Category: economics

Safety is missing from productivity debates

A March 2012 report from Safe Work Australia reminds us that the issue of productivity and safety is not a new ideological battle. The report states that

“In 1995, an Industry Commission study estimated that only 25 per cent of the total cost of work–related injury and disease was due to the direct costs of work-related incidents. The remaining 75 per cent was accounted for by indirect costs such as lost productivity, loss of income and quality of life.” [link and emphasis added]

The significance of this quote is that the Industry Commission (now the Productivity Commission) established a direct link between work-related injuries and lost productivity. The link was not established by an organisation focusing on safety but one that is all about productivity. But none of the safety advocates or lobbyists have entered the political debate on productivity, even though the relationship between safety management and productivity has been established for almost 20 years, at least.

Continue reading “Safety is missing from productivity debates”

The safety role of the Construction Compliance Code Unit

Recently SafetyAtWorkBlog was able to spend some time with the Director of the Victorian Government’s Construction Compliance Code Unit (CCCU), Nigel Hadgkiss. The CCCU and Hadgkiss have been in the Victorian media recently in terms of the CCCU investigation of industrial relations matters in several Grocon construction projects and some discussions with LendLease but an often overlooked, yet significant, element of the Construction Compliance Code is the occupational health and safety obligations. The CCCU has been working on early drafts of a Health and Safety Management Plan (HSMP) with which all those operating under the Code will need to comply.

Many of the questions SafetyAtWorkBlog posed stemmed from a presentation Hadgkiss made at a breakfast seminar on which SafetyAtWorkBlog previously wrote. That article is recommended for background and context.

Nigel Hadgkiss advised that since 1 July 2012 71 companies and associated companies have “signed up” to the Compliance Code with a full awareness that OHS is a key element of compliance.

OHS obligations of unsuccessful tenderers

The Code requires companies tendering for Victorian Government construction work to follow specific OHS obligations, whether they are the successful tenderers or not. In some ways this seem unfair.

Hadgkiss believes that the tenderers to government contracts are well aware of the safety obligations from the outset. From that point they are contractually bound whether they are successful or not.

Continue reading “The safety role of the Construction Compliance Code Unit”

Devil’s Dust – Australian movie on asbestos and corporate morality

On November 11 and 12 2012, the Australian Broadcasting Corporation will broadcast “Devil’s Dust”, a two-part movie about asbestos in Australia.  This is not a documentary on asbestos-related diseases.  It follows the story of investigative journalist Matt Peacock from the 1970s to the present day in parallel with the corporate machinations of James Hardie Industries and its former CEO, John Reid and the life, times and death of Bernie Banton.

To many Australians, bits and pieces of each of these narrative streams will be familiar but Devil’s Dust illustrates the moral linkages between these streams leading to a powerful story of corporate greed, strength of character and man’s inhumanity to man.  The workplace safety context of Devil’s Dust is obvious – ignoring or hiding information about harm to workers, the management of many workplace risks through allowances and “danger money”.

The television production values depict the times perfectly and for those who know of the asbestos risks, particularly readers of Matt Peacock’s book “Killer Company” which inspired the movie, the opening few seconds summarise major issues in the asbestos story – sacks of asbestos on a truck, cigarette smoking and dust being bashed from work clothes.  Later in the first part, other issues are touched on – the washing of asbestos-contaminated work clothes by wives, asbestos in trains, asbestos in carpet underlay and asbestos used as road toppings. Continue reading “Devil’s Dust – Australian movie on asbestos and corporate morality”

WorkSafe tries a new promotional approach

The increasing prevalence of pictorial social media has generated a surge in organisations generating “infographics” from workplace health and safety statistics Almost always these images are a technique for generating internet traffic through established websites, blogs and other online services. Fundamentally it is stealth advertising for the unwary online user. However, such images have much greater legitimacy when offered by OHS regulators.

In the week prior to its WorkSafe Week 2012, WorkSafe Victoria issued two online infographics as part of a media statement. Both are attractive by their simplicity but the simplicity can also be a problem.

The cost comparison infographic is super general but clearly illustrates that the cost to prevent harm is much less than any fine that may come from prosecution. However, the risk of being prosecuted in Victoria and receiving a monetary penalty seems to be declining as non-pecuniary penalties, such as enforceable undertakings and others, are made available to the Courts.

Fines are only one of the potential costs. An inescapable cost is the cost to the injured worker, the disruption to that worker’s family life, the disruption to the worker’s employer. Continue reading “WorkSafe tries a new promotional approach”

BusinessSA’s backflip on OHS laws carries short-term gain but long-term risk

Australian business associations have different perspectives on the need to harmonise occupational health and safety laws across Australia but BusinessSA has performed an enormous backflip in only a month on new Work Health and Safety Laws.  In a letter (now a media release) to the industry association’s members, BusinessSA has called on the South Australian Government to defer the laws until a scheduled national review in 2014.  The major points of the letter are discussed below.

Objections to the letter on some of the LinkedIn discussion forums have been voiced by some safety and legal professionals, the principle concern being that all state governments agreed to the initiative of the Council of Australian Governments (COAG) in 2008 to harmonise the OHS laws.  Employer groups, unions and OHS regulators have been closely involved in the harmonisation process.  Other parties, including BusinessSA made submissions.  According to the 2008 submission, these were the six key issues:

  • “Self-regulation: The appropriateness of the duty of care, consultative mechanisms, performance-based (as opposed to prescriptive) regulation, and education/training in facilitating an effective (self-regulating) OHS system.
  • Causality and uncertainty: Can, and should, governments attempt to regulate with respect to potential future hazards, given the enormous pace of technological change and uncertainty relating to that change and where causes of Continue reading “BusinessSA’s backflip on OHS laws carries short-term gain but long-term risk”

Lessons for Australia from UK assault on OHS red tape

The chase for government and corporate effectiveness and productivity increases through cutting “red tape” has, historically, had dubious longterm benefits. The attack on the red tape of occupational health and safety (OHS) has been brutal in the United Kingdom and has occurred with an unforgiving, and misguided, tabloid media.  Some in the UK media have been pointing out the government’s strategic folly, the latest is Russell Lynch in the Evening Standard.

On 20 September 2012, Lynch brutally described the UK situation:

“Safer businesses are more productive, not least because of the management time taken up when some poor sod has to be scraped off the floor. And let’s not forget inspections focus on occupational health as well, meaning employees have more chance of working without developing illnesses.”

The sad part of this statement is that productivity advantage of safer businesses has been known by governments for some time but that the wave of red tape attacks was politically stronger.

Some Australian States are on an extreme austerity drive even though the Australian economy is nowhere near as troubled as that of the United Kingdom.  These strategies usually call for across-the-board percentage reductions in costs.  This generality is a major problem as productivity and cost-effectiveness of specific organisations is not considered.  Untargeted cuts penalise the successful and the inefficient – the current experience of the Health and Safety Executive. Continue reading “Lessons for Australia from UK assault on OHS red tape”

OHS – the missing element in productivity debate

On 7 August 2012, the Victorian Premier, Ted Baillieu, verbally attacked the Federal Government over its COAG program and lack of support for  productivity initiatives.  The criticism of productivity sounded odd as the Victorian Government has dropped out of the reform program for occupational health and safety laws yet OHS is understood to have a positive effect on productivity. More clarification was needed on this understanding.

In April 2012 the Productivity Commission, an organisation favoured by Premier Baillieu, discussed OHS reforms in Australia.  that

“Improved health and safety outcomes achieved in practice would then lead to benefits for businesses (such as increased worker productivity, reduced worker replacement costs and reduced workers’ compensation costs), workers (increased participation, reduced medical costs among others) and society more generally (though reduced public expenses on health, welfare and legal systems).” (page 170)

For years there has been a debate about safety versus productivity.  Partly this stemmed from the taking of shortcuts on safety in order to satisfy production.  In the short-term, it was perceived that safety could be an impediment to production – take the guard of a machine, run the line speed faster than recommended, “don’t worry about the faceshield, just get it done”.  But safety professionals have been arguing that this risky behaviour masks the real problem of  not integrating safety management into the business operations and seeing safety as an optional add-on, or something applied when the boss is watching.

The recently released OHS Body of Knowledge provides some relevant insights on the productivity benefits of safety management that deserve better and broader communication. Continue reading “OHS – the missing element in productivity debate”

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