is that OHS may be found to be contrary to all the basic capitalist concepts and that the only way it can be applied in a business is for the application of legal “wriggle room” from the concept of reasonably practicable.

On 6 November 2009, Bob Baxt (a partners with law firm Freehills and the chair of the law committee with AICD) responded to the Eyers and Hepworth article with a personal opinion describing directors and senior managers already in the “firing line” from the corporate regulators.  He seems to see this as unfair but those executives are in the “firing line” because they are suspected of doing the wrong thing.

Baxt describes the “reverse onus of proof” as an “obnoxious device” and he may be right but he needs to consider why such a provision was introduced in the first place – business managers were not complying with their legislative obligations, they were avoiding responsibility, taking short cuts for personal wealth, having workers die and then winding up the company to avoid prosecution.

Too many business professionals focus on “cause and effect” and see injustice.  Yet if they looked a little further back and analysed the “causes” a bit more carefully they may just see that in many cases the regulatory changes have come about as a result of their own misdeeds.

The analysis of capitalism that resulted from the global financial crisis has faded very quickly as the markets rebound.  Companies are applying the same behaviours that led to that crisis.  Most business analysts and executives talk about leadership as the be-all and end-all but we should not be lead in the same direction as in the past as we are likely to end up in the same place.  True leadership is about accepting mistakes and heading in a fresh direction where such mistakes cannot be repeated.

Those who are bleating about how corporate executives are being bludgeoned by regulation and accountability need to get out of the leafy middle-class suburbs and the office buildings with bayside views and take some time to reflect on how we came to be in such an economic mess and why workers continue to get injured, maimed and killed.  It may just be that accepting responsibility is the new foundation required to build a humaneand profitable future.

Kevin Jones

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

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