business – Page 223 – SafetyAtWorkBlog

Nice comparison on Directors’ complaints

In the Australian Financial Review in October 2009 there was an opinion piece (not available online) from the CEO of the Australian Institute of Company Directors (AICD), John Colvin, expressing concerns about the accountability of directors under legislation including the proposed OHS laws in Australia.

According to a report by Adam Schwab in the Crikey newsletter of 23 October 2009 (also not freely available online), Colvin wrote in the AFR:

“There are more than 660 state and territory laws which impose personal liability on individual directors for corporate misconduct. That is, a director is liable because he is a director, even when he may not have had any personal involvement in the breach…”

Schwab writes

“The AICD noted, the NSW courts have taken a hard-line enforcing the deemed liability laws. According to AICD data, between 2004 and 2008, 144 company directors were found guilty of OHS offences, of which 115 of those prosecutions occurred in NSW.”

Schwab then provides a comparison of risk that I wish I’d thought of:

“That means the proportion of directors convicted over these so-called onerous laws is 0.0068%. To compare, there is roughly a 0.04% chance of someone being struck by lightning. Therefore, based on the AICD’s own data, company directors are six times more likely to be hit by lightning than to be prosecuted. It also shouldn’t be forgotten, directors’ liabilities are almost always covered by indemnity insurance and most prosecutions result in a mere financial penalty.

While the NSW OHS laws result in occasional harsh results, to extrapolate one set of allegedly ill-advised laws across the country is much like a cry of wolf.”

This perspective will be an important one to remember when considering the submissions being lodged with Safe Work Australia on the OHS model laws by 9 November 2009. The corporate submissions particularly but also those from the OHS law firms that spruiker the exposure of company directors ruthlessly whenever OHS and accountability is discussed.

Some of us remember the “glory days” when industrial manslaughter was widely considered in some Australian States. (There is a noticeable absence of controversy of the industrial manslaughter law that is operating in the Australian Capital Territory)

Also important is the point that Schwab makes about indemnity insurance for Directors and Officers, a matter that has been discussed elsewhere in SafetyAtWorkBlog.

The amount of “get-out-jail-free” options available for directors should encourage more attention to alternative, non-financial penalties for breaches of OHS law. Over the last 24 hours the United States has been talking about replacing executive cash remunerations with stocks so that director’s incomes are reliant on the share price of the corporation which, in turn, relates to the quality of leadership from the director.

As long as Australia’s principle OHS penalties involve money, directors can buy their way out of trouble. If Australia’s Prime Minister, Kevin Rudd, can face an entire country and apologise for the bad behaviour of others, and the bad policies of other governments in relation to the interaction with indigenous peoples, why should company directors not have a similar obligation when their poor management of a workplace kills someone? If corporate executives are that keen on leadership, let’s see them apply some of the leadership that Rudd showed, and accept responsibility when they should.

Kevin Jones

A consistent approach to developing public policy is required

Australia is a Federation of States. This does not just mean that each State is a different colour of the schoolroom map. Each State has its own duties to its citizens from within the overall scheme of running a country.

There has always been a tension between the two levels of government and currently the management of health care facilities is the cause of friction, as reported, for instance, in The Age newspaper on 23 October 2009. The current tension in this sector illustrates a trend that extends beyond health and into workplace safety legislation, human resources and social policy.

The Victorian Health Minister, Daniel Andrews, is reported to have said that Canberra’s “health bureaucrats [are] remote and incapable of understanding the day-to-day needs of patients.”

“”You can never take it as a given that decision makers and policy makers at the bureaucratic level in Canberra understand how you deliver care in a bed, in a ward or in a country town, because they don’t do that: it’s not their world.”

This argument echoes some of the concerns being raised over the national harmonisation of OHS laws. In such a large country as Australia there are going to be cultural, demographic and geographical variations that a centralised system cannot service. The Federal Government is hoping to harmonise workplace safety but it has already taken over industrial relations and is strongly threatening a takeover of health. Why the inconsistency?

On 22 October 2009 at the HR Leadership Awards ceremony in Melbourne, the CEO of Carnival, Ann Sherry, said that centralised policy makers in Canberra are making important decisions from within a rarified world. Sherry is a member of a review panel into the Australian Public Service (APS) and she identified several features of the APS, and shortcomings, as the service aims to become “world’s best practice in public administration”. Amongst them:

42% of public servants are younger than 45 years;
a highly educated workforce;
senior public service positions are centered in Canberra.

The last characteristic Sherry said has led to a disconnection between service design and delivery, echoing, to some extent, the concerns of Daniel Andrews on health policy.

It seems that there are many reviews and investigations occurring into how various industries and sectors in Australian business and government should be structured for the future, a future that is likely to be very different, climatically, economically and demographically. But there is not a consistency in approaches, or at least one that is readily understood, even though the Australian Prime Minister, Kevin Rudd, talks repeatedly about “nation building“.

The Australian Government has the best chance in a long time to set the country on a path of sustainable growth. The United States, under President Barack Obama, has a similar opportunity. Governments have an obligation to plan for the long-term benefit of their countries ands citizens, not the short-term gains of their political donors, political parties and lobbyists. This obligation is as relevant in occupational health and safety as it is anywhere.

Kevin Jones

The OHS obligations of global corporations

BHP Billiton has issued a media statement concerning the death of a miner, Gregory Goslett, at its coalmine in Khutala in South Africa. Due to the number of deaths the company has had over the last two years, attention on any safety issue at BHP is intense. BHP’s short statement reads:

“It is with deep regret and sadness that BHP Billiton announces a fatal incident at its Khutala Colliery opencast operations in South Africa. At approximately 05:02 am on Tuesday, 20 October 2009 Gregory Goslett (27), Mining Operations Supervisor, was fatally injured whilst driving a light vehicle at the mine.

An initial investigation indicates that Gregory was travelling in a light vehicle when a piece of coal fell from a loaded 25 ton haul truck travelling in the opposite direction. The piece of coal went through the windscreen of the light vehicle and struck Gregory causing fatal injuries to him.

The company is offering all comfort, assistance and support to Gregory’s fiancée Tarryn, his parents and those affected at the operations. Our thoughts are with Gregory’s family, friends and colleagues at this difficult time.

Mining at the opencast area has been suspended and investigations are underway.”

The Age newspaper points out that

“The accident was of the type that BHP has previously moved to eliminate from its Pilbara iron ore mines in Western Australia after several deaths last year…..”

“A key safety change made by BHP in the Pilbara in response to last year’s run of fatal accidents was the improved management of the interaction of light vehicles with heavy vehicles.”

The circumstances of Goslett’s death illustrates the obligations, some would say challenges, that multi-jurisdictional corporations need to ensure that safety improvements are consistently applied across their workplaces, regardless of location or remoteness.

BHP Billiton has been tragically reminded of this but BHP is only one corporation in the global mining industry. Safety solutions and initiatives must extend beyond jurisdictions, countries and commercial entities to each workplace where similar hazards exist. (The oil refinery industry was reminded of this with the Texas City Refinery explosion) The communication and sharing of solutions is a crucial element of the safety profession around the world.

Kevin Jones

Employer concerns on OHS law review

In support of the Safety Show mentioned in a previous article, the organisers have issued a media release which provides illuminating quotes on the issue of the Australian Government’s program for review of OHS laws:

One of those keen to comment is exhibitor at The Safety Show and chief executive of the Australian Federation of Employers and Industries, Garry Brack [significantly NOT a speaker at the Safety Conference ED.].

“We are concerned about the content of the model laws,” Mr Brack says. “New South Wales’ OHS Act is the most difficult piece of legislation in the developed world and we believe this is a lost opportunity to wind up with more balance.”

“If an employee does the wrong thing, the employer is found guilty. We’re not arguing that employees should be prosecuted but reject the notion that employers should be liable when employees fail to meet safety requirements.”

Clearly Brack has not compared the NSW OHS Act to the Federal Taxation legislation.

Brack reflects many of the perspectives of those who deal with OHS in the State of New South Wales. The pent-up frustration is clear and the employers do not believe the reassurances from the Federal Government.

Brack also illustrates the desire for prescription in OHS law. If people, in this case employers, know how to comply with a law, they are more likely to do so.

“Smaller employers don’t have the financial resources and in-house expertise to interpret what is ‘reasonably practicable’. They say ‘Tell us what we have to do’. They don’t wanted to return to the lunacy of years ago where every nut and bolt was defined but they do need a more prescriptive approach and help from regulators.”

He highlights a concern about the OHS laws shared by SafetyAtWorkBlog, small business has always struggled to provide an appropriately safe workplace. “Reasonably practicable” does not help. However, Brack’s desire for prescription is nostalgic at best, some would say fantasy. This government has no intention of taking a seemingly regressive step to prescription and Brack has been aware of this for years. At some point one has to accept reality and work with what is being offered.

Variations

Another exhibitor discussed the expectation that States will still add their own variations to the model OHS laws. This option has never been hidden by the government or the various review panels. In fact, this flexibility has been a major point in the government’s choice on harmonisation rather than uniformity.

“National legislation is highly desirable to avoid the massive duplication of work for national organisations,” Mr [Bill] Henman [of the College of Warehouse Training] says. “Unfortunately, the legislation will be enforced by various state jurisdictions and this will result in variation between states in interpretations, penalties and the finer points of the legislation. The devil is in the detail. [ED. please kick the next person who uses this cliche] Different penalties in different states currently affect the priorities of safety managers and standardised penalties would provide better outcomes.”

Henman needs to read the legislation and supportive documents to see that standardised penalties are proposed. Though Henman is considering one of the most important issues that does not seem to be in consideration in much of the commentary on the legislation to date – improved safety.

“It’s very hard to say whether these new laws will make workplaces safer. The culture of those less safety conscious workplaces where the employer bends the rules has to change. One would hope the new laws will help engender better safety cultures.”

The Master Builders Association of NSW‘s OHS risk management officer, Tim Stootman, echoes the perspective of Garry Brack, looking at the legislation through the experience of a New South Wales employer:

“Master Builders supports the review of OHS laws and believes that this is an opportunity for better, rather than greater, OHS regulation,” Mr Stootman says. “Better, rather than greater, regulation will assist to improve OHS performance in the construction sector.

Master Builders supports the rejection of what could be called a ‘highest common denominator’ approach to OHS duties. Essentially, this approach would have seen an absolute duty of care on employers to ensure the health and safety of their employees and provides unions with the right to bring a prosecution for a breach of the OHS law, the latter a provision adopted in recent changes to the law in the ACT.

The Draft National Model OHS Act is a positive step towards harmonisation of OHS laws in this country.”

Submissions to the government on the draft Safe Work Bill are being regularly posted at the Safe Work Australia website. SafetyAtWorkBlog is watching the submissions and will draw attention to some of the more useful comments in the submissions.

Kevin Jones

Prosecution results from fall through roof

On 22 October 2007, a commercial premise in Southbank, Victoria, was to undergo renovations which included replacing the asbestos roof with an iron roof. Two men were employed as project managers and during the roof replacement, according to WorkSafe Victoria.

“…the dogman fell [through an unguarded shaft] a total distance of 8 metres and as a result he broke 3 bones of his right wrist and a fractured scapula as well as sustaining bruising to the body and serious lacerations to the head.”

On 16 October 2009, the Magistrates’ Court fined the specialist roofing company contracted for the task $A15,000. The prosecution summary says that as the company specialised in roofing, the hazards of working on an asbestos roof, and unprotected edges, would have been well-known.

The two project managers were fined $A7,500 each as they were not sufficiently experienced for their project management roles. The lack of fall protection for those working on the roof was of particular note according to the Prosecution Summary from WorkSafe Victoria.

More details on the prosecution are available from the WorkSafe hyperlinks in this article.

It would be interesting to run this prosecution summary as a hypothetical under the proposed National OHS Model law to provide a contrast between the old and new laws particularly on the following matters, although many more could be considered if further details were available:

who controls the workplace
competence
suitably qualified
role and enforcement of JSA’s
contractor management

Kevin Jones

Peek-a-boo safety – Oh Dear!

The Australian Model OHS laws do not have duties and responsibilities that focus on the employer. The focus is now on a “person conducting a business or undertaking” or a PCBU. In a legal seminar in Melbourne on 20 October 2009, this acronym was spoken as a “peek-a-boo”. Throughout the next 60 minutes, prominent Australian OHS lawyers repeatedly mentioned the OHS responsibilities of the “peek-a-boos”.

iStock_000002473027Small

If OHS law has not been taken seriously by some sectors now, there is no hope if this absurd terminology continues.

How will regulators and safety professionals “sell” safety in a small business person is described as a peek-a-boo? If we’re lucky, the employer will think of a game played with young children. If we are not lucky, they may think of diaphanous female lingerie tenuously constructed with ribbons. If the employer is a goth, one may get away with a cool reference to a Siouxsie & The Banshees song.

One could speak PCBU phonetically as “pissy-be-u” but even that is dubious. Please delete this term from one’s vocabulary and recommend to the Australian Government that its bill-drafters look for another acronym.

Kevin Jones

Independent Aussie politician forecasts “near riots” on OHS

Rob Oakenshott is an independent politician in the New South Wales parliament, He was formerly a representative of the National Party. Oakenshott is one of the first Australian politicians who are not directly involved in the program of OHS law harmonisation to raise any concerns.

What spurred him to speak was a recent case in the High Court of Australia centring around NSW’s absolute OHS duty of care. Comments from the Allens Arthur Robinson newsletter say:

“The matter will present an opportunity for the court to determine whether the interpretation of the duties under the OHS Act is so restrictive that it makes it impossible for an employer to comply with them and practically removes the benefit of the statutory defences. The issue of the difficulty of complying with the legislation is something that the defendants have submitted runs counter to the rule of law and the Constitution.”

Oakenshott stated in a media release (not yet available on his website):

“I am also concerned that aspects of NSW state legislation such as the absolute liability elements are being considered by the Federal Government,” he said. “Having been involved in state politics for fifteen years, I can assure the government they will have near riots on the streets from the small business community of Australia if they mirror NSW legislation in the quest for harmonious national laws.”

This would be the first time that OHS would ever have raised the passion of Australian small businesses to this extent. A survey produced for the ACTU (considered to be representative of the general population by the research company) quoted the following statistics:

67% believe that workplace safety is important, but only 40% see it as “very important”.

Kevin Jones

Category: business

Nice comparison on Directors’ complaints

Like this:

A consistent approach to developing public policy is required

Like this:

The OHS obligations of global corporations

Like this:

Employer concerns on OHS law review

Variations

Like this:

Prosecution results from fall through roof

Like this:

Peek-a-boo safety – Oh Dear!

Like this:

Independent Aussie politician forecasts “near riots” on OHS

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Variations

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this: